PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT, dated as of the 12th day of July, 2013 (this “Agreement”), is made by KRISPY KREME DOUGHNUTS, INC., a North Carolina corporation (the “Parent”), KRISPY KREME DOUGHNUT CORPORATION, a North Carolina corporation (the “Borrower”), and by each of the undersigned Subsidiaries of the Borrower and each other Subsidiary that, after the date hereof, executes an instrument of accession hereto substantially in the form of Exhibit C (a “Pledgor Accession”; the undersigned and such other Subsidiaries, collectively, together with the Parent and the Borrower, the “Pledgors”), in favor of XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders party to the Credit Agreement referred to below (in such capacity, the “Administrative Agent”), for the benefit of the Secured Parties (as hereinafter defined). Except as otherwise provided herein, capitalized terms used herein without definition have the meanings given to them in the Credit Agreement referred to below.
RECITALS
A. The Borrower, the Parent, the Lenders and the Administrative Agent are parties to a Credit Agreement, dated as of July 12, 2013 (as amended, modified, restated or supplemented from time to time, the “Credit Agreement”), providing for the availability of certain credit facilities to the Borrower upon the terms and subject to the conditions set forth therein.
B. As a condition to the extension of credit to the Borrower under the Credit Agreement, each of the Parent and each Subsidiary that is a party to this Agreement as of the date hereof has entered into a Guaranty Agreement, dated as of the date hereof (as amended, modified, restated or supplemented from time to time, the “Guaranty”), pursuant to which the Parent and each such Subsidiary has guaranteed to the Secured Parties the payment in full of the Obligations of the Borrower under the Credit Agreement and the other Credit Documents. Additionally, certain other Subsidiaries of the Borrower may from time to time after the date hereof enter into the Guaranty, pursuant to which such Subsidiaries will guarantee to the Secured Parties the payment in full of the Obligations of the Borrower under the Credit Agreement and the other Credit Documents.
C. It is a further condition to the extension of credit to the Borrower under the Credit Agreement that the Pledgors shall have agreed, by executing and delivering this Agreement, to secure the payment in full of their respective obligations under the Credit Agreement, the Guaranty and the other Credit Documents. The Secured Parties are relying on this Agreement in their decision to extend credit to the Borrower under the Credit Agreement, and would not enter into the Credit Agreement without the execution and delivery of this Agreement by the Pledgors.
D. The Pledgors will obtain benefits as a result of the extension of credit to the Borrower under the Credit Agreement, which benefits are hereby acknowledged, and, accordingly, desire to execute and deliver this Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to induce the Secured Parties to enter into the Credit Agreement and to induce the Lenders to extend credit to the Borrower thereunder, each Pledgor hereby agrees as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. The following terms that are defined in the Uniform Commercial Code (as hereinafter defined) are used in this Agreement as so defined (and, in the event any such term is defined differently for purposes of Article 9 of the Uniform Commercial Code than for any other purpose or purposes of the Uniform Commercial Code, the Article 9 definition shall govern): Account, As-Extracted Collateral, Chattel Paper, Commercial Tort Claim, Commodity Account, Commodity Intermediary, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Record, Securities Account, Securities Intermediary, Software, Supporting Obligations and Tangible Chattel Paper. In addition, the following terms have the meanings set forth below:
“Collateral” has the meaning given to such term in Section 2.1.
“Collateral Accounts” has the meaning given to such term in Section 6.3.
“Contracts” means, collectively, all rights of each Pledgor under all leases, contracts and agreements to which such Pledgor is now or hereafter a party, including, without limitation, all rights, privileges and powers under Ownership Agreements and Licenses, together with any and all extensions, modifications, amendments and renewals of such leases, contracts and agreements and all rights of such Pledgor to receive moneys due or to become due thereunder or pursuant thereto and to amend, modify, terminate or exercise rights under such leases, contracts and agreements.
“Copyright Collateral” means, collectively, all Copyrights and Copyright Licenses to which any Pledgor is or hereafter becomes a party and all other General Intangibles embodying, incorporating, evidencing or otherwise relating or pertaining to any Copyright or Copyright License, in each case whether now owned or existing or hereafter acquired or arising.
“Copyright License” means any agreement now or hereafter in effect granting any right to any third party under any Copyright now or hereafter owned by any Pledgor or which any Pledgor otherwise has the right to license, or granting any right to any Pledgor under any property of the type described in the definition of Copyright herein now or hereafter owned by any third party, and all rights of any Pledgor under any such agreement.
“Copyrights” means, collectively, all of each Pledgor’s copyrights, copyright registrations and applications for copyright registration, whether under the laws of the United States or any other country or jurisdiction, including all recordings, supplemental registrations and derivative or collective work registrations, and all renewals and extensions thereof, in each case whether now owned or existing or hereafter acquired or arising.
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“Existing Joint Venture” means, collectively, the Joint Ventures of the Parent and its Subsidiaries set forth on Schedule 5.7 to the Credit Agreement.
“License” means any Copyright License, Patent License or Trademark License.
“Mobile Goods” means, collectively, all of each Pledgor’s motor vehicles, tractors, trailers, aircraft, rolling stock and other like property, whether or not the title thereto is governed by a certificate of title or ownership, in each case whether now owned or existing or hereafter acquired.
“Ownership Agreement” means any partnership agreement, joint venture agreement, limited liability company operating agreement, stockholders agreement or other agreement creating, governing or evidencing any such capital stock or equity interests and to which any Pledgor is now or hereafter becomes a party, as any such agreement may be amended, modified, supplemented, restated or replaced from time to time.
“Patent Collateral” means, collectively, all Patents and all Patent Licenses to which any Pledgor is or hereafter becomes a party and all other General Intangibles embodying, incorporating, evidencing or otherwise relating or pertaining to any Patent or Patent License, in each case whether now owned or existing or hereafter acquired or arising.
“Patent License” means any agreement now or hereafter in effect granting to any third party any right to make, use or sell any invention on which a Patent, now or hereafter owned by any Pledgor or which any Pledgor otherwise has the right to license, is in existence, or granting to any Pledgor any right to make, use or sell any invention on which property of the type described in the definition of Patent herein, now or hereafter owned by any third party, is in existence, and all rights of any Pledgor under any such agreement.
“Patents” means, collectively, all of each Pledgor’s letters patent, whether under the laws of the United States or any other country or jurisdiction, all recordings and registrations thereof and applications therefor, including, without limitation, the inventions and improvements described therein, and all reissues, continuations, divisions, renewals, extensions, substitutions and continuations-in-part thereof, in each case whether now owned or existing or hereafter acquired or arising.
“Permitted Hedge Agreement” means any Hedge Agreement that is required or permitted by the Credit Agreement to be entered into by the Borrower.
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“Pledged Interests” means, collectively, (i) all of the issued and outstanding shares, interests or other equivalents of capital stock of each Person that is a direct Subsidiary of any Pledgor as of the date hereof or that becomes a direct Subsidiary of any Pledgor at any time after the date hereof, at any time now or hereafter owned by any Pledgor, whether voting or non-voting and whether common or preferred; (ii) all partnership, joint venture, limited liability company or other equity interests in each Person not a corporation that is a direct Subsidiary of any Pledgor as of the date hereof or that becomes a direct Subsidiary of any Pledgor at any time after the date hereof, at any time now or hereafter owned by any Pledgor; (iii) all options, warrants and other rights to acquire, and all securities convertible into, any of the foregoing; (iv) all rights to receive interest, income, dividends, distributions, returns of capital and other amounts (whether in cash, securities, property, or a combination thereof), and all additional stock, warrants, options, securities, interests and other property, from time to time paid or payable or distributed or distributable in respect of any of the foregoing (but subject to the provisions of Section 5.3), including, without limitation, all rights of such Pledgor to receive amounts due and to become due under or in respect of any Ownership Agreement or upon the termination thereof; (v) all rights of access to the books and records of any such Person; and (vi) all other rights, powers, privileges, interests, claims and other property in any manner arising out of or relating to any of the foregoing, of whatever kind or character (including any tangible or intangible property or interests therein), and whether provided by contract or granted or available under applicable law in connection therewith, including, without limitation, such Person’s right to vote and to manage and administer the business of any such Subsidiary pursuant to any applicable Ownership Agreement, in each case together with all certificates, instruments and entries upon the books of financial intermediaries at any time evidencing any of the foregoing.
“Proceeds” has the meaning given to such term in Section 2.1.
“Secured Parties” means, collectively, the Lenders (including the Issuing Lender and the Swingline Lender in their capacities as such), the Hedge Parties and the Administrative Agent.
“Trademark Collateral” means, collectively, all Trademarks and Trademark Licenses to which any Pledgor is or hereafter becomes a party and all other General Intangibles embodying, incorporating, evidencing or otherwise relating or pertaining to any Trademark or Trademark License, in each case whether now owned or existing or hereafter acquired or arising.
“Trademark License” means any agreement now or hereafter in effect granting any right to any third party under any Trademark now or hereafter owned by any Pledgor or which any Pledgor otherwise has the right to license, or granting any right to any Pledgor under any property of the type described in the definition of Trademark herein now or hereafter owned by any third party, and all rights of any Pledgor under any such agreement.
“Trademarks” means, collectively, all of each Pledgor’s trademarks, service marks, trade names, corporate and company names, business names, logos, trade dress, trade styles, other source or business identifiers, designs and general intangibles of a similar nature, whether under the laws of the United States or any other country or jurisdiction, all recordings and registrations thereof and applications therefor, all renewals, reissues and extensions thereof, all rights corresponding thereto, and all goodwill associated therewith or symbolized thereby, in each case whether now owned or existing or hereafter acquired or arising.
“Uniform Commercial Code” means the Uniform Commercial Code as the same may be in effect from time to time in the State of New York; provided that if, by reason of applicable law, the validity or perfection of any security interest in any Collateral granted under this Agreement is governed by the Uniform Commercial Code as in effect in another jurisdiction, then as to the validity or perfection, as the case may be, of such security interest, “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction.
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1.2 Other Terms; Construction. All terms in this Agreement that are not capitalized shall, unless the context otherwise requires, have the meanings provided by the Uniform Commercial Code to the extent the same are used or defined therein.
ARTICLE II
CREATION OF SECURITY INTEREST
2.1 Pledge and Grant of Security Interest. Each Pledgor hereby pledges, assigns and delivers to the Administrative Agent, for the ratable benefit of the Secured Parties, and grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a Lien upon and security interest in, all of such Pledgor’s right, title and interest in and to the following property and assets of such Pledgor, in each case whether now owned or existing or hereafter acquired or arising and wherever located (collectively, the “Collateral”):
(i) all Accounts;
(ii) all As-Extracted Collateral;
(iii) all Chattel Paper;
(iv) the Commercial Tort Claims (if any) set forth on Annex I hereto;
(v) all Contracts;
(vi) all Copyright Collateral;
(vii) all Deposit Accounts;
(viii) all Documents;
(ix) all Equipment;
(x) all Fixtures;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights;
(xvii) all Patent Collateral;
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(xviii) all Pledged Interests; provided, however, that at no time shall the Pledged Interests of any Pledgor that is a Foreign Subsidiary exceed 65% of all such shares, interests, rights and other property of the type described in this clause (xviii) of such Foreign Subsidiary that is entitled to vote;
(xix) all Software;
(xx) all Supporting Obligations;
(xxi) all Trademark Collateral;
(xxii) all cash, cash equivalents and money of such Pledgor, wherever held;
(xxiii) to the extent not covered or not specifically excluded by clauses (i) through (xxii) above, all of such Pledgor’s other personal property;
(xxiv) all Records evidencing or relating to any of the foregoing or that are otherwise necessary or useful in the collection thereof;
(xxv) all accessions, additions, attachments, improvements, modifications and upgrades to, replacements of and substitutions for any of the foregoing; and
(xxvi) any and all proceeds, as defined in the Uniform Commercial Code, products, rents, royalties and profits of or from any and all of the foregoing and, to the extent not otherwise included in the foregoing, (w) all payments under any insurance (whether or not the Administrative Agent is the loss payee thereunder), indemnity, warranty or guaranty with respect to any of the foregoing Collateral, (x) all payments in connection with any requisition, condemnation, seizure or forfeiture with respect to any of the foregoing Collateral, (y) all claims and rights (but not obligations) to recover for any past, present or future infringement or dilution of or injury to any Copyright Collateral, Patent Collateral or Trademark Collateral, and (z) all other amounts from time to time paid or payable under or with respect to any of the foregoing Collateral (collectively, “Proceeds”). For purposes of this Agreement, the term “Proceeds” includes whatever is receivable or received when Collateral or Proceeds are sold, exchanged, collected or otherwise disposed of, whether voluntarily or involuntarily.
Notwithstanding the foregoing: (A) the Administrative Agent may, in its sole discretion, reject or refuse to accept for credit toward payment of the Secured Obligations any Collateral that is an Account, Instrument, Chattel Paper, lease or other obligation or property of any kind due or owing from or belonging to a Sanctioned Person; (B) the terms “Collateral”, “Pledged Interests” and “General Intangibles” shall expressly exclude any Capital Stock (as defined in the Credit Agreement) or any other right or interest in the Existing Joint Ventures; (C) in no event shall the security interest granted under this Agreement attach to (1) any lease, license, contract, property rights or agreement to which such Pledgor is a party (or to any of its right or interests thereunder) if the grant of such security interest therein would constitute or result in either (i) the abandonment, invalidation or unenforceability of any right, title or interest of such Pledgor therein or (ii) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, property rights or agreement (other than to the extent that any such term would be rendered ineffective by Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code as in effect in the relevant jurisdiction), (2) any assets owned by any Pledgor on the date hereof or hereafter acquired that is subject to a Permitted Lien securing Indebtedness permitted to be incurred pursuant to the Credit Agreement if the contract or other agreement in which such Permitted Lien is granted (or the documentation providing for such Indebtedness) validly prohibits the creation of any other Lien on such assets or (3) any Fixtures located on premises leased to any Pledgor to the extent the pledge thereof or grant of a security interest therein (x) is prohibited by a lease governing such premises or (y) would result in the forfeiture of any Pledgor’s right, title or interest therein under applicable law; and (D) the security interest created hereby in Pledged Interests constituting voting stock of any Foreign Subsidiary shall be limited to that portion of such voting stock that does not exceed 65% of the aggregate issued and outstanding voting stock of such Foreign Subsidiary.
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2.2 Security for Secured Obligations. This Agreement and the Collateral secure the full and prompt payment, at any time and from time to time as and when due (whether at the stated maturity, by acceleration or otherwise), of (a) in the case of the Borrower, all Obligations of the Borrower under the Credit Agreement and the other Credit Documents, including, without limitation, all principal of and interest on the Loans, all Reimbursement Obligations, all fees, expenses, indemnities and other amounts payable by the Borrower under the Credit Agreement or any other Credit Document (including interest accruing after the filing of a petition or commencement of a case by or with respect to the Borrower seeking relief under any Debtor Relief Law and any fraudulent transfer and fraudulent conveyance laws, whether or not the claim for such interest is allowed in such proceeding), and all obligations of the Borrower to any Hedge Party under any Permitted Hedge Agreement, and (b) in the case of each other Pledgor, all of its liabilities and obligations as a Guarantor (as defined in the Guaranty) in respect of the Obligations (other than Excluded Swap Obligations); and in each case under (a) and (b) above, (i) all such liabilities and obligations that, but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, would become due, and (ii) all fees, costs and expenses payable by the Pledgors under Section 8.1, in each case under (a) and (b) above whether now existing or hereafter created or arising and whether direct or indirect, absolute or contingent, due or to become due (the liabilities and obligations of the Pledgors described in this Section 2.2, collectively, the “Secured Obligations”).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Pledgor represents and warrants as follows:
3.1 Ownership of Collateral. Each Pledgor owns, or has valid rights as a lessee or licensee with respect to, all Collateral purported to be pledged by it hereunder, free and clear of any Liens except for the Liens granted to the Administrative Agent, for the benefit of the Secured Parties, pursuant to this Agreement, and except for other Permitted Liens. No security agreement, financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any government or public office, and no Pledgor has filed or consented to the filing of any such statement or notice, except (i) Uniform Commercial Code financing statements naming the Administrative Agent as secured party, (ii) security instruments filed in the U.S. Copyright Office or the U.S. Patent and Trademark Office naming the Administrative Agent as secured party, (iii) filings with respect to which termination statements and other necessary releases have been delivered to the Administrative Agent for filing, and (iv) as may be otherwise permitted by the Credit Agreement.
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3.2 Security Interests; Filings. This Agreement, together with (i) the filing, with respect to each Pledgor, of duly completed Uniform Commercial Code financing statements naming such Pledgor as debtor, the Administrative Agent as secured party, and describing the Collateral, in the jurisdictions set forth with respect to such Pledgor on Annex A hereto, (ii) to the extent required by applicable law, the filing, with respect to each relevant Pledgor, of duly completed and executed assignments in the forms set forth as Exhibits A and B with the U.S. Copyright Office or the U.S. Patent and Trademark Office, as appropriate, with regard to registered Copyright Collateral, Patent Collateral and Trademark Collateral of such Pledgor, as the case may be, (iii) in the case of uncertificated Pledged Interests consisting of capital stock, registration of transfer thereof to the Administrative Agent on the issuer’s books or the execution by the issuer of a control agreement satisfying the requirements of Section 8-106 (or its successor provision) of the Uniform Commercial Code, and (iv) the delivery to the Administrative Agent of all stock certificates and Instruments included in the Collateral (and assuming continued possession thereof by the Administrative Agent), creates, and at all times shall constitute, a valid and perfected security interest in and Lien upon the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, to the extent a security interest therein can be perfected by such filings or possession, as applicable, superior and prior to the rights of all other Persons therein (except for Permitted Liens), and no other or additional filings, registrations, recordings or actions are or shall be necessary or appropriate in order to maintain the perfection and priority of such Lien and security interest, other than actions required with respect to Collateral of the types excluded from Article 9 of the Uniform Commercial Code or from the filing requirements under such Article 9 by reason of Section 9-109, 9-309 or 9-310 of the Uniform Commercial Code and other than continuation statements required under the Uniform Commercial Code.
3.3 Locations. Annex B lists, as to each Pledgor on the Closing Date, (i) its exact legal name, (ii) the jurisdiction of its incorporation or organization, its federal tax identification number, and (if applicable) its organizational identification number, (iii) the addresses of its chief executive office and (iv) the address of each location of all original invoices, ledgers, Chattel Paper, Instruments and other records or information evidencing or relating to the Collateral of such Pledgor, in each instance except for any new locations established in accordance with the provisions of Section 4.2. Except as may be otherwise noted therein, all locations identified in Annex B are owned by the applicable Pledgor. No Pledgor (x) presently conducts business under any prior or other corporate or company name or under any trade or fictitious names, except as indicated beneath its name on Annex B, (y) has entered into any contract or granted any Lien within the past five years under any name other than its legal corporate name or a trade or fictitious name indicated on Annex B, or (z) has filed any tax return under any name other than its exact legal name, except as indicated beneath its name on Annex B.
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3.4 Authorization; Consent. No authorization, consent or approval of, or declaration or filing with, any Governmental Authority (including, without limitation, any notice filing with state tax or revenue authorities required to be made by account creditors in order to enforce any Accounts in such state) is required for the valid execution, delivery and performance by any Pledgor of this Agreement, the grant by it of the Lien and security interest in favor of the Administrative Agent provided for herein, or the exercise by the Administrative Agent of its rights and remedies hereunder, except for (i) the filings described in Section 3.2, (ii) in the case of Accounts owing from any federal governmental agency or authority, the filing by the Administrative Agent of a notice of assignment in accordance with the federal Assignment of Claims Act of 1940, as amended, and (iii) in the case of Pledged Interests, such filings and approvals as may be required in connection with a disposition of any such Pledged Interests by laws affecting the offering and sale of securities generally.
3.5 No Restrictions. There are no statutory or regulatory restrictions, prohibitions or limitations on any Pledgor’s ability to grant to the Administrative Agent a Lien upon and security interest in the Collateral pursuant to this Agreement or (except for the provisions of the federal Anti-Assignment Act and Anti-Claims Act, as amended) on the exercise by the Administrative Agent of its rights and remedies hereunder (including any foreclosure upon or collection of the Collateral), and there are no contractual restrictions on any Pledgor’s ability so to grant such Lien and security interest.
3.6 Accounts. Except as, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, each Account is, or at the time it arises will be, (i) a bona fide, valid and legally enforceable indebtedness of the account debtor according to its terms, arising out of or in connection with the sale, lease or performance of Goods or services by the Pledgors or any of them, (ii) subject to no offsets, discounts, counterclaims, contra accounts or any other defense of any kind and character, other than warranties and discounts customarily given by the Pledgors in the ordinary course of business and warranties provided by applicable law, (iii) to the extent listed on any schedule of Accounts at any time furnished to the Administrative Agent, a true and correct statement of the amount actually and unconditionally owing thereunder, maturing as stated in such schedule and in the invoice covering the transaction creating such Account, and (iv) not evidenced by any Tangible Chattel Paper or other Instrument; or if so, such Tangible Chattel Paper or other Instrument (other than invoices and related correspondence and supporting documentation) shall promptly be duly endorsed to the order of the Administrative Agent and delivered to the Administrative Agent to be held as Collateral hereunder. To the knowledge of each Pledgor, there are no facts, events or occurrences that would in any way impair the validity or enforcement of any Accounts except as set forth above.
3.7 Pledged Interests. As of the date hereof, the Pledged Interests required to be pledged hereunder by each Pledgor consist of the number and type of shares of capital stock (in the case of issuers that are corporations) or the percentage and type of other equity interests (in the case of issuers other than corporations) as described beneath such Pledgor’s name in Annex C. All of the Pledged Interests have been duly and validly issued and are fully paid and nonassessable (or, in the case of partnership, limited liability company or similar Pledged Interests, not subject to any capital call or other additional capital requirement) and not subject to any preemptive rights, warrants, options or similar rights or restrictions in favor of third parties or any contractual or other restrictions upon transfer. As to each issuer thereof, the Pledged Interests pledged hereunder constitute 100% of the outstanding capital stock of or other equity interests in such issuer, except as set forth in Annex C (or, in the case of any issuer that is a Foreign Subsidiary, such lower percentage, not less than 65% (with respect to voting capital stock or other equity interests only) in any event, as may be permitted by the terms of this Agreement and the Credit Agreement).
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3.8 Intellectual Property. Annexes D, E and F correctly set forth all material registered Copyrights, Patents and Trademarks owned by any Pledgor as of the date hereof (and as amended concurrently with the delivery of the financial statements described in Section 6.1(b) of the Credit Agreement pursuant to Section 4.8) and used or proposed to be used in its business. Except as, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (a) each such Pledgor owns or possesses the valid right to use all Copyrights, Patents and Trademarks; (b) all registrations therefor have been validly issued under applicable law and are in full force and effect; (c) no claim has been made in writing or, to the knowledge of such Pledgor, orally, that any of the Copyrights, Patents or Trademarks is invalid or unenforceable or violates or infringes the rights of any other Person, and there is no such violation or infringement in existence; and (d) to the knowledge of such Pledgor, no other Person is presently infringing upon the rights of such Pledgor with regard to any of the Copyrights, Patents or Trademarks.
3.9 Deposit Accounts. Annex G lists, as of the date hereof (and as amended from time to time pursuant to Section 4.10), all Deposit Accounts maintained by any Pledgor, and lists in each case the name in which the account is held, the name of the depository institution, the account number and a description of the type or purpose of the account. As of the Closing Date, no Deposit Account (other than Deposit Accounts maintained at Xxxxx Fargo) contains more than $500,000 in cash or other assets.
3.10 Securities and Commodity Accounts. Annex H lists, as of the date hereof (and as amended from time to time pursuant to Section 4.11), all Securities Accounts and Commodity Accounts maintained by any Pledgor with any Securities Intermediary or Commodity Intermediary, and lists in each case the name in which the account is held, the name of the Securities Intermediary or Commodity Intermediary, the account number, and a description of the type or purpose of the account. As of the Closing Date, no Securities Account or Commodity Account contains cash, securities or other assets having a value in excess of $500,000.
3.11 Documents of Title. No xxxx of lading, warehouse receipt or other Document or Instrument of title is outstanding with respect to any Collateral other than Mobile Goods and other than Inventory in transit in the ordinary course of business to a location set forth on Annex B or to a customer of a Pledgor.
3.12 Commercial Tort Claims. Annex I lists, as of the date hereof and to the knowledge of each Pledgor, all Commercial Tort Claims existing in favor of any Pledgor.
ARTICLE IV
COVENANTS
4.1 Use and Disposition of Collateral. So long as no Event of Default shall have occurred and be continuing, each Pledgor may, in any lawful manner not inconsistent with the provisions of this Agreement and the other Credit Documents, use, control and manage the Collateral in the operation of its businesses, and receive and use the income, revenue and profits arising therefrom and the Proceeds thereof, in the same manner and with the same effect as if this Agreement had not been made; provided, however, that no Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge, grant any Lien with respect to or otherwise encumber any of the Collateral or any interest therein, except for the security interest created in favor of the Administrative Agent hereunder and except as may be otherwise expressly permitted in accordance with the terms of this Agreement and the Credit Agreement (including any applicable provisions therein regarding delivery of proceeds of sale or disposition to the Administrative Agent).
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4.2 Change of Name, Locations, etc. No Pledgor will (i) change its name, identity or corporate structure, (ii) change its chief executive office from the location thereof listed on Annex B, (iii) change the jurisdiction of its incorporation or organization from the jurisdiction listed on Annex B (whether by merger or otherwise), (iv) file any document with the Internal Revenue Service using any name other than its exact legal name listed on Annex B, or (v) remove any books, records or other information relating to Collateral, from the applicable location thereof listed on Annex B, unless in each case such Pledgor has (1) given twenty (20) days’ prior written notice to the Administrative Agent of its intention to do so, together with information regarding any such new location and such other information in connection with such proposed action as the Administrative Agent may reasonably request, and (2) delivered to the Administrative Agent ten (10) days prior to any such change or removal such documents, instruments and financing statements as may be required by the Administrative Agent, all in form and substance satisfactory to the Administrative Agent, paid all necessary filing and recording fees and taxes, and taken all other actions reasonably requested by the Administrative Agent (including, at the request of the Administrative Agent, delivery of opinions of counsel reasonably satisfactory to the Administrative Agent to the effect that all such actions have been taken), in order to perfect and maintain the Lien upon and security interest in the Collateral provided for herein in accordance with the provisions of Section 3.2.
4.3 Records; Inspection.
(a) Each Pledgor will keep and maintain at its own cost and expense satisfactory and complete, in all material respects, records of the Accounts and all other Collateral, including, without limitation, records of all payments received, all credits granted thereon, all merchandise returned and all other documentation relating thereto, and will furnish to the Administrative Agent from time to time such statements, schedules and reports (including, without limitation, accounts receivable aging schedules) with regard to the Collateral as the Administrative Agent may reasonably request.
(b) Each Pledgor shall, from time to time at such times as may be reasonably requested and upon reasonable notice, (i) make available to the Administrative Agent for inspection and review at such Pledgor’s offices copies of all invoices and other documents and information relating to the Collateral (including, without limitation, itemized schedules of all collections of Accounts, showing the name of each account debtor, the amount of each payment and such other information as the Administrative Agent shall reasonably request), and (ii) permit the Administrative Agent or its representatives to visit its offices or the premises upon which any Collateral may be located, inspect its books and records and make copies and memoranda thereof, inspect the Collateral, discuss its finances and affairs with its officers, employees and independent accountants and take any other actions necessary for the protection of the interests of the Secured Parties in the Collateral. At the request of the Administrative Agent, each Pledgor will legend, in form and manner satisfactory to the Administrative Agent, the books, records and materials evidencing or relating to the Collateral with an appropriate reference to the fact that the Collateral has been assigned to the Administrative Agent and that the Administrative Agent has a security interest therein. The Administrative Agent shall have the right to make test verifications of Accounts in any reasonable manner and through any reasonable medium, and each Pledgor agrees to furnish all such reasonable assistance and information as the Administrative Agent may require in connection therewith.
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4.4 Accounts. Unless notified otherwise by the Administrative Agent in accordance with the terms hereof, each Pledgor shall endeavor to collect its Accounts and all amounts owing to it thereunder in accordance with sound business practices and shall apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balances thereof, and in connection therewith shall, at the request of the Administrative Agent after the occurrence and during the continuance of an Event of Default, take such action as the Administrative Agent may deem necessary or advisable (within applicable laws) to enforce such collection. Each Pledgor shall promptly notify the Administrative Agent in writing of any Accounts that constitute a claim against a federal governmental agency or authority, and, upon request of the Administrative Agent, such Pledgor shall take such steps as may be necessary or desirable to comply with the federal Assignment of Claims Act of 1940, as amended.
4.5 Delivery of Certain Collateral; Further Actions. All certificates or Instruments representing or evidencing any Accounts, Investment Property or other Collateral with an individual value equal to or greater than $500,000 shall be delivered promptly to the Administrative Agent pursuant hereto to be held as Collateral hereunder, shall be in form suitable for transfer by delivery and shall be delivered together with undated stock powers duly executed in blank, appropriate endorsements or other necessary instruments of registration, transfer or assignment, duly executed and in form and substance satisfactory to the Administrative Agent, and in each case together with such other instruments or documents as the Administrative Agent may reasonably request. Each Pledgor will, at its own cost and expense, cooperate with the Administrative Agent in obtaining a control agreement, in form and substance reasonably satisfactory to the Administrative Agent, and in taking such other actions as may be requested by the Administrative Agent from time to time with respect to any Investment Property or other Collateral in which a security interest may be perfected by (or can be perfected only by) control under the Uniform Commercial Code.
4.6 Equipment. Each Pledgor will, in accordance with sound business practices, maintain all Equipment used by it in its business (other than obsolete, worn out or no longer useful Equipment) in good repair, working order and condition (normal wear and tear excepted) and make all necessary repairs and replacements thereof so that the value and operating efficiency thereof shall at all times be maintained and preserved. No Pledgor shall knowingly permit any Equipment to become a Fixture to any real property (other than real property the fee interest in which is subject to a Mortgage in favor of the Administrative Agent).
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4.7 Inventory. Each Pledgor will, in accordance with sound business practices, maintain all Inventory held by it or on its behalf in good saleable or useable condition. Unless notified otherwise by the Administrative Agent in accordance with the terms hereof, each Pledgor may, in any lawful manner not inconsistent with the provisions of this Agreement and the other Credit Documents, process, use and, in the ordinary course of business but not otherwise, sell or otherwise dispose of its Inventory.
4.8 Intellectual Property.
(a) Each applicable Pledgor will, at its own expense, execute and deliver to the Administrative Agent on the Closing Date fully completed assignments in the forms of Exhibits A and B, as applicable, for recordation in the U.S. Copyright Office or the U.S. Patent and Trademark Office with regard to any Copyright Collateral, Patent Collateral or Trademark Collateral, as the case may be, described in Annex D, E or F hereto. In the event that after the date hereof any Pledgor shall acquire any registered Copyright, Patent or Trademark, or effect any registration of any Copyright, Patent or Trademark or file any application for registration thereof, whether within the United States or any other country or jurisdiction, such Pledgor shall, concurrently with the delivery of the financial statements described in Section 6.1(b) of the Credit Agreement, (i) furnish written notice thereof to the Administrative Agent together with information sufficient to permit the Administrative Agent, upon its receipt of such notice, to (and each Pledgor hereby authorizes the Administrative Agent to) modify this Agreement, as appropriate, by amending Annexes D, E and F hereto or to add additional exhibits hereto to include any Copyright, Patent or Trademark that becomes part of the Collateral under this Agreement, and (ii) at its own expense, execute and deliver to the Administrative Agent, with regard to United States Patents, Trademarks and Copyrights, fully completed assignments in the forms of Exhibits A and B, as applicable, for recordation in the U.S. Copyright Office or the U.S. Patent and Trademark Office as more fully described hereinabove, together in all instances with any other agreements, instruments and documents that the Administrative Agent may reasonably request from time to time to further effect and confirm the assignment and security interest created by this Agreement in such Copyrights, Patents and Trademarks, and each Pledgor hereby appoints the Administrative Agent its attorney-in-fact to execute, deliver and record any and all such agreements, instruments and documents for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed and such power, being coupled with an interest, shall be irrevocable for so long as this Agreement shall be in effect with respect to such Pledgor.
(b) Each Pledgor (either itself or through its licensees or its sublicensees) will, for each material Trademark used in the conduct of its business, use its best efforts to (i) maintain such Trademark in full force and effect, free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark with notice of federal registration to the extent required by applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third-party rights.
(c) Each Pledgor (either itself or through its licensees or sublicensees) will refrain from committing any act, or omitting any act, whereby any material Patent used in the conduct of such Pledgor’s business may become invalidated or dedicated to the public, and shall continue to xxxx any products covered by a material Patent with the relevant patent number as required by applicable patent laws.
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(d) Each Pledgor (either itself or through its licensees or sublicensees) will, for each material work covered by a Copyright, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice as required under applicable copyright laws.
(e) Each Pledgor shall notify the Administrative Agent immediately if it knows or has reason to know that any material Patent, Trademark or Copyright used in the conduct of its business may become abandoned or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the U.S. Patent and Trademark Office, U.S. Copyright Office or any court) regarding such Pledgor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.
(f) Each Pledgor will, subject to the exercise of its reasonable business judgment, take all necessary steps that are consistent with the practice in any proceeding before the U.S. Patent and Trademark Office, U.S. Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each application relating to any material Patents, Trademarks or Copyrights (and to obtain the relevant grant or registration) and to maintain each registration of any material Patents, Trademarks and Copyrights used in the conduct of such Pledgor’s business, including the filing of applications for renewal, affidavits of use, affidavits of incontestability and maintenance fees, and, if consistent with sound business judgment, to initiate opposition, interference and cancellation proceedings against third parties.
(g) In the event that any Collateral consisting of a material Patent, Trademark or Copyright used in the conduct of any Pledgor’s business is believed infringed, misappropriated or diluted by a third party, such Pledgor shall notify the Administrative Agent promptly after it learns thereof and shall, if consistent with sound business judgment, promptly xxx for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the circumstances to protect such Collateral.
(h) Upon the occurrence and during the continuance of any Event of Default, each Pledgor shall use its reasonable best efforts to obtain all requisite consents or approvals from the licensor of each License included within the Copyright Collateral, Patent Collateral or Trademark Collateral to effect the assignment of all of such Pledgor’s right, title and interest thereunder to the Administrative Agent or its designee.
4.9 Mobile Goods. Upon the request of the Administrative Agent at any time, whether or not an Event of Default shall have occurred and be continuing, each Pledgor will deliver to the Administrative Agent originals of the certificates of title or ownership for all Mobile Goods owned by it, together (in the case of motor vehicles) with the manufacturer’s statement of origin with the Administrative Agent listed as lienholder and odometer statements and together in all other cases with appropriate instruments or certificates of transfer and delivery, duly completed and executed, and will take such other action as the Administrative Agent may deem necessary to perfect the security interest created by this Agreement in all such Mobile Goods.
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4.10 Deposit Accounts. Each Pledgor agrees that (i) it will promptly provide the Administrative Agent with written notice of each Deposit Account with cash or other assets in excess of $500,000 (other than Deposit Accounts used exclusively for payroll purposes and accounts maintained with the Administrative Agent), (ii) upon request of the Administrative Agent, promptly obtain an executed control agreement from the applicable depository bank or other financial institution and applicable Pledgor with respect to each Deposit Account described in clause (i) in form and substance reasonably satisfactory to the Administrative Agent, and (iii) in the event that any Pledgor opens any Deposit Account that is not already listed on Annex G, such Pledgor shall (in addition to complying with the other requirements of this Section), concurrently with the delivery of the financial statements described in Section 6.1(b) of the Credit Agreement, furnish written notice thereof to the Administrative Agent together with information sufficient to permit the Administrative Agent, upon its receipt of such notice, to (and each Pledgor hereby authorizes the Administrative Agent to) modify this Agreement, as appropriate, by amending Annex G to include such information.
4.11 Securities and Commodity Accounts. Each Pledgor agrees that (i) it will promptly provide the Administrative Agent with written notice of each Securities Account or Commodity Account with cash, securities or other assets with a value equal to or greater than $500,000 (other than such accounts permitted under Section 8.3(xvi) of the Credit Agreement), (ii) upon request of the Administrative Agent, promptly obtain an executed control agreement from the applicable Securities Intermediary or Commodity Intermediary and applicable Pledgor with respect to each Securities Account or Commodity Account described in clause (i) in form and substance reasonably satisfactory to the Administrative Agent, and (iii) in the event that any Pledgor opens any Securities Account or Commodity Account that is not already listed on Annex H, such Pledgor shall (in addition to complying with the other requirements of this Section), concurrently with the delivery of the financial statements described in Section 6.1(b) of the Credit Agreement, furnish written notice thereof to the Administrative Agent together with information sufficient to permit the Administrative Agent, upon its receipt of such notice, to (and each Pledgor hereby authorizes the Administrative Agent to) modify this Agreement, as appropriate, by amending Annex H to include such information.
4.12 Collateral in Possession of Third Party. Without limiting the generality of any other provision of this Agreement, each Pledgor agrees that, at any time after the occurrence and during the continuance of an Event of Default, it shall not permit any Collateral to be in the possession of any bailee, warehouseman, agent, processor or other third party at any time unless such bailee or other Person shall have been notified of the security interest created by this Agreement (or, if required under applicable law in order to perfect the Administrative Agent’s security interest in such Collateral, such bailee or other Person shall have acknowledged to the Administrative Agent in writing that it is holding such Collateral for the benefit of the Administrative Agent and subject to such security interest and to the instructions of the Administrative Agent) and such Pledgor shall have exercised its reasonable best efforts to obtain from such bailee or other Person, at such Pledgor’s sole cost and expense, the written acknowledgement described above (if not already required by applicable law to perfect the Administrative Agent’s security interest) and agreement to waive and release any Lien (whether arising by operation of law or otherwise) it may have with respect to such Collateral, such agreement to be in form and substance reasonably satisfactory to the Administrative Agent.
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4.13 Commercial Tort Claims. Each Pledgor agrees that it will, concurrently with the delivery of the financial statements described in Section 6.1(b) of the Credit Agreement, furnish to the Administrative Agent a description of any Commercial Tort Claim in its favor meeting the requirements of Section 9-108(e) of the Uniform Commercial Code, and upon the Administrative Agent’s request execute and deliver such documents, financing statements and other instruments, and take such other action, as the Administrative Agent may reasonably request in order to include such Commercial Tort Claim as Collateral hereunder and to perfect the security interest of the Administrative Agent therein.
4.14 Protection of Security Interest. Each Pledgor agrees that it will, at its own cost and expense, take any and all actions necessary to warrant and defend the right, title and interest of the Secured Parties in and to the Collateral against the claims and demands of all other Persons.
ARTICLE V
CERTAIN PROVISIONS RELATING TO PLEDGED INTERESTS
5.1 After-Acquired Equity Interests; Ownership.
(a) If any Pledgor shall, at any time and from time to time after the date hereof, acquire any additional capital stock or other Pledged Interests in any Subsidiary of the types described in the definition of the term “Pledged Interests,” the same shall be automatically deemed to be Pledged Interests hereunder, and to be pledged to the Administrative Agent pursuant to Section 2.1 (subject, in the case of Pledged Interests in Foreign Subsidiaries, to the limitation set forth in the proviso in Section 2.1(xviii), and such Pledgor will forthwith pledge and deposit the same with the Administrative Agent and deliver to the Administrative Agent any certificates therefor, together with undated stock powers or other necessary instruments of transfer or assignment, duly executed in blank and in form and substance reasonably satisfactory to the Administrative Agent, together with such other certificates and instruments as the Administrative Agent may reasonably request (including Uniform Commercial Code financing statements or appropriate amendments thereto), and will promptly thereafter deliver to the Administrative Agent a fully completed and duly executed amendment to this Agreement in the form of Exhibit D (each, a “Pledge Amendment”) in respect thereof. Each Pledgor hereby authorizes the Administrative Agent to attach each such Pledge Amendment to this Agreement, and agrees that all such Collateral listed on any Pledge Amendment shall for all purposes be deemed Collateral hereunder and shall be subject to the provisions hereof; provided that the failure of any Pledgor to execute and deliver any Pledge Amendment with respect to any such additional Collateral as required hereinabove shall not impair the security interest of the Administrative Agent in such Collateral or otherwise adversely affect the rights and remedies of the Administrative Agent hereunder with respect thereto.
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(b) If any Pledged Interests (whether now owned or hereafter acquired) included in the Collateral are “uncertificated securities” within the meaning of the Uniform Commercial Code or are otherwise not evidenced by any certificate or instrument, each applicable Pledgor will promptly notify the Administrative Agent thereof and will promptly take and cause to be taken, and will (if the issuer of such uncertificated securities is a Person other than a Subsidiary of the Borrower) use commercially reasonable efforts to cause the issuer to take, all actions required under Articles 8 and 9 of the Uniform Commercial Code and any other applicable law, to enable the Administrative Agent to acquire “control” of such uncertificated securities (within the meaning of such term under Section 8-106 (or its successor provision) of the Uniform Commercial Code) and as may be otherwise necessary to perfect the security interest of the Administrative Agent therein.
(c) Except to the extent otherwise expressly permitted by or pursuant to the Credit Agreement, the Pledgors will cause the Pledged Interests in each issuer pledged hereunder to constitute at all times 100% of the capital stock or other Pledged Interests in such issuer, such that the issuer shall be a direct or indirect Wholly Owned Subsidiary of the Parent (subject, in the case of Pledged Interests in Foreign Subsidiaries, to the limitation set forth in the proviso in Section 2.1(xviii), and unless the Administrative Agent shall have given its prior written consent or except as may be expressly permitted by the Credit Agreement, no Pledgor will cause or permit any such issuer to issue or sell any new capital stock, any warrants, options or rights to acquire the same, or other Pledged Interests of any nature to any Person other than such Pledgor, or cause, permit or consent to the admission of any other Person as a stockholder, partner or member of any such issuer.
5.2 Voting Rights. So long as no Event of Default shall have occurred and be continuing, each Pledgor shall be entitled to exercise all voting and other consensual rights pertaining to its Pledged Interests (subject to its obligations under Section 5.1(a)), and for that purpose the Administrative Agent will execute and deliver or cause to be executed and delivered to each applicable Pledgor all such proxies and other instruments as such Pledgor may reasonably request in writing to enable such Pledgor to exercise such voting and other consensual rights; provided, however, that no Pledgor will cast any vote, give any consent, waiver or ratification, or take or fail to take any action, in any manner that would, or could reasonably be expected to, violate or be inconsistent with any of the terms of this Agreement, the Credit Agreement or any other Credit Document or have the effect of materially and adversely impairing the position or interests of the Secured Parties.
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5.3 Dividends and Other Distributions. So long as no Event of Default shall have occurred and be continuing (or would occur as a result thereof), and except as provided otherwise herein, all interest, income, dividends, distributions and other amounts payable in cash in respect of the Pledged Interests may be paid to and retained by the Pledgors; provided, however, that all such interest, income, dividends, distributions and other amounts shall, at all times after the occurrence and during the continuance of an Event of Default, be paid to the Administrative Agent and retained by it as part of the Collateral (except to the extent applied upon receipt to the repayment of the Secured Obligations). The Administrative Agent shall also be entitled at all times (whether or not during the continuance of an Event of Default) to receive directly, and to retain as part of the Collateral, (i) all interest, income, dividends, distributions or other amounts paid or payable in cash or other property in respect of any Pledged Interests in connection with the dissolution, liquidation, recapitalization or reclassification of the capital of the applicable issuer to the extent representing (in the reasonable judgment of the Administrative Agent) an extraordinary, liquidating or other distribution in return of capital, (ii) all additional Pledged Interests or other securities or property (other than cash) paid or payable or distributed or distributable in respect of any Pledged Interests in connection with any noncash dividend, distribution, return of capital, spin-off, stock split, split-up, reclassification, combination of shares or interests or similar rearrangement, and (iii) without affecting any restrictions against such actions contained in the Credit Agreement, all additional Pledged Interests or other securities or property (including cash) paid or payable or distributed or distributable in respect of any Pledged Interests in connection with any consolidation, merger, exchange of securities, liquidation or other reorganization. All interest, income, dividends, distributions or other amounts that are received by any Pledgor in violation of the provisions of this Section shall be received in trust for the benefit of the Administrative Agent, shall be segregated from other property or funds of such Pledgor and shall be forthwith delivered to the Administrative Agent as Collateral in the same form as so received (with any necessary endorsements). Any and all money and other property paid over to or received by the Administrative Agent pursuant to the provisions of this Section shall be retained by the Administrative Agent in a Collateral Account (as hereinafter defined) upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 6.2. The Administrative Agent shall, within five (5) Business Days after all Events of Default have been cured or waived, repay to each applicable Pledgor all cash interest, income, dividends, distributions and other amounts that such Pledgor would otherwise be permitted to retain pursuant to the provisions of this Section and that remain in such Collateral Account.
ARTICLE VI
REMEDIES
6.1 Remedies. If an Event of Default shall have occurred and be continuing, the Administrative Agent shall be entitled to exercise in respect of the Collateral all of its rights, powers and remedies provided for herein or otherwise available to it under any other Credit Document, by law, in equity or otherwise, including all rights and remedies of a secured party under the Uniform Commercial Code, and shall be entitled in particular, but without limitation of the foregoing, to exercise the following rights, which each Pledgor agrees to be commercially reasonable:
(a) To notify any or all account debtors or obligors under any Accounts, Contracts or other Collateral of the security interest in favor of the Administrative Agent created hereby and to direct all such Persons to make payments of all amounts due thereon or thereunder directly to the Administrative Agent or to an account designated by the Administrative Agent; and in such instance and from and after such notice, all amounts and Proceeds (including wire transfers, checks and other Instruments) received by any Pledgor in respect of any Accounts, Contracts or other Collateral shall be received in trust for the benefit of the Administrative Agent hereunder, shall be segregated from the other funds of such Pledgor and shall be forthwith deposited into such account or paid over or delivered to the Administrative Agent in the same form as so received (with any necessary endorsements or assignments), to be held as Collateral and applied to the Secured Obligations as provided herein; and by this provision, each Pledgor irrevocably authorizes and directs each Person who is or shall be a party to or liable for the performance of any Contract, upon receipt of notice from the Administrative Agent to the effect that an Event of Default has occurred and is continuing, to attorn to or otherwise recognize the Administrative Agent as owner under such Contract and to pay, observe and otherwise perform the obligations under such Contract to or for the Administrative Agent or the Administrative Agent’s designee as though the Administrative Agent or such designee were such Pledgor named therein, and to do so until otherwise notified by the Administrative Agent;
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(b) To take possession of, receive, endorse, assign and deliver, in its own name or in the name of any Pledgor, all checks, notes, drafts and other Instruments relating to any Collateral, including receiving, opening and properly disposing of all mail addressed to any Pledgor concerning Accounts and other Collateral; to verify with account debtors or other contract parties the validity, amount or any other matter relating to any Accounts or other Collateral, in its own name or in the name of any Pledgor; to accelerate any indebtedness or other obligation constituting Collateral that may be accelerated in accordance with its terms; to take or bring all actions and suits deemed necessary or appropriate to effect collections and to enforce payment of any Accounts or other Collateral; to settle, compromise or release in whole or in part any amounts owing on Accounts or other Collateral; and to extend the time of payment of any and all Accounts or other amounts owing under any Collateral and to make allowances and adjustments with respect thereto, all in the same manner and to the same extent as any Pledgor might have done;
(c) To notify any or all depository institutions with which any Deposit Accounts are maintained and which Deposit Accounts are subject to Control in favor of the Administrative Agent to remit and transfer all monies, securities and other property on deposit in such Deposit Accounts or deposited or received for deposit thereafter to the Administrative Agent, for deposit in a Collateral Account or such other accounts as may be designated by the Administrative Agent, for application to the Secured Obligations as provided herein;
(d) To transfer to or register in its name or the name of any of its Administrative Agents or nominees all or any part of the Collateral, without notice to any Pledgor and with or without disclosing that such Collateral is subject to the security interest created hereunder;
(e) To require any Pledgor to, and each Pledgor hereby agrees that it will at its expense and upon request of the Administrative Agent forthwith, assemble all or any part of the Collateral as directed by the Administrative Agent and make it available to the Administrative Agent at a place designated by the Administrative Agent;
(f) To enter and remain upon the premises of any Pledgor and take possession of all or any part of the Collateral, with or without judicial process; to use the materials, services, books and records of any Pledgor for the purpose of liquidating or collecting the Collateral, whether by foreclosure, auction or otherwise; and to remove the same to the premises of the Administrative Agent or any designated agent for such time as the Administrative Agent may desire, in order to effectively collect or liquidate the Collateral;
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(g) To exercise (i) all voting, consensual and other rights and powers pertaining to the Pledged Interests (whether or not transferred into the name of the Administrative Agent), at any meeting of shareholders, partners, members or otherwise, and (ii) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to the Pledged Interests as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Interests upon the merger, consolidation, reorganization, reclassification, combination of shares or interests, similar rearrangement or other similar fundamental change in the structure of the applicable issuer, or upon the exercise by any Pledgor or the Administrative Agent of any right, privilege or option pertaining to such Pledged Interests), and in connection therewith, the right to deposit and deliver any and all of the Pledged Interests with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine, and give all consents, waivers and ratifications in respect of the Pledged Interests, all without liability except to account for any property actually received by it, but the Administrative Agent shall have no duty to exercise any such right, privilege or option or give any such consent, waiver or ratification and shall not be responsible for any failure to do so or delay in so doing; and for the foregoing purposes each Pledgor will promptly execute and deliver or cause to be executed and delivered to the Administrative Agent, upon request, all such proxies and other instruments as the Administrative Agent may reasonably request to enable the Administrative Agent to exercise such rights and powers; AND IN FURTHERANCE OF THE FOREGOING AND WITHOUT LIMITATION THEREOF, EACH PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS THE TRUE AND LAWFUL PROXY AND ATTORNEY-IN-FACT OF SUCH PLEDGOR, WITH FULL POWER OF SUBSTITUTION IN THE PREMISES, TO EXERCISE ALL SUCH VOTING, CONSENSUAL AND OTHER RIGHTS AND POWERS TO WHICH ANY HOLDER OF ANY PLEDGED INTERESTS WOULD BE ENTITLED BY VIRTUE OF HOLDING THE SAME, WHICH PROXY AND POWER OF ATTORNEY, BEING COUPLED WITH AN INTEREST, IS IRREVOCABLE AND SHALL BE EFFECTIVE FOR SO LONG AS THIS AGREEMENT SHALL BE IN EFFECT; and
(h) To sell, resell, assign and deliver, in its sole discretion, all or any of the Collateral, in one or more parcels, on any securities exchange on which any Pledged Interests may be listed, at public or private sale, at any of the Administrative Agent’s offices or elsewhere, for cash, upon credit or for future delivery, at such time or times and at such price or prices and upon such other terms as the Administrative Agent may deem satisfactory. If any of the Collateral is sold by the Administrative Agent upon credit or for future delivery, the Administrative Agent shall not be liable for the failure of the purchaser to purchase or pay for the same and, in the event of any such failure, the Administrative Agent may resell such Collateral. In no event shall any Pledgor be credited with any part of the Proceeds of sale of any Collateral until and to the extent cash payment in respect thereof has actually been received by the Administrative Agent. Each purchaser at any such sale shall hold the property sold absolutely, free from any claim or right of whatsoever kind, including any equity or right of redemption of any Pledgor, and each Pledgor hereby expressly waives all rights of redemption, stay or appraisal, and all rights to require the Administrative Agent to marshal any assets in favor of such Pledgor or any other party or against or in payment of any or all of the Secured Obligations, that it has or may have under any rule of law or statute now existing or hereafter adopted. No demand, presentment, protest, advertisement or notice of any kind (except any notice required by law, as referred to below), all of which are hereby expressly waived by each Pledgor, shall be required in connection with any sale or other disposition of any part of the Collateral. If any notice of a proposed sale or other disposition of any part of the Collateral shall be required under applicable law, the Administrative Agent shall give the applicable Pledgor at least ten (10) days’ prior notice of the time and place of any public sale and of the time after which any private sale or other disposition is to be made, which notice each Pledgor agrees is commercially reasonable. The Administrative Agent shall not be obligated to make any sale of Collateral if it shall determine not to do so, regardless of the fact that notice of sale may have been given. The Administrative Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. Upon each public sale and, to the extent permitted by applicable law, upon each private sale, the Administrative Agent may purchase all or any of the Collateral being sold, free from any equity, right of redemption or other claim or demand, and may make payment therefor by endorsement and application (without recourse) of the Secured Obligations in lieu of cash as a credit on account of the purchase price for such Collateral.
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6.2 Application of Proceeds.
(a) All Proceeds collected by the Administrative Agent upon any sale, other disposition of or realization upon any of the Collateral, together with all other moneys received by the Administrative Agent hereunder, shall be applied in accordance with the provisions of Section 2.12 of the Credit Agreement. For purposes of applying amounts in accordance with this Section, the Administrative Agent shall be entitled to rely upon any Secured Party that has entered into a Permitted Hedge Agreement with the Borrower for a determination (which such Secured Party agrees to provide or cause to be provided upon request of the Administrative Agent) of the outstanding Secured Obligations owed to such Secured Party under any such Permitted Hedge Agreement. Unless it has actual knowledge (including by way of written notice from any such Secured Party) to the contrary, the Administrative Agent, in acting hereunder, shall be entitled to assume that no Permitted Hedge Agreements or Secured Obligations in respect thereof are in existence between any Secured Party and the Borrower. If any Lender or Affiliate thereof that is a party to a Permitted Hedge Agreement with the Borrower (the obligations of the Borrower under which are Secured Obligations) ceases to be a Lender or Affiliate thereof, such former Lender or Affiliate thereof shall nevertheless continue to be a Secured Party hereunder with respect to the Secured Obligations under such Permitted Hedge Agreement.
(b) In the event that the proceeds of any such sale, disposition or realization are insufficient to pay all amounts to which the Secured Parties are legally entitled, the Pledgors shall be jointly and severally liable for the deficiency, together with interest thereon at the highest rate specified in any applicable Credit Document for interest on overdue principal or such other rate as shall be fixed by applicable law, together with the costs of collection and all other fees, costs and expenses payable hereunder.
(c) Upon any sale of any Collateral hereunder by the Administrative Agent (whether by virtue of the power of sale herein granted, pursuant to judicial proceeding, or otherwise), the receipt of the Administrative Agent or the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Administrative Agent or such officer or be answerable in any way for the misapplication thereof.
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6.3 Collateral Accounts. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to cause to be established and maintained, at its principal office or such other location or locations as it may establish from time to time in its discretion, one or more accounts (collectively, “Collateral Accounts”) for the collection of cash Proceeds of the Collateral. Such Proceeds, when deposited, shall continue to constitute Collateral for the Secured Obligations and shall not constitute payment thereof until applied as herein provided. The Administrative Agent shall have sole dominion and control over all funds deposited in any Collateral Account, and such funds may be withdrawn therefrom only by the Administrative Agent. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to (and, if directed by the Required Lenders pursuant to the Credit Agreement, shall) apply amounts held in the Collateral Accounts in payment of the Secured Obligations in the manner provided for in Section 6.2.
6.4 Grant of License. Each Pledgor hereby grants to the Administrative Agent an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to any Pledgor) to use, license or sublicense any Patent Collateral, Trademark Collateral or Copyright Collateral now owned or licensed or hereafter acquired or licensed by such Pledgor, wherever the same may be located throughout the world, for such term or terms, on such conditions and in such manner as the Administrative Agent shall determine, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license or sublicense by the Administrative Agent shall be exercised, at the option of the Administrative Agent, only upon the occurrence and during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Administrative Agent in accordance herewith shall be binding upon each applicable Pledgor notwithstanding any subsequent cure of an Event of Default.
6.5 Private Sales.
(a) Each Pledgor recognizes that the Administrative Agent may be compelled, at any time after the occurrence and during the continuance of an Event of Default, to conduct any sale of all or any part of the Pledged Interests without registering or qualifying such Pledged Interests under the Securities Act of 1933, as amended (the “Securities Act”), and/or any applicable state securities laws in effect at such time. Each Pledgor acknowledges that any such private sales may be made in such manner and under such circumstances as the Administrative Agent may deem necessary or advisable in its sole and absolute discretion, including at prices and on terms that might be less favorable than those obtainable through a public sale without such restrictions (including, without limitation, a public offering made pursuant to a registration statement under the Securities Act), and, notwithstanding such circumstances, agrees that any such sale shall not be deemed not to have been made in a commercially reasonable manner solely because it was conducted as a private sale, and agrees that the Administrative Agent shall have no obligation to conduct any public sales and no obligation to delay the sale of any Pledged Interests for the period of time necessary to permit its registration for public sale under the Securities Act and applicable state securities laws, and shall not have any responsibility or liability as a result of its election so not to conduct any such public sales or delay the sale of any Pledged Interests, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until after such registration. Each Pledgor hereby waives any claims against the Administrative Agent or any other Secured Party arising by reason of the fact that the price at which any Pledged Interests may have been sold at any private sale was less than the price that might have been obtained at a public sale or was less than the aggregate amount of the Secured Obligations, even if the Administrative Agent accepts the first offer received and does not offer such Pledged Interests to more than one offeree.
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(b) Each Pledgor agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the Administrative Agent and the other Secured Parties, that the Administrative Agent and the other Secured Parties have 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 the Pledgors.
6.6 The Pledgors Remain Liable. Notwithstanding anything herein to the contrary, (i) each Pledgor shall remain liable under all Contracts to which it is a party included within the Collateral (including, without limitation, all Ownership Agreements) to perform all of its obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Administrative Agent of any of its rights or remedies hereunder shall not release any Pledgor from any of its obligations under any of such Contracts, and (iii) except as specifically provided for hereinbelow, the Administrative Agent shall not have any obligation or liability by reason of this Agreement under any of such Contracts, nor shall the Administrative Agent be obligated to perform any of the obligations or duties of any Pledgor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. The powers, rights and remedies conferred on the Administrative Agent hereunder are solely to protect its interest and privilege in such Contracts, as Collateral, and shall not impose any duty upon it to exercise any such powers, rights or remedies.
6.7 Waivers. Each Pledgor, to the greatest extent not prohibited by applicable law, hereby (i) agrees that it will not invoke, claim or assert the benefit of any rule of law or statute now or hereafter in effect (including, without limitation, any right to prior notice or judicial hearing in connection with the Administrative Agent’s possession, custody or disposition of any Collateral or any appraisal, valuation, stay, extension, moratorium or redemption law), or take or omit to take any other action, that would or could reasonably be expected to have the effect of delaying, impeding or preventing the exercise of any rights and remedies in respect of the Collateral, the absolute sale of any of the Collateral or the possession thereof by any purchaser at any sale thereof, and waives the benefit of all such laws and further agrees that it will not hinder, delay or impede the execution of any power granted hereunder to the Administrative Agent, but that it will permit the execution of every such power as though no such laws were in effect, (ii) waives all rights that it has or may have under any rule of law or statute now existing or hereafter adopted to require the Administrative Agent to marshal any Collateral or other assets in favor of such Pledgor or any other party or against or in payment of any or all of the Secured Obligations, and (iii) waives all rights that it has or may have under any rule of law or statute now existing or hereafter adopted to demand, presentment, protest, advertisement or notice of any kind (except notices expressly provided for herein). In addition, each Pledgor waives any and all rights of contribution or subrogation upon the sale or disposition of all or any portion of the Collateral by the Administrative Agent.
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ARTICLE VII
THE ADMINISTRATIVE AGENT
7.1 The Administrative Agent; Standard of Care. The Administrative Agent will hold all items of the Collateral at any time received under this Agreement in accordance with the provisions hereof. The obligations of the Administrative Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement and the other Credit Documents, are only those expressly set forth in this Agreement and the other Credit Documents. The Administrative Agent shall act hereunder at the direction, or with the consent, of the Required Lenders on the terms and conditions set forth in the Credit Agreement. The powers conferred on the Administrative Agent hereunder are solely to protect its interest, on behalf of the Secured Parties, in the Collateral, and shall not impose any duty upon it to exercise any such powers. Except for treatment of the Collateral in its possession in a manner substantially equivalent to that which the Administrative Agent, in its individual capacity, accords its own property of a similar nature, and the accounting for moneys actually received by it hereunder, the Administrative 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 the Collateral. Neither the Administrative Agent nor any other Secured Party shall be liable to any Pledgor (i) for any loss or damage sustained by such Pledgor, or (ii) for any loss, damage, depreciation or other diminution in the value of any of the Collateral that may occur as a result of or in connection with or that is in any way related to any exercise by the Administrative Agent or any other Secured Party of any right or remedy under this Agreement, any failure to demand, collect or realize upon any of the Collateral or any delay in doing so, or any other act or failure to act on the part of the Administrative Agent or any other Secured Party, except to the extent that the same is caused by its own gross negligence or willful misconduct.
7.2 Further Assurances; Attorney-in-Fact.
(a) Each Pledgor hereby irrevocably authorizes the Administrative Agent at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any financing statements and amendments thereto that (i) indicate the Collateral (x) as all assets of such Pledgor or words of similar effect, regardless of whether any particular asset included within the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of any such jurisdiction, or (y) as being of an equal or lesser scope or with greater detail, and (ii) provide any other information required by Part 5 of Article 9 of the Uniform Commercial Code for the sufficiency or filing office acceptance of any financing statement or amendment.
(b) Each Pledgor agrees that it will do such further acts and things (including, without limitation, making any notice filings with state tax or revenue authorities required to be made by account creditors in order to enforce any Accounts in such state) and to execute and deliver to the Administrative Agent such additional conveyances, assignments, agreements and instruments as the Administrative Agent may reasonably require or deem advisable to perfect, establish, confirm and maintain the security interest and Lien provided for herein, to carry out the purposes of this Agreement or to further assure and confirm unto the Administrative Agent its rights, powers and remedies hereunder.
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(c) Each Pledgor hereby irrevocably appoints the Administrative Agent its lawful attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor, the Administrative Agent or otherwise, and with full power of substitution in the premises (which power of attorney, being coupled with an interest, is irrevocable for so long as this Agreement shall be in effect), from time to time in the Administrative Agent’s discretion after the occurrence and during the continuance of an Event of Default (except for the actions described in clause (i) below, which may be taken by the Administrative Agent without regard to whether an Event of Default has occurred) to take any action and to execute any instruments that the Administrative Agent may deem necessary or advisable to accomplish the purpose of this Agreement, including, without limitation:
(i) to sign the name of such Pledgor on any financing statement, continuation statement, notice or other similar document that, in the Administrative Agent’s opinion, should be made or filed in order to perfect or continue perfected the security interest granted under this Agreement (including, without limitation, any title or ownership applications for filing with applicable state agencies to enable any motor vehicles now or hereafter owned by such Pledgor to be retitled and the Administrative Agent listed as lienholder thereon);
(ii) to ask, 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;
(iii) to receive, endorse and collect any checks, drafts, Instruments, Chattel Paper and other orders for the payment of money made payable to such Pledgor representing any interest, income, dividend, distribution or other amount payable in respect of any of the Collateral and to give full discharge for the same;
(iv) to obtain, maintain and adjust any property or casualty insurance required to be maintained by such Pledgor under Section 6.6 of the Credit Agreement and direct the payment of proceeds thereof to the Administrative Agent;
(v) to pay or discharge taxes, Liens or other encumbrances levied or placed on or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by the Administrative Agent in its sole discretion, any such payments made by the Administrative Agent to become Secured Obligations of the Pledgors to the Administrative Agent, due and payable immediately and without demand;
(vi) to file any claims or take any action or institute any proceedings that the Administrative Agent may deem necessary or advisable for the collection of any of the Collateral or otherwise to enforce the rights of the Administrative Agent with respect to any of the Collateral; and
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(vii) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with any and all of the Collateral as fully and completely as though the Administrative Agent were the absolute owner of the Collateral for all purposes, and to do from time to time, at the Administrative Agent’s option and the Pledgors’ expense, all other acts and things deemed necessary by the Administrative Agent to protect, preserve or realize upon the Collateral and to more completely carry out the purposes of this Agreement.
(d) If any Pledgor fails to perform any covenant or agreement contained in this Agreement after written request to do so by the Administrative Agent (provided that no such request shall be necessary at any time after the occurrence and during the continuance of an Event of Default), the Administrative Agent may itself perform, or cause the performance of, such covenant or agreement and may take any other action that it deems necessary and appropriate for the maintenance and preservation of the Collateral or its security interest therein, and the reasonable expenses so incurred in connection therewith shall be payable by the Pledgors under Section 8.1.
ARTICLE VIII
MISCELLANEOUS
8.1 Indemnity and Expenses. The Pledgors agree jointly and severally:
(a) To indemnify and hold harmless the Administrative Agent, each other Secured Party and each of their respective directors, officers, employees, agents and affiliates from and against any and all claims, damages, demands, losses, obligations, judgments and liabilities (including, without limitation, reasonable attorneys’ fees and expenses) in any way arising out of or in connection with this Agreement and the transactions contemplated hereby, except to the extent the same shall arise as a result of the gross negligence or willful misconduct of the party seeking to be indemnified; and
(b) To pay the reasonable fees and expenses of counsel to the Administrative Agent and to reimburse the Administrative Agent upon demand for all reasonable costs and expenses incurred by it, in each case in connection with (i) the engagement of appraisers, consultants, auditors or similar Persons by the Administrative Agent at any time to render opinions concerning the value of the Collateral, (ii) the creation, perfection and maintenance of the perfection of the Administrative Agent’s Liens upon the Collateral, including, without limitation, Lien search, filing and recording fees, (iii) the custody, use or preservation of, or the sale of, collection from or other realization upon, any of the Collateral, including the reasonable expenses of re-taking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, (iv) the exercise or enforcement of any rights or remedies granted hereunder, under any of the other Credit Documents or otherwise available to it (whether at law, in equity or otherwise), or (v) the failure by any Pledgor to perform or observe any of the provisions hereof. The provisions of this Section shall survive the execution and delivery of this Agreement, the repayment of any of the Secured Obligations, the termination of the Commitments and the termination or expiration of all Letters of Credit under the Credit Agreement, the termination of this Agreement or any other Credit Document, and the termination of, and settlement of the Borrower’s obligations under, any Permitted Hedge Agreement to which any Hedge Party is a party.
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8.2 No Waiver. The rights and remedies of the Secured Parties expressly set forth in this Agreement and the other Credit Documents are cumulative and in addition to, and not exclusive of, all other rights and remedies available at law, in equity or otherwise. No failure or delay on the part of any Secured Party in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or be construed to be a waiver of any Default or Event of Default. No course of dealing between the Pledgors and the Secured Parties or their agents or employees shall be effective to amend, modify or discharge any provision of this Agreement or any other Credit Document or to constitute a waiver of any Default or Event of Default. No notice to or demand upon any Pledgor in any case shall entitle such Pledgor or any other Pledgor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of any Secured Party to exercise any right or remedy or take any other or further action in any circumstances without notice or demand.
8.3 Enforcement. By its acceptance of the benefits of this Agreement, each Lender agrees that this Agreement may be enforced only by the Administrative Agent, acting upon the instructions or with the consent of the Required Lenders as provided for in the Credit Agreement, and that no Lender shall have any right individually to enforce or seek to enforce this Agreement or to realize upon any Collateral or other security given to secure the payment and performance of the Secured Obligations.
8.4 Amendments, Waivers, etc. No amendment, modification, waiver, discharge or termination of, or consent to any departure by any Pledgor from, any provision of this Agreement, shall be effective unless in a writing signed by the Administrative Agent and such of the Lenders as may be required under the provisions of the Credit Agreement to concur in the action then being taken, and then the same shall be effective only in the specific instance and for the specific purpose for which given.
8.5 Continuing Security Interest; Term; Successors and Assigns; Assignment; Termination and Release; Survival. This Agreement shall create a continuing security interest in the Collateral and shall secure the payment and performance of all of the Secured Obligations as the same may arise and be outstanding at any time and from time to time from and after the date hereof, and shall (i) remain in full force and effect until the occurrence of the Termination Requirements (as hereinafter defined), (ii) be binding upon and enforceable against each Pledgor and its successors and assigns (provided, however, that no Pledgor may sell, assign or transfer any of its rights, interests, duties or obligations hereunder without the prior written consent of the Lenders) and (iii) inure to the benefit of and be enforceable by each Secured Party and its successors and assigns. Upon any sale or other disposition by any Pledgor of any Collateral in a transaction expressly permitted hereunder or under or pursuant to the Credit Agreement or any other applicable Credit Document, the Lien and security interest created by this Agreement in and upon such Collateral shall be automatically released, and upon the satisfaction of all of the Termination Requirements, this Agreement and the Lien and security interest created hereby shall terminate (provided that the provisions of Section 6.7 shall survive the termination of this Agreement); and in connection with any such release or termination, the Administrative Agent, at the request and expense of the applicable Pledgor, will execute and deliver to such Pledgor such documents and instruments evidencing such release or termination as such Pledgor may reasonably request and will assign, transfer and deliver to such Pledgor, without recourse and without representation or warranty, such of the Collateral as may then be in the possession of the Administrative Agent (or, in the case of any partial release of Collateral, such of the Collateral so being released as may be in its possession). All representations, warranties, covenants and agreements herein shall survive the execution and delivery of this Agreement and any Pledgor Accession. For purposes of this Agreement, “Termination Requirements” means (x) the payment in full in cash of the Secured Obligations (other than contingent and indemnification obligations not then due and payable), (y) the termination of the Commitments and the termination or expiration of all Letters of Credit under the Credit Agreement, and (z) the termination of, and settlement of all obligations of the Borrower under, each Permitted Hedge Agreement to which any Hedge Party is a party.
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8.6 Additional Pledgors. Each Pledgor recognizes that the provisions of the Credit Agreement require Persons that become Subsidiaries of the Borrower (other than Immaterial Subsidiaries), and that are not already parties hereto, to execute and deliver a Pledgor Accession, whereupon each such Person shall become a Pledgor hereunder with the same force and effect as if originally a Pledgor hereunder on the date hereof, and agrees that its obligations hereunder shall not be discharged, limited or otherwise affected by reason of the same, or by reason of the Administrative Agent’s actions in effecting the same or in releasing any Pledgor hereunder, in each case without the necessity of giving notice to or obtaining the consent of such Pledgor or any other Pledgor.
8.7 Notices. All notices and other communications provided for hereunder shall be given to the parties in the manner and subject to the other notice provisions set forth in the Credit Agreement and the Guaranty.
8.8 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations Law, but excluding all other choice of law and conflicts of law rules).
8.9 Severability. To the extent any provision of this Agreement is prohibited by or invalid under the applicable law of any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity and only in such jurisdiction, without prohibiting or invalidating such provision in any other jurisdiction or the remaining provisions of this Agreement in any jurisdiction.
8.10 Construction. The headings of the various sections and subsections of this Agreement have been inserted for convenience only and shall not in any way affect the meaning or construction of any of the provisions hereof. Unless the context otherwise requires, words in the singular include the plural and words in the plural include the singular.
8.11 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.
[The remainder of this page left blank intentionally.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed under seal by their duly authorized officers as of the date first above written.
| KRISPY KREME DOUGHNUT | ||
| CORPORATION | ||
| By: | /s/ Xxxxxxx X. Xxxx | |
| Name: | Xxxxxxx X. Xxxx | |
| Title: | Chief Financial Officer | |
| KRISPY KREME DOUGHNUTS, INC. | ||
| By: | /s/ Xxxxxxx X. Xxxx | |
| Name: | Xxxxxxx X. Xxxx | |
| Title: | Chief Financial Officer | |
| HDN DEVELOPMENT CORPORATION | ||
| By: | /s/ H. Xxxxx Xxxxxx, III | |
| Name: | H. Xxxxx Xxxxxx, III | |
| Title: | President | |
Accepted and agreed to:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
as Administrative
Agent
| By: | /s/ R. Xxxx Xxxxxxx | |
| Name: | R. Xxxx Xxxxxxx | |
| Title: | Senior Vice President | |
ANNEX A
FILING LOCATIONS
| Name of Pledgor | Jurisdiction |
| Krispy Kreme Doughnut Corporation | North Carolina |
| Krispy Kreme Doughnuts, Inc. | North Carolina |
| HDN Development Corporation | Kentucky |
ANNEX B
JURISDICTION OF ORGANIZATION, CERTAIN LOCATIONS
| Jurisdiction of | ||||||
| Incorporation/ | Federal Tax | Organizational | ||||
| Legal Name of Pledgor | Organization | ID No. | ID No. | Chief Executive Office Address | Records Related to Collateral | Other Places of Business |
| Krispy Kreme Doughnut | North Carolina | 00-0000000 | 0081920 | 000 Xxxxxxxxx Xx. | 000 Xxxxxxxxx Xx. | 370 Knollwood St. |
| Corporation | Xxxxx 000 | Xxxxx 000 | Xxxxx 000 | |||
| Xxxxxxx-Xxxxx, XX 00000 | Xxxxxxx-Xxxxx, XX 00000 | Xxxxxxx-Xxxxx, XX 00000 | ||||
| 0000 Xxx Xxx. | ||||||
| Xxxxxxx-Xxxxx, XX 00000 | ||||||
| 0000 Xxxxxx Xxxx Xxxx. | ||||||
| Xxxxxxx-Xxxxx, XX 00000 | ||||||
| 000 X. 00xx Xxxxxx | ||||||
| Xxxxxxx-Xxxxx, XX 00000 | ||||||
| See also Schedule 5.12 to the | ||||||
| Credit Agreement. | ||||||
| Krispy Kreme | North Carolina | 00-0000000 | 0513436 | 000 Xxxxxxxxx Xx. | 370 Knollwood St. | None |
| Doughnuts, Inc. | Xxxxx 000 | Xxxxx 000 | ||||
| Xxxxxxx-Xxxxx, XX 00000 | Xxxxxxx-Xxxxx, XX 00000 | |||||
| HDN Development | Kentucky | 00-0000000 | 0415293 | 000 Xxxxxxxxx Xx. | 000 Xxxxxxxxx Xx. | None |
| Corporation | Xxxxx 000 | Xxxxx 000 | ||||
| Xxxxxxx-Xxxxx, XX 00000 | Xxxxxxx-Xxxxx, XX 00000 |
No Pledgor (x) presently conducts business under any prior or other corporate or company name or under any trade or fictitious names other than “Krispy Kreme” or “Krispy Kreme Doughnuts”, (y) has entered into any contract or granted any Lien within the past five years under any name other than its legal corporate name, or (z) has filed any tax return under any name other than its exact legal name.
ANNEX C
PLEDGED INTERESTS
| Percentage of | ||||
| Outstanding | ||||
| Type of | Certificate | No. of shares | Interests | |
| Name of Issuer | Interests | No. | (if applicable) | in Issuer |
| Krispy Kreme Doughnut Corporation | Capital Stock | 584 | 1 | 100% |
| HDN Development Corporation | Stock | 3 | 100 | 100% |
| KK Canada Holdings, Inc. | Common Stock | 1 | 100 | 100% |
| 2 | 1,000 | |||
| Krispy Kreme Asia Pacific Ltd. | Common Stock | 2 | 6,500 | 65% |
| Krispy Kreme Canada, Inc. | Common Stock | 1 | 100 | 100% |
| Krispy Kreme Management I, LLC | LLC Membership Interests |
N/A | N/A | 100% |
| Krispy Kreme Management II, LLC | LLC Membership Interests |
N/A | N/A | 100% |
| North Texas Doughnuts, L.P. | General Partnership Interests |
N/A | N/A | 1% |
| Limited Partnership Interests |
N/A | N/A | 99% | |
| Northeast Doughnuts, LLC | LLC Membership Interests |
N/A | N/A | 100% |
| Panhandle Doughnuts, LLC | LLC Membership Interests |
N/A | N/A | 100% |
| Southern Doughnuts, LLC | LLC Membership Interests |
N/A | N/A | 100% |
| Southwest Doughnuts, LLC | LLC Membership Interests |
N/A | N/A | 100% |
ANNEX D
COPYRIGHTS AND COPYRIGHT APPLICATIONS
All Owned by Krispy Kreme Doughnut Corporation
| Country | Copyright Title | Registration Number | Registration Date |
| United States | Krispy Kreme Automated Xxxxx Xxxxx | XXx 000-000 | 00/00/00 |
| Xxxxxx Xxxxxx | Krispy Kreme Automated Xxxxx Xxxxx | XXx 000-000 | 00/00/00 |
| Xxxxxx Xxxxxx | Krispy Kreme Automated Route Sales Handbook | TXu 208-351 | 08/20/85 |
| United States | Krispy Kreme Doughnut Corporation Shop System Training and Reference Guide (additions, editing and updating; previous reg. TXu 208-351) | TXu 260-264 | 11/13/86 |
| United States | Krispy Kreme Doughnut Corporation Shop System (revised program text; previous reg. TXu 207-298 and TXu 207-987) | TXu 286-505 | 06/24/87 |
| United States | Krispy Kreme Doughnut Corporation Shop System Training and Reference Guide (some new and some revised; previous reg. TXu 260-264) | TXu 286-644 | 06/24/87 |
| United States | Krispy Kreme Doughnut Corporation Shop System (revised program text; previous reg. TXu 286-505) | TXu 359-092 | 02/23/89 |
| United States | Krispy Kreme Doughnut Corporation Shop System Training and Reference Guide (some new and some revised; previous reg. TXu 286-644) | TXu 359-093 | 02/23/89 |
ANNEX E
PATENTS AND PATENT APPLICATIONS
All Owned by HDN Development Corporation
| PATENT | ISSUE | ||
| (APPLICATION) | (FILING) | ||
| COUNTRY | TITLE OF INVENTION | NUMBER | DATE |
| Australia | Methods and Systems for Automatically Extruding and Cutting | 2001263415 | |
| Dough-based Products Having Pre-selected Weights | Issued 02/03/05 | ||
| Austria | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Belgium | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Canada | Methods and Systems for Automatically Extruding and Cutting | 2,408,690 | |
| Dough-based Products Having Pre-selected Weights | Issued 03/14/06 | ||
| Denmark | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Europe | Methods and Systems for Automatically Extruding and Cutting | EP 1 286 595 B1 | |
| Dough-based Products Having Pre-selected Weights | Issued 11/10/04 | ||
| Finland | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| France | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Germany | Methods and Systems for Automatically Extruding and Cutting | 601 07 083.6-08 | Validation Completed |
| Dough-based Products Having Pre-selected Weights | (Validation of | ||
| EP 1 286 595 B1) | |||
| Greece | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation in Progress |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 |
| PATENT | ISSUE | ||
| (APPLICATION) | (FILING) | ||
| COUNTRY | TITLE OF INVENTION | NUMBER | DATE |
| International | Methods and Systems for Preparing Dough-Based Products | PCT/US2013/039376 | Filed 05/13/2013 |
| Pending | |||
| Ireland | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Italy | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Japan | Methods and Systems for Automatically Extruding and Cutting | 4731090 | Issued 04/28/2011 |
| Dough-based Products Having Pre-selected Weights | |||
| Korea (South) | Methods and Systems for Automatically Extruding and Cutting | 740412 | Issued 07/16/2007 |
| Dough-based Products Having Pre-selected Weights | |||
| Mexico | Methods and Systems for Automatically Extruding and Cutting | 243234 | Issued 01/11/2007 |
| Dough-based Products Having Pre-selected Weights | |||
| The Netherlands | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Portugal | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Saudi Arabia | Methods and Systems for Preparing Dough-Based Products | 113340521 | Filed 05/04/2013 |
| Pending | |||
| Spain | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Sweden | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Switzerland | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| Taiwan | Methods and Systems for Preparing Dough-Based Products | 102115944 | Filed 05/03/2013 |
| Pending | |||
| Turkey | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 | ||
| United Kingdom | Methods and Systems for Automatically Extruding and Cutting | Validation of | Validation Completed |
| Dough-based Products Having Pre-selected Weights | EP 1 286 595 B1 |
| PATENT | ISSUE | ||
| (APPLICATION) | (FILING) | ||
| COUNTRY | TITLE OF INVENTION | NUMBER | DATE |
| United States | Systems for Controlling Mixing Processes | 6,827,476 | |
| Issued 12/07/2004 | |||
| United States | Method for Controlling Mixing Processes | 6,656,515 | |
| Issued 12/02/2003 | |||
| United States | Methods and Systems for Automatically Extruding and Cutting | 6,511,689 | |
| Dough-Based Products Having Pre-Selected Weights | Issued 01/28/2003 | ||
| United States | Methods and Apparatus for Applying Glaze or Other Coatings | 7,293,525 | Issued 11/13/2007 |
| to Food Products | |||
| United States | Methods And Systems For Automatically Extruding And | 7,029,715 | |
| Cutting Dough-Based Products Having Pre-Selected Weights | Issued 04/18/2006 | ||
| United States | Methods and Apparatuses For Cutting Dough Utilizing a | 8,002,534 | Issued 08/23/2011 |
| Shaped Opening | |||
| United States | Doughnut | D586,528 | Issued 02/17/2009 |
| United States | Doughnut | D586,978 | Issued 02/24/2009 |
| United States | Doughnut | D614,828 | Issued 05/04/2010 |
| United States | Doughnut | D614,829 | Issued 05/04/2010 |
| United States | Doughnut | D615,276 | Issued 05/11/2010 |
| United States | Doughnut | D613,027 | Issued 04/06/2010 |
| United States | Doughnut | 29/288,281 | Filed 06/06/2007 |
| Pending | |||
| United States | Methods and Apparatuses For Cutting Dough Utilizing a | 13/215,817 | Filed 08/23/2011 |
| Shaped Opening | Pending | ||
| United States | Crisped Rice Food Product | 29/405,700 | Filed 11/4/2011 |
| Pending | |||
| United States | Crisped Rice Food Product | 29/405,701 | Filed 11/04/2011 |
| Pending | |||
| United States | Crisped Rice Food Product | 29/426,894 | Filed 07/11/2012 |
| Pending | |||
| United States | Methods and Systems for Preparing Dough-Based Products | 13/886,387 | Filed 05/03/2013 |
| Pending |
ANNEX F
TRADEMARKS AND TRADEMARK APPLICATIONS
All Owned by HDN Development Corporation
ANNEX G
DEPOSIT ACCOUNTS
| Bank Name | Acct Number | Acct Name | Account Type |
| FIFTH THIRD BANCORP | ########## | KRISPY KREME DOUGHNUTS #364 | Depository |
| FIFTH THIRD BANCORP | ########## | KRISPY KREME DOUGHNUTS CONCENTRATION | Concentration |
| Xxxxx Fargo Bank | ########## | KKDC LOCKBOX | Lockbox |
| Xxxxx Fargo Bank | ########## | KKDC GIFT CARD ACCOUNT | Gift Card - not our money |
| Xxxxx Fargo Bank | ########## | KKDC CONCENTRATION | Concentration |
| Xxxxx Fargo Bank | ########## | KKDC CREDIT CARD | Credit Card |
| Xxxxx Fargo Bank | ########## | NORTH TEXAS CREDIT CARD | Credit Card |
| Xxxxx Fargo Bank | ########## | KKDC DEPOSITORY | Depository |
| Xxxxx Fargo Bank | ########## | KRISPY KREME | Asia Pacific LTD |
| Xxxxx Fargo Bank | ########## | KKDC EDI | XXX |
| Xxxxx Fargo Bank | ########## | KKDC PAYROLL | Payroll |
| Xxxxx Fargo Bank | ########## | RELATIONSHIP SUMMARY - KKDC | |
| Xxxxx Fargo Bank | ########## | HKD Account | |
| BANK OF AMERICA, N.A. | ########## | N. TEXAS XXXX | Depository |
| BANK OF AMERICA, N.A. | ########## | N. TEXAS XXXX | Depository |
| BANK OF AMERICA, N.A. | ########## | N. TEXAS XXXX | Depository |
| BANK OF AMERICA, N.A. | ########## | N. TEXAS XXXX | Depository |
| BANK OF AMERICA, N.A. | ########## | RELATIONSHIP SUMMARY - KKD | Concentration |
| BANK OF AMERICA, N.A. | ########## | Krispy Kreme #21 | Depository |
| XX Xxxxxx Chase | ########## | Demand Deposit Account | Depository |
| SUNTRUST | ########## | KRISPY KREME DOUGHNUTS | Primary Business Checking |
| First Tennessee | ########## | KRISPY KREME DOUGHNUTS | Concentration |
| First Tennessee | ########## | Krispy Kreme 10 | Depository |
| First Tennessee | ########## | Krispy Kreme 4 | Depository |
| First Tennessee | ########## | Krispy Kreme 6 | Depository |
| First Tennessee | ########## | Krispy Kreme 7 | Depository |
| First Tennessee | ########## | Krispy Kreme 101 | Depository |
| First Tennessee | ########## | Krispy Kreme 110 | Depository |
| First Tennessee | ########## | Krispy Kreme 262 | Depository |
| First Tennessee | ########## | Krispy Kreme 54 | Depository |
| First Tennessee | ########## | Krispy Kreme 55 | Depository |
| First Tennessee | ########## | Krispy Kreme 52 | Depository |
| First Tennessee | ########## | Krispy Kreme 53 | Depository |
| First Tennessee | ########## | Krispy Kreme 62 | Depository |
| First Tennessee | ########## | Krispy Kreme 63 | Depository |
| First Tennessee | ########## | Krispy Kreme 64 | Depository |
| First Tennessee | ########## | Krispy Kreme 111 | Depository |
| First Tennessee | ########## | Krispy Kreme 154 | Depository |
| First Tennessee | ########## | Krispy Kreme 158 | Depository |
| First Tennessee | ########## | Krispy Kreme 3 | Depository |
| First Tennessee | ########## | Krispy Kreme 19 | Depository |
| First Tennessee | ########## | Krispy Kreme 105 | Depository |
| First Tennessee | ########## | Krispy Kreme 126 | Depository |
| First Tennessee | ########## | Krispy Kreme 136 | Depository |
| First Tennessee | ########## | Krispy Kreme 137 | Depository |
| First Tennessee | ########## | Krispy Kreme 135 | Depository |
| First Tennessee | ########## | Krispy Kreme 41 | Depository |
| First Tennessee | ########## | Krispy Kreme 51 | Depository |
| First Tennessee | ########## | Krispy Kreme 100 | Depository |
| First Tennessee | ########## | Krispy Kreme 139 | Depository |
| First Tennessee | ########## | Krispy Kreme 40 | Depository |
| First Tennessee | ########## | Krispy Kreme 58 | Depository |
| First Tennessee | ########## | Krispy Kreme 364 | Depository |
| First Tennessee | ########## | Krispy Kreme 74 | Depository |
| First Tennessee | ########## | Krispy Kreme 75 | Depository |
| First Tennessee | ########## | Krispy Kreme 76 | Depository |
| First Tennessee | ########## | Krispy Kreme 77 | Depository |
| First Tennessee | ########## | Krispy Kreme 42 | Depository |
| First Tennessee | ########## | Krispy Kreme 44 | Depository |
| First Tennessee | ########## | Krispy Kreme 45 | Depository |
| First Tennessee | ########## | Krispy Kreme 46 | Depository |
| First Tennessee | ########## | Krispy Kreme 49 | Depository |
| First Tennessee | ########## | Krispy Kreme 56 | Depository |
| First Tennessee | ########## | Krispy Kreme 143 | Depository |
| First Tennessee | ########## | Krispy Kreme 271 | Depository |
| First Tennessee | ########## | Krispy Kreme 272 | Depository |
| First Tennessee | ########## | Krispy Kreme 219 | Depository |
| First Tennessee | ########## | Krispy Kreme 36 | Depository |
| First Tennessee | ########## | Krispy Kreme 117 | Depository |
| First Tennessee | ########## | Krispy Kreme 32 | Depository |
| First Tennessee | ########## | Krispy Kreme 122 | Depository |
| First Tennessee | ########## | Krispy Kreme 23 | Depository |
| First Tennessee | ########## | Krispy Kreme 3509 | Depository |
| First Tennessee | ########## | Krispy Kreme 226 | Depository |
| First Tennessee | ########## | Krispy Kreme 95 | Depository |
| First Tennessee | ########## | Krispy Kreme 24 | Depository |
| First Tennessee | ########## | Krispy Kreme 28 | Depository |
| First Tennessee | ########## | Krispy Kreme 121 | Depository |
| First Tennessee | ########## | Krispy Kreme 124 | Depository |
| First Tennessee | ########## | Krispy Kreme 195 | Depository |
| First Tennessee | ########## | Krispy Kreme 196 | Depository |
| First Tennessee | ########## | Krispy Kreme 197 | Depository |
| First Tennessee | ########## | Krispy Kreme 90 | Depository |
| First Tennessee | ########## | Krispy Kreme 59 | Depository |
| First Tennessee | ########## | Krispy Kreme 87 | Depository |
| First Tennessee | ########## | Krispy Kreme 89 | Depository |
| First Tennessee | ########## | Krispy Kreme 245 | Depository |
| First Tennessee | ########## | Krispy Kreme 82 | Depository |
| First Tennessee | ########## | Krispy Kreme 232 | Depository |
| First Tennessee | ########## | Krispy Kreme 208 | Depository |
| First Tennessee | ########## | Krispy Kreme 361 | Depository |
| First Tennessee | ########## | Krispy Kreme 85 | Depository |
| First Tennessee | ########## | Krispy Kreme 86 | Depository |
| First Tennessee | ########## | Krispy Kreme 251 | Depository |
| First Tennessee | ########## | Krispy Kreme 252 | Depository |
| First Tennessee | ########## | Krispy Kreme 253 | Depository |
| First Tennessee | ########## | Krispy Kreme 337 | Depository |
| First Tennessee | ########## | Krispy Kreme 378 | Depository |
| First Tennessee | ########## | Krispy Kreme 346 | Depository |
| First Tennessee | ########## | Krispy Kreme 362 | Depository |
| First Tennessee | ########## | Krispy Kreme 325 | Depository |
| First Tennessee | ########## | Krispy Kreme 330 | Depository |
| First Tennessee | ########## | Krispy Kreme 237 | Depository |
| First Tennessee | ########## | Krispy Kreme 322 | Depository |
| First Tennessee | ########## | Krispy Kreme 340 | Depository |
| First Tennessee | ########## | Krispy Kreme 999 | Depository |
| First Tennessee | ########## | Krispy Kreme 152 | Depository |
| First Tennessee | ########## | Krispy Kreme 172 | Depository |
| First Tennessee | ########## | Krispy Kreme 12 | Depository |
| First Tennessee | ########## | Krispy Kreme 16 | Depository |
| First Tennessee | ########## | Krispy Kreme 132 | Depository |
| First Tennessee | ########## | Krispy Kreme 134 | Depository |
ANNEX H
SECURITIES ACCOUNTS
| I. Securities Accounts | |||
| Intermediary | Account Number | Account Name | Account Type |
| Xxxxxxx Xxxxxx | ####-#### | Krispy Kreme Doughnut Corporation | Brokerage |
| II. Commodity Accounts | |||
| Intermediary | Account Number | Account Name | Account Type |
| X.X. X’Xxxxx | ### ##### | Krispy Kreme Doughnuts [sic] Corporation | Agricultural futures |
| hedging account | |||
| X.X. X’Xxxxx | ### ##### | Krispy Kreme Doughnuts [sic] Corporation | Fuel futures hedging |
| account | |||
ANNEX I
COMMERCIAL TORT CLAIMS
None.
EXHIBIT A
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
WHEREAS, [NAME OF PLEDGOR] (the “Pledgor”) is the owner of the copyright applications and registrations listed on Schedule A attached hereto (all such copyrights, registrations and applications, collectively, the “Copyrights”); and
WHEREAS, the Pledgor has entered into a Pledge and Security Agreement (as amended, modified, restated or supplemented from time to time, the “Security Agreement”), dated as of July 12, 2013, in which the Pledgor has agreed with Xxxxx Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), with offices at 0000 X. X.X. Xxxxxx Xxxx., Xxxxxxxx 0X0, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, to execute this Assignment;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as security for the payment and performance of the Secured Obligations (as defined in the Security Agreement), the Pledgor does hereby grant to the Administrative Agent a security interest in all of its right, title and interest in and to the Copyrights, and the use thereof, together with all proceeds and products thereof. This Grant has been given in conjunction with the security interest granted to the Administrative Agent under the Security Agreement, and the provisions of this Grant are without prejudice to and in addition to the provisions of the Security Agreement, which are incorporated herein by this reference.
| [NAME OF PLEDGOR] | |
| By: | |
| Name: | |
| Title: | |
Schedule A
COPYRIGHTS AND COPYRIGHT APPLICATIONS
| Application or | Registration or | |||||
| Owner | Registration No. | Country | Filing Date |
EXHIBIT B
GRANT OF SECURITY INTEREST
IN
PATENTS AND TRADEMARKS
WHEREAS, [NAME OF PLEDGOR] (the “Pledgor”) is the owner of the trademark applications and registrations listed on Schedule A attached hereto, (all such trademarks, registrations and applications, collectively, the “Trademarks”) and is the owner of the patents and patent applications listed on Schedule A attached hereto (all such patents, registrations and applications, collectively, the “Patents”); and
WHEREAS, the Pledgor has entered into a Pledge and Security Agreement (as amended, modified, restated or supplemented from time to time, the “Security Agreement”), dated as of July 12, 2013, in which the Pledgor has agreed with Xxxxx Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), with offices at 0000 X. X.X. Xxxxxx Xxxx., Xxxxxxxx 0X0, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, to execute this Grant;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as security for the payment and performance of the Secured Obligations (as defined in the Security Agreement), the Pledgor does hereby grant to the Administrative Agent a security interest in all of its right, title and interest in and to the Trademarks and the Patents, and the use thereof, together with all proceeds and products thereof and the goodwill of the businesses symbolized by the Trademarks. This Grant has been given in conjunction with the security interest granted to the Administrative Agent under the Security Agreement, and the provisions of this Grant are without prejudice to and in addition to the provisions of the Security Agreement, which are incorporated herein by this reference.
| [NAME OF PLEDGOR] | |
| By: | |
| Name: | |
| Title: | |
Schedule A
TRADEMARKS AND TRADEMARK APPLICATIONS
| Application or | Issue or | |||||||
| Owner | Xxxx | Registration No. | Country | Filing Date |
PATENTS
AND PATENT APPLICATIONS
| Application or | Issue or | |||||||
| Owner | Registration No. | Country | Inventor | Filing Date |
EXHIBIT C
FORM OF
PLEDGOR
ACCESSION
THIS PLEDGOR ACCESSION (this “Accession”), dated as of _____________, ____, is executed and delivered by [NAME OF NEW PLEDGOR], a ______________ corporation (the “New Pledgor”), in favor of Xxxxx Fargo Bank, National Association, in its capacity as Administrative Agent under the Credit Agreement referred to hereinbelow (in such capacity, the “Administrative Agent”), pursuant to the Security Agreement referred to hereinbelow.
Reference is made to the Credit Agreement, dated as of July 12, 2013, among Krispy Kreme Doughnut Corporation (the “Borrower”), Krispy Kreme Doughnuts, Inc. (the “Parent”), the Lenders party thereto, and the Administrative Agent (as amended, modified, restated or supplemented from time to time, the “Credit Agreement”). In connection with and as a condition to the initial and continued extensions of credit under the Credit Agreement, (i) the Parent and certain subsidiaries of the Borrower, pursuant to a Guaranty, dated as of July [__], 2013 (as amended, modified, restated or supplemented from time to time, the “Guaranty”), have guaranteed the payment in full of the obligations of the Borrower under the Credit Agreement and the other Credit Documents (as defined in the Credit Agreement), and (ii) the Parent, the Borrower and certain of its subsidiaries, pursuant to a Pledge and Security Agreement, dated as of July 12, 2013 (as amended, modified, restated or supplemented from time to time, the “Security Agreement”), have granted in favor of the Administrative Agent a security interest in and Lien upon the Collateral described therein as security for their obligations under the Credit Agreement, the Guaranty and the other Credit Documents. Capitalized terms used herein without definition shall have the meanings given to them in the Security Agreement.
The Borrower has agreed under the Credit Agreement to cause each of its future direct and indirect subsidiaries (other than Immaterial Subsidiaries) to become a party to the Guaranty as a guarantor thereunder and to the Security Agreement as a Pledgor thereunder. The New Pledgor is a direct or indirect subsidiary of the Borrower and, as required by the Credit Agreement, has become a guarantor under the Guaranty as of the date hereof. The New Pledgor will obtain benefits as a result of the continued extension of credit to the Borrower under the Credit Agreement, which benefits are hereby acknowledged, and, accordingly, desire to execute and deliver this Accession. Therefore, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce the Lenders to continue to extend credit to the Borrower under the Credit Agreement, the New Pledgor hereby agrees as follows:
1. The New Pledgor hereby joins in and agrees to be bound by each and all of the provisions of the Security Agreement as a Pledgor thereunder. In furtherance (and without limitation) of the foregoing, pursuant to Section 2.1 of the Security Agreement, and as security for all of the Secured Obligations, the New Pledgor hereby pledges, assigns and delivers to the Administrative Agent, for the ratable benefit of the Secured Parties, and grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a Lien upon and security interest in, all of its right, title and interest in and to the Collateral as set forth in Section 2.1 of the Security Agreement, all on the terms and subject to the conditions set forth in the Security Agreement.
2. The New Pledgor hereby represents and warrants that (i) Schedule 1 hereto sets forth all information required to be listed on Annexes X, X, X, X, X, X, X, X and I to the Security Agreement in order to make each representation and warranty contained in Sections 3.1 and 3.2 of the Security Agreement true and correct with respect to the New Pledgor as of the date hereof and after giving effect to this Accession and (ii) after giving effect to this Accession and to the incorporation into such Annexes, as applicable, of the information set forth in Schedule 1, each representation and warranty contained in Article III of the Security Agreement is true and correct with respect to the New Pledgor as of the date hereof, as if such representations and warranties were set forth at length herein.
3. This Accession shall be a Credit Document (within the meaning of such term under the Credit Agreement), shall be binding upon and enforceable against the New Pledgor and its successors and assigns, and shall inure to the benefit of and be enforceable by each Secured Party and its successors and assigns. This Accession and its attachments are hereby incorporated into the Security Agreement and made a part thereof.
2
IN WITNESS WHEREOF, the New Pledgor has caused this Accession to be executed under seal by its duly authorized officer as of the date first above written.
| [NAME OF NEW PLEDGOR] | |
| By: | |
| Name: | |
| Title: | |
3
Schedule 1
Information to be added to Annex A of the Security Agreement:
FILING LOCATIONS
| Name of Pledgor | Filing Location |
| Secretary of State of ____________ |
Information to be added to Annex B of the Security Agreement:
JURISDICTION OF ORGANIZATION, CERTAIN LOCATIONS
[Name of Pledgor:]
| Jurisdiction of Incorporation/Organization: | ||||
| Federal Tax ID no.: | ||||
| Organizational ID no.: | [N/A] | |||
| Chief Executive Office Address: | ||||
| Records Related to Collateral: | ||||
| Locations of Equipment or Inventory: | ||||
| Other places of business: | ||||
| Trade/fictitious or prior corporate names (last five years): | ||||
| Names used in tax filings (last five years): | ||||
4
Information to be added to [Annexes C/D/E/F/G/H/I] of the Security Agreement:
[Complete as applicable]
5
EXHIBIT D
PLEDGE AMENDMENT
THIS PLEDGE AMENDMENT, dated as of _______________, _____, is delivered by [NAME OF PLEDGOR] (the “Pledgor”) pursuant to Section Error! Reference source not found. of the Security Agreement referred to hereinbelow. The Pledgor hereby agrees that this Pledge Amendment may be attached to the Pledge and Security Agreement, dated as of July 12, 2013, made by the Pledgor and certain other pledgors named therein in favor of Xxxxx Fargo Bank, National Association, as Administrative Agent (as amended, modified, restated or supplemented from time to time, the “Security Agreement,” capitalized terms defined therein being used herein as therein defined), and that the Pledged Interests listed on Schedule 1 to this Pledge Amendment shall be deemed to be part of the Pledged Interests within the meaning of the Security Agreement and shall become part of the Collateral and shall secure all of the Secured Obligations as provided in the Security Agreement. This Pledge Amendment and its attachments are hereby incorporated into the Security Agreement and made a part thereof.
| [NAME OF PLEDGOR] | |
| By: | |
| Title: | |
Schedule 1
PLEDGED INTERESTS
| Percentage of | ||||||||
| Outstanding | ||||||||
| Type of | Certificate | No. of shares | Interests | |||||
| Name of Issuer | Interests | Number | (if applicable) | in Issuer |
