EXHIBIT 10.4
EXECUTION COPY
DOMESTIC GUARANTEE AND COLLATERAL AGREEMENT
dated and effective as of
October 29, 2004,
among
D-R INTERHOLDING, LLC,
as Guarantor and Pledgor,
DRESSER-RAND GROUP INC.,
as Domestic Borrower,
each Domestic Subsidiary Loan Party
identified herein,
and
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
TABLE OF CONTENTS
Page
Article I
Definitions
SECTION 1.01. Credit Agreement......................................................... 1
SECTION 1.02. Other Defined Terms...................................................... 1
Article II
Guarantee
SECTION 2.01. Guarantee ............................................................... 4
SECTION 2.02. Guarantee of Payment..................................................... 5
SECTION 2.03. No Limitations, etc. .................................................... 5
SECTION 2.04. Reinstatement ........................................................... 7
SECTION 2.05. Agreement To Pay; Subrogation............................................ 7
SECTION 2.06. Information ............................................................. 7
SECTION 2.07. Maximum Liability........................................................ 7
SECTION 2.08. Payments Free and Clear of Taxes, Etc. .................................. 7
Article III
Pledge of Securities
SECTION 3.01. Pledge .................................................................. 8
SECTION 3.02. Delivery of the Pledged Collateral....................................... 9
SECTION 3.03. Representations, Warranties and Covenants................................ 9
SECTION 3.04. Certification of Limited Liability Company and Limited Partnership
Interests................................................................ 11
SECTION 3.05. Registration in Nominee Name; Denominations.............................. 11
SECTION 3.06. Voting Rights; Dividends and Interest, etc. ............................. 12
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Article IV
Security Interests in Personal Property
SECTION 4.01. Security Interest........................................................ 13
SECTION 4.02. Representations and Warranties........................................... 15
SECTION 4.03. Covenants ............................................................... 17
SECTION 4.04. Other Actions ........................................................... 20
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral........... 21
Article V
Remedies
SECTION 5.01. Remedies Upon Default.................................................... 23
SECTION 5.02. Application of Proceeds.................................................. 24
SECTION 5.03. Grant of License To Use Intellectual Property............................ 25
SECTION 5.04. Securities Act, etc. .................................................... 25
SECTION 5.05. Registration, etc. ...................................................... 26
Article VI
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and Subrogation................................................ 27
SECTION 6.02. Contribution and Subrogation............................................. 27
SECTION 6.03. Subordination............................................................ 27
Article VII
Miscellaneous
SECTION 7.01. Notices ................................................................. 28
SECTION 7.02. Security Interest Absolute............................................... 28
SECTION 7.03. Binding Effect; Several Agreement........................................ 28
SECTION 7.04. Successors and Assigns................................................... 29
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SECTION 7.05. Collateral Agent's Fees and Expenses; Indemnification.................... 29
SECTION 7.06. Collateral Agent Appointed Attorney-in-Fact.............................. 29
SECTION 7.07. GOVERNING LAW............................................................ 30
SECTION 7.08. Waivers; Amendment....................................................... 30
SECTION 7.09. WAIVER OF JURY TRIAL..................................................... 30
SECTION 7.10. Severability ............................................................ 31
SECTION 7.11. Counterparts ............................................................ 31
SECTION 7.12. Headings ................................................................ 31
SECTION 7.13. Jurisdiction; Consent to Service of Process.............................. 31
SECTION 7.14. Termination or Release................................................... 32
SECTION 7.15. Additional Subsidiaries.................................................. 32
SECTION 7.16. Right of Set-off......................................................... 33
SECTION 7.17. Credit Agreement......................................................... 33
Schedules
Schedule I Domestic Subsidiary Loan Parties
Schedule II Pledged Stock; Pledged Debt Securities
Schedule III Intellectual Property
Schedule IV Limited Liability Company Interests
Schedule V Commercial Tort Claims
Schedule VI Partnership Interests
Exhibits
Exhibit I Form of Supplement to the Domestic Guarantee and Collateral
Agreement
Exhibit II Form of Perfection Certificate
Exhibit III Form of Intercompany Note
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DOMESTIC GUARANTEE AND COLLATERAL AGREEMENT dated and effective as of
October 29, 2004 (this "Agreement"), among D-R INTERHOLDING, LLC, a Delaware
limited liability company ("Holdings"), DRESSER-RAND GROUP INC., a Delaware
corporation ("Acquisition Corp." or the "Domestic Borrower"), each Domestic
Subsidiary Loan Party listed on the signature page and any other entity that
becomes a party pursuant to Section 7.15 (each, a "Domestic Subsidiary Loan
Party") and CITICORP NORTH AMERICA, INC. ("CNAI"), as collateral agent (in such
capacity, the "Collateral Agent") for the Secured Parties (as defined below).
Reference is made to the Credit Agreement dated as of October 29, 2004
(as amended, restated, supplemented, waived or otherwise modified from time to
time, the "Credit Agreement"), among Holdings, the Domestic Borrower, the
Foreign Borrowers party thereto from time to time, the lenders party thereto
from time to time (the "Lenders"), CNAI, as Administrative Agent and as
Collateral Agent for the Lenders, XXXXXX XXXXXXX SENIOR FUNDING, INC. ("MS") and
UBS SECURITIES LLC ("UBS"), as Co-Syndication Agents, CITIGROUP GLOBAL MARKETS
INC., MS and UBS, as Joint Lead Arrangers and Joint Book Managers and NATEXIS
BANQUES POPULAIRES and BEAR XXXXXXX CORPORATE LENDING INC., as Co-Documentation
Agents.
The Lenders have agreed to extend credit to the Borrowers (as defined
in the Credit Agreement) subject to the terms and conditions set forth in the
Credit Agreement. The obligations of the Lenders to extend such credit are
conditioned upon, among other things, the execution and delivery of this
Agreement. Holdings and the Domestic Subsidiary Loan Parties are Affiliates of
the Borrowers, will derive substantial benefits from the extension of credit to
the Borrowers pursuant to the Credit Agreement and are willing to execute and
deliver this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this
Agreement and not otherwise defined herein have the respective meanings assigned
thereto in the Credit Agreement. All terms defined in the New York UCC (as
defined herein) and not defined in this Agreement have the meanings specified
therein. The term "instrument" shall have the meaning specified in Article 9 of
the New York UCC.
(b) The rules of construction specified in Section 1.02 of the Credit
Agreement also apply to this Agreement.
SECTION 1.02. Other Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Account Debtor" means any person who is or who may become obligated to
any Guarantor under, with respect to or on account of an Account.
"Article 9 Collateral" has the meaning assigned to such term in Section
4.01.
"Collateral" means Article 9 Collateral and Pledged Collateral.
"Control Agreement" means a securities account control agreement or
commodity account control agreement, as applicable, in form and substance
reasonably satisfactory to the Collateral Agent.
"Copyrights" means all of the following now owned or hereafter acquired
by any Guarantor: (a) all copyright rights in any work subject to the copyright
laws of the United States or any other country, whether as author, assignee,
transferee or otherwise; and (b) all registrations and applications for
registration of any such Copyright in the United States or any other country,
including registrations, supplemental registrations and pending applications for
registration in the United States Copyright Office, including those listed on
Schedule III.
"Credit Agreement" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Domestic Subsidiary Loan Party" has the meaning assigned to such term
in the preliminary statement of this Agreement.
"Federal Securities Laws" has the meaning assigned to such term in
Section 5.04.
"General Intangibles" means all "General Intangibles" as defined in the
New York UCC, including all choses in action and causes of action and all other
intangible personal property of any Guarantor of every kind and nature (other
than Accounts) now owned or hereafter acquired by any Guarantor, including
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap
Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Guarantor to secure payment by an Account Debtor of any of the Accounts.
"Guaranteed Obligations" means (a) the Loan Document Obligations and
(b) the due and punctual payment and performance of all obligations of each Loan
Party under each Swap Agreement (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) that (i) is in
effect on the Closing Date with a counterparty that is a Lender or an Affiliate
of a Lender as of the Closing Date or (ii) is entered into after the Closing
Date with any counterparty that is a Lender or an Affiliate of a Lender at the
time such Swap Agreement is entered into.
"Guarantors" means Holdings, the Domestic Borrower and each Domestic
Subsidiary Loan Party.
"Intellectual Property" means all intellectual and similar property of
every kind and nature now owned or hereafter acquired by any Guarantor,
including inventions, designs, Patents, Copyrights, Trademarks, IP Agreements,
trade secrets, domain names, confidential or
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proprietary technical and business information, know-how, show-how or other data
or information and all related documentation.
"Intercompany Note" shall mean a promissory note substantially in the
form of Exhibit III.
"IP Agreements" means all agreements granting to or receiving from a
third party any rights to Intellectual Property to which any Guarantor, now or
hereafter, is a party.
"Loan Document Obligations" means (a) the due and punctual payment by
the Borrowers of (i) the unpaid principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans made to the Borrowers, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrowers under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) and obligations to provide cash collateral and
(iii) all other monetary obligations of the Borrowers to any of the Secured
Parties under the Credit Agreement and each of the other Loan Documents,
including obligations to pay fees, expense and reimbursement obligations and
indemnification obligations, whether primary, secondary, direct, indirect,
contingent, fixed or otherwise (including interest incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) and (b) the due
and punctual performance of all other obligations of the Borrowers under or
pursuant to the Credit Agreement and each of the other Loan Documents (other
than the Guaranteed Obligations referred to in clause (b) of the definition of
"Guaranteed Obligations") (including interest incurred during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding).
"Material Pledged Debt Securities" has the meaning assigned to such
term in Section 3.01.
"New York UCC" means the Uniform Commercial Code as from time to time
in effect in the State of New York.
"Patents" means all of the following now owned or hereafter acquired by
any Guarantor: (a) all letters patent of the United States or the equivalent
thereof in any other country, and all applications for letters patent of the
United States or the equivalent thereof in any other country, including those
listed on Schedule III, and (b) all reissues, continuations, divisions,
continuations-in-part or extensions thereof, and the inventions disclosed or
claimed therein, including the right to make, use and/or sell the inventions
disclosed or claimed therein.
"Perfection Certificate" means a certificate substantially in the form
of Exhibit II, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Financial Officer of the Domestic
Borrower.
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"Pledged Collateral" has the meaning assigned to such term in Section
3.01.
"Pledged Debt Securities" has the meaning assigned to such term in
Section 3.01.
"Pledged Securities" means any promissory notes, stock certificates or
other certificated securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.
"Pledged Stock" has the meaning assigned to such term in Section 3.01.
"Pledgor" shall mean each Guarantor.
"Secured Parties" means (a) the Lenders, (b) the Administrative Agent,
(c) the Collateral Agent, (d) each Issuing Bank, (e) each counterparty to any
Swap Agreement entered into with a Loan Party the obligations under which
constitute Obligations, (f) the beneficiaries of each indemnification obligation
undertaken by any Loan Party under any Loan Document and (g) the successors and
permitted assigns of each of the foregoing.
"Security Interest" has the meaning assigned to such term in Section
4.01.
"Trademarks" means all of the following now owned or hereafter acquired
by any Guarantor: (a) all trademarks, service marks, corporate names, company
names, business names, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations thereof (if any), and all registration
and recording applications filed in connection therewith in the United States
Patent and Trademark Office or any similar offices in any State of the United
States or any other country or any political subdivision thereof, and all
renewals thereof, including those listed on Schedule III (provided that no
security interest shall be granted in United States intent-to-use trademark
applications to the extent that, and solely during the period in which, the
grant of a security interest therein would impair the validity or enforceability
of such intent-to-use trademark applications under applicable federal law) and
(b) all goodwill associated therewith or symbolized thereby.
ARTICLE II
GUARANTEE
SECTION 2.01. Guarantee. Each Guarantor absolutely, irrevocably and
unconditionally guarantees, jointly with the other Guarantors and severally, as
a primary obligor and not merely as a surety, the due and punctual payment and
performance of the Guaranteed Obligations. Each Guarantor further agrees that
the Guaranteed Obligations may be extended, modified, substituted, amended or
renewed, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any extension or
renewal of any Guaranteed Obligation. Each Guarantor unconditionally and
irrevocably waives notice of nonperformance, acceleration, presentment to,
demand of payment from and protest to any Borrower or any other Loan Party of
any of the Guaranteed Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment.
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SECTION 2.02. Guarantee of Payment. Each Guarantor further agrees that
its guarantee hereunder constitutes a guarantee of payment when due, whether at
scheduled maturity or on any date of a required prepayment or by acceleration,
demand or otherwise, and not of collection, and waives any right to require that
any resort be had by the Collateral Agent or any other Secured Party to any
security held for the payment of the Guaranteed Obligations or to any balance of
any deposit account or credit on the books of the Collateral Agent or any other
Secured Party in favor of any Borrower or any other person.
SECTION 2.03. No Limitations, etc. (a) Except for termination of a
Guarantor's obligations hereunder as expressly provided for in Section 7.14, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by:
(i) the failure of the Administrative Agent, the Collateral Agent or
any other Secured Party to assert any claim or demand or to exercise or
enforce any right or remedy under the provisions of any Loan Document or
otherwise;
(ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document or any
other agreement, including with respect to any other Guarantor under this
Agreement;
(iii) the failure to perfect any security interest in, or the exchange,
substitution, release or any impairment of, any Collateral or any other
collateral securing the Guaranteed Obligations;
(iv) any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations;
(v) any other act or omission that may or might in any manner or to any
extent vary the risk of any Guarantor or otherwise operate as a discharge of
any Guarantor as a matter of law or equity (other than the indefeasible
payment in full in cash of all the Guaranteed Obligations);
(vi) any illegality, lack of validity or enforceability of any
Guaranteed Obligation;
(vii) any change in the corporate existence, structure or ownership of
any Borrower, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Borrower or its assets or any resulting release or
discharge of any Guaranteed Obligation;
(viii) the existence of any claim, set-off or other rights that the
Guarantor may have at any time against any Borrower, the Collateral Agent,
or any other corporation or person, whether in connection herewith or any
unrelated transactions, provided that
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nothing herein will prevent the assertion of any such claim by separate suit
or compulsory counterclaim; and
(ix) any other circumstance (including without limitation, the
expiration of any statute of limitations) or any existence of or reliance on
any representation by the Collateral Agent that might otherwise constitute a
defense to, or a legal or equitable discharge of, the Domestic Borrower or
the Guarantor or any other guarantor or surety.
Each Guarantor expressly authorizes the Secured Parties to take and hold
security for the payment and performance of the Guaranteed Obligations, to
exchange, waive or release any or all such security (with or without
consideration), to enforce or apply such security and direct the order and
manner of any sale thereof in their sole discretion or to release or substitute
any one or more other guarantors or obligors upon or in respect of the
Guaranteed Obligations, all without affecting the obligations of any Guarantor
hereunder. Each Guarantor acknowledges that its guarantee is continuing in
nature and applies to all Guaranteed Obligations, whether existing now or in the
future. Each Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in this Article II are knowingly made
in contemplation of such benefits.
(b) To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of any Borrower or any
other Loan Party or the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
any Borrower or any other Loan Party, other than the indefeasible payment in
full in cash of all the Guaranteed Obligations. The Collateral Agent and the
other Secured Parties may, at their election, foreclose on any security held by
one or more of them by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Guaranteed Obligations, make any other accommodation with any
Borrower or any other Loan Party or exercise any other right or remedy available
to them against any Borrower or any other Loan Party, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been fully and indefeasibly paid in full
in cash. To the fullest extent permitted by applicable law, each Guarantor
waives any defense arising out of any such election even though such election
operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
any Borrower or any other Loan Party, as the case may be, or any security.
SECTION 2.04. Reinstatement. Each Guarantor agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Guaranteed Obligation is
rescinded or must otherwise be restored by the Administrative Agent or any other
Secured Party upon the bankruptcy or reorganization of any Borrower, any other
Loan Party or otherwise.
SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against any Guarantor by virtue
hereof, upon the failure of any Borrower or any other Loan Party to pay any
Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each
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Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the
Collateral Agent for distribution to the applicable Secured Parties in cash the
amount of such unpaid Guaranteed Obligation. Upon payment by any Guarantor of
any sums to the Collateral Agent as provided above, all rights of such Guarantor
against any Borrower, or other Loan Party or any other Guarantor arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subject to Article VI.
SECTION 2.06. Information. Each Guarantor assumes all responsibility
for being and keeping itself informed of the financial condition and assets of
each Borrower and each other Loan Party, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Collateral Agent or the other Secured Parties will have
any duty to advise such Guarantor of information known to it or any of them
regarding such circumstances or risks.
SECTION 2.07. Maximum Liability. Anything herein or in any other Loan
Document to the contrary notwithstanding, the maximum liability of each
Guarantor (other than Holdings and the Domestic Borrower) hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors (after giving effect to the right of contribution
established in Section 6.02).
SECTION 2.08. Payments Free and Clear of Taxes, Etc. (a) Any and all
payments made by any Guarantor under or in respect of this Agreement or any
other Loan Document shall be made, in accordance with Section 2.17 of the Credit
Agreement.
ARTICLE III
PLEDGE OF SECURITIES
SECTION 3.01. Pledge. As security for the payment or performance, as
the case may be, in full of the Guaranteed Obligations, each Pledgor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in all of such Pledgor's right, title and interest
in, to and under (a) the Equity Interests of any Material Subsidiary directly
owned by it as of the Closing Date and any other Equity Interests of any
Material Subsidiary directly owned in the future by such Pledgor and any
certificates representing all such Equity Interests (the "Pledged Stock");
provided that the Pledged Stock shall not include (i) any Equity Interests of
any Material Subsidiary that may be pledged pursuant to any foreign pledge
agreement under the terms of the Credit Agreement, (ii) any Equity Interests of
any Material Subsidiary listed on Schedule VI hereto, as such schedule may be
updated from time to time, (iii) more than 65% of the issued and outstanding
voting Equity Interests of any Foreign Subsidiary or any Domestic Subsidiary
substantially all of whose assets consist of the Equity Interests in "controlled
foreign companies" under Section 957 of the Code, (iv) any Equity Interests of
any Subsidiary to the extent that, as of the Closing Date and for so long as, a
pledge of such Equity Interests would violate a
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contractual obligation binding on the issuer or holder of such Equity Interests,
(v) any Equity Interests of any Subsidiary acquired after the Closing Date in
accordance with the Credit Agreement if, and to the extent that, and for so long
as (A) pledging such Equity Interests would violate applicable law or a
contractual obligation binding on the issuer or holder of such Equity Interests
and (B) such law or obligation existed at the time of the acquisition thereof
and was not created or made binding on such Equity Interests in contemplation of
or in connection with the acquisition of such Subsidiary, provided that the
foregoing clause (B) shall not apply in the case of a joint venture, including a
joint venture that is a Subsidiary, and, (vi) Equity Interests in any Foreign
Subsidiary if the Domestic Borrower demonstrates to the Collateral Agent and the
Collateral Agent determines (in its reasonable discretion) that the cost of
pledging the Equity Interests in such Foreign Subsidiary exceeds the value of
the security offered thereby; provided that, upon the reasonable request of the
Collateral Agent, Domestic Borrower shall, and shall cause any applicable
Subsidiary to, use commercially reasonable efforts to have waived or eliminated
any contractual obligation of the types described in clauses (iv) and (v) above,
other than those set forth in a joint venture agreement to which Holdings or any
Subsidiary is a party; provided further, that Pledged Stock shall include the
interests listed on Schedule II; (b)(i) the debt securities for borrowed money
having an aggregate principal amount in excess of $10,000,000 (other than (i)
intercompany current liabilities incurred in the ordinary course of business in
connection with the cash management operations of Holdings, the Domestic
Borrower and the Subsidiaries, (ii) any such debt securities that may be pledged
pursuant to any foreign pledge agreement under the terms of the Credit
Agreement, and (iii) any debt securities listed on Annex A to the Credit
Agreement (other than those debt securities listed on Schedule II hereto))
("Material Pledged Debt Securities") held by such Pledgor as of the Closing
Date, (ii) any Material Pledged Debt Securities in the future issued to such
Pledgor and (iii) the promissory notes and any other instruments, if any,
evidencing such Material Pledged Debt Securities (the "Pledged Debt
Securities"); provided, that the Pledged Debt Securities shall include the debt
securities listed on Schedule II; (c) subject to Section 3.06, all payments of
principal or interest, dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of, in exchange
for or upon the conversion of, and all other proceeds received in respect of,
the securities referred to in clauses (a) and (b) above; (d) all rights and
privileges of such Pledgor with respect to the securities and other property
referred to in clauses (a), (b) and (c) above; and (e) all proceeds of any of
the foregoing (the items referred to in clauses (a) through (e) above being
collectively referred to as the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Pledgor
agrees promptly to deliver or cause to be delivered to the Collateral Agent, for
the ratable benefit of the Secured Parties, any and all Pledged Stock and any
and all Pledged Debt Securities to the extent such Pledged Securities, in the
case of promissory notes or other instruments evidencing Indebtedness, are
required to be delivered pursuant to paragraph (b) of this Section 3.02.
(b) Each Pledgor will cause any Material Pledged Debt Securities owed
to such Pledgor by any person to be evidenced by a duly executed promissory note
that is pledged
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and delivered to the Collateral Agent, including the Intercompany Note, for the
ratable benefit of the Secured Parties, pursuant to the terms hereof. To the
extent any such promissory note is a demand note, each Pledgor party thereto
agrees, if requested by the Collateral Agent, to immediately demand payment
thereunder upon an Event of Default specified under Sections 7.01(b), (c), (f),
(h) or (i) of the Credit Agreement.
(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities
required to be delivered pursuant to the foregoing paragraphs (a) and (b) of
this Section 3.02 (other than the Intercompany Note) shall be accompanied by
stock powers or note powers, as applicable, duly executed in blank or other
instruments of transfer reasonably satisfactory to the Collateral Agent and by
such other instruments and documents as the Collateral Agent may reasonably
request and (ii) all other property composing part of the Pledged Collateral
delivered pursuant to the terms of this Agreement shall be accompanied to the
extent necessary to perfect the security interest in or allow realization on the
Pledged Collateral by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents (including issuer
acknowledgments in respect of uncertificated securities) as the Collateral Agent
may reasonably request. Each delivery of Pledged Securities shall be accompanied
by a schedule describing the securities, which schedule shall be attached hereto
as Schedule II and made a part hereof; provided that failure to attach any such
schedule hereto shall not affect the validity of such pledge of such Pledged
Securities. Each schedule so delivered shall supplement any prior schedules so
delivered.
SECTION 3.03. Representations, Warranties and Covenants. The Pledgors,
jointly and severally, represent, warrant and covenant to and with the
Collateral Agent, for the ratable benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth as of the Closing Date the (x)
name and jurisdiction of each issuer of, and the ownership interest (including
percentage owned and number of shares or units) of each Pledgor in, the Pledged
Stock and (y) amount and obligor under the Material Pledged Debt Securities;
(b) the Pledged Stock and Pledged Debt Securities (solely with respect
to Pledged Debt Securities issued by a person that is not a Subsidiary of
Holdings or an Affiliate of any such Subsidiary, to each Pledgor's knowledge)
have been duly and validly authorized and issued by the issuers thereof and (i)
in the case of Pledged Stock, are fully paid and nonassessable and (ii) in the
case of Pledged Debt Securities (solely with respect to Pledged Debt Securities
issued by a person that is not a Subsidiary of Holdings or an Affiliate of any
such Subsidiary, to each Pledgor's knowledge) are legal, valid and binding
obligations of the issuers thereof;
(c) except for the security interests granted hereunder, each Pledgor
(i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedule II as owned by such Pledgor, (ii)
holds the same free and clear of all Liens, other than Liens permitted under
Section 6.02 of the Credit Agreement, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security interest
in or other Lien on, the Pledged Collateral, other than pursuant to a
transaction permitted by the Credit Agreement
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and other than Liens permitted under Section 6.02 of the Credit Agreement and
(iv) subject to the rights of such Pledgor under the Loan Documents to dispose
of Pledged Collateral, will defend its title or interest hereto or therein
against any and all Liens (other than Liens permitted under Section 6.02 of the
Credit Agreement), however arising, of all persons;
(d) except for restrictions and limitations imposed by the Loan
Documents, securities laws generally, the laws of any applicable foreign
jurisdiction (with respect to Pledged Collateral pledged after the Closing Date)
or otherwise permitted to exist pursuant to the terms of the Credit Agreement,
(i) the Pledged Collateral is and will continue to be freely transferable and
assignable and (ii) none of the Pledged Collateral is or will be subject to any
option, right of first refusal, shareholders agreement, charter or by-law
provisions or contractual restriction of any nature that might prohibit, impair,
delay or otherwise affect the pledge of such Pledged Collateral hereunder, the
sale or disposition thereof pursuant hereto or the exercise by the Collateral
Agent of rights and remedies hereunder;
(e) each Pledgor has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated;
(f) except for consents or approvals required by laws of any applicable
foreign jurisdiction (with respect to Pledged Collateral pledged after the
Closing Date), no consent or approval of any Governmental Authority, any
securities exchange or any other person was or is necessary to the validity of
the pledge effected hereby (other than such as have been obtained and are in
full force and effect);
(g) by virtue of the execution and delivery by the Pledgors of this
Agreement, when any Pledged Securities are delivered to the Collateral Agent,
for the ratable benefit of the Secured Parties, in accordance with this
Agreement, the Collateral Agent will obtain, for the ratable benefit of the
Secured Parties, a legal, valid and perfected first priority lien upon and
security interest in such Pledged Securities as security for the payment and
performance of the Guaranteed Obligations under the New York UCC, except, in the
case of Pledged Securities delivered after the Closing Date, as provided by the
laws of any applicable foreign jurisdiction and subject to Liens permitted by
the Credit Agreement; and
(h) the pledge effected hereby is effective to vest in the Collateral
Agent, for the ratable benefit of the Secured Parties, the rights of the
Pledgors in the Pledged Collateral as set forth herein, except as provided by
the laws of any applicable foreign jurisdiction (with respect to Pledged
Collateral pledged after the Closing Date).
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests. Except as provided by the laws of any applicable foreign
jurisdiction, each interest in any limited liability company or limited
partnership controlled by any Loan Party and pledged hereunder shall be
represented by a certificate, shall to the extent permitted by applicable laws
be a "security" within the meaning of Article 8 of the New York UCC and shall be
governed by Article 8 of the New York UCC; provided, however, in the case of (a)
the limited liability company interests set forth on Schedule IV, the Domestic
Borrower shall cause such interests to be represented by a certificate, to be a
"security" within the meaning of Article 8 of the New York UCC and to be
governed by Article 8 of the New York UCC, in each case not
10
later than 20 Business Days after the Closing Date and (b) that any limited
liability company or limited partnership that, in either case, is organized
under the laws of any state of the United States and is a Wholly Owned
Subsidiary formed or acquired after the Closing Date, the Domestic Borrower
shall cause such interests to be represented by a certificate, to be a
"security" within the meaning of Article 8 of the New York UCC and to be
governed by Article 8 of the New York UCC, in each case not later than 20
Business Days after the date of formation or acquisition thereof, as applicable.
SECTION 3.05. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
sole and absolute discretion) to hold the Pledged Securities in the name of the
applicable Pledgor, endorsed or assigned in blank or in favor of the Collateral
Agent or, if an Event of Default shall have occurred and be continuing, in its
own name as pledgee or the name of its nominee (as pledgee or as sub-agent).
Each Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. If an Event of Default shall have
occurred and be continuing, the Collateral Agent shall have the right to
exchange the certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.
Each Pledgor shall use its commercially reasonable efforts to cause any Loan
Party that is not a party to this Agreement to comply with a request by the
Collateral Agent, pursuant to this Section 3.05, to exchange certificates
representing Pledged Securities of such Loan Party for certificates of smaller
or larger denominations.
SECTION 3.06. Voting Rights; Dividends and Interest, etc. (a) Unless
and until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms of
this Agreement, the Credit Agreement and the other Loan Documents; provided
that such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any
Pledged Securities, the rights and remedies of any of the Collateral Agent
or the other Secured Parties under this Agreement, the Credit Agreement or
any other Loan Document or the ability of the Secured Parties to exercise
the same.
(ii) The Collateral Agent shall promptly execute and deliver to each
Pledgor, or cause to be executed and delivered to such Pledgor, all such
proxies, powers of attorney and other instruments as such Pledgor may
reasonably request for the purpose of enabling such Pledgor to exercise the
voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) Each Pledgor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Securities to the extent and only to
the extent that such dividends, interest, principal and other distributions
are permitted by, and otherwise paid or distributed in accordance with, the
terms and conditions of the Credit Agreement, the other Loan Documents and
applicable laws; provided that any noncash dividends, interest, principal or
other
11
distributions that would constitute Pledged Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received in
exchange for Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation, acquisition or other
exchange of assets to which such issuer may be a party or otherwise, shall
be and become part of the Pledged Collateral, and, if received by any
Pledgor, shall not be commingled by such Pledgor with any of its other funds
or property but shall be held separate and apart therefrom, shall be held in
trust for the benefit of the Collateral Agent, for the ratable benefit of
the Secured Parties, and shall be forthwith delivered to the Collateral
Agent, for the ratable benefit of the Secured Parties, in the same form as
so received (endorsed in a manner reasonably satisfactory to the Collateral
Agent).
(b) Upon the occurrence and during the continuance of an Event of
Default and after notice by the Collateral Agent to the relevant Pledgors of the
Collateral Agent's intention to exercise its rights hereunder, except as
provided by the laws of any applicable foreign jurisdiction, all rights of any
Pledgor to dividends, interest, principal or other distributions that such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) of this Section
3.06 shall cease, and all such rights shall thereupon become vested, for the
ratable benefit of the Secured Parties, in the Collateral Agent which shall have
the sole and exclusive right and authority to receive and retain such dividends,
interest, principal or other distributions. All dividends, interest, principal
or other distributions received by any Pledgor contrary to the provisions of
this Section 3.06 shall not be commingled by such Pledgor with any of its other
funds or property but shall be held separate and apart therefrom, shall be held
in trust for the benefit of the Collateral Agent, for the ratable benefit of the
Secured Parties, and shall be forthwith delivered to the Collateral Agent, for
the ratable benefit of the Secured Parties, in the same form as so received
(endorsed in a manner reasonably satisfactory to the Collateral Agent). Any and
all money and other property paid over to or received by the Collateral Agent
pursuant to the provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral Agent upon
receipt of such money or other property and shall be applied in accordance with
the provisions of Section 5.02. After all Events of Default have been cured or
waived and the Domestic Borrower has delivered to the Collateral Agent a
certificate to that effect, the Collateral Agent shall promptly repay to each
Pledgor (without interest) all dividends, interest, principal or other
distributions that such Pledgor would otherwise be permitted to retain pursuant
to the terms of paragraph (a)(iii) of this Section 3.06 and that remain in such
account.
(c) Upon the occurrence and during the continuance of an Event of
Default and after notice by the Collateral Agent to the relevant Pledgors of the
Collateral Agent's intention to exercise its rights hereunder, except as
provided by the laws of any applicable foreign jurisdiction, all rights of any
Pledgor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this Section
3.06, shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, for the ratable benefit of the Secured Parties, which shall
have the sole and exclusive right and authority to exercise such voting and
consensual rights and powers; provided that, unless otherwise directed by the
Required Lenders, the Collateral Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the
Pledgors to exercise such rights.
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After all Events of Default have been cured or waived and the Domestic Borrower
has delivered to the Collateral Agent a certificate to that effect, each Pledgor
shall have the right to exercise the voting and/or consensual rights and powers
that such Pledgor would otherwise be entitled to exercise pursuant to the terms
of paragraph (a)(i) above.
ARTICLE IV
SECURITY INTERESTS IN PERSONAL PROPERTY
SECTION 4.01. Security Interest. (a) As security for the payment or
performance, as the case may be, in full of the Guaranteed Obligations, each
Guarantor hereby assigns and pledges to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, and hereby grants to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest (the "Security Interest") in all right,
title and interest in or to any and all of the following assets and properties
now owned or at any time hereafter acquired by such Guarantor or in which such
Guarantor now has or at any time in the future may acquire any right, title or
interest (collectively, the "Article 9 Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all Fixtures;
(vii) all General Intangibles;
(viii) all Instruments;
(ix) all Inventory;
(x) all Investment Property;
(xi) all Letter-of-Credit Rights;
(xii) all Commercial Tort Claims;
(xiii) all books and records pertaining to the Article 9 Collateral;
and
(xiv) to the extent not otherwise included, all proceeds, supporting
Obligations and products of any and all of the foregoing and all collateral
given by any person with respect to any of the foregoing.
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Notwithstanding anything to the contrary in this Agreement, this Agreement shall
not constitute a grant of a security interest (other than the grant of security
interest in the Pledged Stock pursuant to Section 3.01) in, and "Article 9
Collateral" shall not include, (a) any Equity Interests of any Person (except
for Equity Interests of any Material Subsidiary listed on Schedule VI hereto as
such schedule may be updated from time to time, that can be perfected upon the
filing of a financing statement), (b) any Material Pledged Debt Securities or
any debt securities that may be pledged pursuant to any foreign pledge agreement
under the terms of the Credit Agreement, (c) any assets of any Subsidiary to the
extent that, as of the Closing Date, and for so long as, a pledge of such assets
would violate a contractual obligation binding on such assets or such
Subsidiary, (d) any assets of any Subsidiary acquired after the Closing Date in
accordance with the Credit Agreement if, and to the extent that, and for so long
as (1) pledging such assets would violate applicable law or a contractual
obligation binding on such assets or such Subsidiary and (2) such law or
obligation existed at the time of the acquisition thereof or (e) any United
States intent-to-use trademark applications to the extent that, and solely
during the period in which, the grant of a security interest therein would
impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law; provided, that, upon the reasonable
request of the Collateral Agent, Domestic Borrower shall, and shall cause any
applicable Subsidiary to, use commercially reasonable efforts to have waived or
eliminated any contractual obligation of the types described in clauses (c) and
(d) above, other than those set forth in a joint venture agreement to which
Holdings or any Subsidiary is a party .
(b) Each Guarantor hereby irrevocably authorizes the Collateral Agent
at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings), continuation
statements, or other filings and recordings, with respect to the Article 9
Collateral and any other collateral pledged hereunder or any part thereof and
amendments thereto that contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment, or such other information as may be required
under applicable law including (i) whether such Guarantor is an organization,
the type of organization and any organizational identification number issued to
such Guarantor, (ii) in the case of Fixtures, a sufficient description of the
real property to which such Article 9 Collateral relates and (iii) a description
of collateral that describes such property in any other manner as the Collateral
Agent may reasonably determine is necessary or advisable to ensure the
perfection of the security interest in the Article 9 Collateral or other
collateral granted under this Agreement, including describing such property as
"all assets" or "all property". Each Guarantor agrees to provide such
information to the Collateral Agent promptly upon request.
The Collateral Agent is further authorized to file with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) such documents as
may be necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Guarantor, without the signature of any Guarantor, and naming any Guarantor or
the Guarantors as debtors and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Guarantor with respect to or
arising out of the Article 9 Collateral.
14
SECTION 4.02. Representations and Warranties. The Guarantors jointly
and severally represent and warrant to the Collateral Agent and the Secured
Parties that:
(a) Each Guarantor has good and valid rights in and title to the
Article 9 Collateral with respect to which it has purported to grant a Security
Interest hereunder and has full power and authority to grant to the Collateral
Agent the Security Interest in such Article 9 Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval that has been obtained and is in full force and effect.
(b) The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal name
of each Guarantor, is correct and complete, in all material respects, as of the
Closing Date. Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Article 9 Collateral have been
prepared by the Collateral Agent based upon the information provided to the
Collateral Agent in the Perfection Certificate for filing in each governmental,
municipal or other office specified in Schedule 4 of Appendix I to the
Perfection Certificate (or specified by notice from the Domestic Borrower to the
Collateral Agent after the Closing Date in the case of filings, recordings or
registrations required by Section 5.10 of the Credit Agreement), and constitute
all the filings, recordings and registrations (other than filings required to be
made in the United States Patent and Trademark Office and the United States
Copyright Office in order to perfect the Security Interest in Article 9
Collateral consisting of United States Patents, United States registered
Trademarks and United States registered Copyrights) that are necessary to
publish notice of and protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Collateral Agent (for the
ratable benefit of the Secured Parties) in respect of all Article 9 Collateral
in which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements or amendments. Each Guarantor represents and warrants
that a fully executed agreement in the form hereof (or a short form hereof which
form shall be reasonably acceptable to the Collateral Agent) containing a
description of all Article 9 Collateral consisting of Intellectual Property with
respect to United States Patents (and Patents for which United States
registration applications are pending), United States registered Trademarks (and
Trademarks for which United States registration applications are pending) and
United States registered Copyrights (and Copyrights for which United States
registration applications are pending) has been delivered to the Collateral
Agent for recording with the United States Patent and Trademark Office and the
United States Copyright Office pursuant to 35 U.S.C. Section 261, 15 U.S.C.
Section 1060 or 17 U.S.C. Section 205 and the regulations thereunder, as
applicable, and reasonably requested by the Collateral Agent, to protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
in respect of all Article 9 Collateral consisting of such Intellectual Property
in which a security interest may be perfected by recording with the United
States Patent and Trademark Office and the United States Copyright Office, and
no further or subsequent filing, refiling, recording, rerecording, registration
or reregistration is necessary (other than such actions as are necessary to
perfect the Security Interest with respect to any Article 9 Collateral
consisting of
15
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid security
interest in all the Article 9 Collateral securing the payment and performance of
the Guaranteed Obligations under the New York UCC, (ii) subject to the filings
described in Section 4.02(b), a perfected security interest in all Article 9
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code or other applicable law in such jurisdictions and
(iii) a security interest that shall be perfected in all Article 9 Collateral in
which a security interest may be perfected upon the receipt and recording of
this Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable. The Security Interest is not subject to
any prior ranking or pari passu ranking Lien and shall be prior to any other
Lien on any of the Article 9 Collateral, other than Liens expressly permitted
pursuant to Section 6.02 of the Credit Agreement or arising by operation of law.
(d) The Article 9 Collateral is owned by the Guarantors free and clear
of any Lien, other than Liens expressly permitted pursuant to Section 6.02 of
the Credit Agreement or arising by operation of law. None of the Guarantors has
filed or consented to the filing of (i) any financing statement or analogous
document under the Uniform Commercial Code or any other applicable laws covering
any Article 9 Collateral, (ii) any assignment in which any Guarantor assigns any
Article 9 Collateral or any security agreement or similar instrument covering
any Article 9 Collateral with the United States Patent and Trademark Office or
the United States Copyright Office or (iii) any assignment in which any
Guarantor assigns any Article 9 Collateral or any security agreement or similar
instrument covering any Article 9 Collateral with any foreign governmental,
municipal or other office, which financing statement or analogous document,
assignment, security agreement or similar instrument is still in effect, except,
in each case, for Liens expressly permitted pursuant to Section 6.02 of the
Credit Agreement.
(e) None of the Guarantors holds any Commercial Tort Claim individually
in excess of $10,000,000 as of the Closing Date except as indicated on Schedule
V hereto, as such schedule may be updated or supplemented from time to time.
(f) All Accounts have been originated by the Guarantors and all
Inventory has been acquired by the Guarantors in the ordinary course of
business.
(g) As to itself and its Intellectual Property, except to the extent
not reasonably expected to have a Material Adverse Effect:
(i) The operation of such Guarantor's business as currently conducted
and the use of the Intellectual Property in connection therewith do not
infringe, misappropriate or otherwise violate the intellectual property
rights of any third party.
(ii) Such Guarantor owns or has the right to use the Intellectual
Property.
16
(iii) The Intellectual Property set forth on Schedule III hereto
includes all of the patents, patent applications, domain names, trademark
registrations and applications and copyright registrations and applications
owned by such Guarantor.
(iv) The Intellectual Property is subsisting and has not been adjudged
invalid or unenforceable in whole or part.
SECTION 4.03. Covenants. (a) Each Guarantor agrees promptly to notify
the Collateral Agent in writing of any change (i) in its corporate name, (ii) in
its identity or type of organization or corporate structure, (iii) in its
Federal Taxpayer Identification Number or organizational identification number
or (iv) in its jurisdiction of organization. Each Guarantor agrees promptly to
provide the Collateral Agent with certified organizational documents reflecting
any of the changes described in the immediately preceding sentence. Each
Guarantor agrees not to effect or permit any change referred to in the first
sentence of this paragraph (a) unless all filings have been made under the
Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected first priority security interest in all the Article 9
Collateral, for the ratable benefit of the Secured Parties. Each Guarantor
agrees promptly to notify the Collateral Agent if any material portion of the
Article 9 Collateral owned or held by such Guarantor is damaged or destroyed.
(b) Subject to the rights of such Guarantor under the Loan Documents to
dispose of Collateral, each Guarantor shall, at its own expense, take any and
all actions necessary to defend title to the Article 9 Collateral against all
persons and to defend the Security Interest of the Collateral Agent, for the
ratable benefit of the Secured Parties, in the Article 9 Collateral and the
priority thereof against any Lien not expressly permitted pursuant to Section
6.02 of the Credit Agreement.
(c) Each Guarantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Collateral Agent may from time to time
reasonably request to preserve, protect and perfect the Security Interest and
the rights and remedies created hereby, including the payment of any fees and
taxes required in connection with the execution and delivery of this Agreement,
the granting of the Security Interest and the filing of any financing statements
(including fixture filings) or other documents in connection herewith or
therewith. If any amount payable under or in connection with any of the Article
9 Collateral that is in excess of $10,000,000 shall be or become evidenced by
any promissory note or other instrument, such note or instrument shall be
promptly pledged and delivered to the Collateral Agent, for the ratable benefit
of the Secured Parties, duly endorsed in a manner reasonably satisfactory to the
Collateral Agent.
Without limiting the generality of the foregoing, each Guarantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Guarantors,
to supplement this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically identify any asset or item that may constitute
Copyrights, Patents, Trademarks or IP Agreements; provided that any Guarantor
shall have the right, exercisable within 30 days after it has been notified by
the Collateral Agent of the specific identification of such Article 9
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties
17
made by such Guarantor hereunder with respect to such Article 9 Collateral. Each
Guarantor agrees that it will use its commercially reasonable efforts to take
such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such Article 9
Collateral within 30 days after the date it has been notified by the Collateral
Agent of the specific identification of such Article 9 Collateral.
(d) After the occurrence of an Event of Default and during the
continuance thereof, the Collateral Agent shall have the right to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of, or any other matter relating to, the Article 9 Collateral,
including, in the case of Accounts or Article 9 Collateral in the possession of
any third person, by contacting Account Debtors or the third person possessing
such Article 9 Collateral for the purpose of making such a verification. The
Collateral Agent shall have the right to share any information it gains from
such inspection or verification with any Secured Party.
(e) At its option, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Article 9 Collateral and not permitted pursuant
to Section 6.02 of the Credit Agreement, and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Guarantor fails to do
so as required by the Credit Agreement or this Agreement, and each Guarantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
reasonable payment made or any reasonable expense incurred by the Collateral
Agent pursuant to the foregoing authorization; provided, however, that nothing
in this Section 4.03(e) shall be interpreted as excusing any Guarantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any
Guarantor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.
(f) Each Guarantor (rather than the Collateral Agent or any Secured
Party) shall remain liable for the observance and performance of all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral and each
Guarantor jointly and severally agrees to indemnify and hold harmless the
Collateral Agent and the Secured Parties from and against any and all liability
for such performance.
(g) None of the Guarantors shall make or permit to be made an
assignment, pledge or hypothecation of the Article 9 Collateral or shall grant
any other Lien in respect of the Article 9 Collateral, except as expressly
permitted by the Credit Agreement. None of the Guarantors shall make or permit
to be made any transfer of the Article 9 Collateral and each Guarantor shall
remain at all times in possession of the Article 9 Collateral owned by it,
except as permitted by the Credit Agreement.
(h) None of the Guarantors will, without the Collateral Agent's prior
written consent, grant any extension of the time of payment of any Accounts
included in the Article 9 Collateral, compromise, compound or settle the same
for less than the full amount thereof, release, wholly or partly, any person
liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, credits, discounts, compromises or
18
settlements granted or made in the ordinary course of business and consistent
with prudent business practices or as otherwise permitted by the Credit
Agreement.
(i) Each Guarantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Guarantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance covering the Article 9 Collateral,
endorsing the name of such Guarantor on any check, draft, instrument or other
item of payment for the proceeds of such policies of insurance and for making
all determinations and decisions with respect thereto. In the event that any
Guarantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required by the Credit Agreement or to pay any premium in
whole or part relating thereto, the Collateral Agent may, without waiving or
releasing any obligation or liability of the Guarantors hereunder or any Event
of Default, in its sole discretion, obtain and maintain such policies of
insurance and pay such premium and take any other actions with respect thereto
as the Collateral Agent reasonably deems advisable. All sums disbursed by the
Collateral Agent in connection with this Section 4.03(i), including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Guarantors to the Collateral Agent and shall be
additional Guaranteed Obligations secured hereby.
SECTION 4.04. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
for the ratable benefit of the Secured Parties, the Collateral Agent's security
interest in the Article 9 Collateral, each Guarantor agrees, in each case at
such Guarantor's own expense, to take the following actions with, respect to the
following Article 9 Collateral:
(a) Instruments and Tangible Chattel Paper. If any Guarantor shall at
any time hold or acquire any Instruments or Tangible Chattel Paper evidencing an
amount in excess of $10,000,000, such Guarantor shall forthwith endorse, assign
and deliver the same to the Collateral Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as the Collateral Agent may from
time to time reasonably request.
(b) Cash Accounts. No Guarantor shall grant control of any deposit
account to any Person other than the Collateral Agent and the bank with which
the deposit account is maintained.
(c) Investment Property. Except to the extent otherwise provided in
Article III, if any Guarantor shall at any time hold or acquire any certificated
security, such Guarantor shall forthwith endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time reasonably
specify. If any security now or hereafter acquired by any Guarantor that is part
of the Article 9 Collateral is uncertificated and is issued to such Guarantor or
its nominee directly by the issuer thereof, upon the Collateral Agent's
reasonable request and following the occurrence of an Event of Default, such
Guarantor shall promptly notify the Collateral Agent of such uncertificated
securities and pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) cause the issuer to agree to
comply with instructions from the Collateral Agent as to such security, without
further consent
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of any Guarantor or such nominee, or (ii) cause the issuer to register the
Collateral Agent as the registered owner of such security. If any security or
other Investment Property that is part of the Article 9 Collateral, whether
certificated or uncertificated, representing an Equity Interest in a third party
and having a fair market value in excess of $10,000,000 now or hereafter
acquired by any Guarantor is held by such Guarantor or its nominee through a
securities intermediary or commodity intermediary, such Guarantor shall promptly
notify the Collateral Agent thereof and, at the Collateral Agent's request and
option, pursuant to a Control Agreement either (A) cause such securities
intermediary or commodity intermediary, as applicable, to agree, in the case of
a securities intermediary, to comply with entitlement orders or other
instructions from the Collateral Agent to such securities intermediary as to
such securities or other Investment Property or, in the case of a commodity
intermediary, to apply any value distributed on account of any commodity
contract as directed by the Collateral Agent to such commodity intermediary, in
each case without further consent of any Guarantor or such nominee, or (B) in
the case of Financial Assets or other Investment Property held through a
securities intermediary, arrange for the Collateral Agent to become the
entitlement holder with respect to such Investment Property, for the ratable
benefit of the Secured Parties, with such Guarantor being permitted, only with
the consent of the Collateral Agent, to exercise rights to withdraw or otherwise
deal with such Investment Property. The Collateral Agent agrees with each of the
Guarantors that the Collateral Agent shall not give any such entitlement orders
or instructions or directions to any such issuer, securities intermediary or
commodity intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by any Guarantor, unless an Event of Default
has occurred and is continuing or, after giving effect to any such withdrawal or
dealing rights, would occur. The provisions of this paragraph (c) shall not
apply to any Financial Assets credited to a securities account for which the
Collateral Agent is the securities intermediary.
(d) Tort Claims. If any Guarantor shall at any time hold or acquire a
Commercial Tort Claim in an amount reasonably estimated to exceed $10,000,000,
such Guarantor shall promptly notify the Collateral Agent thereof in a writing
signed by such Guarantor, including a summary description of such claim, and
grant to the Collateral Agent in writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance reasonably satisfactory to the Collateral Agent.
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Guarantor agrees that it will not knowingly do any act or
omit to do any act (and will exercise commercially reasonable efforts to prevent
its licensees from doing any act or omitting to do any act) whereby any Patent
that is material to the normal conduct of such Guarantor's business may become
prematurely invalidated or dedicated to the public, and agrees that it shall
take commercially reasonable steps with respect to any material products covered
by any such Patent as necessary and sufficient to establish and preserve its
rights under applicable patent laws.
(b) Each Guarantor will, and will use its commercially reasonable
efforts to cause its licensees or its sublicensees to, for each material
Trademark necessary to the normal conduct of such Guarantor's business, (i)
maintain such Trademark in full force free from any adjudication of abandonment
or invalidity for non-use, (ii) maintain the quality of products and services
offered under such Trademark consistent with the quality of such products and
services
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as of the date hereof, (iii) display such Trademark with notice of federal or
foreign registration or claim of trademark or service xxxx as required under
applicable law and (iv) not knowingly use or knowingly permit its licensees' use
of such Trademark in violation of any third-party rights.
(c) Each Guarantor will, and will use its commercially reasonable
efforts to cause its licensees or its sublicensees to, for each work covered by
a material Copyright necessary to the normal conduct of such Guarantor's
business that it publishes, displays and distributes, use copyright notice as
required under applicable copyright laws.
(d) Each Guarantor shall notify the Collateral Agent promptly if it
knows that any Patent, Trademark or Copyright material to the normal conduct of
such Guarantor's business may imminently become abandoned, lost or dedicated to
the public other than by expiration, or of any materially adverse determination
or development, excluding office actions and similar determinations in the
United States Patent and Trademark Office, United States Copyright Office, any
court or any similar office of any country, regarding such Guarantor's ownership
of any such material Patent, Trademark or Copyright or its right to register or
to maintain the same.
(e) Each Guarantor, either itself or through any agent, employee,
licensee or designee, shall (i) inform the Collateral Agent on a semi-annual
basis of each application by itself, or through any agent, employee, licensee or
designee, for any Patent with the United States Patent and Trademark Office and
each registration of any Trademark or Copyright with the United States Patent
and Trademark Office, the United States Copyright Office or any comparable
office or agency in any other country filed during the preceding six-month
period, and (ii) upon the reasonable request of the Collateral Agent, execute
and deliver any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral Agent's
security interest in such Patent, Trademark or Copyright.
(f) Each Guarantor shall exercise its reasonable business judgment
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any comparable
office or agency in any other country with respect to maintaining and pursuing
each material application relating to any Patent, Trademark and/or Copyright
(and obtaining the relevant grant or registration) material to the normal
conduct of such Guarantor's business and to maintain (i) each issued Patent and
(ii) the registrations of each Trademark and each Copyright in each case that is
material to the normal conduct of such Guarantor's business, including, when
applicable and necessary in such Guarantor's reasonable business judgment,
timely filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if any Guarantor believes
necessary in its reasonable business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.
(g) In the event that any Guarantor knows or has reason to know that
any Article 9 Collateral consisting of a Patent, Trademark or Copyright material
to the normal conduct of its business has been or is about to be materially
infringed, misappropriated or diluted by a third party, such Guarantor shall
promptly notify the Collateral Agent and shall, if such Guarantor deems it
necessary in its reasonable business judgment, promptly contact such third
party, and if necessary in its reasonable business judgment, xxx and recover
damages, and take such other actions as are reasonably appropriate under the
circumstances.
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(h) Upon and during the continuance of an Event of Default, each
Guarantor shall use commercially reasonable efforts to obtain all requisite
consents or approvals from the licensor under each IP Agreement to effect the
assignment of all such Guarantor's right, title and interest thereunder to (in
the Collateral Agent's sole discretion) the designee of the Collateral Agent or
the Collateral Agent.
ARTICLE V
REMEDIES
SECTION 5.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Pledgor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Guarantors to the Collateral Agent or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or a nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers thereunder cannot be obtained) and (b)
with or without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to enter any premises where the Article 9 Collateral may
be located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the applicable Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Pledgor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized in connection with any sale of a security (if it deems it advisable
to do so) pursuant to the foregoing to restrict the prospective bidders or
purchasers to persons who represent and agree that they are purchasing such
security for their own account, for investment, and not with a view to the
distribution or sale thereof. Upon consummation of any such sale of Collateral
pursuant to this Section 5.01 the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives and releases (to the extent permitted by law) all
rights of redemption, stay, valuation and appraisal that such Pledgor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.
The Collateral Agent shall give the applicable Pledgors 10 Business
Days' written notice (which each Pledgor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
22
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or the portion thereof, to be sold may be sold
in one lot as an entirety or in separate parcels, as the Collateral Agent may
(in its sole and absolute discretion) determine. The Collateral Agent shall not
be obligated to make any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In the case of any sale of all or any part of the Collateral made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in the event
that any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in the case of any such failure, such Collateral may be
sold again upon notice given in accordance with provisions above. At any public
(or, to the extent permitted by law, private) sale made pursuant to this Section
5.01, any Secured Party may bid for or purchase for cash, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Pledgor (all such rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property in accordance with Section 5.02 hereof
without further accountability to any Pledgor therefor. For purposes hereof, a
written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Collateral Agent shall be free to carry out such
sale pursuant to such agreement and no Pledgor shall be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Collateral Agent shall have entered into such an agreement
all Events of Default shall have been remedied and the Guaranteed Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose upon the Collateral and to sell the Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to conform to
the commercially reasonable standards as provided in Section 9-610(b) of the New
York UCC or its equivalent in other jurisdictions.
SECTION 5.02. Application of Proceeds. The Collateral Agent shall
promptly apply the proceeds, moneys or balances of any collection or sale of
Collateral, as well as any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent and the Collateral Agent in connection with such
collection or sale or otherwise in connection with this Agreement, any other
Loan Document or any of the Guaranteed Obligations, including all court
costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Administrative Agent and the
Collateral Agent hereunder or under any other Loan Document on behalf of any
Pledgor
23
and any other costs or expenses incurred in connection with the exercise of
any right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Guaranteed Obligations (the
amounts so applied to be distributed among the Secured Parties pro rata in
accordance with the respective amounts of the Guaranteed Obligations owed to
them on the date of any such distribution); and
THIRD, to the Pledgors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 5.03. Grant of License To Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Agreement at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, each Guarantor hereby grants to (in the
Collateral Agent's sole discretion) a designee of the Collateral Agent or the
Collateral Agent, for the ratable benefit of the Secured Parties, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to any Guarantor) to use, license or sublicense any of the
Article 9 Collateral consisting of Intellectual Property (excluding Trademarks)
now owned or hereafter acquired by such Guarantor, wherever the same may be
located, and including, without limitation, in such license reasonable access to
all media in which any of the licensed items may be recorded or stored and to
all computer software and programs used for the compilation or printout thereof,
the right to prosecute and maintain all intellectual property and the right to
xxx for past infringement of the intellectual property. The use of such license
by the Collateral Agent may be exercised, at the option of the Collateral Agent,
upon the occurrence and during the continuation of an Event of Default; provided
that any license, sublicense or other transaction entered into by the Collateral
Agent in accordance herewith shall be binding upon the Guarantors
notwithstanding any subsequent cure of an Event of Default.
SECTION 5.04. Securities Act, etc. In view of the position of the
Pledgors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar federal statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with respect
to any disposition of the Pledged Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any
24
subsequent transferee of any Pledged Collateral could dispose of the same.
Similarly, there may be other legal restrictions or limitations affecting the
Collateral Agent in any attempt to dispose of all or part of the Pledged
Collateral under applicable Blue Sky or other state securities laws or similar
laws analogous in purpose or effect. Each Pledgor acknowledges and agrees that
in light of such restrictions and limitations, the Collateral Agent, in its sole
and absolute discretion, (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Collateral or
part thereof shall have been filed under the Federal Securities Laws or, to the
extent applicable, Blue Sky or other state securities laws and (b) may approach
and negotiate with a single potential purchaser to effect such sale. Each
Pledgor acknowledges and agrees that any such sale might result in prices and
other terms less favorable to the seller than if such sale were a public sale
without such restrictions. In the event of any such sale, the Collateral Agent
shall incur no responsibility or liability for selling all or any part of the
Pledged Collateral at a price that the Collateral Agent, in its sole and
absolute discretion, may in good xxxxx xxxx reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached. The provisions of this Section
5.04 will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at which
the Collateral Agent sells.
SECTION 5.05. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Collateral Agent desires to sell any of the Pledged Collateral at a public
sale, it will, at any time and from time to time, upon the written request of
the Collateral Agent, use its commercially reasonable efforts to take or to
cause the issuer of such Pledged Collateral to take such action and prepare,
distribute and/or file such documents, as are required or advisable in the
reasonable opinion of counsel for the Collateral Agent to permit the public sale
of such Pledged Collateral. Each Pledgor further agrees to indemnify, defend and
hold harmless the Administrative Agent, each other Secured Party, any
underwriter and their respective officers, directors, affiliates and controlling
persons from and against all loss, liability, expenses, costs of counsel
(including reasonable fees and expenses to the Collateral Agent of legal
counsel), and claims (including the costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Pledgor or the issuer of such Pledged Collateral by the Collateral Agent
or any other Secured Party expressly for use therein. Each Pledgor further
agrees, upon such written request referred to above, to use its commercially
reasonable efforts to qualify, file or register, or cause the issuer of such
Pledged Collateral to qualify, file or register, any of the Pledged Collateral
under the Blue Sky or other securities laws of such states as may be reasonably
requested by the Collateral Agent and keep effective, or cause to be kept
effective, all such qualifications, filings or registrations. Each Pledgor will
bear all costs and expenses of carrying out its obligations under this Section
5.05. Each Pledgor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 5.05 only and that
such failure would not be
25
adequately compensable in damages and, therefore, agrees that its agreements
contained in this Section 5.05 may be specifically enforced.
ARTICLE VI
INDEMNITY, SUBROGATION AND SUBORDINATION
SECTION 6.01. Indemnity and Subrogation. In addition to all such rights
of indemnity and subrogation as the Guarantors may have under applicable law
(but subject to Section 6.03), the Domestic Borrower agrees that (a) in the
event a payment shall be made by any Guarantor under this Agreement in respect
of any Obligation of the Domestic Borrower, the Domestic Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Guarantor shall be sold pursuant to this Agreement or any other Security
Document to satisfy in whole or in part an Obligation of the Domestic Borrower,
the Domestic Borrower shall indemnify such Guarantor in an amount equal to the
greater of the book value or the fair market value of the assets so sold.
SECTION 6.02. Contribution and Subrogation. Each Guarantor (other than
Holdings and the Domestic Borrower) (a "Contributing Guarantor") agrees (subject
to Section 6.03) that, in the event a payment shall be made by any other
Guarantor (other than Holdings and the Domestic Borrower) hereunder in respect
of any Guaranteed Obligation or assets of any other Guarantor (other than
Holdings and the Domestic Borrower) shall be sold pursuant to any Security
Document to satisfy any Guaranteed Obligation owed to any Secured Party and such
other Guarantor (the "Claiming Guarantor") shall not have been fully indemnified
by the Domestic Borrower as provided in Section 6.01, the Contributing Guarantor
shall indemnify the Claiming Guarantor in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as applicable, in each case multiplied by a fraction of which the
numerator shall be the net worth of such Contributing Guarantor on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 7.15, the date of the supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the
rights of such Claiming Guarantor under Section 6.01 to the extent of such
payment.
SECTION 6.03. Subordination. (a) Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 6.01 and
6.02 and all other rights of indemnity, contribution or subrogation of the
Pledgor under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Guaranteed Obligations. No failure
on the part of the Domestic Borrower or any Guarantor to make the payments
required by Sections 6.01 and 6.02 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to its obligations hereunder, and each
Guarantor shall remain liable for the full amount of the obligations of such
Guarantor hereunder.
26
(b) Each Guarantor hereby agrees that all Indebtedness and other
monetary obligations owed by it to any other Guarantor or any Subsidiary shall
be fully subordinated to the indefeasible payment in full in cash of the
Guaranteed Obligations.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to any Domestic Subsidiary Loan Party shall be given to it in care of
the Domestic Borrower, with such notice to be given as provided in Section 9.01
of the Credit Agreement.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest, the security interest in the Pledged
Collateral and all obligations of each Pledgor hereunder shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Credit Agreement, any other Loan Document, any agreement with respect to any of
the Guaranteed Obligations or any other agreement or instrument relating to any
of the foregoing, (b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Guaranteed Obligations or
(d) any other circumstance that might otherwise constitute a defense available
to, or a discharge of, any Pledgor in respect of the Guaranteed Obligations or
this Agreement.
SECTION 7.03. Binding Effect; Several Agreement. This Agreement shall
become effective as to any party to this Agreement when a counterpart hereof
executed on behalf of such party shall have been delivered to the Administrative
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such party and the
Collateral Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such party, the Collateral Agent and the other
Secured Parties and their respective permitted successors and assigns, except
that no party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each party and may be amended, modified,
supplemented, waived or released with respect to any party without the approval
of any other party and without affecting the obligations of any other party
hereunder.
SECTION 7.04. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any
27
Pledgor or the Collateral Agent that are contained in this Agreement shall bind
and inure to the benefit of their respective permitted successors and assigns.
SECTION 7.05. Collateral Agent's Fees and Expenses; Indemnification.
(a) The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.05 of
the Credit Agreement.
(b) The Parties hereto agree that the Collateral Agent shall be
entitled to indemnification as provided in Section 9.05 of the Credit Agreement.
(c) Any such amounts payable as provided hereunder shall be additional
Guaranteed Obligations secured hereby and by the other Security Documents. The
provisions of this Section 7.05 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party. All amounts due under this Section 7.05 shall be payable on written
demand therefor.
SECTION 7.06. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Collateral Agent as the attorney-in-fact of such Pledgor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Pledgor, (a) to receive,
endorse, assign or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part
thereof; (b) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (c) to ask for, demand,
xxx for, collect, receive and give acquittance for any and all moneys due or to
become due under and by virtue of any Collateral; (d) to sign the name of any
Pledgor on any invoice or xxxx of lading relating to any of the Collateral; (e)
to send verifications of Accounts to any Account Debtor; (f) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (g) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (h) to notify, or to require any
Guarantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, that nothing herein contained shall
be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby.
The Collateral Agent and the other Secured Parties
28
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Pledgor for
any act or failure to act hereunder, except for their own gross negligence or
wilful misconduct.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay by the
Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender in
exercising any right, power or remedy hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy, or any abandonment or discontinuance of steps
to enforce such a right, power or remedy, preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The rights, powers
and remedies of the Administrative Agent, the Collateral Agent, any Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights, powers or remedies that they would otherwise
have. No waiver of any provision of this Agreement or consent to any departure
by any Loan Party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section 7.08, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan or the issuance of a Letter of Credit shall not be construed as a waiver
of any Default or Event of Default, regardless of whether the Administrative
Agent, the Collateral Agent, any Lender or any Issuing Bank may have had notice
or knowledge of such Default or Event of Default at the time. No notice or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Loan Party or Loan Parties with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 9.08 of the Credit Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.09.
29
SECTION 7.10. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 7.03. Delivery of an executed counterpart to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually signed original.
SECTION 7.12. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each
party to this Agreement hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Pledgor, or its properties, in
the courts of any jurisdiction.
(b) Each party to this Agreement hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
SECTION 7.14. Termination or Release. (a) This Agreement, the
guarantees made herein, the Security Interest and all other security interests
granted hereby shall terminate when all the Obligations have been indefeasibly
paid in full in cash and the Lenders have no further commitment to lend under
the Credit Agreement, the Revolving L/C Exposure has been reduced to zero and
each Issuing Bank has no further obligations to issue Letters of Credit under
the Credit Agreement.
30
(b) A Domestic Subsidiary Loan Party shall automatically be released
from its obligations hereunder and the security interests in the Collateral of
such Domestic Subsidiary Loan Party shall be automatically released upon the
consummation of any transaction permitted by the Credit Agreement as a result of
which such Domestic Subsidiary Loan Party ceases to be a Subsidiary of Holdings
pursuant to the terms of the Credit Agreement.
(c) Upon any sale or other transfer by any Pledgor of any Collateral
that is permitted under the Credit Agreement to any person that is not a
Pledgor, or upon the effectiveness of any written consent to the release of the
security interest granted hereby in any Collateral pursuant to Section 9.08 of
the Credit Agreement, the security interest in such Collateral shall be
automatically released.
(d) If any security interest granted hereby in any Collateral violates
Section 9.23 of the Credit Agreement, the security interest in such Collateral
shall be automatically released.
(e) In connection with any termination or release pursuant to paragraph
(a), (b), (c) or (d) of this Section 7.14, the Collateral Agent shall execute
and deliver to any Pledgor, at such Pledgor's expense all documents that such
Pledgor shall reasonably request to evidence such termination or release and
shall assist such Pledgor in making any filing in connection therewith. Any
execution and delivery of documents pursuant to this Section 7.14 shall be
without recourse to or warranty by the Collateral Agent.
SECTION 7.15. Additional Subsidiaries. Upon execution and delivery by
the Collateral Agent and any Domestic Subsidiary Loan Party that is required to
become a party hereto by Section 5.10 of the Credit Agreement of an instrument
substantially in the form of Exhibit I hereto with such changes and
modifications thereto as may be required by the laws of any applicable foreign
jurisdiction, such Domestic Subsidiary Loan Party shall become a Domestic
Subsidiary Loan Party hereunder with the same force and effect as if originally
named as a Domestic Subsidiary Loan Party herein. The execution and delivery of
any such instrument shall not require the consent of any other party to this
Agreement. The rights and obligations of each party to this Agreement shall
remain in full force and effect notwithstanding the addition of any new party to
this Agreement.
SECTION 7.16. Right of Set-off. If an Event of Default shall have
occurred and be continuing, each Lender and each Issuing Bank is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender or such Issuing Bank to or for the credit or the
account of any Pledgor to this Agreement against any of and all the obligations
of such Pledgor now or hereafter existing under this Agreement owed to such
Lender or such Issuing Bank, irrespective of whether or not such Lender or such
Issuing Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section 7.16
are in addition to other rights and remedies (including other rights of set-off)
that such Lender or such Issuing Bank may have.
31
SECTION 7.17. Credit Agreement. If any conflict or inconsistency exists
between this Agreement and the Credit Agreement, the Credit Agreement shall
govern.
[Signature Page Follows]
32
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
D-R INTERHOLDING, LLC,
as a Guarantor and Pledgor (in each capacity)
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
DRESSER-RAND GROUP INC.,
as Domestic Borrower, Guarantor and
Pledgor (in each capacity)
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
DRESSER-RAND LLC,
as a Guarantor and Domestic Subsidiary Loan
Party (in each capacity)
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer
DRESSER-RAND COMPANY,
as a Guarantor and Domestic Subsidiary Loan
Party (in each capacity)
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer
DRESSER-RAND POWER LLC,
as a Guarantor and Domestic Subsidiary Loan
Party (in each capacity)
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer
Dresser-Rand Global Services, L.L.C.,
as a Guarantor and Domestic Subsidiary Loan
Party (in each capacity)
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Director
Exhibit I
to the Domestic Guarantee
and Collateral Agreement
SUPPLEMENT NO. __ dated as of (this "Supplement"), to the
Domestic Guarantee and Collateral Agreement dated as of October 29, 2004 (the
"Domestic Guarantee and Collateral Agreement"), among D-R INTERHOLDING, LLC, a
Delaware limited liability company ("Holdings"), DRESSER-RAND GROUP INC., a
Delaware corporation ("Acquisition Corp." or the "Domestic Borrower"), each
Domestic Subsidiary Loan Party identified therein (each, a "Domestic Subsidiary
Loan Party") and CITICORP NORTH AMERICA, INC. ("CNAI"), as collateral agent (in
such capacity, the "Collateral Agent") for the Secured Parties.
A. Reference is made to the Credit Agreement dated as of October 29,
2004 (as amended, supplemented, waived or otherwise modified from time to time,
the "Credit Agreement"), among Holdings, the Domestic Borrower, the Foreign
Borrowers party thereto from time to time, the lenders party thereto from time
to time (the "Lenders"), CNAI as Administrative Agent and as Collateral Agent
for the Lenders, XXXXXX XXXXXXX SENIOR FUNDING, INC. ("MS") and UBS SECURITIES
LLC ("UBS"), as Co-Syndication Agents, CITIGROUP GLOBAL MARKETS INC., MS and
UBS, as Joint Lead Arrangers and Joint Book Managers and NATEXIS BANQUES
POPULAIRES and BEAR XXXXXXX CORPORATE LENDING INC, as Co-Documentation Agents.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement and the
Domestic Guarantee and Collateral Agreement referred to therein.
C. The Guarantors have entered into the Domestic Guarantee and
Collateral Agreement in order to induce the Lenders to make Loans and each
Issuing Bank to issue Letters of Credit. Section 7.15 of the Domestic Guarantee
and Collateral Agreement provides that additional Subsidiaries may become
Domestic Subsidiary Loan Parties under the Domestic Guarantee and Collateral
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the "New Subsidiary") is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Domestic Subsidiary Loan Party under the Domestic Guarantee and Collateral
Agreement in order to induce the Lenders to make additional Loans and each
Issuing Bank to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Subsidiary agree as
follows:
SECTION 1. In accordance with Section 7.15 of the Domestic Guarantee
and Collateral Agreement, the New Subsidiary by its signature below becomes a
Domestic Subsidiary Loan Party and a Guarantor under the Domestic Guarantee and
Collateral Agreement with the same force and effect as if originally named
therein as a Domestic Subsidiary Loan Party and a Guarantor, and the New
Subsidiary hereby (a) agrees to all the terms and provisions of the Domestic
Guarantee and Collateral Agreement applicable to it as a Domestic Subsidiary
Loan Party and Guarantor thereunder and (b) represents and warrants that the
representations and
Exh I-1
warranties made by it as a Guarantor thereunder (as supplemented by the attached
supplemental Schedules to the Perfection Certificate) are true and correct, in
all material respects, on and as of the date hereof. In furtherance of the
foregoing, the New Subsidiary, as security for the payment and performance in
full of the Guaranteed Obligations, does hereby create and grant to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, their successors and assigns, a security interest in and Lien
on all the New Subsidiary's right, title and interest in and to the Collateral
(as defined in the Domestic Guarantee and Collateral Agreement) of the New
Subsidiary. Each reference to a "Domestic Subsidiary Loan Party" or a
"Guarantor" in the Domestic Guarantee and Collateral Agreement shall be deemed
to include the New Subsidiary. The Domestic Guarantee and Collateral Agreement
is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to (i) the effects of bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance or other similar laws affecting creditors'
rights generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (iii)
implied covenants of good faith and fair dealing.
SECTION 3. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract. This Supplement shall become
effective when (a) the Collateral Agent shall have received a counterpart of
this Supplement that bears the signature of the New Subsidiary and (b) the
Collateral Agent has executed a counterpart hereof.
SECTION 4. The New Subsidiary has attached hereto supplemental
Schedules 1(a) through 17 to the Perfection Certificate in substantially the
same form as the equivalent Schedules to the Perfection Certificate, and the New
Subsidiary hereby represents and warrants that the attached Schedules are
complete and correct with respect to the New Subsidiary.
SECTION 5. Except as expressly supplemented hereby, the Domestic
Guarantee and Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. 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 Domestic Guarantee and Collateral Agreement shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 7.01 of the Domestic Guarantee and
Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, disbursements and other charges of
counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have
duly executed this Supplement to the Domestic Guarantee and Collateral Agreement
as of the day and year first above written.
[Name of New Subsidiary]
By: __________________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC., as
Collateral Agent
By: __________________________________________
Name:
Title:
