Exhibit 4.4
SECURITY AGREEMENT
This SECURITY AGREEMENT (as amended, supplemented, amended and restated or
otherwise modified from time to time, this "Security Agreement"), dated as of
October 15, 2002, is made by GOLFSMITH INTERNATIONAL, INC., a Delaware
corporation (the "Company"), GOLFSMITH INTERNATIONAL HOLDINGS, INC., a Delaware
corporation ("Holdings"), each Subsidiary (as defined below) of the Company a
signatory hereto, and each other Subsidiary of the Company which may from time
to time hereafter become a party hereto pursuant to Section 7.5 (each,
individually, an "Additional Grantor", and collectively, the "Additional
Grantors", and together with the Company and Holdings, each, individually, a
"Grantor", and collectively, the "Grantors"), in favor of U.S. BANK TRUST
NATIONAL ASSOCIATION, as collateral agent (together with its successor(s)
thereto in such capacity, the "Collateral Agent") for each of the Secured
Parties.
W I T N E S S E T H :
WHEREAS, the Company, the other Grantors and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of October 15, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Company has issued (the
"Notes Issuance") its Senior Secured Notes due 2009 (and, if applicable, its
Senior Secured Notes due 2009, Series B issued in exchange therefor)
(collectively, the "Notes");
WHEREAS, various financial institutions, as lenders (the "Lenders"),
General Electric Capital Corporation, a Delaware corporation, as agent on behalf
of the Lenders (in such capacity, the "Lender Agent"), and the Grantors have
entered into that certain Credit Agreement, dated as of October 15, 2002 (such
credit agreement is the Credit Agreement referred to and defined in the
Indenture, and as used herein, the term "Credit Agreement" has the meaning
ascribed thereto in the Indenture), pursuant to which the Lenders have agreed to
make certain loans and other financial accommodations from time to time to the
Borrowers (as defined therein) and the Grantors have entered into Collateral
Documents (as defined therein) with the Lender Agent as well;
WHEREAS, the Collateral Agent, the Lender Agent and the Grantors have
entered into that certain Intercreditor Agreement, dated as of October 15, 2002
(such intercreditor agreement is the Intercreditor Agreement referred to and
defined in the Indenture, and as used herein, the term "Intercreditor Agreement"
has the meaning ascribed thereto in the Indenture), pursuant to which, among
other things, (a) the Lender Agent is recognized as having a first priority
interest in all of the Collateral (as defined in the Collateral Agreements)
(other than real property, Equipment and proceeds thereof) for the benefit of
itself and the Lenders and (b) the Collateral Agent is recognized as having (i)
a second priority interest in all of the Collateral (as defined in the
Collateral Agreements) (other than real property, Equipment and proceeds
thereof) for the benefit of itself, the Trustee and the Holders and (ii) a first
priority interest in all of the Collateral (as defined in the Collateral
Agreements) constituting real property, Equipment and proceeds thereof for the
benefit of itself, the Trustee and the Holders;
WHEREAS, as a condition precedent to the Notes Issuance, each Grantor is
required to execute and deliver this Security Agreement;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Security Agreement inasmuch as such Grantor will derive substantial direct and
indirect benefits from proceeds of the Notes issued by the Company;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Holders
to acquire the Notes and maintain the Indebtedness evidenced thereby, each
Grantor agrees, for the benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Additional Grantor" and "Additional Grantors" are defined in the
preamble.
"Capital Securities" means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the date hereof.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Company" is defined in the preamble.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units,
display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral
devices and other related computer hardware;
(b) all software programs (including both source code, object code
and all related applications and data files), whether now owned, licensed
or leased or hereafter acquired
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by any Grantor, designed for use on the computers and electronic data
processing hardware described in clause (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through (c);
and
(e) all rights with respect to all of the foregoing, including any
and all copyrights, licenses, options, warranties, service contracts,
program services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of the
foregoing.
"Control Agreement" means, with respect to (a) Collateral consisting of
uncertificated Capital Securities, a Subsidiary Securities Control Agreement and
(b) Collateral consisting of investment property of any other type, a securities
account control agreement.
"Copyright Collateral" means all copyrights (including all copyrights for
semiconductor chip product mask works) of each Grantor, whether statutory or
common law, registered or unregistered and whether published or unpublished, now
or hereafter in force throughout the world including all of such Grantor's
right, title and interest in and to all copyrights registered in the United
States Copyright Office or anywhere else in the world and also including the
copyrights referred to in Item A of Schedule V hereto, and registrations and
recordings thereof and all applications for registration thereof, whether
pending or in preparation, all copyright licenses, including each copyright
license referred to in Item B of Schedule V hereto, the right to xxx for past,
present and future infringements of any of the foregoing thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
"Credit Agreement" is defined in the second recital.
"Deposit Account" means a demand, time, savings, passbook or other account
maintained with a bank, savings and loan association, credit union or other
financial institution (each, a "Depositary").
"Deposit Account Agreement" means an agreement, substantially in the form
of the Restricted Account Agreement, dated on or about October 15, 2002, among
the Company, the Lender Agent (as of such date), the Collateral Agent and Xxxxx
Fargo Bank, National Association.
"Distributions" means all non-cash dividends paid on Capital Securities,
liquidating dividends paid on Capital Securities, shares of Capital Securities
resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Capital Securities constituting
Collateral, but shall not include Dividends.
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"Dividends" means cash dividends and cash distributions with respect to
any Capital Securities constituting Collateral that are not a liquidating
dividend.
"Equipment" is defined in clause (d) of Section 2.1.
"Grantor" and "Grantors" are defined in the preamble.
"Indenture" is defined in the first recital.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Intercompany Note" means, with respect to any Grantor, as the payee
thereunder, a subordinated promissory note, which subordinated promissory note
evidences all intercompany loans (to the extent such loans are evidenced by a
note) which may be made from time to time by such Grantor to the Company or any
of its Subsidiaries as the maker of such subordinated promissory note, as such
subordinated promissory note, in accordance with Section 4.2.4, is amended,
modified or supplemented from time to time, together with any subordinated
promissory note of such maker taken in extension or renewal thereof or
substitution therefor.
"Intercreditor Agreement" is defined in the third recital.
"Inventory" is defined in clause (e) of Section 2.1.
"Lender Agent" is defined in the second recital.
"Lenders" is defined in the second recital.
"Master Deposit Account" means the Deposit Account of the Company to be
established and maintained with the Collateral Agent upon the occurrence of a
Specified Event.
"Material Adverse Effect" means a material adverse effect on
(a) the properties, business, prospects, operations, earnings,
assets, liabilities or condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole;
(b) the ability of any Grantor to perform its obligations under any
of the Related Documents, including the payment of any principal, premium
(if any), interest, fees, expenses or other amounts under or in respect of
any of the Related Documents; or
(c) the validity or enforceability of any of the Related Documents
or any of the rights or remedies of the Collateral Agent or any other
Secured Party under any of the Related Documents.
"Motor Vehicles" shall mean motor vehicles, tractors, trailers and other
like property, whether or not the title thereto is governed by a certificate of
title or ownership.
"Notes" is defined in the first recital.
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"Notes Issuance" is defined in the first recital.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation for
filing anywhere in the world and including each patent and patent
application referred to in Item A of Schedule III attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
clause (a);
(c) all patent licenses, including each patent license referred to
in Item B of Schedule III attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in Item A of Schedule III attached hereto, and for
breach or enforcement of any patent license, including any patent license
referred to in Item B of Schedule III attached hereto, and all rights
corresponding thereto throughout the world.
"Receivables" is defined in clause (f) of Section 2.1.
"Related Contracts" is defined in clause (f) of Section 2.1.
"Related Documents" means the Indenture, the Notes, this Security
Agreement, the Trademark Security Agreement, the Patent Security Agreement, if
any, the Copyright Security Agreement, if any, and the other Collateral
Agreements.
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means the Collateral Agent, the Trustee and the Holders.
"Securities Act" is defined in Section 6.2.
"Security Agreement" is defined in the preamble.
"Senior Security Agreement" is defined in clause (c) of Section 7.10.
"Specified Event" means (i) a Default of the nature referred to in clause
(1), (2), (7) or (8) of Section 6.01 of the Indenture or (ii) an Event of
Default.
"Subsidiary Securities Control Agreement" means a Subsidiary Securities
Control Agreement, substantially in the form of Exhibit F hereto (which provides
for the Lender Agent to have control over the Capital Securities the subject
thereof during any period that the Credit Agreement is in effect and the
Collateral Agent to have control thereafter) with such changes thereto as are
acceptable to the Collateral Agent and, the Lender Agent, executed by and among
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the applicable Grantor(s), the Collateral Agent, the Lender Agent and the issuer
of such Capital Securities, as such agreement may be amended, supplemented,
amended and restated or otherwise modified from time to time. For purposes of
this definition, "control" means control as used in Section 8-106 of the U.C.C.
(or any successor provision thereto).
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this clause (a) being collectively called a
"Trademark"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether
pending or in preparation for filing, including registrations, recordings
and applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State thereof
or any foreign country, including those referred to in Item A of Schedule
IV attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Schedule IV attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in clause (a) and (b);
(d) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clauses (a) and (b);
(e) the right to xxx third parties for past, present and future
infringements of any Trademark Collateral described in clause (a) and, to
the extent applicable, clause (b); and
(f) all proceeds of, and rights associated with, the foregoing,
including any claim by any Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, including any Trademark, Trademark
registration or Trademark license referred to in Item A and Item B of
Schedule IV attached hereto, or for any injury to the goodwill associated
with the use of any such Trademark or for breach or enforcement of any
Trademark license.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule VI attached hereto,
and including the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
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"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
SECTION 1.2. Indenture Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Security Agreement, including its
preamble and recitals, have the meanings provided in the Indenture.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or in the
Indenture or the context otherwise requires and whether or not capitalized,
terms for which meanings are provided in the U.C.C. are used in this Security
Agreement, including its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. Each Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers and transfers to the Collateral Agent
for its benefit and the ratable benefit of each other Secured Party, and hereby
grants to the Collateral Agent for its benefit and the ratable benefit of each
other Secured Party, a continuing security interest in all of such Grantor's
following property, whether tangible or intangible, whether now or hereafter
existing, owned or acquired by such Grantor, and wherever located (collectively,
the "Collateral"):
(a) all Intercompany Notes in which such Grantor has an interest
(including each Intercompany Note described in Item A of Schedule I
hereto);
(b) all interest and other payments and rights with respect to each
Intercompany Note in which such Grantor has an interest;
(c) (i) all investment property in which such Grantor has an
interest (including the Capital Securities of each issuer of such Capital
Securities described in Schedule I hereto) and (ii) all other Capital
Securities which are interests in limited liability companies or
partnerships in which such Grantor has an interest (including the Capital
Securities of each issuer of such Capital Securities described in Schedule
I hereto), in each case together with Dividends and Distributions payable
in respect of the Collateral described in the foregoing clauses (c)(i) and
(c)(ii) (provided, however, that not more than 65% of all of the Capital
Securities that are voting Capital Securities of any Foreign Subsidiary of
such Grantor shall be so pledged by such Grantor);
(d) all equipment in all of its forms of such Grantor (including all
Motor Vehicles), wherever located, including all parts thereof and all
accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor and all accessories related thereto (any
and all of the foregoing being the "Equipment");
(e) all inventory in all of its forms of such Grantor, wherever
located, including
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(i) all raw materials and work in process therefor, finished goods
thereof, and materials used or consumed in the manufacture or production
thereof,
(ii) all goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods in which
such Grantor has an interest or right as consignee), and
(iii) all goods which are returned to or repossessed by such
Grantor,
and all accessions thereto, products thereof and documents therefor (any
and all such inventory, materials, goods, accessions, products and
documents being the "Inventory");
(f) all accounts, contracts, contract rights, chattel paper,
documents, instruments, promissory notes and general intangibles
(including tax refunds and payment intangibles) of such Grantor, whether
or not arising out of or in connection with the sale or lease of goods or
the rendering of services, and all rights of such Grantor now or hereafter
existing in and to all security agreements, guaranties, leases and other
contracts securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, documents, instruments, promissory notes,
general intangibles and payment intangibles (all of the foregoing being
the "Receivables", and any and all such security agreements, guaranties,
leases and other contracts being the "Related Contracts");
(g) all Deposit Accounts of such Grantor (including the Master
Deposit Account in the case where such Grantor is the Company) and all
cash, checks, drafts, notes, bills of exchange, money orders and other
like instruments, if any, now owned or hereafter acquired, held therein
(or in sub-accounts thereof) and all certificates and instruments, if any,
from time to time representing or evidencing such investments, and all
interest, earnings and proceeds in respect thereof;
(h) all Intellectual Property Collateral of such Grantor;
(i) all of such Grantor's letter of credit rights;
(j) all commercial tort claims in which such Grantor has rights
(including as a plaintiff);
(k) all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this
Section;
(l) all of such Grantor's other property and rights of every kind
and description and interests therein; and
(m) all products, offspring, rents, issues, profits, returns,
income, supporting obligations and proceeds of and from any and all of the
foregoing Collateral (including proceeds which constitute property of the
types described in clauses (a) through (j), proceeds deposited from time
to time in any lock box or Deposit Account of such Grantor (including the
Master Deposit Account in the case where such Grantor is the Company),
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and, to the extent not otherwise included, all payments under insurance
(whether or not the Collateral Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights described in clause (f) above arising under any
contracts, instruments, licenses or other documents described in such clause as
to which the grant of a security interest would constitute a violation of a
valid and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained. Each Grantor
agrees to use its best efforts to obtain any such required consent. In addition,
"Collateral" shall not include any trademark applications based on intent to
use, until such time as those applications are converted to a use based
application or the xxxx is registered.
SECTION 2.2. Security for Obligations. This Security Agreement secures the
payment of all Obligations of the Company now or hereafter existing under the
Indenture, the Notes and each other Related Document to which the Company is or
may become a party, whether for principal, interest, costs, fees, expenses or
otherwise, and all Obligations of each other Grantor now or hereafter existing
under its Guarantee, this Security Agreement and each other Related Document to
which such other Grantor is or may become a party (all such obligations of the
Company and each other Grantor being the "Secured Obligations").
SECTION 2.3. Delivery of Certificated Securities and Intercompany Notes.
At all times during which the Credit Agreement is not in effect, all Collateral
comprised of Intercompany Notes and certificated Capital Securities shall be
delivered to and held by or on behalf of (and, in the case of the Intercompany
Notes, endorsed to the order of) the Collateral Agent pursuant hereto, shall be
in suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank.
SECTION 2.4. Dividends on Securities and Payments on Intercompany Notes.
At all times during which the Credit Agreement is not in effect, in the event
that any Dividend is to be paid on any security that constitutes Collateral or
any payment of principal or interest is to be made on any Intercompany Note at a
time when no Specified Event has occurred and is continuing or would result
therefrom, such Dividend or payment may be paid directly to the applicable
Grantor. At all times during which the Credit Agreement is not in effect, if any
such Specified Event has occurred and is continuing, then any such Dividend or
payment shall be paid directly to the Collateral Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Notes. This
Security Agreement shall create a continuing security interest in the Collateral
and shall
(a) remain in full force and effect until payment in full in cash of
all Secured Obligations,
(b) be binding upon each Grantor, its successors, transferees and
assigns, and
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(c) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and each other
Secured Party.
Without limiting the generality of the foregoing clause (c), any Holder may
assign or otherwise transfer (in whole or in part) any Note held by it to any
other Person, and such other Person shall thereupon become vested with all the
rights and benefits in respect thereof granted to such Holder under any Related
Document (including this Security Agreement) or otherwise, subject, however, to
any contrary provisions in such assignment or transfer, and to the provisions of
Section 2.14 and 2.15 of the Indenture. Upon the payment in full in cash of all
Secured Obligations, the security interest granted herein shall terminate and
all rights to the Collateral shall revert to such Grantor. Upon any such
termination, the Collateral Agent will, at such Grantor's sole expense, execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination. Upon (i) the sale, transfer or other
disposition of Collateral in accordance with Section 4.16 of the Indenture or
(ii) the payment in full in cash of all Secured Obligations, the security
interests granted herein shall automatically terminate with respect to (x) such
Collateral (in the case of clause (i)) or (y) all Collateral (in the case of
clause (ii)). Upon any such sale, transfer, disposition or termination, the
Collateral Agent will, at such Grantor's sole expense, deliver to such Grantor,
without any representations, warranties or recourse of any kind whatsoever, all
applicable certificated securities and all applicable Intercompany Notes,
together with all other applicable Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination (including such
documents as such Grantor shall reasonably request to remove the notation of the
Collateral Agent as lienholder on any certificate of title for any applicable
Motor Vehicle).
SECTION 2.6. Grantors Remain Liable. Anything herein to the contrary
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and
shall perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not been
executed,
(b) the exercise by the Collateral Agent of any of its rights
hereunder shall not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral, and
(c) neither the Collateral Agent nor any other Secured Party shall
have any obligation or liability under any such contracts or agreements
included in the Collateral by reason of this Security Agreement, nor shall
the Collateral Agent or any other Secured Party be obligated to perform
any of the obligations or duties of any Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 2.7. Security Interest Absolute. This Security Agreement shall in
all respects be a continuing, absolute, unconditional and irrevocable grant of
security interest, and shall remain in full force and effect until all of the
Secured Obligations have been paid in full. All rights of the Collateral Agent
and the security interests granted to the Collateral Agent (for its
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benefit and the ratable benefit of each other Secured Party) hereunder, and all
obligations of each Grantor hereunder, shall be absolute, unconditional and
irrevocable, irrespective of
(a) any lack of validity, legality or enforceability of the
Indenture, any Note or any other Related Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any right or
remedy against the Company, any other Grantor or any other Person
under the provisions of the Indenture, any Note, any other Related
Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor of, or collateral securing, any Secured Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligations;
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to
(and each Grantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Secured Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification of,
or any consent to or departure from, any of the terms of the Indenture,
any Note or any other Related Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver
or release of or addition to, or consent to, or departure from, any
guaranty, for any of the Secured Obligations; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Company,
any other Grantor, any surety or any guarantor.
SECTION 2.8. Postponement of Subrogation, etc. Each Grantor hereby agrees
that it will not exercise any rights which it may acquire by reason of any
payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the prior payment in full in cash of all Secured Obligations.
Any amount paid to any Grantor on account of any payment made hereunder prior to
the payment in full in cash of all Secured Obligations shall be held in trust
for the benefit of the Secured Parties and shall immediately be paid to the
Secured Parties and credited and applied against the Secured Obligations,
whether matured or unmatured, in accordance with the terms of the Indenture;
provided, however, that if
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(a) such Grantor has made payment to the Secured Parties of all or
any part of the Secured Obligations, and
(b) all Secured Obligations have been paid in full in cash,
each Secured Party agrees that, at the requesting Grantor's request, the Secured
Parties will execute and deliver to such Grantor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to such Grantor of an interest in the Secured
Obligations resulting from such payment by such Grantor. In furtherance of the
foregoing, for so long as any Secured Obligations remain outstanding, each
Grantor shall refrain from taking any action or commencing any proceeding
against the Company or any other Grantor (or its successors or assigns, whether
in connection with a bankruptcy proceeding or otherwise) to recover any amounts
in respect of payments made under this Security Agreement to any Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Each Grantor represents and
warrants to each Secured Party insofar as the representations and warranties
contained herein are applicable to such Grantor and its properties, as set forth
in this Article III.
SECTION 3.2. As to Capital Securities of Subsidiaries. With respect to any
Subsidiary of any Grantor that is
(a) a corporation, business trust, joint stock company or similar
Person, all Capital Securities issued by such Subsidiary are duly
authorized and validly issued, fully paid and non-assessable, and
represented by a certificate; and
(b) a partnership or limited liability company, all Capital
Securities issued by such Subsidiary that constitute Collateral (i) (A)
are dealt in or traded on securities exchanges or in securities markets,
(B) expressly provide that such Capital Securities are securities governed
by Article 8 of the U.C.C. or (C) are held in a securities account and are
subject to the "control" (as defined in Section 8-106 of the U.C.C.) of
the Collateral Agent and (ii) are uncertificated.
The percentage of the issued and outstanding Capital Securities of each
Subsidiary pledged by any Grantor hereunder are as set forth in Schedule I
hereto.
SECTION 3.3. As to Intercompany Notes. In the case of each Intercompany
Note, all of such Intercompany Notes have been duly authorized, executed,
endorsed, issued and delivered, and are the legal, valid and binding obligation
of the issuers thereof, and are not in default.
SECTION 3.4. Grantor Name, Location, etc. The jurisdiction in which each
Grantor is located for purposes of Sections 9-301 and 9-307 of the U.C.C. is set
forth in Item A of Schedule
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II hereto. Prior to July 1, 2001 (or October 1, 2001 if the location is
Connecticut and January 1, 2002 if the location is Alabama, Florida or
Mississippi), set forth in Item B of Schedule II is each location a secured
party would have filed a Uniform Commercial Code financing statement to perfect
a security interest in Equipment, Inventory and general intangibles owned by
each Grantor. No Grantor has any trade names other than those set forth in Item
C of Schedule II hereto. During the four months preceding the date hereof, no
Grantor has been known by any legal name different from the one set forth on the
signature page hereto, nor has such Grantor been the subject of any merger or
other corporate reorganization, except as set forth in Item D of Schedule II
hereto. The name set forth on the signature page is the true and correct name of
such Grantor. Each Grantor's federal taxpayer identification number is (and,
during the four months preceding the date hereof, such Grantor has not had a
federal taxpayer identification number different from that) set forth in Item E
of Schedule II hereto. If the Collateral of any Grantor includes any Inventory
located in the State of California, such Grantor is not a "retail merchant"
within the meaning of Section 9102 of the California U.C.C. No Grantor is a
party to any federal, state or local government contract except as set forth in
Item F of Schedule II hereto. No Grantor maintains any Deposit Accounts with any
Person except as set forth in Item G of Schedule II hereto.
SECTION 3.5. Ownership, No Liens, etc. Such Grantor owns its Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Security Agreement and except (a) in the
case of Collateral not consisting of Capital Securities and Intercompany Notes,
as permitted by Section 4.18 of the Indenture and (b) in the case of Collateral
consisting of Capital Securities and Intercompany Notes for so long as any
credit extensions or commitments are outstanding under the Credit Agreement, the
prior Lien of the Lender Agent. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Collateral Agent relating to this Security Agreement or as have been filed in
connection with Liens permitted pursuant to Section 4.18 of the Indenture or as
to which a duly executed termination statement relating to such financing
statement or other instrument has been delivered to the Collateral Agent on the
Closing Date.
SECTION 3.6. Possession and Control. Each Grantor agrees that it will
maintain exclusive possession of its goods, instruments, promissory notes and
Inventory, other than (a) Inventory in transit in the ordinary course of
business, (b) Inventory which is in the possession or control of a warehouseman,
bailee agent or other Person (other than a Person controlled by or under common
control with such Grantor) that has been notified of the security interest
created in favor of the Secured Parties pursuant to this Security Agreement, and
has agreed to hold such Inventory subject to the Secured Parties' Lien and waive
any Lien held by it against such Inventory (provided that each applicable
Grantor shall have 60 days from the date hereof to provide such notice and
obtain such agreement and waiver with respect to Inventory (other than Inventory
having an aggregate book value of less than $100,000) that is held by any
warehouseman, bailee agent or such other Person as of the date hereof) and (c)
instruments or promissory notes that have been delivered to the Collateral Agent
or Lender Agent pursuant to Section 3.7.
SECTION 3.7. Negotiable Documents, Instruments and Chattel Paper. Each
Grantor has, contemporaneously herewith, delivered to the Collateral Agent or
the Lender Agent
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possession of all originals of all negotiable documents, instruments and chattel
paper currently owned or held by such Grantor (duly endorsed in blank).
SECTION 3.8. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
would reasonably be expected to have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and enforceable;
(c) such Grantor has made all necessary filings and recordations to
protect its interest in such Intellectual Property Collateral, including
recordations of all of its interests in the Patent Collateral, if any, and
Trademark Collateral in the United States Patent and Trademark Office and
in corresponding offices in countries in which the failure to so file
and/or record could reasonably have a Material Adverse Effect and its
claims to the Copyright Collateral, if any, in the United States Copyright
Office and in corresponding offices in countries in which the failure to
so file and/or record could reasonably have a Material Adverse Effect;
(d) such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted rights
of any third party; and
Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in and necessary for or of importance to the conduct of such Grantor's
business.
SECTION 3.9. Validity, etc. This Security Agreement creates a valid
continuing security interest in the Collateral securing the payment of the
Secured Obligations, and
(a) in the case of Collateral comprised of certificated securities
or instruments (including certificated Capital Securities and Intercompany
Notes), upon the delivery of such Collateral to the Collateral Agent, such
security interest will be a valid first priority perfected security
interest;
(b) in the case of Collateral comprised of uncertificated Capital
Securities, upon the execution and delivery of a Subsidiary Securities
Control Agreement by the applicable Grantor and issuer of such
uncertificated Capital Securities, the filing of the Uniform Commercial
Code financing statements delivered by the Grantor having an interest in
such Collateral to the Collateral Agent with respect to such Collateral
and the termination of the Liens securing the Credit Agreement, such
security interest will be a valid first priority perfected security
interest;
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(c) in the case of Collateral comprised of investment property
(other than Capital Securities and certificated securities), upon the
Collateral Agent obtaining "control" (as defined in Section 8-106 of the
U.C.C., as such term relates to investment property (other than
certificated securities)) of such Collateral, the filing of the Uniform
Commercial Code financing statements delivered by the Grantor having an
interest in such Collateral to the Collateral Agent with respect to such
Collateral and the termination of the Liens securing the Credit Agreement,
such security interest will be a valid first priority perfected security
interest;
(d) in the case of Collateral comprised of Motor Vehicles, upon (i)
the recordation or notation of the Collateral Agent's Lien on the
certificates of title or ownership in respect of such Motor Vehicles and
(ii) the filing of the Uniform Commercial Code financing statements
delivered by the Grantor having an interest in such Motor Vehicles to the
Collateral Agent with respect to such Collateral, such security interest
will be a valid first priority perfected security interest;
(e) in the case of all other Collateral, upon the filing in the
jurisdiction of incorporation or formation of the applicable Grantor
Uniform Commercial Code financing statements delivered by such Grantor to
the Collateral Agent with respect to such Collateral, such security
interest will be a valid first priority perfected security interest
(except to the extent a Uniform Commercial Code financing statement was
previously filed in connection with Liens permitted pursuant to Section
4.18 of the Indenture and such financing statement remains effective in
respect of such Collateral).
Each Grantor has executed and provided the Collateral Agent with all of the
Uniform Commercial Code financing statements referred to above for filing by CT
Corporation Systems with the appropriate offices therefor and has taken or (in
the cases described in the foregoing clauses (a), (b) and (c)) will take,
promptly upon termination of the Liens securing the Credit Agreement, all of the
other actions referred to above necessary to create perfected, first-priority
security interests in the applicable Collateral other than the actions described
in clause (d)(i) above with respect to Motor Vehicles (A) having a fair market
value of less than $50,000 and (B) owned as of the date hereof having a fair
market value of at least $50,000 for which the applicable Grantor shall have 45
days to complete.
SECTION 3.10. Authorization, Approval, etc. Except as described in Section
3.9 or such as have been obtained or made and are in full force and effect, no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either
(a) for the grant by such Grantor of the security interest granted
hereby, the pledge by such Grantor of any Collateral pursuant hereto or
for the execution, delivery and performance of this Security Agreement by
such Grantor,
(b) for the perfection of or the exercise by the Collateral Agent of
its rights and remedies hereunder, or
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(c) for the exercise by the Collateral Agent of the voting or other
rights provided for in this Security Agreement, or, except with respect to
any Capital Securities issued by a Subsidiary of such Grantor, as may be
required in connection with a disposition of such Capital Securities by
laws affecting the offering and sale of securities generally, the remedies
in respect of the Collateral pursuant to this Security Agreement.
SECTION 3.11. Compliance with Laws. Such Grantor is in compliance with the
requirements of all applicable laws (including the provisions of the Fair Labor
Standards Act), rules, regulations and orders of every governmental authority,
the non-compliance with which could reasonably be expected to have a Material
Adverse Effect or which could reasonably be expected to materially adversely
affect the value of the Collateral or the worth of the Collateral as collateral
security.
ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. Each Grantor covenants and agrees that, so
long as any portion of the Secured Obligations shall remain unpaid, such Grantor
will, unless the Holder or Holders of at least a majority in aggregate principal
amount of the outstanding Notes shall otherwise consent in writing, perform,
comply with and be bound by the obligations set forth in this Article IV.
SECTION 4.2. As to Investment Property and Intercompany Notes; Etc.
SECTION 4.2.1. Capital Securities of Subsidiaries. No Grantor will allow
any of its Subsidiaries that is
(a) a corporation, business trust, joint stock company or similar
Person, to issue uncertificated securities; and
(b) a partnership or limited liability company, to issue Capital
Securities that are not uncertificated securities.
SECTION 4.2.2. Investment Property (other than Certificated Securities).
With respect to any investment property (including uncertificated Capital
Securities but excluding certificated Securities) of such Grantor constituting
Collateral, such Grantor shall (a) cause a Control Agreement relating to such
investment property to be executed and delivered in favor of the Collateral
Agent and (b) deliver Uniform Commercial Code financing statements which when
filed will result in the Collateral Agent having a first priority perfected
security interest in such investment property during any period that the Credit
Agreement is not in effect.
SECTION 4.2.3. Stock Powers, etc. Such Grantor agrees that if at time the
Credit Agreement shall not be in effect, all certificated securities
constituting Collateral delivered by such Grantor pursuant to this Security
Agreement will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Collateral
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Agent. During such time as the Credit Agreement shall not be in effect, such
Grantor will, from time to time upon the request of the Collateral Agent,
promptly deliver to the Collateral Agent such stock powers, instruments, and
similar documents, satisfactory in form and substance to the Collateral Agent,
with respect to such Collateral as the Collateral Agent may reasonably request
and will, from time to time upon the request of the Collateral Agent after the
occurrence of any Specified Event, promptly transfer any securities constituting
Collateral into the name of any nominee designated by the Collateral Agent.
SECTION 4.2.4. Continuous Pledge. Such Grantor will, at all times, keep
pledged to the Collateral Agent pursuant hereto on a first priority (or other
priority as provided herein and in the Intercreditor Agreement) perfected basis
all investment property constituting Collateral, all Dividends and Distributions
with respect thereto, all Intercompany Notes, all interest, principal and other
proceeds received by the Collateral Agent with respect to the Intercompany
Notes, and all other Collateral and other securities, instruments, proceeds, and
rights from time to time received by or distributable to such Grantor in respect
of any of the foregoing Collateral and will not permit any Subsidiary of such
Grantor to issue any securities which shall not have been immediately duly
pledged hereunder on a first priority perfected basis.
SECTION 4.2.5. Voting Rights; Dividends, etc. Such Grantor agrees that,
during any period that the Credit Agreement is not in effect:
(a) after any Specified Event shall have occurred and be continuing,
promptly upon receipt of notice thereof by such Grantor and without any
request therefor by the Collateral Agent, unless otherwise required to
make such delivery to the Lender Agent pursuant to the Credit Agreement,
to deliver (properly endorsed where required hereby or requested by the
Collateral Agent) to the Collateral Agent all Dividends, Distributions,
all interest, all principal, all other cash payments, and all proceeds of
the Collateral, all of which shall be held by the Collateral Agent as
additional Collateral for use in accordance with clause (b) of Section
6.1; and
(b) after any Specified Event shall have occurred and be continuing
and the Collateral Agent has notified such Grantor of the Collateral
Agent's intention to exercise its voting power under this Section 4.2.5(b)
(i) the Collateral Agent may exercise (to the exclusion of
such Grantor) the voting power and all other incidental rights of
ownership with respect to any securities or other investment
property constituting Collateral and such Grantor hereby grants the
Collateral Agent an irrevocable proxy, exercisable under such
circumstances, to vote such securities and such other Collateral;
and
(ii) promptly to deliver to the Collateral Agent such
additional proxies and other documents as may be necessary to allow
the Collateral Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, payment
intangibles and proceeds which may at any time and from time to time be held by
such Grantor but which such Grantor is then obligated to deliver to the
Collateral Agent, shall, until delivery to the Xxxxxxxxxx
00
Xxxxx, xx held by such Grantor separate and apart from its other property in
trust for the Collateral Agent. The Collateral Agent agrees that unless a
Specified Event shall have occurred and be continuing and the Collateral Agent
shall have given the notice referred to in Section 4.2.5(b), such Grantor shall
have the exclusive voting power with respect to any securities constituting
Collateral and the Collateral Agent shall, upon the written request of such
Grantor, promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by such Grantor which are necessary to allow such Grantor
to exercise that voting power; provided, however, that no vote shall be cast, or
consent, waiver, or ratification given, or action taken by such Grantor that
would impair any such Collateral or be inconsistent with or violate any
provision of the Indenture or any other Related Document (including this
Security Agreement).
SECTION 4.2.6. Amendment of Organic Documents. Such Grantor will not
amend, supplement or otherwise modify, or permit, consent or suffer to occur any
amendment, supplement or modification of any terms or provisions contained in,
or applicable to, any Organic Document of any issuer of any Capital Security
comprising the Collateral in which it has an equity interest if the effect
thereof is to impair, or is in any manner adverse to, the rights or interests of
the Collateral Agent or any other Secured Party hereunder or under the Indenture
or any other Related Document, without the prior written consent of the
Collateral Agent and the Holder or Holders of at least a majority in aggregate
principal amount of the outstanding Notes. No Grantor will change its name or
place of incorporation or organization or federal taxpayer identification number
except upon 30 days' prior written notice to the Collateral Agent. If any
Grantor is organized outside of the United States, it will not change its
"location" as determined in accordance with Sections 9-301 and 9-307 of the
U.C.C. and as set forth in Item A of Schedule II hereto except upon 30 days'
prior written notice to the Collateral Agent.
SECTION 4.3. As to Receivables; Deposit Account. (a) Each Grantor shall
have the right to collect all Receivables so long as no Specified Event shall
have occurred and be continuing; provided, however, that during any period that
the Credit Agreement is not in effect such Grantor agrees to promptly deposit
all payments received by such Grantor on account of the Receivables, whether in
the form of cash, checks, drafts, notes, bills of exchange, money orders or
other like instruments or otherwise, in a Deposit Account in precisely the form
in which received (but with any endorsements of such Grantor necessary for
deposit or collection).
(b) All proceeds of Collateral received by such Grantor shall be deposited
into a Deposit Account of such Grantor, unless, during the occurrence and
continuance of a Specified Event, such Grantor is otherwise notified in writing
by the Collateral Agent. Following any such notice by the Collateral Agent to
such Grantor pursuant to this Section 4.4(c), unless otherwise so required to
make such delivery to the Lender Agent pursuant to the terms of the Credit
Agreement, all proceeds of Collateral received by such Grantor shall be
delivered in kind to the Master Deposit Account (which shall be established by
the Company with the Collateral Agent if such Master Deposit Account is not then
existing) or any other account or accounts specified by the Collateral Agent.
Proceeds of Collateral received by such Grantor shall, prior to deposit in the
Master Deposit Account or such other account or accounts specified by the
Collateral Agent, be held separate and apart from, and not commingled with, all
other property and in express trust for the benefit of the Collateral Agent
until delivery thereof is made to the Master Deposit Account or such other
account or accounts.
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(c) From and after the date that is 60 days from the date hereof, no
Grantor shall keep any funds overnight in any Deposit Account for which a
Deposit Account Agreement is not in effect to the extent such funds, when taken
together with all other funds of such Grantor and each other Grantor that are
kept overnight in Deposit Accounts for which Deposit Account Agreements are not
in effect, exceeds $100,000.
(d) During any period that the Credit Agreement is not in effect,
following and during the continuance of a Specified Event, such Grantor shall
transfer all funds out of each of its Deposit Accounts that is not the Master
Deposit Account (other than, in the aggregate, funds in all Deposit Accounts
(other than the Master Deposit Account) that do not exceed at any time $10,000)
for deposit into the Master Deposit Account at the close of business each day
or, if not commercially reasonable to do so, no less frequently than once every
five Business Days.
(e) During any period that the Credit Agreement is not in effect, the
Collateral Agent shall have the right to apply any amount in each Deposit
Account (including the Master Deposit Account) to the payment of any Secured
Obligations which are due and payable or payable upon demand or to the payment
of any Secured Obligations at any time that a Specified Event shall have
occurred and be continuing.
(f) With respect to each Deposit Account maintained with the Collateral
Agent (including the Master Deposit Account), it is hereby agreed that (i)
deposits in each such Deposit Account are subject to a security interest as
contemplated hereby, (ii) following the termination of the Credit Agreement,
each such Deposit Account shall be under the sole dominion and control of the
Collateral Agent and (iii) following the termination of the Credit Agreement,
the Collateral Agent shall have the sole right of withdrawal over each such
Deposit Account; provided, however, that, unless and until the Collateral Agent
shall notify the applicable Grantors that a Specified Event shall have occurred
and be continuing and that during the continuance thereof no such Grantor shall
withdraw any of the funds contained in any such Deposit Account (which notice
may be given by telephone if promptly confirmed in writing or by facsimile), any
such Grantor may at any time withdraw any of the funds contained in its Deposit
Account for use in any lawful manner not inconsistent with the provisions of
this Security Agreement, the Indenture or any other Related Document.
SECTION 4.4. Motor Vehicles. (a) Such Grantor shall deliver to the
Collateral Agent the original of the certificate of title or ownership listing
the Collateral Agent as lienholder for (i) any Motor Vehicle owned as of the
date hereof by such Grantor that has a fair market value of at least $50,000
within 45 days of the date hereof or (ii) at the request of the Collateral
Agent, following a Specified Event any other Motor Vehicle owned by such Grantor
within 45 days of such request.
(b) Upon the acquisition after the date hereof by such Grantor of (i) any
Motor Vehicle having a fair market value of at least $50,000 or (ii) any other
Motor Vehicle for which the Collateral Agent has requested the original of the
certificate of title or ownership thereof following a Specified Event, such
Grantor shall deliver to the Collateral Agent originals of the certificates of
title or ownership for such Motor Vehicles, together with the manufacturer's
statement of origin with the Collateral Agent listed as lienholder.
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(c) Without limiting Section 5.1, such Grantor hereby appoints the
Collateral Agent as its attorney-in-fact, effective the date hereof and
terminating upon the termination of this Security Agreement, for the purpose of
(i) executing on behalf of such Grantor title or ownership applications for
filing with appropriate state agencies to enable Motor Vehicles now owned or
hereafter acquired by such Grantor to be retitled and the Collateral Agent
listed as lienholder thereon, (ii) filing such applications with such state
agencies and (iii) executing such other documents and instruments on behalf of,
and taking such other action in the name of, such Grantor as the Collateral
Agent may deem necessary or advisable to accomplish the purposes hereof
(including, without limitation, the purpose of creating in favor of the
Collateral Agent a perfected lien on the Motor Vehicles and exercising the
rights and remedies of the Collateral Agent under Section 6.1 hereof). This
appointment as attorney-in-fact is irrevocable and coupled with an interest.
(d) Any certificates of title or ownership delivered pursuant to the terms
hereof shall be accompanied by odometer statements for each Motor Vehicle
covered thereby.
SECTION 4.5. As to Collateral. (a) Until the occurrence and continuance of
a Specified Event, and such time during any period that the Credit Agreement is
not in effect, as the Collateral Agent shall notify such Grantor of the
revocation of such power and authority such Grantor (i) may in the ordinary
course of its business (except as otherwise permitted under the Indenture), at
its own expense, sell, lease or furnish under the contracts of service any of
the Inventory normally held by such Grantor for such purpose, and use and
consume, in the ordinary course of its business (except as otherwise permitted
under the Indenture), any raw materials, work in process or materials normally
held by such Grantor for such purpose, (ii) will, at its own expense, endeavor
to collect, as and when due, all amounts due with respect to any of the
Collateral, including the taking of such action with respect to such collection
as the Collateral Agent may reasonably request following the occurrence of a
Specified Event or, in the absence of such request, as such Grantor may deem
advisable, and (iii) may grant, in the ordinary course of business (except as
otherwise permitted under the Indenture), to any party obligated on any of the
Collateral, any rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of goods, the sale
or lease of which shall have given rise to such Collateral. The Collateral
Agent, however, may, at any time following a Specified Event during any period
that the Credit Agreement is not in effect, whether before or after any
revocation of such power and authority or the maturity of any of the Secured
Obligations, notify any parties obligated on any of the Collateral to make
payment to the Collateral Agent of any amounts due or to become due thereunder
and enforce collection of any of the Collateral by suit or otherwise and
surrender, release, or exchange all or any part thereof, or compromise or extend
or renew for any period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby. Upon request of the Collateral
Agent following a Specified Event during any period that the Credit Agreement is
not in effect, such Grantor will, at its own expense, notify any parties
obligated on any of the Collateral to make payment to the Collateral Agent of
any amounts due or to become due thereunder.
(b) Following a Specified Event during any period that the Credit
Agreement is not in effect, the Collateral Agent is authorized to endorse, in
the name of such Grantor, any item, howsoever received by the Collateral Agent,
representing any payment on or other proceeds of any of the Collateral.
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SECTION 4.6. As to Intellectual Property Collateral. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor:
(a) such Grantor shall not, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Collateral Agent) that any of the Patent
Collateral is of negligible economic value to such Grantor, or (ii) have a
valid business purpose to do otherwise, do any act, or omit to do any act,
whereby any of the Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable;
(b) such Grantor shall not, and such Grantor shall not permit any of
its licensees to, unless such Grantor shall either (i) reasonably and in
good faith determine (and notice of such determination shall have been
delivered to the Collateral Agent) that any of the Trademark Collateral is
of negligible economic value to such Grantor, or (ii) have a valid
business purpose to do otherwise,
(i) fail to continue to use any of the U.S. Trademark
Collateral in order to maintain all of the U.S. Trademark Collateral
in full force free from any claim of abandonment for non-use,
(ii) fail to maintain as in the past the quality of products
and services offered under all of the Trademark Collateral in a
manner which might reasonably be expected to cause material
impairment of any such Trademark Collateral,
(iii) fail to employ all of the Trademark Collateral
registered with any Federal or state or foreign authority with an
appropriate notice of such registration,
(iv) use any of the Trademark Collateral registered with any
Federal or state or foreign authority except for the uses for which
registration or application for registration of such Trademark
Collateral has been is being or will be made, and
(v) do or permit any act or knowingly omit to do any act
whereby any of the Trademark Collateral may lapse or become invalid
or unenforceable;
(c) such Grantor shall not, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Collateral Agent) that any of the
Copyright Collateral or any of the Trade Secrets Collateral is of
negligible economic value to such Grantor, or (ii) have a valid business
purpose to do otherwise, do or permit any act or knowingly omit to do any
act whereby any of the Copyright Collateral or any of the Trade Secrets
Collateral may lapse or become invalid or unenforceable or placed in the
public domain except upon expiration of the end of an unrenewable term of
a registration thereof;
(d) such Grantor shall notify the Collateral Agent immediately if it
knows, or has reason to know, that any application or registration
relating to any material item of the
21
Intellectual Property Collateral may become abandoned or dedicated to the
public or placed in the public domain or invalid or unenforceable, or of
any 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, the United States Copyright Office or
any foreign counterpart thereof or any court) regarding such Grantor's
ownership of any of the Intellectual Property Collateral, its right to
register the same or to keep and maintain and enforce the same;
(e) in no event shall such Grantor or any of its agents, employees,
designees or licensees file an application for the registration of any
Intellectual Property Collateral with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof,
unless it promptly informs the Collateral Agent, and upon request of the
Collateral Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Collateral Agent may reasonably
request consonant with the Intercreditor Agreement to evidence the
Collateral Agent's security interest in such Intellectual Property
Collateral and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;
(f) such Grantor shall take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, to maintain and pursue
any application (and to obtain the relevant registration) filed with
respect to, and to maintain any registration of, the Intellectual Property
Collateral, including the filing of applications for renewal, affidavits
of use, affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to the
extent that dedication, abandonment or invalidation is permitted under the
foregoing clauses (a), (b) and (c)); and
(g) such Grantor shall, contemporaneously herewith, execute and
deliver to the Collateral Agent a Trademark Security Agreement in the
forms of Exhibits B hereto, respectively, and shall execute and deliver to
the Collateral Agent any other document required to acknowledge or
register or perfect the Collateral Agent's interest in any part of the
Intellectual Property Collateral.
SECTION 4.7. Insurance. Such Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Indenture and will, upon the request of the Collateral
Agent, furnish a certificate of a reputable insurance broker setting forth the
nature and extent of all insurance maintained by such Grantor in accordance with
this Section.
SECTION 4.8. Further Assurances, etc. Such Grantor agrees that, from time
to time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Collateral Agent may request, in order to perfect,
preserve and protect any security interest granted or purported to be granted
hereby or to enable the Collateral Agent to exercise and enforce its rights and
remedies
22
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, such Grantor will
(a) xxxx conspicuously each document included in the Inventory, each
chattel paper included in the Receivables and each Related Contract and,
at the request of the Collateral Agent, each of its records pertaining to
the Collateral with a legend, in form and substance satisfactory to the
Collateral Agent, indicating that such document, chattel paper, Related
Contract or Collateral is subject to the security interest granted hereby;
(b) following the termination of the Credit Agreement, if any
Receivable shall be evidenced by a promissory note or other instrument,
negotiable document or chattel paper, deliver and pledge to the Collateral
Agent hereunder such promissory note, instrument, negotiable document or
chattel paper duly endorsed and accompanied by duly executed instruments
of transfer or assignment, all in form and substance satisfactory to the
Collateral Agent;
(c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices (including any
assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. Section 3726, any successor or amended version
thereof or any regulation promulgated under or pursuant to any version
thereof), as may be necessary or desirable, or as the Collateral Agent may
request, in order to perfect and preserve the security interests and other
rights granted or purported to be granted to the Collateral Agent hereby;
(d) not enter into any agreement amending, supplementing, or waiving
any provision of any Intercompany Note (including any underlying
instrument pursuant to which such Intercompany Note is issued) or
compromising or releasing or extending the time for payment of any
obligation of the maker thereof;
(e) promptly execute and deliver all further instruments, and take
all further action, that may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to
enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral;
(f) cause the Collateral Agent to be listed as the lienholder on the
certificate of title or ownership relating to (i) any Motor Vehicle owned
by such Grantor that has a fair market value of at least $50,000 or (ii)
at the request of the Collateral Agent, any other Motor Vehicle owned by
such Grantor;
(g) not take or omit to take any action the taking or the omission
of which would result in any impairment or alteration of any obligation of
the maker of any Intercompany Note or other instrument constituting
Collateral;
(h) furnish to the Collateral Agent, from time to time at the
Collateral Agent's request, statements and schedules further identifying
and describing the Collateral and such other reports in connection with
the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail;
23
(i) do all things reasonably requested by the Collateral Agent in
order to enable the Collateral Agent to have control (as such term is
defined in Article 8 and Article 9 of any applicable Uniform Commercial
Code relevant to the creation, perfection or priority of Collateral
consisting of investment property, deposit accounts, electronic chattel
paper and letter of credit rights) over any Collateral; and
(j) notify the Collateral Agent if such Grantor reasonably believes
it is entitled to recover a commercial tort claim the value of which is in
excess of $50,000 and such Grantor take all such action reasonably
requested by the Collateral Agent to grant to the Collateral Agent and
perfect a security interest in such commercial tort claim.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral. Each Grantor agrees that a carbon, electronic,
photographic or other reproduction of this Security Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the Collateral
Agent's discretion, following the occurrence and continuation of a Specified
Event, to take any action and to execute any instrument which the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Security Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights
of the Collateral Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of such Grantor hereunder
(including all obligations of such Grantor pursuant to Section 4.10).
24
Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest;
provided, however, that notwithstanding anything to the contrary contained in
this Agreement, the Collateral Agent shall not exercise and shall have no duty
to exercise, any of the powers set forth in this Section, except in accordance
with the Intercreditor Agreement.
SECTION 5.2. Collateral Agent May Perform. If any Grantor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor pursuant to
Section 6.4.
SECTION 5.3. Collateral Agent Has No Duty. In addition to, and not in
limitation of, Section 2.6, the powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to
any investment property constituting Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as any Grantor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Specified Event, but failure of the Collateral Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property. Except as expressly
provided herein to the contrary, in no event will the Collateral Agent have any
liability under this Security Agreement or otherwise except for its own gross
negligence or willful misconduct.
SECTION 5.5. Other Duties and Rights of the Collateral Agent.
(a) The Collateral Agent shall not be liable for interest on any
money or assets received by it except as the Collateral Agent may agree in
writing with the Company. Assets held in trust by the Collateral Agent
need not be segregated from other assets except to the extent required by
law.
(b) The Collateral Agent may rely and shall be fully protected in
acting or refraining from acting upon any document reasonably believed by
it to be genuine and to
25
have been signed or presented by the proper Person. The Collateral Agent need
not investigate any fact or matter stated in any document.
(c) Before the Collateral Agent acts or refrains from acting, it may
consult with counsel and may require an officers' certificate or an
opinion of counsel, or both, at the expense of the Grantors. The
Collateral Agent shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(d) The Collateral Agent may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(e) The Collateral Agent shall not be liable for any action that it
takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers under this Security Agreement.
(f) The Collateral Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, notice, request, direction,
consent, order, bond, debenture, or other paper or document, but the
Collateral Agent, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit and, if the
Collateral Agent shall determine to make such further inquiry or
investigation, it shall be entitled, upon reasonable notice to the
Company, to examine the books, records and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys. Except as expressly stated herein to the contrary, in no event
shall the Collateral Agent have any responsibility to ascertain whether
there has been compliance with any of the covenants or provisions of the
Security Agreement.
(g) The Collateral Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Security Agreement at the
request, order or direction of the Trustee or any of the Holders pursuant
to the provisions of this Security Agreement unless such Holders shall
have offered to the Collateral Agent security or indemnity reasonably
satisfactory to the Collateral Agent against the costs, expenses and
liabilities which may be incurred by it in compliance with such request,
order or direction.
(h) The Collateral Agent shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
SECTION 5.6. Replacement of Collateral Agent.
(a) The Collateral Agent may resign upon 30 days prior notice by so
notifying the Company and the Trustee. The Trustee may remove the
Collateral Agent upon 30 days prior notice by so notifying the Company,
and, in such event, the Trustee and the Company shall appoint a successor
Collateral Agent. Either the Trustee or the Company may remove the
Collateral Agent if:
(i) the Collateral Agent is adjudged bankrupt or insolvent;
26
(ii) a receiver or other public officer takes charge of the
Collateral Agent or its property; or
(iii) the Collateral Agent becomes incapable of acting.
(b) If the Collateral Agent resigns or is removed or if a vacancy
exists in the office of Collateral Agent for any reason, the Trustee and
the Company shall notify each Holder of such event and shall promptly
appoint a successor Collateral Agent.
(c) A successor Collateral Agent shall deliver a written acceptance
of its appointment to the retiring Collateral Agent and to the Company.
Immediately after that, the retiring Collateral Agent shall transfer all
property held by it as Collateral Agent to the successor Collateral Agent,
subject to the lien provided in Section 7.07 of the Indenture, 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 Security Agreement.
(d) 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, the Trustee or the Company may petition any
court of competent jurisdiction for the appointment of a successor
Collateral Agent.
(e) Notwithstanding any resignation or replacement of the Collateral
Agent pursuant to this Section, each Grantor's obligations under Section
6.4 shall continue for the benefit of the retiring Collateral Agent.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Specified Event shall have occurred
and be continuing then, subject in all respects to the requirements and
limitations provided in the Intercreditor Agreement:
(a) The Collateral Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may
(i) require each Grantor to, and such Grantor hereby agrees
that it will, at its expense and upon request of the Collateral
Agent forthwith, assemble all or part of the Collateral as directed
by the Collateral Agent and make it available to the Collateral
Agent at a place to be designated by the Collateral Agent which is
reasonably convenient to both parties, and
27
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other
terms as the Collateral Agent may deem commercially reasonable. Each
Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten days' prior notice to such Grantor of the time
and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned. Each Grantor hereby waives any claims
against the Collateral Agent arising by reason of the fact that the
price at which any Collateral may have been sold at any private sale
was less than the price which might have been obtained at a public
sale, even if the Collateral Agent accepts the first offer received
and does not offer such Collateral to more than one offeree. The
Collateral Agent may sell the Collateral without giving any
warranties as to the Collateral. The Collateral Agent may
specifically disclaim or modify any warranties of title or the like.
This procedure will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral. The
Collateral Agent shall have no obligation to marshal any of the
Collateral.
(b) All cash proceeds received by the Collateral Agent in respect of
any sale of, collection from, or other realization upon, all or any part
of the Collateral shall be applied by the Collateral Agent against, all or
any part of the Secured Obligations as follows:
(i) first, to the payment of any amounts payable to the
Collateral Agent pursuant to Sections 6.08 and 7.07 of the Indenture
and Section 6.4;
(ii) second, to the equal and ratable payment of Secured
Obligations, in accordance with each Secured Party's Secured
Obligations owing to it under or pursuant to the Indenture or any
other Related Document, applied
(A) first to fees and expense reimbursements then due to
such Secured Party,
(B) then to interest due to such Secured Party, and
(C) then to pay the remaining outstanding Secured
Obligations; and
(iii) fourth, to be held as additional collateral security
until the payment in full in cash of all of the Secured Obligations,
after which such remaining cash proceeds shall be paid over to the
applicable Grantor or to whomsoever may be lawfully entitled to
receive such surplus.
(c) The Collateral Agent may
28
(i) transfer all or any part of the Collateral into the name
of the Collateral Agent or its nominee, with or without disclosing
that such Collateral is subject to the lien and security interest
hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Collateral Agent of any amount due or to become
due thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any obligations of any nature
of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in such
Grantor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of such Grantor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION 6.2. Securities Laws. Subject in all respects to the requirements
and limitations provided in the Intercreditor Agreement, if the Collateral Agent
shall determine to exercise its right to sell all or any of the Collateral
pursuant to Section 6.1, each Grantor agrees that, upon request of the
Collateral Agent, such Grantor will, at its own expense:
(a) execute and deliver, and cause (or, with respect to any issuer
which is not a Subsidiary of such Grantor, use its best efforts to cause)
each issuer of the Collateral contemplated to be sold and the directors
and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as
may be necessary or, in the opinion of the Collateral Agent, advisable to
register such Collateral under the provisions of the Securities Act of
1933, as from time to time amended (the "Securities Act"), and to cause
the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Collateral
Agent;
(c) cause (or, with respect to any issuer which is not a Subsidiary
of such Grantor, use its best efforts to cause) each such issuer to make
available to its security holders, as soon as practicable, an earnings
statement that will satisfy the provisions of Section 11(a) of the
Securities Act; and
29
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
Each Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Collateral Agent or the Secured Parties
by reason of the failure by any Grantor to perform any of the covenants
contained in this Section and, consequently, agrees that, if such Grantor shall
fail to perform any of such covenants, it shall pay, as liquidated damages and
not as a penalty, an amount equal to the value (as determined by the Collateral
Agent) of the Collateral on the date the Collateral Agent shall demand
compliance with this Section.
SECTION 6.3. Compliance with Restrictions. Each Grantor agrees that in any
sale of any of the Collateral whenever a Specified Event shall have occurred and
be continuing, the Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and such Grantor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Collateral Agent be liable nor accountable to
such Grantor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.
SECTION 6.4. Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to indemnify the
Collateral Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Security Agreement
(including enforcement of this Security Agreement), except claims, losses
or liabilities resulting from the Collateral Agent's gross negligence or
willful misconduct.
(b) Each Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the
Collateral Agent may incur in connection with
(i) the administration of this Security Agreement,
(ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any of the
Collateral,
(iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the Secured Parties hereunder, and
30
(iv) the failure by any Grantor to perform or observe any of
the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Related Document. This Security Agreement is a Related
Document executed pursuant to the Indenture and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the provisions Section 1.04 thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any provision
of this Security Agreement nor consent to any departure by any Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Collateral Agent (on behalf of (x) the Holders or (y) the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Notes, as the case may be), and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 7.3. Protection of Collateral. The Collateral Agent may from time
to time, at its option, perform any act which each Grantor agrees hereunder to
perform and which such Grantor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of a Specified Event) and the
Collateral Agent may from time to time take any other action which the
Collateral Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and, if to any Grantor, mailed or telecopied or delivered to it, addressed to it
in care of the Company at the address of the Company specified in the Indenture,
if to the Collateral Agent, mailed or telecopied or delivered to it, addressed
to it at the address of the Collateral Agent specified in the Indenture. All
such notices and other communications, when mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any such notice or communication, if
transmitted by telecopier, shall be deemed given when transmitted and
electronically confirmed.
SECTION 7.5. Additional Grantors. Upon the execution and delivery by any
other Person of an instrument in the form of Annex I hereto, such Person shall
become a "Grantor" hereunder with the same force and effect as if originally
named as a Grantor herein. The execution and delivery of any such instrument
shall not require the consent of any other Grantor hereunder. The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Security
Agreement.
SECTION 7.6. Section Captions. Section captions used in this Security
Agreement are for convenience of reference only, and shall not affect the
construction of this Security Agreement.
31
SECTION 7.7. Severability. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.
SECTION 7.8. Counterparts. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.9. Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK. THIS SECURITY AGREEMENT AND THE OTHER RELATED DOCUMENTS CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH
RESPECT THERETO.
SECTION 7.10. Intercreditor Agreement.
(a) In case of any conflict or inconsistency between this Security
Agreement and the Intercreditor Agreement or with respect to the rights and
obligations of the parties prior to enforcement and the conditions and terms on
which security interests may be enforced, the Intercreditor Agreement shall
control; provided, however, that the terms of the Intercreditor Agreement shall
not increase the obligations of, or adversely affect any rights, of any Grantor,
in each case under this Security Agreement.
(b) Not in limitation but in furtherance of the foregoing, any provision
of this Security Agreement that provides for the Collateral Agent to have
"control" of any Collateral consisting of investment property for purposes of
Article 8 or 9 of the U.C.C. shall be deemed satisfied if the Lender Agent shall
have control of such Collateral (including, in the case of any such Collateral
consisting of certificated securities by the delivery of such Collateral to the
Lender Agent) so long as the conditions described in Section 9-314(c) of the
U.C.C. shall not be satisfied prior to the Collateral Agent obtaining control of
any such Collateral following the relinquishment of such control by the Lender
Agent unless the Lien of the Collateral Agent in such Collateral is terminated
or released in accordance with the terms hereof or the Intercreditor Agreement.
(c) Prior to the termination of the Credit Agreement, in the event that
any obligation of a Grantor conflicts with an obligation of such Grantor under
the Collateral Documents executed pursuant to (and as defined in) the Credit
Agreement, such Grantor will first comply with its
32
obligation under such Collateral Documents, and then, to the extent possible,
comply with its obligations hereunder.
(d) Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Collateral Agent pursuant to this Security Agreement and
the exercise of any right or remedy by the Collateral Agent hereunder, in each
case in respect of any collateral constituting Noteholder Common Collateral (as
defined in the Intercreditor Agreement described below) are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and this Security Agreement, the terms
of the Intercreditor Agreement shall govern.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
33
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed, all as of the date first written above.
GOLFSMITH INTERNATIONAL, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH INTERNATIONAL HOLDINGS, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH GP HOLDINGS, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH HOLDINGS, L.P.
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Security Agreement
GOLFSMITH GP, L.L.C.,
By: Golfsmith Holdings, L.P., as Sole Member
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH DELAWARE, L.L.C.,
By: Golfsmith Holdings, L.P., as Sole Member
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH CANADA, L.L.C.,
By: Golfsmith Holdings, L.P., as Sole Member
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH EUROPE, L.L.C.,
By: Golfsmith Holdings, L.P., as Sole Member
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Security Agreement
GOLFSMITH USA, L.L.C.,
By: Golfsmith Holdings, L.P., as Sole Member
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH NU, L.L.C.,
By: Golfsmith Holdings, L.P., as Sole Member
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH LICENSING, L.L.C.,
By: Golfsmith Holdings, L.P., as Sole Member
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GOLFSMITH INTERNATIONAL, L.P.,
By: Golfsmith GP, L.L.C., as General Partner
By: Golfsmith Holdings, L.P., as Sole Member
By: Golfsmith GP Holdings, Inc., as General
Partner
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Security Agreement
U.S. BANK TRUST NATIONAL ASSOCIATION, as
Collateral Agent
By /s/ XXXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Security Agreement
SCHEDULE I
Item A. Intercompany Notes
- Maker: Intercompany Demand Note, dated January 1, 1999, by and between
Golfsmith Europe, L.L.C., as borrower, and Golfsmith Holdings, L.P., as
lender, for aggregate unpaid amount of all loans and intercompany advances
made by lender to borrower.
Item B. Securities
GRANTOR ISSUER AUTHORIZED SHARES OUTSTANDING % PLEDGED
------- ------ ----------------- ----------- ---------
Golfsmith International Golfsmith International, Inc. 100 100 100%
Holdings, Inc.
Golfsmith International, Inc. Golfsmith GP Holdings, Inc. 10,000 1,000 100%
TYPE OF L.L.C
ISSUER ISSUER INTERESTS % PLEDGED
------ ------ --------- ---------
Golfsmith Holdings, L.P. Golfsmith GP, L.L.C. membership 100%
Golfsmith Holdings, L.P. Golfsmith Delaware, L.L.C. membership 100%
Golfsmith Holdings, L.P. Golfsmith USA, L.L.C. membership 100%
Golfsmith Holdings, L.P. Golfsmith Licensing, L.L.C. membership 100%
Golfsmith Holdings, L.P. Golfsmith NU, L.L.C. membership 100%
Golfsmith Holdings, L.P. Golfsmith Europe, L.L.C. membership 100%
Golfsmith Holdings, L.P. Golfsmith Canada, L.L.C. membership 100%
TYPE OF
PARTNERSHIP
GRANTOR ISSUER INTEREST % PLEDGED
------- ------ -------- ---------
Golfsmith Golfsmith Holdings, L.P. 99% limited
International, Inc. partnership
Golfsmith GP Golfsmith Holdings, L.P. 1% general 100%
Holdings, Inc. partnership
Golfsmith GP, L.L.C. Golfsmith International, L.P. 99% limited
partnership
Golfsmith Delaware, Golfsmith 1% general 100%
L.L.C. International, L.P. partnership
SCHEDULE II
Item A: Locations of Each Grantor
Golfsmith International, Inc. Delaware
Golfsmith GP Holdings, Inc. Delaware
Golfsmith Holdings, L.P. Delaware
Golfsmith GP, L.L.C. Delaware
Golfsmith Delaware, L.L.C. Delaware
Golfsmith Canada, L.L.C. Delaware
Golfsmith Europe, L.L.C. Delaware
Golfsmith USA, L.L.C. Delaware
Golfsmith Licensing, L.L.C. Delaware
Golfsmith International, L.P. Delaware
Item B: Filing Locations Prior to July 1, 2001
GRANTOR LOCATION
------- --------
Golfsmith International did not exist
Holdings, Inc.
Golfsmith International, Inc. Texas (Xxxxxx county)
Golfsmith GP Holdings, Inc. Texas (Xxxxxx county)
Golfsmith Holdings, L.P. Texas (Xxxxxx county)
Golfsmith GP, L.L.C. Texas (Xxxxxx county)
Golfsmith Delaware, L.L.C. Texas (Xxxxxx county)
Golfsmith Canada, L.L.C. Texas (Xxxxxx county)
Golfsmith Europe, L.L.C. Texas (Xxxxxx county)
Golfsmith USA, L.L.C. Texas (Xxxxxx county), Arizona,
Colorado, Illinois, Minnesota,
California
Golfsmith NU, L.L.C. Texas (Xxxxxx county)
Pennsylvania (Allegheny county)
Georgia (Xxxx and Gwinnett counties),
Ohio (Franklin county) Michigan,
New Jersey, New York
Golfsmith Licensing, L.L.C. Texas (Xxxxxx county)
Golfsmith International, L.P. Texas (Xxxxxx county), Georgia
(Xxxxxx county)
Item C: Trade Names
NAME OF ENTITY TRADE AND/OR OTHER NAME(S)
-------------- --------------------------
Golfsmith International, L.P. Golfsmith; Golfsmith Golf Center
Golfsmith USA, L.L.C. Golfsmith; Golfsmith Golf Center
Golfsmith NU, L.L.C. Golfsmith; Golfsmith Golf Center
Item E: Taxpayer ID Numbers
GOLFSMITH ENTITY FEIN
---------------- ----
Golfsmith International None
Holdings, Inc.
Golfsmith International, Inc. 00-0000000
Golfsmith GP Holdings, Inc. 00-0000000
Golfsmith Holdings, L.P. 00-0000000
Golfsmith GP, L.L.C. 00-0000000
Golfsmith Delaware, L.L.C. 00-0000000
Golfsmith Canada, L.L.C. 00-0000000
GOLFSMITH ENTITY FEIN
Golfsmith Europe, L.L.C. 00-0000000
Golfsmith USA, L.L.C. 00-0000000
Golfsmith NU, L.L.C. 00-0000000
Golfsmith Licensing, L.L.C. None
Golfsmith International, L.P. 00-0000000
Item F: Government Contracts
None.
Item G: Deposit Accounts
BANK NAME ACCOUNT DESCRIPTION ACCOUNT NUMBER ENTITY
--------- ------------------- -------------- ------
Xxxxx Fargo GE Capital - Revolver 4496864422 Golfsmith International, X.X.
Xxxxx Fargo Golfsmith Intl L.P. Payroll 0000000000 Golfsmith International X.X.
Xxxxx Fargo Insurance 4496834631 Golfsmith International X.X.
Xxxxx Fargo Flexible Spending 0000000000 Golfsmith International L.P.
Bank One Retail cash/check 11 ,18, 24 1115001207798 Golfsmith USA L.L.C
First Union Retail cash/check 14, 23, 28 2000007704349 Golfsmith NU L.L.C
Huntington Retail cash/check 17, 27, 31 01891811261 Golfsmith NU L.L.C
Royal Bank of Xxxxx Cash & Refunds for 1002690 Golfsmith Canada L.L.C
Canada Vancouver
Royal Bank of Checking account for 0000000 Golfsmith Canada L.L.C
Canada payables
Royal Bank of Deposit accounts for US 0000000 Golfsmith Canada L.L.C
Canada Payments
Royal Bank of Visa & Mastercard Mail Order 1036177 Golfsmith Canada L.L.C
Canada
Royal Bank of Canadian Payroll 1036185 Golfsmith Canada L.L.C
Canada
SCHEDULE III
GOLFSMITH INTERNATIONAL, INC. IS THE RECORD OWNER OF ALL INTELLECTUAL
PROPERTY; THEY ARE THE GRANTOR OF ALL SECURITY INTEREST IN THE INTELLECTUAL
PROPERTY.
Item A. Patents
ISSUED U.S. PATENTS
TAB NUMBER DATE ISSUE TITLE PATENT HOLDER
--- ------ ---- ----------- -------------
1 D349,142 7/26/94 Golf Club Putter Head Union Planters Bank/Lynx
Golf, Inc.
2 4,883,275 11/28/89 Golf Club Iron Head Union Planters Bank/Lynx
Golf, Inc.
3 D376,399 10/10/96 Golf Club Head Union Planters Bank/Lynx
Golf, Inc.
4 D365,445 12/26/95 Golf Club Bag Union Planters Bank/Lynx
Golf, Inc.
5 D307,455 4/24/90 Golf Club Putter Head Union Planters Bank/Lynx
Golf, Inc
6 D300,546 4/4/89 Golf Club Head Union Planters Bank
7 D299,563 1/24/89 Golf Glove Lynx Golf, Inc.
8 D350,581 9/13/94 Golf Club Putter Head Lynx Golf, Inc.
9 D350,583 9/13/94 Golf Club Putter Head Union Planters Bank/Lynx
Golf, Inc
10 D307,617 5/1/90 Golf Putter Head Union Planters Bank/Lynx
Golf, Inc
11 D371,640 7/9/96 Golf Club having a Union Planters Bank/Lynx
reinforced thumb Golf, Inc
portion
12 D326,885 6/9/92 Golf Putter Head Custom Golf Clubs, Inc.
13 5,839,975 11/24/98 Arch Reinforced Golf Black Rock Golf Corp.
Club Head (Killer Bee)
No pending patent applications and no applications in preparation
Item B. Patent Licenses
PATENT LICENSES
TAB LICENSOR LICENSEE PATENT DATE
--- -------- -------- ------ ----
1 Xxxxxxx Xxxxx Golfsmith Int'l, N/A 4/24/00 amended
Inc. 6/11/01
2 Xxxxxxx Xxxxx Golfsmith Int'l, N/A 6/30/99 amended
Inc. 6/11/01
SCHEDULE IV
Item A. Trademarks
TRADEMARK REGISTRATIONS
TAB TRADEMARK NUMBER REGISTRATION DATE COUNTRY
--- --------- ------ ----------------- -------
1 GOLFSMITH 1523640 5/31/94 Argentina
2 BLACKCAT 651600 9/25/95 Australia
3 CRYSTAL CAT 789998 3/31/99 Australia
4 DESIGN/DEVICE/LOGO (CAT 794118 5/13/99 Australia
HEAD OLD DESIGN)
5 GOLFSMITH A498532 10/31/88 Australia
6 KILLER BEE (& DESIGN) 717222 9/11/96 Australia
7 LYNX 591604 12/2/92 Australia
8 PARALLAX 792092 4/22/99 Australia
9 PREDATOR 432300 8/27/85 Australia
10 SNAKE EYES (& DESIGN) 742649 8/29/97 Australia
11 TIGRESS 792086 4/22/99 Australia
12 DESIGN/DEVICE/LOGO (CAT 156622 11/17/94 Austria (CTM)
HEAD OLD DESIGN)
13 GOLFSMITH 131757 7/31/90 Austria (CTM)
14 LYNX 156995 3/2/95 Austria (CTM)
15 DESIGN/DEVICE/LOGO 669785 8/27/99 Benelux (CTM)
(SNAKE EYES)
16 DESIGN/DEVICE/LOGO (CAT 560449 11/17/94 Benelux (CTM)
HEAD OLD DESIGN)
17 GOLFSMITH 453336 10/26/98 Benelux (CTM)
18 LYNX 559478 11/17/94 Benelux (CTM)
19 LYNX & DESIGN (CAT HEAD 544664 1/27/94 Benelux (CTM)
OLD DESIGN)
20 PREDATOR 411779 8/26/95 Benelux (CTM)
21 SNAKE EYES 669786 8/27/99 Benelux (CTM)
22 BLACK CAT TMA 463563 9/20/96 Canada
23 CRYSTAL CAT TMA 540834 2/6/01 Canada
24 DESIGN/DEVICE/LOGO 543000 3/23/01 Canada
(SNAKE EYES)
25 DESIGN/DEVICE/LOGO (CAT TMA 363650 11/17/89 Canada
HEAD OLD DESIGN)
26 ELEGANCE TMA 242377 4/3/80 Canada
27 GOLFSMITH 350081 1/20/89 Canada
28 KILLER BEE TMA 504269 11/18/98 Canada
29 KILLER BEE (& DESIGN) TMA 504268 11/18/98 Canada
30 LIBERTY TMA 337999 3/11/88 Canada
31 LYNX TMA 388111 8/23/91 Canada
32 LYNX (STYLIZED) TMA 455121 3/15/96 Canada
33 LYNX MASTER TMA 242375 4/3/80 Canada
34 PARALLAX TMA 326329 4/16/87 Canada
35 PREDATOR TMA 231907 2/23/79 Canada
TAB TRADEMARK NUMBER REGISTRATION DATE COUNTRY
--- --------- ------ ----------------- -------
36 PROWLER TMA 242374 4/30/80 Canada
37 TIGRESS TMA 242376 4/3/80 Canada
38 CRYSTAL CAT 1428984 8/7/00 China (PRC)
39 DESIGN/DEVICE/LOGO 1453154 10/7/00 China (PRC)
(SNAKE EYES)
40 DESIGN/DEVICE/LOGO 1444251 9/14/00 China (PRC)
(SNAKE EYES)
41 DESIGN/DEVICE/LOGO (CAT 1428987 8/7/00 China (PRC)
HEAD OLD DESIGN)
42 GOLFSMITH 1422921 7/21/00 China (PRC)
43 KILLER BEE (& DESIGN) 1473130 11/14/00 China (PRC)
44 LYNX 1573138 5/21/01 China (PRC)
45 PROWLER 1509058 1/21/01 China (PRC)
46 SNAKE EYES 1453221 10/7/00 China (PRC)
47 SNAKE EYES 1453148 10/7/00 China (PRC)
48 SNAKE EYES (& DESIGN) 1457186 10/14/00 China (PRC)
49 SNAKE EYES (& DESIGN) 1461381 10/21/00 China (PRC)
50 GOLFSMITH 126691 3/1/91 Denmark
51 PREDATOR VR 05045 1990 7/27/90 Denmark
52 BLACK CAT 230433 11/27/98 European
Community (CTM)
53 DESIGN/DEVICE/LOGO 1220318 8/16/00 European
(SNAKE EYES) Community (CTM)
54 DESIGN/DEVICE/LOGO (CAT 242131 4/21/99 European
HEAD OLD DESIGN) Community (CTM)
55 GOLFSMITH 1118579 7/23/01 European
Community (CTM)
56 LYNX 230391 5/17/99 European
Community (CTM)
57 LYNX (STYLIZED) 807156 8/17/00 European
Community (CTM)
58 LYNXMASTER 230300 3/10/99 European
Community (CTM)
59 PARALLAX 230284 11/27/98 European
Community (CTM)
60 PREDATOR 230276 11/27/98 European
Community (CTM)
61 PROWLER 230268 11/27/98 European
Community (CTM)
TAB TRADEMARK NUMBER REGISTRATION DATE COUNTRY
--- --------- ------ ----------------- -------
62 SILVER CAT 637975 6/1/99 European
Community (CTM)
63 SNAKE EYES 1219914 8/16/00 European
Community (CTM)
64 SNAKE EYES (& DESIGN) 1220136 8/16/00 European
Community (CTM)
65 STINGER 1553411 7/23/01 European
Community (CTM)
66 GOLFSMITH 114100 9/20/91 Finland
67 DESIGN/DEVICE/LOGO (LYNX) 94 544989 11/17/94 France (CTM)
68 LYNX 95 552144 1/4/95 France (CTM)
69 GOLFSMITH 1496561 11/2/88 France (CTM)
70 PREDATOR 1321090 8/26/85 France (CTM)
71 BLACK CAT 39508343 3/4/96 Germany (CTM)
72 DESIGN/DEVICE/LOGO (LYNX) 39402823 5/8/95 Germany (CTM)
73 GOLFSMITH 1167989 11/15/90 Germany (CTM)
74 PREDATOR 1089377 3/20/86 Germany (CTM)
75 BLACK CAT 7895/1996 9/26/94 Hong Kong
76 DESIGN/DEVICE/LOGO 11647/2000 2/18/00 Hong Kong
(SNAKE EYES)
77 DESIGN/DEVICE/LOGO 7433/2000 5/24/00 Hong Kong
(SNAKE EYES)
78 DESIGN/DEVICE/LOGO (CAT 12785/2000 3/2/00 Hong Kong
HEAD OLD DESIGN)
79 GOLFSMITH B06793/1996 10/26/93 Hong Kong
80 KILLER BEE (& DESIGN) 03800/1998 9/10/96 Hong Kong
81 LYNX 7204/2000 3/20/00 Hong Kong
82 LYNX 1279/1984 1/20/83 Hong Kong
83 LYNX (STYLIZED) 1117/1982 1/3/81 Hong Kong
84 SNAKE EYES 9472/2000 10/11/99 Hong Kong
85 SNAKE EYES 9471/2000 10/11/99 Hong Kong
86 DESIGN/DEVICE/LOGO (CAT 470300 3/17/01 Indonesia
HEAD)
87 DESIGN/DEVICE/LOGO (CAT 470629 3/28/01 Indonesia
HEAD)
88 GOLFSMITH 330747 4/4/95 Indonesia
89 KILLER BEE (& DESIGN) 399550 10/15/97 Indonesia
90 DESIGN/DEVICE/LOGO (LYNX) 166007 11/14/94 Ireland
TAB TRADEMARK NUMBER REGISTRATION DATE COUNTRY
--- --------- ------ ----------------- -------
91 LYNX 128922 9/23/88 Ireland
92 PARALLAX 128924 9/23/88 Ireland
93 PREDATOR 128923 9/23/88 Ireland
94 DESIGN/DEVICE/LOGO (CAT 691055 10/21/96 Italy (CTM)
HEAD LOGO)
95 GOLFSMITH 551091 10/15/91 Italy (CTM)
96 LYNX 691056 12/21/96 Italy (CTM)
97 BOOM BOOM 2649495 4/28/94 Xxxxx
00 XXXXXX/XXXXXX/XXXX 0000000 00/00/00 Xxxxx
(SNAKE EYES)
99 DESIGN/DEVICE/LOGO 4516751 4/19/02 Japan
(SNAKE EYES)
100 GOLFSMITH 2173071 9/29/89 Xxxxx
000 XXXXXXXXX 0000000 00/00/00 Xxxxx
102 DESIGN/DEVICE/LOGO (CAT 475359 8/18/00 South Korea
HEAD OLD DESIGN)
103 GOLFSMITH 189342 3/9/90 South Korea
104 KILLER BEE & DESIGN 394831 2/9/98 South Korea
105 LYNX 298229 9/18/94 South Korea
106 LYNX 300891 10/27/94 South Korea
107 LYNX 314142 5/25/95 South Korea
108 LYNX 345230 8/9/96 South Korea
109 LYNX (& DESIGN) (CAT 71888 9/18/00 South Korea
HEAD)
110 SNAKE EYES (& DESIGN) 481416 11/16/00 South Korea
111 LYNX 85 05378 7/20/93 Malaysia
112 GOLFSMITH 4522750 2/21/94 Mexico
113 KILLER BEE & DESIGN 537660 N/A Mexico
114 LYNX 103429 3/5/01 New Zealand
115 SNAKE EYES (& DESIGN) 317071 9/28/99 New Zealand
116 SNAKE EYES (& DESIGN) 311863 6/28/99 New Zealand
117 GOLFSMITH 188587 11/2/88 New Zealand
118 DESIGN/DEVICE/LOGO (CAT 141621 6/7/90 Norway
HEAD)
119 GOLFSMITH 146182 7/25/91 Norway
120 PREDATOR 141622 6/7/00 Norway
121 LYNX (STYLIZED) 158537 9/19/93 Norway
122 GOLFSMITH 62540 2/5/96 Philippines
123 GOLFSMITH 259976 9/10/93 Portugal (CTM)
124 LYNX 305584 10/10/95 Portugal (CTM)
125 DESIGN/DEVICE/LOGO (CAT T99/11246C 7/10/99 Singapore
HEAD)
000 XXXXXX/XXXXXX/XXXX (XXX X00/00000X X/X Xxxxxxxxx
HEAD OLD DESIGN)
127 DESIGN/DEVICE/LOGO (CAT T99/11247A 10/7/99 Singapore
HEAD)
TAB TRADEMARK NUMBER REGISTRATION DATE COUNTRY
--- --------- ------ ----------------- -------
128 GOLFSMITH 17193 11/11/93 Singapore
129 KILLER BEE (& DESIGN) 9356 96 9/2/96 Singapore
130 LYNX T8300911J 2/21/94 Singapore
131 LYNX X0000000X 8/29/95 Singapore
132 SNAKE EYES (& DESIGN) T99/08501 F 10/8/99 Singapore
133 GOLFSMITH 92 6769 8/12/92 South Africa
134 KILLER BEE (& DESIGN) 96 13143 9/17/96 South Africa
135 DESIGN/DEVICE/LOGO (CAT 1931294 6/5/95 Spain
HEAD OLD DESIGN)
136 GOLFSMITH 1282341 3/20/91 Spain
137 GOLFSMITH 219470 11/23/90 Sweden (CTM)
138 PREDATOR 201125 5/7/86 Sweden (CTM)
139 DESIGN/DEVICE/LOGO (LYNX) 426459 11/1/94 Switzerland
140 GOLFSMITH 219470 11/23/90 Switzerland
141 KILLER BEE (& DESIGN) 440053 8/6/96 Switzerland
142 LYNX 427932 11/29/94 Switzerland
143 BLACK CAT 695184 11/1/95 Taiwan (ROC)
144 CRYSTAL CAT 886742 3/16/00 Taiwan (ROC)
145 DESIGN/DEVICE/LOGO 914749 11/16/00 Taiwan (ROC)
(SNAKE EYES)
146 DESIGN/DEVICE/LOGO 917686 12/1/00 Taiwan (ROC)
(SNAKE EYES)
147 DESIGN/DEVICE/LOGO (CAT 427703 1/16/89 Taiwan (ROC)
HEAD OLD DESIGN)
148 DESIGN/DEVICE/LOGO (CAT 468188 12/1/89 Taiwan (ROC)
HEAD OLD DESIGN)
149 DESIGN/DEVICE/LOGO (CAT 471252 1/1/90 Taiwan (ROC)
HEAD OLD DESIGN)
150 DESIGN/DEVICE/LOGO (CAT 477066 3/1/90 Taiwan (ROC)
HEAD OLD DESIGN)
151 DESIGN/DEVICE/LOGO (CAT 474125 2/1/90 Taiwan (ROC)
HEAD OLD DESIGN)
152 DESIGN/DEVICE/LOGO (CAT 493117 8/1/90 Taiwan (ROC)
HEAD OLD DESIGN)
153 GOLFSMITH 476096 2/16/90 Taiwan (ROC)
154 GOLFSMITH 947060 6/16/01 Taiwan (ROC)
155 KILLER BEE 886741 3/16/00 Taiwan (ROC)
156 LIBERTY 334375 7/31/96 Taiwan (ROC)
157 LYNX 377128 9/16/87 Taiwan (ROC)
158 LYNX 955979 8/16/01 Taiwan (ROC)
159 LYNX (STYLIZED) 350551 12/16/87 Taiwan (ROC)
160 LYNX (STYLIZED) 348027 12/1/86 Taiwan (ROC)
161 LYNX (STYLIZED) 468187 12/1/89 Taiwan (ROC)
162 LYNX (STYLIZED) 475705 2/16/90 Taiwan (ROC)
TAB TRADEMARK NUMBER REGISTRATION DATE COUNTRY
--- --------- ------ ----------------- -------
163 LYNX (STYLIZED) 442679 5/16/89 Taiwan (ROC)
164 LYNX (STYLIZED) 474124 2/1/90 Taiwan (ROC)
165 LYNX (STYLIZED) 500379 10/1/90 Taiwan (ROC)
166 LYNX (STYLIZED) & DESIGN 82307 6/1/76 Taiwan (ROC)
(CAT HEAD DETAILED)
167 PARALLAX 324686 5/1/86 Taiwan (ROC)
168 PREDATOR 331137 6/29/96 Taiwan (ROC)
169 PROWLER 910372 10/16/00 Taiwan (ROC)
170 SNAKE EYES 917687 12/1/00 Taiwan (ROC)
171 SNAKE EYES 774546 8/30/97 Taiwan (ROC)
172 TEXAS WEDGE 476097 2/16/90 Taiwan (ROC)
173 TIGRESS 889987 4/16/00 Taiwan (ROC)
000 XXXXXX/XXXXXX/XXXX (XXX XX000000 11/24/00 Thailand
HEAD)
175 DESIGN/DEVICE/LOGO (CAT TM 102725 11/30/99 Thailand
HEAD OLD DESIGN) 131656 (old)
176 DESIGN/DEVICE/LOGO (CAT TM 125404 1/3/01 Thailand
HEAD DESIGN)
177 GOLFSMITH 132815 (old) 3/15/89 Thailand
178 KILLER BEE (& DESIGN) TM 69585 7/12/00 Thailand
179 LYNX 78858 10/1/98 Thailand
180 LYNX 74487 8/7/91 Thailand
181 LYNX TM 18364 9/25/94 Thailand
182 LYNX (STYLIZED) TM 103335 5/12/89 Thailand
138891 (old)
183 PREDATOR TM 103337 5/8/89 Thailand
133210 (old)
184 BLACK CAT 2008686 8/30/96 United
Kingdom (CTM)
185 DESIGN/DEVICE/LOGO (CAT 1536846 6/10/94 United
HEAD) Kingdom (CTM)
186 GOLFSMITH B1361988 10/27/88 United
Kingdom (CTM)
187 LIBERTY 1255176 11/26/85 United
Kingdom (CTM)
188 LYNX 1211627 1/27/84 United
Kingdom (CTM)
189 LYNX 1211626 1/27/84 United
Kingdom (CTM)
190 PARALLAX 1255177 11/26/85 United
Kingdom (CTM)
TAB TRADEMARK NUMBER REGISTRATION DATE COUNTRY
--- --------- ------ ----------------- -------
191 PREDATOR 1092683 3/16/99 United
Kingdom (CTM)
192 SNAKE EYES 2040290 7/26/96 United
Kingdom (CTM)
193 ACCUCORE 2,125,496 12/30/97 United States
194 BACKFLOW 2,121,599 12/16/97 United States
195 BECAUSE IT'S MORE THAN 1,903,655 0/0/00 Xxxxxx Xxxxxx
JUST A GAME
196 BIMETALLIC 2,125,480 12/30/97 United States
197 BLACK CAT 1,983,048 6/25/96 United States
198 BLACK HAWK 2,152,015 4/21/98 United States
199 BLACKSMITH 2,125,856 12/30/97 United States
200 BOBTAIL 1,126,412 10/30/79 United States
201 BRASS MASTER 2,248,524 6/1/99 United States
202 BULL WHIP SHAFT (& 2,140,571 3/3/98 United States
DESIGN)
203 CARBON STICK 2,190,347 9/22/98 United States
204 CARBON TOUR 2,253,665 6/15/99 United States
205 COMFORT 2,389,096 9/28/00 United States
206 COPPER CLASSIC 2,204,865 11/24/98 United States
207 CRYSTAL CAT 2,453,296 5/22/01 United States
208 CUSTOM MADE WEDGE SYSTEM 2,238,074 4/13/99 United States
209 DEAD STOP 2,139,044 2/24/98 United States
210 DESIGN/DEVICE/LOGO 2,065,242 5/27/97 United States
(BLACK CAT HEAD)
211 DESIGN/DEVICE/LOGO (CAT 1,518,085 12/27/88 United States
HEAD OLD DESIGN)
212 DESIGN/DEVICE/LOGO (CAT 1,518,125 12/27/88 United States
HEAD OLD DESIGN)
000 XXXXXXXXXX XXXXXX 0,000,000 00/00/00 Xxxxxx Xxxxxx
214 EASY ON 1,434,797 3/31/87 United States
215 FIBER STAR 2,193,255 10/6/98 United States
216 FIRE STAR 2,130,690 1/20/98 United States
217 GOLFSMITH 1,447,761 7/14/87 United States
218 GRAND TITANIUM 2,266,938 0/0/00 Xxxxxx Xxxxxx
000 XXXX XXXX 2,125,678 12/30/97 United States
220 INTERFACE 2,129,126 1/13/98 United States
221 JETSTREAM 2,124,015 12/23/97 United States
222 KILLER BEE 1,966,455 4/9/96 United States
223 KILLER BEE (& DESIGN) 1,997,989 0/0/00 Xxxxxx Xxxxxx
000 XXXX XXXX 2,144,570 3/17/98 United States
225 LADY STERLING 2,144,569 3/17/98 United States
TAB TRADEMARK NUMBER REGISTRATION DATE COUNTRY
--- --------- ------ ----------------- -------
226 LIBERTY 1,416,763 11/11/86 United States
227 XXXX XXX 2,325,087 3/7/00 United States
228 LYNX 1,446,493 0/0/00 Xxxxxx Xxxxxx
000 XXXX 000,000 0/00/00 Xxxxxx Xxxxxx
230 LYNX 53115 X/X Xxxxxx Xxxxxx
Xxxxxxxxxx
000 XXXX 00000 X/X Xxxxxx Xxxxxx
California
232 NIGHT HAWK 2,124,013 12/23/97 United States
233 O/S PROJECT 2,140,897 3/31/98 United States
234 PARALLAX 1,399,697 7/1/86 United States
235 PATHMARK 2,132,755 1/27/98 United States
236 PATRIOT 1,399,698 7/1/86 United States
237 PAW 2,013,921 11/5/96 United States
238 POINT BLANK 2,124,012 12/23/97 United States
239 POSITRAC 2,125,832 12/30/97 Xxxxxx Xxxxxx
000 POWER TAPER 1,984,104 7/2/96 United States
241 PREDATOR 1,351,870 7/30/95 United States
242 PURE BALANCE 2,140,899 3/3/98 United States
243 ROUGH RIDER 2,258,083 6/29/99 United States
244 SEASONED PLAYER 2,129,129 1/13/98 United States
245 SHORT GAME SYSTEM 2,392,567 10/20/00 United States
000 XXXXX XXXX 0,000,000 0/00/00 Xxxxxx Xxxxxx
247 SILVERSMITH 2,121,889 12/16/97 United States
248 SINGLE STROKE 2,193,256 10/6/98 United States
249 SNAKE EYES (& DESIGN) 1,889,946 4/18/95 United States
250 SOFT STROKE 2,129,128 1/13/98 United States
251 SONIC BOOM 2,156,583 5/12/98 United States
252 SONORA 2,301,230 12/21/99 United States
000 XXXXXX XXXX XX. 0,000,000 0/00/00 Xxxxxx Xxxxxx
254 SPECIAL FORCE 2,129,132 1/13/98 United States
255 SPEED BUMPS 2,124,011 12/23/97 United States
256 STERLING 2,129,131 1/13/98 United States
257 STINGER 2,374,557 8/8/00 United States
258 STOP ACTION 2,129,133 1/13/98 United States
259 SUNDANCE 2,129,127 1/13/98 Xxxxxx Xxxxxx
000 SUPER TRACK 2,249,691 6/1/99 United States
261 TEXAS CLASSIC 2,190,501 9/22/98 United Xxxxxx
000 XXXXX XXXXX 0,000,000 0/00/00 Xxxxxx Xxxxxx
263 TIGRESS 1,356,970 8/27/85 United States
264 TOUR CAVITY 2,255,633 6/22/99 United States
265 TOUR TECH 2,140,901 3/3/98 United States
266 TRI-RAIL 2,129,134 1/13/98 United States
267 WEED CUTTER 2,124,014 12/23/97 Xxxxxx Xxxxxx
000 XPC 1,274,437 4/17/84 United States
TRADEMARK APPLICATIONS
APPLICATION DATE OF
TAB TRADEMARK NUMBER APPLICATION COUNTRY
--- --------- ------ ----------- -------
1 LYNX 879682 6/19/01 Australia
2 SNAKE EYES 1020587 6/28/99 Canada
3 SNAKE EYES (& DESIGN) 1020586 6/28/99 Canada
4 DESIGN/DEVICE/LOGO (CAT 200190356 12/6/00 China
HEAD)
5 GOLFSMITH 9900032476 4/2/99 China
6 LYNX 9900098601 8/25/99 China
7 LYNX 9900053811 5/17/99 China
8 CRYSTAL CAT 806877 4/17/98 European
Community (CTM)
9 GOLFSMITH 610484 10/27/93 India
10 SNAKE EYES 88204/1999 10/4/99 Japan
11 LYNX 93 08614 10/28/93 Malaysia
12 SNAKE EYES (& DESIGN) 99 10290 10/15/99 Malaysia
13 KILLER BEE 116020 12/3/96 Philippines
14 LYNX 4 1999 07528 10/1/99 Philippines
15 SNAKE EYES (& DESIGN) 4 1999 06367 8/26/99 Philippines
16 BLACK CAT 95 00630 1/20/95 South Africa
17 DESIGN/DEVICE/LOGO (CAT 99/19087 10/15/90 South Africa
HEAD)
18 LYNX 99/19085 10/15/99 South Africa
19 SNAKE EYES (& DESIGN) 99/19086 10/15/99 South Africa
20 TIGRESS 91/19086 4/23/91 South Africa
21 SNAKE EYES (& DESIGN) 90041243 10/5/01 Taiwan (ROC)
00 XXXXX XXXX & XXXXXX 00/000,000 0/00/00 Xxxxxx Xxxxxx
23 FIRE FORGED 76/181,735 12/12/00 United States
25 QUICK STRIKE 76/105,038 8/8/00 United States
26 TOUR STEEL 76/181,734 12/12/00 United States
Item B. Trademark Licenses
TRADEMARK LICENSES
TAB LICENSOR LICENSEE TRADEMARK DATE
--- -------- -------- --------- ----
1 Golfsmith Int'l, L.P. Bali Leathers, Inc. LYNX, Cat Head Design, 9/1/01
SNAKE EYES, Snake Eyes
Design, SNAKE EYES &
Design, & KILLER BEE &
Design,
2 Golfsmith Int'l, L.P. Golf Gear Australia Pty. SNAKE EYES, SNAKE EYES & 5/1/01
Ltd. DESIGN & Snake Eyes Design
3 Golfsmith Int'l, L.P. Golf Gear Australia Pty. Cat Head Design & LYNX 5/1/01
Ltd. trademarks
4 Golfsmith Int'l, L.P. Hwa Kyung, Inc. Cathead Design & LYNX 1/1/01
trademarks
5 Golfsmith Int'l, L.P. Mascot Leisure Business Design/Device/Logo (Cat 9/1/00
Corp. Head), LYNX, LYNX
(Stylized), & LYNX, LYNX
(Stylized) & Design (Cat
Head Detailed)
6 Golfsmith Int'l, L.P. Korea Golf Academy GOLFSMITH 1/1/02
7 Golfsmith Int'l, L.P. Sumikin Xxxxxx Corp. Design/Device/Logo (Cat 3/1/00
Eye), Design/Device/Logo
(Cat Head), LYNX (New
Font), LYNX (Stylized),
LYNX (with Japanese
Characters), LYNX & Design
(Cat Eye), & LYNX Golf &
Design (Cat Eye)
8 Golfsmith Int'l, L.P. Xxxx Xxxxx d/b/a STINGER 6/1/00
Performance Golf, Inc.
9 Golfsmith Int'l, L.P. Pro Select, Inc. TI CAT 7/9/02
10 Golfsmith Int'l, L.P Cobra Golf, Inc. BIMETALLIC 1/1/99
11 Golfsmith Int'l, L.P TTHGOLF "Marks & Images" 2/22/02
12 Spalding Sports Golfsmith Int'l, X.X. XXXXXXXX & Star, 3/1/02
TAB LICENSOR LICENSEE TRADEMARK DATE
--- -------- -------- --------- ----
Worldwide, Inc. ASCENT, BIRDIE, BIRD ON BALL
& Design, CASH-IN, EPIC,
LEGACY, PRO IMPACT,
PULSAR, TEE-FLITE, TOUR
1000, TOUR IMPACT &
SYCHRODYNE
13 Spalding Sports Worldwide, Golfsmith Int'l, X.X. XXXXXXXX & Star, ASCENT, 3/1/02
Inc. BIRDIE, BIRD ON BALL &
Design, CASH-IN, EPIC,
LEGACY, PRO IMPACT, PUSAR,
TEE-FLITE, TOUR 1000, TOUR
IMPACT & SYCHRODYNE
14
15 The Boeing Company Golfsmith Int'l, L.P. 747 7/1/92
16 T.H. Xxxxxx, Inc. Golfsmith Int'l, L.P. XXXXXX XXXXXX 7/1/95
17 T.H. Xxxxxx, Inc. Golfsmith Int'l, L.P. XXXXXX XXXXXX 1/1/00
18 T.H. Xxxxxx, Inc. Golfsmith Int'l, L.P. XXXXXX XXXXXX 1/1/00
19 Dunlop Slazenger Int'l Ltd. Golfsmith Int'l, L.P. JETSTREAM 11/25/96
20 Ski Dynastar, Inc. Golfsmith Int'l, L.P. ELASTEEL 6/10/99
21 Xxxx, Inc. Golfsmith Int'l, L.P. CONTOUR 1/1/00
DOMAIN NAMES
TAB DOMAIN NAME OWNER REG. DATE EXP. DATE
1 xxxxxxxxx.xxx Golfsmith International, Inc. 12/14/01 12/14/03
2 xxxxxxxxx.xxx Golfsmith International, Inc. 4/26/95 4/27/03
3 xxxxxxxxx.xxxx Golfsmith International, Inc. 10/31/01 10/31/03
4 xxxxxxxxx.xx Golfsmith International, Inc. 5/3/02 5/24/04
5 xxxxxxxxxxxx.xxx Golfsmith International, Inc. 2/8/99 2/8/03
6 xxxxxxxx.xxx Golfsmith, Inc. 10/22/99 10/22/10
-2-
SCHEDULE V
No copyrights registered or pending
-3-
SCHEDULE VI
No trade secret or know-how licenses
-4-
EXHIBIT A
to Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of __________
__, ____, is made between ___________________, a ____________ (the "Grantor"),
and U.S. BANK TRUST NATIONAL ASSOCIATION, as collateral agent (together with its
successor(s) thereto in such capacity, the "Collateral Agent") for each of the
Secured Parties;
W I T N E S S E T H :
WHEREAS, Golfsmith International, Inc., a Delaware corporation (the
"Company"), the Subsidiaries of the Company and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of October 15, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Company has issued (the
"Notes Issuance") its Senior Secured Notes due 2009 (and its Senior Secured
Notes due 2009, Series B to be issued in exchange therefor) (collectively, the
"Notes");
WHEREAS, various financial institutions, as lenders (the "Lenders"),
General Electric Capital Corporation, a Delaware corporation, as agent on behalf
of the Lenders (in such capacity, the "Lender Agent"), and the Grantor and
certain of its Affiliates have entered into that certain Credit Agreement, dated
as of October 15, 2002 (the "Credit Agreement"), pursuant to which the Lenders
have agreed to make certain loans and other financial accommodations from time
to time to the Borrowers (as defined therein) and the Grantor and such
Affiliates have entered into Collateral Agreements (as defined therein) with the
Lender Agent as well;
WHEREAS, the Collateral Agent, the Lender Agent and the Grantors have
entered into that certain Intercreditor Agreement, dated as of October 15, 2002
(such intercreditor agreement is the Intercreditor Agreement referred to and
defined in the Indenture, and as used herein, the term "Intercreditor Agreement"
has the meaning ascribed thereto in the Indenture), pursuant to which, among
other things, (a) the Lender Agent is recognized as having a first priority
interest in all of the Collateral (as defined in the Collateral Agreements)
(other than real property, Equipment and proceeds thereof) for the benefit of
itself and the Lenders and (b) the Collateral Agent is recognized as having (i)
a second priority interest in all of the Collateral (as defined in the
Collateral Agreements) (other than real property, Equipment and proceeds
thereof) for the benefit of itself, the Trustee and the Holders and (ii) a first
priority interest in all of the Collateral (as defined in the Collateral
Agreements) constituting real property, Equipment and proceeds thereof for the
benefit of itself, the Trustee and the Holders;
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Security Agreement, dated as of October 15, 2002 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Patent Collateral (as defined
below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Company;
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in order to induce the Holders to acquire the Notes
and maintain the Indebtedness evidenced thereby, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Patent Collateral"), whether now owned or
hereafter acquired or existing by it:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation for
filing anywhere in the world and including each patent and patent
application referred to in Item A of Schedule III attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
clause (a);
(c) all patent licenses, including each patent license referred to
in Item B of Schedule III attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in Item A of Schedule III attached hereto, and for
breach or enforcement of any patent license, including any patent license
referred to in Item B of Schedule III attached hereto, and all rights
corresponding thereto throughout the world.
-2-
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Patent Collateral with the United States Patent and
Trademark Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Collateral Agent for its
benefit and the benefit of each Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Collateral Agent and each
Secured Party thereunder) shall remain in full force and effect in accordance
with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash of
all Secured Obligations, the Collateral Agent shall, at the Grantor's expense,
execute and deliver to the Grantor all instruments and other documents as may be
necessary or proper to release the lien on and security interest in the Patent
Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
SECTION 8. Subject to Intercreditor Agreement. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL
AGENT PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE
COLLATERAL AGENT HEREUNDER, IN EACH CASE IN RESPECT OF ANY COLLATERAL
CONSTITUTING NOTEHOLDER COMMON COLLATERAL (AS DEFINED IN THE INTERCREDITOR
AGREEMENT DESCRIBED BELOW) ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT, DATED AS OF OCTOBER 15, 2002 (AS AMENDED, MODIFIED OR SUPPLEMENTED
FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") AMONG GENERAL ELECTRIC CAPITAL
CORPORATION AS SENIOR AGENT, AND U.S. BANK TRUST NATIONAL ASSOCIATION, AS
COLLATERAL AGENT, U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE, AND THE
OBLIGORS, INCLUDING THE GRANTORS HEREUNDER NAMED THEREIN. IN THE EVENT OF ANY
CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT,
THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a ____________
_____________
By ____________________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent
By ____________________________________
Name:
Title:
-4-
SCHEDULE III
to Patent Security Agreement
Item A. Patents
Issued Patents
-------------------------------------------------------------------
*Country Patent No. Issue Date Inventor(s) Title
-------- ---------- ---------- ----------- -----
Pending Patent Applications
-------------------------------------------------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Patent Applications in Preparation
--------------------------------------------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Item B. Patent Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
--------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
EXHIBIT B
to Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
__________ __, ____, is made between _____________________, a ___________
__________ (the "Grantor"), and U.S. BANK TRUST NATIONAL ASSOCIATION, as
collateral agent (together with its successor(s) thereto in such capacity, the
"Collateral Agent") for each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, Golfsmith International, Inc., a Delaware corporation (the
"Company"), the Subsidiaries of the Company and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of October 15, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Company has issued (the
"Notes Issuance") its Senior Secured Notes due 2009 (and its Senior Secured
Notes due 2009, Series B to be issued in exchange therefor) (collectively, the
"Notes");
WHEREAS, various financial institutions, as lenders (the "Lenders"),
General Electric Capital Corporation, a Delaware corporation, as agent on behalf
of the Lenders (in such capacity, the "Lender Agent"), and the Grantor and
certain of its Affiliates have entered into that certain Credit Agreement, dated
as of October 15, 2002 (the "Credit Agreement"), pursuant to which the Lenders
have agreed to make certain loans and other financial accommodations from time
to time to the Borrowers (as defined therein) and the Grantor and such
Affiliates have entered into Collateral Agreements (as defined therein) with the
Lender Agent as well;
WHEREAS, the Collateral Agent, the Lender Agent and the Grantors have
entered into that certain Intercreditor Agreement, dated as of October 15, 2002
(such intercreditor agreement is the Intercreditor Agreement referred to and
defined in the Indenture, and as used herein, the term "Intercreditor Agreement"
has the meaning ascribed thereto in the Indenture), pursuant to which, among
other things, (a) the Lender Agent is recognized as having a first priority
interest in all of the Collateral (as defined in the Collateral Agreements)
(other than real property, Equipment and proceeds thereof) for the benefit of
itself and the Lenders and (b) the Collateral Agent is recognized as having (i)
a second priority interest in all of the Collateral (as defined in the
Collateral Agreements) (other than real property, Equipment and proceeds
thereof) for the benefit of itself, the Trustee and the Holders and (ii) a first
priority interest in all of the Collateral (as defined in the Collateral
Agreements) constituting real property, Equipment and proceeds thereof for the
benefit of itself, the Trustee and the Holders;
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Security Agreement, dated as of October 15, 2002 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Trademark Collateral (as
defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Company;
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in order to induce the Holders to acquire the Notes
and maintain the Indebtedness evidenced thereby, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided (or incorporated by reference) in the Security
Agreement.
SECTION 2. Grant of Security Interest. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure all of the
Secured Obligations, the Grantor does hereby mortgage, pledge and hypothecate to
the Collateral Agent, and grant to the Collateral Agent a security interest in,
for its benefit and the benefit of each Secured Party, all of the following
property (the "Trademark Collateral"), whether now owned or hereafter acquired
or existing by it:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this clause (a) being collectively called a
"Trademark"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether
pending or in preparation for filing, including registrations, recordings
and applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State thereof
or any foreign country, including those referred to in Item A of Schedule
IV attached hereto;
-2-
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Schedule IV attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in clause (a) and (b);
(d) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, including any Trademark, Trademark
registration or Trademark license referred to in Item A and Item B of
Schedule IV attached hereto, or for any injury to the goodwill associated
with the use of any such Trademark or for breach or enforcement of any
Trademark license.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Trademark Collateral with the United States Patent
and Trademark Office and corresponding offices in other countries of the world.
The security interest granted hereby has been granted as a supplement to, and
not in limitation of, the security interest granted to the Collateral Agent for
its benefit and the benefit of each Secured Party under the Security Agreement.
The Security Agreement (and all rights and remedies of the Collateral Agent and
each Secured Party thereunder) shall remain in full force and effect in
accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash of
all Secured Obligations, the Collateral Agent shall, at the Grantor's expense,
execute and deliver to the Grantor all instruments and other documents as may be
necessary or proper to release the lien on and security interest in the
Trademark Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Trademark Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
SECTION 8. Subject to Intercreditor Agreement. Notwithstanding anything
herein to the contrary, the lien and security interest granted to the Collateral
Agent pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder, in each case in respect of any collateral
constituting Noteholder Common Collateral (as defined in the Intercreditor
Agreement described below) are subject to the provisions of the Intercreditor
Agreement, dated as of October 15, 2002 (as amended, modified or supplemented
from time to time, the "Intercreditor Agreement") among General Electric Capital
Corporation as Senior Agent, and U.S. Bank Trust National Association, as
Collateral Agent, U.S. Bank Trust National Association, as Trustee, and the
Obligors, including the Grantors hereunder named therein. In the event of any
conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern.
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a ____________
_____________
By _______________________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent
By _______________________________________
Name:
Title:
-5-
SCHEDULE IV
to Trademark Security Agreement
Item A. Trademarks
Registered Trademarks
----------------------------------------------------------------------
*Country Trademark Registration No. Registration Date
-------- --------- ---------------- -----------------
Pending Trademark Applications
--------------------------------------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Pending Applications in Preparation
----------------------------------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
Item B. Trademark Licenses
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- ---- ----
--------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
EXHIBIT C
to Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
__________ __, ____, is made between _____________________, a __________ (the
"Grantor"), and U.S. BANK TRUST NATIONAL ASSOCIATION, as collateral agent
(together with its successor(s) thereto in such capacity, the "Collateral
Agent") for each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, Golfsmith International, Inc., a Delaware corporation (the
"Company"), the Subsidiaries of the Company and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of October 15, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Company has issued (the
"Notes Issuance") its Senior Secured Notes due 2009 (and its Senior Secured
Notes due 2009, Series B to be issued in exchange therefor) (collectively, the
"Notes");
WHEREAS, various financial institutions, as lenders (the "Lenders"),
General Electric Capital Corporation, a Delaware corporation, as agent on behalf
of the Lenders (in such capacity, the "Lender Agent"), and the Grantor and
certain of its Affiliates have entered into that certain Credit Agreement, dated
as of October 15, 2002 (the "Credit Agreement"), pursuant to which the Lenders
have agreed to make certain loans and other financial accommodations from time
to time to the Borrowers (as defined therein) and the Grantor and such
Affiliates have entered into Collateral Agreements (as defined therein) with the
Lender Agent as well;
WHEREAS, the Collateral Agent, the Lender Agent and the Grantors have
entered into that certain Intercreditor Agreement, dated as of October 15, 2002
(such intercreditor agreement is the Intercreditor Agreement referred to and
defined in the Indenture, and as used herein, the term "Intercreditor Agreement"
has the meaning ascribed thereto in the Indenture), pursuant to which, among
other things, (a) the Lender Agent is recognized as having a first priority
interest in all of the Collateral (as defined in the Collateral Agreements)
(other than real property, Equipment and proceeds thereof) for the benefit of
itself and the Lenders and (b) the Collateral Agent is recognized as having (i)
a second priority interest in all of the Collateral (as defined in the
Collateral Agreements) (other than real property, Equipment and proceeds
thereof) for the benefit of itself, the Trustee and the Holders and (ii) a first
priority interest in all of the Collateral (as defined in the Collateral
Agreements) constituting real property, Equipment and proceeds thereof for the
benefit of itself, the Trustee and the Holders;
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Security Agreement, dated as of October 15, 2002 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Copyright Collateral (as
defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Company;
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in order to induce the Holders to acquire the Notes
and maintain the Indebtedness evidenced thereby, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Copyright Collateral"), whether now owned or
hereafter acquired or existing by it, being all copyrights (including all
copyrights for semi-conductor chip product mask works) of the Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
throughout the world including all of the Grantor's right, title and interest in
and to all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including the copyrights referred to in Item
A of Schedule V attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses, including each
copyright license referred to in Item B of Schedule V attached hereto, the right
to xxx for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Copyright Collateral with the United States
Copyright Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to,
-2-
and not in limitation of, the security interest granted to the Collateral Agent
for its benefit and the benefit of each Secured Party under the Security
Agreement. The Security Agreement (and all rights and remedies of the Collateral
Agent and each Secured Party thereunder) shall remain in full force and effect
in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash of
all Secured Obligations, the Collateral Agent shall, at the Grantor's expense,
execute and deliver to the Grantor all instruments and other documents as may be
necessary or proper to release the lien on and security interest in the
Copyright Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Copyright Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
SECTION 8. Subject to Intercreditor Agreement. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL
AGENT PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE
COLLATERAL AGENT HEREUNDER, IN EACH CASE IN RESPECT OF ANY COLLATERAL
CONSTITUTING NOTEHOLDER COMMON COLLATERAL (AS DEFINED IN THE INTERCREDITOR
AGREEMENT DESCRIBED BELOW) ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT, DATED AS OF OCTOBER 15, 2002 (AS AMENDED, MODIFIED OR SUPPLEMENTED
FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") AMONG GENERAL ELECTRIC CAPITAL
CORPORATION AS SENIOR AGENT, AND U.S. BANK TRUST NATIONAL ASSOCIATION, AS
COLLATERAL AGENT, U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE, AND THE
OBLIGORS, INCLUDING THE GRANTORS HEREUNDER NAMED THEREIN. IN THE EVENT OF ANY
CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT,
THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a ____________
_____________
By ____________________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent
By ____________________________________
Name:
Title:
-4-
SCHEDULE V
to Copyright
Security Agreement
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
------------------------------------------------------------------------
*Country Registration No. Registration Date Author(s) Title
-------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-------------------------------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
----------------------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
--------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
ANNEX I
to Security Agreement
SUPPLEMENT TO SECURITY AGREEMENT
This SUPPLEMENT NO. ___, dated as of ________ __, ____ (this
"Supplement"), to the Security Agreement, dated as of ________ __, ____ (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Security Agreement"), among the initial signatories thereto and each
other Person which from time to time thereafter became a party thereto pursuant
to Section 7.5 thereof (each, individually, a "Grantor", and, collectively, the
"Grantors"), in favor of U.S. BANK TRUST NATIONAL ASSOCIATION, as collateral
agent (together with any successor(s) thereto in such capacity, the "Collateral
Agent") for each of the Secured Parties (such and other capitalized terms being
used herein with the meanings provided, or incorporated by reference, in the
Security Agreement), is made by the undersigned.
W I T N E S S E T H:
WHEREAS, Golfsmith International, Inc., a Delaware corporation (the
"Company"), the Subsidiaries of the Company and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of October 15, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Company has issued (the
"Notes Issuance") its Senior Secured Notes due 2009 (and its Senior Secured
Notes due 2009, Series B to be issued in exchange therefor) (collectively, the
"Notes");
WHEREAS, various financial institutions, as lenders (the "Lenders"),
General Electric Capital Corporation, a Delaware corporation, as agent on behalf
of the Lenders (in such capacity, the "Lender Agent"), and the Grantor and
certain of its Affiliates have entered into that certain Credit Agreement, dated
as of October 15, 2002 (the "Credit Agreement"), pursuant to which the Lenders
have agreed to make certain loans and other financial accommodations from time
to time to the Borrowers (as defined therein) and the Grantor and such
Affiliates have entered into Collateral Agreements (as defined therein) with the
Lender Agent as well;
WHEREAS, the Collateral Agent, the Lender Agent and the Grantors have
entered into that certain Intercreditor Agreement, dated as of October 15, 2002
(such intercreditor agreement is the Intercreditor Agreement referred to and
defined in the Indenture, and as used herein, the term "Intercreditor Agreement"
has the meaning ascribed thereto in the Indenture), pursuant to which, among
other things, (a) the Lender Agent is recognized as having a first priority
interest in all of the Collateral (as defined in the Collateral Agreements)
(other than real property, Equipment and proceeds thereof) for the benefit of
itself and the Lenders and (b) the Collateral Agent is recognized as having (i)
a second priority interest in all of the Collateral (as defined in the
Collateral Agreements) (other than real property, Equipment and proceeds
thereof) for the benefit of itself, the Trustee and the Holders and (ii) a first
priority interest in all of the Collateral
(as defined in the Collateral Agreements) constituting real property, Equipment
and proceeds thereof for the benefit of itself, the Trustee and the Holders;
WHEREAS, as a condition to the Notes Issuance, the undersigned is required
to execute and deliver this Supplement;
WHEREAS, the undersigned has duly authorized the execution, delivery and
performance of this Supplement and the Security Agreement;
WHEREAS, the Security Agreement provides that additional parties may
become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement;
WHEREAS, pursuant to the provisions of Section 7.5 of the Security
Agreement, the undersigned is becoming an Additional Grantor under the Security
Agreement; and
WHEREAS, the undersigned desires to become a Grantor under the Security
Agreement in order to induce the Holders to acquire the Notes and maintain the
Indebtedness evidenced thereby as consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with the Security Agreement, the undersigned by its
signature below becomes a Grantor under the Security Agreement with the same
force and effect as if it were an original signatory thereto as a Grantor and
the undersigned hereby
(a) agrees to all the terms and provisions of the Security Agreement
applicable to it as a Grantor thereunder;
(b) assigns and pledges to the Collateral Agent for its benefit and
the ratable benefit of each other Secured Party, and grants to the
Collateral Agent for its benefit and the ratable benefit of each other
Secured Party, a security interest in all of the following, whether now or
hereafter existing or acquired by the undersigned (its "Collateral"):
(i) all Intercompany Notes in which the undersigned has an
interest (including each Intercompany Note described in Item A of
Schedule I hereto);
(ii) all interest and other payments and rights with respect
to each Intercompany Note in which the undersigned has an interest;
(iii) (A) all investment property in which the undersigned has
an interest (including the Capital Securities of each issuer of such
Capital Securities described in Schedule I hereto) and (B) all other
Capital Securities which are
-2-
interests in limited liability companies or partnerships in which
the undersigned has an interest (including the Capital Securities of
each issuer of such Capital Securities described in Schedule I
hereto), in each case together with Dividends and Distributions
payable in respect of the Collateral described in the foregoing
clauses (iii)(A) and (iii)(B) (provided, however, that not more than
65% of all of the Capital Securities that are voting Capital
Securities of any Foreign Subsidiary of the undersigned shall be so
pledged by the undersigned);
(iv) all equipment in all of its forms of the undersigned
(including all Motor Vehicles), wherever located, including all
parts thereof and all accessions, additions, attachments,
improvements, substitutions and replacements thereto and therefor
and all accessories related thereto (any and all of the foregoing
being the "Equipment");
(A) all inventory in all of its forms of the
undersigned, wherever located, including
(B) all raw materials and work in process therefor,
finished goods thereof, and materials used or consumed in the
manufacture or production thereof,
(C) all goods in which the undersigned has an interest
in mass or a joint or other interest or right of any kind
(including goods in which the undersigned has an interest or
right as consignee), and
(D) all goods which are returned to or repossessed by
the undersigned,
and all accessions thereto, products thereof and documents therefor
(any and all such inventory, materials, goods, accessions, products
and documents being the "Inventory");
(v) all accounts, contracts, contract rights, chattel paper,
documents, instruments, promissory notes and general intangibles
(including tax refunds and payment intangibles) of the undersigned,
whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services, and all rights of the
undersigned now or hereafter existing in and to all security
agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights,
chattel paper, documents, instruments, promissory notes, general
intangibles and payment intangibles (all of the foregoing being the
"Receivables", and any and all such security agreements, guaranties,
leases and other contracts being the "Related Contracts");
-3-
(vi) all deposit accounts of the undersigned and all cash,
checks, drafts, notes, bills of exchange, money orders and other
like instruments, if any, now owned or hereafter acquired, held
therein (or in sub-accounts thereof) and all certificates and
instruments, if any, from time to time representing or evidencing
such investments, and all interest, earnings and proceeds in respect
thereof;
(vii) all Intellectual Property Collateral of the undersigned;
(viii) all of the undersigned's letter of credit rights;
(ix) all commercial tort claims in which the undersigned has
rights (including as a plaintiff);
(x) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section;
(xi) all of the undersigned's other property and rights of
every kind and description and interests therein; and
(xii) all products, offspring, rents, issues, profits,
returns, income, supporting obligations and proceeds of and from any
and all of the foregoing Collateral (including proceeds which
constitute property of the types described in clauses (i) through
(xi), proceeds deposited from time to time in any lock box or
deposit account of the undersigned, and, to the extent not otherwise
included, all payments under insurance (whether or not the
Collateral Agent is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral);
provided, however, that "Collateral" shall not include any general
intangibles or other rights described in clause (v) above arising under
any contracts, instruments, licenses or other documents described in such
clause as to which the grant of a security interest would constitute a
violation of a valid and enforceable restriction in favor of a third party
on such grant, unless and until any required consents shall have been
obtained (and in connection therewith, the undersigned agrees to use its
best efforts to obtain any such required consent);
(c) agrees that each of the Schedules attached hereto shall be
deemed to be a Schedule thereto; and
(d) represents and warrants that the representations and warranties
made by it as a Grantor thereunder are true and correct on and as of the
date hereof.
-4-
In furtherance of the foregoing, each reference to a "Grantor" or "Additional
Grantor" in the Security Agreement shall be deemed to include the undersigned.
SECTION 2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event 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 Security Agreement shall not in any way be affected or
impaired.
SECTION 5. Without limiting the provisions of the Indenture (or any other
Related Document, including the Security Agreement), the undersigned agrees to
reimburse the Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including reasonable attorneys' fees and
expenses of the Collateral Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THIS SUPPLEMENT, THE SECURITY
AGREEMENT AND THE OTHER RELATED DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING
AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF
AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7. This Supplement hereby incorporates by reference the provisions
of the Security Agreement, which provisions are deemed to be a part hereof, and
this Supplement shall be deemed to be a part of the Security Agreement. Unless
otherwise defined herein or the context otherwise requires, terms used in this
Supplement, including its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Security Agreement.
SECTION 8. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
SECTION 9. Subject to Intercreditor Agreement. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL
AGENT PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE
COLLATERAL AGENT HEREUNDER, IN EACH CASE IN RESPECT OF ANY COLLATERAL
CONSTITUTING NOTEHOLDER COMMON COLLATERAL (AS DEFINED IN THE INTERCREDITOR
AGREEMENT DESCRIBED BELOW) ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT, DATED AS OF OCTOBER 15, 2002 (AS AMENDED, MODIFIED OR
-5-
SUPPLEMENTED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") AMONG GENERAL
ELECTRIC CAPITAL CORPORATION AS SENIOR AGENT, AND U.S. BANK TRUST NATIONAL
ASSOCIATION, AS COLLATERAL AGENT, U.S. BANK TRUST NATIONAL ASSOCIATION, AS
TRUSTEE, AND THE OBLIGORS, INCLUDING THE GRANTORS HEREUNDER NAMED THEREIN. IN
THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND
THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN.
-6-
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
[NAME OF ADDITIONAL GRANTOR], a
____________ _____________
By:____________________________________
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Collateral Agent
By:_________________________________
Name:
Title:
-7-
SCHEDULE I
to Supplement No. __
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Intercompany Notes
Maximum Amount of
Intercompany Loans
Maker Evidenced Thereby Date
----- ----------------- ----
Item B. Securities
Common Stock
-----------------------------------------
Authorized Outstanding % of Shares
Company (corporate) Shares Shares Pledged
------------------- ------ ------ -------
Limited Liability Company Interests
-------------------------------------------------------------
Company (limited liability % of Limited Liability Type of Limited Liability
company) Company Interests Pledged Company Interests Pledged
-------- ------------------------- -------------------------
Partnership Interests
---------------------
% of Partnership Type of Partnership
Company (partnership) Interests Pledged Interests Pledged
--------------------- ----------------- -----------------
Item C. Additional Subsidiaries
SCHEDULE II
to Supplement No. __
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Locations of each Grantor:
Name of Grantor: Location for purposes of U.C.C.:
[GRANTOR] [LOCATION]
Item B. Filing locations prior to July 1, 2001
Name of Grantor: Filing Locations prior to
July 1, 2001 (or October 1, 2001 if the
location is Connecticut and January 1,
2002 if the location is Alabama,
Florida or Mississippi):
[GRANTOR] [LOCATION]
Item C. Trade names.
Name of Grantor: Trade Names:
[GRANTOR]
Item D. Merger or other corporate reorganization.
Name of Grantor: Merger or other corporate
reorganization:
[GRANTOR]
Item E. Taxpayer ID numbers.
Name of Grantor: Taxpayer ID numbers:
[GRANTOR]
Item F. Government Contracts:
Name of Grantor: Description of Contract:
[GRANTOR]
Item G. Deposit Accounts:
Name of Grantor: Description of Deposit Account:
[GRANTOR]
SCHEDULE III
to Supplement No. __
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Patents
Issued Patents
-------------------------------------------------------------------
*Country Patent No. Issue Date Inventor(s) Title
-------- ---------- ---------- ----------- -----
Pending Patent Applications
-------------------------------------------------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Patent Applications in Preparation
-------------------------------------------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Item B. Patent Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
--------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
SCHEDULE IV
to Supplement No. __
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Trademarks
Registered Trademarks
----------------------------------------------------------------------
*Country Trademark Registration No. Registration Date
-------- --------- ---------------- -----------------
Pending Trademark Applications
--------------------------------------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Pending Applications in Preparation
----------------------------------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
Item B. Trademark Licenses
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- ---- ----
--------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
SCHEDULE V
to Supplement No. __
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
------------------------------------------------------------------------
*Country Registration No. Registration Date Author(s) Title
-------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
------------------------------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
----------------------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
--------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
SCHEDULE VI
to Supplement No __
to Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Trade Secret or Know-How Licenses
------------------------------------------------------------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
--------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
