SUBORDINATED SECURITY AGREEMENT
Exhibit 10.26
SUBORDINATED SECURITY AGREEMENT, dated as of October 9, 2007 (as amended, supplemented,
restated or otherwise modified from time to time, this “Agreement”), made by TIMBERLANDS
II, LLC, a Delaware limited liability company, XXXXX TIMBERLAND ACQUISITION, LLC, a Delaware
limited liability company (each a “Borrower” and collectively, the “Borrowers”),
XXXXX TRS HARVESTING OPERATIONS, LLC, a Delaware limited liability company (“Xxxxx TRS
Subsidiary”), and each Additional Grantor (such capitalized term and all other capitalized
terms not otherwise defined herein to have the meanings provided for in Article I) that may
from time to time become a party hereto (the Borrowers, Xxxxx TRS Subsidiary and the Additional
Grantors are collectively referred to as the “Grantors” and individually as a
“Grantor”), in favor of WACHOVIA BANK NATIONAL ASSOCIATION, as administrative agent (in
such capacity, the “Administrative Agent”) for each of the Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of the date hereof (as amended,
supplemented, restated or otherwise modified from time to time, the “Senior Credit
Agreement”), among the Borrowers, the various lending institutions as are, or may from time to
time become, parties thereto (collectively, the “Senior Lenders”), and CoBank, ACB, (the
“Senior Administrative Agent”), the Senior Lenders have extended commitments to make loans
to the Borrower and the Grantors have agreed to give a first priority security interest in the
Collateral (except that the Senior Lenders shall receive a second priority security interest with
respect to the Subordinated Priority Collateral) to the Senior Lenders;
WHEREAS, pursuant to the Subordinated Credit Agreement, dated as of the date hereof (as
amended, supplemented, restated or otherwise modified from time to time, the “Credit
Agreement”), among the Borrowers, the various lending institutions as are, or may from time to
time become, parties thereto (collectively, the “Lenders”) and the Administrative Agent,
the Lenders have extended Commitments to make Loans to the Borrower and the Grantors have agreed to
give a second priority security interest in the Collateral (except that the Lenders shall receive a
first priority security interest with respect to the Subordinated Priority Collateral) to the
Lenders;
WHEREAS, as a condition precedent to the occurrence of the Funding Date, each Grantor is
required to execute and deliver this Agreement; and
WHEREAS, each Grantor has duly authorized the execution, delivery and performance of this
Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Lenders to make the Loans to the Borrowers pursuant
to the Credit Agreement, each Grantor agrees, with the Administrative Agent for its benefit and the
benefit of the other of the Lenders, as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
The following terms (whether or not underscored) when used in this Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to be equally applicable
to the singular and plural forms thereof):
“Additional Grantors” is defined in clause (b) of Section 7.2.
“Administrative Agent” is defined in the preamble.
“Agreement” is defined in the preamble.
“Assigned Agreements” is defined in clause (p) of Section 2.1.
“Borrower” is defined in the preamble.
“Collateral” is defined in Section 2.1.
“Collateral Account” is defined in clause (a) of Section 4.15.
“Computer Hardware and Software Collateral” means (a) all computer and other
electronic data processing hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card readers, tape drives, hard
and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories
and all peripheral devices and other related computer hardware; (b) all software programs
(including both source code, object code and all related applications and data files) designed for
use on the computers and electronic data processing hardware described in clause (a); (c)
all licenses and leases of software programs; (d) all firmware associated therewith; (e) all
documentation (including flow charts, logic diagrams, manuals, guides and specifications) with
respect to such hardware, software and firmware described in the clauses (a) through
(c); and (f) all rights with respect to all of the foregoing, including any and all
copyrights, licenses, options, warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of the foregoing.
“Copyright Collateral” means all copyrights of each Grantor (including Community
designs, copyrights in software and databases and all Mask Works (as defined under 12 U.S.C. 901 of
the U.S. Copyright Act)), whether statutory or common law, registered or unregistered, now or
hereafter in force throughout the world including all of such Grantor’s right, title and interest
in and to all copyrights registered in the United States Copyright Office or anywhere else in the
world and also including the copyrights referred to in Item A of IV attached
hereto (as such Schedule may be amended or supplemented from time to time), and all applications
for registration thereof, whether pending or in preparation, all copyright licenses, including each
copyright license referred to in Item B of Schedule IV attached hereto (as such
Schedule may be amended or supplemented from time to time), the right to xxx for past, present and
future infringements of any thereof, all rights corresponding thereto throughout the world, all
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extensions and renewals of any thereof and all proceeds of the foregoing, including licenses,
royalties, income, payments, claims, damages and proceeds of suit.
“Credit Agreement” is defined in the second recital.
“Deposit Account” has the meaning provided for in the U.C.C. and includes, without
limitation, each lock-box account, concentration account and other collateral accounts maintained
by each Grantor, together with all funds held therein and all certificates and instruments, if any,
from time to time representing or evidencing such accounts) maintained with a bank (including,
without limitation, those accounts identified on Item I of Schedule I attached
hereto, as such Schedule may be amended or supplemented from time to time).
“Equipment” has the meaning provided for in the U.C.C. and includes, without
limitation, all Equipment wherever located and whether or not affixed to any real property,
including all accessories, additions, attachments, improvements, substitutions and replacements
thereto and therefor.
“General Intangible” has the meaning provided for in the U.C.C. and includes, without
limitation, all Material Agreements, all Intellectual Property Collateral, all rights under or
evidenced by choses in action or causes of action, all judgments, tax refund claims, claims against
carriers and shippers, claims under liens and insurance policies, all rights under security
agreements, guarantees, indemnities and other instruments and contracts securing or otherwise
relating to any of the foregoing, and all other intangible personal property of every kind and
nature, and all accessions, additions, improvements, modifications and upgrades to, replacements of
and substitutions for the foregoing.
“Grantor” and “Grantors” are defined in the preamble.
“Intellectual Property Collateral” means, collectively, the Computer Hardware and
Software Collateral, the Copyright Collateral, the Patent Collateral, the Trademark Collateral and
the Trade Secrets Collateral.
“Inventory” has the meaning provided for in the U.C.C. and includes, without
limitation, all goods manufactured, acquired or held for sale or lease, all raw materials,
component materials, work-in-progress and finished goods, all supplies, goods and other items and
materials used or consumed in the manufacture, production, packaging, shipping, selling, leasing or
furnishing of such inventory or otherwise in the operation of the business or each Grantor, all
goods in which each Grantor now or at any time hereafter has any interest or right of any kind, and
all goods that have been returned to or repossessed by or on behalf of each Grantor, in each case
whether or not the same is in transit or in the constructive, actual or exclusive occupancy or
possession of any Grantor or all accessions thereto, products thereof and documents therefor.
“Investment Accounts” means, collectively, the Collateral Account, Commodities
Accounts, Deposit Account and Securities Accounts.
“Lender” and “Lenders” are defined in the second recital.
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“Patent Collateral” means (a) all letters patent and applications for letters patent
throughout the world (including all patent applications in preparation for filing anywhere in the
world), including each patent and patent application referred to in Item A of Schedule
II attached hereto (as such Schedule may be amended or supplemented from time to time); (b) all
patent licenses, including each patent license referred to in Item B of Schedule II
attached hereto (as such Schedule may be amended or supplemented from time to time); (c) all
reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations
of any of the items described in clauses (a) and (b) above; and (d) all proceeds
of, and rights associated with, the foregoing (including license royalties and proceeds of
infringement suits), the right to xxx third parties for past, present or future infringements of
any patent or patent application, including any patent or patent application referred to in
Item A of Schedule II attached hereto (as such Schedule may be amended or
supplemented from time to time), and for breach or enforcement of any patent license, including any
patent license referred to in Item B of Schedule II attached hereto (as such
Schedule may be amended or supplemented from time to time), and all rights corresponding thereto
throughout the world.
“Proceeds” has the meaning provided for in the U.C.C. and includes, without
limitation, (a) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to
any Grantor from time to time with respect to any of the Collateral, (b) any and all payments (in
any form whatsoever) made or due and payable to any Grantor from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority, (c) any claim of any Grantor against third parties for
past, present or future infringement of any Intellectual Property Collateral, (d) any recoveries by
any Grantor against third parties with respect to any litigation or dispute concerning any of the
Collateral including claims arising out of the loss or nonconformity of, interference with the use
of, defects in, or infringement of rights in, or damage to, the Collateral, and (e) any and all
other amounts, rights to payment or other property acquired upon the sale, lease, license, exchange
or other disposition of Collateral and all rights arising out of the Collateral.
“Receivables Collateral” means all Collateral relating to the right of payment 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 evidenced by any
Account, Document, Instrument, Chattel Paper, General Intangible or Investment Property.
“Secured Obligations” is defined in Section 2.2.
“Securities Account” means all “securities accounts” as defined in Article 8 of the
U.C.C. and shall include, without limitation, all the accounts identified on Item 5 of
Schedule I attached hereto (as such Schedule may be amended or supplemented from time to
time).
“Security Agreement Supplement” is defined in clause (b) of Section
7.2.
“Senior Administrative Agent” is defined in the first recital.
“Senior Credit Agreement” is defined in the first recital.
“Senior Lenders” is defined in the first recital.
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“Supporting Obligation” means a Letter-of-Credit Right or secondary obligation that
supports the payment or performance of an Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property, including, without limitation, all security agreements,
guaranties, leases and other contracts securing or otherwise relating to any such Accounts, Chattel
Paper, Documents, Instruments, including Goods represented by the sale or lease of delivery which
gave rise to any of the foregoing, returned or repossessed merchandise and rights of stoppage in
transit, replevin, reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party.
“Trademark” is defined in the definition “Trademark Collateral”.
“Trademark Collateral” means (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, trade dress, service marks,
certification marks, collective marks, logos, internet domain names, other source of business
identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and
general intangibles of a like nature (all of the foregoing items in this clause (a) being
collectively called a “Trademark”), now existing anywhere in the world or hereafter adopted
or acquired, whether currently in use or not, all registrations and recordings thereof and all
applications in connection therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State thereof or any foreign country,
including those referred to in Item A of Schedule III attached hereto (as such
Schedule may be amended or supplemented from time to time); (b) all Trademark licenses, including
each Trademark license referred to in Item B of Schedule III attached hereto (as
such Schedule may be amended or supplemented from time to time); (c) all reissues, extensions or
renewals of any of the items described in clauses (a) and (b) above; (d) all of the
goodwill of the business connected with the use of, and symbolized by the items described in,
clauses (a) and (b) above; and (e) all proceeds of, and rights associated with, the
foregoing, including any claim by each Grantor against third parties for past, present or future
infringement or dilution of any Trademark, Trademark registration or Trademark license, including
any Trademark, Trademark registration or Trademark license referred to in Item B of
Schedule III attached hereto (as such Schedule may be amended or supplemented from time to
time), or for any injury to the goodwill associated with the use of any such Trademark or for
breach or enforcement of any Trademark license.
“Trade Secret” is defined in the definition “Trade Secrets Collateral”.
“Trade Secrets Collateral” means common law and statutory trade secrets and all other
confidential or proprietary information and all know-how obtained by or used in or contemplated at
any time for use in the business of any 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, all Trade Secret licenses), including each Trade Secret license referred to
in Schedule V attached hereto (as such Schedule may be amended or supplemented from time to
time), and including the right to xxx for and to enjoin and to collect damages for the actual or
threatened misappropriation of any Trade Secret and for the breach or enforcement of any such Trade
Secret license.
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“U.C.C.” means the Uniform Commercial Code as in effect from time to time in the State
of New York; provided that if, by reason of applicable Law, the validity or perfection or
the effect of validity or perfection or non-perfection or the priority of any security interest in
any Collateral granted under this Agreement is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than New York, then as to such matters “U.C.C.” shall mean the Uniform
Commercial Code as in effect in such other jurisdiction.
SECTION 1.1. Credit Agreement Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble and recitals, have
the meanings provided in the Credit Agreement.
SECTION 1.2. U.C.C. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the U.C.C. are used in this Agreement,
including its preamble and recitals, with such meanings. Without limiting the foregoing the
following terms are used herein as defined in the U.C.C.: Account, Authenticate, Certificated
Securities, Chattel Paper, Commercial Tort Claim, Commodities Accounts, Control, Documents,
Electronic Chattel Paper, Entitlement Holder, Entitlement Orders, Fixtures, Goods, Instruments,
Investment Property, Letter-of-Credit Right, Money, Payment Intangibles, Security Entitlements,
Uncertificated Securities and Tangible Chattel Paper.
ARTICLE II
SECURITY INTEREST
SECURITY INTEREST
SECTION 2.1. Grant of Security Interest. Each Grantor hereby pledges, hypothecates,
collaterally assigns, charges, mortgages and pledges to the Administrative Agent for its benefit
and the ratable benefit of each of the Lender Parties, and hereby grants to the Administrative
Agent, for its benefit and the ratable benefit of each of the Lender Parties, a security interest
in, all of its right, title and interest in and to the following, whether now or hereafter existing
or acquired (collectively, the “Collateral”):
(a) all Equipment in all of its forms of such Grantor;
(b) all Inventory in all of its forms of such Grantor;
(c) all Accounts in all of its forms of such Grantor;
(d) all Intellectual Property Collateral in all of its forms of such Grantor;
(e) all General Intangibles in all of its forms of such Grantor;
(f) all Investment Property in all of its forms of such Grantor;
(g) all Deposit Accounts in all of its forms of such Grantor;
(h) all Chattel Paper in all of its forms of such Grantor;
(i) all Commercial Tort Claims in all of its forms of such Grantor;
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(j) all Goods in all of its forms of such Grantor;
(k) all Instruments in all of its forms of such Grantor;
(l) all Payment Intangibles in all of its forms of such Grantor;
(m) all Documents in all of its forms of such Grantor;
(n) all Supporting Obligations in all of its forms of such Grantor;
(o) all Letter-of-Credit Rights in all of its forms of such Grantor;
(p) all of such Grantor’s right, title and interest in and to all of its Material Agreements
(including the Material Agreements specified in Schedule VI attached hereto), and each Rate
Protection Agreement to which such Grantor is now or may hereafter become a party, in each case as
such agreements may be amended or otherwise modified from time to time (collectively, the
“Assigned Agreements”), including (i) all rights of such Grantor to receive moneys due and
to become due under or pursuant to the Assigned Agreements; (ii) all rights of such Grantor to
receive proceeds of any insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements; (iii) all claims of such Grantor for damages arising out of or for breach of or default
under the Assigned Agreements; and (iv) the right of such Grantor to terminate the Assigned
Agreements, to perform thereunder and to compel performance and otherwise exercise all remedies
thereunder;
(q) all Fixtures in all of its forms of such Grantor;
(r) the Reserve Account, all amounts therein and all other Account Collateral;
(s) the Subordinated Priority Collateral;
(t) all of such Grantor’s other property and rights of every kind and description and
interests therein, including all moneys, securities and other property, now or hereafter held or
received by, or in transit to, the Administrative Agent or any Lender from or for such Grantor,
whether for safekeeping, pledge, custody, transmission, collection or otherwise;
(u) all of such Grantor’s books, records, documents, instruments, electronic databases,
computer records, ledger cards, customer lists, manuals, files, correspondence, tapes, drafts and
related data processing software, writings, data bases, information and other property relating to,
used or useful in connection with, evidencing, embodying, incorporating or referring to, any and
all of the foregoing Collateral; and
(v) all
Proceeds of any and all of the foregoing Collateral;
provided, however, that any agreement to which any Grantor is a party shall be
excluded from the security interest granted by such Grantor under this Section to the extent that
the assignment thereof or the creation of a security interest therein would constitute a breach of
the terms of such agreement, or would permit any party to such agreement to terminate such
agreement, in each case as such agreement is in effect on the date of this Agreement or the date on
which such
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agreement is first entered into by the applicable Grantor; provided, further,
however, that (i) any of the agreements excluded in accordance with the foregoing provision
shall cease to be so excluded if, at such time, (A) the prohibition of assignment or creation of a
security interest in such agreement is no longer in effect, or is rendered ineffective as a matter
of law, or (B) the applicable Grantor has obtained all of the consents of the other parties to such
agreement necessary for the assignment of, or creation of a security interest in, such agreement
and (ii) with respect to any Material Agreement referred to in clause (p), such Grantor
shall use its commercially reasonable best efforts to obtain any such necessary consent.
SECTION 2.2. Security for Obligations. This Agreement secures the prompt payment in
full in cash of all Obligations, including all amounts payable by the Borrower and each other Loan
Party under or in connection with the Credit Agreement, the Notes and each other Loan Document,
whether for principal, interest, costs, fees, expenses, indemnities or otherwise and whether now or
hereafter existing (all of such obligations being the “Secured Obligations”).
SECTION 2.3. Continuing Security Interest; Transfer of Notes. This Agreement shall
create a continuing security interest in the Collateral and shall remain in full force and effect
until payment in full in cash of all Secured Obligations (on terms and pursuant to documentation in
form and substance reasonably satisfactory to the Administrative Agent) and the irrevocable
termination of all the Commitments, at which time the security interest granted herein shall
terminate and all rights to the Collateral shall revert to the Grantors. In the event that any part
of the Collateral is sold in connection with a sale permitted under the Credit Agreement (other
than a sale to a Grantor) the security interest granted herein shall terminate with respect to such
Collateral and all rights therein shall revert to the applicable Grantor or Grantors. Upon any such
termination or release, the Administrative Agent will, at each Grantor’s sole expense and without
any representations, warranties or recourse of any kind whatsoever, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such termination or
release.
SECTION 2.4. Security Interest Absolute. All rights of the Administrative Agent and
the security interests granted to the Administrative Agent hereunder, and all obligations of each
Grantor hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity, legality or enforceability of any Loan Document;
(b) the failure of any Lender Party:
(i) to assert any claim or demand or to enforce any right or remedy against any Grantor, any
other Loan Party or any other Person under the provisions of any Loan Document or otherwise; or
(ii) to exercise any right or remedy against any other guarantor of, or collateral securing,
any Secured Obligation of any Grantor or of any other Loan Party;
(c) any change in the time, manner or place of payment of, or in any other term of, all or any
of the Secured Obligations or any other extension, compromise or renewal of
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any Secured Obligation, including any increase in the Secured Obligations resulting from the
extension of additional credit to any Grantor or any other Loan Party or otherwise;
(d) any reduction, limitation, impairment or termination of any Secured Obligation of any
Grantor or of any other Loan Party for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and each Grantor hereby waives
any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Secured Obligation of any Grantor or of any
other Loan Party or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of any Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of any collateral (including
the Collateral), or any amendment to or waiver or release of or addition to or consent to departure
from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a defense available to, or a
legal or equitable discharge of, any Grantor, any other Loan Party, any surety or any guarantor or
otherwise, including as a result of any proceeding of the nature referred to in Section 8.1.8 of
the Credit Agreement.
SECTION 2.5. Grantors Remain Liable. Anything herein to the contrary notwithstanding:
(a) each Grantor shall remain liable under the contracts and agreements included in the
Collateral (including the Assigned Agreements) to the extent set forth therein, and shall perform
all of its duties and obligations under such contracts and agreements to the same extent as if this
Agreement had not been executed;
(b) each Grantor will comply in all material respects with all material Laws relating to the
ownership and operation of the Collateral, including, without limitation, all registration
requirements under applicable material Laws, and shall pay when due all taxes, fees and assessments
imposed on or with respect to the Collateral, except to the extent the validity thereof is (A)
being diligently contested in good faith by appropriate proceedings which (i) suspend the
collection thereof and any Lien therefrom and (ii) for which adequate reserves in accordance with
GAAP have been set aside by such Grantor, and (B) could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect;
(c) the exercise by the Administrative Agent of any of its rights hereunder shall not release
any Grantor from any of its duties or obligations under any contracts or agreements included in the
Collateral; and
(d) neither the Administrative Agent nor any other Lender Party shall have any obligation or
liability under any contracts or agreements included in the Collateral by reason of this Agreement,
nor shall the Administrative Agent or any other Lender Party be obligated to
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perform any of the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 2.6. Waiver of Subrogation. Each Grantor hereby irrevocably waives to the
extent permitted by applicable Law and until such time as the Secured Obligations shall have been
paid in full in cash (on terms and pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent) and all the Commitments have irrevocably terminated, any
claim or other rights which it may now or hereafter acquire against the Borrower or any other Loan
Party that arises from the existence, payment, performance or enforcement of such Grantor’s
obligations under this Agreement or any other Loan Document, including any right of subrogation,
reimbursement, exoneration or indemnification, and any right to participate in any claim or remedy
of any Lender Party against the Borrower or any other Loan Party or any collateral which any Lender
Party now has or hereafter acquires, whether or not such claim, remedy or right arises in equity or
under contract or Law. If any amount shall be paid to any Grantor in violation of the preceding
sentence, such amount shall be deemed to have been paid to such Grantor for the benefit of, and
held in trust for, the Lender Parties, and shall forthwith be paid to the Administrative Agent to
be credited and applied against the Secured Obligations, whether matured or unmatured. Each Grantor
acknowledges that it will receive direct and indirect benefits for the financing arrangements
contemplated by the Credit Agreement and that the waiver set forth in this Section is knowingly
made in contemplation of such benefits
ARTICLE III
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
Each Grantor represents and warrants unto each Lender Party, as of the date it becomes a party
to this Agreement, as set forth in this Article.
SECTION 3.1. Location of Grantors; Collateral, etc. Item E of Schedule
I attached hereto (as such Schedule may be amended or supplemented from time to time)
identifies for such Grantor the state in which it is organized and the relevant organizational
identification number (or states that one does not exist). All of the Equipment, Inventory (other
than Inventory that is in-transit to a location specified in Item B of Schedule I
attached hereto on a vehicle owned or leased by a Grantor) and Fixtures of such Grantor are located
at the places specified in Item A, Item B and Item H, respectively, of
Schedule I attached hereto (as such Schedule may be amended or supplemented from time to
time). The principal place of business and chief executive office of such Grantor and the office
where such Grantor keeps its records concerning the Collateral, and the original copies of each
Assigned Agreement and all originals of all Instruments and Tangible Chattel Paper, are located at
the places specified in Item C of Schedule I attached hereto (as such Schedule may
be amended or supplemented from time to time). Except as set forth in Item D of
Schedule I attached hereto such Grantor has no trade names and has not been known by any
legal name different from the one set forth on the signature page hereto. Except as notified by
such Grantor to the Administrative Agent, such Grantor is not a party to any one or more Federal,
state or local government contracts.
SECTION 3.2. Ownership, No Liens, etc. Such Grantor owns its portion of the
Collateral free and clear of any Lien, except for the security interest created by this Agreement
and except as otherwise permitted by Section 7.2.3 of the Credit Agreement. Except as disclosed
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in Item F of Schedule II attached hereto (as such Schedule may be amended or
supplemented from time to time) or from time to time to the Administrative Agent, none of the
Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor, located
on any leased property or subject to the Control of any Person, other than the Administrative Agent
or such Grantor.
SECTION 3.3. Receivables Collateral and Assigned Agreements. (a) All Receivables
Collateral (i) is and will be the legal, valid and binding obligation of the Account Debtor in
respect thereof, representing an unsatisfied obligation of such Account Debtor, (ii) is and will be
enforceable in accordance with its terms, (iii) is not and will not be subject to any setoffs,
defenses, taxes, counterclaims (except with respect to refunds, returns and allowances in the
ordinary course of business with respect to damaged merchandise) and (iv) is and will be in
compliance with all applicable Law.
(b) Such Grantor has delivered to the Administrative Agent exclusive Control of all intangible
Chattel Paper and possession of all originals of all Instruments and Tangible Chattel Paper
currently owned or held by such Grantor (duly endorsed in blank in favor of the Administrative
Agent), and true and correct copies of each Assigned Agreement.
SECTION 3.4. Intellectual Property Collateral. With respect to any Intellectual
Property Collateral that is material to the operations of any Grantor:
(a) such Intellectual Property Collateral is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, and is valid and enforceable;
(b) such Grantor has made all necessary filings and recordations to protect its interest in
such Intellectual Property Collateral, including recordations of all of its interests in (i) the
Patent Collateral and Trademark Collateral in the United States Patent and Trademark Office and in
corresponding offices throughout the world and (ii) the Copyright Collateral in the United States
Copyright Office and in corresponding offices throughout the world;
(c) in the case of any such Intellectual Property Collateral that is owned by such Grantor,
such Grantor is the exclusive owner of the entire and unencumbered right, title and interest in and
to such Intellectual Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted rights of any third party;
(d) in the case of any such Intellectual Property Collateral that is licensed by such Grantor,
such Grantor is in compliance with all the material terms of such license; and
(e) such Grantor has performed and will continue to perform all acts and has paid and will
continue to pay all required fees and taxes to maintain each and every item of such Intellectual
Property Collateral in full force and effect throughout the world.
Such Grantor owns directly or is entitled to use by license or otherwise, all patents, trademarks,
trade secrets, copyrights, licenses, technology, know-how, processes and other intellectual
property that is necessary for the proper conduct of such Grantor’s business.
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SECTION 3.5. Assigned Agreements. The Assigned Agreements of such Grantor, true and
complete copies of which have been furnished to the Administrative Agent, have been duly
authorized, executed and delivered by such Grantor and (to the best knowledge of such Grantor) each
other party thereto, are in full force and effect and are binding upon and enforceable against such
Grantor and (to the best knowledge of such Grantor) each other party thereto, in accordance with
their terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting creditor’s right generally and to the effect of general
principles of equity (regardless of whether considered in a proceeding in equity or at law). To the
knowledge of such Grantor, there exists no default under any Assigned Agreement by any party
thereto. With respect to each Assigned Agreement a duly executed Collateral Assignment of Material
Agreement as provided in the Credit Agreement has been delivered to the Administrative Agent with
respect thereto.
SECTION 3.6. Commercial Tort Claims. Except for matters disclosed in Item G
of Schedule I attached hereto (as such Schedule may be amended or supplemented from time to
time) no Grantor owns any Commercial Tort Claims. The Administrative Agent has a perfected second
priority security interest in such Commercial Tort Claims.
SECTION 3.7. Investment Accounts. Item I of Schedule I attached
hereto (as such Schedule may be amended or supplemented from time to time) identifies each Deposit
Account of each Grantor, Item J of Schedule I attached hereto (as such Schedule may
be amended or supplemented from time to time) identifies each Securities Account of each Grantor
and Item K of Schedule I attached hereto (as such Schedule may be amended or
supplemented from time to time) identifies each Commodities Account of each Grantor. Each Grantor
is the sole Entitlement Holder of each such Investment Account, such Grantor has not consented or
has knowledge that any Person, other than the Administrative Agent, has Control over any interest
in any such Investment Account, and the Administrative Agent has exclusive Control over each such
Investment Account.
SECTION 3.8. Inventory. All Inventory is, and will be, of good and merchantable
quality, free from any material defects. Such Inventory is not, and will not be, subject to any
licensing, patent, trademark, trade name or copyright agreement with any Person that restricts such
Grantor’s or Administrative Agent’s ability to manufacture and/or sell such Inventory. The
completion and manufacturing process of such Inventory by a Person other than such Grantor would be
permitted under any contract to which such Grantor is a party or to which the Inventory is subject.
Such Grantor does not sell any Inventory to any customer on approval or on any other basis that
entitles the customer to return, or which may obligate the Debtor to repurchase, such Inventory.
SECTION 3.9. Letter of Credit Rights. Item L of Schedule I attached
hereto (as such Schedule may be amended or supplemented from time to time) identifies all letters
of credit to which such Grantor has rights. Such Grantor has obtained the consent of each issuer of
each such letter of credit to the assignment of the proceeds thereof to the Administrative Agent.
The Administrative Agent has exclusive Control over the Letter-of-Credit Rights related to such
letters of credit.
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SECTION 3.10. Valid Security Interest. Upon (a) the filing of U.C.C. financing
statements in the U.C.C. filing offices of each jurisdiction referred to in Item E of
Schedule I attached hereto that names each Grantor as “Debtor” and the Administrative Agent
as “Secured Party” and adequately describes the Collateral; (b) the filing of this Agreement with
the United States Patent and Trademark Office and the United States Copyright Office, as the case
may be, with respect to all Intellectual Property Collateral; (c) consent of each applicable issuer
with respect to Letter of Credit Rights and (d) execution of a control agreement establishing the
Administrative Agent’s Control with respect to each Investment Account, the security interest
granted pursuant to this Agreement creates a valid second priority perfected security interest in
the Collateral (other than the Subordinated Priority Collateral) and a valid first priority
perfected security interest in the Subordinated Priority Collateral, in each case together with all
Proceeds thereof, subject to no other Liens other than Liens permitted under Section 7.2.3 of the
Credit Agreement, securing the payment of the Secured Obligations.
SECTION 3.11. Authorization, Approval, etc. No authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority is required either for (a)
the grant by such Grantor of the security interest granted hereby or for the execution, delivery
and performance of this Agreement by such Grantor or (b) the perfection of or the exercise by the
Administrative Agent of its rights and remedies hereunder (other than the taking of those actions
referred to in clauses (a) through (c) of Section 3.5).
SECTION 3.12. Due Execution, Validity, Etc. Such Grantor has full power and
authority, and holds all requisite licenses, permits and other approvals of Governmental
Authorities, to enter into and perform its obligations under this Agreement. The execution,
delivery and performance by such Grantor of this Agreement does not contravene or result in a
default under such Grantor’s Organizational Documents or contravene or result in a default under
any contractual restriction, Lien or Law binding on such Grantor. This Agreement has been duly
authorized by such Grantor, has been duly executed and delivered on behalf of such Grantor and
constitutes the legal, valid and binding obligation of such Grantor enforceable in accordance with
its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting the rights of creditors generally, and subject to the effect
of general principles of equity (regardless of whether considered in a proceeding in equity or at
law).
ARTICLE IV
COVENANTS
COVENANTS
Each Grantor covenants and agrees that, until all the Secured Obligations have been paid in
full in cash (on terms and pursuant to documentation in form and substance reasonably satisfactory
to the Administrative Agent) and all the Commitments have been irrevocably terminated, such Grantor
will, perform the obligations set forth in this Section.
SECTION 4.1. Equipment and Inventory. Each Grantor hereby agrees that it shall:
(a) keep all of its Equipment, Inventory (other than Inventory sold in the ordinary course of
business or that is in-transit to a location specified in Item A or Item B of
Schedule I attached hereto (as such Schedule may be amended or supplemented from time to
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time) on a vehicle owned or leased by a Grantor) and the Documents evidencing the same at the
places therefor specified in Item C of Schedule I attached hereto to (as such
Schedule may be amended or supplemented from time to time) unless such Grantor has given at least
30 days’ prior notice to the Administrative Agent of another location, and all action, if any,
necessary to maintain in accordance with the terms hereof the Administrative Agent’s perfected
second priority security interest therein shall have been taken with respect to such Equipment,
Inventory and Documents;
(b) comply with the covenants contained in Section 7.1.3 of the Credit Agreement relating to
the maintenance of its properties;
(c) comply with the covenants contained in clause (b) of Section 7.1.2 of the Credit Agreement
regarding the payment of taxes and other charges of Governmental Authorities; and
(d) not deliver any Document evidencing any Equipment or Inventory to any Person other than
the issuer of such Document to claim the Goods evidenced therefor or the Administrative Agent.
SECTION 4.2. Receivables Collateral and General Intangibles. (a) Each Grantor shall
keep its principal place of business, chief executive office and the office where it keeps its
records concerning the Receivables Collateral and all originals of the Assigned Agreements
Instruments and Tangible Chattel Paper, at the places specified in Section 3.1 unless such
Grantor has given at least 30 days’ prior notice to the Administrative Agent and all actions, if
any, necessary to maintain the Administrative Agent’s perfected second priority security interest
shall have been taken with respect to such Collateral; not change its name or state of organization
unless such Grantor has given at least 30 days’ prior notice to the Administrative Agent and all
actions, if any, necessary to maintain the Administrative Agent’s perfected second priority
security interest (or, in the case of the Subordinated Priority Collateral, a first priority
security interest) shall have been taken with respect to all of the Collateral; hold and preserve
such records, Assigned Agreements, Instruments and Chattel Paper; and permit representatives of the
Administrative Agent at any time during normal business hours, upon reasonable notice, to inspect
and make abstracts of the same.
(b) Each Grantor shall diligently endeavor to collect its Receivables Collateral and all
amounts owing to it thereunder in the ordinary course of its business consistent with past
practices and shall apply forthwith upon receipt thereof all such amounts as are so collected to
the outstanding balances thereof, provided that during the continuance of any Event of
Default such Grantor shall, at the request of the Administrative Agent, take such action as the
Administrative Agent may deem necessary or advisable to enforce such collection. No Pledgor shall,
except to the extent done in the ordinary course of its business consistent with past practices and
in accordance with sound business judgment (i) grant any extension of the time for payment of any
Receivables Collateral, (ii) compromise or settle any Receivables Collateral for less than the full
amount thereof, (iii) release, in whole or in part, any Person or property liable for the payment
of any Receivables Collateral, or (iv) allow any credit or discount on any Receivables Collateral;
provided that during the continuance of any Event of Default each Grantor shall comply with
any limitations on the foregoing actions or specified by the
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Administrative Agent to such Grantor. In no event shall any Grantor amend, modify, terminate
or waive any provision of any Receivables Collateral in a manner which could reasonably be expected
to have a material adverse effect on such Receivables Collateral. Each Grantor will use its best
efforts to keep in full force and effect any Supporting Obligation relating to any Receivables
Collateral.
SECTION 4.3. Investment Property. Subject to the rights of the Senior Administrative
Agent, each Grantor will take any and all actions necessary to (a) cause the Administrative Agent
to obtain exclusive Control of any Investment Property owned by such Grantor in a manner acceptable
to the Administrative Agent and (b) obtain from any issuers of such Investment Property and such
other Persons, for the benefit of the Administrative Agent, written confirmation of the
Administrative Agent’s Control over such Investment Property upon terms and conditions acceptable
to the Administrative Agent. Subject to the rights of the Senior Administrative Agent, for purposes
of this Section, the Administrative Agent shall have exclusive Control of Investment Property if
(i) such Investment Property consists of Certificated Securities and such Grantor delivers such
Certificated Securities to the Administrative Agent (with appropriate endorsements if such
Certificated Securities are in registered form); (ii) such Investment Property consists of
Uncertificated Securities and the issuer thereof agrees, pursuant to documentation in form and
substance reasonably satisfactory to the Administrative Agent, that it will comply with
instructions originated by the Administrative Agent without further consent by such Grantor; and
(iii) such Investment Property consists of Security Entitlements and either (A) the Administrative
Agent becomes the Entitlement Holder thereof or (B) the appropriate Securities Intermediary agrees,
pursuant to documentation in form and substance satisfactory to Administrative Agent, that it will
comply with Entitlement Orders originated by the Administrative Agent without further consent by
such Grantor.
SECTION 4.4. Intellectual Property Collateral. (a) No Grantor shall, unless such
Grantor shall either (i) reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Administrative Agent) that any of the Patent Collateral is of
negligible economic value to such Grantor or (ii) have a valid business purpose (exercised in the
ordinary course of business that is consistent with past practice) to do otherwise, do any act, or
omit to do any act, whereby any of the Patent Collateral may lapse or become abandoned or dedicated
to the public or unenforceable.
(b) No Grantor shall, and no Grantor shall permit any of its licensees to, unless such Grantor
shall either (i) reasonably and in good faith determine (and notice of such determination shall
have been delivered to the Administrative Agent) that any of the Trademark Collateral is of
negligible economic value to such Grantor or (ii) have a valid business purpose (exercised in the
ordinary course of business that is consistent with past practice) to do otherwise:
(A) fail to continue to use any of the Trademark Collateral in order to maintain all of the
Trademark Collateral in full force free from any claim of abandonment for non-use;
(B) fail to maintain as in the past the quality of products and services offered under all of
the Trademark Collateral;
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(C) fail to employ all of the Trademark Collateral registered with any Federal or state or
foreign authority with an appropriate notice of such registration; or
(D) do or permit any act or knowingly omit to do any act whereby any of the Trademark
Collateral may lapse or become invalid or unenforceable.
(c) No Grantor shall, unless such Grantor shall either reasonably and in good faith determine
(and notice of such determination shall have been delivered to the Administrative Agent) that any
of the Copyright Collateral or any of the Trade Secrets Collateral is of negligible economic value
to such Grantor or have a valid business purpose (exercised in the ordinary course of business that
is consistent with past practice) to do otherwise, do or permit any act or knowingly omit to do any
act whereby any of the Copyright Collateral or any of the Trade Secrets Collateral may lapse or
become invalid or unenforceable or placed in the public domain except upon expiration of the end of
an unrenewable term of a registration thereof.
(d) Each Grantor shall notify the Administrative Agent immediately if it knows that any
application or registration relating to any material item of the Intellectual Property Collateral
may become abandoned or dedicated to the public or placed in the public domain or invalid or
unenforceable, or of any adverse determination or development (including the institution of, or any
such determination or development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any foreign counterpart thereof or any court)
regarding such Grantor’s ownership of any of the Intellectual Property Collateral, its right to
register the same or to keep and maintain and enforce the same.
(e) In no event shall any Grantor or any of its agents, employees, designees or licensees file
an application for the registration of any Intellectual Property Collateral with the United States
Patent and Trademark Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, unless it gives prior notice thereof to the
Administrative Agent and, if requested by the Administrative Agent, executes and delivers any and
all agreements, instruments, documents and papers as the Administrative Agent may reasonably
request to evidence the Lenders’ second priority security interest in such Intellectual Property
Collateral.
(f) Each Grantor shall take all necessary steps, including in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, to maintain and pursue any
application (and to obtain the relevant registration) filed with respect to, and to maintain any
registration of, the Intellectual Property Collateral, including the filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to the extent that dedication,
abandonment or invalidation is permitted under the foregoing clauses (a), (b) and
(c)).
SECTION 4.5. Assigned Agreements. Each Grantor shall at its expense, with respect to
all Assigned Agreements, comply with the covenants contained in clause (n) of Section 7.1.1 and
Section 7.2.10 of the Credit Agreement. Without the prior consent of the Administrative Agent, no
Grantor shall waive, settle, release or discharge any Person with respect to any of its
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obligations under any Assigned Agreement (other than upon due completion of such obligations
by such Person).
SECTION 4.6. Bailees, Warehouses and Leased Premises. No Collateral shall at any time
be in the possession or control of any warehouse, bailee or any of any Grantor’s agents or
processors, or located on any leased premises, without the Administrative Agent’s prior consent and
unless the Administrative Agent has received warehouse receipts or bailee lien waivers satisfactory
to the Administrative Agent prior to the commencement of such possession or control. Each Grantor
shall, upon the request of the Administrative Agent, notify any such warehouse, bailee, agent,
processor or lessor of the Lenders’ second priority security interest in the Collateral and shall
instruct such Person to hold all such Collateral for the Administrative Agent’s account subject to
the Administrative Agent’s instructions given during the continuance of any Event of Default.
SECTION 4.7. Chattel Paper and Instruments. Each Grantor will deliver to the Senior
Administrative Agent all Tangible Chattel Paper and Instruments duly endorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Senior Administrative Agent and provide certified copies to the Administrative
Agent. Subject to the rights of the Senior Administrative Agent, each Grantor will provide the
Administrative Agent with exclusive Control over all Electronic Chattel Paper by having the
Administrative Agent identified as an assignee of the records pertaining to the single
authoritative copy thereof and otherwise complying with the applicable elements of Control set
forth in the U.C.C. Each Grantor will also deliver to the Senior Administrative Agent and
Administrative Agent all security agreements securing any Chattel Paper and Instruments and execute
U.C.C. financing statement amendments assigning to the Administrative Agent and the Senior
Administrative Agent any U.C.C. financing statements filed by such Grantor in connection with such
security agreements. Each Grantor will xxxx conspicuously all Chattel Paper and Instruments with a
legend, in form and substance reasonably satisfactory to the Senior Administrative Agent and
Administrative Agent, indicating that such Chattel Paper and Instruments are subject to the Liens
created hereunder.
SECTION 4.8. Letters of Credit. Each Grantor will deliver to the Senior
Administrative Agent all letters of credit in which it is the beneficiary thereof, duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Administrative Agent. Each Grantor will take any and all actions
necessary (or reasonably requested by the Administrative Agent), from time to time, to cause the
Senior Administrative Agent to obtain exclusive Control of any Letter-of-Credit Rights owned by
such Grantor in a manner reasonably acceptable to the Senior Administrative Agent. If there shall
be a Discharge of the Senior Obligations, each Grantor shall deliver same to the Administrative
Agent.
SECTION 4.9. Commercial Tort Claims. Each Grantor shall advise the Administrative
Agent promptly upon such Grantor becoming aware, after the date hereof, that it owns any Commercial
Tort Claims. With respect to any such Commercial Tort Claims, such Grantor will execute and deliver
such documents as the Administrative Agent deems necessary to create, perfect and protect the
Administrative Agent’s second priority security interest in such Commercial Tort Claim.
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SECTION 4.10. Collateral Generally. (a) Subject to the Subordinated Intercreditor
Agreement, the Administrative Agent may, at any time following the occurrence and during the
continuance of any Event of Default, notify any parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amounts due or to become due thereunder and enforce
collection of any of the Collateral by suit or otherwise and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any period (whether or not longer than the
original period) any Indebtedness thereunder or evidenced thereby. Upon request of the
Administrative Agent after the occurrence and during the continuance of any Event of Default, each
Grantor will, at its own expense, notify any parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amounts due or to become due thereunder.
(b) Subject to the Subordinated Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent is authorized to endorse, in the name
of each Grantor, any item, howsoever received by the Administrative Agent, representing any payment
on or other Proceeds of any of the Collateral.
SECTION 4.11. Insurance. Each Grantor will maintain or cause to be maintained
insurance as provided in Section 7.1.4 of the Credit Agreement. All proceeds of insurance
maintained by each Grantor so covering the Collateral shall be applied to the payment of the
Secured Obligations under the circumstances provided for in the Credit Agreement and the Senior
Credit Agreement. Subject to the Subordinated Intercreditor Agreement, each Grantor irrevocably
makes, constitutes and appoints the Administrative Agent (and all officers, employees or agents
designated by the Administrative Agent) as such Grantor’s true and lawful agent and
attorney-in-fact for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the
name of such Grantor on any check, draft, instrument or other item of payment for the Proceeds of
such policies of insurance and for making all determinations and decisions with respect thereto. In
the event that any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required by Section 7.1.4 of the Credit Agreement or to pay any premium in
whole or part relating thereto, the Administrative Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any other actions with
respect thereto as the Administrative Agent deems advisable. All sums disbursed by the
Administrative Agent in connection with this Section including reasonable attorneys’ fees, court
costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors
to the Administrative Agent and shall be additional Secured Obligations secured hereby.
SECTION 4.12. Investment Accounts. Subject to the Subordinated Intercreditor
Agreement, each Grantor will take any and all actions necessary to cause the Administrative Agent
to obtain Control of all Investment Accounts owned by such Grantor in a manner acceptable to the
Administrative Agent. No Grantor shall close or terminate any Investment Account without the prior
consent of the Administrative Agent and unless a successor or replacement account has been
established with the consent of the Administrative Agent and is subject to a control agreement
reasonably satisfactory to the Administrative Agent.
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SECTION 4.13. Transfers and Other Liens. No Grantor shall (a) sell, assign (by
operation of law or otherwise) or otherwise dispose of any of the Collateral, except as permitted
by the Credit Agreement, or (b) create or suffer to exist any Lien upon or with respect to any of
the Collateral, except for the security interest created by this Agreement and except those
permitted by Section 7.2.3 of the Credit Agreement.
SECTION 4.14. Further Assurances, etc. Each Grantor agrees that, from time to time at
its own expense, such Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or that the
Administrative Agent may reasonably request, in order to perfect, preserve and protect any security
interest granted or purported to be granted hereby or to enable the Administrative Agent to
exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, each Grantor will:
(a) xxxx conspicuously each asset forming a part of the Collateral with a legend, in form and
substance reasonably satisfactory to the Administrative Agent, indicating that such Collateral is
subject to the security interest granted hereby;
(b) execute and file such financing or continuation statements, or amendments thereto, and
such other instruments or notices (including any assignment of claim form under or pursuant to the
federal assignment of claims statute, 31 U.S.C. § 3726, any successor or amended version thereof or
any regulation promulgated under or pursuant to any version thereof), as may be necessary, or as
the Administrative Agent may reasonably request, in order to perfect and preserve the security
interests and other rights granted or purported to be granted to the Administrative Agent hereby;
(c) furnish to the Administrative Agent, from time to time at the Administrative Agent’s
request, statements and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent may reasonably request, all
in reasonable detail;
(d) if requested by the Administrative Agent, each Grantor which owns or leases Equipment
which is subject to a certificate of title statute that requires notation of a lien thereon to
perfect a security interest therein shall deliver to the Administrative Agent all original
certificates of title for such Equipment, shall take all necessary steps to cause the
Administrative Agent’s security interest be perfected in accordance with such statute and deliver
to the Administrative Agent a schedule in reasonable detail describing such Equipment,
registration number, license number and all other information required to comply with such statute;
provided, however, that until the Administrative Agent makes such a request under
this clause, the parties hereto acknowledge that the security interest of the Administrative Agent
in such Collateral has not been perfected and all the representations and warranties, covenants
and Events of Default contained herein and in the other Loan Documents which would otherwise be
violated shall be deemed modified to reflect the foregoing and not be violated; and
(e) if requested by the Administrative Agent, execute and deliver confirmatory written
instruments, and obtain any consents, waivers or agreements, as may be necessary, or as the
Administrative Agent may reasonably request, in order to perfect and
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preserve the security interests and other rights granted or purported to be granted to the
Administrative Agent hereby, but any such Grantor’s failure to do so shall not affect or limit the
security interest granted hereby or the Administrative Agent’s other rights in and to the
Collateral.
With respect to the foregoing and the grant of the security interest hereunder, each Grantor
hereby authorizes the Administrative Agent to Authenticate and to file one or more U.C.C. financing
or continuation statements, and amendments thereto, and make filings with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office or any similar
office in any other country), in each case for the purpose of perfecting, confining, continuing,
enforcing or protecting the security interest granted by each Grantor, without the signature of any
Grantor, and naming any Grantor or the Grantors as debtors and the Administrative Agent as secured
party. A carbon, photographic, telecopied or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a financing statement
where permitted by Law.
SECTION 4.15. Collateral Account. (a) Subject to the Subordinated Intercreditor
Agreement, upon notice by the Administrative Agent to any Grantor pursuant to this Section
following the occurrence and during the continuance of any Event of Default, all Proceeds of
Collateral received by such Grantor shall be delivered in kind to the Administrative Agent for
deposit to a deposit account (the “Collateral Account”) of such Grantor maintained by or on
behalf of the Administrative Agent, and until such Proceeds are so deposited they shall be held in
trust for the benefit of the Administrative Agent and shall not be commingled with the other assets
of such Grantor.
(b) Subject to the Subordinated Intercreditor Agreement, the Administrative Agent shall have
the right to apply any amount in the Collateral Account to the payment of any Secured Obligations,
subject to and in accordance with the terms of the Credit Agreement. Subject to the rights of the
Administrative Agent, each Grantor shall have the right on each Business Day, with respect to and
to the extent of collected funds in the Collateral Account, to require the Administrative Agent to
purchase any Cash Equivalent Investment, provided that, in the case of Certificated
Securities, the Administrative Agent will retain possession thereof as Collateral and, in the case
of other Investment Property, the Administrative Agent will take such actions, including
registration of such Investment Property in its name, as it shall determine is necessary to perfect
its security interest therein.
SECTION 4.16. Notice of Material Adverse Effect. Each Grantor shall promptly notify
the Administrative Agent, after obtaining knowledge thereof, of any event that could reasonably be
expected to have a material adverse effect on any value of the Collateral, the ability of such
Grantor or the Administrative Agent to dispose of the Collateral or the rights or remedies of the
Administrative Agent in relation thereto.
SECTION 4.17. General Intangibles. Each Grantor shall use commercially reasonable
efforts to obtain any consents, waivers or agreements necessary to enable Administrative Agent to
exercise remedies hereunder and under the other Loan Documents with
respect to any of such Grantor’s rights under any General Intangibles, including such
Grantor’s rights as a licensee of any Intellectual Property Collateral.
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ARTICLE V
THE ADMINISTRATIVE AGENT
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. Subject to the
Subordinated Intercreditor Agreement, each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of
such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out
the terms of this Agreement, to take, upon the occurrence and during the continuance of any Event
of Default, any and all actions and execute any and all documents and instruments that may, in the
judgment of the Administrative Agent, be necessary or desirable to accomplish the purposes of this
Agreement. Without limiting the generality of the foregoing, after the occurrence and during the
continuance of any Event of Default each Grantor hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all
of the following:
(a) (i) demand payment of its Receivables Collateral; (ii) enforce payments of its Receivables
Collateral by legal proceedings or otherwise; (iii) exercise all of its rights and remedies with
respect to proceedings brought to collect its Receivables Collateral; (iv) sell or assign its
Receivables Collateral upon such terms, for such amount and at such times as the Administrative
Agent deems advisable; (v) settle, adjust, compromise, extend or renew any of its Receivables
Collateral; (vi) discharge and release any of its Receivables Collateral; (vii) prepare, file and
sign such Grantor’s name on any proof of claim in bankruptcy or other similar document against any
Loan Party of any of its Receivables Collateral; (viii) notify the post office authorities to
change the address for delivery of the such Grantor’s mail to an address designated by the
Administrative Agent, and open and dispose of all mail addressed to such Grantor; and (ix) endorse
such Grantor’s name upon any Chattel Paper, Document, Instrument, invoice, or similar document or
agreement relating to any Receivables Collateral or any goods pertaining thereto;
(b) in the case of any Intellectual Property Collateral, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may
request to evidence the Lender Parties’ security interest in such Intellectual Property Collateral
and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;
(c) take possession of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under or in respect of any Collateral and file any claim
or take any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due
under or in respect of any Collateral whenever payable;
(d) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral,
effect any repairs or any insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof;
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(e) execute, in connection with any sale or other disposition provided for in Section
6.1, any endorsements, assignments or other instruments of conveyance or transfer with respect
to the Collateral; and
(f) (i) direct any Person liable for any payment under any of the Collateral to make payment
of any and all moneys due or to become due thereunder directly to the Administrative Agent or as
the Administrative Agent shall direct; (ii) ask or demand for, collect, and receive payment of and
give receipt for, any and all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (iii) sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the Collateral; (iv) commence
and prosecute any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (v) defend any suit, action or proceeding brought against such Grantor
with respect to any Collateral; (vi) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate; (vii) notify, or require any Grantor to notify, Account Debtors to make
all payments directly to the Administrative Agent and change the post office box number or other
address to which the Account Debtors make payments; (viii) assign any Intellectual Property
Collateral (along with the goodwill of the business to which any such Intellectual Property
Collateral pertains), throughout the world for such terms, on such conditions, and in such manner,
as the Administrative Agent shall in its sole discretion determine; and (ix) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent’s option and such Grantor’s expense,
at any time, or from time to time, all acts and things that the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the Lender Parties’ security
interests therein and to effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.
Each Grantor hereby acknowledges, consents and agrees that the power of attorney granted pursuant
to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Administrative Agent May Perform. If any Grantor fails to perform any
agreement contained herein, subject to the Subordinated Intercreditor Agreement the Administrative
Agent may itself perform, or cause performance of, such agreement, and the reasonable expenses of
the Administrative Agent incurred in connection therewith shall be payable by such Grantor.
SECTION 5.3. Access and Examination. In order to give effect to the intent of this
Agreement the Administrative Agent may at all reasonable times upon reasonable advance notice (if
no Default or an Event of Default has occurred and is continuing) have access to, examine, audit,
make extracts from and inspect each Grantor’s records, files and books of account and the
Collateral, and may discuss each Grantor’s affairs with such Grantor’s officers and
management. Each Grantor will deliver to the Administrative Agent promptly following its request
therefor any instrument necessary for the Administrative Agent to obtain records from any service
bureau maintaining records for such Grantor. The Administrative Agent may, at expense of the
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Grantors, use each Grantor’s personnel, supplies and premises as may be reasonably necessary for
maintaining or enforcing the security interest granted hereunder. The Administrative Agent shall
have the right, at any time, in each Grantor’s name to verify the validity, amount or any other
matter relating to the Receivables Collateral; provided that the Administrative Agent shall
not communicate with any account obligors of the Grantors unless an Event of Default has occurred
and is continuing.
SECTION 5.4. Administrative Agent Has No Duty. (a) The powers conferred on the
Administrative Agent hereunder are solely to protect its interest (on behalf of the Lender Parties)
in the Collateral and shall not impose any duty on it to exercise any such powers. The
Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the U.C.C. or otherwise, shall be to
deal with it in the same manner as the Administrative Agent deals with similar property for its own
account. Neither the Administrative Agent, the Senior Administrative Agent, nor any of its
officers, directors, employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so, nor shall any such Person be under any
obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the Collateral or any part
thereof (including the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral). Neither the Administrative Agent, the Senior
Administrative Agent, nor any of its officers, directors, employees or agents shall be responsible
to any Grantor for any loss, damages, depreciation or other diminution in the value of any of the
Collateral that may occur as a result of or in connection with or that is in any way related to any
exercise, except in respect of any damages attributable solely to any such Person’s own gross
negligence or willful misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction.
(b) Each Grantor assumes all responsibility and liability arising from or relating to the use,
sale or other disposition of the Collateral. The Obligations shall not be affected by any failure
of the Administrative Agent to take any steps to perfect the security interest granted hereunder or
to collect or realize upon the Collateral, nor shall loss of or damage to the Collateral release
any Grantor from any of its Obligations.
ARTICLE VI
REMEDIES
REMEDIES
SECTION 6.1. Remedies. Subject to the Subordinated Intercreditor Agreement, if any
Event of Default shall have occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it (including, without
limitation, as provided in Section 5.1), all the rights and remedies of a secured party on
default under the U.C.C. and also may:
(i) require each Grantor to, and each Grantor hereby agrees that it will, at its expense and
upon the request of the Administrative Agent forthwith, assemble all or part of the Collateral as
directed by the Administrative Agent and make it available to the
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Administrative Agent at its
premises or another place designated by the Administrative Agent (whether or not the U.C.C. applies
to the affected Collateral);
(ii) without demand of performance or other demand, presentment, obtaining a final judgment,
protest, advertisement or notice of any kind (except any notice required by Law referred to below)
to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale, at any of the Administrative Agent’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. Each Grantor agrees that, to the extent
notice of sale shall be required by Law, 10 days’ prior notice to such Grantor of the time and
place of any public sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Administrative Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Administrative 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.
In case any sale of all or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Administrative Agent until the sale price is paid by the
purchase or purchasers thereof, but the Administrative Agent shall not incur any liability in case
any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to
the extent permitted by Law, private) sale made pursuant to this Section, any Lender Party may bid
for or purchase, free (to the extent permitted by Law) from any right of redemption, stay,
valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and
released to the extent permitted by Law), the Collateral or any part thereof offered for sale and
may make payment on account thereof by using any claim then due and payable to such Lender Party
from any Grantor as a credit against the purchase price, and such Lender Party may upon compliance
with the terms of sale, hold, retain and dispose of such property without further accountability to
any Grantor therefor;
(iii) with respect to the Intellectual Property, on demand, to cause the security interest to
become an assignment, transfer and conveyance of any of or all such Collateral by the applicable
Grantors to the Administrative Agent, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any such Collateral throughout the
world on such terms and conditions and in such manner as the Administrative Agent shall determine
(other than in violation of any then existing licensing arrangements to the extent that waivers
cannot be obtained);
(iv) with or without legal process and with or without prior notice or demand for performance,
to take possession of the Collateral and without liability for trespass to enter any premises where
the Collateral may be located and occupy (without the requirement to pay rent) the same until the
Secured Obligations are paid in full in cash (on terms and pursuant to
documentation in form and substance reasonably satisfactory to the Administrative Agent) and
all the Commitments have been irrevocably terminated; and
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(v) to notify any or all depository institutions with which any Investment Accounts are
maintained to remit and transfer all monies, securities and other property on deposit in such
Investment Accounts or deposited or received for deposit thereafter to the Administrative Agent,
for deposit in the Collateral Account or such other accounts as may be designated by the
Administrative Agent, for application to the Secured Obligations as provided herein.
(b) Without limiting clause (a), subject to the Subordinated Intercreditor Agreement,
the Administrative Agent may exercise any and all rights and remedies of each Grantor under or in
connection with the Collateral, including the right to xxx upon or otherwise collect, extend the
time for payment of, modify or amend the terms of, compromise or settle for cash, credit, or
otherwise upon any terms, grant other indulgences, extensions, renewals, compositions, or releases,
and take or omit to take any other action with respect to the Collateral, any security therefor,
any agreement relating thereto, any insurance applicable thereto, or any Person liable directly or
indirectly in connection with any of the foregoing, without discharging or otherwise affecting the
liability of any Grantor for the Obligations or under this Agreement or any other Loan Document and
the Assigned Agreements or otherwise in respect of the Collateral, including any and all rights of
such Grantor to demand or otherwise require payment of any amount under, or performance of any
provision of, any Collateral.
SECTION 6.2. Application of Proceeds. All cash proceeds received by the Administrative
Agent in respect of any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Administrative Agent, be held, to the extent permitted
under applicable Law, by the Administrative Agent as additional collateral security for all or any
part of the Secured Obligations, and/or then or at any time thereafter shall be applied (after
payment of any amounts payable to the Administrative Agent pursuant to Section 11.3 of the Credit
Agreement and Section 6.3) in whole or in part by the Administrative Agent for the ratable
benefit of the Lender Parties against all or any part of the Secured Obligations in accordance with
Section 8.6 of the Credit Agreement. Any surplus of such cash or cash proceeds held by the
Administrative Agent and remaining after payment in full in cash of all the Secured Obligations (on
terms and pursuant to documentation in form and substance reasonably satisfactory to the
Administrative Agent), and the irrevocable termination of all the Commitments, shall be paid over
to the Grantors or to whomsoever may be lawfully entitled to receive such surplus.
SECTION 6.3. Indemnity and Expenses. Each Grantor agrees to jointly and severally
indemnify and hold harmless the Administrative Agent and its directors, officers, employees,
agents, Affiliates and their Related Parties from and against any and all claims, losses and
liabilities arising out of or resulting from this Agreement (including enforcement of this
Agreement), except claims, losses or liabilities resulting from any such Person’s gross negligence
or willful misconduct as determined by a final non-appealable judgment of a court of competent
jurisdiction. Each Grantor will promptly following demand pay to the Administrative Agent the
amount of any and all reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Administrative
Agent may incur in connection with (a) the administration of this Agreement, (b) the custody,
preservation, use or operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (c) the exercise or enforcement of any of the rights of the Administrative Agent
or
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the other Lender Parties hereunder or (d) the failure by any Grantor to perform or observe any
of the provisions hereof.
SECTION 6.4. Grant of License. Subject to the rights of the Senior Administrative
Agent, each Grantor hereby grants to the Administrative Agent an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to use, license or
sublicense any Intellectual Property Collateral now owned or licensed or hereafter acquired or
licensed by such Grantor, wherever the same may be located throughout the world, for such terms, on
such conditions and in such manner as the Administrative Agent shall determine, whether general,
special or otherwise, and whether on an exclusive or nonexclusive basis, and including in such
license reasonable access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout thereof;
provided, however, that no such license or sublicense is granted in the case of any
such Collateral if such license or sublicense would be prohibited by, or give rise to a right to
terminate any contract governing such Collateral. The use of such license or sublicense by the
Administrative Agent shall be exercised, at the option of the Administrative Agent, only upon the
occurrence and during the continuation of an Event of Default; provided that any license,
sublicense or other transaction entered into by the Administrative Agent in accordance herewith
shall be binding upon each applicable Grantor notwithstanding any subsequent cure of an Event of
Default.
ARTICLE VII
MISCELLANEOUS PROVISIONS
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Agreement is a Loan Document executed pursuant to
the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof, including Section 1.3
and Article XI thereof.
SECTION 7.2. Amendments, etc.; Additional Grantors; Successors and Assigns. (a) No
amendment to or waiver of any provision of this Agreement nor consent to any departure by any
Grantor herefrom, shall be effective unless the same shall be in writing and signed by the
Administrative Agent and the percentage of the Lenders as required by Section 11.1 of the Credit
Agreement, and then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it is given.
(b) Upon the execution and delivery by any Person of a security agreement supplement in
substantially the form of Exhibit A hereto (each a “Security Agreement
Supplement”), (i) such Person shall be referred to as an “Additional Grantor” and shall
be and become a Grantor, and each reference in this Agreement to “Grantor” shall also mean and
refer to such Additional Grantor and (ii) the disclosure schedule attached to each Security
Agreement Supplement shall be incorporated into and become a part of and supplement Schedules
I through VI attached hereto, as appropriate, and the Administrative Agent may attach
such supplemental
disclosure schedules to such Schedules, and each reference to such Schedules shall refer to
such Schedules as supplemented by such supplemental disclosure schedules.
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(c) This Agreement shall be binding upon each Grantor and its successors, transferees and
assignees, and shall inure to the benefit of and be enforceable by the Administrative Agent and
each other Lender Party and their respective successors and assigns; provided,
however, that no Grantor may assign its obligations hereunder without the prior written
consent of the Administrative Agent. Without limiting the generality of the foregoing, any Lender
may assign or otherwise transfer (in whole or in part) any Loans held by it to any other Person,
and such other Person shall thereupon become vested with all the rights and benefits in respect
thereof granted to such Lender under any Loan Document (including this Agreement) or otherwise,
subject, however, to the provisions of Section 10.10 of the Credit Agreement.
SECTION 7.3. Protection of Collateral. The Administrative Agent may from time to
time, at its option and at the expense of the Grantors, perform any act which any Grantor agrees
hereunder to perform and which such Grantor shall fail to perform after being requested to so
perform (it being understood that no such request need be given after the occurrence and during the
continuance of any Event of Default), and the Administrative Agent may from time to time take any
other action which the Administrative Agent deems necessary or appropriate for the maintenance,
preservation or protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other communications provided for
hereunder shall be made as provided in, and subject to the terms of, Section 11.2 of the Credit
Agreement. All notices to each Grantor shall be sent care of the Borrower at its address set forth
in the Credit Agreement and all notices to the Administrative Agent shall be sent as provided in
the Credit Agreement.
SECTION 7.5. Section Captions. Section captions used in this Agreement are for
convenience of reference only, and shall not affect the construction of this Agreement.
SECTION 7.6. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions
of this Agreement or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 7.7. Counterparts. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.
SECTION 7.8. Waivers. Each Grantor hereby waives any right, to the extent permitted
by applicable Law, to receive prior notice of a judicial or other hearing with respect to any
action or prejudgment remedy or proceeding by the Administrative Agent to take possession, exercise
control over or dispose of any item of Collateral, where such action is permitted under the terms
of this Agreement or any other Loan Document or by applicable Law, or of the time,
place or terms of sale in connection with the exercise of the Administrative Agent’s rights
hereunder. Each Grantor waives, to the extent permitted by applicable Law, any bonds, security or
sureties required by the Administrative Agent with respect to any of the Collateral. Without
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limiting the foregoing, each Grantor agrees that it will not invoke, claim or assert any benefit of
applicable Law, or take or attempt to take any action that could reasonably be expected to have the
effect of delaying, impeding or preventing the Administrative Agent from exercising any of its
rights or remedies with respect to the Collateral as herein provided. Each Grantor also consents
that the Administrative Agent, in connection with the enforcement of the Administrative Agent’s
rights and remedies under this Agreement, may enter upon any premises owned by or leased to it
without obligations to pay rent or for use and occupancy, through self-help, without judicial
process and without having first obtained an order of any court.
SECTION 7.9. Governing Law, Entire Agreement, etc. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING
AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.10. Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF, ANY LENDER PARTY OR GRANTOR
SHALL BE BROUGHT AND MAINTAINED IN THE FEDERAL AND STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN
OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GRANTOR
AND LENDER PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH
COURTS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH GRANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR
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TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH GRANTOR,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
SECTION 7.11. Waiver of Jury Trial. EACH LENDER PARTY AND GRANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY LENDER
PARTY OR ANY GRANTOR. EACH GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT ENTERING INTO THIS AGREEMENT.
SECTION 7.12. Waiver of Certain Claims. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO
GRANTOR SHALL ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST EACH LENDER PARTY ON ANY THEORY OF
LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL
DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT OR ANY INSTRUMENT
CONTEMPLATED HEREBY.
SECTION 7.13. No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
SECTION 7.14. Intercreditor Agreement. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THE TERMS OF THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ADMINISTRATIVE
AGENT OR ANY OTHER LENDER HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT,
DATED AS OF OCTOBER 9, 2007 (AS AMENDED, SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO
TIME, THE “INTERCREDITOR AGREEMENT”), AMONG THE ADMINISTRATIVE AGENT, THE SENIOR
ADMINISTRATIVE AGENT, AND THE LOAN PARTIES. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE
INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN
AND CONTROL.
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered
by its officer thereunto duly authorized as of the date and year first above written.
| TIMBERLANDS II, LLC, a Delaware limited liability company |
||||||||
| XXXXX TIMBERLAND MANAGEMENT ORGANIZATION, LLC | ||||||||
| By: | /s/ Xxxx X. Xxxxxxx | |||||||
| XXXXX TIMBERLAND ACQUISITION, LLC | ||||||||||
| By: | XXXXX TIMBERLAND MANAGEMENT ORGANIZATION, LLC, as Manager |
|||||||||
| By: | /s/ Xxxx X. Xxxxxxx | |||||||||
| XXXXX TRS HARVESTING OPERATIONS, LLC | ||||||||||
| By: | FOREST RESOURCE CONSULTANTS, INC., as Manager | |||||||||
| By: | /s/ Xxxxx Foil | |||||||||
| Security Agreement Signature Page |
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| ACKNOWLEDGED AND ACCEPTED: | ||||
| WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent |
||||
By: |
/s/ Xxxxx X. Xxxxxxxx | |||
| Title: Director | ||||
| Security Agreement Signature Page |
-31-
SCHEDULE I
to
Security Agreement
to
Security Agreement
Item A. Location of Equipment
| Grantor Mailing Address | County | State |
Item B. Location of Inventory
| Grantor Mailing Address | County | State |
Item C. Principal Place of Business/Chief Executive Office
| Grantor Mailing Address | County | State |
Item D. Trade Names
| Grantor | Trade Name |
Item E. State of Organization and Identification Number
| Grantor | State of Organization | Identification Number |
Item F. Bailments
| Grantor | Bailee | Address | ||
Item G. Commercial Tort Claims
| Grantor | Description of Commercial Tort Claim |
Item H. Location of Fixtures
| Grantor Mailing Address | County | State |
Item I. Deposit Accounts
| Grantor | Bank Mailing Address | Account Name and Number |
Item J. Securities Accounts
| Grantor | Bank Mailing Address | Account Name and Number |
Item K. Commodities Accounts
| Grantor | Bank Mailing Address | Account Name and Number |
Item L. Letters of Credit
| Grantor | Bank Mailing Address | Account Name and Number | ||
Schedule I-2
SCHEDULE II
to
Security Agreement
to
Security Agreement
Item A. Patents
| Issued Patents | |||||||||||
| Grantor | Country | Patent No. | Issue Date | Inventor(s) | Title | ||||||
| Pending Patent Applications | |||||||||||
| Grantor | Country | Serial No. | Filing Date | Inventor(s) | Title | ||||||
| Patent Applications in Preparation | |||||||||||
| Expected | |||||||||||
| Grantor | Country | Serial No. | Filing Date | Inventor(s) | Title | ||||||
Item B. Patent Licenses
| Country or | Effective | Expiration | ||||||||||
| Territory | Licensor | Licensee | Date | Date | Date | Matter | ||||||
SCHEDULE III
to
Security Agreement
to
Security Agreement
Item A. Trademarks
| Registered Trademarks | ||||||||
| Grantor | Country | Trademark | Registration No. | Registration Date | ||||
| Pending Trademark Applications | ||||||||
| Grantor | Country | Trademark | Serial No. | Filing Date | ||||
| Trademark Applications in Preparation | ||||||||||
| Expected | Products/ | |||||||||
| Grantor | Country | Trademark | Docket No. | Filing Date | Services | |||||
Item B. Trademark Licenses
| Country or | Effective | Expiration | ||||||||
| Territory | Trademark | Licensor | Licensee | Date | Date | |||||
SCHEDULE IV
to
Security Agreement
to
Security Agreement
Item A. Copyrights
| Registered Copyrights | ||||||||||
| Grantor | Country | Registration No. | Registration Date | Author(s) | Title | |||||
| Copyrights Pending Registration Applications | ||||||||||
| Grantor | Country | Series No. | Filing Date | Author(s) | Title | |||||
| Copyright Registration Applications in Preparation | ||||||||||
| Expected | ||||||||||
| Grantor | Country | Docket No. | Filing Date | Author(s) | Title | |||||
Item B. Copyright Licenses
| Country or | Effective | Expiration | Subject | |||||||||
| Grantor | Territory | Licensor | Licensee | Date | Date | Matter | ||||||
SCHEDULE V
to
Security Agreement
to
Security Agreement
Trade
Secrets
| Country or | Effective | Expiration | Subject | |||||||||
| Grantor | Territory | Licensor | Licensee | Date | Date | Matter | ||||||
SCHEDULE VI
to
Security Agreement
to
Security Agreement
Assigned Agreements
| 1. | Fiber Supply Agreement | |
| 2. | Master Stumpage Agreement | |
| 3. | Transaction Agreement | |
| 4. | Contribution Agreement |
EXHIBIT A
to
Security Agreement
to
Security Agreement
FORM OF SECURITY AGREEMENT SUPPLEMENT
[Date]
Wachovia Bank NA
000 X. Xxxxxxx Xxxxxx, XX0000
Xxxxxxxxx, XX 00000-0000
000 X. Xxxxxxx Xxxxxx, XX0000
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxxx, Director, Structured Asset Finance
TIMBERLANDS II, LLC and
XXXXX TIMBERLAND ACQUISITION, LLC
XXXXX TIMBERLAND ACQUISITION, LLC
Ladies and Gentlemen:
Reference is made to the Subordinated Security Agreement, dated as of [ ], 2007
(as amended, supplemented, restated or otherwise modified from time to time, the “Security
Agreement”), made by Timberlands II, LLC., a Delaware limited liability company
(“Timberlands II”), Xxxxx Timberland Acquisition, LLC, a Delaware limited liability company
(“Xxxxx Timberland”), Xxxxx TRS Harvesting Operations, LLC, a Delaware limited liability
company (“Xxxxx TRS Subsidiary”), and each other Person (such capitalized term and all
other capitalized terms not otherwise defined herein to have the meanings provided for in
Article I) that is may from time to time become a party thereto (Timberlands II, Xxxxx
Timberland, Xxxxx TRS Subsidiary and such other Persons that become Additional Grantors are
collectively referred to as the “Grantors” and individually as a “Grantor”), in
favor of Wachovia Bank, National Association, as administrative agent (in such capacity, the
“Administrative Agent”) for each of the Lender Parties.
The undersigned hereby agrees, as of the date first above written, to become a Grantor under
the Security Agreement as if it were an original party thereto and agrees that each reference in
the Security Agreement to a “Grantor” shall also mean and refer to the undersigned.
The undersigned hereby collaterally assigns, mortgages and pledges to the Administrative
Agent, for its benefit and the ratable benefit of the Lender Parties, and hereby grants to the
Administrative Agent for its benefit and the ratable benefit of the Lender Parties, as collateral
for the Secured Obligations, a pledge and assignment of, and a security interest in, all of the
right, title and interest of the undersigned in and to its Collateral, whether now owned or
hereafter
acquired, subject to all of the terms and provisions of the Security Agreement, as if such
Collateral of the undersigned had been subject to the Security Agreement on the date of its
original execution.
The undersigned has attached hereto supplements to Schedules I through VI to
the Security Agreement, and the undersigned hereby certifies that such supplements are accurate and
complete as of the date first above written.
Exhibit A-2
The undersigned hereby makes each representation and warranty set forth in Article III of the
Security Agreement as to itself and as to its Collateral to the same extent as each other Grantor
and hereby agrees to be bound as a Grantor by all of the terms and provisions of the Security
Agreement to the same extent as all the other Grantors.
This letter shall be governed by and construed in accordance with the Laws of the State of New
York.
| Very truly yours, [NAME OF ADDITIONAL GRANTOR] |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| ACKNOWLEDGED AND ACCEPTED: | ||||
| WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent |
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By: |
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| Title: | ||||
Exhibit A-3
