AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT
EXHIBIT
10.2
AMENDED AND RESTATED GUARANTEE AND
COLLATERAL AGREEMENT
made by
AVIS BUDGET HOLDINGS, LLC,
AVIS BUDGET CAR RENTAL, LLC
and certain of its Subsidiaries
in favor of
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
as Administrative Agent
Dated as of December 23, 2008
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Section
1. DEFINED TERMS
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2
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|
1.1
Definitions
|
2
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|
1.2
Other
Definitional
Provisions
|
5
|
|
Section
2. B.
ORROWER
GUARANTEE
|
5
|
|
2.1
Borrower
Guarantee
|
5
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2.2
No
Subrogation
|
6
|
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2.3
Amendments,
etc. with
respect to the Subsidiary Borrower Obligations
|
6
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2.4
Guarantee
Absolute and
Unconditional
|
6
|
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2.5
Reinstatement
|
7
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2.6
Payments
|
7
|
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Section
3. HOLDINGS AND SUBSIDIARY
GUARANTEE
|
7
|
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3.1
Holdings
and Subsidiary
Guarantee
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7
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3.2
Right
of
Contribution
|
8
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3.3
No
Subrogation
|
8
|
|
3.4
Amendments,
etc. with
respect to the Borrower Obligations and Subsidiary Borrower
Obligations
|
9
|
|
3.5
Guarantees
Absolute and
Unconditional
|
9
|
|
3.6
Reinstatement
|
10
|
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3.7
Payments
|
10
|
|
Section
4. GRANT OF SECURITY
INTEREST
|
10
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|
Section
5. REPRESENTATIONS AND
WARRANTIES
|
12
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5.1
Title;
No Other
Liens
|
12
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5.2
Perfected
Liens
|
12
|
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5.3
Jurisdiction
of
Organization; Chief Executive Office
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12
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5.4
Investment
Property
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13
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5.5
Intellectual
Property
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13
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5.6
Receivables
|
14
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5.7
Vehicles
|
14
|
|
Section
6. COVENANTS
|
14
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6.1
Delivery
of
Instruments, Certificated Securities and Chattel Paper
|
14
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6.2
Payment
of
Obligations
|
14
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|
6.3
Maintenance
of
Perfected Security Interest; Further Documentation
|
14
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|
6.4
Changes
in Name,
etc
|
15
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6.5
Notices
|
15
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|
6.6
Investment
Property
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15
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6.7
Receivables
|
16
|
|
6.8
Intellectual
Property
|
16
|
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6.9
Vehicles
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18
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|
6.10
Commercial
Tort Claims
|
18
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|
Section
7. REMEDIAL
PROVISIONS
|
18
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7.1
Certain
Matters
Relating to Receivables
|
18
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7.2
Communications
with
Obligors; Grantors Remain Liable
|
18
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7.3
Pledged
Stock
|
19
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|
7.4
Proceeds
to be Turned
Over To Administrative Agent
|
19
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7.5
Application
of
Proceeds
|
20
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7.6
Code
and Other
Remedies
|
20
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7.7
Registration
Rights
|
21
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7.8
Deficiency
|
21
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7.9
Grant
of Intellectual
Property License
|
21
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Section
8. THE ADMINISTRATIVE
AGENT
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22
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8.1
Administrative
Agent’s
Appointment as Attorney-in-Fact, etc
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22
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8.2
Duty
of Administrative
Agent
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23
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8.3
Execution
of Financing
Statements
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24
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8.4
Authority
of
Administrative Agent
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24
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Section
9. MISCELLANEOUS
|
24
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9.1
Amendments
in
Writing
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24
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9.2
Notices
|
24
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|
9.3
No
Waiver by Course of
Conduct; Cumulative Remedies
|
24
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9.4
Enforcement
Expenses;
Indemnification
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25
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9.5
Successors
and
Assigns
|
25
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9.6
Set-Off
|
25
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9.7
Counterparts
|
26
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9.8
Severability
|
26
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9.9
Section
Headings
|
26
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9.10
Integration
|
26
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9.11
GOVERNING
LAW
|
26
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9.12
Submission
To Jurisdiction;
Waivers
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26
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9.13
Acknowledgements
|
27
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9.14
Additional
Grantors
|
27
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9.15
Releases
|
27
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9.16
WAIVER
OF JURY TRIAL
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27
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9.17
Continuation
of Security
Interests
|
28
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SCHEDULES
Schedule 1
Notice Addresses
Schedule 2
Pledged Stock and Pledged Notes
Schedule 3
Domestic Perfection Matters
Schedule 4
[Reserved]
Schedule 5
Jurisdictions of Organization and Chief Executive
Offices
Schedule 6
Intellectual Property
Schedule 7
Vehicles
Annex
I
Form of Assumption Agreement
AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT, dated as of December 23, 2008 (the
“Effective Date”), 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 Administrative Agent (in such
capacity, the “Administrative Agent”) for the banks and other financial
institutions or entities (the “Lenders”) from time to time parties to the Credit
Agreement, dated as of April 19, 2006 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among AVIS BUDGET HOLDINGS,
LLC (“Holdings”), AVIS BUDGET CAR RENTAL, LLC (the “Borrower”), the Subsidiary
Borrowers (as defined in the Credit Agreement) from time to time parties to
the
Credit Agreement, DEUTSCHE BANK SECURITIES INC., as Syndication Agent, Bank
of
America, N.A., Calyon New York Branch and Citicorp USA, INc., as Documentation
Agents, Wachovia Bank, National Association, as Co-Documentation Agent, the
Lenders and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the
Credit Agreement, the Lenders have severally agreed to make extensions of credit
to the Borrower and the Subsidiary Borrowers upon the terms and subject to
the
conditions set forth therein;
WHEREAS, the Borrower and
each Subsidiary Borrower is a member of an affiliated group of companies that
includes each other Grantor;
WHEREAS, the proceeds of
the
extensions of credit under the Credit Agreement will be used in part to enable
the Borrower and each Subsidiary Borrower to make valuable transfers to one
or
more of the other Grantors in connection with the operation of their respective
businesses;
WHEREAS, the Borrower, each
Subsidiary Borrower and the other Grantors will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement;
WHEREAS, pursuant to the
Credit Agreement, the Borrower and certain other Grantors entered into a
Guarantee and Collateral Agreement dated as of April 19, 2006 (the “Existing
Guarantee and Collateral Agreement”) in favor of the Administrative Agent for
the benefit of the lenders party to the Credit Agreement and certain other
parties in order to guarantee and secure the extensions of credit made to the
Borrower thereunder and certain other extensions of credit;
WHEREAS, the Borrower
entered into a First Amendment to the Credit Agreement, dated as of December
23,
2008 (the “First Amendment”), pursuant to which the Administrative Agent, the
Lenders and the Borrower agreed to amend certain terms in the Credit Agreement;
and
WHEREAS, it is a condition
precedent to the agreements of the Lenders under the First Amendment to amend
certain terms in the Credit Agreement that the Grantors shall have executed
and
delivered this Agreement to the Administrative Agent for the ratable benefit
of
the Secured Parties;
NOW, THEREFORE, in
consideration of the premises and to induce the Administrative Agent and the
Lenders to enter into the First Amendment and to induce the Lenders to amend
certain terms in the Credit Agreement and to continue to make their respective
extensions of credit thereunder and certain other extensions of credit, each
Grantor hereby agrees that the Existing Guarantee and Collateral Agreement
is
hereby amended and restated as of the Effective Date to read in its entirety
as
follows:
SECTION 1. DEFINED
TERMS
1.1 Definitions.
(a)
Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and the following terms are used herein
as defined in Article 9 of the New York UCC: Account, Certificated
Security, Chattel Paper, Deposit Account, Documents, Equipment, General
Intangibles, Instruments, Inventory, Letter of Credit Rights and Supporting
Obligations.
(b) The following terms shall have the
following meanings:
“Agreement”: this
Amended and Restated 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 Loans and Reimbursement Obligations and all other obligations
and liabilities of the Borrower (including, without limitation, (i) interest
accruing at the then applicable rate provided in the Credit Agreement after
the
maturity of the Loans and Reimbursement Obligations and interest accruing at
the
then applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding and (ii)
Revolving Extensions of Credit made under the New Local Facility) to the
Administrative Agent or any Lender (or, in the case of any Specified Swap
Agreement, any Affiliate of any Lender), whether direct or indirect, absolute
or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, this
Agreement (including, without limitation, the Borrower Guarantor Obligations),
the other Loan Documents, any Letter of Credit, any Specified Swap 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, swap coupon or termination payments, fees or indemnities or
reasonable out-of-pocket costs or expenses (including, without limitation,
all
reasonable out-of-pocket fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Borrower pursuant
to
the terms of any of the foregoing agreements).
“Borrower Guarantor
Obligations”: without duplicating any Borrower Obligations, all
obligations and liabilities of the Borrower described in Section 2 of this
Agreement.
“Borrower Termination
Event”: as defined in Section 3.1(d).
“Collateralized”:
secured by cash collateral
arrangements and/or backstop letters of credit
entered into on terms and in amounts reasonably satisfactory to the
Administrative Agent and the relevant Issuing Lender.
“Collateral”: as
defined in Section 4.
“Collateral Account”:
any collateral account established
by the Administrative Agent as provided in
Section 7.1 or 7.4.
“Copyright Licenses”:
any written or oral agreement
naming any Grantor as licensor or licensee
(including, without limitation, those listed in Schedule 6), granting any right
under any Copyright, including, without limitation, the grant of rights to
manufacture, distribute, exploit and sell Copyrighted materials.
“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, all registrations, applications and recordings thereof
in the United States Copyright Office and any other copyright registry office
(including, without limitation, those listed in Schedule 6), 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.
“Foreign Subsidiary Voting
Stock”: the voting Capital Stock of any Foreign Subsidiary.
“Grantor”: as defined
in the preamble hereto.
“Guarantor
Obligations”: with respect to any Guarantor, without duplicating any
Subsidiary Borrower Obligations, all obligations and liabilities of such
Guarantor which may arise under or in connection with this Agreement (including,
without limitation, Section 3) or any other Loan Document or any Specified
Swap
Agreement to which such Guarantor is a party, in each case whether on account
of
guarantee obligations, repayment obligations, reimbursement obligations, fees,
indemnities or reasonable out-of-pocket costs or expenses (including, without
limitation, all reasonable, out-of-pocket fees and disbursements of counsel
to
the Administrative Agent or to the Lenders that are required to be paid by
such
Guarantor pursuant to the terms of this Agreement or any other Loan
Document).
“Guarantors”: the
collective reference to each Grantor other than the Borrower. For the
avoidance of doubt, notwithstanding any other provision of this Agreement,
the
parties hereto expressly agree that no Excluded Subsidiary, Foreign Subsidiary
or Securitization Entity shall be a Guarantor.
“Intellectual
Property”: the collective reference to all rights, priorities and
privileges with respect to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks, the Trademark Licenses, trade secrets, know-how,
and
other confidential information, 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.
“Intercompany Note”: any
promissory note evidencing loans or advances made by any Loan Party to Holdings
or any of its Subsidiaries.
“Investment Property”: the
collective reference to (i) all “investment property” as such term is defined in
Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary
Voting Stock excluded from the definition of “Pledged Stock”) 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 Pledged Stock.
“New York UCC”: the
Uniform Commercial Code as from time to time in effect in the State of New
York.
“Obligations”: (i) in
the case of the Borrower, the Borrower Obligations and the Borrower Guarantor
Obligations, (ii) in the case of each Guarantor which is also a Subsidiary
Borrower, its Subsidiary Borrower Obligations, and (iii) in the case of each
Guarantor (whether or not a Subsidiary Borrower), 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 Schedule 6, (ii) all applications for letters patent of the
United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in Schedule 6, and (iii) all rights to obtain any reissues
or extensions of the foregoing.
“Patent License”: all
agreements, whether written or oral, providing for the grant by or to any
Grantor of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent, including, without limitation, any of the foregoing
listed on Schedule 6.
“Pledged Notes”: all
promissory notes listed on Schedule 2, all Intercompany Notes at any time issued
to or held by any Grantor and all other promissory notes issued to or held
by
any Grantor.
“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 Subsidiary of any Grantor (other than any
Excluded Subsidiary or any Securitization Entity) that may be issued or granted
to, or held by, any Grantor while this Agreement is in effect; provided that
in
no event shall Pledged Stock or Collateral include more than 66% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary.
“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.
“Receivable”: any right to
payment for goods sold or leased or for services rendered, whether or not such
right is evidenced by any Instrument or Chattel Paper and whether or not it
has
been earned by performance (including, without limitation, such right if it
constitutes an Account).
“Secured Parties”: the
collective reference to the Administrative Agent, the Lenders and any affiliate
of any Lender to which Borrower Obligations or Guarantor Obligations, as
applicable, are owed.
“Securities Account”:
as defined in Article 8
of the New York UCC.
“Securities Act”: the
Securities Act of 1933, as amended.
“Subsidiary Borrower
Obligations”: with respect to each Subsidiary Borrower, without
duplicating any Guarantor Obligations, the collective reference to the unpaid
principal of and interest on the Loans and all other obligations and liabilities
of such Subsidiary Borrower (including, without limitation, interest accruing
at
the then applicable rate provided in the Credit Agreement after the maturity
of
the Loans and interest accruing at the then applicable rate provided in the
Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to
such Subsidiary Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender (or, in the case of any Specified Swap Agreement, any
Affiliate of any Lender), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this Agreement,
the
other Loan Documents, any Letter of Credit, any Specified Swap 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, swap coupon or termination payments, fees or indemnities or
reasonable out-of-pocket costs or expenses (including, without limitation,
all
reasonable out-of-pocket fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by such Subsidiary Borrower
pursuant to the terms of any of the foregoing agreements).
“Subsidiary Borrower
Termination Event”: as defined in Section 2.1(d).
“Subsidiary Guarantor”: each
Guarantor other than Holdings and the Borrower.
“Trademarks”: (i) all
trademarks, trade names, corporate names, company names, business names, domain
names, fictitious business names, trade styles, service marks, logos and other
indicators of the source of goods or services, 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 therein, including,
without limitation, any of the foregoing listed on Schedule 6, and (ii) the
right to obtain all renewals thereof.
“Trademark License”: any agreement,
whether written or oral, providing for the grant by or to any Grantor of any
right to use any Trademark, including, without limitation, any of the foregoing
referred to in Schedule 6.
“Vehicles”: all cars,
trucks, trailers and other vehicles covered by a certificate of title law of
any
state other than any car, truck, trailer or other vehicle securing indebtedness
permitted under the Credit Agreement and, in any event including, without
limitation, the vehicles described on Schedule [7] and all tires and other
appurtenances to any of the foregoing.
1.2 Other
Definitional Provisions. (a) The words
“hereof,” “herein”, “hereto” and “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any
particular provision of this Agreement, and Section and Schedule references
are
to this Agreement unless otherwise specified.
(b) The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such
terms.
(c) Where the context requires, terms
relating to the Collateral or any part thereof, when used in relation to a
Grantor, shall refer to such Grantor’s Collateral or the relevant part
thereof.
SECTION 2. BORROWER GUARANTEE
2.1 Borrower
Guarantee. (a) The Borrower hereby,
unconditionally and irrevocably, guarantees to the Administrative Agent, for
the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by each Subsidiary Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of its Subsidiary Borrower Obligations.
(b) Anything herein or in any other Loan
Document to the contrary notwithstanding, the maximum liability of the Borrower
hereunder and under the other Loan Documents in respect of its guarantee
obligations shall in no event exceed the amount which can be guaranteed by
the
Borrower 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) The guarantee contained in this
Section 2 shall remain in full force and effect until all the Subsidiary
Borrower Obligations shall have been satisfied by payment in full, each Letter
of Credit shall have terminated, expired or been Collateralized and the
Commitments shall have been terminated (all of the foregoing conditions
together, the “Subsidiary Borrower Termination Event”), notwithstanding that
from time to time during the term of the Credit Agreement each Subsidiary
Borrower may be free from any Subsidiary Borrower Obligations.
(d) No payment made by any Subsidiary
Borrower, any of the other Guarantors, any other guarantor or any other Person
or received or collected by the Administrative Agent or any Lender from any
Subsidiary Borrower, any of the other 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 Subsidiary Borrower Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of the Borrower hereunder
which shall, notwithstanding any such payment (other than any payment made
by
the Borrower in respect of the Subsidiary Borrower Obligations or any payment
received or collected from the Borrower in respect of the Subsidiary Borrower
Obligations), remain liable for the Subsidiary Borrower Obligations up to the
maximum liability of the Borrower hereunder until the occurrence of the
Subsidiary Borrower Termination Event.
2.2 No
Subrogation. Notwithstanding any payment or payments made by the
Borrower hereunder, or any set-off or application of funds of the Borrower
by
the Administrative Agent or any Lender, the Borrower shall not be entitled
to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Subsidiary Borrowers or against any collateral security or guarantee
or right of offset held by the Administrative Agent or any Lender for the
payment of the Subsidiary Borrower Obligations, nor shall the Borrower seek
or
be entitled to seek any contribution or reimbursement from the Subsidiary
Borrowers in respect of payments made by the Borrower hereunder, until the
Subsidiary Borrower Termination Event. If any amount shall be paid to the
Borrower on account of such subrogation rights at any time before the
Subsidiary Borrower Termination Event, such amount shall be held by the Borrower
in trust for the Administrative Agent and the Lenders, segregated from other
funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be
turned over to the Administrative Agent in the exact form received by the
Borrower (duly indorsed by the Borrower to the Administrative Agent, if
required), to be applied against the Subsidiary Borrower Obligations, whether
matured or unmatured, in such order as the Administrative Agent may
determine.
2.3 Amendments,
etc. with respect to the Subsidiary Borrower
Obligations. The Borrower shall remain obligated hereunder
notwithstanding that, without any reservation of rights against the Borrower
and
without notice to or further assent by the Borrower, any demand for payment
of
any of the Subsidiary Borrower Obligations made by the Administrative Agent
or
any Lender may be rescinded by the Administrative Agent or such Lender and
any
of the Subsidiary Borrower Obligations continued, and the Subsidiary 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 Administrative Agent or any Lender, and the Credit Agreement and the other
Loan Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or
in
part, as the Administrative Agent (or the Required Lenders or all Lenders,
as
the case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent or any Lender for the payment of the Subsidiary Borrower Obligations
may
be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Subsidiary Borrower Obligations or for the guarantee contained in this Section
2
or any property subject thereto.
2.4 Guarantee
Absolute and Unconditional. The Borrower
waives any and all notice of the creation, renewal, extension or accrual of
any
of the Subsidiary Borrower Obligations and notice of or proof of reliance by
the
Administrative Agent or any Lender upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Subsidiary
Borrower Obligations, and any of them, shall conclusively be deemed to have
been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and the Subsidiary Borrowers, on the one hand, and the
Administrative Agent and the Lenders, 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. The Borrower waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment
to
or upon the Borrower or the applicable Subsidiary Borrower with respect to
the
Subsidiary Borrower Obligations. The Borrower understands and agrees that
the guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment (to the extent permitted by
applicable law) without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Subsidiary Borrower
Obligations or any other collateral security therefor or guarantee or right
of
offset with respect thereto at any time or from time to time held by the
Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by any Subsidiary Borrower or any other Person
against the Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or any
Subsidiary Borrower) which constitutes, or might be construed to constitute,
an
equitable or legal discharge of the Subsidiary Borrowers for the
Subsidiary Borrower Obligations, or of the Borrower 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 the Borrower, the Administrative Agent or any Lender 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 the Subsidiary Borrowers or
any
other Person or against any collateral security or guarantee for the Subsidiary
Borrower Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Lender to make any such demand,
to
pursue such other rights or remedies or to collect any payments from the
Borrower, any Subsidiary Borrower, or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any Subsidiary Borrower or any other Person
or
any such collateral security, guarantee or right of offset, shall not relieve
the Borrower 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 Administrative Agent or any Lender against the
Borrower. For the purposes hereof, “demand” shall include the commencement
and continuance of any legal proceedings.
2.5 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 Subsidiary Borrower
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower, any Subsidiary Borrower or any
other Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Borrower,
any Subsidiary Borrower or any other Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.6 Payments. The
Borrower hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off
or
counterclaim in Dollars at the Funding Office.
SECTION 3. HOLDINGS
AND
SUBSIDIARY GUARANTEE
3.1 Holdings
and Subsidiary Guarantee. (a) Each of
the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the ratable benefit of the Secured
Parties and their respective successors, indorsees, transferees and assigns,
the
prompt and complete payment and performance by the Borrower and the Subsidiary
Borrowers when due (whether at the stated maturity, by acceleration or
otherwise) of the Borrower Obligations and the Subsidiary Borrower Obligations.
(b) Anything herein or in any other Loan
Document to the contrary notwithstanding, the maximum liability of each
Guarantor (other than Holdings) hereunder and under the other Loan Documents
shall in no event exceed the amount which can be guaranteed by such Guarantor
under applicable federal and state laws relating to the insolvency of debtors
(after giving effect to the right of contribution established in Section
3.2).
(c) Each Guarantor agrees that the
Borrower Obligations and the Subsidiary Borrower Obligations, either solely
or
collectively, 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 3 or affecting the rights and remedies of the Administrative
Agent or any Lender hereunder.
(d) The guarantee contained in this
Section 3 shall remain in full force and effect until all the Borrower
Obligations and Subsidiary Borrower Obligations shall have been satisfied by
payment in full, each Letter of Credit shall have terminated, expired or been
Collateralized, and the Commitments shall have been terminated (all of the
foregoing conditions together, the “Borrower Termination Event”),
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Borrower Obligations and Subsidiary Borrower
Obligations.
(e) No payment made by the Borrower, any
of the Subsidiary Borrowers, any of the Guarantors, any other guarantor or
any
other Person or received or collected by the Administrative Agent or any Lender
from the Borrower, any of the Subsidiary Borrowers, any of the Guarantors,
any
other guarantor or any other Person by virtue of any action or proceeding or
any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations or the Subsidiary
Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder which shall, notwithstanding
any
such payment (other than any payment made by such Guarantor in respect of the
Borrower Obligations or the Subsidiary Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower Obligations
or the Subsidiary Borrower Obligations), remain liable for the Borrower
Obligations and the Subsidiary Borrower Obligations up to the maximum liability
of such Guarantor hereunder until the
occurrence of the
Borrower Termination Event.
3.2 Right
of Contribution. Each Subsidiary Guarantor
hereby agrees that to the extent that a Guarantor shall have paid more than
its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor’s right of contribution shall be
subject to the terms and conditions of Section 3.3. The provisions of this
Section 3.2 shall in no respect limit the obligations and liabilities of any
Guarantor to the Administrative Agent and the Lenders, and each Guarantor shall
remain liable to the Administrative Agent and the Lenders for the full amount
guaranteed by such Guarantor hereunder.
3.3 No
Subrogation. Notwithstanding any payment
made by any Guarantor hereunder or any set-off or application of funds of any
Guarantor by the Administrative Agent or any Lender, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent
or
any Lender against the Borrower, any Subsidiary Borrower or any other Guarantor
or any collateral security or guarantee or right of offset held by the
Administrative Agent or any Lender for the payment of the Borrower Obligations
or the Subsidiary Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower, any
Subsidiary Borrower or any other Guarantor in respect of payments made by such
Guarantor hereunder, until the occurrence of the Borrower Termination
Event. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time before the occurrence of the Borrower Termination
Event, such amount shall be held by such Guarantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Borrower Obligations and the Subsidiary Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
3.4 Amendments,
etc. with respect to the Borrower Obligations
and Subsidiary 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 or Subsidiary Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded
by
the Administrative Agent or such Lender and any of the Borrower Obligations
and
the Subsidiary Borrower Obligations continued, and the Borrower Obligations
and
the Subsidiary Borrower Obligations or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or
any
Lender, and the Credit Agreement and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders or all Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right
of
offset at any time held by the Administrative Agent or any Lender for the
payment of the Borrower Obligations or the Subsidiary Borrower Obligations
may
be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender 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 the Subsidiary Borrower Obligations or for the guarantee
contained in this Section 3 or any property subject thereto.
3.5 Guarantees
Absolute and Unconditional. Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Borrower Obligations and Subsidiary Borrower Obligations
and notice of or proof of reliance by the Administrative Agent or any Lender
upon the guarantee contained in this Section 3 or acceptance of the guarantee
contained in this Section 3; the Borrower Obligations and Subsidiary Borrower
Obligations 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 3; and all dealings between the Borrower,
the Subsidiary Borrowers and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 3. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment
to
or upon the Borrower, the Subsidiary Borrowers or any of the Guarantors with
respect to the Borrower Obligations and the Subsidiary Borrower
Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 3 shall be construed as a continuing, absolute and
unconditional guarantee of payment (to the extent permitted by applicable law)
without regard to (a) the validity or enforceability of the Credit Agreement
or
any other Loan Document, any of the Borrower Obligations or the Subsidiary
Borrower Obligations or any other collateral security therefor or guarantee
or
right of offset with respect thereto at any time or from time to time held
by
the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower, any Subsidiary Borrower or any
other Person against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever
(with or without notice to or knowledge of
the
Borrower, any Subsidiary Borrower or such Guarantor) which constitutes, or
might
be construed to constitute, an equitable or legal discharge of the Borrower
for
the Borrower Obligations, of any Subsidiary Borrower for the Subsidiary Borrower
Obligations or of such Guarantor under the guarantee contained in this Section
3, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any Lender 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 the Borrower, any Subsidiary Borrower, any
other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or the Subsidiary Borrower Obligations or any
right
of offset with respect thereto, and any failure by the Administrative Agent
or
any Lender to make any such demand, to pursue such other rights or remedies
or
to collect any payments from the Borrower, any Subsidiary Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security
or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any Subsidiary 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 Administrative Agent or any Lender against any
Guarantor. For the purposes hereof “demand” shall include the commencement
and continuance of any legal proceedings.
3.6 Reinstatement.
The
guarantee contained in this
Section 3 shall continue to be effective, or be reinstated, as the case may
be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
or the Subsidiary Borrower Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower, any Subsidiary Borrower or any Guarantor, or upon or as a result
of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Borrower, any Subsidiary Borrower or any Guarantor
or
any substantial part of its property, or otherwise, all as though such payments
had not been made.
3.7 Payments.
Each
Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off
or
counterclaim in Dollars at the Funding Office.
Each Grantor hereby assigns
and transfers to the Administrative Agent, and hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in, all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in
the
future may acquire any right, title or interest (collectively, the
“Collateral”), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor’s Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Equipment;
(d) all Fixtures;
(e) all General Intangibles;
(f) all Instruments;
(g) all Documents;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property;
(k) all Letter-of-Credit Rights;
(l) all Pledged Notes;
(m) all Pledged Stock;
(n) all Receivables;
(o) all Vehicles and title documents with
respect to Vehicles;
(p) all other property not otherwise
described above (except for any property specifically excluded from any clause
in this section above, and any property specifically excluded from any defined
term used in any clause of this section above);
(q) all books and records pertaining to
the Collateral; and
(r) 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 4, this Agreement shall not
constitute a grant of and the Collateral shall not include a security interest
in (a) 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, (b) any trademark applications
filed in the United States Patent and Trademark Office on the basis of such
Grantor's “intent-to-use” such trademark, unless and until acceptable evidence
of use of the Trademark has been filed with the United States Patent and
Trademark Office pursuant to Section 1(c) or Section 1(d) of the Xxxxxx Act
(15
U.S.C. 1051, et seq.), to the extent that granting a Lien in such Trademark
application prior to such filing would adversely affect the
enforceability or validity of such Trademark application; provided, that upon
the filing of acceptable evidence of use of the Trademark with the United States
Patent and Trademark Office such application shall be automatically subject
to
the security interest granted herein and deemed to be included in the Collateral
and (c) Receivables classified as receivables that are “assets under vehicle
programs” in the financial statements of the Borrower; provided, further, that
in no event shall General Intangibles include more than 66% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary.
To induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower and each
Subsidiary Borrower thereunder, each Grantor hereby represents and warrants
to
the Administrative Agent and each Lender that:
5.1 Title;
No Other Liens. Except for the security
interest granted to the Administrative Agent for the ratable benefit of the
Secured Parties pursuant to this Agreement and the other Liens permitted to
exist on the Collateral by the Credit Agreement, such Grantor owns each item
of
the Collateral free and clear of any and all Liens or claims of others. No
effective financing statement or other public notice with respect to all or
any
part of the Collateral is on file or of record in any public office, except
such
as have been filed in favor of the Administrative Agent, for the ratable benefit
of the Secured Parties, pursuant to this Agreement or as are permitted by the
Credit Agreement. 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 by or licensed to 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
Administrative Agent and each Lender understands that any such licenses may
be
exclusive to the applicable licensees, and such exclusivity provisions may
limit
the ability of the Administrative Agent to utilize, sell, lease or transfer
the
related Intellectual Property or otherwise realize value from such Intellectual
Property pursuant hereto.
5.2 Perfected
Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) and, in the case
of
Vehicles, Section 6.9, will constitute valid perfected security interests in
all
of the Collateral in favor of the Administrative Agent, for the ratable benefit
of the Secured Parties, as collateral security for such Grantor’s Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
and (b) are prior to all other Liens on the Collateral in existence on the
date
hereof except for (i) unrecorded Liens permitted by the Credit Agreement which
have priority over the Liens on the Collateral by operation of law and (ii)
in
the case of Collateral other than Pledged Stock, Permitted Liens; provided,
however, that additional filings in the United States Patent and Trademark
Office and United States Copyright Office may be necessary with respect to
the
perfection of the Administrative Agent’s Lien in United States registrations and
applications for Trademarks, Patents and Copyrights which are filed by, issued
to, or acquired by any Grantor after the date hereof and, provided, further,
that additional filings and/or other actions may be required to perfect the
Administrative Agent’s Lien in Intellectual Property Collateral which is created
under the laws of a jurisdiction outside the United States and, provided,
further, no Grantor shall be required to perfect the security interests granted
pursuant to this Agreement (other than with respect to any Collateral Account)
by means of delivery of an agreement granting “control” (as defined in Article 8
of the New York UCC) over any Deposit Account or Securities Account.
5.3 Jurisdiction
of Organization; Chief Executive
Office. On the date hereof, such Grantor’s jurisdiction of
organization and the location of such Grantor’s chief executive office or sole
place of business or principal residence, as the case may be, are specified
on
Schedule 5. Such Grantor has furnished to the Administrative Agent a
certified charter, certificate of incorporation or other organizational document
and long-form good standing certificate as of a date which is recent to the
date
hereof.
5.4 Investment
Property. (a) The shares of the
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 or,
if
less, such amount as has been previously agreed with the Administrative
Agent.
(b) All the shares of the Pledged Stock
have been duly and validly issued and are fully paid and nonassessable.
(c) 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 and any statutory Liens permitted under Section 7.3 of the Credit
Agreement.
5.5 Intellectual
Property. (a) Schedule 6 lists
all registrations and applications recorded in the United States Patent and
Trademark Office or the United States Copyright Office included in Intellectual
Property owned by such Grantor in its own name on the date hereof and all
licenses under which such Grantor holds or has the right to an exclusive license
in Intellectual Property on the date hereof that such Grantor has recorded
in
one of the foregoing offices, including the registration or application number
for such licensed Intellectual Property. With respect to any unpublished
patent applications (whether disclosed on Schedule 6 or hereafter disclosed
by
such Grantor), such Grantor will disclose on Schedule 6 and in any subsequent
report or disclosure, the application number for such patent application but
not
the title or subject matter. In the event that the Administrative Agent or
any agent thereof discovers the title or subject matter of any such patent
application prior to its publication, through any filing receipt or otherwise,
the Administrative Agent will not knowingly disclose or use such information
for
any purpose.
(b) On the date hereof, all material
Intellectual Property owned by such Grantor is, to its knowledge, valid,
subsisting, unexpired and enforceable, has not been abandoned and, to its
knowledge, does not infringe upon the Intellectual Property rights of any other
Person in any material respect except for the alleged infringements and
enforcement activity as disclosed on Schedule 6.
(c) Except as set forth in Schedule 6, on
the date hereof, no Grantor has granted an exclusive license in the territory
of
the United Stated in or to (i) any of the following Trademarks: AVIS, BUDGET,
and WE TRY HARDER or (ii) any Patents that cover the Wizard System. It is
understood that Schedule 6 shall be completed by the Grantor within 30 days
after the date hereof.
(d) No holding, decision or judgment has
been rendered by any Governmental Authority against such Grantor which would
limit, cancel or question the validity of, or such Grantor’s rights in, any
Intellectual Property owned by such Grantor in any respect that could reasonably
be expected to have a Material Adverse Effect.
(e) Except for the alleged infringements
and enforcement activity disclosed on Schedule 6, to such Grantor’s knowledge,
no action or proceeding is pending or threatened on the date hereof seeking
to
limit, cancel or assert the invalidity of any Intellectual Property owned by
such Grantor or such Grantor’s ownership interest therein, which, if adversely
determined, would have a material adverse effect on the value of any material
Intellectual Property owned by such Grantor.
5.6 Receivables.
No
amount payable to such Grantor
under or in connection with any Receivable included in the Collateral for
$500,000 or more is evidenced by any Instrument or Chattel Paper which has
not
been delivered to the Administrative Agent.
5.7 Vehicles.
Schedule
[7] is a complete and correct
list of all Vehicles owned by such Grantor on the date hereof.
Each Grantor covenants and
agrees with the Administrative Agent and the Lenders 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:
6.1 Delivery
of Instruments, Certificated Securities and Chattel
Paper. If any amount in excess of $500,000 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 promptly delivered to the
Administrative Agent, duly indorsed (including by delivery of related stock
powers) in a manner reasonably satisfactory to the Administrative Agent, to
be
held as Collateral pursuant to this Agreement.
6.2 Payment
of Obligations. Such Grantor (other than
Holdings and the Borrower) will pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all obligations
and liabilities in respect of 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 against or with respect to the Collateral,
except where the amount or validity thereof is currently being contested in
good
faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of such Grantor or except to
the
extent that such failure to do so could not reasonably be expected to result
in
a Material Adverse Effect.
6.3 Maintenance
of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall not take any action or
fail to take any action which would result in the security interest created
by
this Agreement as a perfected security interest having a priority which is
less
than that described in Section 5.2 and shall make commercially reasonable
efforts to defend such security interest 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 shall furnish to the
Administrative Agent and the Lenders from time to time statements and schedules
further identifying and describing the assets and property of such Grantor
and
such other reports in connection therewith as the Administrative Agent may
reasonably request, all in reasonable detail.
(c) At any time and from time to time,
upon the written request of the Administrative Agent, and at the sole expense
of
such Grantor, such Grantor will promptly and duly execute and deliver, and
have
recorded, such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) 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, Letter of Credit
Rights and any other relevant Collateral, taking any actions necessary to enable
the Administrative Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.
6.4 Changes
in Name, etc. Such Grantor will not, except
upon 15 days’ prior written notice to the Administrative Agent, (i) change its
jurisdiction of organization from that referred to in Section 5.3 or (ii) change
its name. Such Grantor shall deliver to the Administrative Agent all
additional executed financing statements and other documents reasonably
requested by the Administrative Agent to maintain the validity, perfection
and
priority of the security interests provided for herein.
6.5 Notices.
Such
Grantor will advise the
Administrative Agent and the Lenders promptly, in reasonable detail, of:
(a)
any Lien (other than security interests created
hereby or Liens permitted under
the Credit Agreement) on any of the Collateral which would adversely affect
the
ability of the Administrative Agent to exercise any of its remedies hereunder;
and
(b)
of 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.
6.6 Investment
Property. (a) If such Grantor shall
become entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights
in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same
in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for such Grantor’s Obligations. If an Event
of Default shall have occurred and be continuing, any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it hereunder
as additional collateral security for the applicable Grantor’s Obligations, and
in case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect
to
the Investment Property pursuant to the recapitalization or reclassification
of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for such Obligations. If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Lenders, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
(b) Without the prior written consent of
the Administrative Agent (such consent not to be unreasonably withheld), such
Grantor will not (i) sell, assign, transfer, exchange, or otherwise dispose
of,
or grant any option with respect to, the Investment Property or Proceeds thereof
(except pursuant to a transaction expressly permitted by the Credit Agreement),
(ii) 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 statutory Liens permitted by the Credit Agreement or, in
the
case of such Proceeds, nonconsensual Permitted Liens or (iii) enter into any
agreement or undertaking restricting the right or ability of such Grantor or
the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof.
(c) The Administrative Agent will execute
and deliver (or cause to be executed and delivered) to each Grantor all such
proxies and other instruments as such Grantor may request for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise and to receive the dividends or interest payments that
it
is authorized to receive and retain under the Credit Agreement.
(d) 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, (ii) it will notify
the
Administrative Agent promptly in writing of the occurrence of any of the events
described in Section 6.6(a) with respect to the Investment Property issued
by it
and (iii) the terms of Sections 7.3 (c) and 7.7 shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it pursuant to
Section 7.3(c) or 7.7 with respect to the Investment Property issued by
it.
6.7 Receivables.
Such
Grantor will deliver to the
Administrative Agent a copy of each material demand, notice or document received
by it that questions or calls into doubt the validity or enforceability of
more
than 10% of the aggregate amount of the then outstanding Receivables included
in
the Collateral.
6.8 Intellectual
Property. (a) Such Grantor
(either itself or through licensees) will (i) to the extent consistent with
reasonable commercial judgment, continue to use each material Trademark owned
by
such Grantor on each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures and price lists
in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) to the extent consistent with reasonable
commercial judgment, maintain the quality of products and services offered
under
such Trademark at a level substantially consistent with the quality of products
and services offered under such Trademark as of the date hereof, (iii) use
such
Trademark with the appropriate notice of registration and all other notices
and
legends required by applicable Requirements of Law, and (iv) not (and not
authorize any licensee or sublicensee thereof to) do any act or knowingly omit
to do any act whereby such Trademark may become unenforceable or impaired in
any
way except to the extent consistent with reasonable commercial judgment.
Without limitation of other provisions of this Agreement, every Trademark
adopted or acquired by a Grantor that is confusingly similar to or a colorable
imitation of any Trademark owned by such Grantor will automatically be included
in the Collateral for all purposes of this Agreement, and, if a Grantor applies
to register or registers any such Trademark, the applicable Grantor shall notify
the Administrative Agent pursuant to Section 6.8(f) in order for the
Administrative Agent, for the ratable benefit of the Secured Parties, to obtain
a perfected security interest in such Trademark pursuant to this
Agreement.
(b) Such Grantor, to the extent
consistent with reasonable commercial judgment, will not (and will not authorize
its licensees to) do any act, or omit to do any act, whereby any material Patent
is likely to become forfeited, abandoned or dedicated to the public.
(c) Such Grantor, to the extent
consistent with reasonable commercial judgment, will not (and will not authorize
any licensee or sublicensee thereof to) (i) do any act or knowingly omit to
do
any act whereby any material portion of the Copyrights will be materially
impaired or (ii) do any act whereby any material portion of the Copyrights
may
fall into the public domain.
(d) Such Grantor will not (and will not
authorize its licensees to) do any act that knowingly uses any Intellectual
Property owned by such Grantor to infringe upon the Intellectual Property rights
of any other Person in any material respect.
(e) Such Grantor will notify the
Administrative Agent and the Lenders promptly if it knows, or has reason to
know, that any application or registration relating to any material Intellectual
Property is likely to become forfeited, abandoned or dedicated to the public,
or
of any material adverse determination or development (including, without
limitation, the institution of, or any such determination or development in,
any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor’s ownership of, or the validity of, any material Intellectual Property
or such Grantor’s right to register the same or to own and maintain the
same.
(f) Whenever such Grantor, either by
itself or through any agent, employee, licensee or designee, shall file an
application for the registration of any Intellectual Property owned by, or
shall
file a recordation of any Intellectual Property exclusively licensed to, such
Grantor with 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, such Grantor shall report such filing to the
Administrative Agent in accordance with Section 6 of the Credit Agreement,
provided that all such disclosure is subject to the last sentence of Section
5.5
of this Agreement, and except that such report shall include all such
application and recordation filings by such Grantor through the date five (5)
Business Days prior to the date on which such report required by Section 6
of
the Credit Agreement is sent to the Administrative Agent. Upon request of
the Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all reasonably necessary agreements, instruments, documents,
and papers, in a form to be mutually agreed upon by the Borrower and the
Administrative Agent, as the Administrative Agent may request to evidence the
Administrative Agent’s and the Lenders’ security interest (provided that such
Grantor will not have an affirmative obligation to seek an application or
registration for Intellectual Property which Borrower reasonably elects not
to
seek) in any (i) Copyright, Patent and Trademark; and (ii) any material,
exclusive license grant to such Grantor with respect to any Trademark, Copyright
or Patent (provided that (1) the Trademark, Copyright or Patent registration
or
application with respect to which such exclusive license is granted is
identified in the applicable exclusive license agreement or is otherwise already
known to such Grantor; and (2) such Grantor shall not be obligated to obtain
the
consent of any third party licensor that may be necessary to grant such security
interest in such exclusive license), and the general intangibles of such Grantor
relating thereto or represented thereby and, with respect to Trademarks, the
goodwill of the business connected with the use of or symbolized by such
Trademarks.
(g) To the extent consistent with
reasonable commercial judgment, such Grantor will take all 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.
(h) In the event that any material
Intellectual Property owned by such Grantor is infringed, misappropriated or
diluted by a third party, or any licensee of such Intellectual Property breaches
the terms and conditions of the applicable license, such Grantor shall (i)
take
such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof if such infringement,
misappropriation, dilution or breach is material, and, if appropriate in such
Grantor’s reasonable commercial judgment, xxx for infringement,
misappropriation, dilution or breach of contract, seek injunctive relief and
recover any and all damages for such infringement, misappropriation, dilution
or breach of contract.
6.9 Vehicles.
Within
the period of time specified on
Schedule 6.10 of the Credit Agreement with respect to the Vehicles described
therein and, with respect to any Vehicles acquired by such Grantor subsequent
to
the date hereof, within 30 days after the date of acquisition thereof, all
applications for certificates of title/ownership indicating the Administrative
Agent’s (or its subagent’s) first priority security interest in the Vehicle
covered by such certificate, and any other necessary documentation, shall be
filed in each office in each jurisdiction which the Administrative Agent shall
deem advisable to perfect its security interests in the Vehicles.
Notwithstanding the foregoing, in no event shall the Grantors be obligated
to
incur more than $250,000 in the aggregate in sales taxes, transfer taxes or
fees related to the retitling of Vehicles described in Section 3(b) of
Schedule 6.10 of the Credit Agreement to satisfy their obligations with respect
to the perfection thereof.
(a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to this Section 7.1(a), each Grantor shall be
permitted to collect such Grantor’s Receivables. If required by the
Administrative Agent at any time after the occurrence and during the continuance
of an Event of Default, any payments of Receivables included in the Collateral,
when collected by any Grantor, (i) shall be forthwith (and, in any event, within
five Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for
the
account of the Lenders only as provided in Section 7.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the Administrative Agent and
the Lenders, 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.
(b) After the occurrence and during the
continuance of an Event of Default, at the Administrative Agent’s request, each
Grantor shall deliver to the Administrative Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Receivables included in the Collateral, including, without
limitation, all original orders, invoices and shipping receipts.
7.2 Communications
with Obligors; Grantors Remain
Liable. (a) The Administrative Agent in its own name or in the
name of others may at any time after the occurrence and during the continuance
of an Event of Default communicate with obligors under the Receivables included
in the Collateral to verify with them to the Administrative Agent’s satisfaction
the existence, amount and terms of any Receivables included in the
Collateral.
(b) Upon the request of the
Administrative Agent at any time after the occurrence and during the continuance
of an Event of Default, each Grantor shall notify obligors on the Receivables
included in the Collateral that the Receivables included in the Collateral
have
been assigned to the Administrative Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the
Administrative Agent.
(c) Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the Receivables
included in the Collateral to observe and perform all the material conditions
and obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the
Administrative Agent nor any Lender shall have any obligation or liability
under
any Receivable included in the Collateral (or any agreement giving rise thereto)
by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Lender of any payment relating thereto, nor shall
the Administrative Agent or any Lender be obligated in any manner to perform
any
of the obligations of any Grantor under or pursuant to any Receivable included
in the Collateral (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.
7.3 Pledged
Stock. (a) Unless an Event of Default
shall have occurred and be continuing and the Administrative Agent shall have
given notice to the relevant Grantor of the Administrative Agent’s intent to
exercise its corresponding rights pursuant to Section 7.3(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 to the extent permitted by
the
Credit Agreement, to pay and declare dividends to the extent permitted by the
Credit Agreement and to exercise all voting and corporate or other
organizational rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate or other organizational right
exercised or other action taken which, in the Administrative Agent’s reasonable
judgment, would impair the Collateral or which would be inconsistent with or
result in any violation of any provision of the Credit Agreement, this Agreement
or any other Loan Document.
(b) If an Event of Default shall occur
and be continuing and the Administrative Agent shall give notice of its intent
to exercise such rights to the relevant Grantor or Grantors, (i) the
Administrative Agent shall have the right to receive any and all cash dividends,
payments or other Proceeds paid in respect of the Investment Property and make
application thereof to the Obligations in such order as the Administrative
Agent
may determine, and (ii) any or all of the Investment Property shall be
registered in the name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such 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 Administrative 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 Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any
such
right, privilege or option and shall not be responsible for any failure to
do so
or delay in so doing.
(c) Each Grantor hereby authorizes and
instructs each Issuer of any Investment Property pledged by such Grantor
hereunder to (i) comply with any instruction received by it from the
Administrative Agent in writing that (x) states that an Event of Default has
occurred and is continuing and (y) is otherwise in accordance with the terms
of
this Agreement, without any other or further instructions from such Grantor,
and
each Grantor agrees that each Issuer shall be fully protected in so complying,
and (ii) unless otherwise expressly permitted hereby, pay any dividends or
other
payments with respect to the Investment Property directly to the Administrative
Agent.
7.4 Proceeds
to be Turned Over To Administrative Agent.
In addition to the rights of the Administrative Agent and the Lenders specified
in Section 7.1 with respect to payments of Receivables included in the
Collateral, 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 Administrative Agent and the
Lenders, segregated from other funds of such Grantor, and shall, forthwith
upon
receipt by such Grantor, be turned over to the Administrative Agent in the
exact
form received by such Grantor (duly indorsed by
such Grantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder
shall be held by the Administrative Agent in a Collateral Account maintained
under its sole dominion and control. All Proceeds while held by the
Administrative Agent in a Collateral Account (or by such Grantor in trust for
the Administrative Agent and the 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 7.5.
7.5 Application
of Proceeds. At such intervals as may
be agreed upon by the Borrower and the Administrative Agent, or, if an Event
of
Default shall have occurred and be continuing, at any time at the Administrative
Agent’s election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and
any
proceeds of the guarantees set forth in Section 2 or 3, as applicable, in
payment of the Obligations in the following order (and, to the extent
applicable, in a manner consistent with the Credit Agreement):
First, to pay incurred and
unpaid fees and expenses of the Administrative Agent under the Loan
Documents;
Second, to the
Administrative Agent, for application by it towards payment of amounts then
due
and owing and remaining unpaid in respect of the Obligations, pro rata among
the
Secured Parties according to the amounts of the Obligations then due and owing
and remaining unpaid to the Secured Parties;
Third, to the Administrative
Agent, for application by it towards prepayment of the Obligations, pro rata
among the Secured Parties according to the amounts of the Obligations then
held
by the Secured Parties; and
Fourth, any balance
remaining after the Obligations shall have been paid in full, no Letters of
Credit shall be outstanding (other than those Letters of Credit that have been
Collateralized) and the Commitments shall have terminated shall be paid over
to
the Borrower or to whomsoever may be lawfully entitled to receive the
same.
7.6 Code
and Other Remedies. If an Event of Default
shall occur and be continuing, the Administrative Agent, on behalf of the
Lenders, may exercise, in addition to all other rights and remedies granted
to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law. Without limiting
the generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice
of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived to the fullest extent permitted
by
applicable law), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, license, assign, give option or options to purchase,
or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale
or
sales, at any exchange, broker’s board or office of the Administrative Agent or
any Lender or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent
or any Lender shall have the right upon any such public sale or sales, and,
to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity
of
redemption in any
Grantor, which right or equity is hereby waived
and released. Each Grantor further agrees, at the Administrative Agent’s
request, to assemble the Collateral and make it available to the Administrative
Agent at places which the Administrative Agent shall reasonably select, whether
at such Grantor’s premises or elsewhere. The Administrative Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 7.6,
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
Administrative Agent and the Lenders 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 Administrative Agent may elect, and
only after such application and after the payment by the Administrative Agent
of
any other amount required by any provision of law, including, without
limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent
permitted by applicable law, each Grantor waives all claims, damages and demands
it may acquire against the Administrative Agent or any Lender arising out of
the
exercise by them of any rights hereunder.
7.7 Registration
Rights. (a) If the
Administrative Agent shall determine to exercise its right to sell any or all
of
the Pledged Stock pursuant to Section 7.6, and if in the opinion of the
Administrative Agent it is necessary or advisable to have the Pledged Stock,
or
that portion thereof to be sold or registered under the provisions of the
Securities Act, the relevant Grantor will cause the Issuer thereof to (i)
execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to
be
done all such other acts as may be, in the reasonable opinion of the
Administrative Agent, necessary or advisable to register the Pledged Stock,
or
that portion thereof to be sold, under the provisions of the Securities Act,
(ii) use its commercially reasonable best efforts to cause the registration
statement relating thereto to become effective and (iii) make all amendments
thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees
to cause such Issuer to comply with the provisions of the securities or “Blue
Sky” laws of any and all jurisdictions which the Administrative Agent shall
designate and to make available to its security holders, as soon as practicable,
an earnings statement (which need not be audited) which will satisfy the
provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities
Act
and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution
or
resale thereof. Each Grantor acknowledges and agrees that any such private
sale may result in prices and other terms less favorable than if such sale
were
a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a
sale of any of the Pledged Stock for the period of time necessary to permit
the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so.
(c) Each Grantor agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Stock pursuant
to
this Section 7.7 valid and binding and in compliance with any and all other
applicable Requirements of Law.
7.8 Deficiency.
Each
Grantor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
7.9 Grant
of Intellectual Property License. If an Event
of Default shall occur and be continuing, and for so long as such Event of
Default in continuing, each Grantor hereby grants to the Administrative Agent
an
irrevocable, non-exclusive, fully paid-up, worldwide license or (for third
party
rights) sublicense, to use, license or sublicense any of the Intellectual
Property now or hereafter owned, licensed in (to the fullest extent permitted
by
such license), held for use or acquired by such Grantor (and subject to the
applicable terms and conditions governing such Grantor’s rights in and to such
Intellectual Property at the time of the Event of Default), for the purpose
of
enabling the Administrative Agent to exercise rights and remedies under Section
7 hereof at such time as it shall be lawfully entitled to exercise such rights
and remedies, and for no other purpose; subject to (i) the maintenance of
quality control standards with respect to all goods and services sold under
any
licensed Trademarks substantially consistent with those in effect immediately
prior to the Event of Default in order to maintain the validity and
enforceability of such Trademarks and (ii) exclusive licenses granted by such
Grantor prior to the Event of Default to the extent such licenses conflict
at
the time of the Event of Default with the granting of other licenses in and
to
the same Intellectual Property. Such license or sublicense to the
Administrative Agent shall include access to all media in which any of the
applicable intellectual property may be recorded, processed or stored and all
computer programs related thereto.
8.1 Administrative
Agent’s Appointment as Attorney-in-Fact,
etc. (a) Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and
in
the name of such Grantor or in its own name, for the purpose of carrying out
the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
(i) in the name of such Grantor or its
own name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
under any Receivable included in the Collateral or with respect to any other
Collateral and file any claim or take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under any
Receivable included in the Collateral or with respect to any other Collateral
whenever payable;
(ii) in the case of any Intellectual
Property, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Administrative Agent may request to
evidence the Administrative Agent’s and the Lenders’ security interest in such
Intellectual Property and the goodwill connected with the use of and symbolized
by any Trademarks 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 7.6 or 7.7, 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 Administrative Agent
or as the Administrative 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 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 Administrative Agent may deem appropriate; (7)
license or assign any Copyright, Patent or Trademark owned by or licensed to
(to
the fullest extent permitted by such license and subject to the terms and
conditions of such license) such Grantor (along with the goodwill of the
business connected with the use of and symbolized by any Trademarks), throughout
the world for such term or terms, on such conditions, and in such manner, as
the
Administrative Agent shall in its reasonable 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
Administrative Agent were the absolute owner thereof for all purposes, and
do,
at the Administrative Agent’s option and such Grantor’s expense, at any time, or
from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Lenders’ 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 8.1(a) to the
contrary notwithstanding, the Administrative Agent agrees that it will not
exercise any rights under the power of attorney provided for in this Section
8.1(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 material agreements contained herein, the Administrative
Agent, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement.
(c) The reasonable out-of-pocket expenses
of the Administrative Agent incurred in connection with actions undertaken
as
provided in this Section 8.1 shall be payable by such Grantor to the
Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that
said attorneys shall lawfully do or cause to be done by virtue hereof. All
powers, authorizations and agencies contained in this Agreement are coupled
with
an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
8.2 Duty
of Administrative Agent. The Administrative
Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
New
York UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent, any Lender 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 Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent’s and
the Lenders’ interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders 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.
8.3 Execution
of Financing Statements. Pursuant to any
applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements, continuation statements, and amendments to
financing statements in any jurisdictions and with any filing offices as the
Administrative Agent may determine are necessary or advisable to perfect the
security interest granted to the Administrative Agent in connection herewith
with respect to the Collateral without the signature of such Grantor, to the
extent permitted by law, in such form as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. Such financing statements may describe the Collateral in
the same manner as described in this Agreement or may contain an indication
or
description of Collateral that describes such property in any other manner
as
the Administrative Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to the Administrative Agent in connection with this
Agreement, including, without limitation, describing such property as “all
assets, whether now owned or hereafter acquired” or “all personal property,
whether now owned or hereafter acquired.” Each Grantor hereby ratifies and
authorizes the filing by the Administrative Agent of any financing statement
with respect to the Collateral made prior to the date hereof.
8.4 Authority
of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein
or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them,
but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders 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.
9.1 Amendments
in Writing. None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 10.1 of the Credit Agreement.
9.2 Notices.
All
notices, requests and demands to or
upon the Administrative Agent or any Grantor hereunder shall be effected in
the
manner provided for in Section 10.2 of the Credit Agreement; provided that
any
such notice, request or demand to or upon any Guarantor shall be addressed
to
such Guarantor at its notice address set forth on Schedule 1.
9.3 No
Waiver by Course of Conduct; Cumulative
Remedies. Neither the Administrative Agent nor any Lender shall by any
act (except by a written instrument pursuant to Section 8.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder
or
to have acquiesced in any Default or Event of Default. No failure to
exercise, nor any delay in exercising, on the part of the Administrative Agent
or any Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further
exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any
Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Administrative Agent or
such
Lender 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.
9.4 Enforcement
Expenses; Indemnification. (a)
Each Guarantor agrees to pay or reimburse each Lender and the Administrative
Agent for all its reasonable documented out-of-pocket costs and expenses
incurred in collecting against such Guarantor under the guarantees contained
in
Section 2 or 3, as applicable, or otherwise enforcing or preserving any rights
under this Agreement and the other Loan Documents to which such Guarantor is
a
party, including, without limitation, the reasonable fees and disbursements
of
counsel (including the allocated fees and expenses of in-house counsel) to
each
Lender and of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to
save the Administrative Agent and the Lenders 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 and, to the extent applicable,
in a
manner consistent with Section 2.19 of the Credit Agreement.
(c) Each Guarantor agrees to pay, and to
save the Administrative Agent and the Lenders harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of
this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 10.5 of the Credit Agreement.
(d) The agreements in this Section 9.4
shall survive repayment of the Obligations and all other amounts payable under
the Credit Agreement and the other Loan Documents.
9.5 Successors
and Assigns. This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to
the
benefit of the Administrative Agent and the Lenders 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 Administrative Agent.
9.6 Set-Off..
Each
Grantor hereby irrevocably
authorizes the Administrative Agent and each Lender at any time and from time
to
time while an Event of Default shall have occurred and be continuing, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Lender
to or for the credit or the account of such Grantor, or any part thereof in
such
amounts as the Administrative Agent or such Lender may elect, against and on
account of the obligations and liabilities of such Grantor to the Administrative
Agent or such Lender hereunder and claims of every nature and description of
the
Administrative Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether
or
not the Administrative Agent or any Lender has made any demand for payment
and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such
Grantor promptly of any such set-off and the
application made by the Administrative Agent or such Lender of the proceeds
thereof, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Administrative
Agent and each Lender under this Section 9.6 are in addition to other rights
and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender may have.
9.7 Counterparts.
This
Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by facsimile or other electronic transmission), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
9.8 Severability.
Any
provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or
render unenforceable such provision in any other jurisdiction.
9.9 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.
9.10 Integration.
This
Agreement and the other Loan
Documents represent the agreement of the Grantors, the Administrative Agent
and
the Lenders with respect to the subject matter hereof and thereof, and there
are
no promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.
9.11 GOVERNING
LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
9.12 Submission
To Jurisdiction; Waivers. Each Grantor
hereby irrevocably and unconditionally:
(a) submits
for itself and its
property in any legal action or proceeding relating to this Agreement and the
other Loan Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non‑exclusive general jurisdiction of
the courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;
(b) consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any
such
court or that such action or proceeding was brought in an inconvenient court
and
agrees not to plead or claim the same;
(c) agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to such Grantor at its address referred to in Section 9.2
or at
such other address of which the Administrative 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.
9.13 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;
(b) neither the Administrative Agent nor
any Lender has any fiduciary relationship with or duty to any Grantor arising
out of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent and Lenders, 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 other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the
Lenders.
9.14 Additional
Grantors. Each Subsidiary of the
Borrower or Holdings that is required to become a party to this Agreement
pursuant to Section 6.9 of the Credit Agreement shall become a Grantor for
all
purposes of this Agreement upon execution and delivery by such Subsidiary of
an
Assumption Agreement in the form of Annex 1 hereto.
9.15 Releases.
(a)
At
such time as the Obligations
(other than Obligations in respect of Specified Swap Agreements) shall have
been
paid in full, the Commitments have been terminated and the Letters of Credit
shall have terminated, expired or been Collateralized, the Collateral shall
be
released from the Liens created hereby, and this Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the request and
sole expense of any Grantor following any such termination, the Administrative
Agent shall deliver to such Grantor any Collateral held by the Administrative
Agent hereunder, and promptly execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be
sold, transferred or otherwise disposed of by any Grantor in a transaction
permitted by the Credit Agreement, then the Administrative Agent, at the request
and sole expense of such Grantor, shall promptly execute and deliver to such
Grantor all releases or other documents reasonably necessary or desirable for
the release of the Liens created hereby on such Collateral. At the request
and sole expense of the Borrower, a Subsidiary Guarantor shall be released
from
its obligations hereunder in the event that all the Capital Stock of such
Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in
a
transaction permitted by the Credit Agreement; provided that the Borrower shall
have delivered to the Administrative Agent a written request for release
identifying the relevant Subsidiary Guarantor, together with a certification
by
the Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
9.16 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.
9.17 Continuation
of Security Interests. All security
interests, Liens and obligations created by the Existing Guarantee and
Collateral Agreement are continued in full force and effect under this
Agreement. The Existing Guarantee and Collateral Agreement remains in full
force and effect as amended by this Agreement.
IN WITNESS WHEREOF, the undersigned has caused
this Amended and Restated Guarantee and Collateral Agreement to be duly executed
and delivered as of the date first above written.
Avis Budget Car Renal, LLC
Avis Budget Holdings, LLC
Avis Budget Finance, Inc.
Avis Car Rental Group, LLC
By:/s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
ARACS LLC
By:/s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Avis Rent A Car System, LLC
By:/s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Avis Asia and Pacific, Limited
Avis Caribbean, Limited
Avis Enterprises, Inc.
Avis Group Holdings, LLC
Avis International, Ltd.
PF Claims Management, Ltd.
By:/s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
AB Car Rental Services, Inc.
By:/s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Avis Operations, LLC
By:/s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
BGI Leasing, Inc.
Budget Rent A Car System, Inc.
By:/s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President, Chief Financial Officer and Treasurer
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President, Chief Financial Officer and Treasurer
Budget Truck Rental, LLC
By:/s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President, Chief Financial Officer and Treasurer
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President, Chief Financial Officer and Treasurer
Runabout, LLC
By: /s/ Xxxxx X.
Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President, Chief Financial Officer and Treasurer
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President, Chief Financial Officer and Treasurer
Wizard Services, Inc.
By:/s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
PR Holdco, Inc.
By:/s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Name: Xxxxxxxx Xxxxxxx
Title: Vice President and Treasurer
