Exhibit 10.4
GUARANTEE AND SECURITY AGREEMENT
dated as of
June 22, 2004
among
CONSECO, INC.
THE SUBSIDIARY GUARANTORS PARTY HERETO
and
BANK OF AMERICA, N.A.
as Agent
TABLE OF CONTENTS
PAGE
Section 1. Definitions.....................................................................................1
Section 2. Guarantees by Subsidiary Guarantors.............................................................9
Section 3. Grant of Transaction Liens.....................................................................12
Section 4. General Representations and Warranties.........................................................14
Section 5. Further Assurances; General Covenants..........................................................16
Section 6. Accounts.......................................................................................18
Section 7. Chattel Paper and Instruments..................................................................18
Section 8. Commercial Tort Claims.........................................................................19
Section 9. Recordable Intellectual Property...............................................................19
Section 10. Proceeds of Letters of Credit..................................................................20
Section 11. Investment Property............................................................................21
Section 12. Controlled Deposit Accounts....................................................................24
Section 13. Operation of Collateral Accounts...............................................................25
Section 14. Transfer of Record Ownership...................................................................26
Section 15. Right to Vote Securities.......................................................................27
Section 16. Remedies upon Event of Default.................................................................27
Section 17. Application of Proceeds........................................................................28
Section 18. Fees and Expenses; Indemnification.............................................................29
Section 19. Authority to Administer Collateral.............................................................30
Section 20. Limitation on Duty in Respect of Collateral....................................................31
Section 21. General Provisions Concerning the Agent........................................................31
Section 22. Termination of Transaction Liens; Release of Collateral........................................33
Section 23. Additional Subsidiary Guarantors and Lien Grantors.............................................34
Section 24. Notices........................................................................................34
Section 25. No Implied Waivers; Remedies Not Exclusive.....................................................36
Section 26. Successors and Assigns.........................................................................36
Section 27. Amendments and Waivers.........................................................................36
Section 28. Choice of Law..................................................................................36
Section 29. Waiver of Jury Trial...........................................................................36
Section 30. Severability...................................................................................36
SCHEDULES:
Schedule 1 Equity Interests in Subsidiaries and Affiliates Owned by Original Lien Grantors
Schedule 2 Other Investment Property Owned by Original Lien Grantors
Schedule 3 Securities Accounts, Commodity Accounts and Deposit Accounts
Schedule 4 Material Commercial Tort Claims
Schedule 5 Pledged Instruments
Schedule 6 Account Collateral
EXHIBITS:
Exhibit A Security Agreement Supplement
Exhibit B Copyright Security Agreement
Exhibit C Patent Security Agreement
Exhibit D Trademark Security Agreement
Exhibit E Perfection Certificate
Exhibit F Issuer Control Agreement
Exhibit G Securities Account Control Agreement
ii
GUARANTEE AND SECURITY AGREEMENT
AGREEMENT dated as of June 22, 2004 among CONSECO, INC., a Delaware
corporation (the "Company"), the SUBSIDIARY GUARANTORS party hereto and BANK OF
AMERICA, N.A., as Agent.
WHEREAS, the Company is entering into the Credit Agreement described in
Section 1 hereof in order to (i) refinance (the "Refinancing") in full all
indebtedness outstanding under the Credit Agreement dated as of September 10,
2003, as amended, among the Company, the lenders named therein, and Bank of
America, N.A., as agent for such lenders, (ii) pay fees and expenses incurred in
connection with the Refinancing, (iii) repurchase the CDOC Preferred Stock and
(iv) finance other general corporate purposes;
WHEREAS, the Company is willing to secure its obligations under the Credit
Agreement by granting Liens on substantially all of its assets to the Agent as
provided in the Security Documents;
WHEREAS, the Company is willing to cause each of its current and future
Domestic Subsidiaries (other than Insurance Subsidiaries, Subsidiaries of
Insurance Subsidiaries and Immaterial Subsidiaries) to (i) guarantee the
foregoing obligations of the Company and (ii) secure such guarantee thereof by
granting Liens on substantially all of the assets of such Subsidiaries to the
Agent as provided in the Security Documents;
WHEREAS, the Lenders are not willing to enter into the Credit Agreement
unless (i) the foregoing obligations of the Company are secured and guaranteed
as described above and (ii) each guarantee thereof is secured by Liens on
substantially all of the assets of the relevant Subsidiary Guarantor as provided
in the Security Documents; and
WHEREAS, upon any foreclosure or other enforcement of the Security
Documents, the net proceeds of, or other collections on, the relevant Collateral
are to be received by or paid over to the Agent and applied as provided in
Section 22 hereof;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions. (a) Terms Defined in Credit Agreement. Terms
defined in the Credit Agreement and not otherwise defined in subsection (b) or
(c) of this Section have, as used herein, the respective meanings provided for
therein.
(b) Terms Defined in UCC. As used herein, each of the following terms has
the meaning specified in the UCC:
Term UCC
---- ---
Account 9-102
Authenticate 9-102
Certificated Security 8-102
Chattel Paper 9-102
Commercial Tort Claim 9-102
Commodity Account 9-102
Commodity Contract 9-102
Commodity Customer 9-102
Commodity Intermediary 9-102
Deposit Account 9-102
Document 9-102
Electronic Chattel Paper 9-102
Entitlement Holder 8-102
Entitlement Order 8-102
Equipment 9-102
Financial Asset 8-102 & 103
General Intangibles 9-102
Instrument 0-000
Xxxxxxxxx 9-102
Investment Property 9-102
Letter-of-Credit Right 9-102
Payment Intangible 9-102
Record 9-102
Securities Account 8-501
Securities Intermediary 8-102
Security 8-102 & 103
Security Entitlement 8-102
Supporting Obligations 9-102
Tangible Chattel Paper 9-102
Uncertificated Security 8-102
(c) Additional Definitions. The following additional terms, as used herein,
have the following meanings:
"Account Control Agreement" means a Commodity Account Control Agreement, a
Deposit Account Control Agreement or a Securities Account Control Agreement, as
the context requires.
"Agent" means Bank of America, N.A., in its capacity as Agent under the
Loan Documents, and its successors and assigns in such capacity.
"Article 9" means Article 9 of the UCC.
"CIHC Notes" means (i) the Surplus Debenture No. 4 dated December 31, 1998
issued by Jefferson National Life Insurance Company of Texas (now known as
Conseco Life Insurance Company of Texas) to the benefit of CIHC, Incorporated in
the amount of $336,000,000, (ii) the Surplus Debenture No. 5 dated December 31,
1998 issued by Jefferson National Life Insurance Company of Texas (now known as
Conseco Life Insurance Company of Texas) to the benefit of
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CIHC, Incorporated in the amount of $305,000,000, (iii) the Surplus Debenture
No. 6 dated April 30, 1999 issued by Jefferson National Life Insurance Company
of Texas (now known as Conseco Life Insurance Company of Texas) to the benefit
of CIHC, Incorporated in the amount of $58,250,000 and (iv) the Surplus
Debenture No. 2 dated September 29, 1995 issued by TLIC Life Insurance Company
(now known as Conseco Life Insurance Company of Texas) to the benefit of CIHC,
Incorporated in the amount of $50,000,000.
"Collateral" means all property, whether now owned or hereafter acquired,
on which a Lien is granted or purports to be granted to the Agent pursuant to
the Security Documents. When used with respect to a specific Lien Grantor, the
term "Collateral" means all its property on which such a Lien is granted, or
purports to be granted, pursuant to the Security Documents.
"Collateral Accounts" means the Controlled Commodity Accounts, the
Controlled Deposit Accounts and the Controlled Securities Accounts.
"Commodity Account Control Agreement" means, with respect to any Commodity
Account as to which a Lien Grantor is the Commodity Customer, an agreement by
such Lien Grantor, the Agent and the relevant Commodity Intermediary that, upon
the occurrence and during the continuance of an Event of Default, the Commodity
Intermediary will comply only with instructions originating from the Agent
without further consent by such Lien Grantor. Each such agreement must be
reasonably satisfactory in form and substance to the Agent.
"Company" has the meaning specified in the recitals hereto.
"Control" has the following meanings:
(a) when used with respect to any Security or Security Entitlement,
the meaning specified in UCC Section 8-106;
(b) when used with respect to any Deposit Account, the meaning
specified in UCC Section 9-104;
(c) when used with respect to any Electronic Chattel Paper, the
meaning specified in UCC Section 9-105;
(d) when used with respect to any Commodity Account or Commodity
Contract, the meaning specified in UCC Section 9-106(b); and
(e) when used with respect to any right to payment or performance by
the issuer or a Nominated Person in respect of a letter of credit, the
meaning specified in UCC Section 9-107.
"Controlled Commodity Account" means a Commodity Account as to which (i) a
Lien Grantor is the Commodity Customer and (ii) a Commodity Account Control
Agreement is in effect.
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"Controlled Deposit Account" means a Deposit Account (i) that is subject to
a Deposit Account Control Agreement, (ii) as to which the Agent is the
Depositary Bank's "customer" (as defined in UCC Section 4-104) or (iii) as to
which the Agent is the Depositary Bank.
"Controlled Securities Account" means a Securities Account that (i) is
maintained in the name of a Lien Grantor at an office of a Securities
Intermediary located in the United States and (ii) together with all Financial
Assets credited thereto and all related Security Entitlements, is subject to a
Securities Account Control Agreement among such Lien Grantor, the Agent and such
Securities Intermediary.
"Copyright License" means any agreement now or hereafter in existence
granting to any Lien Grantor, or pursuant to which any Lien Grantor grants to
any other Person, any right to use, copy, reproduce, distribute, prepare
derivative works, display or publish any records or other materials on which a
Copyright is in existence or may come into existence, including any agreement
identified in Schedule 1 to any Copyright Security Agreement.
"Copyright Security Agreement" means a Copyright Security Agreement,
substantially in the form of Exhibit B, executed and delivered by a Lien Grantor
in favor of the Agent for the benefit of the Secured Parties.
"Copyrights" means all the following: (i) all copyrights under the laws of
the United States (whether or not the underlying works of authorship have been
published), all registrations and recordings thereof, all copyrightable works of
authorship (whether or not published), and all applications for copyrights under
the laws of the United States, including registrations, recordings and
applications in the United States Copyright Office or in any similar office or
agency of the United States or any State thereof, including those described in
Schedule 1 to any Copyright Security Agreement, (ii) all renewals of any of the
foregoing, (iii) all claims for, and rights to xxx for, past or future
infringements of any of the foregoing and (iv) all income, royalties, damages
and payments now or hereafter due or payable with respect to any of the
foregoing, including damages and payments for past or future infringements
thereof.
"Credit Agreement" means the Credit Agreement dated as of the date hereof
among Conseco, Inc., the Lenders party thereto, and Bank of America, N.A., as
Agent.
"Deposit Account Control Agreement" means, with respect to any Deposit
Account of any Lien Grantor, an agreement among such Lien Grantor, the Agent and
the relevant Depositary Bank, set forth in an authenticated Record, (i) that
upon the occurrence and during the continuance of an Event of Default, such
Depositary Bank will comply only with instructions originated by the Agent
directing disposition of the funds in such Deposit Account without further
consent by such Lien Grantor and (ii) subordinating to the relevant Transaction
Lien all claims of the Depositary Bank to such Deposit Account (except its right
to deduct its customary operating charges and fees and any uncollected funds
previously credited thereto).
"Depositary Bank" means a bank at which a Controlled Deposit Account is
maintained.
"Equity Interest" means (i) in the case of a corporation, any shares of its
capital stock, (ii) in the case of a limited liability company, any membership
interest therein, (iii) in the case of a partnership, any partnership interest
(whether general or limited) therein, (iv) in the case of any
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other business entity, any participation or other interest in the equity or
profits thereof, (v) any warrant, option or other right to acquire any Equity
Interest described in this definition or (vi) any Security Entitlement in
respect of any Equity Interest described in this definition.
"Federal Government" means the federal government of the United States or
any agency or instrumentality thereof.
"Intellectual Property" means all rights, priorities and privileges
relating to intellectual property, including Copyrights, Patents, Patent
Licenses, Trademarks and Trademark Licenses, arising under the laws of the
United States, which intellectual property is owned by the Lien Grantors.
"Intellectual Property Filing" means (i) with respect to any Patent, Patent
License, Trademark or Trademark License, the filing of the applicable Patent
Security Agreement or Trademark Security Agreement with the United States Patent
and Trademark Office, together with an appropriately completed recordation form
and (ii) with respect to any Copyright or Copyright License, the filing of the
applicable Copyright Security Agreement with the United States Copyright Office,
together with an appropriately completed recordation form, in each case
sufficient to record the Transaction Lien granted to the Agent in such
Recordable Intellectual Property.
"Intellectual Property Security Agreement" means a Copyright Security
Agreement, a Patent Security Agreement or a Trademark Security Agreement.
"Issuer Control Agreement" means an Issuer Control Agreement substantially
in the form of Exhibit F (with any changes that the Agent shall have approved,
such approval to be evidenced by the Agent's execution and delivery of such
Issuer Control Agreement).
"Lien Grantors" means the Company and the Subsidiary Guarantors.
"Liquid Investment" means a Cash Equivalent (other than commercial paper)
that matures within 30 days after it is first included in the Collateral.
"LLC Interest" means a membership interest or similar interest in a limited
liability company.
"Material Commercial Tort Claim" means a Commercial Tort Claim involving a
claim for more than $5,000,000.
"Nominated Person" means a Person whom the issuer of a letter of credit (i)
designates or authorizes to pay, accept, negotiate or otherwise give value under
such letter of credit and (ii) undertakes by agreement or custom and practice to
reimburse.
"Original Lien Grantor" means any Lien Grantor that grants a Lien on any of
its assets hereunder on the Effective Date.
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"own" refers to the possession of sufficient rights in property to grant a
security interest therein as contemplated by UCC Section 9-203, and "acquire"
refers to the acquisition of any such rights.
"Partnership Interest" means a partnership interest, whether general or
limited.
"Patent License" means any agreement now or hereafter in existence granting
to any Lien Grantor, or pursuant to which any Lien Grantor grants to any other
Person, any right with respect to any Patent or any invention now or hereafter
in existence, whether patentable or not, whether a patent or application for
patent is in existence on such invention or not, and whether a patent or
application for patent on such invention may come into existence or not,
including any agreement identified in Schedule 1 to any Patent Security
Agreement.
"Patent Security Agreement" means a Patent Security Agreement,
substantially in the form of Exhibit C, executed and delivered by a Lien Grantor
in favor of the Agent for the benefit of the Secured Parties.
"Patents" means (i) all letters patent and design letters patent of the
United States and all applications for letters patent or design letters patent
of the United States, including applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States or any
State thereof, including those described in Schedule 1 to any Patent Security
Agreement, (ii) all reissues, divisions, continuations, continuations in part,
revisions and extensions of any of the foregoing, (iii) all claims for, and
rights to xxx for, past or future infringements of any of the foregoing and (iv)
all income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including damages and payments for past or
future infringements thereof.
"Perfection Certificate" means, with respect to any Lien Grantor, a
certificate substantially in the form of Exhibit E, completed and supplemented
with the schedules contemplated thereby to the satisfaction of the Agent, and
signed by an officer of such Lien Grantor.
"Permitted Liens" means Liens (other than the Transaction Liens) on the
Collateral permitted to be created or assumed or to exist pursuant to Section
7.02 of the Credit Agreement.
"Permitted Priority Liens" means inchoate tax Liens arising by operation of
law.
"Pledged", when used in conjunction with any type of asset, means at any
time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time. For example, "Pledged Equity Interest"
means an Equity Interest that is included in the Collateral at such time and
"Pledged letter of credit" means a letter of credit that creates rights to
payment or performance that are included in the Collateral at such time.
"Post-Petition Interest" means any interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Company (or would accrue but for the
operation of applicable bankruptcy or insolvency laws), whether or not such
interest is allowed or allowable as a claim in any such proceeding.
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"Proceeds" means all proceeds of, and all other profits, products, rents or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or other realization upon, any
Collateral, including all claims of the relevant Lien Grantor against third
parties for loss of, damage to or destruction of, or for proceeds payable under,
or unearned premiums with respect to, policies of insurance in respect of, any
Collateral, and any condemnation or requisition payments with respect to any
Collateral.
"Recordable Intellectual Property" means (i) Patents, (ii) Patent Licenses,
(iii) Trademarks, (iv) Trademark Licenses, (v) Copyrights and (vi) Copyright
Licenses, and all rights in or under any of the foregoing.
"Regulated Subsidiary" means a Subsidiary as to which the consent of a
governmental body or official is required for any acquisition of control or
change of control thereof.
"Release Conditions" means the following conditions for releasing all the
Secured Guarantees and terminating all the Transaction Liens:
(i) all Commitments under the Credit Agreement shall have expired or
been terminated; and
(ii) all Secured Obligations (other than contingent indemnification
obligations not yet due and payable) shall have been paid in full.
"Secured Agreement", when used with respect to any Secured Obligation,
refers collectively to each instrument, agreement or other document that sets
forth obligations of the Company, obligations of a Subsidiary Guarantor and/or
rights of the holder with respect to such Secured Obligation.
"Secured Guarantee" means, with respect to each Subsidiary Guarantor, its
guarantee of the Secured Obligations under Section 2 hereof or Section 1 of a
Security Agreement Supplement.
"Secured Obligations" means all obligations of the Company or any Obligor
now or hereafter existing under the Loan Documents, in each case whether direct
or indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising.
"Secured Parties" means the holders from time to time of the Secured
Obligations.
"Secured Party Requesting Notice" means, at any time, a Secured Party that
has, at least five Business Days prior thereto, delivered to the Agent a written
notice (i) stating that it holds one or more Secured Obligations and wishes to
receive copies of the notices referred to in Section 21(h) and (ii) setting
forth its address, facsimile number and electronic mail address to which copies
of such notices should be sent.
"Securities Account Control Agreement" means, when used with respect to a
Securities Account, a Securities Account Control Agreement substantially in the
form of Exhibit G (with any changes that the Agent shall have approved, such
approval to be evidenced by the Agent's
7
execution and delivery of such Securities Account Control Agreement) or in any
other form reasonably satisfactory to the Agent among the relevant Securities
Intermediary, the relevant Lien Grantor and the Agent to the effect that, upon
the occurrence and during the continuance of an Event of Default, such
Securities Intermediary will comply only with Entitlement Orders originated by
the Agent with respect to such Securities Account without further consent by the
relevant Lien Grantor.
"Security Agreement Supplement" means a Security Agreement Supplement,
substantially in the form of Exhibit A, signed and delivered to the Agent for
the purpose of adding a Subsidiary as a party hereto pursuant to Section 23
and/or adding additional property to the Collateral.
"Security Documents" means this Agreement, the Security Agreement
Supplements, the Commodity Account Control Agreements, the Deposit Account
Control Agreements, the Issuer Control Agreements, the Securities Account
Control Agreements, the Intellectual Property Security Agreements and all other
supplemental or additional security agreements, control agreements, mortgages or
similar instruments delivered pursuant to the Loan Documents.
"Subsidiary Guarantor" means each Subsidiary listed on the signature pages
hereof under the caption "Subsidiary Guarantors" and each Subsidiary that shall,
at any time after the date hereof, become a "Subsidiary Guarantor" pursuant to
Section 23.
"Supporting Letter of Credit" means a letter of credit that supports the
payment or performance of one or more items included in the Collateral.
"Trademark License" means any agreement now or hereafter in existence
granting to any Lien Grantor, or pursuant to which any Lien Grantor grants to
any other Person, any right to use any Trademark, including any agreement
identified in Schedule l to any Trademark Security Agreement.
"Trademark Security Agreement" means a Trademark Security Agreement,
substantially in the form of Exhibit D, executed and delivered by a Lien Grantor
in favor of the Agent for the benefit of the Secured Parties.
"Trademarks" means: (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos, brand names, trade dress, prints and labels on which any of the
foregoing have appeared or appear, package and other designs, and all other
source or business identifiers, and all general intangibles of like nature, and
the rights in any of the foregoing which arise under applicable law, (ii) the
goodwill of the business symbolized thereby or associated with each of them,
(iii) all registrations and applications in connection therewith, including
registrations and applications in the United States Patent and Trademark Office
or in any similar office or agency of the United States or any State thereof,
including those described in Schedule 1 to any Trademark Security Agreement,
(iv) all renewals of any of the foregoing, (v) all claims for, and rights to xxx
for, past or future infringements of any of the foregoing and (vi) all income,
royalties, damages and payments now or hereafter due or payable with respect to
any of the foregoing, including damages and payments for past or future
infringements thereof.
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"Transaction Liens" means the Liens granted by the Lien Grantors under the
Security Documents.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York; provided that, if perfection or the effect of perfection
or non-perfection or the priority of any Transaction Lien on any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "UCC" means the Uniform Commercial Code as in effect from time to
time in such other jurisdiction for purposes of the provisions hereof relating
to such perfection, effect of perfection or non-perfection or priority.
(d) Terms Generally. The definitions of terms herein (including those
incorporated by reference to the UCC or to another document) apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun includes the corresponding masculine, feminine and neuter
forms. The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation". The word "will" shall be construed
to have the same meaning and effect as the word "shall". Unless the context
requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Sections, Exhibits and Schedules shall be construed to refer to Sections of, and
Exhibits and Schedules to, this Agreement and (v) the word "property" shall be
construed to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
Section 2. Guarantees by Subsidiary Guarantors. (a) Secured Guarantees.
Each Subsidiary Guarantor unconditionally and irrevocably guarantees the full
and punctual payment of each Secured Obligation when due (whether at stated
maturity, upon acceleration or otherwise). If the Company fails to pay any
Secured Obligation punctually when due, each Subsidiary Guarantor agrees that it
will forthwith on demand pay the amount not so paid at the place and in the
manner specified in the relevant Secured Agreement.
(b) Secured Guarantees Unconditional. The obligations of each Subsidiary
Guarantor under its Secured Guarantee shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Company, any other Subsidiary Guarantor
or any other Person under any Secured Agreement, by operation of law or
otherwise;
(ii) any modification or amendment of or supplement to any Secured
Agreement;
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(iii) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Company, any other
Subsidiary Guarantor or any other Person under any Secured Agreement;
(iv) any change in the corporate existence, structure or ownership of
the Company, any other Subsidiary Guarantor or any other Person or any of
their respective subsidiaries, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Company, any other
Subsidiary Guarantor or any other Person or any of their assets or any
resulting release or discharge of any obligation of the Company, any other
Subsidiary Guarantor or any other Person under any Secured Agreement;
(v) the existence of any claim, set-off or other right whatsoever (in
any case, whether based on contract, tort or any other theory) that such
Subsidiary Guarantor may have at any time against the Company, any other
Subsidiary Guarantor, any Secured Party or any other Person, whether in
connection with the Loan Documents or any unrelated transactions, provided
that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against the
Company, any other Subsidiary Guarantor or any other Person for any reason
of any Secured Agreement, or any provision of applicable law or regulation
purporting to prohibit the payment of any Secured Obligation by the
Company, any other Subsidiary Guarantor or any other Person;
(vii) any manner of application of Collateral or any other collateral,
or proceeds thereof, to all or any of the Secured Obligations, or any
manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other
Obligations of any Obligor under the Loan Documents or any other assets of
any Obligor or any of its Subsidiaries;
(viii) any failure of any Secured Party to disclose to any Subsidiary
Guarantor any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other
Obligor now or hereafter known to such Secured Party (each Subsidiary
Guarantor waiving any duty on the part of the Secured Parties to disclose
such information); or
(ix) other than satisfaction in full of the Release Conditions, any
other act or omission to act or delay of any kind by the Company, any other
Subsidiary Guarantor, any other party to any Secured Agreement, any Secured
Party or any other Person, or any other circumstance whatsoever (other than
payment in full of the Secured Obligations) that might, but for the
provisions of this clause (vii), constitute a legal or equitable discharge
of or defense to any obligation of any Subsidiary Guarantor hereunder.
(c) Release of Secured Guarantees. (i) All the Secured Guarantees will be
released when all the Release Conditions are satisfied. If at any time any
payment of a Secured Obligation is rescinded or must be otherwise restored or
returned upon the insolvency or
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receivership of the Company or otherwise, the Secured Guarantees shall be
reinstated with respect thereto as though such payment had been due but not made
at such time.
(ii) If all the capital stock of a Subsidiary Guarantor or all the
assets of a Subsidiary Guarantor are sold to a Person other than the
Company or one of its Subsidiaries in a transaction permitted by the Credit
Agreement (any such sale, a "Sale of Subsidiary Guarantor"), the Secured
Guarantee of such Subsidiary Guarantor shall automatically be discharged
and released without any further action by the Agent or any other Secured
Party effective as of the time of such Sale of Subsidiary Guarantor;
provided that, if such sale is an Asset Sale, arrangements reasonably
satisfactory to the Agent have been made to apply the Net Proceeds thereof
as required by the Credit Agreement. Such release shall not require the
consent of any Secured Party, and the Agent shall be fully protected in
relying on a certificate of the Company as to whether any particular sale
constitutes a Sale of Subsidiary Guarantor.
(iii) In addition to any release permitted by subsection (ii), the
Agent may release any Secured Guarantee with the prior written consent of
the Required Lenders; provided that any release of all or substantially all
the Secured Guarantees shall require the consent of all the Lenders.
(d) Waiver by Subsidiary Guarantors. Each Subsidiary Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action be
taken by any Person against the Company, any other Subsidiary Guarantor or any
other Person.
(e) Subrogation. A Subsidiary Guarantor that makes a payment with respect
to a Secured Obligation hereunder shall be subrogated to the rights of the payee
against the Company with respect to such payment; provided that no Subsidiary
Guarantor shall enforce any payment by way of subrogation against the Company,
or by reason of contribution against any other Subsidiary Guarantor of such
Secured Obligation, until all of the Release Conditions have been satisfied in
full. If any amount shall be paid to any Subsidiary Guarantor in violation of
the immediately preceding sentence at any time prior to the satisfaction in full
of the Release Conditions, such amount shall be received and held in trust for
the benefit of the Secured Parties, shall be segregated from other property and
funds of such Subsidiary Guarantor and shall forthwith be paid or delivered to
the Agent in the same form as so received (with any necessary endorsement or
assignment) to be credited and applied to the Secured Obligations and all other
amounts payable under this Agreement in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Secured Obligations or other
amounts payable under this Agreement thereafter arising; provided that the
obligations of such Subsidiary Guarantor under this Section 2(e) shall be
subject to the limitation contained in Section 2(i).
(f) Stay of Acceleration. If acceleration of the time for payment of any
Secured Obligation by the Company is stayed by reason of the insolvency or
receivership of the Company or otherwise, all Secured Obligations otherwise
subject to acceleration under the terms of any Secured Agreement shall
nonetheless be payable by the Subsidiary Guarantors hereunder forthwith on
demand by the Agent.
11
(g) Right of Set-Off. In addition to any rights and remedies of the Secured
Parties provided by applicable law, if any Secured Obligation is not paid
promptly when due (after the passage of any applicable cure period as set forth
in the Loan Documents), each of the Secured Parties and their respective
Affiliates is authorized at any time and from time to time, without prior notice
to any Subsidiary Guarantor, any such notice being waived by each Subsidiary
Guarantor, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Secured Party or
Affiliate to or for the credit or the account of any Subsidiary Guarantor
against the obligations of such Subsidiary Guarantor under its Secured
Guarantee, irrespective of whether or not such Secured Party shall have made any
demand thereunder and although such obligations may be contingent or unmatured;
provided that neither any Secured Party nor any of its Affiliates shall be
entitled to exercise any such set off with respect to any trust or payroll
account. Each Secured Party agrees to promptly notify the Company and the Agent
after any such set off and application made by such Secured Party; provided that
the failure to give such notice shall not affect the validity of such set off
and application.
(h) Continuing Guarantee. Each Secured Guarantee is a continuing guarantee,
shall be binding on the relevant Subsidiary Guarantor and its successors and
assigns, and shall inure to the benefit of and be enforceable by the Agent or
the Secured Parties and their successors, transferees and assigns. If all or
part of any Secured Party's interest in any Secured Obligation is assigned or
otherwise transferred, the transferor's rights under each Secured Guarantee, to
the extent applicable to the obligation so transferred, shall automatically be
transferred with such obligation. No Subsidiary Guarantor shall have the right
to assign its rights hereunder or any interest herein without the prior written
consent of the Secured Parties.
(i) Limitation on Obligations of Subsidiary Guarantor. Notwithstanding
anything to the contrary herein, it is the intention of the parties hereto that
the Secured Guarantee of each Subsidiary Guarantor not constitute a fraudulent
conveyance under applicable fraudulent conveyance provisions of the United
States Bankruptcy Code or any comparable provision of applicable state law. To
effectuate that intention, the parties hereto hereby agree that the obligations
of each Subsidiary Guarantor under its Secured Guarantee are limited to the
maximum amount that would not render the Subsidiary Guarantor's obligations
subject to avoidance under applicable fraudulent conveyance provisions of the
United States Bankruptcy Code or any comparable provision of applicable state
law.
Section 3. Grant of Transaction Liens. (a) The Company, in order to secure
the Secured Obligations, and each Subsidiary Guarantor listed on the signature
pages hereof, in order to secure its Secured Guarantee, grants to the Agent for
the benefit of the Secured Parties a continuing security interest in all right,
title and interest of the Company or such Subsidiary Guarantor, as the case may
be, in, to and under the following property of the Company or such Subsidiary
Guarantor, as the case may be, whether now owned or existing or hereafter
acquired or arising and regardless of where located:
(i) all Accounts;
(ii) all Chattel Paper;
12
(iii) the Commercial Tort Claims described in Schedule 4;
(iv) all Deposit Accounts;
(v) all Documents;
(vi) all Equipment;
(vii) all General Intangibles (including any Equity Interests in other
Persons that do not constitute Investment Property);
(viii) all Instruments;
(ix) all Inventory;
(x) all Investment Property;
(xi) all Letter-of-Credit Rights;
(xii) all Intellectual Property;
(xiii) all books and records (including customer lists, credit files,
computer programs, printouts and other computer materials and records) of
such Original Lien Grantor pertaining to any of its Collateral;
(xiv) such Original Lien Grantor's ownership interest in (1) its
Collateral Accounts, (2) all Financial Assets credited to its Collateral
Accounts from time to time and all Security Entitlements in respect
thereof, (3) all cash held in its Collateral Accounts from time to time and
(4) all other money in the possession of the Agent; and
(xv) all Proceeds of the Collateral described in the foregoing clauses
(i) through (xiv);
provided that the following property is excluded from the foregoing security
interests: (A) motor vehicles the perfection of a security interest in which is
excluded from the Uniform Commercial Code in the relevant jurisdiction, (B)
voting Equity Interests in any first-tier Foreign Subsidiary, to the extent (but
only to the extent) required to prevent the Collateral from including more than
65% of all voting Equity Interests in such first-tier Foreign Subsidiary, (C)
Capital Stock of any Foreign Subsidiary that is not a first-tier Foreign
Subsidiary, (D) Equipment leased by an Original Lien Grantor under a lease that
prohibits the granting of a Lien on such Equipment, (E) cash and Cash
Equivalents maintained in any trust or payroll account, so long as such account
are maintained as a trust or payroll account respectively, (F) Cash and Cash
Equivalents maintained in any account of any Lien Grantor that is an investment
adviser registered under the Investment Advisers Act of 1940 so long as (x) such
account is
13
maintained to satisfy qualified professional asset manager requirements under
ERISA and (y) the aggregate amount of cash and Cash Equivalents in all such
accounts does not exceed $2,000,000 at any time, (G) cash and Cash Equivalents
maintained in any account of any Lien Grantor that is a broker-dealer registered
under the Exchange Act and a member of NASD so long as (x) such account is
maintained to satisfy minimum net regulatory capital requirements imposed by
NASD regulations pursuant to the Exchange Act and (y) the aggregate amount of
cash and Cash Equivalents in all such accounts does not exceed $10,000,000 at
any time, (H) intent-to-use trademark applications to the extent that, and
solely during the period in which, the grant of a security interest therein
would impair the validity and enforceability of such intent to use trademark
applications under applicable United States federal law and (I) any general
intangibles or other rights arising under any contract, instrument, license or
other document if (but only to the extent that) the grant of a security interest
therein would constitute a violation of a valid and enforceable restriction in
favor of a third party, unless and until all required consents shall have been
obtained. Each Original Lien Grantor shall use commercially reasonable efforts
to obtain any such required consent that is reasonably obtainable.
(b) With respect to each right to payment or performance included in the
Collateral from time to time, the Transaction Lien granted therein includes a
continuing security interest in (i) any Supporting Obligation that supports such
payment or performance and (ii) any Lien that (x) secures such right to payment
or performance or (y) secures any such Supporting Obligation.
(c) The Transaction Liens are granted as security only and shall not
subject the Agent or any other Secured Party to, or transfer or in any way
affect or modify, any obligation or liability of any Lien Grantor with respect
to any of the Collateral or any transaction in connection therewith.
(d) If the governmental body or official having jurisdiction over any
Regulated Subsidiary determines that the pledge of the shares of capital stock
of such Regulated Subsidiary hereunder constitutes the acquisition of or a
change of control with respect to such Regulated Subsidiary as to which the
prior approval of such governmental body or official was required, then,
immediately upon the relevant Lien Grantor's (1) written memorialization of oral
notice or (2) receipt of written notice from such governmental body or official
of such determination and without any action on the part of the Agent or any
other Person, such pledge shall be rendered void ab initio and of no effect.
Upon any such occurrence, (i) the Agent shall, at such Lien Grantor's written
request and expense, return all certificates representing such capital stock to
such Lien Grantor and execute and deliver such documents as such Lien Grantor
shall reasonably request to evidence such Lien Grantor's retention of all rights
in such capital stock and (ii) such Lien Grantor shall, if requested by the
Agent or the Required Lenders, promptly submit a request to the relevant
governmental body or official for approval of the pledge of such shares to the
Agent hereunder and, upon receipt of such approval, shall forthwith deliver to
the Agent certificates representing all the outstanding shares of capital stock
of such Regulated Subsidiary (subject to the limitation in Section 11(m) if such
Regulated Subsidiary is a Foreign Subsidiary) to be held as Collateral
hereunder.
Section 4. General Representations and Warranties. Each Original Lien
Grantor represents and warrants that:
(a) Such Lien Grantor is duly organized, validly existing and in good
standing under the laws of the jurisdiction identified as its jurisdiction of
organization in its Perfection Certificate.
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(b) Schedule 1 lists all Equity Interests in Subsidiaries and Affiliates
directly owned by such Lien Grantor as of the Effective Date. Such Lien Grantor
holds all such Equity Interests directly (i.e., not through a Subsidiary, a
Securities Intermediary or any other Person).
(c) Schedule 2 lists, as of the Effective Date, all Securities owned by
such Lien Grantor (except Securities evidencing Equity Interests in Subsidiaries
and Affiliates).
(d) Schedule 3 lists, as of the Effective Date, (i) all Securities Accounts
to which Financial Assets are credited in respect of which such Lien Grantor
owns Security Entitlements, (ii) all Commodity Accounts in respect of which such
Lien Grantor is the Commodity Customer and (iii) all Deposit Accounts in the
name of such Lien Grantor.
(e) All Pledged Equity Interests owned by such Lien Grantor are owned by it
free and clear of any Lien other than Permitted Liens. All shares of capital
stock included in such Pledged Equity Interests (including shares of capital
stock in respect of which such Lien Grantor owns a Security Entitlement) have
been duly authorized and validly issued and are fully paid and non-assessable.
None of such Pledged Equity Interests is subject to any option to purchase or
similar right of any Person. Such Lien Grantor is not and will not become a
party to or otherwise bound by any agreement (except as permitted by the Credit
Agreement) which restricts in any manner the rights of any present or future
holder of any Pledged Equity Interest with respect thereto.
(f) Such Lien Grantor has good legal title in fee simple to or rights in
and power to transfer, or valid leasehold interests in, all its Collateral,
except for such defects in title or interests as could not, individually or in
the aggregate with respect to all Lien Grantors, reasonably be expected to have
a Material Adverse Effect. The property of such Lien Grantor is subject to no
Liens, other than Liens permitted under Section 7.02 of the Credit Agreement.
(g) Such Lien Grantor has not performed any acts that could reasonably be
expected to prevent the Agent from enforcing any of the provisions of the
Security Documents or that would limit the Agent in any such enforcement. No
authorized financing statement, security agreement, mortgage or similar or
equivalent document or instrument covering all or part of the Collateral owned
by such Lien Grantor is on file or of record in any jurisdiction in which such
filing or recording would be effective to perfect or record a Lien on such
Collateral, except financing statements, mortgages or other similar or
equivalent documents with respect to Liens permitted under Section 7.02 of the
Credit Agreement. After the Effective Date, no Collateral owned by such Lien
Grantor will be in the possession or under the Control of any other Person
having a claim thereto or security interest therein, other than a Lien permitted
under Section 7.02 of the Credit Agreement.
(h) The Transaction Liens on all Collateral owned by such Lien Grantor (i)
have been validly created, (ii) will attach to each item of such Collateral on
the Effective Date (or, if such Lien Grantor first obtains rights thereto on a
later date, on such later date) and (iii) when so attached, will secure all the
Secured Obligations or such Lien Grantor's Secured Guarantee, as the case may
be.
15
(i) Such Lien Grantor has delivered a Perfection Certificate to the Agent.
The information set forth therein is correct and complete as of the Effective
Date. Within 60 days after the Effective Date, such Lien Grantor will furnish
(or cause to be furnished) to the Agent a file search report from each UCC
filing office listed in its Perfection Certificate, showing the filing made at
such filing office to perfect the Transaction Liens on its Collateral.
(j) When UCC financing statements describing the Collateral as set forth in
Schedule 3 to such Lien Grantor's Perfection Certificate have been filed in the
offices specified in such Perfection Certificate, the Transaction Liens will
constitute perfected security interests in the Collateral owned by such Lien
Grantor to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, prior to all Liens and rights of others therein
except Permitted Liens that have priority over the Transaction Liens by
operation of law. When, in addition to the filing of such UCC financing
statements, the applicable Intellectual Property Filings have been made with
respect to such Lien Grantor's Recordable Intellectual Property (including any
future filings required pursuant to Sections 5(a) and 9(a)), the Transaction
Liens will constitute perfected security interests in all right, title and
interest of such Lien Grantor in its Recordable Intellectual Property to the
extent that security interests therein may be perfected by such filings, prior
to all Liens and rights of others therein except Permitted Liens. Except for (i)
the filing of such UCC financing statements and (ii) such Intellectual Property
Filings, no registration, recordation or filing with, and no authorization or
approval or other action by, any governmental body, agency or official is
required in connection with the execution or delivery of the Security Documents
or is necessary for the validity or enforceability thereof or for the perfection
or due recordation of the Transaction Liens or (except with respect to the
capital stock of any Regulated Subsidiary) for the enforcement of the
Transaction Liens.
(k) Such Lien Grantor's Collateral is insured as required by the Credit
Agreement.
(l) If such Lien Grantor is also a Subsidiary Guarantor, in executing and
delivering this Agreement (including providing its Secured Guarantee), such Lien
Grantor has (i) without reliance on the Agent or any other Secured Party or any
information received from the Agent or any other Secured Party and based upon
such documents and information it deems appropriate, made an independent
investigation of the transactions contemplated by the Loan Documents and the
Company, the Company's business, assets, operations, prospects and condition,
financial or otherwise, and any circumstances which may bear upon such
transactions, the Company or the obligations and risks undertaken herein with
respect to the Secured Obligations, (ii) adequate means to obtain from the
Company on a continuing basis information concerning the Company, (iii) full and
complete access to the Loan Documents and any other documents executed in
connection with the Loan Documents and (iv) not relied and will not rely upon
any representations or warranties of the Agent or any other Secured Party not
embodied herein or any acts heretofore or hereafter taken by the Agent or any
other Secured Party (including any review by the Agent or any other Secured
Party of the affairs of the Company).
Section 5. Further Assurances; General Covenants. Each Lien Grantor
covenants as follows:
(a) Such Lien Grantor will at the Company's expense, execute, deliver, file
and record any statement, assignment, instrument, document, agreement or other
paper and take any
16
other action (including any Intellectual Property Filing and any filing of
financing or continuation statements under the UCC) that from time to time may
be necessary, or that the Agent may reasonably request, in order to:
(i) create, preserve, perfect or confirm the Transaction Liens on such
Lien Grantor's Collateral;
(ii) in the case of Pledged Deposit Accounts, Pledged Letter-of-Credit
Rights, Pledged Electronic Chattel Paper and Pledged Investment Property,
cause the Agent to have Control thereof; or
(iii) enable the Agent to exercise and enforce any of its rights,
powers and remedies with respect to any of such Lien Grantor's Collateral.
To the extent permitted by applicable law, such Lien Grantor authorizes the
Agent to execute and file such financing statements or continuation statements,
and amendments thereto, including, without limitation, one or more financing
statements indicating that such financing statements cover all assets or all
personal property (or words of similar effect) of such Lien Grantor, in each
case without such Lien Grantor's signature appearing thereon, and regardless of
whether any particular asset described in such financing statement falls within
the scope of the UCC or the granting clause of this Agreement. Such Lien Grantor
agrees (but makes no representation that the applicable filing officer shall
accept) that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.
Such Lien Grantor constitutes the Agent its attorney-in-fact to execute and
file, in the event such Lien Grantor fails to do so promptly, all Intellectual
Property Filings and other filings required or so requested for the foregoing
purposes, all such acts of such attorney being hereby ratified and confirmed;
and such power, being coupled with an interest, shall be irrevocable until all
the Transaction Liens granted by such Lien Grantor terminate pursuant to Section
22. The Company will pay the reasonable costs of, or incidental to, any
Intellectual Property Filings and any recording or filing of any financing or
continuation statements or other documents recorded or filed pursuant hereto.
(b) Such Lien Grantor will not (i) change its name or corporate structure,
(ii) change its location (determined as provided in UCC Section 9-307) or (iii)
become bound, as provided in UCC Section 9-203(d) or otherwise, by a security
agreement entered into by another Person, without first giving the Agent at
least 20 days' prior written notice thereof and taking all actions required by
the Agent for the purpose of perfecting or protecting the security interest
granted by this Agreement.
(c) If any of its Collateral is in the possession or control of a
warehouseman, bailee or agent at any time, such Lien Grantor will (i) notify
such warehouseman, bailee or agent of the relevant Transaction Liens, (ii)
instruct such warehouseman, bailee or agent to hold all such Collateral for the
Agent's account subject to the Agent's instructions (which shall permit such
Collateral to be removed by such Lien Grantor in the ordinary course of business
until the Agent notifies such warehouseman, bailee or agent that an Event of
Default has occurred and is continuing), (iii) use commercially reasonable
efforts to cause such warehouseman, bailee
17
or agent to Authenticate a Record acknowledging that it holds possession of such
Collateral for the Agent's benefit and (iv) make any such authenticated Record
available to the Agent.
(d) Such Lien Grantor will not sell, lease, exchange, assign or otherwise
dispose of, or grant any option with respect to, any of its Collateral, other
than licenses of Intellectual Property granted in the ordinary course of
business; provided that such Lien Grantor may do any of the foregoing unless (i)
doing so would violate a covenant in the Credit Agreement or (ii) an Event of
Default shall have occurred and be continuing and the Agent shall have notified
such Lien Grantor that its right to do so is terminated, suspended or otherwise
limited.
(e) Such Lien Grantor will, promptly upon request, provide to the Agent all
information and evidence concerning such Lien Grantor's Collateral that the
Agent may reasonably request to enable it to enforce the provisions of the
Security Documents.
Section 6. Accounts. Each Lien Grantor represents, warrants and covenants
that if an Event of Default shall have occurred and be continuing, such Lien
Grantor will, if requested to do so by the Agent, promptly notify (and to the
extent it fails to do so promptly, such Lien Grantor authorizes the Agent so to
notify) each account debtor in respect of any of its Accounts that such Accounts
have been assigned to the Agent hereunder, and that any payments due or to
become due in respect of such Accounts are to be made directly to the Agent or
its designee for the period during which such Event of Default is continuing.
Section 7. Chattel Paper and Instruments. Except as to actions to be taken
by the Agent, each Lien Grantor represents, warrants and covenants as follows:
(a) On the Effective Date (in the case of an Original Lien Grantor) or the
date on which it signs and delivers its first Security Agreement Supplement (in
the case of any other Lien Grantor), such Lien Grantor will deliver to the Agent
as Collateral hereunder (i) all Pledged Tangible Chattel Paper, provided that a
delivery of the Pledged Tangible Chattel Paper shall be required pursuant to
this paragraph only to the extent that the aggregate value of all Pledged
Tangible Chattel Paper that has not been delivered would exceed $5,000,000 and
(ii) each Pledged Instrument having a value in excess of $2,000,000 then owned
by such Lien Grantor. Thereafter, whenever such Lien Grantor acquires any other
Pledged Tangible Chattel Paper or Pledged Instrument having a value in excess of
$2,000,000, such Lien Grantor will immediately deliver such Pledged Tangible
Chattel Paper or Pledged Instrument to the Agent as Collateral hereunder.
(b) So long as no Event of Default shall have occurred and be continuing,
the Agent will, promptly upon request by the relevant Lien Grantor, make
appropriate arrangements for making any Pledged Tangible Chattel Paper or
Pledged Instrument available to it for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent deemed appropriate
by the Agent, against trust receipt or like document).
(c) Schedule 5 lists, as of the Effective Date, all Pledged Instruments.
(d) All Pledged Tangible Chattel Paper and Pledged Instruments owned by
such Lien Grantor, when delivered to the Agent (to the extent such delivery is
required), will be indorsed to the order of the Agent, or accompanied by duly
executed instruments of assignment, all in form
18
and substance reasonably satisfactory to the Agent. Within 45 days of the
Effective Date, the Company shall cause each CIHC Note to be reissued by the
relevant issuer (or the successor to such issuer) in favor of CDOC, Inc. and
shall cause each such reissued note to be delivered to the Agent, with an
indorsement to the order of the Agent or accompanied by duly executed
instruments of assignment, all in form and substance reasonably satisfactory to
the Agent.
(e) Upon the delivery of any Pledged Tangible Chattel Paper or Pledged
Instrument owned by such Lien Grantor to the Agent, the Transaction Lien on such
Collateral will be perfected, subject to no prior Liens or rights of others.
(f) Each Lien Grantor will take (or cause others to take) all actions
required under UCC Section 9-105 to cause the Agent to obtain and maintain
Control of any and all Electronic Chattel Paper owned by such Lien Grantor from
time to time, provided that such Lien Grantor's actions to cause the Agent to
obtain and maintain Control of such Electronic Chattel shall be required
pursuant to this paragraph only to the extent that the aggregate value of all
Electronic Chattel Paper then owned by such Lien Grantor and not subject to the
Agent's Control would exceed $5,000,000.
Section 8. Commercial Tort Claims. Each Lien Grantor represents, warrants
and covenants as follows:
(a) In the case of an Original Lien Grantor, Schedule 4 accurately
describes, with the specificity required to satisfy Official Comment 5 to UCC
Section 9-108, each Material Commercial Tort Claim with respect to which such
Original Lien Grantor is the claimant as of the Effective Date. In the case of
any other Lien Grantor, Schedule 4 to its first Security Agreement Supplement
will accurately describe, with the specificity required to satisfy said Official
Comment 5, each Material Commercial Tort Claim with respect to which such Lien
Grantor is the claimant as of the date on which it signs and delivers such
Security Agreement Supplement.
(b) If any Lien Grantor acquires a Material Commercial Tort Claim after the
Effective Date (in the case of an Original Lien Grantor) or the date on which it
signs and delivers its first Security Agreement Supplement (in the case of any
other Lien Grantor), such Lien Grantor will promptly sign and deliver to the
Agent a Security Agreement Supplement granting a security interest in such
Commercial Tort Claim (which shall be described therein with the specificity
required to satisfy said Official Comment 5) to the Agent for the benefit of the
Secured Parties.
(c) Upon the filing of a UCC financing statement in the jurisdiction under
the laws of which the relevant Lien Grantor is organized, the Transaction Lien
on each Commercial Tort Claim described pursuant to subsection (a) or (b) above
will be perfected, subject to no prior Liens or rights of others, except for
Permitted Liens that have priority over the Transaction Liens by operation of
law.
Section 9. Recordable Intellectual Property. Each Lien Grantor covenants as
follows:
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(a) On the Effective Date (in the case of an Original Lien Grantor) or the
date on which it signs and delivers its first Security Agreement Supplement (in
the case of any other Lien Grantor), such Lien Grantor will sign and deliver to
the Agent Intellectual Property Security Agreements with respect to all
Recordable Intellectual Property then owned by it. Within 45 days after each
March 31 thereafter, it will sign and deliver to the Agent any Intellectual
Property Security Agreement necessary to grant Transaction Liens on all
Recordable Intellectual Property owned by it on such March 31 that is not
covered by any previous Intellectual Property Security Agreement so signed and
delivered by it. In each case, it will promptly make all Intellectual Property
Filings necessary to record the Transaction Liens on such Recordable
Intellectual Property.
(b) Such Lien Grantor will notify the Agent promptly if it knows that any
application or registration relating to any Recordable Intellectual Property
owned or licensed by it may become abandoned or dedicated to the public, or of
any adverse determination or development (including the institution of, or any
adverse determination or development in, any proceeding in the United States
Copyright Office, the United States Patent and Trademark Office or any court)
regarding such Lien Grantor's ownership of such Recordable Intellectual
Property, its right to register or patent the same, or its right to keep and
maintain the same; provided that the foregoing shall not apply to the extent
that any such event, individually or together with all such events, could not
reasonably be expected to have a Material Adverse Effect.
Section 10. Proceeds of Letters of Credit. Except as to actions to be taken
by the Agent, each Lien Grantor represents, warrants and covenants as follows:
(a) On the Effective Date (in the case of an Original Lien Grantor) or the
date on which it signs and delivers its first Security Agreement Supplement (in
the case of any other Lien Grantor), such Lien Grantor will deliver to the Agent
each letter of credit having a face amount in excess of $2,500,000 (the
"Specified Letters of Credit").
(b) Notwithstanding the foregoing, so long as no Event of Default shall
have occurred and be continuing, the Agent will, promptly upon request by any
Lien Grantor, make appropriate arrangements for making any Specified Letter of
Credit delivered to the Agent pursuant to subsection (a) above available to such
Lien Grantor to facilitate the administration thereof or the exercise of its
rights thereunder (any such arrangement to be effected, to the extent deemed
appropriate by the Agent, against trust receipt or like document).
(c) Such Lien Grantor, by granting a security interest in its
Letter-of-Credit Rights to the Agent, intends to (and hereby does) assign to the
Agent its rights (including its contingent rights) to the proceeds of all
letters of credit of which it is or hereafter becomes a beneficiary. If any such
letter of credit is not a Supporting Letter of Credit, such Lien Grantor will
(i) use commercially reasonable efforts to cause the issuer of such letter of
credit and each Nominated Person (if any) with respect thereto to consent to
such assignment of the proceeds thereof and (ii) deliver written evidence of any
such consent obtained to the Agent.
(d) The Transaction Lien on the relevant Lien Grantor's rights to the
proceeds of each letter of credit under which such Lien Grantor is a beneficiary
will be perfected, subject to no prior Liens or rights of others, if either (i)
such letter of credit is a Supporting Letter of Credit
20
and the Transaction Lien on the item of Collateral supported thereby has been
perfected or (ii) the relevant issuing bank and each relevant Nominated Person
(if any) shall have consented to the assignment of the proceeds thereof set
forth in subsection (c) above.
(e) If an Event of Default shall have occurred and be continuing, such Lien
Grantor will, promptly upon request by the Agent, notify (and in the event such
Lien Grantor fails to do so promptly, such Lien Grantor authorizes the Agent to
notify) the issuer and each Nominated Person with respect to each of its Pledged
letters of credit that (i) the proceeds thereof have been assigned to the Agent
hereunder and (ii) any payments due or to become due in respect thereof are to
be made directly to the Agent or its designee for the period during which such
Event of Default is continuing.
Section 11. Investment Property. Each Lien Grantor represents, warrants and
covenants as follows:
(a) Certificated Securities. On the Effective Date (in the case of an
Original Lien Grantor) or the date on which it signs and delivers its first
Security Agreement Supplement (in the case of any other Lien Grantor), such Lien
Grantor will deliver to the Agent as Collateral hereunder all certificates
representing Pledged Certificated Securities then owned by such Lien Grantor.
Thereafter, whenever such Lien Grantor acquires any other certificate
representing a Pledged Certificated Security, such Lien Grantor will promptly
deliver such certificate to the Agent as Collateral hereunder. The provisions of
this subsection are subject to the limitation in Section 11(m) in the case of
voting Equity Interests in a Foreign Subsidiary.
(b) Uncertificated Securities.
(i) On the Effective Date (in the case of an Original Lien Grantor) or
the date on which it signs and delivers its first Security Agreement
Supplement (in the case of any other Lien Grantor), such Lien Grantor will
enter into (and, if the relevant issuer is a Subsidiary, cause, or if the
relevant issuer is not a Subsidiary, use commercially reasonable efforts to
cause, the relevant issuer to enter into) an Issuer Control Agreement in
respect of each Pledged Uncertificated Security then owned by such Lien
Grantor and deliver such Issuer Control Agreement to the Agent (which shall
enter into the same). Thereafter, whenever such Lien Grantor acquires any
other Pledged Uncertificated Security, such Lien Grantor will enter into
(and, if the relevant issuer is a Subsidiary, cause, or if the relevant
issuer is not a Subsidiary, use commercially reasonable efforts to cause,
the relevant issuer to enter into) an Issuer Control Agreement in respect
of such Pledged Uncertificated Security and deliver such Issuer Control
Agreement, if any, to the Agent (which shall enter into the same). The
provisions of this subsection are subject to (i) the limitation in Section
11(m) in the case of voting Equity Interests in a Foreign Subsidiary and
(ii) Sections 11(n) and 14(c).
(ii) If any Pledged Uncertificated Partnership Interest or any Pledged
Uncertificated LLC Interest that was not considered a security under the
UCC as of the Effective Date, becomes a security under the UCC thereafter,
the Lien Grantor that originally pledged such interest shall promptly after
the date on which such interest becomes an uncertificated security enter
into (and, if the relevant issuer is a Subsidiary,
21
cause, or if the relevant issuer is not a Subsidiary, use commercially
reasonable efforts to cause, the relevant issuer to enter into) an Issuer
Control Agreement in respect of each such Pledged Uncertificated Security
then owned by such Lien Grantor and deliver such Issuer Control Agreement
to the Agent (which shall enter into the same).
(c) Security Entitlements. (i) All Security Entitlements owned by the
Company shall be held, upon or promptly after receipt thereof, in one or more
Controlled Securities Accounts; provided, that this Section 11(c)(i) shall not
apply to any Security Entitlements maintained in (i) any Securities Account to
the extent that the aggregate value of the Security Entitlements held in such
Securities Account does not exceed $5,000,000; and provided further that the
aggregate value of all Securities Entitlements owned by the Company and held in
all its Securities Accounts (other than Securities Accounts that satisfy the
applicable conditions set forth in clauses (E), (F) and (G) of the proviso at
the end of Section 3(a)) that are not Controlled Securities Accounts shall not
at any time be in excess of $10,000,000 and (ii) any Securities Accounts that
satisfy the applicable conditions set forth in clauses (E), (F) and (G) of the
proviso at the end of Section 3(a). The provisions of this subsection are
subject to Section 14(c).
(ii) Each Lien Grantor agrees that it will provide the Agent with
prompt written notice (and in any case within 20 days) of the opening of
any new Securities Accounts and any such notice shall be deemed to be an
automatic amendment to Schedule 3 hereto to include such account.
(iii) The Company represents, warrants and covenants that (i) Schedule
6 lists, as of the Effective Date, all Controlled Securities Accounts and
(ii) each Controlled Securities Account will be operated as provided in
Section 13.
(d) Commodity Accounts.
(i) All Commodity Contracts owned by the Company shall be held, upon
or promptly after receipt thereof, in one or more Controlled Commodity
Accounts; provided, that this Section 11(d)(i) shall not apply to any
Commodity Contracts maintained in (i) any Commodities Account to the extent
that the aggregate value of the Commodity Contracts held in such
Commodities Account, does not exceed $5,000,000; and provided further that
the aggregate value of all Commodity Contracts held by the Company in all
Commodity Accounts (other than Commodity Accounts that are trust accounts)
that are not Controlled Commodity Accounts shall not at any time be in
excess of $10,000,000 and (ii) any Commodities Account that is a trust
account, so long as such Commodities Account is maintained as a trust
account.
(ii) Each Lien Grantor agrees that it will provide the Agent with
prompt written notice (and in any case within 10 days) of the opening of
any new Commodity Accounts and any such notice shall be deemed to be an
automatic amendment to Schedule 3 hereto to include such account.
22
(iii) The Company represents, warrants and covenants that (i) Schedule
6 lists, as of the Effective Date, all Controlled Commodity Accounts and
(ii) each Controlled Commodity Account will be operated as provided in
Section 13.
(e) Regulated Subsidiaries. If the Collateral includes any capital stock of
a Regulated Subsidiary that is not represented by certificates, the relevant
Lien Grantor shall exercise its commercially reasonable efforts to cause such
capital stock to be represented by certificates and, promptly upon receipt
thereof, comply with Section 11(a) with respect thereto. No Lien Grantor shall
hold any capital stock of a Regulated Subsidiary in a Securities Account.
(f) Perfection as to Certificated Securities. When such Lien Grantor
delivers the certificate representing any Pledged Certificated Security owned by
it to the Agent and complies with Section 11(k) in connection with such
delivery, (i) the Transaction Lien on such Pledged Certificated Security will be
perfected, subject to no prior Liens or rights of others, (ii) the Agent will
have Control of such Pledged Certificated Security and (iii) the Agent will be a
protected purchaser (within the meaning of UCC Section 8-303) thereof.
(g) Perfection as to Uncertificated Securities. When such Lien Grantor, the
Agent and the issuer of any Pledged Uncertificated Security owned by such Lien
Grantor enter into an Issuer Control Agreement with respect thereto, (i) the
Transaction Lien on such Pledged Uncertificated Security will be perfected,
subject to no prior Liens or rights of others (except Permitted Priority Liens),
(ii) the Agent will have Control of such Pledged Uncertificated Security and
(iii) the Agent will be a protected purchaser (within the meaning of UCC Section
8-303) thereof.
(h) Perfection as to Security Entitlements. So long as the Financial Asset
underlying any Security Entitlement owned by such Lien Grantor is credited to a
Controlled Securities Account, (i) the Transaction Lien on such Security
Entitlement will be perfected, subject to no prior Liens or rights of others
(except (x) Liens and rights of the relevant Securities Intermediary that are
Permitted Liens and (y) Permitted Priority Liens), (ii) the Agent will have
Control of such Security Entitlement and (iii) no action based on an adverse
claim to such Security Entitlement or such Financial Asset, whether framed in
conversion, replevin, constructive trust, equitable lien or other theory, may be
asserted against the Agent or any other Secured Party.
(i) Perfection as to Commodity Accounts. So long as any Commodity Account
is subject to a Commodity Account Control Agreement, (i) the Transaction Liens
on such Commodity Account and all Commodity Contracts carried therein will be
perfected, subject to no prior Liens or rights of others (except (x) Liens and
rights of the relevant Commodity Intermediary permitted by such Commodity
Account Control Agreement and (y) Permitted Priority Liens) and (ii) the Agent
will have Control of such Commodity Account and all Commodity Contracts carried
therein from time to time.
(j) Agreement as to Applicable Jurisdiction. In respect of all Security
Entitlements owned by such Lien Grantor, and all Securities Accounts to which
the related Financial Assets are credited, the Securities Intermediary's
jurisdiction (determined as provided in UCC Section 8-110(e)) will at all times
be located in the United States. In respect of all Commodity Contracts owned by
such Lien Grantor and all Commodity Accounts in which such Commodity Contracts
23
are carried, the Commodity Intermediary's jurisdiction (determined as provided
in UCC Section 9-305(b)) will at all times be located in the United States.
(k) Delivery of Pledged Certificates. All Pledged Certificates, when
delivered to the Agent, will be in suitable form for transfer by delivery, or
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance reasonably satisfactory to the Agent.
(l) Communications. Each Lien Grantor will promptly give to the Agent
copies of any notices and other communications received by it with respect to
(i) Pledged Securities registered in the name of such Lien Grantor or its
nominee and (ii) Pledged Security Entitlements as to which such Lien Grantor is
the Entitlement Holder relating to any matter that could reasonably be expected
to have a Material Adverse Effect.
(m) Foreign Subsidiaries. A Lien Grantor will not be obligated to comply
with the provisions of this Section at any time with respect to any voting
Equity Interest in a Foreign Subsidiary if and to the extent (but only to the
extent) that such voting Equity Interest is excluded from the Transaction Liens
at such time pursuant to clause (B) of the proviso at the end of Section 3(a)
and/or the comparable provisions of one or more Security Agreement Supplements.
(n) Compliance with Applicable Foreign Laws. If and so long as the
Collateral includes (i) any Equity Interest in, or other Investment Property
issued by, a Subsidiary (other than an Immaterial Subsidiary) organized under
the laws of a jurisdiction outside the United States or (ii) any Security
Entitlement in respect of a Financial Asset issued by such a Subsidiary (other
than an Immaterial Subsidiary), the relevant Lien Grantor will take all such
action as may be required under the laws of such foreign jurisdiction to ensure
that the Transaction Lien on such Collateral ranks prior to all Liens and rights
of others therein other than Permitted Liens that have priority over the
Transaction Liens by operation of law. If and so long as the Collateral includes
any Pledged Uncertificated Security issued by such a Subsidiary (other than an
Immaterial Subsidiary), the relevant Lien Grantor will comply with this
subsection, and will not be required to comply with Section 11(b), with respect
thereto.
Section 12. Controlled Deposit Accounts. The Company represents, warrants
and covenants as follows:
(a) All cash owned by the Company shall be deposited, upon or promptly
after the receipt thereof, in one or more Controlled Deposit Accounts; provided
that this Section 12(a) shall not apply to any cash maintained in (i) any
Deposit Account to the extent that the average daily balance of cash held in
such Deposit Account, as determined on a monthly basis, does not exceed
$5,000,000; and provided further that the aggregate amount of cash maintained by
the Company in all its Deposit Accounts (other than Deposit Accounts that
satisfy the applicable conditions set forth in clauses (E), (F) and (G) of the
proviso at the end of Section 3(a)) that are not Controlled Deposit Accounts
shall not at any time be in excess of $10,000,000 and (ii) any Deposit Account
that satisfies the applicable conditions set forth in clauses (E), (F) and (G)
of the proviso at the end of Section 3(a).
24
(b) Schedule 6 lists, as of the Effective Date, all Controlled Deposit
Accounts.
(c) Each Controlled Deposit Account will be operated as provided in Section
13.
(d) In respect of each Controlled Deposit Account, the Depositary Bank's
jurisdiction (determined as provided in UCC Section 9-304) will at all times be
a jurisdiction in which Article 9 is in effect.
(e) So long as the Agent has Control of a Controlled Deposit Account, the
Transaction Lien on such Controlled Deposit Account will be perfected, subject
to no prior Liens or rights of others (except (i) the Depositary Bank's right to
deduct its customary operating charges and any uncollected funds previously
credited thereto and (ii) Permitted Priority Liens).
(f) It will provide the Agent with prompt written notice (and in any case
within 20 days) of the opening of any new Deposit Account and any such notice
shall be deemed to be an automatic amendment to Schedule 3 hereto.
Section 13. Operation of Collateral Accounts(a)(i) Funds held in any
Controlled Deposit Account may, until withdrawn, be invested and reinvested in
such Liquid Investments as the relevant Lien Grantor may select from time to
time, (ii) Funds held in any Controlled Securities Account may, until withdrawn,
be invested and reinvested in such Cash Equivalents as the relevant Lien Grantor
may select from time to time, (iii) Funds held in any Controlled Commodity
Account may, until withdrawn, be invested and reinvested in such Cash
Equivalents as the relevant Lien Grantor may select from time to time; provided
that upon the occurrence and during the continuance of an Event of Default, the
Agent shall have the sole right to direct the disposition of funds with respect
to each Collateral Account (including the withdrawal of such funds), and it
shall be a term and condition of the Collateral Accounts, notwithstanding any
term or condition to the contrary in any other agreement relating to the
Collateral Accounts, that upon written notice by the Agent to such account
holder, the holders of such accounts will comply with instructions with respect
to such accounts originated only by the Agent, without notice to, consent from
or other reference to any Lien Grantor. Upon the curing of such Event of
Default, the Agent will instruct the relevant account holder that the relevant
Lien Grantor may withdraw, or direct the disposition of, funds held therein
unless and until the Agent rescinds such instruction.
(b) Upon the occurrence and during the continuation of an Event of Default,
each Lien Grantor will (i) immediately upon the written request of the Agent,
instruct each Person obligated at any time to make any payment to such Lien
Grantor for any reason to make such payment to a Collateral Account and (ii)
deposit in the Collateral Accounts or pay to the Agent for deposit in the
Collateral Accounts, at the end of each Business Day, all proceeds of Collateral
and all other cash of each Lien Grantor.
(c) Each Lien Grantor may from time to time provide the Agent with an
Account Control Agreement or a supplement (in form and substance reasonably
satisfactory to the Collateral Agent) to an existing Account Control Agreement
with such then existing Depositary Bank, Commodity Intermediary or Securities
Intermediary covering a new Collateral Account
25
(and, upon the receipt by the Collateral Agent of such Account Control Agreement
or supplement, Schedule 6 shall be automatically amended to include such
account).
(d) Each Lien Grantor agrees that it will promptly provide the Agent with
written notice of any termination (if such termination is permitted) of any
Collateral Account (and, upon such notice, Schedule 6 shall be automatically
amended to remove such account). Upon any termination by any Lien Grantor of any
Collateral Account, the Company will immediately transfer all funds and property
held in such terminated Collateral Account to another Collateral Account.
(e) If immediately available cash on deposit in all Collateral Accounts is
not sufficient to make any distribution or withdrawal to be made pursuant
hereto, the Agent will cause to be liquidated, as promptly as practicable, such
investments held in or credited to one or more such Collateral Account as shall
be required to obtain sufficient cash to make such distribution or withdrawal
and, notwithstanding any other provision hereof, such distribution or withdrawal
shall not be made until such liquidation has taken place.
Section 14. Transfer of Record Ownership. (a) At any time when an Event of
Default shall have occurred and be continuing, the Agent may (and to the extent
that action by it is required, the relevant Lien Grantor, if directed to do so
by the Agent, will as promptly as practicable) cause each of the Pledged
Securities (or any portion thereof specified in such direction) to be (x)
transferred of record into the name of the Agent or its nominee or (y) credited
to an appropriate Collateral Account; provided that no such action shall be
taken with respect to any capital stock of any Regulated Subsidiary unless any
and all regulatory approvals required under applicable law shall have been
obtained; and provided further that (i) to the extent any of the Pledged
Securities (or a portion thereof) have been transferred of record into the name
of the Agent or its nominee and (ii) no Event of Default is continuing, the
Agent will cooperate reasonably with the relevant Lien Grantor to cause such
Pledged Security (or a portion thereof) to be re-registered in the name of such
Lien Grantor. Each Lien Grantor will take any and all actions reasonably
requested by the Agent to facilitate compliance with this subsection.
(b) Perfection upon Transfer of Record Ownership. If and when any Pledged
Security (whether certificated or uncertificated) owned by such Lien Grantor is
transferred of record into the name of the Agent or its nominee pursuant to
Section 14(a), (i) the Transaction Lien on such Pledged Security will be
perfected, subject to no prior Liens or rights of others, (ii) the Agent will
have Control of such Pledged Security and (iii) the Agent will be a protected
purchaser (within the meaning of UCC Section 8-303) thereof.
(c) Provisions Inapplicable after Transfer of Record Ownership. If the
provisions of Section 14(a) are implemented, Sections 11(b) and 11(c) shall not
thereafter apply to (i) any Pledged Security that is registered in the name of
the Agent or its nominee or (ii) any Security Entitlement in respect of which
the Agent or its nominee is the Entitlement Holder.
(d) Communications after Transfer of Record Ownership. The Agent will
promptly give to the relevant Lien Grantor copies of any notices and other
communications received by the Agent with respect to (i) Pledged Securities
registered in the name of the Agent or its
26
nominee and (ii) Pledged Security Entitlements as to which the Agent or its
nominee is the Entitlement Holder.
Section 15. Right to Vote Securities. (a) Unless an Event of Default shall
have occurred and be continuing, each Lien Grantor will have the right, from
time to time, to vote and to give consents, ratifications and waivers with
respect to any Pledged Security owned by it and the Financial Asset underlying
any Pledged Security Entitlement owned by it, and the Agent will, upon receiving
a written request from such Lien Grantor, promptly deliver (or cause to be
delivered) to such Lien Grantor or as specified in such request such proxies,
powers of attorney, consents, ratifications and waivers in respect of any such
Pledged Security that is registered in the name of the Agent or its nominee or
any such Pledged Security Entitlement as to which the Agent or its nominee is
the Entitlement Holder, in each case as shall be specified in such request and
be in form and substance reasonably satisfactory to the Agent. Unless an Event
of Default shall have occurred and be continuing, the Agent will have no right
to take any action which the owner of a Pledged Partnership Interest or Pledged
LLC Interest is entitled to take with respect thereto, except the right to
receive payments and other distributions to the extent provided herein.
(b) If an Event of Default shall have occurred and be continuing, and after
written notice from the Agent to such Lien Grantor, the Agent will have the
right to the extent permitted by law (and, in the case of a Pledged Partnership
Interest or Pledged LLC Interest, by the relevant partnership agreement, limited
liability company agreement, operating agreement or other governing document) to
vote, to give consents, ratifications and waivers and to take any other action
with respect to the Pledged Investment Property, the other Pledged Equity
Interests (if any) and the Financial Assets underlying the Pledged Security
Entitlements, with the same force and effect as if the Agent were the absolute
and sole owner thereof, and each Lien Grantor will take all such action as the
Agent may reasonably request from time to time to give effect to such right;
provided that the Agent will not have the right to vote, to give consents,
ratifications or waivers or to take any other action with respect to the capital
stock of any Regulated Subsidiary, in each case to the extent that such action
would require prior regulatory approval under applicable law, unless such
approval shall have been granted.
Section 16. Remedies upon Event of Default. (a) If an Event of Default
shall have occurred and be continuing, the Agent may exercise (or cause its
sub-agents to exercise) any or all of the remedies available to it (or to such
sub-agents) under the Security Documents.
(b) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing, the Agent may exercise on behalf
of the Secured Parties all the rights of a secured party under the UCC (whether
or not in effect in the jurisdiction where such rights are exercised) with
respect to any Collateral and, in addition, the Agent may, without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law, withdraw all cash held in the Collateral Accounts
and apply such cash as provided in Section 17 and, if there shall be no such
cash or if such cash shall be insufficient to pay all the Secured Obligations in
full, sell, lease, license or otherwise dispose of the Collateral or any part
thereof; provided that the right of the Agent to sell or otherwise dispose of
the capital stock of any Regulated Subsidiary shall be subject to the Agent or
the relevant Lien Grantor obtaining, to the extent necessary under applicable
law, the prior approval of such sale or other disposition by the governmental
body or official having jurisdiction with respect to such
27
Regulated Subsidiary. Notice of any such sale or other disposition shall be
given to the relevant Lien Grantor(s) as required by Section 19.
(c) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing:
(i) the Agent may license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any Pledged
Intellectual Property (including any Pledged Recordable Intellectual
Property) for such term or terms, on such conditions and in such manner as
the Agent shall in its reasonable discretion determine; provided that such
licenses or sublicenses do not conflict with any existing license of which
the Agent shall have received a copy;
(ii) the Agent may (without assuming any obligation or liability
thereunder), at any time and from time to time, in its sole and reasonable
discretion, enforce (and shall have the exclusive right to enforce) against
any licensee or sublicensee all rights and remedies of any Lien Grantor in,
to and under any of its Pledged Intellectual Property and take or refrain
from taking any action under any thereof, and each Lien Grantor releases
the Agent and each other Secured Party from liability for, and agrees to
hold the Agent and each other Secured Party free and harmless from and
against any claims and expenses arising out of, any lawful action so taken
or omitted to be taken with respect thereto, except for claims and expenses
arising from the Agent's or such Secured Party's gross negligence or
willful misconduct; and
(iii) upon request by the Agent (which shall not be construed as
implying any limitation on its rights or powers), each Lien Grantor will
execute and deliver to the Agent a power of attorney, in form and substance
reasonably satisfactory to the Agent, for the implementation of any sale,
lease, license or other disposition of any of such Lien Grantor's Pledged
Intellectual Property or any action related thereto. In connection with any
such disposition, but subject to any confidentiality restrictions imposed
on such Lien Grantor in any license or similar agreement, such Lien Grantor
will supply to the Agent its know-how and expertise relating to the
relevant Intellectual Property or the products or services made or rendered
in connection with such Intellectual Property, and its customer lists and
other records relating to such Intellectual Property and to the
distribution of said products or services.
Section 17. Application of Proceeds. (a) If an Event of Default shall have
occurred and be continuing, the Agent may apply (i) any cash held in the
Collateral Accounts and (ii) the proceeds of any sale or other disposition of,
or any collections (including in the form of interest, dividends, redemption
payments and other distributions in respect of any Equity Interests) on, all or
any part of the Collateral, in the following order of priorities:
first, to pay the expenses of such sale or other disposition or
collection, including reasonable compensation to agents of and counsel for
the Agent, and all expenses, liabilities and advances incurred or made by
the Agent in connection with the Security Documents, and any other amounts
then due and payable to the
28
Agent pursuant to Section 18 or pursuant to Sections 10.04 or 10.05 of the
Credit Agreement;
second, to pay the unpaid principal of the Secured Obligations
ratably, until payment in full of the principal of all Secured Obligations
shall have been made;
third, to pay ratably all interest (including Post-Petition Interest)
on the Secured Obligations;
fourth, to pay all other Secured Obligations then due and payable
ratably, until payment in full of all such other Secured Obligations shall
have been made; and
finally, to pay to the relevant Lien Grantor, or as a court of
competent jurisdiction may direct, any surplus then remaining from the
proceeds of the Collateral owned by it;
provided that Collateral owned by a Subsidiary Guarantor and any proceeds
thereof shall be applied pursuant to the foregoing clauses first, second, third
and fourth,only to the extent permitted by the limitation in Section 2(i). The
Agent may make such distributions hereunder in cash or in kind or, on a ratable
basis, in any combination thereof.
(b) In making the payments and allocations required by this Section, the
Agent may rely upon information supplied to it pursuant to Section 21(g). All
distributions made by the Agent pursuant to this Section shall be final (except
in the event of manifest error) and the Agent shall have no duty to inquire as
to the application by any Secured Party of any amount distributed to it.
Section 18. Fees and Expenses; Indemnification. (a) The Company will within
ten Business Days following written demand (together with, in the case of
clauses (i), (ii) and (iv) below, if requested by the Company, backup
documentation supporting such written demand) pay to the Agent:
(i) the amount of any taxes that the Agent may have been required to
pay by reason of the Transaction Liens or to free any Collateral from any
other Lien thereon;
(ii) the amount of any and all reasonable out-of-pocket expenses,
including transfer taxes and reasonable fees and expenses of counsel and
other outside experts, that the Agent may incur in connection with (x) the
administration or enforcement of the Security Documents, including such
expenses as are incurred to preserve the value of the Collateral or the
validity, perfection, rank or value of any Transaction Lien, (y) the
collection, sale or other disposition of any Collateral or (z) the exercise
by the Agent of any of its rights or powers under the Security Documents;
(iii) the amount of any fees that the Company shall have agreed in
writing to pay to the Agent and that shall have become due and payable in
accordance with such written agreement; and
29
(iv) without duplication of any other indemnity, the amount required
to indemnify the Agent for, or hold it harmless and defend it against, any
loss, liability or expense (including the reasonable fees and expenses of
its counsel and any experts or sub-agents appointed by it hereunder)
incurred or suffered by the Agent in connection with the Security
Documents, except to the extent that such loss, liability or expense arises
from the Agent's gross negligence or willful misconduct or a breach of any
duty that the Agent has under this Agreement (after giving effect to
Sections 20 and 21).
Any such amount not paid to the Agent on demand will bear interest for each day
thereafter until paid at a rate per annum equal to 2.0% plus the rate otherwise
applicable to the Term Loans as provided in the Credit Agreement.
(b) If any transfer tax, documentary stamp tax or other tax is payable in
connection with any transfer or other transaction provided for in the Security
Documents, the Company will pay such tax and provide any required tax stamps to
the Agent or as otherwise required by law.
(c) The Company shall indemnify each of the Secured Parties, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all liabilities, losses, damages, costs and
expenses of any kind (including reasonable expenses of investigation by
engineers, environmental consultants and similar technical personnel and
reasonable fees and disbursements of counsel) arising out of, or in connection
with any and all Environmental Claims. Without limiting the generality of the
foregoing, each Lien Grantor waives all rights for contribution and all other
rights of recovery with respect to liabilities, losses, damages, costs and
expenses arising under or related to Environmental Laws that it might have by
statute or otherwise against any Indemnitee.
Section 19. Authority to Administer Collateral. Each Lien Grantor
irrevocably appoints the Agent its true and lawful attorney, with full power of
substitution, in the name of such Lien Grantor, any Secured Party or otherwise,
for the sole use and benefit of the Secured Parties, but at the Company's
expense, to the extent permitted by law to exercise, at any time and from time
to time while an Event of Default shall have occurred and be continuing, all or
any of the following powers with respect to all or any of such Lien Grantor's
Collateral:
(a) to demand, xxx for, collect, receive and give acquittance for any and
all monies due or to become due upon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) to sell, lease, license or otherwise dispose of the same or the
proceeds or avails thereof, as fully and effectually as if the Agent were the
absolute owner thereof, and
(d) to extend the time of payment of any or all thereof and to make any
allowance or other adjustment with reference thereto;
30
provided that, except in the case of Collateral that is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, the Agent will give the relevant Lien Grantor at least ten days' prior
written notice of the time and place of any public sale thereof or the time
after which any private sale or other intended disposition thereof will be made.
Any such notice shall (i) contain the information specified in UCC Section
9-613, (ii) be Authenticated and (iii) be sent to the parties required to be
notified pursuant to UCC Section 9-611(c); provided that, if the Agent fails to
comply with this sentence in any respect, its liability for such failure shall
be limited to the liability (if any) imposed on it as a matter of law under the
UCC.
Section 20. Limitation on Duty in Respect of Collateral. Beyond the
exercise of reasonable care in the custody and preservation thereof and
accounting for monies received therefrom, the Agent will have no duty as to any
Collateral in its possession or control or in the possession or control of any
sub-agent or bailee or any income therefrom or as to the preservation of rights
against prior parties or any other rights pertaining thereto. The Agent will be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession or control if such Collateral is accorded treatment
substantially equal to that which it accords its own property, and will not be
liable or responsible for any loss or damage to any Collateral, or for any
diminution in the value thereof, by reason of any act or omission of any
sub-agent or bailee selected by the Agent in good faith, except to the extent
that such liability arises from the Agent's gross negligence or willful
misconduct.
Section 21. General Provisions Concerning the Agent. (a) Appointment and
Authorization; "Agent". The Agent is hereby irrevocably appointed, designated
and authorized to take such actions under the provisions of this Agreement and
each other Security Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Security Document, together with such actions and powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary contained
elsewhere herein or in any other Security Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Agent have or be deemed to have any fiduciary relationship with any Secured
Party, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Security Document or otherwise exist against the Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein and in
the other Security Documents with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
(b) Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Security Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct. The exculpatory provisions of Section 20 and this Section shall
apply to any such agent, employee or attorney-in-fact.
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(c) Liability of Agent. No Agent-Related Person shall (i) be liable for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Security Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct in connection
with its duties expressly set forth herein or required by applicable law) or
(ii) be responsible in any manner to any Secured Party for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate thereof, or any officer thereof, contained herein or in any other
Security Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Security Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Security Document, or for any failure of the Company or any Subsidiary
or Affiliate thereof or any other party to any Security Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Secured Party to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Security Document, or to inspect the properties, books or
records of the Company or any Subsidiary or Affiliate thereof. The Agent shall
not be responsible for the existence, genuineness or value of any Collateral or
for the validity, perfection, priority or enforceability of any Transaction
Lien, whether impaired by operation of law or by reason of any action or
omission to act on its part under the Security Documents.
(d) Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company or any Subsidiary), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing to take
any action under any Security Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Secured
Parties against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Security Document in accordance with a request or consent
of the Required Lenders (or such other number of Lenders as may be expressly
required hereby or by the Credit Agreement in any instance) and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Secured Parties.
(e) Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the Agent for the
account of the Lenders, unless the Agent shall have received written notice from
a Secured Party or the Company referring to the Credit Agreement, describing
such Default and stating that such notice is a "notice of default." The Agent
will notify the Secured Parties of its receipt of any such notice. The Agent
shall take such action with respect to such Default as may be directed by the
Required Lenders in accordance with Article 8 of the Credit Agreement; provided,
however, that unless and until the Agent has received any such direction, the
Agent may (but shall not be obligated to) take such action, or
32
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Secured Parties.
(f) Agent in Individual Capacity. BofA and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company or any of
its Subsidiaries and their respective Affiliates as though BofA were not the
Agent hereunder and without notice to or consent of the Secured Parties. The
Secured Parties acknowledge that, pursuant to such activities, BofA or its
Affiliates may receive information regarding the Company or its Subsidiaries or
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company, such Subsidiary or such Affiliate) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Term Loans, BofA shall have the same
rights and powers under this Agreement as any other Secured Party and may
exercise such rights and powers as though it were not the Agent, and the terms
"Secured Party" and "Secured Parties" include BofA in its individual capacity.
(g) Information as to Secured Obligations and Actions by Secured Parties.
For all purposes of the Security Documents, including determining the amounts of
the Secured Obligations or whether any action has been taken under any Secured
Agreement, the Agent will be entitled to rely on information from (i) its own
records for information as to the Lenders, their Secured Obligations and actions
taken by them; (ii) any Secured Party for information as to its Secured
Obligations and actions taken by it, to the extent that the Agent has not
obtained such information from the foregoing sources; and (iii) the Company, to
the extent that the Agent has not obtained information from the foregoing
sources.
(h) Within two Business Days after it receives or sends any notice referred
to in this subsection, the Agent shall send to each Secured Party Requesting
Notice, copies of any notice given by the Agent to any Lien Grantor, or received
by it from any Lien Grantor, pursuant to Section 16, 17, 19 or 22.
(i) The Agent may refuse to act on any notice, consent, direction or
instruction from any Secured Parties or any agent, trustee or similar
representative thereof that, in the Agent's opinion, (i) is contrary to law or
the provisions of any Security Document, (ii) may expose the Agent to liability
(unless the Agent shall have been indemnified, to its reasonable satisfaction,
for such liability by the Secured Parties that gave such notice, consent,
direction or instruction) or (iii) is unduly prejudicial to Secured Parties not
joining in such notice, consent, direction or instruction.
Section 22. Termination of Transaction Liens; Release of Collateral. (a)
The Transaction Liens granted by each Subsidiary Guarantor shall terminate when
its Secured Guarantee is released pursuant to Section 2(c).
(b) The Transaction Liens granted by the Company shall terminate when all
the Release Conditions are satisfied in full.
33
(c) Concurrently with any sale, lease or other disposition (except a sale
or disposition to another Lien Grantor or a lease) permitted by the proviso to
Section 5(d), the Transaction Liens on the assets sold or disposed of (but not
in any Proceeds arising from such sale or disposition) will cease immediately
without any action by the Agent or any other Secured Party.
(d) Upon any termination of a Transaction Lien or release of Collateral,
the Agent will, at the expense of the relevant Lien Grantor, execute and deliver
to such Lien Grantor such documents as such Lien Grantor shall reasonably
request to evidence the termination of such Transaction Lien or the release of
such Collateral, as the case may be; provided that if the Agent does not file a
UCC termination statement within 20 days after the Agent receives an
authenticated demand for such termination from the relevant Lien Grantor, then
such Lien Grantor may file such UCC termination statement in accordance with
Section 9-509(d)(2) of the UCC.
Section 23. Additional Subsidiary Guarantors and Lien Grantors. Any
Subsidiary may become a party hereto by signing and delivering to the Agent a
Security Agreement Supplement, whereupon such Subsidiary shall become a
"Subsidiary Guarantor" and a "Lien Grantor" as defined herein.
Section 24. Notices. (a) Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed or delivered to the applicable address, facsimile number (provided that
any matter transmitted by the Company by facsimile (1) shall be immediately
confirmed by a telephone call to the recipient at the number specified below and
(2) shall be followed promptly by delivery of a hard copy original thereof) or
(subject to subsection (c) below) electronic mail address, and all notices and
other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:
(i) if to the Company or the Agent, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02 of the Credit Agreement or to such other address, facsimile
number, electronic mail address or telephone number as shall be designated
by such party in a notice to the other parties;
(ii) if to any Lender, to the Agent to be forwarded to such Lender at
its address, facsimile number, electronic mail address or telephone number
specified in its administrative questionnaire or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Company and the Agent;
(iii) if to any Subsidiary Guarantor listed on the signature pages
hereof, to the Company as set forth above to be forwarded to such
Subsidiary Guarantor at its address, facsimile number, electronic mail
address or telephone number designated by such party in a notice to the
Company;
34
(iv) if to any other Subsidiary Guarantor, to the address, facsimile
number, electronic mail address or telephone number specified for such
Person in its first Security Agreement Supplement or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the other parties; and
(v) if to any Secured Party Requesting Notice, to such address,
facsimile number, electronic mail address or telephone number as such party
may hereafter specify for the purpose by notice to the Agent.
All such notices and other communications shall be deemed to be given or
made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant party hereto; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
(b) This Agreement and the other Security Documents may be transmitted
and/or signed by facsimile or Adobe PDF delivered by electronic mail. The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually-signed originals and shall be
binding on the Company, all Subsidiary Guarantors, the Secured Parties and the
Agent. The Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, that the failure to
request or deliver the same shall not limit the effectiveness of any facsimile
document or signature.
(c) Electronic mail and Internet and intranet websites may be used only to
distribute routine communications and to distribute this Agreement and other
Security Documents for execution by the parties thereto, and may not be used for
any other purpose.
(d) The Agent and the Lenders shall be entitled to rely and act upon any
notices purportedly given by or on behalf of the Company or any Subsidiary
Guarantor even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Company and the Subsidiary Guarantors
shall jointly and severally indemnify each Agent-Related Person and each Secured
Party and each Related Party thereto from all losses, costs, out-of-pocket
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Company or any Subsidiary
Guarantor; provided that such indemnity shall not, as to any Person, be
available to the extent that such losses, costs, out-of-pocket expenses or
liabilities are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Person. All telephonic notices to and other communications
with the Agent may be recorded by the Agent, and each of the parties hereto
hereby consents to such recording.
35
Section 25. No Implied Waivers; Remedies Not Exclusive. No failure by the
Agent or any Secured Party to exercise, and no delay in exercising and no course
of dealing with respect to, any right or remedy under any Security Document
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Agent or any Secured Party of any right or remedy under any Loan Document
preclude any other or further exercise thereof or the exercise of any other
right or remedy. The rights and remedies specified in the Loan Documents are
cumulative and are not exclusive of any other rights or remedies provided by
law.
Section 26. Successors and Assigns. This Agreement is for the benefit of
the Agent and the Secured Parties. If all or any part of any Secured Party's
interest in any Secured Obligation is assigned or otherwise transferred, the
transferor's rights hereunder, to the extent applicable to the obligation so
transferred, shall be automatically transferred with such obligation. This
Agreement shall be binding on the Lien Grantors and their respective successors
and assigns.
Section 27. Amendments and Waivers. Neither this Agreement nor any
provision hereof may be waived, amended, modified or terminated except pursuant
to an agreement or agreements in writing entered into by the parties hereto,
with the consent of such Lenders as are required to consent thereto under
Section 10.01 of the Credit Agreement.
Section 28. Choice of Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York.
Section 29. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY SECURITY DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY SECURITY DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS.
Section 30. Severability. If any provision of any Security Document is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of the Security Documents shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Agent and the Secured Parties in order to carry out
the intentions of the parties thereto as nearly as may be possible and (ii) the
invalidity or unenforceability of such provision in such jurisdiction shall not
affect the validity or enforceability thereof in any other jurisdiction.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CONSECO, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
BANK OF AMERICA, N.A., as Agent
By: /s/ Xxxxx X. Oxford
------------------------------
Name: Xxxxx X. Oxford
Title: Vice President
Subsidiary Guarantors:
AMERICAN LIFE AND CASUALTY
MARKETING DIVISION CO.
CDOC, INC.
CFIHC, INC.
CONSECO MANAGEMENT SERVICES
COMPANY
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
CODELINKS, LLC
By: CDOC, Inc., its Manager
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
40/86 ADVISORS, INC.
40/86 MORTGAGE CAPITAL, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President 40/86 Advisors, Inc.
Senior Vice President 40/86
Mortgage Capital, Inc.
PERFORMANCE MATTERS ASSOCIATES, INC.
PERFORMANCE MATTERS ASSOCIATES OF
TEXAS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
CONSECO SERVICES, LLC
By: Conseco Management Services Company, its
Manager
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
