EX-10.25 31 dex1025.htm GUARANTY, PLEDGE AND SECURITY AGREEMENT GENERAL ELECTRIC CAPITAL CORPORATION GUARANTY, PLEDGE AND SECURITY AGREEMENT among PEPLIN, INC., PEPLIN OPERATIONS USA, INC. and Each Other Guarantor From Time to Time Party Hereto and...
Exhibit 10.25
GENERAL ELECTRIC CAPITAL CORPORATION
GUARANTY, PLEDGE AND SECURITY AGREEMENT
among
XXXXXX, INC.,
XXXXXX OPERATIONS USA, INC.
and
Each Other Guarantor
From Time to Time Party Hereto
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as agent for Lenders
Dated as of December 28, 2007
TABLE OF CONTENTS
Page | ||||||
ARTICLE I GUARANTY | 1 | |||||
Section 1.1 | Guaranty | 1 | ||||
Section 1.2 | Limitation of Guaranty | 2 | ||||
Section 1.3 | Contribution | 2 | ||||
Section 1.4 | Authorization; Other Agreements | 2 | ||||
Section 1.5 | Guaranty Absolute and Unconditional | 3 | ||||
Section 1.6 | Subordination of Other Indebtedness | 5 | ||||
Section 1.7 | Reliance | 5 | ||||
Section 1.8 | Continuing Guaranty | 5 | ||||
ARTICLE II SECURITY AGREEMENT; PROVISIONS RELATING TO ACCOUNTS COLLATERAL AND INVENTORY COLLATERAL | 5 | |||||
Section 2.1 | Grant of Security Interest | 5 | ||||
Section 2.2 | Intellectual Property and Rights to Payment | 8 | ||||
Section 2.3 | Security Agreement | 8 | ||||
Section 2.4 | Termination of Security Interest | 8 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES; COVENANTS | 9 | |||||
Section 3.1 | Representations Warranties and Covenants of Loan Agreement | 9 | ||||
Section 3.2 | Due Organization and Authorization | 9 | ||||
Section 3.3 | Changes to Name, Location, Jurisdiction | 9 | ||||
Section 3.4 | Consents | 10 | ||||
Section 3.5 | No Conflicts | 10 | ||||
Section 3.6 | Indebtedness | 10 | ||||
Section 3.7 | Solvency | 10 | ||||
Section 3.8 | Title; No Other Liens; Locations | 10 | ||||
Section 3.9 | Deposit Accounts | 10 | ||||
Section 3.10 | Investments; Pledged Collateral | 11 | ||||
Section 3.11 | Commercial Tort Claims | 12 | ||||
Section 3.12 | Instruments and Tangible Chattel Paper | 12 | ||||
Section 3.13 | Letter of Credit Rights | 13 | ||||
Section 3.14 | Electronic Chattel Paper | 13 | ||||
Section 3.15 | Accounts Administration | 13 | ||||
Section 3.16 | Creation, Preservation and Perfection of Security Interests | 13 | ||||
Section 3.17 | Post-Closing Obligations | 14 | ||||
ARTICLE IV REMEDIAL PROVISIONS | 15 | |||||
Section 4.1 | UCC and Other Remedies | 15 | ||||
Section 4.2 | Accounts and Payments in Respect of General Intangibles and Instruments | 17 | ||||
Section 4.3 | Pledged Collateral | 18 | ||||
Section 4.4 | Proceeds to be Turned over to and Held by Agent | 19 | ||||
Section 4.5 | Remedial Provisions. | 19 | ||||
Section 4.6 | Appointment of Agent | 20 | ||||
Section 4.7 | Deficiency | 21 |
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TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE V MISCELLANEOUS | 21 | |||||
Section 5.1 | Reinstatement | 21 | ||||
Section 5.2 | Independent Obligations | 21 | ||||
Section 5.3 | No Waiver by Course of Conduct | 21 | ||||
Section 5.4 | Amendments in Writing | 22 | ||||
Section 5.5 | Additional Guarantors | 22 | ||||
Section 5.6 | Notices | 22 | ||||
Section 5.7 | Successors and Assigns | 22 | ||||
Section 5.8 | Counterparts | 22 | ||||
Section 5.9 | Interpretation | 22 | ||||
Section 5.10 | Severability | 22 | ||||
Section 5.11 | Payments; Foreign Currency Indemnity | 22 | ||||
Section 5.12 | Governing Law | 22 | ||||
Section 5.13 | SUBMISSION TO JURISDICTION | 23 | ||||
Section 5.14 | Service of Process | 23 | ||||
Section 5.15 | Non-Exclusive Jurisdiction | 23 | ||||
Section 5.16 | WAIVER OF JURY TRIAL | 23 | ||||
Section 5.17 | Conflicts | 23 |
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ANNEX
Annex 1 Form of Joinder Agreement
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GUARANTY, PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of December 28, 2007, by XXXXXX, INC. (“Xxxxxx”), XXXXXX OPERATIONS USA, INC. (“Xxxxxx Operations”) and each of the other entities listed on the signature pages hereto or that becomes a party hereto pursuant to Section 5.5 (collectively, the “Guarantors”), in favor of General Electric Capital Corporation (“GECC”), in its capacity as agent for Lenders (defined below) (together with its successors and permitted assigns, the “Agent”).
ARTICLE I
GUARANTY
Section 1.1 Guaranty. Each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Debt Document, of the Term Loan and all other Obligations of the Borrower whether existing on the date hereof or hereinafter incurred or created (the “Guaranteed Obligations”). This guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.
Section 1.2 Limitation of Guaranty. Any term or provision of this Agreement or any other Debt Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor that is a Subsidiary of the Borrower (any “Subsidiary Guarantor”) shall be liable hereunder shall not exceed the maximum amount for which such Subsidiary Guarantor can be liable without rendering this Agreement or any other Debt Document, as it relates to such Subsidiary Guarantor, subject to avoidance under applicable laws relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11, United States Code or any applicable provisions of comparable laws) (collectively, “Fraudulent Transfer Laws”). Any analysis of the provisions of this Agreement for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in Section 1.3 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under this Agreement.
Section 1.3 Contribution. To the extent that any Subsidiary Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the economic benefit actually received by such Subsidiary Guarantor from the Term Loans and other Obligations and (b) the amount such Subsidiary Guarantor would otherwise have paid if such Subsidiary Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by the Borrower) in the same proportion as such Subsidiary Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Subsidiary Guarantors on such date, then such Subsidiary Guarantor shall be reimbursed by such other Subsidiary Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Subsidiary Guarantors on such date.
Section 1.4 Authorization; Other Agreements. The Agent is hereby authorized, without notice to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to time, to do each of the following:
(a) (i) modify, amend, supplement, renew, extend, increase the principal amount of and/or the rate of interest on, or otherwise change, (ii) accelerate or otherwise change the time, place, manner or term of payment of, or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or any Debt Document;
(b) apply to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided in the Debt Documents;
(c) refund at any time any payment received by the Agent in respect of any Guaranteed Obligation;
(d) (i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral (as defined below) for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii) receive, take, request, accept and hold additional Collateral to secure any Guaranteed Obligation or additional guarantees in respect of the Guaranteed Obligations, (iii) add, release or substitute any one or more other Guarantors, or any other guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv)
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otherwise deal in any manner with the Borrower, any other Guarantor, and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof;
(e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations; and
(f) exercise any other rights available to it under the Loan Agreement and other Debt Documents.
Section 1.5 Guaranty Absolute and Unconditional. Each Guarantor agrees that its obligations hereunder are irrevocable, absolute, independent and unconditional and shall not be discharged or otherwise affected by any circumstance other than payment in full of the Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, each Guarantor hereby agrees as follows:
(a) the Agent may enforce this Agreement upon the occurrence of an Event of Default under the Loan Agreement notwithstanding any dispute between the Borrower and the Agent and/or any Lender with respect to the existence of such Event of Default;
(b) the obligations of each Guarantor hereunder are independent of the Obligations of the Borrower under the Debt Documents and the obligations of any other guarantor (including any other Guarantor) of the Obligations of the Borrower under the Debt Documents, and a separate action or actions may be brought and prosecuted against such Guarantor whether or not any action is brought against the Borrower or any of such other guarantors and whether or not Guarantor is the alter ego of any of the Borrower and whether or not the Borrower is joined in any such action or actions;
(c) payment by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge any Guarantor’s liability for any portion of the Guaranteed Obligations which has not been paid, and if the Agent and/or any Lender is awarded a judgment in any suit brought to enforce any Guarantor’s obligations hereunder, such judgment shall not be deemed to release such Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the subject of such suit, and such judgment shall not, except to the extent satisfied by such Guarantor, limit, affect, modify or abridge any other Guarantor’s liability hereunder in respect of the Guaranteed Obligations; and
(d) to waive and not to assert any claim, setoff, counterclaim or defense, whether arising in connection with or in respect of any of the following or otherwise, and hereby agrees that its obligations under this Agreement shall not be reduced, limited, impaired, discharged or terminated as a result of, or otherwise affected by, any of the following (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Agreement, in each case except as otherwise agreed in writing by the Agent):
i. the invalidity or unenforceability of any obligation of the Borrower or any other Guarantor under any Debt Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of the Guaranteed Obligations or any part of them, or the lack of perfection or continuing perfection
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or failure of priority of any security for the Guaranteed Obligations or any part of them;
ii. any rescission, waiver, amendment, modification of, or consent to departure from, any of the terms or provisions of any Debt Document or any agreement or instrument executed or delivered in connection therewith;
iii. the absence of (A) any attempt to collect any Guaranteed Obligation or any part thereof from the Borrower or any other Guarantor or other action to enforce any of the same, (B) any action to enforce any Debt Document, any provision thereof, or any lien thereunder, or (C) any act to assert or enforce any claim, right, demand, power or remedy whether arising under any Debt Document, at law, in equity or otherwise;
iv. the failure by any person to take any steps to perfect and maintain any lien on, or to preserve any rights with respect to, any Collateral;
v. any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against the Borrower, any other Guarantor or any of the Borrower’s other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or interest thereon) in or as a result of any such proceeding;
vi. any foreclosure, whether or not through judicial sale, and any other sale or transfer of Collateral or any election following the occurrence of an Event of Default by the Agent to proceed separately against any Collateral in accordance with the Agent’s rights under any applicable law;
vii. any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of the Borrower, any other Guarantor or any of the Borrower’s other Subsidiaries, in each case other than the payment in full of the Guaranteed Obligations; or
viii. diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the following: (A) any demand for payment or performance and protest and notice of protest; (B) any notice of acceptance; (C) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable, (D) any other notice in respect of the Guaranteed Obligations or any part of them, (E) any defense arising by reason of any disability or other defense of the Borrower or any other Guarantor and (F) any defense based on Agent’s errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to gross negligence or willful misconduct as determined by a final determination by a court of competent jurisdiction. Each Guarantor further unconditionally and irrevocably agrees not to (X) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against the Borrower or any other Guarantor by reason of any Debt
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Document or any payment made thereunder or (Y) assert any claim, defense, setoff or counterclaim it may have against any other Loan Party or set off any of its obligations to such other Loan Party against obligations of such Loan Party to such Guarantor.
Section 1.6 Subordination of Other Indebtedness. Any Indebtedness of the Borrower or any other Loan Party now or hereafter held by any Guarantor is hereby subordinated in right of payment to the Guaranteed Obligations, and any such Indebtedness of any such Borrower or such other Loan Party to such Guarantor collected or received by such Guarantor after an Event of Default has occurred and is continuing shall be held in trust for Agent on behalf of the Finance Parties and shall forthwith be paid over to Agent for the benefit of the Finance Parties to be credited and applied against the Guaranteed Obligations but without affecting, impairing or limiting in any manner the liability of such Guarantor under any other provision of this Agreement; provided that prior to the occurrence of an Event of Default, Guarantors may borrow, repay and reborrow intercompany Indebtedness to the extent such intercompany Indebtedness is permitted under Section 7.2 of the Loan Agreement.
Section 1.7 Reliance. Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof, that diligent inquiry would reveal, and each Guarantor hereby agrees that the Agent shall not have any duty to advise any Guarantor of information known to it regarding such condition or any such circumstances. In the event the Agent, in its sole discretion, undertakes at any time or from time to time to provide any such information to any Guarantor, the Agent shall be under no obligation to (a) undertake any investigation not a part of its regular business routine, (b) disclose any information that the Agent, pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any Guarantor.
Section 1.8 Continuing Guaranty. This guaranty is a continuing guaranty and shall remain in effect until all of the Guaranteed Obligations shall have been paid in full. Each Guarantor hereby irrevocably waives any right to revoke this guaranty as to future transactions giving rise to any Guaranteed Obligations.
ARTICLE II
SECURITY AGREEMENT; PROVISIONS RELATING TO
ACCOUNTS COLLATERAL AND INVENTORY COLLATERAL
Section 2.1 Grant of Security Interest. As security for the prompt payment and performance of the Guaranteed Obligations whether at stated maturity, by acceleration or otherwise, each Guarantor hereby grants, pledges and assigns to Agent, on behalf of the Finance Parties, a continuing first priority lien (subject only to Permitted Liens) on and security interest in, upon, and to, all right, title and interest in and to any and all property and interests in property of each Guarantor whether now owned or hereafter owned, created, acquired or arising, and regardless of where located, including, without limitation, all of the following properties and interests in properties (collectively, the “Collateral”):
(a) all Accounts;
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(b) all Chattel Paper (whether tangible or electronic);
(c) all Commercial Tort Claims, as more particularly described in the Perfection Certificate (as may be amended or supplemented from time to time);
(d) all Deposit Accounts;
(e) all cash and Cash Equivalents
(f) all Documents;
(g) all Equipment;
(h) all Fixtures;
(i) all Goods;
(j) all Instruments;
(k) all Inventory;
(l) all Letter-of-Credit Rights and letters of credit;
(m) all General Intangibles, Payment Intangibles and other rights to payment, including, without limitation, all Rights to Payment (as defined in Section 2.2) and all Indebtedness owing to such Guarantor from another Loan Party (which Indebtedness must be evidenced by way of a global intra-group note on or before the Closing Date), including all right, title and interest of such Guarantor in instruments evidencing any Indebtedness owed to such Guarantor or other obligations, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time (such Indebtedness collectively, the “Pledged Debt”);
(n) all Investment Property and Financial Assets, including, without limitation, 100% of the shares of the outstanding capital stock or other equity interests, of any class, of each Subsidiary of such Guarantor and all certificates evidencing the same (collectively, the “Pledged Securities”, and together with the Pledged Debt, the “Pledged Collateral”), together with, in each case:
(i) all shares, securities, stock, equity interests, moneys or property representing a dividend on any of the Pledged Securities, or representing a distribution or return of capital upon or in respect of the Pledged Securities, or resulting from a split-up, revision, reclassification or other like change of the Pledged Securities or otherwise received in exchange therefor, and any subscription warrants, rights or options issued to the holders of, or otherwise in respect of, the Pledged Securities, and
(ii) without affecting the obligations of such Guarantor under any provision prohibiting such action hereunder, in the event of any consolidation or merger in which the issuer of any Pledged Security is not the surviving entity, all shares of each class of the capital stock of the successor corporation (unless such
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successor corporation is such Guarantor itself or the Borrower), or all other stock, as applicable, formed by or resulting from such consolidation or merger (the Pledged Securities, together with all other certificates, shares, securities, Stock, properties or moneys as may from time to time be pledged hereunder pursuant to this clause (ii) and clause (i) above being herein collectively called the “Securities Collateral”);
(o) all Contracts and other contract rights (including, without limitation, rights under any lease, license or other agreements);
(p) all cash, royalty fees, other proceeds, accounts and general intangibles that consist of rights of payment to or on behalf of a Loan Party or proceeds from the sale, licensing or other disposition of all or any part of, or rights in, the Intellectual Property (as defined in Section 2.2) by or on behalf of a Loan Party (collectively, “Rights to Payment”);
(q) all Securities Entitlements;
(r) all Software;
(s) all other tangible and intangible personal property whatsoever of such Guarantor; and
(t) all Proceeds, Supporting Obligations, products, insurance claims, offspring, accessions, rents, profits, income, benefits, additions, attachments, accessories, substitutions and replacements of, to, arising out of or related to any of the Collateral and, to the extent related to any Collateral, all books, correspondence, credit files, records, invoices and other documents (including, without limitation, all tapes, cards, computer runs and other documents and documents in the possession or under the control of such Guarantor or any computer bureau or service company from time to time acting for such Guarantor);
provided, however, this grant is subject to the limitations set forth in Section 2.2.
Unless otherwise specified herein, the following terms have the meanings ascribed to them in the UCC (as defined below), provided, that if such term shall be defined differently in multiple divisions or articles of the UCC, the definitions for such terms specified in Article or Division 9 of the UCC shall control: “Accounts”, “Account Debtor”, “Chattel Paper”, “Commercial Tort Claims”, “Contracts”, “Deposit Accounts”, “Documents”, “Equipment”, “Financial Asset”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit Rights”, “Payment Intangible”, “Proceeds”, “Securities”, “Securities Account”, “Security Entitlement”, “Software” and “Supporting Obligations”. As used herein, “UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York; provided, however, that, in the event that, by reason of mandatory provisions of any applicable requirement of law, any of the attachment, perfection or priority of the Agent’s security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction other than the State of New York, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.
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Section 2.2 Exceptions to the Grant of Security Interest. Notwithstanding anything herein to the contrary, in no event shall the Collateral include (a) any intellectual property arising anywhere in the world owned or licensed by any Loan Party, which shall be defined as any and all copyright, trademark (and goodwill associated with such trademarks), servicemark (and goodwill associated with such servicemarks), patent, design right, software, trade secret and intangible rights of a Loan Party and any applications, registrations, claims, products, awards, judgments, amendments, renewals, extensions, improvements, continuations, reissues, reexaminations or divisions and insurance claims related thereto (collectively, “Intellectual Property”) now owned or licensed or hereafter acquired or licensed, or any claims for damages by way of any past, present or future infringement of any of the foregoing; provided, however, that the Collateral shall include all Rights to Payment, or (b) any lease, license, contract, property rights or agreement to which any Guarantor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of such Guarantor therein or (ii) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, property rights or agreement (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 (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); provided, however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in clause (b)(i) or (b)(ii) above. Notwithstanding the foregoing, to the extent it is necessary under applicable law in any bankruptcy or insolvency proceeding involving a Loan Party for Agent (on behalf of the Finance Parties) to have a security interest in the underlying Intellectual Property in order for Agent to have (i) a security interest in the Rights to Payment and (ii) a security interest in any payments with respect to Rights to Payment that are received after the commencement of such bankruptcy or insolvency proceeding, then the Collateral shall automatically, and effective as of the date hereof, include the Intellectual Property to the extent necessary to permit attachment and perfection of Agent’s security interest (on behalf of the Finance Parties) in the Rights to Payment and any payments in respect thereof that are received after the commencement of any bankruptcy or insolvency proceeding. Agent hereby agrees on behalf of the Finance Parties that, if Agent obtains a security interest in the Intellectual Property pursuant to the immediately preceding sentence, Agent will not exercise any remedies (under the UCC or otherwise) with respect to the Intellectual Property (other than remedies with respect to Rights to Payment or any other proceeds of the Intellectual Property).
Section 2.3 Security Agreement. This Agreement shall constitute a security agreement as that term is used in the Uniform Commercial Code in effect in the jurisdiction(s) in which each Guarantor is organized and in the jurisdiction(s) in which the Collateral is situated. Each Finance Party and each Guarantor agrees that the Perfection Certificate (as may be amended or supplemented from time to time) and all descriptions of Collateral, schedules, amendments and supplements thereto are and shall at all time remain a part of this Agreement.
Section 2.4 Termination of Security Interest. Subject to Section 11.10 of the Loan Agreement, Agent’s lien on the Collateral (on behalf of the Finance Parties) shall continue until all of the Obligations are indefeasibly repaid in full in cash, all of the Commitments under the Loan Agreement are terminated, and the Loan Agreement shall have been terminated (the “Termination Date”). Upon the Termination Date, Agent shall, at Loan Parties’ sole cost and
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expense and without any recourse, representation or warranty, release its liens in the Collateral, and all rights remaining therein, if any, shall revert to Loan Parties.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; COVENANTS
To induce the Agent and the Lenders to enter into the Debt Documents, each Guarantor hereby represents, warrants and covenants to the Agent and the Lenders, for as long as any Obligation or Commitment remains outstanding, as follows:
Section 3.1 Representations Warranties and Covenants of Loan Agreement.
(a) Each of the representations and warranties as to such Guarantor made by the Borrower or such Guarantor in Article 5 (Representations and Warranties of Loan Parties) of the Loan Agreement are true and correct on each date as required by the Loan Agreement.
(b) Each Guarantor shall comply with all covenants and other provisions applicable to it under the Loan Agreement.
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(a) No Guarantor has any Deposit Accounts, Securities Accounts or other bank or investment accounts except as described on the Perfection Certificate (as may be amended or supplemented from time to time).
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(b) As of the Closing Date, each Guarantor is the sole entitlement holder or account holder, as applicable, of each of the Securities Accounts and Deposit Accounts set forth on the Perfection Certificate (as may be amended or supplemented from time to time) under the heading “Investment Property; Instruments; Accounts”, and such Guarantor has not consented to, and is not otherwise aware of, any person (other than the Agent) having “control” (as used in this Section 3.9 “control” shall have the meaning provided under Sections 9-104 and 9-106 of the UCC or any similar sections under any equivalent UCC) over, or any other interest in, any such Securities Account or Deposit Account or any money deposited therein or any securities or other property credited thereto.
(c) Other than with respect to deposit accounts used solely to fund payroll, withholding taxes or payroll taxes or any deposit accounts which are zero balance accounts or controlled disbursement accounts, each Guarantor has taken all actions reasonably necessary or desirable to establish the Agent’s control over any Securities Accounts and Deposit Accounts.
(d) No Guarantor shall close or terminate any Securities Account or Deposit Account without the prior consent of the Agent and unless a successor or replacement account is existing or has been established with the consent of the Agent with respect to which successor or replacement account a control agreement has been entered into by the appropriate Guarantor, the Agent and securities intermediary or depository institution at which such successor or replacement account is to be maintained.
(e) Prior to or concurrently with the establishment of any new Securities Account or Deposit Account, such Guarantor shall deliver to the Agent a notice of the existence and nature of such account, a supplement to the Perfection Certificate (as may be amended or supplemented from time to time) containing a specific description of such account and an Account Control Agreement entered into by the appropriate Guarantor, the Agent and the securities intermediary or depository institution at which such account is to be maintained, which Account Control Agreement shall comply with the requirements set forth in Section 7.10 of the Loan Agreement.
Section 3.10 Investments; Pledged Collateral.
(a) No Guarantor has any outstanding advances to, or owns or holds any equity or long-term debt investments in, any person, except as described on the Perfection Certificate (as may be amended or supplemented from time to time) or as expressly permitted under Section 7.7 of the Loan Agreement.
(b) All Pledged Securities pledged by such Guarantor hereunder (i) are listed on the Perfection Certificate (as may be amended or supplemented from time to time) and constitute that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on the Perfection Certificate (as may be amended or supplemented from time to time), (ii) have been duly authorized, validly issued and are fully paid and nonassessable (other than Pledged Securities in limited liability companies and partnerships), and (iii) constitute the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with their terms. As of the Closing Date, any certificates evidencing such Pledged Securities have been delivered to the Agent.
(c) The Pledged Debt pledged by such Guarantor hereunder (i) is listed on the Perfection Certificate (as may be amended or supplemented from time to time), (ii) with
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respect to any Loan Party, has been duly authorized and validly issued and delivered, as applicable, and (iii) with respect to any Loan Party, constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, and is not in default. As of the Closing Date, any instruments evidencing such Pledged Debt required to be delivered pursuant to the Loan Documents have been delivered to the Agent.
(d) Upon the occurrence and during the continuance of an Event of Default, the Agent shall be entitled to exercise all of the rights of the Guarantor granting the security interest in any Pledged Collateral, and a transferee or assignee of such Pledged Collateral shall become a holder of such Pledged Collateral to the same extent as such Guarantor and with respect to the Pledged Securities, and shall be entitled to participate in the management of the issuer of such Pledged Securities and, upon the sale or other disposition by the Agent of the entire interest of such Guarantor, such Guarantor shall, by operation of law, cease to be a holder of such Pledged Securities. The Agent agrees that it shall endeavor to give written notice to the relevant Guarantor or Guarantors of its intent to exercise the rights described in this Section 3.10(d) prior to the exercise thereof.
Section 3.11 Commercial Tort Claims.
(a) To the best of any Guarantor’s knowledge after due inquiry, the only Commercial Tort Claims of any Guarantor existing on the date hereof for which the potential recovery reasonably exceeds $50,000 (regardless of whether the defendant or other material facts can actually be determined and regardless of whether such Commercial Tort Claim has been asserted, threatened in writing or whether litigation has been commenced for such claims) are those listed on the Perfection Certificate (as may be amended or supplemented from time to time).
(b) Each Guarantor, if it shall acquire any interest in any Commercial Tort Claim in excess of $50,000 individually (whether from another person or because such Commercial Tort Claim shall have come into existence) or, when combined with all other Commercial Tort Claims, in the aggregate, in excess of $100,000, (i) shall, promptly upon such acquisition, deliver to the Agent, in each case in form and substance reasonably satisfactory to the Agent, a notice of the existence and nature of such Commercial Tort Claim and a supplement to the Perfection Certificate (as may be amended or supplemented from time to time) containing a specific description of such Commercial Tort Claim, (ii) agrees that Section 2.1 shall apply to such Commercial Tort Claim and (iii) shall execute and deliver to the Agent, in each case in form and substance reasonably satisfactory to the Agent, any document, and take all other action, deemed by the Agent to be reasonably necessary or appropriate for the Agent to obtain, on behalf of the Finance Parties, a first priority perfected security interest in all Commercial Tort Claims.
Section 3.12 Instruments and Tangible Chattel Paper.
(a) No amount payable to any Guarantor under or in connection with any account is evidenced by any instrument or tangible chattel paper that has not been delivered to the Agent, properly endorsed for transfer, to the extent delivery is required below by Section 3.12(b) ;
(b) If any amount payable under or in connection with any Collateral owned by such Guarantor shall be or become evidenced by an instrument or tangible chattel paper, other than such instrument delivered in accordance with Section 3.10 and in the possession of the Agent, such Guarantor shall xxxx all such instruments and tangible chattel paper with the following legend: “This writing and the obligations evidenced or secured hereby are subject to
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the security interest of General Electric Capital Corporation, as Agent” and, at the request of the Agent, shall immediately deliver such instrument or tangible chattel paper to the Agent, duly indorsed in a manner satisfactory to the Agent.
Section 3.15 Accounts Administration.
(a) All data and other information relating to Accounts or other intangible Collateral shall at all times be kept by such Guarantor at its chief executive office listed in the Perfection Certificate (as may be amended or supplemented from time to time) or at the chief executive office of any other Loan Party as listed in the Perfection Certificate (as may be amended or supplemented from time to time) and, except in the ordinary course of business in which case Agent shall be promptly notified in writing no later than ten (10) Business Days after such move, shall not be moved from such locations without obtaining the prior written consent of Agent, which consent shall not be unreasonably withheld.
(b) Each Guarantor shall keep satisfactory and complete records of its Accounts and all payments and collections thereon and sales thereof and shall submit to Agent on such periodic basis as Agent shall reasonably request a sales and collections report for the preceding period, in form and substance satisfactory to Agent.
(c) Agent shall have the right at any time to notify Account Debtors that Accounts have been assigned to Agent.
(d) No Guarantor has made, or will make, any agreement with any Account Debtor for any extension of the time for payment of the Account, any compromise or settlement for less than the full amount thereof, any release of any Account Debtor from liability therefor, or any deduction therefrom except a discount or allowance for prompt or early payment allowed by such Guarantor in the ordinary course of its business consistent with its historical practices and, upon the occurrence and during the continuance of any Default or Event of Default, disclosed to Agent in writing.
Section 3.16 Creation, Preservation and Perfection of Security Interests.
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(a) Subject to Section 5.7 of the Loan Agreement, the security interest granted to Agent hereby constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid first priority security interest in Collateral acquired after the date hereof.
(b) At the discretion of the Agent, each Guarantor shall furnish all filings, certificates, documents and instruments reasonably necessary or desirable to perfect Agent’s security interest in the Collateral, including but not limited to any certificates evidencing the Securities Collateral and all UCC financing statements. Upon the reasonable request of Agent, each Guarantor shall furnish to Agent such further information, execute and deliver to Agent such additional documents and instruments (including, without limitation, additional UCC financing statements) and do such other acts and things as Agent may at any time reasonably request relating to the perfection or protection of the security interest created by this Agreement or for the purpose of carrying out the intent of this Agreement. Without limiting the foregoing, each Guarantor shall cooperate and do all acts deemed reasonably necessary or advisable by Agent to continue a perfected first priority security interest in the Collateral, subject only to Permitted Liens, and shall obtain and furnish to Agent any subordinations, releases, landlord waivers, lessor waivers, mortgage waivers, or control agreements, and similar documents as may be from time to time reasonably requested by, and in form and substance satisfactory to, Agent. Each Guarantor authorizes Agent to file financing statements in all reasonably appropriate jurisdictions and amendments thereto describing the Collateral as “all assets”, or words of similar import, and containing any other information required by the applicable UCC to perfect Agent’s security interest granted hereby. Each Guarantor irrevocably grants to Agent the power to sign such Guarantor’s name and generally to act on behalf of such Guarantor to execute and file applications for title, transfers of title, financing statements, notices of lien and other documents pertaining to any or all of the Collateral, and obtain and promptly deliver to Agent such certificate showing the lien of this Agreement with respect to the Collateral.
(c) No Guarantor shall grant “control” (within the meaning of Sections 8-106, 9-104, 9-105, 9-106, 9-107 of the UCC, as applicable, or any similar sections under any equivalent UCC) of any Collateral to any person other than the Agent.
(d) No Guarantor shall (i) use or permit any Collateral to be used unlawfully or in violation of any provision of any Debt Document or any requirement of law in each case in any material respect or in any way that would adversely affect any policy of insurance covering such Collateral or (ii) enter into any contractual obligation or undertaking restricting the right or ability of such Guarantor or the Agent to Transfer any Collateral if such restriction would have a Material Adverse Effect.
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ARTICLE IV
Section 4.1 UCC and Other Remedies.
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benefit of the Finance Parties), with respect to such appointment without prior notice or hearing as to such appointment and (v) the Agent may render any or all of the Collateral unusable at a Loan Party’s premises and may dispose of such Collateral on the premises without liability for rents or costs. The Agent shall not have any obligation to any Guarantor to maintain or preserve the rights of any Guarantor as against third parties with respect to any Collateral while such Collateral is in the possession of the Agent.
(i) fail to incur significant costs, expenses or other liabilities reasonably deemed as such by the Agent to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;
(ii) fail to obtain permits, or other consents, for access to any Collateral or for the collection or transfer of any Collateral, or, if not required by other requirements of law, fail to obtain permits or other consents for the collection or disposition of any Collateral;
(iii) fail to exercise remedies against account debtors or other persons obligated on any Collateral or to remove liens on any Collateral or to remove any adverse claims against any Collateral;
(iv) advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact other Persons, whether or not in the same business as any Guarantor, for expressions of interest in acquiring any such Collateral;
(v) exercise collection remedies against account debtors and other persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers
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to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Agent in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;
(vi) dispose of assets in wholesale rather than retail markets;
(vii) disclaim disposition warranties, such as title, possession or quiet enjoyment; or
(viii) purchase insurance or credit enhancements to insure the Agent against risks of loss, collection or disposition of any Collateral or to provide to the Agent a guaranteed return from the collection or disposition of any Collateral.
Each Guarantor acknowledges that the purpose of this Section 4.1 is to provide a non-exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Agent or any Lender shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 4.1. Without limitation upon the foregoing, nothing contained in this Section 4.1 shall be construed to grant any rights to any Guarantor or to impose any duties on the Agent that would not have been granted or imposed by this Agreement or by applicable requirements of law in the absence of this Section 4.1.
Section 4.2 Accounts and Payments in Respect of General Intangibles and Instruments.
(a) In addition to, and not in substitution for, any similar requirement in the Loan Agreement, at any time during the continuance of an Event of Default (whether or not any such Event of Default has resulted in acceleration pursuant to Section 8.2 of the Loan Agreement), the Agent shall have the following rights and remedies:
i. Any payment of Accounts or payment in respect of General Intangibles, when collected by any Guarantor, shall be held in trust for the Agent and segregated from such other funds of such Guarantor and shall be turned over to the Agent, or to such other bank or person as may be approved by the Agent, within two (2) Business Days immediately upon receipt in the identical form received.
ii. Each Guarantor shall deliver to the Agent all original and other documents evidencing, and relating to, the contractual obligations and transactions that gave rise to any Account or any payment in respect of General Intangibles, including all original orders, invoices and shipping receipts.
iii. Any of the Agent’s officers, employees or agents shall have the right, at any time or times hereafter, in the name of the Agent or any designee of the Agent, to verify the validity, amount or any other matter relating to any Accounts by mail, telephone or otherwise, including, but not limited to,
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verification of each Guarantor’s compliance with applicable laws. Each Guarantor shall cooperate fully with Agent in an effort to facilitate and promptly conclude such verification process. Such verification may include contacts between Agent and applicable federal, state and local regulatory authorities having jurisdiction over any Guarantor’s affairs, all of which contacts each Guarantor hereby irrevocably authorizes.
iv. The Agent may limit or terminate the authority of a Guarantor to collect its Accounts or amounts due under General Intangibles or Instruments or any part thereof and, in its own name or in the name of others, communicate with Account Debtors to verify with them to the Agent’s satisfaction the existence, amount and terms of any Account or amounts due under any General Intangible or Instrument.
v. The Agent shall have the right at any time to (A) notify any Account Debtor of any Guarantor or any obligor on any Instrument that such Accounts, General Intangibles and Instruments, as applicable, have been assigned to the Agent and that payments in respect thereof shall be made directly to Agent (for the benefit of the Finance Parties) (and once such notice has been given to an Account Debtor, such Guarantor shall not give any contrary instructions to such Account Debtor without Agent’s prior written consent) and (B) enforce such Guarantor’s rights against such Account Debtors and obligors of Accounts, General Intangibles and Instruments.
(b) Anything herein to the contrary notwithstanding, each Guarantor shall remain liable under each Account and each payment in respect of General Intangibles to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither the Agent nor any Lender shall have any obligation or liability under any agreement giving rise to an Account or a payment in respect of a General Intangible by reason of or arising out of any Debt Document or the receipt by the Agent or any Lender of any payment relating thereto, nor shall the Agent or any Lender be obligated in any manner to perform any obligation of any Guarantor under or pursuant to any agreement giving rise to an Account or a payment in respect of a General Intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
Section 4.3 Pledged Collateral.
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registrar or other designated agency upon such terms and conditions as the Agent may determine), all without liability except to account for property actually received by it; provided, however, that the Agent shall have no duty to any Guarantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
Section 4.5 Remedial Provisions.
(a) Upon the occurrence and during the continuance of an Event of Default, Agent and its attorneys may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Pledged Collateral), and Agent may also, without demand, advertisement or notice of any kind (other than the notice specified below relating to a public or private sale), sell the Pledged Collateral or any part thereof in one or more portions at one or more public or private sales or dispositions, at any
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exchange, broker’s board or at any of Agent’s offices (or those of Agent’s attorneys) or elsewhere, for cash, on credit, or for future delivery, at such price or prices and upon such other terms as Agent deems advisable. The Guarantor agrees that, to the extent notice of sale shall be required by law, a reasonable authenticated notification of disposition shall be given at least ten (10) days prior to any such sale and such notice shall (i) describe Agent and Guarantor, (ii) describe the Pledged Collateral that is the subject of the intended disposition, (iii) state the method of the intended disposition, (iv) state that the Guarantor is entitled to an accounting of the Obligations, as the case may be, and state the charge, if any, for an accounting, and (v) state the time and place of any public disposition or the time after which any private sale is to be made; provided, that no notification need be given to the Guarantor if it has authenticated after default a statement renouncing or modifying any right to notification of sale or other intended disposition. At any sale of the Pledged Collateral, if permitted by law, Agent may bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness) for the purchase of the Pledged Collateral or any portion thereof free of any right or equity of redemption in the Guarantor. Agent shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. 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.
(b) Each Guarantor recognizes that the Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act of 1933 (the “Securities Act”) or applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Guarantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under applicable state securities laws even if such issuer would agree to do so.
(c) Each Guarantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of any portion of the Pledged Collateral (other than public sales under the provisions of the Securities Act and any applicable state or foreign securities law) valid and binding and in compliance with all applicable requirements of law. Each Guarantor further agrees that a breach of any covenant contained in this Agreement will cause irreparable injury to the Agent and other Secured Parties, that the Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Agreement shall be specifically enforceable against such Guarantor, and such Guarantor hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Loan Agreement.
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attorney to: (i) endorse such Guarantor’s name on any checks or other forms of payment or security that may come into Agent’s possession; (ii) settle and adjust disputes and claims respecting such Guarantor’s Accounts directly with Account Debtors, for amounts and upon terms which Agent determines to be reasonable; and (iii) do such other and further acts and deeds in the name of such Guarantor that Agent may deem necessary or desirable to enforce its rights in or to any of the Collateral (on behalf of the Finance Parties). The appointment of Agent as each Guarantor’s attorney in fact is a power coupled with an interest and is irrevocable until the Termination Date.
ARTICLE V
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Section 5.12 Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
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Section 5.13 SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS.
[SIGNATURE PAGES FOLLOW]
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GUARANTORS: | ||||||
XXXXXX, INC., a Delaware corporation | ||||||
By: | /s/ Xxxxxx Xxxxx | |||||
Name: | Xxxxxx Xxxxx | |||||
Title: | Chief Financial Officer | |||||
XXXXXX OPERATIONS USA, INC., a | ||||||
California corporation | ||||||
By: | /s/ Xxxxxx Xxxxx | |||||
Name: | Xxxxxx Xxxxx | |||||
Title: | Chief Financial Officer |
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
By: | /s/ Xxxxx Xxxxxx | |||||
Name: | Xxxxx Xxxxxx | |||||
Title: | Duly Authorized Signatory |
ANNEX 1
TO
GUARANTY, PLEDGE AND SECURITY AGREEMENT
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of , 20 , is delivered pursuant to Section 5.5 of the Guaranty, Pledge and Security Agreement, dated as of December 28, 2007, by XXXXXX, INC., XXXXXX OPERATIONS USA, INC. and the Affiliates of Borrower from time to time party thereto as Guarantors in favor of the General Electric Capital Corporation, as Agent (the “Guaranty”). Capitalized terms used herein without definition are used as defined in the Guaranty.
By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 5.5 of the Guaranty, hereby becomes a party to the Guaranty as a Guarantor thereunder with the same force and effect as if originally named as a Guarantor therein and, without limiting the generality of the foregoing, expressly assumes all obligations and liabilities of a Guarantor thereunder and hereby agrees to be bound as a Guarantor for purposes thereof.
The undersigned hereby represents and warrants that each of the representations and warranties contained in Article III of the Guaranty applicable to it is true and correct on and as the date hereof as if made on and as of such date.
[ADDITIONAL GUARANTOR] | ||||||
By: |
| |||||
Name: | ||||||
Title: |
A1-1
ACKNOWLEDGED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION | ||||
as Agent | ||||
By: |
| |||
Name: | ||||
Title: |
A1-2