EXHIBIT 4.45
EXECUTION COPY
COLLATERAL AGREEMENT
among
ANC RENTAL CORPORATION,
certain of its Subsidiaries,
WILMINGTON TRUST COMPANY
as Collateral Trustee,
LIBERTY MUTUAL INSURANCE COMPANY,
solely in its capacity as a Surety Party
under the Surety Bond Documents,
and
XXXXXX COMMERCIAL PAPER INC.,
as administrative agent under the
Senior Loan Agreement referred to herein
Dated as of August 30, 2001
TABLE OF CONTENTS
Page
Section 1. DEFINED TERMS.................................................................................. 2
1.1 Definitions.................................................................................... 2
1.2 Other Definitional Provisions.................................................................. 9
Section 2. GRANT OF SECURITY INTEREST..................................................................... 9
2.1 Grants of Security Interests................................................................... 9
2.2 Limitation..................................................................................... 10
2.3 Separate and Distinct Liens.................................................................... 10
Section 3. REPRESENTATIONS AND WARRANTIES................................................................. 10
3.1 Title; No Other Liens.......................................................................... 11
3.2 Perfected Liens................................................................................ 11
3.3 Chief Executive Office......................................................................... 11
3.4 Inventory and Equipment........................................................................ 11
3.5 Farm Products.................................................................................. 11
3.6 Pledged Securities............................................................................. 12
3.7 Receivables.................................................................................... 12
3.8 Contracts...................................................................................... 12
3.9 Intellectual Property.......................................................................... 13
3.10 Excluded Assets................................................................................ 14
Section 4. COVENANTS...................................................................................... 14
4.1 Delivery of Instruments and Chattel Paper...................................................... 14
4.2 Maintenance of Insurance....................................................................... 14
4.3 Payment of Obligations......................................................................... 15
4.4 Maintenance of Perfected Security Interest; Further Documentation.............................. 15
4.5 Changes in Locations, Name, etc................................................................ 16
4.6 Notices........................................................................................ 17
4.7 Investment Property............................................................................ 17
4.8 Receivables.................................................................................... 20
4.9 Contracts...................................................................................... 20
4.10 Intellectual Property.......................................................................... 21
4.11 Additional Collateral, etc..................................................................... 22
4.12 Further Assurances............................................................................. 24
Section 5. REMEDIAL PROVISIONS............................................................................ 24
5.1 Certain Matters Relating to Receivables........................................................ 24
5.2 Communications with Obligors; Obligors Remain Liable........................................... 25
5.3 Pledged Stock and the Finance Company Equity Interests......................................... 25
5.4 Proceeds to be Turned Over To Collateral Trustee............................................... 26
5.5 Application of Proceeds........................................................................ 27
5.6 Code and Other Remedies........................................................................ 27
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Page
5.7 Registration Rights............................................................................ 27
5.8 Waiver; Deficiency............................................................................. 28
5.9 Limitation by Law.............................................................................. 29
Section 6. THE COLLATERAL TRUSTEE......................................................................... 29
6.1 Collateral Trustee's Appointment as Attorney-in-Fact, etc...................................... 29
6.2 Duty of Collateral Trustee..................................................................... 31
6.3 Execution of Financing Statements.............................................................. 31
6.4 Authority of Collateral Trustee................................................................ 31
6.5 Access to Premises............................................................................. 31
Section 7. MISCELLANEOUS.................................................................................. 32
7.1 Amendments in Writing.......................................................................... 32
7.2 Notices........................................................................................ 32
7.3 No Waiver by Course of Conduct; Cumulative Remedies............................................ 32
7.4 Enforcement Expenses; Indemnification.......................................................... 32
7.5 Successors and Assigns......................................................................... 33
7.6 Counterparts................................................................................... 33
7.7 Severability................................................................................... 33
7.8 Section Headings............................................................................... 33
7.9 Integration.................................................................................... 33
7.10 GOVERNING LAW.................................................................................. 33
7.11 Submission To Jurisdiction; Waivers............................................................ 34
7.12 Acknowledgments................................................................................ 34
7.13 Additional Obligors............................................................................ 34
7.14 Releases....................................................................................... 34
7.15 Intercreditor Agreements....................................................................... 35
7.16 Conflicts with New Credit Facility Collateral Agreements....................................... 36
7.17 Acknowledgement in Respect of Surety Rights.................................................... 36
7.18 Delivery of Acknowledgement and Consents....................................................... 36
7.19 WAIVER OF JURY TRIAL........................................................................... 36
7.20 Additional Collateral.......................................................................... 36
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Schedules
Schedule 1 Description of Pledged Securities
Schedule 2 Filings and Other Actions Required to Perfect
Security Interest
Schedule 3 Jurisdiction of Incorporation and Location of Chief
Executive Office
Schedule 4 Locations of Inventory and Equipment
Schedule 5 Intellectual Property
Schedule 6 Contracts
Schedule 7 Existing Prior Liens
Annexes
Annex I Assumption Agreement
Annex II Acknowledgment and Consent
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COLLATERAL AGREEMENT, dated as of August 30, 2001, among (a) each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein, the "Obligors"), (b) WILMINGTON TRUST COMPANY, not
individually but solely in its capacity as Trustee (in such capacity, the
"Collateral Trustee") under the Trust Agreement, dated as of August 30, 2001 (as
amended, supplemented or otherwise modified from time to time, the "Trust
Agreement"), among ANC Rental Corporation, a Delaware corporation (the
"Company"), the Subsidiaries of the Company parties thereto and the Collateral
Trustee, (c) Liberty Mutual Insurance Company, solely in its capacity as a
Surety Party under the Surety Bond Documents ("Liberty") and (d) Xxxxxx
Commercial Paper Inc., as administrative agent under the Senior Loan Agreement
referred to below.
W I T N E S S E T H:
WHEREAS, the Company is a party to the Senior Loan Agreement (such
term and other capitalized terms used in these recitals being used with the
definitions given to such terms or otherwise incorporated by reference in
Section 1.1 hereof);
WHEREAS, the Company and the other Obligors are also party to the
Indenture;
WHEREAS, certain of the Obligors are Surety Bond Account Parties in
respect of the Surety Bonds and in connection with the issuance of the Surety
Bonds, the Company executed the Contract of Indemnity;
WHEREAS, the Company is a member of an affiliated group of companies
that includes each other Obligor;
WHEREAS, the proceeds of the extensions of credit under the Senior
Loan Agreement and the release of cash collateral from the Cash Collateral
Account have been or will be used in part to enable the Company to make valuable
transfers to one or more of the other Obligors in connection with the operation
of their respective businesses;
WHEREAS, the Company and the other Obligors are engaged in related
businesses, and each Obligor has derived, and will derive, substantial direct
and indirect benefit from the making of the extensions of credit under the
Senior Loan Agreement, the release of cash collateral from the Cash Collateral
Account and the extension of the expiry dates, renewal, continuance, increase or
issuance of the Surety Bonds;
WHEREAS, each Obligor other than the Company is a party to the
Subsidiary Guarantee pursuant to which such Obligor has guaranteed the Company's
obligations under the Loan Documents;
WHEREAS, pursuant to the Indenture, each Obligor other than the
Company has guaranteed the Company's obligations under the Indenture and the
other Indenture Documentation;
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WHEREAS, one or more of the Obligors is a party to one or more
Surety Bond Guarantees, pursuant to which such Obligor has guaranteed
obligations of one or more Surety Bond Account Parties under Surety Bond
Documents; and
WHEREAS, it is a condition precedent to (a) the obligation of the
Lenders to agree to amend the Senior Loan Agreement and to permit the release of
the cash collateral in the Cash Collateral Account to the Company and (b) the
extension, renewal, increase, continuation or issuance of Surety Bonds, subject
to certain terms and conditions, by the Surety Parties, in each case, that the
Obligors shall have executed and delivered this Agreement to the Collateral
Trustee for the benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to agree to certain amendments to the Senior Loan Agreement and the
Surety Parties, subject to certain terms and conditions, to issue, extend,
renew, continue, increase and or permit to remain outstanding the Surety Bonds,
each Obligor hereby agrees with the Collateral Trustee, for the ratable benefit
of the Secured Parties, as follows:
Section 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, capitalized
terms used but not defined herein shall have the meanings specified in the Trust
Agreement, and the following terms which are defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof are used herein as so
defined: Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Documents, Equipment, Farm Products, Goods, Instruments, Inventory,
Letter-of-Credit Rights and Supporting Obligations. So long as Liberty continues
to be a Secured Party, to the extent capitalized terms herein are defined in
documents (i) to which Liberty is not a party, or (ii) which can be amended or
changed without Liberty's consent, such capitalized terms shall have the
meanings specified in such documents as of the date hereof, notwithstanding
subsequent amendments or changes, unless Liberty agrees otherwise in writing.
(b) The following terms shall have the following meanings:
"Agreement": this Collateral Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Capital Stock": any and all shares, interests, participations or
other equivalents, however designated, of corporate stock, membership
interests or other equity participations, including partnership interests,
whether general or limited, of the Person, excluding any debt securities
convertible into such Capital Stock.
"Cash Collateral Account": the Collateral and Securities Account
designated under the Collateral and Control Agreement.
"Collateral": the collective reference to the Corporate Collateral
and the Finance Company Equity Interests.
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"Collateral Account": any collateral account established by the
Collateral Trustee as provided in Section 5.1 or 5.4.
"Collateral Trustee": as defined in the preamble hereto.
"Company": as defined in the preamble hereto.
"Concentration Accounts": as defined in the New Credit Facility
Documents.
"Contracts": any present and future contracts and agreements of any
Obligor, including, without limitation, the contracts and agreements
listed in Schedule 6 (as the same may be amended, supplemented or
otherwise modified from time to time) and all other contracts and
agreements entered into hereafter by any Obligor, including, without
limitation, (i) all rights of any Obligor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights of
any Obligor to damages arising thereunder and (iii) all rights of any
Obligor to perform and to exercise all remedies thereunder.
"Copyright Licenses": any present and future written agreement
naming any Obligor as licensor or licensee (including, without limitation,
those listed in Schedule 5), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.
"Copyrights": (i) all now owned or hereafter acquired copyrights
arising under the laws of the United States, any other country or any
political subdivision thereof, whether registered or unregistered and
whether published or unpublished (including, without limitation, those
listed in Schedule 5), all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the United States Copyright
Office, and (ii) the right to obtain all renewals thereof.
"Corporate Collateral": with respect to each Obligor, all of the
following property now owned or hereafter acquired by such Obligor or in
which such Obligor now has or at any time in the future may acquire any
right, title or interest: all Accounts, all Chattel Paper, the Collateral
Account (and all cash, money and instruments at any time on deposit in the
Collateral Account, all investments made and interest earned in respect of
such cash and monies and all proceeds of any of the foregoing), the
Concentration Accounts (and all cash, money and instruments at any time on
deposit in the Concentration Accounts, all investments made and interest
earned in respect of such cash and monies and all proceeds of any of the
foregoing), all Contracts, all Deposit Accounts, all Documents, all
Equipment, all General Intangibles, all Instruments, all Intellectual
Property, all Inventory, all Investment Property, all Letter of Credit
Rights, all Vehicles, all Goods and other property not otherwise described
above, all books and records pertaining to any and all of the foregoing,
and to the extent not otherwise included, all Proceeds, Supporting
Obligations and products of any and all of the foregoing and all
collateral security and guarantees given by any Person with respect to any
of the foregoing; provided, that notwithstanding the foregoing, the
Corporate Collateral shall
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not include (x) the Excluded Assets or any collateral security or
guarantees given by any Person with respect to any of the Excluded Assets
and (y) the Excluded Vehicles.
"Deposit Account": all "Deposit Accounts", as defined in the Uniform
Commercial Code of any applicable jurisdiction, whether now owned or
hereafter acquired, and, in any event, including, without limitation, any
demand, time, savings, passbook or like account maintained with a
depositary institution.
"Domestic Subsidiary": any Subsidiary of the Company organized under
the laws of the United States or any state thereof or the District of
Columbia.
"Excluded Assets": any Contract, General Intangible, Copyright
License, Patent License or Trademark License ("Intangible Assets"), in
each case to the extent the grant by the relevant Obligor of a security
interest pursuant to this Agreement in such Obligor's right, title and
interest in such Intangible Asset (i) is prohibited by any contract,
agreement, instrument or indenture governing such Intangible Asset, (ii)
would give any other party to such contract, agreement, instrument or
indenture the right to terminate its obligations thereunder or (iii) is
permitted only with the consent of another party, if such consent has not
been obtained; provided, that any Receivable or any money or other amounts
due or to become due under any such contract, agreement, instrument or
indenture shall not constitute Excluded Assets.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in respect
of which (a) no election has been made by the Company to treat such
Foreign Subsidiary as a branch for United States tax purposes or (b) total
net assets of such Foreign Subsidiary (as shown on the most recent balance
sheet of such Foreign Subsidiary delivered to the Secured Parties)
aggregates an equivalent of $5,000,000 or less. Any Foreign Subsidiary
which is owned by another Subsidiary that constitutes an Excluded Foreign
Subsidiary pursuant to clause (a) of the foregoing sentence shall be an
Excluded Foreign Subsidiary.
"Excluded Vehicles": the collective reference to (i) all Vehicles
which are included in the Master Collateral under and as defined in the
Master Collateral Agency Agreement, (ii) any other property which is
included in the Master Collateral under and as defined in the Master
Collateral Agency Agreement and (iii) all Proceeds and products of any and
all of the foregoing.
"Finance Companies": the collective reference to ANC Rental Funding
Corp., National Car Rental Financing Corp., National Car Rental Financing
Limited Partnership, CarTemps Financing L.L.C., Alamo Financing L.P.,
Alamo Financing L.L.C., ARG Funding Corp., ANC Financial Corporation, ANC
Financial GP Corporation, CarTemps Financing L.P., Spirit Leasing, Inc.
and any of their respective successors and any finance Subsidiary of the
Company established in the future.
"Finance Company Equity Interests": all of the Capital Stock of each
of the Finance Company Issuers, together with any other present and future
interests, shares, stock certificates, options or rights of any nature
whatsoever in respect of the Capital Stock of the Finance Company Issuers
that may be issued or granted to, or held by, any
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Obligor while this Agreement is in effect other than the general
partnership interests in each of Alamo Financing L.P., National Car Rental
Financing Limited Partnership, CarTemps Financing L.P. and all books and
records pertaining to any and all of the foregoing, and to the extent not
otherwise included, all Proceeds and products of any and all of the
foregoing.
"Finance Company Issuer": each of Alamo Financing L.P., National Car
Rental Financing Limited Partnership, CarTemps Financing L.P., ARG Funding
Corp., Alamo Financing L.L.C., National Car Rental Financing Corporation
and CarTemps Financing L.L.C.
"Financing Leases": as defined in the Base Indenture, dated as of
February 26, 1993, between ARG Funding Corp., as issuer, and The Bank of
New York, as trustee.
"First Priority Interest": as defined in Section 2.1(a).
"Fleet Collateral": the collective reference to (i) the Finance
Company Equity Interests and (ii) the Vehicle Collateral.
"Foreign Subsidiary": either (a) any Subsidiary of the Company that
is not a Domestic Subsidiary or (b) a Domestic Subsidiary whose only
assets are the Capital Stock of one or more Foreign Subsidiaries.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
Foreign Subsidiary.
"GAAP": the generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, the statements and
pronouncements of the Financial Accounting Standards Board and such other
statements by such other entities as have been approved by a significant
segment of the accounting profession, which are applicable at the date
hereof.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof whether now owned or hereafter
acquired and, in any event, including, without limitation, with respect to
any Obligor, all contracts, agreements, instruments and indentures in any
form, and portions thereof, to which such Obligor is a party or under
which such Obligor has any right, title or interest or to which such
Obligor or any property of such Obligor is subject, as the same may from
time to time be amended, supplemented or otherwise modified, including,
without limitation, (i) all rights of such Obligor to receive moneys due
and to become due to it thereunder or in connection therewith, (ii) all
rights of such Obligor to damages arising thereunder and (iii) all rights
of such Obligor to perform and to exercise all remedies thereunder.
"Inactive Subsidiary": each Subsidiary of the Company that has total
net assets (as shown on the most recent balance sheet of such Subsidiary
delivered to the Secured Parties) of $100,000 or less.
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"Indenture Documentation": the Indenture, the Indenture Securities,
the Indenture Guarantees and all other documents and instruments entered
into in connection with the Indenture.
"Insurance Companies": International AutoNation Group Insurance
Company, Ltd. and its successors and any other captive insurance
subsidiary of the Company currently existing or established in the future.
"Intellectual Property": the collective reference to all present and
future rights, priorities and privileges relating to intellectual
property, whether arising under United States, multinational or foreign
laws or otherwise, including, without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and
the Trademark Licenses, and all rights to xxx at law or in equity for any
infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by
any Obligor to the Company or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all present
and future "investment property" as such term is defined in Section 9-102
of the Uniform Commercial Code in effect in the State of New York on the
date hereof (other than any Foreign Subsidiary Voting Stock excluded from
the definition of "Pledged Stock") and (ii) whether or not constituting
"investment property" as so defined, all Pledged Securities and the
Finance Company Equity Interests.
"Issuers": the collective reference to each issuer of a Pledged
Security or a Finance Company Equity Interest.
"LLC Agreements": the operating agreements with respect to each LLC
Issuer.
"LLC Issuers": Alamo Rent-A-Car, LLC, a Delaware limited liability
company and all other limited liability companies that become party hereto
pursuant to Section 5.13 of the Senior Loan Agreement, Section 4.22 of the
Indenture and Section 7.13 of this Agreement.
"Loan Documents": as defined in the Senior Loan Agreement.
"Material Adverse Effect": a material adverse effect on (i) the
business, assets, property, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole or (ii) the
validity or enforceability of the Agreement or any Secured Instrument, or
any New Credit Facility Documents or the rights or remedies of the
Collateral Trustee and the Secured Parties hereunder or thereunder.
"New Credit Facility Collateral Agreements": the collective
reference to (i) the Guarantee and Collateral Agreement, dated June 30,
2000, among the Company and certain of its Subsidiaries parties thereto in
favor of Congress Financial Corporation (Florida) as administrative agent
and (ii) the Guarantee and Collateral Agreement, dated
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June 30, 2000, among the Company and certain of its Subsidiaries parties
thereto in favor of Xxxxxx Commercial Paper Inc, as administrative agent;
as each of the foregoing may be amended, supplemented or otherwise
modified from time to time.
"New Credit Facility Documents": the New Credit Facility and the
Loan Documents referred to therein.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Notice of Acceleration": as defined in the Trust Agreement.
"Obligor": as defined in the preamble hereto.
"Patent License": all present and future agreements, whether written
or oral, providing for the grant by or to any Obligor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent, including, without limitation, any of the foregoing referred to in
Schedule 5.
"Patents": all now owned and hereafter arising or acquired (i)
letters patent of the United States, any other country or any political
subdivision thereof, all reissues and extensions thereof and all goodwill
associated therewith, including, without limitation, any of the foregoing
referred to in Schedule 5, (ii) all applications for letters patent of the
United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in Schedule 5, and (iii) all rights to obtain any
reissues or extensions of the foregoing.
"Permitted Liens": as defined in the ANC Liberty Agreement.
"Pledged LLC Interests": the present and future ownership of the
Company in each LLC Issuer and all present and future right, title and
interest in, to and under each LLC Agreement with respect thereto and all
present and future rights of the Company to receive payments of money or
other distributions of payments arising out of or in connection with its
ownership interest and its rights under each LLC Agreement.
"Pledged Notes": all promissory notes listed on Schedule 1, all
Intercompany Notes at any time issued to any Obligor and all other
promissory notes issued to or held by any Obligor.
"Pledged Securities": the collective reference to the Pledged Notes,
the Pledged Stock and the Pledged LLC Interests.
"Pledged Stock": the shares of Capital Stock listed on Schedule 1,
together with any other present and future shares, stock certificates,
options or rights of any nature whatsoever in respect of the Capital Stock
of any Person that may be issued or granted to, or held by, any Obligor
while this Agreement is in effect; provided that in no event shall (a)
more than 65% of the total outstanding Foreign Subsidiary Voting Stock of
any Foreign Subsidiary or (b) the Capital Stock of any Inactive
Subsidiary, any Finance
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Company (except the Finance Company Equity Interests) or any Insurance
Company be required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, including, without limitation, all
dividends or other income from the Investment Property, collections
thereon or distributions or payments with respect thereto.
"Receivable": any present and future right to payment for goods sold
or leased or for services rendered, whether or not such right is evidenced
by an Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Risk Management Subsidiary": each of Post Retirement Liability
Management, Inc., a Florida corporation, and Rental Liability Management,
Inc., a Florida corporation.
"Second Priority Interest": as defined in Section 2.1(b).
"Securities Act": the Securities Act of 1933, as amended.
"Third Priority Interests": as defined in Section 2.1(d).
"Trademark License": any present and future agreement, whether
written or oral, providing for the grant by or to any Obligor of any right
to use any Trademark, including, without limitation, any of the foregoing
referred to in Schedule 5.
"Trademarks": all now owned and hereafter arising or acquired (i)
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other
source or business identifiers, and all goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether
in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any State thereof or any other country or
any political subdivision thereof, or otherwise, and all common-law rights
related thereto, including, without limitation, any of the foregoing
referred to in Schedule 5, and (ii) right to obtain all renewals thereof.
"Trust Agreement": as defined in the preamble hereto.
"United States: the United States of America.
"Vehicle Collateral": all Vehicles subject to Financing Leases
pursuant to which any of National Car Rental System, Inc., Spirit
Rent-A-Car, Inc. d/b/a Alamo or Alamo Rent-A-Car, LLC is the lessee and
which Vehicles are included in the Lessee Grantor Master Collateral under
and as defined in the Master Collateral Agency Agreement.
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"Vehicle Debt": indebtedness of the Subsidiaries of the Company
incurred to finance, refinance or lease, directly or indirectly, Vehicles
(but only to the extent actually used to finance, refinance or lease
Vehicles).
"Vehicles": all now owned or hereafter acquired cars, trucks, buses
(including, without limitation, shuttle buses and vans), trailers,
construction and earth moving equipment and other vehicles covered by a
certificate of title law of any state and all tires and other
appurtenances to any of the foregoing.
"Wholly-Owned Subsidiary": a Subsidiary, 100% of the outstanding
Capital Stock and other Equity Interests of which is directly or
indirectly owned by the Company or by one or more Wholly Owned
Subsidiaries of the Company other than director's qualifying shares or
shares held by citizens or nationals of a foreign jurisdiction pursuant to
regulatory requirements.
1.2 Other Definitional Provisions. The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(a) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(b) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to an Obligor, shall refer to such
Obligor's Collateral or the relevant part thereof.
Section 2. GRANT OF SECURITY INTEREST
2.1 Grants of Security Interests.
(a) Each Obligor hereby assigns and transfers to the Collateral
Trustee, and hereby grants to the Collateral Trustee, as collateral security for
the prompt and complete payment, performance, discharge and satisfaction of all
First Priority Secured Obligations, a security interest (collectively, the
"First Priority Interests") in all right, title and interest of such Obligor in
all Collateral, whether now existing or hereafter acquired.
(b) Each Obligor hereby assigns and transfers to the Collateral
Trustee, and hereby grants to the Collateral Trustee, as collateral security for
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of such Obligor's Secured Obligations in
respect of the Second Priority Secured Obligations, a security interest
(collectively, the "Second Priority Interests") in all right, title and interest
of such Obligor in all Collateral, whether now existing or hereafter acquired.
(c) Each Obligor hereby assigns and transfers to the Collateral
Trustee, and hereby grants to the Collateral Trustee, as collateral security for
the prompt and complete
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payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of such Obligor's Secured Obligations in respect of the Third
Priority Secured Debt Obligations, a security interest (collectively, the "Third
Priority Debt Interests") in all right, title and interest of such Obligor in
all Collateral, whether now existing or hereafter acquired.
(d) Each Obligor hereby assigns and transfers to the Collateral
Trustee, and hereby grants to the Collateral Trustee, as collateral security for
the prompt and complete payment, performance, discharge and satisfaction of all
Third Priority Secured Surety Bond Obligations, a security interest
(collectively, the "Third Priority Surety Bond Interests"; and together with the
Third Priority Debt Interests, collectively, the "Third Priority Interests") in
all right, title and interest of such Obligor in all Collateral, whether now
existing or hereafter acquired.
(e) The Second Priority Interest is junior in priority to the First
Priority Interest.
(f) The Third Priority Interests granted pursuant to Section 2.1(c)
and Section 2.1(d) are (i) pari passu in priority with each other and (ii)
junior in priority to each of the First Priority Interest and the Second
Priority Interest.
2.2 Limitation. Anything herein or in any other Secured Instrument
or the Trust Agreement to the contrary notwithstanding, the maximum amount of
Secured Obligations secured pursuant hereto or pursuant to any Secured
Instrument or the Trust Agreement by the assets owned by any Obligor that is a
Subsidiary of the Company shall in no event exceed the amount which can be so
secured under applicable federal and state laws relating to the insolvency of
debtors.
2.3 Separate and Distinct Liens. As set forth in the separate
granting clauses contained in Section 2.1 above, it is the intent of each
Obligor, the Secured Parties and the Collateral Trustee, that Section 2.1 shall
create four separate and distinct Liens in favor of (a) the Collateral Trustee,
for the benefit of the holders of the First Priority Secured Obligations, (b)
the Collateral Trustee, for the benefit of the holders of the Second Priority
Secured Obligations, (c) the Collateral Trustee, for the benefit of the holders
of the Third Priority Secured Debt Obligations and (d) the Collateral Trustee,
for the benefit of the Third Priority Secured Surety Bond Obligations.
Section 3. REPRESENTATIONS AND WARRANTIES
To induce the Collateral Trustee and the Secured Parties to agree to
certain amendments to the Senior Loan Agreement and the Indenture and to induce
the Surety Parties, subject to certain terms and conditions, to issue, extend,
renew, continue, increase and/or to permit to remain outstanding the Surety
Bonds for the benefit of, at the request of or on behalf of the Company and/or
one or more Subsidiaries of the Company, each Obligor hereby represents and
warrants to the Collateral Trustee and each Secured Party that:
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3.1 Title; No Other Liens. Except for the separate and distinct
security interest granted to the Collateral Trustee for the ratable benefit of
the Secured Parties pursuant to this Agreement and the other Liens permitted to
exist on the Collateral by the Secured Instruments, such Obligor owns each item
of the Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Collateral Trustee, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Secured
Instruments.
3.2 Perfected Liens.(a) The security interests granted pursuant to
this Agreement upon completion of the filings and other actions specified on
Schedule 2 (which, in the case of all filings and other documents referred to on
said Schedule, have been or will be delivered to the Collateral Trustee in
completed and duly executed form) will constitute separate and distinct valid
perfected security interests in all of the Collateral (other than (x) Inventory
and Equipment constituting Collateral maintained at locations where there is (i)
less than $20,000 aggregate book value of Inventory and Equipment maintained at
each such location and (ii) an aggregate book value, as to all Inventory and
Equipment maintained at such locations, not to exceed $200,000 and (y) Vehicles)
in favor of (i) the Collateral Trustee, for the benefit of the holders of the
First Priority Secured Obligations, (ii) the Collateral Trustee, for the benefit
of the holders of the Second Priority Secured Obligations, (iii) the Collateral
Trustee, for the benefit of the holders of the Third Priority Secured Debt
Obligations, and (iv) the Collateral Trustee, for the benefit of the holders of
the Third Priority Secured Surety Bond Obligations, as collateral security for
such Obligor's Secured Obligations, enforceable in accordance with the terms
hereof against all creditors of such Obligor and any Persons purporting to
purchase any Collateral from such Obligor and are prior to all other Liens on
the Collateral in existence on the date hereof except (x) in the case of the
Corporate Collateral, Liens created pursuant to the New Credit Facility
Documents, (y) Liens listed on Schedule 7 and (z) Permitted Liens which have
priority by operation of law. Except as set forth in Schedule 7, such Obligor
has not granted any consensual Liens on the Collateral other than Permitted
Liens.
(b) Pursuant to this Agreement, the Secured Parties are being
granted Liens on all Collateral that secures the obligations under the New
Credit Facility.
3.3 Chief Executive Office. On the date hereof, such Obligor's
jurisdiction of organization, the location of such Obligor's chief executive
office or sole place of business or principal residence, as the case may be, and
such Obligor's federal employer identification number are specified on Schedule
3.
3.4 Inventory and Equipment. On the date hereof, the Inventory and
the Equipment (other than mobile goods and Inventory and Equipment maintained at
locations where there is (i) less than $20,000 aggregate book value of Inventory
and Equipment maintained at each such location and (ii) an aggregate book value,
as to all Inventory and Equipment maintained at such locations, not to exceed
$200,000) are kept at the locations listed on Schedule 4.
3.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
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3.6 Pledged Securities. (a) Except as set forth on Schedule 1, the
shares of Pledged Stock and the Finance Company Equity Interests pledged by such
Obligor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Obligor or, in the
case of Republic Xxx Xxxxxx Partner, Inc., 65% of its Capital Stock or, in the
case of Foreign Subsidiary Voting Stock, 65% of the outstanding Foreign
Subsidiary Voting Stock of each other relevant Issuer.
(b) All the shares of the Pledged Stock and the Finance Company
Equity Interests have been duly and validly issued and are fully paid and
nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, except as limited by the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Obligor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other Person,
except (i) the security interest created by this Agreement, and (ii) in respect
of the Corporate Collateral consisting of Investment Property, the security
interest created pursuant to the New Credit Facility Documents.
(e) The Company or another Obligor is the registered owner of all of
the ownership interest in each LLC Issuer, and the Company or such other Obligor
constitutes the only "member" of each LLC Issuer. The ownership interest of the
Company or such other Obligor in each LLC Issuer has been duly and validly
issued and is fully paid and non-assessable and constitutes the Company's or
such other Obligor's entire interest in such LLC Issuer. With respect to the
ownership interest in each LLC Issuer held by the Company or such other Obligor,
upon the Collateral Trustee's request, the Company or such other Obligor shall
execute and deliver written instructions to such LLC Issuer to register the
pledge, security interest and lien arising hereunder in such ownership interest
in the registration books maintained by such LLC Issuer.
3.7 Receivables. (a) No amount payable to such Obligor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Collateral Trustee (or a bailee appointed or
approved by the Collateral Trustee) to the extent required by Section 4.1.
(b) None of the obligors on any Receivable is a Governmental
Authority, except for Receivables constituting not more than 5% of the face
amount of all Receivables.
(c) The amounts represented by such Obligor to the Secured Parties
from time to time as owing to such Obligor in respect of the Receivables will at
such times be accurate within $100,000 as to all such Receivables.
3.8 Contracts. (a) No consent of any party (other than such Obligor)
to any material Contract is required, or purports to be required, in connection
with the execution,
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delivery and performance of this Agreement other than the consents which have
been obtained, and all consents necessary to the consummation of the
transactions contemplated by this Agreement and the Trust Agreement have been
obtained, except to the extent the failure to obtain such consent could not have
a material adverse effect on the Collateral or the rights or remedies of the
Collateral Trustee hereunder.
(b) Each material Contract is in full force and effect and
constitutes a valid and legally enforceable obligation of the parties thereto,
except as limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(c) No consent or authorization of, filing with or other act by or
in respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
material Contracts by any party thereto other than those which have been duly
obtained, made or performed and other than those with respect to which the
failure to obtain, make or perform could not reasonably be expected to have a
Material Adverse Effect, are in full force and effect and do not subject the
scope of any such Contract to any material adverse limitation, either specific
or general in nature.
(d) Neither such Obligor nor (to the best of such Obligor's
knowledge) any of the other parties to each material Contract is in default in
the performance or observance of any of the terms thereof in any manner that, in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of such Obligor in, to and under
all material Contracts are not subject to any defenses, offsets, counterclaims
or claims that, in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(f) Such Obligor has delivered to the Collateral Trustee (or any
bailee appointed or approved by the Collateral Trustee) a complete and correct
copy of each material Contract, including all amendments, supplements and other
modifications thereto.
(g) No amount payable to such Obligor under or in connection with
any material Contract is evidenced by any Instrument or Chattel Paper which has
not been delivered to the Collateral Trustee (or any bailee appointed or
approved by the Collateral Trustee).
(h) None of the parties to any Contract is a Governmental Authority.
3.9 Intellectual Property. (a) Schedule 5 lists all Intellectual
Property owned by such Obligor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property of such
Obligor described on Schedule 5 is valid, subsisting, unexpired and enforceable,
has not been abandoned and, to the knowledge of such Obligor, does not infringe
the intellectual property rights of any other Person.
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(c) Except as set forth in Schedule 5, on the date hereof, none of
the Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Obligor is the licensor or franchisor.
(d) Except as otherwise disclosed in the Secured Instruments, no
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or such Obligor's rights
in, any Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect.
(e) Except as otherwise disclosed in the Secured Instruments, no
material action or proceeding is pending, or, to the knowledge of such Obligor,
threatened, on the date hereof seeking to limit, cancel or question the validity
of any material Intellectual Property or such Obligor's ownership interest
therein which, if adversely determined, would have a material adverse effect on
the value of any Intellectual Property.
3.10 Excluded Assets. To the knowledge of the Company, the aggregate
value of Excluded Assets does not exceed $2,500,000; provided that the
aforementioned knowledge qualifier shall not apply to Intellectual Property that
constitutes Excluded Assets.
SECTION 4. COVENANTS
Each Obligor covenants and agrees with the Collateral Trustee and
the Secured Parties that, from and after the date of this Agreement until (i)
the Secured Obligations shall have been paid in full in cash or other
immediately available funds, (ii) all Surety Bond Obligations shall have been
fully and completely performed, paid, discharged and satisfied and (iii) in the
case of Indenture Obligations, defeasance and/or discharge of such obligations:
4.1 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument, Certificated Security or Chattel Paper, such Instrument,
Certificated Security or Chattel Paper shall be immediately delivered to the
Collateral Trustee (or any bailee appointed or approved by the Collateral
Trustee), duly indorsed in a manner satisfactory to the Collateral Trustee, to
be held as Collateral pursuant to this Agreement, provided, that, so long as no
Notice of Acceleration is in effect, the Obligors shall not be obligated to
deliver to the Collateral Trustee (or a bailee appointed or approved by the
Collateral Trustee) any Instruments or Chattel Paper held by any Obligor at any
time to the extent that the aggregate face amount of all such Instruments and
Chattel Paper held by all Obligors at such time does not exceed $250,000.
4.2 Maintenance of Insurance. Such Obligor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory, Equipment and Vehicles against loss by fire, explosion, theft and
such other casualties comparable in scope and coverage as insurance maintained
by companies engaged in the same or similar businesses and (ii) insuring such
Obligor, the Collateral Trustee and the Secured Parties against liability for
personal injury and property damage relating to such Inventory, Equipment and
Vehicles, such policies to be in such form and amounts and having such coverage
as are usually maintained by companies engaged in the same or similar
businesses.
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(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Collateral Trustee of
written notice thereof, (ii) if reasonably requested by the Collateral Trustee,
include a breach of warranty clause and (iii) comply with Section 4.2(a). Such
Obligor shall cause the Collateral Trustee to be named as a loss payee and
additional insured (but without any liability for any premiums) under such
insurance and shall obtain non-contributory lender's loss payable endorsements
to all insurance policies (it being understood and agreed that no such
endorsements are required on the insurance policies with respect to Excluded
Vehicles). Such lender's loss payable endorsements shall specify that (A) the
proceeds of such insurance shall be payable to the Collateral Trustee as its
interest may appear and (B) the Collateral Trustee shall be paid regardless of
any act or omission of any Obligor or its Affiliates, provided that if such
Obligor, after using its best efforts, is unable to obtain the specification
referred to in clause (B) above, such Obligor will have sixty days to use its
best efforts to obtain insurance with such specification.
(c) The Company shall deliver to the Collateral Trustee a report of
a reputable insurance broker with respect to such insurance substantially
concurrently with the delivery by the Company to the Collateral Trustee of its
audited financial statements for each fiscal year and such supplemental reports
with respect thereto as the Collateral Trustee may from time to time reasonably
request.
4.3 Payment of Obligations. (a) Such Obligor will pay and discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except that
no such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Obligor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
4.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Obligor shall maintain the First Priority Interest
created by Section 2.1(a) as a perfected security interest (other than with
respect to Vehicles) subject only to (i) in the case of the Corporate
Collateral, Liens created pursuant to the New Credit Facility Documents, (ii)
Liens listed on Schedule 7, (iii) Permitted Liens consisting of Liens securing
capital leases and purchase money security interests and (iv) Permitted Liens
which have priority by operation of law and shall defend such security interest
against the claims and demands of all Persons whomsoever.
(b) Such Obligor shall maintain the Second Priority Interest created
by Section 2.1(b) as a perfected security interest (other than with respect to
Vehicles) subject only to (i) the First Priority Interest, (ii) in the case of
the Corporate Collateral, Liens created pursuant to the New Credit Facility
Documents, (iii) Liens listed on Schedule 7, (iv) Permitted Liens consisting of
Liens securing capital leases and purchase money security interests and (v)
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Permitted Liens which have priority by operation of law and shall defend such
security interest against the claims and demands of all Persons whomsoever.
(c) Such Obligor shall maintain the Third Priority Interests created
by Section 2.1(c) and Section 2.1(d) as a perfected security interest (other
than with respect to Vehicles) subject only to (i) the First Priority Interest,
(ii) the Second Priority Interest, (iii) in the case of the Corporate
Collateral, Liens created pursuant to the New Credit Facility Documents, (iv)
Liens listed on Schedule 7, (v) Permitted Liens consisting of Liens securing
capital leases and purchase money security interests and (vi) Permitted Liens
which have priority by operation of law and shall defend such security interest
against the claims and demands of all Persons whomsoever.
(d) Notwithstanding anything to the contrary contained in this
Section, (i) with respect to Intellectual Property, such Obligor shall only be
required (A) to maintain, evidence and record, or to assist the Collateral
Trustee in connection with the enforcement of its security interest with, the
United States Patent and Trademark Office and the United States Copyright
Office, or such other applicable Governmental Authority of the United States, or
any state, local governmental or political subdivision thereof, and (B) to file
Uniform Commercial Code financing statements and maintain and continue the
effectiveness thereof and (ii) with respect to the Pledged Securities and
Finance Company Equity Interests that are certificated securities, such Obligor
shall only be required to (A) deliver to the Collateral Trustee (or any bailee
appointed or approved by the Collateral Trustee) the original of such
certificated securities, together with stock powers in blank indorsed to the
Collateral Trustee or any bailee appointed or approved by the Collateral
Trustee, and (B) to file Uniform Commercial Code financing statements and
maintain and continue the effectiveness thereof.
(e) Such Obligor will furnish to the Collateral Trustee and the
Secured Parties from time to time statements and schedules further identifying
and describing the assets and property of such Obligor and such other reports in
connection with the Collateral as the Collateral Trustee may reasonably request,
all in reasonable detail.
(f) At any time and from time to time, upon the written request of
the Collateral Trustee, and at the sole expense of such Obligor, such Obligor
will promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral
Trustee may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby, (ii)
in the case of Investment Property, Deposit Accounts, Letter-of-Credit Rights
and any other relevant Collateral, taking any actions necessary to enable the
Collateral Trustee to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto and (iii) in the case of any
Pledged Notes, delivering the original of such Pledged Notes to the Collateral
Trustee (or any bailee appointed or approved by the Collateral Trustee), duly
indorsed in a manner satisfactory to the Collateral Trustee.
4.5 Changes in Locations, Name, etc. (a) Such Obligor will not,
except upon 15 days' prior written notice (or, in the case of the occurrence of
the events described in clauses
17
(i) and (iii) below, not less than 15 days written notice after the date of such
occurrence) to the Collateral Trustee and delivery to the Collateral Trustee of
(i) all additional executed financing statements and other documents necessary
to maintain the validity, perfection and priority of the security interests
provided for herein or as the Collateral Trustee may deem reasonably necessary
or desirable to protect its interest in the Collateral or its ability to realize
thereon and (ii) if applicable, a written supplement to Schedule 4 showing any
additional location at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment (other than (A)
Inventory sold or disposed of in the ordinary course of business and
Equipment which is obsolete or disposed of pursuant to the Secured
Instruments and (B) Equipment and Inventory which (x) is being repaired
and (y) has an aggregate book value, as to all such Equipment and
Inventory, not to exceed $500,000) to be kept at a location other than
those listed on Schedule 4;
(ii) change its jurisdiction of organization or the location
of its chief executive office or sole place of business or principal
residence from that referred to in Section 3.3; or
(iii) change its name, identity or organizational structure.
(b) The Company agrees to promptly inform the Collateral Trustee,
Liberty and the Administrative Agent of all material grants, transfers,
releases, sales or encumbrances of Collateral to, upon the instruction of,
or for the benefit of either administrative agent or any lender under the
New Credit Facility or any other Person.
4.6 Notices. Such Obligor will advise the Collateral Trustee and the
Secured Parties promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Permitted Liens) on any of the Collateral which would materially adversely
affect the ability of the Collateral Trustee to exercise any of its remedies
hereunder;
(b) the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby; and
(c) each material demand, notice or document received by it relating
in any way to any material Contract that questions the validity or
enforceability of such Contract.
4.7 Investment Property. (a) If such Obligor shall become entitled
to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock or Finance Company Equity Interests, or otherwise in respect
thereof, such Obligor shall accept the same as the agent of the Collateral
Trustee and the Secured Parties, hold the same in trust for the Collateral
Trustee and the Secured
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Parties and deliver the same forthwith to the Collateral Trustee (or any bailee
appointed or approved by the Collateral Trustee) in the exact form received,
duly indorsed by such Obligor to the Collateral Trustee (or any bailee appointed
or approved by the Collateral Trustee), if required, together with an undated
stock power covering such certificate duly executed in blank by such Obligor and
with, if required by the terms of such stock certificate, signature guaranteed,
to be held by the Collateral Trustee (or any bailee appointed or approved by the
Collateral Trustee), subject to the terms hereof, as additional collateral
security for the Secured Obligations. Any sums paid upon or in respect of the
Investment Property upon the liquidation or dissolution of any Issuer shall be
paid over to the Collateral Trustee (or any bailee appointed or approved by the
Collateral Trustee) to be held by it hereunder as additional collateral security
for the Secured Obligations, and in case any distribution of capital shall be
made on or in respect of the Investment Property, or any property shall be
distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Collateral Trustee, be
delivered to the Collateral Trustee (or any bailee appointed or approved by the
Collateral Trustee) to be held by it hereunder as additional collateral security
for the Secured Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Obligor, such Obligor shall, until such money or property is paid or delivered
to the Collateral Trustee (or any bailee appointed or approved by the Collateral
Trustee), hold such money or property in trust for the Secured Parties,
segregated from other funds of such Obligor, as additional collateral security
for the Secured Obligations. Notwithstanding the foregoing, the Obligors shall
not be required to pay over to the Collateral Trustee or deliver to the
Collateral Trustee (or any bailee appointed or approved by the Collateral
Trustee) as Collateral any proceeds of any liquidation or dissolution of any
Issuer, or any distribution of capital or property in respect of any Investment
Property, to the extent that (i) such liquidation, dissolution or distribution,
if treated as a Disposition of the relevant Issuer, would be permitted by the
Secured Instruments and (ii) the proceeds thereof are applied toward prepayment
of Loans to the extent required by the Senior Loan Agreement or the Indenture.
(b) Without the prior written consent of the Collateral Trustee,
such Obligor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer
(except pursuant to a transaction not expressly prohibited by the Secured
Instruments), (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Investment Property or Proceeds thereof
(except pursuant to a transaction not expressly prohibited by the Secured
Instruments), (iii) create, incur or permit to exist any Lien or option in favor
of, or any claim of any Person with respect to, any of the Investment Property
or Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or the New Credit Facility Documents or (iv) enter
into any agreement or undertaking restricting the right or ability of such
Obligor or the Collateral Trustee to sell, assign or transfer any of the Pledged
Securities, the Finance Company Equity Interests or Proceeds thereof (except
pursuant to a transaction not expressly prohibited by the Secured Instruments)
other than with respect to each of clauses (i) through (iv) as provided in the
documentation relating to Vehicle Debt.
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(c) In the case of each Obligor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Collateral Trustee promptly
in writing of the occurrence of any of the events described in Section 4.7(a)
with respect to the Pledged Securities issued by it and (iii) the terms of
Sections 5.3(c) and 5.7 shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 5.3(c) or 5.7 with
respect to the Pledged Securities and the Finance Company Equity Interests
issued by it, except with respect to each of clauses (i) through (iv) to the
extent limited by documentation related to Vehicle Debt.
(d) Each Obligor which is an Issuer that is a partnership or a
limited liability company (i) confirms that none of the terms of any equity
interest issued by it provides that such equity interest is a "security" within
the meaning of Sections 8-102 and 8-103 of the New York UCC (a "Security"), (ii)
agrees that it will take no action to cause or permit any such equity interest
to become a Security, (iii) agrees that it will not issue any certificate
representing any such equity interest and (iv) agrees that if, notwithstanding
the foregoing, any such equity interest shall be or become a Security, such
Issuer will (and the Obligor that holds such equity interest hereby instructs
such Issuer to) comply with instructions originated by the Collateral Trustee
without further consent by such Obligor.
(e) Without the prior written consent of the Collateral Trustee, the
Company shall not permit any LLC Issuer directly or indirectly to issue, sell,
grant, assign or otherwise dispose of any additional membership interest of such
LLC Issuer or of any option or warrant with respect thereto or amend the
articles of organization or operating agreement of such LLC Issuer to limit or
restrict permissible activities in which such LLC Issuer may engage or take any
action to withdraw the authority of or to limit or restrict the authority of
such LLC Issuer's managers or officers or pay any interim distribution and cash
or other assets to any member, except as permitted in the Secured Instruments.
Any distribution by any LLC Issuer other than as permitted under the Secured
Instruments shall comply with applicable law and the applicable LLC Agreement.
The Company shall promptly notify the Collateral Trustee of the occurrence of
any events specified in the LLC Agreements that may result in any LLC Issuer's
dissolution or liquidation.
(f) By execution and delivery hereof by the Company, each LLC
Agreement, to the extent it does not already reflect the following, is hereby
amended: (i) to permit the Company to pledge and assign any and all membership
interests in (or other ownership interest of) such LLC Issuer (including,
without limitation, the Pledged LLC Interests) to the Collateral Trustee; and
(ii) to permit the Collateral Trustee to be admitted to such LLC Issuer as a
member thereof upon the transfer of the membership interests to the Collateral
Trustee without compliance by the Collateral Trustee or any other Person with
any of the conditions or other requirements of such LLC Agreement and without
conferring upon such LLC Issuer or any other member thereof any option to
acquire the membership interests so transferred to the Collateral Trustee or its
designees. The Company agrees to take such action and execute such further
documents as the Collateral Trustee may from time to time request in order to
give effect to the foregoing provisions of this Section. Nothing herein shall be
construed to make the Collateral Trustee liable as a member of any LLC Issuer
and the Collateral Trustee by virtue of this Agreement or otherwise shall not
have any of the duties, obligations or liabilities of a member of
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such LLC Issuer. The parties hereto expressly agree that this Agreement shall
not be construed as creating a partnership or joint venture among the Collateral
Trustee and/or each LLC Issuer.
(g) Each Obligor hereby agrees that it shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, transfer or sell, or
grant, incur, assume or suffer to exist any Lien on, the general partnership
interest of any Finance Company Issuer that is a limited partnership.
4.8 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice and as otherwise permitted under the Secured
Instruments, such Obligor will not (i) grant any extension of the time of
payment of any Receivable, (ii) compromise or settle any Receivable for less
than the full amount thereof, (iii) release, wholly or partially, any Person
liable for the payment of any Receivable, (iv) allow any credit or discount
whatsoever on any Receivable or (v) amend, supplement or modify any Receivable
in any manner that could materially adversely affect the value thereof.
(b) Such Obligor will deliver to the Collateral Trustee a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables.
(c) The Collateral Trustee shall have the right at any time or times
in its own name or in the name of a nominee of the Collateral Trustee to verify
the validity, amount and terms of any Receivables or Contracts by mail,
telephone, facsimile transmission or otherwise, but shall not contact the same
customers on a repeated basis and shall only do so on a periodic basis and with
the sole purpose to verify such information.
(d) No payment shall be made in respect of Receivables, except
payments remitted in accordance with the New Credit Facility Documents.
(e) None of the transactions giving rise to Receivables in an
aggregate amount in excess of $200,000 will violate any applicable Federal,
State or local laws or regulations (such that any such violation would in any
way adversely affect the obligation of the account debtor, counterparty or other
obligor to make payments to such Obligor in respect of such Receivable or would
adversely affect the ability of such Obligor to collect any such payments in
respect of such Receivable), all documentation relating thereto will be legally
sufficient under such laws and regulations and all such documentation will be
legally enforceable in accordance with its terms in all material respects,
except as limited by the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
4.9 Contracts. (a) Such Obligor will perform and comply in all
material respects with all its obligations under all of its material Contracts.
(b) Such Obligor will not amend, modify, terminate or waive any
provision of any material Contract in any manner which could reasonably be
expected to materially adversely affect the value of such Contract as
Collateral.
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(c) Such Obligor will exercise promptly and diligently each and
every material right which it may have under each material Contract (other than
any right of termination).
4.10 Intellectual Property. (a) Such Obligor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law and
(iv) not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way, unless (i) the Collateral Trustee shall have received
prompt written notice of such Obligor's abandonment or failure to maintain any
such Intellectual Property, (ii) any such Intellectual Property is no longer
used in the business of such Obligor, and shall not be affixed to, or used in
connection with the use of, any of the Collateral and (iii) any such
Intellectual Property shall not otherwise be material to the business of such
Obligor in any respect and shall have little or no value.
(b) Such Obligor (either itself or through licensees) will not do
any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public, unless (i) the Collateral
Trustee shall have received prompt written notice of such Obligor's abandonment
or failure to maintain any such Intellectual Property, (ii) any such
Intellectual Property is no longer used in the business of such Obligor or used
in connection with the use of, any of the Collateral and (iii) any such
Intellectual Property shall not otherwise be material to the business of such
Obligor in any respect and shall have little or no value.
(c) Such Obligor (either itself or through licensees), (i) will
employ each material Copyright, (ii) will not (and will not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act whereby
any material portion of the Copyrights may become invalidated or otherwise
impaired and (iii) will not do any act whereby any material portion of the
Copyrights may fall into the public domain, unless (i) the Collateral Trustee
shall have received prompt written notice of such Obligor's abandonment or
failure to maintain any such Intellectual Property, (ii) any such Intellectual
Property is no longer used in the business of such Obligor or used in connection
with the use of, any of the Collateral and (iii) any such Intellectual Property
shall not otherwise be material to the business of such Obligor in any respect
and shall have little or no value.
(d) Such Obligor (either itself or through licensees) will not do
any act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Obligor will notify the Collateral Trustee and the Secured
Parties immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
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Xxxxxxxxx Xxxxxx, xxx Xxxxxx Xxxxxx Copyright Office or any court or tribunal in
any country) regarding such Obligor's ownership of, or the validity of, any
material Intellectual Property or such Obligor's right to register the same or
to own and maintain the same.
(f) Whenever such Obligor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Obligor shall report such
filing to the Collateral Trustee within five Business Days after the last day of
the fiscal quarter in which such filing occurs. Upon request of the Collateral
Trustee, such Obligor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Collateral Trustee may
request to evidence the Collateral Trustee's and the Secured Parties' security
interest in any Copyright, Patent or Trademark and the goodwill and general
intangibles of such Obligor relating thereto or represented thereby.
(g) Such Obligor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application relating to any material Intellectual Property (and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability
(except to the extent that abandonment, impairment or invalidation is permitted
under the foregoing clauses (a) through (c)).
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Obligor shall (i)
take such actions as such Obligor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Collateral Trustee after it learns thereof and xxx for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
4.11 Additional Collateral, etc. (a) With respect to any real or
personal property acquired after the date hereof by any Obligor which would have
been Collateral had it been owned by such Obligor on the date hereof, including
any entity that becomes an Obligor hereafter pursuant to Section 4.11(b), (other
than any property described in paragraph (b) or (c) of this Section) as to which
the Collateral Trustee, for the benefit of the Secured Parties, does not have a
perfected Lien, promptly (i) execute and deliver to the Collateral Trustee such
amendments to this Agreement or such other documents as necessary or advisable
to grant to the Collateral Trustee, for the benefit of the Secured Parties, a
security interest in such property and (ii) take all actions necessary or
advisable to grant to the Collateral Trustee, for the benefit of the Secured
Parties, a perfected security interest (as provided in this Agreement) in such
property, including without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by this Agreement
or by law or as may be reasonably requested by the Collateral Trustee.
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(b) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary, an Insurance Company, a Finance Company or an Inactive
Subsidiary) created or acquired after the date hereof (which, for the purposes
of this paragraph, shall include (x) any existing Subsidiary that ceases to be
an Excluded Foreign Subsidiary or an Inactive Subsidiary and (y) any Risk
Management Subsidiary that becomes a Wholly-Owned Subsidiary of the Company), by
the Company or any of its Subsidiaries, promptly (i) execute and deliver to the
Collateral Trustee such amendments to this Agreement as necessary or advisable
to grant to the Collateral Trustee, for the benefit of the Secured Parties, a
perfected security interest (as provided in this Agreement) in the Capital Stock
of such new Subsidiary that is owned by the Company or any of its Subsidiaries,
(ii) deliver to the Collateral Trustee (or any bailee appointed or approved by
the Collateral Trustee) the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Company or such Subsidiary, as the case may be, (iii)
cause such new Subsidiary (A) to become a party to this Agreement and (B) to
take such actions necessary or advisable to grant to the Collateral Trustee for
the benefit of the Secured Parties a perfected security interest in the
Collateral described in this Agreement with respect to such new Subsidiary,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by this Agreement or by law
or as may be reasonably requested by the Collateral Trustee, and (iv) if
requested by the Collateral Trustee, deliver to the Collateral Trustee legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Collateral
Trustee.
(c) With respect to any new Excluded Foreign Subsidiary created or
acquired after the date hereof by the Company or any of its Subsidiaries (other
than any Excluded Foreign Subsidiaries), promptly (i) execute and deliver to the
Collateral Trustee such amendments to this Agreement or such other documents as
necessary or advisable in order to grant to the Collateral Trustee, for the
benefit of the Secured Parties, a perfected security interest (as provided in
this Agreement) in the Capital Stock of such new Subsidiary that is owned by the
Company or any of its Subsidiaries (other than any Excluded Foreign
Subsidiaries), (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Excluded Foreign Subsidiary be
required to be so pledged), (ii) deliver to the Collateral Trustee (or any
bailee appointed or approved by the Collateral Trustee) the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Company or such
Subsidiary, as the case may be, and take such other action as may be necessary
or, in the opinion of the Collateral Trustee, desirable to perfect the Lien of
the Collateral Trustee thereon, and (iii) if requested by the Collateral
Trustee, deliver to the Collateral Trustee legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Collateral Trustee.
(d) With respect to any Commercial Tort Claims with a value of
$1,000,000 or more held or acquired after the date hereof by the Company or any
of its Subsidiaries, promptly (i) execute and deliver to the Collateral Trustee
such amendments to this Agreement or such other documents as necessary or
advisable to grant to the Collateral Trustee, for the benefit of the Secured
Parties, a security interest in such Commercial Tort Claims and (ii) take all
actions necessary or advisable to grant to the Collateral Trustee, for the
benefit of the Secured Parties, a perfected security interest (as provided in
this Agreement) in such Commercial Tort Claims, including without limitation,
(A) the filing of Uniform Commercial Code financing
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statements in such jurisdictions as may be required by this Agreement or by law
or as may be reasonably requested by the Collateral Trustee and (B) providing
the Collateral Trustee with a signed writing describing the brief details
thereof and granting the Collateral Trustee a security interest therein and in
the proceeds thereof, with such writing in form and substance satisfactory to
the Collateral Trustee.
4.12 Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take such actions, as the Collateral Trustee may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement, or of more fully perfecting or renewing the rights of the Collateral
Trustee and the Secured Parties with respect to the Collateral (or with respect
to any additions thereto or replacements or proceeds thereof or with respect to
any other property or assets hereafter acquired by the Company or any Subsidiary
which may be deemed to be part of the Collateral) pursuant hereto or thereto.
Upon the exercise by the Collateral Trustee or any Secured Party of any power,
right, privilege or remedy pursuant to this Agreement which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, the Company will execute and deliver, or will cause the execution and
delivery of, all applications, certifications, instruments and other documents
and papers that Collateral Trustee or such Secured Party may be required to
obtain from the Company or any of its Subsidiaries for such governmental
consent, approval, recording, qualification or authorization.
SECTION 5. REMEDIAL PROVISIONS
5.1 Certain Matters Relating to Receivables. (a) The Collateral
Trustee shall have the right, at any time when a Notice of Acceleration is in
effect, to make test verifications of the Receivables in any manner and through
any medium that it reasonably considers advisable, and each Obligor shall
furnish all such assistance and information as the Collateral Trustee may
require in connection with such test verifications. At any time when a Notice of
Acceleration is in effect, upon the Collateral Trustee's request and at the
expense of the relevant Obligor, such Obligor shall cause independent public
accountants or others satisfactory to the Collateral Trustee to furnish to the
Collateral Trustee reports showing reconciliations, aging and test verifications
of, and trial balances for, the Receivables.
(b) The Collateral Trustee hereby authorizes each Obligor to collect
such Obligor's Receivables, subject to the Collateral Trustee's direction and
control when a Notice of Acceleration is in effect, and the Collateral Trustee
may curtail or terminate said authority at any time when a Notice of
Acceleration in is effect. If required by the Collateral Trustee at any time
when a Notice of Acceleration is in effect, any payments of Receivables, when
collected by any Obligor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Obligor in the exact form received, duly
indorsed by such Obligor to the Collateral Trustee if required, in a Collateral
Account maintained under the sole dominion and control of the Collateral
Trustee, subject to withdrawal by the Collateral Trustee for the account of the
Secured Parties only as provided in Section 5.5, and (ii) until so turned over,
shall be held by such Obligor in trust for the Collateral Trustee and the
Secured Parties, segregated from other funds of
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such Obligor. Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) At the Collateral Trustee's request, each Obligor shall promptly
deliver to the Collateral Trustee (or any bailee appointed or approved by the
Collateral Trustee) all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
5.2 Communications with Obligors; Obligors Remain Liable. (a) Upon
the request of the Collateral Trustee at any time when a Notice of Acceleration
is in effect, each Obligor shall notify obligors on the Receivables and parties
to the Contracts that the Receivables and the Contracts have been assigned to
the Collateral Trustee for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Collateral Trustee.
(b) Anything herein to the contrary notwithstanding, each Obligor
shall remain liable under each of the Receivables (or any agreement giving rise
thereto) and Contracts 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 Collateral Trustee nor any
Secured Party shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) or Contract by reason of or arising out of
this Agreement or the receipt by the Collateral Trustee or any Secured Party of
any payment relating thereto, nor shall the Collateral Trustee or any Secured
Party be obligated in any manner to perform any of the obligations of any
Obligor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract, 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 which
may have been assigned to it or to which it may be entitled at any time or
times.
5.3 Pledged Stock and the Finance Company Equity Interests. (a)
Unless a Notice of Acceleration is in effect and the Collateral Trustee shall
have given notice to the relevant Obligor of the Collateral Trustee's intent to
exercise its corresponding rights pursuant to Section 5.3(b), each Obligor shall
be permitted to receive all cash dividends paid in respect of the Pledged Stock
and the Finance Company Equity Interests and all payments made in respect of the
Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent permitted in
the Secured Instruments, and to exercise all voting and corporate rights with
respect to the Pledged Securities and the Finance Company Equity Interests.
(b) If a Notice of Acceleration is in effect and the Collateral
Trustee shall give notice of its intent to exercise such rights to the relevant
Obligor or Obligors, (i) the Collateral Trustee shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Pledged Securities and the Finance Company Equity Interests and make application
thereof to the Secured Obligations in the order set forth in the Trust
Agreement, and (ii) any or all of the Pledged Securities and the Finance Company
Equity Interests shall be
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registered in the name of the Collateral Trustee or its nominee, and the
Collateral Trustee or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities or such Finance
Company Equity Interests, as the case may be, at any meeting of shareholders of
the relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities or such Finance Company Equity
Interests, as the case may be, as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Pledged Securities and the Finance Company Equity Interests upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any Issuer, or upon the exercise by any
Obligor or the Collateral Trustee of any right, privilege or option pertaining
to such Pledged Securities or such Finance Company Equity Interests, as the case
may be, and in connection therewith, the right to deposit and deliver any and
all of the Pledged Securities and the Finance Company Equity Interests with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Collateral Trustee may determine), all without
liability except to account for property actually received by it, but the
Collateral Trustee shall have no duty to any Obligor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.
(c) Each Obligor hereby authorizes and instructs each Issuer of any
Pledged Securities and the Finance Company Equity Interests pledged by such
Obligor hereunder to (i) comply with any instruction received by it from the
Collateral Trustee in writing that (x) states that a Notice of Acceleration is
in effect and (y) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from such Obligor, and each Obligor
agrees that each Issuer shall be fully protected in so complying, and (ii)
unless otherwise expressly permitted hereby, pay any dividends or other payments
with respect to the Pledged Securities and the Finance Company Equity Interests
directly to the Collateral Trustee.
(d) When a Notice of Acceleration is in effect and by prior written
notice thereof to any LLC Issuer and the Company, (i) the Collateral Trustee may
transfer the membership interests of the Company into the name of the Collateral
Trustee and (ii) the Collateral Trustee shall be admitted as a member of such
LLC Issuer in the place of the Company.
5.4 Proceeds to be Turned Over To Collateral Trustee. In addition to
the rights of the Collateral Trustee and the Secured Parties specified in
Section 5.1 with respect to payments of Receivables, if and when a Notice of
Acceleration is in effect, all Proceeds received by any Obligor consisting of
cash, checks and other near-cash items shall be held by such Obligor in trust
for the Collateral Trustee and the Secured Parties, segregated from other funds
of such Obligor, and shall, forthwith upon receipt by such Obligor, be turned
over to the Collateral Trustee in the exact form received by such Obligor (duly
indorsed by such Obligor to the Collateral Trustee, if required). All Proceeds
received by the Collateral Trustee hereunder shall be held by the Collateral
Trustee in a Collateral Account maintained under its sole dominion and control.
All Proceeds while held by the Collateral Trustee in a Collateral Account (or by
such Obligor in trust for the Collateral Trustee and the Secured Parties) shall
continue to be held as collateral security for all the Secured Obligations and
shall not constitute payment thereof until applied as provided in the Trust
Agreement.
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5.5 Application of Proceeds. At such intervals as may be agreed upon
by the Company and the Collateral Trustee, or, if a Notice of Acceleration is in
effect, at any time at the Collateral Trustee's election, the Collateral Trustee
may apply all or any part of Proceeds constituting Collateral, whether or not
held in any Collateral Account, in payment of the Secured Obligations in the
order set forth in Section 3.4 of the Trust Agreement.
5.6 Code and Other Remedies. If a Notice of Acceleration is in
effect, the Collateral Trustee, on behalf of the Secured Parties, may exercise,
in addition to all other rights and remedies granted to them in this Agreement
and in any other instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under the New
York UCC or any other applicable law. Without limiting the generality of the
foregoing, but subject to Section 7.15, the Collateral Trustee, without demand
of performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Obligor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Collateral Trustee or any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Collateral Trustee or any Secured Party shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Obligor, which right or equity is
hereby waived and released. Each Obligor further agrees, at the Collateral
Trustee's request, to assemble the Collateral and make it available to the
Collateral Trustee at places which the Collateral Trustee shall reasonably
select, whether at such Obligor's premises or elsewhere. The Collateral Trustee
shall apply the net proceeds of any action taken by it pursuant to this Section
5.6, after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Collateral Trustee and the Secured Parties hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Secured Obligations, in the order set forth in Section
3.4 of the Trust Agreement, and only after such application and after the
payment by the Collateral Trustee of any other amount required by any provision
of law, including, without limitation, Section 9-615(a)(3) of the New York UCC,
need the Collateral Trustee account for the surplus, if any, to any Obligor. To
the extent permitted by applicable law, each Obligor waives all claims, damages
and demands it may acquire against the Collateral Trustee or any Secured Party
arising out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition.
5.7 Registration Rights. (a) If the Collateral Trustee shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 5.6, and if in the good faith judgment of the Collateral Trustee it
is necessary or advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act, the relevant
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Obligor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Collateral Trustee, necessary or advisable to register
the Pledged Stock, or that portion thereof to be sold, under the provisions of
the Securities Act, (ii) use its best efforts to cause the registration
statement relating thereto to become effective and to remain effective for a
period of one year from the date of the first public offering of the Pledged
Stock, or that portion thereof to be sold, and (iii) make all amendments thereto
and/or to the related prospectus which, in the opinion of the Collateral
Trustee, are necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Obligor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Collateral Trustee shall designate and to make available
to its security holders, as soon as practicable, an earnings statement (which
need not be audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) Each Obligor recognizes that the Collateral Trustee may be
unable to effect a public sale of any or all the Pledged Stock or the Finance
Company Equity Interests, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will 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 Obligor 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 Collateral Trustee shall be under no obligation to delay
a sale of any of the Pledged Stock or the Finance Company Equity Interests 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 Obligor 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 all
or any portion of the Pledged Stock or the Finance Company Equity Interests
pursuant to this Section 5.7 valid and binding and in compliance with any and
all other applicable Requirements of Law. Each Obligor further agrees that a
breach of any of the covenants contained in this Section 5.7 will cause
irreparable injury to the Collateral Trustee and the Secured Parties, that the
Collateral Trustee and the 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 Section 5.7 shall be specifically enforceable against such
Obligor, and such Obligor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Acceleration Notice is in effect.
5.8 Waiver; Deficiency. Each Obligor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Secured Obligations and the fees and disbursements
of any attorneys employed by the Collateral Trustee or any Secured Party to
collect such deficiency.
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5.9 Limitation by Law. All rights, remedies and powers provided in
this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions hereof
are intended to be subject to all applicable mandatory provisions of law which
may be controlling and to be limited to the extent necessary so that they will
not render this Agreement invalid, unenforceable in whole or in part or not
entitled to be recorded, registered or filed under the provisions of any
applicable law.
SECTION 6. THE COLLATERAL TRUSTEE
6.1 Collateral Trustee's Appointment as Attorney-in-Fact, etc. (a)
Each Obligor hereby irrevocably constitutes and appoints the Collateral Trustee
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Obligor and in the name of such Obligor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Obligor
hereby gives the Collateral Trustee the power and right, on behalf of such
Obligor, without notice to or assent by such Obligor, to do any or all of the
following:
(i) in the name of such Obligor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or Contract or with respect to any other Collateral and file
any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Collateral Trustee for the
purpose of collecting any and all such moneys due under any Receivable or
Contract or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments, documents
and papers as the Collateral Trustee may request to evidence the
Collateral Trustee's and the Secured Parties' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Obligor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 5.6 or 5.7, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Trustee or as the Collateral Trustee
shall direct; (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims
30
and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents
in connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof
and to enforce any other right in respect of any Collateral; (5) defend
any suit, action or proceeding brought against such Obligor with respect
to any Collateral; (6) settle, compromise or adjust any such suit, action
or proceeding and, in connection therewith, give such discharges or
releases as the Collateral Trustee may deem appropriate; (7) assign any
Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner, as
the Collateral Trustee shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as
though the Collateral Trustee were the absolute owner thereof for all
purposes, and do, at the Collateral Trustee's option and such Obligor's
expense, at any time, or from time to time, all acts and things which the
Collateral Trustee deems necessary to protect, preserve or realize upon
the Collateral and the Collateral Trustee's and the Secured Parties'
security interests therein and to effect the intent of this Agreement, all
as fully and effectively as such Obligor might do.
Anything in this Section 6.1(a) to the contrary notwithstanding, the
Collateral Trustee agrees that it will not exercise any rights under the power
of attorney provided for in this Section 6.1(a) unless a Notice of Acceleration
is in effect, except, that, the Collateral Trustee may, at any time and
consistent with the verification procedures described in Section 4.9(c), (A)
sign any Obligor's name on any verification of Receivables sent to an account
debtor or any obligor in respect thereof and (B) execute in the name of any
Obligor and file any Uniform Commercial Code financing statements or amendments
thereto. Each Obligor hereby releases the Collateral Trustee and its officers,
employees and designees from any liabilities arising from any act or acts under
this power of attorney and in furtherance thereof, whether of omission or
commission, except as a result of the Collateral Trustee's own gross negligence
or willful misconduct as determined pursuant to a final non-appealable order of
the court of competent jurisdiction. The Collateral Trustee may, at its option,
upon notice to any Obligor, cure any default by such Obligor under any material
agreement with a third party that affects the Collateral, its value or the
ability of the Collateral Trustee to collect, sell or otherwise dispose of the
Collateral or the rights and remedies of the Collateral Trustee with respect
thereto.
(b) If any Obligor fails to perform or comply with any of its
agreements contained herein, the Collateral Trustee, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(c) Each Obligor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
31
6.2 Duty of Collateral Trustee. The Collateral Trustee's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral Trustee
deals with similar property for its own account. Neither the Collateral Trustee,
any Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any 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 Obligor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Collateral Trustee
and the Secured Parties hereunder are solely to protect the Collateral Trustee's
and the Secured Parties' interests in the Collateral and shall not impose any
duty upon the Collateral Trustee or any Secured Party to exercise any such
powers. The Collateral Trustee and the Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to any Obligor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
6.3 Execution of Financing Statements. Pursuant to any applicable
law, each Obligor authorizes the Collateral Trustee to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Obligor in such form and in such
offices as the Collateral Trustee reasonably determines appropriate to perfect
the security interests of the Collateral Trustee under this Agreement.
6.4 Authority of Collateral Trustee. Each Obligor acknowledges that
the rights and responsibilities of the Collateral Trustee under this Agreement
with respect to any action taken by the Collateral Trustee or the exercise or
non-exercise by the Collateral Trustee of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Trustee and the Secured
Parties, be governed by the Trust Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Collateral Trustee and the Obligors, the Collateral Trustee shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Obligor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
6.5 Access to Premises. From time to time as requested by the
Collateral Trustee, the Collateral Trustee or its designee shall have access to
each Obligor's premises during normal business hours and after notice to such
Obligor, or at any time without notice to any Obligor if an Acceleration Notice
is in effect, for the purposes of verifying and auditing the Collateral and the
books and records of such Obligor. Each Obligor shall promptly furnish to the
Collateral Trustee such copies of such books and records or extracts therefrom
as the Collateral Trustee may reasonably request.
32
SECTION 7. MISCELLANEOUS
7.1 Amendments in Writing. (a) None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by each affected Obligor and the Collateral
Trustee (with the written consent of the Required Secured Debt Parties and the
Required Surety Parties) and, to the extent such party holds Secured
Obligations, the Administrative Agent and Liberty, as the case may be, and (b)
without the consent of the Administrative Agent, the Indenture Trustee, the
Surety Parties or any other Secured Party, the Collateral Trustee and each
affected Obligor, at any time and from time to time, may enter into one or more
agreements supplemental hereto, in form satisfactory to the Collateral Trustee,
(i) to add to the covenants of such Obligor for the benefit of the Secured
Parties or to surrender any right or power herein conferred upon such Obligor;
(ii) to mortgage or pledge to the Collateral Trustee, or grant a security
interest in favor of the Collateral Trustee in, any property or assets as
additional security for the Secured Obligations; or (iii) to cure any ambiguity,
to correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein or therein, or to make any other
provision with respect to matters or questions arising hereunder which shall not
be inconsistent with any provision hereof; provided that any such action
contemplated by this clause (iii) shall not adversely affect the interests of
the Secured Parties; or (iv) add, delete or modify any provision herein to the
extent required by the U.S. Securities and Exchange Commission with respect to
the qualification of the Indenture under the Trust Indenture Act.
7.2 Notices. All notices, requests and demands to or upon the
Collateral Trustee or any Obligor hereunder shall be effected in the manner
provided for in Section 6.1 of the Trust Agreement.
7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Collateral Trustee nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
default giving rise to an Acceleration Notice. No failure to exercise, nor any
delay in exercising, on the part of the Collateral Trustee or any Secured Party,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Collateral Trustee or any Secured
Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Collateral Trustee or such
Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
7.4 Enforcement Expenses; Indemnification. (a) Each Obligor agrees
to pay, or reimburse each Secured Party and the Collateral Trustee for, all its
costs and expenses incurred in enforcing or preserving any rights under this
Agreement and the other Secured Instruments to which such Obligor is a party,
including, without limitation, the fees and disbursements of counsel to each
Secured Party and of counsel to the Collateral Trustee.
33
(b) Each Obligor agrees to pay, and to save the Collateral Trustee
and the Secured Parties harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Obligor agrees to pay, and to save the Collateral Trustee
and the Secured Parties harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent the Company would be required to do so pursuant to the Secured
Instruments and the Trust Agreement.
(d) The agreements in this Section are joint and several and shall
survive repayment of the Secured Obligations and all other amounts payable under
the Secured Instruments and the Trust Agreement.
7.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Obligor and shall inure to the benefit of the
Collateral Trustee and the Secured Parties and their successors and assigns;
provided that no Obligor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Collateral Trustee.
7.6 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
7.7 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7.8 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
7.9 Integration. This Agreement, the Trust Agreement and the other
Secured Instruments represent the agreement of the Obligors, the Collateral
Trustee and the Secured Parties with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Collateral Trustee or any Secured Party relative to subject matter hereof
and thereof not expressly set forth or referred to herein, in the Trust
Agreement or in the other Secured Instruments.
7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
34
7.11 Submission To Jurisdiction; Waivers. Each Obligor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Secured Instruments to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Obligor at its
address referred to in Section 7.2 or at such other address of which the
Collateral Trustee shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
7.12 Acknowledgments. Each Obligor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, the Trust Agreement and the other Secured
Instruments to which it is a party;
(b) neither the Collateral Trustee nor any Secured Party has any
fiduciary relationship with or duty to any Obligor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Obligors, on the one hand, and the Collateral Trustee
and Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Secured
Instruments or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Obligors and the Secured Parties.
7.13 Additional Obligors. Each Subsidiary of the Company that is
required to become a party to this Agreement pursuant to Section 4.11 shall
become an Obligor for all purposes of this Agreement upon execution and delivery
by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.
7.14 Releases. (a) At such time as the Secured Obligations shall
have been paid in full in cash or other immediately available funds, and all
Surety Bond Obligations shall
35
have been fully and completely performed, paid, discharged and satisfied or in
the case of the Indenture Obligations, defeasance and/or discharge of such
obligations, the Collateral shall be automatically released from the Liens
created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Collateral Trustee and each
Obligor hereunder shall automatically terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Obligors to the extent not prohibited by
applicable law and subject to any other existing Liens. At the request and sole
expense of any Obligor following any such termination, to the extent not
prohibited by applicable law and subject to any other existing Liens, the
Collateral Trustee shall deliver to such Obligor any Collateral held by the
Collateral Trustee hereunder, and execute and deliver to such Obligor such
documents as such Obligor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Obligor in a transaction permitted by the Secured Instruments
(including without limitation, pursuant to Section 6.5 of the Senior Loan
Agreement and Section 4.10 of the Indenture), then the Collateral Trustee, at
the request and sole expense of such Obligor, shall execute and deliver to such
Obligor all releases or other documents reasonably necessary or desirable for
the release of the Liens created hereby and by the other Trust Security
Documents on such Collateral; provided that the Company shall have delivered to
the Trustee, at least ten Business Days prior to the date of the proposed
release, a written request for release identifying the relevant Obligor,
together with (i) a certification by the Company stating that such transaction
is in compliance with all Secured Instruments and the other Loan Documents and
(ii) a written confirmation by the Administrative Agent that such release is
permitted by the Senior Loan Agreement and a written confirmation by each Surety
Party that such sale is permitted by the Surety Bond Documents to which such
Surety Party is a party.
(c) An Obligor that is a Subsidiary of the Company shall be released
from its obligations hereunder in the event that all the Capital Stock or
substantially all of the assets of such Obligor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Secured Instruments and
in accordance with Section 6.10 of the Trust Agreement. In the event that any
Subsidiary is released from its obligations hereunder pursuant to this Section
7.14, any mortgage granted by such Subsidiary to the Collateral Trustee shall
also be released.
7.15 Intercreditor Agreements. (a) Notwithstanding anything in this
Agreement to the contrary, the rights of the Collateral Trustee hereunder are
subject to (i) in respect of Corporate Collateral, the Intercreditor Agreement,
(ii) upon execution of the Master Collateral Agency Agreement Supplement by the
Collateral Trustee, in respect of Fleet Collateral consisting of Vehicle
Collateral, the Fleet Intercreditor Agreement and (iii) in respect of Fleet
Collateral consisting of the Finance Company Equity Interests, the MBIA Consent,
the Ambac Consent and the Letter Agreement, in each case to the extent provided
therein. Each of the Secured Parties hereby acknowledges, and each Person that
becomes a Secured Party, by its acceptance of the benefits under this Agreement,
acknowledges, that the provisions contained in each of the Intercreditor
Agreement, the Fleet Intercreditor Agreement (if and when such Fleet
Intercreditor Agreement is executed by such Secured Party or a trustee acting on
its behalf), the MBIA Consent, the Ambac Consent and the Letter Agreement are
binding upon it as if it were a party thereto and may be enforceable against it
by any other party thereto.
36
(b) Notwithstanding anything in this Agreement to the contrary, with
respect to the delivery of Corporate Collateral which may be perfected by
possession by the secured party with respect thereto, or which is required
pursuant to the terms of this Agreement, such delivery shall be deemed to have
been complied with so long as such delivery is made to (i) Borrowing Base
Administrative Agent (as defined in the Intercreditor Agreement), or (ii)
Supplemental Facility Administrative Agent (as defined in the Intercreditor
Agreement) and held subject to Section 2(d) and 2(e), respectively, of the
Intercreditor Agreement.
7.16 Conflicts with New Credit Facility Collateral Agreements.
Notwithstanding anything in this Agreement to the contrary, in the event that
any Obligor's obligations under Sections 4.7(a), 4.11(b), 4.11(c), 5.3, 5.4 and
5.7 of this Agreement shall conflict or otherwise be inconsistent with its
obligations under the New Credit Facility Collateral Agreements, such Obligor
shall be deemed to have complied with its obligations hereunder to the extent
such Obligor complies with its corresponding obligations under the New Credit
Facility Collateral Agreements and, upon such compliance with the obligations
under the New Credit Facility Collateral Agreements, shall be relieved from its
corresponding obligations under this Agreement until such time as the New Credit
Facility Collateral Agreements are no longer in effect.
7.17 Acknowledgements. Notwithstanding any other provision of this
Agreement, all parties hereto expressly acknowledge that (i) nothing herein
shall be in derogation of, or shall limit, condition or delay the exercise of,
any rights or remedies of any Surety Party which have arisen or shall arise in
equity, under applicable law or under the Surety Bond Documents, including,
without limitation, rights or remedies of reimbursement, exoneration, equitable
subrogation or equitable lien, (ii) the provisions of this Agreement do not
apply to any cash or letter of credit provided to any Surety Party with respect
to the Surety Bond Documents or Surety Bond Obligations, and (iii) the
provisions of this Agreement do not apply to any collateral granted pursuant to
the Collateral and Control Agreement.
7.18 Delivery of Acknowledgement and Consents. Upon execution
hereof, each Issuer (other than the Finance Company Issuers) that is not a party
to this Agreement shall execute and deliver to the Collateral Trustee an
Acknowledgement and Consent in the form attached hereto as Annex II.
7.19 WAIVER OF JURY TRIAL. EACH OBLIGOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, EACH OF THE COLLATERAL TRUSTEE AND THE SECURED PARTIES, HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER SECURED INSTRUMENT AND FOR
ANY COUNTERCLAIM THEREIN.
7.20 Additional Collateral. Except for the provision of cash,
letters of credit, guarantees, indemnities, or other undertaking contemplated by
Section 8(b) of the Intercreditor Agreement, and the collateral granted pursuant
to the Collateral and Control Agreement, neither the Company nor any of its
Subsidiaries shall deliver or grant a security interest in or lien on any
collateral in favor of any Secured Party unless it is delivered or granted to
the Collateral Trustee in favor of all Secured Parties under this Agreement and
as provided in the Trust Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered as of the date first above written.
ANC RENTAL CORPORATION,
as Company
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
ALAMO RENT-A-CAR (CANADA), INC.
ALAMO RENT-A-CAR MANAGEMENT, LP
By: ARC-GP, Inc., its general partner
ANC COLLECTOR CORPORATION
ANC FINANCIAL, LP
By: ANC Financial GP Corporation, its general
partner
ARC-GP, INC.
ARC-TM, INC.
LIABILITY MANAGEMENT COMPANIES HOLDING, INC.
NATIONAL CAR RENTAL LICENSING, INC.
NATIONAL CAR RENTAL SYSTEM, INC.
NCR AFFILIATE SERVICER, INC.
NCRAS MANAGEMENT, LP
By: NCRAS-GP, Inc., its general partner
NCRAS-GP, INC.
REPUBLIC XXX XXXXXX PARTNER, INC.
REPUBLIC INDUSTRIES AUTOMOTIVE
RENTAL GROUP (BELGIUM) INC.
SPIRIT RENT-A-CAR, INC.
SRAC MANAGEMENT, LP
By: SRAC-GP, Inc., its general partner
SRAC-GP, INC.
SRAC-TM, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
ALAMO RENT-A-CAR, LLC
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
ANC FINANCIAL CORPORATION
ANC FINANCIAL PROPERTIES LLC
ANC IT COLLECTOR CORPORATION
ARC-TM PROPERTIES LLC
NCR AFFILIATE SERVICER PROPERTIES, LLC
ANC INFORMATION TECHNOLOGY HOLDING, INC.
ANC INFORMATION TECHNOLOGY, INC.
ANC INFORMATION TECHNOLOGY, L.P.
By: ANC INFORMATION TECHNOLOGY, INC., its
general partner
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
LIBERTY MUTUAL INSURANCE COMPANY,
solely in its capacity as a Surety Party under the
Surety Bond Documents
By: /s/ Xxxx Xxxxxx
---------------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President, Liberty Bond Services,
a division of LMIC
XXXXXX COMMERCIAL PAPER INC.,
as administrative agent under the Senior Loan
Facility
By: /s/ G. Xxxxxx Xxxxx
---------------------------------------------
Name: G. Xxxxxx Xxxxx
Title: Authorized Signatory
WILMINGTON TRUST COMPANY,
as Collateral Trustee
By: /s/ Xxxxxx Xxxx
----------------------------------------
Name: Xxxxxx Xxxx
Title: Senior Financial Services Officer
Schedule 1
to Collateral Agreement
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares
----------------------- -------------- --------------------- -------------
PLEDGED NOTES:
Issuer Payee Principal Amount
----------------------- -------------- ----------------------
Schedule 2
to Collateral Agreement
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Patent and Trademark Filings
[List all filings]
Actions with respect to Pledged Stock
Other Actions
[Describe other actions to be taken]
Schedule 3
to Collateral Agreement
JURISDICTION OF ORGANIZATION AND LOCATION OF CHIEF EXECUTIVE OFFICE
Location of Chief
Obligor Jurisdiction of Organization Executive Office
---------------------- ---------------------------- ----------------
Schedule 4
to Collateral Agreement
LOCATIONS OF INVENTORY AND EQUIPMENT
Obligor Locations
----------------------------------- --------------------------------
Schedule 5
to Collateral Agreement
INTELLECTUAL PROPERTY
I. Copyrights and Copyright Licenses:
II. Patents and Patent Licenses:
III. Trademarks and Trademark Licenses:
Schedule 6
to Collateral Agreement
CONTRACTS
Schedule 7
to Collateral Agreement
EXISTING PRIOR LIENS
Annex I
to Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 20_ _, made by
______________________________, a ______________ corporation (the "Additional
Obligor"), in favor of WILMINGTON TRUST COMPANY, not in its individual capacity
but solely as Trustee (in such capacity, (the "Collateral Trustee") under the
Trust Agreement referred to below. All capitalized terms not defined herein
shall have the meaning ascribed to them in such Trust Agreement.
V W I T N E S S E T H :
WHEREAS, ANC RENTAL CORPORATION (the "Company"), certain of its
Subsidiaries and the Collateral Trustee have entered into a Trust Agreement,
dated as of August 30, 2001 (as amended, supplemented or otherwise modified from
time to time, the "Trust Agreement") for the benefit of the Secured Parties;
WHEREAS, in connection with the Trust Agreement, the Company,
certain of its Affiliates (other than the Additional Obligor) Liberty, solely in
its capacity as Surety Party under the Surety Bond Documents, and the
Administrative Agent, have entered into the Collateral Agreement, dated as of
August 30, 2001 (as amended, supplemented or otherwise modified from time to
time, the "Collateral Agreement") in favor of the Collateral Trustee for the
benefit of the Secured Parties;
WHEREAS, the Collateral Agreement requires the Additional Obligor to
become a party to the Collateral Agreement; and
WHEREAS, the Additional Obligor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Collateral Agreement. By executing and delivering this Assumption
Agreement, the Additional Obligor, as provided in Section 7.13 of the Collateral
Agreement, hereby becomes a party to the Collateral Agreement as an Obligor
thereunder with the same force and effect as if originally named therein as an
Obligor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of an Obligor thereunder. The
information set forth in Annex 1-A hereto is hereby added to the information set
forth in Schedules ____________ to the Collateral Agreement. The Additional
Obligor hereby represents and warrants that each of the representations and
warranties contained in Section 3 of the Collateral Agreement as it relates to
such Additional Obligor is true and correct on and as the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such date.
2
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL OBLIGOR]
By:____________________________________
Name:
Title:
Annex II
to Collateral Agreement
ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the
Collateral Agreement dated as of August 30, 2001 (the "Agreement"), among the
obligors parties thereto and the WILMINGTON TRUST COMPANY, as collateral trustee
(the "Collateral Trustee"), among others. The undersigned agrees for the benefit
of the Collateral Trustee and the Secured Parties (as defined in the Agreement)
as follows:
1. The undersigned will be bound by the terms of the Agreement and
will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Collateral Trustee promptly in
writing of the occurrence of any of the events described in Section 4.6(a) of
the Agreement.
3. The terms of Sections 4.7, 4.12, 5.3(a) and 5.7 of the Agreement
shall apply to it, mutatis mutandis, with respect to all actions that may be
required of it, or prohibited, pursuant to Section 4.7, 4.12, 5.3(a) or 5.7 of
the Agreement.
[NAME OF ISSUER]
By:___________________________________
Name:
Title:
Address for Notices:
______________________________________
______________________________________
Fax:__________________________________
