Exhibit 99.33
EXECUTION COPY
SECURITY AGREEMENT
Dated March 10, 2003
From
The Grantors referred to herein
as Grantors
to
WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee and Collateral Agent,
and the other Secured Parties referred to herein
TABLE OF CONTENTS
SECTION PAGE
Section 1. Grant of Security.......................................... 2
Section 2. Security for Obligations................................... 5
Section 3. Grantors Remain Liable..................................... 5
Section 4. Delivery and Control of Security Collateral................ 6
Section 5. Maintaining the Account Collateral......................... 7
Section 6. Investing of Amounts in the Collateral Accounts............ 8
Section 7. Maintaining Electronic Chattel Paper and
Transferable Records....................................... 8
Section 8. Representations and Warranties............................. 8
Section 9. Further Assurances......................................... 10
Section 10. Post-Closing Changes; Bailees; Collections on
Assigned Agreements; Receivables and Related
Contracts.................................................. 12
Section 11. Voting Rights; Dividends; Etc.............................. 14
Section 12. As to the Assigned Agreements.............................. 15
Section 13. Transfers and Other Liens; Additional Shares............... 16
Section 14. Trustee Appointed Attorney-in-Fact......................... 16
Section 15. Trustee May Perform........................................ 17
Section 16. Trustee's Duties........................................... 17
Section 17. Remedies................................................... 18
Section 18. Indemnity and Expenses..................................... 22
Section 19. Amendments; Waivers; Additional Grantors; Etc.............. 22
Section 20. Notices, Etc............................................... 23
Section 21. Continuing Security Interest............................... 23
Section 22. Release of Collateral; Termination......................... 23
Section 23. Security Interest Absolute................................. 24
Section 24. Execution in Counterparts.................................. 25
Section 25. Governing Law; Jurisdiction; Waiver of Jury Trial,
Etc........................................................ 25
Schedules I - Location, Chief Executive Office, Place Where
Agreements Are Maintained, Type of Organization,
Jurisdiction Of Organization And Organizational
Identification Number
i
Schedule II - Pledged Equity and Pledged Debt
Schedule III - Assigned Agreements
Schedule IV - Changes in Name, Location, Etc.
Exhibits
Exhibit A - Form of Security Agreement Supplement
Exhibit B Form of Account Control Agreement
Exhibit C-1 - Form of Consent and Agreement of Xxxxxxxxx International Inc.
Exhibit C-2 - Form of Consent and Agreement of Xxxxxxxxx Canadian Publishing
Co.
Exhibit C-3 - Form of Consent and Agreement of RMI
ii
SECURITY AGREEMENT
SECURITY AGREEMENT dated March 10, 2003 made by XXXXXXXXX INC., a
Canadian corporation (the "COMPANY"), RAVELSTON MANAGEMENT INC., an Ontario
corporation ("RMI"), and 504468 N.B. INC., a New Brunswick corporation ("NBI"),
and the Additional Grantors (as defined in Section 19) (the Company, RMI, NBI,
and the Additional Grantors being, collectively, the "GRANTORS"), to WACHOVIA
TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee and Collateral Agent under the
Indenture (as hereinafter defined) (in such capacity, together with any
successor appointed pursuant to the Indenture, the "COLLATERAL AGENT") for
itself, each of the Holders (as defined in the Indenture), and each other
secured party specified in any of the other Note Documents (as hereinafter
defined) (collectively, the "SECURED PARTIES").
PRELIMINARY STATEMENTS.
(1) The Company, as issuer, and RMI and NBI, as guarantors, have
entered into an Indenture dated as of March 10, 2003 (said Agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the "INDENTURE") with The Ravelston Corporation
Limited, Sugra Limited and the Collateral Agent.
(2) The Grantors are entering into this Agreement in order to grant
to the Collateral Agent for the ratable benefit of itself and the other Secured
Parties a security interest in the Collateral (as hereinafter defined).
(3) Each of the Company and NBI is the owner of the shares of stock
or other equity interests (the "INITIAL PLEDGED EQUITY") set forth on and
described in Schedule II hereto and issued by the Persons named therein.
(4) The Company is a party to the Support Agreement (as defined in
the Indenture).
(5) RMI is a party to the Services Agreements (as defined in the
Indenture) (the Services Agreements and the Support Agreement hereinafter
referred to as the "INITIAL ASSIGNED AGREEMENTS").
(6) The Grantors shall, from time to time, maintain one or more
collateral accounts (collectively, the "COLLATERAL ACCOUNTS") to be used to
deposit the Cash Collateralized Note Amount (as defined in the Indenture), in
the form of funds or financial assets, in the event that any portion of the
Pledged Equity (as hereinafter defined) is released pursuant to and in
accordance with the provisions of Section 14.04(a)(v) of the Indenture, with
respect to which accounts any Grantor may, from time to time, have security
entitlements (the "PLEDGED SECURITY ENTITLEMENTS") with respect to all the
financial assets (the "PLEDGED FINANCIAL ASSETS") credited from time to time to
such accounts, and which accounts shall be maintained with or under the sole
control and dominion of the Collateral Agent and subject to the terms of this
Agreement.
(7) It is a condition precedent to the purchase of the Notes (as
defined in the Indenture) by the Holders and the performance by the Secured
Parties of their respective obligations under this Agreement, the Indenture, the
Notes, the Intercreditor Agreement, the other Security Documents or any other
document or agreement related thereto or delivered in connection therewith
(collectively, the "NOTE DOCUMENTS") that the Grantors shall have granted the
assignment and security interest and made the pledge and assignment contemplated
by this Agreement.
(8) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Note Documents.
(9) Terms defined in the Note Documents and not otherwise defined in
this Agreement are used in this Agreement as defined in the Note Documents.
Further, unless otherwise defined in this Agreement or the other Note Documents,
terms defined in Article 8 or 9 of the UCC (as defined below) and/or in the
Federal Book Entry Regulations (as defined below) are used in this Agreement as
such terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations. "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 security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of 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. The term "FEDERAL BOOK ENTRY
REGULATIONS" means (a) the federal regulations contained in Subpart B
("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry
securities consisting of U.S. Treasury bonds, notes and bills and Subpart D
("ADDITIONAL PROVISIONS") of 31 C.F.R. Part 357, 31 C.F.R. Section 357.2,
Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44
and (b) to the extent substantially identical to the federal regulations
referred to in clause (a) above (as in effect from time to time), the federal
regulations governing other book-entry securities. The term "PPSA(ON)" shall
mean the Personal Property Security Act (Ontario) (or any successor statute) and
the term "PPSA(NB)"shall mean the Personal Property Security Act (New Brunswick)
(or any successor statute).
NOW, THEREFORE, in consideration of the premises and in order to
induce the Holders to purchase the Notes, and each Secured Party to perform
their respective obligations under the Note Documents, each Grantor hereby
agrees with the Collateral Agent and the other Secured Parties as follows:
Section 1. Grant of Security. Each Grantor hereby grants, assigns
and transfers to the Collateral Agent and the other Secured Parties, a security
interest in, such Grantor's right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the "COLLATERAL"):
2
(a) the following (the "SECURITY COLLATERAL"):
(i) the Initial Pledged Equity and the certificates, if any,
representing the Initial Pledged Equity, and all dividends,
distributions, return of capital, cash, instruments and other
property (including, without limitation, equity interests of any
class and certificates representing the same) from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Equity and all
subscription warrants, rights or options issued thereon or with
respect thereto (the Initial Pledged Equity, together with all other
shares and other equity interests described in this clause (i) being
collectively the "PLEDGED EQUITY");
(ii) all Pledged Security Entitlements with respect to all
Pledged Financial Assets from time to time credited to any
Collateral Account, and all Pledged Financial Assets, and all
dividends, distributions, return of capital, interest, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such Pledged Security Entitlements or such Pledged
Financial Assets and all subscription warrants, rights or options
issued thereon or with respect thereto;
(b) each of the agreements listed on Schedule III hereto, to which
such Grantor is now a party, in each case as such agreements may be
amended, amended and restated, supplemented or otherwise modified from
time to time (collectively, the "ASSIGNED AGREEMENTS"), including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due under or pursuant to the Assigned Agreements, (ii) all rights
of such Grantor to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect to the Assigned Agreements, (iii) claims of such
Grantor for damages arising out of or for breach of or default under the
Assigned Agreements and (iv) the right of such Grantor to terminate the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder (all such Collateral being the
"AGREEMENT COLLATERAL");
(c) all accounts (including, without limitation,
health-care-insurance receivables), chattel paper (including, without
limitation, tangible chattel paper and electronic chattel paper), general
intangibles (including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services and whether
or not earned by performance, generated from any of the Assigned
Agreements (any and all of such accounts, chattel paper, general
intangibles and other obligations, to the extent not referred to in clause
(a) or (b) above, or clause (d) below, being the "RECEIVABLES");
3
(d) the following (collectively, the "ACCOUNT COLLATERAL"):
(i) the Collateral Accounts, and all funds and financial
assets from time to time credited thereto (including, without
limitation, (A) readily marketable direct obligations of the
government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full faith
and credit of the government of the United States, (B) insured
certificates of deposit, guaranteed investment certificates or time
deposits with any commercial bank that is a Lender Party or member
of the Federal Reserve System, issues (or the parent of which
issues) commercial paper rated as described in clause (C) below, is
organized under the laws of the United States or any State thereof
and has combined capital and surplus of at least $1 billion or (C)
commercial paper in an aggregate amount of no more than $1,000,000
per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and rated
at least "Prime-1" (or the equivalent grade) by Xxxxx'x Investors
Service, Inc. or "A-l" (or the then equivalent grade) by Standard &
Poor's, a division of The McGraw Hill Companies, Inc. (collectively,
"CASH EQUIVALENTS")), all interest, dividends, distributions, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect, of or in exchange
for any or all of such funds and financial assets, and all
certificates and instruments, if any, from time to time representing
or evidencing the Collateral Accounts; and
(ii) all promissory notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time delivered
to or otherwise possessed by the Collateral Agent for or on behalf
of such Grantor, including, without limitation, those delivered or
possessed in substitution for or in addition to any or all of the
then existing Account Collateral; and
(iii) all interest, dividends, distributions, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the then existing Account Collateral; and
(e) all books and records (including, without limitation, customer
lists, credit files, printouts and other computer output materials and
records) of such Grantor pertaining to any of the Collateral; and
(f) all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral (including, without
limitation, proceeds, collateral and supporting obligations that
constitute property of the types
4
described in clauses (a) through (e) of this Section 1 and this clause
(f)) and, to the extent not otherwise included, all (A) payments under
insurance (whether or not the Collateral Agent is the loss payee thereof),
or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral,
and (B) cash.
Section 2. Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment of all obligations of such Grantor now or
hereafter existing under the Note Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such obligations being the "SECURED
OBLIGATIONS"). Without limiting the generality of the foregoing, this Agreement
secures, as to each Grantor, the payment of all amounts that constitute part of
the Secured Obligations and would be owed by such Grantor, whether incurred
alone or with another or others and whether as principal, guarantor or surety,
to any Secured Party under the Note Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Grantor.
Section 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Collateral Agent
or any other Secured Party of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) neither the Collateral Agent nor any other
Secured Party shall have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement or any other
Note Document, nor shall the Collateral Agent or any other Secured Party be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder. Furthermore, the Collateral Agent shall not be liable or accountable
for any failure to seize, collect, realize, dispose of, enforce or otherwise
deal with the Collateral, shall not be bound to institute proceedings for any
such purposes or for the purpose of preserving any rights of the Collateral
Agent, the Grantor or any other person, firm or corporation in respect of the
Collateral and shall not be liable or responsible for any loss, cost or damage
whatsoever which may arise in respect of any such failure including, without
limitation, resulting from the negligence of the Collateral Agent or any of its
officers, servants, agents, solicitors, attorneys, Receivers (as hereinafter
defined) or otherwise. Neither the Collateral Agent nor its officers, servants,
agents or Receivers shall be liable by reason of any entry into possession of
the Collateral or any part thereof, to account as a mortgagee in possession, for
anything except actual receipts, for any loss on realization, for any act or
omission for which a mortgagee in possession might be liable for any loss, cost,
damage or expense whatsoever which may arise in respect of any such actions,
omissions or negligence.
5
Section 4. Delivery and Control of Security Collateral. (a) All
certificates or instruments representing or evidencing Security Collateral shall
be delivered to and held by or on behalf of the Collateral Agent pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. The Collateral Agent shall have
the right, at any time in its discretion and with notice to each Grantor, to
transfer to or to register in the name of the Collateral Agent or any of its
nominees any or all of the Security Collateral, subject only to the revocable
rights specified in Section 1(a), provided, however, that in the case of
Security Collateral consisting of Class B Shares of Xxxxxxxxx International
Inc., such rights to register Security Collateral in the name of the Collateral
Agent or any of its nominees shall only be exercised only after the occurrence
and during the continuance of an Event of Default. In addition, the Collateral
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security Collateral for certificates or instruments
of smaller or larger denominations. Also, the Collateral Agent shall have the
right at any time to convert Security Collateral consisting of financial assets
credited to the Collateral Account to Security Collateral consisting of
financial assets held directly by the Collateral Agent, and to convert Security
Collateral consisting of financial assets held directly by the Collateral Agent,
to Security Collateral consisting of financial assets credited to the Collateral
Accounts.
(b) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes an uncertificated security,
such Grantor will cause the issuer thereof either (i) to register the Collateral
Agent as the registered owner of such security or (ii) to agree in an
authenticated record with such Grantor and the Collateral Agent that such issuer
will comply with instructions with respect to such security originated by the
Collateral Agent without further consent of such Grantor, such authenticated
record to be in form and substance satisfactory to the Collateral Agent. With
respect to any Security Collateral in which any Grantor has any right, title or
interest and that is not an uncertificated security, upon the request of the
Collateral Agent, such Grantor will notify each such issuer of Pledged Equity
that such Pledged Equity is subject to the security interest granted hereunder.
(c) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a security entitlement in
which the Collateral Agent is not the entitlement holder, such Grantor will
cause the securities intermediary with respect to such security entitlement
either (i) to identify in its records the Collateral Agent as the entitlement
holder of such security entitlement against such securities intermediary or (ii)
to agree in an authenticated record with such Grantor and the Collateral Agent
that such securities intermediary will comply with entitlement orders (that is,
notifications communicated to such securities intermediary directing transfer or
redemption of the financial asset to which such Grantor has a security
entitlement) originated by the Collateral Agent without further consent of such
Grantor, such authenticated record to be in substantially the form of Exhibit B
hereto or otherwise in
6
form and substance satisfactory to the Collateral Agent (such agreement being an
"ACCOUNT CONTROL AGREEMENT").
(d) No Grantor will change or add any securities intermediary that
maintains any securities account in which any of the Collateral is credited or
carried, or change or add any such securities account, in each case without
first complying with the above provisions of this Section 4 in order to perfect
the security interest granted hereunder in such Collateral.
(e) Not later than 10 business days after the date hereof, each
Grantor with respect to Security Collateral shall (i) take and complete any and
all action necessary in order to ensure that all beneficial and registered
ownership interests in each item of Security Collateral are held by a single
Grantor, rather than being divided among multiple Grantors; (ii) provide the
Collateral Agent and/or any other Secured Party requesting the same with
evidence satisfactory to the Collateral Agent and/or such other Secured Party
that all such action described in clause (i) above has been taken; and (iii)
deliver to or in accordance with the instructions of the Collateral Agent
original stock certificates and stock powers originally executed in blank, all
in form and substance satisfactory to the Collateral Agent, reflecting any
changes in ownership with respect to any Security Collateral resulting from the
actions described in clause (i) above.
Section 5. Maintaining the Account Collateral. So long as any
Secured Obligations remain outstanding:
(a) Each Grantor will maintain all Account Collateral only with the
Collateral Agent or with banks (the "PLEDGED ACCOUNT BANKS") that have
agreed, in an Account Control Agreement authenticated by the Grantor, the
Collateral Agent and the Pledged Account Banks, to (i) comply with
instructions originated by the Collateral Agent directing the disposition
of funds in the Account Collateral without the further consent of the
Grantor and (ii) waive or subordinate in favor of the Collateral Agent all
claims of the Pledged Account Banks (including, without limitation, claims
by way of a security interest, lien or right of setoff or right of
recoupment) to the Account Collateral, which authenticated record shall be
substantially in the form of Exhibit B hereto, or shall otherwise be in
form and substance satisfactory to the Collateral Agent.
(b) Each Grantor agrees that it will not terminate any bank as a
Pledged Account Bank or terminate any Account Collateral.
(c) The Collateral Agent shall have sole right to direct the
disposition of funds with respect to the Collateral Accounts, 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 no amount (including, without limitation,
interest on Cash Equivalents credited thereto) will be paid or released to
or for the account of, or withdrawn by or for the account of, any Grantor
or any other Person from the Collateral Accounts.
7
(d) The Collateral Agent may, at any time and without notice to, or
consent from, the Grantor, transfer, or direct the transfer of, funds from
the Account Collateral to satisfy the Grantor's obligations under the Note
Documents if an Event of Default shall have occurred and be continuing.
Section 6. Investing of Amounts in the Collateral Accounts. The
Collateral Agent will, subject to the provisions of Sections 5, 17 and 22, from
time to time (a) invest, or direct the applicable Pledged Account Bank to
invest, amounts received with respect to the Collateral Accounts in such Cash
Equivalents credited to (A) the Collateral Accounts or (B) in the case of Cash
Equivalents consisting of Securities Collateral, a securities account in which
the Collateral Agent is the securities intermediary or a securities account
subject to an Account Control Agreement, and (b) invest interest paid on the
Cash Equivalents referred to in clause (a) above, and reinvest other proceeds of
any such Cash Equivalents that may mature or be sold, in each case in such Cash
Equivalents credited in the same manner. Interest and proceeds that are not
invested or reinvested in Cash Equivalents as provided above shall be deposited
and held in the Collateral Accounts; and the Collateral Agent and other Secured
Parties shall not be liable for any losses resulting from such investments. In
addition, the Collateral Agent shall have the right at any time to exchange, or
direct the applicable Pledged Account Bank to exchange, such Cash Equivalents
for similar Cash Equivalents of smaller or larger determinations, or for other
Cash Equivalents, credited to the Collateral Accounts.
Section 7. Maintaining Electronic Chattel Paper and Transferable
Records. So long as any Secured Obligation of any Grantor under any Note
Document shall remain unpaid each Grantor will maintain all (1) electronic
chattel paper so that the Collateral Agent has control of the electronic chattel
paper in the manner specified in Section 9-105 of the UCC or pursuant to similar
laws in Canada, as applicable, and (ii) all transferable records so that the
Collateral Agent has control of the transferable records in the manner specified
in Section 16 of the Uniform Electronic Transactions Act, as in effect in the
jurisdiction governing such transferable record ("UETA") or pursuant to similar
laws in Canada, as applicable.
Section 8. Representations and Warranties. Each Grantor (and, in the
case of clause (i), The Ravelston Corporation Limited ("RCL")) represents and
warrants as follows:
(a) Such Grantor's exact legal name, as defined in Section 9-503(a)
of the UCC, and as evidenced pursuant to its Articles of
Incorporation/Amalgamation in the jurisdiction of incorporation, is
correctly set forth in Schedule 1 hereto. Such Grantor has only the trade
names listed on Schedule IV hereto. Such Grantor is located (within the
meaning of Section 9-307 of the UCC) and has its chief executive office
and the office in which it maintains the original copies of each Assigned
Agreement to which such Grantor is a party and all originals of all
chattel paper that evidence Receivables
8
of such Grantor, in the state or provincial jurisdiction set forth in
Schedule I hereto. The information set forth in Schedule I hereto with
respect to such Grantor is true and accurate in all respects. Such Grantor
has not, within five years prior to the date hereof, previously changed
its name, location, chief executive office, place where it maintains its
agreements, type of organization, jurisdiction of organization or
organizational identification number from those set forth in Schedule I
hereto except as disclosed in Schedule IV hereto.
(b) All Security Collateral consisting of certificated securities
and instruments have been delivered to the Collateral Agent. Original or
certified copies of each Assigned Agreement and all originals of all
chattel paper that evidence Receivables have been delivered to the
Collateral Agent. None of the Receivables or Agreement Collateral is
evidenced by a promissory note or other instrument that has not been
delivered to the Collateral Agent.
(c) Such Grantor is the legal and beneficial owner of the Collateral
of such Grantor free and clear of any Lien, claim, option or right of
others, except for the security interest created under this Agreement. No
effective financing statement or other instrument similar in effect
covering all or any part of such Collateral or listing such Grantor or any
trade name of such Grantor as debtor is on file in any recording office,
except such as may have been filed in favor of the Collateral Agent
relating to the Note Documents.
(d) The Pledged Equity pledged by such Grantor hereunder has been
duly authorized and validly issued and is fully paid and non-assessable.
With respect to the Pledged Equity that is an uncertificated security,
such Grantor has caused the issuer thereof either (i) to register the
Collateral Agent as the registered owner of such security or (ii) to agree
in an authenticated record with such Grantor and the Collateral Agent that
such issuer will comply with instructions with respect to such security
originated by the Collateral Agent without further consent of such
Grantor. If such Grantor is an issuer of Pledged Equity, such Grantor
confirms that it has received notice of such security interest.
(e) The Initial Pledged Equity pledged by such Grantor constitutes
the percentage of the issued and outstanding equity interests of the
issuers thereof indicated on Schedule II hereto.
(f) The Assigned Agreements to which such Grantor is a party, true
and complete copies of which have been furnished to the Collateral Agent,
have been duly authorized, executed and delivered by all parties thereto,
have not been amended, amended and restated, supplemented or otherwise
modified, except as described on Schedule III hereto, are in full force
and effect and are binding upon and enforceable against all parties
thereto in accordance with their terms. There exists no default under any
Assigned Agreement to which such Grantor is a party by any party thereto.
Each party to the Assigned Agreements listed on
9
Schedule III hereto to which such Grantor is a party other than the
Grantors has executed and delivered to such Grantor a consent, in
substantially the form of Exhibit C-1, C-2 or C-3 hereto, as applicable,
or otherwise in form and substance satisfactory to the Collateral Agent,
to the assignment of the Agreement Collateral to the Collateral Agent
pursuant to this Agreement.
(g) All filings and other actions (including, without limitation,
actions necessary to obtain control of Collateral as provided in Sections
9-104, 9-105, 9-106 and 9-107 of the UCC, in Section 16 of the UETA, in
the PPSA(ON) and in the PPSA (NB)) necessary to perfect the security
interest in the Collateral of such Grantor created under this Agreement
have been duly made or taken and are in full force and effect, and this
Agreement creates in favor of the Collateral Agent for the benefit of
itself and the other Secured Parties a valid and, together with such
filings and other actions, perfected first priority security interest in
the Collateral of such Grantor, securing the payment of the Secured
Obligations.
(h) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the grant by such Grantor of the
security interest granted hereunder or for the execution, delivery or
performance of this Agreement by such Grantor, (ii) the perfection or
maintenance of the security interest created hereunder (including the
first priority nature of such security interest), except for the filing of
financing and continuation statements under the UCC, the PPSA(ON) and the
PPSA(NB), which financing statements have been duly filed and are in full
force and effect, and the actions described in Section 4 with respect to
Security Collateral, which actions have been taken and are in full force
and effect, or (iii) the exercise by the Collateral Agent of its voting or
other rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement, except as may be required in
connection with the disposition of any portion of the Security Collateral
by laws affecting the offering and sale of securities generally.
(i) RCL hereby represents and warrants that each of the Transfer and
Consent Agreements, by which RCL transferred its interests in any Assigned
Agreements to RMI, were duly authorized and validly executed by RCL, and
are valid, binding and enforceable against all parties thereto.
Section 9. Further Assurances. (a) Each Grantor agrees that from
time to time, at the expense of such Grantor, such Grantor will promptly execute
and deliver, or otherwise authenticate, all, further instruments and documents,
and take all further action that may be necessary or desirable, or that the
Collateral Agent may request, in order to perfect and protect any pledge or
security interest granted or purported to be granted by such Grantor hereunder
or to enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral of such Grantor. Without
limiting the generality of the foregoing, each Grantor will promptly with
respect to Collateral of
10
such Grantor: (i) at the request of the Collateral Agent, xxxx conspicuously
each chattel paper included in Receivables, each Assigned Agreement and, at the
request of the Collateral Agent, each of its records pertaining to such
Collateral with a legend, in form and substance satisfactory to the Collateral
Agent, indicating that such chattel paper, Assigned Agreement or Collateral is
subject to the security interest granted hereby; (ii) if any such Collateral
shall be evidenced by a promissory note or other instrument or chattel paper,
deliver and pledge to the Collateral Agent hereunder such note or instrument or
chattel paper duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Collateral
Agent; (iii) execute or authenticate and file such financing, financing change
or continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Collateral Agent may
request, in order to perfect and preserve the security interest granted or
purported to be granted by such Grantor hereunder; (iv) deliver and pledge to
the Collateral Agent for benefit of itself and the other Secured Parties
certificates representing Security Collateral that constitutes certificated
securities, accompanied by undated stock or bond powers executed in blank; (v)
take all action necessary to ensure that the Collateral Agent has control of
Collateral consisting of deposit accounts, electronic chattel paper, investment
property, and transferable records as provided in Sections 9-104, 9-105, 9-106
and 9-107 of the UCC, in Section 16 of UETA, in the PPSA (ON) and in the
PPSA(NB); (vi) at the request of the Collateral Agent, take all action to ensure
that the Collateral Agent's security interest is noted on any certificate of
ownership related to any Collateral evidenced by a certificate of ownership; and
(vii) deliver to the Collateral Agent evidence that all other action that the
Collateral Agent may deem reasonably necessary or desirable in order to perfect
and protect the security interest created by such Grantor under this Agreement
has been taken. From time to time upon request by the Collateral Agent, each
Grantor will, at such Grantor's expense, cause to be delivered to the Collateral
Agent, for the benefit of the Secured Parties, an Opinion of Independent
Counsel, from outside counsel reasonably satisfactory to the Collateral Agent,
as to such matters relating to the transactions contemplated hereby as the
Collateral Agent may reasonably request.
(b) Each Grantor hereby authorizes the Collateral Agent to file one
or more financing, financing change 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 Grantor, in each case without the
signature of such Grantor, and regardless of whether any particular asset
described in such financing statements falls within the scope of the UCC,
PPSA(ON) or PPSA(NB) or the granting clause of this Agreement. A photocopy or
other reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law. Each Grantor ratifies its authorization for the
Collateral Agent to have filed such financing statements, continuation
statements, financing change statements or amendments filed prior to the date
hereof.
11
(c) Each Grantor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
of such Grantor and such other reports in connection with such Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.
(d) The Company will furnish to the Collateral Agent, at any time
upon the reasonable request of the Collateral Agent, an opinion of counsel, from
outside counsel reasonably satisfactory to the Collateral Agent, to the effect
that all financing, financing change or continuation statements have been filed,
and all other action has been taken (including, without limitation, action
necessary to (i) give the Collateral Agent control over the Collateral as
provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC, in Section 16 of
UETA, in the PPSA(ON) and in the PPSA(NB) and (ii) cause the security interest
in any Collateral evidenced by a certificate of ownership to be noted on such
certificate of ownership) to perfect continuously from the date hereof the
security interest granted hereunder.
Section 10. Post-Closing Changes; Bailees; Collections on Assigned
Agreements; Receivables and Related Contracts. (a) No Grantor will change its
name, type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 8(a) of this
Agreement without first giving at least 30 days' prior written notice to the
Collateral Agent and taking all action required by the Collateral Agent for the
purpose of perfecting or protecting the security interest granted by this
Agreement. No Grantor will change the place where it keeps the originals of the
Assigned Agreements to which such Grantor is a party and all originals of all
chattel paper that evidence Receivables of such Grantor from the locations
therefor specified in Sections 8(a) and 8(b) without first giving the Collateral
Agent 30 days' prior written notice of such change. No Grantor will become bound
by a security agreement authenticated by another Person which by its terms may
pertain to the Collateral (including, without limitation, a security agreement
authenticated as provided in Section 9-203(d) of the UCC) without giving the
Collateral Agent 30 days' prior written notice thereof and taking all action
required by the Collateral Agent to ensure that the perfection and first
priority nature of the Collateral Agent's security interest in the Collateral
will be maintained. Each Grantor will hold and preserve its records relating to
the Collateral, including, without limitation, the Assigned Agreements, and will
permit representatives of the Collateral Agent at any time during normal
business hours to inspect and make abstracts from such records and other
documents. If the Grantor does not have an organizational identification number
and later obtains one, it will forthwith notify the Collateral Agent of such
organizational identification number,
(b) If any Collateral of any Grantor is at any time in the
possession or control of a warehouseman, bailee, processor or agent, or if the
Collateral Agent so requests such Grantor will (i) notify such warehouseman,
bailee, processor or agent of the security interest created hereunder, (ii)
instruct such warehouseman, bailee, processor or agent to hold all such
Collateral solely for the Collateral Agent's account subject only to the
Collateral Agent's instructions (which shall permit such Collateral to be
removed by
12
such Grantor in the ordinary course of business until the Collateral Agent
notifies such warehouseman, bailee, processor or agent that an Event of Default
has occurred and is continuing), (iii) use best efforts, to cause such
warehouseman, bailee, processor or agent to authenticate a record acknowledging
that it holds possession of such Collateral for the Collateral Agent's benefit
and shall act solely on the instructions of the Collateral Agent without the
further consent of the Grantor or any other Person, and (iv) make such
authenticated record available to the Collateral Agent.
(c) Except as otherwise provided in this subsection (c), each
Grantor will continue to collect, at its own expense, all amounts due or to
become due such Grantor under the Assigned Agreements and Receivables. In
connection with such collections, such Grantor may take (and, at the Collateral
Agent's direction after the occurrence of an Event of Default which is
continuing, will take) such action as such Grantor or the Collateral Agent may
deem necessary or advisable to enforce collection of the Assigned Agreements and
Receivables; provided, however, that in the event that an Event of Default has
occurred and is continuing and the Collateral Agent has given written notice
thereof to the applicable Grantor(s) in respect thereof and to the obligors
thereunder, the Collateral Agent shall have the right (i) in the case of the
Services Agreements, to direct the obligors thereunder to make payment of
amounts payable thereunder (up to 70% of the amounts due thereunder) directly to
the Collateral Agent for so long as such Event of Default shall continue and
(ii) in the case of the Support Agreement, to make payment of 100% of all
amounts payable thereunder directly to the Collateral Agent for so long as such
Event of Default shall continue, and, upon any such notification and at the
expense of such Grantor, to enforce collection of any such Assigned Agreements
and Receivables, to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as such Grantor might have done, and
to otherwise exercise all rights with respect to such Assigned Agreements and
Receivables, including, without limitation, those set forth set forth in Section
9-607 of the UCC or pursuant to the PPSA(ON) or PPSA(NB). After receipt by any
Grantor of the notice from the Collateral Agent referred to in the proviso to
the preceding sentence, (i) all amounts and proceeds (including, without
limitation, instruments) that may be received by such Grantor in respect of the
Assigned Agreements and Receivables of such Grantor shall be received in trust
for the benefit of the Collateral Agent hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over to the Collateral
Agent in the same form as so received (with any necessary indorsement) and for
so long as the Event of Default giving rise to such notice be continuing,
applied as provided in Section 17(b) and (ii) such Grantor will not adjust,
settle or compromise the amount or payment of any Receivable or amount due on
any Assigned Agreement, release wholly or partly any obligor thereof, or allow
any credit or discount thereon. No Grantor will permit or consent to the
subordination of its right to payment under any of the Assigned Agreements and
Receivables to any other indebtedness or obligations of the obligor thereof.
13
Section 11. Voting Rights; Dividends; Etc. (a) So long as no Event
of Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Security
Collateral of such Grantor or any part thereof for any purpose;
provided, however, that such Grantor will not exercise or refrain
from exercising any such right if such action would have a material
adverse effect on the value of the Security Collateral or any part
thereof.
(ii) Each Grantor shall be entitled to receive and retain any
and all dividends, interest and other distributions paid in respect
of the Security Collateral of such Grantor if and to the extent that
the payment thereof is not otherwise prohibited by the terms of the
Note Documents; provided however, that any and all
(A) dividends, interest and other distributions paid or
payable other than in cash in respect of, and instruments and
other property received, receivable or otherwise distributed
in respect of, or in exchange for, any Security Collateral,
(B) dividends and other distributions paid or payable in
cash in respect of any Security Collateral in connection with
a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or
paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Security Collateral
shall be, and shall be forthwith delivered to the Collateral Agent to hold as,
Security Collateral and shall, if received by such Grantor, be received in trust
for the benefit of the Collateral Agent, be segregated from the other property
or funds of such Grantor and be forthwith delivered to the Collateral Agent as
Security Collateral in the same form as so received (with any necessary
indorsement).
(iii) The Collateral Agent will execute and deliver (or cause
to be executed and delivered) to each Grantor all such proxies and
other instruments as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i)
above and to receive the dividends or interest payments that it is
authorized to receive and retain pursuant to paragraph (ii) above.
14
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 11(a)(i)
shall, upon notice to such Grantor by the Collateral Agent, cease
and (y) to receive the dividends, interest and other distributions
that it would otherwise be authorized to receive and retain pursuant
to Section 11(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise or refrain from exercising
such voting and other consensual rights and to receive and hold as
Security Collateral such dividends, interest and other
distributions.
(ii) All dividends, interest and other distributions that are
received by any Grantor contrary to the provisions of paragraph (i)
of this Section 11(b) shall be received in trust for the benefit of
the Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent as
Security Collateral in the same form as so received (with any
necessary indorsement).
Section 12. As to the Assigned Agreements. (a) Each Grantor will at
its expense:
(i) perform and observe all terms and provisions of the
Assigned Agreements to be performed or observed by it, maintain the
Assigned Agreements to which it is a party in full force and effect,
enforce the Assigned Agreements to which it is a party in accordance
with the terms thereof and take all such action to such end as may
be reasonably requested from time to time by the Collateral Agent;
and
(ii) furnish to the Collateral Agent promptly upon receipt
thereof copies of all notices, requests and other documents received
by such Grantor, and notify the Collateral Agent immediately of any
claims, litigation or default, under or pursuant to the Assigned
Agreements to which it is a party, and from time to time (A) furnish
to the Collateral Agent such information and reports regarding the
Assigned Agreements and such other Collateral of such Grantor as the
Collateral Agent may reasonably request and (B) upon request of the
Collateral Agent make to each other party to any Assigned Agreement
to which it is a party such demands and requests for information and
reports or for action as such Grantor is entitled to make
thereunder.
15
(b) Each Grantor agrees that it will not, except to the extent
otherwise permitted under the Indenture:
(i) cancel or terminate any Assigned Agreement to which it is
a party or consent to or accept any cancellation or termination
(other than regularly scheduled termination by the terms of such
Assigned Agreement) thereof;
(ii) amend, amend and restate, supplement or otherwise modify
any such Assigned Agreement or give any consent, waiver (including,
without limitation, any waiver of rights, privileges, remedies or
powers) or approval thereunder (except for periodic renewals under
identical terms);
(iii) waive any default under or breach of any such Assigned
Agreement; or
(iv) take any other action in connection with any such
Assigned Agreement that would materially impair the value of the
interests or rights of such Grantor thereunder or that would
materially impair the interests or rights of the Collateral Agent or
any other Secured Party.
(c) Each Grantor hereby consents on its behalf and on behalf of its
Subsidiaries to the assignment and pledge to the Collateral Agent for benefit of
the Secured Parties of each Assigned Agreement to which it is a party by any
other Grantor hereunder.
Section 13. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Indenture, or (ii) create or suffer
to exist any Lien upon or with respect to any of the Collateral of such Grantor
except for the pledge, assignment and security interest created under this
Agreement.
(b) Each Grantor agrees that it will (i) cause each issuer of the
Pledged Equity pledged by such Grantor not to issue any equity interests or
other securities in substitution for the Pledged Equity issued by such issuer,
except to such Grantor, and (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional equity
interests or other securities representing Pledged Equity.
Section 14. Collateral Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, in the Collateral
Agent's discretion after the occurrence of an Event of Default which is
continuing, to take any action and to execute any instrument
16
that the Collateral Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce compliance
with the terms and conditions of any Assigned Agreement or the rights of
the Collateral Agent with respect to any of the Collateral.
Section 15. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may, as the
Collateral Agent deems necessary to protect the security interest granted
hereunder in the Collateral or to protect the value thereof, but without any
obligation to do so and without notice, itself perform, or cause performance of,
such agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by such Grantor under Section 18.
Section 16. The Collateral Agent's Duties. (a) The powers conferred
on the Collateral Agent hereunder are solely to protect the Secured Parties'
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Collateral
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not any Secured Party has
or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.
(b) Anything contained herein to the contrary notwithstanding, the
Collateral Agent may from time to time, when the Collateral Agent deems it to be
necessary, appoint one or more agents (each a "SUBAGENT") for the Collateral
Agent hereunder with respect to all or any part of the Collateral. In the event
that the Collateral Agent so appoints any Subagent with respect to any
Collateral, (i) the assignment and pledge of such Collateral and the security
interest granted in such Collateral by each Grantor hereunder shall be deemed
for purposes of this Security Agreement to have been made to such Subagent, in
addition to the Collateral Agent, for the ratable benefit of the
17
Collateral Agent and the other Secured Parties, as security for the Secured
Obligations of such Grantor, (ii) such Subagent shall automatically be vested,
in addition to the Collateral Agent, with all rights, powers, privileges,
interests and remedies of the Collateral Agent hereunder with respect to such
Collateral, and (iii) the term "Collateral Agent," when used herein in relation
to any rights, powers, privileges, interests and remedies of the Collateral
Agent with respect to such Collateral, shall include such Subagent; provided,
however, that no such Subagent shall be authorized to take any action with
respect to any such Collateral unless and except to the extent expressly
authorized in writing by the Collateral Agent.
Section 17. Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon
default under the UCC, PPSA(ON) or PPSA(NB), as applicable (whether or not
the UCC, PPSA(ON) or PPSA(NB), as applicable, apply to the affected
Collateral), and also may: (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the Collateral as
directed by the Collateral Agent and make it available to the Collateral
Agent at a place and time to be designated by the Collateral Agent that is
reasonably convenient to both parties; (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Collateral Agent may deem commercially reasonable;
(iii) occupy any premises owned or leased by any of the Grantors where the
Collateral or any part thereof is assembled or located for a reasonable
period in order to effectuate its rights and remedies hereunder or under
law, without obligation to such Grantor in respect of such occupation; and
(iv) exercise any and all rights and remedies of any of the Grantors under
or in connection with the Collateral, or otherwise in respect of the
Collateral, including, without limitation, (A) any and all rights of such
Grantor to demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreements, the Receivables
and the other Collateral, (B) withdraw, or cause or direct the withdrawal,
of all funds with respect to the Account Collateral and (C) exercise all
other rights and remedies with respect to the Assigned Agreements, the
Receivables and the other Collateral, including, without limitation, those
set forth in Section 9-607 of the UCC and those set forth in the PPSA(ON)
and PPSA(NB). Each Grantor agrees that, to the extent notice of sale shall
be required by law, at least ten days' notice to such Grantor of the time
and place of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification. The Collateral Agent
shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Collateral Agent may adjourn any public
18
or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. No person dealing with the
Collateral Agent or its servants or agents shall be concerned to inquire
whether the security hereby constituted has become enforceable, whether
the powers which the Collateral Agent is purporting to exercise have
become exercisable, whether any money remains due on the security of the
Collateral, as to the necessity or expedience of the stipulations and
conditions subject to which any sale, lease or disposition shall be made,
otherwise as to the propriety or regularity of any sale or any other
dealing by the Collateral Agent with the Collateral or to see to the
application of any money paid to the Collateral Agent. In the absence of
fraud on the part of such persons, such dealings shall be deemed, so far
as regards the safety and protection of such person, to be within the
powers hereby conferred and to be valid and effective accordingly.
(b) Any cash held by or on behalf of the Collateral Agent and all
cash proceeds received by or on behalf of the Collateral Agent in respect
of any sale of, collection from, or other realization upon all or any part
of the Collateral may, in the discretion of the Collateral Agent, be held
by the Collateral Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the Collateral
Agent pursuant to Section 18) in whole or in part by the Collateral Agent
for the ratable benefit of the Secured Parties against, all or any part of
the Secured Obligations, in the following manner:
(i) first, paid to the Collateral Agent for any amounts then
owing to the Collateral Agent under the Note Documents; and
(ii) second, ratably paid to the Holders and any other Secured
Parties, for any amounts then owing to them, in their capacities as
such, under the Note Documents ratably in accordance with such
respective amounts then owing to such Secured Parties.
Any surplus of such cash or cash proceeds held by or on the behalf of the
Collateral Agent and remaining after payment in full of all the Secured
Obligations shall be paid over to the applicable Grantor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Collateral shall be
received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid
over to the Collateral Agent in the same form as so received (with any
necessary indorsement).
(d) The Collateral Agent may, without notice to any Grantor except
as required by law and at any time or from time to time, charge, set-off
and
19
otherwise apply all or any part of the Secured Obligations against any
funds held with respect to the Account Collateral or in any other deposit
account.
(e) If the Collateral Agent shall determine to exercise its right to
sell all or any of the Security Collateral of any Grantor pursuant to this
Section 17, each Grantor agrees that, upon request of the Collateral
Agent, such Grantor will, at its own expense:
(i) execute and deliver, and cause each issuer of such
Security Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and
things, as may be necessary or, in the opinion of the Collateral
Agent, advisable to register for resale such Security Collateral
under the provisions of the Securities Act of 1933 (as amended from
time to time, the "SECURITIES ACT"), to cause the registration
statement relating thereto (the "COLLATERAL SHELF REGISTRATION
STATEMENT") to become effective and to remain effective for such
period as prospectuses are required by law to be furnished and in
any event for so long as is necessary to enable the Holders to
dispose of the Security Collateral in the manner of sale provided
for in the registration statement and to make all amendments and
supplements thereto and to the related prospectus that, in the
opinion of the Collateral Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules
and regulations of the Securities and Exchange Commission applicable
thereto;
(ii) use its best efforts to qualify the Security Collateral
under the state securities or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of such Security
Collateral, as requested by the Collateral Agent or any other
Secured Party;
(iii) cause each such issuer of such Security Collateral to
make available to its security holders, as soon as practicable, an
earnings statement that will satisfy the provisions of Section 11(a)
of the Securities Act;
(iv) provide the Collateral Agent and each other Secured Party
and each other Secured Party with such other information and
projections as may be necessary or, in the opinion of the Collateral
Agent or any other Secured Party, advisable to enable the Collateral
Agent or any other Secured Party to effect the sale of such Security
Collateral;
(v) take such other actions in furtherance of the resale of
the Security Collateral pursuant to the Collateral Shelf
Registration Statement as are comparable to those described in
Section 5 (Registration
20
Procedures) of the Registration Rights Agreement with respect to the Shelf
Registration Statement (as defined therein) mutatis mutandis; and
(vi) do or cause to be done all such other acts and things as
may be necessary to make such sale of such Security Collateral or
any part thereof valid and binding and in compliance with applicable
law.
(f) The Collateral Agent is authorized, in connection with any sale
of the Security Collateral pursuant to this Section 17, to deliver or
otherwise disclose to any prospective purchaser of the Security
Collateral: (i) any registration statement or prospectus, and all
supplements and amendments thereto, prepared pursuant to subsection (e)(i)
above; (ii) any information and projections provided to it pursuant to
subsection (e)(iv) above; and (iii) any other information in its
possession relating to such Security Collateral.
(g) Each Grantor acknowledges the impossibility of ascertaining the
amount of damages that would be suffered by the Secured Parties by reason
of the failure by such Grantor to perform any of the covenants contained
in subsection (e) above and, consequently, agrees that, if such Grantor
shall fail to perform any of such covenants, it will pay, as liquidated
damages and not as a penalty, an amount equal to the value of the Security
Collateral on the date the Collateral Agent shall demand compliance with
subsection (e) above.
(h) The Collateral Agent may, in addition to any other rights it may
have, appoint by instrument in writing a receiver or receiver and manager
(both of which are herein called a "Receiver") of all or any part of the
Collateral or may institute proceedings in any court of competent
jurisdiction for the appointment of such a Receiver. Any such Receiver is
hereby given and shall have the same powers and rights and exclusions and
limitations of liability as the Collateral Agent has under this Security
Agreement, at law or in equity. In exercising any such powers, any such
Receiver shall, to the extent permitted by law, act as and for all
purposes shall be deemed to be the agent of the Grantor and the Collateral
Agent shall not be responsible for any act or default of any such
Receiver. The Collateral Agent may appoint one or more Receivers hereunder
and may remove any such Receiver or Receivers and appoint another or
others in his or their stead from time to time. Any Receiver so appointed
may be an officer or employee of the Collateral Agent. A court need not
appoint, ratify the appointment by the Collateral Agent of or otherwise
supervise in any manner the actions of any Receiver. Upon a Grantor
receiving notice from the Collateral Agent of the taking of possession of
the Collateral or the appointment of a Receiver, all powers, functions,
rights and privileges of each of the directors and officers of such
Grantor with respect to the Collateral shall cease, unless specifically
continued by the written consent of the Collateral Agent.
21
Section 18. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct.
(b) Each Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the other Secured Parties hereunder or (iv) the failure by
such Grantor to perform or observe any of the provisions hereof.
Section 19. Amendments; Waivers; Additional Grantors; Etc. (a) No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Collateral Agent
or any other Secured Party to exercise, and no delay in exercising any right
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.
(b) Upon the execution and delivery, or authentication, by any
Person of a security agreement supplement in substantially the form of Exhibit A
hereto (each a "SECURITY AGREEMENT SUPPLEMENT"), (i) such Person shall be
referred to as an "ADDITIONAL GRANTOR" and shall be and become a Grantor
hereunder, and each reference in this Agreement and the other Note Documents to
"Grantor" shall also mean and be a reference to such Additional Grantor, and
each reference in this Agreement and the other Note Documents to "Collateral"
shall also mean and be a reference to the Collateral of such Additional Grantor,
and (ii) the supplemental Schedules I-IV attached to each Security Agreement
Supplement shall be incorporated into and become a part of and supplement
Schedules I-IV, respectively, hereto, and the Collateral Agent may attach such
supplemental schedules to such Schedules; and each reference to such Schedules
shall mean and be a reference to such Schedules as supplemented pursuant to each
Security Agreement Supplement.
22
Section 20. Notices, Etc. All notices and other communications
provided for hereunder shall be either (i) in writing (including telegraphic,
telecopier or telex communication) and mailed, telegraphed, telecopied, telexed
or otherwise delivered or (ii) by electronic mail (if electronic mail addresses
are designated as provided below) confirmed immediately in writing, in the case
of the Collateral Agent, addressed to it at its address specified in the
Indenture and, in the case of each Grantor, addressed to it at its address set
forth opposite such Grantor's name on the signature pages hereto or on the
signature page to the Security Agreement Supplement pursuant to which it became
a party hereto; or, as to any party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and other communications shall, when mailed, telegraphed, telecopied,
telexed, sent by electronic mail or otherwise, be effective when deposited in
the mails, delivered to the telegraph company, telecopied, confirmed by telex
answerback, sent by electronic mail and confirmed in writing, or otherwise
delivered (or confirmed by a signed receipt), respectively, addressed as
aforesaid; except that notices and other communications to the Collateral Agent
shall not be effective until received by the Collateral Agent. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or of any Security Agreement Supplement or Schedule
hereto shall be effective as delivery of an original executed counterpart
thereof.
Section 21. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until the payment in full in cash of the Secured
Obligations, (b) be binding upon each Grantor, its successors and assigns and
(c) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns.
Section 22. Release of Collateral; Termination. (a) So long as no
Default or Event of Default shall have occurred and be continuing, the
Collateral Agent will release to the Company or at its order (or, at the request
of the Company, to the Collateral Agent to be applied to the Secured Obligations
of the Company under the Note Documents), the Collateral to the extent permitted
to be released under the terms of the Note Documents and will, at such Grantor's
expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence the release of such item of Collateral from
the assignment and security interest granted hereby; provided, however, that (i)
at the time of such request and such release no Default shall have occurred and
be continuing, (ii) all conditions required to be satisfied under the Indenture
shall have been complied with, and (iii) the Grantor shall have delivered to the
Collateral Agent a form of release for execution by the Collateral Agent and a
certificate of such Grantor to the effect that the transaction is in compliance
with the Note Documents and as to such other matters as the Collateral Agent may
request.
(b) Upon the payment in full in cash of the Secured Obligations, the
pledge and security interest granted hereby shall terminate and all rights to
the Collateral shall revert to the applicable Grantor. Upon any such
termination, the Collateral Agent
23
will, at the applicable Grantor's expense, execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence such
termination.
Section 23. Security Interest Absolute. The obligations of each
Grantor under this Agreement are independent of the Secured Obligations or any
other obligations of any Grantor, or any Affiliate of any Grantor under or in
respect of the Note Documents, and a separate action or actions may be brought
and prosecuted against each Grantor to enforce this Agreement, irrespective of
whether any action is brought against such Grantor or any other Affiliate of any
Grantor or whether such Grantor or any other Affiliate of any Grantor is joined
in any such action or actions. All rights of the Collateral Agent and the other
Secured Parties and the pledge, assignment and security interest hereunder, and
all obligations of each Grantor hereunder, shall be irrevocable, absolute and
unconditional irrespective of, and each Grantor hereby irrevocably waives (to
the maximum extent permitted by applicable law) any defenses it may now have or
may hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Note Document or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
obligations of any other Affiliate of a Grantor under or in respect of the
Note Documents or any other amendment or waiver of or any consent to any
departure from any Note Document, including, without limitation, any
increase in the Secured Obligations to any Grantor or any of its
Affiliates or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Obligations;
(d) any manner of application of any 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 other Affiliate of any Grantor under or in respect of
the Note Documents or any other assets of any Affiliate of any Grantor;
(e) any change, restructuring or termination of the corporate
structure or existence of any Grantor, or any Affiliate of any Grantor;
(f) any failure of any Secured Party to disclose to any Grantor or
any Affiliate of any Grantor any information relating to the business,
condition (financial or otherwise), operations, performance, assets,
nature of assets, liabilities or prospects of any other Grantor or
Affiliate of any Grantor now or hereafter known to such Secured Party
(each Grantor waiving any duty on the part of the Secured Parties to
disclose such information);
24
(g) the failure of any other Person to execute this Agreement or any
other Note Document, guaranty or agreement or the release or reduction of
liability of any Grantor or other grantor or surety with respect to the
Secured Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a
defense available to, or a discharge of, such Grantor or any other Grantor
or a third party grantor of a security interest.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Grantor or any Affiliate of any
Grantor or otherwise, all as though such payment had not been made.
Section 24. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
Section 25. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
(b) Each Grantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any of the other Note Documents to which
it is or is to be a party, or for recognition or enforcement of any judgment,
and each Grantor hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the extent permitted by law, in such federal
court. Each Grantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Note Document shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Note Document in the courts of any jurisdiction.
(c) Each Grantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Note Documents
to which it is or is to be a party in
25
any New York State or federal court. Each Grantor hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.
(d) Each Grantor represents, warrants and agrees that, prior to the
Closing Date, it will have appointed CT Corporation System as its authorized
agent (the "AUTHORIZED AGENT", which term, as used herein, includes any
successor in such capacity) upon whom process may be served in any such action,
suit or proceeding arising out of, based on or relating to this Agreement or any
of the transactions contemplated hereby. Such appointment shall, to the fullest
extent it may effectively do so under applicable law, be irrevocable. Each
Grantor represents, warrants and agrees that, prior to the Closing Date, the
Authorized Agent will have agreed to act as such agent for service of process
and such Grantor agrees, to the fullest extent it may effectively do so under
applicable law, to take any and all action, including the filing of any and all
documents and instruments and the payment of all fees, that may be necessary to
effect and to continue such appointment in full force and effect as aforesaid
for so long as any of the Secured Obligations shall be outstanding and until the
principal of, premium, if any and interest on, and any and all other amounts
payable under or with respect to the Secured Obligations shall have been paid in
full. Each Grantor agrees, to the fullest extent it may effectively do so under
applicable law, that service of process upon the Authorized Agent and written
notice for such service to such Grantor (mailed or delivered to its Secretary at
the address shown next to its name on the signature page of this Agreement)
shall be deemed, in every respect, effective service of process upon such
Grantor in any such action, suit or proceeding.
(e) In respect of any judgment or order given or made against a
Grantor for any amount due hereunder that is expressed and paid in a currency
(the "JUDGMENT CURRENCY") other than United States dollars, such Grantor will
indemnify the Collateral Agent and each other Secured Party, from and against
any and all loss incurred by such Secured Party as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which such Secured Party is able to purchase
United States dollars with the amount of judgment currency actually received by
such Secured Party. Each Grantor agrees, to the fullest extent it may
effectively do so under applicable law, that the foregoing indemnity shall
constitute a separate and independent obligation of such Grantor and shall
continue in full force and effect notwithstanding any such judgment or order as
aforesaid. The term "rate of exchange" shall include any premiums and costs of
exchange payable in connection with the purchase of or conversion into United
States dollars.
(f) To the extent that a Grantor or any of its properties, assets or
revenues may have or may hereafter become entitled to, or have attributed to it,
any right of immunity, on the grounds of sovereignty or otherwise, from (i) any
legal action, suit or proceeding, (ii) setoff or counterclaim, (iii) the
jurisdiction of any court, (iv) service process, (v) attachment upon or prior to
judgment, (vi) attachment in aid of execution of
26
judgment, (vii) execution of judgment, or (viii) other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment,
in any jurisdiction in which any action, suit or proceeding may at any time be
commenced with respect to its obligations, liabilities or any other matter under
or arising out of or in connection with this Agreement, such Grantor, to the
fullest extent it may effectively do so under applicable law, hereby irrevocably
and unconditionally waives, and agrees not to plead or claim, any such immunity
and consents to such relief and enforcement.
(g) EACH GRANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE NOTE DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
27
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
Address for Notices: XXXXXXXXX INC.
00 Xxxxxxx Xxxxxx Xx ______________________________
Xxxxxxx, Xxxxxx X0X 0X0 Title:
Attention: Chief Financial Officer
Address for Notices: RAVELSTON MANAGEMENT INC.
00 Xxxxxxx Xxxxxx Xx ______________________________
Xxxxxxx, Xxxxxx X0X 0X0 Title:
Attention: Chief Financial Officer
Address for Notices: 504468 N.B. INC.
00 Xxxxxxx Xxxxxx Xx ______________________________
Xxxxxxx, Xxxxxx X0X 0X0 Title:
Attention: Chief Financial Officer
Address for Notices: THE RAVELSTON CORPORATION LIMITED
(solely with respect to the
representation in Section 8(i))
00 Xxxxxxx Xxxxxx Xx ______________________________
Xxxxxxx, Xxxxxx X0X 0X0 Title:
Attention: Chief Financial Officer
28
SCHEDULE I TO THE
SECURITY AGREEMENT
LOCATION, CHIEF EXECUTIVE OFFICE, PLACE WHERE AGREEMENTS
ARE MAINTAINED, TYPE OF ORGANIZATION, JURISDICTION OF ORGANIZATION
AND ORGANIZATIONAL IDENTIFICATION NUMBER
LOCATION, CHIEF
EXECUTIVE OFFICE,
AND
PLACE WHERE JURISDICTION
AGREEMENTS ARE TYPE OF OF ORGANIZATIONAL
GRANTOR MAINTAINED ORGANIZATION ORGANIZATION I.D. NO.
------- ---------- ------------ ------------ --------
Xxxxxxxxx Inc. 00 Xxxxxxx Xxxxxx, Xxxxxxxx Xxxxxx 197578-1
Toronto, Canada Corporation
M5C 2B7
Ravelston 00 Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxx, 1517107
Management Inc. Toronto, Xxxxxx Xxxxxxxxxxx Xxxxxx
X0X 0X0
504468 N.B. 00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx New 504468
Inc. Toronto, Canada Corporation Brunswick,
M5C 2B7 Canada
(Registered office
and agent at the
following address:
Xxxxxxx XxXxxxxx
Stirling Scales
10th Floor,
Brunswick House
00 Xxxxxxx Xxxx
Xxxxx Xxxx,
Xxx Xxxxxxxxx
Xxxxxx, X0X 0X0
Correspondence:
X.X. Xxx 0000
Xxxxxx Xxxxxxx A
Saint Xxxx,
New Brunswick
Canada, E2L 4S6)
SCHEDULE II TO THE
SECURITY AGREEMENT
PLEDGED EQUITY
PERCENTAGE
OF CLASS
CLASS OF OF
EQUITY PAR CERTIFICATE NUMBER OUTSTANDING
ISSUER INTEREST VALUE NO(S) OF SHARES SHARES
------ -------- ----- ----- --------- ------
Xxxxxxxxx Class A $0.01 A5124 2,000,000 14.82%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0154 1,766,013 13.09%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0161 1,403,177 10.40%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0483 809,028 6.00%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0369 5,406 0.04%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 A5413 1,460,407 10.83%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0478 1,661,787 12.32%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0479 655,000 4.86%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0511 29,000 0.21%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0515 304,287 2.26%
International Inc. Common Stock
Xxxxxxxxx Class A $0.01 M0518 14,197 0.11%
International Inc. Common Stock
Xxxxxxxxx Class B $0.01 B0005 12,990,000 86.66%
International Inc. Common Stock
Xxxxxxxxx Class B $0.01 B0006 2,000,000 13.34%
International Inc. Common Stock
SCHEDULE III TO THE
SECURITY AGREEMENT
ASSIGNED AGREEMENTS
GRANTOR ASSIGNED AGREEMENT
Services Agreement between Xxxxxxxxx International Inc.
and The Ravelston Corporation Limited, dated as of
January 1, 1998 as assigned by The Ravelston Corporation
RMI Limited to Ravelston Management Inc. pursuant to a
Transfer and Consent Agreement dated July 5, 2002 (as
amended, amended and restated, or otherwise modified or
supplemented from time to time).
Amended and Restated Services Agreement between
Xxxxxxxxx Canadian Publishing Holdings Co. and The
Ravelston Corporation Limited, dated as of December 1,
1999 as assigned by The Ravelston Corporation Limited to
RMI Ravelston Management Inc. pursuant to a Transfer and
Consent Agreement dated July 5, 2002 (as amended,
amended and restated, or otherwise modified or
supplemented from time to time).
Support Agreement between Xxxxxxxxx Inc. and Ravelston
Management Inc. dated as of March 10, 2003 (as amended,
HI amended and restated, or otherwise modified or supplemented
from time to time).
SCHEDULE IV TO THE
SECURITY AGREEMENT
CHANGES IN NAME, LOCATION, ETC.
None.
EXHIBIT A TO THE
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
[Date of Security Agreement Supplement]
WACHOVIA TRUST COMPANY,
NATIONAL ASSOCIATION
as Trustee and Collateral Agent
under the Indenture referred to below
Attn:____________
Xxxxxxxxx Inc.
Ladies and Gentlemen:
Reference is made to (i) the Indenture dated as of March 10, 2003
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "INDENTURE"), among Xxxxxxxxx Inc., (the "COMPANY"), as the issuer
of Notes thereunder, Ravelston Management Inc., ("RMI"), 504468 N.B. Inc.,
("NB1"), The Ravelston Corporation Limited, Sugra Limited, and Wachovia Trust
Company, National Association, as trustee and collateral agent (together with
any successor appointed pursuant to the Indenture, the "COLLATERAL AGENT"), and
(ii) the Security Agreement dated March 10, 2003 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "SECURITY
AGREEMENT") made by the Grantors from time to time party thereto in favor of the
Collateral Agent for the Secured Parties (as defined therein). Terms defined in
the Indenture or the Security Agreement and not otherwise defined herein are
used herein as defined in the Indenture or the Security Agreement.
SECTION 1. Grant of Security. The undersigned hereby grants, assigns
and transfers to the Collateral Agent, for the ratable benefit of the Secured
Parties, a security interest in, all of its right, title and interest in and to
all of the Collateral of the undersigned, whether now owned or hereafter
acquired by the undersigned, wherever located and whether now or hereafter
existing or arising, including, without limitation, the property and assets of
the undersigned set forth on the attached supplemental schedules to the
Schedules to the Security Agreement.
SECTION 2. Security for Obligations. The grant of a security
interest in, the Collateral by the undersigned under this Security Agreement
Supplement and the Security Agreement secures the payment of all obligations of
the undersigned now or hereafter existing under or in respect of the Note
Documents, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or
otherwise. Without limiting the generality of the foregoing, this Security
Agreement Supplement and the Security Agreement secures the payment of all
amounts that constitute part of the Secured Obligations and that would be owed
by the undersigned, whether incurred alone or with another or others and whether
as principal, guarantor or surety, to any Secured Party under the Note Documents
but for the fact that such Secured Obligations are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving a Grantor or any Affiliate of a Grantor.
SECTION 3. Supplements to Security Agreement Schedules. The
undersigned has attached hereto supplemental Schedules I through IV to Schedules
I through IV, respectively, to the Security Agreement, and the undersigned
hereby certifies, as of the date first above written, that such supplemental
schedules have been prepared by the undersigned in substantially the form of the
equivalent Schedules to the Security Agreement and are complete and correct.
SECTION 4. Representations and Warranties. The undersigned hereby
makes each representation and warranty set forth in Section 8 of the Security
Agreement (as supplemented by the attached supplemental schedules) to the same
extent as each other Grantor.
SECTION 5. Obligations Under the Security Agreement. The undersigned
hereby agrees, as of the date first above written, to be bound as a Grantor by
all of the terms and provisions of the Security Agreement to the same extent as
each of the other Grantors. The undersigned further agrees, as of the date first
above written, that each reference in the Security Agreement to an "Additional
Grantor" or a "Grantor" shall also mean and be a reference to the undersigned.
SECTION 6. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York.
(a) The undersigned hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New York
City, and any appellate court from any thereof; in any action or proceeding
arising out of or relating to this Agreement or any of the other Note Documents
to which it is or is to be a party, or for recognition or enforcement of any
judgment, and the undersigned hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. The undersigned agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Note Document shall affect any right that
any party may otherwise have to bring any action or proceeding relating to this
Agreement or any other Note Document in the courts of any jurisdiction.
2
(b) The undersigned irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Note Documents
to which it is or is to be a party in any New York State or federal court. The
undersigned hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court.
(c) The undersigned represents, warrants and agrees that, prior to
the Closing Date, it will have appointed CT Corporation System as its authorized
agent (the "AUTHORIZED AGENT", which term, as used herein, includes any
successor in such capacity) upon whom process may be served in any such action,
suit or proceeding arising out of, based on or relating to this Agreement or any
of the transactions contemplated hereby. Such appointment shall, to the fullest
extent it may effectively do so under applicable law, be irrevocable. The
undersigned represents, warrants and agrees that, prior to the Closing Date, the
Authorized Agent will have agreed to act as such agent for service of process
and the undersigned agrees, to the fullest extent it may effectively do so under
applicable law, to take any and all action, including the filing of any and all
documents and instruments and the payment of all fees, that may be necessary to
effect and to continue such appointment in full force and effect as aforesaid
for so long as any of the Secured Obligations shall be outstanding and until the
principal of, premium, if any and interest on, and any and all other amounts
payable under or with respect to the Secured Obligations shall have been paid in
full. The undersigned agrees, to the fullest extent it may effectively do so
under applicable law, that service of process upon the Authorized Agent and
written notice for such service to the undersigned (mailed or delivered to its
Secretary at the address shown next to its name on the signature page of this
Agreement) shall be deemed, in every respect, effective service of process upon
the undersigned in any such action, suit or proceeding.
(d) In respect of any judgment or order given or made against the
undersigned for any amount due hereunder that is expressed and paid in a
currency (the "JUDGMENT CURRENCY") other than United States dollars, the
undersigned will indemnify the Collateral Agent and each other Secured Party,
from and against any and all loss incurred by such Secured Party as a result of
any variation as between (i) the rate of exchange at which the United States
dollar amount is converted into the judgment currency for the purpose of such
judgment or order and (ii) the rate of exchange at which such Secured Party is
able to purchase United States dollars with the amount of judgment currency
actually received by such Secured Party. The undersigned agrees, to the fullest
extent it may effectively do so under applicable law, that the foregoing
indemnity shall constitute a separate and independent obligation of the
undersigned and shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid. The term "rate of exchange" shall include any
premiums and costs of exchange payable in connection with the purchase of or
conversion into United States dollars.
3
(e) To the extent that the undersigned or any of its properties,
assets or revenues may have or may hereafter become entitled to, or have
attributed to it, any right of immunity, on the grounds of sovereignty or
otherwise, from (i) any legal action, suit or proceeding, (ii) setoff or
counterclaim, (iii) the jurisdiction of any court, (iv) service process, (v)
attachment upon or prior to judgment, (vi) attachment in aid of execution of
judgment, (vii) execution of judgment, or (viii) other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment,
in any jurisdiction in which any action, suit or proceeding may at any time be
commenced with respect to its obligations, liabilities or any other matter under
or arising out of or in connection with this Agreement, the undersigned , to the
fullest extent it may effectively do so under applicable law, hereby irrevocably
and unconditionally waives, and agrees not to plead or claim, any such immunity
and consents to such relief and enforcement.
(f) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE NOTE DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL GRANTOR]
By
-------------------------------------
Title:
Address for notices:
----------------------------------
----------------------------------
----------------------------------
4
EXHIBIT B TO THE
SECURITY AGREEMENT
FORM OF ACCOUNT CONTROL AGREEMENT
(DEPOSIT ACCOUNT/SECURITIES ACCOUNT)
ACCOUNT CONTROL AGREEMENT (this "AGREEMENT") dated as of ________
____ among_________, a___________ (the "GRANTOR"), WACHOVIA TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee and Collateral Agent (the "SECURED PARTY"), and
__________, a __________ ("______________ as securities intermediary and
depository bank (the "ACCOUNT HOLDER").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security interest
(the "SECURITY INTEREST") in the following accounts maintained by the Account
Holder for the Grantor (each, an "ACCOUNT" and collectively, the "ACCOUNTS"):
[Insert account numbers and other identifying information.]
(2) Terms defined in Article 8 or 9 of the Uniform Commercial Code
in effect in the State of New York ("N.Y. UNIFORM COMMERCIAL CODE") are used in
this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. The Accounts. The Grantor and Account Holder represent
and warrant to, and agrees with, the Secured Party that:
(a) The Account Holder maintains each Account for the Grantor, and
all property (including, without limitation, all funds and financial assets)
held by the Account Holder for the account of the Grantor are, and will continue
to be, credited to an Account in accordance with instructions given by the
Grantor (unless otherwise provided herein).
(b) To the extent that funds are credited to any Account, such
Account is a deposit account; and to the extent that financial assets are
credited to any Account, such Account is a securities account. The Account
Holder is (i) the bank with which each Account that is a deposit account is
maintained and (ii) the securities intermediary with respect to financial assets
held in any Account that is a securities account. The Grantor is (x) the Account
Holder's customer with respect to the Accounts and (y) the entitlement holder
with respect to financial assets credited from time to time to any Account.
5
(c) Notwithstanding any other agreement to the contrary, the Account
Holder's jurisdiction with respect to each Account for purposes of the N.Y.
Uniform Commercial Code is, and will continue to be for so long as the Security
Interest shall be in effect, the State of New York.
(d) Attached as Exhibit A hereto are statements of the respective
Accounts as of the date hereof showing the property credited to each Account.
(e) The Grantor and Account Holder do not know of any claim to or
interest in any Account or any property (including, without limitation, funds
and financial assets) credited to any Account, except for claims and interests
of the parties referred to in this Agreement.
SECTION 2. Confirmation of Grant of Security Interest. The Grantor
hereby confirms that it has granted to the Secured Party a security interest in
the Accounts, all property credited thereto and all proceeds thereof, pursuant
to the Security Agreement (the "SECURITY AGREEMENT") dated March 10, 2003 among
the Grantor, the Secured Party, and certain other parties thereto. To the extent
(and only to the extent) that such grant is for any reason found to be invalid,
the Grantor hereby grants to the Secured Party a security interest in the
Accounts, all property credited thereto from time to time, all proceeds thereof,
and all other property related thereto as more fully described in the Security
Agreement, as security for the Secured Obligations (as defined in the Security
Agreement).
SECTION 3. Control by Secured Party. The Account Holder will comply
with (i) all instructions directing disposition of the funds in any and all of
the Accounts, (ii) all notifications and entitlement orders that the Account
Holder receives directing it to transfer or redeem any financial asset in any
and all of the Accounts, and (iii) all other directions concerning any and all
of the Accounts, including, without limitation, directions to distribute to the
Secured Party proceeds of any such transfer or redemption or interest or
dividends on property in any and all of the Accounts (any such instruction,
notification or direction referred to in clause (i), (ii) or (iii) above being
an "ACCOUNT DIRECTION"), in each case of clauses (i), (ii) and (iii) above
originated by the Secured Party without further consent by the Grantor or any
other person or entity.
SECTION 4. Grantor's Rights in Accounts.
(a) The Account Holder will comply with Account Directions and other
directions concerning each Account originated by, and only by, the Secured
Party.
(b) Until the Account Holder receives a notice from the Secured
Party that the Secured Party will exercise exclusive control over any Account (a
"NOTICE OF EXCLUSIVE CONTROL" with respect to such Account), the Account Holder
may distribute to the Grantor all interest and regular cash dividends on
property (including, without limitation, funds and financial assets) in such
Account.
2
(c) If the Account Holder receives from the Secured Party a Notice
of Exclusive Control with respect to any Account, the Account Holder will cease
distributing to the Grantor all interest and dividends on property (including,
without limitation, funds and financial assets) in such Account.
SECTION 5. Priority of Secured Party's Security Interest. (a) The
Account Holder (i) subordinates to the Security Interest and in favor of the
Secured Party any security interest, lien, or right of recoupment or setoff that
the Account Holder may have, now or in the future, against any Account or
property (including, without limitation, any funds and financial assets)
credited to any Account, and (ii) agrees that it will not exercise any right in
respect of any such security interest or lien or any such right of recoupment or
setoff until the Security Interest is terminated, except that the Account Holder
(A) will retain its prior security interest and lien on property credited to any
Account, (B) may exercise any right in respect of such security interest or
lien, and (C) may exercise any right of recoupment or setoff against any
Account, in the case of clauses (A), (B) and (C) above, to secure or to satisfy,
and only to secure or to satisfy, payment (x) for such property, (y) for its
customary fees and expenses for the routine maintenance and operation of such
Account, and (z) if such Account is a deposit account, for the face amount of
any items that have been credited to such Account but are subsequently returned
unpaid because of uncollected or insufficient funds.
(b) The Account Holder will not enter into any other agreement with
any person or entity relating to Account Directions or other directions with
respect to any Account.
SECTION 6. Statements, Confirmations, and Notices of Adverse Claims.
(a) The Account Holder will send copies of all statements and confirmations for
each Account simultaneously to the Secured Party and the Grantor.
(b) When the Account Holder knows of any claim or interest in any
Account or any property (including, without limitation, funds and financial
assets) credited to any Account other than the claims and interests of the
parties referred to in this Agreement, the Account Holder will promptly notify
the Secured Party and the Grantor of such claim or interest.
SECTION 7. The Account Holder's Responsibility. (a) Except for
permitting a withdrawal, delivery, or payment in violation of Section 4, the
Account Holder will not be liable to the Secured Party for complying with
Account Directions or other directions concerning any Account from the Grantor
that are received by the Account Holder before the Account Holder receives and
has a reasonable opportunity to act on a Notice of Exclusive Control.
(b) The Account Holder will not be liable to the Grantor or the
Secured Party for complying with a Notice of Exclusive Control or with an
Account Direction or other direction concerning any Account originated by the
Secured Party, even if the Grantor notifies the Account Holder that the Secured
Party is not legally
3
entitled to issue the Notice of Exclusive Control or Account Direction or such
other direction unless the Account Holder takes the action after it is served
with an injunction, restraining order, or other legal process enjoining it from
doing so, issued by a court of competent jurisdiction, and had a reasonable
opportunity to act on the injunction, restraining order or other legal process.
(c) This Agreement does not create any obligation of the Account
Holder except for those expressly set forth in this Agreement and, in the case
of any Account that is a securities account, in Part 5 of Article 8 of the N.Y.
Uniform Commercial Code and, in the case of any Account that is a
deposit-account, in Article 4 of the N.Y. Uniform Commercial Code. In
particular, the Account Holder need not investigate whether the Secured Party is
entitled under the Secured Party's agreements with the Grantor to give an
Account Direction or other direction concerning any Account or a Notice of
Exclusive Control. The Account Holder may rely on notices and communications it
believes given by the appropriate party.
SECTION 8. Indemnity. The Grantor will indemnify the Account Holder,
its officers, directors, employees and agents against claims, liabilities and
expenses arising out of this Agreement (including, without limitation,
reasonable attorney's fees and disbursements), except to the extent the claims,
liabilities or expenses are caused by the Account Holder's gross negligence or
willful misconduct as found by a court of competent jurisdiction in a final,
non-appealable judgment.
SECTION 9. Termination; Survival. (a) The Secured Party may
terminate this Agreement by notice to the Account Holder and the Grantor. If the
Secured Party notifies the Account Holder that the Security Interest has
terminated, this Agreement will immediately terminate.
(b) The Account Holder may terminate this Agreement on 60 days'
prior notice to the Secured Party and the Grantor, provided that before such
termination the Account Holder and the Grantor shall make arrangements to
transfer the property (including, without limitation, all funds and financial
assets) credited to each Account to another Account Holder that shall have
executed, together with the Grantor, a control agreement in favor of the Secured
Party in respect of such property in substantially the form of this Agreement or
otherwise in form and substance satisfactory to the Secured Party.
(c) Sections 7 and 8 will survive termination of this Agreement.
SECTION 10. Governing Law. This Agreement and each Account will be
governed by the law of the State of New York. The Account Holder and the Grantor
may not change the law governing any Account without the Secured Party's express
prior written agreement.
4
SECTION 11. Entire Agreement. This Agreement is the entire
agreement, and supersedes any prior agreements, and contemporaneous oral
agreements, of the parties concerning its subject matter.
SECTION 12. Amendments. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by the party
to be charged.
SECTION 13. Financial Assets. The Account Holder agrees with the
Secured Party and the Grantor that, to the fullest extent permitted by
applicable law, all property (other than funds) credited from time to time to
any Account will be treated as financial assets under Article 8 of the N.Y.
Uniform Commercial Code.
SECTION 14. Notices. A notice or other communication to a party
under this Agreement will be in writing (except that Account Directions may be
given orally), will be sent to the party's address set forth under its name
below or to such other address as the party may notify the other parties and
will be effective on receipt.
SECTION 15. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Grantor, the Secured Party and the
Account Holder, and thereafter shall be binding upon and inure to the benefit of
the Grantor, the Secured Party and the Account Holder and their respective
successors and assigns.
SECTION 16. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
[NAME OF GRANTOR]
By:
------------------------------------
Name:
Title:
Address:
----------------------------------------
----------------------------------------
5
WACHOVIA TRUST COMPANY,
NATIONAL ASSOCIATION, as
Trustee and Collateral Agent
By:
------------------------------------
Name:
Title:
Address:
----------------------------------------
----------------------------------------
[NAME OF ACCOUNT HOLDER]
By:
------------------------------------
Name:
Title:
Address:
----------------------------------------
----------------------------------------
6
EXHIBIT A
[Statements of the various Accounts showing the property credited to each
Account]
EXHIBIT C-1 TO THE
SECURITY AGREEMENT
CONSENT AND AGREEMENT OF
XXXXXXXXX INTERNATIONAL INC.
The undersigned hereby (a) acknowledges notice of, and consents to
the terms and provisions of, the Security Agreement dated March 10, 2003 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT", the terms defined therein being used herein as
therein defined) among Xxxxxxxxx Inc. and certain other grantors from time to
time party thereto and Wachovia Trust Company, National Association, as Trustee
and Collateral Agent (the "COLLATERAL AGENT") for the Secured Parties referred
to therein, (b) consents in all respects to the pledge and assignment to the
Collateral Agent of all of the Grantor's (as defined below) right, title and
interest in, to and under the Assigned Agreements (as defined below) pursuant to
the Security Agreement, (c) acknowledges that the Grantor has provided it with
notice of the right of the Collateral Agent in the exercise of its rights and
remedies under the Security Agreement to make all demands, give all notices,
take all actions and exercise all rights of the Grantor under the Assigned
Agreements, and (d) agrees with the Collateral Agent that:
(10) A true copy each of (i) the Services Agreement between the
undersigned and The Ravelston Corporation Limited ("RCL"), dated as of
January 1, 1998 (the "HII SERVICES AGREEMENT") and (ii) the Transfer and
Consent Agreement between RCL and Ravelston Management Inc. (the
"GRANTOR"), dated July 5, 2002 (together with the HIT Services Agreement,
are collectively referred to as the "ASSIGNED AGREEMENTS"), in each case,
including, without limitation, all amendments, modifications, restatements
and supplements, are attached hereto as Schedule 1. The Assigned
Agreements are in full force and effect and enforceable against the
undersigned, and the undersigned is not aware of any default under the
Assigned Agreements or any event that would give any party the right to
terminate or rescind the Assigned Agreements. No prepayments have been
made of any amounts to become due under the Assigned Agreements.
(11) The undersigned will make all payments to be made by it under
or in connection with the Assigned Agreements provided that in the event
that an Event of Default has occurred and is continuing, the undersigned
will make payment of amounts payable thereunder (up to 70% of the amounts
due thereunder) directly to the Collateral Agent.
(12) All payments referred to in paragraph 2 above shall be made by
the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and the
undersigned will not seek to recover from any Secured Party for any reason
any such payment once made.
(13) After the occurrence of an Event of Default which is
continuing, the Collateral Agent or its designee shall be entitled to
exercise any and all rights and remedies of the Grantor under the Assigned
Agreements in accordance with the terms of the Security Agreement, and the
undersigned shall comply in all respects with such exercise.
(14) In the event of a default by the Grantor in the performance of
any of its obligations under the Assigned Agreements, or upon the
occurrence or non-occurrence of any event or condition under the Assigned
Agreements which would immediately or with the passage of any applicable
grace period or the giving of notice, or both, enable the undersigned to
terminate or suspend its obligations under the Assigned Agreements, the
undersigned shall not terminate the Assigned Agreements until it first
gives the Collateral Agent written notice of the default and permits the
Collateral Agent to cure the default within a period of 30 days after the
later of (i) notice of default having been given to the Collateral Agent
by the undersigned and (ii) the expiration of the applicable cure period
provided in the Assigned Agreements for the Grantor to cure the default.
(15) The undersigned shall deliver to the Collateral Agent,
concurrently with the delivery thereof to the Grantor, a copy of each
notice, request or demand given by the undersigned pursuant to the
Assigned Agreements.
(16) Except as specifically provided in this Consent and Agreement,
neither the Collateral Agent nor any other Secured Party shall have any
liability or obligation under the Assigned Agreements as a result of this
Consent and Agreement, the Security Agreement or otherwise.
(17) Upon the enforcement of the Security Agreement by the
Collateral Agent and the transfer of the Assigned Agreements to a
transferee, the undersigned will recognize the transferee as the
counterparty to the Assigned Agreements in the place and stead of the
Grantor.
This Consent and Agreement shall be binding upon the undersigned and
its successors and assigns, and shall inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Secured
Parties and their successors, transferees and assigns. This Consent and
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
2
IN WITNESS WHEREOF, the undersigned has duly executed this Consent
and Agreement as of the date set opposite its name below.
Dated: March 10, 2003 HOLLIINGER INTERNATIONAL INC.
By:
------------------------------------
Name:
Title:
3
SCHEDULE 1
EXHIBIT C-2 TO THE
SECURITY AGREEMENT
CONSENT AND AGREEMENT OF
XXXXXXXXX CANADIAN PUBLISHING CO.
The undersigned hereby (a) acknowledges notice of, and consents to
the terms and provisions of, the Security Agreement dated March 10, 2003 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT", the terms defined therein being used herein as
therein defined) among Xxxxxxxxx Inc. and certain other grantors from time to
time party thereto and Wachovia Trust Company, National Association, as Trustee
and Collateral Agent (the "COLLATERAL AGENT") for the Secured Parties referred
to therein, (b) consents in all respects to the pledge and assignment to the
Collateral Agent of all of the Grantor's (as defined below) right, title and
interest in, to and under the Assigned Agreements (as defined below) pursuant to
the Security Agreement, (c) acknowledges that the Grantor has provided it with
notice of the right of the Collateral Agent in the exercise of its rights and
remedies under the Security Agreement to make all demands, give all notices,
take all actions and exercise all rights of the Grantor under the Assigned
Agreements, and (d) agrees with the Collateral Agent that:
(18) A true copy each of(i) the Services Agreement between the
undersigned and The Ravelston Corporation Limited ("RCL"), dated as of
January 1, 1998 (the "HII SERVICES AGREEMENT") and (ii) the Transfer and
Consent Agreement between RCL and Ravelston Management Inc. (the
"GRANTOR"), dated July 5, 2002 (together with the HII Services Agreement,
are collectively referred to as the "ASSIGNED AGREEMENTS"), in each case,
including, without limitation, all amendments, modifications, restatements
and supplements, are attached hereto as Schedule 1. The Assigned
Agreements are in full force and effect and enforceable against the
undersigned, and the undersigned is not aware of any default under the
Assigned Agreements or any event that would give any party the right to
terminate or rescind the Assigned Agreements. No prepayments have been
made of any amounts to become due under the Assigned Agreements.
(19) The undersigned will make all payments to be made by it under
or in connection with the Assigned Agreements provided that in the event
that an Event of Default has occurred and is continuing, the undersigned
will make payment of amounts payable thereunder (up to 70% of the amounts
due thereunder) directly to the Collateral Agent.
(20) All payments referred to in paragraph 2 above shall be made by
the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and the
undersigned will not seek to recover from any Secured Party for any reason
any such payment once made.
(21) After the occurrence of an Event of Default which is
continuing, the Collateral Agent or its designee shall be entitled to
exercise any and all rights and remedies of the Grantor-under the Assigned
Agreements in accordance with the terms of the Security Agreement, and the
undersigned shall comply in all respects with such exercise.
(22) In the event of a default by the Grantor in the performance of
any of its obligations under the Assigned Agreements, or upon the
occurrence or non-occurrence of any event or condition under the Assigned
Agreements which would immediately or with the passage of any applicable
grace period or the giving of notice, or both, enable the undersigned to
terminate or suspend its obligations under the Assigned Agreements, the
undersigned shall not terminate the Assigned Agreements until it first
gives the Collateral Agent written notice of the default and permits the
Collateral Agent to cure the default within a period of 30 days after the
later of (i) notice of default having been given to the Collateral Agent
by the undersigned and (ii) the expiration of the applicable cure period
provided in the Assigned Agreements for the Grantor to cure the default.
(23) The undersigned shall deliver to the Collateral Agent,
concurrently with the delivery thereof to the Grantor, a copy of each
notice, request or demand given by the undersigned pursuant to the
Assigned Agreements.
(24) Except as specifically provided in this Consent and Agreement,
neither the Collateral Agent nor any other Secured Party shall have any
liability or obligation under the Assigned Agreements as a result of this
Consent and Agreement, the Security Agreement or otherwise.
(25) Upon the enforcement of the Security Agreement by the
Collateral Agent and the transfer of the Assigned Agreements to a
transferee, the undersigned will recognize the transferee as the
counterparty to the Assigned Agreements in the place and stead of the
Grantor.
This Consent and Agreement shall be binding upon the undersigned and
its successors and assigns, and shall inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Secured
Parties and their successors, transferees and assigns. This Consent and
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
2
IN WITNESS WHEREOF, the undersigned has duly executed this Consent
and Agreement as of the date set opposite its name below.
Dated: March 10, 2003 HOLLIINGER CANADIAN PUBLISHING CO.
By:
------------------------------------
Name:
Title:
3
SCHEDULE 1
EXHIBIT C-3 TO THE
SECURITY AGREEMENT
CONSENT AND AGREEMENT OF
RAVELSTON MANAGEMENT INC.
The undersigned hereby (a) acknowledges notice of, and consents to
the terms and provision of, the Security Agreement dated March 10, 2003 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT", the terms defined therein being used herein as
therein defined) among Xxxxxxxxx Inc. and certain other grantors from time to
time party thereto and Wachovia Trust Company, National Association, as Trustee
and Collateral Agent (the "COLLATERAL AGENT") for the Secured Parties referred
to therein, (b) consents in all respects to the pledge and assignment to the
Collateral Agent of all of the Grantor's (as defined below) right, title and
interest in, to and under the Assigned Agreement (as defined below) pursuant to
the Security Agreement, (c) acknowledges that the Grantor has provided it with
notice of the right of the Collateral Agent in the exercise of its rights and
remedies under the Security Agreement to make all demands, give all notices,
take all actions and exercise all rights of the Grantor under the Assigned
Agreement, and (d) agrees with the Collateral Agent that:
(1) A true copy of the Support Agreement between the undersigned and
Xxxxxxxxx Inc. (the "GRANTOR") dated as of March 10, 2003 (the "ASSIGNED
AGREEMENT"), including, without limitation, all amendments, modifications,
restatements and supplements is attached hereto as Schedule 1. The
Assigned Agreement is in full force and effect and enforceable against the
undersigned, and the undersigned is not aware of any default under the
Assigned Agreement or any event that would give any party the right to
terminate or rescind the Assigned Agreement. No prepayments have been made
of any amounts to become due under the Assigned Agreement.
(2) The undersigned will make all payments to be made by it under or
in connection with the Assigned Agreement provided that in the event that
an Event of Default has occurred and is continuing, the undersigned will
make payment of 100% of all amounts payable thereunder directly to the
Collateral Agent.
(3) All payments referred to in paragraph 2 above shall be made by
the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and the
undersigned will not seek to recover from any Secured Party for any reason
any such payment once made.
(4) After the occurrence of an Event of Default which is continuing,
the Collateral Agent or its designee shall be entitled to exercise any and
all rights and remedies of the Grantor under the Assigned Agreement in
accordance with
the terms of the Security Agreement, and the undersigned shall comply in
all respects with such exercise.
(5) The undersigned will not, without the prior written consent of
the Collateral Agent, (i) cancel or terminate the Assigned Agreement or
consent to or accept any cancellation or termination thereof, or (ii)
amend, amend and restate, supplement or otherwise modify the Assigned
Agreement, except, in each case, to the extent otherwise permitted under
the Note Documents referred to in the Security Agreement.
(6) In the event of a default by the Grantor in the performance of
any of its obligations under the Assigned Agreement, or upon the
occurrence or non-occurrence of any event or condition under the Assigned
Agreement which would immediately or with the passage of any applicable
grace period or the giving of notice, or both, enable the undersigned to
terminate or suspend its obligations under the Assigned Agreement, the
undersigned shall not terminate the Assigned Agreement until it first
gives the Collateral Agent written notice of the default and permits the
Collateral Agent to cure the default within a period of 30 days after the
later of (i) notice of default having been given to the Collateral Agent
by the undersigned and (ii) the expiration of the applicable cure period
provided in the Assigned Agreement for the Grantor to cure the default.
(7) The undersigned shall deliver to the Collateral Agent,
concurrently with the delivery thereof to the Grantor, a copy of each
notice, request or demand given by the undersigned pursuant to the
Assigned Agreement.
(8) Except as specifically provided in this Consent and Agreement,
neither the Collateral Agent nor any other Secured Party shall have any
liability or obligation under the Assigned Agreement as a result of this
Consent and Agreement, the Security Agreement or otherwise.
(9) Upon the enforcement of the Security Agreement by the Collateral
Agent and the transfer of the Assigned Agreement to a transferee, the
undersigned will recognize the transferee as the counterparty to the
Assigned Agreement in the place and stead of the Grantor,
This Consent and Agreement shall be binding upon the undersigned and
its successors and assigns, and shall inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Secured
Parties and their successors, transferees and assigns. This Consent and
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
2
IN WITNESS WHEREOF, the undersigned has duly executed this Consent
and Agreement as of the date set opposite its name below.
Dated: March 10, 2003 RAVELSTON MANAGEMENT INC.
By:
------------------------------------
Name:
Title:
3
SCHEDULE 1
-4-
INTENTIONALLY OMITTED.
