PLEDGE AND SECURITY AGREEMENT
DATED AS OF MAY 13, 2002
BETWEEN
EACH OF
MARINER HEALTH CARE, INC.
AND THE OTHER GRANTORS PARTY HERETO
AND
RESIDENTIAL FUNDING CORPORATION
DBA GMAC-RFC HEALTH CAPITAL
AS THE JOINT COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS; GRANT OF SECURITY.............................................................. 2
1.1 GENERAL DEFINITIONS......................................................................... 2
1.2 DEFINITIONS; INTERPRETATION................................................................. 10
SECTION 2. GRANT OF SECURITY........................................................................... 10
2.1 GRANT OF SECURITY........................................................................... 10
2.2 CERTAIN LIMITED EXCLUSIONS.................................................................. 11
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE............................................ 12
3.1 SECURITY FOR OBLIGATIONS.................................................................... 12
3.2 CONTINUING LIABILITY UNDER COLLATERAL....................................................... 12
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS................................................ 12
4.1 GENERALLY................................................................................... 12
4.2 EQUIPMENT AND INVENTORY..................................................................... 15
4.3 RECEIVABLES................................................................................. 16
4.4 INVESTMENT RELATED PROPERTY................................................................. 18
4.5 MATERIAL CONTRACTS.......................................................................... 24
4.6 LETTER OF CREDIT RIGHTS..................................................................... 25
4.7 INTELLECTUAL PROPERTY....................................................................... 26
4.8 COMMERCIAL TORT CLAIMS...................................................................... 29
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS..................... 30
5.1 ACCESS; RIGHT OF INSPECTION................................................................. 30
5.2 FURTHER ASSURANCES.......................................................................... 30
5.3 ADDITIONAL GRANTORS......................................................................... 31
SECTION 6. JOINT COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT........................................... 31
6.1 POWER OF ATTORNEY........................................................................... 31
6.2 NO DUTY ON THE PART OF JOINT COLLATERAL AGENT OR SECURED PARTIES............................ 32
6.3 RATIFICATION................................................................................ 32
SECTION 7. REMEDIES.................................................................................... 32
7.1 GENERALLY................................................................................... 33
7.2 APPLICATION OF PROCEEDS..................................................................... 34
7.3 INVESTMENT RELATED PROPERTY................................................................. 34
7.4 INTELLECTUAL PROPERTY....................................................................... 35
7.5 CASH PROCEEDS............................................................................... 37
SECTION 8. JOINT COLLATERAL AGENT...................................................................... 37
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS............................................. 37
SECTION 10. STANDARD OF CARE; JOINT COLLATERAL AGENT MAY PERFORM........................................ 38
SECTION 11. MISCELLANEOUS............................................................................... 38
11.1 NOTICE, ASSIGNMENT, ETC..................................................................... 38
11.2 EFFECT OF DISCHARGE OF ROLLOVER NOTE INDENTURE............................................. 39
SCHEDULE A -- LIST OF GRANTORS
SCHEDULE 1.1 -- EXCLUDED SUBSIDIARY INTERESTS
SCHEDULE 4.1 -- GENERAL INFORMATION
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SCHEDULE 4.2 -- LOCATION OF EQUIPMENT AND INVENTORY
SCHEDULE 4.4 -- INVESTMENT RELATED PROPERTY
SCHEDULE 4.6 -- DESCRIPTION OF LETTERS OF CREDIT
SCHEDULE 4.7 -- INTELLECTUAL PROPERTY
SCHEDULE 4.8 -- COMMERCIAL TORT CLAIMS
EXHIBIT A -- PLEDGE SUPPLEMENT
EXHIBIT B -- FORM OF UNCERTIFICATED SECURITIES CONTROL AGREEMENT
EXHIBIT C -- FORM OF COLLATERAL ACCOUNT CONTROL AGREEMENT
EXHIBIT D -- FORM OF PERSONAL PROPERTY SECURITY INTEREST OPINION
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This PLEDGE AND SECURITY AGREEMENT, dated as of May 13, 2002
(this "AGREEMENT"), between EACH OF THE UNDERSIGNED, whether as an original
signatory hereto or as an Additional Grantor (as herein defined) (each, a
"GRANTOR"), and RESIDENTIAL FUNDING CORPORATION DBA GMAC-RFC HEALTH CAPITAL, as
joint collateral agent for the Secured Parties (as herein defined) (in such
capacity as joint collateral agent, the "JOINT COLLATERAL AGENT").
RECITALS:
WHEREAS, reference is made to that certain Credit and Guaranty
Agreement, dated as of the date hereof (as it may be amended, restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
by and among MARINER HEALTH CARE, INC., a Delaware corporation (f/k/a Mariner
Post-Acute Network, Inc., and herein referred to as the "COMPANY"), certain
Subsidiaries of the Company, as Guarantors, the lenders party thereto from time
to time (the "LENDERS"), XXXXXXX XXXXX CREDIT PARTNERS L.P., as a Joint Lead
Arranger and as Syndication Agent, UBS AG, STAMFORD BRANCH, as Administrative
Agent (the "ADMINISTRATIVE AGENT") and as Swing Line Lender, UBS WARBURG LLC, as
a Joint Lead Arranger, GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation
Agent and as Collateral Monitoring Agent, and the Joint Collateral Agent;
WHEREAS, subject to the terms and conditions of the Credit Agreement,
certain Grantors may enter into one or more Hedge Agreements (as herein defined)
with one or more Lender Counterparties;
WHEREAS, in consideration of the extensions of credit and other
accommodations of Lenders and Lender Counterparties as set forth in the Credit
Agreement and the Hedge Agreements, respectively, each Grantor has agreed to
secure such Grantor's obligations under the Credit Documents and the Hedge
Agreements as set forth herein;
WHEREAS, reference is made to that certain Indenture, dated as of the
date hereof (as it may be amended, restated, supplemented or otherwise modified
from time to time, the "ROLLOVER NOTE INDENTURE"), by and among the Company,
certain Subsidiaries of the Company, as Guarantors, and THE BANK OF NEW YORK, a
New York banking corporation, as Trustee (together with any successor trustee
appointed in accordance with the Rollover Note Indenture, the "ROLLOVER NOTE
TRUSTEE");
WHEREAS, in consideration of the purchase of the Rollover Notes by the
Rollover Noteholders as set forth in the Rollover Note Indenture, each Grantor
has agreed to secure such Grantor's obligations under the Rollover Note
Indenture and the Rollover Notes as set forth herein;
WHEREAS, under that certain Intercreditor and Collateral Agency
Agreement dated as of the date hereof (as it may be amended, restated,
supplemented or otherwise modified from time to time, the "INTERCREDITOR
AGREEMENT") by and among the Company, the Administrative Agent, the Rollover
Note Trustee and the Joint Collateral Agent, the Joint Collateral Agent was
appointed as joint collateral agent for the Secured Parties; and
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and the Joint Collateral
Agent agree as follows:
SECTION 1. DEFINITIONS; GRANT OF SECURITY.
1.1 GENERAL DEFINITIONS. In this Agreement, the following terms
shall have the following meanings:
"ACCOUNT DEBTOR" shall mean each Person who is obligated on a
Receivable or any Supporting Obligation related thereto.
"ACCOUNTS" shall mean all "accounts" as defined in Article 9
of the UCC.
"AGREEMENT" shall have the meaning set forth in the preamble.
"ADDITIONAL GRANTORS" shall have the meaning assigned in
Section 5.3.
"AFFILIATE" shall mean, as applied to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power (i) to vote 15% or more of the
Securities having ordinary voting power for the election of directors of such
Person or (ii) to direct or cause the direction of the management and policies
of that Person, whether through the ownership of voting securities or by
contract or otherwise.
"ASSIGNED AGREEMENTS" shall mean all agreements and contracts
to which such Grantor is a party as of the date hereof, or to which such Grantor
becomes a party after the date hereof, including, without limitation, each
Material Contract, as each such agreement may be amended, supplemented or
otherwise modified from time to time.
"BANKRUPTCY CODE" shall mean Title 11 of the United States
Code entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"CASH PROCEEDS" shall have the meaning assigned in Section
7.5.
"CHATTEL PAPER" shall mean all "chattel paper" as defined in
Article 9 of the UCC, including, without limitation, "electronic chattel paper"
or "tangible chattel paper", as each term is defined in Article 9 of the UCC.
"COLLATERAL" shall have the meaning assigned in Section 2.1.
"COLLATERAL RECORDS" shall mean books, records, ledger cards,
files, correspondence, customer lists, blueprints, technical specifications,
manuals, computer software, computer printouts, tapes, disks and related data
processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.
"COLLATERAL SUPPORT" shall mean all property (real or
personal) assigned, hypothecated or otherwise securing any Collateral and shall
include any security agreement or other agreement granting a lien or security
interest in such real or personal property.
"COLLECTION ACCOUNT" shall mean any account established at a
financial institution designated by the Joint Collateral Agent in the name of
"Mariner Health Care, Inc. -
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Residential Funding Corporation dba GMAC-RFC HEALTH CAPITAL, as Joint Collateral
Agent", together with any and all successor, replacement or substituted accounts
thereto.
"COMMERCIAL TORT CLAIMS" shall mean all "commercial tort
claims" as defined in Article 9 of the UCC, including, without limitation, all
commercial tort claims listed on Schedule 4.8 (as such schedule may be amended
or supplemented from time to time).
"COMMODITIES ACCOUNTS" (i) shall mean all "commodity accounts"
as defined in Article 9 of the UCC and (ii) shall include, without limitation,
all of the accounts listed on Schedule 4.4 under the heading "Commodities
Accounts" (as such schedule may be amended or supplemented from time to time).
"COMPANY" shall have the meaning set forth in the recitals.
"CONCENTRATION ACCOUNT" shall mean any account listed on
Schedule 4.4(A)(8)(a) under the heading "Deposit Accounts: Concentration
Account" (as such schedule may be amended or supplemented from time to time),
together with any and all successor, replacement or substituted accounts
thereto.
"CONTROLLED FOREIGN CORPORATION" shall mean "controlled
foreign corporation" as defined in the Tax Code.
"COPYRIGHT LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Copyrights (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(B) (as such schedule may be amended or
supplemented from time to time).
"COPYRIGHTS" shall mean all United States and foreign
copyrights, all mask works fixed in semi-conductor chip products (as defined
under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or
unregistered, now or hereafter in force throughout the world, all registrations
and applications therefor including, without limitation, the applications
referred to in Schedule 4.7(A) (as such schedule may be amended or supplemented
from time to time), all rights corresponding thereto throughout the world, all
extensions and renewals of any thereof, the right to xxx for past, present and
future infringements of any of the foregoing, and all proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims,
damages, and proceeds of suit.
"CREDIT AGREEMENT" shall have the meaning set forth in the
recitals.
"DOCUMENTS" shall mean all "documents" as defined in Article 9
of the UCC.
"DE MINIMIS SECURITIES ACCOUNTS" shall have the meaning
assigned to such term in Section 4.4.4(a)(iii) hereto.
"DE MINIMIS SECURITIES ENTITLEMENTS" shall have the meaning
assigned to such term in Section 4.4.4(a)(iii) hereto.
"DEPOSIT ACCOUNTS" (i) shall mean all "deposit accounts" as
defined in Article 9 of the UCC and in any event shall include any demand, time,
savings, passbook or title account maintained with a depository institution and
(ii) shall include, without limitation, all of the
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accounts listed on Schedule 4.4 under the heading "Deposit Accounts" (as such
schedule may be amended or supplemented from time to time).
"DIRECTING PARTY" shall have the meaning assigned to it in the
Intercreditor Agreement.
"EQUIPMENT" shall mean: (i) all "equipment" as defined in
Article 9 of the UCC, (ii) all machinery, manufacturing equipment, data
processing equipment, computers, office equipment, furnishings, furniture,
appliances, fixtures, tools (in each case, regardless of whether characterized
as equipment under the UCC) and (iii) all accessions or additions thereto, all
parts thereof, whether or not at any time of determination incorporated or
installed therein or attached thereto, and all replacements therefor, wherever
located, now or hereafter existing, including any fixtures.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"EVENT OF DEFAULT" shall mean (i) at any time on or prior to
the First Priority Termination Date, an Event of Default as defined in the
Credit Agreement and (ii) at any time after the First Priority Termination Date,
an Event of Default as defined in the Rollover Note Indenture.
"EXCLUDED SUBSIDIARY INTERESTS" shall mean any shares of
capital stock, limited liability company interests, partnership interests or
trust interests in any entity listed on Schedule 1.1 hereto (as such schedule
may be amended or supplemented from time to time); provided, that any shares of
capital stock, limited liability company interests, partnership interests or
trust interests in any entity listed on Schedule 1.1 hereto shall automatically
be deemed not to be an Excluded Subsidiary Interest upon a grant of security
interest by the applicable Grantor in such capital stock, limited liability
company interests, partnership interests or trust interests by the delivery to
the Joint Collateral Agent of a Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules thereto,
reflecting such Pledged Equity Interests.
"EXCLUDED PROPERTY" shall mean (i) all Fixtures located on, in
connection with, relating to the Mariner Health of Jacksonville facility located
in Xxxxx County, Florida, (ii) all Fixtures and Equipment located on, in
connection with, relating to the Jacinto City Healthcare Center facility located
in Xxxxxx County, Texas, Southfield HealthCare Center facility located in Xxxxxx
County, Texas, The Village Healthcare Center facility located in Xxxxxx County,
Texas, Retama Manor Nursing Center/ Corpus Christi North located in Nueces
County, Texas, Spring Branch HealthCare Center located in Xxxxxx County, Texas
and Xxxx Xxxxx Nursing Center facility located in Xxxxx County, Texas and (iii)
all personal property located on, in connection with, relating to or arising out
of the Mariner Health of Westchester facility located in Xxxx County, Illinois
and the Xxxxxx Health of Palmetto facility located in Manatee County, Florida
"EXCLUDED PROPERTY DOCUMENT" shall mean any agreement that
evidences the transfer of the security interest in the Excluded Property by the
applicable Grantor in favor of a Person other than the Joint Collateral Agent.
"FIRST PRIORITY OBLIGATIONS" shall mean the Obligations as
defined in the Credit Agreement and all other sums payable by the Grantors to
the Joint Collateral Agent under the Credit Documents; provided that at no time
may the aggregate principal amount of the First
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Priority Obligations exceed the amount of "Senior Indebtedness" as permitted by
and defined in the Rollover Note Indenture as of the date hereof or as amended
from time to time with the consent of Requisite Lenders (as defined in the
Credit Agreement).
"FIRST PRIORITY SECURED PARTIES" shall mean the Joint
Collateral Agent, the Agents (as such term is defined in the Credit Agreement),
the Lenders and the Lender Counterparties and shall include, without limitation,
all former Lenders, Lender Counterparties, Agents and Joint Collateral Agent to
the extent that any First Priority Obligations owing to such Persons were
incurred while such Persons were Lenders, Lender Counterparties, Agents or Joint
Collateral Agent and such First Priority Obligations have not been paid or
satisfied in full.
"FIRST PRIORITY TERMINATION DATE" shall mean the last day to
occur of (i) the payment in full of all First Priority Obligations, (ii) the
cancellation or termination of the Commitments and (iii) the cancellation or
expiration of all outstanding Letters of Credit.
"FIXTURES" shall mean all "fixtures" as defined in Article 9
of the UCC.
"GENERAL INTANGIBLES" (i) shall mean all "general intangibles"
as defined in Article 9 of the UCC and (ii) shall include, without limitation,
all interest rate or currency protection or hedging arrangements, all tax
refunds, all licenses, permits, concessions and authorizations, all Assigned
Agreements and all Intellectual Property (in each case, regardless of whether
characterized as general intangibles under the UCC).
"GOODS" (i) shall mean all "goods" as defined in Article 9 of
the UCC and (ii) shall include, without limitation, all Inventory and Equipment
(in each case, regardless of whether characterized as goods under the UCC).
"GRANTORS" shall have the meaning set forth in the preamble.
"INSTRUMENTS" shall mean all "instruments" as defined in
Article 9 of the UCC.
"INSURANCE" shall mean: (i) all insurance policies covering
any or all of the Collateral (regardless of whether the Joint Collateral Agent
is the loss payee thereof) and (ii) any key man life insurance policies.
"INSURANCE CONCENTRATION ACCOUNT" shall mean any account
listed on Schedule 4.4(A)(8)(b) under the heading "Deposit Account: Insurance
Concentration Account" (as such schedule may be amended or supplemented from
time to time), together with any and all successor, replacement or substituted
accounts.
"INTELLECTUAL PROPERTY" shall mean, collectively, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks, the Trademark Licenses, the Trade Secrets, and the Trade Secret
Licenses and in any event shall include all present and future rights,
priorities and privileges relating to intellectual property arising under United
States, applicable state, multinational or foreign laws or otherwise.
"INVENTORY" shall mean: (i) all "inventory" as defined in
Article 9 of the UCC and (ii) all goods held for sale or lease or to be
furnished under contracts of service or so leased or furnished, all raw
materials, work in process, finished goods, and materials used or consumed in
the manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in any Grantor's
business; all goods in which any
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Grantor has an interest in mass or a joint or other interest or right of any
kind; and all goods which are returned to or repossessed by any Grantor, all
computer programs embedded in any goods and all accessions thereto and products
thereof (in each case, regardless of whether characterized as inventory under
the UCC).
"INVESTMENT ACCOUNTS" shall mean the Securities Accounts,
Commodities Accounts and Deposit Accounts.
"INVESTMENT RELATED PROPERTY" shall mean: (i) all "investment
property" (as such term is defined in Article 9 of the UCC) other than Excluded
Subsidiary Interests and (ii) all of the following (regardless of whether
classified as investment property under the UCC): all Pledged Equity Interests,
Pledged Debt, the Investment Accounts and certificates of deposit.
"JOINT COLLATERAL AGENT" shall have the meaning set forth in
the preamble.
"LENDER" shall have the meaning set forth in the recitals.
"LETTER OF CREDIT RIGHT" shall mean "letter-of-credit right"
as defined in Article 9 of the UCC.
"MONEY" shall mean "money" as defined in the UCC.
"NON-ASSIGNABLE CONTRACT" shall mean any agreement, contract
or license to which any Grantor is a party that by its terms purport to restrict
or prevent the assignment or granting of a security interest therein (either by
its terms or by any federal or state statutory prohibition or otherwise,
irrespective of whether such prohibition or restriction is enforceable under
Sections 9-406 through 409 of the UCC).
"OUTSTANDING LETTER OF CREDIT" shall mean any Letter of Credit
issued pursuant to the Credit Agreement other than any Letter of Credit
outstanding beyond the Revolving Commitment Termination Date and backed by cash
collateral or a supporting letter of credit in accordance with Section 2.4 of
the Credit Agreement.
"PATENT LICENSES" shall mean all agreements providing for the
granting of any right in or to Patents (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule 4.7(D) (as such schedule may be amended or supplemented from time to
time).
"PATENTS" shall mean all United States and foreign patents and
applications for letters patent throughout the world, including, but not limited
to each patent and patent application referred to in Schedule 4.7(C) (as such
schedule may be amended or supplemented from time to time), all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and
reexaminations of any of the foregoing, all rights corresponding thereto
throughout the world, and all proceeds of the foregoing including, without
limitation, licenses, royalties, income, payments, claims, damages, and proceeds
of suit and the right to xxx for past, present and future infringements of any
of the foregoing.
"PERMITTED LIEN" shall mean (i) at any time on or prior to the
First Priority Termination Date, a Permitted Lien as defined in the Credit
Agreement and (ii) at any time after the First Priority Termination Date, a
Permitted Lien as defined in the Rollover Note Indenture.
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"PLEDGED DEBT" shall mean all Indebtedness owed to such
Grantor, including, without limitation, all Indebtedness described on Schedule
4.4(A) under the heading "Pledged Debt" (as such schedule may be amended or
supplemented from time to time), issued by the obligors named therein, the
instruments evidencing such Indebtedness, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Indebtedness.
"PLEDGED EQUITY INTERESTS" shall mean all Pledged Stock,
Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust
Interests.
"PLEDGED LLC INTERESTS" shall mean all interests in any
limited liability company including, without limitation, all limited liability
company interests listed on Schedule 4.4(A) under the heading "Pledged LLC
Interests" (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records of such
limited liability company or on the books and records of any securities
intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company
interests; provided, that Pledged LLC Interests shall not include Excluded
Subsidiary Interests.
"PLEDGED PARTNERSHIP INTERESTS" shall mean all interests in
any general partnership, limited partnership, limited liability partnership or
other partnership including, without limitation, all partnership interests
listed on Schedule 4.4(A) under the heading "Pledged Partnership Interests" (as
such schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such partnership interests and any interest
of such Grantor on the books and records of such partnership or on the books and
records of any securities intermediary pertaining to such interest and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
partnership interests; provided, that Pledged Partnership Interests shall not
include Excluded Subsidiary Interests.
"PLEDGED TRUST INTERESTS" shall mean all interests in a
Delaware business trust or other trust including, without limitation, all trust
interests listed on Schedule 4.4(A) under the heading "Pledged Trust Interests"
(as such schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such trust interests and any interest of such
Grantor on the books and records of such trust or on the books and records of
any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust interests;
provided, that Pledged Trust Interests shall not include Excluded Subsidiary
Interests.
"PLEDGED STOCK" shall mean all shares of capital stock owned
by such Grantor, including, without limitation, all shares of capital stock
described on Schedule 4.4(A) under the heading "Pledged Stock" (as such schedule
may be amended or supplemented from time to time), and the certificates, if any,
representing such shares and any interest of such Grantor in the entries on the
books of the issuer of such shares or on the books of any securities
intermediary pertaining to such shares, and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise
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distributed in respect of or in exchange for any or all of such shares;
provided, that Pledged Stock shall not include Excluded Subsidiary Interests.
"PLEDGE SUPPLEMENT" shall mean any supplement to this
agreement in substantially the form of Exhibit A.
"PROCEEDS" shall mean: (i) all "proceeds" as defined in
Article 9 of the UCC, (ii) payments or distributions made with respect to any
Investment Related Property and (iii) whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
"RECEIVABLES" shall mean all rights to payment, whether or not
earned by performance, for goods or other property sold, leased, licensed,
assigned or otherwise disposed of, or services rendered or to be rendered,
including, without limitation all such rights constituting or evidenced by any
Account, Chattel Paper, Instrument, General Intangible or Investment Related
Property, together with all of Grantor's rights, if any, in any goods or other
property giving rise to such right to payment and all Collateral Support and
Supporting Obligations related thereto and all Receivables Records.
"RECEIVABLES RECORDS" shall mean (i) all original copies of
all documents, instruments or other writings or electronic records or other
Records evidencing the Receivables, (ii) all books, correspondence, credit or
other files, Records, ledger sheets or cards, invoices, and other papers
relating to Receivables, including, without limitation, all tapes, cards,
computer tapes, computer discs, computer runs, record keeping systems and other
papers and documents relating to the Receivables, whether in the possession or
under the control of Grantor or any computer bureau or agent from time to time
acting for Grantor or otherwise, (iii) all evidences of the filing of financing
statements and the registration of other instruments in connection therewith,
and amendments, supplements or other modifications thereto, notices to other
creditors or secured parties, and certificates, acknowledgments, or other
writings, including, without limitation, lien search reports, from filing or
other registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or electronic forms of information
related in any way to the foregoing or any Receivable.
"RECORD" shall have the meaning specified in Article 9 of the
UCC.
"ROLLOVER NOTES" shall mean the Second Priority Secured Notes
due 2009 issued under the Rollover Note Indenture.
"ROLLOVER NOTE INDENTURE" shall have the meaning set forth in
the recitals.
"ROLLOVER NOTE TRUSTEE" shall have the meaning set forth in
the recitals.
"ROLLOVER NOTEHOLDERS" shall mean those entities from time to
time holding the Rollover Notes.
"SECOND PRIORITY OBLIGATIONS" shall mean all obligations of
any nature of any Grantor from time to time owed to the Rollover Note Trustee or
to any Rollover Noteholder under any Rollover Note or the Rollover Note
Indenture, whether for principal, premium, if any, or interest (including
interest which, but for the filing of a petition in bankruptcy with respect to
any Grantor, would have accrued on any Second Priority Obligation, whether or
not a claim is allowed against such Grantor for such interest in the related
bankruptcy proceeding) fees,
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expenses, indemnification or otherwise and all sums payable by the Grantors to
the Joint Collateral Agent under the Senior Note Documents.
"SECOND PRIORITY SECURED PARTIES" shall mean the Joint
Collateral Agent, the Rollover Noteholders and the Rollover Note Trustee.
"SECURED OBLIGATIONS" shall mean, collectively, the First
Priority Obligations and the Second Priority Obligations.
"SECURED PARTIES" shall mean collectively, the First Priority
Secured Parties and the Second Priority Secured Parties.
"SECURITIES ACCOUNTS" (i) shall mean all "securities accounts"
as defined in Article 8 of the UCC and (ii) shall include, without limitation,
all of the accounts listed on Schedule 4.4(A) under the heading "Securities
Accounts" (as such schedule may be amended or supplemented from time to time).
"SENIOR NOTE DOCUMENTS" shall have the meaning assigned in the
Rollover Note Indenture.
"SUPPORTING OBLIGATION" shall mean all "supporting
obligations" as defined in Article 9 of the UCC.
"TAX CODE" shall mean the United States Internal Revenue Code
of 1986, as amended from time to time.
"TRADEMARK LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Trademarks (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(F) (as such schedule may be amended or
supplemented from time to time).
"TRADEMARKS" shall mean all United States, state and foreign
trademarks, trade names, corporate names, company names, business names,
fictitious business names, internet domain names, trade styles, service marks,
certification marks, collective marks, logos, other source or business
identifiers, designs and general intangibles of a like nature, all registrations
and applications for any of the foregoing including, but not limited to the
registrations and applications referred to in Schedule 4.7(E) (as such schedule
may be amended or supplemented from time to time), all extensions or renewals of
any of the foregoing, all of the goodwill of the business connected with the use
of and symbolized by the foregoing, the right to xxx for past, present and
future infringement or dilution of any of the foregoing or for any injury to
goodwill, and all proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages, and proceeds of suit.
"TRADE SECRET LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Trade Secrets (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(G) (as such schedule may be amended or
supplemented from time to time).
"TRADE SECRETS" shall mean all trade secrets and all other
confidential or proprietary information and know-how now or hereafter owned or
used in, or contemplated at any time for use in, the business of such Grantor
that gives the business a competitive advantage (all of
9
the foregoing being collectively called a "Trade Secret"), whether or not such
Trade Secret has been reduced to a writing or other tangible form, including all
documents and things embodying, incorporating, or referring in any way to such
Trade Secret, the right to xxx for past, present and future infringement of any
Trade Secret, and all proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages, and proceeds of suit;
provided, that Trade Secrets shall not include any patient information.
"TRANSACTION DOCUMENTS" shall mean the Credit Documents and
the Senior Note Documents.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of Delaware or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.
"UNITED STATES" shall mean the United States of America.
1.2 DEFINITIONS; INTERPRETATION.All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement or, if not
defined therein, in the UCC. References to "Sections," "Exhibits" and
"Schedules" shall be to Sections, Exhibits and Schedules, as the case may be, of
this Agreement unless otherwise specifically provided. Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. If any conflict or inconsistency
exists at any time on or prior to the First Priority Termination Date between
this Agreement, the Credit Agreement and/or the Rollover Note Indenture, the
Credit Agreement shall govern. If any conflict or inconsistency exists at any
time after the First Priority Termination Date between this Agreement and the
Rollover Note Indenture, the Rollover Note Indenture shall govern. All
references herein to provisions of the UCC shall include all successor
provisions under any subsequent version or amendment to any Article of the UCC.
SECTION 2. GRANT OF SECURITY.
2.1 GRANT OF SECURITY. Each Grantor hereby assigns and transfers
to the Joint Collateral Agent, and hereby grants to the Joint Collateral Agent,
a security interest and continuing lien on all of such Grantor's right, title
and interest in, to and under all personal property of such Grantor including,
but not limited to the following, in each case whether now owned or existing or
hereafter acquired or arising and wherever located (all of which being
hereinafter collectively referred to as the "COLLATERAL"):
(a) Accounts;
(b) Chattel Paper;
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(c) Documents;
(d) General Intangibles;
(e) Goods;
(f) Instruments;
(g) Insurance;
(h) Intellectual Property;
(i) Investment Related Property;
(j) Letter of Credit Rights;
(k) Money;
(l) Receivables and Receivable Records;
(m) Commercial Tort Claims;
(n) to the extent not otherwise included above, all
Collateral Records, Collateral Support and Supporting Obligations relating to
any of the foregoing; and
(o) to the extent not otherwise included above, all
Proceeds, products, accessions, rents and profits of or in respect of any of the
foregoing.
2.2 CERTAIN LIMITED EXCLUSIONS. Notwithstanding anything herein to
the contrary, in no event shall the security interest granted under Section 2.1
hereof attach to, or the term "Collateral" be deemed to include, (a) any
Excluded Property, Government Receivables, Lease, Assignment Agreement, license,
contract, property rights or agreement to which any Grantor is a party or any of
its rights or interests thereunder if, and for so long as, the grant of such
security interest shall constitute or result in (i) the abandonment,
invalidation or unenforceability of any right, title or interest of any Grantor
therein or (ii) a breach or termination pursuant to the terms of, or a default
under, any such Government Receivable, Excluded Property Document, Lease,
Assigned Agreement or other license, contract, property rights or agreement or
the violation of any applicable law (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409
of the UCC (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law (including the Bankruptcy Code) or
principles of equity); provided, however that such security interest shall
attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and to the extent severable,
shall attach immediately to any portion of such Excluded Property, Government
Receivables, Lease, Assigned Agreement or other license, contract, property
rights or agreement that does not result in any of the consequences specified in
(i) or (ii) above; or (b) in any of the outstanding capital stock of a
Controlled Foreign Corporation in excess of 65% of the voting power of all
classes of capital stock of such Controlled Foreign Corporation entitled to
vote; provided that immediately upon the amendment of the Tax Code to allow the
pledge of a greater percentage of the voting power of capital stock in a
Controlled Foreign Corporation without adverse tax consequences, the
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Collateral shall include, and the security interest granted by each Grantor
shall attach to, such greater percentage of capital stock of each Controlled
Foreign Corporation.
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.
3.1 SECURITY FOR OBLIGATIONS.This Agreement secures, and the
Collateral is collateral security for, the prompt and complete payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a) (and any
successor provision thereof)), of all Secured Obligations.
CONTINUING LIABILITY UNDER COLLATERAL.Notwithstanding anything herein
to the contrary, (i) each Grantor shall remain liable for all obligations under
the Collateral and nothing contained herein is intended or shall be a delegation
of duties to the Joint Collateral Agent or any other Secured Party, (ii) each
Grantor shall remain liable under each of the agreements included in the
Collateral, including, without limitation, any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Joint Collateral Agent nor any
Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related thereto nor shall the Joint Collateral Agent nor any Secured Party have
any obligation to make any inquiry as to the nature or sufficiency of any
payment received by it or have any obligation to take any action to collect or
enforce any rights under any agreement included in the Collateral, including,
without limitation, any agreements relating to Pledged Partnership Interests or
Pledged LLC Interests and (iii) the exercise by the Joint Collateral Agent of
any of its rights hereunder shall not release any Grant or from any of its
duties or obligations under the contracts and agreements included in the
Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.
4.1 GENERALLY. (a) Representations and Warranties. Each Grantor
hereby represents and warrants to the Joint Collateral Agent and each other
Secured Party, on the Closing Date (after giving effect to the Reorganization)
and on each Credit Date, that:
(i) with respect to any Collateral in excess of
$100,000 individually or $1,000,000 in the aggregate, it owns such
Collateral purported to be owned by it or otherwise has the rights it
purports to have in each item of such Collateral and, as to all such
Collateral whether now existing or hereafter acquired, will continue to
own or have such rights in each item of the Collateral,
(ii) the Collateral granted by such Grantor is
free and clear of any and all Liens, rights or claims of all other
Persons other than Permitted Liens, including, without limitation,
liens arising as a result of such Grantor becoming bound (as a result
of merger or otherwise) as debtor under a security agreement entered
into by another Person;
(iii) it has indicated on Schedule 4.1(A)(as such
schedule may be amended or supplemented from time to time): (w) the
type of organization of such Grantor, (x) the jurisdiction of
organization of such Grantor, (y) its organizational identification
number, to the extent issued by the jurisdiction of organization, and
(z) the jurisdiction where the chief executive office or its sole place
of business is (or the
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principal residence if such Grantor is a natural person), and for the
one-year period preceding the date hereof has been, located.
(iv) the full legal name of such Grantor is as
set forth on Schedule 4.1(A) and it has not done in the last five (5)
years, and does not do, business under any other name (including any
trade-name or fictitious business name) except for those names set
forth on Schedule 4.1(B) (as such schedule may be amended or
supplemented from time to time);
(v) except as provided on Schedule 4.1(C), it
has not changed its name, jurisdiction of organization, chief executive
office or sole place of business or its corporate structure in any way
(e.g., by merger, consolidation, change in corporate form or otherwise)
within the past five (5) years;
(vi) it has not within the last five (5) years
become bound (whether as a result of merger or otherwise) as debtor
under a security agreement entered into by another Person, which has
not heretofore been terminated other than the agreements identified on
Schedule 4.1(D) hereof (as such schedule may be amended or supplemented
from time to time);
(vii) with respect to each agreement identified on
Schedule 4.1(D), it has indicated on Schedule 4.1(A) and Schedule
4.1(B) the information required pursuant to Section 4.1(a)(ii), (iii)
and (iv) with respect to the debtor under each such agreement;
(viii) upon the filing of all UCC financing
statements naming each Grantor as debtor and the Joint Collateral Agent
as secured party and describing the Collateral in the filing offices
set forth opposite such Grantor's name on Schedule 4.1(E) hereof (as
such schedule may be amended or supplemented from time to time) and, to
the extent not subject to Article 9 of the UCC, upon the recordation of
the security interests granted hereunder in Patents, Trademarks and
Copyrights in the applicable intellectual property registries, and the
registration of all unregistered Copyrights, and other filings
delivered by each Grantor, and the delivery of an executed control
agreement for each Concentration Account, Insurance Concentration
Account and Collection Account listed in Items (a)(8)(A), (a)(8)(B) and
(a)(8)(C), respectively of Schedule 4.4 hereof (as such schedule may be
amended or supplemented from time to time) in accordance with Section
4.4.4 hereof, the security interests granted to the Joint Collateral
Agent hereunder in the Collateral other than Deposit Accounts not
listed on Schedule 4.4 hereof (as such schedule may be amended or
supplemented from time to time), constitute valid and perfected first
priority Liens (subject only to Permitted Liens and to the rights of
the United States government (including any agency or department
thereof) with respect to Government Receivables) on all of the
Collateral;
(ix) except for the filings contemplated by
clause (viii) above and as otherwise indicated on Schedule 4.1(F), all
actions and consents, including all filings, notices, registrations and
recordings necessary or desirable for the exercise by the Joint
Collateral Agent of the voting or other rights provided for in this
Agreement or the exercise of remedies in respect of the Collateral have
been made or obtained;
(x) other than the financing statements filed in
favor of the Joint Collateral Agent, no effective UCC financing
statement, fixture filing or other instrument similar in effect under
any applicable law covering all or any part of the Collateral is on
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file in any filing or recording office except for (x) financing
statements identified on Schedule 4.1(G) for which proper termination
statements have been delivered to the Joint Collateral Agent for
filing, (y) other Liens being discharged in connection with the
consummation of the Plan of Reorganization (whether or not termination
statements have been delivered to the Joint Collateral Agent) and (z)
financing statements filed in connection with Permitted Liens;
(xi) no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority or
regulatory body is required for either (i) the pledge or grant by any
Grantor of the Liens purported to be created in favor of the Joint
Collateral Agent hereunder or (ii) the exercise by Joint Collateral
Agent of any rights or remedies in respect of any Collateral (whether
specifically granted or created hereunder or created or provided for by
applicable law), except (A) for the filings contemplated by clause
(viii) above and (B) as may be required, in connection with the
disposition of any Investment Related Property, by laws generally
affecting the offering and sale of Securities;
(xii) all information supplied by any Grantor with
respect to any of the Collateral (in each case taken as a whole with
respect to any particular Collateral) is accurate and complete in all
material respects;
(xiii) none of the Collateral constitutes, or is
the Proceeds of, "farm products" (as defined in the UCC);
(xiv) it does not own any "as extracted
collateral" (as defined in the UCC) or any timber to be cut; and
(xv) such Grantor has been duly organized as an
entity of the type as set forth opposite such Grantor's name on
Schedule 4.1(A) solely under the laws of the jurisdiction as set forth
opposite such Grantor's name on Schedule 4.1(A) and remains duly
existing as such. Such Grantor has not filed any certificates of
domestication, transfer or continuance in any other jurisdiction.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party that from and after the date of this Agreement until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit, that:
(i) except for the security interest created by
this Agreement, it shall not create or suffer to exist any Lien upon or
with respect to any of the Collateral, except Permitted Liens, and such
Grantor shall defend the Collateral against all Persons at any time
claiming any interest therein;
(ii) it shall not produce, use or permit any
Collateral to be used unlawfully or in violation of any provision of
this Agreement or any applicable statute, regulation or ordinance or
any policy of insurance covering the Collateral;
(iii) it shall not change such Grantor's name,
identity, corporate structure (e.g., by merger, consolidation, change
in corporate form or otherwise) sole place of business, chief executive
office, type of organization or jurisdiction of organization unless it
shall have (a) notified the Joint Collateral Agent in writing, by
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executing and delivering to the Joint Collateral Agent a completed
Pledge Supplement, substantially in the form of Exhibit A attached
hereto, together with all Supplements to Schedules necessary to notify
the Joint Collateral Agent of changes, additions, dispositions or
substitutions of the Collateral thereto, at least ten (10) Business
Days prior to any such change, identifying such new proposed name,
identity, corporate structure, sole place of business, chief executive
office or jurisdiction of organization and providing such other
information in connection therewith as the Joint Collateral Agent may
reasonably request and (b) taken all actions necessary or advisable to
maintain the continuous validity, perfection and the same or better
priority of the Joint Collateral Agent's security interest in the
Collateral intended to be granted and agreed to hereby; and
(iv) it shall not take or permit any action which
could materially impair the Joint Collateral Agent's rights in the
Collateral.
4.2 EQUIPMENT AND INVENTORY. (a) Representations and Warranties.
Each Grantor represents and warrants to the Joint Collateral Agent and each
other Secured Party, on the Closing Date and on each Credit Date, that:
(i) all of the Equipment and Inventory included
in the Collateral in excess of $300,000 individually or $2,000,000 in
the aggregate, is and has been kept for the past five (5) years only at
the locations specified in Schedule 4.2 (as such schedule may be
amended or supplemented from time to time) (whether or not listed under
such Grantor's name); and
(ii) none of the Inventory or Equipment in excess
of $500,000 in the aggregate is in the possession of an issuer of a
negotiable document (as defined in Section 7-104 of the UCC) therefor
or otherwise in the possession of a bailee or a warehouseman.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party that from and after the date of this Agreement until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit that:
(i) with respect to any Equipment, Inventory and
any Documents evidencing any Equipment and Inventory in excess of
$300,000 individually or $2,000,000 in the aggregate, it shall keep
such Equipment, Inventory and any Documents evidencing any Equipment
and Inventory at any location specified on Schedule 4.2 (as such
schedule may be amended or supplemented from time to time) (whether or
not listed under such Grantor's name) unless it shall have (a) notified
the Joint Collateral Agent in writing, by executing and delivering to
the Joint Collateral Agent a completed Pledge Supplement, substantially
in the form of Exhibit A attached hereto, together with all Supplements
to Schedules thereto, at least thirty (30) days prior to any change in
locations, identifying such new locations and providing such other
information in connection therewith as the Joint Collateral Agent may
reasonably request and (b) taken all actions necessary or advisable to
maintain the continuous validity, perfection and the same or better
priority of the Joint Collateral Agent's security interest in the
Collateral intended to be granted and agreed to hereby, or to enable
the Joint Collateral Agent to exercise and enforce its rights and
remedies hereunder, with respect to such Equipment and Inventory;
15
(ii) it shall keep correct and accurate records
of the Inventory, as is customarily maintained under similar
circumstances by Persons of established reputation engaged in similar
business, and in any event in conformity with GAAP;
(iii) it shall not deliver any Document evidencing
any Equipment and Inventory to any Person other than the issuer of such
Document to claim the Goods evidenced therefor or the Joint Collateral
Agent;
(iv) if any Equipment or Inventory is in
possession or control of any third party, each Grantor shall join with
the Joint Collateral Agent in notifying the third party of the Joint
Collateral Agent's security interest and obtaining an acknowledgment
from the third party that it is holding the Equipment and Inventory for
the benefit of the Joint Collateral Agent; and
(v) with respect to any item of Equipment owned
by such Grantor which is covered by a certificate of title under a
statute of any jurisdiction under the law of which indication of a
security interest on such certificate is required as a condition of
perfection thereof (A) provide information with respect to any such
Equipment in excess of $300,000 individually or $2,000,000 in the
aggregate, (B) execute and file with the registrar of motor vehicles or
other appropriate authority in such jurisdiction an application or
other document requesting the notation or other indication of the
security interest created hereunder on such certificate of title and
(C) deliver to the Joint Collateral Agent copies of all such
applications or other documents filed during such calendar quarter and
copies of all such certificates of title issued during such calendar
quarter indicating the security interest created hereunder in the items
of Equipment covered thereby.
4.3 RECEIVABLES. (a) Representations and Warranties. Each Grantor
represents and warrants to the Joint Collateral Agent and each other Secured
Party, on the Closing Date and on each Credit Date, that, no Receivable is
evidenced by, or constitutes, an Instrument or Chattel Paper which has not been
delivered to, or otherwise subjected to the control of, the Joint Collateral
Agent to the extent required by, and in accordance with, Section 4.3(c).
(b) Covenants and Agreements: Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party that from and after the date of this Agreement until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit that:
(i) it shall keep and maintain at its own cost
and expense satisfactory and complete records of the Receivables,
including, but not limited to, the originals of all documentation with
respect to all Receivables and records of all payments received and all
credits granted on the Receivables, all merchandise returned and all
other dealings therewith;
(ii) it shall promptly transfer or cause to be
transferred all funds arising from the collection of all Receivables
(A) to a Deposit Account of any Grantor and (B) in any event, no later
than two (2) Business Days after transfer to the account in (A) above,
to a Concentration Account listed on Schedule 4.4(A)(8)(a) hereto (as
such schedule may be amended or supplemented from time to time) or,
upon the occurrence of and during the existence of an Event of Default
at the direction of the Joint Collateral
16
Agent, to a Collection Account listed on Schedule 4.4(A)(8)(c) hereto
(as such schedule may be amended or supplemented from time to time);
(iii) it shall perform in all material respects
all of its obligations with respect to the Receivables as it deems
appropriate or advisable in the exercise of its business judgment;
(iv) it shall not amend, modify, terminate or
waive any provision of any Receivable in any manner which could
reasonably be expected to have a Material Adverse Effect. Other than in
the ordinary course of business as generally conducted by it on and
prior to the date hereof, and except as otherwise provided in
subsection (v) below, following an Event of Default, such Grantor shall
not (w) grant any extension or renewal of the time of payment of any
Receivable, (x) compromise or settle any dispute, claim or legal
proceeding with respect to any Receivable for less than the total
unpaid balance thereof, (y) release, wholly or partially, any Person
liable for the payment thereof or (z) allow any credit or discount
thereon;
(v) except as otherwise provided in this
subsection, each Grantor shall continue to collect, or cause to be
collected, all amounts due or to become due to such Grantor under the
Receivables and any Supporting Obligation and diligently exercise each
material right it may have under any Receivable, any Supporting
Obligation or Collateral Support, as it deems appropriate or advisable
in the exercise of its business judgment, in each case, at its own
expense, and in connection with such collections and exercise, such
Grantor shall take such action as such Grantor or, during the existence
of an Event of Default, the Joint Collateral Agent may deem necessary
or advisable. Notwithstanding the foregoing, during the existence of an
Event of Default, the Joint Collateral Agent shall have the right at
any time to notify, or require any Grantor to notify (and if so, such
Grantor shall so notify), any Account Debtor of the Joint Collateral
Agent's security interest in the Receivables and any Supporting
Obligation and, in addition, at any time following the occurrence and
during the continuation of an Event of Default, the Joint Collateral
Agent may: (1) direct the Account Debtors under any Receivables to make
payment of all amounts due or to become due to such Grantor thereunder
directly to the Joint Collateral Agent; (2) notify, or require any
Grantor to notify, each Person maintaining a lockbox or similar
arrangement to which Account Debtors under any Receivables have been
directed to make payment to remit all amounts representing collections
on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to the Joint
Collateral Agent; and (3) enforce, at the expense of such Grantor,
collection of any such Receivables and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done; provided, the Joint Collateral
Agent shall not take any of the actions set forth in this sentence if
and to the extent that such action is prohibited under any federal or
state law. If the Joint Collateral Agent notifies any Grantor that it
has elected to collect the Receivables in accordance with the preceding
sentence, any payments of Receivables received by such Grantor shall be
forthwith (and in any event within two (2) Business Days) deposited by
such Grantor in the exact form received, duly indorsed by such Grantor
to the Joint Collateral Agent if required, in a Collection Account
maintained under the sole dominion and control of the Joint Collateral
Agent, and until so turned over, all amounts and proceeds (including
checks and other instruments) received by such Grantor in respect of
the Receivables, any Supporting Obligation or Collateral Support shall
17
be received in trust for the benefit of the Joint Collateral Agent
hereunder and shall be segregated from other funds of such Grantor and
such Grantor shall not adjust, settle or compromise the amount or
payment of any Receivable, or release wholly or partly any Account
Debtor or obligor thereof, or allow any credit or discount thereon; and
(vi) it shall use its best efforts to keep in
full force and effect any Supporting Obligation or Collateral Support
relating to any Receivable.
(c) Delivery and Control of Receivables. With respect to
any Receivables in excess of $100,000 individually or $1,000,000 in the
aggregate that is evidenced by, or constitutes, Chattel Paper or Instruments,
each Grantor shall cause each originally executed copy thereof to be delivered
to the Joint Collateral Agent (or its agent or designee) appropriately indorsed
to the Joint Collateral Agent or indorsed in blank: (i) with respect to any such
Receivables in existence on the date hereof, on or prior to the date hereof and
(ii) with respect to any such Receivables hereafter arising, within ten (10)
Business Days after such Grantor acquires rights therein. With respect to any
Receivables in excess of $100,000 individually or $1,000,000 in the aggregate
which would constitute "electronic chattel paper" under Article 9 of the UCC,
each Grantor shall take all steps necessary to give the Joint Collateral Agent
control over such Receivables (within the meaning of Section 9-105 of the UCC):
(i) with respect to any such Receivables in existence on the date hereof, on or
prior to the date hereof and (ii) with respect to any such Receivables hereafter
arising, within ten (10) Business Days after such Grantor acquiring rights
therein. Any Receivable not otherwise required to be delivered or subjected to
the control of the Joint Collateral Agent in accordance with this subsection (c)
shall be delivered or subjected to such control upon request of the Joint
Collateral Agent.
4.4 INVESTMENT RELATED PROPERTY.4.4.1 INVESTMENT RELATED PROPERTY
GENERALLY
(a) Covenants and Agreements. Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party from and after the date of this Agreement until the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all Outstanding Letters of Credit that:
(i) in the event it acquires rights in any
Investment Related Property which has not otherwise been deposited or
credited to an Investment Account subject to the Joint Collateral
Agent's "control" (within the meanings of Sections 8-106, 9-106 or
9-104, as applicable, of the UCC) in accordance with Section 4.4.4(c)
herein after the date hereof, it shall deliver to the Joint Collateral
Agent a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules
necessary to notify the Joint Collateral Agent of such acquisitions
thereto, reflecting such new Investment Related Property and all other
Investment Related Property. Notwithstanding the foregoing, it is
understood and agreed that the security interest of the Joint
Collateral Agent shall attach to all Investment Related Property
immediately upon any Grantor's acquisition of rights therein and shall
not be affected by the failure of any Grantor to deliver a supplement
to Schedule 4.4 as required hereby;
(ii) except as provided in the next sentence, in
the event such Grantor receives any dividends, interest or
distributions on any Investment Related Property, or any securities or
other property upon the merger, consolidation, liquidation or
dissolution of any issuer of any Investment Related Property, then (a)
such dividends, interest or distributions and securities or other
property shall be included in the definition of Collateral without
further action and (b) such Grantor shall take all steps to ensure the
validity, perfection, priority and, if applicable, control of the Joint
Collateral Agent over
18
such Investment Related Property (including, without limitation,
delivery thereof to the Joint Collateral Agent). Notwithstanding the
foregoing, so long as no Event of Default shall have occurred and be
continuing, the Joint Collateral Agent authorizes each Grantor to
retain all ordinary cash dividends and distributions paid in the normal
course of the business of the issuer and consistent with the past
practice of the issuer and all payments of principal and interest; and
(iii) each Grantor consents to the grant by each
other Grantor of a Security Interest in all Investment Related Property
to the Joint Collateral Agent.
(b) Delivery and Control.
(i) Each Grantor agrees that (A) with respect to
any Investment Related Property in which it currently has rights, it
shall comply with the provisions of this 4.4.1(b) on or before the
Closing Date or Credit Date, (B) with respect to any Investment Related
Property hereafter acquired by such Grantor it shall comply with the
provisions of this Section 4.4.1(b) immediately upon acquiring rights
therein and (C) with respect to Pledged Debt as set forth in Schedule
4.4(A)(5)(B) attached hereto, it shall comply with the provisions of
Section 5.17(h) of the Credit Agreement, in each case in form and
substance satisfactory to the Joint Collateral Agent. With respect to
any Investment Related Property that is represented by a certificate or
that is an "instrument" (other than any Investment Related Property
credited to a Securities Account), it shall cause such certificate or
instrument to be delivered to the Joint Collateral Agent, indorsed in
blank by an "effective indorsement" (as defined in Section 8-107 of the
UCC), regardless of whether such certificate constitutes a
"certificated security" for purposes of the UCC. With respect to any
Investment Related Property that is an "uncertificated security" for
purposes of the UCC (other than any "uncertificated securities"
credited to a Securities Account), it shall cause the issuer of such
uncertificated security to either (i) register the Joint Collateral
Agent as the registered owner thereof on the books and records of the
issuer or (ii) execute an agreement substantially in the form of
Exhibit B hereto, pursuant to which such issuer agrees to comply with
the Joint Collateral Agent's instructions with respect to such
uncertificated security without further consent by such Grantor.
(c) Voting and Distributions.
(i) So long as no Event of Default shall have
occurred and be continuing:
(1) except as otherwise provided under the covenants and
agreements relating to investment related property in this
Agreement or elsewhere herein or in the Credit Agreement or,
at any time after the First Priority Termination Date, in the
Rollover Note Indenture, each Grantor shall be entitled to
exercise or refrain from exercising any and all voting and
other consensual rights pertaining to the Investment Related
Property or any part thereof; provided, no Grantor shall
exercise or refrain from exercising any such right if the
Joint Collateral Agent shall have notified such Grantor that,
in the Joint Collateral Agent's reasonable judgment, such
action would have a Material Adverse Effect; and
(2) the Joint Collateral Agent shall promptly execute and deliver
(or cause to be executed and delivered) to each Grantor all
proxies, and other instruments as
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such Grantor may from time to time reasonably request for the
purpose of enabling such Grantor to exercise the voting and
other consensual rights when and to the extent which it is
entitled to exercise pursuant to clause (A) above.
(ii) Upon the occurrence and during the
continuation of an Event of Default:
(1) all rights of each Grantor to exercise or refrain from
exercising the voting and other consensual rights which it
would otherwise be entitled to exercise pursuant hereto shall
cease and all such rights shall thereupon become vested in the
Joint Collateral Agent who shall thereupon have the sole right
to exercise such voting and other consensual rights;
(2) in order to permit the Joint Collateral Agent to exercise the
voting and other consensual rights which it may be entitled to
exercise pursuant hereto and to receive all dividends and
other distributions which it may be entitled to receive
hereunder: (1) each Grantor shall promptly execute and deliver
(or cause to be executed and delivered) to the Joint
Collateral Agent all proxies, dividend payment orders and
other instruments as the Joint Collateral Agent may from time
to time reasonably request and (2) each Grantor acknowledges
that the Joint Collateral Agent may utilize the power of
attorney set forth in Section 6; and
(3) if the Event of Default is duly waived or otherwise ceases to
exist, then all such voting rights will automatically revert
to the appropriate Grantor and the Joint Collateral Agent
shall so confirm in writing upon any Grantor's written
request.
4.4.2 PLEDGED EQUITY INTERESTS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants to the Joint Collateral Agent and each other Secured
Party, on the Closing Date and on each Credit Date, that:
(i) Schedule 4.4(A) (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Pledged Stock, "Pledged LLC Interests," "Pledged Partnership
Interests" and "Pledged Trust Interests," respectively, all of the
Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and
Pledged Trust Interests owned by any Grantor and such Pledged Equity
Interests constitute the percentage of issued and outstanding shares of
stock, percentage of membership interests, percentage of partnership
interests or percentage of beneficial interest of the respective
issuers thereof indicated on such Schedule;
(ii) it is the record and beneficial owner of the
Pledged Equity Interests free of all Liens, rights or claims of other
Persons other than Permitted Liens, and there are no outstanding
warrants, options or other rights to purchase, or shareholder, voting
trust or similar agreements outstanding with respect to, or property
that is convertible into, or that requires the issuance or sale of, any
Pledged Equity Interests except as indicated on Schedule 4.4(A) (as
such Schedule may be amended or supplemented from time to time);
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(iii) except as indicated on Schedule 4.1(F) and
without limiting the generality of Section 4.1(a)(viii), no consent of
any Person including any other general or limited partner, any other
member of a limited liability company, any other shareholder or any
other trust beneficiary is necessary or desirable, and has not been
obtained, in connection with the creation, perfection or first priority
status of the security interest of the Joint Collateral Agent in any
Pledged Equity Interests or the exercise by the Joint Collateral Agent
of the voting or other rights provided for in this Agreement or the
exercise of remedies in respect thereof;
(iv) none of the Pledged LLC Interests nor
Pledged Partnership Interests are or represent interests in issuers
that are: (a) registered as investment companies, (b) are dealt in or
traded on securities exchanges or markets or (c) have opted to be
treated as securities under the uniform commercial code of any
jurisdiction;
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party that from and after the date of this Agreement until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit that:
(i) without the prior written consent of the
Joint Collateral Agent, it shall not vote to enable or take any other
action to: (a) amend or terminate any partnership agreement, limited
liability company agreement, certificate of incorporation, by-laws or
other organizational documents in any way that materially and adversely
changes the rights of such Grantor with respect to any Investment
Related Property or adversely affects the validity, perfection or
priority of the Joint Collateral Agent's security interest, (b) permit
any issuer of any Pledged Equity Interest to issue any additional
stock, partnership interests, limited liability company interests or
other equity interests of any nature other than to such Grantor or to
issue securities convertible into or granting the right of purchase or
exchange for any stock or other equity interest of any nature of such
issuer, (c) other than as permitted under the Credit Agreement or, at
any time after the First Priority Termination Date, the Rollover Note
Indenture, permit any issuer of any Pledged Equity Interest to dispose
of all or a material portion of their assets, (d) waive any default
under or breach of any terms of organizational document relating to the
issuer of any Pledged Equity Interest or the terms of any Pledged Debt
except to the extent in such Grantor's business judgment, such
enforcement is not in such Grantor's best interest, or (e) cause any
issuer of any Pledged Partnership Interests or Pledged LLC Interests
which are not securities (for purposes of the UCC) on the date hereof
to elect or otherwise take any action to cause such Pledged Partnership
Interests or Pledged LLC Interests to be treated as securities for
purposes of the UCC; provided, however, notwithstanding the foregoing,
if any issuer of any Pledged Partnership Interests or Pledged LLC
Interests takes any such action in violation of the foregoing in this
clause (e), such Grantor shall promptly notify the Joint Collateral
Agent in writing of any such election or action and, in such event,
shall take all steps necessary or advisable to establish the Joint
Collateral Agent's "control" thereof;
(ii) it shall comply with all of its obligations
under any partnership agreement or limited liability company agreement
relating to Pledged Partnership Interests or Pledged LLC Interests,
other than obligations being contested in good faith or with respect to
which Grantor believes in good faith that it has a set off claim and
shall enforce all of its material rights with respect to any Investment
Related Property except to
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the extent in Grantor's business judgment, such enforcement is not in
Grantor's best interest; and
(iii) each Grantor consents to the grant by each
other Grantor of a security interest in all Investment Related Property
to the Joint Collateral Agent and, without limiting the foregoing,
consents to the transfer of any Pledged Partnership Interest and any
Pledged LLC Interest to the Joint Collateral Agent or its nominee
following an Event of Default and to the substitution of the Joint
Collateral Agent or its nominee as a partner in any partnership or as a
member in any limited liability company with all the rights and powers
related thereto.
4.4.3 PLEDGED DEBT
(a) Representations and Warranties. Each Grantor hereby
represents and warrants to the Joint Collateral Agent and each other Secured
Party, on the Closing Date and each Credit Date, that:
(i) Schedule 4.4 (as such schedule may be
amended or supplemented from time to time) sets forth under the heading
"Pledged Debt" all of the Pledged Debt owned by any Grantor that is
evidenced by an Instrument and, to the best of such Grantor's
knowledge, all of such Pledged Debt has been duly authorized,
authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof and is not in default and
constitutes all of the issued and outstanding inter-company
Indebtedness evidenced by an instrument or certificated security of the
respective issuers thereof owing to such Grantor.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees from and after the date of this Agreement until the payment
in full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all Outstanding Letters of
Credit that:
(i) it shall notify the Joint Collateral Agent
of any default under any Pledged Debt (after the passage of any
applicable grace or cure period) that has caused, either in any
individual case or in the aggregate, a Material Adverse Effect.
4.4.4 INVESTMENT ACCOUNTS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants to the Joint Collateral Agent and each other Secured
Party, on the Closing Date and each Credit Date, that:
(i) Schedule 4.4 hereto (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Securities Accounts" and "Commodities Accounts,"
respectively, all of the Securities Accounts and Commodities Accounts
in which each Grantor has an interest. Each Grantor is the sole
entitlement holder of each Securities Account and Commodities Account
opposite its name, and such Grantor has not consented to, and is not
otherwise aware of, any Person (other than the Joint Collateral Agent
pursuant hereto) having "control" (within the meanings of Sections
8-106 and 9-106 of the UCC) over, or any other interest in, any such
Securities Account or Commodity Account or any securities or other
property credited thereto;
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(ii) Schedules 4.4(A)(8)(a) and 4.4(A)(8)(b)
hereto (as such schedules may be amended or supplemented from time to
time) set forth under the headings "Deposit Accounts: Concentration
Accounts" and "Deposit Accounts: Insurance Concentration Accounts" all
of the Concentration Accounts and Insurance Concentration Accounts
referred to in Schedule 4.29 and Section 5.5(e) of the Credit
Agreement, respectively, and Schedule 4.4(A)(8)(c) hereto (as such
schedule may be amended or supplemented from time to time) sets forth
under the heading "Deposit Accounts: Collection Account," such other
Deposit Accounts not listed in Schedule 4.4(A)(8)(a) or 4.4(A)(8)(b) in
which each Grantor has an interest. Each Grantor is the sole account
holder of each Deposit Account listed on Schedule 4.4(A)(8) opposite
its name and such Grantor has not consented to, and is not otherwise
aware of, any Person (other than the Joint Collateral Agent pursuant
hereto) having either sole dominion and control (within the meaning of
common law) or "control" (within the meaning of Section 9-104 of the
UCC) over, or any other interest in, any such Deposit Account or any
money or other property deposited therein; and
(iii) Except as otherwise in compliance with
Section 5.17(g) of the Credit Agreement, each Grantor has taken all
actions necessary or desirable, including those specified in Section
4.4.4(b) to: (a) establish the Joint Collateral Agent's "control"
(within the meanings of Sections 8-106 and 9-106 or 9-104, as
applicable of the UCC) over any portion of the Investment Related
Property constituting Certificated Securities, Uncertificated
Securities, Securities Accounts (other than Securities Accounts with
outstanding fair market value or balance no greater than $50,000 in the
aggregate at any time for all Grantors (the "De Minimis Securities
Accounts")), Securities Entitlements (other than Securities
Entitlements with outstanding fair market value no greater than $50,000
in the aggregate at any time for all Grantors with respect to which is
credited to a De Minimis Securities Account (the "De Minimis Securities
Entitlements")), Concentration Accounts, Insurance Concentration
Accounts, Collection Accounts or Commodities Accounts; and (b) to
deliver all Instruments evidencing Pledged Debt to the Joint Collateral
Agent.
(b) Covenants and Agreement. Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party that from and after the date of this Agreement until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit that:
(i) it shall not close or terminate any
Concentration Account, Insurance Concentration Account or Collection
Account without the prior consent of the Joint Collateral Agent and
unless a successor or replacement account has been established with the
consent of the Joint Collateral Agent with respect to which successor
or replacement account a control agreement has been entered into by the
appropriate Grantor, Joint Collateral Agent and securities intermediary
or depository institution at which such successor or replacement
account is to be maintained in accordance with the provisions of
Section 4.4.4(c); and
(ii) it shall transfer any and all funds or
Securities Entitlements held in or credited to any De Minimis
Securities Account with an outstanding fair market value or balance in
excess of $50,000 in the aggregate for all Grantors to an Investment
Account under the "control" of the Joint Collateral Agent (within the
meaning of 8-106 and 9-106 or 9-104, as applicable of the UCC) in
accordance with the provisions of Section 4.4.4(c).
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(c) Delivery and Control
(i) Each Grantor agrees that with respect to any
Investment Related Property in which it currently has rights it shall
comply with the provisions of this Section 4.4.4(c) on or before the
Credit Date and with respect to any Investment Related Property
hereafter acquired by such Grantor it shall comply with the provisions
of this Section 4.4.4(c) immediately upon acquiring rights therein.
With respect to any Investment Related Property consisting of
Securities Accounts (other than De Minimis Securities Accounts),
Securities Entitlements (other than De Minimis Securities
Entitlements), Concentration Accounts, Insurance Concentration Accounts
or Collection Accounts, except as otherwise in compliance with Section
5.17(g) of the Credit Agreement, it shall cause the securities
intermediary or depositary institution, as the case may be, maintaining
such Securities Account, Securities Entitlement, Concentration
Accounts, Government Receivables Concentration Accounts or Collection
Accounts to enter into an agreement substantially in the form of
Exhibit C hereto, or otherwise in form and substance reasonably
satisfactory to the Joint Collateral Agent, pursuant to which it shall
agree to comply with the Joint Collateral Agent's "entitlement orders"
or "instructions", as the case may be, without further consent by such
Grantor. Each Grantor shall have entered into such control agreement or
agreements with respect to: (i) any Securities Accounts (other than De
Minimis Securities Accounts), Securities Entitlements (other than De
Minimis Securities Entitlements), Concentration Accounts, Insurance
Concentration Accounts or Collection Accounts that exist on the Credit
Date, as of or prior to the Credit Date, except as otherwise in
compliance with Section 5.17(g) of the Credit Agreement and (ii) any
Securities Accounts (other than De Minimis Securities Accounts),
Securities Entitlements (other than De Minimis Securities
Entitlements), Concentration Accounts, Insurance Concentration Accounts
or Collection Accounts that are created or acquired after the Closing
Date, as of or prior to the deposit or transfer of any such Securities
Entitlements or funds, whether constituting moneys or investments, into
such Securities Accounts, Concentration Accounts, Government
Receivables Concentration Accounts or Collection Accounts.
In addition to the foregoing, if any issuer of any Investment Related
Property is located in a jurisdiction outside of the United States,
each Grantor shall take such additional actions as reasonably requested
by the Joint Collateral Agent, including, without limitation, causing
the issuer to register the pledge on its books and records or making
such filings or recordings, in each case as may be necessary or
advisable, under the laws of such issuer's jurisdiction to insure the
validity, perfection and priority of the security interest of the Joint
Collateral Agent. Upon the occurrence of and during the continuation of
an Event of Default, the Joint Collateral Agent shall have the right,
without notice to any Grantor, to transfer all or any portion of the
Investment Related Property to its name or the name of its nominee or
agent.
4.5 MATERIAL CONTRACTS.
(a) Covenants and Agreements. Each Grantor hereby
covenants and agrees from and after the date of this Agreement until the payment
in full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all Outstanding Letters of
Credit that:
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(i) After the occurrence and during the
continuance of an Event of Default, each Grantor shall deliver promptly
to the Joint Collateral Agent a copy of each material demand, notice or
document received by it relating in any way to any Material Contract;
(ii) each Grantor shall deliver promptly to the
Joint Collateral Agent, and in any event within ten (10) Business Days,
after (1) any Material Contract of such Grantor is terminated or
amended in a manner that is materially adverse to such Grantor or (2)
any new Material Contract is entered into by such Grantor, a written
statement describing such event, with copies of such material
amendments or new contracts, delivered to the Joint Collateral Agent
(to the extent such delivery is permitted by the terms of any such
Material Contract, provided, no prohibition on delivery shall be
effective if it were bargained for by such Grantor with the intent of
avoiding compliance with this Section 4.5(b)(iii)), and an explanation
of any actions being taken with respect thereto;
(iii) it shall perform in all material respects
all of its obligations with respect to the Material Contracts as it
deems appropriate or advisable in the exercise of its business
judgment;
(iv) it shall promptly and diligently exercise
each material right (except the right of termination) it may have under
any Material Contract, any Supporting Obligation or Collateral Support
to the extent such Grantor determines in the exercise of its business
judgment that such enforcement is in its best interests, in each case,
at its own expense, and in connection with such collections and
exercise, such Grantor shall take such action as such Grantor or the
Joint Collateral Agent may deem necessary or advisable;
(v) it shall use its best efforts to keep in
full force and effect any Supporting Obligation or Collateral Support
relating to any Material Contract, in accordance with the terms of such
Material Contract; and
(vi) with respect to any Material Contract (other
than any agreement, contract license to which any Governmental
Authority is a counterparty) that prevents the assignment or granting
of a security interest therein (either by its terms or by any federal
or state statutory prohibition or otherwise) (any such agreement,
contract or license, a "NON-ASSIGNABLE CONTRACT"), each Grantor shall,
within thirty (30) days of the date hereof with respect to any
Non-Assignable Contract in effect on the date hereof and within thirty
(30) days after entering into any Non-Assignable Contract after the
Closing Date, request in writing the consent of the counterparty or
counterparties to the Non-Assignable Contract pursuant to the terms of
such Non-Assignable Contract or applicable law to the assignment or
granting of a security interest in such Non-Assignable Contract to the
Joint Collateral Agent and use its commercially reasonable best efforts
to obtain such consent as soon as practicable thereafter.
4.6 LETTER OF CREDIT RIGHTS. (a) Representations and Warranties.
Each Grantor hereby represents and warrants to the Joint Collateral Agent and
each other Secured Party, on the Closing Date and on each Credit Date, that:
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(i) all material letters of credit to which such
Grantor has rights is listed on Schedule 4.6 (as such schedule may be
amended or supplemented from time to time) hereto; and
(ii) it has obtained the consent of each issuer
of any material letter of credit to the assignment of the proceeds of
the letter of credit to the Joint Collateral Agent.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party that from and after the date of this Agreement until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit that
with respect to any material letter of credit hereafter arising it shall obtain
the consent of the issuer thereof to the assignment of the proceeds of the
letter of credit to the Joint Collateral Agent and shall deliver to the Joint
Collateral Agent a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules necessary
to notify the Joint Collateral Agent of such additional material letter of
credit thereto.
4.7 INTELLECTUAL PROPERTY.
(a) Representations and Warranties. Except as disclosed
in Schedule 4.7(H) (as such schedule may be amended or supplemented from time to
time), each Grantor hereby represents and warrants to the Joint Collateral Agent
and each other Secured Party, on the Closing Date and on each Credit Date, that:
(i) Schedule 4.7 (as such schedule may be
amended or supplemented from time to time) sets forth a true and
complete list of (i) all United States, state and foreign registrations
of and applications for Patents, Trademarks and Copyrights owned by
each Grantor and (ii) all Patent Licenses, Trademark Licenses and
Copyright Licenses material to the business of Grantors, taken as a
whole;
(ii) it is the sole and exclusive owner of the
entire right, title, and interest in and to all Intellectual Property
set forth on Schedule 4.7 (as such schedule may be amended or
supplemented from time to time) and owns or has the valid right to use
all other Intellectual Property used in or necessary to conduct its
business, free and clear of all Liens, except for Permitted Liens and
the agreements set forth on Schedule 4.7(B), (D), (F) and (G) (as each
may be amended or supplemented from time to time);
(iii) all Intellectual Property material to the
business of Grantors, taken as a whole, is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part, and each
Grantor has performed all acts and has paid all renewal, maintenance,
and other fees and taxes required to maintain each and every
registration and application of Intellectual Property in full force and
effect;
(iv) all Intellectual Property material to the
business of Grantors, taken as a whole, is valid and enforceable; no
holding, decision, or judgment has been rendered in any action or
proceeding before any court or administrative authority challenging the
validity of, such Grantor's right to register, or such Grantor's rights
to own or use, any Intellectual Property and no such action or
proceeding is pending or, to the best of such Grantor's knowledge,
threatened;
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(v) all registrations and applications for
Copyrights, Patents and Trademarks are standing in the name of each
Grantor, and none of the Trademarks, Patents, Copyrights or Trade
Secret Collateral has been licensed by any Grantor to any affiliate or
third party that is not a Grantor hereunder, except as disclosed in
Schedule 4.7(B), (D), (F), or (G) (as each may be amended or
supplemented from time to time);
(vi) each Grantor has been using appropriate
statutory notice of registration in connection with its use of
registered Trademarks, proper marking practices in connection with the
use of Patents, and appropriate notice of copyright in connection with
the publication of Copyrights material to the business of Grantors,
taken as a whole;
(vii) each Grantor uses commercially reasonably
efforts to provide adequate standards of quality in the manufacture,
distribution, and sale of all products sold and in the provision of all
services rendered under or in connection with all Trademark Collateral
and has taken all commercially reasonable action necessary to insure
that all licensees of the Trademark Collateral owned by such Grantor
use such adequate standards of quality;
(viii) to each Grantor's knowledge, the conduct of
such Grantor's business does not infringe upon any trademark, patent,
copyright, trade secret or similar intellectual property right owned or
controlled by a third party; no claim has been made that the use of any
Intellectual Property owned or used by Grantor (or any of its
respective licensees) violates the asserted rights of any third party;
(ix) to the best of each Grantor's knowledge, no
third party is infringing upon any Intellectual Property owned or used
by such Grantor, or any of its respective licensees;
(x) no settlement or consents, covenants not to
xxx, nonassertion assurances, or releases have been entered into by
Grantor or to which Grantor is bound that adversely affect Grantor's
rights to own or use any Intellectual Property; and
(xi) except with regard to Permitted Liens, each
Grantor has not made a previous assignment, sale, transfer or agreement
constituting a present or future assignment, sale, transfer or
agreement of any Intellectual Property that has not been terminated or
released. There is no effective financing statement or other document
or instrument now executed, or on file or recorded in any public
office, granting a security interest in or otherwise encumbering any
part of the Intellectual Property, other than in favor of the Joint
Collateral Agent.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party that from and after the date of this Agreement until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit that:
(i) it shall not do any act or omit to do any
act whereby any of the Intellectual Property which is material to the
business of Grantors, taken as a whole, may lapse, or become abandoned,
dedicated to the public, or unenforceable, or which would adversely
affect the validity, grant, or enforceability of the security interest
granted therein;
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(ii) it shall not, with respect to any Trademarks
which are material to the business of Grantors, taken as a whole, cease
the use of any of such Trademarks or fail to maintain the level of the
quality of products sold and services rendered under any of such
Trademark at a level at least substantially consistent with the quality
of such products and services as of the date hereof, and each Grantor
shall take all commercially reasonable steps necessary to insure that
licensees of such Trademarks use such consistent standards of quality;
(iii) it shall, within thirty (30) days of the
creation or acquisition of any Copyrightable work which is material to
the business of Grantor, apply to register the Copyright in the United
States Copyright Office in accordance with such Grantor's past
practice;
(iv) it shall promptly notify the Joint
Collateral Agent if it knows, has reason to know, or reasonably
believes that any item of the Intellectual Property that is material to
the business of any Grantor may become (a) abandoned or dedicated to
the public or placed in the public domain, (b) invalid or
unenforceable, or (c) subject to any adverse determination or
development (including the institution of proceedings) in any action or
proceeding in the United States Patent and Trademark Office, the United
States Copyright Office, and state registry, any foreign counterpart of
the foregoing, or any court;
(v) it shall take all reasonable steps in the
United States Patent and Trademark Office, the United States Copyright
Office, any state registry or any foreign counterpart of the foregoing,
to pursue any application and maintain any registration of each
Trademark, Patent, and Copyright owned by any Grantor and material to
the business of Grantors, taken as a whole, which is now or shall
become included in the Intellectual Property (except for such works
with respect to which such Grantor has determined in the exercise of
its commercially reasonable judgment that it shall not seek
registration) including, but not limited to, those items on Schedule
47(A), (C) and (E) (as each may be amended or supplemented from time to
time);
(vi) in the event that any Intellectual Property
owned by or exclusively licensed to any Grantor is infringed,
misappropriated, or diluted by a third party, such Grantor shall
promptly take all reasonable actions to stop such infringement,
misappropriation, or dilution and protect its exclusive rights in such
Intellectual Property including, but not limited to, the initiation of
a suit for injunctive relief and to recover damages;
(vii) it shall promptly (but in no event more than
thirty (30) days after any Grantor obtains knowledge thereof) report to
the Joint Collateral Agent (i) the filing of any application to
register any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office, or any state
registry or foreign counterpart of the foregoing (whether such
application is filed by such Grantor or through any agent, employee,
licensee, or designee thereof) and (ii) the registration of any
Intellectual Property by any such office, in each case by executing and
delivering to the Joint Collateral Agent a completed Pledge Supplement,
substantially in the form of Exhibit A attached hereto, together with
all Supplements to Schedules thereto;
(viii) it shall, promptly upon the reasonable
request of the Joint Collateral Agent, execute and deliver to the Joint
Collateral Agent any document required
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to acknowledge, confirm, register, record, or perfect the Joint
Collateral Agent's interest in any part of the Intellectual Property,
whether now owned or hereafter acquired;
(ix) except with the prior consent of the Joint
Collateral Agent or as permitted under the Credit Agreement or, at any
time after the First Priority Termination Date, under the Rollover Note
Indenture, each Grantor shall not execute, and there will not be on
file in any public office, any financing statement or other document or
instruments, except financing statements or other documents or
instruments filed or to be filed in favor of the Joint Collateral Agent
and each Grantor shall not sell, assign, transfer, license, grant any
option, or create or suffer to exist any Lien upon or with respect to
the Intellectual Property material to the business of Grantors, taken
as a whole, except for Permitted Liens and the Lien created by and
under this Security Agreement and the other Credit Documents;
(x) it shall hereafter use commercially
reasonable efforts so as not to permit the inclusion in any contract to
which it hereafter becomes a party of any provision that could or might
in any way materially impair or prevent the creation of a security
interest in, or the assignment of, such Grantor's rights and interests
in any property included within the definitions of any Intellectual
Property that is material to the business of the Grantors, taken as a
whole, acquired under such contracts;
(xi) it shall take all steps reasonably necessary
to protect the secrecy of all Trade Secrets that is material to the
business of Grantors, taken as a whole, including, without limitation,
restricting access to trade secret information and documents;
(xii) it shall use proper statutory notice in
connection with its use of any of the Intellectual Property; and
(xiii) it shall continue to collect, at its own
expense, all amounts due or to become due to such Grantor in respect of
the Intellectual Property or any portion thereof. In connection with
such collections, each Grantor may take (and during an Event of
Default, at the Joint Collateral Agent's reasonable direction, shall
take) such action as such Grantor or, during an Event of Default, the
Joint Collateral Agent may deem reasonably necessary or advisable to
enforce collection of such amounts. Notwithstanding the foregoing, the
Joint Collateral Agent shall have the right at any time during an Event
of Default, to notify, or require any Grantor to notify, any obligors
with respect to any such amounts of the existence of the security
interest created hereby.
4.8 COMMERCIAL TORT CLAIMS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants to the Joint Collateral Agent and each other Secured
Party, on the Closing Date and on each Credit Date, that Schedule 4.8 (as such
schedule may be amended or supplemented from time to time) sets forth all
Commercial Tort Claims of each Grantor in excess of $100,000 individually or
$1,000,000 in the aggregate; and
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees with the Joint Collateral Agent and each other Secured
Party that from and after the date of this Agreement until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit that
with
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respect to any Commercial Tort Claim in excess of $100,000 individually or
$1,000,000 in the aggregate hereafter arising it shall deliver to the Joint
Collateral Agent a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules thereto,
identifying such new Commercial Tort Claims.
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL
GRANTORS.
5.1 ACCESS; RIGHT OF INSPECTION. Each Grantor will, and will cause
each of its Subsidiaries to, permit any authorized representatives designated by
the Joint Collateral Agent to visit and inspect any of the properties of any
Grantor and any of its respective Subsidiaries, to inspect, copy and take
extracts from its and their financial and accounting records, and to discuss its
and their affairs, finances and accounts with its and their officers and
independent public accountants, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested, provided that all visits to and inspections shall be conducted in a
manner calculated to minimize any disruption to the Grantors' operations and
consistent with the confidentiality provision set forth in Section 10.17 of the
Credit Agreement.
5.2 FURTHER ASSURANCES. (a) Each Grantor agrees that from time to
time, at the expense of such Grantor, that it shall promptly execute and deliver
all further instruments and documents, and take all further action, that the
Joint Collateral Agent may reasonably request, in order to create and/or
maintain the validity, perfection or priority of and protect any security
interest granted or purported to be granted hereby or to enable the Joint
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
each Grantor shall:
(i) authorize the Joint Collateral Agent to file
such financing or continuation statements, or amendments thereto, and
execute and deliver such other agreements, instruments, endorsements,
powers of attorney or notices, as may be necessary or desirable, or as
the Joint Collateral Agent may reasonably request, in order to perfect
and preserve the security interests granted or purported to be granted
hereby;
(ii) take all actions reasonably requested by
Joint Collateral Agent as being necessary to ensure the recordation of
appropriate evidence of the liens and security interest granted
hereunder in the Intellectual Property with any intellectual property
registry in which said Intellectual Property is registered or in which
an application for registration is pending including, without
limitation, the United States Patent and Trademark Office, the United
States Copyright Office, the various Secretaries of State and the
foreign counterparts on any of the foregoing;
(iii) at any reasonable time, upon request by the
Joint Collateral Agent, exhibit the Collateral to and allow inspection
of the Collateral by the Joint Collateral Agent, or persons designated
by the Joint Collateral Agent subject to the provisions of Section 5.1
above; and
(iv) at the Joint Collateral Agent's request,
appear in and defend any action or proceeding that may affect such
Grantor's title to or the Joint Collateral Agent's security interest in
all or any part of the Collateral.
(b) Each Grantor hereby authorizes the Joint Collateral
Agent to file a Record or Records, including, without limitation, financing or
continuation statements, and
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amendments thereto, in any jurisdictions and with any filing offices as the
Joint Collateral Agent may determine, in its sole discretion, are necessary or
advisable to perfect the security interest granted to the Joint Collateral Agent
herein. Such financing statements may describe the Collateral in the same manner
as described herein or may contain an indication or description of collateral
that describes such property in any other manner as the Joint Collateral Agent
may determine, in its sole discretion, is necessary, advisable or prudent to
ensure the perfection of the security interest in the Collateral granted to the
Joint Collateral Agent herein, including, without limitation, describing such
property as "all assets" or "all personal property, whether now owned or
hereafter acquired." Each Grantor shall furnish to the Joint Collateral Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Joint Collateral Agent may reasonably request, all in reasonable detail.
(c) Each Grantor hereby authorizes the Joint Collateral
Agent to modify this Agreement after obtaining such Grantor's approval of or
signature to such modification by amending Schedule 4.7 (as such schedule may be
amended or supplemented from time to time) to include reference to any right,
title or interest in any existing Intellectual Property or any Intellectual
Property acquired or developed by any Grantor after the execution hereof or to
delete any reference to any right, title or interest in any Intellectual
Property in which any Grantor no longer has or claims any right, title or
interest.
5.3 ADDITIONAL GRANTORS. From time to time subsequent to the date
hereof, additional Persons shall, in accordance with the Credit Agreement or the
Rollover Note Indenture, become parties hereto as additional Grantors (each, an
"Additional Grantor"), by executing a Counterpart Agreement. Upon delivery of
any such Counterpart Agreement to the Joint Collateral Agent, notice of which is
hereby waived by Grantors, each Additional Grantor shall be a Grantor. Each
Grantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Joint Collateral Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
SECTION 6. JOINT COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
6.1 POWER OF ATTORNEY. Each Grantor hereby irrevocably appoints
the Joint Collateral Agent as such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such
Grantor, the Joint Collateral Agent or otherwise, from time to time in the Joint
Collateral Agent's discretion to take any action and to execute any instrument
that the Joint Collateral Agent may deem reasonably necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, the
following:
(a) upon the occurrence and during the continuance of any
Event of Default, in consultation with the applicable Grantor(s) in order to
ensure the validity, perfection and priority of the Joint Collateral Agent and
any other rights of the Joint Collateral Agent over the Collateral to obtain and
adjust insurance relating to the Collateral required to be maintained by such
Grantor or paid to the Joint Collateral Agent pursuant to the Credit Agreement,
and not so maintained or paid;
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(b) upon the occurrence and during the continuance of any
Event of Default, to ask for, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of any
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) upon the occurrence and during the continuance of any
Event of Default, to file any claims or take any action or institute any
proceedings that the Joint Collateral Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights of
the Joint Collateral Agent with respect to any of the Collateral;
(e) to prepare and file any UCC financing statements
relating to the Collateral against such Grantor as debtor;
(f) to prepare, sign, and file for recordation in any
intellectual property registry, appropriate evidence of the lien and security
interest granted herein in the Intellectual Property in the name of such Grantor
as assignor;
(g) to take or cause to be taken all actions necessary to
perform or comply or cause performance or compliance with the terms of this
Agreement, including, without limitation, access to pay or discharge taxes or
Liens (other than Permitted Liens) levied or placed upon or threatened against
the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Joint Collateral Agent in its sole
discretion, any such payments made by the Joint Collateral Agent to become
obligations of such Grantor to the Joint Collateral Agent, due and payable
immediately without demand; and
(h) subject to any Requirement of Law, generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though the Joint Collateral Agent
were the absolute owner thereof for all purposes, and to do, at the Joint
Collateral Agent's option and such Grantor's expense, at any time or from time
to time, upon three (3) Business Days notice to such Grantor, all acts and
things that the Joint Collateral Agent deems reasonably necessary to protect,
preserve or realize upon the Collateral and the Joint Collateral Agent's
security interest therein in order to effect the intent of this Agreement, all
as fully and effectively as such Grantor might do.
6.2 NO DUTY ON THE PART OF JOINT COLLATERAL AGENT OR SECURED
PARTIES. The powers conferred on the Joint Collateral Agent hereunder are solely
to protect the interests of the Secured Parties in the Collateral and shall not
impose any duty upon the Joint Collateral Agent or any Secured Party to exercise
any such powers. The Joint Collateral Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
RATIFICATION. Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interest created hereby are released.
SECTION 7. REMEDIES.
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7.1 GENERALLY.
(a) If any Event of Default shall have occurred and be
continuing, the Joint Collateral Agent may, subject to the terms of and in the
manner contemplated by the Intercreditor Agreement, exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it at law or in equity, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral) to collect, enforce or satisfy any Secured Obligations then
owing, whether by acceleration or otherwise, and also may pursue any of the
following separately, successively or simultaneously:
(i) require any Grantor to, and each Grantor
hereby agrees that it shall at its expense and promptly upon request of
the Joint Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Joint Collateral Agent and make it
available to the Joint Collateral Agent at a place to be designated by
the Joint Collateral Agent that is reasonably convenient to both
parties;
(ii) enter onto the property where any Collateral
is located and take possession thereof with or without judicial
process, subject to any Requirement of Law;
(iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent the
Joint Collateral Agent deems appropriate; and
(iv) without notice except as specified below or
under the UCC, sell, assign, lease, license (on an exclusive or
nonexclusive basis) or otherwise dispose of the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Joint Collateral Agent's offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices
and upon such other terms as the Joint Collateral Agent may deem
commercially reasonable.
(b) The Joint Collateral Agent or any Secured Party may
be the purchaser of any or all of the Collateral at any public or private (to
the extent any portion of the Collateral being privately sold is of a kind that
is customarily sold on a recognized market or the subject of widely distributed
standard price quotations) sale in accordance with the UCC and the Joint
Collateral Agent, as agent for and representative of the Secured Parties, shall
be entitled, at the direction of the Directing Party, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such sale made in accordance with the UCC, to use and
apply any of the Secured Obligations owing solely to the Secured Parties or
Secured Party for whom such Directing Party is acting at such time as a credit
on account of the purchase price for any Collateral payable by the Joint
Collateral Agent at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days notice to such Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Joint Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Joint Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time
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and place to which it was so adjourned. Each Grantor agrees that it would not be
commercially unreasonable for the Joint Collateral Agent to dispose of the
Collateral or any portion thereof by using Internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capability of doing so, or that match buyers and sellers of assets.
Each Grantor hereby waives any claims against the Joint Collateral Agent arising
by reason of the fact that the price at which any Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale, even if the Joint Collateral Agent accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, Grantors shall be liable for the deficiency and
the reasonable and documented fees of any attorneys employed by the Joint
Collateral Agent to collect such deficiency. Each Grantor further agrees that a
breach of any of the covenants contained in this Section will cause irreparable
injury to the Joint Collateral Agent, that the Joint Collateral Agent has no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no default has occurred giving rise to the
Secured Obligations becoming due and payable prior to their stated maturities.
Nothing in this Section shall in any way alter the rights of the Joint
Collateral Agent hereunder.
(c) The Joint Collateral Agent may sell the Collateral
without giving any warranties as to the Collateral. The Joint Collateral Agent
may specifically disclaim or modify any warranties of title or the like. This
procedure will not be considered to adversely effect the commercial
reasonableness of any sale of the Collateral.
(d) If the Joint Collateral Agent sells any of the
Collateral on credit, the Secured Obligations will be credited only with
payments actually made by the purchaser and received by the Joint Collateral
Agent and applied to the indebtedness of the purchaser. In the event the
purchaser fails to pay for the Collateral, the Joint Collateral Agent may resell
the Collateral.
(e) The Joint Collateral Agent shall have no obligation
to marshal any of the Collateral.
7.2 APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by the Joint Collateral Agent
in respect of any sale, any collection from, or other realization upon all or
any part of the Collateral shall be applied in full or in part by the Joint
Collateral Agent against, the Secured Obligations in the order of priority set
forth in the Intercreditor Agreement.
7.3 INVESTMENT RELATED PROPERTY.
(a) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws, the Joint Collateral Agent may be compelled, with respect to any sale of
all or any part of the Investment Related Property conducted without prior
registration or qualification of such Investment Related Property under the
Securities Act and/or such state securities laws, to limit purchasers to those
who will agree, among other things, to acquire the Investment Related Property
for their own account, for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges that any such private sale may be at
prices and on terms less favorable than those obtainable through a public sale
without such restrictions (including a public offering made pursuant to a
34
registration statement under the Securities Act) and, notwithstanding such
circumstances, each Grantor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that the Joint Collateral
Agent shall have no obligation to engage in public sales and no obligation to
delay the sale of any Investment Related Property for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
If the Joint Collateral Agent determines to exercise its right to sell any or
all of the Investment Related Property, upon written request, each Grantor shall
and shall cause each issuer of any Pledged Stock to be sold hereunder, each
partnership and each limited liability company from time to time to furnish to
the Joint Collateral Agent all such information as the Joint Collateral Agent
may request in order to determine the number and nature of interest, shares or
other instruments included in the Investment Related Property which may be sold
by the Joint Collateral Agent in exempt transactions under the Securities Act
and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
(b) Upon the occurrence and during the continuation of an
Event of Default, the Joint Collateral Agent shall have the right to apply the
balance from any Deposit Account or instruct the bank at which any Deposit
Account is maintained to pay the balance of any Deposit Account to or for the
benefit of the Joint Collateral Agent.
7.4 INTELLECTUAL PROPERTY.
(a) Anything contained herein to the contrary
notwithstanding, except as otherwise set forth in Section 2.2, upon the
occurrence and during the continuation of an Event of Default:
(i) the Joint Collateral Agent shall have the
right (but not the obligation) to bring suit or otherwise commence any
action or proceeding in the name of any Grantor, the Joint Collateral
Agent or otherwise, in the Joint Collateral Agent's sole discretion, to
enforce any Intellectual Property, in which event such Grantor shall,
at the request of the Joint Collateral Agent, do any and all lawful
acts and execute any and all documents required by the Joint Collateral
Agent in aid of such enforcement and such Grantor shall promptly, upon
demand, reimburse and indemnify the Joint Collateral Agent as provided
in Section 10 hereof in connection with the exercise of its rights
under this Section, and, to the extent that the Joint Collateral Agent
shall elect not to bring suit to enforce any Intellectual Property as
provided in this Section, each Grantor agrees to use all reasonable
measures, whether by action, suit, proceeding or otherwise, to prevent
the infringement of any of the Intellectual Property by others and for
that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing as shall be reasonably
necessary to prevent such infringement;
(ii) if the Secured Obligations shall have become
immediately due and payable, upon written demand from the Joint
Collateral Agent, each Grantor shall grant, assign, convey or otherwise
transfer to the Joint Collateral Agent an absolute assignment of all of
such Grantor's right, title and interest in and to the Intellectual
Property and shall execute and deliver to the Joint Collateral Agent
such documents as are necessary or appropriate to carry out the intent
and purposes of this Agreement subject to the limitation set forth in
Section 2.2 herein;
35
(iii) each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured Obligations
outstanding only to the extent that the Joint Collateral Agent (or any
Secured Party) receives cash proceeds in respect of the sale of, or
other realization upon, the Intellectual Property; and
(iv) the Joint Collateral Agent shall have the
right to notify, or require each Grantor to notify, any obligors with
respect to amounts due or to become due to such Grantor in respect of
the Intellectual Property, of the existence of the security interest
created herein, to direct such obligors to make payment of all such
amounts directly to the Joint Collateral Agent, and, upon such
notification and at the expense of such Grantor, to enforce collection
of any such amounts and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as such
Grantor might have done;
(1) all amounts and proceeds (including checks and other
instruments) received by Grantor in respect of amounts due to
such Grantor in respect of the Collateral or any portion
thereof shall be received in trust for the benefit of the
Joint Collateral Agent hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over
or delivered to the Joint Collateral Agent in the same form as
so received (with any necessary endorsement) to be held as
cash Collateral and applied as provided by Section 7.7 hereof;
and
(2) Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any
obligor with respect thereto or allow any credit or discount
thereon without the prior written consent of the Joint
Collateral Agent, which consent shall not be unreasonably
withheld.
(b) If (i) an Event of Default shall have occurred and,
by reason of cure, waiver, modification, amendment or otherwise, no longer be
continuing, (ii) no other Event of Default shall have occurred and be
continuing, (iii) an assignment or other transfer to the Joint Collateral Agent
of any rights, title and interests in and to the Intellectual Property shall
have been previously made and shall have become absolute and effective, and (iv)
the Secured Obligations shall not have become immediately due and payable or the
acceleration of any Secured Obligations shall have been duly rescinded, then,
upon the written request of any Grantor, the Joint Collateral Agent shall
promptly execute and deliver to such Grantor, at such Grantor's sole cost and
expense, such assignments or other transfer as may be necessary to reassign to
such Grantor any such rights, title and interests as may have been assigned to
the Joint Collateral Agent as aforesaid, subject to any disposition thereof that
may have been made by the Joint Collateral Agent; provided, after giving effect
to such reassignment, the Joint Collateral Agent's security interest granted
pursuant hereto, as well as all other rights and remedies of the Joint
Collateral Agent granted hereunder, shall continue to be in full force and
effect; and provided further, the rights, title and interests so reassigned
shall be free and clear of any Liens granted by or on behalf of the Joint
Collateral Agent and the Secured Parties.
(c) Solely for the purpose of enabling the Joint
Collateral Agent to exercise rights and remedies under this Section 7 and at
such time as the Joint Collateral Agent shall be lawfully entitled to exercise
such rights and remedies, each Grantor hereby grants to the Joint Collateral
Agent, to the extent it has the right to do so, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to such
Grantor), subject, in the case of Trademarks, to sufficient rights to quality
control and inspection in favor of such Grantor to avoid the risk of
invalidation of said Trademarks, to use, operate under, license, or sublicense
36
any Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located.
7.5 CASH PROCEEDS. In addition to the rights of the Joint
Collateral Agent specified in Section 4.3 with respect to payments of
Receivables, all proceeds of any Collateral received by any Grantor consisting
of cash, checks and other near-cash items (collectively, "CASH PROCEEDS") shall
be held by such Grantor in trust for the Joint Collateral Agent, segregated from
other funds of such Grantor, and shall, forthwith upon receipt by such Grantor,
unless otherwise provided pursuant to Section 4.4(a)(ii) above or Section
2.14(a) of the Credit Agreement, be turned over to the Joint Collateral Agent in
the exact form received by such Grantor (duly indorsed by such Grantor to the
Joint Collateral Agent, if required) and held by the Joint Collateral Agent in
the Collection Account. Any Cash Proceeds received by the Joint Collateral Agent
(whether from a Grantor or otherwise): (i) if no Event of Default shall have
occurred and be continuing, shall be held by the Joint Collateral Agent for the
ratable benefit of the Secured Parties, as collateral security for the Secured
Obligations (whether matured or unmatured) and (ii) if an Event of Default shall
have occurred and be continuing, may, in the sole discretion of the Joint
Collateral Agent, (A) be held by the Joint Collateral Agent for the ratable
benefit of the Secured Parties, as collateral security for the Secured
Obligations (whether matured or unmatured) and/or (B) then or at any time
thereafter may be applied by the Joint Collateral Agent against the Secured
Obligations then due and owing.
SECTION 8. JOINT COLLATERAL AGENT.
The Joint Collateral Agent has been appointed to act as Joint
Collateral Agent hereunder (i) by the Administrative Agent pursuant to the
Intercreditor Agreement, (ii) the Rollover Note Trustee pursuant to the
Intercreditor Agreement and (iii) by their acceptance of the benefits hereof, by
the other Secured Parties. The Joint Collateral Agent shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, to grant or refuses to grant any consent and
to take or refrain from taking any action (including, without limitation, the
release or substitution of Collateral), solely in accordance with the provisions
of the Intercreditor Agreement. In furtherance of the foregoing provisions of
the Intercreditor Agreement, each Secured Party, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Collateral hereunder, it being understood and agreed by such Secured
Party that all rights and remedies hereunder may be exercised solely by the
Joint Collateral Agent for the benefit of all Secured Parties in accordance with
the terms of this Section. The Joint Collateral Agent may resign or be removed
and a successor Joint Collateral Agent may be appointed, all in accordance with
Section 19 of the Intercreditor Agreement.
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all Outstanding Letters of Credit, be
binding upon each Grantor, its successors and assigns, and inure, together with
the rights and remedies of the Joint Collateral Agent hereunder, to the benefit
of the Joint Collateral Agent and its successors, transferees and assigns, for
the benefit and on behalf of the Secured Parties. Without limiting the
generality of the foregoing, any Secured Party may assign or otherwise transfer
any Secured Obligations held by it to any other Person subject to and in
compliance with the terms of the Credit Agreement or the Rollover Note
Indenture, as applicable, and such other Person shall thereupon become vested
with all the benefits in respect
37
thereof granted to the Secured Parties herein or otherwise. Upon the payment in
full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all Outstanding Letters of
Credit, the security interest and Liens granted hereby shall terminate hereunder
and of record and all rights to the Collateral shall revert to Grantors. Upon
any such termination the Joint Collateral Agent shall, at Grantors' expense,
execute and deliver to Grantors such documents as Grantors shall reasonably
request to evidence such termination.
SECTION 10. STANDARD OF CARE; JOINT COLLATERAL AGENT MAY PERFORM.
The powers conferred on the Joint Collateral Agent hereunder are solely
to protect its interest, for the benefit and on behalf of the Secured Parties,
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Joint Collateral Agent shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral. The Joint Collateral
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Joint Collateral Agent accords
its own property. Neither the Joint Collateral Agent nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or otherwise. If any Grantor fails to perform
any agreement contained herein, the Joint Collateral Agent may itself perform,
or cause performance of, such agreement, and the expenses of the Joint
Collateral Agent incurred in connection therewith shall be payable by each
Grantor under Section 10.2 of the Credit Agreement and Section 15 of the
Intercreditor Agreement.
SECTION 11. MISCELLANEOUS. NOTICE, ASSIGNMENT, ETC.Any notice required or
permitted to be given under this Agreement shall be given in accordance with
Section 10.1 of the Credit Agreement and Section 12.2 of the Rollover Note
Indenture, as applicable. No failure or delay on the part of the Joint
Collateral Agent in the exercise of any power, right or privilege hereunder or
under any other Transaction Document shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Transaction
Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default (as each term is defined in the
Credit Agreement or the Rollover Note Indenture) if such action is taken or
condition exists. This Agreement shall be binding upon and inure to the benefit
of the Joint Collateral Agent and Grantors and their respective successors and
assigns. No Grantor shall assign any right, duty or obligation hereunder except
as otherwise permitted under and in accordance with the Credit Agreement or the
Rollover Note Indenture, and any such assignment shall be null and void. This
Agreement and the other Transaction Documents embody the entire agreement and
understanding between Grantors and the Joint Collateral Agent and supersede all
38
prior agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Transaction Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties. This
Agreement may be executed in one or more counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.
11.2 EFFECT OF TERMINATION OF CREDIT DOCUMENTS OR THE ROLLOVER NOTE
INDENTURE.
(a) Upon the payment in full of the First Priority
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all Outstanding Letters of Credit, and upon
receipt by the Joint Collateral Agent of notice of the same (which notice shall
be sent by the Administrative Agent in accordance with Section 25 of the
Intercreditor Agreement), the term "Secured Parties" used herein shall be deemed
to mean the Second Priority Secured Parties only; the term "Transaction
Documents" shall be deemed to refer only to the Intercreditor Agreement, the
Collateral Documents (as defined in the Credit Agreement) and the Senior Note
Documents; the term "Secured Obligations" shall be deemed to mean all Secured
Obligations other than the First Priority Obligations; and all references herein
to the Administrative Agent shall be deemed ineffective and of no further force
and effect.
(b) Upon the payment in full of the Second Priority
Obligations and the discharge of the Rollover Note Indenture, and upon receipt
by the Joint Collateral Agent of notice of the same (which notice shall be sent
by the Rollover Note Trustee in accordance with Section 25 of the Intercreditor
Agreement), the term "Secured Parties" used herein shall be deemed to mean the
First Priority Secured Parties only; the term "Transaction Documents" shall be
deemed to refer only to the Intercreditor Agreement and the Credit Documents;
the term "Secured Obligations" shall be deemed to mean only all Secured
Obligations other than the Second Priority Obligations; and all references
herein to the Rollover Notes, the Rollover Note Indenture and the Rollover Note
Trustee shall be deemed ineffective and of no further force and effect.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 2708 OF TITLE 6 OF THE DELAWARE
CODE).
39
IN WITNESS WHEREOF, each Grantor and the Joint Collateral
Agent have caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first written
above.
GRANTORS: MARINER HEALTH CARE, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Sr. Vice President and Treasurer
EACH OTHER GRANTOR LISTED ON SCHEDULE A HERETO
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
40
JOINT COLLATERAL AGENT: RESIDENTIAL FUNDING
CORPORATION DBA GMAC-RFC
HEALTH CAPITAL,
as the Joint Collateral Agent
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
41
SCHEDULE A
LIST OF GRANTORS
SCHEDULE 1.1
EXCLUDED SUBSIDIARY INTERESTS
Name of Entity
SCHEDULE 4.1-1
SCHEDULE 4.1
TO PLEDGE AND SECURITY AGREEMENT
GENERAL INFORMATION
(A) Full Legal Name, Type of Organization, Jurisdiction of Organization,
Chief Executive Office/Sole Place of Business (or Residence if Grantor
is a Natural Person) and Organizational Identification Number of each
Grantor:
Chief Executive
Office/Sole Place of
Business (or Residence
Type of Jurisdiction of if Grantor is a Natural
Full Legal Name Organization Organization Person) Organization I.D.#
--------------- ------------ --------------- ----------------------- ------------------
(B) Other Names (including any Trade-Name or Fictitious Business Name)
under which each Grantor has conducted business for the past five (5)
years:
Name of Grantor Description of Agreement
--------------- ------------------------
(C) Changes in Name, Jurisdiction of Organization, Chief Executive Office
or Sole Place of Business (or Principal Residence if Grantor is a
Natural Person) and Corporate Structure within past five (5) years:
Full Legal Name Trade Name or Fictitious Business Name
--------------- --------------------------------------
(D) Agreements pursuant to which any Grantor is found as debtor within
past five (5) years:
Name of Grantor Date of Change Description of Change
--------------- -------------- ---------------------
(E) Initial Financing Statements:
Name of Grantor Filing Jurisdiction(s)
--------------- ----------------------
SCHEDULE 4.1-1
(F) Consents:
(G) Existing Financing Statements:
SCHEDULE 4.7-2
SCHEDULE 4.2
TO PLEDGE AND SECURITY AGREEMENT
Name of Grantor Location of Equipment and Inventory
--------------- -----------------------------------
SCHEDULE 4.2-1
SCHEDULE 4.4
TO PLEDGE AND SECURITY AGREEMENT
INVESTMENT RELATED PROPERTY
(A)(1) Pledged Stock:
STOCK NO. OF % OF OUTSTANDING
STOCK CLASS OF CERTIFICATED CERTIFICATE PAR PLEDGED STOCK OF THE
GRANTOR ISSUER STOCK (Y/N) NO. VALUE STOCK STOCK ISSUER
------- ------ -------- ------------ ----------- ----- ------- ----------------
(2) Pledged LLC Interests:
% OF OUTSTANDING
LLC INTERESTS OF
LIMITED LIABILITY CERTIFICATE NO. NO. OF PLEDGED THE LIMITED
GRANTOR COMPANY CERTIFICATED (Y/N) (IF ANY) UNITS LIABILITY COMPANY
------- ----------------- ------------------ --------------- -------------- -----------------
(3) Pledged Partnership Interests:
TYPE OF
PARTNERSHIP % OF OUTSTANDING
INTERESTS (E.G., PARTNERSHIP
GENERAL OR CERTIFICATE NO. INTERESTS OF THE
GRANTOR PARTNERSHIP LIMITED) CERTIFICATED (Y/N) (IF ANY) PARTNERSHIP
------- ----------- ---------------- ------------------ --------------- ----------------
(4) Pledged Trust Interests:
CLASS OF
TRUST CERTIFICATE NO. % OF OUTSTANDING TRUST
GRANTOR TRUST INTERESTS CERTIFICATED (Y/N) (IF ANY) INTERESTS OF THE TRUST
------- ----- --------- ------------------ --------------- ----------------------
EXHIBIT 4.4-1
(5) Pledged Debt:
ORIGINAL PRINCIPAL OUTSTANDING
GRANTOR ISSUER AMOUNT PRINCIPAL BALANCE ISSUE DATE MATURITY DATE
------- ------ ------------------ ----------------- ---------- -------------
(6) Securities Account:
SHARE OF SECURITIES
GRANTOR INTERMEDIARY ACCOUNT NUMBER ACCOUNT NAME
------- ------------------- -------------- ------------
(7) Commodities Accounts:
NAME OF COMMODITIES
GRANTOR INTERMEDIARY ACCOUNT NUMBER ACCOUNT NAME
------- ------------------- -------------- ------------
(8) (a) Deposit Accounts: Concentration Account
NAME OF DEPOSITARY
GRANTOR BANK ACCOUNT NUMBER ACCOUNT NAME
------- ------------------ -------------- ------------
(b) Deposit Accounts: Insurance Concentration Account
NAME OF DEPOSITARY
GRANTOR BANK ACCOUNT NUMBER ACCOUNT NAME
------- ------------------ -------------- ------------
(c) Deposit Accounts: Collection Account
NAME OF DEPOSITARY
GRANTOR BANK ACCOUNT NUMBER ACCOUNT NAME
------- ------------------ -------------- ------------
EXHIBIT 4.4-2
SCHEDULE 4.6
TO PLEDGE AND SECURITY AGREEMENT
Name of Grantor Description of Letters of Credit
--------------- --------------------------------
SCHEDULE 4.6-1
SCHEDULE 4.7
TO PLEDGE AND SECURITY AGREEMENT
INTELLECTUAL PROPERTY
(A) Copyrights
(B) Copyright Licenses
(C) Patents
(D) Patent Licenses
(E) Trademarks
(F) Trademark Licenses
(G) Trade Secret Licenses
(H) Intellectual Property Matters
SCHEDULE 4.7-1
SCHEDULE 4.8
TO PLEDGE AND SECURITY AGREEMENT
Name of Grantor Commercial Tort Claims
--------------- ----------------------
SCHEDULE 4.8-1
EXHIBIT A
TO PLEDGE AND SECURITY AGREEMENT
PLEDGE SUPPLEMENT
This PLEDGE SUPPLEMENT, dated [MM/DD/YY], is delivered pursuant to the
Pledge and Security Agreement, dated as of [MM/DD/YY] (as it may be from time
to time amended, restated, modified or supplemented, the "SECURITY AGREEMENT"),
among [NAME OF COMPANY], the other Grantors named therein, and RESIDENTIAL
FUNDING CORPORATION DBA GMAC-RFC HEALTH CAPITAL, as the Joint Collateral Agent.
Capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed thereto in the Security Agreement.
Grantor hereby confirms the grant to the Joint Collateral Agent set
forth in the Security Agreement of, and does hereby grant to the Joint
Collateral Agent, a security interest in all of Grantor's right, title and
interest in and to all Collateral to secure the Secured Obligations, in each
case whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located. Grantor represents
and warrants that the attached Supplements to Schedules accurately and
completely set forth all additional information required pursuant to the
Security Agreement and hereby agrees that such Supplements to Schedules shall
constitute part of the Schedules to the Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be
duly executed and delivered by its duly authorized officer as of [MM/DD/YY].
[NAME OF GRANTOR]
By:
----------------------------------------
Name:
Title:
EXHIBIT A-1
SUPPLEMENT TO SCHEDULE 1.1
TO PLEDGE AND SECURITY AGREEMENT
EXCLUDED SUBSIDIARY INTERESTS
Name of Entity:
EXHIBIT 1.1
SUPPLEMENT TO SCHEDULE 4.1
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
(A) Full Legal Name, Type of Organization, Jurisdiction of Organization,
Chief Executive Office/Sole Place of Business (or Residence if Grantor
is a Natural Person) and Organizational Identification Number of each
Grantor:
Chief Executive
Office/Sole Place of
Business (or Residence
Jurisdiction of if Grantor is a Natural
Full Legal Name Type of Organization Organization Person) Organization I.D.#
--------------- -------------------- --------------- ----------------------- ------------------
(B) Other Names (including any Trade-Name or Fictitious Business Name)
under which each Grantor has conducted business for the past five (5)
years:
Name of Grantor Description of Agreement
--------------- ------------------------
(C) Changes in Name, Jurisdiction of Organization, Chief Executive Office
or Sole Place of Business (or Principal Residence if Grantor is a
Natural Person) and Corporate Structure within past five (5) years:
Full Legal Name Trade Name or Fictitious Business Name
--------------- --------------------------------------
(D) Agreements pursuant to which any Grantor is found as debtor within
past five (5) years:
Name of Grantor Date of Change Description of Change
--------------- -------------- ---------------------
(E) Initial Financing Statements:
EXHIBIT 1.2
Name of Grantor Filing Jurisdiction(s)
--------------- ----------------------
(F) Consents:
(G) Existing Financing Statements:
EXHIBIT 1.3
SUPPLEMENT TO SCHEDULE 4.2
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
Name of Grantor Location of Equipment and Inventory
--------------- -----------------------------------
EXHIBIT 1.4
SUPPLEMENT TO SCHEDULE 4.4
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
(A)
Pledged Stock:
Pledged Partnership Interests:
Pledged LLC Interests:
Pledged Trust Interests:
Pledged Debt:
Securities Account:
Commodities Accounts:
Deposit Accounts:
EXHIBIT 1.5
SUPPLEMENT TO SCHEDULE 4.6
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
Name of Grantor Description of Letters of Credit
--------------- --------------------------------
EXHIBIT 1.6
SUPPLEMENT TO SCHEDULE 4.7
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
(A) Copyrights
(B) Copyright Licenses
(C) Patents
(D) Patent Licenses
(E) Trademarks
(F) Trademark Licenses
(G) Trade Secret Licenses
(H) Intellectual Property Matters
EXHIBIT 1.7
SUPPLEMENT TO SCHEDULE 4.8
TO PLEDGE AND SECURITY AGREEMENT
Additional Information:
Name of Grantor Commercial Tort Claims
--------------- ----------------------
EXHIBIT 1.8
EXHIBIT B
TO PLEDGE AND SECURITY AGREEMENT
UNCERTIFICATED SECURITIES CONTROL AGREEMENT
This Uncertificated Securities Control Agreement dated as of
_________, 200_ among ________________ (the "PLEDGOR"), RESIDENTIAL FUNDING
CORPORATION DBA GMAC-RFC HEALTH CAPITAL, as joint collateral agent for the
Secured Parties, (the "JOINT COLLATERAL AGENT") and ____________, a
________corporation (the "ISSUER"). Capitalized terms used but not defined
herein shall have the meaning assigned in the Pledge and Security Agreement
dated as of May [10], 2002 among the Pledgor, the other Grantors party thereto
and the Joint Collateral Agent (the "SECURITY AGREEMENT"). All references
herein to the "UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York.
SECTION 1. REGISTERED OWNERSHIP OF SHARES. The Issuer hereby
confirms and agrees that as of the date hereof the Pledgor is the registered
owner of __________ shares of the Issuer's [common] stock (the "PLEDGED
SHARES") and the Issuer shall not change the registered owner of the Pledged
Shares without the prior written consent of the Collateral Agent.
SECTION 2. INSTRUCTIONS. If at any time the Issuer shall
receive instructions originated by the Collateral Agent relating to the Pledged
Shares, the Issuer shall comply with such instructions without further consent
by the Pledgor or any other person.
SECTION 3. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE
ISSUER. The Issuer hereby represents and warrants to the Joint Collateral
Agent:
(a) It has not entered into, and until the termination of the
this agreement will not enter into, any agreement with any other person
relating the Pledged Shares pursuant to which it has agreed to comply with
instructions issued by such other person; and
(b) It has not entered into, and until the termination of this
agreement will not enter into, any agreement with the Pledgor or the Joint
Collateral Agent purporting to limit or condition the obligation of the Issuer
to comply with Instructions as set forth in Section 2 hereof.
(c) Except for the claims and interest of the Joint Collateral
Agent and of the Pledgor in the Pledged Shares, the Issuer does not know of any
claim to, or interest in, the Pledged Shares. If any person asserts any lien,
encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Pledged
Shares, the Issuer will promptly notify the Joint Collateral Agent and the
Pledgor thereof.
(d) This Uncertificated Securities Control Agreement is the valid
and legally binding obligation of the Issuer.
SECTION 4. CHOICE OF LAW. This Agreement shall be governed by
the laws of the State of [New York].
SECTION 5. CONFLICT WITH OTHER AGREEMENTS. In the event of any
conflict between this Agreement (or any portion thereof) and any other
agreement now existing or hereafter entered
Exhibit B-1
into, the terms of this Agreement shall prevail. No amendment or modification
of this Agreement or waiver of any right hereunder shall be binding on any
party hereto unless it is in writing and is signed by all of the parties
hereto.
SECTION 6. VOTING RIGHTS. Until such time as the Joint
Collateral Agent shall otherwise instruct the Issuer in writing, the Pledgor
shall have the right to vote the Pledged Shares.
SECTION 7. SUCCESSORS; ASSIGNMENT. The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto
and their respective corporate successors or heirs and personal representatives
who obtain such rights solely by operation of law. The Joint Collateral Agent
may assign its rights hereunder only with the express written consent of the
Issuer and by sending written notice of such assignment to the Pledgor.
SECTION 8. INDEMNIFICATION OF ISSUER. The Pledgor and the Joint
Collateral Agent hereby agree that (a) the Issuer is released from any and all
liabilities to the Pledgor and the Joint Collateral Agent arising from the
terms of this Agreement and the compliance of the Issuer with the terms hereof,
except to the extent that such liabilities arise from the Issuer's negligence
and (b) the Pledgor, its successors and assigns shall at all times indemnify
and save harmless the Issuer from and against any and all claims, actions and
suits of others arising out of the terms of this Agreement or the compliance of
the Issuer with the terms hereof, except to the extent that such arises from
the Issuer's negligence, and from and against any and all liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising by reason of the same, until the termination of this
Agreement.
SECTION 9. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.
Pledgor: [INSERT ADDRESS]
Attention:
Telecopier:
Joint Collateral Agent: [INSERT ADDRESS]
Attention:
Telecopier:
Issuer: [INSERT ADDRESS]
Attention:
Telecopier:
Any party may change its address for notices in the manner set forth
above.
SECTION 10. TERMINATION. The obligations of the Issuer to the
Joint Collateral Agent pursuant to this Control Agreement shall continue in
effect until the security interests of the Joint Collateral Agent in the
Pledged Shares have been terminated pursuant to the terms of the Security
Agreement and the Joint Collateral Agent has notified the Issuer of such
termination in writing. The Joint Collateral Agent agrees to provide Notice of
Termination in substantially the form of Exhibit A hereto to the Issuer upon
the request of the Pledgor on or after the termination of the
Exhibit B-2
Joint Collateral Agent's security interest in the Pledged Shares pursuant to
the terms of the Security Agreement. The termination of this Control Agreement
shall not terminate the Pledged Shares or alter the obligations of the Issuer
to the Pledgor pursuant to any other agreement with respect to the Pledged
Shares.
SECTION 11. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing and
delivering one or more counterparts.
[NAME OF PLEDGOR]
By:
----------------------------------------
Name:
Title:
RESIDENTIAL FUNDING CORPORATION dba
GMAC-RFC HEALTH CAPITAL, as Joint
Collateral Agent
By:
----------------------------------------
Name:
Title:
[NAME OF ISSUER]
By:
----------------------------------------
Name:
Title:
Exhibit B-3
Exhibit A
[Letterhead of Joint Collateral Agent]
[Date]
[Name and Address of Issuer]
Attention:
--------------------------
Re: Termination of Control Agreement
You are hereby notified that the Uncertificated Securities Control
Agreement between you, [the Pledgor] and the undersigned (a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Agreement. Notwithstanding any previous instructions to you,
you are hereby instructed to accept all future directions with respect to
Pledged Shares (as defined in the Uncertificated Control Agreement) from [the
Pledgor]. This notice terminates any obligations you may have to the
undersigned with respect to the Pledged Shares, however nothing contained in
this notice shall alter any obligations which you may otherwise owe to [the
Pledgor] pursuant to any other agreement.
You are instructed to deliver a copy of this notice by facsimile
transmission to [insert name of Pledgor].
Very truly yours,
RESIDENTIAL FUNDING CORPORATION dba
GMAC-RFC HEALTH CAPITAL, as Joint
Collateral Agent
By:
----------------------------------------
Name:
Title:
Exhibit A-1
EXHIBIT C
TO PLEDGE AND SECURITY AGREEMENT
FORM OF COLLATERAL ACCOUNT CONTROL AGREEMENT
This Collateral Account Control Agreement dated as of __________,
200[ ] among ________________ (the "Debtor"), RESIDENTIAL FUNDING CORPORATION
DBA GMAC-RFC HEALTH CAPITAL, as [Joint Collateral Agent for the Secured Parties]
(the "JOINT COLLATERAL AGENT") and ____________ in its capacity as a
"securities intermediary" (as defined in Section 8-102 of the UCC and a "bank"
as defined in Section 9-102 of the UCC (in such capacities, the "Financial
Institution"). Capitalized terms used but not defined herein shall have the
meaning assigned in the Pledge and Security Agreement dated as of _________,
2002 between the Debtor, the other grantors therein and the Joint Collateral
Agent (the "Security Agreement"). All references herein to the "UCC" shall mean
the Uniform Commercial Code as in effect in the State of New York.
1. ESTABLISHMENT OF COLLATERAL ACCOUNTS. The Financial Institution hereby
confirms and agrees that:
(a) The Financial Institution has established the following
accounts:
(i) the "[IDENTIFY EXACT TITLE OF ACCOUNT]" with account
number [IDENTIFY ACCOUNT NUMBER] in the name
"[IDENTIFY EXACT TITLE OF ACCOUNT]" in the name of
"[identify name of account holder]" (the "_____
Account");
(ii) the "[identify exact title of account]" with account
number [identify account number] in the name
"[identify exact title of account]" in the name of
"[identify name of account holder]" (the "_____
Account"); and
(iii) the "[IDENTIFY EXACT TITLE OF ACCOUNT]" with account
number [IDENTIFY ACCOUNT NUMBER] in the name
"[IDENTIFY EXACT TITLE OF ACCOUNT]" in the name of
"[identify name of account holder]" (the "_____
Account").
Each such account and any successor account, being referred to herein
individually as a "Pledged Account" and collectively as the "Pledged Accounts."
The Financial Institution shall not change the name or account number of any
Pledged Account without the prior written consent of the Secured Party(1);
(b) Each of the Pledged Accounts are either a "securities
account" (as defined in Section 8-501 of the UCC) or a
"deposit account" as defined in Section 9-102(a)(29) of the
UCC). The Financial Intermediary acknowledges and agrees that
the ____ Account[s] are intended to be deposit accounts and
the _________ Account[s] are intended to be securities
accounts. Notwithstanding such intention, as used herein
"Deposit Account" shall mean any Pledged Account which is
determined to be a "deposit account" (within
Exhibit C-1
the meaning of Section 9-102(a)(29) of the UCC and
"Securities Account" shall mean any Pledged Account which is
determined to be a "securities account" (within the meaning
of Section 8-501 of the UCC .
(c) All securities or other property underlying any financial
assets credited to any Securities Account shall be registered
in the name of the Financial Institution, indorsed to the
Financial Institution or in blank or credited to another
securities account maintained in the name of the Financial
Institution and in no case will any financial asset credited
to any Securities Account be registered in the name of the
Debtor, payable to the order of the Debtor or specially
indorsed to the Debtor except to the extent the foregoing
have been specially indorsed to the Financial Institution or
in blank;
(d) All property delivered to the Financial Institution pursuant
to the Security Agreement will be promptly credited to one of
the Pledged Accounts.
2. "FINANCIAL ASSETS" ELECTION. The Financial Institution hereby agrees
that each item of property (whether investment property, financial
asset, security, instrument or cash) credited to any Pledged Account
that is a Securities Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the UCC.
3. CONTROL OF THE PLEDGED ACCOUNTS. If at any time the Financial
Institution shall receive any order from the Joint Collateral Agent
directing transfer or redemption of any financial asset relating to a
Pledged Account or any instruction originated by the Joint Collateral
Agent directing the disposition of funds in a Pledged Account, the
Financial Institution shall comply with such entitlement order or
instruction without further consent by the Debtor or any other person.
4. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event that the
Financial Institution has or subsequently obtains by agreement, by
operation of law or otherwise a security interest in any Pledged
Account or any security entitlement or cash credited thereto, the
Financial Institution hereby agrees that such security interest shall
be subordinate to the security interest of the Joint Collateral Agent.
The financial assets, money and other items credited to any Pledged
Account will not be subject to deduction, set-off, banker's lien, or
any other right in favor of any person other than the Secured Party
(except that the Financial Institution may set off (i) all amounts due
to the Financial Institution in respect of customary fees and expenses
for the routine maintenance and operation of the respective Pledged
Account and (ii) the face amount of any checks which have been
credited to such Pledged Account but are subsequently returned unpaid
because of uncollected or insufficient funds).
5. CHOICE OF LAW. This Agreement shall each be governed by the laws of
the State of New York. Regardless of any provision in any other
agreement, for purposes of the UCC, New York shall be deemed to be the
Financial Institution's jurisdiction (within the meaning of Section
9-304 of the UCC and Section 8-110 of the UCC). The Pledged Accounts
shall be governed by the laws of the State of New York.
Exhibit C-2
6. CONFLICT WITH OTHER AGREEMENTS.
(a) In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or
hereafter entered into, the terms of this Agreement shall
prevail;
(b) No amendment or modification of this Agreement or waiver of
any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all of the parties
hereto;
(c) The Financial Institution hereby confirms and agrees that:
(i) There are no other agreements entered into between
the Financial Institution and the Debtor with
respect to any Pledged Account [EXCEPT FOR [IDENTIFY
OTHER AGREEMENTS] (THE "ACCOUNT AGREEMENTS")];
(ii) It has not entered into, and until the termination
of the this agreement will not enter into, any
agreement with any other person relating the Pledged
Accounts and/or any financial assets credited
thereto pursuant to which it has agreed to comply
with entitlement orders (as defined in Section
8-102(a)(8) of the UCC) or instructions (within the
meaning of Section 9-104 of the UCC) of such other
person; and
(iii) It has not entered into, and until the termination
of this agreement will not enter into, any agreement
with the Debtor or the Joint Collateral Agent
purporting to limit or condition the obligation of
the Financial Institution to comply with entitlement
orders or instructions.
7. ADVERSE CLAIMS. Except for the claims and interest of the Joint
Collateral Agent and of the Debtor in the Pledged Accounts, the
Financial Institution does not know of any lien on or claim to, or
interest in, any Pledged Account or in any "financial asset" (as
defined in Section 8-102(a) of the UCC) credited thereto. If any
person asserts any lien, encumbrance or adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or
similar process) against the Pledged Accounts or in any financial
asset carried therein, the Financial Institution will promptly notify
the Joint Collateral Agent and the Debtor thereof.
8. MAINTENANCE OF ACCOUNTS. In addition to, and not in lieu of, the
obligation of the Financial Institution to honor entitlement orders
and instructions as set forth in Section 3 hereof, the Financial
Institution agrees to maintain the Pledged Accounts as follows:
(a) Notice of Sole Control. If at any time the Joint Collateral
Agent delivers to the Financial Institution a Notice of Sole
Control in substantially the form set forth in Exhibit A
hereto,
Exhibit C-3
the Financial Institution agrees that after receipt of such
notice, it will take all instruction with respect to the
Pledged Accounts solely from the Joint Collateral Agent and
shall not comply with instructions or entitlement orders of
any other person.
(b) Statements and Confirmations. The Financial Institution will
promptly send copies of all statements, confirmations and
other correspondence concerning (i) any Securities Account
and/or any financial assets credited thereto and (ii) any
Deposit Account, simultaneously to each of the Debtor and the
Joint Collateral Agent at the address for each set forth in
Section 12 of this Agreement.
(c) Tax Reporting. All items of income, gain, expense and loss
recognized in any Securities Account and all interest, if
any, relating to any Deposit Account, shall be reported to
the Internal Revenue Service and all state and local taxing
authorities under the name and taxpayer identification number
of the Debtor.
(d) Voting Rights. Until such time as the Financial Institution
receives a Notice of Sole Control pursuant to subsection (a)
of this Section 8, the Debtor shall direct the Financial
Institution with respect to the voting of any financial
assets credited to the Pledged Accounts.
(e) Permitted Investments. Until such time as the Financial
Institution receives a Notice of Sole Control signed by the
Joint Collateral Agent, the Debtor shall direct the Financial
Institution with respect to the selection of investments to
be made for any Pledged Account that is a securities account;
provided, however, that the Financial Institution shall not
honor any instruction to purchase any investments other than
investments of a type describe on Exhibit B hereto.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FINANCIAL
INSTITUTION. The Financial Institution hereby makes the following
representations, warranties and covenants:
(a) The Pledged Accounts have each been established as set forth
in Section 1 and such Pledged Accounts will be maintained in
the manner set forth herein until termination of this
Agreement; and
(b) This Collateral Account Control Agreement is the valid and
legally binding obligations of the Financial Institution.
10. INDEMNIFICATION OF FINANCIAL INSTITUTION. The Debtor and the Joint
Collateral Agent hereby agree that (a) the Financial Institution is
released from any and all liabilities to the Debtor and the Joint
Collateral Agent arising from the terms of this agreement and the
compliance of the Financial Institution with the terms hereof, except
to the extent that such liabilities arise from the Financial
Institution's negligence and (b) the Debtor, its successors and
assigns shall at all times indemnify and save harmless the Financial
Institution from and against any and all claims, actions and suits of
others arising out of the terms of this agreement or the compliance of
the Financial Institution with the terms hereof, except to the extent
that such arises from the Financial Institution's negligence, and from
and against any and all liabilities, losses, damages, costs,
Exhibit C-4
charges, counsel fees and other expenses of every nature and character
arising by reason of the same, until the termination of this
agreement.
11. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives
who obtain such rights solely by operation of law. The Joint
Collateral Agent may assign its rights hereunder only with the express
written consent of the Financial Institution and by sending written
notice of such assignment to the Debtor.
12. NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when
sent by telecopy or other electronic means and electronic confirmation
of error free receipt is received or two days after being sent by
certified or registered United States mail, return receipt requested,
postage prepaid, addressed to the party at the address set forth
below.
Debtor:
Joint Collateral Agent:
Financial Institution:
Any party may change his address for notices in the manner
set forth above.
13. TERMINATION. The obligations of the Financial Institution to the Joint
Collateral Agent pursuant to this Control Agreement shall continue in
effect until the security interests of the Joint Collateral Agent in
each of the Pledged Accounts have been terminated pursuant to the
terms of the Security Agreement and the Joint Collateral Agent has
notified the Financial Institution of such termination in writing. The
Joint Collateral Agent agrees to provide Notice of Termination in
substantially the form of Exhibit C hereto to the Financial
Institution upon the request of the Debtor on or after the termination
of the Joint Collateral Agent's security interest in the Pledged
Accounts pursuant to the terms of the Security Agreement. The
termination of this Control Agreement shall not terminate the Pledged
Accounts or alter the obligations of the Financial Institution to the
Debtor pursuant to any other agreement with respect to the Pledged
Accounts.
Exhibit C-5
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing
and delivering one or more counterparts.
[NAME OF DEBTOR]
By:
----------------------------------------
Name:
Title:
RESIDENTIAL FUNDING CORPORATION DBA
GMAC-RFC HEALTH CAPITAL, as Joint
Collateral Agent
By:
----------------------------------------
Name:
Title:
[NAME OF INSTITUTION SERVING AS FINANCIAL
INSTITUTION]
By:
----------------------------------------
Name:
Title:
Exhibit C-6
Exhibit A
[Letterhead of Joint Collateral Agent]
[Date]
[Name and Address of Financial Institution]
Attention: _____________________
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in the Collateral Account Control Agreement,
dated _______, 200_, among [insert name of the Debtor], you and the undersigned
(a copy of which is attached) we hereby give you notice of our sole control
over each of the Pledged Accounts and all financial assets or funds credited
thereto. You are hereby instructed not to accept any direction, instructions or
entitlement orders or instructions with respect to the Pledged Accounts or the
financial assets or funds credited thereto from any person other than the
undersigned, unless otherwise ordered by a court of competent jurisdiction.
You are instructed to deliver a copy of this notice by
facsimile transmission to [insert name of the Debtor].
Very truly yours,
RESIDENTIAL FUNDING CORPORATION dba
GMAC-RFC HEALTH CAPITAL, as Joint
Collateral Agent
By:
----------------------------------------
Name:
Title:
cc: [Name of Debtor]
Exhibit C-A-1
Exhibit B
Permitted Investments
Exhibit C-B-1
Exhibit C
[Letterhead of Joint Collateral Agent]
[Date]
[Name and Address of Financial Institution]
Attention:
Re: Termination of Collateral Account
Control Agreement
You are hereby notified that the Collateral Account Control
Agreement between you, [THE DEBTOR] and the undersigned (a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Agreement. Notwithstanding any previous instructions to you,
you are hereby instructed to accept all future directions with respect to
account number(s) ___________ from [THE DEBTOR]. This notice terminates any
obligations you may have to the undersigned with respect to such account,
however nothing contained in this notice shall alter any obligations which you
may otherwise owe to [THE DEBTOR] pursuant to any other agreement.
You are instructed to deliver a copy of this notice by
facsimile transmission to [insert name of Debtor].
Very truly yours,
RESIDENTIAL FUNDING CORPORATION dba
GMAC-RFC HEALTH CAPITAL, as Joint
Collateral Agent
By:
----------------------------------------
Name:
Title:
cc: [Name of Debtor]
Exhibit C-C-1
EXHIBIT D
TO PLEDGE AND SECURITY AGREEMENT
FORM OF PERSONAL PROPERTY SECURITY INTEREST OPINION
[INSERT DATE]
[INSERT FULL NAME AND ADDRESS OF THE JOINT COLLATERAL AGENT]
RE: MARINER HEALTH CARE, INC.
Ladies and Gentlemen:
We have acted as special counsel to Mariner Health Care,
Inc., a Delaware corporation (the "Borrower"), each of the Borrower's
subsidiaries listed on Schedule 1 hereto (each of the Borrower and such other
loan parties, a "Grantor" and, collectively, the "Grantors"), in connection
with the preparation, execution and delivery of the Pledge and Security
Agreement, dated [the date hereof] (the "Security Agreement"), between each of
the Grantors and Residential Funding Corporation dba GMAC-RFC HEALTH CAPITAL,
as [Joint Collateral Agent] for the [Secured Parties] (as defined in the
Security Agreement) (the "Joint Collateral Agent"). This opinion is being
delivered pursuant to Section [ ] of the Security Agreement.
In our examination we have assumed the genuineness of all
signatures including endorsements, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as facsimile, electronic,
certified or photostatic copies, and the authenticity of the originals of such
copies. As to any facts material to this opinion which we did not independently
establish or verify, we have relied upon statements and representations of the
Grantors and their officers and other representatives and of public officials,
including the facts and conclusions set forth therein.
In rendering the opinions set forth herein, we have examined
and relied on originals or copies of the following:
(a) the Security Agreement;
(b) [ the letter, dated [INSERT DATE] from each Grantor
to the Joint Collateral Agent authorizing the filing of UCC financing
statements (the "Authorization Letter");]
(c) an acknowledgment copy of a financing statement
bearing file date _____ and file number _____ [ALTERNATIVELY: an unfiled copy
of a financing statement]
Exhibit D-1
[ALTERNATIVELY: a print out of a confirmation of an electronic data
transmission of financing statement information, bearing file date_____ and
file number_____] identifying the name of each Grantor listed on Schedule 2
hereto, as debtor and "Residential Funding Corporation dba GMAC-RFC HEALTH
CAPITAL, as Joint Collateral Agent", as secured party, which was filed
[ALTERNATIVELY: we understand will be filed within ten (10) days of the
transfer of the security interest] in the filing office identified opposite
each Grantor's name on Schedule 2 hereto (such filing office(s), the "Filing
Office(s)" and such financing statement, the "Financing Statement(s)");
(d) the account agreement dated as of ________ between
[IDENTIFY NAME OF APPLICABLE GRANTOR] and the Financial Institution pursuant to
which the Pledged Account (as such terms are defined below) was established;
(e) a certified copy of the organization document
identified on Schedule 3 hereto as to each Grantor's existence in such state
(the "Secretary of State Certificates"); and
(f) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
Capitalized terms used herein and not otherwise defined
herein shall have the same meanings as set forth in the Security Agreement. As
used herein:
(i) "UCC" means (a) the New York UCC, (b) the Filing
State UCC, and (c) the [IDENTIFY NAME OF STATE OF FINANCIAL INSTITUTION'S
JURISDICTION AS IDENTIFIED IN (VIII) BELOW] UCC (in each case as such term is
defined below), as applicable.
(ii) "UCC Collateral" means the Collateral (as such term
is defined in the Security Agreement) to the extent such collateral is of a
type subject to Article 9 of the UCC.
(iii) "Delaware UCC" means the Uniform Commercial Code as
in effect on the date hereof in the State of Delaware (without regard to laws
referenced in Section 9-201 thereof).
(iv) "New York UCC" means the Uniform Commercial Code as
in effect on the date hereof in the State of New York (without regard to laws
referenced in Section 9-201 thereof).
(v) "Filing State" means [IDENTIFY NAME OF STATE(S)
WHERE THE FINANCING STATEMENTS ARE FILED].
(vi) "Filing State UCC" means the Uniform Commercial Code
as in effect on the date hereof in the Filing State (without regard to laws
referenced in Section 9-201 thereof).
(vii) "Possessory Certificates" means the certificates
identified on Schedule 4 hereto.
Exhibit D-2
(viii) "[IDENTIFY NAME OF STATE OF FINANCIAL INSTITUTION'S
JURISDICTION] UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of [IDENTIFY NAME OF STATE OF FINANCIAL INSTITUTION'S
JURISDICTION] (without regard to laws referenced in Section 9-201 thereof).
(ix) "Pledged Account" means account number [INSERT
ACCOUNT NUMBER] established at [INSERT NAME OF FINANCIAL INSTITUTION THAT
ESTABLISHED THE PLEDGED ACCOUNT] in the name of [INSERT EXACT NAME ON ACCOUNT].
(X) "Financial Institution" means [INSERT NAME OF
FINANCIAL INSTITUTION THAT ESTABLISHED THE PLEDGED ACCOUNT].
We express no opinion with respect to any laws other than the
UCC and, for purposes of opinion paragraph 5, [INSERT CORPORATE LAW OF FILING
STATE, E.G., THE DELAWARE GENERAL CORPORATION LAW].
We have this date delivered to you our opinion with respect
to the enforceability of the Security Agreement and certain other transaction
agreements. We call to your attention that the opinions set forth herein with
respect to the security interest of the Joint Collateral Agent are subject to
the qualifications contained in such other opinion.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Under the Delaware UCC, the provisions of the
Security Agreement are effective to create a valid security interest in each
Grantor's rights in the UCC Collateral in favor of the Joint Collateral Agent
to secure the Secured Obligations (as defined in the Security Agreement).
2. [TO BE GIVEN BY LOCAL COUNSEL, IF APPROPRIATE]
Pursuant to the [Authorization Letter][Security Agreement], each Grantor has
authorized for purposes of Section 9-509 of the Filing State UCC the filing of
the Financing Statement naming such Grantor as debtor and identifying the UCC
Collateral.
3. [TO BE GIVEN BY LOCAL COUNSEL, IF APPROPRIATE] Each
of the Financing Statements includes not only all of the types of information
required by Section 9-502(a) of the Filing State UCC but also the types of
information without which the Filing Office may refuse to accept the Financing
Statements pursuant to Section 9-516 of the Filing State UCC.
4. [TO BE GIVEN BY LOCAL COUNSEL, IF APPROPRIATE] Under
the Filing State UCC, the security interest of the Joint Collateral Agent will
be perfected in each of the Grantor's rights in all UCC Collateral upon the
later of the attachment of the security interest and the filing
Exhibit D-3
of the Financing Statements in the Filing Office, we express no opinion, with
respect to (i) money, (ii) deposit accounts, (iii) letter of credit rights (iv)
goods covered by a certificate of title statute, (v) as-extracted collateral,
timber to be cut, (vi) any property subject to a statute, regulation or treaty
of the United States whose requirements for a security interest's obtaining
priority over the rights of a lien creditor with respect to the property
preempt Section 9-310(a) of the Filing State UCC or (vii) any goods subject to
a negotiable document of title.
5. [TO BE GIVEN BY LOCAL COUNSEL, IF APPROPRIATE] You
have asked whether each Grantor is a "registered organization" as defined in
the Filing State UCC. Pursuant to [IDENTIFY SECTION REFERENCE OF APPLICABLE
CORPORATE LAW, E.G., SS.SS.101(A) AND 103(6) OF THE DELAWARE GENERAL
CORPORATION LAW], the [SECRETARY OF STATE] of the Filing State is required to
maintain a public record showing each Grantor to have been organized. Based on
our review of the Secretary of State Certificates, we are of the opinion that
under the Filing State UCC and the [INSERT CORPORATE LAW OF FILING STATE], each
Grantor is a "registered organization."
6. Assuming that none of the Joint Collateral Agent or
any Secured Party has notice of any adverse claims with respect to the
Possessory Certificates and that such certificates are indorsed in blank or by
an effective indorsement to the Joint Collateral Agent, the Joint Collateral
Agent will acquire such Possessory Certificates (and the shares represented
thereby) free of any adverse claims under Section 8-303 of the New York UCC
upon the later of the attachment of the security interest and the delivery of
such Possessory Certificates to the Joint Collateral Agent. As used herein,
"notice of adverse claim" has the meaning set forth in Section 8-105 of the UCC
and includes, without limitation, any adverse claim that the Joint Collateral
Agent or any Secured Party would discover upon any investigation which such
person has a duty, imposed by statute or regulation, to investigate.
7. Under the [IDENTIFY NAME OF STATE OF FINANCIAL
INSTITUTION'S JURISDICTION] UCC, the provisions of the Control Agreement are
effective to perfect the security interest of the Joint Collateral Agent in
[IDENTIFY NAME OF APPLICABLE GRANTOR]'s rights in the Pledged Account.
Our opinions are subject to the following qualifications:
(a) We have assumed that each Grantor owns, or with
respect to after-acquired property will own, the UCC Collateral granted by it,
and we express no opinion as to the nature or extent of each Grantor's rights
in any of the applicable UCC Collateral and we note that with respect to any
after-acquired property, the security interest will not attach until such
Grantor acquires ownership thereof.
(b) Our opinion with respect to proceeds is subject to
the limitations set forth in Section 9-315 of the UCC and, in addition, we call
to your attention that in the case of certain types of proceeds, other parties
such as holders in due course, protected purchasers of securities, persons who
obtain control over securities entitlements and buyers in the ordinary course
of
Exhibit D-4
business may acquire a superior interest or may take their interest free of the
security interest of a secured party.
(c) We express no opinion with respect to commercial
tort claims.
(d) We express no opinion with respect to any goods
which are accessions to, or commingled or processed with, other goods to the
extent that the security interest is limited by Section 9-335 or 9-336 of the
UCC.
(e) We note that we have delivered to you our opinion
with respect to each Grantor's status as a "registered organization." Except to
the extent that this determination is an element of your choice of law
analysis, we express no opinion with respect to the choice of law governing
perfection, the effect of perfection and non-perfection or priority of the
security interest.
(f) For purposes of our opinion paragraph 5, we have
assumed that each Grantor is and will remain "organized solely" (within the
meaning of Section 9-102(a)(70) of the UCC) under the laws of the State of the
Filing State.
(g) We express no opinion with respect to the nature or
extent of the securities intermediary's rights in, or title to, the securities
or other financial assets underlying any "security entitlement" now or
hereafter credited to a securities account. Furthermore, we express no opinion
with respect to any property or assets now or hereafter credited to a
securities account that is not a "financial asset" and we express no opinion
whether or to what extent any particular item of property credited to such
securities account is a "financial asset". We note that to the extent the
securities intermediary maintains any financial asset in a "clearing
corporation" (as defined in Section 8-102(5) of the UCC), pursuant to Section
8-111 of the UCC, the rules of such clearing corporation may affect the rights
of the securities intermediary.
(h) We have assumed that the Control Agreement is the
legal, valid, binding and enforceable obligation of each of the parties thereto
other than the applicable Grantor.
(i) We have assumed that the Pledged Account is either a
"deposit account" (as defined in the UCC) and the Financial Institution is an
organization that is engaged in the business of banking or (ii) is a
"securities account"(as defined in the UCC) and the Financial Institution in
the ordinary course of its business maintains securities accounts for customers
and is acting in that capacity.
(j) We call to your attention that pursuant to Section
9-340 of the UCC, a bank with which a deposit account is maintained may
continue to exercise any right of recoupment or set-off against a secured party
that holds a security interest in the deposit account.
This opinion is being furnished only to you in connection with the
Security Agreement and is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied
upon by any other person or entity for any purpose without our prior written
consent except that Loan Parties who subsequently become assignees pursuant to
Section __ of the Credit Agreement may rely on it as if it was addressed to the
collateral Agent for their benefit.
Very truly yours,
Exhibit D-5
SCHEDULE 1
List of Subsidiaries of Mariner Health Care, Inc.
FULL NAME OF GRANTOR Jurisdiction of Organization
-------------------- ----------------------------
Exhibit D-S-1
SCHEDULE 2
Schedule Information on face of Financial Statements
Full Name of Full Name of Filing
Grantor Secured Party Filing Office Jurisdiction File Number File Date
Exhibit D-S-2
SCHEDULE 3
Certificates of Organization
Full Name of Type of Organization Public Office(r)
Grantor Document State of Organization Date of Certificates Issuing Certificates
Exhibit D-S-3
SCHEDULE 4
Possessory Certificates
Issuer Certificate Numbers Registered Owner Number of Shares Certificate Date
Exhibit D-S-4
