Exhibit 4.3
PLEDGE AND SECURITY AGREEMENT
AMONG
PENTON MEDIA, INC.,
EACH OF THE OTHER GRANTORS PARTY HERETO
AND
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE
------------------------------
DATED AS OF MARCH 28, 2002
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS......................................................................................1
SECTION 2. GRANT OF SECURITY INTEREST; NO ASSUMPTION OF LIABILITY...........................................8
SECTION 3. DELIVERY OF THE COLLATERAL.......................................................................9
SECTION 4. REPRESENTATIONS AND WARRANTIES...................................................................9
SECTION 5. COVENANTS AND AGREEMENTS........................................................................12
SECTION 6. INVESTMENT RELATED PROPERTY.....................................................................16
SECTION 7. FURTHER ASSURANCES..............................................................................18
SECTION 8. TRUSTEE APPOINTED ATTORNEY-IN-FACT..............................................................19
SECTION 9. REMEDIES UPON DEFAULT...........................................................................19
SECTION 10. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY...................................................23
SECTION 11. REIMBURSEMENT OF TRUSTEE........................................................................23
SECTION 12. WAIVERS; AMENDMENT..............................................................................24
SECTION 13. SECURITY INTEREST ABSOLUTE......................................................................24
SECTION 14. TERMINATION; RELEASE............................................................................24
SECTION 15. ADDITIONAL GRANTORS.............................................................................25
SECTION 16. NOTICES.........................................................................................25
SECTION 17. BINDING EFFECT; SEVERAL AGREEMENT; ASSIGNMENTS..................................................25
SECTION 18. SURVIVAL OF AGREEMENT; SEVERABILITY; ENTIRE AGREEMENT...........................................25
SECTION 19. GOVERNING LAW...................................................................................26
SECTION 20. COUNTERPARTS....................................................................................26
SECTION 21. HEADINGS........................................................................................26
SECTION 22. JURISDICTION; VENUE; CONSENT TO SERVICE OF PROCESS..............................................26
SECTION 23. WAIVER OF JURY TRIAL............................................................................27
SECTION 24. NO DUTY ON THE PART OF THE TRUSTEE; STANDARD OF CARE............................................27
SECTION 25. INDENTURE CONTROLS..............................................................................27
SECTION 26. TRUST INDENTURE ACT CONTROLS....................................................................27
Schedule I Grantors and Addresses for Notices
Schedule II Filing Offices and Federal Employer Identification Numbers
Schedule III Diligence Certificate
Schedule IV Commercial Tort Claims
Exhibit A Form of Supplement
Exhibit B Form of Deposit Account Control Agreement
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of March 28, 2002, entered into
by Penton Media, Inc., a Delaware corporation (the "COMPANY"), and each of the
Subsidiaries of the Company listed on Schedule I hereto (each such Subsidiary,
individually, a "GUARANTOR" and, collectively, the "GUARANTORS"; each of the
Guarantors and the Company are referred to herein, individually, as a "GRANTOR"
and, collectively, as the "GRANTORS") in favor of U.S. Bank National
Association, as trustee (together with its successors and assigns, the
"TRUSTEE") under the Indenture referred to in the next paragraph for the benefit
of the Holders (as defined below).
Reference is made to the Indenture, dated as of March 28, 2002, among
the Company, the Guarantors and the Trustee (as amended, restated, extended,
supplemented or otherwise modified from time to time, the "INDENTURE").
In consideration of the extension of credit as set forth in the
Indenture and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor has agreed to grant
the Security Interest (as defined below) to secure the Secured Obligations (as
defined below) on the terms hereinafter set forth.
Accordingly, the Grantors and the Trustee, on behalf of the Holders,
hereby agree as follows:
Section 1. DEFINITIONS.
(a) Unless the context otherwise requires, capitalized terms
used herein and not defined herein shall have the meanings assigned to such
terms in the Indenture.
(b) As used herein, the following terms shall have the
following meanings:
"ACCOUNT DEBTOR" means any person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"ACCOUNTS" means all "accounts" as defined in Article 9 of
the UCC.
"ACCOUNTS RECEIVABLE" means all Accounts and all right,
title and interest in any returned goods, together with all rights, titles,
securities and guarantees with respect thereto, including any rights to stoppage
in transit, replevin, reclamation and resales, and all related security
interests, liens and pledges, whether voluntary or involuntary.
"ADDITIONAL GRANTOR" has the meaning assigned to such term
in Section 15.
"ADMINISTRATIVE AGENT" means The Bank of New York, as
administrative agent under the Credit Agreement.
"APPLICABLE DATE" means (i) in the case of any Grantor
(other than an Additional Grantor), the date hereof, and (ii) in the case of any
Additional Grantor, the date of the Supplement executed and delivered by such
Additional Grantor.
"CHATTEL PAPER" means all "chattel paper" as defined in
Article 9 of the UCC, including "electronic chattel paper" or "tangible chattel
paper" as defined in Article 9 of the UCC.
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"COLLATERAL" means, with respect to each Grantor, all of
such Grantor's rights, title and interest in, to and under all personal property
of such Grantor, other than the Excluded Assets, including the following, in
each case whether now owned or existing or hereafter acquired or arising and
wherever located: all (i) Accounts Receivable, (ii) Chattel Paper, (iii)
Documents, (iv) Equipment, (v) General Intangibles, (vi) Goods, (vii)
Instruments, (viii) Insurance, (ix) Inventory, (x) Investment Related Property,
including the Collateral Account and all funds and other property from time to
time in, or credited to, the Collateral Account or any Deposit Account or
Securities Account, (xi) Letter of Credit Rights, (xii) Receivables and
Receivable Records, (xiii) Commercial Tort Claims, (xiv) to the extent not
otherwise included in clauses (i) through (xiii) above, all Collateral Records,
Collateral Support and Supporting Obligations in respect of any of the
foregoing, and (xv) to the extent not otherwise included in clauses (i) through
(xiv) above, all Proceeds, products, substitutions, accessions, rents and
profits of or in respect of any of the foregoing.
"COLLATERAL ACCOUNT" has the meaning assigned to such term
in Section 6(c)(ii)(A).
"COLLATERAL RECORDS" means all books, instruments,
certificates, Records, ledger cards, files, correspondence, customer lists,
blueprints, technical specifications, manuals and other documents, and all
computer software, computer printouts, tapes, disks and related data processing
software and similar items, in each case that at any time represent, cover or
otherwise evidence, or contain information relating to, any of the Collateral or
are otherwise necessary or helpful in the collection thereof or realization
thereupon.
"COLLATERAL SUPPORT" means all property (real or personal)
assigned, hypothecated or otherwise securing any of the Collateral, and shall
include any security agreement or other agreement granting a lien or security
interest in such real or personal property.
"COMMERCIAL TORT CLAIMS" means all "commercial tort claims"
as defined in Article 9 of the UCC and shall include the commercial tort claims
listed on Schedule IV.
"COMMODITIES ACCOUNTS" means all "commodity accounts" as
defined in Article 9 of the UCC.
"COMPANY" has the meaning assigned to such term in the
preliminary statement of this Security Agreement.
"COPYRIGHT LICENSE" means all agreements, now or hereafter
in effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to any Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"COPYRIGHTS" means (a) all copyright rights in any work
subject to the copyright laws of the United States or any other country, whether
as author, assignee, transferee or otherwise, (b) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the U.S. Copyright Office,
including those listed on Schedule III hereto or to the applicable Supplement,
(c) all rights corresponding to the foregoing throughout the world and all
extensions and renewals thereof, (d) the right to xxx for past, present and
future infringements of any of the foregoing, and (e) all proceeds of the
foregoing, including licenses, royalties, income, payments, claims, damages and
proceeds of suit.
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"CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement, dated as of March 8, 2002, among the Company, the lenders party
thereto, Bank of America, N.A., as syndication agent, Bank One, NA and Fleet
National Bank, as co-documentation agents, and The Bank of New York, as
administrative agent, as amended, restated, extended, supplemented or otherwise
modified from time to time.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" means a Deposit Account
Control Agreement, substantially in the form of Exhibit B pursuant to which the
Trustee shall have "control" (within the meaning of Article 9 of the UCC) over
such applicable Deposit Account.
"DEPOSIT ACCOUNTS" means all "deposit accounts" as defined
in Article 9 of the UCC, including all such accounts described in Schedule III
hereto or to the applicable Supplement.
"DILIGENCE CERTIFICATE" means the UCC Pre-Closing Diligence
Certificate duly executed and delivered by the Grantors as of March 28, 2002 and
attached as Schedule III hereto.
"DOCUMENTS" means all "documents" as defined in Article 9 of
the UCC.
"EQUIPMENT" means (i) all "equipment" as defined in Article
9 of the UCC, and (ii) regardless of whether characterized as equipment under
the UCC, all equipment, furniture and furnishings, and all tangible personal
property similar to any of the foregoing, including machinery, manufacturing
equipment, data processing equipment, computers, office equipment, appliances,
fixtures, tools, parts and supplies of every kind and description, and all
improvements, accessions, additions or appurtenances thereto, whether or not at
any time of determination incorporated or installed therein or attached thereto,
and all replacements therefor.
"EQUITY INTERESTS" means (a) with respect to a corporation,
the capital stock thereof, (b) with respect to a partnership, any partnership
interest therein, including all rights of a partner in such partnership, whether
arising under the partnership agreement of such partnership or otherwise, (c)
with respect to a limited liability company, any membership interest therein,
including all rights of a member of such limited liability company, whether
arising under the limited liability company agreement of such limited liability
company or otherwise, (d) with respect to any other firm, association, trust,
business enterprise or other entity, any equity interest therein or any other
interest therein that entitles the holder thereof to share in the revenue,
income, earnings or losses thereof or to vote or otherwise participate in any
election of one or more members of the managing body thereof, and (e) all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property and proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing and all other securities that are convertible or exchangeable
therefor.
"GENERAL INTANGIBLES" means (i) all "general intangibles" as
defined in Article 9 of the UCC, and (ii) regardless of whether characterized as
general intangibles under the UCC, all choses in action and causes of action and
all other intangible personal property of any Grantor of every kind and nature
(other than Accounts Receivable, Pledged Equity and Pledged Debt) now owned or
hereafter acquired by any Grantor, including corporate or other business
records, indemnification claims, contract rights (including rights under leases,
whether entered into as lessor or lessee, interest rate protection agreements or
hedging arrangements, foreign currency exchange protection agreements and other
agreements), Intellectual Property, goodwill, registrations, licenses, permits,
concessions, authorizations, franchises, all tax refunds and tax refund claims
and any letter of credit, guarantee, claim, security interest or other security
held by or granted to any Grantor to secure payment by an Account Debtor of any
of the Accounts Receivable or payment by the relevant obligor of any of the
Pledged Debt.
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"GOODS" means all "goods" as defined in Article 9 of the
UCC.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor as to enable the primary obligor
to pay such Indebtedness or other obligation or (d) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation, PROVIDED that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"GRANTOR" and "GRANTORS" have the meanings assigned to such
terms in the preliminary statement of this Security Agreement.
"GUARANTOR" and "GUARANTORS" have the meanings assigned to
such terms in the preliminary statement of this Security Agreement.
"HOLDERS" means holders of the Notes from time to time.
"INDENTURE" has the meaning assigned to such term in the
preliminary statement of this Security Agreement.
"INDENTURE DOCUMENTS" means, collectively, the Indenture,
the Notes, the Guarantees (as defined in the Indenture), the Collateral
Agreements and the Registration Rights Agreement, and such other agreements,
instruments and certificates executed and delivered (or issued) by the Company
or the other Grantors pursuant to the Indenture or any of the foregoing (other
than the Intercreditor Agreement), as any or all may be amended, restated,
extended, supplemented or otherwise modified from time to time.
"INSTRUMENTS" means all "instruments" as defined in Article
9 of the UCC.
"INSURANCE" means (i) all insurance policies covering any or
all of the Collateral (regardless of whether the Trustee is the loss payee
thereof), and (ii) any key man life insurance policies.
"INTELLECTUAL PROPERTY" means all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter acquired
by any Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, internet domain names, Trade Secrets, and all additions,
improvements and accessions to, and books and records describing or used in
connection with, any of the foregoing.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
of even date herewith between the Administrative Agent and the Trustee, as
amended, restated, supplemented or otherwise modified from time to time, or an
intercreditor agreement entered into by the Trustee and a Replacement Agent in
accordance with the Indenture.
"INVENTORY" means (i) all "inventory" as defined in Article
9 of the UCC, and (ii) regardless of whether characterized as inventory under
the UCC, (a) all goods held for sale or lease, or
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furnished or to be furnished under contracts of service or so leased or
furnished, (b) all materials used or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing supplies
and spare parts, (c) all goods in which such Grantor has an interest in mass or
a joint or other interest or right of any kind, (d) all goods that have been
returned to or are repossessed by or on behalf of such Grantor, and (e) all
computer programs embedded in any goods and all accessions thereto and products
thereof.
"INVESTMENT RELATED PROPERTY" means (i) all "investment
property" as defined in Article 9 of the UCC, and (ii) regardless of whether
characterized as investment property under the UCC, all cash, "money" as defined
in Article 1 of the UCC, "securities" as defined in Article 8 of the UCC,
Permitted Investments, certificates of deposit, Deposit Accounts, Commodities
Accounts, Securities Accounts and "securities entitlements" as defined in
Article 8 of the UCC and all Pledged Debt and Pledged Equity.
"LETTER OF CREDIT RIGHT" means "letter-of-credit right" as
defined in Article 9 of the UCC.
"LICENSE" means any Patent License, Trademark License,
Copyright License, Trade Secret License or other license or sublicense to which
any Grantor is a party, including those listed on Schedule III hereto or to the
applicable Supplement.
"NOTES" means the 11-7/8% Senior Secured Notes Due 2007
issued by the Company, and guaranteed by the Guarantors, pursuant to the
Indenture.
"PATENT LICENSE" means all agreements, now or hereafter in
effect, granting to any third party any right to make, have made, use, sell or
import any invention on which a Patent, now or hereafter owned by any Grantor or
which any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell any invention on which a
Patent, now or hereafter owned by any third party, is in existence, and all
rights of any Grantor under any such agreement.
"PATENTS" means (a) all letters patent of the United States
or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and pending applications in the U.S. Patent
and Trademark Office or any similar offices in any other country, including
those listed on Schedule III hereto or to the applicable Supplement, (b) all
reissues, continuations, divisions, continuations-in-part, reexaminations,
renewals or extensions thereof, and the inventions disclosed or claimed therein,
including the right to make, use and/or sell the inventions disclosed or claimed
therein, (c) all rights corresponding to the foregoing throughout the world, (d)
the right to xxx for past, present and future infringements of any of the
foregoing, and (e) all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
"PLEDGED DEBT" means all Indebtedness owed to any Grantor,
including all Indebtedness set forth on Schedule III hereto or to the applicable
Supplement and all right, title and interest of such Grantor to the payment of
any loan, advance or other debt of every kind and nature (other than Accounts
Receivable and General Intangibles), whether due or to become due, whether or
not it has been earned by performance, and all interest, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Indebtedness.
"PLEDGED EQUITY" means all right, title and interest of any
Grantor in any Equity Interests of any entity, including the Pledged Equity set
forth on Schedule III hereto or to the applicable
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Supplement, and the certificates, if any, representing such Equity Interests and
any interest of such Grantor on the books and records of such entity or on the
books and records of any securities intermediary pertaining to such Equity
Interest.
"PLEDGED SECURITIES" means the Pledged Debt, the Pledged
Equity and all notes, chattel paper, instruments, certificates, files, records,
ledger sheets and documents covering, evidencing, representing or relating to
any of the foregoing, in each case whether now existing or owned or hereafter
arising or acquired.
"PROCEEDS" means (i) all "proceeds" as defined in Article 9
of the UCC, (ii) payments or distributions made with respect to any Investment
Related Property, (iii) any payment received from any insurer or other Person or
entity as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property that constitutes the
Collateral, and (iv) whatever is receivable or received when any of the
Collateral or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
"RECEIVABLES" means all rights to payment, whether or not
earned by performance, for goods or other property sold, leased, licensed,
assigned or otherwise disposed of, or services rendered or to be rendered,
including all such rights constituting or evidenced by any Account, Chattel
Paper, Instrument, General Intangible or Investment Related Property, together
with all of any Grantor's rights, if any, in any goods or other property giving
rise to such right to payment and all Collateral Support and Supporting
Obligations related thereto and all Receivables Records.
"RECEIVABLES RECORDS" means (i) all original copies of all
documents, instruments or other writings or electronic records or other Records
evidencing the Receivables, (ii) all books, correspondence, credit or other
files, Records, ledger sheets or cards, invoices, and other papers relating to
Receivables, including all tapes, cards, computer tapes, computer discs,
computer runs, record keeping systems and other papers and documents relating to
the Receivables, whether in the possession or under the control of any Grantor
or any computer bureau or agent from time to time acting for such Grantor or
otherwise, (iii) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments,
supplements or other modifications thereto, notices to other creditors or
collateral agents, and certificates, acknowledgments, or other writings,
including, without limitation, lien search reports, from filing or other
registration officers, (iv) all credit information, reports and memoranda
relating thereto, and (v) all other written or non-written forms of information
related in any way to the foregoing or any Receivable.
"RECORD" means a "record" as defined in Article 9 of the
UCC.
"REPLACEMENT AGENT" has the meaning assigned to such term in
the Intercreditor Agreement.
"SECURED OBLIGATIONS" means (a) the due and punctual payment
of (i) principal of, premium and Liquidated Damages, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Notes, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations, including fees, commissions,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the Grantors
to the Trustee or the Holders under the Indenture and the other Indenture
Documents, and (b) the due and punctual performance of all covenants,
agreements,
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obligations and liabilities of the Grantors under or pursuant to the Indenture
and the other Indenture Documents.
"SECURITIES ACCOUNTS" means all "securities accounts" as
defined in Article 8 of the UCC, including all such accounts described in
Schedule III or to the applicable Supplement.
"SECURITY AGREEMENT" means this Pledge and Security
Agreement, as amended, restated, extended, supplemented or otherwise modified
from time to time.
"SECURITY INTEREST" has the meaning assigned to such term in
Section 2(a).
"SUPPLEMENT" means a supplement hereto, substantially in the
form of Exhibit A.
"SUPPORTING OBLIGATION" means (i) all "supporting
obligations" as defined in Article 9 of the UCC and (ii) all Guarantees and
other secondary obligations supporting any of the Collateral, in each case
regardless of whether characterized as a "supporting obligation" under the UCC.
"TRADEMARK LICENSE" means all agreements, now or hereafter
in effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"TRADEMARKS" means (a) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, certification marks, collective marks, trade dress, logos,
other source or business identifiers, designs and general intangibles of like
nature, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all registration and recording applications filed in
connection therewith, including registrations and registration applications in
the U.S. Patent and Trademark Office, any State of the United States or any
similar offices in any other country or any political subdivision thereof, and
all extensions or renewals thereof, including those listed on Schedule III
hereto or to the applicable Supplement, (b) all goodwill associated with or
symbolized by any of the foregoing, and all other assets, rights and interests
that uniquely reflect or embody such goodwill, (c) all rights corresponding to
the foregoing throughout the world and all extensions and renewals thereof, (d)
the right to xxx for past, present and future infringement or dilution of any of
the foregoing or for any injury to such goodwill, and (e) all proceeds of the
foregoing, including licenses, royalties, income, payments, claims, damages and
proceeds of suit.
"TRADE SECRET LICENSES" means all agreements, now or
hereafter in effect, granting to any third party any right to use any Trade
Secret now or hereafter owned by any Grantor or which any Grantor otherwise has
the right to license, or granting to any Grantor any right to use any Trade
Secret now or hereafter owned by any third party, and all rights of any Grantor
under any such agreement.
"TRADE SECRETS" means (a) all trade secrets and all other
confidential or proprietary information, including technical and business
information, and know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, now or hereafter owned or used in, or contemplated
at any time for use in, the business of any Grantor (all of the foregoing being
collectively called a "TRADE SECRET"), whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all documents and things
embodying, incorporating, or referring in any way to such Trade Secret, (b) the
right to xxx for past, present and future infringement of any Trade Secret, and
(c) all proceeds of the foregoing, including licenses, royalties, income,
payments, claims, damages, and proceeds of suit.
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"UCC" means the Uniform Commercial Code as in effect from
time to time in the State of New York or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.
(c) The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Security Agreement in its
entirety and not to any particular provision hereof, (iv) all references herein
to Sections, Schedules and Exhibits shall be construed to refer to Sections of,
and Schedules and Exhibits, this Security Agreement, and (v) the words "asset"
and "property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
(d) All references herein to provisions of the UCC shall
include all successor provisions under any subsequent version or amendment to
any Article of the UCC.
(e) Each of the Schedules and Exhibits attached hereto is
hereby incorporated into and shall constitute part of this Security Agreement.
Section 2. GRANT OF SECURITY INTEREST; NO ASSUMPTION OF LIABILITY.
(a) GRANT OF SECURITY INTEREST. As security for the payment
and performance in full of the Secured Obligations, each of the Grantors hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Trustee, for the benefit of the Holders, and hereby grants
to the Trustee, for the benefit of the Holders, a security interest in, all of
the right, title and interest of such Grantor in, to and under the Collateral
(the "SECURITY INTEREST"). Without limiting the foregoing, each Grantor hereby
authorizes the Trustee to file one or more financing statements, continuation
statements, filings with the U.S. Patent and Trademark Office or the U.S.
Copyright Office (or any successor office or any similar office in any other
country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each of the
Grantors, without the signature of any Grantor, and naming any Grantor or the
Grantors, as applicable, as debtors and the Trustee as secured party. Each
Grantor further agrees that such financing statements may describe the
Collateral owned or held by it or on its behalf in the same manner as described
herein or may contain an indication or description of collateral that describes
such Collateral in any other manner that the Trustee may determine, in its sole
and absolute discretion, is necessary, advisable or prudent to perfect the
Security Interest granted by such Grantor, including describing such property as
"all assets" or "all personal property."
(b) REVISIONS TO THE UCC. For the avoidance of doubt, it is
expressly understood and agreed that, to the extent the UCC is revised after the
date hereof such that the definition of any of the foregoing terms included in
the description or definition of the Collateral is changed, the parties hereto
desire that any property which is included in such changed definitions, but
which would not otherwise be included in the Security Interest on the date
hereof, nevertheless be included in the Security Interest upon the effective
date of such revision. Notwithstanding the immediately preceding sentence,
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the Security Interest is intended to apply immediately on the Applicable Date to
all of the Collateral to the fullest extent permitted by applicable law,
regardless of whether any particular item of the Collateral was then subject to
the UCC.
(c) CERTAIN LIMITED EXCLUSIONS. Notwithstanding anything
herein to the contrary, in no event shall the Collateral include the Excluded
Assets.
(d) SECURITY FOR SECURED OBLIGATIONS. This Security
Agreement secures, and the Collateral is collateral security for, the prompt and
complete payment or performance in full when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
the payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of Title 11 of the United States Code, or
any similar provision of any other bankruptcy, insolvency, receivership or other
similar law), of all Secured Obligations.
(e) NO ASSUMPTION OF LIABILITY. The Security Interest is
granted as security only and shall not subject the Trustee or any Holder to, or
in any way alter or modify, any obligation or liability of any Grantor with
respect to or arising out of the Collateral.
(f) INTERCREDITOR AGREEMENT. Notwithstanding anything herein
to the contrary, the relative rights and remedies of the Trustee hereunder and
the Administrative Agent (or Replacement Agent) shall be subject to and governed
by the terms of the Intercreditor Agreement at any time the Intercreditor
Agreement is in effect. In the event of any inconsistency between the terms
hereof and the Intercreditor Agreement, the Intercreditor Agreement shall
control at any time the Intercreditor Agreement is in effect.
Section 3. DELIVERY OF THE COLLATERAL.
Subject to Section 6, each of the Grantors agrees promptly
to deliver or cause to be delivered to the Trustee (or to the Administrative
Agent or a Replacement Agent during the effectiveness of the Intercreditor
Agreement) any and all notes, chattel paper, instruments, certificates and
documents covering, evidencing or representing any of the Pledged Securities
included in the Collateral owned or held by or on behalf of such Grantor, in
each case accompanied by (i) in the case of any notes, chattel paper,
instruments or stock certificates, stock powers duly executed in blank or other
instruments of transfer satisfactory to the Trustee and such other instruments
and documents as the Trustee may reasonably request and (ii) in all other cases,
proper instruments of assignment duly executed by such Grantor and such other
instruments or documents as the Trustee may reasonably request. Each Grantor
will cause any Pledged Debt owed or owing to such Grantor by any Person to be
evidenced by a duly executed promissory note that is pledged and delivered to
the Trustee (or to the Administrative Agent or a Replacement Agent during the
effectiveness of the Intercreditor Agreement) pursuant to the terms thereof.
Section 4. REPRESENTATIONS AND WARRANTIES.
Each of the Grantors, jointly with the others and severally,
represents and warrants to the Trustee and the Holders that:
(a) As of the Applicable Date, (i) such Grantor's chief
executive office or its principal place of business is, and for the preceding
four months has been, located at the office indicated on Schedule III hereto or
to the applicable Supplement, (ii) such Grantor's jurisdiction of organization
is the jurisdiction indicated on Schedule III hereto or to the applicable
Supplement, (iii) such Grantor's federal employer identification number is as
set forth on Schedule II hereto or to the applicable Supplement, and (D) such
Grantor's type of organization is as set forth on Schedule III hereto or to the
9
applicable Supplement.
(b) As of the Applicable Date, (i) such Grantor's full legal
name is as set forth on Schedule III hereto or to the applicable Supplement and
(ii) such Grantor has not done in the preceding five years, and does not do,
business under any other name (including any trade-name or fictitious business
name), except for those names set forth on Schedule III hereto or to the
applicable Supplement.
(c) Such Grantor has not within the five years preceding the
Applicable Date become bound (whether as a result of merger or otherwise) as
debtor under a security agreement entered into by another Person, which has not
theretofore been terminated.
(d) Such Grantor has good and valid rights in, and title to,
the Collateral with respect to which it has purported to grant the Security
Interest, except for Liens expressly permitted pursuant to the Indenture
Documents, and as to all Collateral whether now existing or hereafter acquired,
will continue to own or have such rights in each item of Collateral, in each
case free and clear of any and all Liens, rights or claims of all other Persons,
except for Liens expressly permitted pursuant to the Indenture Documents.
(e) All actions and consents, including all filings,
notices, registrations and recordings, necessary or desirable to create, perfect
and ensure the first priority (subject only to Liens expressly permitted by the
Indenture or the Intercreditor Agreement) of the Security Interest in the
Collateral owned or held by it or on its behalf or for the exercise by the
Trustee of any voting or other rights provided for in this Security Agreement or
the exercise of any remedies in respect of any such Collateral have been made or
obtained, (i) except for the filing of UCC financing statements naming such
Grantor as "debtor" and the Trustee as "secured party", or the making of other
appropriate filings, registrations or recordings, containing a description of
such Collateral in the U.S. Patent and Trademark Office, the U.S. Copyright
office and each other applicable governmental, municipal or other office
specified on Schedule II hereto or to the applicable Supplement, (ii) except for
any such Collateral as to which the representations and warranties in this
Section 4(e) would not be true solely by virtue of such Collateral having been
used or disposed of in a manner expressly permitted hereunder or under any other
Indenture Document, and (iii) except to the extent that such Security Interest
may not be perfected by filing, registering, recording or taking any other
action in the United States.
(f) All Collateral owned or held by it or on its behalf is
owned or held by it or on its behalf free and clear of any Lien, except for
Liens expressly permitted by the Indenture. It has not filed or consented to the
filing of (i) any financing statement or analogous document under the UCC or any
other applicable laws covering any such Collateral, (ii) any assignment in which
it assigns any such Collateral or any security agreement or similar instrument
covering any such Collateral with the U.S. Patent and Trademark Office or the
U.S. Copyright Office or (iii) any assignment in which it assigns any such
Collateral or any security agreement or similar instrument covering any such
Collateral with any foreign governmental, municipal or other office, in each
case, which financing statement, analogous document, assignment, security
agreement or other instrument, as applicable, is still in effect, except, in the
case of each of clauses (i), (ii) and (iii) above, for Liens expressly permitted
by the Indenture.
(g) The Security Interest in the Collateral owned or held by
it or on its behalf (i) is effective to vest in the Trustee, on behalf of the
Holders, the rights of the Trustee in such Collateral as set forth herein and
(ii) does not violate Regulation T, U or X as of the Applicable Date.
(h) Such Grantor has full power and authority to grant to
the Trustee the Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in
10
accordance with the terms of this Security Agreement, without the consent or
approval of any other person other than any consent or approval that has been
obtained.
(i) The Diligence Certificate, to the extent it relates to
such Grantor or any of its property, has been duly prepared, completed and
executed and the information set forth therein is true, correct and complete in
all material respects.
(j) A fully executed copy of this Security Agreement has
been delivered to the Trustee for recording with the U.S. Patent and Trademark
Office and the U.S. Copyright Office pursuant to 35 U.S.C. Section 261, 15
U.S.C. Section 1060 or 17 U.S.C. Section 205, and the regulations thereunder, as
applicable, and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction, to protect the validity of and to establish a legal,
valid and perfected security interest in favor of the Trustee (for the benefit
of the Holders) in respect of all Collateral consisting of Patents, Trademarks
and Copyrights owned or held by or on behalf of such Grantor in which a security
interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof) and its territories and
possessions, or in any other necessary jurisdiction, and no further or
subsequent material filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Collateral consisting of Patents,
Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).
(k) The Security Interest constitutes (i) a legal and valid
security interest in all the Collateral owned or held by or on behalf of such
Grantor securing the payment and performance of the Secured Obligations, (ii)
subject to (A) the filing of all UCC financing statements naming such Grantor as
"debtor" and the Trustee as "secured party" and describing the Collateral in the
filing offices set forth opposite such Grantor's name on Schedule II hereto or
to the applicable Supplement, and (B) the delivery to the Trustee (or possession
by the Administrative Agent or a Replacement Agent during the effectiveness of
the Intercreditor Agreement) of any instruments or certificated securities
included in such Collateral, a perfected security interest in such Collateral to
the extent that a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the UCC or other applicable law in such jurisdictions, or by the secured
party's taking possession, (iii) subject to the execution and delivery of
Deposit Account Control Agreements with respect to each Deposit Account included
in the Collateral, a perfected security interest in such Collateral, and (iv)
subject to the recordation of this Security Agreement with the U.S. Patent and
Trademark Office and the U.S. Copyright Office within the three month period
(commencing as of the date hereof) or any other applicable time period pursuant
to 35 U.S.C. Section 261 or 15 U.S.C. Section 1060 (with respect to the U.S.
Patent and Trademark Office) or the one month period (commencing as of the date
hereof) or any other applicable time period pursuant to 17 U.S.C. Section 205
(with respect to the U.S. Copyright Office) and otherwise as may be required
pursuant to the laws of any other necessary jurisdiction to perfect the security
interest in all Collateral in which a security interest may be perfected by
filing in the U.S. Patent and Trademark Office, the U.S. Copyright Office and
other necessary jurisdictions. The Security Interest is and shall be prior to
any other Lien on any of the Collateral owned or held by or on behalf of such
Grantor other than Liens expressly permitted to be prior to the Security
Interest pursuant to the Indenture Documents or the Intercreditor Agreement.
(l) Except as set forth on Schedule III, all registrations
and applications for Copyrights, Patents and Trademarks are standing in the name
of such Grantor, and none of the Trademarks, Patents, Copyrights or Trade
Secrets have been licensed by such Grantor to any affiliate or third party.
Schedule III sets forth a true and accurate list of all United States, state and
foreign registrations of and applications for Patents, Trademarks, and
Copyrights owned by such Grantor and
11
Schedule III sets forth a true and accurate list of all Licenses material to the
conduct of the business of such Grantor or the business of the Grantors as a
whole. Such Grantor is the sole and exclusive owner of the entire right, title,
and interest in and to all Intellectual Property on Schedule III.
(m) All Intellectual Property set forth on Schedule III, and
any other Intellectual Property that is material to the conduct of the business
of such Grantor or the business of the Grantors as a whole, is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part, and such
Grantor has performed all acts and has paid all renewal, maintenance, and other
fees and taxes required to maintain each and every registration and application
of such Intellectual Property in full force and effect.
(n) All Intellectual Property set forth on Schedule III, and
any other Intellectual Property that is material to the conduct of the business
of such Grantor or the business of the Grantors as a whole, is valid and
enforceable; no holding, decision, or judgment has been rendered in any action
or proceeding before any court or administrative authority challenging the
validity of, such Grantor's rights to register, or such Grantor's rights to own
or use, any such Intellectual Property and no such action or proceeding is
pending or, to the best of such Grantor's knowledge, threatened.
(o) Such Grantor uses adequate standards of quality in the
manufacture, distribution, and sale of all products sold and in the provision of
all services rendered under or in connection with all Trademarks and have taken
all action necessary to insure that all licensees of the Trademarks owned by
such Grantor use such adequate standards of quality.
(p) The conduct of such Grantor's business does not infringe
upon any trademark, patent, copyright, trade secret or similar intellectual
property right owned or controlled by a third party; no claim has been made that
the use of any Intellectual Property owned or used by such Grantor (or any of
its respective licensees) violates the asserted rights of any third party.
(q) To the best of such Grantor's knowledge, no third party
is infringing upon any Intellectual Property owned or used by such Grantor, or
any of its respective licensees.
(r) No settlement or consents, covenants not to xxx,
non-assertion assurances, or releases have been entered into by such Grantor or
to which such Grantor is bound that adversely affect such Grantor's rights to
own or use any Intellectual Property.
(s) No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for either (i) the pledge or grant by such Grantor of the Liens
purported to be created in favor of the Trustee hereunder or (ii) the exercise
by Trustee of any rights or remedies in respect of any Collateral (whether
specifically granted or created hereunder or created or provided for by
applicable law), except (A) for the filings contemplated by clause (k) above and
(B) as may be required, in connection with the disposition of any Investment
Related Property, by laws generally affecting the offering and sale of
securities.
Section 5. COVENANTS AND AGREEMENTS.
Each Grantor hereby covenants and agrees as follows:
(a) It will promptly notify the Trustee in writing of any
change (i) in its legal name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of its chief executive office, (iii) in its identity or legal or
organizational structure, including its type of organization, or its
jurisdiction of organization, or (iv) in its federal
12
employer identification number or its organizational identification number (if
any). Upon request by the Trustee, it will promptly notify the Trustee in
writing of any change in its principal place of business or any office in which
it maintains books or records relating to any of the Collateral owned or held by
it or on its behalf or any office or facility at which any such Collateral is
located (including the establishment of any such new office or facility). It
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the UCC or otherwise that are required
in order for the Trustee to continue at all times following such change to have
a valid, legal and perfected security interest in all the Collateral with the
same priority in effect prior to such change.
(b) It shall maintain, at its own cost and expense, such
complete and accurate Records with respect to the Collateral owned or held by it
or on its behalf as is consistent with its current practices and in accordance
with such prudent and standard practices used in industries that are the same as
or similar to those in which it is engaged, but in any event to include complete
accounting Records indicating all payments and proceeds received with respect to
any part of such Collateral, and, at such time or times as the Trustee may
reasonably request, promptly to prepare and deliver to the Trustee a duly
certified schedule or schedules in form and detail satisfactory to the Trustee
showing the identity and amount of any and all such Collateral.
(c) It shall, at its own cost and expense, take any and all
actions necessary to defend title to the Collateral owned or held by it or on
its behalf against all Persons and to defend the Security Interest in such
Collateral and the priority thereof against any Lien or other interest not
expressly permitted by the Indenture or Intercreditor Agreement, and in
furtherance thereof, it shall not take, or permit to be taken, any action not
otherwise expressly permitted by the Indenture that could impair the Security
Interest or the priority thereof or the Trustee's or any Holder's rights in or
to such Collateral.
(d) It shall, at its own expense, execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Trustee may from time to time reasonably
request to preserve, protect and perfect the Security Interest granted by it and
the rights and remedies created hereby, including the payment of any fees and
taxes required in connection with its execution and delivery of this Security
Agreement, the granting by it of the Security Interest and the filing of any
financing statements or other documents in connection herewith or therewith.
Such Grantor also agrees to supplement this Security Agreement by supplementing
the Schedules hereto in order to specifically identify any asset or item owned
or held by it or on its behalf acquired by such Grantor after the date hereof
that constitutes Intellectual Property or Commercial Tort Claims pledged as
Collateral hereunder and to use its best efforts to take such action as shall be
necessary in order that all representations and warranties hereunder shall be
true and correct with respect to such Collateral within 30 days after the date
such Grantor has notified the Trustee of such additional Collateral. If such
additional Collateral includes any U.S. registered Patents, Trademarks and
Copyrights, such supplement shall be accompanied by a copy of this Security
Agreement, as so supplemented, and any other documents necessary for recording
the Trustee's Security Interest in such U.S. registered Patents, Trademarks and
Copyrights with the U.S. Patent and Trademark Office or the U.S. Copyright
Office, as applicable.
(e) The Trustee and such Persons as the Trustee may
reasonably designate shall have the right, at the cost and expense of such
Grantor, to reasonably inspect all of its Records (and to make extracts and
copies from such Records), to discuss its affairs with its officers and
independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Collateral owned or held by or on behalf of such Grantor,
including, in the case of Collateral in the possession of any third person, by
contacting contract parties or other obligors thereon or any third person
possessing such Collateral for the purpose of making such a verification. The
Trustee shall have the absolute right to share on a confidential basis any
13
information it gains from such inspection or verification with any Holder.
(f) At its option, the Trustee may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Collateral owned or held by or on behalf of
such Grantor, and not permitted by the Indenture, and may pay for the
maintenance and preservation of such Collateral to the extent such Grantor fails
to do so as required by the Indenture Documents, and such Grantor agrees,
jointly with the other Grantors and severally, to reimburse the Trustee on
demand for any payment made or any expense incurred by the Trustee pursuant to
the foregoing authorization; PROVIDED that nothing in this subsection shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Trustee or any Holder to cure or perform, any covenants or
other promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interests or other encumbrances and maintenance as set forth
herein or in the other Indenture Documents.
(g) If at any time any Grantor shall take a security
interest in any property of an Account Debtor or any other person to secure
payment and performance of an Account or any Pledged Debt, such Grantor shall
promptly assign such security interest to the Administrative Agent. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other person granting the security interest.
(h) It shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Collateral owned or held by it
or on its behalf, all in accordance with the terms and conditions thereof, and
it agrees, jointly with the other Grantors and severally, to indemnify and hold
harmless the Trustee and the Holders from and against any and all liability for
such performance.
(i) It shall not permit any Inventory with an aggregate
value of more than $250,000 to be in the possession or control of any
warehouseman, bailee, agent or processor at any time unless such warehouseman,
bailee, agent or processor shall have been notified of the Security Interest and
shall have agreed in writing to hold such Inventory subject to the Security
Interest and the instructions of the Trustee and to waive and release any Lien
held by it with respect to such Inventory, whether arising by operation of law
or otherwise.
(j) It shall not grant any extension of the time of payment
of any of the Accounts Receivable or any of the Pledged Debt, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar to
those in which such Grantor is engaged.
(k) It shall, at its own expense, maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory and
Equipment in accordance with Section 4.6 of the Indenture, which insurance shall
be against all risks. All policies covering such insurance (i) shall contain a
standard loss payable clause and, during the effectiveness of the Intercreditor
Agreement, shall name the Administrative Agent (or Replacement Agent) as sole
loss payee, and at any time during which the Intercreditor Agreement is no
longer in effect, shall name the Trustee as loss payee in respect of each claim
relating to the Collateral and resulting in a payment thereunder, and (ii) shall
be indorsed to provide, in respect of the interests of the Trustee and the
Holders, that (A) the Trustee shall be an additional insured, (B) 30 days' prior
written notice of any cancellation or modification thereof or any
14
reduction of amounts payable thereunder shall be given to the Trustee, and (C)
in the event that such Grantor at any time or times shall fail to pay any
premium in whole or part relating to any such policy, the Trustee may, in its
sole discretion, pay such premium. Such Grantor irrevocably makes, constitutes
and appoints the Trustee (and all officers, employees or agents designated by
the Trustee) as such Grantor's true and lawful agent (and attorney-in-fact) for
the purpose, upon the occurrence and during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Collateral under
policies of insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
In the event that such Grantor at any time or times shall fail to obtain or
maintain any of the policies of insurance required hereby or to pay any premium
in whole or part relating thereto, the Trustee may, without waiving or releasing
any obligation or liability of the Grantors hereunder or any Event of Default,
in its sole discretion, obtain and maintain such policies of insurance and pay
such premium and take any other actions with respect thereto as the Trustee
deems advisable. All sums disbursed by the Trustee in connection with this
paragraph, including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable, upon demand, by the Grantors to the
Trustee and shall be additional Secured Obligations secured hereby.
(l) It shall legend upon request by the Trustee its Accounts
Receivable, its Pledged Debt and its books, records and documents evidencing or
pertaining thereto with an appropriate reference to the fact that such Accounts
Receivable have been assigned to the Trustee for the benefit of the Holders and
that the Trustee has a security interest therein.
(m) It shall not, nor shall it permit any of its licensees
to, do any act, or omit to do any act, whereby any Patent that is material to
the conduct of such Grantor's business or the business of the Grantors as a
whole may become invalidated or dedicated to the public, and it shall continue
to xxxx any products covered by any such Patent with the relevant patent number
as necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws. It shall (either itself or through its licensees or its
sublicensees), for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its rights under applicable law, (iv) not knowingly use
or knowingly permit the use of such Trademark in violation of any third party
valid and legal rights. It shall (either itself or through licensees), for each
work covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws. Such Grantor shall take all actions necessary or advisable to
ensure that any Intellectual Property material to the conduct of its business
does not become abandoned, lost or dedicated to the public, and shall notify the
Trustee of any adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in the U.S.
Patent and Trademark Office, U.S. Copyright Office or any court or similar
office of any country) regarding such Grantor's ownership of any Intellectual
Property, its right to register the same, or to keep and maintain the same. Each
Grantor shall, within 105 days of the creation or acquisition of any
Copyrightable work which is material to the business of such Grantor or the
Grantors as a whole, apply to register the Copyright in the U.S. Copyright
Office. With respect to any material Copyrightable work that has been
exclusively licensed to any Grantor, such Grantor shall use its best efforts to
cause the licensor thereof to register the Copyright in the U.S. Copyright
Office and shall promptly record its rights in such License in the U.S.
Copyright Office. If any Grantor, either itself or through any agent, employee,
licensee or designee, shall file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the U.S.
Patent and Trademark Office, U.S. Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, it shall notify the Trustee
15
in writing within 60 days of such filing, and, upon the request of the Trustee,
shall promptly execute and deliver any and all agreements, instruments,
documents and papers as the Trustee may request to evidence the Trustee's
security interest in such Patent, Trademark or Copyright. Such Grantor hereby
appoints the Trustee as its attorney-in-fact to execute and file such writings
for the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; such power, being coupled with an interest, is irrevocable. Such
Grantor will take all necessary steps that are consistent with the practice in
any proceeding before the U.S. Patent and Trademark Office, U.S. Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, to maintain and
pursue each material application relating to the Patents, Trademarks and/or
Copyrights (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights that
is material to the conduct of such Grantor's business, including timely filings
of applications for renewal, affidavits of use, affidavits of incontestability
and payment of maintenance fees, and, if consistent with good business judgment,
to initiate opposition, interference and cancellation proceedings against third
parties. In the event that such Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of such Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor shall, if consistent
with good business judgment, promptly xxx for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and take such other actions as are appropriate
under the circumstances to protect such Collateral. Upon and during the
continuance of an Event of Default, such Grantor shall use its best efforts to
obtain all requisite consents or approvals by the licensor of each License to
effect the assignment of all of such Grantor's right, title and interest
thereunder to the Trustee. Except as expressly permitted under the Indenture or
the Intercreditor Agreement, the Grantors will not execute, and there will not
be on file in any public office, any financing statement, security agreement or
other document or instruments, other financing statements, security agreements,
or other documents or instruments filed or to be filed in favor of the Trustee
for the benefit of the Holders.
Section 6. INVESTMENT RELATED PROPERTY.
(a) REPRESENTATIONS AND WARRANTIES. Each of the Grantors,
jointly with the other Grantors and severally, represents and warrants to the
Trustee and the Holders that Schedule III hereto or to the applicable Supplement
sets forth, as of the Applicable Date, all of the Deposit Accounts and
Securities Accounts included in the Collateral owned or held by or on behalf of
such Grantor.
(b) REGISTRATION IN NOMINEE NAME; DENOMINATIONS. Each
Grantor hereby agrees that (i) without limiting Section 8, the Trustee, on
behalf of the Holders, shall have the right (in its sole and absolute
discretion) to hold any Investment Related Property in its own name as pledgee,
the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned, where applicable, in blank or in favor
of the Trustee (or the Administrative Agent (or Replacement Agent) during the
effectiveness of the Intercreditor Agreement), (ii) at the Trustee's request,
such Grantor will promptly give to the Trustee copies of any material notices or
other communications received by it with respect to any Investment Related
Property registered in its name, and (iii) the Trustee shall at all times have
the right to exchange any certificates, instruments or other documents
representing or evidencing any Investment Related Property owned or held by or
on behalf of such Grantor for certificates, instruments or other documents of
smaller or larger denominations for any purpose consistent with this Security
Agreement.
(c) VOTING AND DISTRIBUTIONS.
(i) Unless and until an Event of Default shall have
occurred and be continuing:
16
(A) Each Grantor shall be entitled to exercise any
and all voting and/or other consensual rights and powers inuring to an
owner of the Investment Related Property, or any part thereof, for any
purpose consistent with the terms of this Security Agreement and the
other Indenture Documents; PROVIDED that such Grantor will not be
entitled to exercise any such right if the result thereof could
materially and adversely affect the rights inuring to a holder of the
Investment Related Property or the rights and remedies of the Trustee
or any of the Holders under this Security Agreement or any other
Indenture Document or the ability of the Trustee or any of the Holders
to exercise the same.
(B) Each Grantor shall be entitled to receive,
retain and use any and all cash dividends, interest and principal paid
on the Investment Related Property owned or held by it or on its behalf
to the extent and only to the extent that such cash dividends, interest
and principal are not prohibited by, and otherwise paid in accordance
with, the terms and conditions of the Indenture, the other Indenture
Documents and applicable laws. All non-cash dividends, interest and
principal, and all dividends, interest and principal paid or payable in
cash or otherwise in connection with a partial or total liquidation or
dissolution, return of capital, capital surplus or paid-in surplus, and
all other distributions (other than distributions referred to in the
preceding sentence) made on or in respect of the Investment Related
Property, whether paid or payable in cash or otherwise, whether
resulting from a subdivision, combination or reclassification of the
outstanding securities of any issuer of any Investment Related Property
or received in exchange for any Investment Related Property, or any
part thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the
Collateral, and, if received by such Grantor, shall not be commingled
with any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the benefit of the Trustee
hereunder and shall be forthwith delivered to the Trustee in the same
form as so received (with any necessary endorsement).
(ii) Without limiting the generality of the foregoing,
upon the occurrence and during the continuance of an Event of Default:
(A) All rights of each Grantor to dividends,
interest or principal that it is authorized to receive pursuant to
subsection (c)(i)(B) above shall cease, and all such rights shall
thereupon become vested in the Trustee, which shall have the sole and
exclusive right and authority to receive and retain such dividends,
interest or principal, as applicable. All dividends, interest and
principal received by or on behalf of any Grantor contrary to the
provisions of this Section shall be held in trust for the benefit of
the Trustee, shall be segregated from other property or funds of such
Grantor and shall be forthwith delivered to the Trustee upon demand in
the same form as so received (with any necessary endorsement). Subject
to the Intercreditor Agreement while it is in effect, any and all money
and other property paid over to or received by the Trustee pursuant to
the provisions of this subsection (c)(ii)(A) shall be retained by the
Trustee in an account to be established in the name of the Trustee, for
the benefit of the Holders, upon receipt of such money or other
property (the "COLLATERAL ACCOUNT") and shall be applied in accordance
with the provisions of Section 9(b). Subject to the Intercreditor
Agreement while it is in effect and to the provisions of this
subsection (c)(ii)(A), such account shall at all times be under the
sole dominion and control of the Trustee, and the Trustee shall at all
times have the sole right to make withdrawals therefrom and to exercise
all rights with respect to the funds and other property from time to
time therein or credited thereto as set forth in the Indenture
Documents. After all Events of Default have been cured or waived, the
Trustee shall, within five Business Days after all such Events of
Default have been cured or waived, repay to the applicable Grantor all
cash dividends, interest and principal (without interest) that such
Grantor would
17
otherwise be permitted to retain pursuant to the terms of subsection
(c)(i)(B) above and which remain in such account.
(B) All rights of each Grantor to exercise the
voting and consensual rights and powers it is entitled to exercise
pursuant to subsection (c)(i)(A) above, and the obligations of the
Trustee under subsection (c)(i)(B) above, shall cease, and all such
rights shall thereupon become vested in the Trustee, which shall have
the sole and exclusive right and authority to exercise such voting and
consensual rights and powers, PROVIDED that unless otherwise directed
by Holders of a majority of the aggregate principal amount of
outstanding Notes, the Trustee shall have the right from time to time
following and during the continuance of an Event of Default to permit
such Grantor to exercise such rights. After all Events of Default have
been cured or waived, the applicable Grantor will have the right to
exercise the voting and consensual rights and powers that it would
otherwise be entitled to exercise pursuant to the terms of subsection
(c)(i)(A) above.
(d) CASH AND INVESTMENT PROPERTY. Each Grantor covenants and
agrees that (i) with respect to each of its Deposit Accounts existing on the
date hereof and set forth in Schedule III hereto, it shall deliver, or cause to
be delivered, to the Trustee on or prior to April 15, 2002, a duly executed
Deposit Account Control Agreement with respect to each such Deposit Account
(other than a Deposit Account that at all times has less than (A) $25,000 on
deposit therein, and (B) when aggregated with all other Deposit Accounts that
are not subject to a Deposit Account Control Agreement in favor of the Trustee,
$100,000 on deposit therein), (ii) it shall not at any time establish or
maintain any other Deposit Account without concurrently therewith delivering to
the Trustee a duly executed Deposit Account Control Agreement with respect to
such Deposit Account, (iii) it shall deposit, or cause to be deposited, no less
frequently than every other Business Day all of its Investment Related Property
(other than Deposit Accounts and Securities Accounts) into one or more such
Deposit Accounts or any Securities Account. Prior to the delivery of a "Notice
of Exclusive Control" under the applicable Deposit Account Control Agreement,
and pursuant to the terms thereof and the other Indenture Documents, each
Deposit Account shall at all times be under the "control" (within the meaning of
Article 9 of the UCC) of the Trustee, and no Grantor shall have access to or any
right to draw upon or withdraw any cash or other funds therefrom, except for
purposes not otherwise prohibited by the Indenture Documents.
Section 7. FURTHER ASSURANCES.
Each Grantor hereby covenants and agrees, at its own cost
and expense, to execute, acknowledge, deliver and/or cause to be duly filed all
such further agreements, instruments and other documents, and take all such
further actions, that the Trustee may from time to time reasonably request to
preserve, protect and perfect (including as a result of any revisions to Article
9 of the UCC in any jurisdiction or the effectiveness thereof or any other
change in applicable law) the Security Interest granted by it and the rights and
remedies created hereby, including the payment of any fees and taxes required in
connection with its execution and delivery of this Security Agreement, the
granting by it of the Security Interest and the filing of any financing
statements or other documents in connection herewith or therewith. In addition,
to the extent permitted by applicable law, each Grantor hereby irrevocably
authorizes the Trustee to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Collateral owned or
held by it or on its behalf without the signature of such Grantor and agrees
that a photographic or other reproduction of this Security Agreement or of a
financing statement signed by such Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions. Each Grantor hereby further irrevocably authorizes the Trustee to
file a Record or Records, including financing statements, in all jurisdictions
and with all filing offices that the Trustee may determine, in its sole and
absolute discretion, are necessary, advisable or prudent to perfect the Security
Interest granted by it and agrees that such financing statements may
18
describe the Collateral owned or held by it or on its behalf in the same manner
as described herein or may contain an indication or description of collateral
that describes such Collateral in any other manner that the Trustee may
determine, in its sole and absolute discretion, is necessary, advisable or
prudent to perfect the Security Interest granted by such Grantor, including
describing such property as "all assets" or "all personal property."
Section 8. TRUSTEE APPOINTED ATTORNEY-IN-FACT.
(a) Each Grantor hereby appoints the Trustee as its true and
lawful agent and attorney-in-fact for the purpose of carrying out the provisions
of this Security Agreement and taking any action and executing any instrument
that the Trustee may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest, and
without limiting the generality of the foregoing, the Trustee shall have the
right, with power of substitution for such Grantor and in such Grantor's name or
otherwise, for the use and benefit of the Trustee and the Holders, upon the
occurrence and during the continuance of an Event of Default and at such other
time or times permitted by the Indenture, (i) to receive, endorse, assign and/or
deliver any and all notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Collateral owned or held by it or on its
behalf or any part thereof; (ii) to demand, collect, receive payment of, give
receipt for, and give discharges and releases of, any of such Collateral; (iii)
to commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
any of the Collateral owned or held by it or on its behalf or to enforce any
rights in respect of any of such Collateral; (iv) to settle, compromise,
compound, adjust or defend any actions, suits or proceedings relating to any of
such Collateral; (v) to notify, or to require such Grantor to notify, obligors
to make payment directly to the Trustee, and (vi) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of such Collateral, and to do all other acts and things necessary to carry out
the purposes of this Security Agreement, as fully and completely as though the
Trustee were the absolute owner of such Collateral for all purposes; PROVIDED
that nothing herein contained shall be construed as requiring or obligating the
Trustee or any Holder to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by the Trustee or any Holder, or
to present or file any claim or notice, or to take any action with respect to
any of the Collateral or the moneys due or to become due in respect thereof or
any property covered thereby, and no action taken or omitted to be taken by the
Trustee with respect to any of the Collateral shall give rise to any defense,
counterclaim or offset in favor of such Grantor or to any claim or action
against the Trustee. The provisions of this Section shall in no event relieve
any Grantor of any of its obligations hereunder or under the other Indenture
Documents with respect to any of the Collateral or impose any obligation on the
Trustee or any Holder to proceed in any particular manner with respect to any of
the Collateral, or in any way limit the exercise by the Trustee or any Holder of
any other or further right that it may have on the date of this Security
Agreement or hereafter, whether hereunder, under any other Indenture Document,
by law or otherwise. Any sale pursuant to the provisions of this paragraph shall
be deemed to conform to the commercially reasonable standards as provided in
Section 9-610(b) of the UCC as in effect in the State of New York or its
equivalent in other jurisdictions (or any successor provision).
Section 9. REMEDIES UPON DEFAULT.
(a) REMEDIES GENERALLY.
(i) GENERAL RIGHTS. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each
item of Collateral owned or held by it or on its behalf to the Trustee
on demand, and it is agreed that the Trustee shall have the right, with
or without legal process and with or without prior notice or demand for
performance, to take possession of the Collateral owned or held by it
or on its behalf and without
19
liability for trespass to enter any premises where such Collateral may
be located for the purpose of taking possession of or removing such
Collateral and, generally, to exercise any and all rights afforded to a
secured party under the UCC or other applicable law. Without limiting
the generality of the foregoing, each Grantor agrees that the Trustee
shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of any of the Collateral
owned or held by or on behalf of such Grantor, at public or private
sale or at any broker's board or on any securities exchange, for cash,
upon credit or for future delivery as the Trustee shall deem
appropriate. In connection with any sale or disposition of the
Collateral pursuant to this Section 9, each Grantor agrees to promptly
deliver to the Trustee any documents required under Section 11.10 of
the Indenture. The Trustee shall be irrevocably authorized at any such
sale of such Collateral constituting securities (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing such
Collateral for their own account for investment and not with a view to
the distribution or sale thereof, and upon consummation of any such
sale, the Trustee shall have the right to assign, transfer and deliver
to the purchaser or purchasers thereof the Collateral so sold. Each
such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of the applicable
Grantor, and such Grantor hereby waives (to the extent permitted by
law) all rights of redemption, stay, valuation and appraisal which such
Grantor now has or may at any time in the future have under any rule of
law or statute now existing or hereafter enacted.
(ii) SALE OF COLLATERAL. The Trustee shall give each
Grantor ten days' written notice (which such Grantor agrees is
reasonable notice within the meaning of Sections 9-611 and 9-612 of the
UCC as in effect in the State of New York or its equivalent in other
jurisdictions (or any successor provisions)), of the Trustee's
intention to make any sale of any of the Collateral owned or held by or
on behalf of such Grantor. Such notice, in the case of a public sale,
shall state the time and place for such sale and, in the case of a sale
at a broker's board or on a securities exchange, shall state the board
or exchange at which such sale is to be made and the day on which such
Collateral will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Trustee may
fix and state in the notice (if any) of such sale. At any such sale,
the Collateral to be sold may be sold in one lot as an entirety or in
separate parcels, as the Trustee may (in its sole and absolute
discretion) determine. The Trustee shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been
given. The Trustee may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for sale, and such
sale may, without further notice, be made at the time and place to
which the same was so adjourned. In case any sale of any of the
Collateral is made on credit or for future delivery, the Collateral so
sold may be retained by the Trustee until the sale price is paid by the
purchaser or purchasers thereof, but the Trustee shall not incur any
liability in case any such purchaser or purchasers shall fail to take
up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice. At any public (or,
to the extent permitted by applicable law, private) sale made pursuant
to this Section, any Holder may bid for or purchase, free (to the
extent permitted by applicable law) from any right of redemption, stay,
valuation or appraisal on the part of such Grantor (all said rights
being also hereby waived and released to the extent permitted by law),
any of the Collateral offered for sale and may make payment on account
thereof by using any claim then due and payable to such Holder from
such Grantor as a credit against the purchase price, and such Holder
may, upon compliance with the terms of sale, hold, retain and dispose
of such property without further accountability to such Grantor
therefor. For purposes hereof, (i) a written agreement to purchase any
of the Collateral shall be treated as a sale thereof, (ii) the Trustee
shall be free to carry out such sale pursuant to such agreement, and
(iii) no Grantor shall be entitled to
20
the return of any of the Collateral subject thereto, notwithstanding
the fact that after the Trustee shall have entered into such an
agreement all Events of Default shall have been remedied and the
Secured Obligations paid in full. As an alternative to exercising the
power of sale herein conferred upon it, the Trustee may proceed by a
suit or suits at law or in equity to foreclose upon any of the
Collateral and to sell any of the Collateral pursuant to a judgment or
decree of a court or courts having competent jurisdiction or pursuant
to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-610(b) of
the UCC as in effect in the State of New York or its equivalent in
other jurisdictions (or any successor provisions). Without limiting the
generality of the foregoing, each Grantor agrees as follows: (A) if the
proceeds of any sale of the Collateral owned or held by it or on its
behalf pursuant to this Section are insufficient to pay all the Secured
Obligations, it shall be liable for the resulting deficiency and the
fees, charges and disbursements of any counsel employed by the Trustee
or any Holder to collect such deficiency, (B) it hereby waives any
claims against the Trustee arising by reason of the fact that the price
at which any such Collateral may have been sold at any private sale
pursuant to this Section was less than the price that might have been
obtained at a public sale, even if the Trustee accepts the first offer
received and does not offer such Collateral to more than one offeree,
(C) there is no adequate remedy at law for failure by it to comply with
the provisions of this Section and that such failure would not be
adequately compensable in damages, and therefore agrees that its
agreements in this Section may be specifically enforced, (D) the
Trustee may sell any such Collateral without giving any warranties as
to such Collateral, and the Trustee may specifically disclaim any
warranties of title or the like, and (E) the Trustee shall have no
obligation to xxxxxxxx any such Collateral.
(b) APPLICATION OF PROCEEDS OF SALE. The Trustee shall apply
the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all reasonable costs and expenses
incurred by the Trustee (in its capacity as such hereunder or under any
other Indenture Document) in connection with such collection or sale or
otherwise in connection with this Security Agreement, any other
Indenture Document or any of the Secured Obligations, including all
out-of-pocket court costs and the reasonable fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Trustee hereunder or under any other Indenture Document on behalf of
any Grantor and any other reasonable out-of-pocket costs or expenses
incurred in connection with the exercise of any right or remedy
hereunder or under any other Indenture Document;
SECOND, to the payment in full of the Secured Obligations
(the amounts so applied to be distributed among the Holders pro rata in
accordance with the amounts of the Secured Obligations owed to them on
the date of any such distribution); and
THIRD, to the applicable Grantor, its successors or assigns,
or as a court of competent jurisdiction may otherwise direct.
The Trustee shall have sole and absolute discretion as to
the time of application of any such proceeds, moneys or balances in
accordance with this Security Agreement. Upon any sale of the
Collateral by the Trustee (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the
purchase money by the Trustee or of the officer making the sale shall
be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money
paid over to the Trustee or such officer or be answerable in any way
for the misapplication thereof.
21
(c) INVESTMENT RELATED PROPERTY. In view of the position of
each Grantor in relation to the Investment Related Property, or because of other
current or future circumstances, a question may arise under the Securities Act
of 1933, as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "FEDERAL SECURITIES LAWS") with respect
to any disposition of the Investment Related Property permitted hereunder. Each
Grantor understands that compliance with the Federal securities laws might very
strictly limit the course of conduct of the Trustee if the Trustee were to
attempt to dispose of all or any part of the Investment Related Property, and
might also limit the extent to which or the manner in which any subsequent
transferee of any Investment Related Property could dispose of the same.
Similarly, there may be other legal restrictions or limitations affecting the
Trustee in any attempt to dispose of all or part of the Investment Related
Property under applicable Blue Sky or other state securities laws or similar
laws analogous in purpose or effect. Each Grantor recognizes that in light of
such restrictions and limitations the Trustee may, with respect to any sale of
the Investment Related Property, limit the purchasers to those who will agree,
among other things, to acquire such Investment Related Property for their own
account, for investment, and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that in light of such restrictions
and limitations, the Trustee, in its sole and absolute discretion, (i) may
proceed to make such a sale whether or not a registration statement for the
purpose of registering such Investment Related Property, or any part thereof,
shall have been filed under the Federal securities laws and (ii) may approach
and negotiate with a single potential purchaser to effect such sale. Each
Grantor acknowledges and agrees that any such sale might result in prices and
other terms less favorable to the seller than if such sale were a public sale
without such restrictions. In the event of any such sale, the Trustee shall
incur no responsibility or liability for selling all or any part of the
Investment Related Property at a price that the Trustee, in its sole and
absolute discretion, may in good xxxxx xxxx reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached. The provisions of this Section
will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at which
the Trustee sells any such Investment Related Property.
(d) REGISTRATION, ETC. Each Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Trustee desires to sell any of the Investment Related Property owned or held
by or on behalf of such Grantor at a public sale, it will, at any time and from
time to time, upon the written request of the Trustee, use its best efforts to
take or to cause, where applicable, the issuer of such Investment Related
Property to take such action and prepare, distribute and/or file such documents,
as are required or advisable in the reasonable opinion of counsel for the
Trustee to permit the public sale of such Investment Related Property. Each
Grantor further agrees to indemnify, defend and hold harmless the Trustee, each
Holder, any underwriter and their respective officers, directors, affiliates and
controlling Persons from and against all loss, liability, expenses, costs of
counsel (including reasonable fees and expenses of legal counsel), and claims
(including the costs of investigation) that they may incur, insofar as such
loss, liability, expense or claim, as applicable, relates to such Grantor or any
of its property, and arises out of or is based upon any alleged untrue statement
of a material fact contained in any prospectus (or any amendment or supplement
thereto) or in any notification or offering circular, or arises out of or is
based upon any alleged omission to state a material fact required to be stated
therein or necessary to make the statements in any thereof not misleading,
except insofar as the same may have been caused by any untrue statement or
omission based upon information furnished in writing to such Grantor or the
issuer of such Investment Related Property, as applicable, by the Trustee
expressly for use therein. Each Grantor further agrees, upon such written
request referred to above, to use its best efforts to qualify, file or register,
or cause, where applicable, the issuer of such Investment Related Property to
qualify, file or register, any of the Investment Related Property owned or held
by or on behalf of such Grantor under the Blue Sky or other securities laws of
such states as may be requested by the
22
Trustee and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. Each Grantor will bear all costs and
expenses of carrying out its obligations under this Section. Each Grantor
acknowledges that there is no adequate remedy at law for failure by it to comply
with the provisions of this Section and that such failure would not be
adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
Section 10. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY.
For the purpose of enabling the Trustee to exercise rights
and remedies under Section 9, and under this Section, at such time as the
Trustee shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to the Trustee an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to the Grantors)
to use, license or sub-license any of the Collateral consisting of Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof (subject, in
the case of Trademarks, to sufficient rights to quality control and inspection
in favor of the Grantor to avoid the risk of invalidation of said Trademarks).
The use of such license by the Trustee shall be exercised, at the option of the
Trustee, upon the occurrence and during the continuation of an Event of Default;
PROVIDED that any license, sub-license or other transaction entered into by the
Trustee in accordance herewith shall be binding upon the Grantors
notwithstanding any subsequent cure of an Event of Default. Any royalties and
other payments received by the Trustee shall be applied in accordance with
Section 9(b).
Section 11. REIMBURSEMENT OF TRUSTEE.
Each Grantor agrees, jointly with the other Grantors and
severally, to pay to the Trustee the amount of any and all reasonable
out-of-pocket expenses, including the fees, other charges and disbursements of
counsel (including allocated costs of internal counsel) and of any experts or
agents, that the Trustee may incur in connection with (a) the administration of
this Security Agreement relating to such Grantor or any of its property and any
consent, amendment, waiver or other modification to this Security Agreement, (b)
the creation and perfection of Liens in favor of Trustee for the benefit of
Holders, including filing and recording fees, expenses and taxes, search fees,
and the reasonable fees, expenses and disbursements of any counsel providing any
opinions in respect of the Collateral or the Liens created pursuant to the
Collateral Agreements, (c) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral owned or held
by or on behalf of such Grantor, (d) the exercise, enforcement or protection of
any of the rights of the Trustee hereunder relating to such Grantor or any of
its property, including any costs of settlement incurred by the Trustee after
the occurrence of an Event of Default, (e) any refinancing or restructuring of
the credit arrangements pursuant to the Indenture, including a "work-out," or
pursuant to any insolvency or bankruptcy cases or proceedings, or (f) the
failure by such Grantor to perform or observe any of the provisions hereof.
Without limitation of its indemnification obligations under the other Indenture
Documents, each of the Grantors agrees, jointly with the other Grantors and
severally, to indemnify the Trustee and the Holders against, and hold the
Trustee and each Holder harmless from, any and all losses, claims, damages,
liabilities and related out-of-pocket expenses, including reasonable counsel
fees (including allocated costs of internal counsel), other charges and
disbursements, incurred by or asserted against the Trustee or any Holder arising
out of, in any way connected with, or as a result of (a) the execution or
delivery by such Grantor of this Security Agreement or any other Indenture
Document or any agreement or instrument contemplated hereby or thereby, or the
performance by such Grantor of its obligations under the Indenture Documents and
the other transactions contemplated thereby or (b) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not the
Trustee or any Holder is a party thereto, PROVIDED that such indemnity shall
not, as to the Trustee or any Holder, be available to the
23
extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of the
Trustee or such Holder, respectively. Any amounts payable as provided hereunder
shall be additional Secured Obligations secured hereby and by the other Security
Documents. The provisions of this Section shall remain operative and in full
force and effect regardless of the termination of this Security Agreement or any
other Indenture Document, the consummation of the transactions contemplated
hereby or thereby, the repayment of any of the Secured Obligations, the
invalidity or unenforceability of any term or provision of this Security
Agreement or any other Indenture Document or any investigation made by or on
behalf of the Trustee or any Holder. All amounts due under this Section shall be
payable within ten days of written demand therefor and shall bear interest at
the rate of 11-7/8% per annum.
Section 12. WAIVERS; AMENDMENT.
No failure or delay of the Trustee in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Trustee and the Holders hereunder and under the other
Indenture Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Security Agreement or any other Indenture Document or consent to any departure
by any Grantor therefrom shall in any event be effective unless the same shall
be permitted by this Section, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice or
demand on any Grantor in any case shall entitle such Grantor to any other or
further notice or demand in similar or other circumstances. Neither this
Security Agreement nor any provision hereof may be waived, amended, supplemented
or otherwise modified, or any departure therefrom consented to, except pursuant
to an agreement or agreements in writing entered into by, between or among the
Trustee and the Grantor or Grantors with respect to which such waiver,
amendment, other modification or consent is to apply, subject to any consent
required in accordance with Article IX of the Indenture.
Section 13. SECURITY INTEREST ABSOLUTE.
All rights of the Trustee hereunder, the Security Interest
and all obligations of each Grantor hereunder shall be absolute and
unconditional irrespective of (i) any lack of validity or enforceability of the
Indenture, any other Indenture Document, any agreement with respect to any of
the Secured Obligations, or any other agreement or instrument relating to any of
the foregoing, (ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other waiver,
amendment, supplement or other modification of, or any consent to any departure
from, the Indenture, any other Indenture Document or any other agreement or
instrument relating to any of the foregoing, (iii) any exchange, release or
non-perfection of any Lien on any other collateral, or any release or waiver,
amendment, supplement or other modification of, or consent under, or departure
from, any guaranty, securing or guaranteeing all or any of the Secured
Obligations, or (iv) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor in respect of the Secured
Obligations or in respect of this Security Agreement or any other Indenture
Document.
Section 14. TERMINATION; RELEASE.
This Security Agreement and the Security Interest shall
terminate when all the Secured Obligations have been finally and indefeasibly
paid in full in cash. In connection with the termination of the Security
Interest pursuant to this Section or any release of any Collateral permitted by
24
Sections 11.9 and 11.10 of the Indenture, the Trustee shall execute and deliver
to the applicable Grantor, at the cost and expense of such Grantor, all UCC
termination statements and similar documents that such Grantor may reasonably
request to evidence such termination or release. Any execution and delivery of
documents pursuant to this Section shall be without recourse to or warranty by
the Trustee or any Holder. Notwithstanding the foregoing, this Security
Agreement shall continue to be effective or shall be reinstated, as the case may
be, if at any time any amount received by a Holder in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by such
Holder upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Grantor or upon the appointment of any intervenor or
conservator of, or trustee or similar official for, any Grantor or any
substantial part of its properties, or otherwise, all as though such payments
had not been made.
Section 15. ADDITIONAL GRANTORS.
Upon execution and delivery after the date hereof by the
Trustee and a Subsidiary of a Supplement, such Subsidiary, shall become a
Grantor hereunder with the same force and effect as if originally named as a
Grantor herein (each an "ADDITIONAL GRANTOR"). The execution and delivery of any
Supplement shall not require the consent of any other Grantor hereunder. The
rights and obligations of each Grantor hereunder and under the Indenture
Documents shall remain in full force and effect notwithstanding the addition of
any Additional Grantor as a party to this Security Agreement.
Section 16. NOTICES.
All communications and notices hereunder shall be in
writing and given as provided in Section 12.2 of the Indenture. All
communications and notices hereunder to the Trustee shall be given to it at its
address for notices set forth in such Section, and all communications and
notices hereunder to the Company and any other Grantor shall be given to it at
its address for notices set forth on Schedule I hereto or to the applicable
Supplement, with, in the case of any Grantor other than the Company, a copy to
the Company.
Section 17. BINDING EFFECT; SEVERAL AGREEMENT; ASSIGNMENTS.
Whenever in this Security Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party, and all covenants, promises and agreements by or on
behalf of any Grantor that are contained in this Security Agreement shall bind
and inure to the benefit of each party hereto and its successors and assigns.
This Security Agreement shall become effective as to any Grantor when a
counterpart hereof executed on behalf of such Grantor shall have been delivered
to the Trustee and a counterpart hereof shall have been executed on behalf of
the Trustee, and thereafter shall be binding upon such Grantor and the Trustee
and their respective successors and assigns, and shall inure to the benefit of
such Grantor, the Trustee and the Holders, and their respective successors and
assigns, except that no Grantor shall have the right to assign its rights or
obligations hereunder or any interest herein or in any of the Collateral (and
any such attempted assignment shall be void), except as expressly contemplated
by this Security Agreement or the other Indenture Documents. This Security
Agreement shall be construed as a separate agreement with respect to each of the
Grantors and may be amended, supplemented, waived or otherwise modified or
released in accordance herewith and in accordance with the Indenture with
respect to any Grantor without the approval of any other Grantor and without
affecting the obligations of any other Grantor hereunder.
Section 18. SURVIVAL OF AGREEMENT; SEVERABILITY; ENTIRE AGREEMENT.
All covenants, agreements, representations and warranties
made by the Grantors herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to
25
this Security Agreement or any other Indenture Document shall be considered to
have been relied upon by the Trustee and the Holders and shall survive the
execution and delivery of any Indenture Document, regardless of any
investigation made by the Holders or on their behalf, and shall continue in full
force and effect until this Security Agreement shall terminate. In the event any
one or more of the provisions contained in this Security Agreement or in any
other Indenture Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein or therein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). This Security Agreement and the other
Indenture Documents embody the entire agreement and understanding among the
Grantors and the Trustee and supersede all prior agreements and understandings
between such parties relating to the subject matter hereof and thereof.
Section 19. GOVERNING LAW.
THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 20. COUNTERPARTS.
This Security Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one contract (subject to Section 17), and shall become effective as provided
in Section 17. Delivery of an executed counterpart of this Security Agreement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Security Agreement.
Section 21. HEADINGS.
Section and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Security
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Security Agreement.
Section 22. JURISDICTION; VENUE; CONSENT TO SERVICE OF PROCESS.
Each Grantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Security Agreement or the other
Indenture Documents, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that, to the
extent permitted by applicable law, all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by applicable law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Security Agreement shall
affect any right that the Trustee or any Holder may otherwise have to bring any
action or proceeding relating to this Security Agreement or the other Indenture
Documents against such Grantor or any of its property in the courts of any
jurisdiction. Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Security Agreement or the other Indenture
Documents in any foregoing court referred to in this Section. Each of the
parties hereto hereby
26
irrevocably waives, to the fullest extent permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court. Each party hereto irrevocably consents to service of process
in the manner provided for notices in Section 16. Nothing in this Security
Agreement will affect the right of any party hereto to serve process in any
other manner permitted by law.
Section 23. WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS SECURITY AGREEMENT. EACH PARTY HERETO (I) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS SECURITY
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
Section 24. NO DUTY ON THE PART OF THE TRUSTEE; STANDARD OF CARE.
The powers conferred on the Trustee hereunder are solely to
protect the interests of the Holders in the Collateral and shall not impose any
duty upon the Trustee to exercise any such powers. The Trustee and the Holders
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. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Trustee shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. The Trustee shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Trustee accords its own property. Neither the Trustee nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or otherwise.
Section 25. INDENTURE CONTROLS.
All terms, covenants, conditions, provisions and
requirements of the Indenture, including Article VII thereof, are incorporated
by reference in this Security Agreement. In the event of any conflict or
inconsistency between the provisions of this Security Agreement and those of the
Indenture, including any conflicts or inconsistencies in any definitions herein
or therein, the provisions or definitions of the Indenture shall govern.
Section 26. TRUST INDENTURE ACT CONTROLS.
If any provision of this Security Agreement limits,
qualifies or conflicts with the duties imposed by the Trust Indenture Act of
1939 as in effect on the date of this Security Agreement, the imposed duties
shall control.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, the parties hereto have duly executed this Security
Agreement as of the day and year first above written.
PENTON MEDIA, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------------------------
Name: Xxxxxx X. Xxxx
----------------------------------------------
Title: Chairman of the Board and
---------------------------------------------
Chief Executive Officer
---------------------------------------------
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO
AS TO EACH OF THE FOREGOING
By: /s/ Xxxxxx X. XxXxxxxx
------------------------------------------------
Name: Xxxxxx X. XxXxxxxx
----------------------------------------------
Title: Treasurer
---------------------------------------------
XXXXXXXX.XXX
By: /s/ Xxxxxx X. XxXxxxxx
------------------------------------------------
Name: Xxxxxx X. XxXxxxxx
----------------------------------------------
Title: Chief Financial Officer
---------------------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxx X. Xxxxxx III
------------------------------------------------
Name: Xxxxx X. Xxxxxx III
----------------------------------------------
Title: Vice President
---------------------------------------------
28
SCHEDULE I
TO PLEDGE AND SECURITY AGREEMENT
GRANTORS AND ADDRESSES FOR NOTICES
----------------------------------
Grantor Address for Notices
------- -------------------
Penton Media, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Boardwatch, Incorporated 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Xxxxxxx Xxxxxx Publishing Company 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Duke Communications International, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Xxxx Investments, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Xxxxxxxxxx.xxx, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Internet World Media, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
One, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Xxxxxx Internet, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
PTS Delaware, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Xxxxxxxx.xxx 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Streaming Media, Inc. 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
Tech Conferences, Incorporated 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx
SCHEDULE II
TO PLEDGE AND SECURITY AGREEMENT
FILING OFFICES AND FEDERAL EMPLOYER IDENTIFICATION NUMBERS
----------------------------------------------------------
Federal Employer
Grantor Filing Office Identification Numbers
------- ------------- ----------------------
Penton Media, Inc. Delaware 00-0000000
Boardwatch, Incorporated Colorado 00-0000000
Xxxxxxx Xxxxxx Publishing Company Illinois 00-0000000
Duke Communications International, Inc. Colorado 00-0000000
Duke Investments, Inc. Colorado 00-0000000
Xxxxxxxxxx.xxx, Inc. Delaware 00-0000000
Internet World Media, Inc. Delaware 00-0000000
One, Inc. Colorado 00-0000000
Penton Internet, Inc. Delaware 00-0000000
PTS Delaware, Inc. Delaware 00-0000000
Xxxxxxxx.xxx California 77-04144434
Streaming Media, Inc. California 00-0000000
Tech Conferences, Incorporated Connecticut 00-0000000
SCHEDULE III
TO PLEDGE AND SECURITY AGREEMENT
DILIGENCE CERTIFICATE
---------------------
(attached)
SCHEDULE IV
TO PLEDGE AND SECURITY AGREEMENT
COMMERCIAL TORT CLAIMS
----------------------
None.
EXHIBIT A
TO PLEDGE AND SECURITY AGREEMENT
FORM OF SUPPLEMENT
------------------
SUPPLEMENT NO. __, dated as of ______________, to the PLEDGE AND
SECURITY AGREEMENT, dated as of March 28, 2002, among PENTON MEDIA, INC, a
Delaware corporation (the "COMPANY"), the subsidiaries of the Company party
thereto, and U.S. BANK NATIONAL ASSOCIATION, as trustee (the "TRUSTEE") under
the Indenture referred to in the next paragraph (as amended, restated, extended,
supplemented or otherwise modified from time to time, the "SECURITY AGREEMENT").
Reference is made to the Indenture, dated as of March 28,
2002, among the Company, the subsidiaries of the Company party thereto, and the
Trustee (as amended, restated, extended, supplemented or otherwise modified from
time to time, the "INDENTURE"). Capitalized terms used herein and not defined
herein shall have the meanings assigned to such terms in the Indenture and the
Security Agreement.
The Grantors have entered into the Security Agreement in
connection with the issuance by the Company of 11-7/8% Senior Secured Notes Due
2007. Section 15 of the Security Agreement provides that additional Subsidiaries
may become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary (the "NEW
GRANTOR") is executing this Supplement to become a Grantor under the Security
Agreement in accordance with the requirements of the Indenture.
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Trustee and the New Grantor
hereby agree as follows:
Section 1. In accordance with Section 15 of the Security Agreement, the
New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor, and the New Grantor hereby agrees to, and to be bound by, all the terms
and provisions of the Security Agreement applicable to it as a Grantor
thereunder. In furtherance of the foregoing, the New Grantor, as security for
the payment and performance in full of the Secured Obligations, does hereby
create and grant to the Trustee (and its successors and assigns), for the
benefit of the Secured Parties (and their successors and assigns), a security
interest in and lien on all of the New Grantor's right, title and interest in
and to the Collateral (as defined in the Security Agreement) of the New Grantor.
Each reference to a "Grantor" in the Security Agreement shall be deemed to
include the New Grantor. The Security Agreement is hereby incorporated herein by
reference.
Section 2. The New Grantor represents and warrants to the Trustee and
the other Secured Parties that (i) this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, (ii) set forth on the Schedules
attached hereto are true and complete schedules of all of the information that
would have been required to have been delivered by or on behalf of the New
Grantor pursuant to the Security Agreement and the Schedules thereto if the New
Grantor had been originally named in the Security Agreement, and (iii) the
representations and warranties made by it as a Grantor under the Security
Agreement are true and correct on and as of the date hereof giving effect to the
applicable information referred to in clause (ii) of this Section.
Section 3. This Supplement may be executed in counterparts (and by each
party hereto on a
different counterpart), each of which shall constitute an original, but both of
which, when taken together, shall constitute but one contract. This Supplement
shall become effective when the Trustee shall have received counterparts of this
Supplement that, when taken together, bear the signatures of the New Grantor and
the Trustee. Delivery of an executed counterpart of this Supplement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart of this Supplement.
Section 4. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
Section 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 6. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 7. All communications and notices hereunder shall be in writing
and given as provided in Section 16 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth in the applicable Schedule hereto, with a copy to the
Company.
Section 8. The New Grantor agrees to reimburse the Trustee for its
out-of-pocket expenses in connection with this Supplement, including the fees,
disbursements and other charges of counsel for the Trustee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the New Grantor and the Trustee have duly
executed this Supplement No. __ to the Security Agreement as of the day and year
first above written.
[NAME OF NEW GRANTOR]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[ATTACH SCHEDULES CORRESPONDING TO THE
SCHEDULES TO THE SECURITY AGREEMENT]
EXHIBIT B
TO PLEDGE AND SECURITY AGREEMENT
FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT
-----------------------------------------
(attached)
