GENERAL ELECTRIC CAPITAL CORPORATION GUARANTY, PLEDGE AND SECURITY AGREEMENT among PEPLIN, INC., PEPLIN OPERATIONS USA, INC. and Each Other Guarantor From Time to Time Party Hereto and GENERAL ELECTRIC CAPITAL CORPORATION, as agent for Lenders Dated...
Exhibit 10.26
GENERAL ELECTRIC CAPITAL CORPORATION
among
XXXXXX, INC.,
XXXXXX OPERATIONS USA, INC.
and
Each Other Guarantor
From Time to Time Party Hereto
XXXXXX OPERATIONS USA, INC.
and
Each Other Guarantor
From Time to Time Party Hereto
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as agent for Lenders
as agent for Lenders
Dated as of December 28, 2007
TABLE OF CONTENTS
Page | ||||||||
ARTICLE I GUARANTY | 1 | |||||||
Section 1.1 | Guaranty | 1 | ||||||
Section 1.2 | Limitation of Guaranty | 2 | ||||||
Section 1.3 | Contribution | 2 | ||||||
Section 1.4 | Authorization; Other Agreements | 2 | ||||||
Section 1.5 | Guaranty Absolute and Unconditional | 3 | ||||||
Section 1.6 | Subordination of Other Indebtedness | 5 | ||||||
Section 1.7 | Reliance | 5 | ||||||
Section 1.8 | Continuing Guaranty | 5 | ||||||
ARTICLE
II SECURITY AGREEMENT; PROVISIONS RELATING TO ACCOUNTS COLLATERAL
AND INVENTORY COLLATERAL |
5 | |||||||
Section 2.1 | Grant of Security Interest | 5 | ||||||
Section 2.2 | Intellectual Property and Rights to Payment | 8 | ||||||
Section 2.3 | Security Agreement | 8 | ||||||
Section 2.4 | Termination of Security Interest | 8 | ||||||
ARTICLE III REPRESENTATIONS AND WARRANTIES; COVENANTS | 9 | |||||||
Section 3.1 | Representations Warranties and Covenants of Loan Agreement | 9 | ||||||
Section 3.2 | Due Organization and Authorization | 9 | ||||||
Section 3.3 | Changes to Name, Location, Jurisdiction | 9 | ||||||
Section 3.4 | Consents | 10 | ||||||
Section 3.5 | No Conflicts | 10 | ||||||
Section 3.6 | Indebtedness | 10 | ||||||
Section 3.7 | Solvency | 10 | ||||||
Section 3.8 | Title; No Other Liens; Locations | 10 | ||||||
Section 3.9 | Deposit Accounts | 10 | ||||||
Section 3.10 | Investments; Pledged Collateral | 11 | ||||||
Section 3.11 | Commercial Tort Claims | 12 | ||||||
Section 3.12 | Instruments and Tangible Chattel Paper | 12 | ||||||
Section 3.13 | Letter of Credit Rights | 13 | ||||||
Section 3.14 | Electronic Chattel Paper | 13 | ||||||
Section 3.15 | Accounts Administration | 13 | ||||||
Section 3.16 | Creation, Preservation and Perfection of Security Interests | 13 | ||||||
Section 3.17 | Post-Closing Obligations | 13 | ||||||
ARTICLE IV REMEDIAL PROVISIONS | 15 | |||||||
Section 4.1 | UCC and Other Remedies | 15 | ||||||
Section 4.2 | Accounts and Payments in Respect of General Intangibles and Instruments | 17 | ||||||
Section 4.3 | Pledged Collateral | 18 | ||||||
Section 4.4 | Proceeds to be Turned over to and Held by Agent | 19 | ||||||
Section 4.5 | Remedial Provisions. | 19 | ||||||
Section 4.6 | Appointment of Agent | 20 | ||||||
Section 4.7 | Deficiency | 21 |
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TABLE OF CONTENTS
(continued)
Page | ||||||||
ARTICLE V MISCELLANEOUS | 21 | |||||||
Section 5.1 Section 5.2 | Reinstatement Independent Obligations |
21 21 |
||||||
Section 5.3 | No Waiver by Course of Conduct | 21 | ||||||
Section 5.4 | Amendments in Writing | 22 | ||||||
Section 5.5 | Additional Guarantors | 22 | ||||||
Section 5.6 | Notices | 22 | ||||||
Section 5.7 | Successors and Assigns | 22 | ||||||
Section 5.8 | Counterparts | 22 | ||||||
Section 5.9 | Interpretation | 22 | ||||||
Section 5.10 | Severability | 22 | ||||||
Section 5.11 | Payments; Foreign Currency Indemnity | 22 | ||||||
Section 5.12 | Governing Law | 22 | ||||||
Section 5.13 | Submission to Jurisdiction | 23 | ||||||
Section 5.14 | Service of Process | 23 | ||||||
Section 5.15 | Non-Exclusive Jurisdiction | 23 | ||||||
Section 5.16 | Waiver of Jury Trial | 23 | ||||||
Section 5.17 | Conflicts | 23 |
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ANNEX
Annex 1 | Form of Joinder Agreement |
-i-
GUARANTY, PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of December 28,
2007, by XXXXXX, INC. (“Xxxxxx”), XXXXXX OPERATIONS USA, INC. (“Xxxxxx Operations”)
and each of the other entities listed on the signature pages hereto or that becomes a party hereto
pursuant to Section 5.5 (collectively, the “Guarantors”), in favor of General
Electric Capital Corporation (“GECC”), in its capacity as agent for Lenders (defined below)
(together with its successors and permitted assigns, the “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Loan Agreement, dated as of December 28, 2007, among Agent,
GECC, in its capacity as security trustee for the Lenders (“Security Trustee”), the
financial institutions who are listed in Part 2 of Schedule A thereto or hereafter become parties
thereto as lenders (collectively, the “Lenders”), Xxxxxx Limited, a corporation registered
in Queensland, Australia (“Borrower”), Xxxxxx and the other entities listed in Part 1 of
Schedule A thereto and the other entities or persons, if any, who hereafter become parties thereto
as guarantors (as amended, restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”; capitalized terms used herein without definition are used as defined in
the Loan Agreement), the Lenders have agreed to make extensions of credit to the Borrower upon the
terms and subject to the conditions set forth therein;
WHEREAS, the Borrower is a direct wholly-owned subsidiary of Xxxxxx and, as of the Closing
Date, Xxxxxx Operations is a direct wholly-owned subsidiary of the Borrower;
WHEREAS, Xxxxxx Operations provides management services to the Borrower and certain of its
Affiliates for operations within the United States of America;
WHEREAS, each Guarantor will derive substantial direct and indirect benefits from the making
of the extensions of credit under the Loan Agreement to the Borrower; and
WHEREAS, it is a condition precedent to the obligation of the Lenders to make extensions of
credit to the Borrower under the Loan Agreement that the Guarantors shall have executed and
delivered this Agreement to the Agent, for the benefit of itself, the Lenders and the Security
Trustee (collectively, the “Finance Parties”);
NOW, THEREFORE, in consideration of the premises and to induce the Lenders to make extensions
of credit to the Borrower under the Loan Agreement, each Guarantor hereby agrees with the Agent as
follows:
ARTICLE I
GUARANTY
Section 1.1 Guaranty. Each Guarantor hereby, jointly and severally,
absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of
acceleration, mandatory prepayment or otherwise in accordance with any Debt Document, of the Term
Loan and all other Obligations of the Borrower whether existing on the date hereof or hereinafter
incurred or created (the “Guaranteed Obligations”). This guaranty by each Guarantor
hereunder constitutes a guaranty of payment and not of collection.
Section 1.2 Limitation of Guaranty. Any term or provision of this Agreement
or any other Debt Document to the contrary notwithstanding, the maximum aggregate amount for which
any Guarantor that is a Subsidiary of the Borrower (any “Subsidiary Guarantor”) shall be
liable hereunder shall not exceed the maximum amount for which such Subsidiary Guarantor can be
liable without rendering this Agreement or any other Debt Document, as it relates to such
Subsidiary Guarantor, subject to avoidance under applicable laws relating to fraudulent conveyance
or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act and Section 548 of title 11, United States Code or any applicable provisions of
comparable laws) (collectively, “Fraudulent Transfer Laws”). Any analysis of the
provisions of this Agreement for purposes of Fraudulent Transfer Laws shall take into account the
right of contribution established in Section 1.3 and, for purposes of such analysis, give
effect to any discharge of intercompany debt as a result of any payment made under this Agreement.
Section 1.3 Contribution. To the extent that any Subsidiary Guarantor shall
be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a)
the amount of the economic benefit actually received by such Subsidiary Guarantor from the Term
Loans and other Obligations and (b) the amount such Subsidiary Guarantor would otherwise have paid
if such Subsidiary Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding
the amount thereof repaid by the Borrower) in the same proportion as such Subsidiary Guarantor’s
net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the
Subsidiary Guarantors on such date, then such Subsidiary Guarantor shall be reimbursed by such
other Subsidiary Guarantors for the amount of such excess, pro rata, based on the respective net
worth of such other Subsidiary Guarantors on such date.
Section 1.4 Authorization; Other Agreements. The Agent is hereby authorized,
without notice to or demand upon any Guarantor and without discharging or otherwise affecting the
obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to
time, to do each of the following:
(a) (i) modify, amend, supplement, renew, extend, increase the principal amount of and/or the
rate of interest on, or otherwise change, (ii) accelerate or otherwise change the time, place,
manner or term of payment of, or (iii) waive or otherwise consent to noncompliance with, any
Guaranteed Obligation or any Debt Document;
(b) apply to the Guaranteed Obligations any sums by whomever paid or however realized to any
Guaranteed Obligation in such order as provided in the Debt Documents;
(c) refund at any time any payment received by the Agent in respect of any Guaranteed
Obligation;
(d) (i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon,
fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise
alter or release any Collateral (as defined below) for any Guaranteed Obligation or any other
guaranty therefor in any manner, (ii) receive, take, request, accept and hold additional Collateral
to secure any Guaranteed Obligation or additional guarantees in respect of the Guaranteed
Obligations, (iii) add, release or substitute any one or more other Guarantors, or any other
guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv)
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otherwise deal in any manner with the Borrower, any other Guarantor, and any other guarantor,
maker or endorser of any Guaranteed Obligation or any part thereof;
(e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations;
and
(f) exercise any other rights available to it under the Loan Agreement and other Debt
Documents.
Section 1.5 Guaranty Absolute and Unconditional. Each Guarantor agrees that
its obligations hereunder are irrevocable, absolute, independent and unconditional and shall not be
discharged or otherwise affected by any circumstance other than payment in full of the Guaranteed
Obligations. In furtherance of the foregoing and without limiting the generality thereof, each
Guarantor hereby agrees as follows:
(a) the Agent may enforce this Agreement upon the occurrence of an Event of Default under the
Loan Agreement notwithstanding any dispute between the Borrower and the Agent and/or any Lender
with respect to the existence of such Event of Default;
(b) the obligations of each Guarantor hereunder are independent of the Obligations of the
Borrower under the Debt Documents and the obligations of any other guarantor (including any other
Guarantor) of the Obligations of the Borrower under the Debt Documents, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any action is brought
against the Borrower or any of such other guarantors and whether or not Guarantor is the alter ego
of any of the Borrower and whether or not the Borrower is joined in any such action or actions;
(c) payment by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall in
no way limit, affect, modify or abridge any Guarantor’s liability for any portion of the Guaranteed
Obligations which has not been paid, and if the Agent and/or any Lender is awarded a judgment in
any suit brought to enforce any Guarantor’s obligations hereunder, such judgment shall not be
deemed to release such Guarantor from its covenant to pay the portion of the Guaranteed Obligations
that is not the subject of such suit, and such judgment shall not, except to the extent satisfied
by such Guarantor, limit, affect, modify or abridge any other Guarantor’s liability hereunder in
respect of the Guaranteed Obligations; and
(d) to waive and not to assert any claim, setoff, counterclaim or defense, whether arising in
connection with or in respect of any of the following or otherwise, and hereby agrees that its
obligations under this Agreement shall not be reduced, limited, impaired, discharged or terminated
as a result of, or otherwise affected by, any of the following (which may not be pleaded and
evidence of which may not be introduced in any proceeding with respect to this Agreement, in each
case except as otherwise agreed in writing by the Agent):
i. the invalidity or unenforceability of any obligation of the Borrower or any
other Guarantor under any Debt Document or any other agreement or instrument
relating thereto (including any amendment, consent or waiver thereto), or any
security for, or other guaranty of the Guaranteed Obligations or any part of them,
or the lack of perfection or continuing perfection
3
or failure of priority of any security for the Guaranteed Obligations or any
part of them;
ii. any rescission, waiver, amendment, modification of, or consent to
departure from, any of the terms or provisions of any Debt Document or any
agreement or instrument executed or delivered in connection therewith;
iii. the absence of (A) any attempt to collect any Guaranteed Obligation or
any part thereof from the Borrower or any other Guarantor or other action to
enforce any of the same, (B) any action to enforce any Debt Document, any provision
thereof, or any lien thereunder, or (C) any act to assert or enforce any claim,
right, demand, power or remedy whether arising under any Debt Document, at law, in
equity or otherwise;
iv. the failure by any person to take any steps to perfect and maintain any
lien on, or to preserve any rights with respect to, any Collateral;
v. any workout, insolvency, bankruptcy proceeding, reorganization,
arrangement, liquidation or dissolution by or against the Borrower, any other
Guarantor or any of the Borrower’s other Subsidiaries or any procedure, agreement,
order, stipulation, election, action or omission thereunder, including any
discharge or disallowance of, or bar or stay against collecting, any Guaranteed
Obligation (or interest thereon) in or as a result of any such proceeding;
vi. any foreclosure, whether or not through judicial sale, and any other sale
or transfer of Collateral or any election following the occurrence of an Event of
Default by the Agent to proceed separately against any Collateral in accordance
with the Agent’s rights under any applicable law;
vii. any other defense, setoff, counterclaim or any other circumstance that
might otherwise constitute a legal or equitable discharge of the Borrower, any
other Guarantor or any of the Borrower’s other Subsidiaries, in each case other
than the payment in full of the Guaranteed Obligations; or
viii. diligence, promptness, presentment, requirements for any demand or
notice hereunder including any of the following: (A) any demand for payment or
performance and protest and notice of protest; (B) any notice of acceptance; (C)
any presentment, demand, protest or further notice or other requirements of any
kind with respect to any Guaranteed Obligation (including any accrued but unpaid
interest thereon) becoming immediately due and payable, (D) any other notice in
respect of the Guaranteed Obligations or any part of them, (E) any defense arising
by reason of any disability or other defense of the Borrower or any other Guarantor
and (F) any defense based on Agent’s errors or omissions in the administration of
the Guaranteed Obligations, except behavior which amounts to gross negligence or
willful misconduct as determined by a final determination by a court of competent
jurisdiction. Each Guarantor further unconditionally and irrevocably agrees not to
(X) enforce or otherwise exercise any right of subrogation or any right of
reimbursement or contribution or similar right against the Borrower or any other
Guarantor by reason of any Debt
4
Document or any payment made thereunder or (Y) assert any claim, defense,
setoff or counterclaim it may have against any other Loan Party or set off any of
its obligations to such other Loan Party against obligations of such Loan Party to
such Guarantor.
Section 1.6 Subordination of Other Indebtedness. Any Indebtedness of the
Borrower or any other Loan Party now or hereafter held by any Guarantor is hereby subordinated in
right of payment to the Guaranteed Obligations, and any such Indebtedness of any such Borrower or
such other Loan Party to such Guarantor collected or received by such Guarantor after an Event of
Default has occurred and is continuing shall be held in trust for Agent on behalf of the Finance
Parties and shall forthwith be paid over to Agent for the benefit of the Finance Parties to be
credited and applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of such Guarantor under any other provision of this Agreement;
provided that prior to the occurrence of an Event of Default, Guarantors may borrow, repay
and reborrow intercompany Indebtedness to the extent such intercompany Indebtedness is permitted
under Section 7.2 of the Loan Agreement.
Section 1.7 Reliance. Each Guarantor hereby assumes responsibility for
keeping itself informed of the financial condition of the Borrower, each other Guarantor and any
other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all
other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part
thereof, that diligent inquiry would reveal, and each Guarantor hereby agrees that the Agent shall
not have any duty to advise any Guarantor of information known to it regarding such condition or
any such circumstances. In the event the Agent, in its sole discretion, undertakes at any time or
from time to time to provide any such information to any Guarantor, the Agent shall be under no
obligation to (a) undertake any investigation not a part of its regular business routine, (b)
disclose any information that the Agent, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (c) make any future disclosures of such
information or any other information to any Guarantor.
Section 1.8 Continuing Guaranty. This guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been paid in full. Each
Guarantor hereby irrevocably waives any right to revoke this guaranty as to future transactions
giving rise to any Guaranteed Obligations.
ARTICLE II
SECURITY AGREEMENT; PROVISIONS RELATING TO
ACCOUNTS COLLATERAL AND INVENTORY COLLATERAL
ACCOUNTS COLLATERAL AND INVENTORY COLLATERAL
Section 2.1 Grant of Security Interest. As security for the prompt payment
and performance of the Guaranteed Obligations whether at stated maturity, by acceleration or
otherwise, each Guarantor hereby grants, pledges and assigns to Agent, on behalf of the Finance
Parties, a continuing first priority lien (subject only to Permitted Liens) on and security
interest in, upon, and to, all right, title and interest in and to any and all property and
interests in property of each Guarantor whether now owned or hereafter owned, created, acquired or
arising, and regardless of where located, including, without limitation, all of the following
properties and interests in properties (collectively, the “Collateral”):
(a) all Accounts;
5
(b) all Chattel Paper (whether tangible or electronic);
(c) all Commercial Tort Claims, as more particularly described in the Perfection Certificate
(as may be amended or supplemented from time to time);
(d) all Deposit Accounts;
(e) all cash and Cash Equivalents
(f) all Documents;
(g) all Equipment;
(h) all Fixtures;
(i) all Goods;
(j) all Instruments;
(k) all Inventory;
(l) all Letter-of-Credit Rights and letters of credit;
(m) all General Intangibles, Payment Intangibles and other rights to payment, including,
without limitation, all Rights to Payment (as defined in Section 2.2) and all Indebtedness
owing to such Guarantor from another Loan Party (which Indebtedness must be evidenced by way of a
global intra-group note on or before the Closing Date), including all right, title and interest of
such Guarantor in instruments evidencing any Indebtedness owed to such Guarantor or other
obligations, and any distribution of property made on, in respect of or in exchange for the
foregoing from time to time (such Indebtedness collectively, the “Pledged Debt”);
(n) all Investment Property and Financial Assets, including, without limitation, 100% of the
shares of the outstanding capital stock or other equity interests, of any class, of each Subsidiary
of such Guarantor and all certificates evidencing the same (collectively, the “Pledged
Securities”, and together with the Pledged Debt, the “Pledged Collateral”), together
with, in each case:
(i) all shares, securities, stock, equity interests, moneys or property
representing a dividend on any of the Pledged Securities, or representing a
distribution or return of capital upon or in respect of the Pledged Securities, or
resulting from a split-up, revision, reclassification or other like change of the
Pledged Securities or otherwise received in exchange therefor, and any subscription
warrants, rights or options issued to the holders of, or otherwise in respect of,
the Pledged Securities, and
(ii) without affecting the obligations of such Guarantor under any provision
prohibiting such action hereunder, in the event of any consolidation or merger in
which the issuer of any Pledged Security is not the surviving entity, all shares of
each class of the capital stock of the successor corporation (unless such
6
successor corporation is such Guarantor itself or the Borrower), or all other
stock, as applicable, formed by or resulting from such consolidation or merger (the
Pledged Securities, together with all other certificates, shares, securities,
Stock, properties or moneys as may from time to time be pledged hereunder pursuant
to this clause (ii) and clause (i) above being herein collectively called the
“Securities Collateral”);
(o) all Contracts and other contract rights (including, without limitation, rights under any
lease, license or other agreements);
(p) all cash, royalty fees, other proceeds, accounts and general intangibles that consist of
rights of payment to or on behalf of a Loan Party or proceeds from the sale, licensing or other
disposition of all or any part of, or rights in, the Intellectual Property (as defined in
Section 2.2) by or on behalf of a Loan Party (collectively, “Rights to Payment”);
(q) all Securities Entitlements;
(r) all Software;
(s) all other tangible and intangible personal property whatsoever of such Guarantor; and
(t) all Proceeds, Supporting Obligations, products, insurance claims, offspring, accessions,
rents, profits, income, benefits, additions, attachments, accessories, substitutions and
replacements of, to, arising out of or related to any of the Collateral and, to the extent related
to any Collateral, all books, correspondence, credit files, records, invoices and other documents
(including, without limitation, all tapes, cards, computer runs and other documents and documents
in the possession or under the control of such Guarantor or any computer bureau or service company
from time to time acting for such Guarantor);
provided, however, this grant is subject to the limitations set forth in
Section 2.2.
Unless otherwise specified herein, the following terms have the meanings ascribed to them in
the UCC (as defined below), provided, that if such term shall be defined differently in
multiple divisions or articles of the UCC, the definitions for such terms specified in Article or
Division 9 of the UCC shall control: “Accounts”, “Account Debtor”, “Chattel
Paper”, “Commercial Tort Claims”, “Contracts”, “Deposit Accounts”,
“Documents”, “Equipment”, “Financial Asset” “Fixtures”,
“General Intangibles”, “Goods”, “Instruments”, “Inventory”,
“Investment Property”, “Letter-of-Credit Rights”, “Payment Intangible”,
“Proceeds”, “Securities”, “Securities Account”, “Security
Entitlement”, “Software” and “Supporting Obligations”. As used
herein, “UCC” means the Uniform Commercial Code as from time to time in effect in the State of New
York; provided, however, that, in the event that, by reason of mandatory provisions
of any applicable requirement of law, any of the attachment, perfection or priority of the Agent’s
security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction
other than the State of New York, “UCC” shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of the definitions related to or otherwise used in such provisions.
7
Section 2.2 Exceptions to the Grant of Security Interest. Notwithstanding
anything herein to the contrary, in no event shall the Collateral include (a) any intellectual
property arising anywhere in the world owned or licensed by any Loan Party, which shall be defined
as any and all copyright, trademark (and goodwill associated with such trademarks), servicemark
(and goodwill associated with such servicemarks), patent, design right, software, trade secret and
intangible rights of a Loan Party and any applications, registrations, claims, products, awards,
judgments, amendments, renewals, extensions, improvements, continuations, reissues, reexaminations
or divisions and insurance claims related thereto (collectively, “Intellectual Property”)
now owned or licensed or hereafter acquired or licensed, or any claims for damages by way of any
past, present or future infringement of any of the foregoing; provided, however,
that the Collateral shall include all Rights to Payment, or (b) any lease, license, contract,
property rights or agreement to which any Guarantor is a party or any of its rights or interests
thereunder if and for so long as the grant of such security interest shall constitute or result in
(i) the abandonment, invalidation or unenforceability of any right, title or interest of such
Guarantor therein or (ii) a breach or termination pursuant to the terms of, or a default under, any
such lease, license, contract, property rights or agreement (other than to the extent that any such
term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or
any successor provision or provisions) of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code) or principles of equity); provided, however, that
such security interest shall attach immediately at such time as the condition causing such
abandonment, invalidation or unenforceability shall be remedied and to the extent severable, shall
attach immediately to any portion of such lease, license, contract, property rights or agreement
that does not result in any of the consequences specified in clause (b)(i) or (b)(ii) above.
Notwithstanding the foregoing, to the extent it is necessary under applicable law in any bankruptcy
or insolvency proceeding involving a Loan Party for Agent (on behalf of the Finance Parties) to
have a security interest in the underlying Intellectual Property in order for Agent to have (i) a
security interest in the Rights to Payment and (ii) a security interest in any payments with
respect to Rights to Payment that are received after the commencement of such bankruptcy or
insolvency proceeding, then the Collateral shall automatically, and effective as of the date
hereof, include the Intellectual Property to the extent necessary to permit attachment and
perfection of Agent’s security interest (on behalf of the Finance Parties) in the Rights to Payment
and any payments in respect thereof that are received after the commencement of any bankruptcy or
insolvency proceeding. Agent hereby agrees on behalf of the Finance Parties that, if Agent obtains
a security interest in the Intellectual Property pursuant to the immediately preceding sentence,
Agent will not exercise any remedies (under the UCC or otherwise) with respect to the Intellectual
Property (other than remedies with respect to Rights to Payment or any other proceeds of the
Intellectual Property).
Section 2.3 Security Agreement. This Agreement shall constitute a security
agreement as that term is used in the Uniform Commercial Code in effect in the jurisdiction(s) in
which each Guarantor is organized and in the jurisdiction(s) in which the Collateral is situated.
Each Finance Party and each Guarantor agrees that the Perfection Certificate (as may be amended or
supplemented from time to time) and all descriptions of Collateral, schedules, amendments and
supplements thereto are and shall at all time remain a part of this Agreement.
Section 2.4 Termination of Security Interest. Subject to Section 11.10 of the
Loan Agreement, Agent’s lien on the Collateral (on behalf of the Finance Parties) shall continue
until all of the Obligations are indefeasibly repaid in full in cash, all of the Commitments under
the Loan Agreement are terminated, and the Loan Agreement shall have been terminated (the
“Termination Date”). Upon the Termination Date, Agent shall, at Loan Parties’ sole cost
and
8
expense and without any recourse, representation or warranty, release its liens in the
Collateral, and all rights remaining therein, if any, shall revert to Loan Parties.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; COVENANTS
To induce the Agent and the Lenders to enter into the Debt Documents, each Guarantor hereby
represents, warrants and covenants to the Agent and the Lenders, for as long as any Obligation or
Commitment remains outstanding, as follows:
Section 3.1 Representations Warranties and Covenants of Loan Agreement.
(a) Each of the representations and warranties as to such Guarantor made by the Borrower or
such Guarantor in Article 5 (Representations and Warranties of Loan Parties) of the Loan
Agreement are true and correct on each date as required by the Loan Agreement.
(b) Each Guarantor shall comply with all covenants and other provisions applicable to it under
the Loan Agreement.
Section 3.2 Due Organization and Authorization. Each Guarantor’s
exact legal name (as set forth on the public record of such jurisdiction of organization
that shows such Guarantor to have been organized) is as set forth in the Perfection Certificate (as
may be amended or supplemented from time to time) and each Guarantor is, and will remain, duly
organized, existing and in good standing under the laws of the State of its organization as
specified in the Perfection Certificate (as may be amended or supplemented from time to time), has
its chief executive office at the location specified in the Perfection Certificate (as may be
amended or supplemented from time to time), and is, and will remain, duly qualified and licensed in
every jurisdiction where its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified and licensed could not reasonably
be expected to have a Material Adverse Effect. This Agreement and the other Debt Documents have
been duly authorized, executed and delivered by each Guarantor and constitute legal, valid and
binding agreements enforceable in accordance with their terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and
subject to general principles of equity, regardless of whether considered in a proceeding in equity
or at law and the time barring of claims and defenses of set-off or counterclaim. The execution,
delivery and performance by each Guarantor of each Debt Document executed or to be executed by it
is in each case within such Guarantor’s powers. Within five years before the date of this
Agreement, no Guarantor has conducted business under or used any other name (whether corporate,
partnership or assumed) other than as shown on the Perfection Certificate (as may be amended or
supplemented from time to time). Each trade name of each Guarantor represents a division or
trading style of such Guarantor and not a separate person or independent Affiliate.
Section 3.3 Changes to Name, Location, Jurisdiction. No Guarantor shall,
and no Guarantor shall permit any of its Subsidiaries to, (a) change its name or its state of
organization, (b) relocate its chief executive office without 30 days prior written notification to
Agent, (c) engage in any business other than or reasonably related or incidental to the businesses
currently engaged in by such Guarantor or Subsidiary, (d) cease to conduct business substantially
in the manner conducted by such Guarantor or Subsidiary as of the date of this Agreement or (e)
change its fiscal year end, except on at least 30 days prior written notice to Agent.
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Section 3.4 Consents. No filing (other than filings of UCC financing
statements in respect of any Debt Document), registration, qualification with, or approval, consent
or withholding of objections from, any governmental authority or instrumentality or any other
entity or person with respect to the entry into, or performance by any Guarantor, of any of the
Debt Documents.
Section 3.5 No Conflicts . The entry into, and performance by each
Guarantor of, this Agreement and the other Debt Documents will not (a) violate any of the
constituent or organizational documents of such Guarantor, (b) violate any material law, rule,
regulation, order, award or judgment applicable to such Guarantor, or (c) result in any breach of
or constitute a default under, or result in the acceleration of any obligation or creation of any
lien, claim or encumbrance on any of such Guarantor’s property (except for liens in favor of the
Agent or Security Trustee) pursuant to, any indenture, mortgage, deed of trust, bank loan, credit
agreement, or other Material Agreement to which such Guarantor is a party.
Section 3.6 Indebtedness. Except as described on the Perfection Certificate (as
may be amended or supplemented from time to time) or as permitted under the Debt Documents, no
Guarantor has any Indebtedness, including, without limitation, any outstanding guarantees for the
obligations of, or any outstanding borrowings from, any other person.
Section 3.7 Solvency. Both before and after giving effect to each Term Loan, the
transactions contemplated in the Loan Agreement, and the payment and accrual of all transaction
costs in connection with the foregoing, each Guarantor is and will be Solvent.
Section 3.8 Title; No Other Liens; Locations . Each Guarantor is, and will
remain, the sole and lawful owner, and in possession of (other than Collateral out for maintenance,
repair or in-transit between locations specified on the Perfection Certificate (as may be amended
or supplemented from time to time), the value for which at any time shall not be, in the aggregate,
greater than $50,000), the Collateral, and has the sole right and lawful authority to grant the
security interest described herein. The Collateral is, and will remain, free and clear of all
liens, claims and encumbrances of any kind whatsoever, except as permitted by Section 5.7 of the
Loan Agreement. The real estate listed on the Perfection Certificate (as may be amended or
supplemented from time to time) constitutes all of the real property owned, leased or used by such
Guarantor in its business and such Guarantor will not execute any material agreement or contract in
respect to such real estate after the date of this Agreement without giving Agent prompt written
notice thereof. As of the Closing Date, the only places of business of such Guarantor, and the
places where it keeps and intends to keep all Collateral (other than Collateral out for
maintenance, repair or in-transit between locations specified on the Perfection Certificate (as may
be amended or supplemented from time to time), the value for which at any time shall not be, in the
aggregate, greater than $50,000) and records concerning the Collateral, are at the addresses set
forth on the Perfection Certificate (as may be amended or supplemented from time to time). No
Collateral is held by any bailee or warehouseman for which such bailee or warehouseman has issued a
negotiable document (as defined in Section 7-104 of the UCC or any similar section under any
equivalent UCC).
Section 3.9 Deposit Accounts.
(a) No Guarantor has any Deposit Accounts, Securities Accounts or other bank or investment
accounts except as described on the Perfection Certificate (as may be amended or supplemented from
time to time).
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(b) As of the Closing Date, each Guarantor is the sole entitlement holder or account holder,
as applicable, of each of the Securities Accounts and Deposit Accounts set forth on the Perfection
Certificate (as may be amended or supplemented from time to time) under the heading “Investment
Property; Instruments; Accounts”, and such Guarantor has not consented to, and is not otherwise
aware of, any person (other than the Agent) having “control” (as used in this Section 3.9
“control” shall have the meaning provided under Sections 9-104 and 9-106 of the UCC or any similar
sections under any equivalent UCC) over, or any other interest in, any such Securities Account or
Deposit Account or any money deposited therein or any securities or other property credited
thereto.
(c) Other than with respect to deposit accounts used solely to fund payroll, withholding taxes
or payroll taxes or any deposit accounts which are zero balance accounts or controlled disbursement
accounts, each Guarantor has taken all actions reasonably necessary or desirable to establish the
Agent’s control over any Securities Accounts and Deposit Accounts.
(d) No Guarantor shall close or terminate any Securities Account or Deposit Account without
the prior consent of the Agent and unless a successor or replacement account is existing or has
been established with the consent of the Agent with respect to which successor or replacement
account a control agreement has been entered into by the appropriate Guarantor, the Agent and
securities intermediary or depository institution at which such successor or replacement account is
to be maintained.
(e) Prior to or concurrently with the establishment of any new Securities Account or Deposit
Account, such Guarantor shall deliver to the Agent a notice of the existence and nature of such
account, a supplement to the Perfection Certificate (as may be amended or supplemented from time to
time) containing a specific description of such account and an Account Control Agreement entered
into by the appropriate Guarantor, the Agent and the securities intermediary or depository
institution at which such account is to be maintained, which Account Control Agreement shall comply
with the requirements set forth in Section 7.10 of the Loan Agreement.
Section 3.10 Investments; Pledged Collateral.
(a) No Guarantor has any outstanding advances to, or owns or holds any equity or long-term
debt investments in, any person, except as described on the Perfection Certificate (as may be
amended or supplemented from time to time) or as expressly permitted under Section 7.7 of the Loan
Agreement.
(b) All Pledged Securities pledged by such Guarantor hereunder (i) are listed on the
Perfection Certificate (as may be amended or supplemented from time to time) and constitute that
percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth
on the Perfection Certificate (as may be amended or supplemented from time to time), (ii) have been
duly authorized, validly issued and are fully paid and nonassessable (other than Pledged Securities
in limited liability companies and partnerships), and (iii) constitute the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with their terms. As of
the Closing Date, any certificates evidencing such Pledged Securities have been delivered to the
Agent.
(c) The Pledged Debt pledged by such Guarantor hereunder (i) is listed on the Perfection
Certificate (as may be amended or supplemented from time to time), (ii) with
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respect to any Loan Party, has been duly authorized and validly issued and delivered, as
applicable, and (iii) with respect to any Loan Party, constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with its terms, and is
not in default. As of the Closing Date, any instruments evidencing such Pledged Debt required to
be delivered pursuant to the Loan Documents have been delivered to the Agent.
(d) Upon the occurrence and during the continuance of an Event of Default, the Agent shall be
entitled to exercise all of the rights of the Guarantor granting the security interest in any
Pledged Collateral, and a transferee or assignee of such Pledged Collateral shall become a holder
of such Pledged Collateral to the same extent as such Guarantor and with respect to the Pledged
Securities, and shall be entitled to participate in the management of the issuer of such Pledged
Securities and, upon the sale or other disposition by the Agent of the entire interest of such
Guarantor, such Guarantor shall, by operation of law, cease to be a holder of such Pledged
Securities. The Agent agrees that it shall endeavor to give written notice to the relevant
Guarantor or Guarantors of its intent to exercise the rights described in this Section
3.10(d) prior to the exercise thereof.
Section 3.11 Commercial Tort Claims.
(a) To the best of any Guarantor’s knowledge after due inquiry, the only Commercial Tort
Claims of any Guarantor existing on the date hereof for which the potential recovery reasonably
exceeds $50,000 (regardless of whether the defendant or other material facts can actually be
determined and regardless of whether such Commercial Tort Claim has been asserted, threatened in
writing or whether litigation has been commenced for such claims) are those listed on the
Perfection Certificate (as may be amended or supplemented from time to time).
(b) Each Guarantor, if it shall acquire any interest in any Commercial Tort Claim in excess of
$50,000 individually (whether from another person or because such Commercial Tort Claim shall have
come into existence) or, when combined with all other Commercial Tort Claims, in the aggregate, in
excess of $100,000, (i) shall, promptly upon such acquisition, deliver to the Agent, in each case
in form and substance reasonably satisfactory to the Agent, a notice of the existence and nature of
such Commercial Tort Claim and a supplement to the Perfection Certificate (as may be amended or
supplemented from time to time) containing a specific description of such Commercial Tort Claim,
(ii) agrees that Section 2.1 shall apply to such Commercial Tort Claim and (iii) shall
execute and deliver to the Agent, in each case in form and substance reasonably satisfactory to the
Agent, any document, and take all other action, deemed by the Agent to be reasonably necessary or
appropriate for the Agent to obtain, on behalf of the Finance Parties, a first priority perfected
security interest in all Commercial Tort Claims.
Section 3.12 Instruments and Tangible Chattel Paper.
(a) No amount payable to any Guarantor under or in connection with any account is evidenced by
any instrument or tangible chattel paper that has not been delivered to the Agent, properly
endorsed for transfer, to the extent delivery is required below by Section 3.12(b);
(b) If any amount payable under or in connection with any Collateral owned by such Guarantor
shall be or become evidenced by an instrument or tangible chattel paper, other than such instrument
delivered in accordance with Section 3.10 and in the possession of the Agent, such
Guarantor shall xxxx all such instruments and tangible chattel paper with the following legend:
“This writing and the obligations evidenced or secured hereby are subject to
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the security interest of General Electric Capital Corporation, as Agent” and, at the request
of the Agent, shall immediately deliver such instrument or tangible chattel paper to the Agent,
duly indorsed in a manner satisfactory to the Agent.
Section 3.13 Letter of Credit Rights. If any Guarantor is or becomes the
beneficiary of any letter of credit that is not a supporting obligation of any Collateral, such
Guarantor shall promptly, and in any event within five (5) Business Days after becoming a
beneficiary, notify the Agent thereof and enter into a contractual obligation with the Agent, the
issuer of such letter of credit or any nominated person with respect to the Letter-of-Credit Rights
under such letter of credit, which contractual obligation shall (A) assign such Letter of Credit
Rights to the Agent, (B) be sufficient to grant the Agent control (within the meaning of Section
9-107 of the UCC or any similar section under any equivalent UCC) of such Letter of Credit Rights,
and (C) be in form and substance reasonably satisfactory to the Agent.
Section 3.14 Electronic Chattel Paper. If any amount under or in connection
with any Collateral owned by such Guarantor shall be or become evidenced by electronic chattel
paper, such Guarantor shall take all steps reasonably necessary to grant the Agent control (within
the meaning of Section 9-105 of the UCC or any similar section under any equivalent UCC) of all
such electronic chattel and all “transferable records” as defined in each of the Uniform Electronic
Transactions Act and the Electronic Signatures in Global and National Commerce Act.
Section 3.15 Accounts Administration.
(a) All data and other information relating to Accounts or other intangible Collateral shall
at all times be kept by such Guarantor at its chief executive office listed in the Perfection
Certificate (as may be amended or supplemented from time to time) or at the chief executive office
of any other Loan Party as listed in the Perfection Certificate (as may be amended or supplemented
from time to time) and, except in the ordinary course of business in which case Agent shall be
promptly notified in writing no later than ten (10) Business Days after such move, shall not be
moved from such locations without obtaining the prior written consent of Agent, which consent shall
not be unreasonably withheld.
(b) Each Guarantor shall keep satisfactory and complete records of its Accounts and all
payments and collections thereon and sales thereof and shall submit to Agent on such periodic basis
as Agent shall reasonably request a sales and collections report for the preceding period, in form
and substance satisfactory to Agent.
(c) Agent shall have the right at any time to notify Account Debtors that Accounts have been
assigned to Agent.
(d) No Guarantor has made, or will make, any agreement with any Account Debtor for any
extension of the time for payment of the Account, any compromise or settlement for less than the
full amount thereof, any release of any Account Debtor from liability therefor, or any deduction
therefrom except a discount or allowance for prompt or early payment allowed by such Guarantor in
the ordinary course of its business consistent with its historical practices and, upon the
occurrence and during the continuance of any Default or Event of Default, disclosed to Agent in
writing.
Section 3.16 Creation, Preservation and Perfection of Security Interests.
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(a) Subject to Section 5.7 of the Loan Agreement, the security interest granted to Agent
hereby constitutes a valid, first priority security interest in the presently existing Collateral,
and will constitute a valid first priority security interest in Collateral acquired after the date
hereof.
(b) At the discretion of the Agent, each Guarantor shall furnish all filings, certificates,
documents and instruments reasonably necessary or desirable to perfect Agent’s security interest in
the Collateral, including but not limited to any certificates evidencing the Securities Collateral
and all UCC financing statements. Upon the reasonable request of Agent, each Guarantor shall
furnish to Agent such further information, execute and deliver to Agent such additional documents
and instruments (including, without limitation, additional UCC financing statements) and do such
other acts and things as Agent may at any time reasonably request relating to the perfection or
protection of the security interest created by this Agreement or for the purpose of carrying out
the intent of this Agreement. Without limiting the foregoing, each Guarantor shall cooperate and
do all acts deemed reasonably necessary or advisable by Agent to continue a perfected first
priority security interest in the Collateral, subject only to Permitted Liens, and shall obtain and
furnish to Agent any subordinations, releases, landlord waivers, lessor waivers, mortgage waivers,
or control agreements, and similar documents as may be from time to time reasonably requested by,
and in form and substance satisfactory to, Agent. Each Guarantor authorizes Agent to file
financing statements in all reasonably appropriate jurisdictions and amendments thereto describing
the Collateral as “all assets”, or words of similar import, and containing any other information
required by the applicable UCC to perfect Agent’s security interest granted hereby. Each Guarantor
irrevocably grants to Agent the power to sign such Guarantor’s name and generally to act on behalf
of such Guarantor to execute and file applications for title, transfers of title, financing
statements, notices of lien and other documents pertaining to any or all of the Collateral, and
obtain and promptly deliver to Agent such certificate showing the lien of this Agreement with
respect to the Collateral.
(c) No Guarantor shall grant “control” (within the meaning of Sections 8-106, 9-104, 9-105,
9-106, 9-107 of the UCC, as applicable, or any similar sections under any equivalent UCC) of any
Collateral to any person other than the Agent.
(d) No Guarantor shall (i) use or permit any Collateral to be used unlawfully or in violation
of any provision of any Debt Document or any requirement of law in each case in any material
respect or in any way that would adversely affect any policy of insurance covering such Collateral
or (ii) enter into any contractual obligation or undertaking restricting the right or ability of
such Guarantor or the Agent to Transfer any Collateral if such restriction would have a Material
Adverse Effect.
Section 3.17 Post-Closing Obligations. Within ten (10) days after the date
hereof (or such longer period approved by Agent in its absolute discretion), the Guarantors shall
deliver to the Agent written waivers by all Loan Parties to any restrictions on assignment in any
intercompany leases or other intercompany agreements (other than with respect to any intercompany
licenses or other intercompany agreements related to Intellectual Property), and failure to comply
with this obligation shall constitute an immediate Event of Default.
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ARTICLE IV
REMEDIAL PROVISIONS
Section 4.1 UCC and Other Remedies.
(a) UCC Remedies. During the continuance of an Event of Default, the Agent may
exercise, in addition to all other rights and remedies granted to it in this Agreement and in any
other instrument or agreement securing, evidencing or relating to any Guaranteed Obligation, all
rights and remedies of a secured party under the UCC or any other applicable law.
(b) Disposition of Collateral. Without limiting the generality of the foregoing, the
Agent may, without demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except as required by applicable law) to or upon any Guarantor or any other
person (all and each of which demands, defenses, advertisements and notices are hereby waived to
the extent permitted by applicable law), during the continuance of any Event of Default (personally
or through its agents or attorneys), (i) enter upon the premises where any Collateral is located,
without any obligation to pay rent, through self-help, without judicial process, without first
obtaining a final judgment in a court of competent jurisdiction or giving any Guarantor or any
other person notice or opportunity for a hearing on the Agent’s claim or action, (ii) collect,
receive, appropriate, remove and realize upon any Collateral or store the Collateral on the
premises, (iii) Transfer or grant an option or options to purchase and deliver all or any part of
any Collateral (and enter into contractual obligations to do any of the foregoing), in one or more
parcels at a public or private sale or sales, at any exchange, broker’s board or office of 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 and (iv) apply the proceeds from any disposition of the Collateral to the Obligations in
accordance with Section 8.4 of the Loan Agreement. Notwithstanding the foregoing, the Agent’s
rights under this paragraph are subject to the applicable limitations under federal law and
regulations. The Agent shall have the right, upon any such public sale or sales and, to the extent
permitted by the UCC and other applicable requirements of law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption
of any Guarantor, which right or equity is hereby waived and released. Each Guarantor agrees that
any notice that Agent is required to give to a Guarantor under the UCC of the time and place of any
public sale or the time after which any private sale or other intended disposition of the
Collateral is to be made shall be deemed to constitute reasonable notice if such notice is given in
accordance with this Agreement at least ten (10) days prior to such action.
(c) Management of the Collateral. Each Guarantor further agrees, that, during the
continuance of any Event of Default, (i) at the Agent’s request, it shall assemble the Collateral
and make it available to the Agent at places that the Agent shall reasonably select, whether at
such Guarantor’s premises or elsewhere, (ii) without limiting the foregoing, the Agent also has the
right to require that each Guarantor store and keep any Collateral pending further action by the
Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance
services as shall be reasonably necessary to protect the same and to preserve and maintain such
Collateral in good condition, (iii) until the Agent is able to Transfer any Collateral, the Agent
shall have the right to hold or use such Collateral to the extent that it deems appropriate for the
purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by
the Agent, (iv) the Agent may, if it so elects, seek the appointment of a receiver or keeper to
take possession of any Collateral and to enforce any of the Agent’s remedies (for the
15
benefit of the Finance Parties), with respect to such appointment without prior notice or
hearing as to such appointment and (v) the Agent may render any or all of the Collateral unusable
at a Loan Party’s premises and may dispose of such Collateral on the premises without liability for
rents or costs. The Agent shall not have any obligation to any Guarantor to maintain or preserve
the rights of any Guarantor as against third parties with respect to any Collateral while such
Collateral is in the possession of the Agent.
(d) Application of Proceeds. The Agent shall apply the cash proceeds of any action
taken by it pursuant to this Section 4.1 in accordance with the Loan Agreement.
(e) Direct Obligation. Neither the Agent nor any Lender shall be required to make any
demand upon, or pursue or exhaust any right or remedy against, any Guarantor, any other Loan Party
or any other person with respect to the payment of the Obligations or to pursue or exhaust any
right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof.
All of the rights and remedies of the Agent and the Lenders under any Debt Document shall be
cumulative, may be exercised individually or concurrently and not exclusive of any other rights or
remedies provided by any requirement of law. To the extent it may lawfully do so, each Guarantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not
to assert against the Agent or any Lender, any valuation, stay, appraisement, extension, redemption
or similar laws and any and all rights or defenses it may have as a surety, now or hereafter
existing, arising out of the exercise by them of any rights hereunder.
(f) Commercially Reasonable. To the extent that applicable requirements of law impose
duties on the Agent to exercise remedies in a commercially reasonable manner, each Guarantor
acknowledges and agrees that it is not commercially unreasonable for the Agent to do any of the
following:
(i) fail to incur significant costs, expenses or other liabilities reasonably
deemed as such by the Agent to prepare any Collateral for disposition or otherwise
to complete raw material or work in process into finished goods or other finished
products for disposition;
(ii) fail to obtain permits, or other consents, for access to any Collateral
or for the collection or transfer of any Collateral, or, if not required by other
requirements of law, fail to obtain permits or other consents for the collection or
disposition of any Collateral;
(iii) fail to exercise remedies against account debtors or other persons
obligated on any Collateral or to remove liens on any Collateral or to remove any
adverse claims against any Collateral;
(iv) advertise dispositions of any Collateral through publications or media of
general circulation, whether or not such Collateral is of a specialized nature or
to contact other Persons, whether or not in the same business as any Guarantor, for
expressions of interest in acquiring any such Collateral;
(v) exercise collection remedies against account debtors and other persons
obligated on any Collateral, directly or through the use of collection agencies or
other collection specialists, hire one or more professional auctioneers
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to assist in the disposition of any Collateral, whether or not such Collateral
is of a specialized nature or, to the extent deemed appropriate by the Agent,
obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Agent in the collection or disposition of any
Collateral, or utilize Internet sites that provide for the auction of assets of the
types included in the Collateral or that have the reasonable capacity of doing so,
or that match buyers and sellers of assets to dispose of any Collateral;
(vi) dispose of assets in wholesale rather than retail markets;
(vii) disclaim disposition warranties, such as title, possession or quiet
enjoyment; or
(viii) purchase insurance or credit enhancements to insure the Agent against
risks of loss, collection or disposition of any Collateral or to provide to the
Agent a guaranteed return from the collection or disposition of any Collateral.
Each Guarantor acknowledges that the purpose of this Section 4.1 is to provide a non-exhaustive list
of actions or omissions that are commercially reasonable when exercising remedies against any
Collateral and that other actions or omissions by the Agent or any Lender shall not be deemed
commercially unreasonable solely on account of not being indicated in this Section 4.1. Without
limitation upon the foregoing, nothing contained in this Section 4.1 shall be construed to grant any
rights to any Guarantor or to impose any duties on the Agent that would not have been granted or
imposed by this Agreement or by applicable requirements of law in the absence of this Section 4.1.
Section 4.2 Accounts and Payments in Respect of General Intangibles and Instruments.
(a) In addition to, and not in substitution for, any similar requirement in the Loan
Agreement, at any time during the continuance of an Event of Default (whether or not any such Event
of Default has resulted in acceleration pursuant to Section 8.2 of the Loan Agreement), the Agent
shall have the following rights and remedies:
i. Any payment of Accounts or payment in respect of General Intangibles, when
collected by any Guarantor, shall be held in trust for the Agent and segregated
from such other funds of such Guarantor and shall be turned over to the Agent, or
to such other bank or person as may be approved by the Agent, within two (2)
Business Days immediately upon receipt in the identical form received.
ii. Each Guarantor shall deliver to the Agent all original and other documents
evidencing, and relating to, the contractual obligations and transactions that gave
rise to any Account or any payment in respect of General Intangibles, including all
original orders, invoices and shipping receipts.
iii. Any of the Agent’s officers, employees or agents shall have the right, at
any time or times hereafter, in the name of the Agent or any designee of the Agent,
to verify the validity, amount or any other matter relating to any Accounts by
mail, telephone or otherwise, including, but not limited to,
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verification of each
Guarantor’s compliance with applicable laws. Each
Guarantor shall cooperate fully with Agent in an effort to facilitate and
promptly conclude such verification process. Such verification may include
contacts between Agent and applicable federal, state and local regulatory
authorities having jurisdiction over any Guarantor’s affairs, all of which contacts
each Guarantor hereby irrevocably authorizes.
iv. The Agent may limit or terminate the authority of a Guarantor to collect
its Accounts or amounts due under General Intangibles or Instruments or any part
thereof and, in its own name or in the name of others, communicate with Account
Debtors to verify with them to the Agent’s satisfaction the existence, amount and
terms of any Account or amounts due under any General Intangible or Instrument.
v. The Agent shall have the right at any time to (A) notify any Account Debtor
of any Guarantor or any obligor on any Instrument that such Accounts, General
Intangibles and Instruments, as applicable, have been assigned to the Agent and
that payments in respect thereof shall be made directly to Agent (for the benefit
of the Finance Parties) (and once such notice has been given to an Account Debtor,
such Guarantor shall not give any contrary instructions to such Account Debtor
without Agent’s prior written consent) and (B) enforce such Guarantor’s rights
against such Account Debtors and obligors of Accounts, General Intangibles and
Instruments.
(b) Anything herein to the contrary notwithstanding, each Guarantor shall remain liable under
each Account and each payment in respect of General Intangibles to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in accordance with
the terms of any agreement giving rise thereto. Neither the Agent nor any Lender shall have any
obligation or liability under any agreement giving rise to an Account or a payment in respect of a
General Intangible by reason of or arising out of any Debt Document or the receipt by the Agent or
any Lender of any payment relating thereto, nor shall the Agent or any Lender be obligated in any
manner to perform any obligation of any Guarantor under or pursuant to any agreement giving rise to
an Account or a payment in respect of a General Intangible, 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 that may have been assigned to it
or to which it may be entitled at any time or times.
Section 4.3 Pledged Collateral.
(a) Voting Rights. During the continuance of an Event of Default, upon notice by the
Agent to the relevant Guarantor or Guarantors, the Agent or its nominee may exercise (A) any
voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of
shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged
Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other
right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner
thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger,
amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the
corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver
any Pledged Collateral with any committee, depositary, transfer agent,
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registrar or other
designated agency upon such terms and conditions as the Agent may
determine), all without liability except to account for property actually received by it;
provided, however, that the Agent shall have no duty to any Guarantor to exercise
any such right, privilege or option and shall not be responsible for any failure to do so or delay
in so doing.
(b) Proxies. During the continuance of an Event of Default, in order to permit the
Agent to exercise the voting and other consensual rights that it may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions that it may be entitled to
receive hereunder, (i) each Guarantor shall promptly execute and deliver (or cause to be executed
and delivered) to the Agent all such proxies, dividend payment orders and other instruments as the
Agent may from time to time reasonably request and (ii) without limiting the effect of
clause (i) above, such Guarantor hereby grants to the Agent an irrevocable proxy to vote
all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Collateral would be entitled (including giving or
withholding written consents of shareholders, partners or members, as the case may be, calling
special meetings of shareholders, partners or members, as the case may be, and voting at such
meetings), which proxy shall be effective, automatically and without the necessity of any action
(including any Transfer of any Pledged Collateral on the record books of the issuer thereof) by any
other person (including the issuer of such Pledged Collateral or any officer or agent thereof)
during the continuance of an Event of Default and which proxy shall only terminate upon the payment
in full of the Guaranteed Obligations.
(c) Authorization of Issuers. Each Guarantor hereby expressly irrevocably authorizes
and instructs, without any further instructions from such Guarantor, each issuer of any Pledged
Collateral pledged hereunder by such Guarantor to (i) comply with any instruction received by it
from the Agent in writing that states that an Event of Default is continuing and is otherwise in
accordance with the terms of this Agreement and each Guarantor agrees that such issuer shall be
fully protected from liabilities to such Guarantor in so complying and (ii) unless otherwise
expressly permitted hereby, pay any dividend or make any other payment with respect to the Pledged
Collateral directly to the Agent.
Section 4.4 Proceeds to be Turned over to and Held by Agent. Except as
otherwise provided in the Loan Agreement or this Agreement, all proceeds of any Collateral received
by any Guarantor hereunder in cash or Cash Equivalents shall be held by such Guarantor in trust for
the Agent and the Lenders, segregated from other funds of such Guarantor, and shall, promptly upon
receipt by any Guarantor, be turned over to the Agent in the exact form received (with any
necessary endorsement). All such proceeds of Collateral and any other proceeds of any Collateral
received by the Agent in cash or Cash Equivalents shall be held by the Agent as collateral security
for the Guaranteed Obligations and shall not constitute payment thereof until applied as provided
in Section 8.4 of the Loan Agreement.
Section 4.5 Remedial Provisions.
(a) Upon the occurrence and during the continuance of an Event of Default, Agent and its
attorneys may exercise in respect of the Pledged Collateral, in addition to other rights and
remedies provided for herein or otherwise available to it, all the rights and remedies of a secured
party under the UCC (whether or not the UCC applies to the affected Pledged Collateral), and Agent
may also, without demand, advertisement or notice of any kind (other than the notice specified
below relating to a public or private sale), sell the Pledged Collateral or any part thereof in one
or more portions at one or more public or private sales or dispositions, at any
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exchange, broker’s
board or at any of Agent’s offices (or those of Agent’s attorneys) or elsewhere,
for cash, on credit, or for future delivery, at such price or prices and upon such other terms
as Agent deems advisable. The Guarantor agrees that, to the extent notice of sale shall be
required by law, a reasonable authenticated notification of disposition shall be given at least ten
(10) days prior to any such sale and such notice shall (i) describe Agent and Guarantor, (ii)
describe the Pledged Collateral that is the subject of the intended disposition, (iii) state the
method of the intended disposition, (iv) state that the Guarantor is entitled to an accounting of
the Obligations, as the case may be, and state the charge, if any, for an accounting, and (v) state
the time and place of any public disposition or the time after which any private sale is to be
made; provided, that no notification need be given to the Guarantor if it has authenticated
after default a statement renouncing or modifying any right to notification of sale or other
intended disposition. At any sale of the Pledged Collateral, if permitted by law, Agent may bid
(which bid may be, in whole or in part, in the form of cancellation of indebtedness) for the
purchase of the Pledged Collateral or any portion thereof free of any right or equity of redemption
in the Guarantor. Agent shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) Each Guarantor recognizes that the Agent may be unable to effect a public sale of any
Pledged Collateral by reason of certain prohibitions contained in the Securities Act of 1933 (the
“Securities Act”) or applicable state or foreign securities laws or otherwise or may
determine that a public sale is impracticable, not desirable or not commercially reasonable and,
accordingly, may resort to one or more private sales thereof to a restricted group of purchasers
that shall 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 Guarantor
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
Agent shall be under no obligation to delay a sale of any Pledged Collateral 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 Guarantor 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 any portion of the Pledged Collateral (other
than public sales under the provisions of the Securities Act and any applicable state or foreign
securities law) valid and binding and in compliance with all applicable requirements of law. Each
Guarantor further agrees that a breach of any covenant contained in this 0 will cause
irreparable injury to the Agent and other Secured Parties, that the Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each
and every covenant contained in this 0 shall be specifically enforceable against such
Guarantor, and such Guarantor hereby waives and agrees not to assert any defense against an action
for specific performance of such covenants except for a defense that no Event of Default has
occurred under the Loan Agreement.
Section 4.6 Appointment of Agent. Effective only upon the occurrence and
during the continuance of an Event of Default, each Guarantor hereby irrevocably appoints Agent
(and any of Agent’s designated officers or employees) as such Guarantor’s true and lawful
20
attorney
to: (i) endorse such Guarantor’s name on any checks or other forms of payment or
security that may come into Agent’s possession; (ii) settle and adjust disputes and claims
respecting such Guarantor’s Accounts directly with Account Debtors, for amounts and upon terms
which Agent determines to be reasonable; and (iii) do such other and further acts and deeds in the
name of such Guarantor that Agent may deem necessary or desirable to enforce its rights in or to
any of the Collateral (on behalf of the Finance Parties). The appointment of Agent as each
Guarantor’s attorney in fact is a power coupled with an interest and is irrevocable until the
Termination Date.
Section 4.7 Deficiency. Each Grantor shall remain liable for any deficiency
if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the
Guaranteed Obligations and the fees and disbursements of any attorney employed by the Agent or any
Lender to collect such deficiency.
ARTICLE V
MISCELLANEOUS
Section 5.1 Reinstatement. Each Guarantor agrees that, if any payment made by
any Loan Party or other person and applied to the Guaranteed Obligations is at any time annulled,
avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, then, if, prior to any of the foregoing, any provision of this
Agreement (including the guaranty of such Guarantor hereunder) shall have been terminated,
cancelled or surrendered, such provision, and any lien or other Collateral securing such
Guarantor’s liability hereunder that may have been released or terminated by virtue of such
termination, cancellation or surrender, shall be reinstated in full force and effect and such prior
termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise
affect the obligations of any such Guarantor in respect of any lien or other Collateral securing
such obligation or the amount of such payment.
Section 5.2 Independent Obligations. The obligations of each Guarantor
hereunder are independent of and separate from the Guaranteed Obligations. If any Guaranteed
Obligation is not paid when due, or upon any Event of Default, the Agent may, at its sole election,
proceed directly and at once, without notice, against any Guarantor to collect and recover the full
amount or any portion of any Obligation or Guaranteed Obligation then due, without first proceeding
against any other Guarantor or any other Loan Party and without first joining any other Guarantor
or any other Loan Party in any proceeding.
Section 5.3 No Waiver by Course of Conduct. The Agent shall not, by any act
(except by a written instrument pursuant to Section 11.9 of the Loan Agreement), 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 Agent, 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 Agent
of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right
or remedy that the Agent would otherwise have on any future occasion.
21
Section 5.4 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 11.9 of the Loan Agreement.
Section 5.5 Additional Guarantors. If, at the option of the Borrower or as
required pursuant to the Loan Agreement, the Borrower shall cause any Subsidiary that is not a
Guarantor to become a Guarantor hereunder, such Subsidiary shall execute and deliver to the Agent a
Joinder Agreement substantially in the form of Annex 1 and shall thereafter for all
purposes be a party hereto and have the same rights, benefits and obligations as a Guarantor party
hereto as of the date hereof.
Section 5.6 Notices. All notices, requests and demands to or upon the Agent
or any Guarantor hereunder shall be effected in the manner provided for in Section 11.2 of the Loan
Agreement.
Section 5.7 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the Agent and its
successors and assigns; provided, however, that no Guarantor may assign, transfer
or delegate any of its rights or obligations under this Agreement without the prior written consent
of the Agent.
Section 5.8 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute one and the same
agreement. Signature pages may be detached from multiple separate counterparts and attached to a
single counterpart. Delivery of an executed signature page of this Agreement by facsimile
transmission or by electronic transmission shall be as effective as delivery of a manually executed
counterpart hereof.
Section 5.9 Interpretation. The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of such terms. The terms
“herein,” “hereof” and similar terms refer to this Agreement as a whole and not to
any particular Article, Section or clause in this Agreement. References herein to an Annex,
Article, Section or clause refer to the appropriate Annex to, or Article, Section or clause of this
Agreement. The Recitals hereto are incorporated in and made a part of this Agreement to the same
extent as if set forth in full herein.
Section 5.10 Severability. Any provision of this Agreement being held
illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision
not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of
such provision in any other jurisdiction.
Section 5.11 Payments; Foreign Currency Indemnity. Any payments made by any
Guarantor under this Agreement shall be made in accordance with the requirements set forth in
Sections 2.3(e), 10.2 and 10.3 of the Loan Agreement.
Section 5.12 Governing Law. This Agreement and the rights and obligations of
the parties hereto shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
22
Section 5.13 Submission to Jurisdiction. Any legal action or proceeding
with respect to this Agreement may be brought in the courts of the State of New York located in the
City of New York, Borough of Manhattan, or of the United States of America for the Southern
District of New York and, by execution and delivery of this Agreement, each Guarantor hereby
accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each Guarantor hereby irrevocably waives any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, that any of them may now or hereafter have to the bringing of any such action
or proceeding in such jurisdictions.
Section 5.14 Service of Process. Each Guarantor hereby irrevocably waives
personal service of any and all legal process, summons, notices and other documents and other
service of process of any kind and consents to such service in any suit, action or proceeding
brought in the United States of America with respect to or otherwise arising out of or in
connection with this Agreement by any means permitted by applicable requirements of law, including
by the mailing thereof (by registered or certified mail, postage prepaid) to the address set forth
on the signature pages to the Loan Agreement (and shall be effective when such mailing shall be
effective, as provided in Section 11.2 of the Loan Agreement). Each Guarantor agrees that a final
non-appealable judgment in a court of competent jurisdiction in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
Section 5.15 Non-Exclusive Jurisdiction. Nothing contained in this
Section 5.15 shall affect the right of any Finance Party to serve process in any other
manner permitted by applicable requirements of law or commence legal proceedings or otherwise
proceed against any Loan Party in any other jurisdiction.
Section 5.16 Waiver of Jury Trial. Each party hereto hereby
irrevocably waives trial by jury in any suit, action or proceeding with respect to, or directly or
indirectly arising out of, under or in connection with, any Debt Document or the transactions
contemplated therein or related thereto (whether founded in contract, tort or any other theory).
Each party hereto (A) certifies that no other party and no Related Person of any other party has
represented, expressly or otherwise, that such other party would not, in the event of litigation,
seek to enforce the foregoing waiver and (B) acknowledges that it and the other parties hereto have
been induced to enter into this agreement by the mutual waivers and certifications in this
Section 5.16.
Section 5.17 Conflicts. In the event of any conflict between the
terms of this Agreement and that certain Australian Group Charge, dated as of the date hereof, by
Xxxxxx and certain other guarantors under the Loan Agreement, in favor of the Security Trustee (the
“Group Charge”), with respect to any Collateral of Xxxxxx that is the subject of the Group
Charge, the Group Charge shall govern with respect to such Collateral.
[SIGNATURE PAGES FOLLOW]
23
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and
delivered as of the date first above written.
GUARANTORS: XXXXXX, INC., a Delaware corporation |
||||
By: | /s/ Xxxxxx Xxxxx | |||
Name: | Xxxxxx Xxxxx | |||
Title: | Chief Financial Officer | |||
XXXXXX OPERATIONS USA, INC., a California corporation |
||||
By: | /s/ Xxxxxx Xxxxx | |||
Name: | Xxxxxx Xxxxx | |||
Title: | Chief Financial Officer | |||
ACCEPTED AND AGREED
as of the date first above written:
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
as Agent
By: |
/s/ Xxxxx Xxxxxx | |||
Title: Duly Authorized Signatory |
ANNEX 1
TO
GUARANTY,PLEDGE AND SECURITY AGREEMENT
TO
GUARANTY,PLEDGE AND SECURITY AGREEMENT
FORM OF JOINDER AGREEMENT
This
JOINDER AGREEMENT, dated as of
, 20 , is delivered pursuant to Section 5.5
of the Guaranty, Pledge and Security Agreement, dated as of December 28, 2007, by XXXXXX, INC.,
XXXXXX OPERATIONS USA, INC. and the Affiliates of Borrower from time to time party thereto as
Guarantors in favor of the General Electric Capital Corporation, as Agent (the “Guaranty”).
Capitalized terms used herein without definition are used as defined in the Guaranty.
By executing and delivering this Joinder Agreement, the undersigned, as provided in
Section 5.5 of the Guaranty, hereby becomes a party to the Guaranty as a Guarantor thereunder with
the same force and effect as if originally named as a Guarantor therein and, without limiting the
generality of the foregoing, expressly assumes all obligations and liabilities of a Guarantor
thereunder and hereby agrees to be bound as a Guarantor for purposes thereof.
The undersigned hereby represents and warrants that each of the representations and warranties
contained in Article III of the Guaranty applicable to it is true and correct on and as the date
hereof as if made on and as of such date.
IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and
delivered as of the date first above written.
[ADDITIONAL GUARANTOR] |
||||
By: | ||||
Name: | ||||
Title: | ||||
A1-1
ACKNOWLEDGED AND AGREED
as of the date first above written:
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION | ||||
as Agent | ||||
By: |
||||
Title: |
A1-2