Exhibit 2
EXECUTION COPY
AMENDED AND RESTATED SECURITY AGREEMENT
Dated March 31, 2005
From
The Grantors referred to herein
as Grantors
to
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent
TABLE OF CONTENTS
SECTION PAGE
----
Section 1. Grant of Security........................................................................... 2
Section 2. Security for Obligations.................................................................... 6
Section 3. Grantors Remain Liable...................................................................... 6
Section 4. Delivery and Control of Security Collateral................................................. 6
Section 5. Maintaining the Account Collateral.......................................................... 7
Section 6. Investing of Amounts in the Collateral Account and the L/C Collateral Account............... 9
Section 7. Release of Amounts.......................................................................... 9
Section 8. Maintaining Electronic Chattel Paper, Transferable Records and Letter-of-Credit Rights
and Giving Notice of Commercial Tort Claims................................................. 9
Section 9. Representations and Warranties.............................................................. 10
Section 10. Further Assurances.......................................................................... 14
Section 11. As to Equipment and Inventory............................................................... 15
Section 12. Insurance................................................................................... 16
Section 13. Post-Closing Changes; Bailees; Collections on Assigned Agreements, Receivables and
Related Contracts........................................................................... 16
Section 14. As to Intellectual Property Collateral...................................................... 18
Section 15. Voting Rights; Dividends; Etc............................................................... 19
Section 16. As to the Assigned Agreements............................................................... 20
Section 17. Payments Under the Assigned Agreements...................................................... 21
Section 18. As to Letter-of-Credit Rights............................................................... 21
Section 19. Transfers and Other Liens; Additional Shares................................................ 21
Section 20. Administrative Agent Appointed Attorney-in-Fact............................................. 22
Section 21. Administrative Agent May Perform............................................................ 22
Section 22. The Administrative Agent's Duties........................................................... 22
Section 23. Remedies.................................................................................... 23
Section 24. Indemnity and Expenses...................................................................... 25
Section 25. Amendments; Waivers; Additional Grantors; Etc............................................... 25
Section 26. Notices, Etc................................................................................ 25
Section 27. Continuing Security Interest; Assignments under the Credit Agreement........................ 26
Section 28. Release; Termination........................................................................ 26
Section 29. Execution in Counterparts................................................................... 26
Section 30. The Mortgages............................................................................... 27
Section 31. Governing Law............................................................................... 27
Schedules I - Location, Chief Executive Office, Place Where Agreements
Are Maintained, Type Of Organization, Jurisdiction Of
Organization And Organizational Identification Number
Schedule II - Pledged Equity and Pledged Debt
Schedule III - Assigned Agreements
Schedule IV - Locations of Equipment and Inventory
Schedule V - Changes in Name, Location, Etc.
Schedule VI - Patents, Trademarks and Trade Names, Copyrights and
IP Agreements
Schedule VII - Account Collateral
Schedule VIII - Account Collateral not Subject to Account Control Agreement
Schedule IX - Commercial Tort Claims
Schedule X - Letters of Credit
Exhibits
Exhibit A - Form of Security Agreement Supplement
Exhibit B - Form of Account Control Agreement
Exhibit C - Form of Consent and Agreement
Exhibit D - Form of Securities Account Control Agreement
Exhibit E - Form of Commodity Account Control Agreement
Exhibit F - Form of Intellectual Property Security Agreement
Exhibit G - Form of Intellectual Property Security Agreement Supplement
Exhibit H - Form of Consent to Assignment of Letter of Credit Rights
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AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated March 31, 2005 made by
XXXXX & XXXXX COMPANY, a Delaware corporation (the "BORROWER"), the other
Persons listed on the signature pages hereof and the Additional Grantors (as
defined in Section 25) (the Borrower, the Persons so listed and the Additional
Grantors being, collectively, the "GRANTORS"), to DEUTSCHE BANK TRUST COMPANY
AMERICAS, as administrative agent (in such capacity, together with any successor
administrative agent appointed pursuant to Article VII of the Credit Agreement
(as hereinafter defined), the "ADMINISTRATIVE AGENT") for the Secured Parties
(as defined in the Credit Agreement).
PRELIMINARY STATEMENTS.
(1) The Borrower has entered into an Amended and Restated Credit
Agreement dated as of March 31, 2005 (said Agreement, as it may hereafter be
amended, amended and restated, supplemented or otherwise modified from time to
time, being the "CREDIT AGREEMENT") with the Lender Parties and the
Administrative Agent (each as defined therein).
(2) Pursuant to the Credit Agreement, the Grantors are entering into
this Agreement in order to grant to the Administrative Agent for the ratable
benefit of the Secured Parties a security interest in the Collateral (as
hereinafter defined).
(3) Each Grantor is the owner of the shares of stock or other Equity
Interests (the "INITIAL PLEDGED EQUITY") set forth opposite such Grantor's name
on and as otherwise described in Part I of Schedule II hereto and issued by the
Persons named therein and of the indebtedness (the "INITIAL PLEDGED DEBT") set
forth opposite such Grantor's name on and as otherwise described in Part II of
Schedule II hereto and issued by the obligors named therein.
(4) The Borrower has security entitlements (the "PLEDGED SECURITY
ENTITLEMENTS") with respect to all the financial assets (the "PLEDGED FINANCIAL
ASSETS") credited from time to time to the Borrower's accounts (the "SECURITIES
ACCOUNTS"), as described in Part II of Schedule VII hereto.
(5) The Borrower has opened the deposit accounts (the "DEPOSIT
ACCOUNTS"), as described in Part I of Schedule VII hereto.
(6) The Borrower has opened other deposit accounts (the "OTHER
DEPOSIT ACCOUNTS") with banks, in the name of the Borrower and subject to the
terms of this Agreement, as described in Schedule VIII hereto.
(7) It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry into Secured Hedge Agreements by the Hedge Banks from time to time
that the Grantors shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Agreement.
(8) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.
(9) Terms defined in the Credit Agreement and not otherwise defined
in this Agreement are used in this Agreement as defined in the Credit Agreement.
Further, unless otherwise defined in this Agreement or in the Credit Agreement,
terms defined in Article 8 or 9 of the UCC (as defined below) and/or in the
Federal Book Entry Regulations (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or 9 and/or the Federal
Book Entry Regulations. "UCC" means the Uniform Commercial Code as in effect,
from time to time, in the State of New York; provided that, if perfection or the
effect of perfection or non-perfection or the priority of any security interest
in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, "UCC" means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority. The term "FEDERAL BOOK ENTRY
REGULATIONS" means (a) the federal regulations contained in Subpart B
("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry
securities consisting of U.S. Treasury bills, notes and bonds and Subpart D
("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R. Section 357.2,
Section 357.10 through Section 357.15 and Section 357.40 through Section 357.45
and (b) to the extent substantially identical to the federal regulations
referred to in clause (a) above (as in effect from time to time), the federal
regulations governing other book-entry securities.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and issue Letters of Credit under the
Credit Agreement and to induce the Hedge Banks to enter into Secured Hedge
Agreements from time to time, each Grantor hereby agrees with the Administrative
Agent for the ratable benefit of the Secured Parties as follows:
Section 1. Grant of Security. Each Grantor hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in, such Grantor's right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the "COLLATERAL"):
(a) all equipment in all of its forms, including, without
limitation, all machinery, tools, motor vehicles, vessels, aircraft,
furniture and fixtures, and all parts thereof and all accessions thereto
and all software related thereto, including, without limitation, software
that is embedded in and is part of the equipment (any and all such
property being the "EQUIPMENT");
(b) all inventory in all of its forms, including, without
limitation, (i) all raw materials, work in process, finished goods and
materials used or consumed in the manufacture, production, preparation or
shipping thereof, (ii) goods in which such Grantor has an interest in mass
or a joint or other interest or right of any kind (including, without
limitation, goods in which such Grantor has an interest or right as
consignee) and (iii) goods that are returned to or repossessed or stopped
in transit by such Grantor), and all accessions thereto and products
thereof and documents therefor, and all software related thereto,
including, without limitation, software that is embedded in and is part of
the inventory (any and all such property being the "INVENTORY");
(c) all accounts, chattel paper (including, without limitation,
tangible chattel paper and electronic chattel paper), instruments
(including, without limitation, promissory notes), deposit accounts,
letter-of-credit rights, general intangibles (including, without
limitation, payment intangibles) and other obligations of any kind,
whether or not arising out of or in connection with the sale or lease of
goods or the rendering of services and whether or not earned by
performance, and all rights now or hereafter existing in and to all
supporting obligations and in and to all security agreements, mortgages,
Liens, leases, letters of credit and other contracts securing or otherwise
relating to the foregoing property (any and all of such accounts, chattel
paper, instruments, deposit accounts, letter-of-credit rights, general
intangibles and other obligations, to the extent not referred to in clause
(d), (e) or (f) below, being the "RECEIVABLES", and any and all such
supporting obligations, security agreements, mortgages, Liens, leases,
letters of credit and other contracts being the "RELATED CONTRACTS");
provided however that the security
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interest granted under this Section 1(c) shall not attach to any of the
Receivables or Related Contracts that by their terms, prohibit or require
the consent of any Person (other than the Grantor) as a condition to the
creation by such Grantor of a lien thereon, but only, in all cases, to the
extent, and for so long as, such prohibition is not terminated or rendered
unenforceable or otherwise deemed ineffective by the UCC or any other
applicable law;
(d) the following (the "SECURITY COLLATERAL"):
(i) the Initial Pledged Equity and the certificates, if any,
representing the Initial Pledged Equity, and all dividends,
distributions, return of capital, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
Initial Pledged Equity and all subscription warrants, rights or
options issued thereon or with respect thereto;
(ii) the Initial Pledged Debt and the instruments, if any,
evidencing the Initial Pledged Debt, and all interest, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the Initial Pledged Debt;
(iii) all additional shares of stock and other Equity
Interests from time to time acquired by such Grantor in any manner
(such shares and other Equity Interests, together with the Initial
Pledged Equity, being the "PLEDGED EQUITY"), and the certificates,
if any, representing such additional shares or other Equity
Interests, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such shares or other Equity Interests and all
subscription warrants, rights or options issued thereon or with
respect thereto;
(iv) all additional indebtedness from time to time owed to
such Grantor (such indebtedness, together with the Initial Pledged
Debt, being the "PLEDGED DEBT") and the instruments, if any,
evidencing such indebtedness, and all interest, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such indebtedness;
(v) the Securities Accounts, all Pledged Security
Entitlements with respect to all Pledged Financial Assets from time
to time credited to the Securities Accounts, and all Pledged
Financial Assets, and all dividends, distributions, return of
capital, interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such Pledged Security Entitlements or
such Pledged Financial Assets and all subscription warrants, rights
or options issued thereon or with respect thereto;
(vi) the Commodities Account, all Pledged Commodity Contracts
from time to time carried in the Commodities Account, and all value,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such Pledged Commodity Contracts; and
(vii) all other investment property (including, without
limitation, all (A) securities, whether certificated or
uncertificated, (B) security entitlements, (C) securities accounts,
(D) commodity contracts and (E) commodity accounts) in which such
Grantor has now, or acquires from time to time hereafter, any right,
title or interest in any manner,
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and the certificates or instruments, if any, representing or
evidencing such investment property, and all dividends,
distributions, return of capital, interest, distributions, value,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such investment property and all subscription
warrants, rights or options issued thereon or with respect thereto;
(e) each of the agreements listed on Schedule III hereto, the IP
Agreements (as hereinafter defined), and each Hedge Agreement to which
such Grantor is now or may hereafter become a party, in each case as such
agreements may be amended, amended and restated, supplemented or otherwise
modified from time to time (collectively, the "ASSIGNED AGREEMENTS"),
including, without limitation, (i) all rights of such Grantor to receive
moneys due and to become due under or pursuant to the Assigned Agreements,
(ii) all rights of such Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements,
(iii) claims of such Grantor for damages arising out of or for breach of
or default under the Assigned Agreements and (iv) the right of such
Grantor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder (all
such Collateral being the "AGREEMENT COLLATERAL");
(f) the following (collectively, the "ACCOUNT COLLATERAL"):
(i) any collateral deposit account opened by the Borrower with
Deutsche Bank Trust Company Americas (or such other financial
institution as the Administrative Agent may direct), in the name of
the Administrative Agent and under the sole control and dominion of
the Administrative Agent and subject to the terms of this Agreement
(the "COLLATERAL ACCOUNT"), any Letter of Credit collateral deposit
account opened by the Borrower with Deutsche Bank Trust Company
Americas (or such other financial institution as the Administrative
Agent may direct), in the name of the Administrative Agent and under
the sole control and dominion of the Administrative Agent and
subject to the terms of this Agreement (the "L/C COLLATERAL
ACCOUNT"), the Deposit Accounts and the Other Deposit Accounts and
all funds and financial assets from time to time credited thereto
(including, without limitation, all Cash Equivalents), all interest,
dividends, distributions, cash, instruments and other property from
time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such funds and financial
assets, and all certificates and instruments, if any, from time to
time representing or evidencing the Collateral Account, the L/C
Collateral Account, the Deposit Accounts and the Other Deposit
Accounts;
(ii) all promissory notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time delivered
to or otherwise possessed by the Administrative Agent for or on
behalf of such Grantor, including, without limitation, those
delivered or possessed in substitution for or in addition to any or
all of the then existing Account Collateral;
(iii) all interest, dividends, distributions, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the then existing Account Collateral; and
(g) the following (collectively, the "INTELLECTUAL PROPERTY
COLLATERAL"):
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(i) all patents, patent applications, utility models and
statutory invention registrations, all inventions claimed or
disclosed therein and all improvements thereto ("PATENTS");
(ii) all trademarks, service marks, domain names, trade dress,
logos, designs, slogans, trade names, business names, corporate
names and other source identifiers, whether registered or
unregistered (provided that no security interest shall be granted in
United States intent-to-use trademark applications to the extent
that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law),
together, in each case, with the goodwill symbolized thereby
("TRADEMARKS");
(iii) all copyrights, including, without limitation,
copyrights in Computer Software (as hereinafter defined), internet
web sites and the content thereof, whether registered or
unregistered ("COPYRIGHTS");
(iv) all computer software, programs and databases (including,
without limitation, source code, object code and all related
applications and data files), firmware and documentation and
materials relating thereto, together with any and all maintenance
rights, service rights, programming rights, hosting rights, test
rights, improvement rights, renewal rights and indemnification
rights and any substitutions, replacements, improvements, error
corrections, updates and new versions of any of the foregoing
("COMPUTER SOFTWARE");
(v) all confidential and proprietary information, including,
without limitation, know-how, trade secrets, manufacturing and
production processes and techniques, inventions, research and
development information, databases and data, including, without
limitation, technical data, financial, marketing and business data,
pricing and cost information, business and marketing plans and
customer and supplier lists and information (collectively, "TRADE
SECRETS"), and all other intellectual, industrial and intangible
property of any type, including, without limitation, industrial
designs and mask works;
(vi) all registrations and applications for registration for
any of the foregoing, including, without limitation, those
registrations and applications for registration set forth in
Schedule VI hereto (as such Schedule VI may be supplemented from
time to time by supplements to this Agreement, each such supplement
being substantially in the form of Exhibit G hereto (an "IP SECURITY
AGREEMENT SUPPLEMENT") executed by such Grantor to the
Administrative Agent from time to time), together with all reissues,
divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations thereof;
(vii) all tangible embodiments of the foregoing, all rights in
the foregoing provided by international treaties or conventions, all
rights corresponding thereto throughout the world and all other
rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto;
(viii) all agreements, permits, consents, orders and
franchises relating to the license, development, use or disclosure
of any of the foregoing to which such Grantor, now or hereafter, is
a party or a beneficiary, including, without limitation, the
agreements set forth in Schedule VI hereto ("IP AGREEMENTS"); and
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(ix) any and all claims for damages and injunctive relief for
past, present and future infringement, dilution, misappropriation,
violation, misuse or breach with respect to any of the foregoing,
with the right, but not the obligation, to xxx for and collect, or
otherwise recover, such damages;
(h) all commercial tort claims described in Schedule IX hereto
(collectively the "COMMERCIAL TORT CLAIMS COLLATERAL");
(i) all books and records (including, without limitation, customer
lists, credit files, printouts and other computer output materials and
records) of such Grantor pertaining to any of the Collateral; and
(j) all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral (including, without
limitation, proceeds, collateral and supporting obligations that
constitute property of the types described in clauses (a) through (i) of
this Section 1 and this clause (j)) and, to the extent not otherwise
included, all (A) payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or otherwise
with respect to any of the foregoing Collateral, (B) tort claims,
including, without limitation, all commercial tort claims and (C) cash.
Section 2. Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment of all Obligations of each Loan Party now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the "SECURED
OBLIGATIONS").
Section 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Administrative
Agent of any of the rights hereunder shall not release any Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
Section 4. Delivery and Control of Security Collateral. (a) All
certificates or instruments representing or evidencing Security Collateral shall
be delivered to and held by or on behalf of the Administrative Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Administrative Agent. The
Administrative Agent shall have the right, at any time in its discretion and
without notice to any Grantor, to transfer to or to register in the name of the
Administrative Agent or any of its nominees any or all of the Security
Collateral, subject only to the revocable rights specified in Section 15(a). For
the better perfection of the Administrative Agent's rights in and to the
Security Collateral, each Grantor shall forthwith, upon the pledge hereunder of
any Security Collateral in which it has any right, title or interest, cause such
Security Collateral to be registered in the name of the Administrative Agent or
such of its nominees as the Administrative Agent shall direct, subject only to
the revocable rights specified in Section 15(a). In addition, the Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security
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Collateral for certificates or instruments of smaller or larger denominations.
Also, the Administrative Agent shall have the right at any time to convert
Security Collateral consisting of financial assets credited to the Securities
Accounts to Security Collateral consisting of financial assets held directly by
the Administrative Agent, and to convert Security Collateral consisting of
financial assets held directly by the Administrative Agent to Security
Collateral consisting of financial assets credited to the Securities Accounts.
(b) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes an uncertificated security,
such Grantor will cause the issuer thereof either (i) to register the
Administrative Agent as the registered owner of such security or (ii) to agree
in an authenticated record with such Grantor and the Administrative Agent that
such issuer will comply with instructions with respect to such security
originated by the Administrative Agent without further consent of such Grantor,
such authenticated record to be in form and substance satisfactory to the
Administrative Agent. With respect to any Security Collateral in which any
Grantor has any right, title or interest and that is not an uncertificated
security, upon the request of the Administrative Agent, such Grantor will notify
each such issuer of Pledged Equity that such Pledged Equity is subject to the
security interest granted hereunder.
(c) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a security entitlement in
which the Administrative Agent is not the entitlement holder, such Grantor will
cause the securities intermediary with respect to such security entitlement
either (i) to identify in its records the Administrative Agent as the
entitlement holder of such security entitlement against such securities
intermediary or (ii) to agree in an authenticated record with such Grantor and
the Administrative Agent that such securities intermediary will comply with
entitlement orders (that is, notifications communicated to such securities
intermediary directing transfer or redemption of the financial asset to which
such Grantor has a security entitlement) originated by the Administrative Agent
without further consent of such Grantor, such authenticated record to be in
substantially the form of Exhibit D hereto or otherwise in form and substance
satisfactory to the Administrative Agent (such agreement being a "SECURITIES
ACCOUNT CONTROL AGREEMENT").
(d) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a commodity contract, such
Grantor shall cause the commodity intermediary with respect to such commodity
contract to agree in an authenticated record with such Grantor and the
Administrative Agent that such commodity intermediary will apply any value
distributed on account of such commodity contract as directed by the
Administrative Agent without further consent of such Grantor, such authenticated
record to be in substantially the form of Exhibit E hereto or otherwise in form
and substance satisfactory to the Administrative Agent (such agreement being a
"COMMODITY ACCOUNT CONTROL AGREEMENT", and all such authenticated records,
together with all Securities Account Control Agreements being, collectively,
"SECURITY CONTROL AGREEMENTS").
(e) No Grantor will change or add any securities intermediary or
commodity intermediary that maintains any securities account or commodity
account in which any of the Collateral is credited or carried, or change or add
any such securities account or commodity account, in each case without first
complying with the above provisions of this Section 4 in order to perfect the
security interest granted hereunder in such Collateral.
(f) Upon the request of the Administrative Agent, such Grantor will
notify each such issuer of Pledged Debt that such Pledged Debt is subject to the
security interest granted hereunder.
Section 5. Maintaining the Account Collateral. So long as any
Advance or any other Obligation of any Loan Party under any Loan Document shall
remain unpaid, any Letter of Credit
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shall be outstanding, any Secured Hedge Agreement shall be in effect or any
Lender Party shall have any Commitment:
(a) Each Grantor will maintain all Account Collateral only with the
Administrative Agent or with banks (the "PLEDGED ACCOUNT BANKS") that have
agreed, in a record authenticated by the Grantor, the Administrative Agent
and the Pledged Account Banks, to (i) comply with instructions originated
by the Administrative Agent directing the disposition of funds in the
Account Collateral without the further consent of the Grantor and (ii)
waive or subordinate in favor of the Administrative Agent all claims of
the Pledged Account Banks (including, without limitation, claims by way of
a security interest, lien or right of setoff or right of recoupment) to
the Account Collateral, which authenticated record shall be substantially
in the form of Exhibit B hereto, or shall otherwise be in form and
substance satisfactory to the Administrative Agent (the "ACCOUNT CONTROL
AGREEMENT"); provided, however, this Section 5(a) shall not apply to Other
Deposit Accounts listed in Schedule VIII hereto.
(b) Each Grantor will (i) immediately instruct each Person obligated
at any time to make any payment to such Grantor for any reason (an
"OBLIGOR") to make such payment to an Other Deposit Account or a Deposit
Account and (ii) deposit in an Other Deposit Account or a Deposit Account
or pay to the Administrative Agent for deposit in a Deposit Account, at
the end of each Business Day, all proceeds of Collateral and all other
cash of such Grantor.
(c) Each Grantor agrees that it will not add any bank that maintains
a deposit account for such Grantor or open any new deposit account with
any then existing Pledged Account Bank unless (i) the Administrative Agent
shall have received at least 10 days' prior written notice of such
additional bank or such new deposit account and (ii) the Administrative
Agent shall have received, in the case of a bank or Pledged Account Bank
that is not the Administrative Agent, an Account Control Agreement
authenticated by such new bank and such Grantor, or a supplement to an
existing Account Control Agreement with such then existing Pledged Account
Bank, covering such new deposit account (and, upon the receipt by the
Administrative Agent of such Account Control Agreement or supplement,
Schedule VII hereto shall be automatically amended to include such Deposit
Account). Each Grantor agrees that it will not terminate any bank as a
Pledged Account Bank or terminate any Account Collateral, except that the
Grantor may terminate an Other Deposit Account if it gives the
Administrative Agent at least 10 days' prior written notice of such
termination (and, upon such termination, Schedule VIII hereto shall be
automatically amended to delete such Other Deposit Account).
(d) Upon any termination by a Grantor of any Deposit Account by such
Grantor, or any Pledged Account Bank with respect thereto, such Grantor
will immediately (i) transfer all funds and property held in such
terminated Deposit Account to another Deposit Account listed in Part II of
Schedule VII and (ii) notify all Obligors that were making payments to
such Deposit Account to make all future payments to another Deposit
Account listed in Part II of Schedule VII hereto so that the
Administrative Agent shall have a continuously perfected security interest
in such Account Collateral, funds and property. Each Grantor agrees to
terminate any or all Account Collateral and Account Control Agreements
upon request by the Administrative Agent.
(e) The Borrower may draw checks on, and otherwise withdraw amounts
only from, the Deposit Accounts and in such amounts as may be required in
the ordinary course of business (including, without limitation, to pay or
prepay Debt outstanding under the Loan Documents).
(f) The Administrative Agent shall have sole right to direct the
disposition of funds with respect to the Collateral Account and the L/C
Collateral Account; and it shall be a term and
8
condition of each of the Collateral Account and the L/C Collateral
Account, notwithstanding any term or condition to the contrary in any
other agreement relating to the Collateral Account and the L/C Collateral
Account, as the case may be, that no amount (including, without
limitation, interest on Cash Equivalents credited thereto) will be paid or
released to or for the account of, or withdrawn by or for the account of,
the Borrower or any other Person from the Collateral Account and the L/C
Collateral Account, as the case may be.
(g) The Administrative Agent may, (i) at any time and without notice
to, or consent from, the Grantor, transfer, or direct the transfer of,
funds from the Account Collateral to satisfy the Grantor's obligations
under the Loan Documents if an Event of Default shall have occurred and be
continuing and (ii) at any time after the Collateral Account has been
opened and without notice to, or consent from, the Grantor, transfer, or
direct the transfer of, funds from the Deposit Accounts to the Collateral
Account.
Section 6. Investing of Amounts in the Collateral Account and the
L/C Collateral Account. The Administrative Agent will, subject to the provisions
of Sections 5, 7 and 23, at any time after the Collateral Account or L/C
Collateral Account, as the case may be, has been opened, from time to time (a)
invest, or direct the applicable Pledged Account Bank to invest, amounts
received with respect to the Collateral Account and the L/C Collateral Account
in such Cash Equivalents credited to (A) the Collateral Account and the L/C
Collateral Account, respectively, as the Borrower may select and the
Administrative Agent may approve or (B) in the case of Cash Equivalents
consisting of Securities Collateral, a securities account in which the
Administrative Agent is the securities intermediary or a securities account
subject to a Securities Account Control Agreement, and (b) invest interest paid
on the Cash Equivalents referred to in clause (a) above, and reinvest other
proceeds of any such Cash Equivalents that may mature or be sold, in each case
in such Cash Equivalents credited in the same manner. Interest and proceeds that
are not invested or reinvested in Cash Equivalents as provided above shall be
deposited and held in the relevant Collateral Account or L/C Collateral Account.
In addition, the Administrative Agent shall have the right at any time to
exchange, or direct the applicable Pledged Account Bank to exchange, such Cash
Equivalents for similar Cash Equivalents of smaller or larger determinations, or
for other Cash Equivalents, credited to the Collateral Account or the L/C
Collateral Account, as the case may be.
Section 7. Release of Amounts. So long as no Default under Section
6.01(a) or (f) of the Credit Agreement or Event of Default shall have occurred
and be continuing, the Administrative Agent will pay and release, or direct the
applicable Pledged Account Bank to pay and release, to the Borrower or at its
order or, at the request of the Borrower, to the Administrative Agent to be
applied to the Obligations of the Borrower under the Loan Documents, in the case
of the L/C Collateral Account, such amount, if any, as is then on deposit in the
L/C Collateral Account to the extent permitted to be released under the terms of
the Credit Agreement and, in the case of the Collateral Account, the amount, if
any, by which the aggregate principal amount of the Cash Equivalents credited to
the Collateral Account exceeds all amounts then due and payable under the Loan
Documents together with all accrued and unpaid interest and fees under the
Credit Agreement.
Section 8. Maintaining Electronic Chattel Paper, Transferable
Records and Letter-of-Credit Rights and Giving Notice of Commercial Tort Claims.
So long as any Advance or any other Obligation of any Loan Party under any Loan
Document shall remain unpaid, any Letter of Credit shall be outstanding, any
Secured Hedge Agreement shall be in effect or any Lender Party shall have any
Commitment:
(a) Each Grantor will maintain all (i) electronic chattel paper so
that the Administrative Agent has control of the electronic chattel paper
in the manner specified in
9
Section 9-105 of the UCC and (ii) all transferable records so that the
Administrative Agent has control of the transferable records in the manner
specified in Section 16 of the Uniform Electronic Transactions Act, as in
effect in the jurisdiction governing such transferable record ("UETA" );
(b) Each Grantor will maintain all letter-of-credit rights assigned
to the Administrative Agent, including, without limitation, all
letter-of-credit rights associated with each letter of credit that is
designated on Schedule X as constituting Collateral (each, a "COLLATERAL
L/C"), if any, so that the Administrative Agent has control of the
letter-of-credit rights in the manner specified in Section 9-107 of the
UCC; and
(c) Each Grantor will immediately give notice to the Administrative
Agent of any commercial tort claim that may arise in the future and will
immediately execute or otherwise authenticate a supplement to this
Agreement, and otherwise take all necessary action, to subject such
commercial tort claim to the first priority security interest created
under this Agreement.
Section 9. Representations and Warranties. Each Grantor represents
and warrants as follows:
(a) Such Grantor's exact legal name, as defined in Section 9-503(a)
of the UCC, is correctly set forth in Schedule I hereto. Such Grantor has
only the trade names, domain names and marks listed on Schedule VI hereto.
Such Grantor is located (within the meaning of Section 9-307 of the UCC)
and has its chief executive office and the office in which it maintains
the original copies of each Assigned Agreement and Related Contract to
which such Grantor is a party and all originals of all chattel paper that
evidence Receivables of such Grantor, in the state or jurisdiction set
forth in Schedule I hereto. The information set forth in Schedule I hereto
with respect to such Grantor is true and accurate in all respects. Such
Grantor has not previously changed its name, location, chief executive
office, place where it maintains its agreements, type of organization,
jurisdiction of organization or organizational identification number from
those set forth in Schedule I hereto except as disclosed in Schedule V
hereto.
(b) All of the Equipment and Inventory of such Grantor are located
at the places specified therefor in Schedule IV hereto, as such Schedule
IV may be amended from time to time pursuant to Section 11(a). Within the
3 years preceding the execution of this Agreement, such Grantor has not
previously changed the location of its Equipment and Inventory except as
set forth in Schedule V hereto. All Security Collateral consisting of
certificated securities and instruments have been delivered to the
Administrative Agent. Original copies of each Assigned Agreement and all
originals of all chattel paper that evidence Receivables have been
delivered to the Administrative Agent, in each case to the extent that
delivery thereof to the Administrative Agent is required under the Credit
Agreement. None of the Receivables or Agreement Collateral is evidenced by
a promissory note or other instrument that has not been delivered to the
Administrative Agent.
(c) Such Grantor is the legal and beneficial owner of the Collateral
of such Grantor free and clear of any Lien, claim, option or right of
others, except for the security interest created under this Agreement or
permitted under the Credit Agreement. No effective financing statement or
other instrument similar in effect covering all or any part of such
Collateral or listing such Grantor or any trade name of such Grantor as
debtor is on file in any recording office, except such as may have been
filed in favor of the Administrative Agent relating to the Loan Documents
or as otherwise permitted under the Credit Agreement.
10
(d) Such Grantor has exclusive possession and control of the
Equipment and Inventory other than Inventory stored at any leased premises
or warehouse for which a landlord's or warehouseman's agreement, in form
and substance satisfactory to the Administrative Agent, is in effect and
which leased premises or warehouse is so indicated by an asterisk on
Schedule IV hereto, as such Schedule IV may be amended from time to time
pursuant to Section 11(a). In the case of Equipment and Inventory located
on leased premises or in warehouses, no lessor or warehouseman of any
premises or warehouse upon or in which such Equipment or Inventory is
located has (i) issued any warehouse receipt or other receipt in the
nature of a warehouse receipt in respect of any Equipment or Inventory,
(ii) issued any document for any of such Grantor's Equipment or Inventory,
(iii) received notification of any secured party's interest (other than
the security interest granted hereunder) in such Grantor's Equipment or
Inventory or (iv) any Lien, claim or charge (based on contract, statute or
otherwise) on such Equipment and Inventory.
(e) The Pledged Equity pledged by such Grantor hereunder has been
duly authorized and validly issued and is fully paid and non-assessable.
With respect to the Pledged Equity that is an uncertificated security,
such Grantor has caused the issuer thereof either (i) to register the
Administrative Agent as the registered owner of such security or (ii) to
agree in an authenticated record with such Grantor and the Administrative
Agent that such issuer will comply with instructions with respect to such
security originated by the Administrative Agent without further consent of
such Grantor. If such Grantor is an issuer of Pledged Equity, such Grantor
confirms that it has received notice of such security interest. The
Pledged Debt pledged by such Grantor hereunder has been duly authorized,
authenticated or issued and delivered, is the legal, valid and binding
obligation of the issuers thereof, is evidenced by one or more promissory
notes (which notes have been delivered to the Administrative Agent) and is
not in default.
(f) The Initial Pledged Equity pledged by such Grantor constitutes
the percentage of the issued and outstanding Equity Interests of the
issuers thereof indicated on Schedule II hereto. The Initial Pledged Debt
constitutes all of the outstanding indebtedness owed to such Grantor by
the issuers thereof and is outstanding in the principal amount indicated
on Schedule II hereto.
(g) All of the investment property owned by such Grantor is listed
on Schedule II hereto.
(h) The Assigned Agreements to which such Grantor is a party, true
and complete copies of which (other than the Hedge Agreements) have been
furnished to each Secured Party, have been duly authorized, executed and
delivered by such Grantor and, to such Grantor's knowledge, by all other
parties thereto, have not been amended, amended and restated, supplemented
or otherwise modified, are in full force and effect and are binding upon
and enforceable against such Grantor and, to such Grantor's knowledge,
against all other parties thereto in accordance with their terms. There
exists no default under any Assigned Agreement to which such Grantor is a
party by such Grantor or, to such Grantor's knowledge, by any other party
thereto. Each party to the Assigned Agreements listed on Schedule III
hereto to which such Grantor is a party other than the Grantors has
executed and delivered to such Grantor a consent, in substantially the
form of Exhibit C hereto or otherwise in form and substance satisfactory
to the Administrative Agent, to the assignment of the Agreement Collateral
to the Administrative Agent pursuant to this Agreement.
(i) Such Grantor has no deposit accounts, other than the Account
Collateral listed on Schedule VII hereto, as such Schedule VII may be
amended from time to time pursuant to Section 5(d), and legal, binding and
enforceable Account Control Agreements are in effect for each deposit
account that constitutes Account Collateral (other than Account Collateral
consisting
11
of deposit accounts maintained with the Administrative Agent), except to
the extent such Account Control Agreements are not required by Section
5(a). Such Grantor has instructed all existing Obligors to make all
payments to either a Deposit Account or an Other Deposit Account.
(j) Such Grantor is not a beneficiary or assignee under any letter
of credit, other than the letters of credit described in Schedule X
hereto, as such Schedule X may be amended from time to time, and legal,
binding and enforceable Consents to Assignment of Letter of Credit Rights,
in the form of the Consent to Assignment of Letter of Credit Rights
attached hereto as Exhibit H, are in effect for each Collateral L/C. Such
Grantor has instructed all issuers and nominated persons under any
Collateral L/C in which the Grantor is the beneficiary or assignee to make
all payments to either a Deposit Account or an Other Deposit Account.
(k) All filings and other actions (including, without limitation,
(A) actions necessary to obtain control of Collateral as provided in
Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and Section 16 of UETA
and (B) actions necessary to perfect the Administrative Agent's security
interest with respect to Collateral evidenced by a certificate of
ownership) necessary to perfect the security interest in the Collateral of
such Grantor created under this Agreement have been duly made or taken and
are in full force and effect, and this Agreement creates in favor of the
Administrative Agent for the benefit of the Secured Parties a valid and,
together with such filings and other actions, perfected first priority
security interest in the Collateral of such Grantor, securing the payment
of the Secured Obligations.
(l) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the grant by such Grantor of the
security interest granted hereunder or for the execution, delivery or
performance of this Agreement by such Grantor, (ii) the perfection or
maintenance of the security interest created hereunder (including the
first priority nature of such security interest), except for the filing of
financing and continuation statements under the UCC, the recordation of
the Intellectual Property Security Agreements referred to in Section 14(f)
with the U.S. Patent and Trademark Office and the U.S. Copyright Office
and the actions described in Section 4 with respect to Security
Collateral, or (iii) the exercise by the Administrative Agent of its
voting or other rights provided for in this Agreement or the remedies in
respect of the Collateral pursuant to this Agreement, except as may be
required in connection with the disposition of any portion of the Security
Collateral by laws affecting the offering and sale of securities
generally.
(m) The Inventory that has been produced or distributed by such
Grantor has been produced in compliance with all requirements of
applicable law, including, without limitation, the Fair Labor Standards
Act.
(n) As to itself and its Intellectual Property Collateral:
(i) The operation of such Grantor's business as currently
conducted or as contemplated to be conducted and the use of the
Intellectual Property Collateral in connection therewith, to such
Grantor's knowledge, do not conflict with, infringe, misappropriate,
dilute, misuse or otherwise violate the intellectual property rights
of any third party.
(ii) Such Grantor is the exclusive owner of all right, title
and interest in and to the Intellectual Property Collateral, and is
entitled to use all Intellectual Property Collateral subject only to
the terms of the IP Agreements.
12
(iii) The Intellectual Property Collateral set forth on
Schedule VI hereto includes all of the patents, patent applications,
domain names, trademark registrations and applications, copyright
registrations and applications and IP Agreements owned by such
Grantor.
(iv) The Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable in whole or part, and
to the best of such Grantor's knowledge, is valid and enforceable.
Such Grantor is not aware of any uses of any item of Intellectual
Property Collateral that could be expected to lead to such item
becoming invalid or unenforceable.
(v) Such Grantor has made or performed all filings,
recordings and other acts and has paid all required fees and taxes
to maintain and protect its interest in each and every item of
Intellectual Property Collateral in full force and effect throughout
the world, and to protect and maintain its interest therein
including, without limitation, recordations of any of its interests
in the Patents and Trademarks with the U.S. Patent and Trademark
Office and in corresponding national and international patent
offices, and recordation of any of its interests in the Copyrights
with the U.S. Copyright Office and in corresponding national and
international copyright offices. Such Grantor has used proper
statutory notice in connection with its use of each patent,
trademark and copyright in the Intellectual Property Collateral.
(vi) No claim, action, suit, investigation, litigation or
proceeding has been asserted or is pending or threatened in writing
against such Grantor (i) based upon or challenging or seeking to
deny or restrict the Grantor's rights in or use of any of the
Intellectual Property Collateral, (ii) alleging that the Grantor's
rights in or use of the Intellectual Property Collateral or that any
services provided by, processes used by, or products manufactured or
sold by, such Grantor infringe, misappropriate, dilute, misuse or
otherwise violate any patent, trademark, copyright or any other
proprietary right of any third party, or (iii) alleging that the
Intellectual Property Collateral is being licensed or sublicensed in
violation or contravention of the terms of any license or other
agreement. To such Grantor's knowledge, no Person is engaging in any
activity that infringes, misappropriates, dilutes, misuses or
otherwise violates the Intellectual Property Collateral or the
Grantor's rights in or use thereof. Except as set forth on Schedule
VI hereto, such Grantor has not granted any license, release,
covenant not to xxx, non-assertion assurance, or other right to any
Person with respect to any part of the Intellectual Property
Collateral. The consummation of the transactions contemplated by the
Transaction Documents will not result in the termination or
impairment of any of the Intellectual Property Collateral.
(vii) With respect to each IP Agreement: (A) such IP Agreement
is valid and binding and in full force and effect and represents the
entire agreement between the respective parties thereto with respect
to the subject matter thereof; (B) such IP Agreement will not cease
to be valid and binding and in full force and effect on terms
identical to those currently in effect as a result of the rights and
interest granted herein, nor will the grant of such rights and
interest constitute a breach or default under such IP Agreement or
otherwise give any party thereto a right to terminate such IP
Agreement; (C) such Grantor has not received any notice of
termination or cancellation under such IP Agreement; (D) such
Grantor has not received any notice of a breach or default under
such IP Agreement, which breach or default has not been cured; (E)
such Grantor has not granted to any other third party any rights,
adverse or otherwise, under such IP
13
Agreement; and (F) neither such Grantor nor any other party to such
IP Agreement is in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of
time or both, would constitute such a breach or default or permit
termination, modification or acceleration under such IP Agreement.
(viii) To the best of such Grantor's knowledge, (A) none of
the Trade Secrets of such Grantor has been used, divulged, disclosed
or appropriated to the detriment of such Grantor for the benefit of
any other Person other than such Grantor; (B) no employee,
independent contractor or agent of such Grantor has misappropriated
any trade secrets of any other Person in the course of the
performance of his or her duties as an employee, independent
contractor or agent of such Grantor; and (C) no employee,
independent contractor or agent of such Grantor is in default or
breach of any term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar agreement
or contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor's Intellectual Property
Collateral.
(ix) No Grantor or Intellectual Property Collateral is
subject to any outstanding consent, settlement, decree, order,
injunction, judgment or ruling restricting the use of any
Intellectual Property Collateral or that would impair the validity
or enforceability of such Intellectual Property Collateral.
(o) The Grantor has no commercial tort claims (as defined in Section
9-102(13) of the UCC) other than those listed in Schedule IX hereto.
Section 10. Further Assurances. (a) Each Grantor agrees that from
time to time, at the expense of such Grantor, such Grantor will promptly execute
and deliver, or otherwise authenticate, all further instruments and documents,
and take all further action that may be necessary or desirable, or that the
Administrative Agent may request, in order to perfect and protect any pledge or
security interest granted or purported to be granted by such Grantor hereunder
or to enable the Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral of such Grantor. Without
limiting the generality of the foregoing, each Grantor will promptly with
respect to Collateral of such Grantor: (i) xxxx conspicuously each document
included in Inventory, each chattel paper included in Receivables, each Related
Contract, each Assigned Agreement and, at the request of the Administrative
Agent, each of its records pertaining to such Collateral with a legend, in form
and substance satisfactory to the Administrative Agent, indicating that such
document, chattel paper, Related Contract, Assigned Agreement or Collateral is
subject to the security interest granted hereby; (ii) if any such Collateral
shall be evidenced by a promissory note or other instrument or chattel paper,
deliver and pledge to the Administrative Agent hereunder such note or instrument
or chattel paper duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the
Administrative Agent; (iii) execute or authenticate and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Administrative Agent may
request, in order to perfect and preserve the security interest granted or
purported to be granted by such Grantor hereunder; (iv) deliver and pledge to
the Administrative Agent for benefit of the Secured Parties certificates
representing Security Collateral that constitutes certificated securities,
accompanied by undated stock or bond powers executed in blank; (v) take all
action necessary to ensure that the Administrative Agent has control of
Collateral consisting of deposit accounts, electronic chattel paper, investment
property, letter-of-credit rights and transferable records as provided in
Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and in Section 16 of UETA;
(vi) at the request of the Administrative Agent, take all action to ensure that
the Administrative Agent's security interest is noted on any certificate of
ownership related to any Collateral evidenced by a certificate of ownership;
(vii) at the request of the Administrative Agent, cause the Administrative Agent
to be the beneficiary under
14
Collateral L/Cs, with the exclusive right to make all draws under the Collateral
L/Cs, and with all rights of a transferee under Section 5-114(e) of the UCC; and
(viii) deliver to the Administrative Agent evidence that all other action that
the Administrative Agent may deem reasonably necessary or desirable in order to
perfect and protect the security interest created by such Grantor under this
Agreement has been taken. From time to time upon request by the Administrative
Agent, each Grantor will, at such Grantor's expense, cause to be delivered to
the Administrative Agent, for the benefit of the Secured Parties, an opinion of
counsel, from outside counsel reasonably satisfactory to the Administrative
Agent, as to such matters relating to the transactions contemplated hereby as
the Administrative Agent may reasonably request.
(b) Each Grantor hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more financing statements indicating that
such financing statements cover all assets or all personal property (or words of
similar effect) of such Grantor, in each case without the signature of such
Grantor, and regardless of whether any particular asset described in such
financing statements falls within the scope of the UCC or the granting clause of
this Agreement. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. Each Grantor
ratifies its authorization for the Administrative Agent to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.
(c) Each Grantor will furnish to the Administrative Agent from time
to time statements and schedules further identifying and describing the
Collateral of such Grantor and such other reports in connection with such
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.
(d) Within two Business Days after the request of the Administrative
Agent, the Borrower shall open the Collateral Account and the L/C Collateral
Account with Deutsche Bank Trust Company Americas, or such other financial
institution as the Administrative Agent may direct.
Section 11. As to Equipment and Inventory. (a) Each Grantor will
keep the Equipment and Inventory of such Grantor (other than Inventory sold in
the ordinary course of business) at the places therefor specified in Section
9(b) or at such other locations designated by the Grantor by written notice to
the Administrative Agent within 10 days of the placement of any Equipment and
Inventory at such other locations. Upon the giving of such notice, Schedule IV
shall be automatically amended to add any new locations specified in the notice.
(b) Each Grantor will cause the Equipment of such Grantor to be
maintained and preserved in the same condition, repair and working order as when
new, ordinary wear and tear excepted, and in accordance with any manufacturer's
manual, and will forthwith, or in the case of any loss or damage to any of such
Equipment as soon as practicable after the occurrence thereof, make or cause to
be made all repairs, replacements and other improvements in connection therewith
that are necessary or desirable to such end. Each Grantor will promptly furnish
to the Administrative Agent a statement respecting any loss or damage to any of
the Equipment or Inventory of such Grantor.
(c) Each Grantor will pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including, without limitation, claims for labor, materials and supplies)
against, the Equipment and Inventory of such Grantor, except to the extent
payment thereof is not required by Section 5.01(b) of the Credit Agreement. In
producing its Inventory, each Grantor will comply with all requirements of
applicable law, including, without limitation, the Fair Labor Standards Act.
15
Section 12. Insurance. (a) Each Grantor will, at its own expense,
maintain insurance with respect to the Equipment and Inventory of such Grantor
in such amounts, against such risks, in such form and with such insurers, as
shall be satisfactory to the Administrative Agent from time to time. Each policy
of each Grantor for liability insurance shall provide for all losses to be paid
on behalf of the Administrative Agent and such Grantor as their interests may
appear, and each policy for property damage insurance shall provide for all
losses (except for losses of less than $500,000 per occurrence) to be paid
directly to the Administrative Agent. Each such policy shall in addition (i)
name such Grantor and the Administrative Agent as insured parties thereunder
(without any representation or warranty by or obligation upon the Administrative
Agent) as their interests may appear, (ii) contain the agreement by the insurer
that any loss thereunder shall be payable to the Administrative Agent
notwithstanding any action, inaction or breach of representation or warranty by
such Grantor, (iii) provide that there shall be no recourse against the
Administrative Agent for payment of premiums or other amounts with respect
thereto and (iv) provide that at least 10 days' prior written notice of
cancellation or of lapse shall be given to the Administrative Agent by the
insurer. Each Grantor will, at the request of the Administrative Agent, duly
execute and deliver instruments of assignment of such insurance policies to
comply with the requirements of Section 11 and cause the insurers to acknowledge
notice of such assignment.
(b) Reimbursement under any liability insurance maintained by any
Grantor pursuant to this Section 12 may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any loss involving
damage to Equipment or Inventory when subsection (c) of this Section 12 is not
applicable, the applicable Grantor will make or cause to be made the necessary
repairs to or replacements of such Equipment or Inventory, and any proceeds of
insurance properly received by or released to such Grantor shall be used by such
Grantor, except as otherwise required hereunder or by the Credit Agreement, to
pay or as reimbursement for the costs of such repairs or replacements.
(c) So long as no Event of Default shall have occurred and be
continuing, all insurance payments received by the Administrative Agent in
connection with any loss, damage or destruction of any Inventory or Equipment
will be released by the Administrative Agent to the applicable Grantor for the
repair, replacement or restoration thereof, subject to such terms and conditions
with respect to the release thereof as the Administrative Agent may reasonably
require. To the extent that (i) the amount of any such insurance payments
exceeds the cost of any such repair, replacement or restoration, or (ii) such
insurance payments are not otherwise required by the applicable Grantor to
complete any such repair, replacement or restoration required hereunder, the
Administrative Agent will not be required to release the amount thereof to such
Grantor and may hold or continue to hold such amount in the Collateral Account
as additional security for the Secured Obligations of such Grantor (except that
the Administrative Agent will direct the applicable Pledged Account Bank to
release to such Grantor any such amount if and to the extent that any prepayment
of Obligations is required under the Credit Agreement in connection with the
receipt of such amount and such prepayment has been made). Upon the occurrence
and during the continuance of any Event of Default or the actual or constructive
total loss (in excess of $500,000 per occurrence) of any Equipment or Inventory,
all insurance payments in respect of such Equipment or Inventory shall be paid
to the Administrative Agent and shall, in the Administrative Agent's sole
discretion, (i) be released to the applicable Grantor to be applied as set forth
in the first sentence of this subsection (c) or (ii) be held as additional
Collateral hereunder or applied as specified in Section 23(b).
Section 13. Post-Closing Changes; Bailees; Collections on Assigned
Agreements, Receivables and Related Contracts. (a) No Grantor will change its
name, type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 9(a) of this
Agreement without first giving at least 30 days' prior written notice to the
Administrative Agent and taking all action required by the Administrative Agent
for the purpose of perfecting or protecting the security interest granted by
this Agreement. No Grantor will change the
16
location of the Equipment and Inventory or the place where it keeps the
originals of the Assigned Agreements and Related Contracts to which such Grantor
is a party and all originals of all chattel paper that evidence Receivables of
such Grantor from the locations therefor specified in Sections 9(a) and 9(b)
without first giving the Administrative Agent 30 days' prior written notice of
such change. No Grantor will become bound by a security agreement authenticated
by another Person (determined as provided in Section 9-203(d) of the UCC)
without giving the Administrative Agent 30 days' prior written notice thereof
and taking all action required by the Administrative Agent to ensure that the
perfection and first priority nature of the Administrative Agent's security
interest in the Collateral will be maintained. Each Grantor will hold and
preserve its records relating to the Collateral, including, without limitation,
the Assigned Agreements and Related Contracts, and will permit representatives
of the Administrative Agent at any time during normal business hours to inspect
and make abstracts from such records and other documents. If the Grantor does
not have an organizational identification number and later obtains one, it will
forthwith notify the Administrative Agent of such organizational identification
number.
(b) If any Collateral of any Grantor is at any time in the
possession or control of a warehouseman, bailee or agent, or if the
Administrative Agent so requests such Grantor will (i) notify such warehouseman,
bailee or agent of the security interest created hereunder, (ii) instruct such
warehouseman, bailee or agent to hold all such Collateral solely for the
Administrative Agent's account subject only to the Administrative Agent's
instructions (which shall permit such Collateral to be removed by such Grantor
in the ordinary course of business until the Administrative Agent notifies such
warehouseman, bailee or agent that an Event of Default has occurred and is
continuing), (iii) use commercially reasonable efforts, to cause such
warehouseman, bailee or agent to authenticate a record acknowledging that it
holds possession of such Collateral for the Administrative Agent's benefit and
shall act solely on the instructions of the Administrative Agent without the
further consent of the Grantor or any other Person, and (iv) make such
authenticated record available to the Administrative Agent.
(c) Except as otherwise provided in this subsection (c), each
Grantor will continue to collect, at its own expense, all amounts due or to
become due such Grantor under the Assigned Agreements, Receivables and Related
Contracts. In connection with such collections, such Grantor may take (and, at
the Administrative Agent's direction, will take) such action as such Grantor or
the Administrative Agent may deem necessary or advisable to enforce collection
of the Assigned Agreements, Receivables and Related Contracts; provided,
however, that the Administrative Agent shall have the right at any time, upon
written notice to such Grantor of its intention to do so, to notify the Obligors
under any Assigned Agreements, Receivables and Related Contracts of the
assignment of such Assigned Agreements, Receivables and Related Contracts to the
Administrative Agent and to direct such Obligors to make payment of all amounts
due or to become due to such Grantor thereunder directly to the Administrative
Agent and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Assigned Agreements, Receivables and Related Contracts,
to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done, and to otherwise
exercise all rights with respect to such Assigned Agreements, Receivables and
Related Contracts, including, without limitation, those set forth set forth in
Section 9-607 of the UCC. After receipt by any Grantor of the notice from the
Administrative Agent referred to in the proviso to the preceding sentence, (i)
all amounts and proceeds (including, without limitation, instruments) received
by such Grantor in respect of the Assigned Agreements, Receivables and Related
Contracts of such Grantor shall be received in trust for the benefit of the
Administrative Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith, but in no event prior to the date on which the
Collateral Account has been opened, paid over to the Administrative Agent in the
same form as so received (with any necessary indorsement) to be deposited in the
Collateral Account and either (A) released to such Grantor on the terms set
forth in Section 7 so long as no Event of Default shall have occurred and be
continuing or (B) if any Event of Default shall have occurred and be continuing,
applied as provided in Section 23(b) and (ii) such Grantor will not adjust,
settle or compromise the amount or
17
payment of any Receivable or amount due on any Assigned Agreement or Related
Contract, release wholly or partly any Obligor thereof, or allow any credit or
discount thereon. No Grantor will permit or consent to the subordination of its
right to payment under any of the Assigned Agreements, Receivables and Related
Contracts to any other indebtedness or obligations of the Obligor thereof.
Section 14. As to Intellectual Property Collateral. (a) With respect
to each item of its Intellectual Property Collateral, each Grantor agrees to
take, at its expense, all necessary steps, including, without limitation, in the
U.S. Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authority, to (i) maintain the validity and enforceability of such
Intellectual Property Collateral and maintain such Intellectual Property
Collateral in full force and effect, and (ii) pursue the registration and
maintenance of each patent, trademark, or copyright registration or application,
now or hereafter included in such Intellectual Property Collateral of such
Grantor, including, without limitation, the payment of required fees and taxes,
the filing of responses to office actions issued by the U.S. Patent and
Trademark Office, the U.S. Copyright Office or other governmental authorities,
the filing of applications for renewal or extension, the filing of affidavits
under Sections 8 and 15 of the U.S. Trademark Act, the filing of divisional,
continuation, continuation-in-part, reissue and renewal applications or
extensions, the payment of maintenance fees and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. No Grantor shall, without the written consent of
the Administrative Agent, discontinue use of or otherwise abandon any
Intellectual Property Collateral, or abandon any right to file an application
for patent, trademark, or copyright, unless such Grantor shall have previously
determined that such use or the pursuit or maintenance of such Intellectual
Property Collateral is no longer desirable in the conduct of such Grantor's
business and that the loss thereof would not be reasonably likely to have a
Material Adverse Effect, in which case, such Grantor will give prompt notice of
any such abandonment to the Administrative Agent.
(b) Each Grantor agrees promptly to notify the Administrative Agent
if such Grantor becomes aware (i) that any item of the Intellectual Property
Collateral may have become abandoned, placed in the public domain, invalid or
unenforceable, or of any adverse determination or development regarding such
Grantor's ownership of any of the Intellectual Property Collateral or its right
to register the same or to keep and maintain and enforce the same, or (ii) of
any adverse determination or the institution of any proceeding (including,
without limitation, the institution of any proceeding in the U.S. Patent and
Trademark Office or any court) regarding any item of the Intellectual Property
Collateral.
(c) In the event that any Grantor becomes aware that any item of the
Intellectual Property Collateral is being infringed or misappropriated by a
third party, such Grantor shall promptly notify the Administrative Agent and
shall take such actions, at its expense, as such Grantor or the Administrative
Agent deems reasonable and appropriate under the circumstances to protect or
enforce such Intellectual Property Collateral, including, without limitation,
suing for infringement or misappropriation and for an injunction against such
infringement or misappropriation.
(d) Each Grantor shall use proper statutory notice in connection
with its use of each item of its Intellectual Property Collateral. No Grantor
shall do or permit any act or knowingly omit to do any act whereby any of its
Intellectual Property Collateral may lapse or become invalid or unenforceable or
placed in the public domain.
(e) Each Grantor shall take all steps which it or the Administrative
Agent deems reasonable and appropriate under the circumstances to preserve and
protect each item of its Intellectual Property Collateral, including, without
limitation, maintaining the quality of any and all products or services used or
provided in connection with any of the Trademarks, consistent with the quality
of the
18
products and services as of the date hereof, and taking all steps necessary to
ensure that all licensed users of any of the Trademarks use such consistent
standards of quality.
(f) With respect to its Intellectual Property Collateral, each
Grantor agrees to execute or otherwise authenticate an agreement, in
substantially the form set forth in Exhibit F hereto or otherwise in form and
substance satisfactory to the Administrative Agent (an "INTELLECTUAL PROPERTY
SECURITY AGREEMENT"), for recording the security interest granted hereunder to
the Administrative Agent in such Intellectual Property Collateral with the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authorities necessary to perfect the security interest hereunder in
such Intellectual Property Collateral.
(g) Each Grantor agrees that should it obtain an ownership interest
in any item of the type set forth in Section 1(g) that is not on the date hereof
a part of the Intellectual Property Collateral ("AFTER-ACQUIRED INTELLECTUAL
PROPERTY") (i) the provisions of this Agreement shall automatically apply
thereto, and (ii) any such After-Acquired Intellectual Property and, in the case
of trademarks, the goodwill symbolized thereby, shall automatically become part
of the Intellectual Property Collateral subject to the terms and conditions of
this Agreement with respect thereto. Each Grantor shall give prompt written
notice to the Administrative Agent identifying the After-Acquired Intellectual
Property, and such Grantor shall execute and deliver to the Administrative Agent
with such written notice, or otherwise authenticate, an agreement substantially
in the form of Exhibit G hereto or otherwise in form and substance satisfactory
to the Administrative Agent (an "IP SECURITY AGREEMENT SUPPLEMENT") covering
such After-Acquired Intellectual Property which IP Security Agreement Supplement
shall be recorded with the U.S. Patent and Trademark Office, the U.S. Copyright
Office and any other governmental authorities necessary to perfect the security
interest hereunder in such After-Acquired Intellectual Property.
Section 15. Voting Rights; Dividends; Etc. (a) So long as no Default
under Section 6.01(a) or (f) of the Credit Agreement or Event of Default shall
have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Security Collateral of such
Grantor or any part thereof for any purpose other than originate
Entitlement Orders (as defined in any Securities Account Control
Agreement) with respect to the Securities Account or the Commodity
Account; provided however, that such Grantor will not exercise or refrain
from exercising any such right if such action would have a material
adverse effect on the value of the Security Collateral or any part
thereof.
(ii) Each Grantor shall be entitled to receive and retain any and
all dividends, interest and other distributions paid in respect of the
Security Collateral of such Grantor if and to the extent that the payment
thereof is not otherwise prohibited by the terms of the Loan Documents;
provided, however, that any and all
(A) dividends, interest and other distributions paid or
payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect
of, or in exchange for, any Security Collateral,
(B) dividends and other distributions paid or payable in cash
in respect of any Security Collateral in connection with a partial
or total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Security
Collateral
19
shall be, and shall be forthwith delivered to the Administrative Agent to
hold as, Security Collateral and shall, if received by such Grantor, be
received in trust for the benefit of the Administrative Agent, be
segregated from the other property or funds of such Grantor and be
forthwith delivered to the Administrative Agent as Security Collateral in
the same form as so received (with any necessary indorsement).
(iii) The Administrative Agent will execute and deliver (or cause to
be executed and delivered) to each Grantor all such proxies and other
instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the toccurrence and during the continuance of a Default
under Section 6.01(a) or (f) of the Credit Agreement or an Event of Default:
(i) All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise
be entitled to exercise pursuant to Section 15(a)(i) shall, upon notice to
such Grantor by the Administrative Agent, cease and (y) to receive the
dividends, interest and other distributions that it would otherwise be
authorized to receive and retain pursuant to Section 15(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in
the Administrative Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual
rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.
(ii) All dividends, interest and other distributions that are
received by any Grantor contrary to the provisions of paragraph (i) of
this Section 15(b) shall be received in trust for the benefit of the
Administrative Agent, shall be segregated from other funds of such Grantor
and shall be forthwith paid over to the Administrative Agent as Security
Collateral in the same form as so received (with any necessary
indorsement).
(iii) The Administrative Agent shall be authorized to send to each
Securities Intermediary or Commodity Intermediary as defined in and under
any Security Control Agreement a Notice of Exclusive Control as defined in
and under such Security Control Agreement.
Section 16. As to the Assigned Agreements. (a) Each Grantor will at
its expense:
(i) perform and observe all terms and provisions of the Assigned
Agreements to be performed or observed by it, maintain the Assigned
Agreements to which it is a party in full force and effect, enforce the
Assigned Agreements to which it is a party in accordance with the terms
thereof and take all such action to such end as may be requested from time
to time by the Administrative Agent; and
(ii) furnish to the Administrative Agent promptly upon receipt
thereof copies of all notices, requests and other documents received by
such Grantor under or pursuant to the Assigned Agreements to which it is a
party, and from time to time (A) furnish to the Administrative Agent such
information and reports regarding the Assigned Agreements and such other
Collateral of such Grantor as the Administrative Agent may reasonably
request and (B) upon request of the Administrative Agent make to each
other party to any Assigned Agreement to which it is a party such demands
and requests for information and reports or for action as such Grantor is
entitled to make thereunder.
20
(b) Each Grantor agrees that it will not, except to the extent
otherwise permitted under the Credit Agreement:
(i) cancel or terminate any Assigned Agreement to which it is a
party or consent to or accept any cancellation or termination thereof;
(ii) amend, amend and restate, supplement or otherwise modify any
such Assigned Agreement or give any consent, waiver or approval
thereunder;
(iii) waive any default under or breach of any such Assigned
Agreement; or
(iv) take any other action in connection with any such Assigned
Agreement that would impair the value of the interests or rights of such
Grantor thereunder or that would impair the interests or rights of any
Secured Party.
(c) Each Grantor hereby consents on its behalf and on behalf of its
Subsidiaries to the assignment and pledge to the Administrative Agent for
benefit of the Secured Parties of each Assigned Agreement to which it is a party
by any other Grantor hereunder.
Section 17. Payments Under the Assigned Agreements. (a) Each Grantor
agrees, and has effectively so instructed each other party to each Assigned
Agreement to which it is a party, that all payments due or to become due under
or in connection with such Assigned Agreement will be made directly to a Deposit
Account.
(b) All moneys received or collected pursuant to subsection (a)
above shall be (i) released to the applicable Grantor on the terms set forth in
Section 7 so long as no Default under Section 6.01(a) or (f) of the Credit
Agreement or Event of Default shall have occurred and be continuing or (ii) if
any Default under Section 6.01(a) or (f) of the Credit Agreement or Event of
Default shall have occurred and be continuing, applied as provided in Section
23(b).
Section 18. As to Letter-of-Credit Rights. (a) Each Grantor, by
granting a security interest in its Receivables consisting of letter-of-credit
rights to the Administrative Agent, intends to (and hereby does) assign to the
Administrative Agent its rights (including its contingent rights) to the
proceeds of all Related Contracts consisting of letters of credit of which it is
or hereafter becomes a beneficiary or assignee. Each Grantor will promptly cause
the issuer of each Collateral L/C and each nominated person (if any) with
respect thereto to consent to such assignment of the proceeds thereof in
substantially the form of the Consent to Assignment of Letter of Credit Rights
attached hereto as Exhibit H or otherwise in form and substance satisfactory to
the Administrative Agent and deliver written evidence of such consent to the
Administrative Agent.
(b) Upon the occurrence of a Default under Section 6.01(a) or (f) of
the Credit Agreement or Event of Default, each Grantor will, promptly upon
request by the Administrative Agent, (i) notify (and such Grantor hereby
authorizes the Administrative Agent to notify) the issuer and each nominated
person with respect to each of the Related Contracts consisting of Collateral
L/Cs and any payments due or to become due in respect thereof are to be made
directly to the Administrative Agent or its designee and (ii) arrange for the
Administrative Agent to become the transferee beneficiary of the Collateral
L/Cs.
Section 19. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
21
Collateral, permitted under the terms of the Credit Agreement, or (ii) create or
suffer to exist any Lien upon or with respect to any of the Collateral of such
Grantor except for the pledge, assignment and security interest created under
this Agreement and Permitted Liens.
(b) In the case where a subsidiary of a Loan Party is the issuer of
Pledged Equity each Grantor agrees that it will (i) cause each issuer of the
Pledged Equity pledged by such Grantor not to issue any Equity Interests or
other securities in addition to or in substitution for the Pledged Equity issued
by such issuer, except to such Grantor, and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
Equity Interests or other securities.
Section 20. Administrative Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of a Default, in the Administrative Agent's
discretion, to take any action and to execute any instrument that the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Administrative Agent pursuant to Section 12,
(b) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above,
and
(d) to file any claims or take any action or institute any
proceedings that the Administrative Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
compliance with the terms and conditions of any Assigned Agreement or the
rights of the Administrative Agent with respect to any of the Collateral.
Section 21. Administrative Agent May Perform. If any Grantor fails
to perform any agreement contained herein, the Administrative Agent may, but
without any obligation to do so and without notice, itself perform, or cause
performance of, such agreement, and the expenses of the Administrative Agent
incurred in connection therewith shall be payable by such Grantor under Section
24.
Section 22. The Administrative Agent's Duties. (a) The powers
conferred on the Administrative Agent hereunder are solely to protect the
Secured Parties' interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Administrative Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
any Secured Party has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral. The Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which it accords its own property.
22
(b) Anything contained herein to the contrary notwithstanding, the
Administrative Agent may from time to time, when the Administrative Agent deems
it to be necessary, appoint one or more subagents (each a "SUBAGENT") for the
Administrative Agent hereunder with respect to all or any part of the
Collateral. In the event that the Administrative Agent so appoints any Subagent
with respect to any Collateral, (i) the assignment and pledge of such Collateral
and the security interest granted in such Collateral by each Grantor hereunder
shall be deemed for purposes of this Security Agreement to have been made to
such Subagent, in addition to the Administrative Agent, for the ratable benefit
of the Secured Parties, as security for the Secured Obligations of such Grantor,
(ii) such Subagent shall automatically be vested, in addition to the
Administrative Agent, with all rights, powers, privileges, interests and
remedies of the Administrative Agent hereunder with respect to such Collateral,
and (iii) the term "Administrative Agent," when used herein in relation to any
rights, powers, privileges, interests and remedies of the Administrative Agent
with respect to such Collateral, shall include such Subagent; provided, however,
that no such Subagent shall be authorized to take any action with respect to any
such Collateral unless and except to the extent expressly authorized in writing
by the Administrative Agent.
Section 23. Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party upon default under the UCC (whether or not the UCC applies to the
affected Collateral) and also may: (i) require each Grantor to, and each
Grantor hereby agrees that it will at its expense and upon request of the
Administrative Agent forthwith, assemble all or part of the Collateral as
directed by the Administrative Agent and make it available to the
Administrative Agent at a place and time to be designated by the
Administrative Agent that is reasonably convenient to both parties; (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Administrative Agent may
deem commercially reasonable; (iii) occupy any premises owned or leased by
any of the Grantors where the Collateral or any part thereof is assembled
or located for a reasonable period in order to effectuate its rights and
remedies hereunder or under law, without obligation to such Grantor in
respect of such occupation; and (iv) exercise any and all rights and
remedies of any of the Grantors under or in connection with the
Collateral, or otherwise in respect of the Collateral, including, without
limitation, (A) any and all rights of such Grantor to demand or otherwise
require payment of any amount under, or performance of any provision of,
the Assigned Agreements, the Receivables, the Related Contracts and the
other Collateral, (B) withdraw, or cause or direct the withdrawal, of all
funds with respect to the Account Collateral and (C) exercise all other
rights and remedies with respect to the Assigned Agreements, the
Receivables, the Related Contracts and the other Collateral, including,
without limitation, those set forth in Section 9-607 of the UCC. Each
Grantor agrees that, to the extent notice of sale shall be required by
law, at least ten days' notice to such Grantor of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Administrative Agent shall
not be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b) Any cash held by or on behalf of the Administrative Agent and
all cash proceeds received by or on behalf of the Administrative Agent in
respect of any sale of, collection from, or other realization upon all or
any part of the Collateral may, in the discretion of the Xxxxxxxxxxxxxx
00
Xxxxx, xx held by the Administrative Agent as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts payable to
the Administrative Agent pursuant to Section 24) in whole or in part by
the Administrative Agent for the ratable benefit of the Secured Parties
against, all or any part of the Secured Obligations, in the following
manner:
(i) first, paid to the Administrative Agent for any amounts
then owing to the Administrative Agent pursuant to Section 9.04 of
the Credit Agreement or otherwise under the Loan Documents; and
(ii) second, ratably (A) paid to the Lender Parties and the
Hedge Banks, respectively, for any amounts then owing to them, in
their capacities as such, under the Loan Documents ratably in
accordance with such respective amounts then owing to such Lender
Parties and the Hedge Banks, provided that, for purposes of this
Section 23, the amount owing to any such Hedge Bank pursuant to any
Secured Hedge Agreement to which it is a party (other than any
amount therefore accrued and unpaid) shall be deemed to be equal to
the Agreement Value therefor and (B) deposited as Collateral in the
L/C Collateral Account up to an amount equal to 100% of the
aggregate Available Amount of all outstanding Letters of Credit,
provided that in the event that any such Letter of Credit is drawn,
the Administrative Agent shall pay to the Issuing Bank that issued
such Letter of Credit the amount held in the L/C Collateral Account
in respect of such Letter of Credit, provided further that, to the
extent that any such Letter of Credit shall expire or terminate
undrawn and as a result thereof the amount of the Collateral in the
L/C Collateral Account shall exceed 100% of the aggregate Available
Amount of all then outstanding Letters of Credit, such excess amount
of such Collateral shall be applied in accordance with the remaining
order of priority set out in this Section 23(b).
Any surplus of such cash or cash proceeds held by or on the behalf of the
Administrative Agent and remaining after payment in full of all the
Secured Obligations shall be paid over to the applicable Grantor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Collateral shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid
over to the Administrative Agent in the same form as so received (with any
necessary indorsement).
(d) The Administrative Agent may, without notice to any Grantor
except as required by law and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Secured Obligations
against any funds held with respect to the Account Collateral or in any
other deposit account.
(e) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill symbolized
by any Trademarks subject to such sale or other disposition shall be
included therein, and such Grantor shall supply to the Administrative
Agent or its designee such Grantor's know-how and expertise, and documents
and things relating to any Intellectual Property Collateral subject to
such sale or other disposition, and such Grantor's customer lists and
other records and documents relating to such Intellectual Property
Collateral and to the manufacture, distribution, advertising and sale of
products and services of such Grantor.
24
Section 24. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
(b) Each Grantor will upon demand pay to the Administrative Agent
the amount of any and all reasonable expenses, including, without limitation,
the reasonable fees and expenses of its counsel and of any experts and agents,
that the Administrative Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from or other realization upon, any of
the Collateral of such Grantor, (iii) the exercise or enforcement of any of the
rights of the Administrative Agent or the other Secured Parties hereunder or
(iv) the failure by such Grantor to perform or observe any of the provisions
hereof.
Section 25. Amendments; Waivers; Additional Grantors; Etc. (a) No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Administrative
Agent or any other Secured Party to exercise, and no delay in exercising any
right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
(b) Upon the execution and delivery, or authentication, by any
Person of a security agreement supplement in substantially the form of Exhibit A
hereto (each a "SECURITY AGREEMENT SUPPLEMENT"), (i) such Person shall be
referred to as an "ADDITIONAL GRANTOR" and shall be and become a Grantor
hereunder, and each reference in this Agreement and the other Loan Documents to
"Grantor" shall also mean and be a reference to such Additional Grantor, and
each reference in this Agreement and the other Loan Documents to "Collateral"
shall also mean and be a reference to the Collateral of such Additional Grantor,
and (ii) the supplemental schedules I-IX attached to each Security Agreement
Supplement shall be incorporated into and become a part of and supplement
Schedules I-IX, respectively, hereto, and the Administrative Agent may attach
such supplemental schedules to such Schedules; and each reference to such
Schedules shall mean and be a reference to such Schedules as supplemented
pursuant to each Security Agreement Supplement.
Section 26. Notices, Etc. All notices and other communications
provided for hereunder shall be either (i) in writing (including telegraphic,
telecopier or telex communication) and mailed, telegraphed, telecopied, telexed
or otherwise delivered or (ii) by electronic mail (if electronic mail addresses
are designated as provided below) confirmed immediately in writing, in the case
of the Borrower or the Administrative Agent, addressed to it at its address
specified in the Credit Agreement and, in the case of each Grantor other than
the Borrower, addressed to it at its address specified in the Credit Agreement
or on the signature page to the Security Agreement Supplement pursuant to which
it became a party hereto; or, as to any party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and other communications shall, when mailed, telegraphed, telecopied,
telexed, sent by electronic mail or otherwise, be effective when deposited in
the mails, delivered to the telegraph company, telecopied, confirmed by telex
answerback, sent by electronic mail and confirmed in writing, or otherwise
delivered (or confirmed by a signed receipt), respectively,
25
addressed as aforesaid; except that notices and other communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or of any Security Agreement
Supplement or Schedule hereto shall be effective as delivery of an original
executed counterpart thereof.
Section 27. Continuing Security Interest; Assignments under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the latest of
(i) the payment in full in cash of the Secured Obligations, (ii) the Termination
Date and (iii) the termination or expiration of all Letters of Credit and all
Secured Hedge Agreements, (b) be binding upon each Grantor, its successors and
assigns and (c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender Party may assign or otherwise transfer
all or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender Party herein or otherwise, in
each case as provided in Section 8.07 of the Credit Agreement.
Section 28. Release; Termination. (a) Upon any sale, lease, transfer
or other disposition of any item of Collateral of any Grantor in accordance with
the terms of the Loan Documents (other than sales of Inventory in the ordinary
course of business), the Administrative Agent will, at such Grantor's expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however, that (i) at
the time of such request and such release no Default shall have occurred and be
continuing, (ii) such Grantor shall have delivered to the Administrative Agent,
at least ten Business Days prior to the date of the proposed release, a written
request for release describing the item of Collateral and the terms of the sale,
lease, transfer or other disposition in reasonable detail, including, without
limitation, the price thereof and any expenses in connection therewith, together
with a form of release for execution by the Administrative Agent and a
certificate of such Grantor to the effect that the transaction is in compliance
with the Loan Documents and as to such other matters as the Administrative Agent
may request and (iii) the proceeds of any such sale, lease, transfer or other
disposition required to be applied, or any payment to be made in connection
therewith, in accordance with Section 2.06 of the Credit Agreement shall, to the
extent so required, be paid or made to, or in accordance with the instructions
of, the Administrative Agent when and as required under Section 2.06 of the
Credit Agreement.
(b) Upon the latest of (i) the payment in full in cash of the
Secured Obligations, (ii) the Termination Date and (iii) the termination or
expiration of all Letters of Credit and all Secured Hedge Agreements, the pledge
and security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantor. Upon any such termination,
the Administrative Agent will, at the applicable Grantor's expense, execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination.
Section 29. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
26
Section 30. The Mortgages. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of any
Mortgage and the terms of such Mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such Mortgage
shall be controlling in the case of fixtures and real estate leases, letting and
licenses of, and contracts and agreements relating to the lease of, real
property, and the terms of this Agreement shall be controlling in the case of
all other Collateral.
SECTION 31. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[SIGNATURE PAGES FOLLOW]
27
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
XXXXX & XXXXX COMPANY
By /s/ Xxxx X. Xxxx
-----------------------------------------
Name: Xxxx X. Xxxx
Title: Chief Executive Officer
XXXXX & XXXXX AFFILIATES, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX MANAGEMENT SERVICES, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX OF ARIZONA, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX ASSET SERVICES COMPANY
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX CONSULTING SERVICES COMPANY
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX INSTITUTIONAL PROPERTIES, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX OF MICHIGAN, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX MORTGAGE GROUP, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX OF NEVADA, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX NEW YORK, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX REALTY ADVISERS, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX SOUTHEAST PARTNERS, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
HSM INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
WM. X. XXXXX/XXXXX & XXXXX INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXXXXX HOSPITALITY INTERNATIONAL, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXXXXX SECURITIES, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXX & XXXXX MANAGEMENT SERVICES OF
MICHIGAN, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
