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COLLATERAL AGREEMENT
DATED AS OF
____________, 2004,
AMONG
INTERNATIONAL WIRE GROUP, INC.
THE SUBSIDIARIES OF
INTERNATIONAL WIRE GROUP, INC.
IDENTIFIED HEREIN
AND
BNY MIDWEST TRUST COMPANY
AS COLLATERAL AGENT
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TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions
SECTION 1.01. Indenture...................................................................................1
SECTION 1.02. Other Defined Terms.........................................................................1
SECTION 1.03. Rules of Interpretation.....................................................................4
SECTION 1.04. Intercreditor Agreement.....................................................................5
ARTICLE II
Pledge of Securities
SECTION 2.01. Pledge......................................................................................5
SECTION 2.02. Delivery of the Pledged Collateral..........................................................6
SECTION 2.03. Representations, Warranties and Covenants...................................................6
SECTION 2.04. Certification of Limited Liability Company and Limited Partnership Interests................7
SECTION 2.05. Registration in Nominee Name; Denominations.................................................7
SECTION 2.06. Voting Rights; Dividends and Interest.......................................................8
ARTICLE III
Security Interests in Personal Property
SECTION 3.01. Security Interest..........................................................................10
SECTION 3.02. Representations and Warranties.............................................................11
SECTION 3.03. Covenants..................................................................................13
SECTION 3.04. Other Actions..............................................................................16
SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral.............................19
ARTICLE IV
Remedies
SECTION 4.01. Remedies Upon Default......................................................................21
SECTION 4.02. Application of Proceeds....................................................................23
SECTION 4.03. Grant of License to Use Intellectual Property..............................................23
SECTION 4.04. Securities Act.............................................................................24
SECTION 4.05. Registration...............................................................................24
ARTICLE V
Indemnity, Subrogation and Subordination
SECTION 5.01. Indemnity and Subrogation..................................................................25
SECTION 5.02. Contribution and Subrogation...............................................................25
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SECTION 5.03. Subordination..............................................................................26
ARTICLE VI
Miscellaneous
SECTION 6.01. Notices....................................................................................26
SECTION 6.02. Waivers; Amendment.........................................................................26
SECTION 6.03. Collateral Agent's Fees and Expenses; Indemnification......................................26
SECTION 6.04. Successors and Assigns.....................................................................30
SECTION 6.05. Survival of Agreement......................................................................30
SECTION 6.06. Counterparts; Effectiveness; Several Agreement.............................................30
SECTION 6.07. Severability...............................................................................30
SECTION 6.08. Right of Set-Off...........................................................................31
SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process.................................31
SECTION 6.10. WAIVER OF JURY TRIAL.......................................................................32
SECTION 6.11. Headings...................................................................................32
SECTION 6.12. Security Interest Absolute.................................................................32
SECTION 6.13. Termination or Release.....................................................................32
SECTION 6.14. Additional Subsidiaries....................................................................33
SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact................................................33
Schedules
Schedule I - Subsidiary Parties
Schedule II - Capital Stock; Debt Securities
Schedule III - Intellectual Property
Schedule IV - Mortgaged Properties
Exhibits
Exhibit I - Form of Supplement
Exhibit II - Form of Perfection Certificate
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COLLATERAL AGREEMENT dated as of October ___, 2004, among
International Wire Group, Inc., the Subsidiary Parties identified herein and BNY
Midwest Trust Company, as Collateral Agent (this "AGREEMENT").
WHEREAS, pursuant to the terms, conditions and provisions of
(a) the Indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "INDENTURE"), among
the Company and BNY Midwest Trust Company, as trustee (the "TRUSTEE"), the
Company is issuing $75,000,000 aggregate principal amount of 10% Secured Senior
Subordinated Notes (the "NOTES") which will be guaranteed on a secured senior
subordinated basis by each of the Guarantors. The Subsidiary Parties are
affiliates of the Company, will derive substantial benefits from the execution
of the Indenture and the issuance of Notes by the Issuer pursuant to the
Indenture and are willing to execute and deliver this Agreement in order to
induce the Trustee to enter into the Indenture and the Holders to purchase the
Notes. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. INDENTURE. Capitalized terms used in this
Agreement and not otherwise defined herein have the meanings specified in the
Indenture. All capitalized terms not otherwise defined herein, or in the
Indenture or Intercreditor Agreement, as the case may be, shall have the
meanings specified in the New York UCC (as defined herein); the term
"instrument" shall have the meaning specified in Article 9 of the New York UCC.
SECTION 1.02. OTHER DEFINED TERMS. As used in this Agreement,
the following terms have the meanings specified below:
"ACCOUNT DEBTOR" means any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"ARTICLE 9 COLLATERAL" has the meaning assigned to such term
in Section 3.01.
"COLLATERAL" means Article 9 Collateral and Pledged
Collateral.
"COLLATERAL OBLIGATIONS" means the due and punctual payment of
the principal of and interest on the Notes when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes and performance of all other Security Obligations of
the Indenture Parties to the Holders or the Trustee or the Collateral Agent
under the Indenture, the Notes, this Agreement and the other Indenture
Documents.
"COMPANY" means International Wire Group, Inc.
"CONCENTRATION ACCOUNT" means the cash collateral account
established at the office of Trustee, in the name of the Collateral Agent, for
purposes of this Agreement.
"COPYRIGHT LICENSE" means any written agreement, now or
hereafter in effect, granting any right to any third party under any copyright
now or hereafter owned by any Grantor or that such Grantor otherwise has the
right to license, or granting any right to any Grantor under any copyright now
or hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"COPYRIGHTS" means all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule III.
"EFFECTIVE DATE" means October ____, 2004.
"EQUITY INTERESTS" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"FEDERAL SECURITIES LAWS" has the meaning assigned to such
term in Section 4.04.
"GENERAL INTANGIBLES" means all chosen in action and causes of
action and all other intangible personal property of every kind and nature
(other than Accounts) now owned or hereafter acquired by any Grantor, including
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee,
Hedging Obligations and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.
"GRANTORS" means the Company and the Subsidiary Parties.
"INDENTURE" has the meaning assigned to such term in the.
preliminary statement of this Agreement.
"INDENTURE DOCUMENTS" means (a) the Indenture, the Notes, and
the Security Documents and (b) any other related documents or instruments
executed and delivered pursuant to the Indenture or any Security Document.
"INDENTURE PARTIES" means the Company and the Subsidiary
Parties.
"INTELLECTUAL PROPERTY" means all intellectual and similar
property of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and
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franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
dated as of ________ __, 2004, between the BNY Midwest Trust Company, as
Indenture Trustee, Congress Financial Corporation (Central), as agent for the
financial institutions who are lenders under the Loan and Security Agreement and
Silver Point Finance, L.L.C. as agent for the financial institutions who are
lenders under the Term Loan Agreement.
"LICENSE" means any Patent License, Trademark License,
Copyright License or other license or sublicense agreement to which any Grantor
is a party, including those listed on Schedule III.
"LOAN AND SECURITY AGREEMENT" means (i) the Loan and Security
Agreement, dated as of ________ __, 2004, by and among Omega Wire, Inc., OWI
Corporation, Camden Wire Co., Inc., IWG Resources LLC, International Wire Rome
Operations, Inc. and Wire Technologies, Inc., as Borrowers, Congress Financial
Corporation (Central), as Agent and the lenders from time to time party thereto,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time and (ii) any renewal,
extension, refunding, replacement or refinancing thereof.
"MORTGAGED PROPERTY" means, initially, each parcel of real
property and the improvements thereto owned by any Indenture Party and
identified on Schedule IV hereto, and includes each other parcel of real
property and improvements thereto with respect to which a Mortgage is granted
pursuant to Section 4.11 or 4.12 of the Indenture.
"NEW YORK UCC" means the Uniform Commercial Code as from time
to time in effect in the State of New York.
"NOTES" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"PATENT LICENSE" means any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a patent, now or hereafter owned by any Grantor or that any
Grantor otherwise has the right to license, is in existence, or granting to any
Grantor any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.
"PATENTS" means all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or the
equivalent thereof in any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or the
equivalent thereof in any other country, including registrations, recordings and
pending applications in the United States Patent and Trademark Office or any
similar offices in any other country, including those listed on Schedule III,
and (b) all reissues, continuations, divisions,
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continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"PERFECTION CERTIFICATE" means a certificate substantially in
the form of Exhibit II, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by an Officer of the
Company.
"PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"PLEDGED COLLATERAL" has the meaning assigned to such term in
Section 2.01.
"PLEDGED DEBT SECURITIES" has the meaning assigned to such
term in Section 2.01.
"PLEDGED SECURITIES" means any promissory notes, stock
certificates or other securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.
"PLEDGED STOCK" has the meaning assigned to such term in
Section 2.01.
"PROCEEDS" has the meaning specified in Section 9-102 of the
New York UCC.
"SECURED PARTIES" means (a) the Trustee, (b) the Collateral
Agent, (c) each Holder, (d) the beneficiaries of each indemnification obligation
undertaken by any Indenture Party under any Indenture Document and (e) the
successors and assigns of each of the foregoing.
"SECURITY DOCUMENTS" means this Agreement, the Mortgages, any
agreements pursuant to which assets are added to the Collateral and any other
instruments or documents entered into and delivered in connection with any of
the foregoing, as such agreements, instruments or documents may from time to
time be amended.
"SECURITY INTEREST" has the meaning assigned to such term in
Section 3.01.
"SUBSIDIARY PARTIES" means (a) the Subsidiaries identified on
Schedule I and (b) each other Subsidiary formed by the Company or the
Subsidiaries identified on Schedule I after the Effective Date.
"TERM LOAN AGREEMENT" means (i) the Loan and Security
Agreement, dated as of __________, __, 2004, by and among Omega Wire, Inc., OWI
Corporation, Camden Wire Co., Inc., IWG Resources LLC, International Wire Rome
Operations, Inc. and Wire Technologies, Inc., as Borrowers, Silver Point
Finance, L.L.C., as Agent and the Lenders from time to time party thereto,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time and (ii) any renewal,
extension, refunding, replacement or refinancing thereof.
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"TRADEMARK LICENSE" means any written agreement, now or
hereafter in effect, granting to any third party any right to use any trademark
now or hereafter owned by any Grantor or that any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.
"TRADEMARKS" means all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
SECTION 1.03. RULES OF INTERPRETATION. The definitions of
terms herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. INTERCREDITOR AGREEMENT. This Agreement and all
rights and obligations under this Agreement are subject to the Intercreditor
Agreement. The parties to this Agreement and all Persons claiming any right
under or in respect of this Agreement are bound by and (to the extent provided
in the Intercreditor Agreement) entitled to the benefit of the Intercreditor
Agreement.
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ARTICLE II
PLEDGE OF SECURITIES
SECTION 2.01. PLEDGE. As security for the payment or
performance (as the case may be) in full of the Collateral Obligations, each
Grantor hereby assigns and pledges to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, and hereby grants to
the Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in, all of such Grantor's right, title and interest in, to and under
(a) the shares of capital stock and other Equity Interests owned by it and
listed on Schedule II and any other Equity Interests obtained in the future by
such Grantor and the certificates representing all such Equity Interests (the
"PLEDGED STOCK"); provided that the Pledged Stock shall not include more than
65% of the issued and outstanding voting Equity Interests of any Foreign
Subsidiary; (b)(i) the debt securities listed opposite the name of such Grantor
on Schedule II, (ii) any debt securities in the future issued to such Grantor
and (iii) the promissory notes and any other instruments evidencing such debt
securities (the "PLEDGED DEBT SECURITIES"); (c) all other property that may be
delivered to and held by or on behalf of the Collateral Agent, pursuant to the
terms of this Collateral Agreement; (d) subject to Section 2.06, all payments of
principal or interest, dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of, in exchange
for or upon the conversion of, and all other Proceeds received in respect of,
the securities referred to in clauses (a) and (b) above; (e) subject to Section
2.06, all rights and privileges of such Grantor with respect to the securities
and other property referred to in clauses (a), (b), (c) and (d) above; and (f)
all Proceeds of any of the foregoing (the items referred to in clauses (a)
through (f) above being collectively referred to as the "PLEDGED COLLATERAL").
TO HAVE AND TO HOLD the Pledged Collateral, together with all
right, title, interest, powers, privileges and preferences pertaining or
incidental thereto, unto the Collateral Agent, its successors and assigns, for
the ratable benefit of the Secured Parties, forever; subject, however, to the
terms, covenants and conditions hereinafter set forth.
SECTION 2.02. DELIVERY OF THE PLEDGED COLLATERAL. (a) Prior to
the Senior Lender Termination Date (as defined in the Intercreditor Agreement)
each Grantor agrees to deliver promptly to the Agents (as defined in and in
accordance with the Intercreditor Agreement), as bailee for the Collateral
Agent, any and all Pledged Securities. Upon the occurrence of the Senior Lender
Termination Date, each Grantor agrees promptly to deliver or cause to be
delivered to the Collateral Agent any and all Pledged Securities.
(b) Each Grantor will cause any Indebtedness for borrowed
money in principal amount exceeding $1,000,000 owed to such Grantor by any
Person to be evidenced by a duly executed promissory note that (a) prior to the
Senior Lender Termination Date, is delivered to the Agents as bailee for the
Collateral Agent in accordance with the Intercreditor Agreement, and (b) on or
after the Senior Lender Termination Date, is pledged to the Collateral Agent
pursuant to the terms hereof.
(c) Upon delivery to the Agents or the Collateral Agent, (i)
any Pledged Securities shall be accompanied by stock powers duly executed in
blank or other instruments of
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transfer reasonably satisfactory to the Agents or the Collateral Agent, as the
case may be, and by such other instruments and documents as the Agents or the
Collateral Agent, as the case may be, may reasonably request and (ii) all other
property comprising part of the Pledged Collateral shall be accompanied by
proper instruments of assignment duly executed by the applicable Grantor and
such other instruments or documents as the Agents or the Collateral Agent, as
the case may be, may reasonably request. Each delivery of Pledged Securities
shall be accompanied by a schedule describing the securities, which schedule
shall be attached hereto as Schedule II and made a part hereof; provided that
failure to attach any such schedule hereto shall not affect the validity of such
pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.
SECTION 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Grantors jointly and severally represent, warrant and covenant to and with the
Collateral Agent, for the benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the
issued and outstanding shares of each class of the Equity Interests of the
issuer thereof represented by such Pledged Stock and includes all Equity
Interests, debt securities and promissory notes required to be pledged
hereunder;
(b) the Pledged Stock and Pledged Debt Securities have been
duly and validly authorized and issued by the issuers thereof and (i) in the
case of Pledged Stock, are fully paid and nonassessable, (ii) in the case of
Pledged Debt Securities issued to a Grantor by Affiliates of any Grantor, are
legal, valid and binding obligations of the issuers thereof and (iii) in the
case of Pledged Debt Securities issued to a Grantor by Persons other than
Affiliates of any Grantor, are, to the knowledge of any Grantor, legal, valid
and binding obligations of the issuers thereof;
(c) except for the security interests granted hereunder and to
the Senior Lenders pursuant to the Senior Lender Documents, each of the Grantors
(i) is and, subject to any transfers permitted under the Indenture, will
continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule II as owned by such Grantor, (ii) holds the
same free and clear of all Liens, other than Liens created by this Agreement,
Permitted Liens and transfers permitted under the Indenture, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist
any security interest in or other Lien on, the Pledged Collateral, other than
Liens created by this Agreement, Permitted Liens and transfers permitted under
the Indenture, and (iv) will defend its title or interest thereto or therein
against any and all Liens (other than the Lien created by this Agreement and
Permitted Liens), however, arising, of all Persons whomsoever;
(d) except for restrictions and limitations imposed by the
Indenture Documents, the Senior Lender Documents or securities laws generally,
the Pledged Collateral is and will continue to be freely transferable and
assignable, and none of the Pledged Collateral is or will be subject to any
option, right of first refusal, shareholders agreement, charter or by-law
provisions or contractual restriction of any nature that might prohibit, impair,
delay or otherwise affect the pledge of such Pledged Collateral hereunder, the
sale or disposition thereof pursuant hereto or the exercise by the Collateral
Agent of rights and remedies hereunder;
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(e) each of the Grantors has the power and authority to pledge
the Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated;
(f) no consent or approval of any Governmental Authority, any
securities exchange or any other Person was or is necessary to the validity of
the pledge effected hereby (other than such as have been obtained and are in
full force and effect);
(g) by virtue of the execution and delivery by the Grantors of
this Agreement, when any Pledged Securities are delivered to the Agents as
bailee for the Collateral Agent or to the Collateral Agent in accordance with
this Agreement, the Collateral Agent will obtain a legal, valid and perfected
lien upon and security interest in such Pledged Securities as security for the
payment and performance of the Collateral Obligations; and
(h) the pledge effected hereby is effective to vest in the
Collateral Agent, for the benefit of the Secured Parties, the rights of the
Collateral Agent in the Pledged Collateral as set forth herein.
SECTION 2.04. CERTIFICATION OF LIMITED LIABILITY COMPANY AND
LIMITED PARTNERSHIP INTERESTS. To the extent that the Collateral Agent
reasonably requests, each interest in any limited liability company or limited
partnership controlled by any Grantor and pledged hereunder shall be represented
by a certificate, shall be a "security" within the meaning of Article 8 of the
New York UCC and shall be governed by Article 8 of the New York UCC.
SECTION 2.05. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
reasonable discretion) to hold the Pledged Securities in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
Agent. Each Grantor will promptly give to the Collateral Agent copies of any
material notices or other material communications received by it with respect to
Pledged Securities registered in the name of such Grantor. The Collateral Agent
shall at all times have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations for any
purpose consistent with this Agreement.
SECTION 2.06. VOTING RIGHTS; DIVIDENDS AND INTEREST. (a)
Unless and until an Event of Default shall have occurred and be continuing and
the Collateral Agent shall have notified the Grantors that their rights under
this Section 2.06 are being suspended:
(i) Each Grantor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement, the Indenture and the other Indenture
Documents; provided that such rights and powers shall not be exercised
in any manner that could materially and adversely affect the rights
inuring to a holder of any Pledged Securities or the rights and
remedies of any of the Collateral Agent or the other Secured Parties
under this Agreement or the Indenture or any other Indenture Document
or the ability of the Secured Parties to exercise the same.
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(ii) The Collateral Agent shall execute and deliver to each
Grantor, or cause to be executed and delivered to such Grantor, all
such proxies, powers of attorney and other instruments as such Grantor
may reasonably request for the purpose of enabling such Grantor to
exercise the voting and/or consensual rights and powers it is entitled
to exercise pursuant to subparagraph (i) above.
(iii) Each Grantor shall be entitled to receive and retain any
and all dividends, interest, principal and other distributions paid on
or distributed in respect of the Pledged Securities to the extent and
only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Indenture, the other
Indenture Documents and applicable laws; provided that any noncash
dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received in
exchange for Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral, and, if
received by any Grantor, shall not be commingled by such Grantor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Agents and the
Collateral Agent and shall be forthwith delivered to the Agents or the
Collateral Agent, as the case may be, in the same form as so received
(with any necessary endorsement) in accordance with the Intercreditor
Agreement.
(b) Upon the occurrence and during the continuance of an Event
of Default, and subject to the terms and provisions of the Intercreditor
Agreement, after the Collateral Agent shall have notified the Grantors of the
suspension of their rights under paragraph (a)(iii) of this Section 2.06, then
all rights of any Grantor to dividends, interest, principal or other
distributions that such Grantor is authorized to receive pursuant to paragraph
(a)(iii) of this Section 2.06 shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to receive and retain such dividends, interest, principal or
other distributions. All dividends, interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 2.06 shall be
held in trust for the benefit of the Agents and the Collateral Agent, shall be
segregated from other property or funds of such Grantor and shall be forthwith
delivered to the Agents or the Collateral Agent upon demand in the same form as
so received (with any necessary endorsement) in accordance with the
Intercreditor Agreement. Any and all money and other property paid over to or
received by the Senior Lenders and the Collateral Agent pursuant to the
provisions of this paragraph (b) and in accordance with the Intercreditor
Agreement shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 4.02. After
all Events of Default have been cured or waived and the Company has delivered to
the Collateral Agent a certificate to that effect, the Collateral Agent shall,
promptly repay to each Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and
that remain in such account.
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(c) Upon the occurrence and during the continuance of an Event
of Default, after the Collateral Agent, in accordance with the Intercreditor
Agreement, shall have notified the Grantors of the suspension of their rights
under paragraph (a)(i) of this Section 2.06, then all rights of any Grantor to
exercise the voting and consensual rights and powers it is entitled to exercise
pursuant to paragraph (a)(i) of this Section 2.06, and the obligations of the
Collateral Agent under paragraph (a)(ii) of this Section 2.06, shall cease, and
all such rights shall thereupon become vested in the Collateral Agent, which,
subject to the terms and provisions of the Intercreditor Agreement, shall have
the sole and exclusive right and authority to exercise such voting and
consensual rights and powers; provided that, unless the Collateral Agent shall
have received written objections from Holders of at least 25% in principal
amount of the Notes, the Collateral Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the
Grantors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Grantors
suspending their rights under paragraph (a) of this Section 2.06 (i) may be
given by telephone if promptly confirmed in writing, (ii) may be given to one or
more of the Grantors at the same or different times and (iii) may suspend the
rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by the Collateral Agent in its
sole and absolute discretion) and without waiving or otherwise affecting the
Collateral Agent's rights to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is
continuing.
ARTICLE III
SECURITY INTERESTS IN PERSONAL PROPERTY
SECTION 3.01. SECURITY INTEREST. (a) As security for the
payment or performance, as the case may be, in full of the Collateral
Obligations, each Grantor hereby assigns and pledges to the Collateral Agent,
its successors and assigns, for the benefit of the Secured Parties, and hereby
grants to the Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, a continuing security interest (the "SECURITY INTEREST")
in, all right, title or interest in or to any and all of the following assets
and properties now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the "ARTICLE 9 COLLATERAL"), including, without
limitation
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Account Collateral, Money and all Deposit Accounts,
together with all amounts on deposit from time to time in such
Deposit Accounts;
(iv) all Documents;
(v) all General Intangibles including all intellectual
property, Payment Intangibles and Software;
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(vi) all Goods, including Inventory, Equipment and Fixtures;
(vii) all Instruments;
(viii) all Investment Property;
(ix) Letter-of-Credit rights and other Supporting Obligations;
(x) All Commercial Tort Claims;
(xi) all books and records pertaining to the Article 9
Collateral;
(xii) to the extent not otherwise included, all Proceeds,
Accessions and products of any and all of the foregoing and
all collateral security and guarantees given by any Person
with respect to any of the foregoing;
(xiii) all cash or cash equivalents received by the Trustee or
the Collateral Agent on behalf of the Trustee pursuant to
Article 13 of the Indenture; and
(xiv) all collateral security and guaranties given by any
Person with respect to any of the foregoing.
(b) Each Grantor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) with respect to the
Article 9 Collateral or any part thereof and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (a) whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor and (b) in
the case of a financing statement filed as a fixture filing or covering Article
9 Collateral constituting minerals or the like to be extracted or timber to be
cut, a sufficient description of the real property to which such Article 9
Collateral relates. Each Grantor agrees to provide such information to the
Collateral Agent promptly upon request.
Each Grantor also ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.
The Collateral Agent is further authorized to file with the
United States Patent and Trademark Office or United States Copyright Office (or
any successor office or any similar office in any other country) such documents
as may be necessary (or, in the reasonable opinion of the Collateral Agent,
advisable) for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the signature
of any Grantor, and naming any Grantor or the Grantors as debtors and the
Collateral Agent as secured party.
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(c) The Security Interest is granted as security only and
shall not subject the Collateral Agent or any other Secured Party to, or in any
way alter or modify, any obligation or liability of any Grantor with respect to
or arising out of the Article 9 Collateral.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES. The Grantors
jointly and severally represent and warrant to the Collateral Agent and the
Secured Parties that:
(a) Each Grantor has good and valid rights in and title to the
Article 9 Collateral with respect to which it has purported to grant a Security
Interest hereunder and has full power and authority to grant to the Collateral
Agent the Security Interest in such Article 9 Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval that has been obtained.
(b) The Perfection Certificate has been duly prepared,
completed and executed and the information set forth therein, including the
exact legal name of each Grantor, is correct and complete as of the Effective
Date. The Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations prepared and filed, recorded or registered by the Grantors based
upon the information provided to the Collateral Agent in the Perfection
Certificate for filing in each governmental, municipal or other office specified
in Schedule 1 or Schedule 2 to the Perfection Certificate are all the filings,
recordings and registrations (other than filings required to be made in the
United States Patent and Trademark Office and the United States Copyright Office
in order to perfect the Security Interest in Article ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patents, Trademarks and Copyrights) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the benefit of
the Secured Parties) in respect of all Article 9 Collateral in which the
Security Interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements. Each Grantor represents and warrants that a fully
executed agreement in the form hereof and containing a description of all
Article 9 Collateral consisting of Intellectual Property shall have been
delivered to the Collateral Agent on or before the Effective Date and recorded
by such Grantor with respect to United States Patents and United States
registered Trademarks (and Trademarks for which United States registration
applications are pending) and with respect to United States registered
Copyrights for recording by the United States Patent and Trademark Office and
the United States Copyright Office pursuant to 35 U.S.C. Section 261, 15 U.S.C.
Section 1060 or 17 U.S.C. Section 205 and the regulations thereunder, as
applicable, and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction, to protect the validity of and to establish a legal,
valid and perfected security interest in favor of the Collateral Agent (for the
benefit of the Secured Parties) in respect of all Article 9 Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to
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perfect the Security Interest with respect to any Article 9 Collateral
consisting of Patents, Trademarks and Copyrights (or registration or application
for registration thereof) acquired or developed after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid
security interest in all the Article 9 Collateral securing the payment and
performance of the Collateral Obligations, (ii) subject to the filings described
in Section 3.02(b), a perfected security interest in all Article 9 Collateral in
which a security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. Section 261 or 15
U.S.C. Section 1060 or the one month period (commencing as of the date hereof)
pursuant to 17 U.S.C. Section 205 and otherwise as may be required pursuant to
the laws of any other necessary jurisdiction. The Security Interest is and shall
be prior to any other Lien on any of the Article 9 Collateral, other than those
Permitted Liens that have priority as a matter of law.
(d) The Article 9 Collateral is owned by the Grantors free and
clear of any Lien, except for Permitted Liens. None of the Grantors has filed or
consented to the filing of (i) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Article 9 Collateral, (ii) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any Article
9 Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (iii) any assignment in which any Grantor assigns any
Article 9 Collateral or any security agreement or similar instrument covering
any Article 9 Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except; in each case, for
Permitted Liens
SECTION 3.03. COVENANTS. (a) Each Grantor agrees promptly to
notify the Collateral Agent in writing of any change (i) in its corporate name,
(ii) in the location of its chief executive office, (iii) in its identity or
type of organization or corporate structure, (iv) in its Federal Taxpayer
Identification Number or organizational identification number or (v) in its
jurisdiction of organization. Each Grantor agrees to promptly provide the
Collateral Agent with certified organizational documents reflecting any of the
changes described in the first sentence of this paragraph. Each Grantor agrees
not to effect or permit any change referred to in the first sentence of this
paragraph unless all filings have been made by such Grantor under the Uniform
Commercial Code or otherwise that are required in order for the Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected third priority security interest in all the Article 9 Collateral. Each
Grantor agrees promptly to notify the Collateral Agent if any material portion
of the Article 9 Collateral owned or held by such Grantor is damaged or
destroyed.
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(b) Each Grantor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the Article 9
Collateral owned by it as is consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Article 9 Collateral, and, at
such time or times as the Collateral Agent may reasonably request, promptly to
prepare and deliver to the Collateral Agent a duly certified schedule or
schedules in form and detail satisfactory to the Collateral Agent showing the
identity, amount and location of any and all Article 9 Collateral.
(c) The Company shall deliver to the Collateral Agent on or
before May 15th in each year beginning with May 15, 2005, an officers
Certificate of the Company (a) setting forth the information required pursuant
to the Perfection Certificate or confirming that there has been no change in
such information since the date of such certificate or the date of the most
recent certificate delivered pursuant to this Section 3.03(c) and (b) certifying
that all Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (a) of this Section 3.03 to the extent necessary
to protect and perfect the Security Interest for a period of not less than 18
months after the date of such certificate (except as noted therein with respect
to any continuation statements to be filed within such period). Each certificate
delivered pursuant to this Section 3.03(c) shall identify in the format of
Schedule III all Intellectual Property of any Grantor in existence on the date
thereof and not then listed on such Schedules or previously so identified to the
Collateral Agent.
(d) Each Grantor shall, at its own expense, take any and all
actions necessary to defend title to the Article 9 Collateral against all
Persons and to defend the Security Interest of the Collateral Agent in the
Article 9 Collateral and the priority thereof against any Lien other than those
Permitted Liens which have priority as a matter of law or in accordance with the
Intercreditor Agreement.
Each Grantor agrees, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all actions, including such actions as the Collateral Agent
may from time to time reasonably request, to better assure, create, preserve,
protect, perfect and enforce the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. To the
extent that any Grantor fails to take any action required in the preceding
sentence, the Collateral Agent is irrevocably authorized and empowered, with
full power of substitution, to execute, acknowledge and deliver such security
documents, instruments, certificates, notices and other documents and, subject
to the provisions of the Security Documents, take such other actions in the
name, place and stead of such Grantor; provided that the Collateral Agent will
have no obligation to act in the foregoing manner and no liability for any
action taken or omitted by it in good faith in connection therewith. If any
principal amount
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payable in excess of $1,000,000 under or in connection with any of the Article 9
Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be promptly pledged and delivered to
the Collateral Agent, duly endorsed in a manner reasonably satisfactory to the
Collateral Agent.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Schedule III or adding
additional schedules hereto to specifically identify any asset or item that may
constitute Copyrights, Licenses, Patents or Trademarks; provided that any
Grantor shall have the right, exercisable within 20 days after it has been
notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its reasonable best
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Collateral within 30 days after the date it has been notified by the
Collateral Agent of the specific identification of such Collateral.
(e) Upon reasonable prior notice, the Collateral Agent and
such Persons as the Collateral Agent may reasonably designate shall have, at
such reasonable times and as often as reasonably requested, the right to inspect
the Article 9 Collateral (provided that only one inspection during each fiscal
year of the Company shall be at the Grantors' own cost and expense, provided,
however, that if an Event of Default has occurred and is continuing, all
inspections during the continuance of such Event of Default shall be at the
Grantors' own cost and expense), all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Article 9 Collateral is located, to discuss the Grantors' affairs with the
officers of the Grantors and their independent accountants (provided that the
Grantors shall have been afforded the opportunity to participate in any such
discussion with their independent accountants) and to verify under reasonable
procedures, the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Article 9 Collateral, including, in the
case of Accounts or Article 9 Collateral in the possession of any third person,
by contacting Account Debtors or the third person possessing such Article 9
Collateral for the purpose of making such a verification. The Collateral Agent
shall have the absolute right to share any information it gains from such
inspection or verification with any Secured Party.
(f) At its option, during the continuance of an Event of
Default, the Collateral Agent may discharge past due taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time
levied or placed on the Article 9 Collateral and not permitted under the
Indenture, and may pay for the maintenance and preservation of the Article 9
Collateral to the extent any Grantor fails to do so as required by the Indenture
or this Agreement, and each Grantor jointly and severally agrees to reimburse
the Collateral Agent on demand for any payment made or any expense incurred by
the Collateral Agent pursuant to the foregoing authorization; provided that
nothing in this paragraph shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any Grantor
with respect to
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taxes, assessments, charges, fees, Liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Indenture
Documents.
(g) Each Grantor shall remain liable to observe and perform
all the conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral, all in
accordance with the terms and conditions thereof, and each Grantor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.
(h) None of the Grantors shall make or permit to be made an
assignment, pledge or hypothecation of the Article 9 Collateral or shall grant
any other Lien in respect of the Article 9 Collateral, except as permitted by
the Indenture or the Senior Lender Documents. None of the Grantors shall make or
permit to be made any transfer of the Article 9 Collateral and each Grantor
shall remain at all times in possession of the Article 9 Collateral owned by it,
except that unless and until the Collateral Agent shall notify the Grantors that
an Event of Default shall have occurred and be continuing and that during the
continuance thereof the Grantors shall not sell, convey, lease, assign, transfer
or otherwise dispose of any Article 9 Collateral (which notice may be given by
telephone if promptly confirmed in writing), the Grantors may use and dispose of
the Article 9 Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Indenture or any other Indenture Document.
Without limiting the generality of the foregoing, each Grantor agrees that it
shall not permit any Inventory having a value exceeding $1,000,000 to be in the
possession or control of any warehouseman, agent, bailee, or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have acknowledged in writing, in
form and substance reasonably satisfactory to the Collateral Agent, that such
warehouseman, agent, bailee or processor holds the Inventory for the benefit of
the Agents and the Collateral Agent subject to the Security Interest and shall
act upon the instructions of the Agents and the Collateral Agent in accordance
with the terms and provisions of the Intercreditor Agreement without further
consent from the Grantor.
(i) None of the Grantors will, without the Collateral Agent's
prior written consent, grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or settle
the same for less than the full amount thereof, release, wholly or partly, any
Person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than (i) extensions, compromises, settlements, releases, credits
or discounts granted or made in the ordinary course of business and consistent
with its current practices and in accordance with such prudent and standard
practice used in industries that are the same as or similar to those in which
such Grantor is engaged or (ii) in accordance with the Senior Lender Documents.
(j) The Grantors, at their own expense, shall maintain or
cause to be maintained insurance covering physical loss or damage to the
Inventory and Equipment with financially sound and reputable insurance companies
in such amounts (with no greater risk retention) and against such risks as are
customarily maintained by companies of established repute engaged in the same or
similar businesses operating in the same or similar location. Subject to the
terms of the Intercreditor Agreement, each Grantor irrevocably makes,
constitutes
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and appoints the Collateral Agent (and all officers, employees or agents
designated by the Collateral Agent) as such Grantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Grantor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto. In the event that any Grantor at any time or times shall fail
to obtain or maintain any of the policies of insurance required hereby or to pay
any premium in whole or part relating thereto, the Collateral Agent may, without
waiving or releasing any obligation or liability of the Grantors hereunder or
any Event of Default, in its sole discretion, obtain and maintain such policies
of insurance and pay such premium and take any other actions with respect
thereto as the Collateral Agent deems advisable. All sums disbursed by the
Collateral Agent in connection with this paragraph, including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Grantors to the Collateral Agent and shall be
additional Collateral Obligations secured hereby.
(k) Each Grantor shall maintain, in form and manner reasonably
satisfactory to the Collateral Agent, records of its Chattel Paper and its
books, records and documents evidencing or pertaining thereto.
SECTION 3.04. OTHER ACTIONS. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Security Interest, each Grantor agrees, in each case at such
Grantor's own expense, to take the following actions with respect to the
following Article 9 Collateral:
(a) Instruments. Subject to the terms of the Intercreditor
Agreement, if any Grantor shall at any time hold or acquire
any Instruments, such Grantor shall forthwith endorse, assign
and deliver the same to the Collateral Agent, accompanied by
such instruments of transfer or assignment duly executed in
blank as the Collateral Agent may from time to time reasonably
request; provided, that the Grantors shall not be required to
deliver any Instruments to the Collateral Agent unless the
individual or aggregate amount evidenced on all Instruments,
not yet delivered to the Collateral Agent, exceeds $1,000,000.
(b) Investment Property. Except to the extent otherwise
provided in Article III and subject to the terms and
provisions of the Intercreditor Agreement, if any Grantor
shall at any time hold or acquire any certificated securities
that either (i) have an aggregate value exceeding $1,000,000,
or (ii) are certificated securities issued by any Indenture
Party, such Grantor shall forthwith endorse, assign and
deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank
as the Collateral Agent may from time to time specify. If any
securities now or hereafter acquired from an issuer by any
Grantor are uncertificated, are issued to such Grantor or its
nominee directly by such issuer and have a value exceeding
$1,000,000, such Grantor shall promptly notify the Collateral
Agent thereof and, at the Collateral Agent's request and
option and subject to the terms and provisions of the
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Intercreditor Agreement, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, but
subject to the terms and provisions of the Intercreditor
Agreement, either (i) cause the issuer to agree to comply with
instructions from the Collateral Agent as to such securities,
without further consent of any Grantor or such nominee, or
(ii) arrange for the Collateral Agent to become the registered
owner of the securities. If any securities, whether
certificated or uncertificated, or other investment property
now or hereafter acquired by any Grantor, which, individually
or in the aggregate, have a value exceeding $1,000,000, are
held by such Grantor or its nominee through a securities
intermediary or commodity intermediary, such Grantor shall
promptly notify, the Collateral Agent thereof and, at the
Collateral Agent's request and option and subject to the terms
and provisions of the Intercreditor Agreement, pursuant to an
agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) cause such securities
intermediary or (as the case may be) commodity intermediary to
agree to comply with entitlement orders or other instructions
from the Collateral Agent to such securities intermediary as
to such security entitlements, or (as the case may be) to
apply any value distributed on account of any commodity
contract as directed by the Collateral Agent to such commodity
intermediary, in each case without further consent of any
Grantor or such nominee, or (ii) in the case of financial
assets or other investment property held through a securities
intermediary, arrange for the Collateral Agent to become the
entitlement holder with respect to such investment property,
with the Grantor being permitted to exercise rights to
withdraw or otherwise deal with such investment property
unless an Event of Default has occurred and is continuing. The
Collateral Agent agrees with each of the Grantors that the
Collateral Agent shall not give any such entitlement orders or
instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold
its consent to the exercise of any withdrawal or dealing
rights by any Grantor, unless an Event of Default has occurred
and is continuing, or, after giving effect to any such
investment and withdrawal rights would occur. The provisions
of this paragraph shall not apply to any financial assets
credited to a securities account for which the Collateral
Agent is the securities intermediary.
(c) Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any
electronic chattel paper or any "transferable record," as that
term is defined in Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act, or in Section
16 of the Uniform Electronic Transactions Act as in effect in
any relevant jurisdiction, which has a value, individually or
in the aggregate, exceeding $1,000,000, such Grantor shall
promptly notify the Collateral Agent thereof and, at the
request of the Collateral Agent, and subject to the terms and
provisions of the Intercreditor Agreement, shall take such
action as the Collateral Agent may reasonably request to vest
in the Collateral Agent control under New York UCC Section
9-105 of such electronic chattel paper or control under
Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of
the Uniform Electronic Transactions Act, as so in effect in
such
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jurisdiction, of such transferable record. The Collateral
Agent agrees with such Grantor that the Collateral Agent will
arrange, pursuant to procedures reasonably satisfactory to the
Collateral Agent and so long as such procedures will not
result in the Collateral Agent's loss of control, for the
Grantor to make alterations to such electronic chattel paper
or transferable record permitted under UCC Section 9-105 or,
as the case may be, Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of
Default has occurred and is continuing or would occur after
taking into account any action by such Grantor with respect to
such electronic chattel paper or transferable record.
(d) Letter-of-Credit Rights. If any Grantor is at any time a
beneficiary under a letter of credit now or hereafter issued
in favor of such Grantor with an undrawn face amount exceeding
$1,000,000, such Grantor shall promptly notify the Collateral
Agent thereof and, at the request and option of the Collateral
Agent, and subject to the terms and provisions of the
Intercreditor Agreement, such Grantor shall, pursuant to an
agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment
to the Collateral Agent of the proceeds of any drawing under
the letter of credit or (ii) arrange for the Collateral Agent
to become the transferee beneficiary of the letter of credit,
with the Collateral Agent agreeing, in each case, that the
proceeds of any drawing under the letter of credit are to be
paid to the applicable Grantor unless an Event of Default has
occurred or is continuing.
(e) Commercial Tort Claims. If any Grantor shall at any time
hold or acquire a commercial tort claim in an amount
reasonably estimated to exceed $3,000,000, the Grantor shall
promptly notify the Collateral Agent thereof in a writing
signed by such Grantor including a summary description of such
claim and grant to the Collateral Agent in such writing a
security interest therein and in the proceeds thereof, all
upon the terms of this Agreement, with such writing to be in
form and substance reasonably satisfactory to the Collateral
Agent.
(f) Other Actions as to Any and All Collateral. Each Grantor
further agrees, at the request and option of the Collateral
Agent, and subject to the terms and provisions of the
Intercreditor Agreement, to take any and all other actions the
Collateral Agent may determine to be necessary or useful for
the attachment, perfection and priority of, and the ability of
the Collateral Agent to enforce, the Collateral Agent's
Security Interest in any and all of the Collateral, including,
without limitation, (a) executing, delivering and, where
appropriate, filing financing statements and amendments
relating thereto under the Uniform Commercial Code, to the
extent, if any, that a Grantor's signature thereon is required
therefor, (b) causing the Collateral Agent's name to be noted
as secured party on any certificate of title for a titled good
if such notation is a condition to attachment, perfection or
priority of, or ability of the Collateral Agent to enforce,
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the Collateral Agent's security interest in such Collateral,
(c) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance
with such provision is a condition to attachment, perfection
or priority of, or ability of the Secured Party to enforce,
the Secured Party's security interest in such Collateral, (d)
obtaining governmental and other third party waivers, consents
and approvals in form and substance satisfactory to Collateral
Agent, including, without limitation, any consent of any
licensor, lessor or other person obligated on Collateral, (e)
obtaining waivers from mortgagees and landlords in form and
substance satisfactory to the Collateral Agent and (f) taking
all actions under any earlier versions of the Uniform
Commercial Code or under any other law, as reasonably
determined by the Secured Party to be applicable in any
relevant Uniform Commercial Code or other jurisdiction,
including any foreign jurisdiction.
SECTION 3.05. COVENANTS REGARDING PATENT, TRADEMARK AND
COPYRIGHT COLLATERAL. (a) Each Grantor agrees that it will not, do any act or
omit to do any act (and will exercise commercially reasonable efforts to prevent
its licensees from doing any act as omitting to do any act) whereby any Patent
that is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees that it shall continue to
▇▇▇▇ any products covered by a Patent with the relevant patent number as
necessary and sufficient to establish and preserve its rights under applicable
patent laws.
(b) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such Trademark
with notice of Federal or foreign registration to the extent necessary and
sufficient to establish and preserve its rights under applicable law and (iv)
not knowingly use or knowingly permit the use of such Trademark in violation of
any third party rights.
(c) Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a material Copyright, continue to
publish, reproduce, display, adopt and distribute the work with appropriate
copyright notice as necessary and sufficient to establish and preserve its
rights under applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent promptly if
it knows or has reason to know that any Patent, Trademark or Copyright material
to the conduct of its business may become abandoned, lost or dedicated to the
public, or of any materially adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or its
right to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the
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registration of any Trademark or Copyright) with the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, unless it promptly informs the Collateral Agent,
and executes and delivers any and all agreements, instruments, documents and
papers, including such documents and papers as the Collateral Agent may
reasonably request, to evidence the Collateral Agent's security interest in such
Patent, Trademark or Copyright, and each Grantor hereby agrees to execute and
file such writings for the foregoing purposes, and also appoints the Collateral
Agent as its attorney-in-fact to execute and file such writings for the
foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; such power, being coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that
any Article 9 Collateral consisting of a Patent, Trademark or Copyright material
to the conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party in a manner which could adversely
affect the conduct of such Grantor's business, such Grantor promptly shall
notify the Collateral Agent and shall, if consistent with good business
judgment, promptly ▇▇▇ for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
and take such other actions as are appropriate under the circumstances to
protect such Article 9 Collateral.
(h) Upon and during the continuance of an Event of Default,
each Grantor shall use its reasonable best efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all such Grantor's right, title
and interest thereunder to the Collateral Agent or its designee if and when the
Collateral Agent may require such Grantor to do so in accordance with the
Intercreditor Agreement.
ARTICLE IV
REMEDIES
SECTION 4.01. REMEDIES UPON DEFAULT. Upon the occurrence and
during the continuance of an Event of Default and the occurrence of the Senior
Lender Termination Date, each Grantor agrees to deliver each item of Collateral
to the Collateral Agent on demand, and it is agreed that the Collateral Agent
shall have the right to take any of or all the following
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actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Grantors to the Collateral Agent, or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any applicable law or any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Article 9 Collateral
and without liability for trespass to enter any premises where the Article 9
Collateral may be located for the purpose of taking possession of or removing
the Article 9 Collateral and, generally, to exercise any and all rights afforded
to a secured party under the Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale of securities (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any sale of Collateral shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the applicable Grantors 10
days' written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the
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purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any public (or, to the extent permitted by
law, private) sale made pursuant to this Agreement, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Grantor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor. For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Collateral Agent shall be free to carry
out such sale pursuant to such agreement and no Grantor shall be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Collateral
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may proceed by a suit or suits at
law or in equity to foreclose this Agreement and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver. Any sale pursuant to the provisions of this Section 4.01 shall be
deemed to conform to the commercially reasonable standards as provided in
Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.
SECTION 4.02. APPLICATION OF PROCEEDS. Subject to the terms
and provisions of the Intercreditor Agreement, the Collateral Agent shall apply
the proceeds of any collection or sale of Collateral, including any Collateral
consisting of cash, as follows:
First, to the payment of all costs and expenses
incurred by the Trustee or the Collateral Agent in connection
with such collection or sale or otherwise in connection with
this Agreement, any other Indenture Document or any of the
Collateral Obligations, including all court costs, the fees
and expenses of its agents and the reasonable fees and
expenses of its legal counsel, the repayment of all advances
made by the Trustee or the Collateral Agent hereunder or under
any other Indenture Document on behalf of any Grantor and any
other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other
Indenture Document and any other amounts due to the Trustee or
the Collateral Agent under Section 7.07 of the Indenture;
Second, to the payment in full of the Collateral
Obligations owed to the Holders (the amounts so applied to be
distributed among the Holders pro rata in accordance with the
amounts of the Collateral Obligations owed to Holders on the
date of any such distribution); and
Third, to the Grantors, their successors or assigns,
or as a court of competent jurisdiction may otherwise direct.
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The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 4.03. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY.
For the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Agreement at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent, to the extent such Grantor may do so under applicable
contractual restrictions, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to the Grantors) to use,
license or sublicense any of the Article 9 Collateral consisting of Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof. The use of
such license by the Collateral Agent may be exercised, at the option of the
Collateral Agent, upon the occurrence and during the continuation of an Event of
Default; provided that any license, sublicense or other transaction entered into
by the Collateral Agent in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of Default.
SECTION 4.04. SECURITIES ACT. In view of the position of the
Grantors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "FEDERAL SECURITIES LAWS") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Grantor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if
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such sale were a public sale without such restrictions. In the event of any such
sale, the Collateral Agent shall incur no responsibility or liability for
selling all or any part of the Pledged Collateral at a price that the Collateral
Agent, in its sole and absolute discretion, may in good ▇▇▇▇▇ ▇▇▇▇ reasonable
under the circumstances, notwithstanding the possibility that a substantially
higher price might have been realized if the sale were deferred until after
registration as aforesaid or if more than a single purchaser were approached.
The provisions of this Section 4.04 will apply notwithstanding the existence of
a public or private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.
SECTION 4.05. REGISTRATION. Each Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default and subject to the
terms and conditions of the Intercreditor Agreement, if for any reason the
Collateral Agent desires to sell any of the Pledged Collateral at a public sale,
it will, at any time and from time to time, upon the written request of the
Collateral Agent, use its reasonable best efforts to take or to cause the issuer
of such Pledged Collateral to take such action and prepare, distribute and/or
file such documents, as are required or advisable in the reasonable opinion of
counsel for the Collateral Agent to permit the public sale of such Pledged
Collateral. Each Grantor further agrees to indemnify, defend and hold harmless
the Collateral Agent, each other Secured Party, any underwriter and their
respective officers, directors, affiliates and controlling persons from and
against all loss, liability, expenses, costs of counsel (including, without
limitation, reasonable fees and expenses to the Collateral Agent of legal
counsel), and claims (including the costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Grantor or the issuer of such Pledged Collateral by the Collateral Agent
or any other Secured Party expressly for use therein. Each Grantor further
agrees, upon such written request referred to above, to use its reasonable
efforts to qualify, file or register, or cause the issuer of such Pledged
Collateral to qualify, file or register, any of the Pledged Collateral under the
Blue Sky or other securities laws of such states as may be requested by the
Collateral Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. Each Grantor will bear all costs and
expenses of carrying out its obligations under this Section 4.05. Each Grantor
acknowledges that there is no adequate remedy at law for failure by it to comply
with the provisions of this Section 4.05 and that such failure would not be
adequately compensable in damages, and therefore agrees that its agreements
contained in this Section 4.05 may be specifically enforced.
ARTICLE V
INDEMNITY, SUBROGATION AND SUBORDINATION
SECTION 5.01. INDEMNITY AND SUBROGATION. In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 5.03), the Company agrees that (a) in the
event a payment of an obligation shall be made by any Guarantor under Section
12.01 of the Indenture, the Company shall indemnify such
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Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the Person to whom such payment shall have been made
to the extent of such payment and (b) in the event any assets of any Grantor
shall be sold pursuant to this Agreement or any other Security Document to
satisfy in whole or in part an obligation owed to any Secured Party, the Company
shall indemnify such Grantor in an amount equal to the greater of the book value
or the fair market value of the assets so sold.
SECTION 5.02. CONTRIBUTION AND SUBROGATION. Each Guarantor and
Grantor (a "CONTRIBUTING PARTY") agrees (subject to Section 5.03) that, in the
event a payment shall be made by any other Guarantor under the Indenture or
hereunder in respect of any Obligation or that assets of any other Grantor shall
be sold pursuant to any Security Document to satisfy any Obligation owed to any
Secured Party and such other Guarantor or Grantor (the "CLAIMING PARTY") shall
not have been fully indemnified by the Company as provided in Section 5.01, the
Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment or the greater of the book value or the fair market value
of such assets, as the case may be, in each case multiplied by a fraction of
which the numerator shall be the net worth of the Contributing Party on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on the date hereof (or, (a) in the case of any Guarantor
becoming a party to the Indenture pursuant to Section 4.12 of the Indenture, the
date of the supplement to the Indenture executed and delivered by such Guarantor
or, (b) in the case of any Grantor becoming a party hereto pursuant to Section
6.14, the date of the supplement hereto executed and delivered by such Grantor).
Any Contributing Party making any payment to a Claiming Party pursuant to this
Section 5.02 shall be subrogated to the rights of such Claiming Party under
Section 5.01 to the extent of such payment.
SECTION 5.03. SUBORDINATION. (a) Notwithstanding any provision
of this Agreement to the contrary, all rights of the Guarantors and Grantors
under Sections 5.01 and 5.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Collateral Obligations. No failure
on the part of the Company or any Guarantor or Grantor to make the payments
required by Sections 5.01 and 5.02 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor or Grantor with respect to its obligations under
the Indenture or hereunder, and each Guarantor and Grantor shall remain liable
for the full amount of the obligations of such Guarantor or Grantor under the
Indenture or hereunder.
(b) Each Guarantor and Grantor hereby agrees that all
Indebtedness and other monetary obligations owed by it to any other Guarantor,
Grantor or any other Subsidiary shall be fully subordinated to the indefeasible
payment in full in cash of the Collateral Obligations.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. NOTICES. All communications and notices
hereunder shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section
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14.02 of the Indenture. All communications and notices hereunder to any
Subsidiary Party shall be given to it in care of the Company as provided in
Section 14.02 of the Indenture.
SECTION 6.02. WAIVERS; AMENDMENT. (a) No failure or delay by
the Collateral Agent, the Trustee or any Holder in exercising any right or power
hereunder or under any other Indenture Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent, the Trustee and
the Holders hereunder and under the other Indenture Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any
Indenture Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section 6.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on any Indenture Party in any case shall
entitle any Indenture Party to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except in accordance with the Indenture, pursuant to
an agreement or agreements in writing entered into by the Collateral Agent and
the Indenture Party or Indenture Parties with respect to which such waiver,
amendment or modification is to apply.
SECTION 6.03. COLLATERAL AGENT'S FEES AND EXPENSES;
INDEMNIFICATION. (a) Each Grantor and Guarantor jointly and severally agrees to
pay upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, disbursements and other charges of its
counsel and of any experts or agents, which the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral, (iii) the exercise, enforcement or protection of any rights
of the Collateral Agent hereunder or (iv) the failure of any Grantor or any
Guarantor to perform or observe any of the provisions hereof applicable to it.
(b) Without limitation of its indemnification obligations
under the other Indenture Documents, each Grantor and Guarantor jointly and
severally agrees to indemnify the Collateral Agent, the Trustee, the Holders and
each Affiliate of the foregoing Persons (each such Person being called an
"INDEMNITEE") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of, the execution, delivery or performance of this Agreement or any
claim, litigation, investigation or proceeding relating to any of the foregoing
agreement or instrument contemplated hereby, or to the Collateral, whether or
not any Indemnitee is a party thereto; provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
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(c) Any such amounts payable as provided hereunder shall be
additional Collateral Obligations secured hereby and by the other Security
Documents. The provisions of this Section 6.03 shall remain operative and in
full force and effect regardless of the termination of this Agreement or any
other Indenture Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Collateral Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Indenture Document, or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 6.03 shall
be payable on written demand therefor.
(d) The Collateral Agent shall not be responsible in any
manner whatsoever for the correctness of any recitals, statements,
representations or warranties contained herein. The Collateral Agent makes no
representation as to the value or condition of the Collateral or any part
thereof, as to the title of any Grantor to the Collateral, as to the security
afforded by this Agreement or any other Security Document or as to the validity,
execution, enforceability, legality or sufficiency of this Agreement or any
Security Document, and the Collateral Agent shall incur no liability or
responsibility in respect of any such matters. Except as may be expressly
provided in any Security Document, the Collateral Agent shall not be responsible
for insuring the Collateral, for the payment of taxes, charges, assessments or
liens upon the Collateral or otherwise as to the maintenance of the Collateral,
except as provided in the immediately following sentence when the Collateral
Agent has possession of the Collateral. The Collateral Agent shall have no duty
to the Grantors or to the holders of the Notes as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
the Collateral Agent or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto, except the duty to
accord such of the Collateral as may be in its possession substantially the same
care as it accords its own assets and the duty to account for monies received by
it. The Collateral Agent shall have no obligations to file any UCC financing
statements or UCC continuation statements except at the written direction of the
Grantors or the Trustee and upon receipt of such statements completed and in a
proper form for filing provided to the Collateral Agent at least five Business
Days in advance of any requested filing date. The Collateral Agent shall have no
obligations to file any document with any foreign or domestic patent, trademark
or copyright office, or any foreign governmental, municipal or other office. The
Collateral Agent shall not be responsible for the consequences of any oversight
or error of judgment whatsoever, except that the Collateral Agent shall be
liable for losses due to its willful misconduct, gross negligence or bad faith.
The Collateral Agent shall not be required to ascertain or inquire as to the
performance by any Grantor of any of the covenants or agreements contained
herein or in the Indenture, the Notes or the Security Documents. Neither the
Collateral Agent nor any officer, agent or representative thereof shall be
personally liable for any action taken or omitted to be taken by any such person
in connection with this Agreement or any other Security Document except for such
person's own gross negligence, willful misconduct or bad faith. The Collateral
Agent may execute any of the powers granted under this Agreement or any of the
other Security Documents and perform any duty hereunder or thereunder either
directly or by or through agents or attorneys-in-fact, and shall not be
responsible for the misconduct of any agents or attorneys-in-fact selected by it
with due care.
(e) Subject to any additional requirements provided herein or
in the Indenture, in the performance of its duties under this Collateral
Agreement the Collateral Agent shall deem
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it necessary or desirable that a matter be proved or established with respect to
any Person in connection with the taking, suffering or omitting of any action
hereunder by the Collateral Agent, such matter may be conclusively deemed to be
proved or established by a certificate executed by an officer of such Person,
and absent gross negligence, willful misconduct or bad faith, the Collateral
Agent shall have no liability with respect to any action taken, suffered or
omitted in reliance thereon.
(f) The Collateral Agent may consult with counsel and, in the
absence of bad faith, shall be fully protected in taking any action hereunder in
accordance with any advice of such counsel. The Collateral Agent shall have the
right but not the obligation at any time to seek instructions concerning the
administration of this Agreement, the duties created hereunder or any of the
Collateral from any court of competent jurisdiction.
(g) The Collateral Agent shall be fully protected in relying
upon any resolution, statement, certificate, instrument, opinion, report,
notice, request, consent, order or other paper or document which it believes to
be genuine and to have been signed or presented by the proper party or parties.
In the absence of its gross negligence, willful misconduct or bad faith the
Collateral Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificate or
opinions furnished to the Collateral Agent in connection with this Agreement and
the other Security Documents.
(h) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of any
Event of Default unless and until the Collateral Agent shall have received a
written notice of Event of Default. The Collateral Agent shall have no
obligation whatsoever either prior to or after receiving such a notice of Event
of Default to inquire whether an Event of Default has, in fact, occurred and
shall be entitled to rely conclusively, and shall be fully protected in so
relying, on any certificate so furnished to it and shall have no obligation to
take or omit to take any action with respect to such notice of Event of Default.
(i) If any dispute or disagreement shall arise as to the
allocation of any sum of money received by the Collateral Agent hereunder, under
the Indentures or under any Security Document, the Collateral Agent shall have
the right to deliver such sum to a court of competent jurisdiction and therein
commence an action for interpleader.
(j) A resignation or removal of the Collateral Agent and
appointment of a successor Collateral Agent shall become effective only upon the
successor Collateral Agent's acceptance of appointment as provided in this
Section 6.03.
(i) The Collateral Agent may resign in writing at any
time by so notifying the Grantors and the Trustee and will
thereafter be discharged from the duties created hereby upon
the effectiveness of the Collateral Agent's resignation
pursuant to subclause (iv) below. The Grantors or the Trustee
may remove the Collateral Agent if:
(A) the Collateral Agent is adjudged a
bankrupt or an insolvent or an order for relief is
entered with respect to the Collateral Agent under
-29-
Title 11, U.S. Code or any similar federal or state
law for the relief of debtors;
(B) a custodian or public officer takes
charge of the Collateral Agent or its property; or
(C) the Collateral Agent becomes incapable
of acting.
(ii) If the Collateral Agent resigns or is removed or
if a vacancy exists in the office of Collateral Agent for any
reason, the Trustee shall promptly appoint a successor
Collateral Agent.
(iii) If a successor Collateral Agent does not take
office within 60 days after the retiring Collateral Agent
resigns or is removed, the retiring Collateral Agent may
petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent.
(iv) A successor Collateral Agent shall deliver a
written acceptance of its appointment to the retiring
Collateral Agent, the Indenture Trustee and the Grantors.
Thereupon, the resignation or removal of the retiring
Collateral Agent shall become effective, and the successor
Collateral Agent shall have all the rights, powers and duties
of the Collateral Agent under this Collateral Agreement. The
successor Collateral Agent shall mail a notice of its
succession to the Indenture Trustee. The retiring Collateral
Agent shall promptly transfer all property held by it as
Collateral Agent to the successor Collateral Agent, provided
all sums owing to the Collateral Agent hereunder have been
paid. Notwithstanding replacement of the Collateral Agent
pursuant to this Section 6.03, the Grantor's obligations under
Sections 6.03(a), (b) and (c) hereof shall continue for the
benefit of the retiring Collateral Agent, and the Grantors
shall pay to any such replaced or removed Collateral Agent all
amounts owed to such replaced or removed Collateral Agent
under Sections 6.03(a), (b) and (c) hereof upon such
replacement or removal.
SECTION 6.04. SUCCESSORS AND ASSIGNS. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Guarantor, Grantor or
the Collateral Agent that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
SECTION 6.05. SURVIVAL OF AGREEMENT. All covenants,
agreements, representations and warranties made by the Indenture Parties in the
Indenture Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other
Indenture Document shall be considered to have been relied upon by the Holders
and shall survive the execution and delivery of the Indenture Documents and the
purchase of the Notes by the Holders, regardless of any investigation made by
any Holder or on its behalf and notwithstanding that the Collateral Agent, the
Trustee or any Holder may have had notice or knowledge of any Default or
incorrect representation or warranty and shall continue in full force and effect
as long as any Obligation remains unpaid.
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SECTION 6.06. COUNTERPARTS; EFFECTIVENESS; SEVERAL AGREEMENT.
This Agreement may be executed in counterparts, each of which shall constitute
an original but all of which when taken together shall constitute single
contract, and shall become effective as provided in this Section 6.06. Delivery
of an executed signature page to this Agreement by facsimile transmission shall
be as effective as delivery of a manually signed counterpart of this Agreement.
This Agreement shall become effective as to any Indenture Party when a
counterpart hereof executed on behalf of such Indenture Party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
such Indenture Party and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Indenture Party,
the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Indenture Party shall have the right to
assign or transfer its rights or obligations hereunder or any interest herein or
in the Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Indenture. This Agreement shall
be construed as a separate agreement with respect to each Indenture Party and
may be amended, modified, supplemented, waived or released with respect to any
Indenture Party without the approval of any other Indenture Party and without
affecting the obligations of any other Indenture Party hereunder.
SECTION 6.07. SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 6.08. RIGHT OF SET-OFF. If an Event of Default shall
have occurred and be continuing, subject to the terms and provisions of the
Intercreditor Agreement, each Holder is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by such Holder to or for
the credit or the account of any Subsidiary Party against any of and all the
obligations of such Subsidiary Party now or hereafter existing under this
agreement owed to such Holder, irrespective of whether or not such Holder shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Holder under this Section 6.08 are in addition to
other rights and remedies (including other rights of set-off) which such Holder
may have.
SECTION 6.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each of the Indenture Parties hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Indenture Document, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Indenture Document shall
affect any right that the Collateral Agent, the Trustee or any Holder may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Indenture Document against any Grantor or Guarantor, or its properties
in the courts of any jurisdiction.
(c) Each of the Indenture Parties hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Indenture Document in any court referred to in paragraph (b) of this
Section 6.09. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 6.01. Nothing
in this Agreement or any other Indenture Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER INDENTURE DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6.10.
SECTION 6.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to betaken
into consideration in interpreting, this Agreement.
-32-
SECTION 6.12. SECURITY INTEREST ABSOLUTE. All rights of the
Collateral Agent hereunder, the Security Interest, the grant of a security
interest in the Pledged Collateral and all obligations of each Grantor and
Guarantor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Indenture, any other Indenture
Document, any agreement with respect to any of the Collateral Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any other term of, all or any
of the Collateral Obligations, or any other amendment or waiver of or any
consent to any departure from the Indenture, any other Indenture Document or any
other agreement or instrument, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Collateral Obligations, or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Grantor or
Guarantor in respect of the Collateral Obligations or this Agreement.
SECTION 6.13. TERMINATION OR RELEASE. (a) This Agreement, the
Security Interest and all other security interests granted hereby shall
terminate when all the Collateral Obligations have indefeasibly been paid in
full.
(b) Upon the sale or other disposition (including by way of
consolidation or merger) of a Guarantor or Grantor or the sale or disposition of
all or substantially all the assets of such Guarantor or Grantor (in each case
other than a sale or disposition to the Company or an Affiliate of the Company
and as permitted by the Indenture and if in connection therewith the Company
provides an Officers' Certificate to the Collateral Agent to the effect that the
Company will comply with its obligations under Section 4.06 of the Indenture),
such Guarantor or Grantor shall be deemed released from all obligations
hereunder without any further action required on the part of the Trustee or any
Holder.
(c) A Guarantor or Grantor also shall be released (i) upon the
designation of such Guarantor or Grantor as an Unrestricted Subsidiary; or (ii)
if the Company exercises its legal defeasance option or its covenant defeasance
option as permitted by Section 8.01 of the Indenture.
(d) If any of the Collateral shall become subject to the
disposition, release or eminent domain provisions set forth in Sections 12.03,
12.04 and 12.06 of the Indenture, such Collateral shall be automatically
released from the Security Interest to the extent provided in Sections 12.03,
12.04 and 12.06 of the Indenture.
(e) In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor's expense, all documents that such Grantor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 6.13 shall be without recourse to
or warranty by the Collateral Agent.
SECTION 6.14. ADDITIONAL SUBSIDIARIES. If, pursuant to
Sections 4.11 and 11.03 of the Indenture, the Company is required to cause any
Subsidiary that is not a Subsidiary Party to become a Subsidiary Party, upon
execution and delivery by the Collateral Agent and a
-33-
Subsidiary of an instrument in the form of Exhibit I hereto, such Subsidiary
shall become a Subsidiary Party hereunder with the same force and effect as if
originally named as a Subsidiary Party herein. The execution and delivery of any
such instrument shall not require the consent of any other Indenture Party
hereunder. The rights and obligations of each Indenture Party hereunder shall
remain in full force and effect notwithstanding the addition of any new
Indenture Party as a party to this Agreement.
SECTION 6.15. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable, coupled with an interest and shall not be exercisable unless an
Event of Default has occurred and is continuing. Without limiting the generality
of the foregoing, the Collateral Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default and subject to the terms and
provisions of the Intercreditor Agreement, with full power of substitution
either in the Collateral Agent's name or in the name of such Grantor (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral; (c) to sign
the name of any Grantor on any invoice or ▇▇▇▇ of lading relating to any of the
Collateral; (d) to send verifications of Accounts to any Account Debtor; (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (g) to notify, or
to require any Grantor to notify, Account Debtors to make payment directly to
the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Collateral Agent were the
absolute owner of the Collateral for all purposes; provided that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent to
make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Collateral Agent, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby. The Collateral Agent and the other Secured Parties shall be accountable
only for amounts actually received as a result of the exercise of the powers
granted to them herein, and neither they nor their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence, willful misconduct or
bad faith.
-34-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Collateral Agreement as of the day and year first above written.
INTERNATIONAL WIRE GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
EACH OF THE SUBSIDIARIES LISTED
ON SCHEDULE I HERETO
By: /s/
-----------------------------------------
Name:
Title:
BNY MIDWEST TRUST COMPANY
By:
-----------------------------------------
Name:
Title:
-35-
SCHEDULE I
TO THE COLLATERAL AGREEMENT
SUBSIDIARY PARTIES
IWG RESOURCES LLC
WIRE TECHNOLOGIES, INC.
OMEGA WIRE, INC.
INTERNATIONAL WIRE ROME OPERATIONS, INC.
OWI CORPORATION
CAMDEN WIRE CO., INC.
-36-
SCHEDULE II
TO THE COLLATERAL AGREEMENT
EQUITY INTERESTS
NUMBER OF NUMBER AND CLASS OF PERCENTAGE OF EQUITY
ISSUER CERTIFICATE REGISTERED OWNER EQUITY INTEREST INTERESTS
------ ----------- ---------------- ------------------- --------------------
DEBT SECURITIES
PRINCIPAL MATURITY
ISSUER AMOUNT DATE OF NOTICE DATE
------ --------- -------------- --------
-37-
SCHEDULE II
TO THE COLLATERAL AGREEMENT
U.S. COPYRIGHTS OWNED BY [NAME OR GRANTOR]
U.S. COPYRIGHT REGISTRATION
TITLE REG. NO. AUTHOR
----- -------- ------
PENDING U.S. COPYRIGHT APPLICATIONS
FOR REGISTRATION
TITLE AUTHOR CLASS DATE FILED
----- ------ ------ -----------
NON-U.S. COPYRIGHT REGISTRATIONS
COUNTRY TITLE REG. NO. AUTHOR
-------- ----- -------- ------
NON-U.S. PENDING U.S. COPYRIGHT
APPLICATIONS FOR REGISTRATION
COUNTRY TITLE AUTHOR CLASS DATE FILED
------- ----- ------ ----- ----------
-38-
SCHEDULE III
TO THE COLLATERAL AGREEMENT
CONT'D
LICENSES
I. Licenses/Sublicensees of [Name of Grantor] as Licensor on Date Hereof
A. Copyrights
U.S. COPYRIGHTS
LICENSEE NAME DATE OF TITLE OF U.S.
AND ADDRESS LICENSE/SUBLICENSE COPYRIGHT AUTHOR REG. NO.
------------- ------------------ ------------- ------ --------
NON-U.S. COPYRIGHTS
TITLE OF
LICENSEE NAME DATE OF NON-U.S.
COUNTRY AND ADDRESS LICENSE/SUBLICENSE COPYRIGHT AUTHOR REG. NO.
------- ------------- ------------------ --------- ------ --------
B. Patents
U.S. PATENTS
LICENSEE NAME DATE OF
AND ADDRESS LICENSE/SUBLICENSE ISSUE DATE PATENT NO.
-------------- ------------------ ---------- ----------
U.S. PATENT APPLICATIONS
LICENSEE NAME DATE OF
AND ADDRESS LICENSE/SUBLICENSE DATE FILED APPLICATION NO.
------------- ------------------ ---------- ---------------
-39-
SCHEDULE III
TO THE COLLATERAL AGREEMENT
CONT'D
NON-U.S. PATENTS
LICENSEE NAME DATE OF ISSUE NON-U.S.
COUNTRY AND ADDRESS LICENSE/SUBLICENSE DATE PATENT NO.
------- ---------------- ------------------ ----- ----------
NON-U.S. PATENT APPLICATIONS
LICENSEE NAME DATE OF DATE APPLICATION
COUNTRY AND ADDRESS LICENSE/SUBLICENSE FILED NO.
------- -------------- ------------------ ----- -----------
C. Trademarks
U.S. TRADEMARKS
LICENSEE NAME REG. REG. NO.
AND ADDRESS DATE OF LICENSE/SUBLICENSE U.S. ▇▇▇▇ DATE NO.
----------- -------------------------- --------- ---- --------
U.S. TRADEMARK APPLICATIONS
LICENSEE NAME DATE APPLICATION
AND ADDRESS DATE OF LICENSE/SUBLICENSE U.S. ▇▇▇▇ FILED NO.
----------- -------------------------- --------- ----- -----------
NON-U.S. TRADEMARKS
LICENSEE NAME DATE OF NON-U.S. REG.
COUNTRY AND ADDRESS LICENSE/SUBLICENSE ▇▇▇▇ DATE REG. NO.
------- ----------- ------------------ -------- ---- --------
NON-U.S. TRADEMARK APPLICATIONS
LICENSEE NAME DATE OF NON-U.S. DATE
COUNTRY AND ADDRESS LICENSE/SUBLICENSE ▇▇▇▇ FILED APPLICATION NO.
------- ----------- ------------------ -------- ----- ---------------
-40-
SCHEDULE III
TO THE COLLATERAL AGREEMENT
CONT'D
D. Others
LICENSEE NAME DATE OF LICENSE/
AND ADDRESS SUBLICENSE SUBJECT MATTER
-------------- ---------------- --------------
II. Licensees/Sublicenses of [Name of Grantor] as Licensee on Date Hereof.
A. Copyrights
U.S. COPYRIGHTS
LICENSEE NAME DATE OF TITLE OF
AND ADDRESS LICENSE/SUBLICENSE U.S. COPYRIGHT AUTHOR REG. NO.
----------- ------------------ -------------- ------ --------
NON-U.S. COPYRIGHTS
TITLE OF
LICENSEE NAME DATE OF NON-U.S.
COUNTRY AND ADDRESS LICENSE/SUBLICENSE COPYRIGHT AUTHOR REG. NO.
------- -------------- ------------------ --------- ------ --------
B. Patents
U.S. PATENTS
LICENSEE NAME DATE OF
AND ADDRESS LICENSE/SUBLICENSE ISSUE DATE PATENT NO.
-------------- ------------------ ---------- ----------
U.S. PATENT APPLICATIONS
LICENSEE NAME DATE OF
AND ADDRESS LICENSE/SUBLICENSE DATE FILED APPLICATION NO.
------------- ------------------ ---------- ---------------
NON-U.S. PATENTS
LICENSEE NAME DATE OF ISSUE NON-U.S.
COUNTRY AND ADDRESS LICENSE/SUBLICENSE DATE PATENT NO.
------- ---------------- ------------------ ----- ----------
-41-
SCHEDULE III
TO THE COLLATERAL AGREEMENT
CONT'D
NON-U.S. PATENT APPLICATIONS
LICENSEE NAME DATE OF DATE APPLICATION
COUNTRY AND ADDRESS LICENSE/SUBLICENSE FILED NO.
------- -------------- ------------------ ------ ------------
C. Trademarks
U.S. TRADEMARKS
LICENSEE NAME DATE OF REG. REG. NO.
AND ADDRESS LICENSE/SUBLICENSE U.S. ▇▇▇▇ DATE NO.
----------- ------------------ --------- ---- --------
U.S. TRADEMARK APPLICATIONS
LICENSEE NAME DATE OF DATE APPLICATION
AND ADDRESS LICENSE/SUBLICENSE U.S. ▇▇▇▇ FILED NO.
------------- ------------------ --------- ----- -----------
NON-U.S. TRADEMARKS
LICENSEE NAME DATE OF NON-U.S. REG.
COUNTRY AND ADDRESS LICENSE/SUBLICENSE ▇▇▇▇ DATE REG. NO.
------- ------------- ------------------ -------- ---- --------
NON-U.S. TRADEMARK APPLICATIONS
LICENSEE NAME DATE OF NON-U.S. DATE
COUNTRY AND ADDRESS LICENSE/SUBLICENSE ▇▇▇▇ FILED APPLICATION NO.
------- ----------- ------------------ -------- ----- ---------------
D. Others
LICENSEE NAME DATE OF LICENSE/
AND ADDRESS SUBLICENSE SUBJECT MATTER
-------------- ---------------- --------------
PATENTS OWNED BY
[NAME OF GRANTOR]
U.S. PATENT REGISTRATIONS
PATENT NUMBERS ISSUE DATE
-------------- ----------
-42-
SCHEDULE III
TO THE COLLATERAL AGREEMENT
CONT'D
U.S. PATENT APPLICATIONS
PATENT NUMBERS ISSUE DATE
-------------- ----------
NON-U.S. PATENT REGISTRATIONS
COUNTRY ISSUE DATE PATENT NO.
------- ---------- ----------
NON-U.S. PATENT REGISTRATIONS
COUNTRY FILING DATE PATENT APPLICATION NO.
------- ----------- ----------------------
TRADEMARK/TRADE NAMES OWNED BY
[NAME OF GRANTOR]
U.S. TRADEMARK REGISTRATIONS
▇▇▇▇ REG. DATE REG. NO.
---- --------- --------
U.S. TRADEMARK APPLICATIONS
▇▇▇▇ REG. DATE REG. NO.
---- --------- --------
STATE TRADEMARK REGISTRATIONS
STATE ▇▇▇▇ FILING DATE APPLICATION NO.
----- ----- ----------- ---------------
NON-U.S. TRADEMARK REGISTRATIONS
COUNTRY ▇▇▇▇ REG. DATE REG. NO.
------- ---- --------- --------
-43-
SCHEDULE III
TO THE COLLATERAL AGREEMENT
CONT'D
NON-U.S. TRADEMARK APPLICATIONS
COUNTRY ▇▇▇▇ APPLICATION DATE APPLICATION NO.
------- ---- ---------------- ---------------
TRADE NAMES
COUNTRY(s) WHERE USED TRADE NAMES
--------------------- -----------
-44-
SCHEDULE IIII
TO THE COLLATERAL AGREEMENT
CONT'D
MORTGAGED PROPERTY
-45-
EXHIBIT I
TO THE COLLATERAL AGREEMENT
SUPPLEMENT NO. __ dated as of [_______] , to the Collateral
Agreement dated as of _______, 2004, International Wire Group, Inc. and each
Subsidiary Party listed on Schedule I thereto (each such subsidiary individually
a "SUBSIDIARY GRANTOR" and collectively, the "SUBSIDIARY GRANTORS"; the
Subsidiary Grantors, and the Company are referred to collectively herein as the
"GRANTORS") and BNY Midwest Trust Company, as Collateral Agent (in such
capacity, the "COLLATERAL AGENT").
A. Reference is made to made to Indenture dated as of _______,
2004 (as amended, restated, supplemented or otherwise modified from time to
time, the "INDENTURE"), among the Company and BNY Midwest Trust Company, as
trustee (the "TRUSTEE").
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Indenture and the
Collateral Agreement referred to therein.
C. The Grantors have entered into the Collateral Agreement in
order to induce the Trustee to enter into the Indenture and the Holders to
purchase the Notes. Section 6.14 of Collateral Agreement provides that
additional Subsidiaries formed by the Indenture Parties shall become Subsidiary
Parties under the Collateral Agreement and shall execute and deliver an
instrument in the form of this Supplement. The undersigned Subsidiary (the "NEW
SUBSIDIARY") is executing this Supplement in accordance with the requirements of
the Indenture and the Collateral Agreement as consideration for credit
previously extended to the Company.
Accordingly, the Collateral Agent and the New Subsidiary agree
as follows:
SECTION 1. In accordance with Section 6.14 of the Collateral
Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party
(and accordingly, becomes a Guarantor and a Grantor), Grantor and Guarantor
under the Collateral Agreement with the same force and effect as if originally
named therein as a Subsidiary Party and the New Subsidiary hereby (a) agrees to
all the terms and provisions of the Collateral Agreement applicable to it as a
Subsidiary Party, Grantor and Guarantor hereunder and (b) represents and
warrants that the representations and warranties made by it as a Grantor and
Guarantor hereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Subsidiary, as security for the payment
and performance in full of the Collateral Obligations (as defined in the
Collateral Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all of the New Subsidiary's
right, title and interest in and to the Collateral (as defined in the Collateral
Agreement) of the New Subsidiary. Each reference to a "Guarantor" or "Grantor"
in the Collateral Agreement shall be deemed to include the New Subsidiary. The
Collateral Agreement is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and
-46-
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants
that (a) set forth on Schedule I attached hereto is a true and correct schedule
of the location of any and all Collateral of the New Subsidiary and (b) set
forth under its signature hereto, is the true and correct legal name of the New
Subsidiary, its jurisdiction of formation and the location of its chief
executive office.
SECTION 5. Except as expressly supplemented hereby, the
Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Collateral Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 6.01 of the Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
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IN WITNESS WHEREOF, the New Subsidiary and the Collateral
Agent have duly executed this Supplement to the Collateral Agreement as of the
day and year first above written.
[NAME OF NEW SUBSIDIARY]
By:
-------------------------------------
Name:
Title:
Legal Name:
Jurisdiction of Formation:
Location of Chief Executive office:
BNY MIDWEST TRUST COMPANY
By:
-------------------------------------
Name:
Title:
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SCHEDULE I
TO THE SUPPLEMENT NO __
TO THE COLLATERAL AGREEMENT
LOCATION OF COLLATERAL
DESCRIPTION LOCATION
----------- --------
EQUITY INTERESTS
NUMBER OF
NUMBER OF REGISTERED CLASS OF PERCENTAGE OF
ISSUER CERTIFICATE OWNER EQUITY INTERESTS EQUITY INTERESTS
------ ----------- ----------------- ---------------- ----------------
DEBT SECURITIES
ISSUER PRINCIPAL AMOUNT DATE OF NOTE MATURITY DATE
------ ---------------- ------------ -------------
INTELLECTUAL PROPERTY
MORTGAGED PROPERTY
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