Exhibit 4.17
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SECURITY AGREEMENT
among
QUALITY DISTRIBUTION, LLC,
VARIOUS SUBSIDIARIES OF
QUALITY DISTRIBUTION, INC.
and
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch,
as Collateral Agent
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Dated as of November __, 2003
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Exhibit 4.17
SECURITY AGREEMENT
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SECURITY AGREEMENT, dated as of October __, 2003 (as the same may be
further amended, amended and restated, modified and/or supplemented from time to
time, this "Agreement"), among each of the undersigned (each, an "Assignor" and,
together with each other entity which becomes a party hereto pursuant to Section
11.13, collectively, the "Assignors") and CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands Branch, as Collateral Agent (in such capacity,
together with any successor collateral agent, the "Collateral Agent"), for the
benefit of the Secured Creditors (as defined below). Certain capitalized terms
as used herein are defined in Article X hereof. Except as otherwise defined
herein, all capitalized terms used herein and defined in the Credit Agreement
(as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
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WHEREAS, Quality Distribution, Inc. ("Holdings"), Quality
Distribution, LLC (the "Borrower"), various financial institutions from time to
time party thereto (such financial institutions, together with their successors
and assigns, and any lenders pursuant to any Credit Agreement referred to below,
being herein collectively called the "Lenders"), JPMorgan Chase Bank, as
Documentation Agent, (in such capacity, together with any successor
documentation agent, the "Documentation Agent"), Deutsche Bank Securities Inc.
and Bear Xxxxxxx Corporate Lending Inc., as Co-Syndication Agents (in such
capacity, together with any successor syndication agents, collectively, the
"Co-Syndication Agents"), and Credit Suisse First Boston, acting through its
Cayman Islands Branch, as Administrative Agent (in such capacity, together with
any successor administrative agent, the "Administrative Agent"), have entered
into a Credit Agreement, dated as of October __, 2003 (as amended, amended and
restated, modified and/or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans to, and the issuance of, and
participation in, Letters of Credit for the account of the Borrower, all as
contemplated therein (the Lenders, each Letter of Credit Issuer, the
Documentation Agent, the Co-Syndication Agents, the Administrative Agent and the
Collateral Agent are herein called the "Lender Creditors");
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Lenders or any affiliate thereof (each such Lender or affiliate,
even if the respective Lender subsequently ceases to be a Lender under the
Credit Agreement for any reason, together with such Lender's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors");
WHEREAS, the Borrower, as issuer, and the other Assignors (other than
Holdings), as guarantors, have heretofore entered into the Existing Senior
Subordinated Secured Notes Indenture (as defined below) with the trustee
thereunder (in such capacity, together with any successor trustee, the "Existing
Senior Subordinated Secured Notes Indenture Trustee"), providing for the
issuance of the Existing Senior Subordinated Secured Notes by the Borrower (with
the holders from time to time of such Existing Senior Subordinated Secured Notes
being herein called the "Existing Senior Subordinated Secured Noteholders");
WHEREAS, pursuant to the Holdings Guaranty, Holdings has guaranteed to
the Lender Creditors and the Other Creditors the payment when due of the
Guaranteed Obligations as described therein;
WHEREAS, pursuant to a Subsidiaries Guaranty, dated as of November __,
2003 (as amended, restated, modified and/or supplemented from time to time, the
"Subsidiaries Guaranty"), each Subsidiary Guarantor has jointly and severally
guaranteed to the Lender Creditors and the Other Creditors the payment when due
of the Guaranteed Obligations as described therein;
WHEREAS, pursuant to certain of the Existing Senior Subordinated
Secured Notes Documents, the Assignors (other than Holdings) have jointly and
severally guaranteed the payment when due of all obligations and liabilities of
the Borrower under or with respect to the Existing Senior Subordinated Secured
Notes Documents;
WHEREAS, it is a condition under the Existing Senior Subordinated
Secured Notes Indenture that each Assignor shall have executed and delivered to
the Collateral Agent this Agreement, providing for, inter alia, the grant of a
security interest to secure the Existing Senior Subordinated Secured Notes
Obligations on the terms set forth therein;
WHEREAS, it is a condition precedent to the making of Loans to the
Borrower and the issuance of, and participation in, Letters of Credit for the
account of the Borrower under the Credit Agreement and to the Other Creditors
entering into Interest Rate Protection Agreements and Other Hedging Agreements
that each Assignor shall have executed and delivered to the Collateral Agent
this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of, and participation in, Letters of
Credit for the account of the Borrower under the Credit Agreement and the
entering into by the Borrower Interest Rate Protection Agreements or Other
Hedging Agreements and, accordingly, desires to execute this Agreement in order
to satisfy the condition described in the preceding paragraph and to induce the
Lenders to make Loans to the Borrower and issue, and/or participate in, Letters
of Credit for the account of the Borrower and the Other Creditors to enter into
Interest Rate Protection Agreements or Other Hedging Agreements with the
Borrower ;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors (as defined below) and
hereby covenants and agrees with the Collateral Agent for the benefit of the
Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1 Grant of Security Interests . (a) As security for the prompt and
complete payment and performance when due of all of the Obligations (excluding
the Existing Senior Subordinated Secured Notes Obligations in the case of an
assignment, transfer, grant or pledge of
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Excluded Existing Senior Subordinated Secured Notes Collateral by any Assignor),
each Assignor does hereby assign and transfer unto the Collateral Agent for the
benefit of the Secured Creditors (excluding the Existing Senior Subordinated
Secured Notes Creditor in the case of any assignment, transfer, pledge or grant
of Excluded Existing Senior Subordinated Secured Notes Collateral by any
Assignor), and does hereby pledge and grant to the Collateral Agent for the
benefit of the Secured Creditors (excluding the Existing Senior Subordinated
Secured Notes Creditor in the case of any assignment, transfer, pledge or grant
of Excluded Existing Senior Subordinated Secured Notes Collateral by any
Assignor), a continuing security interest in, all of the right, title and
interest of such Assignor in, to and under all of the following personal
property and fixtures (and all rights therein) of such Assignor, or in which or
to which such Assignor has any rights, in each case, whether now existing or
hereafter from time to time acquired:
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to be deposited in
the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all Tangible
Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims, including, without limitation,
those set forth on Annex F hereto;
(vi) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such
Assignor, including but not limited to Domain Names and Trade Secret
Rights;
(vii) Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Deposit Accounts and all other demand, deposit, time,
savings, cash management, passbook and similar accounts maintained by such
Assignor with any Person and all monies, securities, Instruments and other
investments deposited or required to be deposited in any of the foregoing;
(xi) all Documents;
(xii) all General Intangibles;
(xiii) all Goods;
(xiv) all Instruments;
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(xv) all Inventory;
(xvi) all Investment Property;
(xvii) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xviii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of such Assignor
symbolized by the Marks;
(xix) all Patents;
(xx) all Permits;
(xxi) all Software and all Software licensing rights, all writings,
plans, specifications and schematics, all engineering drawings, customer
lists, goodwill and licenses, and all recorded data of any kind or nature,
regardless of the medium of recording;
(xxii) all Supporting Obligations;
(xxiii) all Tractor Trailers; and
(xxiv) all Proceeds and products of any and all of the foregoing (all
of the above, the "Collateral").
(b) Notwithstanding anything to the contrary contained above in
this Section 1 or elsewhere in this Agreement, no Excluded Existing Senior
Subordinated Secured Notes Collateral hereunder shall secure any of the Existing
Senior Subordinated Secured Notes Obligations (although the Excluded Existing
Senior Subordinated Secured Notes Collateral shall secure all other Obligations
hereunder).
(c) As security for the prompt and complete payment and
performance when due of all of the Existing Senior Subordinated Secured Notes
Obligations, each Assignor does hereby assign and transfer unto the Collateral
Agent and does hereby pledge and grant to the Collateral Agent for the benefit
of the Existing Senior Subordinated Secured Notes Creditor, a continuing
security interest in, all of the right, title and interest of such Assignor in,
to and under all of the Collateral (other than the Excluded Existing Senior
Subordinated Secured Notes Collateral), whether now existing or hereafter from
time to time acquired, subject to the Liens on such Collateral in favor of the
Collateral Agent for the benefit of the Lender Creditors and the Other
Creditors. It is understood and agreed that the assignment, transfer, pledge and
grant described in the preceding sentence has been incorporated herein (out of
an abundance of caution) to ensure that this Agreement, which first provides for
the Existing Senior Subordinated Secured Notes Obligations to be secured as
provided herein on the date hereof, validly gives rise to the grant of a
security interest securing the Existing Senior Subordinated Secured Notes
Obligations.
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(d) The security interest of the Collateral Agent under this
Agreement extends to all Collateral which any Assignor may acquire, or with
respect to which any Assignor may obtain rights, at any time during the term of
this Agreement.
(e) Notwithstanding anything to the contrary contained in Section
1.1(a) above, in no event shall the Collateral include, and no Assignor shall be
deemed to have granted a security interest in any of such Assignor's rights or
interests in any license, contract or agreement to which such Assignor is a
party or any of its rights or interests thereunder to the extent, but only to
the extent, that such a grant would, under the terms of such license, contract
or agreement or otherwise, result in a breach of the terms of, or constitute a
default under any license, contract or agreement to which such Assignor is a
party (other than to the extent that any such term would be rendered ineffective
pursuant to the UCC or any other applicable law (including the Bankruptcy Code)
or principles of equity); provided however, that (x) immediately upon the
ineffectiveness, lapse or termination of any such provision (as a result of a
change in law, receipt of an appropriate consent or otherwise), the Collateral
shall include, and such Assignor shall be deemed to have granted a security
interest in, all such rights and interests without any further action on the
part of such Assignor or any Secured Creditor as if such provision had never
been in effect and (y) the right to receive payments of money or other
consideration in respect of such license, contract or agreement shall not be
excluded from the security interest created hereunder. In the event that any
asset of the Assignor is excluded from the Collateral by virtue of this
paragraph, such Assignor, upon the request of the Collateral Agent, shall use
all reasonable efforts to enable such Assignor to provide a security interest in
such asset pursuant hereto as promptly as practicable.
1.2 Power of Attorney. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all moneys and claims for moneys due
or to become due to such Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable to protect the interests
of the Secured Creditors, which appointment as attorney is coupled with an
interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1 Necessary Filings. (i) All filings, registrations, recordings and
other actions necessary or appropriate to create, preserve, protect and perfect
the security interest granted by such Assignor to the Collateral Agent for the
benefit of the Secured Creditors (excluding the Existing Senior Subordinated
Secured Notes Creditor in the case of any assignment, transfer, pledge or grant
of Excluded Existing Senior Subordinated Secured Notes Collateral by any
Assignor) hereby in respect of the Collateral have been accomplished or (x) in
the case of
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Collateral for which it is necessary to file a UCC-1 financing statement (or
appropriate local equivalent) in order to perfect a security interest in such
Collateral, such filings will be accomplished within the time limits set forth
in Section 13.19 of the Credit Agreement (or to the extent such Collateral is
acquired after the Initial Borrowing Date, within 5 days following the date of
the acquisition of such Collateral), and (y) in the case of Collateral for which
a certificate of title has been issued and for which it is necessary to record a
security interest upon such certificate of title in order to perfect a security
interest in such Collateral, such recordings will be accomplished within 10 days
following the Initial Borrowing Date (or to the extent such Collateral is
acquired after the Initial Borrowing Date, within 30 days following the date of
the acquisition of such Collateral) or such later date as the Collateral Agent
shall determine in its sole discretion, and (ii) the security interest granted
to the Collateral Agent pursuant to this Agreement in and to the Collateral
constitutes (or, in the case of Collateral subject to clauses (x) and (y) above,
upon compliance with such clauses, will constitute) a perfected security
interest therein prior to the rights of all other Persons therein and subject to
no other Liens (other than Permitted Liens) and is entitled to all the rights,
priorities and benefits afforded by the UCC or other relevant law as enacted in
any relevant jurisdiction to perfected security interests.
2.2 No Liens. Such Assignor is, and as to all Collateral acquired by
it from time to time after the date hereof such Assignor will be, the owner of
all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Permitted Liens and Liens
created under this Agreement), and such Assignor shall defend the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein adverse to the Collateral Agent.
2.3 Other Financing Statements. Except as may be permitted under
Section 13.19 of the Credit Agreement, as of the date hereof, there is no
financing statement evidencing a valid security interest against Holdings or any
of its Subsidiaries (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than (x) those created under this Agreement, (y)
financing statements filed in respect of Permitted Liens and (z) those with
respect to which appropriate termination statements executed by the secured
lender thereunder have been delivered or shall be delivered to the Collateral
Agent pursuant to the terms of the Secured Debt Agreements), and so long as the
Termination Date has not occurred, such Assignor will not execute or authorize
to be filed in any public office any financing statement (or similar statement
or instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except financing statements filed or to be filed in
respect of and covering the security interests granted hereby by such Assignor
or in connection with Permitted Liens.
2.4 Chief Executive Office; Record Locations. The chief executive
office of such Assignor is, on the date of this Agreement, located at the
address indicated on Annex A hereto for such Assignor. During the period of the
four calendar months preceding the date of this Agreement, the chief executive
office of such Assignor has not been located at any address other than that
indicated on Annex A in accordance with the immediately preceding sentence, in
each case unless each such other address is also indicated on Annex A hereto for
such Assignor.
2.5 Location of Inventory and Equipment. All Inventory and Equipment
held on the date hereof, or held at any time during the four calendar months
prior to the date hereof, by
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each Assignor is located at one of the locations shown on Annex B hereto or is
in transit between such locations for such Assignor.
2.6 Legal Names; Type of Organization (and Whether a Registered
Organization and/or a Transmitting Utility); Jurisdiction of Organization;
Location; Organizational Identification Numbers; Changes Thereto; etc. The exact
legal name of each Assignor, the type of organization of such Assignor, whether
or not such Assignor is a Registered Organization, the jurisdiction of
organization of such Assignor, such Assignor's Location, the organizational
identification number (if any) of such Assignor, and whether or not such
Assignor is a Transmitting Utility, is listed on Annex C hereto for such
Assignor. Such Assignor shall not change its legal name, its type of
organization, its status as a Registered Organization (in the case of a
Registered Organization), its status as a Transmitting Utility or as a Person
which is not a Transmitting Utility, as the case may be, its jurisdiction of
organization, its Location, or its organizational identification number (if any)
from that used on Annex C hereto, except that any such changes shall be
permitted (so long as not in violation of the applicable requirements of the
Secured Debt Agreements and so long as same do not involve (x) a Registered
Organization ceasing to constitute same or (y) such Assignor changing its
jurisdiction of organization or Location from the United States or a State
thereof to a jurisdiction of organization or Location, as the case may be,
outside the United States or a State thereof) if (i) it shall have given to the
Collateral Agent not less than 15 days' prior written notice of each change to
the information listed on Annex C (as adjusted for any subsequent changes
thereto previously made in accordance with this sentence), together with a
supplement to Annex C which shall correct all information contained therein for
such Assignor, and (ii) in connection with the respective such change or
changes, it shall have taken all action reasonably requested by the Collateral
Agent to maintain the security interests of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect. In addition, to the extent that such Assignor does not
have an organizational identification number on the date hereof and later
obtains one, such Assignor shall promptly thereafter notify the Collateral Agent
of such organizational identification number and shall take all actions
reasonably satisfactory to the Collateral Agent to the extent necessary to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby fully perfected and in full force and effect.
2.7 Trade Names; etc. As of the date hereof, such Assignor has or
operates in any jurisdiction under, or within the five year period preceding the
date of this Agreement (or, if shorter, the period of time such entity has been
a Subsidiary of Holdings) has had or has operated in any jurisdiction under, no
trade names, fictitious names or other names except its legal name as specified
in Annex C and such other trade or fictitious names as are listed on Annex D
hereto for such Assignor. Such Assignor shall not assume or operate in any
jurisdiction under any new trade, fictitious or other name until (i) it shall
have given to the Collateral Agent not less than 15 days' prior written notice
of its intention so to do, clearly describing such new name and the
jurisdictions in which such new name will be used and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new name, it shall have taken all action
reasonably requested by the Collateral Agent to maintain the security interest
of the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect.
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2.8 Certain Significant Transactions. During the one year period
preceding the date of this Agreement, no Person shall have merged or
consolidated with or into any Assignor, and no Person shall have liquidated
into, or transferred all or substantially all of its assets to, any Assignor, in
each case except as described in Annex E hereto. With respect to any
transactions so described in Annex E hereto, the respective Assignor shall have
furnished such information with respect to the Person (and the assets of the
Person and locations thereof) which merged with or into or consolidated with
such Assignor, or was liquidated into or transferred all or substantially all of
its assets to such Assignor, and shall have furnished to the Collateral Agent
such UCC lien searches as may have been requested with respect to such Person
and its assets, to establish that no security interest (excluding Permitted
Liens) continues perfected on the date hereof with respect to any Person
described above (or the assets transferred to the respective Assignor by such
Person), including without limitation pursuant to Section 9-316(a)(3) of the
UCC.
2.9 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof,
such Assignor does not own, or expect to acquire, any property which
constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut.
If at any time after the date of this Agreement such Assignor owns, acquires or
obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor
shall furnish the Collateral Agent with prompt written notice thereof (which
notice shall describe in reasonable detail the As-Extracted Collateral and/or
Timber-to-be-Cut and the locations thereof) and shall take all actions as may be
deemed reasonably necessary or desirable by the Collateral Agent to perfect the
security interest of the Collateral Agent therein.
2.10 Collateral in the Possession of a Bailee. If any Inventory or
other Goods are at any time in the possession of a bailee, such Assignor shall
promptly notify the Collateral Agent thereof and, if requested by the Collateral
Agent, shall use its reasonable best efforts to promptly obtain an
acknowledgment from such bailee, in form and substance reasonably satisfactory
to the Collateral Agent, that the bailee holds such Collateral for the benefit
of the Collateral Agent and shall act upon the instructions of the Collateral
Agent, without the further consent of such Assignor. The Collateral Agent agrees
with such Assignor that the Collateral Agent shall not give any such
instructions unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by the respective Assignor with
respect to any such bailee.
2.11 Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1 Additional Representations and Warranties . As of the time when
each of its Accounts arises, each Assignor shall be deemed to have represented
and warranted that each such Account, and all records, papers and documents
relating thereto (if any) are genuine and in
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all material respects what they purport to be, and that all papers and documents
(if any) relating thereto (i) will represent the genuine legal, valid and
binding (except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or law) obligation of the account debtor
evidencing indebtedness unpaid and owed by the respective account debtor arising
out of the performance of labor or services or the sale or lease and delivery of
the merchandise listed therein, or both, (ii) will be the only original writings
evidencing and embodying such obligation of the account debtor named therein
(other than copies created for general accounting purposes), (iii) will evidence
true and valid obligations, enforceable in accordance with their respective
terms (except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or law)) and (iv) will be in compliance
and will conform in all material respects with all applicable federal, state and
local laws and applicable laws of any relevant foreign jurisdiction.
3.2 Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense satisfactory and complete records of its Accounts and
Contracts, including, but not limited to, originals or copies of all
documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon, all merchandise returned and all
other dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times upon prior notice to such
Assignor and otherwise in accordance with the Credit Agreement. Upon the
occurrence and during the continuance of an Event of Default and at the request
of the Collateral Agent, such Assignor shall, at its own cost and expense,
deliver all tangible evidence of its Accounts and Contract Rights (including,
without limitation, all documents evidencing the Accounts and all Contracts) and
such books and records to the Collateral Agent or to its representatives (copies
of which evidence and books and records may be retained by such Assignor). Each
Assignor shall legend, in form and manner satisfactory to the Collateral Agent,
all leases of Tractor Trailers to Program Affiliates, as well as all documents
of such Assignor evidencing or pertaining to such leases, with an appropriate
reference to the fact that such lease has been assigned to the Collateral Agent
and that the Collateral Agent has a security interest therein. In addition, if
the Collateral Agent so directs, such Assignor shall legend, in form and manner
satisfactory to the Collateral Agent, the Accounts and all other Contracts, as
well as books, records and documents (if any) of such Assignor evidencing or
pertaining to such Accounts and Contracts with an appropriate reference to the
fact that such Accounts and Contracts have been assigned to the Collateral Agent
and that the Collateral Agent has a security interest therein.
3.3 Direction to Account Debtors; Contracting Parties; etc. Upon the
occurrence and during the continuance of an Event of Default, if the Collateral
Agent so directs any Assignor, such Assignor agrees (x) to cause all payments on
account of the Accounts and Contracts to be made directly to the Cash Collateral
Account, (y) that the Collateral Agent may, at its option, directly notify the
obligors with respect to any Accounts and/or under any Contracts to make
payments with respect thereto as provided in the preceding clause (x), and (z)
that the Collateral Agent may enforce collection of any such Accounts and
Contracts and may adjust, settle or compromise the amount of payment thereof, in
the same manner and to the same extent
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as such Assignor. Without notice to or assent by any Assignor, the Collateral
Agent may, upon the occurrence and during the continuance of an Event of
Default, apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account toward the payment of the Obligations in the manner provided
in Section [9.4] of this Agreement. The reasonable costs and expenses of
collection (including reasonable attorneys' fees), whether incurred by an
Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The
Collateral Agent shall deliver a copy of each notice referred to in the
preceding clause (y) to the relevant Assignor, provided that (x) the failure by
the Collateral Agent to so notify such Assignor shall not affect the
effectiveness of such notice or the other rights of the Collateral Agent created
by this Section 3.3 and (y) no such notice shall be required if an Event of
Default of the type described in Section 10.05 of the Credit Agreement has
occurred and is continuing.
3.4 Modification of Terms; etc. No Assignor shall rescind or cancel
any indebtedness evidenced by any Account or under any Contract, or modify any
material term thereof or make any material adjustment with respect thereto, or
extend or renew the same, or compromise or settle any material dispute, claim,
suit or legal proceeding relating thereto, or sell any Account or Contract, or
interest therein, without the prior written consent of the Collateral Agent,
except (i) as permitted by Section 3.5 and (ii) to the extent that the aggregate
cost to Holdings and its Subsidiaries of any such rescission, cancellation,
modification, adjustment, extension, compromise, settlement or sale is not
reasonably likely to have a Material Adverse Effect. No Assignor will do nothing
to impair in any material respect the rights of the Collateral Agent in the
Accounts or Contracts.
3.5 Collection. Each Assignor shall endeavor in accordance with
reasonable business practices to cause to be collected from the account debtor
named in each of its Accounts or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Account or Contract, and
apply forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account or under such Contract. Except as otherwise
directed by the Collateral Agent after the occurrence and during the
continuation of an Event of Default, any Assignor may allow in the ordinary
course of business as adjustments to amounts owing under its Accounts and
Contracts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance or unperformed service, which
such Assignor finds appropriate in accordance with reasonable business judgment
and (ii) a refund or credit due as a result of returned or damaged merchandise
or improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, reasonable attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6 Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral, such Assignor will within 10 Business Days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
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3.7 Assignors Remain Liable Under Accounts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Accounts to observe and perform all of the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to such Accounts. Neither the Collateral Agent nor any
other Secured Creditor shall have any obligation or liability under any Account
(or any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any other Secured Creditor
of any payment relating to such Account pursuant hereto, nor shall the
Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any Account
(or any agreement giving rise thereto), to make any payment, to make any inquiry
as to the nature or the sufficiency of any payment received by them or as to the
sufficiency of any performance by any party under any Account (or any agreement
giving rise thereto), 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 them or to which they may be entitled at any time or times.
3.8 Assignors Remain Liable Under Contracts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
Contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, 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 them or to which they may be entitled at any time or times.
3.9 Deposit Accounts; Etc. (a) No Assignor maintains, or at any time
after the date of this Agreement shall establish or maintain, any demand, time,
savings, passbook or similar account, except for such accounts maintained with a
bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in
accordance with Section 9-304 of the UCC) is within a State of the United
States.Annex L hereto accurately sets forth, as of the date of this Agreement,
for each Assignor, each Deposit Account maintained by such Assignor (including a
description thereof and the respective account number), the name of the
respective bank with which such Deposit Account is maintained, and the
jurisdiction of the respective bank with respect to such Deposit Account. For
each Deposit Account (other than the Cash Collateral Account or any other
Deposit Account maintained with the Collateral Agent), the respective Assignor
shall cause the bank with which the Deposit Account is maintained to execute and
deliver to the Collateral Agent, within 30 days after the date of this Agreement
or, if later, at the time of the establishment of the respective Deposit
Account, a "control agreement" in the form of Annex M hereto (appropriately
completed), with such changes thereto as may be acceptable to the Collateral
Agent. If any bank with which a Deposit Account is maintained refuses to, or
does not, enter into such a "control agreement", then the respective Assignor
shall promptly (and in any event within 30 days after the date of this Agreement
or, if later, 30 days after the
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establishment of such account) close the respective Deposit Account and transfer
all balances therein to the Cash Collateral Account or another Deposit Account
meeting the requirements of this Section 3.9. If any bank with which a Deposit
Account is maintained refuses to subordinate all its claims with respect to such
Deposit Account to the Collateral Agent's security interest therein on terms
satisfactory to the Collateral Agent, then the Collateral Agent, at its option,
may (x) require that such Deposit Account be terminated in accordance with the
immediately preceding sentence or (y) agree to a "control agreement" without
such subordination, provided that in such event the Collateral Agent may at any
time, at its option, subsequently require that such Deposit Account be
terminated (within 30 days after notice from the Collateral Agent) in accordance
with the requirements of the immediately preceding sentence.
(b) After the date of this Agreement, no Assignor shall establish
any new demand, time, savings, passbook or similar account, except for Deposit
Accounts established and maintained with banks and meeting the requirements of
preceding clause (a). At the time any such Deposit Account is established, the
appropriate "control agreement" shall be entered into in accordance with the
requirements of preceding clause (a) and the respective Assignor shall furnish
to the Collateral Agent a supplement to Annex L hereto containing the relevant
information with respect to the respective Deposit Account and the bank with
which same is established.
3.10 Letter-of-Credit Rights. If any Assignor is at any time a
beneficiary under a letter of credit with a stated amount of $1,000,000 or more,
such Assignor shall promptly notify the Collateral Agent thereof and, at the
request of the Collateral Agent, such Assignor shall, pursuant to an agreement
in form and substance reasonably satisfactory to the Collateral Agent, use its
reasonable best efforts to (i) arrange for the issuer and any confirmer of such
letter of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under such letter of credit or (ii) arrange for the
Collateral Agent to become the transferee beneficiary of such letter of credit,
with the Collateral Agent agreeing, in each case, that the proceeds of any
drawing under the letter of credit are to be applied as provided in this
Agreement after the occurrence and during the continuance of an Event of
Default.
3.11 Commercial Tort Claims. Each Commercial Tort Claim of any
Assignor in an amount (taking the greater of the aggregate claimed damages
thereunder or the reasonably estimated value thereof, in each case less the
amount of any claim against such Assignor arising from the same facts and
circumstances as such Commercial Tort Claim) of $1,000,000 or more in existence
on the date of this Agreement is described in Annex F hereto. If any Assignor
shall at any time after the date of this Agreement acquire a Commercial Tort
Claim in an amount (taking the greater of the aggregate claimed damages
thereunder or the reasonably estimated value thereof, in each case less the
amount of any claim against such Assignor arising from the same facts and
circumstances as such Commercial Tort Claim) of $1,000,000 or more, such
Assignor shall promptly notify the Collateral Agent thereof in a writing signed
by such Assignor and describing the details thereof and shall grant to the
Collateral Agent in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form
and substance reasonably satisfactory to the Collateral Agent.
3.12 Chattel Paper. Upon the request of the Collateral Agent made at
any time or from time to time, each Assignor shall promptly furnish to the
Collateral Agent a list of all
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Electronic Chattel Paper held or owned by such Assignor. Furthermore, if
requested by the Collateral Agent, each Assignor shall promptly take all actions
which are reasonably practicable so that the Collateral Agent has "control" of
all Electronic Chattel Paper in accordance with the requirements of Section
9-105 of the UCC. Each Assignor will promptly (and in any event within 10 days)
following any request by the Collateral Agent, deliver all of its Tangible
Chattel Paper to the Collateral Agent.
3.13 Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, certificates, reports
and other assurances or instruments and take such further steps, including any
and all actions as may be necessary or required under the Federal Assignment of
Claims Act, relating to its Accounts, Contracts, Instruments and other property
or rights covered by the security interest hereby granted, as the Collateral
Agent may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING
TRADEMARKS AND DOMAIN NAMES
4.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use the registered Marks and Domain Names listed in Annex G hereto
for such Assignor and that said listed Marks and Domain Names include all United
States marks and applications for United States marks registered in the United
States Patent and Trademark Office and all Domain Names that such Assignor owns
or uses in connection with its business as of the date hereof. Each Assignor
represents and warrants that it owns, is licensed to use or otherwise has the
right to use, all Marks and Domain Names that it uses. Each Assignor further
warrants that it has no knowledge of any third party claim received by it that
any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any trademark, service xxxx or trade name of any
other Person other than as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use all U.S. trademark registrations and applications and Domain
Name registrations listed in Annex G hereto and that said registrations are
valid, subsisting, have not been canceled and that such Assignor is not aware of
any material third-party claim that any of said registrations is invalid or
unenforceable, and is not aware that there is any reason that any of said
registrations is invalid or unenforceable, and is not aware that there is any
reason that any of said applications will not mature into registrations. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of an Event of Default, any
document which may be required by the United States Patent and Trademark Office
or similar registrar in order to effect an absolute assignment of all right,
title and interest in each Xxxx and/or Domain Name, and record the same.
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4.2 Licenses and Assignments. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Xxxx or Domain Name that is material to the business of such
Assignor absent prior written approval of the Collateral Agent.
4.3 Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is, or may be, infringing or diluting or
otherwise violating any of such Assignor's rights in and to any Xxxx or Domain
Name in any manner that could reasonably be expected to have a Material Adverse
Effect, or with respect to any party claiming that such Assignor's use of any
Xxxx or Domain Name material to such Assignor's business violates in any
material respect any property right of that party. Each Assignor further agrees
to prosecute in accordance with reasonable business practices any Person
infringing any Xxxx or Domain Name in any manner that could reasonably be
expected to have a Material Adverse Effect.
4.4 Preservation of Marks and Domain Names. Each Assignor agrees to
use its Marks and Domain Names which are material to such Assignor's business in
interstate commerce during the time in which this Agreement is in effect and to
take all such other actions as are reasonably necessary to preserve such Marks
as trademarks or service marks under the laws of the United States (other than
any such Marks which are no longer used or useful in its business or
operations).
4.5 Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents reasonably required to maintain all
Xxxx and/or Domain Name registrations, including but not limited to affidavits
of use and applications for renewals of registration in the United States Patent
and Trademark Office for all of its material registered Marks, and shall pay all
fees and disbursements in connection therewith and shall not abandon any such
filing of affidavit of use or any such application of renewal prior to the
exhaustion of all administrative and judicial remedies without prior written
consent of the Collateral Agent (other than with respect to registrations and
applications deemed by such Assignor in its reasonable business judgment to be
no longer prudent to pursue or maintain).
4.6 Future Registered Marks and Domain Names. If any Xxxx registration
is issued hereafter to any Assignor as a result of any application now or
hereafter pending before the United States Patent and Trademark Office or any
Domain Name is registered by Assignor, within 30 days of receipt of such
certificate or similar indicia of ownership, such Assignor shall deliver to the
Collateral Agent a copy of such registration certificate or similar indicia of
ownership, and a grant of a security interest in such Xxxx and/or Domain Name,
to the Collateral Agent and at the expense of such Assignor, confirming the
grant of a security interest in such Xxxx and/or Domain Name to the Collateral
Agent hereunder, the form of such security to be substantially in the form of
Annex N hereto or in such other form as may be reasonably satisfactory to the
Collateral Agent.
4.7.Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks
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and Domain Names, together with all trademark rights and rights of protection to
the same, vested in the Collateral Agent for the benefit of the Secured
Creditors (excluding the Existing Senior Subordinated Secured Notes Creditor, in
the case of Marks and rights therein owned or held by any Assignor which
constitute Excluded Existing Senior Subordinated Secured Notes Collateral), in
which event such rights, title and interest shall immediately vest, in the
Collateral Agent for the benefit of the Secured Creditors, and the Collateral
Agent shall be entitled to exercise the power of attorney referred to in Section
4.1 hereof to execute, cause to be acknowledged and notarized and record said
absolute assignment with the applicable agency or registrar; (ii) take and use
or sell the Marks or Domain Names and the goodwill of such Assignor's business
symbolized by the Marks or Domain Names and the right to carry on the business
and use the assets of such Assignor in connection with which the Marks or Domain
Names have been used; and (iii) direct such Assignor to refrain, in which event
such Assignor shall refrain, from using the Marks or Domain Names in any manner
whatsoever, directly or indirectly, and such Assignor shall execute such further
documents that the Collateral Agent may reasonably request to further confirm
this and to transfer ownership of the Marks or Domain Names and registrations
and any pending trademark applications in the United States Patent and Trademark
Office or applicable Domain Name registrar to the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of all rights in
(i) all Trade Secret Rights, (ii) the Patents listed in Annex H hereto for such
Assignor and that said Patents include all the United States patents and
applications for United States patents that such Assignor owns as of the date
hereof and (iii) the Copyrights listed in Annex I hereto for such Assignor and
that said Copyrights include all the United States copyrights registered with
the United States Copyright Office and applications to United States copyrights
that such Assignor owns as of the date hereof. Each Assignor further warrants
that it has no knowledge of any material third party claim that any aspect of
such Assignor's present or contemplated business operations infringes or will
infringe any patent of any other Person or such Assignor has misappropriated any
trade secret or proprietary information which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of any Event of Default,
any document which may be required by the United States Patent and Trademark
Office or the United States Copyright Office in order to effect an absolute
assignment of all right, title and interest in each Patent or Copyright, and to
record the same.
5.2 Licenses and Assignments. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Patent or Copyright that is material to the business of such
Assignor absent prior written approval of the Collateral Agent.
5.3 Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor
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with respect to any infringement, contributing infringement or active inducement
to infringe or other violation of such Assignor's rights in any Patent or
Copyright or to any claim that the practice of any Patent or use of any
Copyright violates any property right of a third party, or with respect to any
misappropriation of any Trade Secret Right or any claim that practice of any
Trade Secret Right violates any property right of a third party, in each case,
in any manner which, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. Each Assignor further agrees,
absent direction of the Collateral Agent to the contrary, to diligently
prosecute, in accordance with its reasonable business judgment, any Person
infringing any Patent or Copyright or any Person misappropriating any Trade
Secret Right, in each case to the extent that such infringement or
misappropriation, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.4 Maintenance of Patents or Copyrights. At its own expense, each
Assignor shall make timely payment of all post-issuance fees required to
maintain in force its rights under each Patent or Copyright, absent prior
written consent of the Collateral Agent (other than any such Patents or
Copyrights which are no longer used or are deemed by such Assignor in its
reasonable business judgment to no longer be useful in its business or
operations).
5.5 Prosecution of Patent or Copyright Applications. At its own
expense, each Assignor shall prosecute, in accordance with reasonable business
practices, all material applications for (i) United States Patents listed in
Annex H hereto and (ii) Copyrights listed on Annex I hereto, in each case for
such Assignor and shall not abandon any such application prior to exhaustion of
all administrative and judicial remedies (other than applications that are
deemed by such Assignor in its reasonable business judgment to no longer be
necessary in the conduct of the Assignor's business), absent written consent of
the Collateral Agent.
5.6 Other Patents and Copyrights. Within 30 days of the acquisition or
issuance of a United States Patent, registration of a Copyright, or acquisition
of a registered Copyright, or of filing of an application for a United States
Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent
a copy of said Copyright or Patent, or certificate or registration of, or
application therefor, as the case may be, with a grant of a security interest as
to such Patent or Copyright, as the case may be, to the Collateral Agent and at
the expense of such Assignor, confirming the grant of a security interest, the
form of such grant of a security interest to be substantially in the form of
Annex O or P hereto, as appropriate, or in such other form as may be reasonably
satisfactory to the Collateral Agent.
5.7 Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title, and
interest of such Assignor in each of the Patents and Copyrights vested in the
Collateral Agent for the benefit of the Secured Creditors (excluding the
Existing Senior Subordinated Secured Notes Creditor, in the case of Patents and
Copyrights and rights therein owned or held by any Assignor which constitute
Excluded Existing Senior Subordinated Secured Notes Collateral), in which event
such right, title, and interest shall immediately vest in the Collateral Agent
for the benefit of the Secured Creditors, in which case the Collateral Agent
shall be entitled to exercise the power of attorney referred to in Section 5.1
hereof to execute, cause to be acknowledged and notarized and to record said
absolute assignment with the applicable agency; (ii) take and practice or sell
the Patents and Copyrights;
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and (iii) direct such Assignor to refrain, in which event such Assignor shall
refrain, from practicing the Patents and using the Copyrights directly or
indirectly, and such Assignor shall execute such further documents as the
Collateral Agent may reasonably request further to confirm this and to transfer
ownership of the Patents and Copyrights to the Collateral Agent for the benefit
of the Secured Creditors.
ARTICLE VI
SPECIAL PROVISIONS CONCERNING TRACTOR TRAILERS
6.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true, lawful, sole and exclusive owner of
or otherwise has the right to use the Tractor Trailers of such Assignor listed
in Part A of Annex J hereto and that said listed Tractor Trailers constitute all
the Tractor Trailers that such Assignor presently owns or uses in connection
with its business. Each Assignor represents and warrants that it is the true,
lawful, sole and exclusive owner of the Tractor Trailers of such Assignor listed
on Parts B and C of Annex J hereto and that said listed Tractor Trailers
constitute all the Tractor Trailers that such Assignor owns in connection with
its business as of the Initial Borrowing Date. Each Assignor represents and
warrants that upon the recordation of a security interest in favor of the
Collateral Agent on the certificate of title for each Tractor Trailer listed on
Parts B and C of Annex J and the filing of such certificates of title in the
state or province specified for such Tractor Trailer on Parts B or C, as the
case may be, of Annex J (which recordations have been made if this
representation and warranty is being made (x) in the case of a recordation of a
certificate of title for a Tractor Trailer listed on Part B of Annex J, on or
prior to the Initial Borrowing Date and (y) in the case of a recordation of a
certificate of the title for a Tractor Trailer listed on Part C of Annex J, on
or after the 90th day following the Initial Borrowing Date), all filings,
registrations and recordings necessary or appropriate to perfect the security
interest granted to the Collateral Agent for the benefit of the Secured
Creditors (excluding the Existing Senior Subordinated Secured Notes Creditor, in
the case of Tractor Trailers and rights therein owned or held by any Assignor
which constitute Excluded Existing Senior Subordinated Secured Notes Collateral)
in the Tractor Trailers listed on Part B of Annex J and covered by this
Agreement will have been accomplished, and such security interests shall be
perfected under applicable law. Each Assignor agrees to execute all
documentation reasonably required to effect such recordations and to cause the
filing of the relevant certificates of title with the appropriate state or
provincial governmental agency. Each Assignor hereby grants to the Collateral
Agent an absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by the
relevant governmental agency of any state or province in order to effect an
absolute assignment of all right, title and interest in each Tractor Trailer,
and register the same.
6.2 Maintenance of Registration. Each Assignor shall, at its own
expense and in accordance with reasonable business practices, process all
documents required by the relevant state and provincial governmental agencies to
maintain vehicle registrations, for all of its owned Tractor Trailers.
6.3 Subsequently Acquired Tractor Trailers. Within 90 days following
the acquisition of any Tractor Trailer (or such later date as the Collateral
Agent shall determine in its sole
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discretion), the relevant Assignor shall, at its own expense, cause a security
interest in favor of the Collateral Agent to be recorded on the certificate of
title for such Tractor Trailer and cause each such certificate of title to be
filed in the relevant state or province in which such Tractor Trailer is
registered. Each Assignor agrees to execute all documentation reasonably
required to effect such recordations and to cause the filing of relevant
certificates of title with the appropriate state or provincial governmental
agency.
6.4 Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Tractor Trailers, vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
rights, title and interest shall immediately vest, in the Collateral Agent for
the benefit of the Secured Creditors, and the Collateral Agent shall be entitled
to exercise the power of attorney referred to in Section 6.1 to execute, cause
to be acknowledged and notarized and to record said absolute assignment with the
applicable agency; (ii) take and use or sell the Tractor Trailers; and (iii)
request such Assignor to (whereupon such Assignor shall) deliver all of the
certificates of title for each Tractor Trailer owned by such Assignor to the
Collateral Agent.
6.5 Further Assurances. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its owned Tractor
Trailers, documents of title, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments and take such further steps relating
to the Tractor Trailers constituting Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Tractor Trailers constituting Collateral.
ARTICLE VII
PROVISIONS CONCERNING ALL COLLATERAL
7.1 Protection of Collateral Agent's Security. Each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at such Assignor's own expense to the extent and in the
manner provided in the Secured Debt Agreements; all policies or certificates
with respect to such insurance (and any other insurance maintained by such
Assignor); (i) shall be endorsed to the Collateral Agent's satisfaction for the
benefit of the Collateral Agent (including, without limitation, by naming the
Collateral Agent as loss payee and naming each of the the Collateral Agent and
the other Secured Creditors as additional insureds); (ii) shall state that such
insurance policies shall not be cancelled or revised without 30 days' prior
written notice thereof by the insurer to the Collateral Agent; and (iii)
certified copies of such policies or certificates shall be deposited with the
Collateral Agent to the extent, at the times and in the manner specified in the
Credit Agreement. If any Assignor shall fail to insure its Inventory and
Equipment in accordance with the preceding sentence, or if any Assignor shall
fail to so endorse and deposit all policies or certificates with respect
thereto, the Collateral Agent shall have the right (but shall be under no
obligation) to procure such insurance and such
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Assignor agrees to promptly reimburse the Collateral Agent for all costs and
expenses of procuring such insurance. Except as otherwise permitted to be
retained or expended by the relevant Assignor pursuant to the Credit Agreement
(or, after the Credit Document Obligations Termination Date, any other Secured
Debt Agreement), the Collateral Agent shall, upon receipt of any proceeds from
insurance maintained by any Assignor, apply such proceeds in accordance with the
Credit Agreement (or, after the Credit Document Obligations Termination Date, in
accordance with the instructions of the Required Secured Creditors), or after
the Obligations have been accelerated or otherwise become due and payable, with
Section 8.4. Each Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of such Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
7.2 Warehouse Receipts Non-Negotiable. To the extent practicable, each
Assignor agrees that if any warehouse receipt or receipt in the nature of a
warehouse receipt is issued with respect to any of its Inventory, such Assignor
shall request that such warehouse receipt or receipt in the nature thereof shall
not be "negotiable" (as such term is used in Section 7-104 of the UCC as in
effect in any relevant jurisdiction or under other relevant law).
7.3 Additional Information. Each Assignor will, at its own expense,
from time to time upon the reasonable request of the Collateral Agent, promptly
(and in any event within 10 days (or, if no Default or Event of Default has
occurred and is continuing, within 15 days) after its receipt of the respective
request) furnish to the Collateral Agent such information with respect to the
Collateral (including the identity of the Collateral or such components thereof
as may have been requested by the Collateral Agent, the value and location of
such Collateral, etc.) as may be requested by the Collateral Agent. Without
limiting the forgoing, each Assignor agrees that it shall promptly (and in any
event within 10 days (or, if no Default or Event of Default has occurred and is
continuing, within 15 days) after its receipt of the respective request) furnish
to the Collateral Agent such updated Annexes hereto as may from time to time be
reasonably requested by the Collateral Agent.
7.4 Further Actions. Each Assignor will, at its own expense and upon
the reasonable request of the Collateral Agent, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
lists, descriptions and designations of its Collateral, warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, certificates, reports and other
assurances or instruments and take such further steps relating to the Collateral
and other property or rights covered by the security interest hereby granted,
which the Collateral Agent deems reasonably appropriate or advisable to perfect,
preserve or protect its security interest in the Collateral.
7.5 Financing Statements. Each Assignor agrees to execute and deliver
to the Collateral Agent such financing statements, in form reasonably acceptable
to the Collateral Agent, as the Collateral Agent may from time to time
reasonably request or as are reasonably necessary or desirable in the opinion of
the Collateral Agent to establish and maintain a valid, enforceable, first
priority perfected security interest in the Collateral as provided herein and
the other rights and security contemplated hereby. Each Assignor will pay any
applicable filing fees,
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recordation taxes and related expenses relating to its Collateral. Each Assignor
hereby authorizes the Collateral Agent to file any such financing statements
without the signature of such Assignor where permitted by law (and such
authorization includes describing the Collateral as "all assets" of such
Assignor).
ARTICLE VIII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
8.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law and under the other provisions of this
Agreement, shall have all rights as a secured creditor under any UCC, and such
additional rights and remedies to which a secured creditor is entitled under the
laws in effect in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the Accounts
and the Contracts) constituting the Collateral to make any payment required
by the terms of such agreement, instrument or other obligation directly to
the Collateral Agent and may exercise any and all remedies of such Assignor
in respect of such Collateral;
(iii) instruct all banks which have entered into a control
agreement with the Collateral Agent to transfer all monies, securities and
instruments held by such depository bank to the Cash Collateral Account and
withdraw all monies, securities and instruments in the Cash Collateral
Account for application to the Obligations in accordance with Section 8.4;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 8.2 hereof, or
direct such Assignor to sell, assign or otherwise liquidate any or all of
the Collateral or any part thereof, and, in each case, take possession of
the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the Collateral
Agent at any reasonable place or places designated by the Collateral Agent,
in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered
to the Collateral Agent;
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(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action
by the Collateral Agent as provided in Section 8.2 hereof; and
(z) while the Collateral shall be so stored and kept,
provide such guards, other security and maintenance services as
shall be reasonably necessary to protect the same and to preserve
and maintain it in good condition;
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Domain Names, Patents or Copyrights included
in the Collateral for such term and on such conditions and in such manner
as the Collateral Agent shall in its sole judgment determine;
(vii) apply any monies constituting Collateral or proceeds
thereof in accordance with the provisions of Section 8.4; and
(viii) take any other action as specified in clauses (1) through
(5), inclusive, of Section 9-607 of the UCC;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. By
accepting the benefits of this Agreement and each other Security Document, the
Secured Creditors expressly acknowledge and agree that this Agreement and each
other Security Document may be enforced only by the action of the Collateral
Agent acting upon the instructions of the Required Secured Creditors and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Agreement or any other Security Document or to realize upon the
security to be granted hereby or thereby, it being understood and agreed that
such rights and remedies shall be exercised exclusively by the Collateral Agent
for the benefit of the Secured Creditors upon the terms of this Agreement and
the other Security Documents.
8.2 Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 8.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such sale, lease or other disposition which shall be a private
sale or other private proceedings permitted by such requirements shall be made
upon not less than 10 days' written notice to the relevant Assignor specifying
the time at which such disposition is to be made and the intended sale price or
other consideration therefor, and shall be subject, for the 10 days after the
giving of
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such notice, to the right of the relevant Assignor or any nominee of such
Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' written notice to
the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after publication
of notice of such auction not less than 10 days prior thereto in two newspapers
in general circulation to be selected by the Collateral Agent. To the extent
permitted by any such requirement of law, the Collateral Agent may bid for and
become the purchaser of the Collateral or any item thereof, offered for
disposition in accordance with this Section without accountability to the
relevant Assignor. If, under applicable law, the Collateral Agent shall be
permitted to make disposition of the Collateral within a period of time which
does not permit the giving of notice to the relevant Assignor as hereinabove
specified, the Collateral Agent need give such Assignor only such notice of
disposition as shall be required by such applicable law. Each Assignor agrees to
do or cause to be done all such other acts and things as may be reasonably
necessary to make such disposition or dispositions of all or any portion of the
Collateral valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such sale or sales, all at such Assignor's expense.
8.3 Waiver of Claims. Except as otherwise provided in this Agreement,
EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION
OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession or any
such disposition except any damages which are the direct result of the
Collateral Agent's gross negligence or willful misconduct (as determined by
a court of competent jurisdiction in a final and non-appealable decision);
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Upon the occurrence and during the continuation of an Event of Default, any sale
of, or the grant of options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of the relevant Assignor therein
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and thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
8.4 Application of Proceeds. (a) All moneys collected by the
Collateral Agent upon any sale or other disposition of any Collateral (other
than Excluded Existing Senior Subordinated Secured Notes Collateral) pursuant to
the enforcement of this Agreement or the exercise of any of the remedial
provisions hereof (or, if any other Security Document requires proceeds of
"collateral" thereunder (other than Excluded Collateral) to be applied in
accordance with the terms of this Agreement, by such other "collateral agent"
thereunder pursuant to the enforcement of such Security Document or the exercise
of the remedial provisions thereof), together with all other moneys received by
the Collateral Agent hereunder (or such other "collateral agent" under such
other Security Documents) as a result of any such enforcement or the exercise of
any such remedial provisions (other than with respect to Excluded Collateral) or
as a result of any distribution of any Collateral (or "collateral" under any
other Security Document, as the case may be) (in each case, other than Excluded
Collateral) upon the bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding involving the
readjustment of the obligations and indebtedness of any Credit Party, or the
application of any Collateral (or "collateral" under any other Security
Document, as the case may be) (in each case, other than Excluded Collateral) to
the payment thereof or any distribution of Collateral (or "collateral" under any
other Security Document, as the case may be) (in each case, other than Excluded
Collateral) upon the liquidation or dissolution of any Credit Party, or the
winding up of the assets or business of any Credit Party or under any Mortgage
Policies (to the extent same does not constitute Excluded Collateral), shall be
applied as follows:
(i) first, to the payment of all Obligations owing the Collateral
Agent of the type described in clauses (iv), (v) and (vi) of the definition
of "Obligations";
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided in
Section 8.4(e), with each Secured Creditor receiving an amount equal to its
outstanding Primary Obligations or, if the proceeds are insufficient to pay
in full all such Primary Obligations, its Pro Rata Share of the amount
remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Creditors as
provided in Section 8.4(e), with each Secured Creditor receiving an amount
equal to its outstanding Secondary Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its Pro Rata
Share of the amount remaining to be distributed;
(iv) fourth, to the extent proceeds remain after the applications
pursuant to preceding clauses (i) through (iii), an amount equal to the
outstanding Tertiary Obligations (as hereinafter defined) shall be paid to
the Existing Senior Subordinated Secured Notes Creditor as provided in
Section 8.4(e), with the Existing Senior Subordinated Secured Notes
Creditor to receive an amount equal to the outstanding
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Tertiary Obligations or, if the proceeds are insufficient to pay in full
all such Tertiary Obligations, the amount remaining to be distributed; and
(v) fifth, to the extent proceeds remain after the applications
pursuant to preceding clauses (i) through (iv), inclusive, and following
the termination of this Agreement pursuant to Section 11.8(a) hereof, to
the relevant Assignor or to whomever may be lawfully entitled to receive
such surplus.
(b) All moneys collected by the Collateral Agent upon any sale or
other disposition of any Excluded Existing Senior Subordinated Secured Notes
Collateral pursuant to the enforcement of this Agreement or the exercise of any
of the remedial provisions hereof (or, if any other Security Document requires
proceeds of Excluded Collateral thereunder to be applied in accordance with the
terms of this Agreement, by such other "collateral agent" thereunder pursuant to
the enforcement of such Security Document or the exercise of the remedial
provisions thereof), together with all other moneys received by the Collateral
Agent hereunder (or such other "collateral agent" under such other Security
Documents) with respect to Excluded Existing Senior Subordinated Secured Notes
Collateral (or Excluded Collateral, as applicable) as a result of any such
enforcement or the exercise of any such remedial provisions or as a result of
any distribution of any Excluded Existing Senior Subordinated Secured Notes
Collateral (or Excluded Collateral, as applicable) upon the bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding involving the readjustment of the obligations and
indebtedness of any Credit Party, or the application of any Excluded Existing
Senior Subordinated Secured Notes Collateral (or Excluded Collateral, as
applicable) to the payment thereof or any distribution of the Excluded Existing
Senior Subordinated Secured Notes Collateral (or Excluded Collateral, as
applicable) upon the liquidation or dissolution of any Credit Party, or the
winding up of the assets or business of any Credit Party or under any Mortgage
Policy covering Excluded Existing Senior Subordinated Secured Notes Collateral
(or Excluded Collateral, as applicable), shall be applied as follows:
(i) first, to the payment of all Obligations owing the Collateral
Agent of the type described in clauses (iv), (v) and (vi) of the definition
of "Obligations";
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided in
Section 8.4(e), with each Secured Creditor receiving an amount equal to its
outstanding Primary Obligations or, if the proceeds are insufficient to pay
in full all such Primary Obligations, its Pro Rata Share of the amount
remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Creditors as
provided in Section 8.4(e), with each Secured Creditor receiving an amount
equal to its outstanding Secondary Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its Pro Rata
Share of the amount remaining to be distributed;
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(iv) fourth, to the extent proceeds remain after the applications
pursuant to preceding clauses (i) through (iii), an amount equal to the
outstanding Tertiary Obligations (as hereinafter defined) shall be paid to
the Secured Creditors as provided in Section 8.4(e), with each Secured
Creditor receiving an amount equal to its outstanding Tertiary Obligations
or, if the proceeds are insufficient to pay in full all such Tertiary
Obligations, its Pro Rata Share of the amount remaining to be distributed;
and
(v) fifth, to the extent proceeds remain after the applications
pursuant to preceding clauses (i) through (iv), inclusive, and following
the termination of this Agreement pursuant to Section 11.8(a) hereof, to
the relevant Assignor or to whomever may be lawfully entitled to receive
such surplus.
(c) For purposes of this Agreement (i) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations,
Secondary Obligations or Tertiary Obligations, as the case may be, and the
denominator of which is the then outstanding amount of all Primary Obligations,
Secondary Obligations, Tertiary Obligations or Quaternary Obligations, as the
case may be, (ii) "Primary Obligations" shall mean (x) all principal of, and
interest on, all Loans, all Unpaid Drawings theretofore made (together with all
interest accrued thereon), the aggregate Stated Amounts of all Letters of Credit
issued under the Credit Agreement, and all Fees and (y) in the case of the Other
Obligations, all amounts due under any Interest Rate Protection Agreement or
Other Hedging Agreement (other than indemnities, fees (including, without
limitation, attorneys' fees) and similar obligations and liabilities), (iii)
"Secondary Obligations" shall mean all Obligations other than Primary
Obligations and Tertiary Obligations and (iv) "Tertiary Obligations" shall mean
all Existing Senior Subordinated Secured Notes Obligations. Furthermore, and
notwithstanding anything to the contrary contained elsewhere in this Agreement,
to the extent that the relevant Secured Creditors amend or modify the Credit
Documents, the Existing Senior Subordinated Secured Notes Documents or the other
Secured Debt Agreements in a manner which has the effect of increasing the
outstanding amount of the Primary Obligations, Secondary Obligations or Tertiary
Obligations, as the case may be, above the amounts thereof as then in effect,
then to the extent additional amounts are owing as a result thereof, such
additional amounts shall be deemed to constitute Primary Obligations, Secondary
Obligations or Tertiary Obligations, as the case may be, in each case so long as
the amendments or modifications which effect such increased amounts are made in
accordance with the requirements set forth in clause (x) of the second proviso
appearing in the first sentence of Section 11.2(a) below.
(d) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 8.4 only) (i) first, to their Primary Obligations, (ii) second, to the
Secondary Obligations (other than Secondary Obligations constituting indemnity
or reimbursement obligations not then due and owing and for which no claim has
been made at the time of the proposed payment) and (iii) third, to their
Tertiary Obligations and, in the case of distributions pursuant to Section
8.4(a).
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(e) All payments required to be made hereunder shall be made (x) if
to the Lender Creditors, to the Administrative Agent under the Credit Agreement
for the account of (and for distribution to) the Lender Creditors, (y) if to the
Existing Senior Subordinated Secured Notes Creditor, to the Existing Senior
Subordinated Secured Notes Indenture Trustee under the Existing Senior
Subordinated Secured Notes Indenture for the account of (and for distribution
to) the Existing Senior Subordinated Secured Notes Trustee and the Existing
Senior Subordinated Secured Noteholders in accordance with the requirements of
the Existing Senior Subordinated Secured Notes Indenture and (z) if to any other
Secured Creditor (other than the Collateral Agent), to the Authorized
Representative for such other Secured Creditor, or in the absence of such an
Authorized Representative, directly to such other Secured Creditor.
(f) For purposes of applying payments received in accordance with
this Section 8.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement, (ii) the Existing Senior
Subordinated Secured Notes Trustee under the Existing Senior Subordinated
Secured Notes Indenture and (iii) each Authorized Representative of an Other
Creditor (or, in the absence of any such Authorized Representative, directly
upon such other relevant Secured Creditors), for a determination (which each
Authorized Representative for any Secured Creditor and the Secured Creditors
agree to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations, Secondary Obligations and Tertiary Obligations (and Dollar
Equivalents thereof) owed to the Lender Creditors, the Other Creditors or the
Existing Senior Subordinated Secured Notes Creditor, as the case may be. Unless
it has actual knowledge (including by way of written notice from any Lender
Creditor, any Other Creditor or any of their respective Authorized
Representatives) to the contrary, the Administrative Agent and each other
Authorized Representative, in furnishing information pursuant to the preceding
sentence, and the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Secondary Obligations are outstanding. Unless it has actual
knowledge (including by way of written notice from an Other Creditor) to the
contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume
that no Interest Rate Protection Agreements or Other Hedging Agreements are in
existence.
(g) Distributions made in accordance with this Section 8.4 shall,
notwithstanding anything to the contrary contained in this Agreement, be subject
to the express subordination provisions contained in the Existing Senior
Subordinated Secured Notes Documents and, as a result thereof, to the extent any
Secured Creditor receives a distribution pursuant to this Section 8.4 which must
be turned over or applied in accordance with said subordination provisions, said
subordination provisions shall control the ultimate distribution of such
amounts.
(h) It is understood and agreed that each of the Assignors shall
remain jointly and severally liable to the relevant Secured Creditors to the
extent of any deficiency between the amount of the proceeds of the Collateral
received by such Secured Creditors hereunder and the aggregate amount of the
sums referred to in clause (a) or (b), as the case may be, of this Section with
respect to the relevant Assignor.
8.5 Remedies Cumulative. Each and every right, power and remedy hereby
specifically given to the Collateral Agent shall be in addition to every other
right, power and remedy specifically given to the Collateral Agent under this
Agreement, the other Secured Debt
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Agreements or now or hereafter existing at law, in equity or by statute and each
and every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time or simultaneously and as often and
in such order as may be deemed expedient by the Collateral Agent. All such
rights, powers and remedies shall be cumulative and the exercise or the
beginning of the exercise of one shall not be deemed a waiver of the right to
exercise any other or others. No delay or omission of the Collateral Agent in
the exercise of any such right, power or remedy and no renewal or extension of
any of the Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an acquiescence
thereof. No notice to or demand on any Assignor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Collateral Agent to any other or
further action in any circumstances without notice or demand. In the event that
the Collateral Agent shall bring any suit to enforce any of its rights hereunder
and shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including reasonable attorneys' fees, and the
amounts thereof shall be included in such judgment.
8.6 Discontinuance of Proceedings. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and each holder of any of the Obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.
ARTICLE IX
INDEMNITY
9.1 Indemnity. (a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, assigns, employees, affiliates and agents
(hereinafter in this Section 9.1 referred to individually as "Indemnitee," and
collectively as "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including reasonable
attorneys' fees and expenses) (for the purposes of this Section 9.1 the
foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any other Secured Debt Agreement
or any other document executed in connection herewith or therewith or in any
other way connected with the administration of the transactions contemplated
hereby or thereby or the enforcement of any of the terms of, or the preservation
of any rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any
country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person
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(including any Indemnitee), or property damage), or contract claim; provided
that no Indemnitee shall be indemnified pursuant to this Section 9.1(a) for
losses, damages or liabilities to the extent caused by the gross negligence or
willful misconduct of such Indemnitee (as determined by a court of competent
jurisdiction in a final and non-appealable decision). Each Assignor agrees that
upon written notice by any Indemnitee of the assertion of such a liability,
obligation, damage, injury, penalty, claim, demand, action, suit or judgment,
the relevant Assignor shall assume full responsibility for the defense thereof.
Each Indemnitee agrees to use its best efforts to promptly notify the relevant
Assignor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 9.1(a) hereof, each
Assignor agrees, jointly and severally, to pay or reimburse the Collateral Agent
for any and all reasonable fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 9.1(a) or (b) hereof,
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any other Secured Debt
Agreement or in any writing contemplated by or made or delivered pursuant to or
in connection with this Agreement or any other Secured Debt Agreement.
(d) If and to the extent that the obligations of any Assignor under
this Section 9.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
9.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article IX shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the full repayment of all the Existing
Senior Subordinated Secured Notes, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and Letters of Credit, and the
payment of all other Obligations and notwithstanding the discharge thereof.
ARTICLE X
DEFINITIONS
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The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined. Except as otherwise defined in this Article X, terms used in this
Agreement shall have the meaning provided such terms in the Credit Agreement
(or, at any time on and after the Credit Documents Obligations Termination Date,
the Credit Agreement as in effect on such date (without giving effect to the
termination thereof)).
"Account" shall mean any "account" as such term is defined in the UCC
as in effect on the date hereof in the State of New York, and in any event shall
include but shall not be limited to, all rights to payment of any monetary
obligation, whether or not earned by performance, (i) for property that has been
or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for
services rendered or to be rendered, (iii) for a policy of insurance issued or
to be issued, (iv) for a secondary obligation incurred or to be incurred, (v)
for energy provided or to be provided, (vi) for the use or hire of a vessel
under a charter or other contract, (vii) arising out of the use of a credit or
charge card or information contained on or for use with the card, or (viii) as
winnings in a lottery or other game of chance operated or sponsored by a State,
governmental unit of a State, or person licensed or authorized to operate the
game by a State or governmental unit of a State. Without limiting the foregoing,
the term "account" shall include all Health-Care-Insurance Receivables.
"Administrative Agent" shall have the meaning provided in the recitals
of this Agreement.
"Agreement" shall have the meaning provided in the preamble of this
Agreement.
"As-Extracted Collateral" shall mean "as-extracted collateral" as such
term is defined in the UCC as in effect on the date hereof in the State of New
York.
"Assignor" shall have the meaning provided in the preamble of this
Agreement.
"Authorized Representative" shall have the meaning provided in Annex K
hereto.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors (excluding the
Existing Senior Subordinated Secured Notes Creditor in the case of cash
constituting Excluded Existing Senior Subordinated Secured Notes Collateral).
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the UCC as in effect on the date hereof in the State of New York. Without
limiting the foregoing, the term "Chattel Paper" shall in any event include all
Tangible Chattel Paper and all Electronic Chattel Paper.
"Class" shall have the meaning provided in Section 11.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
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"Collateral Agent" shall have the meaning provided in the preamble of
this Agreement.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the UCC as in effect on the date hereof in the State of New
York.
"Contract Rights" shall mean all rights of any Assignor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts and any or all Excluded Contracts,
(ii) any and all rights to receive and compel performance under any or all
Contracts and (iii) any and all other rights, interests and claims now existing
or in the future arising in connection with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreement or Other Hedging Agreement) to the extent the grant by an
Assignor of a security interest pursuant to this Agreement in its right, title
and interest in any such contract is not prohibited by such contract (or, if
prohibited, the consent of each other party is obtained) and would not give any
other party to such contract the right to terminate, or automatically result in
the termination of, such other party's obligations thereunder or the Assignor's
rights thereunder (those contracts where such grant is so prohibited (and
consent not obtained) or resulting in such a right of or automatic termination
are referred to herein as "Excluded Contracts").
"Copyrights" shall mean any United States or foreign copyright now or
hereafter owned by any Assignor, including any registrations of any copyrights,
in the United States Copyright Office or any foreign office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by any Assignor.
"Co-Syndication Agent" shall have the meaning provided in the
recitals of this Agreement.
"Credit Agreement" shall have the meaning provided in the recitals of
this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article X.
"Credit Document Obligations Termination Date" shall mean that date
upon which all Credit Document Obligations (other than those arising from
indemnities for which no request has been made) have been paid in full and all
Commitments and Letters of Credit under the Credit Agreement have been
terminated.
"Credit Documents" shall mean the "Credit Documents" under, and as
defined in, the Credit Agreement and shall include any credit documentation
executed and delivered in connection with any replacement or refinancing Credit
Agreement.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
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"Deposit Accounts" shall mean all "deposit accounts" as such term is
defined in the UCC as in effect on the date hereof in the State of New York.
"Documentation Agent" shall have the meaning provided in the recitals
of this Agreement.
"Documents" shall mean "documents" as such term is defined in the UCC
as in effect on the date hereof in the State of New York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which any Assignor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the UCC as in effect on the date hereof in the State of
New York.
"Equipment" shall mean any "equipment," as such term is defined in the
UCC as in effect on the date hereof in the State of New York, now or hereafter
owned by any Assignor and, in any event, shall include, but shall not be limited
to, all machinery, equipment, furnishings, movable trade fixtures and vehicles
now or hereafter owned by any Assignor and any and all additions, substitutions
and replacements of any of the foregoing and all accessions thereto, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto but excluding Equipment to the
extent it is subject to a Permitted Lien and the terms of the Indebtedness
securing such Permitted Lien prohibits assignment of, or granting of a security
interest in, such Assignor's rights and interests therein.
"Event of Default" shall mean (i) any Event of Default under, and as
defined in, the Credit Agreement, (ii) any Event of Default under, and as
defined in, the Existing Senior Subordinated Secured Notes Indenture, (iii) any
payment default under any Interest Rate Protection Agreement or Other Hedging
Agreement and (iv) any payment default on any of the Obligations after the
expiration of any applicable grace period.
"Excluded Collateral" shall mean and include (i) Excluded Existing
Senior Subordinated Secured Notes Collateral and (ii) and any other "collateral"
under any other Security Document which is excluded as security for, or does not
secure, the Existing Senior Subordinated Secured Notes Obligations, to the
extent such other "collateral" constitutes (I) collateral of the type described
in clause (i) of the definition of "Excluded Existing Senior Subordinated
Secured Notes Collateral", (II) collateral of any type owned or held by
Holdings, (III) assets that are covered by certificate of title issued by a
foreign country or governmental unit thereof or, in the case of intellectual
property and permits, registered, filed or issued, as the case may be, under the
laws of any foreign country or governmental unit thereof or other assets
situated, located or held outside the United States, in each case, to the extent
that the perfection of a security interest in such assets cannot be effected
under the laws of the United States or any State thereof or (IV) proceeds of any
"collateral" described in preceding clauses (I), (II) and (III).
"Excluded Contracts" shall have the meaning provided in the definition
of Contracts.
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"Excluded Existing Senior Subordinated Secured Notes Collateral" shall
mean and include (i) all capital stock, Notes, Instruments, Investment Property
and other equity interests and Securities owned or held by any Assignor, (ii)
any and all Collateral owned or held by Holdings, (iii) any and all assets of
the Assignors that are covered by a certificate of title issued by any foreign
country or governmental unit thereof or, in the case of Marks, Patents,
Copyrights and Permits, registered, filed or issued, as the case may be, under
the laws of any foreign country or governmental unit thereof and all other
assets owned or held by any Assignor situated, located or held outside the
United States, in each case, to the extent that the perfection of a security
interest in such assets cannot be effected under the laws of the United States
or any State thereof and (iv) all Proceeds of the Collateral described in
preceding clauses (i), (ii) and (iii).
"Existing Senior Subordinated Secured Noteholders" shall have the
meaning provided in the recitals to this Agreement.
"Existing Senior Subordinated Secured Notes" shall mean the Borrower's
12-1/2% Senior Subordinated Secured Notes due 2008 issued pursuant to the
Existing Senior Subordinated Secured Notes Indenture and otherwise in accordance
with the requirements of the definition of "Existing Senior Subordinated Secured
Notes" contained in the Credit Agreement (as in effect on the date hereof), as
the same are in effect on the date hereof and as the same may be amended,
modified and/or supplemented from time to time in accordance with the terms
thereof and of the Credit Agreement.
"Existing Senior Subordinated Secured Notes Creditor" shall mean the
Existing Senior Subordinated Secured Notes Indenture Trustee for the benefit of
itself and the Existing Senior Subordinated Secured Noteholders.
"Existing Senior Subordinated Secured Notes Documents" shall mean the
Existing Senior Subordinated Secured Notes, the Existing Senior Subordinated
Secured Notes Indenture and the other documents and instruments executed and
delivered with respect to the Existing Senior Subordinated Secured Notes or the
Existing Senior Subordinated Secured Notes Indenture, in each case as in effect
on the date hereof and the same may be amended, modified and/or supplemented
time to time in accordance with the terms thereof and of the Credit Agreement.
"Existing Senior Subordinated Secured Notes Indenture" shall mean the
Indenture, dated as of May 30, 2002, among the Borrower, various Subsidiaries of
the Borrower and the Existing Senior Subordinated Secured Notes Indenture
Trustee, as in effect on the date hereof and as the same may be amended,
modified and/or supplemented from time to time in accordance with the terms
thereof and of the Credit Agreement.
"Existing Senior Subordinated Secured Notes Indenture Trustee" shall
have the meaning provided in the recitals to this Agreement.
"Existing Senior Subordinated Secured Notes Obligations" shall have
the meaning provided in the definition of Obligations.
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"General Intangibles" shall mean "general intangibles" as such term is
defined in the UCC as in effect on the date hereof in the State of New York.
"Goods" shall mean "goods" as such term is defined in the UCC as in
effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the UCC as in
effect on date hereof in the State of New York.
"Holdings" shall have the meaning provided in the recitals of this
Agreement.
"Indemnitee" shall have the meaning provided in Section 9.1 of this
Agreement.
"Instrument" shall mean "instruments" as such term is defined in the
UCC as in effect on the date hereof in the State of New York.
"Interest Rate Protection Agreement or Other Hedging Agreement" shall
have the meaning provided in the recitals of this Agreement.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production, from raw materials through work-in-process to finished goods, and
all products and proceeds of whatever sort and wherever located any portion
thereof which may be returned, rejected, reclaimed or repossessed by the
Collateral Agent from any Assignor's customers, and shall specifically include
all "inventory" as such term is defined in the UCC as in effect on the date
hereof in the State of New York, now or hereafter owned by any Assignor.
"Investment Property" shall mean "investment property" as such term is
defined in the UCC as in effect on the date hereof in the State of New York.
"Lender Creditors" shall have the meaning provided in the recitals of
this Agreement.
"Lenders" shall have the meaning provided in the recitals of
this Agreement.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the UCC as in effect on the date hereof in the State of New
York.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Location" of any Assignor, shall mean such Assignor's "location" as
determined pursuant to Section 9-307 of the UCC.
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"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by any Assignor,
which are registered or filed in the United States Patent and Trademark Office
or the equivalent thereof in any state of the United States or any equivalent
foreign office or agency, as well as any unregistered trademarks and service
marks used by an Assignor and any trade dress including logos, designs,
fictitious business names and other business identifiers used by any Assignor.
"Non-Existing Senior Subordinated Secured Notes Obligations" shall
mean all Obligations other than Existing Senior Subordinated Secured Notes
Obligations.
"Non-Existing Senior Subordinated Secured Notes Obligations
Termination Date" shall mean the date upon which the Total Commitment under the
Credit Agreement has been terminated, all Letters of Credit issued under the
Credit Agreement have been terminated, no Note under the Credit Agreement is
outstanding and all Loans thereunder have been indefeasibly repaid in full, all
Interest Rate Protection Agreements and Other Hedging Agreements entered into
with any Other Creditors have been terminated, and all other Obligations (other
than (I) the Existing Senior Subordinated Secured Notes Obligations and (II)
those Obligations arising from indemnities for which no claim has been made)
then owing have been indefeasibly paid in full.
"Obligations" shall mean and include, as to any Assignor, all of the
following:
(i) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, principal, premium, interest
(including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of any
Assignor at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such
proceeding), reimbursement obligations under Letters of Credit, fees, costs
and indemnities) of such Assignor to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection
with, the Credit Agreement and the other Credit Documents to which such
Assignor is a party (including, without limitation, in the event such
Assignor is a Guarantor, all such obligations, liabilities and indebtedness
of such Assignor under its Guaranty) and the due performance and compliance
by such Assignor with all of the terms, conditions and agreements contained
in the Credit Agreement and in such other Credit Documents (all such
obligations, liabilities and indebtedness under this clause (i), except to
the extent consisting of obligations or indebtedness with respect to
Interest Rate Protection Agreements or Other Hedging Agreements, being
herein collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or
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similar proceeding of any Assignor at the rate provided for in the
respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by such Assignor to the Other
Creditors, now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereinafter arising (including, without
limitation, in the case of a Assignor that is a Guarantor, all obligations,
liabilities and indebtedness of such Assignor under its Guaranty in respect
of the Interest Rate Protection Agreements and Other Hedging Agreements),
and the due performance and compliance by such Assignor with all of the
terms, conditions and agreements contained in each such Interest Rate
Protection Agreement and Other Hedging Agreement (all such obligations,
liabilities and indebtedness under this clause (ii) being herein
collectively called the "Other Obligations");
(iii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, indemnities, fees and
expenses, all interest thereon and all interest that accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of Holdings or
any other Credit Party at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed
in any such proceeding) of each Assignor owing to the Existing Senior
Subordinated Secured Noteholders and the Existing Senior Subordinated
Secured Notes Creditor, whether now existing or hereafter incurred under,
arising out of or in connection with any Existing Senior Subordinated
Secured Notes Document to which such Assignor is a party (including, in the
case of each Subsidiary Guarantor, all such obligations and indebtedness
under any guaranty constituting a Existing Senior Subordinated Secured
Notes Document to which such Assignor is a party) and the due performance
and compliance by each Assignor with all of the terms, conditions and
agreements contained in each such Existing Senior Subordinated Secured
Notes Document (all such obligations and liabilities under this clause
(iii) being herein collectively called the "Existing Senior Subordinated
Secured Notes Obligations");
(iv) any and all sums advanced by the Collateral Agent in order to
preserve the Collateral or preserve its security interest in the
Collateral;
(v) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of such Assignor referred
to in clauses (i), (ii), (iii) and (iv) after an Event of Default shall
have occurred and be continuing, the reasonable expenses of retaking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Collateral Agent of
its rights hereunder, together with reasonable attorneys' fees and court
costs;
(vi) all amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement under Section 9.1 of this Agreement; and
(vii) all amounts owing to any Agent pursuant to any of the Credit
Documents in its capacity as such;
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It is acknowledged and agreed that the "Obligations" shall include extensions of
credit of the types described above, whether outstanding on the date of this
Agreement or extended from time to time after the date of this Agreement;
provided that in the case of additional extensions of credit included as
"Obligations" hereunder by way of an amendment or modification to this
Agreement, such amendment or modification (and the additional extension of
credit permitted thereby) shall comply with the requirements of clause (x) of
the second proviso appearing in the first sentence of Section 11.2(a).
Notwithstanding anything to the contrary contained above in this definition,
obligations and liabilities which would otherwise constitute Obligations
pursuant to clause (iii) of the first sentence of this definition shall not
constitute Obligations for purposes of (or be secured pursuant to) this
Agreement to the extent incurred (or guaranteed) in violation of the provisions
of Section 9.04 of the Credit Agreement as same is in effect on the date hereof
(but only with respect to that portion of indebtedness outstanding (or
guaranteed) in violation thereof).
"Other Creditors" shall have the meaning provided in the recitals of
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article X.
"Patents" shall mean any patent in or to which any Assignor now or
hereafter has any right, title or interest therein, and any divisions,
continuations (including, but not limited to, continuations-in-parts) and
improvements thereof, as well as any application for a patent now or hereafter
made by any Assignor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Permitted Business" shall have the meaning provided in the Credit
Agreement.
"Primary Obligations" shall have the meaning provided in Section
8.4(c) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section 8.4(c) of
this Agreement.
"Proceeds" shall mean all "proceeds" as such term is defined in the
UCC as in effect in the State of New York on the date hereof and, in any event,
shall also include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to the Collateral Agent or
any Assignor from time to time with respect to any of the Collateral, (ii) any
and all payments (in any form whatsoever) made or due and payable to any
Assignor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any person acting under color of governmental
authority) and (iii) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
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"Registered Organization" shall have the meaning provided in the UCC
as in effect on the date hereof in the State of New York.
"Required Secured Creditors" shall mean (i) at all times prior to the
occurrence of the Credit Document Obligations Termination Date, the Required
Lenders (or, to the extent required by Section 13.12 of the Credit Agreement,
each of the Lenders), (ii) at all times on and after the Credit Document
Obligations Termination Date, the holders of at least the majority of the then
outstanding Obligations (determined, in the case of Other Obligations, by the
Collateral Agent in such reasonable manner as is acceptable to it and, in the
case of the Existing Senior Subordinated Secured Notes Obligations, by the
Existing Senior Subordinated Secured Notes Indenture Trustee in accordance with
the provisions of the Existing Senior Subordinated Secured Notes Indenture).
"Requisite Creditors" shall have the meaning provided in Section 11.2
of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
8.4(c) of this Agreement.
"Secured Creditors" shall mean, collectively, the Lender Creditors,
the Other Creditors, and the Existing Senior Subordinated Secured Notes
Creditor.
"Secured Debt Agreements" shall mean and include (i) this Agreement,
(ii) the Credit Agreement, the other Credit Documents and, to the extent then in
effect, any Interest Rate Protection Agreements and Other Hedging Agreements
entered into with any Other Creditors and (iii) the Existing Senior Subordinated
Secured Notes Documents.
"Security" shall mean "security" as such term is defined in the UCC as
in effect on the date hereof in the State of New York.
"Software" shall mean "software" as such term is defined in the UCC as
in effect on the date hereof in the State of New York.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the UCC as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor, or in which any Assignor has
any rights, and, in any event, shall include, but shall not be limited to all of
such Assignor's rights in any Letter-of-Credit Right or secondary obligation
that supports the payment or performance of, and all security for, any Account,
Chattel Paper, Document, General Intangible, Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the UCC as in effect on the date hereof in the State of New
York.
"Termination Date" shall have the meaning provided in Section 11.8(a)
of this Agreement.
"Timber-to-be-Cut" shall mean "timber-to-be-cut" as such term is
defined in the UCC as in effect on the date hereof in the State of New York.
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"Tractor Trailer" shall mean any truck, tractor, trailer, tank trailer
or other trailer or similar vehicle or trailer.
"Trade Secret Rights" shall mean the rights of an Assignor in any
Trade Secret it holds.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production, procedures and other know-how relating to
the design, manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of an Assignor worldwide whether
written or not.
"Transmitting Utility" shall have the meaning given such term in
Section 9-102(a)(80) of the UCC.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations promulgated thereunder from time to time.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"U.S. Pledge Agreement" shall have the meaning provided in the Credit
Agreement.
"U.S. Subsidiaries Guaranty" shall have the meaning provided in the
recitals of this Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company
or overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Collateral Agent or any Assignor shall
not be effective until received by the Collateral Agent or such Assignor, as the
case may be. All notices and other communications shall be in writing and
addressed as follows:
(a) if to any Assignor, at its address set forth opposite its
signature below;
(b) if to the Collateral Agent:
Credit Suisse First Boston
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Group
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Telephone No.: (212) 325-____
Facsimile No.: (212) 325-____
(c) if to any Lender Creditor (other than the Collateral Agent), at
such address as such Lender Creditor shall have specified in the Credit
Agreement; and
(d) if to any other Secured Creditor, (x) to the Authorized
Representative for such Secured Creditor or (y) if there is no such Authorized
Representative, at such address as such Secured Creditor shall have specified in
writing to each Assignor and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
11.2 Waiver; Amendment; Notice of Acceleration. (a) None of the terms
and conditions of this Agreement may be changed, waived, modified or varied in
any manner whatsoever unless in writing duly signed by each Assignor directly
and adversely affected thereby (it being understood that the addition or release
of any Assignor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Assignor other than the Assignor so added or released)
and the Collateral Agent (with the written consent of the Required Secured
Creditors); provided, that (i) additional Assignors may be added as parties
hereto from time to time in accordance with Section 11.13 without the consent of
any other Assignor or of the Secured Creditors, (ii) Assignors may be removed as
parties hereto from time to time in accordance with Section 11.14 without any
consent of any other Assignor or of the Secured Creditors and (iii) any change,
waiver, modification or variance affecting the rights and benefits of any Class
(as defined below), with outstanding Obligations of the respective Class secured
hereby at such time, of Secured Creditors (and not all Secured Creditors in a
like or similar manner) shall require the written consent of the Requisite
Creditors (as defined below) of such affected Class; provided further, however,
that notwithstanding anything to the contrary provided in clause (iii) of the
immediately preceding proviso, (x) the Required Secured Creditors may agree to
modifications to this Agreement for the purpose, among other things, of securing
additional extensions of credit (including, without limitation, pursuant to the
Credit Agreement or any refinancing or extension thereof) and adding new
creditors as "Secured Creditors" hereunder (either as part of an existing Class
of Secured Creditors or as a newly created Class) and such changes shall not
require the written consent of the Requisite Creditors of the various Classes,
so long as (I) such extensions (and resulting addition) do not otherwise give
rise to an express violation of the terms of the Credit Agreement, (II) in the
case of any such extensions under the Credit Agreement or any Interest Rate
Protection Agreement or Other Hedging Agreement, such extensions (and the
obligations evidenced thereby) constitute "Senior Debt" and/or "Guarantor Senior
Debt" under the Existing Senior Subordinated Secured Notes Indenture and (III)
in the case of any other extensions not described in preceding clause (II), such
extensions (and resulting addition) do not otherwise give rise to an express
violation of the terms of the Existing Senior Subordinated Secured Notes
Documents and (y) said clause (iii) shall not apply to any release of Collateral
or any Assignor (or the termination of this Agreement) effected in accordance
with the requirements of Section 11.8 or 11.14 of this Agreement, as the case
may be. For the purpose of this Agreement, the term "Class" shall mean each
class of Secured Creditors with outstanding Obligations secured hereby at such
time, i.e., whether (x) the Lender Creditors as holders of the Credit Document
Obligations, (y) the Other Creditors as holders of
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the Other Obligations or (z) the Existing Senior Subordinated Secured Notes
Creditor (with respect to the Existing Senior Subordinated Secured Notes
Obligations). For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of (x) with respect to the Credit Document
Obligations, the Required Lenders (for this purpose determined after giving
effect to the last sentence of the definition thereof as if the assignment
referred to therein had occurred), (y) with respect to the Other Obligations,
the holders of at least a majority of all Other Obligations outstanding from
time to time under the Interest Rate Protection Agreements or Other Hedging
Agreements (as determined by the Collateral Agent in such reasonable manner as
is acceptable to it) and (z) with respect to the Existing Senior Subordinated
Secured Notes Obligations, the Existing Senior Subordinated Secured Notes
Creditor acting at the direction of the holders of at least a majority of all
Existing Senior Subordinated Secured Notes Obligations outstanding from time to
time.
(b) Each Secured Creditor (other than an Other Creditor), by its
acceptance of the benefits of this Agreement, hereby authorizes its Authorized
Representative to, and each such Authorized Representative (by such
authorization) hereby agrees to, deliver to the Collateral Agent and each other
Authorized Representative:
(i) in the case of the Administrative Agent, prompt written notice of
the acceleration of any Credit Document Obligations (such notice to be
provided in the same manner and substantially contemporaneously with any
notice provided to the Borrower), although the failure to deliver any such
notice shall not affect the validity of such acceleration; and
(ii) in the case of the Existing Senior Subordinated Secured Notes
Trustee, prompt written notice of the acceleration of the Existing Senior
Subordinated Secured Notes Obligations (such notice to be provided in the
same manner and substantially contemporaneously with any notice provided to
the Borrower), although the failure to deliver any such notice shall not
affect the validity of such acceleration.
11.3 Obligations Absolute. The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
or any security for any of the Obligations; whether or not such Assignor shall
have notice or knowledge of any of the foregoing.
11.4 Successors and Assigns. This Agreement shall create a continuing
security interest in the Collateral and (i) shall remain in full force and
effect, subject to release and/or termination as set forth in Section 11.8, (ii)
be binding upon each Assignor and its successors and assigns; provided, however,
that no Assignor shall assign any of its rights or obligations hereunder without
the prior written consent of the Collateral Agent (with the prior written
consent of the Required Secured Creditors). Any Person that becomes a Secured
Creditor after the date hereof by its acceptance of any Note, any Existing
Senior Subordinated Secured Note or any Interest Rate Protection Agreement or
the benefits of this Agreement, as the case may be,
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shall be bound by the terms hereof; it being understood that, as between the
Existing Senior Subordinated Secured Noteholders and the Existing Senior
Subordinated Secured Notes Creditor, no Existing Senior Subordinated Secured
Noteholder shall have any right to give any direction to the Collateral Agent
with respect to any Collateral or take any action or exercise any right of a
Secured Creditor under this Agreement or any other Security Documents, with all
such directions, actions or rights to be given, taken or exercised, as the case
may be, by the Existing Senior Subordinated Secured Notes Creditor acting for
the benefit of the holders of the Existing Senior Subordinated Secured Notes
Obligations, provided that nothing contained in the preceding clause shall be
construed to limit the agreements set forth in the last sentence of Section 8.1.
All agreements, statements, representations and warranties made by each Assignor
herein or in any certificate or other instrument delivered by such Assignor or
on its behalf under this Agreement shall be considered to have been relied upon
by the Secured Creditors and shall survive the execution and delivery of this
Agreement and each other Secured Debt Agreement regardless of any investigation
made by the Secured Creditors or on their behalf.
11.5 Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
11.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL.. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH
ASSIGNOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS JURISDICTION
OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION
11.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH
ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH
SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED
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CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER
JURISDICTION.
(b) EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
11.7 Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of each Assignor under or with
respect to any Collateral.
11.8 Termination; Release. (a) After the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in Section 9.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including UCC termination statements on form UCC-3)
acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the earlier to occur of (x) the date upon which
(i) the Non-Existing Senior Subordinated Secured Notes Obligations Termination
Date shall have occurred and (ii) if (but only if) an Event of Default under,
and as defined in, the Existing Senior Subordinated Secured Notes Indenture
exists on the Non-Existing Senior Subordinated Secured Notes Obligations
Termination Date, all Existing Senior Subordinated Secured Notes Obligations
(other than those arising from indemnities for which no claim has been made)
then owing have been indefeasibly paid in full (or defeased in accordance with
the terms of the Existing Senior Subordinated Secured Notes Indenture) and (y)
that date upon which the Required Secured Creditors shall have released all of
the Collateral pledged hereunder in accordance with the requirements of Section
11.8(b) or (c) below.
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(b) In the event that any part of the Collateral is sold or otherwise
disposed of in connection with a sale or other disposition (other than a sale or
disposition to any Assignor or any Subsidiary thereof) which (x) at all times
prior to the Credit Document Obligations Termination Date, is permitted by the
Credit Agreement and (y) does not violate the provisions of any other Secured
Debt Agreement, then, so long as the Borrower certifies to the Collateral Agent
that, at the time of the respective release and immediately after giving effect
thereto (and to the sale or other disposition of the respective Collateral),
either (x) no Obligations are or will be then due and payable or (y) all
Obligations which will then be due and payable as a result of such sale or
disposition shall be paid on such date in accordance with the requirements of
the respective Secured Debt Agreements, the Collateral Agent, at the request and
expense of the respective Assignor, will (i) duly assign, transfer and deliver
to such Assignor (without recourse and without any representation or warranty)
such of the Collateral as is then being (or has been) so sold or disposed of and
has not theretofore been released pursuant to this Agreement and (ii) execute
such releases and discharges in respect of such Collateral as is then being (or
has been) so sold or disposed of as such Assignor may reasonably request;
provided, however, that if (but only if) an Event of Default under, and as
defined in, the Existing Senior Subordinated Secured Notes Indenture exists on
the date of such sale or other disposition and such date is also the
Non-Existing Senior Subordinated Secured Notes Obligations Termination Date,
only that portion of the Collateral sold or otherwise disposed of in order to
repay in full the Credit Document Obligations and/or the Other Obligations on
such date shall be (and shall be required to be) released pursuant to this
Section 11.8(b) until such Event of Default (and all other Events of Default
under, and as defined in, the Existing Senior Subordinated Secured Notes
Indenture) shall have been cured or otherwise waived by the Required Secured
Creditors (determined after giving effect to the Non-Existing Senior
Subordinated Secured Notes Obligations Termination Date), at which time such
remaining Collateral shall be released as otherwise provided above (without
regard to this proviso).
(c) In addition to any release of Collateral pursuant to preceding
clauses (a) and (b), all or any portion of the Collateral hereunder shall be
released by the Collateral Agent at the written direction of, or with the
written consent of, the Required Secured Creditors (which may be, but shall not
be required to be, granted in connection with a repayment of all, or any
specified portion, of the Obligations owing to such Secured Creditors) and, in
connection therewith, the Collateral Agent, at the request and expense of the
respective Assignor, will (i) duly assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so released and has not theretofore
been released pursuant to this Agreement and (ii) execute such releases and
discharges in respect of such Collateral as is then being (or has been) so
released as such Assignor may reasonably request.
(d) At any time that an Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 11.8(a), (b) or (c), such Assignor shall
deliver to the Collateral Agent a certificate signed by a principal executive
officer of such Assignor stating that the release of the respective Collateral
is permitted pursuant to such Section 11.8(a), (b) or (c). If requested by the
Collateral Agent (although the Collateral Agent shall have no obligation to make
any such request), the relevant Assignor shall furnish appropriate legal
opinions (from counsel, which may be in-house counsel, reasonably acceptable to
the Collateral Agent) to the effect set forth in the immediately
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preceding sentence. Upon any release of Collateral pursuant to Section 11.8(a),
(b) or (c), none of the Secured Creditors shall have any continuing right or
interest in such Collateral, or the proceeds thereof; provided however, that if
(but only if) an Event of Default under, and as defined in, the Existing Senior
Subordinated Secured Notes Indenture exists on the date of such release and such
date is also the Non-Existing Senior Subordinated Secured Notes Obligations
Termination Date, any proceeds of any Collateral sold or otherwise disposed of
on such date and not used to repay in full the Credit Document Obligations
and/or the Other Obligations shall remain subject to the pledge hereunder (and
continue to constitute Collateral) until such Event of Default (and all other
Events of Default under, and as defined in, the Existing Senior Subordinated
Secured Notes Indenture) shall have been cured or otherwise waived by the
Required Secured Creditors (determined after giving effect to the Non-Existing
Senior Subordinated Secured Notes Obligations Termination Date), at which time
any continuing right or interest in such Collateral shall terminate.
(e) The Collateral Agent shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with (or which the Collateral Agent in the absence of gross
negligence or willful misconduct believes to be in accordance with) this Section
11.8.
(f) Without limiting the foregoing provisions of this Section 11.8,
to the extent applicable following the qualification of the Existing Senior
Subordinated Notes Indenture under the Trust Indenture Act, (i) the Assignors
shall comply with Section 314(d) of the Trustee Indenture Act in connection with
the release of property or Liens hereunder and (ii) the parties hereto agree
that if any amendments to this Agreement or any other Security Documents are
required in order to comply with the provisions of the Trust Indenture Act, such
parties shall cooperate and act in good faith to effect such amendments as
promptly as practicable.
11.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Collateral Agent.
11.10 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.
11.11 The Collateral Agent and the other Secured Creditors. The
Collateral Agent will hold in accordance with this Agreement all items of the
Collateral at any time received under this Agreement. It is expressly understood
and agreed that the obligations of the Collateral Agent as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement and in Section 12 of the Credit Agreement. The Collateral Agent shall
act hereunder on the terms and conditions set forth herein and in Section 12 of
the Credit Agreement.
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11.12 Additional Assignors. It is understood and agreed that any
Subsidiary Guarantor that desires to become an Assignor hereunder, or is
required to execute a counterpart of this Agreement after the date hereof
pursuant to the requirements of the Credit Agreement, any other Credit Document
or the Existing Senior Subordinated Secured Notes Indenture shall become an
Assignor hereunder by (x) executing a counterpart hereof and delivering same to
the Collateral Agent, or by executing an assumption agreement in form and
substance satisfactory to the Collateral Agent, (y) delivering supplements to
Annexes A through J, includisive, hereto and Annex L hereto, as are necessary to
cause such Annexes to be complete and accurate with respect to such additional
Assignor on such date and (z) taking all actions as specified in this Agreement,
the Credit Agreement and the Existing Senior Subordinated Secured Notes
Indenture, as would have been taken by such Assignor had it been an original
party to this Agreement, in each case with all documents required above to be
delivered to the Collateral Agent and with all documents and actions required
above to be taken to the reasonable satisfaction of the Collateral Agent.
11.13 Release of Assignors. If at any time all of the equity interests
of any Assignor owned by Holdings and its Subsidiaries are sold to any Person
(other than Holdings or any of its Subsidiaries) in a transaction which (x) at
all times prior to the Credit Document Obligations Termination Date, is
permitted pursuant to the Credit Agreement and (y) does not violate the terms of
any other Secured Debt Agreement then in effect, then, at the request and
expense of the Borrower, the respective Assignor shall be released as an
Assignor pursuant to this Agreement (and the Collateral Agent is authorized and
directed to execute and deliver such instruments of release as are reasonably
satisfactory to it). At any time that the Borrower desires that an Assignor be
released from this Agreement as provided in this Section 11.13, the Borrower
shall deliver to the Collateral Agent a certificate signed by an Authorized
Representative of the Borrower stating that the release of the respective
Assignor is permitted pursuant to this Section 11.13. If requested by the
Collateral Agent (although the Collateral Agent shall have no obligation to make
any such request), the Borrower shall furnish legal opinions (from counsel,
which may be in-house counsel, reasonably acceptable to the Collateral Agent) to
the effect set forth in the immediately preceding sentence. The Collateral Agent
shall have no liability whatsoever to any other Secured Creditor as a result of
the release of any Assignor by it in accordance with (or which it in the absence
of gross negligence or willful misconduct believes to be in accordance with)
this Section 11.13.
11.14 No Third Party Beneficiaries. This Agreement is entered into
solely for the benefit of the parties hereto and their respective successors and
assigns and for the benefit of the Secured Creditors from time to time and their
respective successors and assigns and, except for the Secured Creditors and
their successors and assigns, there shall be no third party beneficiaries
hereof, nor shall any Person other than the parties hereto and their respective
successors and assigns, and the Secured Creditors and their respective
successors and assigns, be entitled to enforce the provisions hereof or have any
claims against any party hereto (or any Secured Creditor) or their successors
and assigns arising from, or under, this Agreement.
ARTICLE XII
SPECIAL AGREEMENTS AND ACKNOWLEDGEMENTS BY SECURED CREDITORS
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By their acceptance of their respective Obligations and the benefits of this
Agreement, the following agreements and acknowledgements are made by the
Existing Senior Subordinated Secured Creditor (and its successors and assigns)
for the benefit of the Secured Creditors holding Non-Existing Senior
Subordinated Secured Notes Obligations (or, in the case of Sections 12.1(b),
12.2(b) and 12.7, all of the Secured Creditors for the benefit of the other
Secured Creditors):
12.1 Priorities With Respect to Collateral, etc. (a) The liens of the
Lender Creditors, the Existing Senior Subordinated Secured Notes Creditor and
the Other Creditors in the Collateral shall be subject to: (x) the priorities
for distributions in accordance with the terms of Section 8.4 (including,
without limitation, in the case of (I) any distribution of any Collateral upon
any bankruptcy, arrangement, receivership, assignment for the benefit of
creditors or any other action or proceeding involving the readjustment of the
obligations and indebtedness of the Borrower or its respective Subsidiaries, or
the application of any Collateral to the payment thereof and (II) any
distribution of the Collateral upon the liquidation or dissolution of the
Borrower or its respective Subsidiaries, or the winding up of the assets or
business of the Borrower or its respective Subsidiaries) and (y) the express
subordination provisions (and only those subordination provisions) contained in
the Existing Senior Subordinated Secured Notes Indenture (which provisions shall
apply in accordance with the express terms thereof). The foregoing shall be
effective at all times prior to the Termination Date, notwithstanding: (i) the
initiation of any bankruptcy, moratorium, reorganization or other insolvency
proceeding with respect to any Credit Party; (ii) the priorities which would
otherwise result from the order of creation, attachment or perfection of any
such lien; (iii) the taking of possession of any of the Collateral by the
Collateral Agent, any Lender Creditor, the Existing Senior Subordinated Secured
Notes Creditor or any Other Creditor; (iv) the filing of any financing statement
or the recording of any mortgage or other instrument in any recording office;
(v) the order in which any of the Credit Document Obligations, Other Obligations
or Existing Senior Subordinated Secured Notes Obligations is created; or (vi)
whether any such lien is now perfected, hereafter ceases to be perfected, is
avoidable by any bankruptcy trustee or otherwise is set aside, invalidated or
lapses; and shall continue in full force and effect until the Termination Date.
(b) Each Secured Creditor, by its acceptance of the benefits of the
Security Agreement, hereby agrees for the benefit of the other Secured Creditors
that, except as otherwise specifically provided in the immediately succeeding
sentence, to the extent any additional or substitute collateral for any of the
Obligations of the type covered by the Security Agreement is delivered by
Holdings or any of its Subsidiaries to or for the benefit of any Secured
Creditor, such collateral shall be subject to the provisions of the Security
Agreement and, in the event such collateral constitutes "Excluded Existing
Senior Subordinated Secured Notes Collateral", be subject to the pledge
limitations for Existing Senior Subordinated Secured Notes Obligations set forth
in the Security Agreement.
12.2 Right to Contest; etc. (a) The Existing Senior Subordinated
Secured Notes Creditor agrees for itself (and for the Existing Senior
Subordinated Secured Noteholders), and their respective successors and assigns,
(i) not to contest or support any other Person in contesting, in any proceeding,
including, without limitation, any bankruptcy, insolvency or liquidation
proceeding, the priority, validity or enforceability of the Liens held by the
Lender Creditors or the Other Creditors or the Collateral Agent (on behalf of
such Secured Creditors) in
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the Collateral or the priority, validity or enforceability of the Obligations
(so long as the Liens held by the Collateral Agent (in favor of the Existing
Senior Subordinated Secured Notes Creditor) in the Collateral (other than the
Excluded Collateral), and the Existing Senior Subordinated Secured Notes
Obligations owing to the Existing Senior Subordinated Secured Notes Creditors,
are not subject to a contest initiated or supported by the Lender Creditors or
the Other Creditors at such time), or the provisions of this Section 12 and (ii)
that the Existing Senior Subordinated Secured Notes Obligations are not (and
shall not be construed to be) secured by any Excluded Collateral.
(b) Each Secured Creditor (other than the Existing Senior
Subordinated Secured Notes Creditor) agrees for itself, and its successors and
assigns, not to contest or support any other Person in contesting, in any
proceeding, including, without limitation, any bankruptcy, insolvency or
liquidation proceeding, the validity or enforceability of the Liens held by the
Existing Senior Subordinated Secured Notes Creditor or the Collateral Agent (on
behalf of the Existing Senior Subordinated Secured Notes Creditor) in any
Collateral (other than Excluded Collateral) or the validity or enforceability of
the Existing Senior Subordinated Secured Notes Obligations, in each case so long
as the Liens held by the Lender Creditors, the Other Creditors or the Collateral
Agent (on behalf of such Secured Creditors) in the Collateral is, and the
relevant Obligations owing to such Secured Creditors are, valid and enforceable
(and not subject to a contest initiated or supported by the Existing Senior
Subordinated Secured Notes Creditor or any Existing Senior Subordinated Secured
Noteholder) at such time.
(c) Each Secured Creditor agrees for itself, and for its successors
and assigns, that neither the Collateral Agent nor the Required Secured
Creditors (in directing the Collateral Agent to take any action with respect to
the Collateral) shall have any duty or obligation to realize first upon any type
of Collateral (including Excluded Collateral) or to sell, dispose of or
otherwise liquidate all or any portion of the Collateral in any manner that
would maximize the return to any Class of Secured Creditors holding Obligations
of any type (whether Credit Document Obligations, Other Obligations or Existing
Senior Subordinated Secured Notes Obligations), notwithstanding that the order
and timing of any such realization, sale, disposition or liquidation may affect
the amount of proceeds actually received by such Class of Secured Creditors from
such realization, sale, disposition or liquidation.
12.3 Payment Invalidated. In the event that any of the Non-Existing
Senior Subordinated Secured Notes Obligations shall be paid in full and
subsequently, for whatever reason (including, but not limited to, an order or
judgment for disgorgement of a preference under Title 11 of the United Stated
Code, or any similar law, or the settlement of any claim in respect thereof),
formerly paid or satisfied Non-Existing Senior Subordinated Secured Notes
Obligations become unpaid or unsatisfied, the terms and conditions of this
Section 12 shall be fully applicable thereto until all such Non-Existing Senior
Subordinated Secured Notes Obligations are again paid in full.
12.4 Right to Amend. Etc. As between the Existing Senior Subordinated
Secured Notes Creditor and the other Secured Creditors (including, without
limitation, the Lenders), it is agreed that the Secured Creditors (excluding the
Existing Senior Subordinated Secured Notes Creditor in its capacity as such) may
at any time and from time to time, in their sole discretion, and without any
obligation to give any notice or receive any consent from the Existing Senior
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Subordinated Secured Notes Creditor in its capacity as such, (i) change the
manner, place or terms of payment, or change or extend the time of payment of,
or renew, alter, refinance, increase or add to the Non-Existing Senior
Subordinated Secured Notes Obligations, (ii) obtain, release, or dispose of any
Collateral for the Non-Existing Senior Subordinated Secured Notes Obligations
(subject, however, to Sections 11.2 and 11.8), or (iii) amend or supplement in
any manner this Agreement and the other Credit Documents or any other agreements
or instruments evidencing, securing or relating to the Non-Existing Senior
Subordinated Secured Notes Obligations (subject, however, to Section 13.12 of
the Credit Agreement and Section 11.2 hereof), and the provisions of this
Section 12 shall continue in full force and effect with respect to all such
Non-Existing Senior Subordinated Secured Notes Obligations.
12.5 Creation of Future Obligations. All of the Non-Existing Senior
Subordinated Secured Notes Obligations shall be deemed to have been funded by
the relevant Secured Creditors in reliance upon the agreements contained in this
Section 12, and the Existing Senior Subordinated Secured Notes Creditor (i)
expressly waives notice of acceptance of the agreements set forth herein, notice
of reliance thereon and any other agreements and notice of the creation of any
Non-Existing Senior Subordinated Secured Notes Obligations, (ii) agrees that the
Secured Creditors shall be entitled to rely upon the agreements set forth herein
at all times in creating Non-Existing Senior Subordinated Secured Notes
Obligations and (iii) agrees that (w) additional extensions of credit may be
made pursuant to the Credit Agreement, with the consent of the Required Lenders
in accordance with Section 13.12 of the Credit Agreement and any other Lenders
whose consent is required thereunder, (x) additional Credit Document Obligations
resulting therefrom may be designated as Non-Existing Senior Subordinated
Secured Notes Obligations (and shall be entitled to such priorities with respect
to the Collateral as may be agreed amongst the Required Lenders), (y) no further
consent of the Existing Senior Subordinated Secured Notes Creditor shall be
required in connection therewith (so long as the incurrence of such Indebtedness
under the Credit Agreement is not expressly prohibited by the Existing Senior
Subordinated Secured Notes Indenture) and (z) the provisions of this Section 12
(and Section 8.4) shall be fully applicable to the Credit Document Obligations
so created in the future.
12.6 Effectiveness. The provisions in this Section 12 (and Section
8.4) shall be effective both before and after the commencement of a bankruptcy,
insolvency, liquidation or similar proceeding. All references in this Agreement
to Holdings or any of its Subsidiaries shall include such entity as debtor in
possession or any receiver or trustee for such entity.
12.7 Further Assurances. Each Secured Creditor agrees to take such
further action and shall execute and deliver to the Administrative Agent, the
Collateral Agent and the other Secured Creditors such additional documents and
instruments (in recordable form, if requested) as the Administrative Agent, the
Collateral Agent or such other Secured Creditors may reasonably request to
effectuate the terms of, and the priorities established by, this Section 12. In
addition, if in connection with any refinancing or replacement of indebtedness
under the Credit Agreement, including as contemplated by the recitals hereof,
the lenders or holders of the refinancing or replacement indebtedness require
that such indebtedness be secured pursuant to separate security documents, each
Secured Creditor agrees to take such actions and execute and deliver such
documents, agreements and instruments as may be necessary or advisable in order
to effect and maintain the relative priorities and rankings of security
interests, rights, remedies
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and payments as contemplated hereby, including, without limitation, through
intercreditor and subordination agreements. The Collateral Agent, for its part,
agrees that it will from time to time upon the reasonable request of any Secured
Creditor (and at the expense of the Assignors), furnish to such Secured
Creditors copies of financing statements covering the Collateral which have been
filed and such other information with respect to the Collateral in the
possession of the Collateral Agent as may reasonably be requested by such
Secured Creditor from time to time.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
Address:
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0000 Xxxxxxx Xxxxx QUALITY DISTRIBUTION, INC.,
Xxxxx Xxxx, XX 00000 as an Assignor
By:
------------------------------------
Name:
Title:
[Address] QUALITY DISTRIBUTION, LLC,
as an Assignor
By:
-------------------------------------
Name:
Title:
[Address] [INSERT NAMES OF SUBSIDIARY
GUARANTORS],
as an Assignor
By:
-------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
as Collateral Agent, as Assignee
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
Annex K to
Security Agreement
THE COLLATERAL AGENT/1/
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1. Appointment. The Secured Creditors, by their acceptance of the
benefits of the Security Agreement to which this Annex K is attached (the
"Security Agreement") hereby irrevocably designate Credit Suisse First Boston
(and any successor Collateral Agent) to act as specified herein and therein.
Each Secured Creditor hereby irrevocable authorizes, and each holder of any
Obligation by the acceptance of such Obligation and by the acceptance of the
benefits of the Security Agreement shall be deemed irrevocably to authorize, the
Collateral Agent to take such action on its behalf under the provisions of the
Security Agreement and any instruments and agreements referred to therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Collateral Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
The Collateral Agent may perform any of its duties hereunder or thereunder by or
through its authorized agents, sub-agents or employees. The Collateral Agent,
for itself and its successors and assigns, hereby accepts such appointment
created hereby upon the terms and conditions specified herein.
2. Nature of Duties. (a) The Collateral Agent shall have no duties
or responsibilities except those expressly set forth herein or in the Security
Agreement. The duties of the Collateral Agent shall be mechanical and
administrative in nature; the Collateral Agent shall not have by reason of this
Agreement, any other Credit Document or any other Secured Debt Agreement a
fiduciary relationship in respect of any Secured Creditor; and nothing in this
Agreement, any other Credit Document or any other Secured Debt Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
the Collateral Agent any obligations in respect of the Security Agreement except
as expressly set forth herein and therein.
(b) The Collateral Agent shall not be responsible for insuring the
Collateral or for the payment of taxes, charges or assessments or discharging of
Liens upon the collateral or otherwise as to the maintenance of the Collateral.
(c) The Collateral Agent shall not be required to ascertain or
inquire as to the performance by any Assignor of any of the covenants or
agreements contained in the Security Agreement, any other Credit Document or any
other Secured Debt Agreement.
(d) The Collateral Agent shall be under no obligation or duty to take
any action under, or with respect to, the Security Agreement if taking such
action (i) would subject the Collateral Agent to a tax in any jurisdiction where
it is not then subject to a tax or (ii) would require the Collateral Agent to
qualify to do business, or obtain any license, in any jurisdiction
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/1/ Unless otherwise defined herein, all capitalized terms used herein (x) and
defined in the Security Agreement, are used herein as therein defined and
(y) not defined in the Security Agreement, are used herein as defined in
the Credit Agreement referenced in the Security Agreement.
where it is not then so qualified or licensed or (iii) would subject the
Collateral Agent to in personam jurisdiction in any locations where it is not
then so subject.
(e) Notwithstanding any other provision of this Annex K, neither the
Collateral Agent nor any of its officers, directors, employees, affiliates or
agents shall, in its individual capacity, be personally liable for any action
taken or omitted to be taken by it in accordance with, or pursuant to this Annex
K of, the Security Agreement, unless caused by its or their own gross negligence
or willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).
(f) Notwithstanding any other provision of the Security Agreement or
this Annex K, the Collateral Agent shall not be responsible or liable for
perfecting, or maintaining the priority of, the Liens created pursuant to the
Security Agreement.
3. Lack of Reliance on the Collateral Agent. Independently and
without reliance upon the Collateral Agent, each Secured Creditor, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of each
Assignor and its Subsidiaries in connection with the making and the continuance
of the Obligations and the taking or not taking of any action in connection
therewith, and (ii) its own appraisal of the creditworthiness of each Assignor
and its Subsidiaries, and the Collateral Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Secured Creditor with any credit or other information with respect thereto,
whether coming into its possession before the extension of any Obligations or
the purchase of any Notes or Existing Senior Subordinated Secured Notes or at
any time or times thereafter. The Collateral Agent shall not be responsible or
liable in any manner whatsoever to any Secured Creditor for the correctness of
any recitals, statements, information, representations or warranties herein, in
the other Secured Debt Agreements or in any document, certificate or other
writing delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of the Security Agreement or the
security interests granted thereunder or the financial condition of any Assignor
or any Subsidiary of any Assignor or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of the Security Agreement or any other Secured Debt Agreement, or the
financial condition of any Assignor or any Subsidiary of any Assignor, or the
existence or possible existence of any default or Event of Default under any
Secured Debt Agreement. The Collateral Agent makes no representations as to the
value or condition of the Collateral or any part thereof, or as to the title of
any Assignor thereto or as to the security afforded by the Security Agreement.
4. Certain Rights of the Collateral Agent. (b) No Secured Creditor
shall have the right to take any action with respect to (or against) any
Collateral, or cause the Collateral Agent to take any action with respect to (or
against) any Collateral, with only the Required Secured Creditors having the
right to direct the Collateral Agent by written instruction in accordance with
Section 4(d) hereof to take any such action. Except for actions required to be
taken by the Collateral Agent in accordance with the Security Agreement, if the
Collateral Agent shall request instructions from the Required Secured Creditors
with respect to any act or action (including failure to act) in connection with
the Security Agreement and the Required Secured Creditors shall fail to instruct
the Collateral Agent with respect to any act or action (including failure to act
and refrain from acting) in connection with the Security Agreement, the
Collateral Agent shall be entitled to refrain from such act or taking such
action unless and until it shall have received express instructions from the
Required Secured Creditors and to the extent requested, appropriate
indemnification in respect of actions to be taken, and the Collateral Agent
shall not incur liability to any Secured Creditor or any other Person by reason
of so refraining. Without limiting the foregoing, (x) no Secured Creditor shall
have any right of action whatsoever against the Collateral Agent as a result of
the Collateral Agent acting or refraining from acting hereunder or under the
Security Agreement in accordance with the instructions of the Required Secured
Creditors or as expressly provided in the Security Agreement and (y) without
limiting preceding clause (x), the Collateral Agent shall not be liable to any
Secured Creditor or any other Person for any action taken or omitted to be taken
by it hereunder or under the Security Agreement, unless caused by its gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).
(b) Notwithstanding anything to the contrary contained herein (and
subject to Section 2(f) of this Annex K), the Collateral Agent is authorized,
but not obligated, (i) to take any action reasonably required to perfect or
continue the perfection of the liens on the Collateral for the benefit of the
Secured Creditors and (ii) when instructions from the Required Secured Creditors
have been requested by the Collateral Agent but have not yet been received, to
take any action which the Collateral Agent, in good faith, believes to be
reasonably required to promote and protect the interests of the Secured
Creditors in the Collateral; provided that once instructions have been received,
the actions of the Collateral Agent shall be governed thereby and the Collateral
Agent shall not take any further action which would be contrary thereto.
(c) Notwithstanding anything to the contrary contained herein or in
the Security Agreement, the Collateral Agent shall not be required to take or
refrain from taking, and shall have no liability to any Secured Creditor for
taking or refraining from taking, any action that exposes or, in the good faith
judgment of the Collateral Agent may expose, the Collateral Agent or its
officers, directors, agents or employees to personal liability, unless the
Collateral Agent shall be adequately indemnified as provided herein or that is,
or in the good faith judgment of the Collateral Agent may be, contrary to the
Security Agreement, any other Secured Debt Agreement or applicable law.
(d) For purposes of the Security Agreement, each Secured Creditor
shall appoint a Person as such Secured Creditor's authorized representative
(each, an "Authorized Representative") for the purpose of giving or delivering
any notices or instructions thereunder. Any instructions given by the Required
Secured Creditors to the Collateral Agent pursuant to the Security Agreement
shall be in writing signed by the Authorized Representative(s) of the various
Secured Creditors comprising the Required Secured Creditors with respect to such
instructions and such instructions shall certify to and for the benefit of the
Collateral Agent that the Secured Creditors issuing or delivering such
instructions constitute the Required Secured Creditors for purposes of this
Section 4 and the instructions being delivered. The Collateral Agent shall be
entitled to conclusively and absolutely rely on such instructions and
certification as to the identity of the Required Secured Creditors with respect
to such instructions, and the Collateral Agent shall not be required to take any
action, and shall not be liable to any Secured Creditor for failing or refusing
to act, pursuant to any instructions which are not given or delivered by the
Authorized Representatives of various Secured Creditors comprising the Required
Secured Creditors with respect to such instructions. The parties hereto
acknowledge that the Authorized Representative of each of the Secured Creditors
shall be (x) the Administrative Agent, in the case of the Lender Creditors, (y)
the Existing Senior Subordinated Secured Notes Indenture Trustee, in the case of
the Existing Senior Subordinated Secured Notes Creditor (on behalf of the
Existing Senior Subordinated Secured Noteholders) and (z) in the case of any
Other Creditor, such representative as may be designated by such Other Creditor
by written notice to the Collateral Agent from time to time.
5. Reliance; Interpretation. The Collateral Agent shall be entitled
to rely, and shall be fully protected in relying, upon, any note, writing,
resolution, notice, statement, certificate, telex, teletype or telescopes
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by the proper Person or entity, and, with respect to all
legal matters pertaining hereto or to the Security Agreement and its duties
thereunder and hereunder, upon advice of counsel selected by it. If, in its good
faith judgment, the Collateral Agent reasonably believes that any instructions
given or delivered pursuant to the Security Agreement require judicial
interpretation or are invalid or otherwise contrary to the provisions of the
Security Agreement, any other Secured Debt Agreement or applicable law, the
Collateral Agent shall have the right to petition a court of competent
jurisdiction to determine the validity of, or otherwise interpret, any such
instructions. In such event, the Collateral Agent shall not be required to carry
out such instructions unless directed to do so, or it is determined that it may
do so, by such court.
6. Indemnification. To the extent the Collateral Agent is not
reimbursed and indemnified by the Assignors under the Security Agreement, the
Secured Creditors will reimburse and indemnify the Collateral Agent, in
proportion to their respective outstanding principal amounts (including, for
this purpose, the Stated Amount of outstanding Letters of Credit, as well as any
unpaid Primary Obligations in respect of Interest Rate Protection Agreements and
Other Hedging Agreements, as outstanding principal) of Obligations, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Collateral Agent in performing its duties hereunder, or in any way relating to
or arising out of its actions as Collateral Agent in respect of the Security
Agreement except for those resulting solely from the Collateral Agent's own
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision). The indemnities set forth
in this Section 6 shall survive the repayment of all Obligations, with the
respective indemnification at such time to be based upon the outstanding
principal amounts (determined as described above) of Obligations at the time of
the respective occurrence upon which the claim against the Collateral Agent is
based or, if same is not reasonably determinable, based upon the outstanding
principal amounts (determined as described above) of Obligations as in effect
immediately prior to the termination of the Security Agreement. The indemnities
set forth in this Section 6 are in addition to any indemnities provided by the
Lenders to the Collateral Agent pursuant to the Credit Agreement, with the
effect being that the Lenders shall be responsible for indemnifying the
Collateral Agent to the extent the Collateral Agent does not receive payments
pursuant to this Section 6 from the Secured Creditors (although in such event,
and upon the payment in full of all such amounts
owing to the Collateral Agent by the Lenders, the Lenders shall be subrogated to
any rights of the Collateral Agent to receive payment from the Secured
Creditors).
7. The Collateral Agent in its Individual Capacity. With respect to
its obligations as a lender under the Credit Agreement and any other Credit
Documents to which the Collateral Agent is a party, and to act as agent under
one or more of such Credit Documents, the Collateral Agent shall have the rights
and powers specified therein and herein for a "Lender", or an "Agent", as the
case may be, and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the terms "Lenders," "Required
Lenders," "holders of Notes," or any similar terms shall, unless the context
clearly otherwise indicates, include the Collateral Agent in its individual
capacity. The Collateral Agent and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of banking, investment banking, trust
or other business with any Assignor or any Affiliate or Subsidiary of any
Assignor as if it were not performing the duties specified herein or in the
other Credit Documents, and may accept fees and other consideration from the
Assignors for services in connection with the Credit Agreement, the other Credit
Documents and otherwise without having to account for the same to the Secured
Creditors.
8. Holders. The Collateral Agent may deem and treat the payee of any
Note or the registered owner of any Existing Senior Subordinated Secured Note as
the owner thereof for all purposes hereof unless and until written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Collateral Agent. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority or consent, is
the holder of any Note or the registered owner of any Existing Senior
Subordinated Secured Note, shall be final and conclusive and binding on any
subsequent holder, transferee, assignee or endorsee, as the case may be, of such
Note or Existing Senior Subordinated Secured Note or of any Note or Existing
Senior Subordinated Secured Note issued in exchange therefor.
9. Resignation and Removal of the Collateral Agent. (c) The
Collateral Agent may resign from the performance of all of its functions and
duties hereunder and under the Security Agreement at any time by giving 30
Business Days' prior or written notice to the U.S. Borrower and the Secured
Creditors. Such resignation shall take effect upon the appointment of a
successor Collateral Agent pursuant to clause (b) or (c) below.
(b) If a successor Collateral Agent shall not have been appointed
within said 30 Business Day period by the Required Secured Creditors, the
Collateral Agent, with the consent (unless an Event of Default shall exist, in
which case no such consent shall be required) of the U.S. Borrower (which
consent shall not be unreasonably withheld or delayed) shall then appoint a
successor Collateral Agent who shall serve as Collateral Agent hereunder or
thereunder until such time, if any, as the Required Secured Creditors appoint a
successor Collateral Agent as provided above.
(c) If no successor Collateral Agent has been appointed pursuant to
clause (b) above by the 30/th/ Business Day after the date of such notice of
resignation was given by the Collateral Agent, as a result of a failure by the
U.S. Borrower to consent to the appointment of such a successor Collateral
Agent, (i) the Required Secured Creditors shall then appoint a
successor Collateral Agent who shall serve as Collateral Agent hereunder or
thereunder or (ii) if the Required Secured Creditors shall have failed to
appoint a successor Collateral Agent by the 35/th/ Business Day after the date
such notice of resignation was given by the Collateral Agent, the Collateral
Agent may appoint (or petition a court of competent jurisdiction to appoint) a
successor Collateral Agent who shall serve as Collateral Agent hereunder or
thereunder, in either such case until such time, if any, as the Required Secured
Creditors appoint a successor Collateral Agent as provided above.
(d) Notwithstanding anything to the contrary contained herein, the
Required Secured Creditors may remove the Collateral Agent by an instrument in
writing executed by the Required Secured Creditors and, thereupon, appoint a
successor Collateral Agent designated by the Required Secured Creditors,
effective as provided in Section 9(e) below.
(e) The resignation or removal of a Collateral Agent shall become
effective only upon the execution and delivery of such documents or instruments
as are necessary to transfer the rights and obligations of the Collateral Agent
under the Security Agreement and the recording or filing of such documents,
instruments or financing statements as may be necessary to maintain the priority
and perfection of any security interest granted by the Security Agreement.
Copies of each such document or instrument shall be delivered to each of the
U.S. Borrower, the Administrative Agent and the Existing Senior Subordinated
Secured Notes Indenture Trustee. The appointment of a successor Collateral Agent
pursuant to this Section 9 shall become effective upon the acceptance of such
appointment (and execution by such successor of the documents, instruments or
financing statements referred to above) and such successor Collateral Agent
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Collateral Agent.
(f) After any resignation or removal hereunder of the Collateral
Agent, the indemnification provisions specified in this Annex K and in the
Security Agreement shall continue to inure to its benefit as to any actions
taken or omitted to be taken by it in connection with its agency hereunder while
it was Collateral Agent.
10. Co-Collateral Agents; Separate Collateral Agents. (a) If at any
time or times it shall be necessary or prudent in order to conform to any law of
any jurisdiction in which any of the Collateral shall be located, or the
Collateral Agent shall be advised by counsel, satisfactory to it, that it is
necessary or prudent in the interest of the Collateral Agent or the Secured
Creditors, then the Collateral Agent shall be entitled to appoint one or more
sub-collateral agents or co-collateral agents, and in such case the Collateral
Agent, the U.S. Borrower and each of the other Assignors having an interest in
the Collateral located in the jurisdiction in which such separate or
sub-collateral agent or co-collateral agent is to act shall execute and deliver
all instruments and agreements necessary or proper to constitute another bank or
trust company, or one or more individuals approved by the Collateral Agent,
either to act as co-collateral agent or co-collateral agents jointly with the
Collateral Agent originally named herein or any successor or successors, or to
act as a separate or sub-collateral agent or agents of the Collateral Agent and
the Secured Creditors in respect of any or all of the Collateral. If the U.S.
Borrower and each of the other Assignors having an interest in the Collateral
located in the jurisdiction in which such separate or sub-collateral agent or
co-collateral agent is to act shall not have joined in the execution of such
instruments or agreements within 10 days after the receipt of a written request
from the
Collateral Agent so to do, or if a Default or an Event of Default shall be
continuing, the Collateral Agent may act under the foregoing provisions of this
Section 10 without the concurrence of the U.S. Borrower and the other Assignors,
and the U.S. Borrower and each of the other Assignors hereby irrevocably appoint
the Collateral Agent as their agent and attorney to act for them under the
foregoing provisions of this Section 10 in either of such contingencies.
(b) Every separate or sub-collateral agent (and all references herein
to a "separate collateral agent" shall be deemed to refer also to a
"sub-collateral agent" or a "collateral sub-agent") and every co-collateral
agent, other than any collateral agent which may be appointed as successor to
any Collateral Agent, shall, to the extent permitted by applicable law, be
appointed and act and be such, subject to the following provisions and
conditions, namely:
(i) all rights, remedies, powers, duties and obligations conferred
upon, reserved to or imposed upon the Collateral Agent in respect of the
custody, control and management of monies, papers or securities shall be
exercised solely by the Collateral Agent hereunder;
(ii) all rights, remedies, powers, duties and obligations conferred
upon, reserved to or imposed upon the Collateral Agent hereunder shall be
conferred, reserved or imposed and exercised or performed by the Collateral
Agent and such separate collateral agent or separate collateral agents or
co-collateral agent or co-collateral agents, jointly or severally, as shall
be provided in the instrument appointing such separate collateral agent or
separate collateral agents or co-collateral agent or co-collateral agents,
except to the extent that, under any law of any jurisdiction in which any
particular act or acts are to be performed, the Collateral Agent shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, remedies, powers, duties and obligations shall be exercised and
performed by such separate collateral agent or separate collateral agents
or co-collateral agent or co-collateral agents;
(iii) no power given hereby to, or which it is provided hereby may be
exercised by, any such separate collateral agent or separate collateral
agents or co-collateral agent or co-collateral agents shall be exercised
hereunder by such separate collateral agent or separate collateral agents
or co-collateral agent or co-collateral agents except (subject to
applicable law) jointly with, or with the consent or at the direction in
writing of, the Collateral Agent (which direction shall be made in
accordance with the provisions of the Security Agreement);
(iv) all provisions of the Security Agreement relating to the
Collateral Agent or to releases of Collateral shall apply to any such
separate collateral agent or separate collateral agents or co-collateral
agent or co-collateral agents;
(v) no collateral agent constituted under this Section 10 shall be
personally liable by reason of any act or omission of any other separate or
co-collateral agent or the Collateral Agent hereunder; and
(vi) the Collateral Agent at any time by an instrument in writing,
executed by it, may accept the resignation of any such separate collateral
agent or co-collateral agent and the Collateral Agent or the Required
Secured Creditors may individually or jointly remove any such separate
collateral agent or co-collateral agent, and in that case, by an instrument
in writing executed by the Collateral Agent or the Required Secured
Creditors, as the case may be, and the Collateral Agent or the Required
Secured Creditors, as the case may be, may appoint a successor to such
separate collateral agent or co-collateral agent, as the case may be,
anything herein contained to the contrary notwithstanding. If the U.S.
Borrower and each of the other Assignors shall not have joined in the
execution of any such instrument within 10 days after the receipt of a
written request from the Collateral Agent so to do, or if a Default or an
Event of Default shall be continuing, the Collateral Agent shall have the
power to accept the resignation of or remove any such separate collateral
agent or co-collateral agent and to appoint a successor to such separate
collateral agent or co-collateral agent, as the case may be, and to execute
any such instrument without the concurrence of the U.S. Borrower or such
other Assignor, and the U.S. Borrower and each of the other Assignors
hereby irrevocably appoint the Collateral Agent their agent and attorney to
act for them in such connection in either of such contingencies. If the
Collateral Agent shall have appointed a separate collateral agent or
separate collateral agents or co-collateral agent or co-collateral agents
as above provided, the Collateral Agent may at any time, by an instrument
in writing, accept the resignation of or remove any such separate
collateral agent or co-collateral agent, the successor to any such separate
collateral agent or co-collateral agent to be appointed by the U.S.
Borrower and each of the other Assignors and the Collateral Agent, or by
the Collateral Agent alone, as hereinabove provided in this Section 10.
