Exhibit 10.2
PLEDGE AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 5, 2002
BETWEEN
EACH OF THE GRANTORS PARTY HERETO
AND
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS............................................................................................... 1
1.1 GENERAL DEFINITIONS.......................................................................................... 1
1.2 DEFINITIONS; INTERPRETATION.................................................................................. 8
SECTION 2. GRANT OF SECURITY......................................................................................... 8
2.1 GRANT OF SECURITY............................................................................................ 8
2.2 CERTAIN LIMITED EXCLUSIONS................................................................................... 9
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.......................................................... 9
3.1 SECURITY FOR OBLIGATIONS..................................................................................... 9
3.2 CONTINUING LIABILITY UNDER COLLATERAL........................................................................ 9
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.............................................................. 10
4.1 GENERALLY.................................................................................................... 10
4.2 EQUIPMENT AND INVENTORY...................................................................................... 13
4.3 RECEIVABLES.................................................................................................. 14
4.4 INVESTMENT RELATED PROPERTY.................................................................................. 16
4.5 MATERIAL CONTRACTS........................................................................................... 21
4.6 LETTER OF CREDIT RIGHTS...................................................................................... 23
4.7 INTELLECTUAL PROPERTY........................................................................................ 23
4.8 COMMERCIAL TORT CLAIMS....................................................................................... 27
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS .................................. 27
5.1 ACCESS; RIGHT OF INSPECTION.................................................................................. 27
5.2 FURTHER ASSURANCES........................................................................................... 27
5.3 ADDITIONAL GRANTORS.......................................................................................... 28
SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT............................................................... 28
6.1 POWER OF ATTORNEY............................................................................................ 28
6.2 NO DUTY ON THE PART OF COLLATERAL AGENT OR SECURED PARTIES................................................... 29
SECTION 7. REMEDIES.................................................................................................. 29
7.1 GENERALLY.................................................................................................... 29
7.2 APPLICATION OF PROCEEDS...................................................................................... 31
7.3 SALES ON CREDIT.............................................................................................. 31
7.4 DEPOSIT ACCOUNTS............................................................................................. 31
7.5 INVESTMENT RELATED PROPERTY.................................................................................. 31
7.6 INTELLECTUAL PROPERTY........................................................................................ 32
7.7 CASH PROCEEDS................................................................................................ 34
SECTION 8. COLLATERAL AGENT.......................................................................................... 34
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS........................................................... 34
SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM........................................................... 35
SECTION 11. MISCELLANEOUS............................................................................................ 35
SCHEDULE 4.1 -- GENERAL INFORMATION
SCHEDULE 4.2 -- LOCATION OF EQUIPMENT AND INVENTORY
SCHEDULE 4.4 -- INVESTMENT RELATED PROPERTY
SCHEDULE 4.5 -- MATERIAL CONTRACTS
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SCHEDULE 4.6 -- DESCRIPTION OF LETTERS OF CREDIT
SCHEDULE 4.7 -- INTELLECTUAL PROPERTY
SCHEDULE 4.8 -- COMMERCIAL TORT CLAIMS
EXHIBIT A -- PLEDGE SUPPLEMENT
EXHIBIT B -- UNCERTIFICATED SECURITIES CONTROL AGREEMENT
EXHIBIT C -- SECURITIES ACCOUNT CONTROL AGREEMENT
EXHIBIT D -- DEPOSIT ACCOUNT CONTROL AGREEMENT
EXHIBIT E -- PERSONAL PROPERTY SECURITY INTEREST OPINION
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This PLEDGE AND SECURITY AGREEMENT, dated as of September
5, 2002 (this "AGREEMENT"), between EACH OF THE UNDERSIGNED, whether as an
original signatory hereto or as an Additional Grantor (each, a "GRANTOR"), and
XXXXXXX XXXXX CREDIT PARTNERS L.P., as Collateral Agent for Secured Parties (in
such capacity, "COLLATERAL AGENT").
RECITALS:
WHEREAS, reference is made to that certain Credit and Guaranty
Agreement, dated as of the date hereof (as it may be amended, restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
by and among XXXXX INC. ("COMPANY"), CERTAIN SUBSIDIARIES OF COMPANY, as
Guarantors, the lenders party thereto from time to time (the "LENDERS"), XXXXXXX
XXXXX CREDIT PARTNERS L.P., as Sole Lead Arranger, Sole Book Runner, Syndication
Agent, Administrative Agent, and Collateral Agent, BEAR XXXXXXX CORPORATE
LENDING INC., as Co-Documentation Agent, and CREDIT SUISSE FIRST BOSTON, CAYMAN
ISLANDS BRANCH, as Co-Documentation Agent;
WHEREAS, subject to the terms and conditions of the Credit Agreement,
certain Grantors may enter into one or more Hedge Agreements with one or more
Lender Counterparties;
WHEREAS, in consideration of the extensions of credit and other
accommodations of Lenders and Lender Counterparties as set forth in the Credit
Agreement and the Hedge Agreements, respectively, each Grantor has agreed to
secure such Grantor's Obligations under the Credit Documents and the Hedge
Agreements as set forth herein; and
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and Collateral Agent
agree as follows:
SECTION 1. DEFINITIONS.
1.1 GENERAL DEFINITIONS. In this Agreement, the following terms shall have
the following meanings:
"ACCOUNT DEBTOR" means each Person who is obligated on a Receivable or
any Supporting Obligation related thereto.
"ACCOUNTS" means all "accounts" as defined in Article 9 of the UCC.
"AGREEMENT" as defined in the preamble hereto.
"ADDITIONAL GRANTOR" as defined in Section 5.3.
"ASSIGNED IP" as defined in Section 4.7 (a)(iii).
"ASSIGNED AGREEMENTS" means all agreements and contracts to which such
Grantor is a party as of the date hereof, or to which such Grantor becomes a
party after the date hereof, including, without limitation, each Material
Contract, as each such agreement may be amended, supplemented or otherwise
modified from time to time.
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"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"CASH PROCEEDS" as defined in Section 7.7.
"CHATTEL PAPER" means all "chattel paper" as defined in Article 9 of the
UCC, including, without limitation, "electronic chattel paper" or "tangible
chattel paper," as each term is defined in Article 9 of the UCC.
"COLLATERAL" as defined in Section 2.1.
"COLLATERAL AGENT" as defined in the preamble hereto.
"COLLATERAL RECORDS" means books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and related data processing
software and similar items that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary in the collection
thereof or realization thereupon.
"COLLATERAL SUPPORT" means all property (real, to the extent set forth
in the Credit Agreement, or personal) assigned, hypothecated or otherwise
securing any Collateral and includes any security agreement or other agreement
granting a lien or security interest in such real or personal property.
"COMMERCIAL TORT CLAIMS" means all "commercial tort claims" as defined
in Article 9 of the UCC, including, without limitation, all commercial tort
claims listed on Schedule 4.8 (as such schedule may be amended or supplemented
from time to time).
"COMMODITIES ACCOUNTS" (i) means all "commodity accounts" as defined in
Article 9 of the UCC and (ii) includes, without limitation, all of the accounts
listed on Schedule 4.4 under the heading "Commodities Accounts" (as such
schedule may be amended or supplemented from time to time).
"COMPANY" as defined in the recitals hereto.
"CONTROLLED FOREIGN CORPORATION" means "controlled foreign corporation"
as defined in the Tax Code.
"COPYRIGHT LICENSES" means any and all agreements providing for the
granting of any right in or to Copyrights (whether the applicable Grantor is
licensee or licensor thereunder), including, without limitation, each agreement
referred to in Section B of Schedule 4.7 (as such schedule may be amended or
supplemented from time to time).
"COPYRIGHTS" means all United States and foreign copyrights, all mask
works fixed in semi-conductor chip products (as defined under 17 U.S.C. Section
901 of the U.S. Copyright Act), whether registered or unregistered, now or
hereafter in force throughout the world, all registrations and applications
therefor including, without limitation, the registrations and applications
referred to in Section A of Schedule 4.7 (as such schedule may be amended or
supplemented from time to time), all rights corresponding thereto throughout the
world, all extensions and renewals of any thereof, the right to xxx for past,
present and future infringements
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of any of the foregoing, and all proceeds of the foregoing, including, without
limitation, royalties, income, payments, claims, damages and proceeds of suit.
"CREDIT AGREEMENT" as defined in the recitals hereto.
"DOCUMENTS" means all "documents" as defined in Article 9 of the UCC.
"DEPOSIT ACCOUNTS" (i) means all "deposit accounts" as defined in
Article 9 of the UCC and (ii) includes, without limitation, all of the accounts
listed on Schedule 4.4 under the heading "Deposit Accounts" (as such schedule
may be amended or supplemented from time to time).
"EQUIPMENT" means: (i) all "equipment" as defined in Article 9 of the
UCC, (ii) all machinery, manufacturing equipment, data processing equipment,
computers, office equipment, furnishings, furniture, appliances, fixtures and
tools (in each case, regardless of whether characterized as equipment under the
UCC) and (iii) all accessions or additions thereto, all parts thereof, whether
or not at any time of determination incorporated or installed therein or
attached thereto, and all replacements therefor, wherever located, now or
hereafter existing, including any fixtures.
"EXCLUDED SUBSIDIARY INTERESTS" as defined in Section 2.2.
"GENERAL INTANGIBLES" (i) means all "general intangibles" as defined in
Article 9 of the UCC, including "payment intangibles" also as defined in Article
9 of the UCC, and (ii) includes, without limitation, all interest rate or
currency protection or hedging arrangements, all tax refunds, all licenses,
permits, concessions and authorizations, all Assigned Agreements and all
Intellectual Property (in each case, regardless of whether characterized as
general intangibles under the UCC).
"GOODS" (i) means all "goods" as defined in Article 9 of the UCC and
(ii) includes, without limitation, all Inventory and Equipment (in each case,
regardless of whether characterized as goods under the UCC).
"GRANTOR" as defined in the preamble hereto.
"INSTRUMENTS" means all "instruments" as defined in Article 9 of the
UCC.
"INSURANCE" means: (i) all insurance policies covering any or all of the
Collateral (regardless of whether Collateral Agent is the loss payee thereof)
and (ii) any key man life insurance policies.
"INTELLECTUAL PROPERTY" means, collectively, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the
Trademark Licenses, the Trade Secrets and the Trade Secret Licenses.
"INVENTORY" means: (i) all "inventory" as defined in Article 9 of the
UCC and (ii) all goods held for sale or lease or to be furnished under contracts
of service or so leased or furnished, all raw materials, work in process,
finished goods and materials used or consumed in the manufacture, packing,
shipping, advertising, selling, leasing, furnishing or production of such
inventory or otherwise used or consumed in any Grantor's business; all goods in
which any Grantor has an interest in mass or a joint or other interest or right
of any kind; and all goods
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which are returned to or repossessed by any Grantor, all computer programs
embedded in any goods and all accessions thereto and products thereof (in each
case, regardless of whether characterized as inventory under the UCC).
"INVESTMENT ACCOUNTS" means the Securities Accounts, Commodities
Accounts and Deposit Accounts.
"INVESTMENT RELATED PROPERTY" means: (i) all "investment property" (as
such term is defined in Article 9 of the UCC) and (ii) all of the following
(regardless of whether classified as investment property under the UCC): all
Pledged Equity Interests, Pledged Debt, the Investment Accounts and certificates
of deposit.
"LENDERS" as defined in the recitals hereto.
"LETTER OF CREDIT RIGHT" means "letter-of-credit right" as defined in
Article 9 of the UCC.
"LIEN" means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and
any lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (ii) in the
case of Pledged Equity Interests, any purchase option, call or similar right of
a third party with respect to such Pledged Equity Interests.
"MONEY" means "money" as defined in the UCC.
"NON-ASSIGNABLE CONTRACT" means any agreement, contract or license to
which any Grantor is a party that by its terms purports to restrict or prevent
the assignment or granting of a security interest therein (either by its terms
or by any federal or state statutory prohibition or otherwise irrespective of
whether such prohibition or restriction is enforceable under Sections 9-406
through 409 of the UCC).
"OWNED IP" as defined in Section 4.7 (a)(iii).
"PATENT LICENSES" means all agreements providing for the granting of any
right in, to or under Patents (whether the applicable Grantor is licensee or
licensor thereunder), including, without limitation, each agreement referred to
in Section D of Schedule 4.7 (as such schedule may be amended or supplemented
from time to time).
"PATENTS" means all United States and foreign patents and applications
for letters patent throughout the world, including, but not limited to, each
patent and patent application referred to in Section C of Schedule 4.7 (as such
schedule may be amended or supplemented from time to time), all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations of any of the foregoing, all rights corresponding thereto
throughout the world and all proceeds of the foregoing, including, without
limitation, royalties, income, payments, claims, damages and proceeds of suit
and the right to xxx for past, present and future infringements of any of the
foregoing.
"PERMITTED SALE" means those sales, transfers, assignments or other
dispositions permitted by the Credit Agreement.
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"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governmental authorities.
"PLEDGED DEBT" means all Indebtedness owed to a Grantor, including,
without limitation, all Indebtedness of such Grantor described on Schedule 4.4
under the heading "Pledged Debt" (as such schedule may be amended or
supplemented from time to time), issued by the obligors named therein, the
instruments evidencing such Indebtedness, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Indebtedness.
"PLEDGED EQUITY INTERESTS" means all Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests.
"PLEDGED LLC INTERESTS" means all interests owned by a Grantor in any
limited liability company including, without limitation, all limited liability
company interests owned by such Grantor listed on Schedule 4.4 under the heading
"Pledged LLC Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such limited liability
company interests and any interest of such Grantor on the books and records of
such limited liability company or on the books and records of any securities
intermediary pertaining to such interest, and all dividends, distributions,
cash, rights, Securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such limited liability company interests; provided that Pledged
LLC Interests shall not include Excluded Subsidiary Interests or interests in
Immaterial Subsidiaries.
"PLEDGED PARTNERSHIP INTERESTS" means all interests owned by a Grantor
in any general partnership, limited partnership, limited liability partnership
or other partnership, including, without limitation, all partnership interests
owned by such Grantor listed on Schedule 4.4 under the heading "Pledged
Partnership Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such partnership
interests and any interest of such Grantor on the books and records of such
partnership or on the books and records of any securities intermediary
pertaining to such interest, and all dividends, distributions, cash, rights,
Securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
partnership interests; provided that Pledged Partnership Interests shall not
include Excluded Subsidiary Interests or interests in Immaterial Subsidiaries.
"PLEDGED TRUST INTERESTS" means all interests owned by a Grantor in a
Delaware business trust or other trust, including, without limitation, all trust
interests owned by such Grantor listed on Schedule 4.4 under the heading
"Pledged Trust Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such trust interests
and any interest of such Grantor on the books and records of such trust or on
the books and records of any securities intermediary pertaining to such
interest, and all dividends, distributions, cash, rights, Securities and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust interests;
provided that Pledged Trust Interests shall not include Excluded Subsidiary
Interests or interests in Immaterial Subsidiaries.
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"PLEDGED STOCK" means all shares of Capital Stock owned by a Grantor,
including, without limitation, all shares of Capital Stock owned by such Grantor
described on Schedule 4.4 under the heading "Pledged Stock" (as such schedule
may be amended or supplemented from time to time) and the certificates, if any,
representing such shares and any interest of such Grantor in the entries on the
books of the issuer of such shares or on the books of any securities
intermediary pertaining to such shares, and all dividends, distributions, cash,
rights, Securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; provided that Pledged Stock Interests shall not include Excluded
Subsidiary Interests or interests in Immaterial Subsidiaries.
"PLEDGE SUPPLEMENT" means any supplement to this Agreement in
substantially the form of Exhibit A.
"PROCEEDS" means: (i) all "proceeds" as defined in Article 9 of the UCC,
(ii) payments or distributions made with respect to any Investment Related
Property and (iii) whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.
"RECEIVABLES" means all rights to payment, whether or not earned by
performance, for goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered, including,
without limitation, all such rights constituting or evidenced by any Account,
Chattel Paper, Instrument, General Intangible or Investment Related Property,
together with all of a Grantor's rights, if any, in any Goods or other property
giving rise to such right to payment and all Collateral Support and Supporting
Obligations related thereto and all Receivables Records.
"RECEIVABLES RECORDS" means (i) all original copies of all documents,
instruments or other writings or electronic records or other Records evidencing
the Receivables, (ii) all books, correspondence, credit or other files, Records,
ledger sheets or cards, invoices and other papers relating to Receivables,
including, without limitation, all tapes, cards, computer tapes, computer discs,
computer runs, record keeping systems and other papers and documents relating to
the Receivables, whether in the possession or under the control of a Grantor or
any computer bureau or agent from time to time acting for such Grantor, (iii)
all evidences of the filing of financing statements and the registration of
other instruments in connection therewith, and amendments, supplements or other
modifications thereto, notices to other creditors or secured parties and
certificates, acknowledgments or other writings, including, without limitation,
lien search reports, from filing or other registration officers, (iv) all credit
information, reports and memoranda relating thereto and (v) all other written or
nonwritten forms of information related in any way to the foregoing or any
Receivable.
"RECORD" as defined in Article 9 of the UCC.
"SECURED OBLIGATIONS" as defined in Section 3.1.
"SECURED PARTIES" means the Lenders and the Lender Counterparties and
includes, without limitation, all former Lenders and Lender Counterparties to
the extent that any Obligations owing to such Persons were incurred while such
Persons were Lenders or Lender Counterparties and such Obligations have not been
paid or satisfied in full.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or
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arrangement, options, warrants, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.
"SECURITIES ENTITLEMENTS" means any "security entitlement" as defined in
Article 8 of the UCC.
"SECURITIES ACCOUNTS" (i) means all "securities accounts" as defined in
Article 8 of the UCC and (ii) includes, without limitation, all of the accounts
listed on Schedule 4.4 under the heading "Securities Accounts" (as such schedule
may be amended or supplemented from time to time).
"SCHEDULED IP" as defined in Section 4.7 (a)(iii).
"SUPPORTING OBLIGATIONS" means all "supporting obligations" as defined
in Article 9 of the UCC.
"TAX CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time.
"TRADEMARK LICENSES" means any and all agreements providing for the
granting of any right in, to or under Trademarks (whether the applicable Grantor
is licensee or licensor thereunder), including, without limitation, each
agreement referred to in Section F of Schedule 4.7 (as such schedule may be
amended or supplemented from time to time).
"TRADEMARKS" means all United States, state and foreign trademarks,
trade names, corporate names, company names, business names, fictitious business
names, internet domain names, trade styles, service marks, certification marks,
collective marks, logos, other source or business identifiers, designs and
general intangibles of a like nature, all registrations and applications for any
of the foregoing, including, but not limited, to the registrations and
applications referred to in Section E of Schedule 4.7 (as such schedule may be
amended or supplemented from time to time), all extensions or renewals of any of
the foregoing, all of the goodwill of the business connected with the use of and
symbolized by the foregoing, the right to xxx for past, present and future
infringement or dilution of any of the foregoing or for any injury to goodwill,
and all proceeds of the foregoing, including, without limitation, royalties,
income, payments, claims, damages and proceeds of suit.
"TRADE SECRET LICENSES" means any and all agreements providing for the
granting of any right in, to or under Trade Secrets (whether the applicable
Grantor is licensee or licensor thereunder), including, without limitation, each
agreement referred to in Section G of Schedule 4.7 (as such schedule may be
amended or supplemented from time to time).
"TRADE SECRETS" means all trade secrets and all other confidential or
proprietary information and know-how now or hereafter owned or used in the
business of a Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, the right to xxx for past, present
and future infringement of any Trade Secret and all proceeds of the foregoing,
including, without limitation, royalties, income, payments, claims, damages and
proceeds of suit.
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"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York or, when the context implies, the Uniform Commercial
Code as in effect from time to time in any other applicable jurisdiction.
"UNITED STATES" means the United States of America.
1.2 DEFINITIONS; INTERPRETATION. All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement or, if not
defined therein, in the UCC. References to "Sections," "Exhibits" and
"Schedules" shall be to Sections, Exhibits and Schedules, as the case may be, of
this Agreement unless otherwise specifically provided. Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The use herein of the word "include" or "including," when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. If any conflict or inconsistency
exists between this Agreement and the Credit Agreement, the Credit Agreement
shall govern. All references herein to provisions of the UCC shall include all
successor provisions under any subsequent version or amendment to any Article of
the UCC.
SECTION 2. GRANT OF SECURITY.
2.1 GRANT OF SECURITY. Each Grantor hereby grants to Collateral Agent a
security interest and continuing lien on all of such Grantor's right, title and
interest in, to and under all personal property of such Grantor including, but
not limited to, the following, in each case whether now owned or existing or
hereafter acquired or arising and wherever located (all of which being
hereinafter collectively referred to as the "COLLATERAL"):
(a) Accounts;
(b) Chattel Paper;
(c) Documents;
(d) General Intangibles;
(e) Goods;
(f) Instruments;
(g) Insurance;
(h) Intellectual Property;
(i) Investment Related Property;
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(j) Letter of Credit Rights;
(k) Money;
(l) Receivables and Receivables Records;
(m) Commercial Tort Claims;
(n) to the extent not otherwise included above, all
Collateral Records, Collateral Support and Supporting Obligations relating to
any of the foregoing; and
(o) to the extent not otherwise included above, all
Proceeds, products, accessions, rents and profits of or in respect of any of the
foregoing.
2.2 CERTAIN LIMITED EXCLUSIONS Notwithstanding anything herein to the
contrary, in no event shall the security interest granted under Section 2.1
attach to (a) any Non-Assignable Contract, lease, license, contract, property
rights or agreement to which any Grantor is a party or any of its rights or
interests thereunder if and for so long as the grant of such security interest
shall constitute or result in (i) the abandonment, invalidation or
unenforceability of any right, title or interest of any Grantor therein or (ii)
in a breach or termination pursuant to the terms of, or a default under, any
such lease, license, contract, property rights or agreement (other than to the
extent that any such term would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity); provided, however, that such
security interest shall attach immediately at such time as the condition causing
such abandonment, invalidation or unenforceability shall be remedied and to the
extent severable, shall attach immediately to any portion of such lease,
license, contract, property rights or agreement that does not result in any of
the consequences specified in clause (i) or (ii) above; or (b) any of the
outstanding Capital Stock of a Controlled Foreign Corporation in excess of 65%
of the voting power of all classes of Capital Stock of such Controlled Foreign
Corporation entitled to vote; provided that immediately upon the amendment of
the Tax Code to allow the pledge of a greater percentage of the voting power of
Capital Stock in a Controlled Foreign Corporation without adverse tax
consequences, the Collateral shall include, and the security interest granted by
each Grantor shall attach to, such greater percentage of Capital Stock of each
Controlled Foreign Corporation; provided further that any such Capital Stock to
the extent excluded by this sub-clause (b) shall be defined herein as "EXCLUDED
SUBSIDIARY INTERESTS".
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.
3.1 SECURITY FOR OBLIGATIONS. This Agreement secures, and the Collateral
is collateral security for, the prompt and complete payment or performance in
full when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, (and any successor provision thereof)), of all Obligations
with respect to every Grantor (the "SECURED OBLIGATIONS").
3.2 CONTINUING LIABILITY UNDER COLLATERAL. Notwithstanding anything herein
to the contrary, (i) each Grantor shall remain liable for all obligations under
the Collateral and nothing contained herein is intended or shall be a delegation
of duties to Collateral Agent or any Secured Party; (ii) each Grantor shall
remain liable under each of the agreements included in the
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Collateral, including, without limitation, any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder, all in accordance with and pursuant to
the terms and provisions thereof, and neither Collateral Agent nor any Secured
Party shall have any obligation or liability under any of such agreements by
reason of or arising out of this Agreement or any other document related
thereto, nor shall Collateral Agent nor any Secured Party have any obligation to
make any inquiry as to the nature or sufficiency of any payment received by it
or have any obligation to take any action to collect or enforce any rights under
any agreement included in the Collateral, including, without limitation, any
agreements relating to Pledged Partnership Interests or Pledged LLC Interests;
and (iii) the exercise by Collateral Agent of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.
4.1 GENERALLY.
(a) Representations and Warranties. Each Grantor hereby represents and
warrants that:
(i) it owns the Collateral purported to be owned
by it or otherwise has the rights it purports to have in each item of
Collateral and, as to all Collateral whether now existing or
hereafter acquired, will continue to own or have such rights in each
item of the Collateral (except to the extent otherwise permitted by
the Credit Agreement), in each case free and clear of any and all
Liens, rights or claims of all other Persons, including, without
limitation, Liens arising as a result of such Grantor becoming bound
(as a result of merger or otherwise) as debtor under a security
agreement entered into by another Person, other than Permitted Liens;
(ii) it has indicated on Section A of Schedule
4.1 (as such schedule may be amended or supplemented from time to
time): (w) the type of organization of such Grantor, (x) the
jurisdiction of organization of such Grantor, (y) its organizational
identification number and (z) the jurisdiction where the chief
executive office or its sole place of business is, and for the
one-year period preceding the date hereof has been, located;
(iii) the full legal name of such Grantor is as
set forth on Section A of Schedule 4.1 and it has not done in the
last five (5) years, and does not do, business under any other name
(including any trade-name or fictitious business name) except for
those names set forth on Section B of Schedule 4.1 (as such schedule
may be amended or supplemented from time to time);
(iv) except as provided on Section C of Schedule
4.1, it has not changed its name, jurisdiction of organization, chief
executive office or sole place of business or its corporate structure
in any way (e.g., by merger, consolidation, change in corporate form
or otherwise) within the past five (5) years;
(v) it has not within the last five (5) years
become bound (whether as a result of merger or otherwise) as debtor
under a security agreement entered into by another Person, which has
not heretofore been terminated; other than the
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agreements identified on Section D of Schedule 4.1 (as such schedule
may be amended or supplemented from time to time);
(vi) with respect to each agreement identified on
Section D of Schedule 4.1, it has indicated on Sections A and B of
Schedule 4.1 the information required pursuant to Section 4.1(a)(ii),
(iii) and (iv) with respect to the debtor under each such agreement;
(vii) upon (A) the filing of all UCC financing
statements naming each Grantor as "debtor" and Collateral Agent as
"secured party" and describing the Collateral in the filing offices
set forth opposite such Grantor's name on Section E of Schedule 4.1
(as such schedule may be amended or supplemented from time to time)
and other filings delivered by each Grantor; (B) the execution of a
control agreement in the form of Exhibits B, C or D hereto with
respect to any uncertificated security, Securities Account or Deposit
Account, respectively; (C) the consent of Issuing Bank with respect
to Letter of Credit Rights; (D) the United States Copyright Office
filings set forth opposite such Grantor's name on Section F of
Schedule 4.1; and (E) the United States Patent and Trademark Office
filings set forth opposite such Grantor's name on Section G of
Schedule 4.1, the security interests granted to Collateral Agent
hereunder constitute valid and perfected First Priority Liens
(subject in the case of priority only to Permitted Liens and to the
rights of the United States government (including any agency or
department thereof) with respect to United States government
Receivables) on all of the Collateral;
(viii) all actions and consents, including all
filings, notices, registrations and recordings necessary for the
exercise by Collateral Agent of the voting or other rights provided
for in this Agreement or the exercise of remedies in respect of the
Collateral have been made or obtained;
(ix) other than the financing statements filed in
favor of Collateral Agent, no effective UCC financing statement,
fixture filing or other instrument similar in effect under any
applicable law covering all or any part of the Collateral is on file
in any filing or recording office except for (x) financing statements
for which proper termination statements have been delivered to
Collateral Agent for filing and (y) financing statements filed in
connection with Permitted Liens;
(x) no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority or
regulatory body is required for either (i) the pledge or grant by any
Grantor of the Liens purported to be created in favor of Collateral
Agent hereunder or (ii) the exercise by Collateral Agent of any
rights or remedies in respect of any Collateral (whether specifically
granted or created hereunder or created or provided for by applicable
law), except (A) for the filings contemplated by clause (vii) above
and (B) as may be required, in connection with the disposition of any
Investment Related Property, by laws generally affecting the offering
and sale of Securities;
(xi) all information supplied by any Grantor with
respect to any of the Collateral (in each case taken as a whole with
respect to any particular type of Collateral) is accurate and
complete in all material respects;
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(xii) none of the Collateral constitutes, or is
the Proceeds of, "farm products" (as defined in the UCC);
(xiii) it does not own any "as extracted
collateral" (as defined in the UCC) or any timber to be cut;
(xiv) except as described on Section D of
Schedule 4.1, such Grantor is not bound as a debtor, either by
contract or by operation of law, by a security agreement previously
entered into by another Person; and
(xv) such Grantor has been duly organized as an
entity of the type set forth opposite such Grantor's name on Section
A of Schedule 4.1 solely under the laws of the jurisdiction as set
forth opposite such Grantor's name on Section A of Schedule 4.1 and
remains duly existing as such. Such Grantor has not filed any
certificates of domestication, transfer or continuance in any other
jurisdiction.
(b) Covenants and Agreements. Each Grantor hereby covenants
and agrees that:
(i) except for the security interest created by
this Agreement, it shall not create or suffer to exist any Lien upon
or with respect to any of the Collateral, except Permitted Liens, and
such Grantor shall defend the Collateral against all Persons at any
time claiming any interest therein;
(ii) it shall not produce, use or permit any
Collateral to be used unlawfully or in violation of any provision of
this Agreement or any applicable statute, regulation or ordinance or
any policy of insurance covering the Collateral, where such use or
violation could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect;
(iii) it shall not change such Grantor's name,
identity, corporate structure (e.g., by merger, consolidation, change
in corporate form or otherwise), sole place of business, chief
executive office, type of organization or jurisdiction of
organization unless it shall have (a) notified Collateral Agent in
writing, by executing and delivering to Collateral Agent a completed
Pledge Supplement, together with all Supplements to Schedules
attached thereto, at least thirty (30) days prior to any such change
or establishment, identifying such new proposed name, identity,
corporate structure, sole place of business, chief executive office
or jurisdiction of organization and providing such other information
in connection therewith as Collateral Agent may reasonably request
and (b) taken all actions necessary to maintain the continuous
validity, perfection and the same priority of Collateral Agent's
security interest in the Collateral intended to be granted and agreed
to hereby;
(iv) if Collateral Agent or any Secured Party
gives value to enable Grantor to acquire rights in or the use of any
Collateral, it shall use such value for such purposes and such
Grantor further agrees that repayment of any Obligation shall apply
on a "first-in, first-out" basis so that the portion of the value
used to acquire rights in any Collateral shall be paid in the
chronological order such Grantor acquired rights therein;
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(v) it shall pay when due all property and other
taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies)
against, the Collateral, except to the extent the validity thereof is
being contested in good faith; provided, such Grantor shall in any
event pay such taxes, assessments, charges, levies or claims not
later than five (5) days prior to the date of any proposed sale under
any judgment, writ or warrant of attachment entered or filed against
such Grantor or any of the Collateral as a result of the failure to
make such payment;
(vi) upon such Grantor or any officer of such
Grantor obtaining knowledge thereof, it shall promptly notify
Collateral Agent in writing of any event that may reasonably be
expected to materially adversely affect the value of the Collateral
or any material portion thereof, the ability of any Grantor or
Collateral Agent to dispose of the Collateral or any material portion
thereof or the rights and remedies of Collateral Agent in relation
thereto, including, without limitation, the levy of any legal process
against the Collateral or any material portion thereof;
(vii) it shall not take or permit any action not
otherwise permitted by the Credit Documents which could reasonably be
expected to impair Collateral Agent's rights in the Collateral; and
(viii) it shall not sell, transfer or assign (by
operation of law or otherwise) any Collateral, except as Permitted
Sales.
4.2 EQUIPMENT AND INVENTORY.
(a) Representations and Warranties. Each Grantor represents
and warrants that:
(i) all of the Equipment and Inventory included in the
Collateral has been kept for the past five (5) years or such shorter
period of time as such Grantor has owned such Equipment or Inventory
only at the locations specified for any Grantor in Schedule 4.2 (as
such schedule may be amended or supplemented from time to time);
(ii) any Goods now or hereafter produced by any Grantor
included in the Collateral have been and will be produced in
compliance in all material respects with the requirements of the Fair
Labor Standards Act, as amended; and
(iii) none of the Inventory or Equipment is in the
possession of an issuer of a negotiable document (as defined in
Section 7-104 of the UCC) therefor or otherwise in the possession of
a bailee or a warehouseman.
(b) Covenants and Agreements. Each Grantor covenants and
agrees that:
(i) it shall keep the Equipment, Inventory and any
Documents evidencing any Equipment and Inventory in the locations
specified for any Grantor on Schedule 4.2 (as such schedule may be
amended or supplemented from time to time) unless it shall have (a)
notified Collateral Agent in writing, by executing and delivering to
Collateral Agent a completed Pledge Supplement, together with all
Supplements to Schedules thereto, at least twenty (20) days prior to
any change in locations, identifying such new locations and providing
such other information in connection therewith as
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Collateral Agent may reasonably request and (b) taken all actions
necessary to maintain the continuous validity, perfection and the
same priority of Collateral Agent's security interest in the
Collateral intended to be granted and agreed to hereby, or to enable
Collateral Agent to exercise and enforce its rights and remedies
hereunder, with respect to such Equipment and Inventory;
(ii) it shall keep correct and accurate records of the
Inventory, as is customarily maintained by it and, in any event, in
conformity with GAAP;
(iii) it shall not deliver any Document evidencing any
Equipment and Inventory to any Person other than the issuer of such
Document to claim the Goods evidenced therefor or Collateral Agent;
(iv) if any Equipment or Inventory is in possession or
control of any third party (other than for repairs), each Grantor
shall join with Collateral Agent in notifying the third party of
Collateral Agent's security interest and obtaining an acknowledgment
from the third party that it is holding the Equipment and Inventory
for the benefit of Collateral Agent; and
(v) with respect to any item of Equipment which is
covered by a certificate of title under a statute of any jurisdiction
under the law of which indication of a security interest on such
certificate is required as a condition of perfection thereof, upon
the reasonable request of Collateral Agent, (A) provide information
with respect to any such Equipment having a book value in excess of
$100,000 individually or $1,000,000 in the aggregate, (B) execute and
file with the registrar of motor vehicles or other appropriate
authority in such jurisdiction an application or other document
requesting the notation or other indication of the security interest
created hereunder on such certificate of title, and (C) deliver to
Collateral Agent copies of all such applications or other documents
filed during such calendar quarter and copies of all such
certificates of title issued during such calendar quarter indicating
the security interest created hereunder in the items of Equipment
covered thereby.
4.3 RECEIVABLES.
(a) Covenants and Agreements. Each Grantor hereby covenants
and agrees that:
(i) it shall keep and maintain at its own cost
and expense satisfactory and complete, in all material respects,
records of the Receivables, including, but not limited to, records of
all payments received and all credits granted on the Receivables;
(ii) it shall xxxx conspicuously, in form and
manner reasonably satisfactory to Collateral Agent, all Chattel Paper
and Instruments (other than any delivered to Collateral Agent as
provided herein), as well as the Receivables Records, with an
appropriate reference to the fact that Collateral Agent has a
security interest therein;
(iii) it shall perform in all material respects
all of its obligations with respect to the Receivables owned by such
Grantor;
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(iv) it shall not amend, modify, terminate or
waive any provision of any Receivable in any manner which could
reasonably be expected to materially adversely affect the value of
the Receivables as Collateral. Other than in the ordinary course of
business as generally conducted by it on and prior to the date
hereof, and except as otherwise provided in subsection (v) below,
upon the occurrence and during the continuance of an Event of
Default, such Grantor shall not (w) grant any extension or renewal of
the time of payment of any Receivable owned by such Grantor, (x)
compromise or settle any dispute, claim or legal proceeding with
respect to any Receivable owned by such Grantor for less than the
total unpaid balance thereof, (y) release, wholly or partially, any
Person liable for the payment thereof or (z) allow any credit or
discount thereon;
(v) except as otherwise provided in this
subsection, each Grantor shall continue to collect all amounts due or
to become due to such Grantor under the Receivables and any
Supporting Obligation and diligently exercise each material right it
may have under any Receivable, any Supporting Obligation or
Collateral Support, in each case, at its own expense and consistent
with past practices, and in connection with such collections and
exercise, such Grantor shall take such action as such Grantor or
Collateral Agent may deem necessary. In addition, at any time
following the occurrence and during the continuance of an Event of
Default, Collateral Agent may: (1) direct the Account Debtors under
any Receivables owned by such Grantor to make payment of all amounts
due or to become due to such Grantor thereunder directly to
Collateral Agent; (2) notify, or require any Grantor to notify, each
Person maintaining a lockbox or similar arrangement to which Account
Debtors under any Receivables have been directed to make payment to
remit all amounts representing collections on checks and other
payment items from time to time sent to or deposited in such lockbox
or other arrangement directly to Collateral Agent; and (3) enforce,
at the expense of such Grantor, collection of any such Receivables
and adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as such Grantor might have
done. If Collateral Agent notifies any Grantor that it has elected to
collect the Receivables in accordance with the preceding sentence,
any payments of Receivables received by such Grantor shall be
forthwith (and in any event within two (2) Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such
Grantor to Collateral Agent if required, in an account maintained
under the sole dominion and control of Collateral Agent, and until so
turned over, all amounts and proceeds (including checks and other
instruments) received by such Grantor in respect of the Receivables,
any Supporting Obligation or Collateral Support shall be received in
trust for the benefit of Collateral Agent hereunder and shall be
segregated from other funds of such Grantor and such Grantor shall
not adjust, settle or compromise the amount or payment of any
Receivable, or release wholly or partly any Account Debtor or obligor
thereof, or allow any credit or discount thereon; and
(vi) it shall use commercially reasonable efforts
to keep in full force and effect any Supporting Obligation or
Collateral Support relating to any Receivable.
(b) Delivery and Control of Receivables. With respect to
any Receivables of any Grantor in excess of $150,000 individually or $1,000,000
in the aggregate that is evidenced by, or constitutes, Chattel Paper or
Instruments, such Grantor shall cause each originally executed copy thereof to
be delivered to Collateral Agent (or its agent or designee) appropriately
indorsed to Collateral Agent or indorsed in blank (i) with respect to any such
Receivables in existence on
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the date hereof, within ten (10) days of the date hereof and (ii) with respect
to any such Receivables hereafter arising, within ten (10) days of such Grantor
acquiring rights therein. With respect to any Receivables of any Grantor in
excess of $150,000 individually or $1,000,000 in the aggregate which would
constitute "electronic chattel paper" under Article 9 of the UCC, such Grantor
shall take all steps necessary to give Collateral Agent control over such
Receivables (within the meaning of Section 9-105 of the UCC) (i) with respect to
any such Receivables in existence on the date hereof, within ten (10) days of
the date hereof and (ii) with respect to any such Receivables hereafter arising,
within ten (10) days of such Grantor acquiring rights therein. Any Receivable
not otherwise required to be delivered or subjected to the control of Collateral
Agent in accordance with this subsection (c) shall be subjected to the control
of the applicable Grantor at any time.
4.4 INVESTMENT RELATED PROPERTY.
4.4.1 INVESTMENT RELATED PROPERTY GENERALLY
(a) Covenants and Agreements. Each Grantor hereby
covenants and agrees that:
(i) in the event it acquires rights in any
Investment Related Property after the date hereof, it shall deliver
to Collateral Agent a completed Pledge Supplement, together with all
Supplements to Schedules thereto, reflecting such new Investment
Related Property. Notwithstanding the foregoing, it is understood and
agreed that the security interest of Collateral Agent shall attach to
all Investment Related Property immediately upon any Grantor's
acquisition of rights therein and shall not be affected by the
failure of any Grantor to deliver a Supplement to Schedule 4.4 as
required hereby;
(ii) except as provided in the next sentence, in
the event such Grantor receives any dividends, interest or
distributions on any Investment Related Property, or any Securities
or other property upon the merger, consolidation, liquidation or
dissolution of any issuer of any Investment Related Property, then
(a) such dividends, interest or distributions and Securities or other
property shall be included in the definition of Collateral without
further action and (b) such Grantor shall immediately take all steps,
if any, necessary to ensure the validity, perfection, priority and,
if applicable, control of Collateral Agent over such Investment
Related Property (including, without limitation, delivery thereof to
Collateral Agent) and, pending any such action, such Grantor shall be
deemed to hold such dividends, interest, distributions, Securities or
other property in trust for the benefit of Collateral Agent and shall
segregate such dividends, distributions, Securities or other property
from all other property of such Grantor. Notwithstanding the
foregoing, so long as no Event of Default shall have occurred and be
continuing, Collateral Agent authorizes each Grantor to retain all
cash dividends and distributions paid in the normal course of the
business of the issuer and consistent with the past practice of the
issuer and all payments of interest; and
(iii) each Grantor consents to the grant by each
other Grantor of a security interest in all Investment Related
Property to Collateral Agent.
(b) Delivery and Control. Each Grantor agrees that, with
respect to any Investment Related Property in which it currently has rights, it
has complied with the provisions of this Section 4.4.1(b) on or before the date
hereof and, with respect to any Investment Related
16
Property hereafter acquired by such Grantor, it shall comply with the provisions
of this Section 4.4.1(b) immediately upon acquiring rights therein, in each case
in form and substance reasonably satisfactory to Collateral Agent. With respect
to any Investment Related Property that is represented by a certificate or that
is an Instrument (other than any Investment Related Property credited to a
Securities Account), it shall cause such certificate or Instrument to be
delivered to Collateral Agent, indorsed in blank by an "effective indorsement"
(as defined in Section 8-107 of the UCC), regardless of whether such certificate
constitutes a "certificated security" for purposes of the UCC. With respect to
any Investment Related Property that is an "uncertificated security" for
purposes of the UCC (other than any "uncertificated securities" credited to a
Securities Account), it shall cause the issuer of such uncertificated security
to either (i) register Collateral Agent as the registered owner thereof on the
books and records of the issuer or (ii) execute an agreement substantially in
the form of Exhibit B hereto.
(c) Voting and Distributions. So long as no Event of
Default shall have occurred and be continuing:
(i) except as otherwise provided under the covenants
and agreements relating to Investment Related Property in this Agreement
or in the Credit Agreement, each Grantor shall be entitled to exercise or
refrain from exercising any and all voting and other consensual rights
pertaining to the Investment Related Property, or any part thereof, for
any purpose not inconsistent with the terms of this Agreement or the
Credit Agreement; provided, no Grantor shall exercise or refrain from
exercising any such right if Collateral Agent shall have notified such
Grantor that, in Collateral Agent's reasonable judgment, such action would
have a Material Adverse Effect; and provided further, such Grantor shall
give Collateral Agent at least five (5) Business Days prior written notice
of the manner in which it intends to exercise, or the reasons for
refraining from exercising, any such right; it being understood, however,
that neither the voting by such Grantor of any Pledged Stock for, or such
Grantor's consent to, the election of directors (or similar governing
body) at a regularly scheduled annual or other meeting of stockholders or
with respect to incidental matters at any such meeting, nor such Grantor's
consent to or approval of any action otherwise permitted under this
Agreement and the Credit Agreement, shall be deemed inconsistent with the
terms of this Agreement or the Credit Agreement within the meaning of this
Section 4.4.1(c)(i), and no notice of any such voting or consent need be
given to Collateral Agent;
(ii) Collateral Agent shall promptly execute and
deliver (or cause to be executed and delivered) to each Grantor all
proxies and other instruments as such Grantor may from time to time
reasonably request for the purpose of enabling such Grantor to exercise
the voting and other consensual rights when and to the extent which it is
entitled to exercise pursuant to clause (i) above; and
(iii) upon the occurrence and during the continuance
of an Event of Default:
(1) all rights of each Grantor to exercise or refrain from exercising
the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease, and all such
rights shall thereupon become vested in Collateral Agent who shall
thereupon have the sole right to exercise such voting and other
consensual rights; and
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(2) in order to permit Collateral Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant
hereto and to receive all dividends and other distributions which it
may be entitled to receive hereunder, (A) each Grantor shall
promptly execute and deliver (or cause to be executed and delivered)
to Collateral Agent all proxies, dividend payment orders and other
instruments as Collateral Agent may from time to time reasonably
request and (B) each Grantor acknowledges that Collateral Agent may
utilize the power of attorney set forth in and in accordance with
Section 6.1.
4.4.2 PLEDGED EQUITY INTERESTS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants that:
(i) Section A of Schedule 4.4 (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Pledged Stock," "Pledged LLC Interests," "Pledged Partnership
Interests" and "Pledged Trust Interests," respectively, all of the
Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and
Pledged Trust Interests owned by such Grantor, and such Pledged Equity
Interests constitute the percentage of issued and outstanding shares of
stock, percentage of membership interests, percentage of partnership
interests or percentage of beneficial interest of the respective
issuers thereof indicated on such Schedule;
(ii) except as set forth on Section B of Schedule 4.4,
it has not acquired any equity interests of another entity or
substantially all the assets of another entity within the past five (5)
years;
(iii) it is the record and beneficial owner of such
Pledged Equity Interests free of all Liens, rights or claims of other
Persons other than Permitted Liens, and, other than as set forth on
Schedule 4.4, there are no outstanding warrants, options or other
rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or
that requires the issuance or sale of, any Pledged Equity Interests;
(iv) without limiting the generality of Section
4.4.2(a)(iii), no consent of any Person, including any other general or
limited partner, any other member of a limited liability company, any
other shareholder or any other trust beneficiary, is necessary in
connection with the creation, perfection or First Priority status of
the security interest of Collateral Agent in any Pledged Equity
Interests or the exercise by Collateral Agent of the voting or other
rights provided for in this Agreement or the exercise of remedies in
respect thereof; and
(v) none of the Pledged LLC Interests nor Pledged
Partnership Interests are or represent interests in issuers that (A)
are registered as investment companies, (B) are dealt in or traded on
securities exchanges or markets or (C) have opted to be treated as
securities under the uniform commercial code of any jurisdiction.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that:
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(i) without the prior written consent of
Collateral Agent, it shall not vote to, enable another Person to or
take any other action to (a) amend or terminate (other than as
permitted by the Credit Agreement) any partnership agreement, limited
liability company agreement, certificate of incorporation, by-laws or
other organizational documents related to such Grantor's Pledged Equity
Interests in any way that materially adversely changes the rights of
such Grantor with respect to any Investment Related Property or
adversely affects the validity, perfection or priority of Collateral
Agent's security interest, (b) permit any issuer of any Pledged Equity
Interest owned by such Grantor to issue any additional stock,
partnership interests, limited liability company interests or other
equity interests of any nature or to issue Securities convertible into
or granting the right of purchase or exchange for any stock or other
equity interest of any nature of such issuer, (c) other than as
permitted under the Credit Agreement, permit any issuer of any Pledged
Equity Interest to dispose of all or a material portion of their
assets, (d) waive any default under or breach of any terms of
organizational documents relating to the issuer of any Pledged Equity
Interest or the terms of any Pledged Debt owned by such Grantor, which
default or breach may reasonably be expected to materially adversely
affect the Collateral, or (e) cause any issuer of any Pledged
Partnership Interests or Pledged LLC Interests which are not Securities
(for purposes of the UCC) on the date hereof to elect or otherwise take
any action to cause such Pledged Partnership Interests or Pledged LLC
Interests to be treated as Securities for purposes of the UCC;
provided, however, notwithstanding the foregoing, if any issuer of any
Pledged Partnership Interests or Pledged LLC Interests takes any such
action in violation of the foregoing in this clause (e), such Grantor
shall promptly notify Collateral Agent in writing of any such election
or action and, in such event, shall take all steps necessary to
establish Collateral Agent's "control" thereof;
(ii) it shall comply, in all material respects,
with all of its obligations under any partnership agreement or limited
liability company agreement relating to Pledged Partnership Interests
or Pledged LLC Interests owned by such Grantor and shall enforce all of
its rights with respect to any Investment Related Property owned by
such Grantor;
(iii) without the prior written consent of
Collateral Agent, it shall not permit any issuer of any Pledged Equity
Interest to merge or consolidate unless (i) such issuer creates a
security interest that is perfected by a filed financing statement
(that is not effective solely under Section 9-508 of the UCC) in
collateral in which such new debtor has or acquires rights and (ii), to
the extent required by the Credit Agreement, all the outstanding
Capital Stock of the surviving or resulting corporation, limited
liability company, partnership or other entity is, upon such merger or
consolidation, pledged hereunder and no cash, Securities or other
property is distributed in respect of the outstanding equity interests
of any other constituent Grantor; provided that if the surviving or
resulting Grantor upon any such merger or consolidation involving an
issuer which is a Controlled Foreign Corporation, then such Grantor
shall only be required to pledge equity interests in accordance with
Section 2.2; and
(iv) each Grantor consents to the grant by each
other Grantor of a security interest in all Investment Related
Property to Collateral Agent and, without limiting the foregoing,
consents to the transfer of any Pledged Partnership Interest and any
Pledged LLC Interest to Collateral Agent or its nominee following and
during the continuance of an Event of Default and to the substitution
of Collateral Agent or its
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nominee as a partner in any partnership or as a member in any limited
liability company with all the rights and powers related thereto.
4.4.3 PLEDGED DEBT
(a) Representations and Warranties. Each Grantor hereby
represents and warrants that Schedule 4.4 (as such schedule may be amended or
supplemented from time to time) sets forth under the heading "Pledged Debt" all
of the Pledged Debt owned by such Grantor and all of such Pledged Debt has been
duly authorized, authenticated or issued, and delivered and is the legal, valid
and binding obligation of the issuers thereof and is not in default and
constitutes all of the issued and outstanding inter-company Indebtedness of such
Grantor.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that it shall notify Collateral Agent of any default under
any Pledged Debt owned by such Grantor that has caused, either in any individual
case or in the aggregate, a Material Adverse Effect.
4.4.4 INVESTMENT ACCOUNTS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants that:
(i) Schedule 4.4 (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Securities Accounts" and "Commodities Accounts,"
respectively, all of the Securities Accounts and Commodities Accounts
in which such Grantor has an interest. Such Grantor is the sole
entitlement holder of each such Securities Account and Commodities
Account attributed to it, and such Grantor has not consented to, and is
not otherwise aware of, any Person (other than Collateral Agent
pursuant hereto) having "control" (within the meanings of Sections
8-106 and 9-106 of the UCC) over, or any other interest in, any such
Securities Account or Commodities Account or Securities or other
property credited thereto;
(ii) Schedule 4.4 (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Deposit Accounts" all of the Deposit Accounts in which such
Grantor has an interest. Such Grantor is the sole account holder of
each such Deposit Account attributed to it and such Grantor has not
consented to, and is not otherwise aware of, any Person (other than
Collateral Agent pursuant hereto) having either sole dominion and
control (within the meaning of common law) or "control" (within the
meaning of Section 9-104 of the UCC) over, or any other interest in,
any such Deposit Account or any Money or other property deposited
therein; and
(iii) Except as otherwise provided in Section
6.21(b) of the Credit Agreement, such Grantor has taken all actions
necessary, including those specified in Section 4.4.4(b), to (a)
establish Collateral Agent's "control" (within the meanings of Sections
8-106 and 9-106 of the UCC) over any portion of the Investment Related
Property constituting certificated Securities, uncertificated
Securities, Securities Accounts, Securities Entitlements or Commodities
Accounts (each as defined in the UCC), (b) establish Collateral Agent's
"control" (within the meaning of Section 9-104 of the UCC) over all
Deposit Accounts and (c) deliver all Instruments in connection
therewith to Collateral Agent.
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(b) Delivery and Control
(i) Each Grantor agrees that, except as
otherwise provided in Section 6.21(b) of the Credit Agreement, with
respect to any Investment Related Property consisting of Securities
Accounts or Securities Entitlements in which it has rights, it shall
cause the securities intermediary maintaining such Securities Account
or Securities Entitlement to enter into an agreement substantially in
the form of Exhibit C. Each Grantor agrees that, except as otherwise
provided in Section 6.21(b) of the Credit Agreement, with respect to
any Investment Related Property in which it has rights that is a
"Deposit Account," it shall cause the depositary institution
maintaining such account to enter into an agreement substantially in
the form of Exhibit D. Except as otherwise provided in Section 6.21(b)
of the Credit Agreement, each Grantor shall have entered into such
control agreement or agreements with respect to (i) any Securities
Accounts, Securities Entitlements or Deposit Accounts that exist on the
date hereof, as of or prior to the Credit Date and (ii) any Securities
Accounts, Securities Entitlements or Deposit Accounts that are created
or acquired after the date hereof, as of or prior to the deposit or
transfer of any such Securities Entitlements or funds, whether
constituting moneys or investments, into such Securities Accounts or
Deposit Accounts. Upon the cure or waiver of any Event of Default,
Collateral Agent shall notify the appropriate depositary institution
maintaining such Securities Accounts or Deposit Accounts that such
depositary institution shall accept instructions from the appropriate
Grantor until such time as such depositary institution receives further
instructions from Collateral Agent.
(ii) In addition to the foregoing, if any issuer
of any Investment Related Property is located in a jurisdiction outside
of the United States, each Grantor shall take such additional actions,
including, without limitation, causing the issuer to register the
pledge on its books and records or making such filings or recordings,
in each case as may be necessary, under the laws of such issuer's
jurisdiction to insure the validity, perfection and priority of the
security interest of Collateral Agent. Upon the occurrence and during
the continuance of an Event of Default, Collateral Agent shall have the
right, without notice to any Grantor, to transfer all or any portion of
the Investment Related Property to its name or the name of its nominee
or agent. In addition, Collateral Agent shall have the right at any
time after the occurrence and during the continuance of an Event of
Default, without notice to any Grantor, to exchange any certificates or
instruments representing any Investment Related Property for
certificates or instruments of smaller or larger denominations.
4.5 MATERIAL CONTRACTS.
(a) Representations and Warranties. Each Grantor hereby
represents and warrants that:
(i) Schedule 4.5 (as such schedule may be
amended or supplemented from time to time) sets forth all of the
Material Contracts to which such Grantor has rights;
(ii) the Material Contracts, true and complete
copies (including any amendments or supplements thereof) of which have
been furnished to Collateral Agent, have been duly authorized, executed
and delivered by all parties thereto, are in full force and effect and
are binding upon and enforceable against all parties thereto in
accordance with their respective terms. There exists no default that
could reasonably be
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expected to cause a Material Adverse Effect under any Material Contract
by any party thereto and neither such Grantor nor, to its best
knowledge, any other Person party thereto is likely to become in
default thereunder, and no Person party thereto has any defenses,
counterclaims or right of set-off with respect to any Material
Contract; and
(iii) except as otherwise set forth on Schedule
4.5, no Material Contract prohibits assignment or requires consent of
or notice to any Person in connection with the assignment to Collateral
Agent hereunder, except such as has been given or made or is currently
sought pursuant to Section 4.5 (b)(vii).
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that:
(i) after the occurrence and during the
continuance of an Event of Default, Collateral Agent may, upon written
notice to the applicable Grantor, notify, or require such Grantor to
notify, the counterparty to make all payments under any Material
Contract of such Grantor directly to Collateral Agent;
(ii) such Grantor shall deliver promptly to
Collateral Agent a copy of each material demand, notice or document
received by it relating in any way to any Material Contract;
(iii) such Grantor shall deliver promptly to
Collateral Agent, and in any event within ten (10) Business Days, after
(1) any Material Contract of such Grantor is terminated or amended in a
manner that is materially adverse to such Grantor or (2) any new
Material Contract is entered into by such Grantor, a written statement
describing such event, with copies of such material amendments or new
contracts, delivered to Collateral Agent (to the extent such delivery
is permitted by the terms of any such Material Contract; provided, no
prohibition on delivery shall be effective if it were bargained for by
such Grantor with the intent of avoiding compliance with this Section
4.5(b)(iii));
(iv) it shall perform in all material respects
all of its obligations with respect to the Material Contracts of such
Grantor;
(v) it shall promptly and diligently exercise
each material right (except the right of termination) it may have under
any Material Contract, any Supporting Obligation or Collateral Support,
in each case, at its own expense, and in connection with such
collections and exercise, such Grantor shall take such action as such
Grantor or Collateral Agent may deem necessary;
(vi) it shall use commercially reasonable efforts
to keep in full force and effect any Supporting Obligation or
Collateral Support relating to any Material Contract of such Grantor;
and
(vii) such Grantor shall, within thirty (30) days
of the date hereof with respect to any Non-Assignable Contract that is
a Material Contract in effect on the date hereof and within thirty (30)
days after entering into any Non-Assignable Contract that is a Material
Contract after the Closing Date, request in writing the consent of the
counterparty or counterparties to such Non-Assignable Contract pursuant
to the terms of such Non-Assignable Contract or applicable law to the
assignment or granting of a
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security interest in such Non-Assignable Contract to Collateral Agent
and use commercially reasonable efforts to obtain such consent as soon
as practicable thereafter.
4.6 LETTER OF CREDIT RIGHTS.
(a) Representations and Warranties. Each Grantor hereby
represents and warrants that:
(i) all material letters of credit to which such
Grantor has rights are listed on Schedule 4.6 (as such schedule may be
amended or supplemented from time to time); and
(ii) it has obtained the consent of each issuer
of any material letter of credit to the assignment of the proceeds of
the letter of credit to Collateral Agent.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that, with respect to any material letter of credit to
which such Grantor has rights hereafter arising, it shall obtain the consent of
the issuer thereof to the assignment of the proceeds of such letter of credit to
Collateral Agent and shall deliver to Collateral Agent a completed Pledge
Supplement, together with all Supplements to Schedules thereto.
4.7 INTELLECTUAL PROPERTY.
(a) Representations and Warranties. Except as disclosed
in Section H of Schedule 4.7 (as such schedule may be amended or supplemented
from time to time), each Grantor hereby represents and warrants that:
(i) Schedule 4.7 (as such schedule may be
amended or supplemented from time to time) sets forth a true and
complete list of (i) all United States, state and foreign registrations
of and applications for Patents, Trademarks and Copyrights owned by
such Grantor and (ii) all Patent Licenses, Trademark Licenses and
Copyright Licenses, in each case material to the business of such
Grantor;
(ii) it is the sole and exclusive owner of the
entire right, title and interest in and to all Intellectual Property
owned by it on Schedule 4.7 (as such schedule may be amended or
supplemented from time to time) and owns or has the valid right to use
all other Intellectual Property used in or necessary to conduct its
business, free and clear of all Liens and licenses, except for
Permitted Liens and the licenses set forth on Sections B, D, F and G of
Schedule 4.7 (as each may be amended or supplemented from time to
time);
(iii) all Intellectual Property owned by such
Grantor and listed on Schedule 4.7 (the "SCHEDULED IP"), all other
Intellectual Property owned by such Grantor necessary to conduct its
business (the "OWNED IP") and, to the knowledge of such Grantor, all
other Intellectual Property necessary to conduct its business (the
"ADDITIONAL IP") is subsisting, valid and enforceable and has not been
adjudged invalid or unenforceable, in whole or in part, and such
Grantor has performed all acts and has paid all renewal, maintenance
and other fees and taxes required to maintain each and every
registration and application of Intellectual Property owned by such
Grantor in full force and effect;
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(iv) no holding, decision or judgment has been
rendered in any action or proceeding before any court or administrative
authority challenging the validity of such Grantor's right to register,
or such Grantor's rights to own or use, any Scheduled IP, Owned IP or,
to the knowledge of such Grantor, Additional IP, and no such action or
proceeding is pending or, to the best of such Grantor's knowledge,
threatened;
(v) such Grantor is listed as the record owner
for all registrations and applications for Copyrights, Patents and
Trademarks owned by such Grantor in the applicable United States, state
or foreign office or agency, and none of the Trademarks, Patents,
Copyrights or Trade Secrets included in the Collateral has been
licensed by such Grantor to any Affiliate or third party, except as
disclosed in Schedule 4.7 (as such schedule may be amended or
supplemented from time to time);
(vi) it has been using appropriate statutory
notices of registration in connection with its use of registered
Trademarks, proper marking practices in connection with the use of
Patents and appropriate notices of copyright in connection with the
publication of Copyrights, in each case material to the business of
such Grantor;
(vii) it uses adequate standards of quality in the
manufacture, distribution and sale of any products sold and in the
provision of all services rendered under or in connection with all
Trademarks necessary to conduct its business included in the Collateral
and has taken all action necessary to insure that all licensees of such
Trademarks included in the Collateral owned by such Grantor use such
adequate standards of quality;
(viii) the conduct of such Grantor's business does
not, to such Grantor's knowledge, infringe upon any Trademark, Patent,
Copyright, Trade Secret or similar Intellectual Property right owned or
controlled by a third party, and no claim has been made in writing to a
Grantor that the use of any Intellectual Property owned or used by such
Grantor (or any of its respective licensees) violates the asserted
rights of any third party;
(ix) to such Grantor's knowledge, no third party
is infringing upon any Intellectual Property owned by such Grantor;
(x) no settlements or consents, covenants not to
xxx, nonassertion assurances or releases have been entered into by
Grantor or to which Grantor is bound that adversely affect Grantor's
rights to own or use any Scheduled IP, Owned IP or, to the knowledge of
such Grantor, Additional IP;
(xi) it has not made a previous assignment, sale,
transfer or agreement constituting a present or future assignment,
sale, transfer or agreement of any Scheduled IP, Owned IP or Additional
IP that has not been terminated or released;
(xii) there is no effective financing statement or
other document or instrument now executed, or on file or recorded in
any public office, granting a security interest in or otherwise
encumbering any part of the Scheduled IP, Owned IP or, to the knowledge
of such Grantor, Additional IP, other than in favor of Collateral
Agent; and
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(xiii) it is not a party to any agreement pursuant
to which it has obtained the exclusive rights to use any third party's
Copyrights, except as set forth on Schedule 4.7, and no license of
Intellectual Property to which such Grantor is a party is reasonably
likely to be construed as an assignment of such licensed Intellectual
Property to such Grantor.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees as follows:
(i) it shall not do any act or omit to do any
act whereby any of the Intellectual Property which is material to the
business of such Grantor may lapse or become abandoned, dedicated to
the public or unenforceable, or which would adversely affect the
validity, grant or enforceability of the security interest granted
herein;
(ii) it shall not, with respect to any Trademarks
which are material to the business of such Grantor, cease the use of
any of such Trademarks or fail to maintain the level of the quality of
products sold, if any, and services rendered under any of such
Trademarks at a level at least substantially consistent with the
quality of such products and services as of the date hereof, and each
Grantor shall take all reasonable steps necessary to insure that
licensees of such Trademarks use such standards of quality;
(iii) it shall, within sixty (60) days of the
creation or acquisition of any copyrightable work which is material to
the business of such Grantor, apply to register the Copyright in the
United States Copyright Office, and it shall record its interest in any
exclusive license of a Copyright to such Grantor in the United States
Copyright Office within sixty (60) days of the execution of such
license;
(iv) it shall promptly notify Collateral Agent if
it knows that any item of the Intellectual Property that is material to
the business of such Grantor may become (A) abandoned or dedicated to
the public or placed in the public domain, (B) invalid or unenforceable
or (C) subject to any adverse determination or development (including
the institution of proceedings) in any action or proceeding in the
United States Patent and Trademark Office, the United States Copyright
Office, any state registry, any foreign counterpart of the foregoing or
any court, arbitral tribunal or regulatory agency;
(v) it shall take all reasonable steps in the
United States Patent and Trademark Office, the United States Copyright
Office, any state registry or any foreign counterpart of the foregoing
to pursue any application and maintain any registration of each
Trademark, Patent and Copyright owned by such Grantor which is now or
shall become included in the Intellectual Property (except for those
items of Intellectual Property with respect to which such Grantor has
determined, in the exercise of its commercially reasonable judgment,
are no longer in use or have negligible value), including, but not
limited to, those items on Sections A, C and E of Schedule 4.7 (as each
may be amended or supplemented from time to time);
(vi) in the event that any Intellectual Property
owned by or exclusively licensed to any Grantor is infringed,
misappropriated, diluted or otherwise violated by a third party, such
Grantor shall promptly take all commercially reasonable actions to stop
such infringement, misappropriation, dilution or other violation and
protect its exclusive rights in such Intellectual Property, including,
but not limited to, the initiation of a suit for injunctive relief and
to recover damages;
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(vii) it shall promptly (but in no event more than
thirty (30) days after any Grantor obtains knowledge thereof) report to
Collateral Agent (i) the filing of any application to register any
Intellectual Property with the United States Patent and Trademark
Office, the United States Copyright Office, any state registry or any
foreign counterpart of the foregoing (whether such application is filed
by such Grantor or through any agent, employee, licensee or designee
thereof), (ii) the registration of any Intellectual Property by any
such office, (iii) the acquisition by such Grantor of any application
or registration of any Intellectual Property and (iv) the existence of
any agreement granting an Intellectual Property license which is in the
nature of an agreement described in Section 4.7(a)(xiii), in each case
by executing and delivering to Collateral Agent a completed Pledge
Supplement, together with all Supplements to Schedules thereto;
(viii) it shall, promptly upon the reasonable
request of Collateral Agent, execute and deliver to Collateral Agent
any document required to acknowledge, confirm, register, record or
perfect Collateral Agent's security interest in any part of the
Intellectual Property, whether now owned or hereafter acquired;
(ix) except with the prior consent of Collateral
Agent or as permitted under the Credit Agreement, such Grantor shall
not execute, and there will not be on file in any public office, any
financing statement or other document or instruments, except financing
statements or other documents or instruments filed or to be filed in
favor of Collateral Agent, and such Grantor shall not sell, assign,
transfer, license, grant any option or create or suffer to exist any
Lien upon or with respect to the Intellectual Property, except for the
Lien created by and under this Security Agreement and the other Credit
Documents and Permitted Liens, if any;
(x) it shall hereafter use commercially
reasonable efforts so as not to permit the inclusion in any contract to
which it hereafter becomes a party of any provision that could or might
in any way materially impair or prevent the creation hereunder of a
security interest in, or the assignment of, such Grantor's rights and
interests in any property included within the definitions of any
Intellectual Property such Grantor acquires under such contracts;
(xi) it shall take all steps reasonably necessary
to protect the secrecy of all Trade Secrets, including, without
limitation, entering into confidentiality and nondisclosure agreements
with employees and other Persons having access to such Trade Secrets
and labeling and restricting access to Trade Secrets;
(xii) it shall use appropriate statutory notices
of registration in connection with its use of registered Trademarks,
proper marking practices in connection with the use of Patents and
appropriate notices of copyright in connection with the publication of
Copyrights, in each case material to the business of such Grantor; and
(xiii) it shall continue to collect, at its own
expense, all amounts due or to become due to such Grantor in respect of
the Intellectual Property or any portion thereof. In connection with
such collections, Grantor may take (and, at Collateral Agent's
reasonable direction, shall take) such action as such Grantor or
Collateral Agent may deem reasonably necessary to enforce collection of
such amounts. Notwithstanding the foregoing, Collateral Agent shall
have the right at any time, to notify, or require such Grantor to
notify, any obligors with respect to any such amounts of the existence
of the security interest created hereby.
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4.8 COMMERCIAL TORT CLAIMS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants that Schedule 4.8 (as such schedule may be amended or
supplemented from time to time) sets forth all Commercial Tort Claims of such
Grantor in excess of $100,000 individually or $1,000,000 in the aggregate; and
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that, with respect to any Commercial Tort Claim in excess
of $100,000 individually or $1,000,000 in the aggregate hereafter arising, it
shall deliver to Collateral Agent a completed Pledge Supplement, together with
all Supplements to Schedules thereto, identifying such new Commercial Tort
Claims.
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES;
ADDITIONAL GRANTORS.
5.1 ACCESS; RIGHT OF INSPECTION. Collateral Agent and its
representatives shall have access to all the books, correspondence and records
of each Grantor, and the right to enter any premises of each Grantor and inspect
any property of each Grantor where any of the Collateral of such Grantor granted
pursuant to this Agreement is located for the purpose of inspecting the same,
observing its use or otherwise protecting its interests therein, in each case to
the extent provided in and in accordance with Section 5.9 of the Credit
Agreement.
5.2 FURTHER ASSURANCES.
(a) Each Grantor agrees that from time to time, at the
expense of such Grantor, it shall promptly execute and deliver all further
instruments and documents and take all further action that may be necessary or
desirable, or that Collateral Agent may reasonably request, in order to create
and/or maintain the validity, perfection or priority of and protect any security
interest granted or purported to be granted hereby or to enable Collateral Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor
shall:
(i) file such financing or continuation
statements, or amendments thereto, and execute and deliver such other
agreements, instruments, endorsements, powers of attorney or notices as
may be necessary, or as Collateral Agent may reasonably request, in
order to perfect and preserve the security interests granted or
purported to be granted hereby;
(ii) take all actions necessary to ensure the
recordation of appropriate evidence of the liens and security interest
granted hereunder in the Intellectual Property with any intellectual
property registry in which said Intellectual Property is registered or
in which an application for registration is pending, including, without
limitation, the United States Patent and Trademark Office, the United
States Copyright Office, the various Secretaries of State and the
foreign counterparts of any of the foregoing; and
27
(iii) at Collateral Agent's request, appear in and
defend any action or proceeding that may affect such Grantor's title to
or Collateral Agent's security interest in all or any part of the
Collateral.
(b) Each Grantor hereby authorizes Collateral Agent to
file a Record or Records, including, without limitation, financing or
continuation statements and amendments thereto in any jurisdictions and with any
filing offices as Collateral Agent may determine, in its reasonable judgment,
are necessary to perfect the security interest granted to Collateral Agent
herein. Such financing statements may describe the Collateral in the same manner
as described herein or may contain an indication or description of collateral
that describes such property in any other manner as Collateral Agent may
determine, in its reasonable judgment, is necessary, advisable or prudent to
ensure the perfection of the security interest in the Collateral granted to
Collateral Agent herein, including, without limitation, describing such property
as "all assets" or "all personal property, whether now owned or hereafter
acquired." Each Grantor shall furnish to Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Collateral Agent may
reasonably request, all in reasonable detail.
(c) Each Grantor hereby authorizes Collateral Agent to
modify this Agreement after obtaining such Grantor's approval of or signature to
such modification by amending Schedule 4.7 (as such schedule may be amended or
supplemented from time to time) to include reference to any right, title or
interest in any existing Intellectual Property or any Intellectual Property
acquired or developed by any Grantor after the execution hereof or to delete any
reference to any right, title or interest in any Intellectual Property in which
any Grantor no longer has or claims any right, title or interest.
5.3 ADDITIONAL GRANTORS. From time to time subsequent to the date
hereof, additional Persons may become parties hereto as additional Grantors
(each, an "ADDITIONAL GRANTOR") by executing a Counterpart Agreement. Upon
delivery of any such counterpart agreement to Collateral Agent, notice of which
is hereby waived by Grantors, each Additional Grantor shall be a Grantor and
shall be as fully a party hereto as if Additional Grantor were an original
signatory hereto. Each Grantor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the addition or release of any
other Grantor hereunder, nor by any election of Collateral Agent not to cause
any Domestic Subsidiary of Company to become an Additional Grantor hereunder.
This Agreement shall be fully effective as to any Grantor that is or becomes a
party hereto, regardless of whether any other Person becomes, fails to become or
ceases to be a Grantor hereunder.
SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
6.1 POWER OF ATTORNEY. Each Grantor hereby irrevocably appoints
Collateral Agent (such appointment being coupled with an interest) as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Collateral Agent or otherwise, from
time to time in Collateral Agent's discretion, to take the following actions:
(a) upon the occurrence and during the continuance of any
Event of Default, to obtain and adjust insurance required to be maintained by
such Grantor or paid to Collateral Agent pursuant to the Credit Agreement;
28
(b) upon the occurrence and during the continuance of any
Event of Default, to ask for, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of any
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) upon the occurrence and during the continuance of any
Event of Default, to file any claims or take any action or institute any
proceedings that Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Collateral Agent with respect to any of the Collateral;
(e) upon the occurrence and during the continuance of any
Event of Default, to prepare and file any UCC financing statements against such
Grantor as debtor;
(f) to prepare, sign and file for recordation in any
intellectual property registry appropriate evidence of the Lien granted herein
in the Intellectual Property in the name of such Grantor as assignor;
(g) upon the occurrence and during the continuance of any
Event of Default, to take or cause to be taken all actions necessary to pay or
discharge taxes or Liens (other than Permitted Liens) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Collateral Agent in
its reasonable good faith judgment, any such payments made by Collateral Agent
to become obligations of such Grantor to Collateral Agent, due and payable
promptly upon demand; and
(h) upon the occurrence and during the continuance of any
Event of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though Collateral Agent were the absolute owner thereof for all purposes and
to do, at Collateral Agent's option and such Grantor's expense, at any time or
from time to time, all acts and things that Collateral Agent deems reasonably
necessary to protect, preserve or realize upon the Collateral and Collateral
Agent's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
6.2 NO DUTY ON THE PART OF COLLATERAL AGENT OR SECURED PARTIES.
The powers conferred on Collateral Agent hereunder are solely to protect the
interests of Secured Parties in the Collateral and shall not impose any duty
upon Collateral Agent or any Secured Party to exercise any such powers.
Collateral Agent and Secured Parties shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
SECTION 7. REMEDIES.
7.1 GENERALLY.
(a) If any Event of Default shall have occurred and be
continuing, Collateral Agent may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it at law or in equity, all the rights and remedies of
29
Collateral Agent on default under the UCC to collect, enforce or satisfy any
Secured Obligations then owing, whether by acceleration or otherwise, and also
may pursue any of the following separately, successively or simultaneously:
(i) require any Grantor to, and each Grantor
hereby agrees that it shall at its expense and promptly upon request of
Collateral Agent forthwith, assemble all or part of the Collateral as
directed by Collateral Agent and make it available to Collateral Agent
at a place to be designated by Collateral Agent that is reasonably
convenient to both parties;
(ii) enter onto the property where any Collateral
is located and take possession thereof with or without judicial
process;
(iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent
Collateral Agent deems appropriate; and
(iv) without notice, except as specified below,
under the UCC or as required by law, sell, assign, lease, license (on
an exclusive or nonexclusive basis) or otherwise dispose of the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of Collateral Agent's offices or elsewhere, for
cash, on credit or for future delivery, at such time or times, at such
price or prices and upon such other terms as Collateral Agent deems
commercially reasonable.
(b) Collateral Agent or any Secured Party may be the
purchaser of any or all of the Collateral at any public or private (to the
extent any portion of the Collateral being privately sold is of a kind that is
customarily sold on a recognized market or the subject of widely distributed
standard price quotations) sale in accordance with the UCC; and Collateral
Agent, as collateral agent for and representative of Secured Parties, shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such sale
made in accordance with the UCC, to use and apply any of the Secured Obligations
as a credit on account of the purchase price for any Collateral payable by
Collateral Agent at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal, which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days notice to such Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Grantor agrees that it would not be commercially unreasonable
for Collateral Agent to dispose of the Collateral or any portion thereof by
using Internet sites that provide for the auction of assets of the types
included in the Collateral, that have the reasonable capability of doing so or
that match buyers and sellers of assets. Each Grantor hereby waives any claims
against Collateral Agent arising by reason of the fact that the price at which
any Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Collateral Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations,
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Grantors shall be liable for the deficiency and the reasonable fees of any
attorneys employed by Collateral Agent to collect such deficiency. Each Grantor
further agrees that a breach of any of the covenants contained in this Section
will cause irreparable injury to Collateral Agent, that Collateral Agent has no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no default has occurred giving rise to the
Secured Obligations becoming due and payable prior to their stated maturities.
Nothing in this Section shall in any way alter the rights of Collateral Agent
hereunder.
(c) Collateral Agent may sell the Collateral without
giving any warranties as to the Collateral. Collateral Agent may specifically
disclaim or modify any warranties of title or the like. This procedure will not
be considered to adversely affect the commercial reasonableness of any sale of
the Collateral.
(d) Collateral Agent shall have no obligation to xxxxxxxx
any of the Collateral.
7.2 APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Collateral Agent in
respect of any sale, any collection from or other realization upon all or any
part of the Collateral shall be applied in full or in part by Collateral Agent
against the Secured Obligations in the following order of priority: first, to
the payment of all reasonable costs and expenses of such sale, collection or
other realization, including reasonable compensation to Collateral Agent and its
agents and counsel, all other reasonable expenses, liabilities and advances made
or incurred by Collateral Agent in connection therewith, all amounts for which
Collateral Agent is entitled to indemnification hereunder (in its capacity as
Collateral Agent and not as a Lender) and all advances made by Collateral Agent
hereunder for the account of the applicable Grantor, and to the payment of all
reasonable costs and expenses paid or incurred by Collateral Agent in connection
with the exercise of any right or remedy hereunder or under the Credit
Agreement, all in accordance with the terms hereof or thereof; second, to the
extent of any excess of such proceeds, to the payment of all other Secured
Obligations for the ratable benefit of the Lenders and the Lender
Counterparties; and third, to the extent of any excess of such proceeds, to the
payment to or upon the order of Grantors or to whosoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct.
7.3 SALES ON CREDIT. If Collateral Agent sells any of the
Collateral upon credit, the Secured Obligations will be credited only with
payments actually made by purchaser and received by Collateral Agent and applied
to indebtedness of the purchaser. In the event the purchaser fails to pay for
the Collateral, Collateral Agent may resell the Collateral and Grantors shall be
credited with proceeds of the sale.
7.4 DEPOSIT ACCOUNTS. If any Event of Default shall have occurred
and be continuing, Collateral Agent may apply the balance from any Deposit
Account or instruct the bank at which any Deposit Account is maintained to pay
the balance of any Deposit Account to or for the benefit of Collateral Agent.
7.5 INVESTMENT RELATED PROPERTY. Each Grantor recognizes that, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws, Collateral Agent may be compelled, with respect to any
sale of all or any part of the Investment Related Property conducted without
prior registration or qualification of such Investment Related
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Property under the Securities Act and/or such state securities laws, to limit
purchasers to those who will agree, among other things, to acquire the
Investment Related Property for their own account, for investment and not with a
view to the distribution or resale thereof. Each Grantor acknowledges that any
such private sale may be at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including a public
offering made pursuant to a registration statement under the Securities Act)
and, notwithstanding such circumstances, each Grantor agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that Collateral Agent shall have no obligation to engage in public
sales and no obligation to delay the sale of any Investment Related Property for
the period of time necessary to permit the issuer thereof to register it for a
form of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree to
so register it. If Collateral Agent determines to exercise its right to sell any
or all of the Investment Related Property, upon written request, each Grantor
shall and shall cause each issuer of any Pledged Stock to be sold hereunder,
each partnership and each limited liability company from time to time to furnish
to Collateral Agent all such information as Collateral Agent may reasonably
request in order to determine the number and nature of interest, shares or other
instruments included in the Investment Related Property which may be sold by
Collateral Agent in exempt transactions under the Securities Act and the rules
and regulations of the Securities and Exchange Commission thereunder, as the
same are from time to time in effect.
7.6 INTELLECTUAL PROPERTY.
(a) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuance of an Event of
Default:
(i) Collateral Agent shall have the right (but
not the obligation) to bring suit or otherwise commence any action or
proceeding in the name of any Grantor, Collateral Agent or otherwise,
in Collateral Agent's sole discretion, to enforce any Intellectual
Property, in which event such Grantor shall, at the request of
Collateral Agent, do any and all lawful acts and execute any and all
documents required by Collateral Agent in aid of such enforcement and
such Grantor shall promptly, upon demand, reimburse and indemnify
Collateral Agent as provided in Section 10 hereof in connection with
the exercise of its rights under this Section, and, to the extent that
Collateral Agent shall elect not to bring suit to enforce any
Intellectual Property as provided in this Section, each Grantor agrees
to use all commercially reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement of any of the
Intellectual Property by others and for that purpose agrees to
diligently maintain any action, suit or proceeding against any Person
so infringing as shall be necessary to prevent such infringement;
(ii) upon written demand from Collateral Agent,
each Grantor shall grant, assign, convey or otherwise transfer to
Collateral Agent an absolute assignment of all of such Grantor's right,
title and interest in and to the Intellectual Property and shall
execute and deliver to Collateral Agent such documents as are necessary
or appropriate to carry out the intent and purposes of this Agreement,
and in the event of any assignment, conveyance or other transfer of any
of the Trademarks included in the Collateral, the goodwill symbolized
by any such Trademarks shall be included in such sale or transfer, and
such Grantor shall supply to Collateral Agent or its designee such
Grantor's manufacturing, advertising and distribution know-how and
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copies of records embodying such know-how, if any, relating to products
and services theretofore sold under such Trademarks;
(iii) each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured Obligations
outstanding only to the extent that Collateral Agent (or any Secured
Party) receives cash proceeds in respect of the sale of, or other
realization upon, the Intellectual Property;
(iv) Collateral Agent shall have the right to
notify, or require each Grantor to notify, any obligors with respect to
amounts due or to become due to such Grantor in respect of the
Intellectual Property, of the existence of the security interest
created herein, to direct such obligors to make payment of all such
amounts directly to Collateral Agent, and, upon such notification and
at the expense of such Grantor, to enforce collection of any such
amounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor
might have done; and
(v) all amounts and proceeds (including checks
and other instruments) received by Grantor in respect of amounts due to
such Grantor in respect of the Collateral or any portion thereof shall
be received in trust for the benefit of Collateral Agent hereunder,
shall be segregated from other funds of such Grantor and shall be
forthwith paid over or delivered to Collateral Agent in the same form
as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 7.7 hereof; and Grantor
shall not adjust, settle or compromise the amount or payment of any
such amount or release wholly or partly any obligor with respect
thereto or allow any credit or discount thereon.
(b) If (i) an Event of Default shall have occurred and,
by reason of cure, waiver, modification, amendment or otherwise, no longer be
continuing, (ii) no other Event of Default shall have occurred and be
continuing, (iii) an assignment or other transfer to Collateral Agent of any
rights, title and interests in and to the Intellectual Property shall have been
previously made and shall have become absolute and effective and (iv) the
Secured Obligations shall not have become immediately due and payable, then upon
the written request of any Grantor, Collateral Agent shall promptly execute and
deliver to such Grantor, at such Grantor's sole cost and expense, such
assignments or other transfer as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to Collateral
Agent as aforesaid, subject to any disposition thereof that may have been made
by Collateral Agent; provided, after giving effect to such reassignment,
Collateral Agent's security interest granted pursuant hereto, as well as all
other rights and remedies of Collateral Agent granted hereunder, shall continue
to be in full force and effect; and provided further, the rights, title and
interests so reassigned shall be free and clear of any Liens granted by or on
behalf of Collateral Agent and Secured Parties.
(c) Solely for the purpose of enabling Collateral Agent
to exercise rights and remedies under this Section 7 and at such time as
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to Collateral Agent, to the extent it has
the right to do so, an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to such Grantor), subject, in the case
of Trademarks, to sufficient rights to quality control and inspection in favor
of such Grantor to avoid the risk of invalidation of said Trademarks, to use,
operate under, license or sublicense any Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located.
33
7.7 CASH PROCEEDS. In addition to the rights of Collateral Agent
specified in Section 4.3 with respect to payments of Receivables, all proceeds
of any Collateral received by any Grantor consisting of cash, checks and other
near-cash items (collectively, "CASH PROCEEDS") shall be held by such Grantor in
trust for Collateral Agent, segregated from other funds of such Grantor, and
shall, forthwith upon receipt by such Grantor, unless otherwise provided
pursuant to Section 4.4.1(a)(ii), be turned over to Collateral Agent in the
exact form received by such Grantor (duly indorsed by such Grantor to Collateral
Agent, if required) and held by Collateral Agent in an account maintained under
the sole dominion and control of the Collateral Agent. If an Event of Default
shall have occurred and be continuing, any Cash Proceeds received by Collateral
Agent (whether from a Grantor or otherwise), in the sole discretion of
Collateral Agent, (A) may be held by Collateral Agent for the ratable benefit of
Secured Parties, as collateral security for the Secured Obligations (whether
matured or unmatured) and/or (B) then or at any time thereafter, may be applied
by Collateral Agent against the Secured Obligations then due and owing.
SECTION 8. COLLATERAL AGENT.
Collateral Agent has been appointed to act as Collateral Agent
hereunder by Lenders and, by their acceptance of the benefits hereof, the other
Secured Parties. Collateral Agent shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided, Collateral
Agent shall, after payment in full of all Obligations under the Credit Agreement
and the other Credit Documents, exercise, or refrain from exercising, any
remedies provided for herein in accordance with the instructions of the holders
of a majority of the aggregate notional amount (or, with respect to any Hedge
Agreement that has been terminated in accordance with its terms, the amount then
due and payable (exclusive of expenses and similar payments but including any
early termination payments then due) under such Hedge Agreement) under all Hedge
Agreements. In furtherance of the foregoing provisions of this Section, each
Secured Party, by its acceptance of the benefits hereof, agrees that it shall
have no right individually to realize upon any of the Collateral hereunder, it
being understood and agreed by such Secured Party that all rights and remedies
hereunder may be exercised solely by Collateral Agent for the benefit of Lenders
and Lender Counterparties in accordance with the terms of this Section.
Collateral Agent may resign or be removed and a successor Collateral Agent may
be appointed, all in accordance with Section 9.7(b) of the Credit Agreement.
After any retiring or removed Collateral Agent's resignation or removal as
Collateral Agent, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Agreement while it
was Collateral Agent hereunder.
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all outstanding Letters of Credit, be
binding upon each Grantor, its successors and assigns, and inure, together with
the rights and remedies of Collateral Agent hereunder, to the benefit of
Collateral Agent and its successors, transferees and assigns. Without limiting
the generality of the foregoing, but subject to the terms of the Credit
Agreement, any Lender may assign or otherwise
34
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate automatically hereunder and of record
and all rights to the Collateral shall revert to Grantors. Upon any such
termination, Collateral Agent shall, at Grantors' expense, execute and deliver
to Grantors such instruments and documents as Grantors shall reasonably request
to evidence such termination.
SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.
The powers conferred on Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder and as otherwise required by law, Collateral
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral. Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession,
if such Collateral is accorded treatment substantially equal to that which
Collateral Agent accords its own property. Neither Collateral Agent nor any of
its directors, officers, employees or agents shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Grantor or otherwise. If any Grantor
fails to perform any agreement contained herein, Collateral Agent may itself
perform, or cause performance of, such agreement, and the expenses of Collateral
Agent incurred in connection therewith shall be payable by each Grantor under
Section 10.2 of the Credit Agreement.
SECTION 11. MISCELLANEOUS.
Any notice required or permitted to be given under this Agreement shall
be given in accordance with Section 10.1 of the Credit Agreement. No failure or
delay on the part of Collateral Agent in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement and
the other Credit Documents are cumulative to, and not exclusive of, any rights
or remedies otherwise available. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or would otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists. This Agreement shall be binding upon and
inure to the benefit of Collateral Agent and Grantors and their respective
successors and assigns. No Grantor shall, without the prior written consent of
Collateral Agent given in accordance with the Credit Agreement, assign any
right, duty or obligation hereunder. This Agreement and the other Credit
Documents embody
35
the entire agreement and understanding between Grantors and Collateral Agent and
supersede all prior agreements and understandings between such parties relating
to the subject matter hereof and thereof. Accordingly, the Credit Documents may
not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties. This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATION LAWS).
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IN WITNESS WHEREOF, each Grantor and Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
XXXXX INC.
By: __________________________
Name:
Title:
CORPLEX, INC.
CRUCIBLE, INC.
FINANCIAL RESEARCH, INC.
INPHOTO SURVEILLANCE, INC.
KCMS, INC.
XXXXX ASSOCIATES, INC.
KROLL BACKGROUND AMERICA, INC.
KROLL CRISIS MANAGEMENT GROUP, INC.
KROLL ELECTRONIC RECOVERY, INC.
KROLL HOLDINGS, INC.
KROLL LABORATORY SPECIALISTS, INC.
KROLL XXXXXXXXX XXXX, INC.
XXXXX ONTRACK, INC.
KROLL XXXXXX & ASSOCIATES, INC.
LABORATORY SPECIALISTS OF AMERICA, INC.
L.A.M.B. ACQUISITION, INC.
MIJENIX CORPORATION
ONTRACK DATA RECOVERY, INC.
U.S. HOLDING, INC.
ZOLFO XXXXXX LLC
ZOLFO XXXXXX HOLDINGS, INC.
By: __________________________
Name:
Title:
37
XXXXXXX SACHS CREDIT PARTNERS L.P.,
as Collateral Agent
By: __________________________
Name:
Title:
38
