EXHIBIT 10.64
EXECUTION COPY
PLEDGE AND SECURITY AGREEMENT
DATED AS OF MARCH 19, 2003
BETWEEN
THE GRANTORS,
AND
HSBC BANK USA,
AS JOINT COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
----
SECTION 1. DEFINITIONS........................................................................1
(a) General Definitions................................................................1
(b) Definitions; Interpretation.......................................................13
SECTION 2. GRANT OF SECURITY.................................................................13
(a) Grant of Security.................................................................14
(b) Certain Limited Exclusions........................................................14
SECTION 3. SECURITY FOR SECURED OBLIGATIONS..................................................15
(a) Security for Secured Obligations..................................................15
(b) Continuing Liability under Collateral.............................................15
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS......................................15
(a) Generally.........................................................................15
(b) Equipment.........................................................................19
(c) Investment Related Property.......................................................20
(d) Material Contracts................................................................26
(e) Letter of Credit Rights...........................................................28
(f) Intellectual Property.............................................................28
(g) Commercial Tort Claims............................................................33
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES................................33
SECTION 6. JOINT COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.................................35
SECTION 7. REMEDIES..........................................................................36
(a) Generally.........................................................................36
(b) Application of Proceeds...........................................................37
(c) Sales on Credit...................................................................37
(d) Investment Related Property.......................................................37
(e) Intellectual Property.............................................................38
SECTION 8. JOINT COLLATERAL AGENT............................................................40
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS.....................40
SECTION 10. STANDARD OF CARE; JOINT COLLATERAL AGENT MAY PERFORM..............................41
SECTION 11. INDEMNITY.........................................................................41
i
SECTION 12. MISCELLANEOUS.....................................................................41
(a) Notices...........................................................................41
(b) Expenses..........................................................................42
(c) Amendments and Waivers............................................................42
(d) Successors and Assigns............................................................43
(e) Independence of Covenants.........................................................43
(f) Survival of Representations, Warranties and Agreements............................43
(g) Marshaling; Payments Set Aside....................................................43
(h) Severability......................................................................43
(i) Headings..........................................................................43
(j) APPLICABLE LAW....................................................................43
(k) CONSENT TO JURISDICTION...........................................................43
(l) WAIVER OF JURY TRIAL..............................................................44
(m) Counterparts......................................................................44
(n) Effectiveness.....................................................................44
SCHEDULE I General Information
SCHEDULE II Location of Equipment
SCHEDULE III Investment Related Property
SCHEDULE IV Material Contracts
SCHEDULE V Letters of Credit
SCHEDULE VI Intellectual Property
SCHEDULE VII Commercial Tort Claims
SCHEDULE VIII Excluded and Restricted Patents
ANNEX A Pledge Supplement
EXHIBIT A Form of Patent Security Agreement
EXHIBIT B Form of Trademark Security Agreement
EXHIBIT C Form of Copyright Security Agreement
ii
This
PLEDGE AND SECURITY AGREEMENT, dated as of March 19, 2003 (this
"AGREEMENT"), between Hexcel Corporation, a Delaware corporation (the "COMPANY")
and each of the other undersigned parties hereto (together with the Company,
each, a "GRANTOR"), and HSBC Bank USA acting in the capacity of collateral agent
(the "JOINT COLLATERAL AGENT") for the benefit of the Secured Parties.
RECITALS:
WHEREAS, reference is made to that certain Indenture, dated as of
the date hereof (as it may be amended, restated, supplemented or otherwise
modified from time to time, the "INDENTURE"), by and among the Company, each
other Grantor and Xxxxx Fargo Bank Minnesota, National Association, as trustee
on behalf of the note holders.
WHEREAS, pursuant to the Indenture, the Company may, subject to the
requirements thereof, designate additional obligations as Parity Lien Debt;
WHEREAS, pursuant to a Collateral Agency Agreement dated as of the
date hereof (as it may be amended, restated, supplemented or otherwise modified
from time to time, the "COLLATERAL AGENCY AGREEMENT") HSBC Bank USA has been
appointed to serve as Joint Collateral Agent for the benefit of the Secured
Parties;
WHEREAS, it is a condition precedent to the issuance of the Notes
that each Grantor agree to secure the Notes and the other Secured Obligations as
provided herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and the Joint Collateral
Agent hereby agree as follows:
SECTION 1. DEFINITIONS
(a) GENERAL DEFINITIONS. In this Agreement, the following terms
shall have the following meanings:
"ACCOUNT DEBTOR" shall mean each Person who is obligated on a
Receivable or any Supporting Obligation related thereto.
"ACCOUNTS" shall mean all "accounts" as defined in Article 9 of the
UCC.
"AFFILIATE" shall mean, as applied to any Person, (1) any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with such specified Person or (2) any other Person who
is a director or officer (A) of such specified Person, (B) of any Subsidiary of
such specified person or (C) of any person described in clause (1). For the
purposes of this definition, "control" when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGREEMENT" shall have the meaning set forth in the preamble.
"ASSET SALE PROCEEDS ACCOUNT" shall mean the account to be
established within thirty (30) days after the Closing Date in accordance with
Section 4(c)(3)(i)(2) hereof and any successor account or accounts.
"AUTHENTICATE" shall mean "authenticate" as defined in Article 9 of
the UCC.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"CAPITAL LEASE OBLIGATION" means an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP. The amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP. The Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty.
"CAPITAL STOCK" shall mean:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited);
and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means
(1) United States dollars;
(2) investments in U.S. government obligations;
(3) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any State thereof or any
foreign country recognized by the United States of America having capital,
surplus and undivided profits aggregating in excess of $50.0 million (or
the U.S. dollar equivalent thereof) and whose long-term debt is rated "A-"
or higher (or such equivalent rating) by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under
the Securities Act);
(4) repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clause (2)
above entered into with a bank meeting the qualifications described in
clause (3) above;
(5) investments in commercial paper, maturing not more
than 90 days after the date of acquisition, issued by a corporation (other
than an affiliate of the Company) organized and in existence under the laws
of the United States of America or any foreign country with a rating at the
time as of which any investment therein is made of "P-1" (or higher)
according to Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according
to Standard & Poor's Ratings Group; and
2
(6) investments in securities with maturities of six
months or less from the date of acquisition issued or fully guaranteed by
any State, commonwealth or territory of the United States of America, or by
any political subdivision or taxing authority thereof, and rated at least
"A" by Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service,
Inc.
"CASH PROCEEDS" shall mean all proceeds of any Collateral consisting
of cash, checks and other near-cash items.
"CHATTEL PAPER" shall mean all "chattel paper" as defined in
Article 9 of the UCC, including, without limitation, "electronic chattel paper"
or "tangible chattel paper", as each term is defined in the UCC.
"CLOSING DATE" shall mean the date on which the Indenture is made.
"COLLATERAL" shall have the meaning set forth in Section 2(a)
hereof.
"COLLATERAL AGENCY AGREEMENT" shall mean that certain Collateral
Agency Agreement dated the date hereof among the Company, the Joint Collateral
Agent, Xxxxx Fargo Bank, as trustee and the representatives of Parity Lien Debt
party from time to time thereto.
"COLLATERAL DOCUMENTS" shall mean this Agreement, the Collateral
Agency Agreement, that certain Trademark Security Agreement dated the date
hereof by the Company in favor of the Joint Collateral Agent for the benefit of
the Secured Parties, that certain Copyright Security Agreement dated the date
hereof by the Company in favor of the Joint Collateral Agent for the benefit of
the Secured Parties, that certain Patent Security Agreement dated the date
hereof by the Company in favor of the Joint Collateral Agent for the benefit of
the Secured Parties and all other instruments, documents and agreements
delivered by any of the parties to the Transaction Documents pursuant to this
Agreement or any other Transaction Document in order to grant or perfect a lien
in favor of the Joint Collateral Agent on any real, personal or mixed property
of such party as security for the Secured Obligations.
"COLLATERAL RECORDS" shall mean books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and other electronic storage
media and related data processing software.
"COLLATERAL SUPPORT" shall mean all property (real or personal)
assigned, hypothecated or otherwise securing any Collateral and shall include
any security agreement or other agreement granting a lien or security interest
in such real or personal property.
"COMMERCIAL TORT CLAIMS" shall mean all "commercial tort claims" as
defined in Article 9 of the UCC, including, without limitation, all commercial
tort claims listed and described with specification on Schedule VII hereto (as
such schedule may be amended or supplemented from time to time).
"COMMODITIES ACCOUNTS" (i) shall mean all "commodity accounts" as
defined in Article 9 of the UCC and (ii) shall include, without limitation, all
of the accounts listed on Schedule III hereto under the heading "Commodities
Accounts" (as such schedule may be amended or supplemented from time to time).
"COPYRIGHT LICENSES" shall mean any and all agreements granting any
right in, to or under Copyrights to which a Grantor is a party (whether such
Grantor is licensee or licensor thereunder)
3
including, without limitation, each agreement referred to in Schedule VI(B) (as
such schedule may be amended or supplemented from time to time).
"COPYRIGHTS" shall mean all United States, state and foreign
copyrights, including but not limited to copyrights in software and databases,
and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act),
whether registered or unregistered, now or hereafter in force throughout the
world, all registrations and applications for any of the foregoing including,
without limitation, the applications referred to in Schedule VI(A) (as such
schedule may be amended or supplemented from time to time), all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof, the right to xxx for past, present and future infringements of any of
the foregoing, and all proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages, and proceeds of suit.
"CREDIT FACILITY COLLATERAL" means, at any time in respect of any
Qualified Credit Facility:
(1) inventory (as defined in Article 9 of the
New York
Uniform Commercial Code), whether now owned or hereafter acquired, and the
cash and non-cash proceeds thereof, and all rights under any existing or
future policy of property loss or casualty insurance on such inventory,
together with the cash proceeds thereof;
(2) accounts (as defined in Article 9 of the
New York
Uniform Commercial Code), whether now existing or hereafter arising, but
only to the extent that such accounts are:
(a) rights to payment for goods sold or services rendered
(whether or not such goods or services conform to the contract), or
(b) rights to payment for goods to be sold or services to
be rendered, but only, at any time, to the extent inventory (whether
consisting of raw materials, work-in-process or finished goods) is
then on hand that may, upon completion of manufacture, be delivered
for such sale,
in the case of each of clauses (1) and (2), together with all rights under
the contract for such sale relating to or affecting the creation or
collection of such account or the completion or sale of such inventory,
together with all Liens, letters of credit, guarantees and other
obligations securing or supporting such accounts, together with the cash
and non-cash proceeds thereof;
(3) money, deposit accounts (as defined in Article 9 of
the
New York Uniform Commercial Code) and deposits therein and Cash
Equivalents, except (i) the Asset Sale Proceeds Account and deposits
therein and (ii) money, deposit accounts, deposits and Cash Equivalents
(whether held directly or in securities accounts) constituting identifiable
proceeds of Collateral; and
(4) property of a Foreign Subsidiary owned by a Foreign
Subsidiary, whenever held, acquired or arising, but only if and to the
extent securing Indebtedness permitted by clause (2) of the definition of
"Permitted Debt" in the Indenture.
"DEPOSIT ACCOUNTS" (i) shall mean all "deposit accounts" as defined
in Article 9 of the UCC.
4
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event (1) matures or is mandatorily redeemable pursuant to
a sinking fund obligation or otherwise, (2) is convertible or exchangeable at
the option of the holder for Indebtedness or Disqualified Stock or (3) is
mandatorily redeemable or must be purchased, upon the occurrence of certain
events or otherwise, in whole or in part, in each case on or prior to the first
anniversary of the Stated Maturity of the Securities; PROVIDED, HOWEVER, that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the first anniversary of the Stated
Maturity of the Securities shall not constitute Disqualified Stock if (1) the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are not more favorable to the holders of such Capital Stock than the terms
applicable to the notes described Sections 4.10 and 4.15 of the Indenture and
(2) any such requirement only becomes operative after compliance with such terms
applicable to the notes, including the purchase of any notes tendered pursuant
thereto; and PROVIDED, FURTHER, HOWEVER, that neither of the Company's series A
preferred stock nor its series B preferred stock shall be deemed to be
Disqualified Stock.
"DOCUMENTS" shall mean all "documents" as defined in Article 9 of
the UCC.
"DOCUMENTS EVIDENCING GOODS" shall mean all Documents evidencing,
representing or issued in connection with Goods.
"DOMESTIC SUBSIDIARIES" means any Restricted Subsidiary of the
Company that was formed under the laws of the United States or any state of the
United States or the District of Columbia or that guarantees or otherwise
provides direct credit support for any Indebtedness of the Company; PROVIDED,
HOWEVER, that a Domestic Foreign Holding Company shall not constitute a Domestic
Subsidiary.
"EQUIPMENT" shall mean: (i) all "equipment" as defined in the UCC,
(ii) all machinery, manufacturing equipment, data processing equipment,
computers, office equipment, furnishings, furniture, appliances, and tools (in
each case, regardless of whether characterized as equipment under the UCC),
(iii) all Fixtures and (iv) all accessions or additions thereto, all parts
thereof, whether or not at any time of determination incorporated or installed
therein or attached thereto, and all replacements therefor, wherever located,
now or hereafter existing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"EVENT OF DEFAULT" shall mean the occurrence of any one or more of
the following conditions: (i) an Event of Default as defined in the Indenture or
(ii) an Event of Default under any Parity Lien Credit Document.
"EXCLUDED ASSETS" shall have the meaning set forth in the Indenture.
"EXCLUDED PATENTS" shall mean the Patents set forth on Schedule
VIII(A) hereto.
"FIXTURES" shall mean all "fixtures" as defined in Article 9 of the
UCC.
"FOREIGN SECURITY DOCUMENTS" means the Intercreditor & Agency
Agreement, the UK Security Trust Deed, the UK Share Charge and the French Share
Pledge and any other document or agreement (other than this Agreement and the
Security Agreement entered into in connection with the New Senior Credit
Facility) pursuant to which any equity interest in a Foreign Subsidiary is
pledged for
5
the benefit of any Foreign Subsidiary Equity Secured Party (as defined in the
Intercreditor & Agency Agreement).
"FOREIGN SUBSIDIARY HOLDING COMPANY" means a Subsidiary formed under
the laws of any State of the United States which (i) is owned and operated
solely for the purpose of owning interests in and intercompany debt of
Subsidiaries that are not Domestic Subsidiaries, (ii) is not obligated in
respect of any Indebtedness, as issuer or borrower, guarantor or otherwise, (iv)
has not created or become subject to any Lien upon any of its present or future
property, and (iv) is a "controlled foreign corporation" for United States
federal income tax purposes.
"FRENCH SHARE PLEDGE" means the Pledge Over a Securities Account
(COMPTE D'INSTRUMENTS FINANCIERS) dated as of the date hereof among the Company
and Fleet Capital Corporation as intercreditor agent.
"GAAP" shall mean generally accepted accounting principles in the
United States as in effect from time to time.
"GENERAL INTANGIBLES" (i) shall mean all "general intangibles" as
defined in Article 9 of the UCC, including "payment intangibles" also as defined
in Article 9 of the UCC and (ii) shall include, without limitation, all interest
rate or currency protection or hedging arrangements, all tax refunds and all
licenses, permits, concessions and authorizations, (in each case, regardless of
whether characterized as general intangibles under the UCC).
"GOODS" (i) shall mean all "goods" as defined in Article 9 of the
UCC and (ii) shall include, without limitation, all Equipment, Documents
Evidencing Goods and Software Embedded In Goods; provided, however, that "Goods"
shall not include Inventory.
"HEDGING OBLIGATIONS" of any Person means the obligations of such
Person pursuant to any interest rate protection agreement or currency exchange
protection agreement or other similar agreement or arrangement involving
interest rates, currencies, commodities or otherwise.
"INDEBTEDNESS" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal of and premium (if any such premium is
then due and owing) in respect of (a) Indebtedness of such Person for money
borrowed; and (b) Indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is
responsible or liable;
(2) all Capital Lease Obligations of such Person;
(3) all obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale obligations
of such Person and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business);
(4) all obligations of such Person for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (1)
through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no
6
later than the tenth business day following receipt by such Person of a
demand for reimbursement following payment on the letter of credit);
(5) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Disqualified Stock of such Person, or with respect to any Subsidiary of
such Person, the liquidation preference with respect to any preferred stock
(but excluding, in each case, any accrued dividends);
(6) all obligations of the type referred to in clauses
(1) through (5) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including by
means of any guarantee;
(7) all obligations of the type referred to in clauses
(1) through (6) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation so
secured; and
(8) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
For purposes of this definition, the obligation of such Person with respect
to the redemption, repayment or repurchase price of any Disqualified Stock
that does not have a fixed redemption, repayment or repurchase price shall
be calculated in accordance with the terms of such stock as if such stock
were redeemed, repaid or repurchased on any date on which Indebtedness
shall be required to be determined pursuant to the indenture; PROVIDED,
HOWEVER, that if such stock is not then permitted to be redeemed, repaid or
repurchased, the redemption, repayment or repurchase price shall be the
book value of such stock as reflected in the most recent financial
statements of such Person. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations,
the amount of liability required by GAAP to be accrued or reflected on the
most recently published balance sheet of such Person; PROVIDED, HOWEVER,
that:
(1) the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP; and
(2) Indebtedness shall not include any liability for
federal, state, local or other taxes.
"INDEMNITEE" shall mean the Joint Collateral Agent, and its and its
Affiliates' officers, partners, directors, trustees, employees, and agents.
"INDENTURE" shall have the meaning set forth in the preamble.
"INSTRUMENTS" shall mean all "instruments" as defined in Article 9
of the UCC.
"INSURANCE" shall mean: (i) all insurance policies covering any or
all of the Collateral (regardless of whether the Joint Collateral Agent is the
loss payee thereof) and (ii) any key man life insurance policies.
7
"INTELLECTUAL PROPERTY" shall mean, collectively, the Copyrights,
Patents, Trademarks, and Trade Secrets.
"INTELLECTUAL PROPERTY LICENSES" shall mean, collectively, the
Copyright Licenses, Patent Licenses, Trademark Licenses, and Trade Secret
Licenses.
"INTERCREDITOR & AGENCY AGREEMENT" shall mean that certain
Intercreditor & Agency Agreement dated as of the date hereof by and among the
Joint Collateral Agent, Fleet Capital Corporation, as intercreditor agent and
security trustee, Fleet Capital Corporation, as existing facility agent and all
other facility agents from time to time party thereto.
"INTERCREDITOR AGENT AND SECURITY TRUSTEE" shall mean Fleet Capital
Corporation and its successors and assigns under the Intercreditor & Agency
Agreement.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVENTORY" shall mean all "inventory" as defined in Article 9 of
the UCC.
"INVESTMENT ACCOUNTS" shall mean the Securities Accounts,
Commodities Accounts and the Asset Sale Proceeds Account; provided, however,
that Investment Accounts shall not include Deposit Accounts except for the Asset
Sale Proceeds Account and deposits therein or any Securities Account holding
only Cash Equivalents (other than any Cash Equivalents constituting identifiable
proceeds of Collateral).
"INVESTMENT RELATED PROPERTY" shall mean: (a) all "investment
property" (as such term is defined in Article 9 of the UCC) and (b) all of the
following (regardless of whether classified as investment property under the
UCC): all (i) Pledged Equity Interests, (ii) Pledged Debt, (iii) the Investment
Accounts and (iv) certificates of deposit; provided, however, that Investment
Related Property shall not include Deposit Accounts or Cash Equivalents except
for the Asset Sale Proceeds Account and deposits therein and any money, Deposit
Accounts and Cash Equivalents (whether held directly or in securities accounts)
constituting identifiable proceeds of Collateral.
"JOINT COLLATERAL AGENT" shall have the meaning set forth in the
preamble.
"LETTER OF CREDIT RIGHT" shall mean "letter-of-credit right" as
defined in Article 9 of the UCC.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the UCC (or equivalent statutes) of any jurisdiction.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(i) the business, operations, properties, assets or condition (financial or
otherwise) of any Grantor and its subsidiaries taken as a whole; (ii) the
ability of any Grantor to fully and timely perform its Secured Obligations;
(iii) the legality, validity, binding effect or enforceability against any
Grantor of a Transaction Document to which it is a party; or (iv) the rights,
remedies and benefits available to, or conferred upon, any agent and Joint
Collateral Agent under any Secured Obligation.
8
"MATERIAL CONTRACT" shall mean any agreement, contract or license or
other arrangement to which any Grantor is a party that is material to the
Grantors and their Subsidiaries taken as a whole and for which breach,
nonperformance, cancellation or failure to renew could reasonably be expected to
have a Material Adverse Effect.
"MATERIAL FOREIGN SUBSIDIARY" means each of Hexcel S A, Hexcel
Holdings (UK) Limited and each other Foreign Subsidiary of the Company that as
at any date of determination, any of the following criteria has been met: (a)
the aggregate revenue generated by such Foreign Subsidiary equals or exceeds an
amount equal to $15,000,000 for the period of four (4) consecutive fiscal
quarters most recently ended, (b) whose assets at any time exceed $5,000,000 in
aggregate book value, or (c) which has had its Capital Stock pledged to the
holder of any other Indebtedness of the Company or any of its Subsidiaries;
provided that (x) any Foreign Subsidiary whose only asset is the equity
interests of a joint-venture shall not be subject to the criteria contained in
clause (a) hereof, and (y) the fair market value of such equity interests in the
joint venture shall be the carrying value of such equity interests on the books
of the Company(determined in accordance with GAAP). A Foreign Subsidiary that is
a Material Foreign Subsidiary at any date pursuant to this definition shall
continue to be or be deemed to be a Material Foreign Subsidiary at all times
thereafter, without regard to the results of any future re-determination
pursuant to this definition.
"MONEY" shall mean "money" as defined in the UCC.
"MORTGAGES" shall mean any mortgage, deed of trust or similar
document executed by any Grantor now or hereafter securing any Secured
Obligations.
"NON-ASSIGNABLE CONTRACT" shall mean any Material Contract that by
its terms purport to restrict or prevent the assignment or granting of a
security interest therein (either by its terms or by any federal or state
statutory prohibition or otherwise irrespective of whether such prohibition or
restriction is enforceable under Sections 9-406 through 409 of the UCC).
"NOTE OBLIGATIONS" shall have the meaning set forth in the
Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing, securing or relating to any Indebtedness, whether
or not a claim in respect thereof has been asserted.
"PARITY LIEN CREDIT DOCUMENT" shall mean the indenture or other
agreement governing any Parity Lien Debt.
"PARITY LIEN DEBT" shall have the meaning specified in the
Indenture.
"PARITY LIEN OBLIGATION" shall have the meaning specified in the
Indenture.
"PARITY LIEN REPRESENTATIVE" shall mean the trustee, agent or other
representative of the holders of Parity Lien Debt."
"PATENT LICENSES" shall mean any and all agreements granting any
right in, to or under Patents, to which a Grantor is a party (whether such
Grantor is licensee or licensor thereunder) including without limitation, each
agreement referred to in Schedule VI(D) hereto (as such schedule may be amended
or supplemented from time to time).
9
"PATENTS" shall mean all United States, state and foreign patents
and applications for letters patent, including, but not limited to, each patent
and patent application referred to in Schedule VI(C) hereto (as such schedule
may be amended or supplemented from time to time), all reissues, divisions,
continuations, continuations-in-part, extensions, renewals, and reexaminations
of any of the foregoing, all rights corresponding thereto throughout the world,
the right to xxx for past, present and future infringements of any of the
foregoing and all proceeds of the foregoing including, without limitation,
royalties, income, payments, claims, damages, and proceeds of suit.
"PAYMENT INTANGIBLE" shall have the meaning specified in Article 9
of the UCC.
"PERMITTED LIEN" shall have the meaning set forth in the Indenture.
"PERSON" shall mean and include natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governmental authorities.
"PLEDGED ALTERNATIVE EQUITY INTERESTS" shall mean all participation
or other interests in any equity or profits of any business entity and the
certificates, if any, representing such interests, all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such interests and any other
warrant, right or option to acquire any of the foregoing; PROVIDED, HOWEVER,
that Pledged Alternative Equity Interests shall not include any Pledged Stock,
Pledged Partnership Interests, Pledged LLC Interests and Pledged Trust
Interests.
"PLEDGED DEBT" shall mean all indebtedness for borrowed money owed
to such Grantor, whether or not evidenced by any instrument or promissory note,
including, without limitation, all indebtedness described on Schedule III hereto
under the heading "Pledged Debt" (as such schedule may be amended or
supplemented from time to time), all monetary obligations owing to any Grantor
from any other Grantor, the instruments evidencing any of the foregoing, and all
interest, cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing.
"PLEDGED EQUITY INTERESTS" shall mean all Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests, Pledged Trust Interests and Pledged
Alternative Equity Interests.
"PLEDGED LLC INTERESTS" shall mean all interests in any limited
liability company including, without limitation, all limited liability company
interests listed on Schedule III hereto under the heading "Pledged LLC
Interests" (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records of such
limited liability company or on the books and records of any securities
intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company
interests and any other warrant, right or option to acquire any of the
foregoing.
"PLEDGED PARTNERSHIP INTERESTS" shall mean all interests in any
general partnership, limited partnership, limited liability partnership or other
partnership including, without limitation, all partnership interests listed on
Schedule III hereto under the heading "Pledged Partnership Interests" (as such
schedule may be amended or supplemented from time to time) and the certificates,
if any, representing such partnership interests and any interest of such Grantor
on the books and records of such
10
partnership or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such partnership interests and any other warrant,
right or option to acquire any of the foregoing.
"PLEDGED STOCK" shall mean all shares of capital stock owned by such
Grantor, including, without limitation, all shares of capital stock described on
Schedule III hereto under the heading "Pledged Stock" (as such schedule may be
amended or supplemented from time to time), and the certificates, if any,
representing such shares and any interest of such Grantor in the entries on the
books of the issuer of such shares or on the books of any securities
intermediary pertaining to such shares, and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares and any other warrant,
right or option to acquire any of the foregoing.
"PLEDGED TRUST INTERESTS" shall mean all interests in a Delaware
business trust or other trust including, without limitation, all trust interests
listed on Schedule III hereto under the heading "Pledged Trust Interests" (as
such schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such trust interests and any interest of such
Grantor on the books and records of such trust or on the books and records of
any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust interests
and any other warrant, right or option to acquire any of the foregoing.
"PROCEEDS" shall mean: (i) all "proceeds" as defined in Article 9 of
the UCC, (ii) payments or distributions made with respect to any Investment
Related Property and (iii) whatever is receivable or received when Collateral or
proceeds are sold, leased, licensed, exchanged, collected or otherwise disposed
of, whether such disposition is voluntary or involuntary.
"QUALIFIED CREDIT FACILITY" shall have the meaning specified in the
Indenture.
"RECORD" shall have the meaning specified in Article 9 of the UCC.
"RESTRICTED PATENT" shall mean the Patents set forth on Schedule
VIII(B) hereto.
"REPRESENTATION DATE" shall mean each of (i) the date hereof and
(ii) each date on which any additional Parity Lien Debt executes a joinder
agreement and becomes party to the Collateral Agency Agreement.
"SECURED OBLIGATIONS" all Note Obligations, Parity Lien Obligations
and all obligations hereunder or under any other Collateral Document (including,
without limitation, any guarantees of the foregoing).
"SECURED PARTY" shall mean each of the Joint Collateral Agent, the
Trustee, the holders from time to time of the Notes, each Parity Lien
Representative and each holder from time to time of Parity Lien Debt.
"SECURITIES" shall mean any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any
11
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"SECURITIES ACCOUNTS" (i) shall mean all "securities accounts" as
defined in Article 8 of the UCC and (ii) shall include, without limitation, all
of the accounts listed on Schedule III hereto under the heading "Securities
Accounts" (as such schedule may be amended or supplemented from time to time).
"SOFTWARE EMBEDDED IN GOODS" means, with respect to any Goods, any
computer program embedded in Goods and any supporting information provided in
connection with a transaction relating to the program if (i) the program is
associated with the Goods in such a manner that it customarily is considered
part of the Goods or (ii) by becoming the owner of the Goods a person acquires a
right to use the program in connection with the Goods.
"STATE" shall mean a State or Commonwealth of the United States, the
District of Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the United
States.
"STATED MATURITY" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"SUBSIDIARY" shall mean, with respect to any specified Person:
(1) any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees of the corporation,
association or other business entity is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are that Person or one or
more Subsidiaries of that Person (or any combination thereof).
"SUPPORTING OBLIGATION" shall mean all "supporting obligations" as
defined in Article 9 of the UCC.
"TRADE SECRET LICENSES" shall mean any and all agreements granting
any right in, to or under Trade Secrets to which Grantor is a party (whether
such Grantor is licensee or licensor thereunder) including, without limitation,
each agreement referred to in Schedule VI(G) hereto (as such schedule may be
amended or supplemented from time to time).
"TRADE SECRETS" shall mean all trade secrets and all other
confidential or proprietary information and know-how (all of the foregoing being
collectively called a "Trade Secret"), whether or not reduced to a writing or
other tangible form, including all documents and things embodying,
incorporating, or describing such Trade Secret, the right to xxx for past,
present and future infringements of any Trade Secret, and all proceeds of the
foregoing, including, without limitation, royalities, income, payments, claims,
damages, and proceeds of suit.
12
"TRADEMARK LICENSES" shall mean any and all agreements granting any
right in, to or under Trademarks to which a Grantor is a party (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule VI(F) hereto (as such schedule may be amended
or supplemented from time to time).
"TRADEMARKS" shall mean all United States, state and foreign
trademarks, service marks, certification marks, collective marks, trade names,
corporate names, d/b/as, business names, fictitious business names, internet
domain names, trade styles, logos, other source or business identifiers, designs
and general intangibles of a like nature, rights of publicity and privacy
pertaining to the right to use names likenesses and biographical data, all
registrations and applications for any of the foregoing including, but not
limited to, the registrations and applications referred to in Schedule VI(E)
hereto (as such schedule may be amended or supplemented from time to time), the
goodwill of the business symbolized by the foregoing, the right to xxx for past,
present and future infringements or dilution of any of the foregoing or for any
injury to goodwill, and all proceeds of the foregoing, including, without
limitation, royalties, income, payments, claims, damages, and proceeds of suit.
"TRANSACTION DOCUMENTS" shall mean the Indenture, this Agreement,
any Collateral Documents and any Parity Lien Credit Documents.
"UCC" or "
NEW YORK UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial Code as in effect from time to time in the State of
New York.
"UK SHARE CHARGE" means the Share Charge dated as of the date hereof
among the Company as chargor and Fleet Capital Corporation as security trustee.
"UK SECURITY TRUST DEED" means the Security Trust Deed dated as of
the date hereof among the Company, Fleet Capital Corporation as security
trustee, HSBC Bank USA as Joint Collateral Agent, Fleet Capital Corporation as
agent under the New Senior Credit Facility and each other Credit Facility Agent
(as defined in the Indenture) thereafter arising.
(b) DEFINITIONS; INTERPRETATION. All capitalized terms used
herein (including the preamble and recitals hereto) and not otherwise defined
herein shall have the meanings ascribed thereto in the Indenture or, if not
defined therein, in the Collateral Agency Agreement and if not defined therein,
the UCC. References to "Sections," "Annexes" and "Schedules" shall be to
Sections, Annexes and Schedules, as the case may be, of this Agreement unless
otherwise specifically provided. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect. Any of the
terms defined herein may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter. If
any conflict or inconsistency exists between this Agreement and either the
Collateral Agency Agreement or the Indenture, such other agreements shall
govern, and in the event of any conflict or inconsistency between such
agreements, the Indenture shall govern. All references herein to provisions of
the UCC shall include all successor provisions under any subsequent version or
amendment to any Article of the UCC.
SECTION 2. GRANT OF SECURITY
13
(a) GRANT OF SECURITY. Subject to Paragraph (b) of this
Section 2, each Grantor hereby grants to the Joint Collateral Agent for the
benefit of the Secured Parties a security interest and continuing lien on all of
such Grantor's right, title and interest in, to and under all personal property
of such Grantor including, but not limited to the following, in each case
whether now owned or existing or hereafter acquired or arising and wherever
located (all of which being hereinafter collectively referred to as the
"Collateral", as defined in Section 1(a)):
(i) Asset Sale Proceeds Account;
(ii) Chattel Paper;
(iii) Documents;
(iv) Goods (including Documents Representing Goods and
Software Embedded in Goods);
(v) Insurance;
(vi) Intellectual Property and Intellectual Property
Licenses;
(vii) Investment Related Property;
(viii) Letter of Credit Rights;
(ix) Material Contracts;
(x) Commercial Tort Claims;
(xi) to the extent not otherwise included above, all
General Intangibles, Payment Intangibles, Chattel Paper,
Instruments, contracts, motor vehicles and other personal property
of any kind and all Collateral Records, Collateral Support and
Supporting Obligations relating to any of the foregoing; and
(xii) to the extent not otherwise included above, all
Proceeds, products, accessions, rents and profits of or in respect
of any of the foregoing.
(b) CERTAIN LIMITED EXCLUSIONS. Notwithstanding anything herein
to the contrary, in no event shall the security interest granted under Section
2(a) hereof attach to any Excluded Assets or Excluded Patent and such Excluded
Assets and Excluded Patents shall not be deemed "Collateral" for the purposes of
this Agreement. In addition, such security interest granted under Section 2(a)
hereof shall not attach to any Capital Stock of any Foreign Subsidiary of the
Company that is not a Material Foreign Subsidiary and any such Capital Stock
shall not constitute "Collateral" for purposes of this Agreement. In addition,
if and only for so long as the grant of a security interest in any Restricted
Patent shall constitute or result in (i) the abandonment, invalidation or
unenforceability of any right, title or interest of any Grantor therein or (ii)
in a breach or termination pursuant to the terms of, or a default under, any
agreement relating to such Restricted Patent (other than to the extent that any
such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408
or 9-409 of the UCC of any relevant jurisdiction or any other applicable law)
then such Restricted Patent shall not constitute Collateral hereunder; provided,
however that the security interest shall attach immediately (and such Restricted
Patent shall constitute Collateral hereunder) at such time as the condition
causing such abandonment, invalidation or unenforceability shall be remedied
and, to the extent severable, shall attached immediately
14
to any portion of such Restricted Patent that does not result in any of the
consequences specified in (i) or (ii).
SECTION 3. SECURITY FOR SECURED OBLIGATIONS
(a) SECURITY FOR SECURED OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt and complete payment
or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a) (and
any successor provision thereof)), of all Secured Obligations.
(b) CONTINUING LIABILITY UNDER COLLATERAL. Notwithstanding
anything herein to the contrary, (i) each Grantor shall remain liable for all
obligations under the Collateral and nothing contained herein is intended or
shall be a delegation of duties to the Joint Collateral Agent or any Secured
Party and (ii) each Grantor shall remain liable under each of the agreements
included in the Collateral, including, without limitation, any agreements
relating to Pledged Partnership Interests or Pledged LLC Interests, to perform
all of the obligations undertaken by it thereunder all in accordance with and
pursuant to the terms and provisions thereof and neither the Joint Collateral
Agent nor any Secured Party shall have any obligation or liability under any of
such agreements by reason of or arising out of this Agreement or any other
document related thereto nor shall the Joint Collateral Agent nor any Secured
Party have any obligation to make any inquiry as to the nature or sufficiency of
any payment received by it or have any obligation to take any action to collect
or enforce any rights under any agreement included in the Collateral, including,
without limitation, any agreements relating to Pledged Partnership Interests or
Pledged LLC Interests, (iii) the exercise by the Joint Collateral Agent of any
of its rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS
(a) GENERALLY.
(i) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby
represents and warrants, on each Representation Date, that:
(1) it owns the Collateral purported to be owned by
it or otherwise has the rights it purports to have in each
item of Collateral and, as to all Collateral whether now
existing or hereafter acquired, will continue to own or have
such rights in each item of the Collateral, in each case
free and clear of any and all Liens, rights or claims of all
other Persons other than Permitted Liens, including, without
limitation, liens arising as a result of such Grantor
becoming bound (as a result of merger or otherwise) as
debtor under a security agreement entered into by another
Person, except for sales expressly permitted by each of the
Transaction Documents;
(2) Such Grantor has been duly organized solely
under the laws of the State specified in Schedule I and is
duly existing as such. Such Grantor has not filed any
certificates of domestication, transfer or continuance in
any other jurisdiction.
15
(3) the execution and delivery of this Agreement by
such Grantor and the performance by it of its obligations
under this Agreement are within its corporate or other
powers and have been duly authorized by all necessary
corporate or other action;
(4) upon the filing of all UCC financing statements
naming each Grantor as "debtor" and HSBC Bank USA as the
Joint Collateral Agent as "secured party" and describing the
Collateral in the filing offices set forth opposite such
Grantor's name on Schedule I(E) hereof (as such schedule may
be amended or supplemented from time to time) and other
filings delivered by each Grantor, the security interests
granted to the Joint Collateral Agent hereunder constitute
valid and perfected first priority Liens (subject to any
Permitted Liens) to the extent such security interests can
be perfected by filing under the UCC;
(5) other than the financing statements and
evidences of security interests filed in favor of the Joint
Collateral Agent, no effective UCC financing statement,
fixture filing, evidence of security interests or other
instrument similar in effect under any applicable law
covering all or any part of the Collateral is on file in any
filing or recording office except for (x) financing
statements for which proper termination statements and
evidences of security interests have been delivered to the
Joint Collateral Agent for filing and (y) financing
statements and evidences of security interests filed in
connection with Permitted Liens;
(6) no authorization, approval or other action by,
and no notice to or filing with, any governmental authority
or regulatory body is required for either (i) the pledge or
grant by any Grantor of the Liens purported to be created in
favor of the Joint Collateral Agent hereunder or (ii) the
exercise by Joint Collateral Agent of any rights or remedies
in respect of any Collateral (whether specifically granted
or created hereunder or created or provided for by
applicable law), except (A) for the filings contemplated by
clause (4) above and (B) as may be required, in connection
with the disposition of any Investment Related Property, by
laws generally affecting the offering and sale of Securities
and as may be required under federal laws pertaining to
Intellectual Property;
(7) all actions and consents, including all filings,
notices, registrations and recordings necessary or desirable
for the exercise by the Joint Collateral Agent of the voting
or other rights provided for in this Agreement or the
exercise of remedies in respect of the Collateral have been
made or obtained except for the recording of evidences of
the security interest in the applicable Intellectual
Property registries with respect to Collateral consisting of
Patents and registered Copyrights and Trademarks and
applications therefor, and except for the taking of
appropriate actions to perfect the lien under applicable
foreign law with respect to non-U.S. Intellectual Property,
and registration of copyrights;
(8) it has indicated on Schedule I(A) hereto (as
such schedule may be amended or supplemented from time to
time): (w) the type of organization of such Grantor, (x) the
jurisdiction of organization of such Grantor, (y) its
organizational identification number (provided that such
organizational identification number shall not be required
for any Grantor who is organized under the law of the State
of Delaware and is a Registered Organization) and (z) the
jurisdiction where the chief executive office or its sole
place of business is (or
16
if such Grantor is a natural person principal residence and
principal place of business), and for the one-year period
preceding the date hereof has been, located;
(9) the full legal name of such Grantor is as set
forth on Schedule I(A) and it has not done in the last five
(5) years, and it does not do, business under any other name
(including any trade-name or fictitious business name)
except for those names set forth on Schedule I(B) (as such
schedule may be amended or supplemented from time to time);
(10) except as provided on Schedule I(C), it has not
changed its name, jurisdiction of organization, chief
executive office or sole place of business (or, if such
Grantor is a natural person, principal residence or
principal place of business) or its corporate structure in
any way (e.g. by merger, consolidation, change in corporate
form or otherwise) within the past five (5) years;
(11) such Grantor has not within the last five (5)
years become bound (whether as a result of merger or
otherwise) as debtor under a security agreement entered into
by another Person, which has not heretofore been terminated
other than the agreements identified on Schedule I(D) hereof
(as such schedule may be amended or supplemented from time
to time);
(12) with respect to each agreement identified on
Schedule I(D), it has indicated on Schedule I(A) and
Schedule I(B) the information required pursuant to Section
4(a)(8) and (9) with respect to each Grantor under each such
agreement;
(13) all information supplied by any Grantor with
respect to any of the Collateral (in each case taken as a
whole with respect to any particular Collateral) is accurate
and complete in all material respects; and
(14) none of the Collateral constitutes, or is the
Proceeds of, "farm products" (as defined in the UCC).
(ii) COVENANTS AND AGREEMENTS. Each Grantor hereby
covenants and agrees that:
(1) except for the security interest created by this
Agreement, it shall not create or suffer to exist any Lien
upon or with respect to any of the Collateral, except
Permitted Liens;
(2) such Grantor shall use commercially reasonable
efforts to defend the Collateral against all Persons at any
time claiming any interest therein;
(3) it shall not produce, use or permit any
Collateral to be used unlawfully or in violation of any
provision of this Agreement or of any Intellectual Property
License or, to such Grantor's knowledge, any other contract
covering such Collateral or any applicable statute,
regulation or ordinance or any policy of insurance covering
the Collateral unless such use could not reasonably be
expected to have a Material Adverse Effect;
17
(4) it shall not change such Grantor's name,
identity, corporate structure (e.g. by merger,
consolidation, change in corporate form or otherwise), sole
place of business (or principal residence if such Grantor is
a natural person), chief executive office, type of
organization or jurisdiction of organization unless it shall
have (a) notified the Joint Collateral Agent in writing, by
executing and delivering to the Joint Collateral Agent a
completed Pledge Supplement, substantially in the form of
Annex A attached hereto, together with all Supplements to
Schedules thereto, at least thirty (30) days prior to any
such change or establishment, identifying such new proposed
name, identity, corporate structure, sole place of business
(or principal residence if such Grantor is a natural
person), chief executive office or jurisdiction of
organization and providing such other information in
connection therewith as the Joint Collateral Agent may
reasonably request and (b) taken all actions necessary or
advisable to maintain the continuous validity, perfection
and the same or better priority of the Joint Collateral
Agent's security interest in the Collateral granted or
intended to be granted and agreed to hereby;
(5) it shall notify the Joint Collateral Agent
quarterly, in writing, of the establishment of any trade
names and provide such other information in connection
therewith as the Joint Collateral Agent may reasonably
request and take all actions necessary or advisable to
maintain the continuous validity, perfection and the same or
better priority of the Joint Collateral Agent's security
interest;
(6) it shall pay promptly when due all property and
other taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Collateral, except to
the extent the validity thereof is being contested in good
faith; provided, such Grantor shall in any event pay such
taxes, assessments, charges, levies or claims not later than
five (5) Business Days prior to the date of any proposed
sale under any judgment, writ or warrant of attachment
entered or filed against such Grantor or any of the
Collateral as a result of the failure to make such payment;
(7) to the extent any such event may be reasonably
expected to have a Material Adverse Effect, upon such
Grantor or any officer of such Grantor obtaining knowledge
thereof, it shall promptly notify the Joint Collateral Agent
in writing of any event that may materially and adversely
affect the value of the Collateral or any portion thereof,
the ability of any Grantor or the Joint Collateral Agent to
dispose of the Collateral or any portion thereof
(8) upon such Grantor or any officer of such Grantor
obtaining knowledge thereof, it shall promptly notify the
Joint Collateral Agent in writing of any event that may
materially and adversely affect the rights and remedies of
the Joint Collateral Agent in relation to any material
Collateral, including, without limitation, the levy of any
legal process against the Collateral or any material portion
thereof;
(9) it shall not take or permit any action which
impairs the Joint Collateral Agent's rights in the
Collateral; and
18
(10) it shall not license out (other than in the
ordinary course of business) sell, transfer or assign (by
operation of law or otherwise) any Collateral except as
expressly permitted by the Indenture and in compliance
therewith.
(b) EQUIPMENT.
(i) REPRESENTATIONS AND WARRANTIES. Each Grantor
represents and warrants, on each Representation Date, that:
(1) all of the Equipment included in the Collateral
has been kept for the past five (5) years only at the
locations specified in Schedule II hereto (as such schedule
may be amended or supplemented from time to time); and
(2) none of the Equipment is in the possession of an
issuer of a negotiable document (as defined in Section 7-104
of the UCC) therefor except with respect to any negotiable
documents that have been delivered to the Joint Collateral
Agent and, none of the Equipment located in the United
States (other than any Equipment with a fair market value of
less than $5,000,000 in the aggregate) and none of the
Equipment located outside of the United States (other than
any Equipment with a fair market value of less than
$2,000,000 in the aggregate) is otherwise in the possession
of any bailee or warehouseman.
(ii) COVENANTS AND AGREEMENTS. Each Grantor covenants and
agrees that:
(1) it shall keep the Equipment in the locations
specified on Schedule II hereto (as such schedule may be
amended or supplemented from time to time) unless it shall
have (a) notified the Joint Collateral Agent in writing, by
executing and delivering to the Joint Collateral Agent a
completed Pledge Supplement, substantially in the form of
Annex A attached hereto, together with all Supplements to
Schedules thereto, at least thirty (15) days prior to any
change in locations, identifying such new locations and
providing such other information in connection therewith as
the Joint Collateral Agent may reasonably request and (b)
taken all actions necessary or advisable to maintain the
continuous validity, perfection and the same or better
priority of the Joint Collateral Agent's security interest
in the Collateral intended to be granted and agreed to
hereby, or to enable the Joint Collateral Agent to exercise
and enforce its rights and remedies hereunder, with respect
to such Equipment; notwithstanding the foregoing, the
Grantors may collectively retain equipment having a fair
market value not to exceed $10,000,000 at any time
outstanding in locations not disclosed on Schedule II;
(2) it shall not deliver any Document Evidencing any
Goods to any Person other than the issuer of such Document
to claim the Goods evidenced therefor or the Joint
Collateral Agent;
(3) if any Equipment located in the United States
(other than any Equipment with a fair market value of less
than $750,000 in the aggregate) or any of the Equipment
located outside of the United States (other than any
Equipment with a fair market value of less than $250,000 in
the aggregate) is in possession or control of any third
party, including, without limitation, any warehouseman,
bailee or agent, each Grantor shall use commercially
reasonable
19
efforts to notify the third party of the Joint Collateral
Agent's security interest and obtaining an Authenticated
acknowledgment from such third party that it is holding the
Equipment for the benefit of the Joint Collateral Agent; and
(4) with respect to any item of Equipment which is
covered by a certificate of title under a statute of any
jurisdiction under the law of which indication of a security
interest on such certificate is required as a condition of
perfection thereof, it will no less often than quarterly (A)
provide information with respect to any such Equipment in
excess of $50,000 individually or $400,000 in the aggregate,
(B) execute and file with the registrar of motor vehicles or
other appropriate authority in such jurisdiction an
application or other document requesting the notation or
other indication of the security interest created hereunder
on such certificate of title, and (C) deliver to the Joint
Collateral Agent copies of all such applications or other
documents filed during such calendar quarter and copies of
all such certificates of title issued during such calendar
quarter indicating the security interest created hereunder
in the items of Equipment covered thereby.
(c) INVESTMENT RELATED PROPERTY.
(1) PLEDGED EQUITY INTERESTS.
(i) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby
represents and warrants, on each Representation Date, that:
(1) Schedule III hereto (as such schedule may be
amended or supplemented from time to time) sets forth under
the headings "Pledged Stock, "Pledged LLC Interests,"
"Pledged Partnership Interests" and "Pledged Trust
Interests," respectively, all of the Pledged Stock, Pledged
LLC Interests, Pledged Partnership Interests and Pledged
Trust Interests owned by any Grantor and such Pledged Equity
Interests constitute the percentage of issued and
outstanding shares of stock, percentage of membership
interests, percentage of partnership interests or percentage
of beneficial interest of the respective issuers thereof
indicated on such Schedule;
(2) except as set forth on Schedule III(B) hereto it
has not acquired any equity interests of another entity
within the past five (5) years;
(3) it is the record and beneficial owner of the
Pledged Equity Interests free of all Liens, rights or claims
of other Persons other than Permitted Liens and there are no
outstanding warrants, options or other rights to purchase,
or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible
into, or that requires the issuance or sale of, any Pledged
Equity Interests;
(4) without limiting the generality of
Section 4(a)(i)(3), no consent of any Person including any
other general or limited partner, any other member of a
limited liability company, any other shareholder or any
other trust beneficiary is necessary or desirable in
connection with the creation, perfection or first priority
status of the security interest of the Joint Collateral
Agent (or, with respect to any Pledged Equity Interests that
are included in Foreign
20
Subsidiary Collateral, the security interest of the
Intercreditor Agent and Security Trustee) in any Pledged
Equity Interests or the exercise by the Joint Collateral
Agent of the voting or other rights provided for in this
Agreement or the exercise of remedies in respect thereof
(or, with respect to any Pledged Equity Interests that are
included in Foreign Subsidiary Collateral, the voting or
other rights provided in the Foreign Security Documents and
exercise of remedies by the Intercreditor Agent and Security
Trustee);
(5) none of the Pledged LLC Interests nor Pledged
Partnership Interests are or represent interests in issuers
that: (a) are registered as investment companies, (b) are
dealt in or traded on securities exchanges or markets or (c)
have opted to be treated as securities under the uniform
commercial code of any jurisdiction.
(ii) COVENANTS AND AGREEMENTS. Each Grantor hereby
covenants and agrees that:
(1) without the prior written consent of the Joint
Collateral Agent (such consent shall not unreasonably be
withheld), it shall not vote to enable or take any other
action to: (a) amend or terminate any partnership agreement,
limited liability company agreement, certificate of
incorporation, by-laws or other organizational documents in
any way that materially changes the rights of such Grantor
with respect to any Investment Related Property or adversely
affects the validity, perfection or priority of the Joint
Collateral Agent's security interest, (b) permit any issuer
of any Pledged Equity Interest to issue any additional
stock, partnership interests, limited liability company
interests or other equity interests of any nature or to
issue securities convertible into or granting the right of
purchase or exchange for any stock or other equity interest
of any nature of such issuer, provided that the Joint
Collateral Agent shall give such consent if in its
reasonable judgment any such additional stock, partnership
interests, limited liability company interests or other
equity interests shall be subject to a first priority
security interest in favor of the Joint Collateral Agent
(or, with respect to any Pledged Equity Interests that are
included in Foreign Subsidiary Collateral, a first priority
security interest in favor of the Intercreditor Agent and
Security Trustee), (c) other than as permitted under the
Indenture, permit any issuer of any Pledged Equity Interest
to dispose of all or a material portion of their assets, (d)
waive any material default under or material breach of any
terms of organizational document relating to the issuer of
any Pledged Equity Interest or the terms of any Pledged
Debt, or (e) cause any issuer of any Pledged Partnership
Interests or Pledged LLC Interests which are not securities
(for purposes of the UCC) on the date hereof to elect or
otherwise take any action to cause such Pledged Partnership
Interests or Pledged LLC Interests to be treated as
securities for purposes of the UCC unless such Grantor shall
provide seven (7) days prior written notice to the Joint
Collateral Agent of any such election or action and, in such
event, shall take all steps necessary or advisable to
establish the Joint Collateral Agent's "control" (within the
meaning of Section 8-106 of the UCC) thereof;
(2) it shall comply in all material respects with
all of its obligations under any partnership agreement or
limited liability company agreement relating to Pledged
Partnership Interests or Pledged LLC Interests and shall use
21
commercially reasonable efforts to enforce all of its rights
with respect to any Investment Related Property;
(3) except as expressly permitted by the Indenture
and in compliance therewith, it shall not permit, without
the prior written consent of the Joint Collateral Agent, any
issuer of any Pledged Equity Interest to merge or
consolidate unless (i) such issuer creates a security
interest that is perfected by a filed financing statement
(that is not effective solely under section 9-508 of the
UCC) in collateral in which such new debtor has or acquires
rights, and (ii) all the outstanding capital stock or other
equity interests of the surviving or resulting corporation,
limited liability company, partnership or other entity is,
upon such merger or consolidation, pledged hereunder; and
(4) each Grantor consents to the grant by each other
Grantor of a security interest in all Investment Related
Property to the Joint Collateral Agent and, without limiting
the foregoing, consents to the transfer of any Pledged
Partnership Interest and any Pledged LLC Interest to the
Joint Collateral Agent or its nominee following an Event of
Default and to the substitution of the Joint Collateral
Agent or its nominee as a partner in any partnership or as a
member in any limited liability company with all the rights
and powers related thereto.
(2) PLEDGED DEBT.
(i) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby
represents and warrants, on the Closing Date and on the
Representation Date, that:
(1) Schedule III hereto (as such schedule may be
amended or supplemented from time to time) sets forth under
the heading "Pledged Debt" all of the Pledged Debt owned by
any Grantor in excess of $7,500 individually or $50,000 in
the aggregate and there is not any default under any Pledged
Debt that has caused a Material Adverse Effect and such
Pledged Debt constitutes all of the issued and outstanding
inter-company indebtedness evidenced by an instrument or
certificated security of the respective issuers thereof
owing to such Grantor; and
(2) all of such Pledged Debt which is intercompany
debt has been duly authorized, authenticated or issued, and
delivered and is the legal, valid and binding obligation of
the issuers thereof and the Company has no actual knowledge
as to any other Pledged Debt not being the legal, valid and
binding obligation of the issuers thereof.
(ii) COVENANTS AND AGREEMENTS. Each Grantor hereby
covenants and agrees that:
(1) it shall notify the Joint Collateral Agent of
any default under any Pledged Debt that has caused or is
reasonably expected to cause, either in any case or in the
aggregate, a Material Adverse Effect.
(3) INVESTMENT ACCOUNTS.
22
(i) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby
represents and warrants, on each Representation Date, that:
(1) Except with respect to any Excluded Assets,
Schedule III hereto (as such schedule may be amended or
supplemented from time to time) sets forth under the
headings "Securities Accounts" and "Commodities Accounts,"
respectively, all of the Securities Accounts and Commodities
Accounts in which each Grantor has an interest. Each Grantor
is the sole entitlement holder of each such Securities
Account and Commodities Account, and such Grantor has not
consented to, and is not otherwise aware of, any Person
(other than the Joint Collateral Agent pursuant hereto)
having "control" (within the meanings of Sections 8-106 and
9-106 of the UCC) over, or any other interest in, any such
Securities Account or Commodity Account or any securities or
other property credited thereto;
(2) within 30 days after the Closing Date, it will
establish a deposit account to be the Asset Sale Proceeds
Account and upon such establishment the Company will be the
sole account holder thereof. Within such 30 day time period,
the Company will deliver to the Joint Collateral Agent a
legal opinion in form and substance satisfactory to the
Joint Collateral Agent that the Joint Collateral Agent has a
valid and perfected security interest in the Asset Sale
Proceeds Account; and
(3) each Grantor has taken and will take all actions
necessary or desirable to: (a) establish the Joint
Collateral Agent's "control" (within the meanings of
Sections 8-106 and 9-106 of the UCC) over any portion of the
Investment Related Property constituting Certificated
Securities, Uncertificated Securities, Securities Accounts,
Securities Entitlements or Commodity Accounts (each as
defined in the UCC); (b) establish the Joint Collateral
Agent's "control" (within the meaning of Section 9-104 of
the UCC) over the Asset Sale Proceeds Account; and (c)
subject to Section 4(c)(4)(ii) hereof, to deliver all
Instruments to the Joint Collateral Agent.
(ii) DELIVERY AND CONTROL
(1) With respect to any Investment Related Property
consisting of Securities Accounts or Securities
Entitlements, it shall cause the securities intermediary
maintaining such Securities Account or Securities
Entitlement to enter into an agreement substantially in the
form of Annex C hereto pursuant to which it shall agree to
comply with the Joint Collateral Agent's "entitlement
orders" without further consent by such Grantor. With
respect to any Investment Related Property that is a
"Deposit Account," subject to the next sentence hereof, it
shall cause the depositary institution maintaining such
account to enter into an agreement substantially in the form
of Annex D hereto, pursuant to which the Joint Collateral
Agent shall have both sole dominion and control over such
Deposit Account (within the meaning of the common law) and
"control" (within the meaning of Section 9-104 of the UCC)
over such Deposit Account. Each Grantor shall have entered
into such control agreement or agreements with respect to:
(i) any Securities Accounts or Securities Entitlements that
exist on the Closing Date, (ii) the Asset Sale Proceeds
Account within thirty (30) days of the Closing Date and
(iii) any Securities Accounts or Securities Entitlements
that are
23
created or acquired after the Closing Date, as of or prior
to the deposit or transfer of any such Securities
Entitlements or funds, whether constituting moneys or
investments, into such Securities Accounts.
(4) INVESTMENT RELATED PROPERTY GENERALLY.
(i) COVENANTS AND AGREEMENTS. Each Grantor hereby
covenants and agrees that:
(1) in the event it acquires rights in any
Investment Related Property after the date hereof, it shall
deliver to the Joint Collateral Agent quarterly a completed
Pledge Supplement, substantially in the form of Annex A
attached hereto, together with all Supplements to Schedules
thereto, reflecting such new Investment Related Property and
all other Investment Related Property. Notwithstanding the
foregoing, it is understood and agreed that the security
interest of the Joint Collateral Agent shall attach to all
Investment Related Property immediately upon any Grantor's
acquisition of rights therein and shall not be affected by
the failure of any Grantor to deliver a supplement to
Schedule III as required hereby; notwithstanding the
foregoing, in the event it acquires any Investment Related
Property with a fair market value greater than $25,000, it
shall deliver to the Joint Collateral Agent a Pledge
Supplement within thirty (30) days of acquiring such
Investment Related Property;
(2) except as provided in the next sentence, in the
event such Grantor receives any dividends, interest or
distributions on any Investment Related Property, or any
securities or other property upon the merger, consolidation,
liquidation or dissolution of any issuer of any Investment
Related Property, then (a) such dividends, interest or
distributions and securities or other property shall be
included in the definition of Collateral without further
action and (b) such Grantor shall immediately take all
steps, if any, necessary or advisable to ensure the
validity, perfection, priority and, if applicable, control
of the Joint Collateral Agent over such Investment Related
Property (including, without limitation, delivery thereof to
the Joint Collateral Agent) and pending any such action such
Grantor shall be deemed to hold such dividends, interest,
distributions, securities or other property in trust for the
benefit of the Joint Collateral Agent and shall be
segregated from all other property of such Grantor.
Notwithstanding the foregoing, so long as no Event of
Default shall have occurred and be continuing, the Joint
Collateral Agent authorizes each Grantor to retain all
ordinary cash dividends and distributions paid in the normal
course of the business of the issuer and consistent with the
past practice of the issuer and all scheduled payments of
interest;
(3) If any issuer of any Investment Related Property
is located in a jurisdiction outside of the United States,
each Grantor shall take such additional actions under the
laws of such issuer's jurisdiction to insure the validity,
perfection and priority (subject to Permitted Liens) of the
security interest of the Joint Collateral Agent. Upon the
occurrence of an Event of Default, the Joint Collateral
Agent shall have the right, without notice to any Grantor,
to transfer all or any portion of the Investment Related
Property to its name or the name of its nominee or agent. In
addition, the Joint Collateral Agent shall have the right at
any time, without notice to any Grantor, to exchange any
certificates or
24
instruments representing any Investment Related Property for
certificates or instruments of smaller or larger
denominations.
(ii) DELIVERY AND CONTROL.
(1) Each Grantor agrees that with respect to any
Investment Related Property in which it currently has rights
it shall comply with the provisions of this Section 4(c)(4)
on or before the Closing Date and with respect to any
Investment Related Property hereafter acquired by such
Grantor it shall comply with the provisions of this Section
4(c)(4) immediately upon acquiring rights therein, in each
case in form and substance satisfactory to the Joint
Collateral Agent. With respect to any Investment Related
Property that is represented by a certificate or that is an
"instrument" (other than (x) any Investment Related Property
credited to a Securities Account and instruments having a
principal amount of less than $7,500 individually and
$50,000 in the aggregate or (y) any instruments included in
the definition of Foreign Subsidiary Collateral that are
delivered to the Intercreditor Agent and Security Trustee)
it shall cause such certificate or instrument to be
delivered to the Joint Collateral Agent, indorsed in blank
by an "effective indorsement" (as defined in Section 8-107
of the UCC), regardless of whether such certificate
constitutes a "certificated security" for purposes of the
UCC. With respect to any Investment Related Property that is
an "uncertificated security" for purposes of the UCC (other
than any "uncertificated securities" credited to a
Securities Account), it shall cause the issuer of such
uncertificated security to either (i) register the Joint
Collateral Agent as the registered owner thereof on the
books and records of the issuer or (ii) execute an agreement
substantially in the form of Annex B hereto, pursuant to
which such issuer agrees to comply with the Joint Collateral
Agent's instructions with respect to such uncertificated
security without further consent by such Grantor.
Notwithstanding the foregoing, with respect to the shares of
any Foreign Subsidiary subject to the security interest in
favor of the Intercreditor Agent and Security Trustee, it
shall be sufficient if the related Grantor shall take all
steps necessary under French and English law to create a
valid, perfected, first priority security interest (subject
to Permitted Liens) in favor of the Intercreditor Agent and
Security Trustee.
(iii) VOTING AND DISTRIBUTIONS.
So long as no Event of Default shall have occurred and be
continuing:
(1) except as otherwise provided under the covenants
and agreements relating to Investment Related Property in
this Agreement or elsewhere herein or in the Indenture, each
Grantor shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights
pertaining to the Investment Related Property or any part
thereof for any purpose not inconsistent with the terms of
this Agreement or the Indenture; provided, (i) with respect
to Investment Related Property in the United States, no
Grantor shall exercise or refrain from exercising any such
right if the Joint Collateral Agent shall have notified such
Grantor that, in the Joint Collateral Agent's reasonable
judgment, such action would have a Material Adverse Effect
on the value of the material Investment Related Property or
any material part thereof and (ii) with respect to
Investment Related Property that is not located in the
United States,
25
after written notification from the Joint Collateral Agent,
no Grantor shall exercise or refrain from exercising any
such right if, such action could reasonably have a Material
Adverse Effect on the value of the material Investment
Related Property or any material part thereof and; and
provided further, such Grantor shall give the Joint
Collateral Agent at least five (5) Business Days prior
written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any
such right; it being understood, however, that neither the
voting by such Grantor of any Pledged Stock for, or such
Grantor's consent to, the election of directors (or similar
governing body) at a regularly scheduled annual or other
meeting of stockholders or with respect to incidental
matters at any such meeting, nor such Grantor's consent to
or approval of any action otherwise permitted under this
Agreement and the Indenture, shall be deemed inconsistent
with the terms of this Agreement or the Indenture within the
meaning of this Section 4(c)(4), and no notice of any such
voting or consent need be given to the Joint Collateral
Agent; and
(2) the Joint Collateral Agent shall promptly
execute and deliver (or cause to be executed and delivered)
to each Grantor all proxies, and other instruments as such
Grantor may from time to time reasonably request for the
purpose of enabling such Grantor to exercise the voting and
other consensual rights when and to the extent which it is
entitled to exercise pursuant to clause (1) above;
Upon the occurrence and during the continuation of an Event of
Default:
(1) all rights of each Grantor to exercise or
refrain from exercising the voting and other consensual
rights which it would otherwise be entitled to exercise
pursuant hereto shall cease and all such rights shall
thereupon become vested in the Joint Collateral Agent who
shall thereupon have the sole right to exercise such voting
and other consensual rights; and
(2) in order to permit the Joint Collateral Agent to
exercise the voting and other consensual rights which it may
be entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled
to receive hereunder: (1) each Grantor shall promptly
execute and deliver (or cause to be executed and delivered)
to the Joint Collateral Agent all proxies, dividend payment
orders and other instruments as the Joint Collateral Agent
may from time to time reasonably request and (2) each
Grantor acknowledges that the Joint Collateral Agent may
utilize the power of attorney set forth in Section 6.
(d) MATERIAL CONTRACTS.
(i) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby
represents and warrants, on each Representation Date, that:
(1) Schedule IV(A) hereto (as such schedule may be
amended or supplemented from time to time) sets forth all of
the Material Contracts to which such Grantor has rights;
(2) the Material Contracts have been duly
authorized, executed and delivered by all the Grantors party
thereto, are in full force and effect and to the
26
knowledge of the Grantors are binding upon and enforceable
against all parties thereto in accordance with their
respective terms, subject to bankruptcy, insolvency
reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor
may be brought; provided, however, that except as otherwise
specified on Schedule IV hereto, on the date hereof no
obligor under any Material Contract is currently the subject
of any bankruptcy or insolvency proceeding. There exists (i)
no payment default under any Material Contract and (ii) no
other default under any Material Contract which would permit
termination of such Material Contract by any party thereto;
and
(3) except for those Material Contracts specifically
identified on Schedule IV(B) hereto as Material Contracts
which prohibit assignments or require consent or notice to
any Person in connection with the assignment, no Material
Contract prohibits assignment or requires consent of or
notice to any Person in connection with the assignment to
the Joint Collateral Agent hereunder, except such as has
been given or made. With respect to those Material Contracts
specified on Schedule IV(B) hereto, each applicable Grantor
will use its commercially reasonable efforts to obtain the
required consent to the security interest of the Joint
Collateral Agent hereunder.
(ii) COVENANTS AND AGREEMENTS. Each Grantor hereby
covenants and agrees that:
(1) the Joint Collateral Agent may at any time
notify, or require any Grantor to so notify, the
counterparty on any Material Contract of the security
interest of the Joint Collateral Agent therein. In addition,
after the occurrence and during the continuance of an Event
of Default, the Joint Collateral Agent may upon written
notice to the applicable Grantor, notify, or require any
Grantor to notify, the counterparty to make all payments
under the Material Contracts directly to the Joint
Collateral Agent;
(2) each Grantor shall deliver promptly to the Joint
Collateral Agent a copy of each material demand, notice or
document received by it relating in any way to any default
or event of default under a Material Contract;
(3) each Grantor shall deliver promptly to the Joint
Collateral Agent, and in any event within twenty (20)
Business Days, after (1) any Material Contract of such
Grantor is terminated or amended in a manner that is
materially adverse to such Grantor or (2) any new Material
Contract is entered into by such Grantor, a written
statement describing such event, with copies of such
material amendments or new contracts, delivered to the Joint
Collateral Agent (to the extent such delivery is permitted
by the terms of any such Material Contract), provided, no
prohibition on delivery shall be effective if it were
bargained for by such Grantor with the intent of avoiding
compliance with this Section 4(d)(ii)(3), and an explanation
of any actions being taken with respect thereto;
(4) it shall perform in all material respects all of
its obligations with respect to the Material Contracts;
27
(5) it shall exercise in a commercially reasonably
manner each material right (except the right of termination)
it may have under any Material Contract, any Supporting
Obligation or Collateral Support, in each case, at its own
expense, and in connection with such collections and
exercise, such Grantor shall take such action as such
Grantor or, after the occurrence and during the continuance
of an Event of a Default, the Joint Collateral Agent may
deem necessary or advisable;
(6) it shall use its best efforts to keep in full
force and effect any Supporting Obligation or Collateral
Support relating to any Material Contract; and
(7) with respect to any Non-Assignable Contract to
which it is a party, each such Grantor shall, unless the
relevant restrictions on transfer are overidden by Section
9-406 of the UCC, within thirty (30) days of the date hereof
with respect to any Non-Assignable Contract in effect on the
date hereof and within thirty (30) days after entering into
any Non-Assignable Contract after the Closing Date, request
in writing the consent of the counterparty or counterparties
to the Non-Assignable Contract pursuant to the terms of such
Non-Assignable Contract or applicable law to the assignment
or granting of a security interest in such Non-Assignable
Contract to Joint Collateral Agent and use its commercially
reasonable efforts to obtain such consent as soon as
practicable thereafter.
(e) LETTER OF CREDIT RIGHTS.
(i) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby
represents and warrants, on each Representation Date, that:
(1) all material letters of credit to which such
Grantor has rights is listed on Schedule V (as such schedule
may be amended or supplemented from time to time) hereto;
and
(2) it has used its best efforts to obtain the
consent of each issuer of any material letter of credit to
the assignment of the proceeds of the letter of credit to
the Joint Collateral Agent.
(ii) COVENANTS AND AGREEMENTS. Each Grantor hereby
covenants and agrees that with respect to any material letter of
credit hereafter arising it shall use its best efforts to obtain the
consent of the issuer thereof to the assignment of the proceeds of
the letter of credit to the Joint Collateral Agent and shall deliver
to the Joint Collateral Agent a completed Pledge Supplement,
substantially in the form of Annex A attached hereto, together with
all Supplements to Schedules thereto.
(f) INTELLECTUAL PROPERTY.
(i) REPRESENTATIONS AND WARRANTIES. Except as disclosed
in Schedule VI (as such schedule may be amended or supplemented from
time to time), each Grantor hereby represents and warrants, on each
Representation Date, that:
(1) Schedule VI (as such schedule may be amended or
supplemented from time to time) sets forth a true and
complete list of (i) all United States, state
28
and foreign registrations of and applications for Patents
(except for the Excluded Patents and Restricted Patents),
Trademarks and Copyrights owned by each Grantor, (ii) all
material Intellectual Property Licenses, granting rights in
any Patents, Trademarks, Copyrights or material Trade
Secrets owned by such Grantor and (iii) other Intellectual
Property Licenses which are material to the business of such
Licensor provided; however, Schedule VI need not list (a)
Intellectual Property Licenses from one Grantor to another
Grantor; (b) immaterial "off-the-shelf" Intellectual
Property Licenses for software used in the day-to-day
business operations of such Grantor provided such software
was not custom written or custom modified by or on behalf of
such Grantor; or (c) Intellectual Property Licenses and
Patents which are Excluded Assets;
(2) all registrations and applications required to
be listed under clause (1) above, are standing in the name
of such Grantor except for such Patent applications which
have been filed under the names of individual inventors
provided that such applications or the Patents issuing from
them are assigned to such Grantor within a reasonable time
period of the date of this Agreement;
(3) it is the sole and exclusive owner of the entire
right, title, and interest in and to all Intellectual
Property described in clause (i) of subsection (f)(i)(1)
above, and owns or has the valid right to use all other
Intellectual Property used in or necessary to conduct its
business, free and clear of all Liens, claims, encumbrances
and licenses, except for Permitted Liens and the
Intellectual Property Licenses set forth on Schedule VI(B),
(D), (F) and (G) (as each may be amended or supplemented
from time to time);
(4) all Intellectual Property owned by such Grantor,
that is material to a Grantor's business (i) is subsisting;
(ii) is, to the best of Grantor's knowledge, valid and
enforceable; (iii) has not been adjudged invalid or
unenforceable, and (iv) Grantor has performed all acts and
paid all renewal, maintenance, and other fees and taxes
required to maintain each and every registration and
application of such Intellectual Property;
(5) all Intellectual Property that is licensed by
Grantor, that is material to a Grantor's business (i) is, to
the best of Grantor's knowledge, subsisting, valid and
enforceable; and (ii) is the subject of an Intellectual
Property License that has been duly authorized, executed and
delivered by all the Grantors party thereto, are in full
force and effect and to the knowledge of the Grantors are
binding upon and enforceable against all parties thereto in
accordance with their respective terms, subject to
bankruptcy, insolvency reorganization, moratorium or other
laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that availability
of the remedy of specific performance or injunctive relief
is subject to the discretion of the court before which any
proceeding therefor may be brought; provided, however, that
except as otherwise specified on Schedule VI hereto, on the
date hereof no obligor under any Intellectual Property
License on Schedules VI(B), (D), (F) or (G) is currently the
subject of any bankruptcy or insolvency proceeding. There
exists (i) no payment default under any Intellectual
Property License Schedules VI(B), (D),(F) or (G) and (ii) no
other default under any Intellectual Property License which
would permit termination of such Intellectual Property
License by any party thereto;
29
(6) no action or proceeding before any court or
administrative authority in pending or, to the best of
Grantor's knowledge, threatened against Grantor challenging
such Grantor's right to register, the validity of, or such
Grantor's rights to own, use, or license to other parties
any Intellectual Property owned by a Grantor;
(7) except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect,
each Grantor has been using required statutory notice of
registration in connection with its use of registered
Trademarks, proper marking practices in connection with the
use of Patents, and appropriate notice of copyright in
connection with the publication of Copyrights material to
the business of such Grantor;
(8) except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect,
each Grantor uses commercially reasonable standards of
quality in the manufacture, distribution, and sale of all
products sold and in the provision of all services rendered
under or in connection with all Trademarks owned by Grantor
and has taken all commercially reasonable action to insure
that all licensees of such Trademarks use such commercially
reasonable standards of quality;
(9) to each Grantor's knowledge, the conduct of such
Grantor's business does not infringe upon or misappropriate
any trademark, patent, copyright, trade secret or similar
intellectual property right owned or controlled by a third
party; no claim is pending, or to the best of such Grantor's
knowledge, threatened, that the conduct of such Grantor's
business or the use of any Intellectual Property owned or
used by Grantor violates the asserted rights of any other
party;
(10) to each Grantor's knowledge, no other party is
infringing upon or misappropriating any material
Intellectual Property owned or used by such Grantor;
(11) no settlement or consent, covenant not to xxx,
nonassertion assurance, or release has been entered into by
such Grantor or to which such Grantor is bound that
adversely affects such Grantor's rights to own or use, or
grant to others the right to use, any material Intellectual
Property which could reasonably be expected to have a
Material Adverse Effect; and
(12) each Grantor has not made any agreements or
entered into any Contracts to (other than this Agreement)
mortgage, pledge, encumber, assign, sell, transfer, license
or grant an option for any material Intellectual Property
outside the ordinary course of business that has not been
terminated or released.
(ii) COVENANTS AND AGREEMENTS. Each Grantor hereby
covenants and agrees as follows:
(1) Grantor shall not do any act or omit to do any
act whereby any of the Intellectual Property which is
material to the business of Grantor may lapse, or become
abandoned, dedicated to the public, or unenforceable, or
which could
30
reasonably be expected to adversely affect the validity,
grant, or enforceability of the security interest granted
therein;
(2) at the Joint Collateral Agent's request Grantor
shall, or with not less than fifteen (15) days' notice to
the Joint Collateral Agent prior to filing any copyright
application of the details of such proposed application (or
shorter notice period, to the extent that delaying the
filing of the copyright application would adversely affect
the Grantor's rights to enforce its copyright against an
alleged infringer), Grantor may, apply to register any
unregistered Copyrightable work which is material to the
business of Grantor, in the United States Copyright Office
and; in each case, Grantor shall, concurrently with such
notice, execute and deliver to the Joint Collateral Agent a
completed Pledge Supplement, substantially in the form of
Annex A attached hereto, together with all Supplements to
Schedules thereto or signed counterpart of a Copyright
Security Agreement substantially in the form of Annex D,
together with all supplements to the schedules thereto;
(3) it shall promptly notify the Joint Collateral
Agent if it knows or has reason to know that any item of
material Intellectual Property that is material to the
business of any Grantor is likely to become or be (a) other
than as a result of the expiration in the ordinary course of
a non-renewable term, abandoned or dedicated to the public
or placed in the public domain, or invalid or unenforceable,
(b) subject to any adverse determination or development
(including the institution of proceedings) in any action or
proceeding in the United States Patent and Trademark Office,
the United States Copyright Office, and state registry, any
foreign counterpart of the foregoing, or any court arbitral
tribunal or regulatory agency, or (c) within the statutory
period in which statutory termination rights can be
exercised;
(4) subject to clause (2) above, it shall take all
reasonable steps in the United States Patent and Trademark
Office, the United States Copyright Office, each state
registry and each foreign counterpart of the foregoing, to
pursue any application and maintain any registration of each
material Trademark, Patent, and Copyright owned by any
Grantor and which is now or shall become included in the
Collateral including, but not limited to, those items on
Schedule VI(A), (C) and (E) (as each may be amended or
supplemented from time to time);
(5) in the event that, to the Grantor's knowledge,
any material Intellectual Property owned by, or licensed to
any Grantor is infringed, misappropriated, or diluted by
another party, such Grantor shall promptly take all
commercially reasonable actions to stop such infringement,
misappropriation, or dilution and protect its rights in such
Intellectual Property including, but not limited to, the
initiation of a suit for injunctive relief and to recover
damages;
(6) to the extent required to prevent material
Trademarks from becoming invalid, each Grantor shall
maintain the level of the quality of products sold and
services rendered under any Trademark, and each Grantor
shall take all steps necessary to insure that licensees of
such Trademarks use such standards of quality;
31
(7) it shall take all commercially reasonable steps
required to protect the secrecy and proprietary nature of
all material Trade Secrets, including, without limitation,
entering into confidentiality agreements with employees and
labeling and restricting access to secret information and
documents;
(8) it shall promptly (but in no event more than
forty-five (45) days after the fact) report to the Joint
Collateral Agent (i) the filing of any application to
register any Trademarks and Patents (whether it owns in
whole or in part) with the United States Patent and
Trademark Office, or any state registry or foreign
counterpart of the foregoing (whether such application is
filed by such Grantor or through any agent, employee,
licensor, licensee, or designee thereof), (ii) the
registration of any Intellectual Property by any such office
(but only to the extent that there was no recordation of the
Joint Collateral Agent's security interst made with respect
to the application for such registration) or (iii) the
acquisition of any application or registration and, in each
case, shall, concurrently with such report to the Joint
Collateral Agent, execute and deliver to the Joint
Collateral Agent a completed Pledge Supplement,
substantially in the form of ANNEX A attached hereto,
together with all Supplements to Schedules thereto or signed
counterpart of a Trademark Security Agreement, or Patent
Security Agreement, substantially in the form of Annexes B,
and C, as applicable together with all supplements to the
schedules thereto;
(9) except with the prior consent of the Joint
Collateral Agent or as permitted under the Indenture, each
Grantor shall not execute, and there will not be on file in
any public office, any financing statement or other document
or instruments, except financing statements or other
documents or instruments filed or to be filed in favor of
the Joint Collateral Agent and each Grantor shall not (i)
outside the ordinary course of business, sell, assign,
transfer, license or grant an option to do any of the
foregoing with respect to any material Intellectual Property
or any material Intellectual Property License, or (ii)
create or suffer to exist any Lien upon or with respect to
the Intellectual Property it owns or with regard to any
Intellectual Property License, except for the Lien created
by and under this Agreement and the other Transaction
Documents;
(10) it shall hereafter use commercially reasonable
efforts so as not to permit the inclusion or absence, as
applicable, in any contract to which it hereafter becomes a
party of any provision the inclusion or absence, as
applicable, of which would impair or prevent the creation,
perfection or enforcement of a security interest in, or the
assignment of, such Grantor's rights and interests in any
Intellectual Property acquired under such Contracts;
(11) it shall use required statutory notices and in
connection with its use of any of material Intellectual
Property;
(12) it shall make commercially reasonable efforts to
continue to collect, at its own expense, all amounts due or
to become due to such Grantor in respect of any Intellectual
Property. In connection with such collections, each Grantor
may take such action as such Grantor may deem reasonably
necessary or advisable to enforce collection of such
amounts. Notwithstanding the foregoing, the Joint Collateral
Agent shall have the right at any time, to notify, or
require to
32
notify, any obligors with respect to any such amounts of the
existence of the security interest created hereby; and
(13) it shall within 60 days of the date hereof
request all consents necessary or advisable to permit the
Restricted Patents to be subject to the security interest of
the Joint Collateral Agent or to permit the Joint Collateral
Agent to exercise remedies with respect thereto.
(g) COMMERCIAL TORT CLAIMS
(i) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby
represents and warrants, on each Representation Date, that Schedule
VII (as such schedule may be amended or supplemented from time to
time) sets forth all Commercial Tort Claims of each Grantor which,
if successfully asserted, could reasonably be expected to result in
a judgment or settlement in excess of $60,000 individually or
$240,000 in the aggregate; and
(ii) COVENANTS AND AGREEMENTS. Each Grantor hereby
covenants and agrees that with respect to any Commercial Tort Claim
which, if successfully asserted, could reasonably be expected to
result in a judgment or settlement in excess of $60,000 individually
or $240,000 in the aggregate hereafter arising it shall deliver to
the Joint Collateral Agent a completed Pledge Supplement,
substantially in the form of Annex A attached hereto, together with
all Supplements to Schedules thereto, identifying such new
Commercial Tort Claims.
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES
(a) ACCESS; RIGHT OF INSPECTION. Subject to the Joint Collateral
Agent complying with all laws and performing all acts as may be required by any
governmental authority with respect to protecting classified assets (including,
without limitation, information, contracts and programs) and export controlled
information in the manner requested by such governmental authority, the Joint
Collateral Agent shall at reasonable times have full and free access during
normal business hours to all the books, correspondence and records of each
Grantor (to the extent any such materials are not classified under federal law
or other applicable law to the Person making such examination at such time), and
the Joint Collateral Agent and its representatives may examine the same, take
extracts therefrom and make photocopies thereof (to the extent any such
materials are not classified under federal law or other applicable law), and
each Grantor agrees to render to the Joint Collateral Agent, at such Grantor's
cost and expense, such clerical and other assistance as may be reasonably
requested with regard thereto. The Joint Collateral Agent and its
representatives shall at all reasonable times also have the right to enter any
premises of each Grantor and inspect any property of each Grantor where any of
the Collateral of such Grantor granted pursuant to this Agreement is located for
the purpose of inspecting the same, observing its use or otherwise protecting
its interests therein.
(b) FURTHER ASSURANCES
(i) Each Grantor agrees that from time to time, at the
expense of such Grantor, that it shall promptly Authenticate,
execute and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, or that the
Joint Collateral Agent may reasonably request, in order to create
and/or maintain the validity, perfection or priority of and protect
any security interest granted or purported to be granted hereby or
to enable the Joint Collateral Agent to exercise and enforce its
rights
33
and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, each Grantor shall:
(1) file such financing or continuation statements,
or amendments thereto, and execute and deliver such other
agreements, instruments, endorsements, powers of attorney or
notices, as may be necessary or desirable, or as the Joint
Collateral Agent may reasonably request, in order to perfect
and preserve the security interests granted or purported to
be granted hereby;
(2) take all actions necessary to ensure the
recordation of appropriate evidence of the liens and
security interest granted hereunder in the Intellectual
Property with any intellectual property registry in which
said Intellectual Property is registered or in which an
application for registration is pending including, without
limitation, the United States Patent and Trademark Office,
the United States Copyright Office, the various Secretaries
of State, and the foreign counterparts on any of the
foregoing; provided, however, in the case of foreign
Intellectual Property, such recordings shall not be required
unless the Joint Collateral Agent reasonably requests that
they be made;
(3) at any reasonable time, upon prior written
request by the Joint Collateral Agent, annex the Collateral
to and allow inspection of the Collateral by the Joint
Collateral Agent, or persons designated by the Joint
Collateral Agent subject to the limitations set forth in
Section 5; and
(4) at the Joint Collateral Agent's reasonable
request, appear in and defend any action or proceeding that
may affect such Grantor's title to or the Joint Collateral
Agent's security interest in all or any part of the
Collateral.
(5) Each Grantor hereby authorizes the filing of any
financing statements or continuation statements, and
amendments to financing statements, or any similar document
in any jurisdictions and with any filing offices as the
Joint Collateral Agent may determine, in its sole
discretion, are necessary or advisable to perfect or
otherwise protect the security interest granted to the Joint
Collateral Agent herein. Such statements, amendments and
other documents may describe the Collateral in the same
manner as described herein or may contain an indication or
description of collateral that describes such property in
any other manner as the Joint Collateral Agent may
determine, in its sole discretion, is necessary, advisable
or prudent to ensure the perfection of the security interest
in the Collateral granted to the Joint Collateral Agent
herein, including, without limitation, describing such
property as "all assets" or "all personal property", in each
case, whether now owned or hereafter acquired. Each Grantor
shall furnish to the Joint Collateral Agent from time to
time statements and schedules further identifying and
describing the Collateral and such other reports in
connection with the Collateral as the Joint Collateral Agent
may reasonably request, all in reasonable detail.
(ii) Each Grantor hereby authorizes the Joint Collateral
Agent to modify this Agreement after obtaining such Grantor's
approval of or signature to such modification by amending Schedule
VI hereto (as such schedule may be amended or supplemented from time
to time) to include reference to any right, title or interest in any
existing Collateral that consists of
34
Intellectual Property or any Collateral that consists of
Intellectual Property licensed to, or acquired or developed by, any
Grantor after the execution hereof.
SECTION 6. JOINT COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
Each Grantor hereby irrevocably appoints the Joint Collateral Agent
(such appointment being coupled with an interest) as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, the Joint Collateral Agent or otherwise, from time
to time in the Joint Collateral Agent's discretion to take any action and to
execute any instrument that the Joint Collateral Agent may deem reasonably
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, the following:
(a) upon the occurrence and during the continuance of any
Event of Default, to obtain and adjust insurance required to be
maintained by such Grantor or paid to the Joint Collateral Agent
pursuant to the Transaction Documents;
(b) upon the occurrence and during the continuance of any
Event of Default, to ask for, demand, collect, xxx for, recover,
compound, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of any
Event of Default, to receive, endorse and collect any drafts or
other instruments, documents and chattel paper in connection with
clause (ii) above;
(d) upon the occurrence and during the continuance of any
Event of Default, to file any claims or take any action or institute
any proceedings that the Joint Collateral Agent may deem necessary
or desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Joint Collateral Agent with
respect to any of the Collateral;
(e) to prepare, sign, and file for recordation in any
intellectual property registry, appropriate evidence of the lien and
security interest granted herein in the Intellectual Property in the
name of such Grantor as grantor;
(f) to take or cause to be taken all actions necessary to
perform or comply or cause performance or compliance with the terms
of this Agreement, including, without limitation, access to pay or
discharge taxes or Liens (other than Permitted Liens) levied or
placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to
be determined by the Joint Collateral Agent in its sole discretion,
any such payments made by the Joint Collateral Agent to become
obligations of such Grantor to the Joint Collateral Agent, due and
payable immediately without demand; and
(g) upon the occurrence and during the continuance of any
Event of Default, generally to sell, transfer, lease, license,
pledge, make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Joint
Collateral Agent were the absolute owner thereof for all purposes,
and to do, at the Joint Collateral Agent's option and such Grantor's
expense, at any time or from time to time, all acts and things that
the Joint Collateral Agent deems reasonably necessary to protect,
preserve or realize upon the Collateral and the Joint Collateral
Agent's security interest
35
therein in order to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
SECTION 7. REMEDIES.
(a) GENERALLY.
(i) If any Event of Default shall have occurred and be
continuing, the Joint Collateral Agent may exercise in respect of
the Collateral, in addition to all other rights and remedies
provided for herein or otherwise available to it at law or in
equity, all the rights and remedies of the Joint Collateral Agent on
default under the UCC (whether or not the UCC applies to the
affected Collateral) to collect, enforce or satisfy any Secured
Obligations then owing, whether by acceleration or otherwise, and
also may pursue any of the following separately, successively or
simultaneously:
(1) require any Grantor to, and each Grantor hereby
agrees that it shall at its expense and promptly upon
request of the Joint Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Joint
Collateral Agent and make it available to the Joint
Collateral Agent at a place to be designated by the Joint
Collateral Agent that is reasonably convenient to both
parties;
(2) enter onto the property where any Collateral is
located and take possession thereof with or without judicial
process;
(3) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or
otherwise prepare the Collateral for disposition in any
manner to the extent the Joint Collateral Agent deems
appropriate;
(4) without notice except as specified below or
under the UCC, sell, assign, lease, license (on an exclusive
or nonexclusive basis) or otherwise dispose of the
Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Joint Collateral
Agent's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or
prices and upon such other terms as the Joint Collateral
Agent may deem commercially reasonable; and
(ii) The Joint Collateral Agent or any Secured Party may
be the purchaser of any or all of the Collateral at any public or
private (to the extent to portion of the Collateral being privately
sold is of a kind that is customarily sold on a recognized market or
the subject of widely distributed standard price quotations) sale in
accordance with the UCC and the Joint Collateral Agent, as Joint
Collateral Agent for and representative of the Secured Parties,
shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the
Collateral sold at any such sale made in accordance with the UCC, to
use and apply any of the Secured Obligations as a credit on account
of the purchase price for any Collateral payable by the Joint
Collateral Agent at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on
the part of any Grantor, and each Grantor hereby waives (to the
extent permitted by applicable law) all rights of
36
redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten (10)
days notice to such Grantor of the time and place of any public sale
or the time after which any private sale is to be made shall
constitute reasonable notification. The Joint Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Joint Collateral Agent may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
Each Grantor agrees that it would not be commercially unreasonable
for the Joint Collateral Agent to dispose of the Collateral or any
portion thereof by using Internet sites that provide for the auction
of assets of the types included in the Collateral or that have the
reasonable capability of doing so, or that match buyers and sellers
of assets. Each Grantor hereby waives any claims against the Joint
Collateral Agent arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale,
even if the Joint Collateral Agent accepts the first offer received
and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, each Grantor shall
be liable for the deficiency and the fees of any attorneys employed
by the Joint Collateral Agent to collect such deficiency. Each
Grantor further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the Joint
Collateral Agent, that the Joint Collateral Agent has no adequate
remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be
specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a
defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated
maturities. Nothing in this Section shall in any way alter the
rights of the Joint Collateral Agent hereunder.
(iii) The Joint Collateral Agent may dispose of the
Collateral without giving any warranties as to the Collateral. The
Joint Collateral Agent may specifically disclaim or modify any
warranties of title or the like. This procedure will not be
considered to adversely effect the commercial reasonableness of any
disposal of the Collateral.
(iv) The Joint Collateral Agent shall have no obligation
to marshal any of the Collateral.
(b) APPLICATION OF PROCEEDS. All proceeds received by the Joint
Collateral Agent in respect of any sale or other disposition, any collection
from, or other realization upon all or any part of the Collateral shall be
applied in accordance with the provisions of the Collateral Agency Agreement and
the Indenture.
(c) SALES ON CREDIT. If Joint Collateral Agent sells or
otherwise disposes of any of the Collateral upon credit, Grantor will be
credited only with payments actually made by purchaser and received by Joint
Collateral Agent and applied to indebtedness of the Purchaser. In the event the
purchaser fails to pay for the Collateral, Joint Collateral Agent may resell or
otherwise dispose of the Collateral and Grantor shall be credited with proceeds
of the sale.
(d) INVESTMENT RELATED PROPERTY.
37
(i) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933 and applicable
state securities laws, the Joint Collateral Agent may be compelled,
with respect to any sale of all or any part of the Investment
Related Property conducted without prior registration or
qualification of such Investment Related Property under the
Securities Act and/or such state securities laws, to limit
purchasers to those who will agree, among other things, to acquire
the Investment Related Property for their own account, for
investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sale may be
at prices and on terms less favorable than those obtainable through
a public sale without such restrictions (including a public offering
made pursuant to a registration statement under the Securities Act)
and, notwithstanding such circumstances, each Grantor agrees that
any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Joint Collateral Agent
shall have no obligation to engage in public sales and no obligation
to delay the sale of any Investment Related Property for the period
of time necessary to permit the issuer thereof to register it for a
form of public sale requiring registration under the Securities Act
or under applicable state securities laws, even if such issuer
would, or should, agree to so register it. If the Joint Collateral
Agent determines to exercise its right to sell any or all of the
Investment Related Property, upon written request, each Grantor
shall and shall cause each issuer of any Pledged Stock to be sold
hereunder, each partnership and each limited liability company from
time to time to furnish to the Joint Collateral Agent all such
information as the Joint Collateral Agent may request in order to
determine the number and nature of interest, shares or other
instruments included in the Investment Related Property which may be
sold by the Joint Collateral Agent in exempt transactions under the
Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder, as the same are from time to time in
effect.
(ii) Upon the occurrence and during the continuation of an
Event of Default, the Joint Collateral Agent shall have the right to
apply the balance from any Asset Sale Proceeds Account or instruct
the bank at which any Asset Sale Proceeds Account is maintained to
pay the balance of any Asset Sale Proceeds Account to or for the
benefit of the Joint Collateral Agent.
(e) INTELLECTUAL PROPERTY.
(i) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of
an Event of Default:
(1) the Joint Collateral Agent shall have the right
(but not the obligation) to bring suit or otherwise commence
any action or proceeding in the name of any Grantor, the
Joint Collateral Agent or otherwise, in the Joint Collateral
Agent's sole discretion, to enforce any Intellectual
Property, in which event such Grantor shall, at the request
of the Joint Collateral Agent, do any and all lawful acts
and execute any and all documents required by the Joint
Collateral Agent in aid of such enforcement and such Grantor
shall promptly, upon demand, reimburse and indemnify the
Joint Collateral Agent as provided in the Section in this
Agreement relating to indemnity and expenses (Section 11
hereof) in connection with the exercise of its rights under
this Section, and, to the extent that the Joint Collateral
Agent shall elect not to bring suit to enforce any
Intellectual Property as provided in this Section, each
Grantor agrees to use all reasonable measures, whether by
action, suit, proceeding or otherwise, to prevent
38
the infringement or misappropriation of any of the
Intellectual Property by others and for that purpose agrees
to diligently maintain any action, suit or proceeding
against any Person so infringing or misappropriating as
shall be necessary to prevent such infringement or
misappropriation;
(2) upon written demand from the Joint Collateral
Agent, each Grantor shall grant, assign, convey or otherwise
transfer to the Joint Collateral Agent or such Joint
Collateral Agent's designee all of such Grantor's right,
title and interest in and to the Intellectual Property and
shall execute and deliver to the Joint Collateral Agent such
documents as are necessary or appropriate to carry out the
intent and purposes of this Agreement;
(3) each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that the Joint
Collateral Agent receives proceeds in respect of the sale
of, or other realization upon, the Intellectual Property in
conformance with Article 4 of the Collateral Agency
Agreement;
(4) within five (5) Business Days after written
notice from the Joint Collateral Agent, each Grantor shall
make available to the Joint Collateral Agent, to the extent
within such Grantor's power and authority, such personnel in
such Grantor's employ or retention on the date of such Event
of Default as the Joint Collateral Agent may reasonably
designate, by name, title or job responsibility, to permit
such Grantor to continue, directly or indirectly, to
produce, advertise and sell the products and services sold
or delivered by such Grantor under or in connection with the
Intellectual Property, such persons to be available to
perform their prior functions on the Joint Collateral
Agent's behalf and to be compensated by the Joint Collateral
Agent at such Grantor's expense on a per diem, pro-rata
basis consistent with the salary and benefit structure
applicable to each as of the date of such Event of Default;
and
(5) the Joint Collateral Agent shall have the right
to notify, or require each Grantor to notify, any obligors
with respect to amounts due or to become due to such Grantor
in respect of the Intellectual Property and Intellectual
Property Licenses, of the existence of the security interest
created herein, to direct such obligors to make payment of
all such amounts directly to the Joint Collateral Agent in
conformance with Section 4(d)(ii)(1) of this Agreement, and,
upon such notification and at the expense of such Grantor,
to enforce collection of any such amounts and to adjust,
settle or compromise the amount or payment thereof, in the
same manner and to the same extent as such Grantor might
have done;
(6) all amounts and proceeds (including checks and
other instruments) received by any Grantor in respect of
amounts due to such Grantor in respect of the Collateral or
any portion thereof shall be received in trust for the
benefit of the Joint Collateral Agent hereunder, shall be
segregated from other funds of such Grantor and shall be
forthwith paid over or delivered to the Joint Collateral
Agent in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as
provided by the Section in this Agreement relating to cash
proceeds (Section 7 hereof); and
39
(7) Grantors shall not adjust, settle or compromise
the amount or payment of any such amount or release wholly
or partly any obligor with respect thereto or allow any
credit or discount thereon.
(ii) If (i) an Event of Default shall have occurred and,
by reason of cure, waiver, modification, amendment or otherwise, no
longer be continuing, (ii) no other Event of Default shall have
occurred and be continuing, (iii) an assignment or other transfer to
the Joint Collateral Agent of any rights, title and interests in and
to the Intellectual Property shall have been previously made and
shall have become absolute and effective, and (iv) the Secured
Obligations shall not have become immediately due and payable, upon
the written request of any Grantor, the Joint Collateral Agent shall
promptly execute and deliver to such Grantor, at such Grantor's sole
cost and expense, such assignments or other transfer instruments as
may be necessary to reassign to such Grantor any such rights, title
and interests as may have been assigned to the Joint Collateral
Agent as aforesaid, subject to any disposition thereof (including a
lease or license granted pursuant to Section 13.05 of the Indenture)
that may have been made by the Joint Collateral Agent; provided,
after giving effect to such reassignment, the Joint Collateral
Agent's security interest granted pursuant hereto, as well as all
other rights and remedies of the Joint Collateral Agent granted
hereunder, shall continue to be in full force and effect; and
provided further, the rights, title and interests so reassigned
shall be free and clear of any Liens granted by or on behalf of the
Joint Collateral Agent.
(iii) Solely for the purpose of enabling the Joint
Collateral Agent to exercise rights and remedies under this Section
7 and at such time as the Joint Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby
grants to the Joint Collateral Agent, to the extent it has the right
to do so, an irrevocable, nonexclusive worldwide license
(exercisable without payment of royalty or other compensation to
such Grantor), subject, in the case of Trademarks, to sufficient
rights to quality control and inspection in favor of the trademark
owner to avoid the risk of invalidation of said Trademarks, to use,
operate under, license, or sublicense any Intellectual Property now
or hereafter owned by or licensed to such Grantor.
SECTION 8. JOINT COLLATERAL AGENT
The Joint Collateral Agent has been appointed to act as Joint
Collateral Agent in accordance with the Collateral Agency Agreement and shall
have the rights and duties specified therein.
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until terminated in
accordance with the Indenture and any Parity Lien Credit Document, be binding
upon each Grantor, its successors and assigns, and inure, together with the
rights and remedies of the Joint Collateral Agent hereunder, to the benefit of
the Joint Collateral Agent and its successors, transferees and assigns. Without
limiting the generality of the foregoing, but subject to the terms of the
Transaction Documents, each Secured Party may assign or otherwise transfer any
Secured Obligations held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to each
Secured Party herein or otherwise. As to any particular Collateral that is sold,
transferred or otherwise disposed of in accordance with the provisions of the
Indenture and any Parity Lien Credit Document, such Collateral shall be released
in accordance with the provisions of the Indenture and any Parity Lien Credit
Document; provided, however, that the security
40
interest shall continue in any proceeds of such disposition. Upon the
termination of the security interest with respect to all Secured Obligations in
accordance with the terms of the Indenture and the Parity Lien Credit Documents,
the security interest granted hereby shall terminate hereunder and of record,
the Collateral shall be released from the Liens created hereby, and all rights
to the Collateral shall revert and be deemed reassigned to Grantors. Upon any
such termination the Joint Collateral Agent shall, at Grantors' expense,
authorize, execute and deliver to Grantors such documents as Grantors shall
reasonably request to evidence such termination.
SECTION 10. STANDARD OF CARE; JOINT COLLATERAL AGENT MAY PERFORM
The powers conferred on the Joint Collateral Agent hereunder are
solely to protect its interest in the Collateral and the interests of the
Secured Parties and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder and subject to the Joint Collateral Agent complying with all laws
and performing all acts as may be required by any governmental authority,
including, without limitation, protecting classified assets (including, without
limitation, information, contracts and programs) and export controlled
information in the manner lawfully requested by such governmental authority, the
Joint Collateral Agent shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. The Joint Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Joint Collateral Agent accords its own
property. Neither the Joint Collateral Agent nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or otherwise. If any Grantor fails to perform any
agreement contained herein, the Joint Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Joint Collateral
Agent incurred in connection therewith shall be payable by each Grantor under
the Section in this Agreement relating to the payment of expenses (Section 12(b)
hereof).
SECTION 11. INDEMNITY
(a) Each Grantor agrees to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless each Indemnitee, from
and against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including without limitation enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
such Indemnitee's gross negligence or willful misconduct.
(b) The obligations of each Grantor in this Section 11 shall
survive the termination of this Agreement and the discharge of such Grantor's
other obligations under this Agreement, the Indenture and any other Transaction
Documents.
SECTION 12. MISCELLANEOUS
(a) NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given to a
Grantor or Trustee, shall be sent to such Person's address as set forth in
Section 15.02 of the Indenture or in the other relevant Transaction Document or
if given to the Joint Collateral Agent shall be to Xxxxxxx X. Xxxx at HSBC Bank
USA, Issuer Services, 000 0xx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000-0000, telephone
000-000-0000. Each notice hereunder shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or
41
by courier service and signed for against receipt thereof, upon receipt of
telefacsimile or telex, or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed; provided, no notice to
Joint Collateral Agent shall be effective until received by Joint Collateral
Agent.
(b) EXPENSES. Whether or not the transactions contemplated under
the Transaction Documents shall be consummated, Grantors agree to pay promptly
all the actual and reasonable costs and expenses of preparation of the
Transaction Documents and any consents, amendments, waivers or other
modifications thereto; all the costs of furnishing all opinions by counsel for
the Grantors; the reasonable fees, expenses and disbursements of counsel to
Joint Collateral Agent (in each case including allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and
administration of the Transaction Documents and any consents, amendments,
waivers or other modifications thereto and any other documents or matters
requested by the Grantors; all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Joint Collateral Agent, for the
benefit of each Secured Party pursuant hereto, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums and reasonable fees, expenses and disbursements of counsel to
Joint Collateral Agent and of counsel providing any opinions that Joint
Collateral Agent may reasonably request in respect of the Collateral or the
Liens created pursuant to the Collateral Documents; all the actual costs and
reasonable fees, expenses and disbursements of any auditors, accountants,
consultants or appraisers; all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Joint Collateral Agent
and its counsel) in connection with the custody or preservation of any of the
Collateral; all other actual and reasonable costs and expenses incurred by each
Agent in connection with the syndication of the Secured Obligations and
commitments and the negotiation, preparation and execution of the Transaction
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; and after the occurrence of a Default
or an Event of Default, all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by Joint Collateral Agent in enforcing any Secured Obligations of or in
collecting any payments due from any Grantor hereunder or under the other
Transaction Documents by reason of such Default or Event of Default (including
in connection with the sale of, collection from, or other realization upon any
of the Collateral) or in connection with any refinancing or restructuring of the
credit arrangements provided hereunder in the nature of a "work-out" or pursuant
to any insolvency or bankruptcy cases or proceedings.
(c) AMENDMENTS AND WAIVERS.
(i) JOINT COLLATERAL AGENT'S CONSENT. Subject to Section
12(c)(ii) and the Indenture, no amendment, modification, termination
or waiver of any provision of this Agreement, or consent to any
departure by any Grantor therefrom, shall in any event be effective
without the written concurrence of the Joint Collateral Agent.
(ii) NO WAIVER; REMEDIES CUMULATIVE. No failure or delay
on the part of the Joint Collateral Agent in the exercise of any
power, right or privilege hereunder or under any other Transaction
Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power,
right or privilege. All rights, powers and remedies existing under
this Agreement and the other Transaction Documents are cumulative,
and not exclusive of, any rights or remedies otherwise available.
Any forbearance or failure to exercise, and any delay in exercising,
any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or
remedy.
42
(d) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns including all
persons who become bound as debtor to this Agreement. No Grantor shall, without
the prior written consent of the Joint Collateral Agent, assign any right, duty
or obligation hereunder.
(e) INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or would otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.
(f) SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof. Notwithstanding anything herein or implied by law
to the contrary, the agreements of each Grantor set forth in Sections 11 and
12(b) shall survive the payment of the Secured Obligations and the termination
hereof.
(g) MARSHALING; PAYMENTS SET ASIDE. Joint Collateral Agent shall
not be under any obligation to marshal any assets in favor of any Grantor or any
other Person or against or in payment of any or all of the Secured Obligations.
(h) SEVERABILITY. In case any provision in or obligation
hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
(i) HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
(j) APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
(k) CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY GRANTOR ARISING OUT OF OR RELATING HERETO OR ANY OTHER TRANSACTION
DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS; AGREES THAT SERVICE OF ALL PROCESS IN ANY
SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO THE APPLICABLE GRANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 12(a); AGREES THAT SERVICE AS PROVIDED IN CLAUSE (a)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE GRANTOR
IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT; AND AGREES JOINT COLLATERAL AGENT RETAINS
THE RIGHT TO SERVE PROCESS IN ANY OTHER
43
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE
COURTS OF ANY OTHER JURISDICTION.
(l) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER TRANSACTION
DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED
FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 12(l) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS
A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(m) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
(n) EFFECTIVENESS. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto and receipt
by Grantors and the Joint Collateral Agent of written or telephonic notification
of such execution and authorization of delivery thereof.
(o) ENTIRE AGREEMENT. This Agreement and the other Transaction
Documents embody the entire agreement and understanding between Grantors and the
Joint Collateral Agent and supersede all prior agreements and understandings
between such parties relating to the subject matter hereof and thereof.
Accordingly, the Transaction Documents may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties.
44
IN WITNESS WHEREOF, each Grantor and the Joint Collateral Agent have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
HEXCEL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
and Chief Financial Officer
HEXCEL POTTSVILLE CORPORATION,
a Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
XXXXX-XXXXXXXX HOLDING CORP.,
a Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
XXXXX-XXXXXXXX CORPORATION,
a Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
45
HEXCEL INTERNATIONAL,
a California Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Treasurer
CS TECH-FAB HOLDING, INC.,
a Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
46
HSBC BANK USA,
as the Joint Collateral Agent
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Assistant Vice President
47
