SECURITY AGREEMENT
Exhibit 10.15
Execution Version
Notwithstanding anything herein to the contrary, the liens and security interests granted to the Agent pursuant to this Agreement in any ABL Collateral and the exercise of any right or remedy by the Agent with respect to any ABL Collateral hereunder are subject to the provisions of the Junior Lien Intercreditor Agreement, dated as of April 16, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Junior Lien Intercreditor Agreement”) among FTS INTERNATIONAL SERVICES, LLC, a Texas limited liability company, FTS International, Inc., a Delaware corporation, the other GRANTORS from time to time party thereto, XXXXX FARGO BANK, NATIONAL ASSOCIATION, as ABL Facility Agent, XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Term Collateral Agent, U.S. BANK NATIONAL ASSOCIATION, as Notes Collateral Agent and certain other persons party or that may become party thereto from time to time. In the event of any conflict between the terms of the Junior Lien Intercreditor Agreement and this Agreement, the terms of the Junior Lien Intercreditor Agreement shall govern and control.
SECURITY AGREEMENT
This SECURITY AGREEMENT (this “Agreement”), dated as of April 16, 2014, among the Persons listed on the signature pages hereof as “Grantors” and those additional entities that hereafter become parties hereto by executing the form of Joinder attached hereto as Annex 1 (each, a “Grantor” and collectively, the “Grantors”), and U.S. BANK NATIONAL BANK (“US Bank”), in its capacity as Collateral Agent (in such capacity, together with its successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Indenture of even date herewith (as amended, restated, supplemented, or otherwise modified from time to time, the “Indenture”) by and among FTS INTERNATIONAL, INC., a Delaware corporation as issuer (the “Issuer”) the guarantors party thereto and US Bank as Trustee, the Issuer has issued on the date hereof $500,000,000 aggregate principal amount of its 6.250% Senior Secured Notes due 2022 (the “Initial Notes”); and
WHEREAS, each Grantor has agreed to grant to Agent, for the benefit of the Trustee, Agent and the holders (the “Noteholders”), from time to time of the Notes (collectively, the “Secured Parties”), a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, the Secured Obligations; (as defined below); and
WHEREAS, each Grantor (other than Issuer ) is a Subsidiary of the Issuer and, as such, will benefit by virtue of the issuance of the Notes.
NOW, THEREFORE, for and in consideration of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions; Construction.
(a) All initially capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Indenture. Any terms (whether
capitalized or lower case) used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein or in the Indenture; provided that to the extent that the Code is used to define any term used herein and if such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern. In addition to those terms defined elsewhere in this Agreement, as used in this Agreement, the following terms shall have the following meanings:
(i) “Account Collateral” has the meaning specified therefor in Section 3(c).
(ii) “Activation Instruction” has the meaning specified therefor in Section 7(k).
(iii) “Agent” has the meaning specified therefor in the preamble to this Agreement.
(iv) “Agreement” has the meaning specified therefor in the preamble to this Agreement.
(v) “Authorized Collateral Agent” has the meaning specified in the Junior Lien Intercreditor Agreement.
(vi) “Books” means books and records (including each Grantor’s Records indicating, summarizing, or evidencing such Grantor’s assets (including the Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s business operations or financial condition, and each Grantor’s goods or General Intangibles related to such information).
(vii) “Chattel Paper” means chattel paper (as that term is defined in the Code), and includes tangible chattel paper and electronic chattel paper.
(viii) “Code” means the New York Uniform Commercial Code, as in effect from time to time; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.
(ix) “Collateral” has the meaning specified therefor in Section 3.
(x) “Commercial Tort Claims” means commercial tort claims (as that term is defined in the Code), and includes those commercial tort claims listed on Schedule 1.
(xi) “Controlled Account” has the meaning specified therefor in Section 7(k).
(xii) “Controlled Account Agreements” means those certain cash management agreements, in form and substance reasonably satisfactory to Agent, each of which is executed and delivered by a Grantor, Agent, and one of the Controlled Account Banks.
(xiii) “Controlled Account Bank” has the meaning specified therefor in Section 7(k).
(xiv) “Discharge of ABL Obligations” has the meaning given to such term in the Junior Lien Intercreditor Agreement.
(xv) “Excluded Assets” has the meaning specified therefor in Section 3 hereof.
(xvi) “Foreclosed Grantor” has the meaning specified therefor in Section 2(i)(iii).
(xvii) “General Intangibles” means general intangibles (as that term is defined in the Code), and includes payment intangibles, software, contract rights, rights to payment, rights under Swap Contracts (including the right to receive payment on account of the termination (voluntarily or involuntarily) of such Swap Contracts), rights arising under common law, statutes, or regulations, choses or things in action, goodwill, Intellectual Property, Intellectual Property Licenses, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, including Intellectual Property Licenses, infringement claims, pension plan refunds, pension plan refund claims, insurance premium rebates, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the Code.
(xviii) “Grantor” and “Grantors” have the respective meanings specified therefor in the preamble to this Agreement.
(xix) “Indenture” has the meaning specified therefor in the recitals to this Agreement.
(xx) “Indenture Document” means the Indenture, the Notes (including any Additional Notes, any Exchange Notes and any guarantees of the foregoing), the Note Guarantees, the Contingent Registration Rights Agreement, the Security Documents and the Intercreditor Agreements.
(xxi) “Intellectual Property” means any and all Trademarks, trade secrets, know-how, inventions (whether or not patentable), algorithms, software programs (including source code and object code), processes, product designs, industrial designs, blueprints, drawings, data, customer lists, URLs and domain names, specifications, documentations, reports, catalogs, literature, and any other forms of technology or proprietary information of any kind, including all rights therein and all applications for registration or registrations thereof.
(xxii) “Intellectual Property Licenses” means, with respect to any Person (the “Specified Party”), (A) any licenses or other similar rights provided to the Specified Party in or with respect to Intellectual Property owned or controlled by any other Person, and (B) any licenses or other similar rights provided to any other Person in or with respect to Intellectual Property owned or controlled by the Specified Party, in each case, including (x) any software license agreements (other than license agreements for commercially available off-the-shelf software that is generally available to the public which have been licensed to a Grantor pursuant to end-user licenses), (y) the license agreements listed on Schedule 3, and
(z) the right to use any of the licenses or other similar rights described in this definition in connection with the enforcement of the Noteholders’ rights under the Indenture Documents.
(xxiii) “Inventory Collateral” has the meaning specified therefor in Section 3(a).
(xxiv) “Issuer” has the respective meanings specified therefor in the recitals to this Agreement.
(xxv) “Joinder” means each Joinder to this Agreement executed and delivered by Agent and each of the other parties listed on the signature pages thereto, in substantially the form of Annex 1.
(xxvi) Material Adverse Effect” means (a) a material adverse effect on the business, assets, results of operations or financial condition of Issuer and its Restricted Subsidiaries taken as a whole or that would materially adversely affect the ability of the Issuer to perform its material obligations under the Indenture Documents, (b) a material impairment of the Agent or the Noteholders’ ability to enforce the Secured Obligations or realize upon the Collateral (other than as a result of an action taken or not taken that is solely in the control of Agent), or (c) a material impairment of the enforceability or priority of Agent’s Liens with respect to all or a material portion of the Collateral.
(xxvii) “Negotiable Collateral” means letters of credit, letter-of-credit rights, instruments, promissory notes, drafts and documents (as each such term is defined in the Code).
(xxviii) “Note Discharge” means the completion of a discharge, legal defeasance or covenant defeasance of the Indenture in accordance with Article VIII of the Indenture.
(xxix) “Noteholders” has the meaning specified therefor in the recitals to this Agreement.
(xxx) “Notes” means the Initial Notes, the Exchange Notes and the Additional Notes.
(xxxi) “Pledged Collateral” means all Pledged Interests, Pledged Operating Agreements, and Pledged Partnership Agreements.
(xxxii) “Pledged Companies” means each Person listed on Schedule 5 as a “Pledged Company”, together with each other Person, all or a portion of whose Equity Interests are acquired or otherwise owned by a Grantor after the Issue Date (in each case, to the extent not constituting Excluded Assets).
(xxxiii) “Pledged Interests” means each Grantor’s right, title and interest in and to the Equity Interests of the Pledged Companies as follows: 100% of the Equity Interests of all Domestic Subsidiaries of such Grantor other than Domestic Subsidiaries that are Foreign Subsidiary Holdcos, and 65% of the voting Equity Interests and 100% of the non-voting Equity Interests, if any, of all First-Tier Foreign Subsidiaries and all Foreign Subsidiary Holdcos owned by such Grantor, in each case, whether now owned or hereafter acquired by such Grantor, regardless of class or designation, and all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, also including any certificates representing the
Equity Interests, the right to receive any certificates representing any of the Equity Interests, all warrants, options, share appreciation rights and other rights, contractual or otherwise, in respect thereof and the right to receive all dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and all cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing (in each case, to the extent not constituting Excluded Assets); provided, however, that, in no event will the Pledged Interests (including any Equity Interests of Domestic Subsidiaries) include or be deemed to include any rights in respect of (1) voting Equity Interests in excess of 65% of all outstanding voting Equity Interests of any Foreign Subsidiary or of any Foreign Subsidiary Holdco, or (2) any assets of any Foreign Subsidiary.
(xxxiv) “Pledged Interests Addendum” means a Pledged Interests Addendum substantially in the form of Exhibit C.
(xxxv) “Pledged Operating Agreements” means all of each Grantor’s rights, powers, and remedies under the limited liability company operating agreements, or equivalent, of each of the Pledged Companies that are limited liability companies.
(xxxvi) “Pledged Partnership Agreements” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each of the Pledged Companies that are partnerships.
(xxxvii) “Proceeds” has the meaning specified therefor in Section 3(g).
(xxxviii) “PTO” means the United States Patent and Trademark Office.
(xxxix) “Receivables Collateral” has the meaning specified therefor in Section 3(b).
(xl) “Record” means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.
(xli) “Related Contract” has the meaning specified therefor in Section 3(b).
(xlii) “Rescission” has the meaning specified therefor in Section 7(k).
(xliii) Secured Obligations” means each and all of the following: (A) all of the present and future obligations of each of the Grantors arising from, or owing under or pursuant to, this Agreement, the Notes, or any of the other Indenture Documents, (B) all other Notes Obligations (including, in the case of each of clauses (A) and (B), reasonable attorneys’ fees and expenses and any interest, fees, or expenses that accrue after the filing of an Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any Insolvency or Liquidation Proceeding). For the avoidance of doubt, in each of clauses (A) and (B), Secured Obligations shall include all fees of, reimbursement of expenses
incurred by, indemnifications, damages and any other liabilities payable to, each of the Trustee and Agent.
(xliv) “Security Interest” has the meaning specified therefor in Section 3.
(xlv) “Specified Request” means, with respect to any Collateral, any request by the Agent given solely at the direction of the Holders of a majority in aggregate principal amount of the Notes or any similar request by any other Pari Passu Collateral Agent or by the ABL Collateral Agent in connection with the grant, creation, attachment, perfection or priority, or the exercise of any rights or remedies, with respect to the Agent’s Lien or the Lien in favor of any such Person on such Collateral.
(xlvi) “Supporting Obligations” means supporting obligations (as such term is defined in the Code), and includes letters of credit and guaranties issued in support of Accounts, Chattel Paper, documents, General Intangibles, instruments or Investment Property.
(xlvii) “Trademarks” means any and all trademarks, trade names, registered trademarks, trademark applications, service marks, registered service marks and service xxxx applications, including (A) the trade names, registered trademarks, trademark applications, registered service marks and service xxxx applications listed on Schedule 6, (B) all renewals thereof, (C) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions thereof, (D) the right to xxx for past, present and future infringements and dilutions thereof, (E) the goodwill of each Grantor’s business symbolized by the foregoing or connected therewith, and (F) all of each Grantor’s rights corresponding thereto throughout the world.
(xlviii) “Trademark Security Agreement” means each Trademark Security Agreement executed and delivered by Grantors, or any of them, and Agent, in substantially the form of Exhibit D.
(xlix) “Triggering Event” means, as of any date of determination, that an Event of Default under the Indenture has occurred as of such date.
(l) “URL” means “uniform resource locator,” an internet web address.
(b) Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein or in the Indenture). Unless otherwise expressly provided herein, any definition or reference to any law, rule or regulation shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or interpreting such law, rule or regulation. The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties. Any reference herein to the satisfaction, repayment, or payment in full of the Secured Obligations shall mean (i) the payment or repayment in full in immediately available funds of (A) the principal amount of, and interest accrued with respect to, all outstanding Notes, together with the payment of any premium applicable to the repayment of the Notes, (B) all expenses that have accrued regardless of whether demand has been made therefor, (C) all fees or charges that have accrued hereunder or under any other Indenture Document, (ii) the receipt by Agent of cash collateral in order to secure any other contingent Secured Obligations for which a claim or demand for payment has been made at such time or in respect of matters or circumstances known to Agent or a Noteholder at the time that are reasonably expected to result in any loss, cost, damage or expense (including attorneys’ fees and legal expenses), such cash collateral to be in such amount as Agent reasonably determines is appropriate to secure such contingent Secured Obligations, and (iii) the payment or repayment in full in immediately available funds of all other Secured Obligations other than unasserted contingent indemnification obligations. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.
(c) All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.
2. [Omitted]
3. Grant of Security. Each Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit of the Agent, the Trustee and each Noteholder, to secure the Secured Obligations, a continuing security interest (hereinafter referred to as the “Security Interest”) in all of such Grantor’s right, title, and interest in and to (but none of such Grantor’s obligation under) the following, whether now owned or hereafter acquired or arising and wherever located (the “Collateral”):
(a) all of such Grantor’s Inventory in all of its forms, including, without limitation, (a) all raw materials, work in process, finished goods and materials used or consumed in the manufacture, production, preparation or shipping thereof, (b) goods in which such Grantor has an interest in mass or a joint or other interest or right of any kind (including, without limitation, goods in which such Grantor has an interest or right as consignee) and (c) goods that are returned to or repossessed or stopped in transit by such Grantor), and all accessions thereto and products thereof and documents (as such term is defined in the Code), customs receipts, and shipping documents therefor, and all software that is embedded in and is part of the inventory (any and all such property being the “Inventory Collateral”)
(b) all of such Grantor’s Accounts, Chattel Paper, Negotiable Collateral, General Intangibles and other obligations of any kind, in each case arising out of or in connection with the sale or lease of goods or the rendering of services and whether or not earned by performance, and all rights now or hereafter existing in and to all supporting obligations and in and to all security agreements, mortgages, Liens, leases, letters of credit and other contracts securing or otherwise relating to the foregoing property (any and all of such Accounts, Chattel Paper, Negotiable Collateral, General Intangibles and other obligations, being the “Receivables Collateral”, and any and all such supporting obligations, security agreements, mortgages, Liens, leases, letters of credit and other contracts being the “Related Contracts”);
(c) all of the following (collectively, the “Account Collateral”):
(i) all of such Grantor’s Deposit Accounts and all funds and financial assets from time to time credited thereto (including, without limitation, all Cash
Equivalents), all interest, dividends, distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such funds and financial assets, and all certificates and instruments, if any, from time to time representing or evidencing the Deposit Accounts;
(ii) all of such Grantor’s certificates of deposit, Deposit Accounts, checks and other instruments from time to time delivered to or otherwise possessed by the Agent for or on behalf of such Grantor, including, without limitation, those delivered or possessed in substitution for or in addition to any or all of the then existing Account Collateral;
(iii) all of such Grantor’s collection accounts, disbursement accounts, lock-boxes, commodity accounts and Securities Accounts, including all cash, marketable securities, securities entitlements, financial assets and other funds and assets held in, on deposit in, or credited to any of the foregoing; and
(iv) all interest, dividends, distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing Account Collateral;
(d) all of such Grantor’s Trademarks, Intellectual Property and Intellectual Property Licenses, in each case, pertaining to any of the Collateral;
(e) all of such Grantor’s Books (including, without limitation, customer lists, credit files, printouts and other computer output materials and records) pertaining to any of Collateral;
(f) to the extent not otherwise included in the foregoing, all substitutes, replacements and accessions to any of the foregoing;
(g) all proceeds (as such term is defined in the Code) of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to, and Supporting Obligations relating to, any and all of the Collateral (including, without limitation, proceeds, collateral and Supporting Obligations that constitute property of the types described in clauses (a) through (f) above and this clause (g)) (the “Proceeds”) and, to the extent not otherwise included, all (x) payments under insurance (whether or not the Agent is the loss payee thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise, in each case, with respect to any of the foregoing Collateral, (y) tort claims, including, without limitation, all Commercial Tort Claims, in each case with respect to the foregoing Collateral and (z) cash with respect to the foregoing Collateral; and
(h) all of such Grantor’s Pledged Collateral.
Notwithstanding anything contained in this Agreement or any other Indenture Document to the contrary, the term “Collateral” shall not (and none of the terms used therein will) include:
(i) all of each Grantor’s right, title and interest in any real property, fixtures and equipment not constituting Inventory Collateral (including all vehicles and other rolling stock) of such Grantor (whether owned on the Issue Date or acquired following the Issue Date);
(ii) any permit, lease, license, contract, property rights, agreement, trademark or other Intellectual Property, to which a Grantor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (a) the abandonment, invalidation, cancellation or unenforceability of any right, title or interest of such Grantor therein or (b) a breach or
termination pursuant to the terms of, or a default under, any such permit, lease, license, contract, property rights, agreement, trademark or other Intellectual Property (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable requirement of law or principles of equity);
(iii) any Trademark or other Intellectual Property application to the extent the grant of a security interest therein would invalidate such application;
(iv) fixed or capital assets that are subject to a purchase money Lien or a capital lease in each case that constitutes a Permitted Lien, to the extent granting a security interest therein would be prohibited or require third party consent that cannot be obtained after use of commercially reasonable efforts;
(v) motor vehicles (or any equipment stored on or in any such motor vehicle), other goods covered by certificates of title or ownership or other rolling stock (whether or not covered by certificates of title or ownership);
(vi) cash collateral for letters of credit or Hedging Obligations permitted by the Indenture securing, in the case of letters of credit, an amount not to exceed 105% of the face amount of cash collateralized letters of credit for the benefit of the Grantors and, in the case of Hedging Obligations, not to exceed 105% of the amount of such Hedging Obligations;
(vii) any Equity Interests of any joint venture, partnership or other entity to the extent granting a security interest therein would constitute a default or termination under the terms of the joint venture agreement, partnership agreement, other organizational documents or other agreement of (or covering or purporting to cover the assets of) such joint venture, partnership or entity or its parent (that is not a Grantor) or result in the abandonment or invalidation of the Grantor’s or any Subsidiary of the Grantor’s interest in such joint venture, partnership or other entity;
(viii) Equity Interests in excess of 65% of all outstanding voting Equity Interests of any First-Tier Foreign Subsidiary or any Foreign Subsidiary Holdco;
(ix) Equity Interests in (a) an Immaterial Subsidiary, (b) any Foreign Subsidiary that is not a First-Tier Foreign Subsidiary, and (c) an Unrestricted Subsidiary;
(x) assets owned by a Grantor that are located outside of the United States (other than foreign Equity Interests as otherwise provided herein) to the extent a Lien on such assets cannot be created under the United States federal law or the laws of any State of the United States or the District of Columbia;
(xi) any Commercial Tort Claims or any letter of credit rights (other than Supporting Obligations constituting ABL Collateral);
(xii) proceeds (as such term is defined in the Code) and products of the foregoing to the extent they are also Excluded Assets; and
(xiii) (1) Deposit Accounts specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the employees of any Grantor established and used in the ordinary course of business, including without limitation deposit and securities accounts the balance of which consists exclusively of (x) withheld income taxes and federal, state or local employment taxes in such amounts as are required to be paid to the Internal Revenue Service or state or local government
agencies within the following two months with respect to employees of any Grantor, and (y) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of any Grantor, (2) all segregated Deposit Accounts constituting (and the balance of which consists solely of funds set aside in connection with) tax accounts and trust accounts, (3) any Deposit Accounts or concentration accounts, the deposits in which shall not aggregate more than $2,500,000 or exceed $1,000,000 with respect to any one account for a period of five (5) consecutive Business Days, (4) any insurance trust accounts maintained in the ordinary course of business and holding only funds necessary to fund the accrued insurance obligations of any Grantor in respect of self-insured health insurance and workers’ compensation insurance, and (5) any escrow accounts required to be maintained in connection with any Permitted Investments or Permitted Dispositions;
(the items of property specified in clauses (i) through (xiii) above, collectively, “Excluded Assets”) provided that, if any aforementioned asset or the proceeds thereof no longer constitute Excluded Assets, such asset shall immediately constitute Collateral, and a Lien on such asset shall immediately attach thereto.
4. Security for Secured Obligations. The Security Interest created hereby secures the payment and performance of the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to Agent, the Trustee, the Noteholders, or any of them, but for the fact that they are unenforceable or not allowable (in whole or in part) as a claim in an Insolvency or Liquidation Proceeding involving any Grantor due to the existence of such Insolvency or Liquidation Proceeding.
5. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) each of the Grantors shall remain liable under the contracts and agreements included in the Collateral, including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Agent or any Noteholder of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under such contracts and agreements included in the Collateral, and (c) none of the Agent or any Noteholder shall have any obligation or liability under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall any Agent or Noteholder be obligated to perform any of the obligations or duties of any Grantors thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. Until an Event of Default under the Indenture shall occur and be continuing, except as otherwise provided in this Agreement, the Indenture, or any other Indenture Document, Grantors shall have the right to possession and enjoyment of the Collateral for the purpose of conducting their respective businesses, subject to and upon the terms hereof and of the Indenture and the other Indenture Documents. Without limiting the generality of the foregoing, it is the intention of the parties hereto that record and beneficial ownership of the Pledged Interests, including all voting, consensual, dividend, and distribution rights, shall remain in the applicable Grantor until (i) the occurrence and continuance of an Event of Default under the Indenture and (ii) Agent has notified the applicable Grantor of Agent’s election to exercise such rights with respect to the Pledged Interests pursuant to Section 16.
6. Representations and Warranties. In order to induce Agent to enter into this Agreement for the benefit of the Agent, the Trustee and the Noteholders, each Grantor makes the following representations and warranties which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Issue Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as
of the date of the issue of any Additional Notes made thereafter, as though made on and as of the date of such subsequent date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:
(a) The name (within the meaning of Section 9-503 of the Code) and jurisdiction of organization of each Grantor is set forth on Schedule 7 (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under the Indenture Documents).
(b) The chief executive office of each Grantor is located at the address indicated on Schedule 7 (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under the Indenture Documents).
(c) Each Grantor’s tax identification numbers and organizational identification numbers, if any, are identified on Schedule 7 (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under the Indenture Documents).
(d) As of the Issue Date, no Grantor holds any commercial tort claims that exceed $3,000,000 in amount, except as set forth on Schedule 1.
(e) Set forth on Schedule 9 (as such Schedule may be updated from time to time subject to Section 7(k)(iii) with respect to Controlled Accounts and provided that Grantors comply with Section 7(c) hereof) is a listing of all of Grantors’ Deposit Accounts and Securities Accounts, including, with respect to each bank or securities intermediary (a) the name and address of such Person, and (b) the account numbers of the Deposit Accounts or Securities Accounts maintained with such Person.
(f) As of the Issue Date: (i) Schedule 3 provides a complete and correct list of all Intellectual Property Licenses entered into by any Grantor pursuant to which (A) any Grantor has provided any license or other rights in Intellectual Property owned or controlled by such Grantor to any other Person (other than non-exclusive software licenses granted in the ordinary course of business) or (B) any Person has granted to any Grantor any license or other rights in Intellectual Property owned or controlled by such Person that is necessary to the business of such Grantor, including any Intellectual Property that is incorporated in any Inventory, software, or other product marketed, sold, licensed, or distributed by such Grantor (other than commercial off-the-shelf software); and (ii) Schedule 6 provides a complete and correct list of all registered Trademarks owned by any Grantor and all applications for registration of Trademarks owned by any Grantor.
(g) (i) to each Grantor’s knowledge, such Grantor owns exclusively or holds licenses in all Intellectual Property that is necessary in the conduct of its business;
(ii) to each Grantor’s knowledge, no Person has infringed or misappropriated or is currently infringing or misappropriating any Intellectual Property rights owned by such Grantor, in each case, that either individually or in the aggregate would reasonably be expected to result in a Material Adverse Effect; and
(i) to each Grantor’s knowledge, all registered Trademarks that are owned by such Grantor and necessary in the conduct of its business are valid, subsisting and enforceable and in compliance with all legal requirements, filings, and payments and other
actions that are required to maintain such Intellectual Property in full force and effect, except as would not reasonably be expected to result in a Material Adverse Effect.
(h) This Agreement creates a valid security interest in the Collateral of each Grantor, to the extent a security interest therein can be created under the Code, securing the payment of the Secured Obligations. Except to the extent a security interest in the Collateral cannot be perfected by the filing of a financing statement under the Code, all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing statements listing each applicable Grantor, as a debtor, and Agent, as secured party, in the jurisdictions listed next to such Grantor’s name on Schedule 11. Upon the making of such filings, Agent shall have a first priority perfected security interest in the Notes Collateral (subject to Permitted Liens) and a second priority perfected security interest in the ABL Collateral (subject to Permitted Liens) of each Grantor to the extent such security interest can be perfected by the filing of a financing statement. Upon filing of any Trademark Security Agreement with the PTO, and the filing of appropriate financing statements in the jurisdictions listed on Schedule 11, all action necessary to protect and perfect the Security Interest in and on each Grantor’s Trademarks has been taken and such perfected Security Interest is enforceable as such as against any and all creditors of and purchasers from any Grantor.
(i) (i) Except for the Security Interest created hereby, each Grantor is and will at all times be the sole holder of record and the legal and beneficial owner, free and clear of all Liens other than Permitted Liens, of the Pledged Interests indicated on Schedule 5 as being owned by such Grantor and, when acquired by such Grantor, any Pledged Interests acquired after the Issue Date; (ii) all of the Pledged Interests are duly authorized, validly issued, fully paid and nonassessable and the Pledged Interests constitute or will constitute the percentage of the issued and outstanding Equity Interests of the Pledged Companies of such Grantor identified on Schedule 5 as supplemented or modified by any Pledged Interests Addendum or any Joinder to this Agreement; (iii) such Grantor has the right and requisite authority to pledge, the Pledged Collateral pledged by such Grantor to Agent as provided herein; (iv) all actions necessary or desirable to perfect and establish the priority of (subject to the Junior Lien Intercreditor Agreement and the Pari Passu Intercreditor Agreement), or otherwise protect, Agent’s Liens in the Pledged Collateral, and the proceeds thereof, have been duly taken, upon (A) the execution and delivery of this Agreement; (B) the taking of possession by the Agent, any other Pari Passu Collateral Agent or the ABL Collateral Agent (or its agent or designee), or, subject to the terms of the Junior Lien Intercreditor Agreement or the Pari Passu Intercreditor Agreement, of any certificates representing the Pledged Interests, together with undated powers (or other documents of transfer acceptable to the ABL Collateral Agent, such other Pari Passu Collateral Agent or the Agent, as applicable) endorsed in blank by the applicable Grantor; (C) the filing of financing statements in the applicable jurisdiction set forth on Schedule 11 for such Grantor with respect to the Pledged Interests of such Grantor that are not represented by certificates, and (D) with respect to any Securities Accounts, the delivery of Control Agreements with respect thereto granting control (x) in the case of ABL Collateral, to the ABL Collateral Agent, or after the Discharge of ABL Obligations, to the Authorized Collateral Agent, or (y) otherwise, to the Authorized Collateral Agent; and (v) subject to the terms of the Junior Lien Intercreditor Agreement or the Pari Passu Intercreditor Agreement, each Grantor has delivered to and deposited with the Authorized Collateral Agent or the ABL Collateral Agent, as bailee or agent for perfection for the benefit of the Agent as secured party, or the Agent all certificates representing the Pledged Interests owned by such Grantor to the extent such Pledged Interests are represented by certificates, and undated powers (or other documents of transfer acceptable to Agent) endorsed in blank with respect to such certificates. None of the Pledged Interests owned or held by such Grantor has been issued or transferred in violation of any securities registration, securities disclosure, or similar laws of any jurisdiction to which such issuance or transfer may be subject.
(j) Except, in each case, as would not reasonably be expected to result in a Material Adverse Effect, no consent, approval, authorization, or other order or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required (i) for the grant of a Security Interest by such Grantor in and to the Collateral pursuant to this Agreement or for the execution, delivery, or performance of this Agreement by such Grantor, or (ii) for the exercise by Agent of the voting or other rights provided for in this Agreement with respect to the Investment Property or the remedies in respect of the Collateral pursuant to this Agreement, except as may be required in connection with such disposition of Investment Property by laws affecting the offering and sale of securities generally and except for consents, approvals, authorizations, or other orders or actions that have been obtained or given (as applicable) and that are still in force.
(k) Except if any Grantor notifies Agent to the contrary, as to all limited liability company or partnership interests, issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby represents and warrants that the Pledged Interests issued pursuant to such agreement (A) are not dealt in or traded on securities exchanges or in securities markets, (B) do not constitute investment company securities, and (C) are not held by such Grantor in a Securities Account. In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, provide that such Pledged Interests are securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevant jurisdiction.
7. Covenants. Each Grantor, jointly and severally, covenants and agrees with Agent that from and after the date of this Agreement and until the date of termination of this Agreement in accordance with Section 23:
(a) Possession of Collateral. In the event that any Collateral, including Proceeds, is evidenced by or consists of Negotiable Collateral or Chattel Paper having an aggregate value or face amount of $3,000,000 or more for all such Negotiable Collateral or Chattel Paper, the Grantors shall promptly notify Agent thereof, and if and to the extent that perfection or priority of Agent’s Security Interest is dependent on or enhanced by possession, the applicable Grantor promptly after a Specified Request shall execute such other documents and instruments as shall be so requested or, if applicable, endorse and deliver physical possession of such Negotiable Collateral or Chattel Paper to Agent (or, subject to the terms of the Pari Passu Intercreditor Agreement or the Junior Lien Intercreditor Agreement, as applicable, to the Authorized Collateral Agent or the ABL Collateral Agent), together with such undated powers (or other relevant document of transfer acceptable to Agent) endorsed in blank as shall be requested pursuant to a Specified Request, and shall do such other acts or things deemed necessary to protect Agent’s Security Interest therein;
(b) Chattel Paper.
(i) Promptly after a Specified Request, each Grantor shall take all steps reasonably necessary to grant Agent control of all electronic Chattel Paper constituting Collateral in accordance with the Code and all “transferable records” as that term is defined in Section 16 of the Uniform Electronic Transaction Act and Section 201 of the federal Electronic Signatures in Global and National Commerce Act as in effect in any relevant jurisdiction, to the extent that the aggregate value or face amount of such electronic Chattel Paper equals or exceeds $3,000,000;
(ii) If any Grantor retains possession of any Chattel Paper or instruments constituting Collateral (which retention of possession shall be subject to the extent permitted hereby and by the Indenture), promptly after a Specified Request such Chattel Paper
and instruments shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the Security Interest of U.S. Bank National Association, as Agent for the benefit of the Trustee, the Agent and the Noteholders”;
(c) Control Agreements.
(i) Except to the extent otherwise excused by Section 7(k)(iv), each Grantor shall obtain an authenticated Control Agreement (which may include a Controlled Account Agreement), from each bank maintaining a Deposit Account or Securities Account for such Grantor;
(ii) Except to the extent otherwise excused by Section 7(k)(iv), each Grantor shall obtain an authenticated Control Agreement, from each issuer of uncertificated securities, securities intermediary, or commodities intermediary issuing or holding any financial assets or commodities to or for any Grantor, or maintaining a Securities Account for such Grantor; and
(iii) The Grantors shall have used their commercially reasonable efforts to complete, on or prior to the Issue Date, all actions required in connection with the perfection of all Security Interests in the Account Collateral, including obtaining the authenticated Control Agreements specified in clauses (i) and (ii) above. To the extent that any such actions (including the obtaining of authenticated Control Agreements) have not been completed on or prior to the Issue Date with respect to Account Collateral, the Grantors shall use their commercially reasonable efforts to complete such actions as soon as reasonably practicable and in any event shall complete such actions within 90 days after the Issue Date.
(d) Letter-of-Credit Rights. If the Grantors (or any of them) are or become the beneficiary of letters of credit in respect of any Collateral having a face amount or value of $3,000,000 or more in the aggregate, then the applicable Grantor or Grantors shall promptly, notify Agent thereof and shall promptly after a Specified Request, enter into a tri-party agreement with Agent and the issuer or confirming bank with respect to letter-of-credit rights assigning such letter-of-credit rights to Agent and directing all payments thereunder to Agent’s Account, all in form and substance reasonably satisfactory to Agent;
(e) Commercial Tort Claims. If the Grantors (or any of them) obtain Commercial Tort Claims constituting Collateral having a value, or involving an asserted claim, in the amount of $3,000,000 or more in the aggregate for all Commercial Tort Claims, then the applicable Grantor or Grantors shall promptly notify Agent upon incurring or otherwise obtaining such Commercial Tort Claims and, shall promptly after a Specified Request amend Schedule 1 to describe such Commercial Tort Claims in a manner that reasonably identifies such Commercial Tort Claims, and which is otherwise reasonably satisfactory to Agent, and hereby authorizes the filing of additional financing statements or amendments to existing financing statements describing such Commercial Tort Claims, and agrees to do such other acts or things deemed necessary or desirable to give Agent a first priority, perfected security interest in any such Commercial Tort Claim;
(f) Government Contracts. Other than Accounts and Chattel Paper the aggregate value of which does not at any one time exceed $3,000,000, if any Account or Chattel Paper constituting Collateral arises out of a contract or contracts with the United States of America or any department, agency, or instrumentality thereof, Grantors shall promptly notify Agent thereof and shall promptly after a Specified Request execute any instruments or take any steps reasonably required in order that all moneys due or to become due under such contract or contracts shall be assigned to Agent, for the benefit of the
Trustee, the Agent and the Noteholders, and shall provide written notice thereof under the Assignment of Claims Act or other applicable law to the Agent;
(g) Intellectual Property.
(i) In order to facilitate filings with the PTO, each Grantor shall execute and deliver to Agent one or more Trademark Security Agreements to further evidence Agent’s Lien on such Grantor’s Trademarks constituting Collateral and the General Intangibles of such Grantor relating thereto or represented thereby;
(ii) Each Grantor shall take all commercially reasonable steps which it reasonably deems appropriate under the circumstances, with respect to Intellectual Property that is necessary to the conduct of such Grantor’s business, to protect and enforce and defend at such Grantor’s expense its Intellectual Property, including, in its reasonable business judgment (A) to enforce and defend, including promptly suing for infringement, misappropriation, or dilution and to recover any and all damages for such infringement, misappropriation, or dilution, and filing for opposition, interference, and cancellation against conflicting Intellectual Property rights of any Person, (B) to prosecute any trademark application or service xxxx application that is part of the Trademarks pending as of the date hereof or hereafter until the termination of this Agreement, and (C) to take all reasonable and necessary action to preserve and maintain all of such Grantor’s Trademarks, Intellectual Property Licenses, and its rights therein, including paying all maintenance fees and filing of applications for renewal, affidavits of use, and affidavits of noncontestability. Each Grantor hereby agrees to take all commercially reasonable steps which it reasonably deems appropriate under the circumstances, as described in this Section 7(g)(ii) with respect to all new or acquired Intellectual Property to which it or any of its Subsidiaries is now or later becomes entitled that is necessary to the conduct of such Grantor’s business;
(iii) Grantors acknowledge and agree that the Agent, the Trustee or the Noteholders shall have no duties with respect to any Intellectual Property or Intellectual Property Licenses of any Grantor. Without limiting the generality of this Section 7(g)(iii), Grantors acknowledge and agree that neither the Agent, the Trustee nor any Noteholder shall be under any obligation to take any steps necessary to preserve rights in the Collateral consisting of Intellectual Property or Intellectual Property Licenses against any other Person, but the Agent or any Noteholder may (but is not obligated) to do so at its option from and after the occurrence and during the continuance of an Event of Default under the Indenture, and all reasonable documented out-of-pocket expenses incurred in connection therewith (including reasonable and documented fees and expenses of attorneys and other professionals) shall be for the sole account of the Grantors;
(iv) [Reserved].
(v) On each date on which financial statements are delivered pursuant to the Indenture in respect of a fiscal quarter, each Grantor shall provide Agent with a written report of all new Trademarks, if any, that are registered or the subject of pending applications for registrations, and of all Intellectual Property Licenses that are necessary to the conduct of such Grantor’s business, in each case, which were acquired, registered, or for which applications for registration were filed by any Grantor during the prior period and any statement of use or amendment to allege use with respect to intent-to-use trademark applications. In each of the foregoing cases, the applicable Grantor shall promptly cause to be prepared, executed, and delivered to Agent supplemental schedules to the applicable Indenture Documents to identify
such Trademark registrations and applications therefor (with the exception of Trademark applications filed on an intent-to-use basis for which no statement of use or amendment to allege use has been filed) and Intellectual Property Licenses as being subject to the security interests created thereunder;
(h) Pledged Collateral.
(i) If any Grantor shall acquire, obtain or receive any Pledged Interests after the Issue Date, it shall promptly deliver to Agent a duly executed Pledged Interests Addendum identifying such Pledged Interests;
(ii) Upon the occurrence and during the continuance of an Event of Default under the Indenture, all sums of money and property paid or distributed in respect of the Investment Property constituting Collateral that are received by any Grantor shall be held by the Grantors in trust for the benefit of Agent, the Trustee and the Noteholders segregated from such Grantor’s other property, and such Grantor shall, subject to the requirements of the Pari Passu Intercreditor Agreement and Junior Lien Intercreditor Agreement, deliver it forthwith to Agent in the exact form received;
(iii) [Reserved].
(iv) No Grantor shall make or consent to any amendment or other modification or waiver with respect to any Pledged Interests, Pledged Operating Agreement, or Pledged Partnership Agreement, or enter into any agreement or permit to exist any restriction with respect to any Pledged Interests if the same is prohibited pursuant to the Indenture Documents;
(v) Each Grantor agrees that it will obtain all necessary approvals and make all necessary filings under federal, state, local, or foreign law to effect the perfection of the Security Interest in favor of the Agent on the Investment Property constituting Collateral and, upon the occurrence and during the continuation of an Event of Default under the Indenture, to effect any sale or transfer thereof; provided that no Grantor shall have any obligation to make any filings or registrations to allow for a public sale of any Investment Property.
(vi) As to all limited liability company or partnership interests, issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby covenants that the Pledged Interests issued pursuant to such agreement (A) are not and shall not be dealt in or traded on securities exchanges or in securities markets, (B) do not and will not constitute investment company securities, and (C) are not and will not be held by such Grantor in a securities account. In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, provide or shall provide that such Pledged Interests are securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevant jurisdiction.
(i) [Reserved].
(j) Transfers and Other Liens. Grantors shall not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral, except as expressly permitted by the Indenture, or (ii) create or permit to exist any Lien upon or with respect to any
of the Collateral of any Grantor, except for Permitted Liens. The inclusion of Proceeds in the Collateral shall not be deemed to constitute Agent’s consent to any sale or other disposition of any of the Collateral except as expressly permitted in this Agreement or the other Indenture Documents;
(k) Controlled Accounts; Controlled Investments.
(i) Each Grantor shall (A) establish and maintain cash management services of a type and on terms reasonably satisfactory to Agent at one or more of the banks set forth on Schedule 10 (each a “Controlled Account Bank”), and shall take reasonable steps to ensure that all of its Account Debtors forward payment of the amounts owed by them directly to such Controlled Account Bank, and (B) deposit or cause to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, all of their collections (including those sent directly by their Account Debtors to a Grantor) into a bank account of such Grantor (each, a “Controlled Account”) at one of the Controlled Account Banks.
(ii) Each Grantor shall establish and maintain Controlled Account Agreements with Agent and the applicable Controlled Account Bank with respect to Controlled Accounts that constitute Collateral, in form and substance reasonably acceptable to Agent. Each such Controlled Account Agreement shall provide, among other things, that (A) the Controlled Account Bank will comply with any instructions originated by Agent directing the disposition of the funds in such Controlled Account without further consent by the applicable Grantor, (B) the Controlled Account Bank waives, subordinates, or agrees not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned checks or other items of payment, and (C) upon the instruction of Agent (an “Activation Instruction”), the Controlled Account Bank will forward by daily sweep all amounts in the applicable Controlled Account to the Agent’s Account. Agent agrees not to issue an Activation Instruction with respect to the Controlled Accounts unless a Triggering Event has occurred and is continuing at the time such Activation Instruction is issued. Agent agrees to use commercially reasonable efforts to rescind an Activation Instruction (the “Rescission”) if the Triggering Event upon which such Activation Instruction was issued has been waived in writing in accordance with the terms of the Indenture, and (2) no additional Triggering Event has occurred and is continuing on the date of the Rescission or is reasonably expected to occur on or immediately after the date of the Rescission.
(iii) So long as no Default or Event of Default under the Indenture has occurred and is continuing, Issuer may amend Schedule 10 to add or replace a Controlled Account Bank or Controlled Account and shall upon such addition or replacement provide to Agent an amended Schedule 10; provided, however, that (A) such prospective Controlled Account Bank shall be the Agent, an Affiliate of the Agent, the ABL Collateral Agent or an Affiliate thereof, a Pari Passu Collateral Agent or an Affiliate thereof or otherwise reasonably satisfactory to Agent, and (B) prior to the time of the opening of such Controlled Account (except with respect to any Controlled Account existing as of the Issue Date), the applicable Grantor and such prospective Controlled Account Bank shall have executed and delivered to Agent a Controlled Account Agreement.
(iv) From and after the date that is ninety (90) days after the Issue Date, no Grantor will open or maintain any Deposit Accounts or Securities Accounts, other than Deposit Accounts or Securities Accounts that are Excluded Assets, unless Grantor and the applicable bank or securities intermediary have entered into Control Agreements with Agent in order to perfect (and further establish) Agent’s Liens in such Deposit Account or Securities
Account and, notwithstanding anything in the Indenture Documents to the contrary, there shall be no Default or Event of Default under the Indenture until after the expiration of such ninety (90) day period for failure to have any such Control Agreements in place.
(l) Name, Etc. No Grantor will change its name, organizational identification number, jurisdiction of organization or organizational identity; provided, that Grantor may change its name upon at least ten (10) days’ prior written notice to Agent of such change.
8. Relation to Other Security Documents. The provisions of this Agreement shall be read and construed with the other Indenture Documents referred to below in the manner so indicated.
(a) Indenture. In the event of any conflict between any provision in this Agreement and a provision in the Indenture, such provision of the Indenture shall control.
(b) Trademark Security Agreements. The provisions of the Trademark Security Agreements are supplemental to the provisions of this Agreement, and nothing contained in the Trademark Security Agreements shall limit any of the rights or remedies of Agent hereunder. In the event of any conflict between any provision in this Agreement and a provision in a Trademark Security Agreement, such provision of this Agreement shall control.
(c) Intercreditor Agreements. Notwithstanding anything herein to the contrary, the Security Interest granted pursuant to or in connection with this Agreement, the terms of any other Security Document or the Indenture, certain other rights and privileges, and the exercise of any right or remedy by Agent hereunder are subject to the provisions of the Pari Passu Intercreditor Agreement and the Junior Lien Intercreditor Agreement (the “Intercreditor Agreements”). In the event of any conflict between the terms of the Intercreditor Agreements and this Agreement, the Indenture or any other Security Document, the terms of the Intercreditor Agreements shall control; provided that the terms of the Junior Lien Intercreditor Agreement governs and controls in the event of any conflict with the Pari Passu Intercreditor Agreement. In addition, whether expressly stated herein or in any other Indenture Document, so long as the Discharge of ABL Obligations has not occurred, the delivery of any ABL Collateral or any certificates, Instruments, Chattel Paper or Documents evidencing or in connection with such ABL Collateral to the ABL Collateral Agent as bailee or agent for perfection for the benefit of Agent as secured party, the granting of “control” over ABL Collateral, the execution and delivery of Control Agreements and/or the assignment of any ABL Collateral to the ABL Collateral Agent as bailee or agent for perfection for the benefit of Agent as secured party, in each case shall constitute compliance by the applicable Grantor with the provisions of this Agreement or any other Indenture Document which require delivery, possession, control and/or assignment of certain types of Collateral to the Agent or delivery of control agreements to the Agent.
9. Further Assurances.
(a) Each Grantor agrees that from time to time, at its own expense, such Grantor will promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably required, pursuant to a Specified Request in order to perfect and protect the Security Interest granted hereby, to create, perfect or protect the Security Interest purported to be granted hereby or to enable Agent to exercise and enforce its rights and remedies hereunder with respect to any of the Collateral.
(b) Each Grantor authorizes the filing by Agent of financing or continuation statements, or amendments thereto, as are necessary to perfect or preserve Agent’s Security Interest in the Collateral and such Grantor will execute and deliver to Agent such other instruments or notices, as Agent
may reasonably request, in order to perfect and preserve the Security Interest granted or purported to be granted hereby, it being understood that the Agent shall have no responsibility for any such filings. For the avoidance of doubt, it is each Grantor’s primary responsibility to establish, maintain and preserve the perfection of the Liens granted under this Agreement.
(c) Each Grantor authorizes Agent at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and amendments (i) describing the Collateral as set forth herein, (ii) describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance, it being understood that the Agent shall have no responsibility for any such filings. For the avoidance of doubt, it is each Grantor’s primary responsibility to establish, maintain and preserve the perfection of the Liens granted under this Agreement. Each Grantor also hereby ratifies any and all financing statements or amendments previously filed by Agent in any jurisdiction.
(d) Each Grantor acknowledges and agrees that it shall not file any financing statement or amendment or termination statement with respect to any financing statement filed in connection with this Agreement prior to the earlier of (x) the payment in full of the Secured Obligations or (y) the occurrence of a Note Discharge, except in compliance with this Agreement and the Indenture subject to such Grantor’s rights under Section 9-509(d)(2) of the Code.
(e) Each of the parties hereto acknowledges and agrees that nothing in this Agreement (i) creates, either directly or by implication, any Security Interest in, Lien on, or rights to any assets or property constituting Excluded Assets or (ii) requires compliance with any applicable foreign law with respect to the grant, creation and perfection of Liens on and Security Interest in any Collateral.
10. Agent’s Right to Perform Contracts, Exercise Rights, etc. Upon the occurrence and during the continuance of an Event of Default under the Indenture, Agent (or its designee) (a) may proceed to perform any and all of the obligations of any Grantor contained in any contract, lease, or other agreement and exercise any and all rights of any Grantor therein contained as fully as such Grantor itself could, (b) shall have the right to use any Grantor’s rights under Intellectual Property Licenses (to the extent that such use (a) does not violate the express terms of any agreement between such Grantor and a third party governing such Grantor’s use of the Intellectual Property License and (b) is not prohibited by any rule of law, statute or regulation) in connection with the enforcement of Agent’s rights hereunder, including the right to prepare for sale and sell any and all Inventory now or hereafter owned by any Grantor and now or hereafter covered by such licenses, and (c) shall have the right to request that any Equity Interests that are pledged hereunder be registered in the name of Agent or any of its nominees. Agent shall have no obligation under this Agreement to take any such action.
11. Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints Agent as its attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, at such time as an Event of Default has occurred and is continuing under the Indenture, subject to the terms of then existing leases, contracts and other agreements, to take any action and to execute any instrument which Agent may reasonably deem necessary or advisable to accomplish the purposes of this Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Accounts or any other Collateral of such Grantor;
(b) to receive and open all mail addressed to such Grantor and to notify postal authorities to change the address for the delivery of mail to such Grantor to that of Agent;
(c) to receive, indorse, and collect any drafts or other instruments, documents, Negotiable Collateral or Chattel Paper of any Grantor;
(d) to file any claims or take any action or institute any proceedings which Agent may deem necessary or desirable for the collection of any of the Collateral of such Grantor or otherwise to enforce the rights of Agent with respect to any of the Collateral;
(e) to repair, alter, or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any Person obligated to such Grantor in respect of any Account of such Grantor;
(f) to use any Intellectual Property or Intellectual Property Licenses (to the extent that such use (i) does not violate the express terms of any agreement between such Grantor and a third party governing such Grantor’s use of the Intellectual Property License and (ii) is not prohibited by any rule of law, statute or regulation) of such Grantor, including but not limited to any labels, Trademarks, trade names, URLs, domain names, industrial designs, or advertising matter, in preparing for sale, advertising for sale, or selling Inventory or other Collateral and to collect any amounts due under Accounts, contracts or Negotiable Collateral of such Grantor; and
(g) Agent, on behalf of the Trustee, the Agent and the Noteholders, shall have the right, but shall not be obligated, to bring suit in its own name to enforce the Intellectual Property and Intellectual Property Licenses and, if Agent shall commence any such suit, the appropriate Grantor shall, at the request of Agent, do any and all lawful acts and execute any and all proper documents reasonably required by Agent in aid of such enforcement.
To the extent permitted by law, each Grantor hereby ratifies all that such attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable until this Agreement is terminated.
12. Agent May Perform. If any Grantor fails to perform any agreement contained herein, Agent shall have the right, but shall not be obligated, to itself perform, or cause performance of, such agreement, and the reasonable expenses of Agent incurred in connection therewith shall be payable, jointly and severally, by Grantors.
13. Agent’s Duties. The powers conferred on Agent hereunder are solely to protect Agent’s interest in the Collateral, for the benefit of the Trustee, the Agent and the Noteholders, and shall not impose any duty upon Agent to exercise any such powers. Except for the safe custody of any Collateral in its actual possession and the accounting for moneys actually received by it hereunder, Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral and shall be under no obligation to act under this Agreement without instructions from Holders of a majority in aggregate principal amount of the Notes pursuant to the Indenture. Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its actual possession if such Collateral is accorded treatment substantially equal to that which Agent accords its own property.
14. Collection of Accounts, General Intangibles and Negotiable Collateral. At any time upon the occurrence and during the continuance of an Event of Default under the Indenture, Agent or Agent’s designee may (a) notify Account Debtors of any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable Collateral of such Grantor have been assigned to Agent, for the benefit of the Trustee, the Agent and the Noteholders, or that Agent has a security interest therein, and (b) collect the Accounts, General Intangibles and Negotiable Collateral of any Grantor directly, and any collection costs and expenses shall constitute part of such Grantor’s Secured Obligations under the Indenture Documents.
15. Disposition of Pledged Interests by Agent. None of the Pledged Interests existing as of the date of this Agreement are, and none of the Pledged Interests hereafter acquired on the date of acquisition thereof will be, registered or qualified under the various federal or state securities laws of the United States and disposition thereof after an Event of Default under the Indenture may be restricted to one or more private (instead of public) sales in view of the lack of such registration. Each Grantor understands that in connection with such disposition, Agent may approach only a restricted number of potential purchasers and further understands that a sale under such circumstances may yield a lower price for the Pledged Interests than if such Pledged Interests were registered and qualified pursuant to federal and state securities laws and sold on the open market. Each Grantor, therefore, agrees that: (a) if Agent shall, pursuant to the terms of this Agreement, sell or cause the Pledged Interests or any portion thereof to be sold at a private sale, Agent shall have the right to rely upon the advice and opinion of any nationally recognized brokerage or investment firm (but shall not be obligated to seek such advice and the failure to do so shall not be considered in determining the commercial reasonableness of such action) as to the best manner in which to offer the Pledged Interest or any portion thereof for sale and as to the best price reasonably obtainable at the private sale thereof; and (b) such reliance shall be conclusive evidence that Agent has handled the disposition in a commercially reasonable manner.
16. Voting and Other Rights in Respect of Pledged Interests.
(a) Upon the occurrence and during the continuation of an Event of Default under the Indenture, (i) Agent may, at its option, and with five (5) Business Days’ prior notice to any Grantor, and in addition to all rights and remedies available to Agent under any other agreement, at law, in equity, or otherwise, exercise all voting rights, or any other ownership or consensual rights (including any dividend or distribution rights) in respect of the Pledged Interests owned by such Grantor, but under no circumstances is Agent obligated by the terms of this Agreement to exercise such rights, and (ii) if Agent duly exercises its right to vote any of such Pledged Interests, each Grantor hereby appoints Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any manner Agent deems advisable for or against all matters submitted or which may be submitted to a vote of shareholders, partners or members, as the case may be. The power-of-attorney and proxy granted hereby is coupled with an interest and shall be irrevocable until either (x) the Secured Obligations have been paid in full or (y) a Note Discharge has occurred.
(b) For so long as any Grantor shall have the right to vote the Pledged Interests owned by it, such Grantor covenants and agrees that it will not vote or take any consensual action with respect to such Pledged Interests which would materially adversely affect the rights of Agent, the Trustee or the Noteholders without the prior written consent of the Holders of a majority in aggregate principal amount of the Notes, subject to the Intercreditor Agreements.
17. Remedies. Subject to the Intercreditor Agreements, upon the occurrence and during the continuance of an Event of Default under the Indenture:
(a) At the instruction of the Holders of the requisite percentage in aggregate principal amount of the Notes pursuant to the Indenture, Agent shall exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other Indenture Documents, or otherwise available to it, all the rights and remedies of a secured party on default under the Code or any other applicable law. Without limiting the generality of the foregoing, each Grantor expressly agrees that, in any such event, Agent without demand of performance or other demand, advertisement or notice of any kind (except a notice specified below of time and place of public or private sale or as required by applicable law) to or upon any Grantor or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), may take immediate possession of all or any portion of the Collateral and (i)
require Grantors to, and each Grantor hereby agrees that it will at its own expense and upon request of Agent forthwith, assemble all or part of the Collateral as directed by Agent and make it available to Agent at one or more locations where such Grantor regularly maintains Inventory, and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Agent’s offices or elsewhere, for cash, on credit, and upon such other terms as Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notification of sale shall be required by law, at least ten (10) days notification by mail to the applicable Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and specifically such notification shall constitute a reasonable “authenticated notification of disposition” within the meaning of Section 9-611 of the Code. Agent shall not be obligated to make any sale of Collateral regardless of notification of sale having been given. Agent may adjourn any public sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor agrees that (A) the internet shall constitute a “place” for purposes of Section 9-610(b) of the Code and (B) to the extent notification of sale shall be required by law, notification by mail of the URL where a sale will occur and the time when a sale will commence at least ten (10) days prior to the sale shall constitute a reasonable notification for purposes of Section 9-611(b) of the Code. Each Grantor agrees that any sale of Collateral to a licensor pursuant to the terms of a license agreement between such licensor and a Grantor is sufficient to constitute a commercially reasonable sale (including as to method, terms, manner, and time) within the meaning of Section 9-610 of the Code.
(b) Subject to the terms of the existing applicable agreements and contracts, Agent is hereby granted a license or other right to use, without liability for royalties or any other charge, each Grantor’s Intellectual Property, including but not limited to, any labels, Trademarks, trade names, URLs, domain names, industrial designs, and advertising matter, whether owned by any Grantor or with respect to which any Grantor has rights under license, sublicense, or other agreements (including any Intellectual Property License), as it pertains to the Collateral, in preparing for sale, advertising for sale and selling any Collateral, and each Grantor’s rights under all licenses and all franchise agreements shall inure to the benefit of Agent.
(c) Agent may, in addition to other rights and remedies provided for herein, in the other Indenture Documents, or otherwise available to it under applicable law and without the requirement of notice to or upon any Grantor or any other Person (which notice is hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), (i) with respect to any Grantor’s Deposit Accounts in which Agent’s Liens are perfected by control under Section 9-104 of the Code, instruct the bank maintaining such Deposit Account for the applicable Grantor to pay the balance of such Deposit Account to or for the benefit of Agent, and (ii) with respect to any Grantor’s Securities Accounts in which Agent’s Liens are perfected by control under Section 9-106 of the Code, instruct the securities intermediary maintaining such Securities Account for the applicable Grantor to (A) transfer any cash in such Securities Account to or for the benefit of Agent, or (B) liquidate any financial assets in such Securities Account that are customarily sold on a recognized market and transfer the cash proceeds thereof to or for the benefit of Agent.
(d) Any cash held by Agent as Collateral and all cash proceeds received by Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied against the Secured Obligations in the order set forth in the Indenture. In the event the proceeds of Collateral are insufficient to satisfy all of the Secured Obligations in full, each Grantor shall remain jointly and severally liable for any such deficiency.
(e) Each Grantor hereby acknowledges that the Secured Obligations arise out of a commercial transaction, and agrees that if an Event of Default under the Indenture shall occur and be continuing Agent shall have the right to an immediate writ of possession without notice of a hearing. Agent shall have the right to the appointment of a receiver for the Collateral of each Grantor, and each Grantor hereby consents to such rights and such appointment and hereby irrevocably waives any objection such Grantor may have thereto or the right to have a bond or other security posted by Agent.
18. Remedies Cumulative. Each right, power, and remedy of Agent, the Trustee or any Noteholders as provided for in this Agreement, the other Indenture Documents now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Agreement, the other Indenture Documents now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by Agent, the Trustee or the Noteholders of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by Agent, the Trustee or such other Noteholders of any or all such other rights, powers, or remedies.
19. Marshaling. Agent shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Secured Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of Agent’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Secured Obligations or under which any of the Secured Obligations is outstanding or by which any of the Secured Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.
20. Indemnity and Expenses.
(a) Each Grantor agrees to indemnify Agent, the Trustee and the other Noteholders from and against all claims, lawsuits and liabilities (including reasonable attorneys’ fees) growing out of or resulting from this Agreement (including enforcement of this Agreement) or any other Indenture Document to which such Grantor is a party, except claims, losses or liabilities resulting from the gross negligence or willful misconduct of the party seeking indemnification as determined by a final non-appealable order of a court of competent jurisdiction. This provision shall survive the termination of this Agreement and the Indenture and the repayment of the Secured Obligations.
(b) Grantors, jointly and severally, shall, upon demand, pay to Agent or the Trustee, as the case may be, all the reasonable and documented out-of-pocket expenses which Agent or the Trustee, respectively, may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or, upon an Event of Default under the Indenture, the sale of, collection from, or other realization upon, any of the Collateral in accordance with this Agreement and the other Indenture Documents, (iii) the exercise or enforcement of any of the rights of Agent hereunder or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.
21. Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER INDENTURE DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by Agent at the written direction of the Holders of a majority in aggregate principal amounts of the Notes, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by Agent and each Grantor to which such amendment applies.
22. Addresses for Notices. All notices and other communications provided for hereunder shall be given in the form and manner and delivered to Agent at its address specified in the Indenture, and to any of the Grantors at the addresses specified in the Indenture, for the Issuer, or, as to any party, at such other address as shall be designated by such party in a written notice to the other party.
23. Continuing Security Interest: Assignments under Indenture.
(a) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until either (x) the Secured Obligations have been paid in full in accordance with the provisions of the Indenture or (y) a Note Discharge has occurred, (ii) be binding upon each Grantor, and their respective successors and assigns, and (iii) inure to the benefit of, and be enforceable by, Agent, and its successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Noteholder may, in accordance with the provisions of the Indenture, assign or otherwise transfer all or any portion of its Notes to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Noteholder herein or otherwise. Upon payment in full of the Secured Obligations in accordance with the provisions of the Indenture or upon the occurrence of a Note Discharge, the Security Interest granted hereby shall automatically terminate, without the requirement of further action by any party, and all rights to the Collateral shall revert to Grantors or any other Person entitled thereto. At such time Issuer shall be entitled to file the appropriate termination statements to terminate such Security Interest by each Grantor or its designees and Agent shall take such other actions requested by any Grantor (at Grantors’ expense) to terminate or evidence the termination of such Security Interest. Except as set forth above, no transfer or renewal, extension, assignment, or termination of this Agreement or of the Indenture, any other Indenture Document, or any other instrument or document executed and delivered by any Grantor to Agent, nor the taking of further security, nor the retaking or re-delivery of the Collateral to Grantors, or any of them, by Agent, nor any other act of the Trustee or the Noteholders, or any of them, shall release any Grantor from any obligation, except in accordance with the provisions of the Indenture. Agent shall not by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder, unless such waiver is in writing and signed by Agent at the direction of the Holders of a majority in aggregate principal amount of the Notes and then only to the extent therein set forth. A waiver by Agent of any right or remedy on any occasion shall not be construed as a bar to the exercise of any such right or remedy which Agent would otherwise have had on any other occasion.
(b) Each Grantor agrees that, if any payment made by any Grantor or other Person and applied to the Secured Obligations is at any time annulled, avoided, set, aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by Agent, the Trustee or any Noteholder to such Grantor, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such payment had never been made. If, prior to any of the foregoing, any Lien or other Collateral securing such Grantor’s liability hereunder shall have been released or terminated by virtue of the foregoing clause (a), such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.
24. Survival. All representations and warranties made by the Grantors in this Agreement and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent, the Trustee or any Noteholder may have had notice or knowledge of any Default or Event of Default under the Indenture or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any loan or any fee or any other amount payable under the Indenture is outstanding and unpaid.
25. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.
(a) THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GRANTOR AND AGENT WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 25(b).
(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR AND AGENT AND NOTEHOLDER (BY ITS PURCHASE OF A NOTE) HEREBY WAIVE (OR DEEMED TO WAIVE) THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “CLAIM”). EACH GRANTOR AND AGENT AND EACH NOTEHOLDER (BY ITS PURCHASE OF A NOTE) REPRESENT (OR SHALL BE DEEMED TO REPRESENT) THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(d) EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND FEDERAL COURTS LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. 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 AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(e) NO CLAIM MAY BE MADE BY ANY GRANTOR AGAINST THE AGENT, THE TRUSTEE OR ANY NOTEHOLDER OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM, AND NO CLAIM MAY BE MADE BY THE AGENT, THE TRUSTEE OR ANY NOTEHOLDER AGAINST ANY GRANTOR, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH, AND EACH GRANTOR, THE AGENT, THE TRUSTEE AND EACH NOTEHOLDER HEREBY WAIVES, RELEASES, AND AGREES NOT TO XXX UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
26. New Subsidiaries. Pursuant to Section 4.14 of the Indenture (and subject to the limitations therein), certain Subsidiaries (whether by acquisition or creation or as otherwise specified therein) of any Grantor are required to enter into this Agreement by executing and delivering in favor of Agent a Joinder to this Agreement in substantially the form of Annex 1. Upon the execution and delivery of Annex 1 by any such new Subsidiary, 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 instrument adding an additional Grantor as a party to this Agreement 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 hereunder.
27. Agent. Each reference herein to any right granted to, benefit conferred upon or power exercisable by the “Agent” shall be a reference to Agent, for the benefit of the Trustee, the Agent and each Noteholder.
28. Miscellaneous.
(a) This Agreement is a Indenture Document. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original
executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Indenture Document mutatis mutandis.
(b) Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.
(c) Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.
(d) Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against any Agents, the Trustee, Noteholders or any Grantor, whether under any rule of construction or otherwise. This Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.
(e) The Trustee and the Holders from time to time of the Notes shall be express third party beneficiaries of this Agreement.
[signature pages follow]
IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to be executed and delivered as of the day and year first above written.
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GRANTORS: |
FTS INTERNATIONAL SERVICES, LLC | |
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By: |
/s/ Xxxxxxx X. Xxxx |
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Name: Xxxxxxx X. Xxxx |
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Title: Senior Vice President — Finance and |
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Treasurer |
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By: |
/s/ Xxxxxxx X. Xxxx |
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Name: Xxxxxxx X. Xxxx |
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Title: Senior Vice President — Finance and |
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Treasurer |
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FTS INTERNATIONAL MANUFACTURING, LLC | |
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By: |
/s/ Xxxxxxx X. Xxxx |
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Name: Xxxxxxx X. Xxxx |
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Title: Senior Vice President — Finance and |
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Treasurer |
[SIGNATURE PAGE TO SECURITY AGREEMENT]
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AGENT: |
U.S. BANK NATIONAL ASSOCIATION, a national | |
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banking association, solely in its capacity as Agent | |
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By: |
/s/ Xxxxxx Xxxx |
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Name: Xxxxxx Xxxx |
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Title: Assistant Vice President |
[SIGNATURE PAGE TO SECURITY AGREEMENT]
SCHEDULE 1
COMMERCIAL TORT CLAIMS
1. Counterclaim in excess of $3,000,000 against Continental Industrial Group, Inc. for breach of contract and fraudulent inducement. Continental Industries Group, Inc. v. FTS International Services, LLC (f/k/a Frac Tech Services, LLC), Cause Xx. 00 Xxx. 0000 (XXX)(XX) pending in the United States District Court for the Southern District of New York.
[SCHEDULES TO SECURITY AGREEMENT]
SCHEDULE 3
INTELLECTUAL PROPERTY LICENSES
None.
[SCHEDULES TO SECURITY AGREEMENT]
SCHEDULE 5
PLEDGED COMPANIES
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Name of |
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Name of |
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Number of |
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Class of |
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Percentage of |
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Percentage of |
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Certificate |
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FTS International Services, LLC |
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N/A |
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Membership interests |
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100% |
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100% |
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Uncertificated | |
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FTS International Services, LLC. |
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FTS International Manufacturing, LLC |
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N/A |
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Membership interests |
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100% |
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100% |
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Uncertificated |
[SCHEDULES TO SECURITY AGREEMENT]
SCHEDULE 6
TRADEMARKS
UNITED STATES TRADEMARKS
U.S. Registrations:
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Owner |
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Registration Number |
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Description |
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FTS International Services, LLC |
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4416031 |
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Aquacor (design in blue) |
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FTS International Services, LLC |
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4416030 |
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Aquacor |
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FTS International Services, LLC |
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4054905 |
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CHL |
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FTS International Services, LLC |
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3497579 |
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CITRINE |
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FTS International Services, LLC |
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3322250 |
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CS-POLYBREAK 210 |
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FTS International Services, LLC |
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4451132 |
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DIAMOND design |
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FTS International Services, LLC |
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4189683 |
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ECO GREEN |
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FTS International Services, LLC |
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4151986 |
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ENERGY SOLUTIONS. WORLDWIDE. |
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FTS International Services, LLC |
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4193471 |
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“F” (shield design) |
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FTS International Services, LLC |
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4193472 |
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“F” (shield design in color) |
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FTS International Services, LLC |
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4185461 |
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“F” (stylized design) |
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FTS International Services, LLC |
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4204838 |
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“F” (stylized design in color) |
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FTS International Services, LLC |
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4313998 |
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F FTS INTERNATIONAL (horizontal design plus words) |
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FTS International Services, LLC |
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4318050 |
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F FTS INTERNATIONAL (horizontal design plus words in color) |
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FTS International Services, LLC |
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4313999 |
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F FTS INTERNATIONAL (vertical design plus words) |
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FTS International Services, LLC |
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4314000 |
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F FTS INTERNATIONAL (vertical design plus words in color) |
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FTS International Services, LLC |
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4011448 |
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FRAC TECH |
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FTS International Services, LLC |
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3522979 |
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FT Frac Tech (logo & design) |
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FTS International Services, LLC |
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4313997 |
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FTS INTERNATIONAL |
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FTS International Services, LLC |
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4471425 |
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FTS INTERNATIONAL MANUFACTURING |
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FTS International Services, LLC |
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4329229 |
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FTS INTERNATIONAL PROPPANTS |
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FTS International Services, LLC |
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4332747 |
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FTS INTERNATIONAL SERVICES |
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FTS International Services, LLC |
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4388204 |
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FTS INTERNATIONAL WIRELINE |
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FTS International Services, LLC |
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4332750 |
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FTSI |
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FTS International Services, LLC |
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4290177 |
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FTSI PROPPANTS |
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FTS International Services, LLC |
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3437249 |
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JADE |
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FTS International Services, LLC |
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4214082 |
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NPD |
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FTS International Services, LLC |
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4108769 |
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NPD-2000 |
[SCHEDULES TO SECURITY AGREEMENT]
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FTS International Services, LLC |
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4177022 |
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NPD-3000 |
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FTS International Services, LLC |
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3428709 |
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OPAL |
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FTS International Services, LLC |
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4210164 |
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PFP |
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FTS International Services, LLC |
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3393387 |
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PLATINUM |
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FTS International Services, LLC |
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3383301 |
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RUBY |
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FTS International Services, LLC |
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4159362 |
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SLICKWATER GREEN |
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FTS International Services, LLC |
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4159141 |
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SW-GREEN |
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FTS International Services, LLC |
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3393386 |
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TURQUOISE |
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FTS International Services, LLC |
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4018863 |
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VS (design) |
U.S. Applications:
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Owner |
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Application |
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Description |
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FTS International Services, LLC |
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86226256 |
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DIAMOND |
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FTS International Services, LLC |
|
86228572 |
|
F FTS INTERNATIONAL Unconventional by Design (horizontal design plus words) |
OTHER TRADEMARKS
International Registrations:
|
Owner |
|
Registration |
|
Country |
|
Description |
|
FTS International Services, LLC |
|
1084396 |
|
WIPO |
|
CHL |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
CHL (International Class 035) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
CHL (International Class 037) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
CHL (International Class 040) |
|
FTS International Services, LLC |
|
1105982 |
|
European Union (WIPO) |
|
“F” (shield design in color) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
“F” (shield design in color) |
|
FTS International Services, LLC |
|
1476283 (Xxxxxxxxx Xx.) 0000000 (XXXX Xx.) |
|
Xxxxxxxxx (WIPO) |
|
“F” (stylized design) |
|
FTS International Services, LLC |
|
1106398 |
|
European Union (WIPO) |
|
“F” (stylized design) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
“F” (stylized design) |
|
FTS International Services, LLC |
|
1106172 |
|
European Union (WIPO) |
|
F FTS INTERNATIONAL (horizontal design plus words) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
F FTS INTERNATIONAL (horizontal design plus words) |
[SCHEDULES TO SECURITY AGREEMENT]
|
FTS International Services, LLC |
|
1105450 |
|
European Union (WIPO) |
|
F FTS INTERNATIONAL (vertical design plus words in color) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
F FTS INTERNATIONAL (vertical design plus words in color) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxx (WIPO) |
|
FRAC TECH |
|
FTS International Services, LLC |
|
1072356 |
|
European Union (WIPO) |
|
XXXX XXXX |
|
XXX Xxxxxxxxxxxxx Xxxxxxxx, XXX |
|
0000000 |
|
Xxxxx (WIPO) |
|
FT Frac Tech (logo and design) |
|
FTS International Services, LLC |
|
1066207 |
|
European Union (WIPO) |
|
FT Frac Tech (logo and design) |
|
FTS International Services, LLC |
|
2574724 |
|
Argentina |
|
FTS INTERNATIONAL (International Class 040) |
|
FTS International Services, LLC |
|
1105453 |
|
European Union (WIPO) |
|
FTS INTERNATIONAL |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
FTS INTERNATIONAL |
|
FTS International Services, LLC |
|
1129118 |
|
China (WIPO) |
|
FTSI |
|
FTS International Services, LLC |
|
1129118 |
|
European Union (WIPO) |
|
FTSI |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
FTSI (International Class 001) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
FTSI (International Class 040) |
|
FTS International Services, LLC |
|
2572756 |
|
Argentina |
|
NPD-2000 |
|
FTS International Services, LLC |
|
1113274 |
|
Australia (WIPO) |
|
NPD-2000 |
|
FTS International Services, LLC |
|
1113274 |
|
China (WIPO) |
|
NPD-2000 |
|
FTS International Services, LLC |
|
1113274 |
|
European Union (WIPO) |
|
NPD-2000 |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
NPD-2000 |
|
FTS International Services, LLC |
|
1113274 |
|
Oman (WIPO) |
|
NPD-2000 |
|
FTS International Services, LLC |
|
2572757 |
|
Argentina |
|
NPD-3000 |
|
FTS International Services, LLC |
|
1123027 |
|
China (WIPO) |
|
NPD-3000 |
|
FTS International Services, LLC |
|
1123027 |
|
European Union (WIPO) |
|
NPD-3000 |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
NPD-3000 |
|
FTS International Services, LLC |
|
2572758 |
|
Argentina |
|
SW-GREEN |
|
FTS International Services, LLC |
|
1124015 |
|
Australia (WIPO) |
|
SW-GREEN |
|
FTS International Services, LLC |
|
1124015 |
|
China (WIPO) |
|
SW-GREEN |
|
FTS International Services, LLC |
|
1124015 |
|
European Union (WIPO) |
|
SW-GREEN |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
SW-GREEN |
|
FTS International Services, LLC |
|
1087729 |
|
Australia (WIPO) |
|
VS (design) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxx (WIPO) |
|
VS (design) |
[SCHEDULES TO SECURITY AGREEMENT]
|
FTS International Services, LLC |
|
1085369 |
|
European Union (WIPO) |
|
VS (design) |
|
FTS International Services, LLC |
|
0000000 |
|
Xxxxxx |
|
VS (design) |
|
FTS International Services, LLC |
|
3144472 |
|
Argentina |
|
FTS INTERNATIONAL (International Class 001) |
International Applications:
|
Owner |
|
Application |
|
Country |
|
Description |
|
FTS International Services, LLC |
|
840084714 |
|
Brazil |
|
“F” (shield design in color) |
|
FTS International Services, LLC |
|
840084692 |
|
Brazil |
|
“F” (shield design (in color) |
|
FTS International Services, LLC |
|
1558350 |
|
Canada |
|
“F” (shield design in color) |
|
FTS International Services, LLC |
|
177903 |
|
Saudi Arabia |
|
“F” (shield design in color) International Class 001 |
|
FTS International Services, LLC |
|
177904 |
|
Saudi Arabia |
|
“F” (shield design in color) International Class 040 |
|
FTS International Services, LLC |
|
840084587 |
|
Brazil |
|
“F” (stylized design) International Class 001 |
|
FTS International Services, LLC |
|
840084595 |
|
Brazil |
|
“F” (stylized design) International Class 040 |
|
FTS International Services, LLC |
|
1558357 |
|
Canada |
|
“F” (stylized design) |
|
FTS International Services, LLC |
|
1106398 |
|
China (WIPO) |
|
“F” (stylized design) |
|
FTS International Services, LLC |
|
1106398 |
|
Oman (WIPO) |
|
“F” (stylized design) |
|
FTS International Services, LLC |
|
177911 |
|
Saudi Arabia |
|
“F” (stylized design) International Class 001 |
|
FTS International Services, LLC |
|
177912 |
|
Saudi Arabia |
|
“F” (stylized design) International Class 040 |
|
FTS International Services, LLC |
|
840084668 |
|
Brazil |
|
F FTS INTERNATIONAL (horizontal design plus words) International Class 001 |
|
FTS International Services, LLC |
|
840084641 |
|
Brazil |
|
F FTS INTERNATIONAL (horizontal design plus words) International Class 040 |
|
FTS International Services, LLC |
|
1558355 |
|
Canada |
|
F FTS INTERNATIONAL (horizontal design plus words) |
|
FTS International Services, LLC |
|
1106172 |
|
Oman (WIPO) |
|
F FTS INTERNATIONAL (horizontal design plus words) |
|
FTS International Services, LLC |
|
177907 |
|
Saudi Arabia |
|
F FTS INTERNATIONAL (horizontal design plus words) International Class 001 |
[SCHEDULES TO SECURITY AGREEMENT]
|
Owner |
|
Application |
|
Country |
|
Description |
|
FTS International Services, LLC |
|
177908 |
|
Saudi Arabia |
|
F FTS INTERNATIONAL (horizontal design plus words) International Class 040 |
|
FTS International Services, LLC |
|
840084684 |
|
Brazil |
|
F FTS INTERNATIONAL (vertical design plus words in color) International Class 001 |
|
FTS International Services, LLC |
|
840084676 |
|
Brazil |
|
F FTS INTERNATIONAL (vertical design plus words in color) International Class 040 |
|
FTS International Services, LLC |
|
1105450 |
|
Oman (WIPO) |
|
F FTS INTERNATIONAL (vertical design plus words in color) |
|
FTS International Services, LLC |
|
177905 |
|
Saudi Arabia |
|
F FTS INTERNATIONAL (vertical design plus words in color) International Class 001 |
|
FTS International Services, LLC |
|
177906 |
|
Saudi Arabia |
|
F FTS INTERNATIONAL (vertical design plus words in color) International Class 040 |
|
FTS International Services, LLC |
|
1521084 |
|
Canada |
|
FT Frac Tech (logo and design) |
|
FTS International Services, LLC |
|
840582870 |
|
Brazil |
|
FTS BRASIL (logo design) International Class 001 |
|
FTS International Services, LLC |
|
840582900 |
|
Brazil |
|
FTS BRASIL (logo design) International Class 040 |
|
FTS International Services, LLC |
|
840084633 |
|
Brazil |
|
FTS INTERNATIONAL |
|
FTS International Services, LLC |
|
840084617 |
|
Brazil |
|
FTS INTERNATIONAL |
|
FTS International Services, LLC |
|
1558356 |
|
Canada |
|
FTS INTERNATIONAL |
|
FTS International Services, LLC |
|
1105453 |
|
Oman (WIPO) |
|
FTS INTERNATIONAL |
|
FTS International Services, LLC |
|
177909 |
|
Saudi Arabia |
|
FTS INTERNATIONAL (International Class 001) |
|
FTS International Services, LLC |
|
177910 |
|
Saudi Arabia |
|
FTS INTERNATIONAL (International Class 040) |
|
FTS International Services, LLC |
|
3184055 |
|
Argentina |
|
FTSI (International Class 001) |
|
FTS International Services, LLC |
|
3184056 |
|
Argentina |
|
FTSI (International Class 040) |
|
FTS International Services, LLC |
|
840230940 |
|
Brazil |
|
FTSI (International Class 001) |
|
FTS International Services, LLC |
|
840230710 |
|
Brazil |
|
FTSI (International Class 040) |
|
FTS International Services, LLC |
|
1589654 |
|
Canada |
|
FTSI |
|
FTS International Services, LLC |
|
1129118 |
|
Oman (WIPO) |
|
FTSI |
[SCHEDULES TO SECURITY AGREEMENT]
|
Owner |
|
Application |
|
Country |
|
Description |
|
FTS International Services, LLC |
|
185500 |
|
Saudi Arabia |
|
FTSI (International Class 001) |
|
FTS International Services, LLC |
|
185501 |
|
Saudi Arabia |
|
FTSI (International Class 040) |
|
FTS International Services, LLC |
|
840007566 |
|
Brazil |
|
NPD-2000 |
|
FTS International Services, LLC |
|
177900 |
|
Saudi Arabia |
|
NPD-2000 |
|
FTS International Services, LLC |
|
840007558 |
|
Brazil |
|
NPD-3000 |
|
FTS International Services, LLC |
|
1123027 |
|
Oman (WIPO) |
|
NPD-3000 |
|
FTS International Services, LLC |
|
1560495 |
|
Canada |
|
NPD-3000 |
|
FTS International Services, LLC |
|
177901 |
|
Saudi Arabia |
|
NPD-3000 |
|
FTS International Services, LLC |
|
840007540 |
|
Brazil |
|
SW-GREEN |
|
FTS International Services, LLC |
|
1560498 |
|
Canada |
|
SW-GREEN |
|
FTS International Services, LLC |
|
1124015 |
|
Oman (WIPO) |
|
SW-GREEN |
|
FTS International Services, LLC |
|
177902 |
|
Saudi Arabia |
|
SW-GREEN |
|
FTS International Services, LLC |
|
831171898 |
|
Brazil |
|
VS (design) |
[SCHEDULES TO SECURITY AGREEMENT]
SCHEDULE 7
NAME; CHIEF EXECUTIVE OFFICE; TAX IDENTIFICATION NUMBERS AND ORGANIZATIONAL NUMBERS
|
Grantor |
|
Organizational |
|
Federal |
|
Chief Executive |
|
Jurisdiction |
|
|
4966919 |
|
00-0000000 |
|
000 Xxxx Xxxxxx Xxxxx 0000 Xxxx Xxxxx, XX 00000 |
|
Delaware | |
|
FTS International Services, LLC |
|
0000000000 |
|
00-0000000 |
|
000 Xxxx Xxxxxx Xxxxx 0000 Xxxx Xxxxx, XX 00000 |
|
Texas |
|
FTS International Manufacturing, LLC |
|
0800918108 |
|
00-0000000 |
|
000 Xxxx Xxxxxx Xxxxx 0000 Xxxx Xxxxx, XX 00000 |
|
Texas |
|
Entity |
|
Owner |
|
Jurisdiction of |
|
FTS International Services, LLC |
|
|
Texas | |
|
FTS International Manufacturing, LLC |
|
FTS International Services, LLC |
|
Texas |
|
FTS International Ventures I, LLC |
|
FTS International Services, LLC |
|
Delaware |
|
FTS International Ventures II, LLC |
|
FTS International Services, LLC |
|
Delaware |
|
FTS International Netherlands I C.V. |
|
FTS International Ventures I, LLC |
|
Netherlands |
|
|
|
FTS International Ventures II, LLC |
|
|
|
FTS International Netherlands II C.V. |
|
FTS International Netherlands I C.V. |
|
Netherlands |
|
|
|
FTS International Ventures II, LLC |
|
|
|
FTS International Netherlands, LLC |
|
FTS International Netherlands II C.V. |
|
Delaware |
|
FTS International Netherlands Coöperatief U.A. |
|
FTS International Netherlands II C.V. |
|
Netherlands |
|
|
FTS International Netherlands, LLC |
|
| |
|
FTS International Netherlands B.V. |
|
FTS International Netherlands Coöperatief U.A. |
|
Netherlands |
[SCHEDULES TO SECURITY AGREEMENT]
SCHEDULE 9
DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS
|
|
|
Address and Contact of |
|
|
|
Account |
|
Type of |
|
Depository |
|
Depository |
|
Grantor |
|
Number |
|
Account |
|
Bank of |
|
000 Xxxxxxxxx Xxxxxx |
|
FTS International |
|
488038435379 |
|
Investment |
|
America, NA |
|
8th Floor |
|
Services, LLC |
|
|
|
|
|
|
|
Xxxxxxx, Xxxxx 00000 |
|
|
488035054999 |
|
Funding | |
|
|
|
|
|
|
488035055008 |
|
Equity | |
|
|
|
Contact: |
|
|
488035055011 |
|
Payments | |
|
|
|
Xxxxx Xxxxxxx |
|
|
0000000000 |
|
Debt Reserve | |
|
|
|
000-000-0000 xxxxx.xxxxxxx@xxxx.xxx |
|
FTS International Services, LLC |
|
91000143745765 |
|
Certificate of Deposit |
|
US Bank(1) |
|
000 Xxxxxxxxx Xxxx |
|
FTS International, Inc. |
|
103680457860 |
|
Checking |
|
|
|
Xxxxxx, Xxxxxxxx 00000 |
|
FTS International, Inc. |
|
103659512786 |
|
Money Market |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
|
|
|
|
|
|
|
|
|
Xxxxx X. Xxxxxxxx |
|
|
|
|
|
|
|
|
|
000-000-0000 xxxxx.xxxxxxxx@xxxxxx.xxx |
|
|
|
|
|
|
|
Xxxxx Fargo |
|
0000 Xxxxxxxxx Xxxxxx |
|
FTS International |
|
4124309303 |
|
Master |
|
Bank NA |
|
9th Floor |
|
Manufacturing, LLC |
|
|
|
Account |
|
|
|
Xxxxxxx, Xxxxx 00000 |
|
FTS International |
|
4124309311 |
|
Payroll |
|
|
|
|
|
Manufacturing, LLC |
|
|
|
Account |
|
|
|
Contact: Xxxxxxx Xxxxxxx |
|
|
|
|
|
(ZBA) |
|
|
|
000-000-0000 xxxxxxx.x.xxxxxxx@wellsfarg x.xxx |
|
FTS International Services, LLC |
|
4122055304 |
|
Master - Logistics |
|
|
|
|
|
FTS International |
|
4121482244 |
|
Master |
|
|
|
|
|
Services, LLC |
|
|
|
Account |
|
|
|
|
|
FTS International |
|
4121482251 |
|
Payroll |
|
|
|
|
|
Services, LLC |
|
|
|
Account |
|
|
|
|
|
|
|
|
|
(ZBA) |
|
|
|
|
|
FTS International |
|
4122257108 |
|
Flexible |
|
|
|
|
|
Services, LLC |
|
|
|
Spend |
|
|
|
|
|
FTS International |
|
4121484752 |
|
Master |
|
|
|
|
|
Manufacturing, LLC |
|
|
|
Account |
|
|
|
|
|
FTS International |
|
4121484760 |
|
Payroll |
|
|
|
|
|
Manufacturing, LLC |
|
|
|
Account |
|
|
|
|
|
|
|
|
|
(ZBA) |
|
|
|
|
|
FTS International, Inc. |
|
0000000000 |
|
Deposit |
(1) US Bank accounts are holdover from Western Colorado Truck Center, LLC, which has been merged out of existence.
[SCHEDULES TO SECURITY AGREEMENT]
SCHEDULE 10
CONTROLLED ACCOUNT BANKS
Xxxxx Fargo Bank, National Association
0000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxx 00000
[SCHEDULES TO SECURITY AGREEMENT]
SCHEDULE 11
LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS
|
Grantor |
|
Jurisdiction |
|
FTS International, Inc. |
|
Delaware Secretary of State |
|
FTS International Services, LLC |
|
Texas Secretary of State |
|
FTS International Manufacturing, LLC |
|
Texas Secretary of State |
[SCHEDULES TO SECURITY AGREEMENT]
ANNEX 1 TO SECURITY AGREEMENT
FORM OF JOINDER
Joinder No. (this “Joinder”), dated as of 20 , to the Security Agreement, dated as of April 16, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “Security Agreement”), by and among each of the parties listed on the signature pages thereto and those additional entities that thereafter become parties thereto (collectively, jointly and severally, “Grantors” and each, individually, a “Grantor”) and U.S. BANK NATIONAL ASSOCIATION, a national banking association (“US Bank”), in its capacity as collateral agent for the Noteholders (as defined below) (in such capacity, together with its successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Indenture dated as of April 16, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “Indenture”) by and among FTS INTERNATIONAL, INC., a Delaware corporation (the “Issuer”), and the guarantors party thereto and U.S. Bank National Association, as trustee, the Issuer issued $500,000,000 aggregate principal amount of 6.250% Senior Secured Notes due 2022; and
WHEREAS, initially capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement or, if not defined therein, in the Indenture, and this Joinder shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis; and
WHEREAS, Grantors have entered into the Security Agreement to provide security for the Notes for the benefit of the Trustee, Agent and the holders of the Notes (the “Noteholders”); and
WHEREAS, pursuant to Section 4.14 of the Indenture and Section 26 of the Security Agreement, certain Subsidiaries of the Issuer must execute and deliver certain Indenture Documents, and the joinder to the Security Agreement by the undersigned new Grantor or Grantors (collectively, the “New Grantors”) may be accomplished by the execution of this Joinder in favor of Agent, for the benefit of the Trustee, Agent and Noteholders;
WHEREAS, each New Grantor (a) is a Subsidiary of the Issuer and, as such, will benefit or has benefited by virtue of the issuance of the Notes and (b) by becoming a Grantor will benefit from certain rights granted to the Grantors pursuant to the terms of the Indenture Documents;
NOW, THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each New Grantor hereby agrees as follows:
1. In accordance with Section 26 of the Security Agreement, each 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 each New Grantor hereby (a) agrees to all of the terms and provisions of the Security Agreement applicable to it as a “Grantor” thereunder and (b) represents and warrants that the representations and warranties made by it as a “Grantor” thereunder are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof. In furtherance of the foregoing, each New Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit of the Trustee, Agent and the Noteholders, to secure the Secured Obligations, a continuing security interest in and to all of such New Grantor’s right, title and interest in
and to the Collateral. Each reference to a “Grantor” in the Security Agreement shall be deemed to include each New Grantor. The Security Agreement is incorporated herein by reference.
2. Schedule 1, “Commercial Tort Claims”, Schedule 3, “Intellectual Property Licenses”, Schedule 5, “Pledged Companies”, Schedule 6, “Trademarks”, Schedule 7, “Name; Chief Executive Office; Tax Identification Numbers and Organizational Numbers”, Schedule 9, “Deposit Accounts and Securities Accounts”, Schedule 10, “Controlled Account Banks”, and Schedule 11, “List of Uniform Commercial Code Filing Jurisdictions” attached hereto supplement Schedule 1, Schedule 3, Schedule 5, Schedule 6, Schedule 7, Schedule 9, Schedule 10, and Schedule 11, respectively, to the Security Agreement and shall be deemed a part thereof for all purposes of the Security Agreement.
3. Each New Grantor shall file, transmit or communicate and, as applicable, authorizes Agent at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and amendments thereto (i) describing the Collateral as set forth in the Security Agreement, (ii) describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance, in each case as is necessary to perfect or preserve Agent’s Security Interest in the Collateral of each New Grantor, it being understood that the Agent shall have no responsibility for any such filings. For the avoidance of doubt, it is each New Grantor’s primary responsibility to establish, maintain and preserve the perfection of the Liens on the Collateral. Each New Grantor also hereby ratifies any and all financing statements or amendments previously filed by Agent in any jurisdiction in connection with the Indenture Documents.
4. Each New Grantor represents and warrants to Agent and the Noteholders that this Joinder has been duly executed and delivered by such New Grantor and constitutes its legal, valid, and binding obligation, enforceable against it in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium, or other similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity) and requirements of reasonableness, good faith and fair dealing.
5. This Joinder is an Indenture Document. This Joinder may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Joinder. Delivery of an executed counterpart of this Joinder by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Joinder. Any party delivering an executed counterpart of this Joinder by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Joinder but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Joinder.
6. The Security Agreement, as supplemented hereby, shall remain in full force and effect.
7. THIS JOINDER SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Joinder to the Security Agreement to be executed and delivered as of the day and year first above written.
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U.S. BANK NATIONAL ASSOCIATION, a national banking association, in its capacity solely as Agent | |
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[SIGNATURE PAGE TO JOINDER NO. TO SECURITY AGREEMENT]
EXHIBIT A
[RESERVED]
EXHIBIT B
[RESERVED]
EXHIBIT C
PLEDGED INTERESTS ADDENDUM
This Pledged Interests Addendum, dated as of , 20 (this “Pledged Interests Addendum”), is delivered pursuant to Section 7 of the Security Agreement referred to below. The undersigned hereby agrees that this Pledged Interests Addendum may be attached to that certain Security Agreement, dated as of April 16, 2014, (as amended, restated, supplemented, or otherwise modified from time to time, the “Security Agreement”), made by the undersigned, together with the other Grantors named therein, to U.S. BANK NATIONAL ASSOCIATION, a national banking association, as Agent. Initially capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Security Agreement or, if not defined therein, in the Indenture, and this Pledged Interests Addendum shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis. The undersigned hereby agrees that the additional interests listed on Schedule I shall be and become part of the Pledged Interests pledged by the undersigned to Agent pursuant to the Security Agreement and any pledged company set forth on Schedule I shall be and become a “Pledged Company” under the Security Agreement, each with the same force and effect as if originally named therein.
This Pledged Interests Addendum is an Indenture Document. Delivery of an executed counterpart of this Pledged Interests Addendum by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Pledged Interests Addendum. If the undersigned delivers an executed counterpart of this Pledged Interests Addendum by telefacsimile or other electronic method of transmission, the undersigned shall also deliver an original executed counterpart of this Pledged Interests Addendum but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Pledged Interests Addendum.
The undersigned hereby certifies that the representations and warranties set forth in Section 6 of the Security Agreement of the undersigned are true and correct in all material respects as to the Pledged Interests listed herein on and as of the date hereof.
THIS PLEDGED INTERESTS ADDENDUM SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum to be executed and delivered as of the day and year first above written.
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[SIGNATURE PAGE TO PLEDGED INTERESTS ADDENDUM]
SCHEDULE I
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PLEDGED INTERESTS ADDENDUM
Pledged Interests
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EXHIBIT D
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made this day of , 20 , by and among Grantors listed on the signature pages hereof (collectively, jointly and severally, “Grantors” and each individually “Grantor”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association (“US Bank”), in its capacity as agent for the Noteholders (as defined below) (in such capacity, together with its successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Indenture dated as of April 16, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “Indenture”) by and among FTS INTERNATIONAL, INC., a Delaware corporation as issuer (the “Issuer”) the guarantors party thereto and US Bank as trustee, the Issuer has issued on the date hereof $500,000,000 aggregate principal amount of its 6.250% Senior Secured Notes due 2022; and
WHEREAS, each Grantor has agreed, under that certain Security Agreement dated as of April 16, 2014 (the “Security Agreement”), to grant to Agent, for the benefit of the Trustee, Agent and the holders of the Notes (the “Noteholders”), a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, the Secured Obligations; and
WHEREAS, pursuant to the Security Agreement, Grantors are required to execute and deliver to Agent, for the benefit of the Trustee, Agent and the Noteholders, this Trademark Security Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby agrees as follows:
8. DEFINED TERMS. All initially capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement or, if not defined therein, in the Indenture, and this Trademark Security Agreement shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis.
9. GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL. Each Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit of the Trustee, Agent and the Noteholders, to secure the Secured Obligations, a continuing security interest (referred to in this Trademark Security Agreement as the “Security Interest”) in all of such Grantor’s right, title and interest in and to the following, whether now owned or hereafter acquired or arising (collectively, the “Trademark Collateral”):
(a) all of its Trademarks and Trademark Intellectual Property Licenses to which it is a party including those referred to on Schedule I;
(b) all goodwill of the business connected with the use of, and symbolized by, each Trademark and each Trademark Intellectual Property License, and
(c) all products and proceeds (as that term is defined in the Code) of the foregoing, including any claim by such Grantor against third parties for past, present or future (i) infringement or dilution of any Trademark or any Trademarks exclusively licensed under any Intellectual Property License, including right to receive any damages, (ii) injury to the goodwill associated with any Trademark, or (iii) right to receive license fees, royalties, and other compensation under any Trademark Intellectual Property License, in each case, to the extent that such property constitutes ABL Collateral.
10. SECURITY FOR SECURED OBLIGATIONS. This Trademark Security Agreement and the Security Interest created hereby secures the payment and performance of the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Trademark Security Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by Grantors, to any Noteholders, Agent or the Trustee or any of them, whether or not they are unenforceable or not allowable due to the existence of an Insolvency or Liquidation Proceeding involving any Grantor.
11. SECURITY AGREEMENT. The Security Interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interests granted to Agent, for the benefit of the Trustee, Agent and the Noteholders, pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights and remedies of Agent with respect to the Security Interest in the Trademark Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. To the extent there is any inconsistency between this Trademark Security Agreement and the Security Agreement, the Security Agreement shall control.
12. AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new trademarks, the provisions of this Trademark Security Agreement shall automatically apply thereto. Grantors shall give prompt notice in writing to Agent with respect to any such new trademarks or renewal or extension of any trademark registration and shall amend Schedule I to include any such new trademark rights. Without limiting Grantors’ obligations under this Section, Grantors hereby authorize Agent unilaterally to modify this Trademark Security Agreement by amending Schedule I to include any such new trademark rights of each Grantor. Notwithstanding the foregoing, no failure to so modify this Trademark Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from Agent’s continuing security interest in all Collateral, whether or not listed on Schedule I.
13. COUNTERPARTS. This Trademark Security Agreement is a Indenture Document. This Trademark Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Trademark Security Agreement. Delivery of an executed counterpart of this Trademark Security Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Trademark Security Agreement. Any party delivering an executed counterpart of this Trademark Security Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Trademark Security Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Trademark Security Agreement.
14. CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE PROVISION. THIS TRADEMARK SECURITY AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT,
AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security Agreement to be executed and delivered as of the day and year first above written.
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[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]
SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
Trademark Registrations/Applications
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Trade Names
Common Law Trademarks
Trademarks Not Currently In Use
Trademark Licenses
