Exhibit 10.5
EXECUTION COPY
AMENDED AND RESTATED SECURITY AGREEMENT dated as of December 5, 2003,
among ADVANCE STORES COMPANY, INCORPORATED, a Virginia corporation (the
“Borrower”), ADVANCE AUTO PARTS, INC., a Delaware corporation (“Holdings”),
each subsidiary of the Borrower listed on Schedule I hereto (each such
subsidiary individually a “Subsidiary Guarantor” and collectively, the
“Subsidiary Guarantors”; the Subsidiary Guarantors, Holdings and the Borrower
are referred to collectively herein as the “Grantors”) and JPMORGAN CHASE
BANK, a New York banking corporation (“JPMCB”), as collateral agent (in such
capacity, the “Collateral Agent”) for the Secured Parties (as defined herein).
Reference is made to (a) the Amended and Restated Credit Agreement dated as of
December 5, 2003 (as further amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, Holdings, the lenders from time to time party thereto (the “Lenders”)
and JPMCB, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”),
Collateral Agent and as issuing bank (in such capacity, the “Issuing Bank”), (b) the Guarantee Agreement
dated as of November 28, 2001 (as amended, supplemented or otherwise modified from time to time, the
“Guarantee Agreement”), among the Subsidiary Guarantors, Holdings and the Collateral Agent, and (c) the
Security Agreement dated as of November 28, 2001 (the “Existing Security Agreement”), among the parties
hereto as in effect the date hereof.
The parties desire to amend and restate the Existing Security Agreement to provide for
the DVA Obligations to be secured by the Collateral pari passu with the other Obligations. Accordingly,
the parties hereto agree by execution and delivery of this Agreement that the Existing Security
Agreement will be deemed to be amended and restated as provided herein.
The Lenders have agreed to make Loans to the Borrower, and the Issuing Bank has agreed
to issue Letters of Credit for the account of the Borrower, pursuant to, and upon the terms and subject
to the conditions specified in, the Credit Agreement. Each of Holdings and the Subsidiary Guarantors
has agreed to guarantee, among other things, all the obligations of the Borrower under the Credit
Agreement. DVA Creditors may from time to time agree to purchase Designated Vendor Accounts. The
obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit, and the
agreement from time to time of DVA Creditors to purchase Designated Vendor Accounts, are conditioned
upon, among other things, the execution and delivery by the Grantors of an agreement in the form hereof
to secure (a) the due and punctual payment of (i) the principal of and premium, 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 Loans, when
and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrower under the Credit Agreement in respect
of any Letter of Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral, and (iii) all other monetary
obligations, including fees, 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 Loan Parties to the Secured Parties under the Credit Agreement and
the other Loan Documents, (b) the due and punctual performance of all covenants, agreements, obligations
and liabilities of the Loan Parties under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all obligations in respect of overdrafts
and related liabilities owed to JPMCB, any Affiliate thereof, the Administrative Agent or the Collateral
Agent arising from or in connection with treasury, depositary or cash management services or in
connection with any automated clearinghouse transfer of funds, (d) unless otherwise agreed to in writing
by the applicable Lender party thereto, the due and punctual payment and performance of all monetary
obligations of the Borrower under each Hedging Agreement entered into with any counterparty that was a
Lender (or an Affiliate of a Lender) at the time such Hedging Agreement was entered into and (e) the due
and punctual payment of all DVA Obligations (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), when and as due (all the monetary obligations described in the preceding
clauses (a) through (e) being collectively called the “Obligations”).
Accordingly, the Grantors and the Collateral Agent, on behalf of itself and each
Secured Party (and each of their respective successors or assigns), hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings specified in the Credit Agreement. All terms defined
in the New York UCC (as defined herein) and not defined in this Agreement shall have the meanings
specified therein; the term “instrument” shall have the meaning specified in Article 9 of the New York
UCC.
SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the following terms shall
have the following meanings:
“Account Debtor” shall mean any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.
“Cash Concentration Account” shall mean the cash concentration account maintained by
the Borrower with the Cash Concentration Bank in Roanoke, Virginia (account number 2001000059003), to
which the Borrower will cause to be transferred, on each Business Day, amounts deposited in the
Collection Deposit Accounts on such Business Day.
“Cash Concentration Bank” shall mean the “Cash Concentration Bank” as defined in the
Cash Concentration Letter Agreement.
“Cash Concentration Letter Agreement” shall mean the agreement among the Cash
Concentration Bank, the Borrower and the Collateral Agent, in substantially the form of Annex 1-A
hereto, pursuant to which the Borrower shall maintain the Cash Concentration Account, as such Cash
Concentration Letter Agreement may be amended, modified or supplemented from time to time.
“Collateral” shall mean all right, title or interest now owned or at anytime hereafter
acquired by any Grantor or in which such Grantor now has or at any time in the future may acquire any
right, title or interest in all (a) Accounts, (b) Chattel Paper, (c) Deposit Accounts (including the
Cash Concentration Account and the Collection Deposit Accounts), (d) Documents, (e) Equipment,
(f) General Intangibles, (g) Instruments, (h) Inventory, (i) Investment Property, (j) all books and
records pertaining to the foregoing and (k) to the extent not otherwise included, all Proceeds and
products of any of the foregoing and all collateral security and guarantees given by any Person with
respect to any of the foregoing; provided that the term “Collateral” shall not include any property of
the type specified in clauses (c) and (f) above if the assignment, granting, creation, mortgage, pledge,
hypothecation or transfer thereof by such Grantor hereunder, would violate the terms of, or otherwise
constitute a default or termination or similar event under any document or instrument to which any Loan
Party is a party (other than those documents or instruments between or among the Loan Parties and/or
their Affiliates only) relating to the ownership of, or pertaining to any rights or interests held in
such property, provided that (i) the terms to be violated or default or termination or similar event
that would result in the event of the granting of the Lien hereunder, are consistent with such Loan
Party’s current business practice in connection with the type of document or instrument to which they
relate and (ii) each Loan Party shall use its best efforts to ensure that the assignment, granting,
creation, mortgage, pledge, hypothecation or transfer of any such property by any Grantor will not
violate the terms of, or otherwise constitute a default or termination or similar event under any
document or instrument to which such Loan Party is a party.
“Collection Deposit Account” shall mean each collection deposit account maintained by
the Borrower and the Subsidiary Guarantors pursuant to a Collection Deposit Letter Agreement (and prior
to the execution of a Collection Deposit Letter Agreement with respect to such account, any other
collection deposit accounts maintained by the Borrower and the Subsidiary Guarantors) into which the
Borrower and the Subsidiary Guarantors will deposit all Daily Receipts.
“Collection Deposit Letter Agreement” shall mean an agreement among the Borrower, any
Lender or other bank and the Collateral Agent, in substantially the form of Annex 1-B hereto, pursuant
to which, the Borrower and the Subsidiary Guarantors shall maintain a Collection Deposit Account, as
such Collection Deposit Agreement may be amended, modified or supplemented from time to time.
“Copyright License” shall mean any written agreement, 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 such Grantor under any
Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such
agreement.
“Copyrights” shall mean all of the following now owned or hereafter acquired by any
Grantor: (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, and (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
United States Copyright Office, including those listed on Schedule II.
“Credit Agreement” shall have the meaning assigned to such term in the preliminary
statement of this Agreement.
“Daily Receipts” shall mean all amounts received by the Borrower and the Subsidiary
Guarantors, whether in the form of cash, checks, any moneys received or receivable in respect of charges
made by means of credit cards, and other negotiable instruments, in each case as a result of the sale of
Inventory.
“Documents” shall mean all instruments, files, records, ledger sheets and documents
covering or relating to any of the Collateral.
“General Intangibles” shall mean all choses in action and causes of action and all
other assignable intangible personal property of any Grantor of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Grantor, including limited partnership or limited
liability company interests, corporate or other business records, indemnification claims, contract
rights (including rights under leases, whether entered into as lessor or lessee, Hedging Agreements and
other agreements), Intellectual Property, goodwill, registrations, franchises, 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. Notwithstanding the foregoing,
the term “General Intangibles” shall not include any accounts receivable sold or created pursuant to any
Receivables Program, except to the extent the same are transferred back or charged back to a Grantor
pursuant to the applicable documents governing such Receivables Program.
“Intellectual Property” shall mean 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, trade secrets, confidential or proprietary technical
and business information, know-how, show-how or other data or information, software and databases and
all embodiments or fixations thereof and related documentation, registrations and franchises, and all
additions, improvements and accessions to, and books and records describing or used in connection with,
any of the foregoing.
“License” shall mean any Patent License, Trademark License, Copyright License or other
license or sublicense to which any Grantor is a party, including those listed on Schedule III (other
than those license agreements in existence on the date hereof and listed on Schedule III and those
license agreements entered into after the date hereof, which by their terms prohibit assignment or a
grant of a security interest by such Grantor as licensee thereunder).
“New York UCC” shall mean the Uniform Commercial Code as from time to time in effect
in the State of New York.
“Obligations” shall have the meaning assigned to such term in the preliminary
statement of this Agreement.
“Patent License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on which a Patent, now or
hereafter owned by any 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” shall mean all of the following now owned or hereafter acquired by any
Grantor: (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 United States Patent and Trademark
Office or any similar offices in any other country, including those listed on Schedule IV, and (b) all
reissues, continuations, divisions, continuations-in-part, 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.
“Perfection Certificate” shall mean a certificate substantially in the form of Annex 2
hereto, completed and supplemented with the schedules and attachments contemplated thereby, and duly
executed by a Financial Officer of the Borrower.
“Proceeds” shall have the meaning specified in Section 9-102 of the New York UCC.
“Secured Parties” shall mean (a) the Lenders, (b) the Administrative Agent, (c) the
Collateral Agent, (d) the Issuing Bank, (e) each counterparty to a Hedging Agreement entered into with
the Borrower if such counterparty was a Lender (or an affiliate of a Lender) at the time the Hedging
Agreement was entered into, (f) the beneficiaries of each indemnification obligation undertaken by any
Grantor under any Loan Document, (g) the DVA Creditors and (h) the successors and assigns of each of the
foregoing.
“Security Interest” shall have the meaning assigned to such term in Section 2.01.
“Trademark License” shall mean any written agreement, 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” shall mean all of the following now owned or hereafter acquired by any
Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, 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 United
States 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 V, (b) all goodwill associated therewith or symbolized thereby and (c) all other
assets, rights and interests that uniquely reflect or embody such goodwill.
SECTION 1.03. Rules of Interpretation. The rules of interpretation specified in Section 1.03 of the
Credit Agreement shall be applicable to this Agreement.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment or performance, as the case may be, in
full of the Obligations, each Grantor hereby grants, mortgages, pledges, hypothecates and transfers to
the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and
hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in, all of such Grantor’s right, title and interest now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or any time in the future
may acquire any right, title or interest, in, to and under the Collateral (the “Security Interest”).
Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to
file in any relevant jurisdiction any initial financing statements (including fixture filings), and
amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of
each applicable jurisdiction for the filing of any financing statement or amendment, including
(a) whether the Grantor is an organization, the type of organization and any organizational
identification number issued to the Grantor and (b) in the case of a financing statement filed as a
fixture filing or covering Collateral constituting minerals or the like to be extracted or timber to be
cut, a sufficient description of the real property to which such Collateral relates. The Grantor agrees
to provide such information to the Collateral Agent promptly upon request. Each Grantor also ratifies
its authorization for the Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.
The Collateral Agent is further authorized to file filings with the United States
Patent and Trademark Office or United States 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 Grantor, without the signature of any
Grantor, and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security Interest is granted as security only and
shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any
obligation or liability of any Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to the Collateral Agent and
the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid rights in and title to the
Collateral with respect to which it has purported to grant a Security Interest hereunder and has full
power and authority to grant to the Collateral Agent the Security Interest in such Collateral pursuant
hereto and to execute, deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other Person other than any consent or approval which
has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal name of each Grantor, is
correct and complete in all material respects. Fully executed Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Collateral have been delivered to the Collateral Agent for
filing in each governmental, municipal or other office specified in Schedule 6 to the Perfection
Certificate, which are all the filings, recordings and registrations (other than filings required to be
made in the United States Patent and Trademark Office and the United States Copyright Office in order to
perfect the Security Interest in Collateral consisting of United States Patents, Trademarks and
Copyrights) that are necessary to publish notice of and protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral Agent (for the ratable benefit
of the Secured Parties) in respect of all Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or amendments.
(b) Each Grantor represents and warrants that fully executed security agreements in the form hereof
and containing a description of all Collateral consisting of Intellectual Property with respect to
United States Patents and United States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights have been delivered to
the Collateral Agent for recording by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 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 Collateral Agent (for the benefit of the Secured Parties) in respect
of all Collateral consisting of Patents, Trademarks and United States registered Copyrights 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 filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than the financing statements referred to above in Section 3.02(a)
and 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).
SECTION 3.03. Validity of Security Interest. The Security Interest constitutes (a) a legal and
valid security interest in all the Collateral securing the payment and performance of the Obligations,
(b) subject to the filings described in Section 3.02 above, a perfected security interest in all
Collateral in which 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 Uniform Commercial Code or other applicable law in such
jurisdictions and (c) a security interest that shall be perfected in all Collateral in which a security
interest may be perfected upon the receipt and recording of this Agreement with the United States Patent
and Trademark Office and the United States Copyright Office, as applicable, within the three month
period (commencing as of the date hereof) pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C.
§ 205 and otherwise as may be required pursuant to the laws of any other necessary jurisdiction. The
Security Interest is and shall be prior to any other Lien on any of the Collateral, other than Liens
expressly permitted to be prior to the Security Interest pursuant to Section 6.02 of the Credit
Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the Grantors free and clear of any
Lien, except for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. The
Grantor has not filed or consented to the filing of (a) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any Collateral, (b) any
assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument
covering any Collateral with the United States Patent and Trademark Office or the United States
Copyright Office or (c) any assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering any Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment, security agreement or similar
instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement. None of the Grantors holds any commercial tort claim except as
indicated on the Perfection Certificate.
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records; Place of Business. (a) Each Grantor
agrees promptly to notify the Collateral Agent in writing of any change (i) in its corporate name,
(ii) in the location of its chief executive office, its principal place of business, any office in which
it maintains books or records relating to Collateral owned by it or any office or facility at which
Collateral owned by it is located (including the establishment of any such new office or facility) other
than with respect to Collateral (A) consisting of goods in transit between facilities, whether in
vehicles owned by the applicable Grantor or on common carriers and (B) located in temporary warehousing
which will remain in such warehousing for no longer than one month, (iii) in its identity or type of
organization or corporate structure, (iv) in its Federal Taxpayer Identification Number or
organizational identification number, as applicable, or (v) in its jurisdiction of organization. Each
Grantor agrees promptly to provide the Collateral Agent with certified organizational documents
reflecting any of the changes described in the preceding sentence. Each Grantor agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have been made under the
Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at
all times following such change to have a valid, legal and perfected first priority security interest in
all the Collateral. Each Grantor agrees promptly to notify the Collateral Agent if any material portion
of the Collateral owned or held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate
records with respect to the Collateral owned by it 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 such Grantor is engaged, but in any event to include complete accounting records
indicating all payments and proceeds received with respect to any part of the Collateral, and, at such
time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the
Collateral Agent a duly certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all Collateral.
SECTION 4.02. Periodic Certification. Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to Section 5.01 of the Credit Agreement,
the Borrower shall deliver to the Collateral Agent a certificate executed by a Financial Officer of the
Borrower (a) setting forth the information required pursuant to this Section 2 of the Perfection
Certificate or confirming that there has been no change in such information since the date of such
certificate or the date of the most recent certificate delivered pursuant to this Section 4.02 and
(b) certifying that all Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the Collateral have been filed of record
in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to
clause (a) above to the extent necessary to protect and perfect the Security Interest for a period of
not less than 18 months after the date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period). Each certificate delivered pursuant to this
Section 4.02 shall identify in the format of Schedule II, III, IV or V, as applicable, all Patents,
Trademarks, Copyrights and Licenses of any Grantor in existence on the date thereof and not then listed
on such Schedules or previously so identified to the Collateral Agent.
SECTION 4.03. Protection of Security. Each Grantor shall, at its own cost and expense, take any and
all actions necessary to defend title to the Collateral against all Persons and to defend the Security
Interest of the Collateral Agent in the Collateral and the priority thereof against any Lien not
expressly permitted pursuant to Section 6.02 of the Credit Agreement.
SECTION 4.04. Further Assurances. Each Grantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents and take all such actions
as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby, including the payment of any
fees and taxes required in connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in connection with any of
the Collateral shall be or become evidenced by any promissory note or other instrument, such note or
instrument shall be promptly pledged and delivered to the Collateral Agent, duly endorsed in a manner
satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby authorizes the
Collateral Agent, with prompt notice thereof to the Grantors, to supplement this Agreement by
supplementing Schedule II, III, IV or V hereto or adding additional schedules hereto to specifically
identify any asset or item that may constitute Copyrights, Licenses, Patents or Trademarks; provided,
however, that any Grantor shall have the right, exercisable within 10 days after it has been notified by
the Collateral Agent of the specific identification of such Collateral, to advise the Collateral Agent
in writing of any inaccuracy of the representations and warranties made by such Grantor hereunder with
respect to such Collateral. Each Grantor agrees that it will 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 it has been notified by the
Collateral Agent of the specific identification of such Collateral.
SECTION 4.05. Inspection and Verification. The Collateral Agent and such Persons as the Collateral
Agent may reasonably designate shall have the right, subject to compliance with Section 5.09 of the
Credit Agreement, to inspect the Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Collateral is located, to discuss the
Grantors’ affairs with the officers of the Grantors and their 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, including, in the case of Accounts or Collateral in the
possession of any third person, by contacting Account Debtors or the third person possessing such
Collateral for the purpose of making such a verification; provided, however, that representatives of the
Grantors shall be entitled to participate in such discussions. The Collateral Agent shall have the
absolute right to share any information it gains from such inspection or verification with any Secured
Party.
SECTION 4.06. Taxes; Encumbrances. At its option and after notice to the applicable Grantor, the
Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or
other encumbrances at any time levied or placed on the Collateral and not permitted pursuant to
Section 6.02 of the Credit Agreement, and may pay for the maintenance and preservation of the Collateral
to the extent any Grantor fails to do so as required by the Credit Agreement or this Agreement, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or
any expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided, however,
that nothing in this Section 4.06 shall be interpreted as excusing any Grantor from the performance of,
or imposing any obligation on the Collateral Agent or any Secured Party 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 Loan
Documents.
SECTION 4.07. Assignment of Security Interest. 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, such Grantor shall promptly assign such security interest to the Collateral 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.
SECTION 4.08. Continuing Obligations of the Grantors. Each Grantor 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, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral
Agent and the Secured Parties from and against any and all liability for such performance.
SECTION 4.09. Use and Disposition of Collateral. None of the Grantors shall make or permit to be
made an assignment, pledge or hypothecation of the Collateral or shall grant any other Lien in respect
of the Collateral, except as expressly permitted by Section 6.02 of the Credit Agreement. None of the
Grantors shall make or permit to be made any transfer of the Collateral and each Grantor shall remain at
all times in possession of the Collateral owned by it, except that (a) Inventory, obsolete or worn out
assets, Permitted Investments and other assets having a fair market value (alone or together with other
related assets sold or to be sold) of less than $25,000 may be sold, in each case in the ordinary course
of business and (b) unless and until the Collateral Agent shall notify the Grantors that an Event of
Default shall have occurred and be continuing and that during the continuance thereof the Grantors shall
not sell, convey, lease, assign, transfer or otherwise dispose of any Collateral (which notice may be
given by telephone if promptly confirmed in writing), the Grantors may use and dispose of the Collateral
in any lawful manner not inconsistent with the provisions of this Agreement, the Credit Agreement or any
other Loan Document. Without limiting the generality of the foregoing, each Grantor agrees that it
shall not permit any Inventory 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 the Inventory subject to the Security
Interest and the instructions of the Collateral Agent and to waive and release any Lien held by it with
respect to such Inventory, whether arising by operation of law or otherwise.
SECTION 4.10. Limitation on Modification of Accounts. None of the Grantors will, without the
Collateral Agent’s prior written consent, grant any extension of the time of payment of any of the
Accounts included in the Collateral, 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.
SECTION 4.11. Insurance. The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with
Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such
Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, 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 any 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 Collateral Agent 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 Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 4.11,
including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be
payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Obligations
secured hereby.
SECTION 4.12. Legend. Each Grantor shall legend, in form and manner satisfactory to the Collateral
Agent, its Chattel Paper and its books, records and documents evidencing or pertaining thereto with an
appropriate reference to the fact that such Chattel Paper have been assigned to the Collateral Agent for
the benefit of the Secured Parties and that the Collateral Agent has a security interest therein.
SECTION 4.13. Covenants Regarding Patent, Trademark and Copyright Collateral. (a) Each Grantor
agrees that it will not, nor will it permit any of its licensees to, do any act, or omit to do any act,
whereby any Patent which is material to the conduct of such Grantor’s business may become invalidated or
dedicated to the public, and agrees that it shall continue to xxxx any products covered by a Patent with
the relevant patent number as necessary and sufficient to establish and preserve its maximum rights
under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its sublicensees) will, 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 maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of
any third party rights.
(c) Each Grantor (either itself or through licensees) will, 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.
(d) Each Grantor shall notify the Collateral Agent immediately if it knows or has reason to know
that any Patent, Trademark or Copyright material to the conduct of its business may become abandoned,
lost or dedicated to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in the United States Patent
and Trademark Office, United States Copyright Office or any court or similar office of any country)
regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the
same, or to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any agent, employee, licensee or
designee, file an application for any Patent, Trademark or Copyright (or for the registration of any
Trademark or Copyright) with the United States Patent and Trademark Office, United States 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, unless it promptly informs the Collateral Agent, and, upon request
of the Collateral Agent, executes and delivers any and all agreements, instruments, documents and papers
as the Collateral Agent may request to evidence the Collateral Agent’s security interest in such Patent,
Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent 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.
(f) Each Grantor will take all necessary steps that are consistent with the practice in any
proceeding before the United States Patent and Trademark Office, United States 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
any 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 cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any Collateral consisting of a Patent,
Trademark or Copyright material to the conduct of any Grantor’s business has been or is about to be
infringed, misappropriated or diluted by a third party, such Grantor promptly shall notify the
Collateral Agent and 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.
(h) Upon and during the continuance of an Event of Default, each Grantor shall use its best efforts
to obtain all requisite consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all of such Grantor’s right, title and interest
thereunder to the Collateral Agent or its designee.
(i) Each Grantor shall ensure that fully executed security agreements in the form hereof and
containing a description of all Collateral consisting of Intellectual Property shall have been received
and recorded within three months after the execution of this Agreement with respect to United States
Patents, United States registered Trademarks (and Trademarks for which United States registration
applications are pending) and United States registered Copyrights have been delivered to the Collateral
Agent for recording by the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 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 Collateral Agent (for the ratable benefit of the Secured Parties) in respect of all
Collateral consisting of Patents, Trademarks and registered Copyrights 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 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 of this amendment and restatement).
SECTION 4.14. Other Actions. In order to further insure the attachment, perfection and priority of,
and the ability of the Collateral Agent to enforce, the Collateral Agent’s security interest in the
Collateral, each Grantor agrees, in each case at such Grantor’s own expense, to take the following
actions with respect to the following Collateral:
(a) Instruments and Tangible Chattel Paper. If any Grantor shall at any time hold or acquire any
Instruments or Tangible Chattel Paper (other than such Instruments or Tangible Chattel Paper held in the
ordinary course of such Grantor’s business and in an aggregate amount not exceeding $100,000), such
Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time
to time specify.
(b) Investment Property. If any Grantor shall at any time hold or acquire any certificated
securities (other than any such certificated securities having an aggregate fair market value not in
excess of $50,000 and held in the ordinary course of such Grantor’s business), such Grantor shall
forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments
of transfer or assignment duly executed in blank as the Collateral Agent may from time to time specify.
If any securities now or hereafter acquired by any Grantor are uncertificated and are issued to such
Grantor or its nominee directly by the issuer thereof, such Grantor shall promptly notify the Collateral
Agent thereof and, at the Collateral Agent’s request and option, pursuant to an agreement in form and
substance satisfactory to the Collateral Agent, either (a) cause the issuer to agree to comply with
instructions from the Collateral Agent as to such securities, without further consent of any Grantor or
such nominee, or (b) arrange for the Collateral Agent to become the registered owner of the securities.
If any securities, whether certificated or uncertificated, or other investment property now or hereafter
acquired by any Grantor are held by such Grantor or its nominee through a securities intermediary or
commodity intermediary, such Grantor shall promptly notify the Collateral Agent thereof and, at the
Collateral Agent’s request and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) cause such securities intermediary or (as the case may
be) commodity intermediary to agree to comply with entitlement orders or other instructions from the
Collateral Agent to such securities intermediary as to such securities or other investment property, or
(as the case may be) to apply any value distributed on account of any commodity contract as directed by
the Collateral Agent to such commodity intermediary, in each case without further consent of any Grantor
or such nominee, or (ii) in the case of Financial Assets or other Investment Property held through a
securities intermediary, arrange for the Collateral Agent to become the entitlement holder with respect
to such investment property, with the Grantor being permitted, only with the consent of the Collateral
Agent, to exercise rights to withdraw or otherwise deal with such investment property. The Collateral
Agent agrees with each of the Grantors that the Collateral Agent shall not give any such entitlement
orders or instructions or directions to any such issuer, securities intermediary or commodity
intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by
any Grantor, unless an Event of Default has occurred and is continuing, or, after giving effect to any
such investment and withdrawal rights would occur. The provisions of this paragraph shall not apply to
any financial assets credited to a securities account for which the Collateral Agent is the securities
intermediary.
(c) Electronic Chattel Paper and Transferable Records. If any Grantor at any time holds or
acquires an interest in any electronic chattel paper or any “transferable record,” as that term is
defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in
§ 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, such Grantor
shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, shall
take such action as the Collateral Agent may reasonably request to vest in the Collateral Agent control
under UCC §9-105 of such electronic chattel paper or control under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, §16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Collateral
Agent agrees with such Grantor that the Collateral Agent will arrange, pursuant to procedures
satisfactory to the Collateral Agent and so long as such procedures will not result in the Collateral
Agent’s loss of control, for the Grantor to make alterations to the electronic chattel paper or
transferable record permitted under UCC §9-105 or, as the case may be, Section 201 of the Federal
Electronic Signatures in Global and National Commerce Xxx xx §00 of the Uniform Electronic Transactions
Act for a party in control to allow without loss of control, unless an Event of Default has occurred and
is continuing or would occur after taking into account any action by such Grantor with respect to such
electronic chattel paper or transferable record.
(d) Letter-of-credit Rights. If any Grantor is at any time a beneficiary (other than in the
ordinary course of its business and in respect of letters of credit in an aggregate amount not exceeding
$150,000) under a letter of credit now or hereafter issued in favor of such Grantor, such Grantor shall
promptly notify the Collateral Agent thereof and, at the request and option of the Collateral Agent,
such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) arrange for the issuer and any confirmed of such letter of credit to
consent to an assignment to the Collateral Agent of the proceeds of any drawing under the letter of
credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of the letter of
credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the
letter of credit are to be applied as provided in the Credit Agreement.
(e) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a commercial tort
claim for an amount exceeding $100,000, the Grantor shall promptly notify the Collateral Agent in a
writing signed by such Grantor of the brief details thereof and grant to the Collateral Agent in such
writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement,
with such writing to be in form and substance satisfactory to the Collateral Agent.
ARTICLE V
Collections
SECTION 5.01. Collection Deposit Accounts. (a) From and after the Effective Date, each Grantor
agrees to deposit all Daily Receipts into the Collection Deposit Accounts on a daily basis.
(b) From and after the Effective Date, the Grantors agree to transfer, or cause to be transferred,
on each Business Day, all amounts on deposit in any Collection Deposit Account to the Cash Concentration
Account other than amounts necessary (i) for the payment of routine bank service fees, (ii) for change
orders and (iii) to reconcile deposit balances.
(c) Unless and until the happening of an Event of Default, the Borrower may at any time withdraw
any of the funds contained in the Cash Concentration Account for use, subject to the provisions of the
Credit Agreement, for general corporate purposes.
(d) Upon the occurrence of an Event of Default, each Collection Deposit Account and the Cash
Concentration Account will, without any further action taken on the part of any Grantor or the
Collateral Agent, automatically convert into a closed account under the exclusive dominion and control
of the Collateral Agent in which funds are held subject to the rights of the Collateral Agent
hereunder. No Grantor shall thereafter have any right or power to withdraw any funds from any
Collection Deposit Account or the Cash Concentration Account without the prior written consent of the
Collateral Agent.
(e) In the event that a Grantor directly receives any remittances on Accounts included in the
Collateral, notwithstanding the arrangements for payment directly into the Collection Deposit Accounts
pursuant to Section 5.02, such remittances shall be held for the benefit of the Collateral Agent and the
Lenders and shall be segregated from other funds of such Grantor, subject to the Security Interest
granted hereby, and such Grantor shall cause such remittances and payments to be deposited into a
Collection Deposit Account or the Cash Concentration Account as soon as practicable after such Grantor’s
receipt thereof.
(f) All payments by any Grantor into any Cash Deposit Account or the Cash Collateral Account
pursuant to this Section 5.01, whether in the form of cash, checks, notes, drafts, bills of exchange,
money orders or otherwise, in the relevant Cash Deposit Account or Cash Collateral Account in precisely
the form in which received (but with any endorsements of such Grantor necessary for deposit or
collection), and until they are so deposited such payments shall be held in trust by such Grantor for
and as the property of the Collateral Agent.
SECTION 5.02. Collections. (a) From and after the Effective Date, each Grantor agrees to notify
and direct promptly each Account Debtor and every other Person obligated to make payments with respect
to the Accounts included in the Collateral to make all such payments to a Collection Deposit Account
established by it. Each Grantor shall use all reasonable efforts to cause each Account Debtor and every
other Person identified in the preceding sentence to make all payments with respect to the Accounts
included in the Collateral directly to such Collection Deposit Account.
(b) Without the prior written consent of the Collateral Agent, no Grantor shall, in a manner
adverse to the Lenders, change the general instructions given to Account Debtors in respect of payment
on Accounts to be deposited in any Collection Deposit Account. Until the Collateral Agent shall have
advised the Grantors to the contrary, each Grantor shall, and the Collateral Agent hereby authorizes
each Grantor to, enforce and collect all amounts owing on the Inventory and Accounts included in the
Collateral, for the benefit and on behalf of the Collateral Agent and the other Secured Parties;
provided, however, that such privilege may at the option of the Collateral Agent be terminated upon the
occurrence and during the continuance of any Event of Default.
SECTION 5.03. Power of Attorney. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such
Grantor’s true and lawful agent and attorney-in-fact, and in such capacity the Collateral Agent shall
have the right, with power of substitution for each Grantor and in each Grantor’s name or otherwise, for
the use and benefit of the Collateral Agent and the Secured Parties, upon the occurrence and during the
continuance of an Event of Default (a) 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 or
any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of any Grantor on any invoice or xxxx of
lading relating to any of the Collateral; (d) to send verifications of Accounts included in the
Collateral to any Account Debtor; (e) 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 all or any of the Collateral or to enforce any rights in respect of any Collateral; (f) to settle,
compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the
Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly
to the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with respect
to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to
carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were
the absolute owner of the Collateral for all purposes; provided, however, that nothing herein contained
shall be construed as requiring or obligating the Collateral Agent or any Secured Party to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent or any Secured Party, or to present or file any claim or notice, or to take any action
with respect to the Collateral or any part thereof 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 Collateral Agent or
any Secured Party with respect to the Collateral or any part thereof shall give rise to any defense,
counterclaim or offset in favor of any Grantor or to any claim or action against the Collateral Agent or
any Secured Party. It is understood and agreed that the appointment of the Collateral Agent as the
agent and attorney-in-fact of the Grantors for the purposes set forth above is coupled with an interest
and is irrevocable. The provisions of this Section shall in no event relieve any Grantor of any of its
obligations hereunder or under any other Loan Document with respect to the Collateral or any part
thereof or impose any obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any way limit the exercise
by the Collateral Agent or any Secured Party of any other or further right which it may have on the date
of this Agreement or hereafter, whether hereunder, under any other Loan Document, by law or otherwise.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Upon the occurrence and during the continuance of an Event of
Default, each Grantor agrees to deliver each item of Collateral to the Collateral Agent on demand, and
it is agreed that the Collateral Agent shall have the right to take any of or all the following actions
at the same or different times: (a) with respect to any Collateral consisting of Intellectual Property,
on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or
all such Collateral by the applicable Grantors to the Collateral Agent, or to license or sublicense,
whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any such
Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained), and (b) with or without legal process and with or without prior notice or
demand for performance, to take possession of the Collateral and without liability for trespass to enter
any premises where the Collateral may be located for the purpose of taking possession of or removing the
Collateral and, generally, to exercise any and all rights afforded to a secured party under the Uniform
Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Grantor
agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the Collateral, 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 Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at
any such sale (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 the 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 Collateral Agent 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 any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay 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.
The Collateral Agent shall give the Grantors 10 days’ written notice (which each
Grantor agrees is reasonable notice within the meaning of Section 9-504(3) of the Uniform Commercial
Code as in effect in the State of New York or its equivalent in other jurisdictions) of the Collateral
Agent’s intention to make any sale of Collateral. 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 the
Collateral, or portion thereof, 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 Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale,
the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral
Agent 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 Collateral
Agent may, without notice or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so
sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent 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 law,
private) sale made pursuant to this Section, any Secured Party may bid for or purchase, free (to the
extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any
Grantor (all said rights being also hereby waived and released to the extent permitted by law), the
Collateral or any part thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to such Secured Party from any Grantor as a credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to any Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be
entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to exercising the power of
sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose this Agreement and to sell the Collateral or any portion thereof 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 6.01 shall be deemed to
conform to the commercially reasonable standards as provided in Section 9-504(3) of the Uniform
Commercial Code as in effect in the State of New York or its equivalent in other jurisdictions.
SECTION 6.02. Application of Proceeds. The Collateral Agent 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 costs and expenses incurred by the Administrative
Agent or the Collateral Agent (in its capacity as such hereunder or under any other
Loan Document) in connection with such collection or sale or otherwise in connection
with this Agreement, any other Loan Document or any of the Obligations including all
court costs and the fees and expenses of its agents and legal counsel, the repayment
of all advances made by the Collateral Agent hereunder or under any other Loan
Document on behalf of any Grantor and any other costs or expenses incurred by the
Collateral Agent or the Administrative Agent in connection with the exercise of any
right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts so applied to
be distributed among the Secured Parties pro rata in accordance with the amounts of
the Obligations owed to them on the date of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds,
moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Collateral
Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the
receipt of the purchase money by the Collateral Agent 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 Collateral Agent or such officer or be answerable in any way for the misapplication thereof. For
purposes of making any payment hereunder in respect of any DVA Obligations, the Collateral Agent may
rely upon any statement or certificate presented to it by any Grantor or DVA Creditor (or any agent for
such DVA Creditor) with respect to the amount of such DVA Obligation, and any distribution by the
Collateral Agent of funds to any agent for any of the DVA Creditors shall be sufficient to discharge the
obligations of the Collateral Agent in respect of such DVA Obligations, and the Collateral Agent shall
not be required to see to the application of such funds by such agent.
SECTION 6.03. Grant of License to Use Intellectual Property. For the purpose of enabling the
Collateral Agent to exercise rights and remedies under this Article at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent 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. The use of such license by the Collateral Agent shall be exercised, at the option of the
Collateral Agent, 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 Collateral Agent in accordance
herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall (except as otherwise
expressly permitted herein) be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Guarantor shall be given to it at
its address or telecopy number set forth on Schedule I, with a copy to the Borrower.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral Agent hereunder, the
Security Interest and all obligations of the Grantors hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment
or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of
the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to,
or a discharge of, any Grantor in respect of the Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements, representations and warranties made
by any Grantor herein and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon by the Secured Parties
and shall survive the making by the Lenders of the Loans, and the execution and delivery to the Lenders
of any notes evidencing such Loans, regardless of any investigation made by the Lenders or on their
behalf, and shall continue in full force and effect until this Agreement shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall become effective as to any
Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the
Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective
successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the
other Secured Parties and their respective successors and assigns, except that no Grantor shall have the
right to assign or transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to
any Grantor without the approval of any other Grantor and without affecting the obligations of any other
Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this 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 or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their respective successors and
assigns.
SECTION 7.06. Collateral Agent’s Fees and Expenses; Indemnification. (a) Each Grantor jointly and
severally agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Collateral Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody or preservation of, or the sale of, collection from or other
realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform or observe any of
the provisions hereof.
(b) Without limitation of its indemnification obligations under the other Loan Documents, each
Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees
against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other charges of counsel, incurred by or
asserted against any of them arising out of, in any way connected with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation, investigation or
proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to the 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 such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional Obligations secured hereby
and by the other Security Documents. The provisions of this Section 7.06 shall remain operative and in
full force and effect regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity
or unenforceability of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any Lender. All amounts due under this
Section 7.06 shall be payable on written demand therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the Collateral Agent 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 Collateral Agent hereunder and of the Collateral Agent, the Issuing Bank, the
Administrative Agent and the Lenders under the other Loan Documents are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any provisions of this Agreement
or any other Loan Document or consent to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which given. No notice to or
demand on any Grantor in any case shall entitle such Grantor or any other Grantor to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor
or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any
consent required in accordance with Section 9.02 of the Credit Agreement or any Intercreditor Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL; APPOINTMENT OF RECEIVER. 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 AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein 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 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 7.11. SECTION 7.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when taken together shall
constitute but one contract (subject to Section 7.04), and shall become effective as provided in
Section 7.04. Delivery of an executed signature page to this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used herein are for the purpose of reference
only, are not part of this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each Grantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by 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 Agreement shall affect any right that the Collateral
Agent, the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or the other Loan Documents against any Grantor or its
properties in the courts of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process in the manner provided
for notices in Section 7.01. Nothing in this Agreement will affected the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 7.14. Termination. (a) This Agreement and the Security Interest shall terminate when all
the Obligations (other than the DVA Obligations and other than inchoate indemnification and
reimbursement rights) have been indefeasibly paid in full, the Lenders have no further commitment to
lend, the LC Exposure has been reduced to zero and the Issuing Bank has no further commitment to issue
Letters of Credit under the Credit Agreement, at which time the Collateral Agent shall execute and
deliver to the Grantors, at the Grantors’ expense, all Uniform Commercial Code termination statements
and similar documents which the Grantors shall reasonably request to evidence such termination. Any
execution and delivery of termination statements or documents pursuant to this Section 7.14 shall be
without recourse to or warranty by the Collateral Agent.
(b) A Subsidiary Guarantor shall automatically be released from its obligations hereunder and the
Security Interest in the Collateral of such Subsidiary Guarantor shall be automatically released in the
event that all the capital stock of such Subsidiary Guarantor shall be sold, transferred or otherwise
disposed of to a Person that is not an Affiliate of the Borrower in accordance with the terms of the
Credit Agreement; provided that the Lenders shall have consented to such sale, transfer or other
disposition (to the extent required by the Credit Agreement) and the terms of such consent did not
provide otherwise.
(c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted under the
Credit Agreement to any Person that is not a Grantor, or, upon the effectiveness of any written consent
to the release of the security interest granted hereby in any Collateral pursuant to Section 9.02(b) of
the Credit Agreement, the security interest in such Collateral shall be automatically released.
(d) The Collateral Agent shall, in connection with a financing contemplated by Section 6.01(a)(vi)
and 6.02(a)(v) of the Credit Agreement, at the request of the lender providing the financing,
(i) subordinate the security interest under this Agreement on the specific assets or improvement being
financed to the security interest of such lender pursuant to an intercreditor and/or subordination
agreement in form and substance reasonably satisfactory to such lender, the Administrative Agent and the
Grantor or (ii) release the Lien and security interest under this Agreement on the specific assets or
improvement being financed; provided that such Lien and security interest shall be reinstated upon the
repayment in full of the loans of such lender and the obligations of the Grantor to such lender arising
from or related to such financing secured by such assets or improvement and, in connection with such
reinstatement, the Grantors shall execute and deliver, at the Grantors’ expense, any Uniform Commercial
Code financing statements or other documents necessary to effect and evidence such reinstatement as may
be reasonably requested by the Collateral Agent. In connection with any subordination or release of
Lien and security interest pursuant to this Section 7.14(d), the Collateral Agent shall execute and
deliver, at the Grantors’ expense, any documents necessary to effect and evidence such subordination as
may be reasonably requested by the Grantors.
SECTION 7.15. Additional Grantors. Upon execution and delivery by the Collateral Agent and a
Subsidiary of Holdings of an instrument in the form of Annex 3 hereto, such Subsidiary shall become a
Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of any Grantor hereunder.
The rights and obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Agreement.
SECTION 7.16. Intercreditor Agreement. The rights hereunder with respect to the DVA Creditors and
the DVA Obligations are subject to the applicable Intercreditor Agreements.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day
and year first above written.
ADVANCE STORES COMPANY, INCORPORATED,
by
/s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: SVP-CFO, Assitant Secretary
ADVANCE AUTO PARTS, INC.,
by
/s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: SVP-CFO, Assitant Secretary
EACH SUBSIDIARY GUARANTOR LISTED ON SCHEDULE I
HERETO,
by
/s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: SVP-CFO, Assitant Secretary
JPMORGAN CHASE BANK, as Collateral Agent,
by
/s/ Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
SCHEDULE I
Subsidiary Guarantors
SCHEDULE II
Copyrights
SCHEDULE III
Licenses
SCHEDULE IV
Patents
SCHEDULE V
Trademarks
5
CASH CONCENTRATION LETTER AGREEMENT dated as of
[ ], among ADVANCE STORES COMPANY, INCORPORATED a
Virginia corporation (the “Borrower”), FIRST UNION NATIONAL BANK, a national
banking corporation (the “Cash Concentration Bank”), JPMORGAN CHASE BANK, a
New York banking corporation (“JPMCB”) as collateral agent (in such capacity,
the “Collateral Agent”) for the Secured Parties (as defined in the Security
Agreement referred to below).
Reference is made to the Amended and Restated Credit Agreement dated as of December 5,
2003 (as further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, Advance Auto Parts, Inc., a Delaware corporation (“Holdings”), the lenders from time
to time party thereto and JPMCB, as administrative agent for the Secured Parties.
A. The Borrower, Holdings, the Subsidiary Guarantors (as defined therein) (the Subsidiary
Guarantors, the Borrower and Holdings being collectively referred to as the “Grantors”) and the
Collateral Agent are parties to an Amended and Restated Security Agreement dated as of December 5, 2003
(as further amended, supplemented or otherwise modified from time to time, the “Security Agreement”).
Pursuant to the terms of the Security Agreement, the Grantors have granted to the Collateral Agent, for
the benefit of the Secured Parties, a security interest in the Grantors’ Accounts and other Collateral,
to secure the payment and performance of the Obligations. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement.
B. The Cash Concentration Bank has agreed to act as collection sub-agent of the Collateral Agent
to receive (a) amounts transferred to the Cash Concentration Account (as defined below) (such amounts,
the “Transferred Receipts”) and (b) payments on the Accounts included in the Collateral.
C. The parties hereto desire to define hereunder certain rights and obligations among them with
respect to the appointment of the Cash Concentration Bank.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. The Collateral Agent hereby appoints the Cash Concentration Bank as its collection sub-agent
under the Security Agreement and authorizes the Cash Concentration Bank, on the terms and subject to the
conditions set forth herein, to receive and hold on deposit (a) Transferred Receipts and (b) payments on
the Accounts included in the Collateral.
2. Prior to or contemporaneously with the execution and delivery by the Cash Concentration Bank of
this Agreement, and for the purposes of this Agreement, the Cash Concentration Bank has established and
will (except as otherwise provided in paragraph 12 below) maintain a cash concentration account in First
Union National Bank (account number 2001000059003) in the name of the Borrower (the “Cash Concentration
Account”). The Cash Concentration Bank shall deposit in the Cash Concentration Account all Transferred
Receipts received by the Cash Concentration Bank and all payments received by the Cash Concentration
Bank in respect of the Accounts included in the Collateral. The Cash Concentration Bank agrees to give
the Collateral Agent prompt notice if the Cash Concentration Bank receives notice that the Cash
Concentration Account is subject to any writ, judgment, warrant of attachment, execution or similar
process. As security for the payment and performance of the Obligations, the Borrower hereby pledges,
assigns and transfers to the Cash Concentration Bank, for the benefit of the Collateral Agent, and
hereby creates and grants to the Cash Concentration Bank, for the benefit of the Collateral Agent, a
security interest in the Cash Concentration Account and all property and assets held therein. The Cash
Concentration Bank acknowledges the security interest of the Collateral Agent for the benefit of the
Lenders in the Cash Concentration Account.
3. [The Cash Concentration Bank shall transmit all funds, if any, then on deposit in the Cash
Concentration Account at the end of each Business Day to the cash concentration account maintained by
the Borrower with First Union National Bank (account number 2001000059003); provided that funds on
deposit which are subject to collection shall be transmitted promptly upon collection.] The Collateral
Agent hereby authorizes the Cash Concentration Bank to permit the Borrower to make withdrawals from the
Cash Concentration Account, so long as the Cash Concentration Bank has not received prior written notice
from the Collateral Agent pursuant to the next succeeding sentence. Promptly upon receipt of written,
telex or telecopy notice from the Collateral Agent so directing the Cash Concentration Bank at any time
(which direction shall be given by the Collateral Agent only upon the occurrence and during the
continuation of an Event of Default and which notice shall be sent simultaneously to the Borrower),
except to the extent and subject to such terms as may be specified in such notice, the Cash
Concentration Bank shall no longer permit withdrawals from the Cash Concentration Account to be made by
the Borrower without the written consent of the Collateral Agent, and, if so directed in such notice,
shall promptly transmit to the Collateral Agent, at the office specified in such notice, all funds, if
any, then on deposit in the Cash Concentration Account (provided that funds on deposit that are subject
to collection shall be transmitted promptly upon collection). If so directed in such notice, the Cash
Concentration Bank shall deliver directly to the Collateral Agent at the office specified in such notice
all checks, drafts and other instruments for the payment of money relating to the Transferred Receipts
or Accounts included in the Collateral in the possession of the Cash Concentration Bank without
depositing such checks, drafts or other instruments in the Cash Concentration Account.
4. Upon the occurrence and during the continuation of an Event of Default, the Cash Concentration
Bank shall, if requested by the Collateral Agent, furnish the Collateral Agent with monthly statements,
in the form and manner typical for the Cash Concentration Bank, of amounts on deposit in, and amounts
withdrawn from, the Cash Concentration Account and such other information relating to the Cash
Concentration Account at such times as shall be reasonably requested by the Collateral Agent.
5. For purposes of this Agreement, any officer of the Collateral Agent shall be authorized to act,
and to give instructions and notice, for the purposes set forth in this Agreement on behalf of the
Collateral Agent hereunder.
6. The fees for the services of the Cash Concentration Bank shall be mutually agreed upon between
the Borrower and the Cash Concentration Bank. The Collateral Agent shall not have any responsibility or
liability for the payment of any such fee.
7. The Cash Concentration Bank may perform any of its duties hereunder by or through its agents,
officers or employees and shall be entitled to rely upon the advice of counsel as to its duties. The
Cash Concentration Bank shall not be liable to the Collateral Agent for any action required of the Cash
Concentration Bank under the terms of this Agreement, if such action was taken or omitted to be taken by
it in the absence of gross negligence or willful misconduct, nor shall the Cash Concentration Bank be
responsible to the Collateral Agent or the Borrower for the consequences of any oversight or error of
judgment or be answerable to the Collateral Agent for the same unless the same shall happen through its
gross negligence or wilful misconduct.
8. The Borrower consents to the appointment of the Cash Concentration Bank and agrees that it will
not withdraw, or request to withdraw, funds from the Cash Concentration Account upon the occurrence and
during the continuation of an Event of Default unless such withdrawal is consented to in writing by the
Collateral Agent.
9. The Cash Concentration Bank undertakes to perform only such duties as are expressly set forth
in this Agreement.
10. The Cash Concentration Bank accepts its obligations as set forth in this Agreement upon the
terms and conditions hereof, including the following, to all of which the Borrower and the Collateral
Agent agree:
(a) The Borrower shall promptly pay the Cash Concentration Bank the compensation, if any, to be
mutually agreed upon with the Borrower for all services rendered by the Cash Concentration Bank
in connection with this Agreement and to reimburse the Cash Concentration Bank for reasonable
out-of-pocket expenses (including counsel fees) incurred by the Cash Concentration Bank in
connection with the services rendered hereunder by the Cash Concentration Bank.
(b) The Borrower agrees to and does hereby indemnify and hold harmless the Cash Concentration Bank
from and against any loss, liability, claim, action, cost or expense incurred hereunder or
arising directly from its action as Cash Concentration Bank hereunder, except for any action or
omission caused by its gross negligence or wilful misconduct (collectively, a “Loss”), as well
as the costs and expenses of defending against any such claim. The Cash Concentration Bank
shall promptly notify the Borrower of the commencement of any claim giving rise to a potential
Loss and of the proceedings relating thereto. The Borrower may, at its option, undertake to
defend any such claim against the Cash Concentration Bank.
(c) The Cash Concentration Bank may consult with one or more legal counsel satisfactory to it, and
in no event shall it be liable for action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion of such counsel.
(d) The Cash Concentration Bank shall be protected from and shall incur no liability for or in
respect of any action taken or damage suffered by it in reliance upon any certification,
notice, direction, consent, affidavit, statement, or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the proper parties, and
the Cash Concentration Bank shall be under no duty whatsoever to inquire into or investigate
the authenticity, validity, accuracy or content of any such item.
(e) The Cash Concentration Bank shall have no responsibility, and shall incur no liability, with
respect to the validity of this Agreement or any document related hereto.
(f) The Cash Concentration Bank shall not be under any duty to give the items held by it hereunder
any greater degree of care than it gives its own similar property, shall not, unless separately
agreed to with the Borrower, be required to invest any funds held hereunder, and shall be under
no duty to take any action with respect to the funds held in the Cash Concentration Account,
except to keep the same safe and to release and deliver same in accordance with this
Agreement. Funds held hereunder shall not earn or accrue interest, unless separately agreed to
with the Borrower. The Cash Concentration Bank’s duties and responsibilities shall be limited
to the specific duties stated in this Agreement.
(g) The Cash Concentration Bank shall act hereunder as a depository only and shall not be liable or
responsible in any manner for the sufficiency, correctness, genuineness or validity of any
certificate or information delivered to it, or for the identity or authority of any Person
making any deposit hereunder.
11. The Cash Concentration Bank shall be entitled to rely on the information furnished to it for
all purposes in connection with carrying out its duties and obligations as Cash Concentration Bank
hereunder, notwithstanding any knowledge that the Cash Concentration Bank may have (in any capacity)
that conflicts with the information so provided.
12. (a) The Cash Concentration Bank may at any time resign as such by giving written notice to the
Borrower and the Collateral Agent of such intention on its part, specifying the date on which its
desired resignation shall become effective; provided, however, that such date shall not be less than
45 days after the date on which such notice is given unless the Borrower and the Collateral Agent agree
to accept less notice.
(b) In the event that the Cash Concentration Bank shall resign or the Borrower shall replace the
Cash Concentration Bank (of which the Borrower shall notify the Collateral Agent in advance), the Cash
Concentration Bank or the Borrower, as applicable, will (i) immediately upon the effectiveness of such
resignation or replacement transmit to a successor collection subagent (which may be the Collateral
Agent and which, if other than the Collateral Agent, shall be a Lender and be reasonably acceptable to
the Collateral Agent) specified in writing by the Borrower to the Collateral Agent and the Cash
Concentration Bank (such successor collection sub-agent, the “Successor Cash Concentration Bank”), at
the office specified in writing by the Borrower to the Collateral Agent and the Cash Concentration Bank,
all funds, if any, then on deposit in, or otherwise to the credit of, the Cash Concentration Account,
provided that funds on deposit which are subject to collection shall be transmitted promptly upon
collection, (ii) deliver directly to the Successor Cash Concentration Bank at the office specified in
writing by the Borrower to the Collateral Agent and the Cash Concentration Bank all Transferred Receipts
and all checks, drafts and other instruments for the payment of money relating to the Accounts included
in the Collateral in the possession of the Cash Concentration Bank, without depositing such Transferred
Receipts or checks, drafts or other instruments in the Cash Concentration Account or any other account
and (iii) deliver any Transferred Receipts or payments relating to the Accounts included in the
Collateral received by the Cash Concentration Bank after such replacement, in whatever form received,
directly to the Successor Cash Concentration Bank at the office specified in writing to the Collateral
Agent and the Cash Concentration Bank.
13. The Collateral Agent agrees with the Borrower that it will provide the Cash Concentration Bank
with notice as specified in paragraph 3 of this Agreement only if an Event of Default has occurred and
is continuing under this Agreement or any other Loan Document.
14. The term of this Agreement shall extend from the date hereof until the earlier of (a) the date
on which all Obligations (other than the DVA Obligations) have been paid in full and (b) any date on
which the Cash Concentration Bank shall not be serving in its capacity hereunder as provided in
paragraph 12 above. The obligations of the Cash Concentration Bank contained in clause (b)(iii) of
paragraph 12 shall survive the termination of this Agreement.
15. All notices and communications hereunder shall be in writing (except where telephonic
instructions or notices are authorized herein) and shall be deemed to have been received and shall be
effective on the day on which delivered (including delivery by telex or facsimile) (a) in the case of
the Collateral Agent, addressed to JPMorgan Chase Bank, Loan and Agency Services Group, One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to the attention of Xxxxx Xxxxxx (Telecopy
No. (000) 000-0000) with a copy to JPMorgan Chase Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to the
attention of Xxxx Xxxxxx, (Telecopy No. (000) 000-0000); (b) in the case of the Cash Concentration Bank,
addressed to First Union National Bank, 000 X. Xxxxxxx Xxxxxx, XX-0, Xxxxxxxxx, X.X. 00000-0000 to the
attention of [ ] (Telecopy No. (000) 000-0000); and (c) in the case of the Borrower,
addressed to Advance Stores Company, Incorporated, 0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000 to the
attention of Chief Financial Officer (Telecopy No. (000) 000-0000).
16. The Cash Concentration Bank will not (except as expressly permitted hereby) assign or transfer
any of its rights or obligations hereunder (other than to the Collateral Agent) without the prior
written consent of the other parties hereto.
17. This Agreement may be amended only by a written instrument executed by the Collateral Agent,
the Cash Concentration Bank and the Borrower, acting by their representative officers thereunto duly
authorized.
18. Except as otherwise provided in the Credit Agreement with respect to rights of set-off
available to the Cash Concentration Bank in the event that it is also a Lender under the Credit
Agreement, the Cash Concentration Bank hereby irrevocably waives, effective upon the occurrence and
during the continuation of an Event of Default, any right to set-off against, or otherwise deduct from,
any funds then or at any time thereafter held in the Cash Concentration Account for any indebtedness or
other claim then or at any time thereafter owed by the Borrower to the Cash Concentration Bank.
19. Except to the extent the laws of the state of Virginia govern the Cash Concentration Account,
this Agreement shall be construed in accordance with and governed by the laws of the State of New York.
20. This Agreement (a) shall inure to the benefit of and be binding upon the Collateral Agent, the
Cash Concentration Bank, the Borrower and their respective successors and assigns and (b) may be
executed simultaneously in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers as of the date first above written.
ADVANCE STORES COMPANY, INCORPORATED,
by
---------------------------
Title:
JPMORGAN CHASE BANK, as Collateral Agent,
by
--------------------------
Title:
FIRST UNION NATIONAL BANK, as Cash Concentration
Bank,
by
-------------------------
Title:
6
Annex 1-B to
the Security Agreement
COLLECTION DEPOSIT LETTER AGREEMENT dated as of [ ], among
ADVANCE STORES COMPANY, INCORPORATED, a Virginia Corporation (the “Borrower”),
JPMORGAN CHASE BANK, a New York banking corporation (“JPMCB”), as collateral
agent (the “Collateral Agent”) for the Secured Parties (as defined in the
Security Agreement referred to below) and [ ], a [ ]
(the “Collection Deposit Bank”).
Reference is made to the Amended and Restated Credit Agreement dated as of December 5,
2003 (as further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, Advance Auto Parts, Inc., a Delaware corporation (“Holdings”), the Lenders from time
to time party thereto and JPMCB, as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”).
A. The Borrower, Holdings, the Subsidiary Guarantors (as defined therein) (the Subsidiary
Guarantors, the Borrower and Holdings being collectively referred to herein as the “Grantors”) and the
Collateral Agent are parties to an Amended and Restated Security Agreement dated as of December 5, 2003
(the “Security Agreement”). Pursuant to the terms of the Security Agreement, the Grantors have granted
to the Collateral Agent, for the benefit of the Secured Parties, a security interest in the Grantors’
Accounts and other Collateral, to secure the payment and performance of the Obligations. Capitalized
terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the
Security Agreement.
B. The Collection Deposit Bank has agreed to receive on behalf of the Grantors (a) Daily Receipts
and (b) payments on the Accounts included in the Collateral.
C. The parties hereto desire to define hereunder certain rights and obligations among them with
respect to the appointment of the Collection Deposit Bank.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. The Collateral Agent hereby authorizes the Collection Deposit Bank, on the terms and subject to
the conditions set forth herein, to receive (a) Daily Receipts and (b) payments on the Accounts included
in the Collateral.
2. Contemporaneously with the execution and delivery by the Collection Deposit Bank of this
Agreement, and for the purposes of this Agreement, the Collection Deposit Bank has established and shall
maintain (except as otherwise provided in paragraph 8 below) for the benefit of the Collateral Agent
upon the occurrence of an Event of Default one or more collection accounts in the name of the Borrower
(all such accounts, collectively, the “Collection Deposit Account”). All Daily Receipts received by the
Collection Deposit Bank and all payments received by the Collection Deposit Bank in respect of the
Accounts included in the Collateral shall be deposited by the Borrower in the Collection Deposit
Account, and such Daily Receipts and payments shall not be commingled with other funds of the Borrower.
All funds at any time on deposit in the Collection Deposit Account shall be held by the Collection
Deposit Bank subject to the terms of this Agreement. The Collection Deposit Bank agrees to give the
Collateral Agent prompt notice if the Collection Deposit Bank receives notice that the Collection
Deposit Account is subject to any writ, judgment, warrant of attachment, execution or similar process.
As security for the payment and performance of the Obligations, the Borrower hereby pledges, assigns and
transfers to the Collection Deposit Bank, for the benefit of the Collateral Agent, and hereby creates
and grants to the Collection Deposit Bank, for the benefit of the Collateral Agent, a security interest
in the Collection Deposit Account and all property and assets held therein. The Collection Deposit Bank
acknowledges the security interest of the Collateral Agent for the benefit of the Lenders in the
Collection Deposit Account.
3. The Collateral Agent hereby authorizes the Collection Deposit Bank to permit the Borrower to
make withdrawals from the Collection Deposit Account, so long as the Collection Deposit Bank has not
received notice from the Collateral Agent pursuant to the next succeeding sentence. Upon receipt of
written, telex, facsimile or telephonic notice (which, in the case of telephonic notice, shall be
promptly confirmed in writing) from the Collateral Agent so directing the Collection Deposit Bank at any
time (which direction shall be given by the Collateral Agent only upon the occurrence and during the
continuation of an Event of Default and which notice shall be sent simultaneously to the Borrower),
except to the extent and subject to such terms as may be specified in such notice, the Collection
Deposit Bank shall no longer permit withdrawals from the Collection Deposit Account to be made by the
Borrower, and, if so directed in such notice, shall promptly transmit to the cash concentration account
maintained by the Borrower with First Union National Bank (account number 2001000059003) (the “Borrower
Cash Concentration Account”) all funds, if any, then on deposit in, or otherwise to the credit of, the
Collection Deposit Account (provided that funds on deposit that are subject to collection shall be
transmitted promptly upon collection). If so directed in such notice, the Collection Deposit Bank shall
transmit directly to the Borrower Cash Concentration Account all Daily Receipts and all checks, drafts
and other instruments for the payment of money relating to the Accounts included in the Collateral in
the possession of the Collection Deposit Bank without depositing such Daily Receipts or such checks,
drafts or other instruments in the Collection Deposit Account or any other account.
4. Upon the occurrence and during the continuation of an Event of Default, the Collection Deposit
Bank shall, if requested by the Collateral Agent, furnish the Collateral Agent with monthly statements,
in the form and manner typical for the Collection Deposit Bank, of amounts of deposits in, and amounts
withdrawn from, the Collection Deposit Account and such other information relating to the Collection
Deposit Account at such times as shall be reasonably requested by the Collateral Agent.
5. For purposes of this Agreement, any officer of the Collateral Agent shall be authorized to act,
and to give instructions and notice, for the purposes set forth in this Agreement on behalf of the
Collateral Agent hereunder.
6. The fees for the services of the Collection Deposit Bank shall be mutually agreed upon between
the Borrower and the Collection Deposit Bank. The Collateral Agent shall not have any responsibility or
liability for the payment of any such fee.
7. The Collection Deposit Bank may perform any of its duties hereunder by or through its agents,
officers or employees and shall be entitled to rely upon the advice of counsel as to its duties. The
Collection Deposit Bank shall not be liable to the Collateral Agent for any action required of the
Collection Deposit Bank under the terms of this Agreement, if such action was taken or omitted to be
taken by it in good faith, nor shall the Collection Deposit Bank be responsible to the Collateral Agent
or the Borrower for the consequences of any oversight or error of judgment or be answerable to the
Collateral Agent for the same unless the same shall happen through its gross negligence or willful
misconduct.
8. In the event that the Borrower shall replace the Collection Deposit Bank (of which the Borrower
shall notify the Collateral Agent in advance), the Collection Deposit Bank or the Borrower, as
applicable, will (a) immediately transmit to the Borrower Cash Concentration Account all funds, if any,
then on deposit in, or otherwise to the credit of, the Collection Deposit Account, (b) deliver directly
to the successor collection deposit bank at the office specified in writing by the Borrower to the
Collateral Agent all subsequently received Daily Receipts and all checks, drafts and other instruments
for the payment of money relating to the Accounts included in the Collateral that would have been
deposited with the Collection Deposit Bank and (c) deliver any Daily Receipts or payments relating to
the Accounts included in the Collateral by the Collection Deposit Bank after such replacement, in
whatever form received, directly to the successor collection deposit bank at the office specified in
writing by the Borrower to the Collateral Agent.
9. The Borrower consents to the appointment of the Collection Deposit Bank and agrees that it will
not withdraw, or request to withdraw, funds from the Collection Deposit Account upon the occurrence and
during the continuation of an Event of Default unless such withdrawal is consented to in writing by the
Collateral Agent. The Borrower acknowledges that the Collection Deposit Bank shall incur no liability
to the Borrower as a result of any action taken pursuant to an instruction given by the Collateral Agent
in accordance with the provisions of this Agreement.
10. The Collateral Agent agrees that it will provide the Collection Deposit Bank with notice as
specified in paragraph 3 of this Agreement only if an Event of Default has occurred and is continuing
under this Agreement or any other Loan Document.
11. The term of this Agreement shall extend from the date hereof until the earlier of (a) the date
on which all Obligations (other than the DVA Obligations) have been paid in full and (b) any date on
which the Collection Deposit Bank shall not be serving in its capacity as collection deposit bank
hereunder as provided in paragraph 8 above. The obligations of the Collection Deposit Bank contained in
the third sentence of paragraph 8 shall survive the termination of this Agreement.
12. All notices and communications hereunder shall be in writing (except where telephonic
instructions or notices are authorized herein) and shall be deemed to have been received and shall be
effective on the day on which delivered (including delivery by telex or facsimile) (a) in the case of
the Collateral Agent, addressed to JPMorgan Chase Bank, Loan and Agency Services Group, One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to the attention of Xxxxx Xxxxxx (Telecopy
No. (000) 000-0000) with a copy to JPMorgan Chase Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to the
attention of Xxxx Xxxxxx, (Telecopy No. (000) 000-0000), and (b) in the case of the Collection Deposit
Bank, addressed to [ ], to the attention of [ ].
13. The Collection Deposit Bank will not (except as contemplated in paragraph 8 above) assign or
transfer any of its rights or obligations hereunder (other than to the Collateral Agent) without the
prior written consent of the other parties hereto.
14. This Agreement may be amended only by a written instrument executed by the Collateral Agent,
the Collection Deposit Bank and the Borrower, acting by their representative officers thereunto duly
authorized.
15. Except as otherwise provided in the Credit Agreement with respect to rights of set-off
available to the Collection Deposit Bank in the event that it is also a Lender under the Credit
Agreement, the Collection Deposit Bank hereby irrevocably waives, effective upon the occurrence and
during the continuation of an Event of Default, any right to set-off against, or otherwise deduct from,
any funds (with the exception of service fees and deposited items which have been returned) then or at
any time thereafter held in the Collection Deposit Account for any indebtedness or other claim then or
at any time thereafter owed by the Borrower to the Collection Deposit Bank.
16. Except to the extent the laws of the state of [ ] govern the Collection Deposit
Account, this Agreement shall be construed in accordance with and governed by the laws of the State of
New York.
17. This Agreement (a) shall inure to the benefit of and be binding upon the Collateral Agent, the
Collection Deposit Bank, the Borrower and their respective successors and assigns and (b) may be
executed simultaneously in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized officers as of the date first above written.
ADVANCE STORES COMPANY INCORPORATED,
by
---------------------------
Title:
JPMORGAN CHASE BANK, as Collateral Agent,
by
--------------------------
Title:
[ ],
as Collection Deposit Bank,
by
Title:
Annex 2 to the
Security Agreement
[Form Of]
PERFECTION CERTIFICATE
Reference is made to (a) the Amended and Restated Credit Agreement dated as of
December 5, 2003 (as further amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Advance Auto Parts, Inc. (“Holdings”), Advance Stores Company, Incorporated (the
“Borrower”), the lenders from time to time party thereto (the “Lenders”) and JPMorgan Chase Bank, as
administrative agent for the Lenders, Collateral Agent and issuing bank, (b) the Guarantee Agreement
dated as of November 28, 2001 (as amended, supplemented or otherwise modified from time to time, the
“Guarantee Agreement”), among the Subsidiary Guarantors (as defined therein), Holdings and the Collateral
Agent and (c) the Amended and Restated Security Agreement dated as of December 5, 2003 (as further
amended, supplemented or otherwise modified from time to time, the “Security Agreement”), among the
Borrower, Holdings, the Subsidiary Guarantors and the Collateral Agent. All capitalized terms used but
not defined herein shall have the meanings given such terms in the Credit Agreement or the Security
Agreement, as applicable.
The undersigned, a Financial Officer of the Borrower, hereby certifies to the
Collateral Agent and each other Secured Party as follows:
1. Names (a) The exact corporate name of each Grantor, as such name appears in its respective
certificate of incorporation, is as follows:
(b) Set forth below is each other corporate name each Grantor has had in the past five years,
together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor has changed its identity or corporate
structure in any way within the past five years. Changes in identity or corporate structure would
include mergers, consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include in Schedule 1 the
information required by Sections 1 and 2 of this certificate as to each acquiree or constituent party to
a merger or consolidation.
(d) The following is a list of all other names (including trade names or similar appellations) used
by each Grantor or any of its divisions or other business units in connection with the conduct of its
business or the ownership of its properties at any time during the past five years:
(e) Set forth below is the Federal Taxpayer Identification Number of each Grantor:
(f) Set forth below is the organizational number of each Grantor that is a registered organization:
2. Current Locations. (a) The chief executive office of each Grantor is located at the address
set forth opposite its name below:
Grantor Mailing Address County State
(b) Set forth below opposite the name of each Grantor are all locations where such Grantor
maintains any books or records relating to any Accounts (with each location at which chattel paper, if
any, is kept being indicated by an “*”):
Grantor Mailing Address County State
(c) The jurisdiction of formation of each Grantor that is a registered organization is set forth
opposite its name below:
Grantor Jurisdiction
(d) Set forth below opposite the name of each Grantor are all the places of business of such
Grantor not identified in paragraph (a), (b) or (c) above:
Grantor Mailing Address County State
(e) Set forth below opposite the name of each Grantor are all the locations where such Grantor
maintains any Collateral not identified above:
Grantor Mailing Address County State
(f) Set forth below opposite the name of each Grantor are the names and addresses of all Persons
other than such Grantor that have possession of any of the Collateral of such Grantor:
Grantor Mailing Address County State
3. Unusual Transactions. All Accounts have been originated by the Grantors and all Inventory has
been acquired by the Grantors in the ordinary course of business.
4. File Search Reports. File search reports have been obtained from each Uniform Commercial Code
filing office identified with respect to such Grantor in Section 2 hereof, and such search reports
reflect no liens against any of the Collateral other than those permitted under the Credit Agreement.
5. UCC Filings. Duly [authenticated] [signed] financing statements on Form UCC-1 in substantially
the form of Schedule 5 hereto have been prepared for filing in the Uniform Commercial Code filing office
in each jurisdiction identified with respect to such Grantor in [Section 2] [Section 2(a) or 2(b)]
hereof.
6. Schedule of Filings. Attached hereto as Schedule 5 is a schedule setting forth, with respect
to the filings described in Section 5 above, each filing and the filing office in which such filing is
to be made.
7. Filing Fees. All filing fees and taxes payable in connection with the filings described in
Section 5 above have been or will be paid.
8. Stock Ownership. Attached hereto as Schedule 8 is a true and correct list of all the duly
authorized, issued and outstanding stock, partnership interests, limited liability company membership
interests or other equity interests in the Borrower and of each Subsidiary and the record and beneficial
owners of such stock, partnership interests, limited liability company membership interests or other
equity interests. Also set forth on Schedule 8 is each equity investment of Holdings and each
Subsidiary that represents 50% or less of the equity of the entity in which such investment was made.
9. Debt Indebtedness. Attached hereto as Schedule 9 is a true and correct list of all
instruments, including promissory notes and other evidence of indebtedness, held by Holdings and each
Subsidiary, including all intercompany notes between Holdings and each Subsidiary of Holdings and
between each Subsidiary of Holdings and each other such Subsidiary.
10. Advances. Attached hereto as Schedule 10 is (a) a true and correct list of all advances made
by Holdings to any Subsidiary of Holdings or made by any Subsidiary of Holdings to Holdings or any other
Subsidiary of Holdings, which advances will be on and after the date hereof evidenced by one or more
intercompany notes pledged to the Collateral Agent under the Pledge Agreement, and (b) a true and
correct list of all unpaid intercompany transfers of goods sold and delivered by or to Holdings or any
Subsidiary of Holdings.
11. Mortgage Filings. Attached hereto as Schedule 11 is a schedule setting forth, with respect to
each Mortgaged Property, (a) the exact corporate name of the corporation that owns such property as such
name appears in its certificate of incorporation, (b) if different from the name identified pursuant to
clause (a), the exact name of the current record owner of such property reflected in the records of the
filing office for such property identified pursuant to the following clause and (c) the filing office in
which a Mortgage with respect to such property must be filed or recorded in order for the Collateral
Agent to obtain a perfected security interest therein.
12. Intellectual Property. Attached hereto as Schedule 12(A) in proper form for filing with the
United States Patent and Trademark Office is a schedule setting forth all of each Grantor’s Patents,
Patent Licenses, Trademarks and Trademark Licenses, including the name of the registered owner, the
registration number and the expiration date of each Patent, Patent License, Trademark and Trademark
License owned by any Grantor. Attached hereto as Schedule 12(B) in proper form for filing with the
United States Copyright Office is a schedule setting forth all of each Grantor’s Copyrights and
Copyright Licenses, including the name of the registered owner, the registration number and the
expiration date of each Copyright or Copyright License owned by any Grantor.
13. Commercial Tort Claims. Attached hereto as Schedule 13 is a true and correct list of
commercial tort claims held by any Grantor, including a brief description thereof.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate on this _____
day of December 2003.
ADVANCE STORES COMPANY, INCORPORATED,
by
/s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: SVP-CFO, Assistant Secretary
Annex 3 to the
Security Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the Amended and
Restated Security Agreement dated as of December 5, 2003 (as further amended,
supplemented or otherwise modified from time to time, the “Security
Agreement”), among ADVANCE STORES COMPANY, INCORPORATED, a Virginia
corporation (the “Borrower”), ADVANCE AUTO PARTS, INC., a Delaware corporation
(“Holdings”), each subsidiary of the Borrower listed on Schedule I thereto
(each such subsidiary individually a “Subsidiary Guarantor” and collectively,
the “Subsidiary Guarantors”; the Subsidiary Guarantors, Holdings and the
Borrower are referred to collectively herein as the “Grantors”) and JPMORGAN
CHASE BANK, a New York banking corporation (“JPMCB”), as collateral agent (in
such capacity, the “Collateral Agent”) for the Secured Parties (as defined
therein).
A. Reference is made to (a) the Amended and Restated Credit Agreement dated as of December 5, 2003
(as further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, Holdings, the lenders from time to time party thereto (the “Lenders”) and JPMCB, as
administrative agent for the Lenders (in such capacity, the “Administrative Agent”), Collateral Agent
and as issuing bank (in such capacity, the “Issuing Bank”), and (b) the Guarantee Agreement dated as of
November 28, 2001 (as amended, supplemented or otherwise modified from time to time, the “Guarantee
Agreement”), among the Subsidiary Guarantors, Holdings and the Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned
to such terms in the Security Agreement or the Credit Agreement, as applicable.
C. The Grantors have entered into the Security Agreement in order to induce the Lenders to make
Loans, the Issuing Bank to issue Letters of Credit and DVA Creditors to purchase Designated Vendor
Accounts. Section 7.15 of the Security Agreement provides that additional Subsidiaries of Holdings 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 in
accordance with the requirements of the Credit Agreement to become a Grantor under the Security
Agreement in order to induce the Lenders to make additional Loans, the Issuing Bank to issue additional
Letters of Credit and DVA Creditors to purchase additional Designated Vendor Accounts, and as
consideration for Loans previously made, Letters of Credit previously issued and Designated Vendor
Accounts previously purchased.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 7.15 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 (a) agrees to all the terms and
provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and
warrants to the Collateral Agent and the Secured Parties that the representations and warranties made by
it as a Grantor thereunder are true and correct on and as of the date hereof. In furtherance of the
foregoing, the New Grantor, as security for the payment and performance in full of the Obligations (as
defined in the Security Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, 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 Collateral Agent and the Secured
Parties that 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.
SECTION 3. This Supplement 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 a single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures
of the New Grantor and the Collateral Agent. Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this
Supplement.
SECTION 4. The New Grantor hereby represents and warrants to the Collateral Agent and the Secured
Parties that (a) set forth on Schedule I attached hereto is a true and correct schedule of the location
of any and all Collateral of the New Grantor other than Collateral (i) consisting of goods in transit
between facilities, whether in vehicles owned by the applicable Grantor or on common carriers and
(ii) located in temporary warehousing which will remain in such warehousing for no longer than one month
and (b) set forth under its signature hereto, is the true and correct location of the chief executive
office of the New Grantor and its jurisdiction of formation.
SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full
force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 7. In case 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 8. All communications and notices hereunder shall be in writing and given as provided in
Section 7.01 of the Security Agreement. All communications and notices hereunder to the New Grantor
shall be given to it at the address set forth under its signature below.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges
and disbursements of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed this
Supplement to the Security Agreement as of the day and year first above written.
[Name Of New Grantor],
by
/s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: SVP-CFO, Assistant Secretary
Address:
JPMORGAN CHASE BANK, as Collateral Agent,
by
/s/ Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
SCHEDULE I
to Supplement No. [ ] to the
Security Agreement
LOCATION OF COLLATERAL
Description Location
PERFECTION CERTIFICATE
Reference is made to (a) the Amended and Restated Credit Agreement dated as ofDecember [ ],
2003, (as further amended, supplmented or otherwise modified from time to time, the "Credit Agreement"),
among Advance Auto Parts, Inc. ("Holdings"), Advance Stores Company, Incorporated (the "Borrower"), the
lenders from time to time party thereto (the "Lenders"), and JPMorgan Chase Bank, as administrative
agent for the Lenders, Collateral Agent and issuing bank, (b) the Guarantee Agreement dated as of
November 28, 2001 (as amended, supplemented or otherwise modified from time to time) among the
Subsidiary Guarantors (as defined therein), Holdings and the Collateral Agent and (c) the Amended and
Restated Security Agreement dated as of December [ ], 2003 (as further amended, supplemented or
otherwise modified from time to time, the "Security Agreement"), among the Borrower, Holdings, the
Subsidiary Guarantors and the Collateral Agent. All capitalized terms used but not defined herein shall
have the meanings given such terms in the Credit Agreement or the Security Agreement, as applicable.
The undersigned, a Financial Officer of the Borrower, hereby certifies to the Collateral Agent
and each other Secured Party as follows:
1. Names
(a) The exact corporate name of each Grantor, as such name appears in its
respective certificate of incorporation, is as follows:
Advance Auto Parts, Inc., a Delaware corporation
Advance Stores Company, Incorporated, a Virginia corporation
Advance Trucking Corporation, a Virginia corporation
Western Auto Supply Company, a Delaware corporation
Western Auto of Puerto Rico, Inc., a Delaware corporation
Western Auto of St. Xxxxxx, Inc., a Delaware corporation
Advance Merchandising Company, Inc., a Virginia corporation
Advance Aircraft Company, Inc., a Virginia corporation
Discount Auto Parts, Inc., a Florida corporation
DAP Acceptance Corporation, a Delaware corporation
(b) Set forth below is each other corporate name each Grantor has had in the past
five years, together with the date of the relevant change:
There have been no name changes for Grantors.
(c) Except as set forth in Schedule 1 hereto, no Grantor has changed its identify
or corporate structure in any way within the past five years. Changes in identity or corporate
structure would include mergers, consolidations and acquisitions, as well as any change in the form,
nature or jurisdiction of corporate organization. If any such change has occurred, include in Schedule
1 the information required by Sections 1 and 2 of this certificate as to each acquiree or constituent
party to a merger or consolidation.
(d) The following is a list of all other names (including trade names or similar
appellations) used by each Grantor or any of its divisions or other business units in connection with
the conduct of its business or the ownership of its properties at any time during the past five years:
Advance Auto Parts
Parts America
Western Auto
Discount Auto Parts
Advance Discount Auto Parts
(e) Set forth below is the Federal Taxpayer Identification Number of each Grantor:
Advance Auto Parts Inc. 00-0000000
Advance Stores Company, Incorporated 00-0000000
Advance Trucking Corporation 00-0000000
Western Auto Supply Company 00-0000000
Western Auto of Puerto Rico, Inc. 00-0000000
Western Auto of St. Xxxxxx, Inc. 00-0000000
Advance Merchandising Company, Inc. 00-0000000
Advance Aircraft Company, Inc. 00-0000000
Discount Auto Parts, Inc. 00-0000000
DAP Acceptance Corporation 00-0000000
(f) Set forth below is the organizational number of each Grantor that is a
registered organization:
Advance Auto Parts, Inc. 0386705-8
Advance Stores Company, Incorporated 0034317-8
Advance Trucking Corporation 0501578-9
Western Auto Supply Company 2930353
Western Auto of Puerto Rico, Inc. 2222941
Western Auto of St. Xxxxxx, Inc. 2239675
Advance Merchandising Company, Inc. 0567871-9
Advance Aircraft Company, Inc. 0567983-2
Discount Auto Parts, Inc. 402764
DAP Acceptance Corporation 3124365
2. Current Locations:
(a) The chief executive office of each Grantor is located at the address set forth
opposite its name below:
Grantor Mailing Address County State
Advance Auto Parts, Inc. 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
Advance Stores Company, 0000 Xxxxxxx Xxxx Xxxxxxx XX
Incorporated Xxxxxxx, XX 00000
Advance Trucking Corporation 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
Western Auto Supply Company 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
Western Auto of Puerto Rico, Inc. 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
Western Auto of St. Xxxxxx, Inc. 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
Advance Merchandising Company, 0000 Xxxxxxx Xxxx Xxxxxxx XX
Inc. Xxxxxxx, XX 00000
Advance Aircraft Company, Inc. 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
Discount Auto Parts, Inc. 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
DAP Acceptance 0000 Xxxxxxx Xxxx Xxxxxxx XX
Corporation Xxxxxxx, XX 00000
(b) Set forth below opposite the name of each Grantor are all locations where such
Grantor maintains any books or records relating to any Accounts Receivable (with each location at which
chattel paper, if any is kept being indicated by an "*"):
Grantor Mailing Address County State
Advance Auto Parts, Inc. 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
Advance Stores Company, 0000 Xxxxxxx Xxxx Xxxxxxx XX
Incorporated Xxxxxxx, XX 00000
Western Auto Supply Company 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
0000 Xxxxxx Xxxxx Xx. Xxxxxxx XX
Xxxxxx Xxxx, XX 00000
000 X 0xx Xxxxxx Xxxxxxxx XX
Xxxxxxxx, XX
Western Auto of Puerto Rico, Inc. 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
65th Infantry
XX Xxx 0000
Xxxxxxxx XX
Western Auto of St. Xxxxxx, Inc. 0000 Xxxxxxx Xxxx Xxxxxxx XX
Xxxxxxx, XX 00000
Discount Auto Parts, Inc. 0000 Xxxxxxxx Xxxx Xxxxx Xxxx XX
Xxxxxxxx, XX 00000
(c) The jurisdiction of formation of each Grantor that is a registered organization
is set forth opposite its name below:
Grantor Jurisdiction
Advance Auto Parts Inc. Delaware
Advance Stores Company, Incorporated Virginia
Advance Trucking Corporation Virginia
Western Auto Supply Company Delaware
Western Auto of Puerto Rico, Inc. Delaware
Western Auto of St. Xxxxxx, Inc. Delaware
Advance Merchandising Company, Inc. Virginia
Advance Aircraft Company, Inc. Virginia
Discount Auto Parts, Inc. Florida
DAP Acceptance Corporation Delaware
(d) Set forth below opposite the name of each Grantor are all the places of business
of such Grantor not identified in paragraph (a), (b) or (c) above:
See Schedule 2(d) attached.
(e) Set forth below opposite the name of each Grantor are all the locations where
such Grantor maintains any Collateral not identified above:
Grantor Mailing Address County State
None
(f) Set forth below opposite the name of each Grantor are the names and addresses of
all Persons other than such Grantor that have possession of any of the Collateral of such Grantor:
Grantor Mailing Address County State
Note: JPMorgan Chase Bank has possession of collateral pledged pursuant to that certain Pledge
Agreement dated as of November 28, 2001.
3. Unusual Transactions. All Accounts have been originated by the Grantors and all
Inventory has been acquired by the Grantors in the ordinary course of business.
4. [Intentionally omitted.]
5. [Intentionally omitted.]
6. [Intentionally omitted.]
7. [Intentionally omitted.]
8. Stock Ownership. Attached hereto as Schedule 8 is a true and correct list of all the
duly authorized, issued and outstanding stock, partnership interests, limited liability company
membership interests or other equity interests of the Borrower and each Subsidiary and the record and
beneficial owners of such stock, partnership interests, membership interests or other equity interests.
Also set forth on Schedule 8 is each equity investment of Holdings and each Subsidiary that represents
50% or less of the equity of the entity in which such investment was made.
See Schedule 8 attached hereto.
9. Debt Instruments. Attached hereto as Schedule 9 is a true and correct list of all
instruments, including any promissory notes and other evidence of indebtedness, held by Holdings and
each Subsidiary, including all intercompany notes between Holdings and between each Subsidiary of
Holdings and each other such Subsidiary.
See Schedule 9 attached hereto.
10. Advances. Attached hereto as Schedule 10 is (a) a true and correct list of all
advances made by Holdings to any Subsidiary of Holdings or made by any Subsidiary of Holdings to
Holdings or any other Subsidiary of Holdings, which advances will be on and after the date hereof
evidenced by one or more intercompany notes pledged to the Collateral Agent under the Pledge Agreement
and (b) a true and correct list of all unpaid intercompany transfers of goods sold and delivered by or
to Holdings or any Subsidiary of Holdings.
See Schedule 10 attached hereto.
11. Mortgage Filings. Attached hereto as Schedule 11 is a Schedule setting forth, with
respect to each Mortgaged Property, (a) the exact corporate name of the corporation that owns such
property as such name appears in its certificate of incorporation, (b) if different from the name
identified pursuant to clause (a), the exact name of the current record owner of such property reflected
in the records of the filing office for such property identified pursuant to the following clause and
(c) the filing office in which a Mortgage with respect to such property must be filing or recorded in
order for the Collateral Agent to obtain a perfected security interest therein.
See Schedule 11 attached hereto.
12. Intellectual Property. Attached hereto as Schedule 12(A) in proper form for filing
with the United States Patent and Trademark Office is a schedule setting forth all of each Grantor's
Patents, Patent Licenses, Trademarks and Trademark Licenses, including the name of the registered owner,
the registration number and the expiration date of each Patent, Patent License, Trademark and Trademark
License owned by any Grantor. Attached hereto as Schedule 12(B) in proper form for filing with the
United States Copyright Office is a schedule setting forth all of each Grantor's Copyrights and
Copyright Licenses, including the name of the registered owner, the registration number and the
expiration date of each Copyright or Copyright License owned by any Grantor.
See Schedules 12 (A) and 12(B) attached hereto.
13. Commercial Tort Claims. Attached hereto as Schedule 13 is a true and correct list of
commercial tort claims held by any Grantor, including a brief description hereof.
None.
14. Deposit Accounts. Attached hereto as Schedule 14 is a true and correct list of
deposit accounts maintained by each Grantor, including the name and address of the depositary
institution, the type of account and the account number.
See Schedule 14 attached hereto.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate this _5th day of
December 2003.
ADVANCE STORES COMPANY,
INCORPORATED,
BY /s/ Xxxxxxx X. Xxxx
______________________
Xxxxxxx X. Xxxx
SVP-CFO, Assistant Secretary
Schedule 1
------------------------------------- ------------------------------------------------- ---------------------
Name of Corporation Nature of Change Date of Change
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
Advance Auto, Inc. Advance Holding Corporation merged with and 11/29/01
into Advance Auto Parts, Inc., the latter being
the survivor
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
Advance Stores Company, Incorporated
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
Parts America, Inc., a Delaware corporation, 1/26/99
was merged into Advance Stores Company,
Incorporated, the latter being the survivor.
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
Western Auto Supply Company
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
W.A. Charities, a nonprofit corporation, was 12/21/00
dissolved.
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
Advance Merchandising Company, Inc. DAP Asset Management, Inc. was merged with and 11/01
into Advance Merchandising Company, Inc., the
latter being the survivor
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
DAP Licensing Company was merged with and into 11/01
Advance Merchandising Company, Inc., the latter
being the survivor
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
LARALEV, Inc. was merged with and into Advance 12/28/01
Merchandising Company, Inc., the latter being
the survivor
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
Discount Auto Parts, Inc. AAP Acquisition Corporation acquired Discount 11/28/01
Auto Parts, Inc., simultaneously merging
Discount Auto Parts, Inc. with and into AAP
Acquisition Corporation, upon which the name
was changed to Discount Auto Parts, Inc.
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
DAP Management Services Corporation was merged 11/01
with and into Discount Auto Parts, Inc., with
the latter being the survivor
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
Discount Auto Parts Distribution Center, Inc. 11/01
was merged with and into Discount Auto Parts,
Inc., with the latter being the survivor
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
HLA Acquisition, Inc. was merged with and into 11/01
Discount Auto Parts, Inc., with the latter
being the survivor
------------------------------------- ------------------------------------------------- ---------------------
------------------------------------- ------------------------------------------------- ---------------------
100 percent of LARALEV, Inc.'s outstanding 12/28/01
stock, all owned by Advance Stores Company,
Incorporate, was contributed to Discount Auto
Parts, Inc.
------------------------------------- ------------------------------------------------- ---------------------
Schedule 8 to Perfection Certificate
Stock Ownership
(a) Owner Advance Auto Parts, Inc.
o Issuer: Advance Stores Company, Incorporated
o 5,000 Class A Shares Authorized
o 538 Class A Common Shares held by Advance Auto Parts, Inc. (100%)
(b) Owner Advance Stores Company, Incorporated
o Issuer: Advance Trucking Corporation
o 5,000 Common Shares Authorized
o 1 Common Share held by Advance Stores Company, Incorporated (100%)
(c) Owner Advance Stores Company, Incorporated
o Issuer: Western Auto Supply Company
o 1,000 Common Shares Authorized
o 100 Common Shares held by Advance Stores Company, Incorporated (100%)
(d) Owner Advance Stores Company, Incorporated
o Issuer: Discount Auto Parts, Inc.
o 50,000,000 Common Shares Authorized
o 5,000,000 Preferred Shares Authorized
o 16,707,923 Common Shares held by Advance Stores Company, Incorporated
(100%)
o No Preferred Shares issued
(e) Owner Discount Auto Parts, Inc.
o Issuer: Advance Merchandising Company, Inc.
o 5,000 Common Shares Authorized
o 100 Common Shares held by Discount Auto Parts, Inc. (100%)
(f) Owner Advance Stores Company, Incorporated
o Issuer: Advance Aircraft Company
o 5,000 Common Shares Authorized
o 100 Common Shares held by Advance Stores Company, Incorporated (100%)
(g) Owner Discount Auto Parts, Inc.
o Issuer: DAP Acceptance Corporation
o 3,000 Common Shares Authorized
o 1,000 Common Shares held by Discount Auto Parts, Inc. (100%)
h) Owner Western Auto Supply Company
o Issuer: Western Auto of Puerto Rico, Inc.
o 100,000 Common Shares Authorized
o 100,000 Common Shares held by Western Auto Supply Company (100%)
(i) Owner Western Auto Supply Company
o Issuer: Western Auto of St. Xxxxxx, Inc.
o 100,000 Common Shares Authorized
o 100,000 Common Shares held by Western Auto Supply Company (100%)
Schedule 9 to Perfection Certificate
Notes
Intercompany Note executed by each of Advance Auto Parts, Inc., Advance Stores Company, Incorporated,
Western Auto Supply Company, Western Auto Supply of Puerto Rico, Inc., Western Auto Supply of St.
Xxxxxx, Inc., WASCO Insurance Agency, Inc., Advance Trucking Corporation, Advance Merchandising Company,
Inc., Advance Aircraft Company, Inc., Discount Auto Supply, Inc. and DAP Acceptance Corporation in favor
of each of the other parties.
Schedule 10 to Perfection Certificate
Intercompany Note executed by each of Advance Auto Parts, Inc., Advance Stores Company, Incorporated,
Western Auto Supply Company, Western Auto Supply of Puerto Rico, Inc., Western Auto Supply of St.
Xxxxxx, Inc., WASCO Insurance Agency, Inc., Advance Trucking Corporation, Advance Merchandising Company,
Inc., Advance Aircraft Company, Inc., Discount Auto Supply, Inc. and DAP Acceptance Corporation in favor
of each of the other parties.
Schedule 11 to Perfection Cerfiticate
Mortgaged Property
1. 0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
(a) Advance Stores Company, Incorporated
(b) Same
(c) Etowah County Recorder
000 Xxxxxxx Xxxxxx, Xxxx 000
Xxxxxxx, XX 00000
2. 000 Xxxxx Xxxxxx
Xxxxxxxxxxxxxx, Xxxx 00000
(a) Advance Stores Company, Incorporated
(b) Same
(c) Xxxxxxx Xxxxx Recorder
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx Xxxxxxxxxx, XX 00000
3. 0000 X-00 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
(a) Advance Stores Company, Incorporated
(b) Same
(c) Clerk of the Court
XxXxxxxx County
X.X. Xxx 000
Xxxxxxx, XX 00000
4. 0000 Xxxxx X.X. Xxxxx 00
Xxxxxxxx, XX 00000
(a) Western Auto Supply Company
(b) Same
(c) Delaware County Recorder
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
5. 0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
(a) Western Auto Supply Company
(b) Same
(c) Xxxxxx County Recorder
000 Xxxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000
6. Xxxxx 0 Xxxxx Xxxx Xxxx
Xxxxxx, XX 00000
(a) Western Auto Supply Company
(b) Same
(c) Salina County Registar of Deeds
000 Xxxx Xxx Xxxxxx, Xxxx 000
X.X. Xxx 0000
Xxxxxx, XX 00000
7. 0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
(a) Discount Auto Parts, Inc.
(b) Same
(c) Office of the Polk County Clerk of the Circuit Court
000 Xxxxx Xxxxxxxx
Xxxxxx, XX 00000
8. 00000 XX Xxxxxxx 00
Xxxxxxxxxx, Xxxxxxxxxxx 00000
(a) Discount Auto Parts, Inc.
(b) Same
(c) Copiah County Courthouse
000 Xxxxxxxx Xx., Xxxxxxxxxx
Xxxxxxxxx, XX 00000
Schedule 12A to Perfection Certificate
LICENSES
None.
PATENTS
None.
TRADEMARKS
FEDERAL XXXX REGISTRATIONS/APPLICATIONS
OWNER: Advance Merchandising Company, Inc.
Registration or
Xxxx Serial or Registration No. Application Date
.................................................. .............................. ............................
.................................................. .............................. ............................
ADV 2,049,823 04/01/1997
.................................................. .............................. ............................
.................................................. .............................. ............................
ADVANCE AUTO PARTS 1,815,267 01/04/1994
.................................................. .............................. ............................
.................................................. .............................. ............................
ADVANCE AUTO PARTS & design 1,847,137 07/26/1994
.................................................. .............................. ............................
.................................................. .............................. ............................
ADVANCE AUTO PARTS & design 1,484,796 04/12/1988
.................................................. .............................. ............................
.................................................. .............................. ............................
ADVANCE AUTO PARTS & design 78/258905 06/05/2003
.................................................. .............................. ............................
.................................................. .............................. ............................
ADVANCE AUTO PARTS & design 78/258959 06/05/2003
.................................................. .............................. ............................
.................................................. .............................. ............................
ADVANCE AUTO PARTS. WE'RE READY IN ADVANCE. & 78/258939 06/05/2003
design
.................................................. .............................. ............................
.................................................. .............................. ............................
ADVANCE AUTO PARTS. WE'RE READY IN ADVANCE. & 78/258981 06/05/2003
design
.................................................. .............................. ............................
.................................................. .............................. ............................
AMERICAN SPIRIT 1,242,721 06/21/1983
.................................................. .............................. ............................
.................................................. .............................. ............................
AUTOCRAFT 1,622,118 11/13/1990
.................................................. .............................. ............................
.................................................. .............................. ............................
AUTOCRAFT CASTAWAY 2,640,809 10/22/2002
.................................................. .............................. ............................
.................................................. .............................. ............................
CARCARE101 2,391,747 10/03/2000
.................................................. .............................. ............................
.................................................. .............................. ............................
CARCARE101 & design 2,391,746 10/03/2000
.................................................. .............................. ............................
.................................................. .............................. ............................
DISCOUNT AUTO PARTS & design 2,415,619 12/26/2000
.................................................. .............................. ............................
.................................................. .............................. ............................
DISCOUNT AUTO PARTS & design 2,539,168 02/19/2002
.................................................. .............................. ............................
.................................................. .............................. ............................
HYDRO FORCE 2,731,342 07/01/2003
.................................................. .............................. ............................
.................................................. .............................. ............................
MORE PARTS, LOWER PRICES 2,482,142 08/28/2001
.................................................. .............................. ............................
.................................................. .............................. ............................
PARTS AMERICA 2,280,955 09/28/1999
.................................................. .............................. ............................
.................................................. .............................. ............................
PARTS EXPRESS 2,381,242 08/29/2000
.................................................. .............................. ............................
.................................................. .............................. ............................
PDQ 1,395,226 05/27/1986
.................................................. .............................. ............................
.................................................. .............................. ............................
PRO2CALL 2,228,513 03/02/1999
.................................................. .............................. ............................
.................................................. .............................. ............................
PROFESSIONAL’S FAVORITE 76/469754 11/26/2002
.................................................. .............................. ............................
.................................................. .............................. ............................
SENTRY 0,255,631 04/30/1929
.................................................. .............................. ............................
.................................................. .............................. ............................
SPARK FORCE 2,361,786 06/27/2000
.................................................. .............................. ............................
.................................................. .............................. ............................
THE BEST PART IS OUR PEOPLE 2,167,375 06/23/1998
.................................................. .............................. ............................
.................................................. .............................. ............................
THE FRONT RUNNER 1,850,319 08/16/1994
.................................................. .............................. ............................
.................................................. .............................. ............................
TIRE SOURCE 1,956,753 02/13/1996
.................................................. .............................. ............................
.................................................. .............................. ............................
TOTALGRIP 78/325379 11/10/2003
.................................................. .............................. ............................
.................................................. .............................. ............................
TOUGH ONE 1,715,139 09/15/1992
.................................................. .............................. ............................
.................................................. .............................. ............................
TRUCKELA 78/291802 08/25/2003
.................................................. .............................. ............................
.................................................. .............................. ............................
WEAREVER 2,044,917 03/11/1997
.................................................. .............................. ............................
.................................................. .............................. ............................
WEAREVER 1,650,703 07/16/1991
.................................................. .............................. ............................
.................................................. .............................. ............................
WESTERN FLYER 0,440,857 10/05/1948
.................................................. .............................. ............................
.................................................. .............................. ............................
WIZARD 0,837,072 10/17/1967
.................................................. .............................. ............................
.................................................. .............................. ............................
WIZARD 78/247111 05/08/2003
.................................................. .............................. ............................
FEDERAL XXXX REGISTRATIONS/APPLICATIONS
OWNER: Advance Merchandising Company, Inc.
(continued)
Registration or
Xxxx Serial or Registration No. Application Date
.................................................. .............................. ............................
.................................................. .............................. ............................
INFO-TRAK* 1,792,873 09/14/1993
.................................................. .............................. ............................
.................................................. .............................. ............................
LASTACELL* 1,494,948 07/05/1988
.................................................. .............................. ............................
.................................................. .............................. ............................
TRAK AUTO* 1,168,761 09/08/1981
.................................................. .............................. ............................
.................................................. .............................. ............................
TRAK* 1,574,103 01/02/1990
.................................................. .............................. ............................
.................................................. .............................. ............................
TRAK AUTO & design* 1,418,151 11/25/1986
.................................................. .............................. ............................
.................................................. .............................. ............................
TROUBLE FREE* 1,490,825 06/07/1988
.................................................. .............................. ............................
.................................................. .............................. ............................
TROUBLE FREE* 2,133,425 01/27/1998
.................................................. .............................. ............................
* These marks were assigned by Trak Auto Corporation to Advance Stores Company by assignment dated July
26, 2002, and assigned by Advance Stores Company to Advance Merchandising Company by undated
assignment. Recordations with the PTO to bring the owner of record current are in process.
FEDERAL XXXX REGISTRATIONS/APPLICATIONS
OWNER: Western Auto Supply Company
Registration or
Xxxx Serial or Registration No. Application Date
.................................................. .............................. ............................
.................................................. .............................. ............................
ENDURANCE 1,197,174 06/08/1982
.................................................. .............................. ............................
.................................................. .............................. ............................
WESTERN AUTO 0,883,548 12/30/1969
.................................................. .............................. ............................
.................................................. .............................. ............................
WESTERN AUTO 0,883,524 12/30/1969
.................................................. .............................. ............................
.................................................. .............................. ............................
checkered flag design 1,209,010 09/14/1982
.................................................. .............................. ............................
.................................................. .............................. ............................
flag design 1,652,836 08/06/1991
.................................................. .............................. ............................
.................................................. .............................. ............................
WESTERN FLYER 0,289,563 12/01/1931
.................................................. .............................. ............................
FEDERAL XXXX REGISTRATIONS/APPLICATIONS
OWNER: Discount Auto Parts, Inc.
Registration or
Xxxx Serial or Registration No. Application Date
.................................................. .............................. ............................
.................................................. .............................. ............................
RIGHT PART. RIGHT AWAY. 76/060218 05/30/2000
.................................................. .............................. ............................
STATE XXXX REGISTRATIONS/APPLICATIONS
OWNER: Advance Merchandising Company, Inc.
State Registration or
Serial or
Xxxx Registration No. Application Date
........................................ .................... ....................... ........................
........................................ .................... ....................... ........................
DISCOUNT AUTO XXXXX Xxxxxxx 000000 04/11/1980
........................................ .................... ....................... ........................
........................................ .................... ....................... ........................
DRIVING HOME THE SAVINGS* Florida T95000000733 06/13/1995
........................................ .................... ....................... ........................
* These marks were included in the sale from Discount Auto to Advance. The owner of record reflected
in the state's records is Rose Auto Stores.
Schedule 12B to Perfection Certificate
COPYRIGHTS
None.
