EXHIBIT 4.4
EXECUTION COPY
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GUARANTEE AND COLLATERAL AGREEMENT
made by
TBC CORPORATION,
TBC PRIVATE BRANDS, INC.
and certain of its Subsidiaries
in favor of
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
Dated as of June 17, 2005
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINED TERMS............................................................... 2
1.1 Definitions................................................................. 2
1.2 Other Definitional Provisions............................................... 6
SECTION 2. GUARANTEE................................................................... 7
2.1 Guarantee................................................................... 7
2.2 Right of Contribution....................................................... 7
2.3 No Subrogation.............................................................. 7
2.4 Amendments, etc. with respect to the Borrower Obligations................... 8
2.5 Guarantee Absolute and Unconditional........................................ 8
2.6 Remedies.................................................................... 9
2.7 Reinstatement............................................................... 9
2.8 Payments.................................................................... 9
2.9 Application of Guarantee Payments and Recoveries............................ 9
SECTION 3. GRANT OF SECURITY INTEREST.................................................. 10
SECTION 4. REPRESENTATIONS AND WARRANTIES.............................................. 11
4.1 Execution, Delivery and Performance......................................... 11
4.2 Title; No Other Liens....................................................... 12
4.3 Perfected Priority Liens.................................................... 12
4.4 Jurisdiction of Organization................................................ 12
4.5 Farm Products............................................................... 12
4.6 Investment Property......................................................... 12
4.7 Receivables................................................................. 13
4.8 Intellectual Property....................................................... 13
SECTION 5. COVENANTS................................................................... 13
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper.......... 13
5.2 Maintenance of Insurance.................................................... 13
5.3 Payment of Obligations...................................................... 14
5.4 Maintenance of Perfected Security Interest; Further Documentation........... 14
5.5 Changes in Locations, Name, etc............................................. 14
5.6 Notices..................................................................... 14
5.7 Investment Property......................................................... 15
5.8 Intellectual Property....................................................... 15
SECTION 6. REMEDIAL PROVISIONS......................................................... 16
6.1 Certain Matters Relating to Receivables..................................... 16
6.2 Communications with Obligors; Grantors Remain Liable........................ 16
6.3 Pledged Stock............................................................... 17
6.4 Proceeds to be Turned Over To Collateral Agent.............................. 17
6.5 Application of Proceeds..................................................... 18
6.6 Code and Other Remedies..................................................... 18
6.7 Sale of Pledged Stock....................................................... 18
6.8 Deficiency.................................................................. 19
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SECTION 7. THE COLLATERAL AGENT........................................................ 19
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc..................... 19
7.2 Duty of Collateral Agent.................................................... 20
7.3 Execution of Financing Statements........................................... 21
7.4 Authority of Collateral Agent............................................... 21
SECTION 8. MISCELLANEOUS............................................................... 21
8.1 Amendments in Writing....................................................... 21
8.2 Notices..................................................................... 21
8.3 No Waiver by Course of Conduct; Cumulative Remedies......................... 21
8.4 Enforcement Expenses; Indemnification....................................... 21
8.5 Successors and Assigns...................................................... 22
8.6 Set-Off..................................................................... 22
8.7 Counterparts................................................................ 22
8.8 Severability................................................................ 22
8.9 Section Headings............................................................ 23
8.10 Integration................................................................. 23
8.11 GOVERNING LAW............................................................... 23
8.12 Submission To Jurisdiction; Waivers......................................... 23
8.13 Acknowledgements............................................................ 23
8.14 Additional Grantors......................................................... 24
8.15 Releases.................................................................... 24
8.16 WAIVER OF JURY TRIAL........................................................ 24
8.17 Continuation of Liens Securing Obligations.................................. 24
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Pledged Stock
Schedule 3 Jurisdictions of Organization
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of June 17, 2005, (a)
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of JPMorgan
Chase Bank, N.A., as Collateral Agent (in such capacity, the "Collateral Agent")
for (i) the banks and other financial institutions or entities (the "Lenders")
from time to time parties to the Credit Agreement, dated as of June 17, 2005 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among TBC Corporation, a Delaware corporation ("Holdings"), TBC
Private Brands, Inc., a Delaware corporation ("TBC Private Brands") (Holdings
and TBC Private Brands, each a "Borrower" and together the "Borrowers"), the
Lenders, the Administrative Agent and the Co-Administrative Agent and (ii) The
Prudential Insurance Company of America ("Prudential") party to the Second
Amended and Restated Note Agreement dated as of April 1, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Existing Note
Agreement") between Prudential and the Borrowers and party to the Note Purchase
Agreement dated as of April 1, 2003 (as amended, supplemented or otherwise
modified from time to time, the "Additional Note Agreement") among Prudential,
certain affiliates, managed accounts or funds of Prudential (the "Prudential
Affiliates") and the Borrowers (the Existing Note Agreement and the Additional
Note Agreement collectively referred to as the "Note Agreements") (the Lenders,
each Lender Affiliate Party to a Specified Hedge Agreement, Prudential and the
Prudential Affiliates being collectively referred to as the "Secured Parties")
and (b) with respect to Section 2 only, among the Collateral Agent for the
Lenders and each Lender Affiliate Party to a Specified Hedge Agreement,
Prudential, the Prudential Affiliates and each Guarantor.
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein, the proceeds of which shall be
used in part to refinance, terminate and replace the $273,500,000 Second Amended
and Restated Credit Agreement (the "Existing Credit Agreement"), dated as of
November 19, 2004 among the Borrowers, the Lenders party thereto, the
Administrative Agent and the Co-Administrative Agent;
WHEREAS, pursuant to the Note Agreements, the Borrowers have
outstanding certain Series B Senior Notes, Series C Senior Notes (collectively,
as amended supplemented or otherwise modified from time to time, the "1996
Notes") and Series D Senior Notes (as amended, supplemented or otherwise
modified from time to time, the "2003 Notes" and, collectively with the 1996
Notes, referred to as the "Prudential Notes") held by Prudential;
WHEREAS, the Prudential Notes and the obligations under the Existing
Credit Agreement are presently secured by, inter alia, certain liens granted by
the Grantors pursuant to the Guarantee and Collateral Agreement (the "Existing
Collateral Agreement"), dated as of March 31, 2003, made by TBC Private Brands
(formerly known as TBC Corporation) and each of the other Grantors party hereto,
in favor of the Collateral Agent, as amended by the First Amendment to the
Guarantee and Collateral Agreement, dated as of November 29, 2003;
WHEREAS, the Borrowers are members of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds from the issuance of the Prudential Notes were
used and the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the
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Borrowers to make valuable transfers to one or more of the other Grantors in
connection with the operation of their respective businesses;
WHEREAS, the Borrowers have requested that Prudential consent to the
Borrowers' execution of the Credit Agreement, which consent is required under
the Note Agreements, and Prudential has agreed to provide such consent,
provided, inter alia, that the Grantors shall have executed and delivered this
Agreement to the Collateral Agent for the ratable benefit of the Secured
Parties;
WHEREAS, the Borrowers and the other Grantors are (and were at the
time of the issuance of the Prudential Notes) engaged in related businesses, and
each Grantor will (and did at the time of the issuance of the Prudential Notes)
derive substantial direct and indirect benefit from the making of the extensions
of credit under the Credit Agreement and the issuance of the Prudential Notes;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement and to the amendment of the Prudential Notes and the Note
Agreements that the Grantors shall have executed and delivered this Agreement to
the Collateral Agent for the ratable benefit of the Secured Parties; and
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to enter into the Credit Agreement and to make their respective
extensions of credit to the Borrowers thereunder and to induce Prudential to
give its consent required under the Note Agreements, each Grantor hereby agrees
with the Collateral Agent, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) The following terms are used herein as
defined in the New York UCC: Accounts, Certificated Security, Chattel Paper,
Commercial Tort Claims, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory, Letter-of-Credit Rights and Supporting
Obligations.
(b) The following terms shall have the following meanings:
"ABR Loans": as defined in the Credit Agreement.
"Additional Note Agreement": as defined in the preamble hereto.
"Administrative Agent": as defined in the Credit Agreement.
"Affiliate": as defined in the Credit Agreement.
"Agreement": this Guarantee and Collateral Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Prudential Notes, the Loans and Reimbursement
Obligations and all other obligations and liabilities of each Borrower
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement, the Note Agreements and the Prudential Notes
after the maturity of the Loans, the Reimbursement Obligations and the
Prudential Notes and interest accruing at the then applicable rate provided in
the Credit Agreement, the Note Agreements and the Prudential Notes, as
applicable, after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to each of the
Borrowers, whether or not a claim for post-filing
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or post-petition interest is allowed in such proceeding) to the Collateral Agent
or any Secured Party (or, in the case of any Specified Hedging Agreement, any
Affiliate of any applicable Secured Party), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit Agreement, the
Note Agreements, the Prudential Notes, this Agreement, any Mortgage, any Letter
of Credit and any guarantee of each of the Borrower's obligations in respect of
any of the foregoing as from time to time in effect, any Specified Hedging
Agreement or any other document made, delivered or given in connection with any
of the foregoing, in each case whether on account of principal, interest,
reimbursement obligations, Make-Whole Amounts, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Collateral Agent or to the Secured Parties that are required
to be paid by any of the Borrowers pursuant to the terms of any of the foregoing
agreements) (collectively, but not including any Specified Hedging Agreement the
"Loan Documents").
"Borrower": as defined in the preamble hereto.
"Business Day": as defined in the Credit Agreement.
"Capital Stock" shall mean any class of capital stock, share capital
or similar equity interest of a Person.
"Co-Administrative Agent": as defined in the Credit Agreement.
"Collateral Account": any collateral account established by the
Collateral Agent as provided in Section 6.1 or 6.4.
"Collateral Agent": as defined in the preamble hereto.
"Collateral": as defined in Section 3.
"Commitments": as defined in the Credit Agreement.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in the Intellectual Property Certificate), all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to obtain
all renewals thereof.
"Credit Agreement": as defined in the preamble hereto.
"Default": shall mean a "Default" as defined in the Credit Agreement
or in either of the Note Agreements.
"Deposit Account": as defined in the Uniform Commercial Code of any
applicable jurisdiction and, in any event, including, without limitation, any
demand, time, savings, passbook or like account maintained with a depositary
institution.
"Event of Default": shall mean an "Event of Default" as defined in
the Credit Agreement or in either of the Note Agreements.
"Existing Collateral Agreement": as defined in the recitals hereto.
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"Existing Credit Agreement": as defined in the recitals hereto.
"Existing Note Agreement": as defined in the preamble hereto.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
Foreign Subsidiary.
"Foreign Subsidiary": any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
"GAAP": as defined in the Credit Agreement.
"Governmental Authority": as defined in the Credit Agreement.
"Grantors": as defined in the preamble hereto.
"Guarantee Related Payment": as defined in Section 2.9.
"Guarantee": as defined in Section 2.1(a).
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2), the
Note Agreements, the Prudential Notes or any other Loan Document to which such
Guarantor is a party, in each case whether on account of guarantee obligations,
reimbursement obligations, Make-Whole Amounts, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Collateral Agent or to the Secured Parties that are required
to be paid by such Guarantor pursuant to the terms of this Agreement, the Note
Agreements or any other Loan Document).
"Guarantors": the collective reference to each Grantor other than
Merchant's, Incorporated.
"Hedging Agreement": as defined in the Credit Agreement.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Patents and the Trademarks, and all
rights to xxx at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Intellectual Property Certificate": a certificate dated the date
hereof and signed by the President, Vice President or a Financial Officer of
Holdings, listing all Intellectual Property owned by each Grantor in its own
name on the date hereof, other than Trademarks or Copyrights arising under
common law or state law, as to which no registration or other filing has been
made, in a form reasonably satisfactory to the Collateral Agent.
"Intercompany Note": any promissory note evidencing loans made by
any Grantor to any Borrower or any of its Subsidiaries.
"Intercreditor Agreement": the Intercreditor Agreement among
Prudential, the Prudential Affiliates, each Lender, the Administrative Agent,
the Co-Administrative Agent and the Collateral Agent, dated as of June 17, 2005.
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"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49) of the New
York UCC (other than any Foreign Subsidiary Voting Stock excluded from the
`definition of "Pledged Stock") and (ii) whether or not constituting "investment
property" as so defined, all Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any Investment
Property.
"Lender Party": as defined in Section 2.6.
"Lenders": as defined in the preamble hereto.
"Letter of Credit": as defined in the Credit Agreement.
"Lien": as defined in the Credit Agreement.
"Loan Document(s)" is defined within the definition of "Borrower
Obligations".
"Loans": as defined in the Credit Agreement.
"Make-Whole Amount": as defined in the Note Agreements.
"Mortgage": as defined in the Credit Agreement.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Note Agreements": as defined in the preamble hereto.
"Obligations": (i) in the case of each Borrower, the Borrower
Obligations and such Borrower's Guarantor Obligations, and (ii) in the case of
each other Guarantor, its Guarantor Obligations.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without limitation,
any of the foregoing referred to in the Intellectual Property Certificate, (ii)
all applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in the Intellectual
Property Certificate, and (iii) all rights to obtain any reissues or extensions
of the foregoing.
"Person": shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, a limited
liability company and a government or any department or agency thereof.
"Pledged Notes": all Intercompany Notes at any time issued to any
Grantor and all other promissory notes issued to or held by any Grantor (other
than promissory notes issued in connection with extensions of trade credit by
any Grantor in the ordinary course of business).
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options, interests or rights
of any nature whatsoever in respect of the Capital Stock of any Person that may
be issued or granted to, or held by, any Grantor while this Agreement is in
effect; provided that in no event shall more than 66% of the total outstanding
Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be
pledged hereunder.
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"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
"Prudential Affiliates": as defined in the preamble hereto.
"Prudential Notes": as defined in the recitals hereto.
"Prudential": as defined in the preamble hereto.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
"Reimbursement Obligations": as defined in the Credit Agreement.
"Required Lenders": as defined in the Credit Agreement.
"Required Noteholders": shall mean the holder or holders of at least
51% of the aggregate principal amount of each of the 1996 Notes and the 2003
Notes, voting as separate classes.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Secured Parties": as defined in the preamble hereto.
"Securities Act": the Securities Act of 1933, as amended.
"Specified Hedging Agreement": any Hedging Agreement entered into by
the Borrower and any Lender or Affiliate thereof in respect of interest rates.
"Subsidiary": as defined in the Credit Agreement.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in the Intellectual Property Certificate, and (ii) the right to
obtain all renewals thereof.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
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(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees (the "Guarantee") to the
Secured Parties and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Borrowers when
due (whether at the stated maturity, by acceleration or otherwise) of the
Borrower Obligations; provided that each Guarantor which is a Borrower shall
only guarantee the Borrower Obligations of the other Borrower.
(b) Anything herein or in any other Loan Document or the Intercreditor
Agreement to the contrary notwithstanding, the maximum liability of each
Guarantor hereunder and under the other Loan Documents or the Intercreditor
Agreement shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to the insolvency of
debtors (after giving effect to the right of contribution established in Section
2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any time
and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Collateral Agent or any Secured Party
hereunder. Each Guarantor shall give notice at the time of any payment by it
hereunder to the recipient of such payment and to the Collateral Agent.
(d) The guarantee contained in this Section 2 shall remain in full force
and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement or the Note Agreements the Borrowers may be
free from any Borrower Obligations.
(e) No payment made by any of the Borrowers, any of the Guarantors, any
other guarantor or any other Person or received or collected by the Collateral
Agent or any Secured Party from any Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment, remain liable for the
Borrower Obligations up to the maximum liability of such Guarantor hereunder
until the Borrower Obligations are paid in full, no Letter of Credit shall be
outstanding and the Commitments are terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that to
the extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Collateral Agent and the Secured Parties, and each
Guarantor shall remain liable to the Collateral Agent and the Lenders for the
full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Collateral Agent or any Secured Party, no Guarantor shall be entitled to be
subrogated to any of the rights of the Collateral Agent or any
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Secured Party against any Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Collateral Agent or any
Secured Party for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from any
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Collateral Agent and the Secured
Parties by the Borrowers on account of the Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Collateral Agent and the Secured Parties, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Collateral Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Collateral Agent, if required), to be applied
against the Borrower Obligations, whether matured or unmatured, in such order as
the Collateral Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Collateral Agent or any Secured Party may be rescinded
by the Collateral Agent or such Secured Party and any of the Borrower
Obligations continued, and the Borrower Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Collateral Agent or any
Secured Party, and the Credit Agreement, the Note Agreements, the Prudential
Notes and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, and any collateral security, guarantee or right
of offset at any time held by the Collateral Agent or any Secured Party for the
payment of the Borrower Obligations may be sold, exchanged, waived, surrendered
or released. Neither the Collateral Agent nor any Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Collateral Agent
or any Secured Party upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Section 2; and all dealings between any of
the Borrowers and any of the Guarantors, on the one hand, and the Collateral
Agent and the Secured Parties, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Section 2. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon any
of the Borrowers or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement, the Note Agreements, the Prudential Notes or any other Loan
Document, any of the Borrower Obligations or any collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Collateral Agent or any Secured Party, (b) any defense, set-off
or counterclaim (other than a defense of payment or performance in full) which
may at any time be available to or be asserted by any Borrower or any other
Person against the Collateral Agent or any Secured Party, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of such Borrower
or such Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal
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discharge of such Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Collateral Agent or any Secured
Party may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as it may have against any of the
Borrowers, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by the Collateral Agent or any Secured Party to
make any such demand, to pursue such other rights or remedies or to collect any
payments from any Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of any Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Collateral Agent or any Secured Party
against any Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
2.6 Remedies. Any one or more of Prudential, each Prudential
Affiliate and the Co-Administrative Agent (for the benefit of the Lenders) (each
a "Lender Party") may, either individually or collectively, seek to enforce the
obligations of any Guarantor under and in respect of the Guarantee. No Lender
Party shall be required to (a) prosecute, collect or seek to enforce or resort
to any remedies against any Borrower or any other Person liable on any of the
Borrower Obligations, (b) join any Borrower or any other Person liable on any of
the Borrower Obligations in any action in which any Lender Party prosecutes
collection or seeks to enforce or resort to any remedies against any Borrower or
other Person liable on any of the Borrower Obligations, or (c) seek to enforce
or resort to any remedies with respect to any Liens granted to (or benefiting,
directly or indirectly) any Lender Party or any other Person liable on any of
the Borrower Obligations.
2.7 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Collateral Agent or
any Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.8 Payments. Each Guarantor hereby guarantees that payments
hereunder (a) in respect of the Credit Agreement, the Loans and the
Reimbursement Obligations, will be paid to the Collateral Agent without set-off
or counterclaim in Dollars at the Funding Office, and (b) in respect of the Note
Agreements and the Prudential Notes, will be paid to the holders of the
Prudential Notes, without set-off or counterclaim, in the manner provided in the
Note Agreements.
2.9 Application of Guarantee Payments and Recoveries
(a) Each payment or other recovery from a Guarantor under or in respect of
its obligations under this Section 2 (each, a "Guarantee Related Payment") shall
belong to each Secured Party, in accordance with their respective "Proportionate
Shares", as defined below. If any Secured Party shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of set-off or
otherwise) on account of the Guarantee in excess of its Proportionate Share of
all payments then or thereafter obtained by the Secured Parties with respect to
the Guarantee, then such party shall give prompt notice to the Collateral Agent
indicating the payment or other recovery obtained. Such Secured Party shall
purchase from the other Secured Parties such participation in the indebtedness
of the Guarantors under this Agreement as shall be necessary to cause such
purchasing party to share such payment or other recovery
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ratably, based on all Proportionate Shares, with all of the Secured Parties;
provided, however, that if all or any portion of such payment or other recovery
is thereafter recovered from such purchasing party, the purchase price shall be
rescinded, and each other Secured Party shall repay to the purchasing party the
purchase price, to the ratable extent of such recovery in proportion to the
amount received by such other Secured Party, together with an amount equal to
such Secured Party's ratable share (according to the proportion of (x) the
amount of such Secured Party's required repayment to the purchasing party to (y)
the total amounts recovered from the purchasing party) of any interest or other
amount paid or payable by the purchasing party in respect of the total amount so
recovered.
(b) The term "Proportionate Share", as used herein, shall mean at any
time, for each Secured Party, a fraction (a) the numerator of which is the
aggregate principal amount of the Obligations held by such party at such time,
and (b) the denominator of which is the aggregate principal amount of the
Obligations held by all Secured Parties at such time.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Collateral Agent,
and hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents (other than title documents with respect to vehicles);
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property;
(k) all Letter-of-Credit Rights;
(l) all Commercial Tort Claims;
(m) all other property not otherwise described above;
(n) all books and records pertaining to the Collateral; and
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(o) to the extent not otherwise included, all Proceeds, Supporting
Obligations and products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to any of the
foregoing;
provided, however, that notwithstanding any of the other provisions
set forth in this Section 3, this Agreement shall not constitute a grant of a
security interest in any property to the extent that such grant of a security
interest is prohibited by any Requirements of Law of a Governmental Authority,
requires a consent not obtained of any Governmental Authority pursuant to such
Requirement of Law or is prohibited by, or constitutes a breach or default under
or results in the termination of or requires any consent not obtained under, any
contract, license, agreement, instrument or other document evidencing or giving
rise to such property or, in the case of any Investment Property, Pledged Stock
or Pledged Note, any applicable shareholder or similar agreement, except to the
extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement
providing for such prohibition, breach, default or termination or requiring such
consent is ineffective under applicable law.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to make their respective extensions of credit to the
Borrowers thereunder and to induce Prudential to give its consent under, and to
amend the Note Agreements, each Grantor hereby represents and warrants to the
Collateral Agent and each Secured Party that:
4.1 Execution, Delivery and Performance. (a) The execution,
delivery and performance by it of this Agreement have been duly authorized by
all necessary corporate action and do not and will not contravene its bylaws or
its articles of incorporation.
(b) The execution, delivery and performance by such Grantor of this
Agreement do not and will not contravene applicable law or, except as permitted
under the Credit Agreement and the Note Agreements, any contractual restriction
binding on or affecting such Grantor or any of its properties, and do not and
will not result in or require the creation of any Lien, security interest or
other charge of encumbrance upon or with respect to any of such Grantor's
properties except as may be created by this Agreement.
(c) Except with regard to Liens permitted to exist on the Collateral by
the Credit Agreement and the Note Agreements, no authorization or approval or
other action by, and no notice to or filing with, any Person or entity not
otherwise obtained is required for the due execution, delivery and performance
by such Grantor of this Agreement.
(d) This Agreement is a legal, valid and binding obligation of such
Grantor, enforceable against such Grantor, in accordance with its terms.
(e) There is no action, suit or proceeding pending or, to the knowledge of
such Grantor, threatened against or otherwise affecting it before any
Governmental Authority or arbitrator which would prohibit the execution,
delivery and performance by it of this Agreement.
(f) Such Grantor is a separately incorporated or organized entity that
operates independently from each other Grantor. Such Grantor (other than any of
the Borrowers) utilizes certain accounting, cash management, management and
other operational and organizational functions of the Borrowers for operational
and organizational efficiency, as well as to assist in the preparation of tax
returns on a consolidated basis. In the event these functions were no longer
provided to such Grantor by the
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Borrowers, such Grantor would need to make the necessary adjustments in its
operations and organizational functions, in order to replace such functions. The
majority of the purchasing functions of such Grantor are handled by the
Borrowers, although some of these functions may be occasionally shared for
efficiency or as special circumstances warrant.
4.2 Title; No Other Liens Except for the security interest
granted to the Collateral Agent for the ratable benefit of the Secured Parties
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement and the Note Agreements, such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others. Except (i) with regard to Liens permitted to exist on the Collateral by
the Credit Agreement and the Note Agreements, and (ii) for financing statements
evidencing operating lease transactions, no financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as have been filed in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, pursuant to this
Agreement or as are permitted by the Credit Agreement and the Note Agreements.
For the avoidance of doubt, it is understood and agreed that any Grantor may, as
part of its business, grant licenses to third parties to use Intellectual
Property owned or developed by a Grantor. For purposes of this Agreement and the
other Loan Documents, such licensing activity shall not constitute a "Lien" on
such Intellectual Property. Each of the Collateral Agent and each Secured Party
understands that any such licenses may be exclusive to the applicable licensees,
and such exclusivity provisions may limit the ability of the Collateral Agent to
utilize, sell, lease or transfer the related Intellectual Property or otherwise
realize value from such Intellectual Property pursuant hereto.
4.3 Perfected Priority Liens. The security interests granted
pursuant to this Agreement (a) to the extent they can be perfected under the
UCC, constitute valid perfected security interests in all of the Collateral in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
as collateral security for such Grantor's Obligations, enforceable in accordance
with the terms hereof and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for Liens permitted by the Credit Agreement
and the Note Agreements and unrecorded Liens which have priority over the Liens
on the Collateral by operation of law.
4.4 Jurisdiction of Organization. On the date hereof, such
Grantor's jurisdiction of organization and identification number from the
jurisdiction of organization (if any) are specified on Schedule 3. Such Grantor
has furnished to the Collateral Agent a certified charter, certificate of
incorporation or other organization document and long-form good standing
certificate as of a date which is recent to the date hereof.
4.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock pledged
by such Grantor hereunder constitute all the issued and outstanding shares of
all classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 66% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
(c) To the knowledge of the Grantors, each of the Pledged Notes
constitutes the legal, valid and binding obligation of the obligor with respect
thereto, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other
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similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.
4.7 Receivables(a) . The amounts represented by such Grantor to
the Secured Parties from time to time as owing to such Grantor in respect of the
Receivables will at such times be accurate.
4.8 Intellectual Property. The Intellectual Property Certificate
lists all Intellectual Property owned by such Grantor in its own name on the
date hereof, other than Trademarks or Copyrights arising under common law or
state law, as to which no registration or other filing has been made.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent and the
Secured Parties that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Delivery of Instruments, Certificated Securities and Chattel
Paper. If an Event of Default shall occur and be continuing and if any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Collateral Agent, duly indorsed in a manner satisfactory to the
Collateral Agent, to be held as Collateral pursuant to this Agreement.
5.2 Maintenance of Insurance. Such Grantor will have and maintain
insurance at its expense at all times and in such amounts, in such form,
containing such terms and written by such companies as may be reasonably
satisfactory to the Collateral Agent (and as more particularly set forth in the
Credit Agreement and the Note Agreements). All policies of insurance shall be
payable to the Collateral Agent and such Grantor, as its interests may appear,
shall name the Collateral Agent as a co-insured party, and shall provide for
thirty (30) days' written notice of cancellation or modification to the
Collateral Agent. So long as any Event of Default exists, the Collateral Agent
is authorized by such Grantor to act as its attorney in collecting, adjusting,
settling or canceling such insurance and endorsing any drafts drawn by insurers.
The Collateral Agent may apply any proceeds of insurance received by it to the
Obligations, whether due or not; provided, however, that the Collateral Agent
will hold such proceeds as a special deposit for use by such Grantor to repair,
restore or replace the assets which gave rise to such proceeds, or to acquire
other tangible assets to be used in such Grantor's businesses, within one year
after the event giving rise to such proceeds, so long as (i) such Grantor is
taking steps to repair, restore or replace such Collateral, or to acquire such
tangible assets, with due diligence and in good faith and (ii) no Event of
Default shall have occurred. Such Grantor will immediately notify the Collateral
Agent of any damage to or loss of Collateral in excess of $5,000,000. Not later
than ten (10) days prior to the expiration date of each policy of insurance then
in effect, such Grantor shall deliver to the Collateral Agent a certificate of
insurance certifying as to (i) the extension of such policy or the issuance of a
renewal policy therefor, describing the same in reasonable detail satisfactory
to the Collateral Agent and (ii) the payment in full of the portion of the
premium therefor then due and payable (or accompanied by other proof of such
payment satisfactory to the Collateral Agent). Such Grantor shall be required
forthwith to notify the Collateral Agent (by telephone, confirmed in writing) if
such Grantor shall determine at any time not to, or at any time be unable to,
extend or renew any such policy then in effect.
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Notwithstanding the foregoing, such Grantor, pursuant to Article Nine of the New
York UCC, shall bear the risk of loss of Collateral.
5.3 Payment of Obligations. Such Grantor will pay and discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except that
no such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall defend the security interest created by
this Agreement against the claims and demands of all Persons whomsoever, subject
to the rights of such Grantor under the Loan Documents to dispose of the
Collateral.
(b) Such Grantor will furnish to the Collateral Agent and the Secured
Parties from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Collateral Agent or any Secured Party may reasonably
request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts, Letter-of-Credit
Rights and any other relevant Collateral, taking any actions necessary to enable
the Collateral Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.5 Changes in Locations, Name, etc. Such Grantor will not,
except upon 30 days' prior written notice to the Collateral Agent and delivery
to the Collateral Agent of all additional executed financing statements and
other documents reasonably requested by the Collateral Agent to maintain the
validity, perfection and priority of the security interests provided for herein:
(i) change its jurisdiction of organization from that referred to in
Section 4.4; or
(ii) change its name.
5.6 Notices. Such Grantor will advise the Collateral Agent and
the Secured Parties promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement and the Note Agreements) on any of the
Collateral which would adversely affect the ability of the Collateral Agent to
exercise any of its remedies hereunder; and
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(b) the occurrence of any other event which could reasonably be expected
to have a material adverse effect on the aggregate value of the Collateral or on
the security interests created hereby.
5.7 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Collateral Agent and the Secured Parties, hold the same
in trust for the Collateral Agent and the Secured Parties and deliver the same
forthwith to the Collateral Agent in the exact form received, duly indorsed by
such Grantor to the Collateral Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and
with, if the Collateral Agent so requests, signature guaranteed, to be held by
the Collateral Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer shall be paid over to
the Collateral Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution representing a return
of capital shall be made on or in respect of the Investment Property or any
property shall be distributed upon or with respect to the Investment Property
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of the
Collateral Agent, be delivered to the Collateral Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Investment Property
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Collateral Agent, hold such money or
property in trust for the Collateral Agent and the Secured Parties, segregated
from other funds of such Grantor, as additional collateral security for the
Obligations.
(b) Without the prior written consent of the Collateral Agent, or unless
otherwise permitted by the Loan Documents, such Grantor will not (i) vote to
enable, or take any other action to permit, any Issuer to issue any Capital
Stock of any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any Capital Stock of any nature
of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of,
or grant any option with respect to, the Investment Property or Proceeds
thereof, (iii) create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with respect to, any of the Investment Property or
Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Collateral Agent to
sell, assign or transfer any of the Investment Property or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as such
terms are applicable to it, and (ii) it will notify the Collateral Agent
promptly in writing of the occurrence of any of the events described in Section
5.7(a) with respect to the Investment Property issued by it.
5.8 Intellectual Property. Such Grantor will take all reasonable
and necessary steps, including, without limitation, in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the material Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.
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SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) At any time
after the occurrence and during the continuance of an Event of Default, the
Collateral Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Collateral Agent may require in connection with such test verifications. At
any time and from time to time, upon the Collateral Agent's request and at the
expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others satisfactory to the Collateral Agent to furnish to the
Collateral Agent reports showing reconciliations, aging and test verifications
of, and trial balances for, the Receivables.
(b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor's Receivables, and the Collateral Agent may curtail or terminate said
authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Collateral Agent if required, in
a Collateral Account maintained under the sole dominion and control of the
Collateral Agent, subject to withdrawal by the Collateral Agent for the account
of the Secured Parties only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the Collateral Agent and the
Secured Parties, segregated from other funds of such Grantor. Each such deposit
of Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
(c) At the Collateral Agent's request at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Collateral Agent in its own name or in the name of others may at any time after
the occurrence and during the continuance of an Event of Default communicate
with obligors under the Receivables to verify with them to the Collateral
Agent's satisfaction the existence, amount and terms of any Receivables.
(b) Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Collateral Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under the Receivables to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the Collateral
Agent nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Collateral Agent or any Secured Party of
any payment relating thereto, nor shall the Collateral Agent or any Secured
Party be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
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6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice to
the relevant Grantor of the Collateral Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement and the Note Agreements, and to
exercise all voting and corporate or other organizational rights with respect to
the Investment Property.
(b) If an Event of Default shall occur and be continuing and the
Collateral Agent shall give notice of its intent to exercise such rights to the
relevant Grantor or Grantors, the Collateral Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Investment Property and make application thereof to the Obligations in
such order and as otherwise provided in the Intercreditor Agreement. If an Event
of Default shall occur and be continuing and either (A) the Co-Administrative
Agent shall have, pursuant to the request of the Required Lenders, by notice to
the Borrowers (i) terminated the Revolving Credit Commitments and/or (ii)
declared the Loans then outstanding to be due and payable in whole, or (B) any
or all of the Prudential Notes shall have become immediately due and payable
pursuant to Section 7.1 of the respective Note Agreement, then any or all of the
Investment Property shall at the request of the Collateral Agent be registered
in the name of the Collateral Agent or its nominee, and the Collateral Agent or
its nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Investment Property at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
other organizational structure of any Issuer, or upon the exercise by any
Grantor or the Collateral Agent of any right, privilege or option pertaining to
such Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Collateral Agent in writing that (x) states
that an Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral Agent. Each Issuer which is a
party hereto acknowledges the authorizations and instructions provided for in
the immediately proceeding sentence.
6.4 Proceeds to be Turned Over To Collateral Agent. In addition
to the rights of the Collateral Agent and the Secured Parties specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing, all Proceeds received by any Grantor consisting
of cash, checks and other near-cash items shall be held by such Grantor in trust
for the Collateral Agent and the Secured Parties, segregated from other funds of
such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to the Collateral Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Collateral Agent, if required). All Proceeds
received by the Collateral Agent hereunder shall be held by the Collateral Agent
in a Collateral Account maintained under its sole
18
dominion and control. All Proceeds while held by the Collateral Agent in a
Collateral Account (or by such Grantor in trust for the Collateral Agent and the
Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. The Collateral Agent shall apply any
Proceeds constituting Collateral (other than any Guarantee Related Payment,
which payments shall be applied in accordance with Section 2.9 hereof) received
by the Collateral Agent pursuant to or in connection with enforcement of this
Agreement or upon the commencement of and during the continuance of any
proceedings by or against any Grantor of any type referred to in Article VII(h)
of the Credit Agreement or Section 7.1(k) of the Note Agreements as provided in
the Intercreditor Agreement (notwithstanding any other provision herein to the
contrary). Any balance of such Proceeds remaining after the Obligations shall
have been paid in full shall be paid over to the Borrowers or to whomsoever may
be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur
and be continuing, the Collateral Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below or required by any Loan Document) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Collateral Agent or any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Collateral Agent or any Secured Party shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Collateral
Agent's request, to assemble the Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably select,
whether at such Grantor's premises or elsewhere. The Collateral Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 6.6,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Collateral Agent and the Secured Parties hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Collateral Agent may
elect, and only after such application and after the payment by the Collateral
Agent of any other amount required by any provision of law, including, without
limitation, Section 9-615(a)(3) of the New York UCC, need the Collateral Agent
account for the surplus, if any, to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Collateral Agent or any Secured Party arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.
6.7 Sale of Pledged Stock. Each Grantor recognizes that the
Collateral Agent may be unable to effect a public sale of any or all the Pledged
Stock, by reason of certain prohibitions contained
19
in the Securities Act and applicable state securities laws or otherwise, and may
be compelled to resort to one or more private sales thereof to a restricted
group of purchasers which will be obliged to agree, among other things, to
acquire such securities for their own account for investment and not with a view
to the distribution or resale thereof. Each Grantor acknowledges and agrees that
any such private sale may result in prices and other terms less favorable than
if such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Collateral Agent shall be under no obligation to delay a
sale of any of the Pledged Stock for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws.
6.8 Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Collateral Agent or any Secured Party to collect such
deficiency.
SECTION 7. THE COLLATERAL AGENT
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Grantor and in the name of such Grantor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due under any Receivable or
with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Agent for the purpose of collecting any and all
such moneys due under any Receivable or with respect to any other Collateral
whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver, and
have recorded, any and all agreements, instruments, documents and papers as
the Collateral Agent may request to evidence the Collateral Agent's and the
Secured Parties' security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or any insurance called for by the
terms of this Agreement and pay all or any part of the premiums therefor and
the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.6 or
6.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent shall
direct; (2) ask or demand for, collect, and receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at any
time in respect of or arising out of any Collateral; (3) sign and indorse any
invoices, freight or express bills, bills of
20
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (6) settle, compromise or adjust
any such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Collateral Agent may deem appropriate; (7)
assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains),
throughout the world for such term or terms, on such conditions, and in such
manner, as the Collateral Agent shall in its sole discretion determine; and
(8) generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as
though the Collateral Agent were the absolute owner thereof for all purposes,
and do, at the Collateral Agent's option and such Grantor's expense, at any
time, or from time to time, all acts and things which the Collateral Agent
deems necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's and the Secured Parties' security interests therein and to
effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Credit Agreement, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
7.2 Duty of Collateral Agent. The Collateral Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral Agent
deals with similar property for its own account. Neither the Collateral Agent,
any Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Collateral Agent and
the Secured Parties hereunder are solely to protect the Collateral Agent's and
the Secured Parties' interests in the Collateral and shall not impose any duty
upon the Collateral Agent or any Secured Party to exercise any such powers. The
Collateral Agent and the Secured Parties shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
21
7.3 Execution of Financing Statements. Pursuant to any applicable
law, each Grantor authorizes the Collateral Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such form and in such
offices as the Collateral Agent determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement. Each Grantor authorizes
the Collateral Agent to use the collateral description "all personal property"
in any such financing statements. Each Grantor hereby ratifies and authorizes
the filing by the Collateral Agent of any financing statement with respect to
the Collateral made prior to the date hereof.
7.4 Authority of Collateral Agent. Each Grantor acknowledges that
the rights and responsibilities of the Collateral Agent under this Agreement
with respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Secured
Parties, be governed by the Intercreditor Agreement and the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Collateral Agent and the Grantors, the
Collateral Agent shall be conclusively presumed to be acting as agent for the
Secured Parties with full and valid authority so to act or refrain from acting,
and no Grantor shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
(a) with the consent of the Required Noteholders and (b) in accordance with
Section 9.02(b) of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 9.01 of the Credit Agreement, and, in the case of any
Grantor, the Note Agreements; provided that any such notice, request or demand
to or upon any Guarantor shall be addressed to such Guarantor at its notice
address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither
the Collateral Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Collateral Agent or any Secured Party, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Agent or any Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or such Secured Party would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Secured Party and the Collateral Agent for all
its costs and expenses incurred in collecting against such Guarantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any rights
under this Agreement, the Note Agreements and the other Loan Documents to which
such Guarantor is a party, including, without limitation, the fees and
disbursements of counsel (including the
22
allocated fees and expenses of in-house counsel) to each Secured Party and of
counsel to the Collateral Agent.
(b) Each Guarantor agrees to pay, and to save the Collateral Agent and the
Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Collateral Agent and the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrowers would be required to do so pursuant to Section 9.03 of the Credit
Agreement or pursuant to Section 11.2 of the Note Agreements.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement, the Note
Agreements, the Prudential Notes and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit of the
Collateral Agent and the Secured Parties and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Collateral Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Collateral Agent and each Secured Party at any time and from time to time while
an Event of Default shall have occurred and be continuing, without notice to
such Grantor or any other Grantor, any such notice being expressly waived by
each Grantor, to set-off and appropriate and apply any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Collateral Agent or such Secured Party to or for the credit
or the account of such Grantor, or any part thereof in such amounts as the
Collateral Agent or such Secured Party may elect, against and on account of the
obligations and liabilities of such Grantor to the Collateral Agent or such
Secured Party hereunder and claims of every nature and description of the
Collateral Agent or such Secured Party against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, the Note Agreements, the
Prudential Notes, any other Loan Document or otherwise, as the Collateral Agent
or such Secured Party may elect, whether or not the Collateral Agent or any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Collateral Agent and
each Secured Party shall notify such Grantor promptly of any such set-off and
the application made by the Collateral Agent or such Secured Party of the
proceeds thereof, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Collateral Agent
and each Secured Party under this Section 8.6 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which the
Collateral Agent or such Secured Party may have.
8.7 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such
23
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement, the Credit Agreement, the Note
Agreements, the Prudential Notes, the Intercreditor Agreement and the other Loan
Documents represent the agreement of the Grantors, the Collateral Agent and the
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the Collateral
Agent or any Secured Party relative to subject matter hereof and thereof not
expressly set forth or referred to herein, in the Credit Agreement, in the Note
Agreements, in the Prudential Notes, in the Intercreditor Agreement or in the
other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement, the Credit Agreement, the Note Agreements, the
Prudential Notes and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Collateral Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
24
(b) neither the Collateral Agent nor any Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement, the Credit Agreement, the Note Agreements, the Prudential Notes
or any of the other Loan Documents, and the relationship between the Grantors,
on the one hand, and the Collateral Agent and Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the Credit Agreement, the
Note Agreements, the Prudential Notes or the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Secured
Parties or among the Grantors and the Secured Parties.
8.14 Additional Grantors. Each Subsidiary of any of the Borrowers
that is required to become a party to this Agreement pursuant to Section 5.11 of
the Credit Agreement and Section 5.6 of the Note Agreements shall become a
Grantor for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans, the Reimbursement
Obligations, all amounts owing in respect of the Prudential Notes and the Note
Agreements and the other Obligations (other than Obligations in respect of
Specified Hedge Agreements) shall have been paid in full, the Commitments have
been terminated and no Letters of Credit shall be outstanding, the Collateral
shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Collateral Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the request and sole
expense of any Grantor following any such termination, the Collateral Agent
shall deliver to such Grantor any Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement
and the Note Agreements, then the Security Interest in such Collateral shall be
automatically released and the Collateral Agent, at the request and sole expense
of such Grantor, shall execute and deliver to such Grantor all documents
reasonably necessary or desirable to evidence the release or termination of the
Liens created hereby on such Collateral. At the request and sole expense of the
Borrowers, a Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement and the
Note Agreements; provided that, in each case, the Borrowers shall have delivered
to the Collateral Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant
Guarantor and the terms of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a certification by the Borrowers stating that such transaction is in
compliance with the Credit Agreement, the Note Agreements and the other Loan
Documents.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.17 Continuation of Liens Securing Obligations. In addition to
constituting new Liens securing all of the Obligations, the Liens created hereby
shall be deemed to be a continuation and confirmation of the Liens created
pursuant to the Existing Collateral Agreement and an amendment and restatement
of the terms and conditions thereof.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
TBC CORPORATION
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: VP and Treasurer
TBC PRIVATE BRANDS, INC.
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: VP and TReasurer
BIG O TIRES, INC.
XXXXXXX'X, INC.
NORTHERN STATES TIRE, INC.
TBC INTERNATIONAL INC.
TBC RETAIL ENTERPRISES, INC.
BIG O DEVELOPMENT, INC.
O ADVERTISING, INC.
BIG O TIRE OF IDAHO, INC.
BIG O RETAIL ENTERPRISES, INC.
TIRE KINGDOM, INC.
MERCHANT'S INCORPORATED
NTW INCORPORATED
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: VP and Treasurer
TBC BRANDS, LLC
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Manager and Secretary
TBC GUARANTEE AND COLLATERAL AGREEMENT
TBC CAPITAL, LLC
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: VP and Treasurer
TBC PRIVATE BRANDS OF TEXAS, LLC
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: VP and Treasurer
TBC GUARANTEE AND COLLATERAL AGREEMENT
JPMORGAN CHASE BANK, N.A.,|
as Collateral Agent
By: /s/ Xxxxx Xxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
TBC GUARANTEE AND COLLATERAL AGREEMENT
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By: /s/ Xxxxx X. Xxxxx
-------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxx
-------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
RGA REINSURANCE COMPANY
By: Prudential Private Placement Investors, L.P., as
Investment Advisor
By: Prudential Private Placement Investors, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
BAYSTATE INVESTMENTS, LLC
By: Prudential Private Placement Investors, L.P., as
Investment Advisor
By: Prudential Private Placement Investors, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
TBC GUARANTEE AND COLLATERAL AGREEMENT
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: Prudential Private Placement Investors, L.P., as
Investment Advisor
By: Prudential Private Placement Investors, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
TBC GUARANTEE AND COLLATERAL AGREEMENT
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
All notices, requests or demands to or upon any Guarantor shall be addressed to
such Guarantor:
x/x XXX Xxxxxxxxxxx
Xxxxx 000
0000 Xxxxxxx Xxxxx
Xxxx Xxxxx Xxxxxxx, XX 00000
Schedule 2
DESCRIPTION OF PLEDGED STOCK
PLEDGED STOCK:
Name of Issuer Class of Stock Cert. No. No. of Shares
-------------- -------------- --------- -------------
TBC Private Brands, Inc. Common N-1 1
TBC International Inc. Common 2 1
Xxxxxxx'x, Inc. Common N-2 100
Big O Tires, Inc. Common 2 100
TBC Retail Enterprises, Inc. Common 1 100
Big O Tire of Idaho, Inc. Common R-1 6,002
O Advertising, Inc. Common R-1 31,000
Tire Kingdom, Inc. Common 7 60,000
Northern States Tire, Inc. Common 2 100
Big O Retail Enterprises, Inc. Common 2 10,000
Big O Development, Inc. Common R-1 20,000
Merchant's, Incorporated Common 5 100
NTW Incorporated Common 23 970
UNCERTIFICATED SECURITIES:
Name of Issuer Percentage of Membership Interests
-------------- ----------------------------------
TBC Brands, LLC 100% owned by TBC Private Brands, Inc.
TBC Capital, LLC 90% owned by TBC Private Brands, Inc.
5% owned by Xxxxxxx'x, Inc.
5% owned by Tire Kingdom, Inc.
TBC Private Brands of Texas, LLC 100% owned by TBC Private Brands, Inc.
Schedule 3
LOCATION OF JURISDICTION OF ORGANIZATION
Grantor Jurisdiction of Organization State Corporate Identification No.
------- ---------------------------- ----------------------------------
TBC Corporation Delaware 3882110
TBC Private Brands, Inc. Delaware 0759827
TBC International Inc. Delaware 2135760
Xxxxxxx'x, Inc. Georgia J419202
Big O Tires, Inc. Nevada C7989-1982
TBC Retail Enterprises, Inc. Delaware 3230500
Big O Tire of Idaho, Inc. Idaho C41796
O Advertising, Inc. Colorado 19911014173
Tire Kingdom, Inc. Xxxxxxx 000000
Merchant's, Incorporated Delaware 3095411
NTW Incorporated Xxxxxxxx 0000000
Xxxxxxxx Xxxxxx Tire, Inc. Delaware 2532260
Big O Retail Enterprises, Inc. Colorado 19881085620
Big O Development, Inc. Colorado 19881105247
TBC Brands, LLC Delaware 3434801
TBC Capital, LLC Delaware 3434796
TBC Private Brands of Texas, LLC Delaware 3867436
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200_, made by
______________________________ (the "Additional Grantor"), in favor of JPMorgan
Chase Bank, N.A., as collateral agent (in such capacity, the "Collateral Agent")
for the banks and other financial institutions or entities (the "Lenders")
parties to the Credit Agreement referred to below and The Prudential Insurance
Company of America ("Prudential") and its affiliates (the "Prudential
Affiliates") party to the Note Agreements referred to below (the Lenders,
Prudential and the Prudential Affiliates collectively referred to as the
"Secured Parties"). All capitalized terms not defined herein shall have the
meaning ascribed to them in such Credit Agreement.
WITNESSETH:
WHEREAS, TBC Corporation ("Holdings"), TBC Private Brands, Inc.
("TBC Private Brands") (Holdings and TBC Private Brands, each a "Borrower" and
together the "Borrowers"), the Lenders, the Administrative Agent and the
Co-Administrative Agent have entered into a Credit Agreement, dated as of June
17, 2005 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement");
WHEREAS, the Borrowers and Prudential have entered into the Amended
and Restated Note Agreement, dated as of April 1, 2003 (as amended, supplemented
or otherwise modified from time to time, the "Existing Note Agreement") and the
Borrowers, Prudential and the Prudential Affiliates have entered into the Note
Purchase Agreement, dated as of April 1, 2003 (as amended, supplemented or
otherwise modified from time to time, the "Additional Note Agreement") (the
Existing Note Agreement and the Additional Note Agreement collectively referred
to as "Note Agreements");
WHEREAS, in connection with the Credit Agreement and the Note
Agreements, the Borrowers and certain of its Affiliates (other than the
Additional Grantor) have entered into the Guarantee and Collateral Agreement,
dated as of June 17, 2005 (as amended, supplemented or otherwise modified from
time to time, the "Guarantee and Collateral Agreement") in favor of the
Collateral Agent for the benefit of the Secured Parties;
WHEREAS, the Credit Agreement and the Note Agreements require the
Additional Grantor to become a party to the Guarantee and Collateral Agreement;
and
WHEREAS, the Additional Grantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 8.14
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and
2
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:___________________________
Name:
Title:
Annex 1-A to
Assumption Agreement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Intellectual Property Certificate
