EXHIBIT 10.2
SECOND AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
made by
DAY INTERNATIONAL GROUP, INC.
and certain of its Subsidiaries
in favor of
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of September 16, 2003
TABLE OF CONTENTS
Page
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SECTION 1. DEFINED TERMS.......................................................... 2
1.1 Definitions................................................................ 2
1.2 Other Definitional Provisions.............................................. 8
SECTION 2. GUARANTEE.............................................................. 8
2.1 Guarantee.................................................................. 8
2.2 Right of Contribution...................................................... 9
2.3 Subrogation................................................................ 10
2.4 Amendments, etc. with respect to the Borrower Obligations.................. 10
2.5 Guarantee Absolute and Unconditional....................................... 11
2.6 Reinstatement.............................................................. 13
2.7 Payments................................................................... 13
SECTION 3. GRANT OF SECURITY INTEREST............................................. 13
SECTION 4. REPRESENTATIONS AND WARRANTIES......................................... 14
4.1 Representations in Credit Agreement........................................ 14
4.2 Title; No Other Liens...................................................... 15
4.3 Perfected First Priority Liens............................................. 15
4.4 Jurisdiction of Organization; Chief Executive Office....................... 15
4.5 Inventory and Equipment.................................................... 15
4.6 Farm Products.............................................................. 15
4.7 Investment Property........................................................ 15
4.8 Receivables................................................................ 16
4.9 Intellectual Property...................................................... 16
SECTION 5. COVENANTS.............................................................. 16
5.1 Covenants in Credit Agreement.............................................. 17
5.2 Delivery of Instruments and Chattel Paper.................................. 17
5.3 Maintenance of Insurance................................................... 17
5.4 Payment of Obligations..................................................... 17
5.5 Maintenance of Perfected Security Interest; Further Documentation.......... 18
5.6 Changes in Name, etc....................................................... 18
5.7 Notices.................................................................... 18
5.8 Investment Property........................................................ 19
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5.9 Receivables................................................................ 20
5.10 Intellectual Property...................................................... 21
5.11 Commercial Tort Claims..................................................... 21
SECTION 6. REMEDIAL PROVISIONS.................................................... 21
6.1 Certain Matters Relating to Receivables.................................... 21
6.2 Communications with Obligors; Grantors Remain Liable....................... 22
6.3 Pledged Stock.............................................................. 23
6.4 Proceeds to be Turned Over To Administrative Agent......................... 24
6.5 Application of Proceeds.................................................... 24
6.6 Code and Other Remedies.................................................... 24
6.7 Registration Rights........................................................ 25
6.8 Deficiency................................................................. 26
SECTION 7. THE ADMINISTRATIVE AGENT............................................... 26
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc................ 27
7.2 Duty of Administrative Agent............................................... 28
7.3 Execution of Financing Statements.......................................... 29
7.4 Authority of Administrative Agent.......................................... 29
7.5 Right of Inspection........................................................ 29
SECTION 8. MISCELLANEOUS.......................................................... 30
8.1 Amendments in Writing...................................................... 30
8.2 Notices.................................................................... 30
8.3 No Waiver by Course of Conduct; Cumulative Remedies........................ 30
8.4 Enforcement Expenses; Indemnification...................................... 30
8.5 Successors and Assigns..................................................... 31
8.6 Set-Off.................................................................... 31
8.7 Counterparts............................................................... 32
8.8 Severability............................................................... 32
8.9 Section Headings........................................................... 32
8.10 Integration................................................................ 32
8.11 GOVERNING LAW.............................................................. 32
8.12 Submission To Jurisdiction; Waivers........................................ 32
8.13 Acknowledgements........................................................... 33
8.14 Additional Grantors........................................................ 33
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8.15 Releases................................................................... 33
8.16 WAIVER OF JURY TRIAL....................................................... 34
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Schedules
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect Security
Interest
Schedule 4 Jurisdiction of Organization, Identification Number and
Location of Chief Executive Office
Schedule 5 Locations of Inventory and Equipment
Schedule 6 Intellectual Property
Annexes
Annex I Assumption Agreement
Annex II Acknowledgment and Consent
A copy of the Schedules and Annexes will be furnished supplementally to the
Commission upon request.
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SECOND AMENDED AND RESTATED GUARANTEE AND COLLATERAL
AGREEMENT, dated as of September 16, 2003, made by each of the signatories
hereto (together with any other entity that may become a party hereto as
provided herein, the "Grantors"), in favor of XXXXXX COMMERCIAL PAPER INC., as
Administrative Agent (in such capacity, the "Administrative Agent") for the
banks and other financial institutions (the "Lenders") from time to time parties
to the Second Amended and Restated Senior Secured Credit Agreement, dated as of
September 16, 2003 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among DAY INTERNATIONAL GROUP, INC., a Delaware
corporation (the "Borrower"), the Lenders, XXXXXX BROTHERS INC., as sole
advisor, sole book manager and joint lead arranger, and BANC ONE CAPITAL
MARKETS, INC., as joint lead arranger, BANK ONE, NA, as syndication agent,
NATIONAL CITY BANK, as documentation agent, and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, certain of the Lenders, Banc One
Capital Markets, Inc., as successor to XX Xxxxx Securities Corporation, as
advisor and arranger, and Bank One, NA, as successor to Societe Generale, as
administrative agent (in such capacity, the "Existing Administrative Agent"),
are parties to the Amended and Restated Senior Secured Credit Agreement, dated
as of October 19, 1999 (as amended, the "Existing Credit Agreement");
WHEREAS, in connection with the Existing Credit Agreement,
certain of the parties hereto entered into the Amended and Restated Guarantee
and Collateral Agreement, dated as of October 19, 1999 (the "Existing Guarantee
and Collateral Agreement");
WHEREAS, prior to the date hereof, certain of the Grantors
under the Existing Guarantee and Collateral Agreement have been merged or
otherwise consolidated into the Grantors hereunder;
WHEREAS, the Existing Credit Agreement is being amended and
restated by the Credit Agreement, and in connection therewith, the parties
hereto wish to enter into this Agreement to amend and restate the Existing
Guarantee and Collateral Agreement;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, certain of the Qualified Counterparties may enter
into Specified Hedge Agreements with one or more of the Grantors;
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the extensions of credit under the Credit Agreement and from the
Specified Hedge Agreements; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent,
for the benefit of the Secured Parties, that the Existing Guarantee and
Collateral Agreement is hereby amended and restated to read in its entirety as
follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement and the following terms are used herein as defined
in the New York UCC: Accounts, Certificated Security, Chattel Paper, Commercial
Tort Claims, Documents, Equipment, Farm Products, General Intangibles, Goods,
Instruments, Inventory, Letter-of-Credit Rights and Supporting Obligations.
(b) The following terms shall have the following
meanings:
"Agreement": this Second Amended and Restated Guarantee and
Collateral Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Borrower Credit Agreement Obligations": the collective
reference to the unpaid principal of and interest on the Loans and
Reimbursement Obligations and all other obligations and liabilities of
the Borrower (including, without limitation, interest accruing at the
then applicable rate provided in the Credit Agreement after the
maturity of the Loans and Reimbursement Obligations and interest
accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Administrative Agent or
any Lender, whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this
Agreement, or the other Loan Documents, or any Letter of Credit, or any
other document made, delivered or
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given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees
and disbursements of counsel to the Administrative Agent or to the
Lenders that are required to be paid by the Borrower pursuant to the
terms of any of the foregoing agreements).
"Borrower Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge Agreement after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to any Qualified Counterparty,
whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, any Specified Hedge Agreement or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant
Qualified Counterparty that are required to be paid by the Borrower
pursuant to the terms of any Specified Hedge Agreement).
"Borrower Obligations": the collective reference to (i) the
Borrower Credit Agreement Obligations, (ii) the Borrower Hedge
Agreement Obligations, but only to the extent that, and only so long
as, the Borrower Credit Agreement Obligations are secured and
guaranteed pursuant hereto, and (iii) all other obligations and
liabilities of the Borrower, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Secured Parties that are
required to be paid by the Borrower pursuant to the terms of this
Agreement).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
"Contracts": with respect to any Grantor, all contracts,
agreements, instruments and indentures in any form, and portions
thereof, to which such Grantor is a party or under which such Grantor
has any right, title or interest or to which such Grantor or any
property of such Grantor is subject, as the same may be amended,
supplemented or otherwise modified from time to time, including,
without limitation, (i) all rights of any Grantor to receive moneys due
and to become due to it thereunder or in connection therewith, (ii) all
rights of any Grantor to damages arising thereunder and (iii) all
rights of any Grantor to perform and to exercise all remedies
thereunder.
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"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished
(including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, and
(ii) the right to obtain all renewals thereof.
"Deposit Account": as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without
limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution.
"Excluded Assets": the collective reference to (i) any
contract, agreement, instrument, indenture, General Intangible,
Copyright License, Patent License or Trademark License ("Intangible
Assets"), in each case to the extent the grant by the relevant Grantor
of a security interest pursuant to this Agreement in such Grantor's
right, title and interest in such Intangible Asset (A) is prohibited by
legally enforceable provisions of any contract, agreement, instrument
or indenture governing such Intangible Asset, (B) would give any other
party to such contract, agreement, instrument or indenture a legally
enforceable right to terminate its obligations thereunder or (C) is
permitted only with the consent of another party, if the requirement to
obtain such consent is legally enforceable and such consent has not
been obtained; provided, that in any event any Receivable or any money
or other amounts due or to become due under any such contract,
agreement, instrument or indenture shall not be Excluded Assets to the
extent that any of the foregoing is (or if it contained a provision
limiting the transferability or pledge thereof would be) subject to
Section 9-406 of the New York UCC, (ii) Foreign Subsidiary Voting Stock
excluded from the definition of "Pledged Stock" set forth in this
Section 1.1 and (iii) any Equipment subject to a Lien permitted by
Section 7.3(g) of the Credit Agreement.
"Foreign Subsidiary": any Subsidiary organized under the laws
of any jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of
any Foreign Subsidiary.
"Guarantor Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of a Guarantor (including,
without limitation, interest accruing at the then applicable rate
provided in any Specified Hedge Agreement
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after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to such
Guarantor, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to any Qualified Counterparty,
whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, any Specified Hedge Agreement or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant
Qualified Counterparty that are required to be paid by such Guarantor
pursuant to the terms of any Specified Hedge Agreement).
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) any Guarantor Hedge Agreement Obligations
of such Guarantor, but only to the extent that, and only so long as,
the other Obligations of such Guarantor are secured and guaranteed
pursuant hereto, and (ii) all obligations and liabilities of such
Guarantor which may arise under or in connection with this Agreement
(including, without limitation, Section 2) or any other Loan Document
to which such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees
and disbursements of counsel to the Administrative Agent or to any
Secured Party that are required to be paid by such Guarantor pursuant
to the terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Hedge Agreements": as to any Person, all interest rate swaps,
currency exchange agreements, commodity swaps, caps or collar
agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates,
currency exchange rates or commodity prices or the exchange of nominal
interest obligations, either generally or under specific contingencies,
including, without limitation, all Interest Rate Protection Agreements,
Permitted Hedge Arrangements and Interest Hedge Agreements. For
avoidance of doubt, Hedge Agreements shall include any interest rate
swap or similar agreement that provides for the payment by the Borrower
or any of its Subsidiaries of amounts based upon a floating rate in
exchange for receipt by the Borrower or such Subsidiary of amounts
based upon a fixed rate.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to xxx at law or in equity
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for any infringement or other impairment thereof, including the right
to receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to the Borrower or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49)
of the New York UCC (other than any Foreign Subsidiary Voting Stock
excluded from the definition of "Pledged Stock" in this Section 1.1)
and (ii) whether or not constituting "investment property" as so
defined, all Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent, including, without limitation, any of the foregoing referred to
in Schedule 6.
"Patents": (i) all letters patent of the United States, any
other country or any political subdivision thereof, all reissues and
extensions thereof and all goodwill associated therewith, including,
without limitation, any of the foregoing referred to in Schedule 6,
(ii) all applications for letters patent of the United States or any
other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of
the foregoing referred to in Schedule 6, and (iii) all rights to obtain
any reissues or extensions of the foregoing.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit
by any Grantor in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options
or rights of any nature whatsoever in respect of the Capital Stock of
any Person that may be issued or granted to, or held by, any Grantor
while this Agreement is in effect; provided
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that in no event shall more than 65% of the total outstanding Foreign
Subsidiary Voting Stock of any Foreign Subsidiary be required to be
pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the Uniform Commercial Code in effect in the State of
New York on the date hereof and, in any event, including, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified
Hedge Agreement was entered into, was a Lender or an affiliate of a
Lender.
"Receivable": any right to payment for goods sold, leased,
licensed, assigned or otherwise disposed of, or for services rendered,
whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
"Secured Parties": the collective reference to the
Administrative Agent, the Lenders (including any Issuing Lender in its
capacity as Issuing Lender) and any Qualified Counterparties.
"Securities Act": the Securities Act of 1933, as amended.
"Specified Hedge Agreement": any Hedge Agreement entered into
by (i) the Borrower or any Guarantor and (ii) any Qualified
Counterparty.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred
to in Schedule 6.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related
thereto, including, without limitation, any of the foregoing referred
to in Schedule 6, and (ii) the right to obtain all renewals thereof.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title
law of any state and all tires and other appurtenances to any of the
foregoing.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to
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this Agreement as a whole and not to any particular provision of this Agreement,
and Section and Schedule references are to this Agreement unless otherwise
specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) (i) The Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to the Administrative
Agent, for the ratable benefit of the Secured Parties and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due (whether at stated maturity, by
acceleration or otherwise) of the Borrower Obligations (other than, in the case
of each Guarantor, Borrower Obligations arising pursuant to clause (ii) of this
Section 2.1(a) in respect of Guarantor Hedge Agreement Obligations in respect of
which such Guarantor is a primary obligor).
(ii) The Borrower hereby unconditionally and irrevocably guarantees
to the Administrative Agent, for the benefit of each Qualified Counterparty and
its respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by each Guarantor when due (whether at stated
maturity, by acceleration or otherwise) of the Guarantor Hedge Agreement
Obligations of such Guarantor in favor of such Qualified Counterparty.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, (i) the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
fraudulent conveyances or transfers or the insolvency of debtors (after giving
effect to the right of contribution established in Section 2.2) and (ii) the
maximum liability of the Borrower under this Section 2 shall in no event exceed
the amount which can be guaranteed by the Borrower under applicable federal and
state laws relating to fraudulent conveyances or transfers or the insolvency of
debtors (after giving effect to the right of contribution established in Section
2.2).
(c) (i) Each Guarantor agrees that the Borrower
Obligations may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee of such
Guarantor contained in this Section 2 or affecting the rights and remedies of
the Administrative Agent or any Secured Party hereunder.
(ii) The Borrower agrees that the Guarantor Hedge Agreement
Obligations may at any time and from time to time exceed the amount of the
liability of the Borrower under this Section 2 without impairing the guarantee
of the Borrower contained in this
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Section 2 or affecting the rights and remedies of the Administrative Agent or
any Secured Party hereunder.
(d) Subject to Section 8.15 hereof, the guarantee
contained in this Section 2 shall remain in full force and effect until all the
Borrower Obligations (other than the Borrower Obligations arising under Section
2.1(a)(ii) hereof) and the obligations of each Guarantor under the guarantee
contained in this Section 2 (other than Guarantor Obligations in respect of
Borrower Obligations arising under Section 2.1(a)(ii) hereof) shall have been
satisfied by full and final payment in cash, no Letter of Credit shall be
outstanding and the Commitments shall be terminated, notwithstanding that from
time to time during the term of the Credit Agreement the Borrower may be free
from any Borrower Obligations and any or all of the Guarantors may be free from
their respective Guarantor Hedge Agreement Obligations.
(e) No payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations or the
Guarantor Hedge Agreement Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of the Borrower or any Guarantor under this
Section 2 which shall, notwithstanding any such payment (other than any payment
made by the Borrower, such Guarantor, any other guarantor or any other Person in
respect of the Borrower Obligations or the Guarantor Hedge Agreement Obligations
or any payment received or collected from the Borrower, such Guarantor, any
other guarantor or any other Person in respect of the Borrower Obligations or
the Guarantor Hedge Agreement Obligations), remain liable for the Borrower
Obligations and the Guarantor Hedge Agreement Obligations up to the maximum
liability of the Borrower or such Guarantor hereunder until the Borrower
Obligations and the Guarantor Hedge Agreement Obligations are fully and finally
paid in cash, no Letter of Credit shall be outstanding and the Commitments are
terminated.
2.2 Right of Contribution. (a) Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder or the Guarantor Hedge Agreement Obligations, such
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate share of such
payment.
(b) The Borrower and each Guarantor agree that to the
extent that the Borrower or any Guarantor shall have paid more than its
proportionate share of any payment made hereunder in respect of any Guarantor
Hedge Agreement Obligation of any other Guarantor, the Borrower or such
Guarantor, as the case may be, shall be entitled to seek and receive
contribution from and against the Borrower and any other Guarantor which has not
paid its proportionate share of such payment.
(c) The Borrower's and each Guarantor's right of
contribution under this Section 2.2 shall be subject to the terms and conditions
of Section 2.3. The
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provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of the Borrower or any Guarantor to the Administrative Agent and the
Secured Parties, and the Borrower and each Guarantor shall remain liable to the
Administrative Agent and the Secured Parties for the full amount guaranteed by
the Borrower or such Guarantor hereunder, except as otherwise provided in
Sections 2.1(e) and 8.15.
2.3 Subrogation. Notwithstanding any payment made by the Borrower
or any Guarantor hereunder or any set-off or application of funds of the
Borrower or any Guarantor by the Administrative Agent or any Secured Party,
neither the Borrower nor any Guarantor shall be entitled to be subrogated to any
of the rights of the Administrative Agent or any Secured Party against the
Borrower or any other Guarantor or any collateral security or guarantee or right
of offset held by the Administrative Agent or any Secured Party for the payment
of the Borrower Obligations or the Guarantor Hedge Agreement Obligations, nor
shall the Borrower or any Guarantor seek or be entitled to seek any contribution
or reimbursement from the Borrower or any other Guarantor in respect of payments
made by the Borrower or such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Secured Parties by the Borrower on account of the
Borrower Obligations are fully and finally paid in cash, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall be
paid to the Borrower or any Guarantor on account of such subrogation rights at
any time when all of the Borrower Obligations shall not have been fully and
finally paid in cash, such amount shall be held by the Borrower or such
Guarantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of the Borrower or such Guarantor, and shall,
forthwith upon receipt by the Borrower or such Guarantor, be turned over to the
Administrative Agent in the exact form received by the Borrower or such
Guarantor (duly indorsed by the Borrower or such Guarantor to the Administrative
Agent, if required), to be applied against the Borrower Obligations or the
Guarantor Hedge Agreement Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. The
Borrower and each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Borrower or any Guarantor
and without notice to or further assent by the Borrower or any Guarantor, any
demand for payment of any of the Borrower Obligations or Guarantor Hedge
Agreement Obligations made by the Administrative Agent or any Secured Party may
be rescinded by the Administrative Agent or such Secured Party and any of the
Borrower Obligations or Guarantor Hedge Agreement Obligations continued, and the
Borrower Obligations or Guarantor Hedge Agreement Obligations, or the liability
of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Secured Party (with the consent of such of the Borrower and the Guarantors as
shall be required thereunder), and the Specified Hedge Agreements, the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or
10
all Lenders, as the case may be) may (with the consent of such of the Borrower
and the Guarantors as shall be required thereunder) deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Secured Party for the payment of the Borrower
Obligations or Guarantor Hedge Agreement Obligations may (with the consent of
such of the Borrower and the Guarantors as shall be required thereunder) be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Secured Party shall, except to the extent set forth in, and for
the benefit of the parties to, the agreements and instruments governing such
collateral security or guarantee, have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Borrower
Obligations or Guarantor Hedge Agreement Obligations or for the guarantees
contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. (a) Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations (other than any notice with respect to any Guarantor
Hedge Agreement Obligation with respect to which such Guarantor is a primary
obligor and to which it is entitled pursuant to the applicable Specified Hedge
Agreement) and notice of or proof of reliance by the Administrative Agent or any
Secured Party upon the guarantee contained in this Section 2 or acceptance of
the guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the Secured
Parties, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the Guarantors
with respect to the Borrower Obligations (other than any diligence, presentment,
protest, demand or notice with respect to any Guarantor Hedge Agreement
Obligation with respect to which such Guarantor is a primary obligor and to
which it is entitled pursuant to the applicable Specified Hedge Agreement). Each
Guarantor understands and agrees that the guarantee of such Guarantor contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower Obligations or
any collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower or any other Person against the Administrative Agent or any Secured
Party, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Borrower Obligations, or of such Guarantor under the guarantee of such Guarantor
contained in this Section 2, in bankruptcy or in any other instance. When making
any demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Administrative Agent or any Secured Party may, but
shall be under no obligation to, make a similar demand on or otherwise
11
pursue such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability under this Section 2, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any Secured Party against any
Guarantor. For the purposes hereof, "demand" shall include the commencement and
continuance of any legal proceedings.
(b) The Borrower waives any and all notice of the
creation, renewal, extension or accrual of any of the Guarantor Hedge Agreement
Obligations and notice of or proof of reliance by the Administrative Agent or
any Secured Party upon the guarantee by the Borrower contained in this Section 2
or acceptance of the guarantee by the Borrower contained in this Section 2; the
Guarantor Hedge Agreement Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee by the Borrower contained in
this Section 2; and all dealings between the Borrower and any of the Guarantors,
on the one hand, and the Administrative Agent and the Secured Parties, on the
other hand, with respect to any Guarantor Hedge Agreement Obligation likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee by the Borrower contained in this Section 2. The Borrower waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower with respect to the Guarantor Hedge Agreement
Obligations. The Borrower understands and agrees that the guarantee by the
Borrower contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Guarantor Hedge Agreement Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
any Person against the Administrative Agent or any Secured Party, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or any Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the applicable Guarantor for the
applicable Guarantor Hedge Agreement Obligations, or of the Borrower under its
guarantee contained in this Section 2, in bankruptcy or in any other instance.
When making any demand under this Section 2 or otherwise pursuing its rights and
remedies under this Section 2 against the Borrower, the Administrative Agent or
any Secured Party may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
any Guarantor or any other Person or against any collateral security or
guarantee for the Guarantor Hedge Agreement Obligations or any right of offset
with respect thereto, and any failure by the Administrative Agent or any Secured
Party to make any
12
such demand, to pursue such other rights or remedies or to collect any payments
from any Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
any Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Borrower of any obligation or liability
under this Section 2, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Secured Party against the Borrower under this Section 2. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations or Guarantor
Hedge Agreement Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
2.7 Payments. The Borrower and each Guarantor hereby guarantees
that payments by it hereunder will be paid to the Administrative Agent without
set-off or counterclaim (i) in the case of obligations in respect of Borrower
Obligations arising under the Credit Agreement or any other Loan Document in
Dollars or Euros (in the case of Tranche A Term Loans denominated in Euros), as
applicable, at the Payment Office specified in the Credit Agreement and (ii) in
the case of obligations in respect of any Borrower Hedge Agreement Obligations
or any Guarantor Hedge Agreement Obligations, in the currency and at the place
specified in the applicable Specified Hedge Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
following property now owned or at any time hereafter acquired by such Grantor
or in which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Deposit Accounts;
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(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property;
(l) all Vehicles;
(m) all Letter-of-Credit Rights;
(n) all Commercial Tort Claims to the extent they have
been notified to the Administrative Agent pursuant to Section 5.11;
(o) all Goods and other property not otherwise described
above;
(p) all books and records pertaining to the Collateral;
and
(q) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing, all Supporting Obligations in
respect of any of the foregoing and all collateral security and guarantees given
by any Person with respect to any of the foregoing;
Provided, that the Collateral shall not include any Excluded Assets.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby represents
and warrants to the Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, provided that each reference in each such representation and warranty to
the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed
to be a reference to such Guarantor's knowledge.
14
4.2 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Credit
Agreement or for which termination statements will be delivered on the Closing
Date.
4.3 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor, (b) in respect of Collateral consisting of Pledged
Stock, are prior to all other Liens on such Pledged Stock in existence on the
date hereof and (c) in respect of all other Collateral as to which a security
interest may be perfected under the Uniform Commercial Code where perfection
provisions are applicable to such Collateral, are prior to all other Liens on
such Collateral in existence on the date hereof except for Liens permitted by
the Credit Agreement.
4.4 Jurisdiction of Organization; Chief Executive Office. On the
date hereof, such Grantor's jurisdiction of organization, identification number
from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long-form good standing
certificate as of a date which is recent to the date hereof.
4.5 Inventory and Equipment. On the date hereof, the Inventory and
the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
4.6 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.7 Investment Property. (a) The shares of Pledged Stock pledged
by such Grantor hereunder constitute all the issued and outstanding shares of
all classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.
15
(c) Each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of,
and has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
4.8 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent to the extent required
by Section 5.2.
(b) None of the obligors on any Receivable is a
Governmental Authority, except for Receivables constituting not more than 5% of
the face amount of all Receivables.
(c) The amounts represented by such Grantor to the
Secured Parties from time to time as owing to such Grantor in respect of the
Receivables will at such times be accurate in all material respects.
4.9 Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, (i) such Grantor (x) is the owner
of, and has the right to use, or (y) has a valid and enforceable license or
other right to use, the material Intellectual Property described on Schedule 6
and (ii) such Grantor has not received any written notice or claim contesting
the validity, enforceability, use or ownership of any material Intellectual
Property.
(c) Except as set forth in Schedule 6, on the date
hereof, none of the Intellectual Property is the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative
Agent and the Secured Parties that, from and after the date of this Agreement
until the Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each Guarantor,
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of
16
Default is caused by the failure to take such action or to refrain from taking
such action by such Guarantor or any of its Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly indorsed in a manner reasonably
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement; provided, that the Grantors shall not be obligated to deliver to
the Administrative Agent any Instruments or Chattel Paper held by any Grantor at
any time to the extent that the aggregate face amount of all such Instruments
and Chattel Paper held by all Grantors at such time does not exceed $100,000.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and
(ii) insuring such Grantor, the Administrative Agent and the Secured Parties
against liability for personal injury and property damage relating to such
Inventory and Equipment, such policies to be in such form and amounts and having
such coverage as may be reasonably satisfactory to the Administrative Agent and
the Lenders.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (ii) name the Administrative
Agent as insured party or loss payee, (iii) include deductibles consistent with
past practice or otherwise reasonably satisfactory to the Administrative Agent
and (iv) be reasonably satisfactory in all other respects to the Administrative
Agent.
(c) The Borrower shall deliver to the Administrative
Agent and the Lenders a report of a reputable insurance broker with respect to
such insurance as the Administrative Agent may from time to time reasonably
request.
5.4 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such
17
security interest against the claims and demands of all Persons whomsoever,
except where such defense would not be required of such Grantor pursuant to
Sections 4(h), (i) and (k) of any Patent and Trademark Security Agreement made
by such Grantor in connection herewith.
(b) Such Grantor will furnish to the Administrative Agent
and the Lenders from time to time statements and schedules further identifying
and describing the assets and property of such Grantor and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts and
Letter-of-Credit Rights, taking any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.6 Changes in Name, etc. Such Grantor will not, except upon 30
days' prior written notice to the Administrative Agent and delivery to the
Administrative Agent of all additional executed financing statements and other
documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein:
(a) change its jurisdiction of organization or the
location of its chief executive office or sole place of business or principal
residence from that referred to in Section 4.3; or
(b) change its name.
5.7 Notices. Such Grantor will advise the Administrative Agent and
the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created
hereby or Liens permitted under the Credit Agreement) on any of the Collateral
which would adversely affect the ability of the Administrative Agent to exercise
any of its remedies hereunder; and
(b) the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
18
5.8 Investment Property. (a) If such Grantor shall become entitled
to receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Administrative
Agent and the Secured Parties, hold the same in trust for the Administrative
Agent and the Secured Parties and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer shall be paid over to
the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Investment Property, or any property shall be
distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent in
the case of Collateral where perfection cannot be accomplished by delivery and
possession thereof, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Investment Property
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Administrative Agent, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent in
the case of Collateral where perfection cannot be accomplished by delivery and
possession thereof, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral
security for the Obligations. Notwithstanding the foregoing, the Grantors shall
not be required to pay over to the Administrative Agent or deliver to the
Administrative Agent as Collateral any proceeds of any liquidation or
dissolution of any Issuer, or any distribution of capital or property in respect
of any Investment Property, to the extent that (i) such liquidation, dissolution
or distribution, if treated as a Disposition of the relevant Issuer, would be
permitted by the Credit Agreement and (ii) the proceeds thereof are applied
toward prepayment of Loans and reduction of Commitments to the extent required
by the Credit Agreement.
(b) Without the prior written consent of the
Administrative Agent, such Grantor will not (i) vote to enable, or take any
other action to permit, any Issuer to issue any stock or other equity securities
of any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of any
nature of any Issuer, unless such securities are delivered to the Administrative
Agent, concurrently with the issuance thereof, to be held by the Administrative
Agent as Collateral, (ii) sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Investment Property or Proceeds
19
thereof (except pursuant to a transaction expressly permitted by the Credit
Agreement), (iii) create, incur or permit to exist any Lien or option in favor
of, or any claim of any Person with respect to, any of the Investment Property
or Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, Mutatis Mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it.
(d) Each Issuer that is a partnership or a limited
liability company (i) confirms that none of the terms of any equity interest
issued by it provides that such equity interest is a "security" within the
meaning of Sections 8-102 and 8-103 of the New York UCC (a "Security"), (ii)
agrees that it will take no action to cause or permit any such equity interest
to become a Security, (iii) agrees that it will not issue any certificate
representing any such equity interest and (iv) agrees that if, notwithstanding
the foregoing, any such equity interest shall be or become a Security, such
Issuer will (and the Grantor that holds such equity interest hereby instructs
such Issuer to) comply with instructions originated by the Administrative Agent
without further consent by such Grantor.
5.9 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Administrative Agent
a copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 10% of the
aggregate amount of the then outstanding Receivables.
5.10 Intellectual Property. Within 45 days after the end of each
calendar quarter, such Grantor will notify the Administrative Agent of any
acquisition by such Grantor of (i) any material registration of Copyright,
Patent or Trademark or (ii) any exclusive rights under a material Copyright
License, Patent License or Trademark License, and shall take such actions as may
be reasonably requested by the Administrative Agent (but only to the extent such
actions are within such Grantor's
20
control) to perfect the security interest granted to the Administrative Agent
and the other Secured Parties therein (including, without limitation, (x) the
execution and delivery of a Patent and Trademark Security Agreement (or
amendments to any such agreement previously executed or delivered by such
Grantor) or other comparable agreements with respect to Copyrights or Copyright
Licenses and (y) the making of appropriate filings (I) of financing statements
under the Uniform Commercial Code of any applicable jurisdiction and/or (II) in
the United States Patent and Trademark Office, or with respect to Copyrights and
Copyright Licenses, other applicable office).
5.11 Commercial Tort Claims. If any Grantor shall at any time
commence a suit, action or proceeding with respect to any Commercial Tort Claim
held by it with a value which such Grantor reasonably believes to be of
$1,000,000 or more, such Grantor shall promptly notify the Administrative Agent
thereof in a writing signed by such Grantor and describing the details thereof
and shall grant to the Administrative Agent for the benefit of the Secured
Parties in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Administrative Agent.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right, at any time and from time to time
after the occurrence and during the continuance of an Event of Default, to make
test verifications of the Receivables in any manner and through any medium that
it reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Administrative Agent may require in connection
with such test verifications. At any time and from time to time after the
occurrence and during the continuance of an Event of Default, upon the
Administrative Agent's reasonable request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
satisfactory to the Administrative Agent to furnish to the Administrative Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables, subject to the Administrative
Agent's direction and control after the occurrence and during the continuance of
an Event of Default, and the Administrative Agent may curtail or terminate said
authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 6.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Administrative
Agent and the Secured Parties, segregated from other funds of such Grantor. Each
such deposit of Proceeds of
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Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
(c) At any time and from time to time after the
occurrence and during the continuance of an Event of Default, at the
Administrative Agent's request, each Grantor shall deliver to the Administrative
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
(d) At any time after the occurrence and during the
continuance of an Event of Default, each Grantor will cooperate with the
Administrative Agent to establish a system of lockbox accounts, under the sole
dominion and control of the Administrative Agent, into which all Receivables
shall be paid and from which all collected funds will be transferred to a
Collateral Account.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
and from time to time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Receivables and parties to
the Contracts (in each case, to the extent constituting Collateral) to verify
with them to the Administrative Agent's satisfaction the existence, amount and
terms of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables and parties to the
Contracts (in each case, to the extent constituting Collateral) that the
Receivables and the Contracts have been assigned to the Administrative Agent for
the ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables (or any agreement
giving rise thereto) and Contracts to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the Administrative
Agent nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) or Contract by reason of or
arising out of this Agreement or the receipt by the Administrative Agent or any
Secured Party of any payment relating thereto, nor shall the Administrative
Agent or any Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto) or Contract, to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
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6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate
rights with respect to the Pledged Securities; PROVIDED, HOWEVER, that no vote
shall be cast or corporate right exercised or other action taken (other than in
connection with a transaction expressly permitted by the Credit Agreement)
which, in the Administrative Agent's reasonable judgment, would materially
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be continuing
and the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Pledged Securities and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of the
Pledged Securities shall be registered in the name of the Administrative Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such Pledged
Securities at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit with and deliver any and all of the Pledged Securities to any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may reasonably determine),
all without liability except to account for property actually received by it,
but the Administrative Agent shall have no duty to any Grantor to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Secured Parties
specified in Section 6.1 with
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respect to payments of Receivables, if an Event of Default shall occur and be
continuing, and the Administrative Agent shall have instructed any Grantor to do
so, all Proceeds received by such Grantor consisting of cash, checks and
Instruments shall be held by such Grantor in trust for the Administrative Agent
and the Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the Secured Parties) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed
upon by the Borrower and the Administrative Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:
First, to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;
Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in
respect of the Obligations, PRO RATA among the Secured Parties
according to the amounts of the Obligations then due and owing and
remaining unpaid to the Secured Parties;
Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, PRO RATA among the Secured
Parties according to the amounts of the Obligations then held by the
Secured Parties; and
Fourth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid
over to the Borrower or to whomsoever may be lawfully entitled to
receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur
and be continuing, the Administrative Agent, on behalf of the Secured Parties,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices
24
are hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the Administrative Agent or any
Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
or any Secured Party shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in any Grantor, which right or equity is hereby waived and
released. Each Grantor further agrees, at the Administrative Agent's request, to
assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor's premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.6 with respect to
any Grantor's Collateral, after deducting all reasonable costs and expenses of
every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral of such Grantor or in any way relating to
the Collateral of such Grantor or the rights of the Administrative Agent and the
Secured Parties hereunder with respect thereto, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations of such Grantor, in the order specified in Section 6.5, and
only after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, including, without
limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Secured Party arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.
6.7 Registration Rights. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the reasonable opinion of the Administrative Agent it
is necessary or advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission
25
applicable thereto. Each Grantor agrees to cause such Issuer to comply with the
provisions of the securities or "Blue Sky" laws of any and all jurisdictions
which the Administrative Agent shall designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each Grantor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all the Pledged Stock, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the
Administrative Agent and the Secured Parties, that the Administrative Agent and
the 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
6.7 shall be specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred and is continuing under the Credit Agreement.
6.8 Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.
(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all
26
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:
(i) in the name of such Grantor or its own name,
or otherwise, take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under any
Receivable or Contract or with respect to any other Collateral and file any
claim or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or Contract or with
respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property,
execute and deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Secured Parties' security interest in such
Intellectual Property and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale
provided for in Section 6.6 or 6.7, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
(v) (1) direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask for or demand, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral; (3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;
(5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) subject to any existing rights of joint owners of
Patents, Trademarks and Copyrights, settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; (7) subject to any
existing reserved rights or licenses, assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), throughout the world for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell,
27
transfer, pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Administrative Agent
were the absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to time,
all acts and things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent's and the
Secured Parties' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do; and
(vi) license or sublicense whether on an
exclusive or non-exclusive basis, any Intellectual Property for such term and on
such conditions and in such manner as the Administrative Agent shall in its sole
judgment determine and, in connection therewith, such Grantor hereby grants to
the Administrative Agent for the benefit of the Secured Parties a royalty-free,
world-wide irrevocable license of its Intellectual Property.
Anything in this Section 7.1 (a) to the contrary
notwithstanding, the Administrative Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless an
Event of Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Secured Party nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor
28
or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Secured Parties hereunder are solely to protect the Administrative
Agent's and the Secured Parties' interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any Secured Party to exercise
any such powers. The Administrative Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to any applicable
law, each Grantor authorizes the Administrative Agent to file or record
financing statements and other filing or recording documents or instruments with
respect to the Collateral without the signature of such Grantor in such form and
in such offices as the Administrative Agent determines appropriate to perfect
the security interests of the Administrative Agent under this Agreement. Each
Grantor authorizes the Administrative Agent to use the collateral description
"all personal property" or "all assets" in any such financing statements. Each
Grantor hereby ratifies and authorizes the filing by the Administrative Agent of
any financing statement with respect to the Collateral made prior to the date
hereof.
7.4 Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Secured Parties, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Grantors, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority. Notwithstanding any other provision herein or in any
Loan Document, the only duty or responsibility of the Administrative Agent to
any Qualified Counterparty under this Agreement is the duty to remit to such
Qualified Counterparty any amounts to which it is entitled pursuant to Section
6.5.
7.5 Right of Inspection. Upon reasonable written advance notice to
any Grantor and at reasonable intervals, or at any time and from time to time
after the occurrence and during the continuation of an Event of Default, the
Administrative Agent shall have reasonable access during normal business hours
to all the books, correspondence and records of such Grantor, and the
Administrative Agent and its representatives may examine the same, and to the
extent reasonable take extracts therefrom and make photocopies thereof, and such
Grantor agrees to render to the Administrative Agent, at such Grantor's
reasonable cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Administrative Agent and its
representatives shall also have the right, upon reasonable advance written
29
notice to such Grantor, to enter during normal business hours into and upon any
premises owned, leased or operated by such Grantor where any of such Grantor's
Inventory or Equipment is located for the purpose of inspecting the same,
observing its use or otherwise protecting its interests therein.
SECTION 3. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement. No consent of any
Qualified Counterparty shall be required for any waiver, amendment, supplement
or other modification to this Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on SCHEDULE 1, unless and until such
Guarantor shall change such address by notice to the Administrative Agent given
in accordance with Section 10.2 of the Credit Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither
the Administrative Agent nor any Secured Party shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any Secured Party of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay, or reimburse each Secured Party and the Administrative Agent for,
all its costs and expenses incurred in collecting against such Guarantor under
the guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such Guarantor
is a party, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Secured
Party and of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which
30
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 10.5 of the Credit Agreement.
(d) The agreements in this Section shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Secured Parties and their successors and assigns;
PROVIDED that, except pursuant to mergers and consolidations expressly permitted
under the Credit Agreement, no Grantor may assign, transfer or delegate any of
its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Secured Party at any time and from time to time
while an Event of Default shall have occurred and be continuing, without notice
to such Grantor or any other Grantor, any such notice being expressly waived by
each Grantor, to set-off and appropriate and apply any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Administrative Agent or such Secured Party to or for the
credit or the account of such Grantor, or any part thereof in such amounts as
the Administrative Agent or such Secured Party may elect, against and on account
of the obligations and liabilities of such Grantor to the Administrative Agent
or such Secured Party hereunder and claims of every nature and description of
the Administrative Agent or such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as the Administrative Agent or such Secured Party may
elect, whether or not the Administrative Agent or any Secured Party has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent and each Secured Party shall
notify such Grantor promptly of any such set-off and the application made by the
Administrative Agent or such Secured Party of the proceeds thereof, PROVIDED
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Administrative Agent and each Secured
Party under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the
Administrative Agent or such Secured Party may have.
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8.7 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Secured Party relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.
8.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission to Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
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(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
8.13 Acknowledgements. (a) Each Grantor hereby acknowledges that:
(b) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to which
it is a party;
(c) neither the Administrative Agent nor any Secured
Party has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative Agent
and Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(d) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Grantors and the Secured Parties.
8.14 Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 6.9 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations (other than Borrower Hedge Agreement
Obligations and Guarantor Hedge Agreement Obligations) shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Borrower, a
Subsidiary Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Subsidiary Guarantor shall be
33
sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement; PROVIDED that the Borrower shall have delivered to the
Administrative Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant
Subsidiary Guarantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.
(c) No consent of any Qualified Counterparty shall be
required for any release of Collateral or Guarantors pursuant to this Section.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, EACH AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
DAY INTERNATIONAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name:
Title:
DAY INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name:
Title:
DAY INTERNATIONAL FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name:
Title:
XXXX INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name:
Title:
