EXHIBIT 10.5
SECURITY AGREEMENT dated as of May 6, 2002,
among SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, a
Delaware limited liability company ("SCI LLC"), ON
SEMICONDUCTOR CORPORATION, a Delaware corporation (the
"Company" and, together with SCI LLC, the "Issuers"),
each subsidiary of the Company listed on Schedule I
hereto (each such subsidiary individually a "Subsidiary"
or a "Guarantor" and, collectively, the "Subsidiaries"
or the "Guarantors"; the Guarantors and the Issuers are
referred to collectively herein as the "Grantors") and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association ("Xxxxx Fargo Bank"), as
trustee under the Indenture referred to below and as
collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as defined herein).
W I T N E S S E T H:
WHEREAS, pursuant to the terms, conditions and provisions of (a) the
Indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), among the Issuers, the
Guarantors and Xxxxx Fargo Bank, as trustee (the "Trustee"), and (b) the
Purchase Agreement dated as of May 1, 2002, among the Issuers, the Guarantors
and Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx & Co. Incorporated,
Xxxxxxx Xxxxx Barney Inc. and X.X. Xxxxxx Securities Inc. (the "Initial
Purchasers"), the Issuers are issuing $300,000,000 aggregate principal amount of
12% Senior Secured Notes due 2008 and may issue, from time to time, additional
notes in accordance with the provisions of the Indenture (collectively, the
"Notes") which will be guaranteed on a senior secured basis by each of the
Guarantors;
WHEREAS, pursuant to the Security Agreement dated as of August 4,
1999 (as amended, supplemented or otherwise modified from time to time), among
the Issuers, each of the subsidiaries of the Company party thereto or which
becomes a party thereto pursuant to the Credit Agreement referred to below
(together with the Issuers, each a "Credit Agreement Grantor" and, collectively,
the "Credit Agreement Grantors") and JPMorgan Chase Bank (as successor to The
Chase Manhattan Bank), a New York banking corporation ("JPMorgan"), as
collateral agent, the Credit Agreement Grantors have granted to the Senior Agent
(as defined below) a first-priority lien and security interest in the Collateral
(as defined below) in connection with the Credit Agreement dated as of August 4,
1999, as amended and restated as of April 3, 2000 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among SCI LLC,
as borrower, the Company, the lenders from time to time party thereto (the
"Lenders"), JPMorgan, as administrative agent, collateral agent and syndication
agent (in such capacity, the "Senior Agent") for the Lenders, and Credit
Lyonnais New York Branch, Credit Suisse First Boston and Xxxxxx Commercial Paper
Inc., as co-documentation agents;
WHEREAS, the Issuers, the Collateral Agent and the Senior Agent have
entered into an Intercreditor Agreement, dated as of the date hereof (the
"Intercreditor Agreement"), pursuant to which the lien and security interest in
the Collateral granted by this Agreement are and shall be subordinated in all
respects to the lien and security interest in the Collateral granted pursuant
to, and all terms and conditions of, the Senior Lender Documents;
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WHEREAS, each Grantor is executing and delivering this Agreement
pursuant to the terms of the Indenture to induce the Trustee to enter into the
Indenture and the Initial Purchasers to purchase the Notes; and
WHEREAS, each Grantor has duly authorized the execution, delivery
and performance of this Agreement.
NOW, THEREFORE, for and in consideration of the premises, and of the
mutual covenants herein contained, and in order to induce the Trustee to enter
into the Indenture and the Initial Purchasers to purchase the Notes, each
Grantor and the Collateral Agent, on behalf of itself and each Secured Party
(and each of their respective successors or assigns), hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall have
the meanings set forth in the Indenture.
SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.
"Accounts" shall mean all "accounts" (as defined in the Uniform Commercial
Code as in effect in the State of New York ("UCC")) of any Grantor and shall
include any and all right, title and interest of any Grantor to payment for
goods and services sold or leased, including any such right evidenced by chattel
paper, whether due or to become due, whether or not it has been earned by
performance, and whether now or hereafter acquired or arising in the future,
including accounts receivable from Affiliates of the Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents, (c)
Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash accounts,
(g) Investment Property and (h) Proceeds.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an option on
a commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" shall mean a Person for whom a Commodity Intermediary
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carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Copyright License" shall mean any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following: (a) all copyright rights in
any work subject to the copyright laws of the United States or any other
country, whether as author, assignee, transferee or otherwise, and (b) all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such term in the
recitals of this Agreement.
"Discharge of Senior Lender Claims" shall have the meaning assigned to
such term in the Intercreditor Agreement.
"Documents" shall mean all instruments, files, records, ledger sheets and
documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such Person is the
Entitlement Holder.
"Equipment" shall mean "equipment" (as defined in the UCC) of any Grantor
and shall include all equipment, furniture and furnishings, and all tangible
personal property similar to any of the foregoing, including tools, parts and
supplies of every kind and description, and all improvements, accessions or
appurtenances thereto, that are now or hereafter owned by any Grantor. The term
Equipment shall include Fixtures.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a Person
or a share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a Person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
"First-Lien Termination Date" shall mean, subject to Section 5.6 of the
Intercreditor Agreement, the date on which the Discharge of Senior Lender Claims
occurs.
"Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under
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any real estate law applicable thereto.
"General Intangibles" shall mean all "general intangibles" (as defined in
the UCC) of any Grantor and shall include choses in action and causes of action
and all other assignable intangible personal property of any Grantor of every
kind and nature (other than Accounts Receivable) now owned or hereafter acquired
by any Grantor, including corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, Hedging Agreements and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the
Accounts Receivable.
"Hedging Agreement" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indenture Documents" shall mean the Indenture, the Notes, this Agreement,
the other Security Documents and the Intercreditor Agreement, as such agreements
may be amended, supplemented or otherwise modified from time to time.
"Intellectual Property" shall mean all intellectual and similar property
of any Grantor of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"Intercreditor Agreement" shall have the meaning assigned to such term in
the recitals of this Agreement.
"Inventory" shall mean "inventory" (as defined in the UCC) of any Grantor
and shall include all goods of any Grantor, whether now owned or hereafter
acquired, held for sale or lease, or furnished or to be furnished by any Grantor
under contracts of service, or consumed in any Grantor's business, including raw
materials, intermediates, work in process, packaging materials, finished goods,
semi-finished inventory, scrap inventory, manufacturing supplies and spare
parts, and all such goods that have been returned to or repossessed by or on
behalf of any Grantor.
"Investment Property" shall mean all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor; provided that Securities shall not include more than 65% of the
issued and outstanding voting stock of any Foreign Subsidiaries.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule III (other than those license agreements in
existence on the date hereof and listed on Schedule III and those license
agreements entered into after the date hereof, which by their terms prohibit
assignment or a grant of a security interest by such Grantor as licensee
thereunder).
"Obligations" shall mean all obligations of the Issuers and the Guarantors
under the Indenture, the Notes and the other Indenture Documents, including
obligations to the Trustee and the Collateral Agent, whether for payment of
principal of, interest on or additional interest, if any, on the Notes and all
other monetary obligations of the Issuers and the Guarantors under the
Indenture, the Notes and the other Indenture Documents, whether for fees,
expenses,
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indemnification or otherwise.
"Other Second-Lien Obligations" means any Indebtedness, other than the
Notes, that is secured by a Permitted Lien, described in clause (a) of the
definition thereof set forth in the Indenture, which is secured equally and
ratably with the Notes by a second-priority security interest in the Collateral,
and that is designated by the Company upon incurrence as "Other Second-Lien
Obligations".
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following now owned or hereafter acquired
by any Grantor: (a) all letters patent of the United States or any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or any other country, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country, including
those listed on Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in the
form of Annex 2 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by an Officer of the Company
and SCI LLC.
"Proceeds" shall mean "proceeds" (as defined in the UCC) of any Grantor
and shall include any consideration received from the sale, exchange, license,
lease or other disposition of any asset or property that constitutes Collateral,
any value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral, and shall include,
(a) any claim of any Grantor against any third party for (and the right to xxx
and recover for and the rights to damages or profits due or accrued arising out
of or in connection with) (i) past, present or future infringement of any Patent
now or hereafter owned by any Grantor, or licensed under a Patent License, (ii)
past, present or future infringement or dilution of any Trademark now or
hereafter owned by any Grantor or licensed under a Trademark License or injury
to the goodwill associated with or symbolized by any Trademark now or hereafter
owned by any Grantor, (iii) past, present or future breach of any License and
(iv) past, present or future infringement of any Copyright now or hereafter
owned by any Grantor or licensed under a Copyright License and (b) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.
"Secured Parties" shall mean the Trustee, the Collateral Agent, each
Holder and the successors and assigns of each of the foregoing.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
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"Securities Account" shall mean an account to which a Financial Asset is
or may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Security Intermediary" shall mean (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Senior Lender Claims" shall have the meaning assigned to such term in the
Intercreditor Agreement.
"Senior Lender Documents" shall have the meaning assigned to such term in
the Intercreditor Agreement.
"Trademark License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following: (a) all trademarks, service
marks, trade names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule V, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
SECTION 1.03. Rules of Interpretation. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
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ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title and interest
in, to and under the Collateral (the "Security Interest"). Without limiting the
foregoing, in accordance with, and to the extent consistent with, the terms of
the Intercreditor Agreement, the Collateral Agent is hereby authorized to file
one or more financing statements (including fixture filings), continuation
statements, filings with the United States Patent and Trademark Office or United
States Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantors, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security Interest is granted
as security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to the Collateral
Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid rights
in and title to the Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete in all material respects. Fully executed Uniform Commercial
Code financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the
Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate, which are all the filings, recordings and registrations
(other than filings required to be made in the United States Patent and
Trademark Office and the United States Copyright Office in order to perfect the
Security Interest in Collateral consisting of United States Patents, Trademarks
and Copyrights) that are necessary to publish notice of and protect the validity
of and to establish a legal, valid and perfected second-priority security
interest in favor of the Collateral Agent (for the ratable benefit of the
Secured Parties) in respect of all Collateral in which the Security Interest may
be perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements.
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(b) Each Grantor shall ensure that fully executed security agreements in
the form hereof (or short-form supplements to this Agreement in form and
substance satisfactory to the Collateral Agent) and containing a description of
all Collateral consisting of Intellectual Property shall have been received and
recorded within three months after the execution of this Agreement with respect
to United States Patents and United States registered Trademarks (and Trademarks
for which United States registration applications are pending) and within one
month after the execution of this Agreement with respect to United States
registered Copyrights have been delivered to the Collateral Agent for recording
by the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C.
Section 205 and the regulations thereunder, as applicable, and otherwise as may
be required pursuant to the laws of any other necessary jurisdiction in the
United States (or any political subdivision thereof) and its territories and
possessions, to protect the validity of and to establish a legal, valid and
perfected second-priority security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, or in
any other necessary jurisdiction, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction (other than such actions as are necessary to perfect the Security
Interest with respect to any Collateral consisting of Patents, Trademarks and
Copyrights (or registration or application for registration thereof) acquired or
developed after the date hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid second-priority security interest in all the
Collateral securing the payment and performance of the Obligations, (b) subject
to the filings described in Section 3.02 above, a perfected second-priority
security interest in all Collateral in which a security interest may be
perfected by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the UCC or other analogous applicable
law in such jurisdictions and (c) a second-priority security interest that shall
be perfected in all Collateral in which a security interest may be perfected
upon the receipt and recording of this Agreement with the United States Patent
and Trademark Office and the United States Copyright Office, as applicable,
within the three month period (commencing as of the date hereof) pursuant to 35
U.S.C. Section 261 or 15 U.S.C. Section 1060 or the one month period (commencing
as of the date hereof) pursuant to 17 U.S.C. Section 205 and otherwise as may be
required to pursuant to the laws of any other necessary jurisdiction in the
United States (or any political subdivision thereof) and its territories and
possessions. The Security Interest is and shall be a second-priority Security
Interest, prior to any other Lien on any of the Collateral, other than (x) Liens
securing Senior Lender Claims or (y) any other Permitted Liens.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for (x) Liens securing Senior Lender
Claims and (y) any other Permitted Liens to exist under the Indenture. The
Grantor has not filed or consented to the filing of (a) any financing statement
or analogous document under the UCC or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral with the
United States Patent and Trademark Office or the United States Copyright Office
or (c) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for (x) Liens securing Senior Lender
Claims and (y) any other Permitted Liens.
ARTICLE IV
Covenants
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SECTION 4.01. Records. Each Grantor agrees to maintain, at its own cost
and expense, such complete and accurate records with respect to the Collateral
owned by it as is consistent with its current practices, but in any event to
include complete accounting records indicating all payments and proceeds
received with respect to any part of the Collateral, and, at such time or times
as the Collateral Agent may reasonably request, promptly to prepare and deliver
to the Collateral Agent an updated Perfection Certificate, noting all material
changes, if any, since the date of the most recent Perfection Certificate.
SECTION 4.02. Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
other than Permitted Liens.
SECTION 4.03. Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent, in
accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, may from time to time request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note or other instrument, such note or
instrument shall be immediately pledged and delivered to the Senior Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent) to be
held as Collateral pursuant to this Agreement and the Intercreditor Agreement,
duly endorsed in a manner satisfactory to the Senior Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent).
SECTION 4.04. Inspection and Verification. The Collateral Agent and such
Persons as the Collateral Agent may reasonably designate shall have the right to
inspect the Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Collateral is
located, at reasonable times and intervals during normal business hours upon
reasonable advance notice to the respective Grantor and to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of the Collateral.
SECTION 4.05. Taxes; Encumbrances. In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, at its option, the
Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted under the Indenture, and may pay for the
maintenance and preservation of the Collateral, in each case to the extent any
Grantor fails to do so as required by the Indenture or this Agreement, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand
for any payment made or any expense incurred by the Collateral Agent pursuant to
the foregoing authorization; provided, however, that nothing in this Section
4.05 shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Indenture Documents.
SECTION 4.06. Assignment of Security Interest. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any other
Person to secure payment and performance of an Account, such Grantor shall
promptly assign such security interest to the Collateral Agent to the extent
permitted by any contracts or arrangements to which such property is subject.
Such assignment need not be filed of public record unless necessary to continue
the perfected status of the security interest against creditors of and
transferees from the Account
10
Debtor or other Person granting the security interest.
SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.
SECTION 4.08. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
expressly permitted by the Indenture. None of the Grantors shall make or permit
to be made any transfer of the Collateral and each Grantor shall remain at all
times in possession of the Collateral owned by it, except that (a) Inventory may
be sold in the ordinary course of business and (b) unless and until the
Collateral Agent shall notify the Grantors that an Event of Default shall have
occurred and be continuing and that during the continuance thereof the Grantors
shall not sell, convey, lease, assign, transfer or otherwise dispose of any
Collateral (which notice may be given by telephone if promptly confirmed in
writing), the Grantors may use and dispose of the Collateral in any lawful
manner not inconsistent with the provisions of this Agreement, the Indenture or
any other Indenture Document. Without limiting the generality of the foregoing,
each Grantor agrees that it shall not permit any material Inventory to be in the
possession or control of any warehouseman, bailee, agent or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have agreed in writing to hold the
Inventory subject to the Security Interest and the instructions of the Senior
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent) and to waive and release any Lien held by it with respect to such
Inventory, whether arising by operation of law or otherwise.
SECTION 4.09. Limitation on Modification of Accounts. None of the Grantors
will, without the prior written consent of the Senior Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices.
SECTION 4.10. Insurance. The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to
the Inventory and Equipment with financially sound and reputable insurance
companies in such amounts (with no greater risk retention) and against such
risks as are customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations.
Subject to the Intercreditor Agreement, each Grantor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Grantor's true and lawful
agent (and attorney-in-fact) for the purpose, during the continuance of an Event
of Default, of making, settling and adjusting claims in respect of Collateral
under policies of insurance, endorsing the name of such Grantor on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
Subject to the Intercreditor Agreement, in the event that any Grantor at any
time or times shall fail to obtain or maintain any of the policies of insurance
required hereby or to pay any premium in whole or part relating thereto, the
Collateral Agent may, without waiving or releasing any obligation or liability
of the Grantors hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any
other actions with respect thereto as the Collateral Agent deems advisable.
Subject to the Intercreditor Agreement, all sums disbursed by the Collateral
Agent in connection with this Section 4.10, including reasonable attorneys'
fees,
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court costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Grantors to the Collateral Agent and shall be additional
Obligations secured hereby.
SECTION 4.11. Legend. If any Accounts Receivable of any Grantor are
evidenced by chattel paper, such Grantor shall legend, in form and manner
satisfactory to the Senior Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent), such Accounts Receivable and its books, records
and documents evidencing or pertaining thereto with an appropriate reference to
the fact that such Accounts Receivable have been assigned to the Senior Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent) for
the benefit of the Secured Parties and that the Senior Agent has a security
interest therein.
SECTION 4.12. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not, nor will it permit any of
its licensees to, do any act, or omit to do any act, whereby any Patent which is
material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue to xxxx any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws
pursuant to which each such Patent is issued.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark sufficient to preclude any findings of
abandonment, (iii) display such Trademark with notice of Federal or foreign
registration to the extent necessary and sufficient to establish and preserve
its maximum rights under applicable law pursuant to which each such Trademark is
issued and (iv) not knowingly use or knowingly permit the use of such Trademark
in violation of any third party rights.
(c) Each Grantor (either itself or through licensees) will, for each work
covered by a material Copyright, continue to publish, reproduce, display, adopt
and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws pursuant to which each such Copyright is issued.
(d) Each Grantor shall notify the Collateral Agent immediately if it knows
or has reason to know that any Patent, Trademark or Copyright material to the
conduct of its business may become abandoned, lost or dedicated to the public,
or of any adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United States
Patent and Trademark Office, United States Copyright Office or any court or
similar office of any country) regarding such Grantor's ownership of any Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain
the same.
(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly informs
the Collateral Agent, and, in accordance with, and to the extent consistent
with, the terms of the Intercreditor Agreement, upon request of the Collateral
Agent, executes and delivers any and all agreements, instruments, documents and
papers as the Collateral Agent may request to evidence and perfect the
Collateral Agent's security interest in such Patent, Trademark or Copyright, and
each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to
execute and file such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent with
the practice in any proceeding before the United States Patent and Trademark
Office, United States Copyright
12
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, to maintain and
pursue each material application relating to the Patents, Trademarks and/or
Copyrights (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights that
is material to the conduct of any Grantor's business, including timely filings
of applications for renewal, affidavits of use, affidavits of incontestability
and payment of maintenance fees, and, if consistent with good business judgment,
to initiate opposition, interference and cancelation proceedings against third
parties.
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly xxx for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default, each Grantor
shall use its best efforts to obtain all requisite consents or approvals from
the licensor of each Copyright License, Patent License or Trademark License to
effect the assignment of all of such Grantor's right, title and interest
thereunder to the Senior Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent) or its designee for the benefit of the Secured
Parties in accordance with the Intercreditor Agreement.
ARTICLE V
Power of Attorney
Each Grantor irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent)
as such Grantor's true and lawful agent and attorney-in-fact, and in such
capacity the Collateral Agent shall have the right, with power of substitution
for each Grantor and in each Grantor's name or otherwise, for the use and
benefit of the Collateral Agent and the Secured Parties, upon the occurrence and
during the continuance of an Event of Default (a) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof; (b)
to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of any Grantor on
any invoice or xxxx of lading relating to any of the Collateral; (d) to send
verifications of Accounts Receivable to any Account Debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent or
any Secured Party to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent or any Secured
Party, or to present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the moneys due or to become due
in respect thereof or any property covered thereby, and no action taken or
omitted to be taken by the Collateral Agent or any Secured Party with respect to
the Collateral or any part thereof shall give rise to any defense, counterclaim
or offset in favor of any Grantor or to any claim or action
13
against the Collateral Agent or any Secured Party. It is understood and agreed
that the appointment of the Collateral Agent as the agent and attorney-in-fact
of the Grantors for the purposes set forth above is coupled with an interest and
is irrevocable. The provisions of this Section shall in no event relieve any
Grantor of any of its obligations hereunder or under any other Indenture
Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Indenture Document, by law or otherwise.
Notwithstanding anything in this Article V to the contrary, the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Article V unless it does so in accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, upon the occurrence
and during the continuance of an Event of Default, each Grantor agrees to
deliver each item of Collateral to the Collateral Agent on demand, and it is
agreed that the Collateral Agent shall have the right to take any of or all the
following actions at the same or different times: (a) with respect to any
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent (except to the
extent assignment, transfer or conveyance thereof would result in a loss of said
Intellectual Property), or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any such
Collateral throughout the world on such terms and conditions and in such manner
as the Collateral Agent shall determine (other than in violation of any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
UCC or other applicable law. Without limiting the generality of the foregoing,
in accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, each Grantor agrees that the Collateral Agent shall
have the right, subject to the mandatory requirements of applicable law, to sell
or otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the Grantors 10 days' written notice
(which each Grantor agrees is reasonable notice within the meaning of Section
9-611 of the Uniform Commercial
14
Code as in effect in the State of New York or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any Obligation
then due and payable to such Secured Party from any Grantor as a credit against
the purchase price, and such Secured Party may, upon compliance with the terms
of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. For purposes hereof a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Collateral Agent shall be free to carry out such sale pursuant to
such agreement and no Grantor shall be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver.
SECTION 6.02. Application of Proceeds. In accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement, the Collateral
Agent shall apply the proceeds of any collection or sale of the Collateral, as
well as any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by Trustee
or the Collateral Agent (in its capacity as such hereunder or under any
other Indenture Document) in connection with such collection or sale or
otherwise in connection with this Agreement or any of the Obligations,
including all court costs and the reasonable fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Trustee or the Collateral Agent hereunder or under any other Indenture
Document on behalf of any Grantor and any other costs or expenses incurred
in connection with the exercise of any right or remedy hereunder or under
any other Indenture Document and any other amounts due to the Trustee or
the Collateral Agent under Section 7.07 of the Indenture;
SECOND, to the payment in full of the Obligations owed to the
Holders and any Other Second-Lien Obligations owed to holders of such
Indebtedness (the amounts so
15
applied to be distributed among the Holders and any holders of Other
Second-Lien Obligations pro rata in accordance with the amounts of the
Obligations owed to Holders and Other Second-Lien Obligations owed to
holders of such Indebtedness on the date of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a court
of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. The Collateral Agent may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.02. At least 15 days before such
record date, the Collateral Agent shall mail to each Holder and the Issuers a
notice that states the record date, the payment and amount to be paid. Upon any
sale of the Collateral by the Collateral Agent (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such officer or
be answerable in any way for the misapplication thereof.
SECTION 6.03. Grant of License to Use Intellectual Property. In accordance
with, and to the extent consistent with, the Intercreditor Agreement, for the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent (if the First-Lien
Termination Date has occurred), upon the occurrence and during the continuation
of an Event of Default; provided that any license, sub-license or other
transaction entered into by the Collateral Agent in accordance herewith shall be
binding upon the Grantors notwithstanding any subsequent cure of an Event of
Default.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 12.02 of the Indenture. All communications and notices
hereunder to any Guarantor shall be given to it at its address or telecopy
number set forth on Schedule I, with a copy to the Company.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Indenture, any other Indenture Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Indenture, any other Indenture Document or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
16
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the purchase and resale of the Notes by the
Initial Purchasers, regardless of any investigation made by the Initial
Purchasers or on their behalf, and shall continue in full force and effect until
this Agreement shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the other Indenture Documents. This
Agreement shall be construed as a separate agreement with respect to each
Grantor and may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor and without
affecting the obligations of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification. In
accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, (a) each Grantor jointly and severally agrees to pay
upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, disbursements and other charges of its
counsel and of any experts or agents, which the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to
perform or observe any of the provisions hereof applicable to it.
(b) Without limitation of its indemnification obligations under the other
Indenture Documents, each Grantor jointly and severally agrees to indemnify the
Collateral Agent, the Trustee, the Holders and each Affiliate of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
of them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any way
connected with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating
hereto or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or
17
any other Indenture Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Notes, the invalidity or unenforceability of
any term or provision of this Agreement or any other Indenture Document, or any
investigation made by or on behalf of the Collateral Agent or any Holder. All
amounts due under this Section 7.06 shall be payable on written demand therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Trustee and the Holders under the other
Indenture Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provisions of this
Agreement or any other Indenture Document or consent to any departure by any
Grantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Grantor in any case shall entitle such Grantor or any
other Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except (i) in accordance with the Indenture pursuant to an agreement
or agreements in writing entered into by the Collateral Agent and the Grantor or
Grantors with respect to which such waiver, amendment or modification is to
apply, or (ii) as otherwise provided in the Intercreditor Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER INDENTURE
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER INDENTURE DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract (subject to Section 7.04), and
shall become effective as provided in
18
Section 7.04. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used herein are for
the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Indenture Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Collateral Agent, the Trustee or any Holder may otherwise have to
bring any action or proceeding relating to this Agreement or the other Indenture
Documents against any Grantor or its properties in the courts of any
jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Indenture Documents in
any New York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement will affected the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 7.14. Termination. (a) This Agreement and the Security Interest
shall terminate at the time provided in Section 10.08 of the Indenture at which
time the Collateral Agent shall execute and deliver to the Grantors, at the
Grantors' expense, all Uniform Commercial Code termination statements and
similar documents, including, without limitation, authorization for the Grantors
to file Uniform Commercial Code termination statements, which the Grantors shall
reasonably request to evidence such termination. Any execution and delivery of
termination statements or documents pursuant to this Section 7.14 shall be
without recourse to or warranty by the Collateral Agent. A Grantor shall
automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Grantor shall be automatically released in
the event that such Grantor ceases to be a Guarantor pursuant to a transaction
permitted under the Indenture, at which time the Collateral Agent shall execute
and deliver to any Grantor, at such Grantor's expense, all documents that such
Grantor shall reasonably request to evidence such release.
(b) If any of the Collateral shall become subject to the release
provisions set forth in Section 10.03 of the Indenture or Section 5.1 of the
Intercreditor Agreement, such Collateral shall be automatically released from
the Security Interest to the extent provided in Section 10.03 of the Indenture
or Section 5.1 of the Intercreditor Agreement, as applicable. The Collateral
Agent shall execute and deliver to the Grantors, at the Grantors' expense, all
Uniform Commercial Code termination statements and similar documents which the
Grantor shall reasonable request to evidence the termination of the Security
Interest in such Collateral.
SECTION 7.15. Additional Grantors. If, pursuant to Sections 4.11 and 11.06
of the
19
Indenture, the Company is required to cause any Subsidiary of the Company that
is not a Grantor to enter in to this Agreement as a Grantor, upon execution and
delivery by the Collateral Agent and such Subsidiary of an instrument in the
form of Annex 3 hereto, such Subsidiary shall become a Grantor hereunder with
the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of
any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor as a party to this Agreement.
SECTION 7.16. Subject to Intercreditor Agreement. Notwithstanding anything
herein to the contrary, the lien and security interest granted to the Collateral
Agent pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder are subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement shall
govern.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
By /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
ON SEMICONDUCTOR CORPORATION,
By /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
EACH OF THE OTHER GUARANTORS
LISTED ON SCHEDULE I HERETO,
By /s/ Xxxx X. Xxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Collateral
Agent,
By /s/ Xxxxxx X. X'Xxxxxxx
--------------------------
Name: Xxxxxx X. X'Xxxxxxx
Title: Corporate Trust Officer
Schedule I to the
Security Agreement
GUARANTORS
Guarantors Address
---------- -------
SCG International Development LLC 0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, XX 00000
SCG (Malaysia SMP) Holding Corporation 0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, XX 00000
SCG (Czech) Holding Corporation 0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, XX 00000
SCG (China) Holding Corporation 0000 Xxxx XxXxxxxx Xxxx
Xxxxxxx, XX 00000
Semiconductor Components Industries Puerto Rico, 0000 Xxxx XxXxxxxx Xxxx
Inc. Xxxxxxx, XX 00000
Semiconductor Components Industries of Rhode 2000 South County Trail
Island, Inc. Xxxx Xxxxxxxxx, XX 00000
Semiconductor Components Industries International 2000 South County Trail
of Rhode Island, Inc. Xxxx Xxxxxxxxx, XX 00000
Schedule II to the
Security Agreement
COPYRIGHTS
Schedule III to the
Security Agreement
LICENSES
Schedule IV to the
Security Agreement
PATENTS
Schedule V to the
Security Agreement
TRADEMARKS
Annex 2 to the
Security Agreement
[Form of]
PERFECTION CERTIFICATE
Reference is made to (a) the Indenture dated as of May 6, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among ON Semiconductor Corporation, a Delaware corporation (the "Company"), and
Semiconductor Components Industries, LLC, a Delaware limited liability company
("SCI LLC " and, together with the Company, the "Issuers"), the Guarantors and
Xxxxx Fargo Bank Minnesota, National Association, a national banking association
("Xxxxx Fargo Bank"), as trustee, (b) the Security Agreement dated as of May 6,
2002, among the Company, SCI LLC, the Guarantors and Xxxxx Fargo Bank, as
collateral agent (in such capacity, the "Collateral Agent"), and (c) the
Intercreditor Agreement dated as of May 6, 2002 (as amended, supplemented or
otherwise modified from time to time, the "Intercreditor Agreement"), among the
Issuers, the Collateral Agent and the Senior Agent. Capitalized terms used but
not defined herein have the meanings assigned to them in the Indenture or the
Security Agreement, as applicable.
The undersigned, an Officer of the Issuers, hereby certifies to the
Collateral Agent and each other Secured Party as follows:
1. Names.
(a) The exact legal name of each Grantor, as such name appears in its respective
certificate of formation, is as follows:
(b) Set forth below is each other legal name each Grantor has had in the past
five years, together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor has changed its
identity or corporate structure in any way within the past five years. Changes
in identity or corporate structure would include mergers, consolidations and
acquisitions, as well as any change in the form, nature or jurisdiction of
corporate organization. If any such change has occurred, include in Schedule 1
the information required by Sections 1 and 2 of this certificate as to each
acquiree or constituent party to a merger or consolidation.
(d) The following is a list of all other names (including trade names or similar
appellations) used by each Grantor or any of its divisions or other business
units in connection with the conduct of its business or the ownership of its
properties at any time during the past five years:
(e) Set forth below is the organizational identification number, if any, issued
by the jurisdiction of formation of each Grantor that is a registered
organization:
Organizational Identification
Grantor Number
------- ------
2
(f) Set forth below is the Federal Taxpayer Identification Number of each
Grantor:
Federal Taxpayer Identification
Grantor Number
------- ------
2. Current Locations. (a) The chief executive office of each Grantor is located
at the address set forth opposite its name below:
Grantor Mailing Address County State
------- --------------- ------ -----
(b) Set forth below opposite the name of each Grantor are all locations where
such Grantor maintains any books or records relating to any Accounts Receivable
or General Intangibles (with each location at which Chattel Paper, if any, is
kept being indicated by an "*"):
Grantor Mailing Address County State
------- --------------- ------ -----
(c) The jurisdiction of formation of each Grantor that is a registered
organization is set forth opposite its name below:
Grantor Jurisdiction
------- ------------
(d) Set forth below opposite the name of each Grantor are all the locations
where such Grantor maintains any Inventory or Equipment or other Collateral not
identified above:
Grantor Mailing Address County State
------- --------------- ------ -----
(e) Set forth below opposite the name of each Grantor are all the places of
business of such Grantor not identified in paragraph (a), (b), (c) or (d) above:
(f) Set forth below opposite the name of each Grantor are the names and
addresses of all Persons other than such Grantor that have possession of any of
the Collateral of such Grantor:
3. Unusual Transactions. All Accounts have been originated by the Grantors and
all Inventory has
3
been acquired by the Grantors in the ordinary course of business.
4. File Search Reports. File search reports have been obtained from each Uniform
Commercial Code filing office identified with respect to such Grantor in Section
2 hereof, and such search reports reflect no liens against any of the Collateral
other than those permitted under the Indenture.
5. UCC Filings. UCC financing statements in substantially the form of Schedule 5
hereto have been prepared for filing in the proper Uniform Commercial Code
filing office in the jurisdiction in which each Grantor is located and, to the
extent any of the Collateral is comprised of fixtures in the proper local
jurisdiction, as set forth with respect to such Grantor in Section 2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Section 5 above, each filing and
the filing office in which such filing is to be made.
7. Stock Ownership and other Equity Interests. Attached hereto as Schedule 7 is
a true and correct list of all the issued and outstanding stock, partnership
interests, limited liability company membership interests or other equity
interests owned by the Company and each Subsidiary of the Company (including SCI
LLC). Also set forth on Schedule 7 is each equity investment of the Company or
any Subsidiary of the Company (including SCI LLC) that represents 50% or less of
the equity of the entity in which such investment was made.
8. Debt Instruments. Attached hereto as Schedule 8 is a true and correct list of
all instruments, including any promissory notes, and other evidence of
indebtedness held by the Company and each Subsidiary of the Company (including
SCI LLC), including all intercompany notes between the Company and each
Subsidiary of the Company (including SCI LLC) and each Subsidiary of the Company
(including SCI LLC) and each other such Subsidiary (including SCI LLC).
9. Advances. Attached hereto as Schedule 9 is (a) a true and correct list of all
advances made by the Company to any Subsidiary of the Company (including SCI
LLC) or made by any Subsidiary of the Company (including SCI LLC) to the Company
or to any other Subsidiary of the Company (including SCI LLC) (other than those
identified on Schedule 8), which advances will be on and after the date hereof
evidenced by one or more intercompany notes pledged to the Collateral Agent
under the Pledge Agreement and (b) a true and correct list of all unpaid
intercompany transfers of goods sold and delivered by or to the Company or any
Subsidiary of the Company (including SCI LLC).
10. Mortgage Filings. Attached hereto as Schedule 10 is a schedule setting
forth, with respect to each Mortgaged Property, (a) the exact name of the Person
that owns such property as such name appears in its certificate of incorporation
or other organizational document, (b) if different from the name identified
pursuant to clause (a), the exact name of the current record owner of such
property reflected in the records of the filing office for such property
identified pursuant to the following clause and (c) the filing office in which a
Mortgage with respect to such property must be filed or recorded in order for
the Collateral Agent to obtain a perfected security interest therein.
11. Intellectual Property.
Attached hereto as Schedule 11(A) is a schedule setting forth all of each
Grantor's Patents and registered Trademarks and Patent and Trademark
applications, including the name of the registered owner or applicant, as
applicable, and the registration or application number, as
4
applicable, of each Patent and registered Trademark or Patent or Trademark
application owned by any Grantor, in proper form for filing with the United
States Patent and Trademark Office, and a schedule setting forth all of each
Grantor's material Patent Licenses and material Trademark Licenses. Attached
hereto as Schedule 11(B) is a schedule setting forth all of each Grantor's
registered Copyrights, including the name of the registered owner and the
registration number of each Copyright owned by any Grantor, in proper form for
filing with the United States Copyright Office, and a schedule setting forth all
of each Grantor's material Copyright Licenses that grant rights with respect to
registered Copyrights.
5
IN WITNESS WHEREOF, the undersigned have duly executed this
certificate on this [ ]th day of May, 2002.
ON SEMICONDUCTOR CORPORATION,
by
--------------------------
Name:
Title:
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
by
--------------------------
Name:
Title:
Annex 3 to the
Security Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the
Security Agreement dated as of May 6, 2002, among
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, a Delaware
limited liability company ("SCI LLC"), ON SEMICONDUCTOR
CORPORATION, a Delaware corporation (the "Company" and,
together with SCI LLC, the "Issuers"), each subsidiary
of the Company listed on Schedule I thereto (each such
subsidiary individually a "Subsidiary" or a "Guarantor"
and, collectively, the "Subsidiaries" or the
"Guarantors"; the Guarantors and the Issuers are
referred to collectively herein as the "Grantors") and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association ("Xxxxx Fargo Bank"), as
trustee under the Indenture referred to below and as
collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as defined therein).
A. Reference is made to (a) the Indenture dated as of May 6, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among the Company, SCI LLC, the Guarantors and Xxxxx Fargo Bank, as trustee, and
(b) the Intercreditor Agreement dated as of May 6, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement"), among the Issuers, the Collateral Agent and the Senior Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Indenture.
C. The Grantors have entered into the Security Agreement in order to
induce the Trustee to enter into the Indenture and the Initial Purchasers to
purchase the Notes. Pursuant to Section 4.11 of the Indenture, the Company is
required to cause certain of its Subsidiaries that are not Grantors to enter in
to this Agreement as Grantors. Section 7.15 of the Security Agreement provides
that such Subsidiaries may become Grantors under the Security Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Grantor") is executing this Supplement in
accordance with the requirements of the Indenture to become a Grantor under
the Security Agreement as consideration for the purchase of the Notes by the
Initial Purchasers and the Holders.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 7.15 of the Security Agreement, the
New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof except to
the extent a representation and warranty expressly relates solely to a specific
date in which case such representation and warranty shall be true and correct on
such date. In furtherance of the foregoing, the New Grantor, as security for the
payment and performance in full of the Obligations (as defined in the Security
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, their successors and
assigns, a security interest in and lien on all of the New Grantor's right,
title and interest in and to the Collateral of the New Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the New
Grantor. The Security Agreement is hereby incorporated herein by reference.
2
SECTION 2. The New Grantor represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below, with a copy to the Company.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
3
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
[NAME OF NEW GRANTOR],
By
------------------------------------
Name:
Title:
Address:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Collateral
Agent,
By
------------------------------------
Name:
Title:
Schedule I
to Supplement No. [ ]
to the Security Agreement
LOCATION OF COLLATERAL
Description Location
----------- --------
