EXHIBIT 10.2
EXECUTION COPY
AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT
made by
Rent-A-Center, Inc.
and certain of its Subsidiaries
in favor of
JPMORGAN CHASE BANK,
as Administrative Agent
Dated as of May 28, 2003,
As Amended and Restated as of July 14, 2004
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS................................................................2
1.1. Definitions.......................................................................2
1.2. Other Definitional Provisions.....................................................7
SECTION 2. GUARANTEE....................................................................8
2.1. Guarantee.........................................................................8
2.2. Rights of Reimbursement, Contribution and Subrogation.............................8
2.3. Amendments, etc. with respect to the Borrower Obligations.........................10
2.4. Guarantee Absolute and Unconditional..............................................10
2.5. Reinstatement.....................................................................11
2.6. Payments..........................................................................11
SECTION 3. GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL...........11
SECTION 4. REPRESENTATIONS AND WARRANTIES...............................................12
4.1. Representations in Credit Agreement...............................................13
4.2. Title; No Other Liens.............................................................13
4.3. Perfected First Priority Liens....................................................13
4.4. Jurisdiction of Organization; Chief Executive Office..............................13
4.5. Inventory and Equipment...........................................................14
4.6. Farm Products.....................................................................14
4.7. Investment Property...............................................................14
4.8. Receivables.......................................................................15
4.9. Intellectual Property.............................................................15
4.10. Letter of Credit Rights...........................................................16
4.11. Commercial Tort Claims............................................................17
SECTION 5. COVENANTS....................................................................17
5.1. Covenants in Credit Agreement.....................................................17
5.2. Delivery and Control of Instruments, Chattel Paper, Negotiable Documents
and Investment Property ..........................................................17
5.3. Maintenance of Insurance..........................................................17
5.4. Payment of Obligations............................................................18
5.5. Maintenance of Perfected Security Interest; Further Documentation.................18
5.6. Changes in Locations, Name, Jurisdiction of Incorporation, Etc....................18
5.7. Notices ..........................................................................19
5.8. Investment Property...............................................................19
5.9. Receivables.......................................................................20
5.10. Intellectual Property.............................................................20
5.11. Commercial Tort Claims............................................................22
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PAGE
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SECTION 6. REMEDIAL PROVISIONS..........................................................23
6.1. Certain Matters Relating to Receivables...........................................23
6.2. Communications with Obligors; Grantors Remain Liable..............................23
6.3. Pledged Securities................................................................24
6.4. Proceeds to be Turned Over To Administrative Agent................................24
6.5. Application of Proceeds...........................................................24
6.6. Code and Other Remedies...........................................................25
6.7. Registration Rights...............................................................26
6.8. Waiver; Deficiency................................................................27
SECTION 7. THE ADMINISTRATIVE AGENT.....................................................27
7.1. Administrative Agent's Appointment as Attorney-in-Fact, Etc.......................27
7.2. Duty of Administrative Agent......................................................29
7.3. Execution of Financing Statements.................................................29
7.4. Authority of Administrative Agent.................................................29
7.5. Appointment of Co-Collateral Agents...............................................30
SECTION 8. MISCELLANEOUS................................................................30
8.1. Amendments in Writing.............................................................30
8.2. Notices...........................................................................30
8.3. No Waiver by Course of Conduct; Cumulative Remedies...............................30
8.4. Enforcement Expenses; Indemnification.............................................30
8.5. Successors and Assigns............................................................31
8.6. Set-Off...........................................................................31
8.7. Counterparts......................................................................31
8.8. Severability......................................................................31
8.9. Section Headings..................................................................32
8.10. Integration.......................................................................32
8.11. GOVERNING LAW.....................................................................32
8.12. Submission to Jurisdiction; Waivers...............................................32
8.13. Acknowledgments...................................................................32
8.14. Additional Grantors...............................................................33
8.15. Releases..........................................................................33
8.16. WAIVER OF JURY TRIAL..............................................................33
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SCHEDULES:
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Investment Property
Schedule 3 Filings and Other Actions Required to Perfect Security Interests
Schedule 4 Exact Legal Name, Jurisdiction of Organization and Location of
Chief Executive Office
Schedule 5 Copyrights, Patents, Trademarks, Intellectual Property Licenses,
Other Intellectual Property
Schedule 6 Letters of Credit
Schedule 7 Commercial Tort Claims
EXHIBITS:
Exhibit A Form of Acknowledgment and Consent
Exhibit B-1 Form of Intellectual Property Security Agreement
Exhibit B-2 Form of After-Acquired Intellectual Property Security Agreement
Exhibit C Form of Control Agreement (Uncertificated Securities)
ANNEX:
Annex 1 Assumption Agreement
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AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT, dated
as of May 28, 2003, as amended and restated as of July 14, 2004, made by each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein, the "Grantors"), in favor of JPMORGAN CHASE BANK, as
Administrative Agent (in such capacity, the "Administrative Agent") for (i) the
banks and other financial institutions or entities (the "Lenders") from time to
time parties to the Amended and Restated Credit Agreement, dated as of May 28,
2003, as amended and restated as of July 14, 2004 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among
RENT-A-CENTER, INC., a Delaware corporation (the "Borrower"), Lenders, CALYON
NEW YORK BRANCH, SUNTRUST BANK and UNION BANK OF CALIFORNIA, each as
documentation agent (in such capacity, the "Documentation Agents"), ▇▇▇▇▇▇
COMMERCIAL PAPERS INC., as syndication agent (in such capacity, the "Syndication
Agent"), and the Administrative Agent, and (ii) the other Secured Parties (as
hereinafter defined).
WITNESSETH:
WHEREAS, the Grantors and certain other signatories thereto
have entered into a
Guarantee and Collateral Agreement dated as of May 28, 2003,
in favor of ▇▇▇▇▇▇ Commercial Paper Inc., as Administrative Agent (the "Existing
Guarantee and Collateral Agreement");
WHEREAS, the Administrative Agent under the Existing
Guarantee
and Collateral Agreement has been replaced by the Administrative Agent pursuant
to the Credit Agreement as agent for the Lenders under this Agreement and the
other Loan Documents;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
WHEREAS, it is a condition precedent to the Restatement
Effective Date that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the Lenders;
WHEREAS, the parties hereto have agreed to amend and restate
the Existing
Guarantee and Collateral Agreement as provided in this Agreement;
and
WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities existing
under the Existing
Guarantee and Collateral Agreement or evidence satisfaction
of any of such obligations and that this Agreement amend and restate in its
entirety the Existing
Guarantee and Collateral Agreement and re-evidence the
obligations of the Grantors outstanding thereunder;
NOW, THEREFORE, in consideration of the above premises and to
induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make or maintain their respective
extensions of credit to the Borrower thereunder, each Guarantor hereby agrees
with the Administrative Agent, for the ratable benefit of the Secured Parties,
that on the Restatement Effective Date, the Existing
Guarantee and Collateral
Agreement shall be amended and restated in its entirety as follows:
SECTION 1. DEFINED TERMS
1.1. Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
New York UCC (as hereinafter defined) on the date hereof are used herein as so
defined: Accounts, Account Debtor, Authenticate, Certificated Security, Chattel
Paper, Commercial Tort Claims, Commodity Account, Commodity Contract, Commodity
Intermediary, Documents, Electronic Chattel Paper, Entitlement Order, Equipment,
Farm Products, Financial Asset, Fixtures, Goods, Instruments, Inventory, Letter
of Credit Rights, Payment Intangibles, Securities Account, Securities
Intermediary, Security, Security Entitlement, Supporting Obligations, Tangible
Chattel Paper and Uncertificated Security.
(b) The following terms shall have the following meanings:
"After-Acquired Intellectual Property": as defined in Section
5.10(k).
"Agreement": this Amended and Restated Guarantee and
Collateral Agreement, as the same may be amended, supplemented,
replaced or otherwise modified from time to time.
"Borrower Obligations": all Obligations (as defined in the
Credit Agreement) of the Borrower.
"Collateral": as defined in Section 3.
"Collateral Account": (i) any collateral account established
by the Administrative Agent as provided in Section 6.1 or 6.4 or (ii)
any cash collateral account established as provided in Section 8 of the
Credit Agreement.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in
Schedule 5), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright, other than licenses to use
products of third parties accepted in ordinary course in connection
with purchases of software and similar items the absence of which would
not have a Material Adverse Effect on the Grantors taken as a whole.
"Copyrights": (i) all domestic and foreign copyrights, whether
or not the underlying works of authorship have been published,
including but not limited to copyrights in software and databases, all
Mask Works (as defined in 17 U.S.C. 901 of the U.S. Copyright Act) and
all works of authorship and other intellectual property rights therein,
all copyrights of works based on, incorporated in, derived from or
relating to works covered by such copyrights, all right, title and
interest to make and exploit all derivative works based on or adopted
from works covered by such copyrights, and all copyright registrations
and copyright applications, and any renewals or
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extensions thereof, including, without limitation, each registration
and application identified in Schedule 5, (ii) the rights to print,
publish and distribute any of the foregoing, (iii) the right to ▇▇▇ or
otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (iv) all income,
royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments
under all Copyright Licenses entered into in connection therewith,
payments arising out of any other sale, lease, license or other
disposition thereof and damages and payments for past, present or
future infringements thereof), and (v) all other rights of any kind
whatsoever accruing thereunder or pertaining thereto.
"Deposit Account": (i) all "deposit accounts" as defined in
Article 9 of the UCC and (ii) all other accounts maintained with any
financial institution (other than Securities Accounts or Commodity
Accounts), together, in each case, with all funds held therein and all
certificates or instruments representing any of the foregoing.
"Excluded Assets": any lease, license, contract, property
right or agreement (other than any contract) to which any Grantor is a
party or any of its rights or interests thereunder if and only for so
long as the grant of a security interest hereunder shall constitute or
result in a breach, termination or default under any such lease,
license, contract, property right or agreement (other than to the
extent that any such term would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant
jurisdiction or any other applicable law or principles of equity);
provided, however, that such security interest shall attach immediately
to any portion of such lease, license, contract, property rights or
agreement that does not result in any of the consequences specified
above.
"Excluded Foreign Subsidiary Voting Stock": the voting Capital
Stock of any Excluded Foreign Subsidiary.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9-102(a)(42) of the Uniform Commercial Code in
effect in the State of
New York on the date hereof and, in any event,
including, without limitation, with respect to any Grantor, all rights
of such Grantor to receive any tax refunds, all Hedge Agreements and
all contracts, agreements, instruments and indentures and all licenses,
permits, concessions, franchises and authorizations issued by
Governmental Authorities in any form, and portions thereof, to which
such Grantor is a party or under which such Grantor has any right,
title or interest or to which such Grantor or any property of such
Grantor is subject, as the same may from time to time be amended,
supplemented, replaced or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights
of such Grantor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect thereto, (iii) all rights of such
Grantor to damages arising thereunder, and (iv) all rights of such
Grantor to terminate and to perform, compel performance and to exercise
all remedies thereunder.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement (including, without limitation,
Section 2) or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to any Secured Party that are required to be paid by such
Guarantor pursuant to the terms of this Agreement or any other Loan
Document).
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"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks, the
Trademark Licenses, the Trade Secrets and the Trade Secret Licenses,
and all rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Intellectual Property Collateral": all Intellectual Property
of the Loan Parties, now owned or hereafter acquired, upon which a Lien
is purported to be created by the Intellectual Property Security
Agreement or this Agreement.
"Intellectual Property Security Agreement": all Intellectual
Property Security Agreements to be executed and delivered by the Loan
Parties, each substantially in the form of Exhibit B-1 to this
Agreement, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.
"Insurance" shall mean all insurance policies covering any or
all of the Collateral (regardless of whether the Administrative Agent
is the loss payee thereof).
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to the Borrower or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49)
of the Uniform Commercial Code in effect in the State of
New York on
the date hereof including, without limitation, all Certificated
Securities and Uncertificated Securities, all Security Entitlements,
all Securities Accounts, all Commodity Contracts and all Commodity
Accounts (other than any Excluded Foreign Subsidiary Voting Stock
excluded from the definition of "Pledged Equity Interests"), (ii)
security entitlements, in the case of any United States Treasury
book-entry securities, as defined in 31 C.F.R. section 357.2, or, in
the case of any United States federal agency book-entry securities, as
defined in the corresponding United States federal regulations
governing such book-entry securities, and (iii) whether or not
constituting "investment property" as so defined, all Pledged Notes,
all Pledged Equity Interests, all Pledged Security Entitlements and all
Pledged Commodity Contracts.
"Issuers": the collective reference to each issuer of a
Pledged Security.
"
New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of
New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent, including, without limitation, any of the foregoing referred to
in Schedule 5.
"Patents": (i) all domestic and foreign patents, patent
applications and patentable inventions, including, without limitation,
each issued patent and patent application identified in
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Schedule 5, all certificates of invention or similar property rights,
(ii) all inventions and improvements described and claimed therein,
(iii) the right to ▇▇▇ or otherwise recover for any and all past,
present and future infringements and misappropriations thereof, (iv)
all income, royalties, damages and other payments now and hereafter due
and/or payable with respect thereto (including, without limitation,
payments under all Patent Licenses entered into in connection
therewith, payments arising out of any other sale, lease, license or
other disposition thereof and damages and payments for past, present or
future infringement thereof), and (v) all reissues, divisions,
continuations, continuations-in-part, substitutes, renewals, and
extensions thereof, all improvements thereon and all other rights of
any kind whatsoever accruing thereunder or pertaining thereto.
"Permitted Liens" the collective reference to (i) in the case
of Collateral other than Pledged Equity Interests, Liens permitted by
Section 7.3 of the Credit Agreement and (ii) in the case of Collateral
consisting of Pledged Equity Interests, non-consensual Liens permitted
by Section 7.3 of the Credit Agreement to the extent arising by
operation of law and Liens permitted by Section 7.3(h) of the Credit
Agreement.
"Pledged Alternative Equity Interests" shall mean all
interests of any Grantor in participation or other interests in any
equity or profits of any business entity and the certificates, if any,
representing such interests and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
interests and any other warrant, right or option to acquire any of the
foregoing; provided, however, that Pledged Alternative Equity Interests
shall not include any Pledged Stock, Pledged Partnership Interests,
Pledged LLC Interests and Pledged Trust Interests.
"Pledged Commodity Contracts": all commodity contracts listed
on Schedule 2 (as such Schedule may be amended from time to time) and
all other commodity contracts to which any Grantor is party from time
to time.
"Pledged Debt Securities": all debt securities now owned or
hereafter acquired by any Grantor, including, without limitation, the
debt securities listed on Schedule 2, (as such Schedule may be amended
from time to time) together with any other certificates, options,
rights or security entitlements of any nature whatsoever in respect of
the debt securities of any Person that may be issued or granted to, or
held by, any Grantor while this Agreement is in effect.
"Pledged Equity Interests" shall mean all Pledged Stock,
Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust
Interests and Pledged Alternative Equity Interests.
"Pledged LLC Interests" shall mean all interests of any
Grantor now owned or hereafter acquired in any limited liability
company including, without limitation, all limited liability company
interests listed on Schedule 2 hereto under the heading "Pledged LLC
Interests" (as such schedule may be amended from time to time) and the
certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records of
such limited liability company and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such limited
liability company interests and any other warrant, right or option to
acquire any of the foregoing.
"Pledged Notes": all promissory notes now owned or hereafter
acquired by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor
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in the ordinary course of business) including, without limitation,
those listed on Schedule 2 (as such Schedule may be amended from time
to time) and all Intercompany Notes at any time issued to any Grantor.
"Pledged Partnership Interests" shall mean all interests of
any Grantor now owned or hereafter acquired in any general partnership,
limited partnership, limited liability partnership or other partnership
including, without limitation, all partnership interests listed on
Schedule 2 hereto under the heading "Pledged Partnership Interests" (as
such schedule may be amended from time to time) and the certificates,
if any, representing such partnership interests and any interest of
such Grantor on the books and records of such partnership and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such partnership interests and any other warrant, right
or option to acquire any of the foregoing.
"Pledged Securities": the collective reference to the Pledged
Debt Securities, the Pledged Notes and the Pledged Equity Interests.
"Pledged Security Entitlements": all security entitlements
with respect to the financial assets listed on Schedule 2 (as such
Schedule may be amended from time to time) and all other security
entitlements of any Grantor.
"Pledged Stock" shall mean all shares of capital stock now
owned or hereafter acquired by such Grantor, including, without
limitation, all shares of capital stock described on Schedule 2 hereto
under the heading "Pledged Stock" (as such schedule may be amended from
time to time), and the certificates, if any, representing such shares
and any interest of such Grantor in the entries on the books of the
issuer of such shares and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares and any other
warrant, right or option to acquire any of the foregoing; provided,
however, that in no event shall (i) more than 65% of the total
outstanding Excluded Foreign Subsidiary Voting Stock be required to be
pledged hereunder and (ii) the capital stock of the Insurance
Subsidiary be required to be pledged hereunder.
"Pledged Trust Interests" shall mean all interests of any
Grantor now owned or hereafter acquired in a Delaware business trust or
other trust including, without limitation, all trust interests listed
on Schedule 2 hereto under the heading "Pledged Trust Interests" (as
such schedule may be amended from time to time) and the certificates,
if any, representing such trust interests and any interest of such
Grantor on the books and records of such trust or on the books and
records of any securities intermediary pertaining to such interest and
all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such trust interests and any other warrant,
right or option to acquire any of the foregoing; provided, however,
that in no event shall the interests of any Grantor in Legacy Trust be
required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the
New York UCC on the date hereof and, in any event,
shall include, without limitation, all dividends or other income from
the Pledged Securities, collections thereon or distributions or
payments with respect thereto.
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"Receivable": all Accounts and any other any right to payment
for goods or other property sold, leased, licensed or otherwise
disposed of or for services rendered, whether or not such right is
evidenced by an Instrument or Chattel Paper or classified as a Payment
Intangible and whether or not it has been earned by performance.
References herein to Receivables shall include any Supporting
Obligation or collateral securing such Receivable.
"Securities Act": the Securities Act of 1933, as amended.
"Specified Collateral": all Collateral other than Collateral
referred to in Section 3(xiii) and the Proceeds and products thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred
to in Schedule 5.
"Trademarks": (i) all domestic and foreign trademarks, service
marks, trade names, corporate names, company names, business names,
trade dress, trade styles, logos, or other indicia of origin or source
identification, Internet domain names, trademark and service ▇▇▇▇
registrations, and applications for trademark or service ▇▇▇▇
registrations and any renewals thereof, including, without limitation,
each registration and application identified in Schedule 5, (ii) the
right to ▇▇▇ or otherwise recover for any and all past, present and
future infringements and misappropriations thereof, (iii) all income,
royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments
under all Trademark Licenses entered into in connection therewith, and
damages and payments for past, present or future infringements
thereof), and (iv) all other rights of any kind whatsoever accruing
thereunder or pertaining thereto, together in each case with the
goodwill of the business connected with the use of, and symbolized by,
each of the above.
"Trade Secret License": any agreement, whether written or
oral, providing for the grant by or to any Grantor of any right to use
any Trade Secret.
"Trade Secrets": (i) all trade secrets and all confidential
and proprietary information, including know-how, manufacturing and
production processes and techniques, inventions, research and
development information, technical data, financial, marketing and
business data, pricing and cost information, business and marketing
plans, and customer and supplier lists and information, (ii) the right
to ▇▇▇ or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (iii) all income,
royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments
arising out of the sale, lease, license, assignment or other
disposition thereof, and damages and payments for past, present or
future infringements thereof), and (iv) all other rights of any kind
whatsoever of any Grantor accruing thereunder or pertaining thereto.
1.2. Other Definitional Provisions. (a) The words "hereof",
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
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(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
(d) The expressions "payment in full," "paid in full" and any
other similar terms or phrases when used herein with respect to the Borrower
Obligations or the Guarantor Obligations shall mean the unconditional, final and
irrevocable payment in full, in immediately available funds, of all of the
Borrower Obligations or the Guarantor Obligations, as the case may be.
SECTION 2. GUARANTEE
2.1. Guarantee.
(a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) If and to the extent required in order for the Obligations
of any Guarantor to be enforceable under applicable federal, state and other
laws relating to the insolvency of debtors, the maximum liability of such
Guarantor hereunder shall be limited to the greatest amount which can lawfully
be guaranteed by such Guarantor under such laws, after giving effect to any
rights of contribution, reimbursement and subrogation arising under Section 2.2.
(c) Each Guarantor agrees that Borrower Obligations may at any
time and from time to time be incurred or permitted in an amount exceeding the
maximum liability of such Guarantor under Section 2.1(b) without impairing the
guarantee contained in this Section 2 or affecting the rights and remedies of
any Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until payment in full of the Obligations, notwithstanding
that from time to time during the term of the Credit Agreement the Borrower may
be free from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by any Secured
Party from the Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in respect of the
Borrower Obligations or any payment received or collected from such Guarantor in
respect of the Borrower Obligations), remain liable for the Borrower Obligations
up to the maximum liability of such Guarantor hereunder until the Borrower
Obligations (other than Obligations in respect of any Hedge Agreement) are paid
in full, no Letter of Credit shall be outstanding and the Commitments are
terminated or have expired.
2.2. Rights of Reimbursement, Contribution and Subrogation. In
case any payment is made on account of the Obligations by any Grantor or is
received or collected on account of the Obligations from any Grantor or its
property:
8
(a) If such payment is made by the Borrower or from its
property, then, if and to the extent such payment is made on account of
Obligations arising from or relating to a Loan made to the Borrower or a Letter
of Credit issued for account of the Borrower, the Borrower shall not be entitled
(A) to demand or enforce reimbursement or contribution in respect of such
payment from any other Grantor or (B) to be subrogated to any claim, interest,
right or remedy of any Secured Party against any other Person, including any
other Grantor or its property; and
(b) If such payment is made by a Guarantor or from its
property, such Guarantor shall be entitled, subject to and upon payment in full
of the Obligations, (A) to demand and enforce reimbursement for the full amount
of such payment from the Borrower and (B) to demand and enforce contribution in
respect of such payment from each other Guarantor which has not paid its fair
share of such payment, as necessary to ensure that (after giving effect to any
enforcement of reimbursement rights provided hereby) each Guarantor pays its
fair share of the unreimbursed portion of such payment. For this purpose, the
fair share of each Guarantor as to any unreimbursed payment shall be determined
based on an equitable apportionment of such unreimbursed payment among all
Guarantors based on the relative value of their assets and any other equitable
considerations deemed appropriate by a court of competent jurisdiction.
(c) If and whenever (after payment in full of the Obligations)
any right of reimbursement or contribution becomes enforceable by any Grantor
against any other Grantor under Sections 2.2(a) and 2.2(b), such Grantor shall
be entitled, subject to and upon payment in full of the Obligations, to be
subrogated (equally and ratably with all other Grantors entitled to
reimbursement or contribution from any other Grantor as set forth in this
Section 2.2) to any security interest that may then be held by the
Administrative Agent upon any Collateral granted to it in this Agreement. Such
right of subrogation shall be enforceable solely against the Grantors, and not
against the Secured Parties, and neither the Administrative Agent nor any other
Secured Party shall have any duty whatsoever to warrant, ensure or protect any
such right of subrogation or to obtain, perfect, maintain, hold, enforce or
retain any Collateral for any purpose related to any such right of subrogation.
If subrogation is demanded by any Grantor, then (after payment in full of the
Obligations) the Administrative Agent shall deliver to the Grantors making such
demand, or to a representative of such Grantors or of the Grantors generally, an
instrument satisfactory to the Administrative Agent transferring, on a quitclaim
basis without any recourse, representation, warranty or obligation whatsoever,
whatever security interest the Administrative Agent then may hold in whatever
Collateral may then exist that was not previously released or disposed of by the
Administrative Agent.
(d) All rights and claims arising under this Section 2.2 or
based upon or relating to any other right of reimbursement, indemnification,
contribution or subrogation that may at any time arise or exist in favor of any
Grantor as to any payment on account of the Obligations made by it or received
or collected from its property shall be fully subordinated in all respects to
the prior payment in full of all of the Obligations. Until payment in full of
the Obligations, no Grantor shall demand or receive any collateral security,
payment or distribution whatsoever (whether in cash, property or securities or
otherwise) on account of any such right or claim. If any such payment or
distribution is made or becomes available to any Grantor in any bankruptcy case
or receivership, insolvency or liquidation proceeding, such payment or
distribution shall be delivered by the person making such payment or
distribution directly to the Administrative Agent, for application to the
payment of the Obligations. If any such payment or distribution is received by
any Grantor, it shall be held by such Grantor in trust, as trustee of an express
trust for the benefit of the Secured Parties, and shall forthwith be transferred
and delivered by such Grantor to the Administrative Agent, in the exact form
received and, if necessary, duly endorsed.
(e) The obligations of the Grantors under the Loan Documents,
including their liability for the Obligations and the enforceability of the
security interests granted thereby, are not contingent upon
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the validity, legality, enforceability, collectibility or sufficiency of any
right of reimbursement, contribution or subrogation arising under this Section
2.2. The invalidity, insufficiency, unenforceability or uncollectibility of any
such right shall not in any respect diminish, affect or impair any such
obligation or any other claim, interest, right or remedy at any time held by any
Secured Party against any Grantor or its property. The Secured Parties make no
representations or warranties in respect of any such right and shall have no
duty to assure, protect, enforce or ensure any such right or otherwise relating
to any such right.
(f) Each Grantor reserves any and all other rights of
reimbursement, contribution or subrogation at any time available to it as
against any other Grantor, but (i) the exercise and enforcement of such rights
shall be subject to Section 2.2(d) and (ii) neither the Administrative Agent nor
any other Secured Party shall ever have any duty or liability whatsoever in
respect of any such right, except as provided in Section 2.2(c).
2.3. Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without notice
to or further assent by any Guarantor, any demand for payment of any of the
Borrower Obligations made by any Secured Party may be rescinded by such Secured
Party and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, increased,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by any Secured Party, and the Credit Agreement and the other Loan
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as
the Administrative Agent (or the Required Lenders under the Credit Agreement or
all Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by any
Secured Party for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. No Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.
2.4. Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by any Secured
Party upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Secured Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment and performance without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by any Secured Party, (b) any defense, set-off or counterclaim (other
than a defense of payment or performance hereunder) which may at any time be
available to or be asserted by the Borrower or any other Person against any
Secured Party, or (c) any other circumstance whatsoever (with or without notice
to or knowledge of the Borrower or such Guarantor) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrower for
the Borrower Obligations, or of such Guarantor for its Guarantor Obligations, in
bankruptcy or in any
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other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, any Secured Party may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by any Secured Party to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of any
Secured Party against any Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
2.5. Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by any Secured Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.6. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars in immediately available funds at the Funding Office.
SECTION 3. GRANT OF SECURITY INTEREST;
CONTINUING LIABILITY UNDER COLLATERAL
(a) Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
personal property of such Grantor, including, without limitation, the following
property, in each case, wherever located and now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
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(viii) Insurance
(ix) all Intellectual Property;
(x) all Inventory;
(xi) all Investment Property;
(xii) all Letter of Credit Rights;
(xiii) all Goods not otherwise described above;
(xiv) any Collateral Account;
(xv) all books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications,
manuals, computer software, computer printouts, tapes, disks and other
electronic storage media and related data processing software and
similar items that at any time evidence or contain information relating
to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon;
(xvi) the commercial tort claims set forth on
Schedule 7; and
(xvii) to the extent not otherwise included, all
other property of the Grantor and all Proceeds and products accessions,
rents and profits of any and all of the foregoing and all collateral
security, Supporting Obligations and guarantees given by any Person
with respect to any of the foregoing.
Notwithstanding anything to the contrary in this Agreement,
none of the Excluded Assets shall constitute Collateral.
(b) Notwithstanding anything herein to the contrary, (i) each
Grantor shall remain liable for all obligations under the Collateral and nothing
contained herein is intended or shall be a delegation of duties to the
Administrative Agent or any Secured Party, (ii) each Grantor shall remain liable
under and each of the agreements included in the Collateral, including, without
limitation, any Receivables and any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests, to perform all of the obligations undertaken
by it thereunder all in accordance with and pursuant to the terms and provisions
thereof and neither the Administrative Agent nor any Secured Party shall have
any obligation or liability under any of such agreements by reason of or arising
out of this Agreement or any other document related thereto nor shall the
Administrative Agent nor any Secured Party have any obligation to make any
inquiry as to the nature or sufficiency of any payment received by it or have
any obligation to take any action to collect or enforce any rights under any
agreement included in the Collateral, including, without limitation, any
agreements relating to any Receivables, Pledged Partnership Interests or Pledged
LLC Interests and (iii) the exercise by the Administrative Agent of any of its
rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Secured Parties that:
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4.1. Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct in all material respects, except for
representations and warranties expressly stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date, and the Secured
Parties shall be entitled to rely on each of them as if they were fully set
forth herein, provided that each reference in each such representation and
warranty to the Borrower's knowledge shall, for the purposes of this Section
4.l, be deemed to be a reference to such Guarantor's knowledge.
4.2. Title; No Other Liens. Such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims, including, without
limitation, liens arising as a result of such Grantor becoming bound (as a
result of merger or otherwise) as Grantor under a security agreement entered
into by another Person, except for Permitted Liens. No financing statement,
mortgage or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties pursuant to this Agreement or as are permitted by the Credit
Agreement and financing statements for which duly authorized termination
statements have been delivered to the Administrative Agent on or prior to the
Closing Date.
4.3. Perfected First Priority Liens. (a) The security
interests granted pursuant to this Agreement (i) upon completion of the filings
and other actions specified on Schedule 3 (all of which, in the case of all
filings and other documents referred to on such Schedule, have been delivered to
the Administrative Agent in duly completed and duly executed form, as
applicable, and may be filed by the Administrative Agent at any time) and
payment of all filing fees, will constitute valid fully perfected security
interests in all of the Specified Collateral (other than Collateral consisting
of vehicles, aircrafts, Deposit Accounts, Commercial Tort Claims and the
Proceeds thereof, leasehold interests in real property and immaterial foreign
Copyrights, immaterial foreign Trademarks and immaterial foreign Patents, except
to the extent such immaterial foreign Copyrights, immaterial foreign Trademarks
and immaterial foreign Patents can be perfected by UCC filings) in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, as
collateral security for such Grantor's Obligations, enforceable in accordance
with the terms hereof and (ii) are prior to all other Liens on the Collateral
except for Permitted Liens. Without limiting the foregoing, each Grantor has
taken all actions necessary or desirable, including without limitation those
specified in Section 5.2 to: (i) establish the Administrative Agent's "control"
(within the meanings of Sections 8-106 and 9-106 of the UCC) over any portion of
the Investment Property constituting Certificated Securities and Uncertificated
Securities (each as defined in the UCC), (ii) establish the Administrative
Agent's "control" (within the meaning of Section 9-107 of the UCC) over all
Letter of Credit Rights, (iii) establish the Administrative Agent's control
(within the meaning of Section 9-105 of the UCC) over all Electronic Chattel
Paper and (v) establish the Administrative Agent's "control" within the meaning
of Section 16 of the Uniform Electronic Transaction Act as in effect in the
applicable jurisdiction (the "UETA") over all "transferable records" (as defined
in UETA).
4.4. Jurisdiction of Organization; Chief Executive Office. On
the date hereof, such Grantor's jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long-form good standing
certificate as of a date that is recent to the date hereof.
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4.5. Inventory and Equipment. None of the Inventory or Equipment is in
the possession of an issuer of a negotiable document (as defined in Section
7-104 of the UCC) therefor or is otherwise in the possession of any bailee or
warehouseman.
4.6. Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.7. Investment Property. (a) Schedule 2 hereto (as such
schedule may be amended from time to time) sets forth under the headings
"Pledged Stock, "Pledged LLC Interests," "Pledged Partnership Interests" and
"Pledged Trust Interests," respectively, all of the Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests owned by
any Grantor and such Pledged Equity Interests constitute the percentage of
issued and outstanding shares of stock, percentage of membership interests,
percentage of partnership interests or percentage of beneficial interest of the
respective issuers thereof indicated on such Schedule. Schedule 2 hereto (as
such schedule may be amended from time to time) sets forth under the heading
"Pledged Debt Securities" or "Pledged Notes" all of the Pledged Debt Securities
and Pledged Notes owned by any Grantor and all of such Pledged Debt Securities
and Pledged Notes has been duly authorized, authenticated or issued, and
delivered and is the legal, valid and binding obligation of the issuers thereof
enforceable in accordance with their terms and is not in default and constitutes
all of the issued and outstanding inter-company indebtedness evidenced by an
instrument or certificated security of the respective issuers thereof owing to
such Grantor. No Grantor has consented to, and no Grantor is otherwise aware of,
any Person (other than the Administrative Agent pursuant hereto) having
"control" (within the meanings of Sections 8-106, 9-106 and 9-104 of the UCC)
over, or any other interest in, any such Securities Account, Commodity Account
or Deposit Account or any securities, commodities or other property credited
thereto other than the securities intermediary or depository bank in respect
thereof which may have a lien on any such account being held by it to secure
only the payment of fees and expenses owed to it in respect of the maintenance
of such account.
(b) The shares of Pledged Equity Interests pledged by such
Grantor hereunder constitute all of the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Excluded Foreign Subsidiary Voting Stock, if less, 65% of the
outstanding Excluded Foreign Subsidiary Voting Stock of each relevant Issuer.
(c) All the shares of the Pledged Equity Interests have been
duly and validly issued and are fully paid and nonassessable.
(d) The terms of any uncertificated Pledged LLC Interests and
Pledged Partnership Interests do not provide that they are securities governed
by Article 8 of the Uniform Commercial Code in effect in any jurisdiction.
(e) The terms of any certificated Pledged LLC Interests and
Pledged Partnership Interests do not provide that they are securities governed
by Article 8 of the Uniform Commercial Code in effect in any jurisdiction.
(f) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Investment Property and Deposit Accounts
pledged by it hereunder, free of any and all Liens or options in favor of, or
claims of, any other Person, except Permitted Liens.
(g) Each Issuer which is an Affiliate of the Borrower that is
not a Grantor hereunder has executed and delivered to the Administrative Agent
an Acknowledgment and Consent, in substantially the form of Exhibit A, to the
pledge of the Pledged Securities pursuant to this Agreement.
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4.8. Receivables. (a) No amount payable to such Grantor under
or in connection with any Receivable is evidenced by any Instrument or Tangible
Chattel Paper which has not been delivered to the Administrative Agent or
constitutes Electronic Chattel Paper that has not been subjected to the control
(within the meaning of Section 9-105 of the UCC) of the Administrative Agent.
(b) The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables will at
such times be accurate, except for immaterial errors.
4.9. Intellectual Property. (a) Schedule 5 lists all
Intellectual Property (other than Trade Secrets) owned by such Grantor in its
own name on the date hereof. Except as set forth in Schedule 5, such Grantor is
the exclusive owner of the entire and unencumbered right, title and interest in
and to such Intellectual Property and is otherwise entitled to use all such
Intellectual Property, without limitation, subject only to the license terms of
the licensing or franchise agreements referred to in paragraph (c) below.
(b) On the date hereof, all material Intellectual Property is
valid, subsisting, unexpired and enforceable, has not been abandoned and does
not materially infringe the intellectual property rights of any other Person in
any material respect.
(c) Except as set forth in Schedule 5, on the date hereof (i)
none of the Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor, and (ii)
there are no other obligations, orders or judgments which affect the use of any
material Intellectual Property.
(d) The rights of such Grantor in or to the Intellectual
Property do not conflict with or infringe upon the rights of any third party,
and no claim has been asserted that the use of such Intellectual Property does
or may infringe upon the rights of any third party, in either case, which
conflict or infringement could reasonably be expected to have a Material Adverse
Effect. There is currently no infringement or unauthorized use of any item of
Intellectual Property that could reasonably be expected to have a Material
Adverse Effect.
(e) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity or
enforceability of, or such Grantor's rights in, any Intellectual Property in any
respect that could reasonably be expected to have a Material Adverse Effect.
With respect to any item of Intellectual Property the invalidity or
unenforceability of which could reasonably be expected to have a Material
Adverse Effect, such Grantor is not aware of any uses of any item of
Intellectual Property that could reasonably be expected to lead to such item
becoming invalid or unenforceable, including, without limitation, unauthorized
uses by third parties and uses which were not supported by the goodwill of the
business connected with Trademarks and Trademark Licenses.
(f) No action or proceeding is pending, or, to the knowledge
of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any material Intellectual Property or such Grantor's
ownership interest therein, (ii) alleging that any services provided by,
processes used by, or products manufactured or sold by such Grantor infringe any
patent, trademark, copyright, or any other right of any third party, (iii)
alleging that any material Intellectual Property is being licensed, sublicensed
or used in violation of any patent, trademark, copyright or any other right of
any third party, or (iv) which, if adversely determined, would have a material
adverse effect on the value of any Collateral taken as a whole. To the knowledge
of such Grantor, no Person is engaging in any activity that infringes upon the
Intellectual Property or upon the rights of such Grantor therein which could
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Schedule 5 hereto, such Grantor has
15
not granted any license, release, covenant not to ▇▇▇, non-assertion assurance,
or other right to any person with respect to any material part of the
Intellectual Property. The consummation of the transactions contemplated by this
Agreement will not result in the termination or impairment of any of the
Intellectual Property.
(g) With respect to each Copyright License, Trademark License
and Patent License: (i) such license is valid and binding and in full force and
effect and represents the entire agreement between the respective licensor and
licensee with respect to the subject matter of such license; (ii) such license
will not cease to be valid and binding and in full force and effect on terms
identical to those currently in effect as a result of the rights and interests
granted herein, nor will the grant of such rights and interests constitute a
breach or default under such license or otherwise give the licensor or licensee
a right to terminate such license; (iii) such Grantor has not received any
notice of termination or cancellation under such license; (iv) such Grantor has
not received any notice of a breach or default under such license, which breach
or default has not been cured; (v) such Grantor has not granted to any other
third party any rights, adverse or otherwise, under such license; and (vi) such
Grantor is not in breach or default in any material respect, and no event has
occurred that, with notice and/or lapse of time, would constitute such a breach
or default or permit termination, modification or acceleration under such
license.
(h) Except as set forth in Schedule 5, such Grantor has
performed all acts and has paid all required fees and taxes to maintain each and
every item of material Intellectual Property in full force and effect and to
protect and maintain its interest therein. Such Grantor has used proper
statutory notice in connection with its use of each material Patent, Trademark
and Copyright included in the Intellectual Property.
(i) To the knowledge of such Grantor, none of the material
Trade Secrets of such Grantor has been used, divulged, disclosed or appropriated
to the detriment of such Grantor for the benefit of any other Person; no
employee, independent contractor or agent of such Grantor has misappropriated
any trade secrets of any other Person in the course of the performance of his or
her duties as an employee, independent contractor or agent of such Grantor; and
no employee, independent contractor or agent of such Grantor is in default or
breach of any term of any employment agreement, non-disclosure agreement,
assignment of inventions agreement or similar agreement or contract relating in
any way to the protection, ownership, development, use or transfer of such
Grantor's material Intellectual Property.
(j) Such Grantor has made all filings and recordations
necessary to adequately protect its interest in its material Intellectual
Property including, without limitation, recordation of its interests in the
Patents and Trademarks with the United States Patent and Trademark Office and in
corresponding national and international patent offices, and recordation of any
of its interests in the Copyrights with the United States Copyright Office and
in corresponding national and international copyright offices.
(k) Such Grantor is not subject to any settlement, consent,
judgment, injunction, order, decree, covenant not to ▇▇▇, non-assertion
assurance or release that would impair the validity or enforceability of, or
such Grantor's rights in, any material Intellectual Property.
4.10. Letter of Credit Rights. No Grantor is a beneficiary or
assignee under any letter of credit other than the letters of credit described
on Schedule 6 (as such schedule may be amended from time to time) hereto. Each
Grantor has caused all issuers and nominated persons under letters of credit in
which the Grantor is the beneficiary or assignee to consent to the assignment
provisions of such letter of credit to the Administrative Agent and has agreed
that upon the occurrence of an Event of Default it will cause all payments
thereunder to be made to the Collateral Account.
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4.11. Commercial Tort Claims. No Grantor has any commercial
tort claims other than (i) as described in Schedule 7 or (ii) as to which the
actions described in Section 5.11 have been taken.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Secured Parties
that, from and after the date of this Agreement until the Obligations (other
than Obligations in respect of any Hedge Agreement) shall have been paid in
full, no Letter of Credit shall be outstanding and the Commitments shall have
terminated or expired:
5.1. Covenants in Credit Agreement. Each Guarantor shall take,
or shall refrain from taking, as the case may be, each action that is necessary
to be taken or not taken, as the case may be, so that no Default or Event of
Default is caused by the failure to take such action or to refrain from taking
such action by such Guarantor or any of its Subsidiaries.
5.2. Delivery and Control of Instruments, Chattel Paper,
Negotiable Documents and Investment Property. (a) If any of the Collateral with
a value in excess of $25,000 individually is or shall become evidenced or
represented by any Instrument, Certificated Security, Negotiable Document or
Tangible Chattel Paper, such Instrument (other than checks received in the
ordinary course of business), Certificated Security, Negotiable Documents or
Tangible Chattel Paper shall be immediately delivered to the Administrative
Agent, duly endorsed in a manner satisfactory to the Administrative Agent, to be
held as Collateral pursuant to this Agreement.
(b) If any of the Collateral with a value in excess of $25,000
individually or $200,000 in the aggregate is or shall become "Electronic Chattel
Paper" such Grantor shall ensure that (i) a single authoritative copy exists
which is unique, identifiable, unalterable (except as provided in clauses (iii),
(iv) and (v) of this paragraph), (ii) such authoritative copy identifies the
Administrative Agent as the assignee and is communicated to and maintained by
the Administrative Agent or its designee, (iii) copies or revisions that add or
change the assignee of the authoritative copy can only be made with the
participation of the Administrative Agent, (iv) each copy of the authoritative
copy and any copy of a copy is readily identifiable as a copy and not the
authoritative copy and (v) any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized revision.
(c) If any of the Collateral is or shall become evidenced or
represented by an Uncertificated Security, such Grantor shall cause the Issuer
thereof either (i) to register the Administrative Agent as the registered owner
of such Uncertificated Security, upon original issue or registration of transfer
or (ii) to agree in writing with such Grantor and the Administrative Agent that
such Issuer will comply with instructions with respect to such Uncertificated
Security originated by the Administrative Agent without further consent of such
Grantor, such agreement to be in substantially the form of Exhibit C.
(d) In addition to and not in lieu of the foregoing, if any
Issuer of any Investment Property is organized under the law of, or has its
chief executive office in, a jurisdiction outside of the United States, each
Grantor shall take such additional actions, including, without limitation,
causing the issuer to register the pledge on its books and records, as may be
necessary or as may be reasonably requested by the Administrative Agent, under
the laws of such jurisdiction to insure the validity, perfection and priority of
the security interest of the Administrative Agent.
5.3. Maintenance of Insurance. (a) Such Grantor will maintain,
with financially sound and reputable insurance companies, insurance on all its
property (including, without limitation, all Inventory, Equipment and motor
vehicles) in at least such amounts and against at least such risks as are
17
usually insured against in the same general area by companies engaged in the
same or a similar business, and furnish to the Administrative Agent with copies
for each Secured Party, upon written request, full information as to the
insurance carried. All insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof and (ii) be reasonably satisfactory in all other respects
to the Administrative Agent. The Administrative Agent shall be named as
additional insured on all such liability insurance policies of such Grantor and
the Administrative Agent shall be named as loss payee on all property and
casualty insurance policies of such Grantor.
(b) The Borrower shall deliver annually to the Administrative
Agent and the Lenders a certificate of a reputable insurance broker with respect
to such insurance as promptly as practicable upon receipt thereof from such
insurance broker and such supplemental reports with respect thereto as the
Administrative Agent may from time to time reasonably request.
5.4. Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all material taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all material claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any material interest therein.
5.5. Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent from
time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the assets and property of
such Grantor as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly authorize, execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby.
5.6. Changes in Locations, Name, Jurisdiction of
Incorporation, Etc. Such Grantor will not, except upon 15 days' prior written
notice to the Administrative Agent and delivery to the Administrative Agent of
duly authorized and, where required, executed copies of all additional financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein:
(a) without limiting the prohibitions on mergers involving the
Grantors contained in the Credit Agreement, change its legal name, jurisdiction
of organization or the location of its chief executive office or sole place of
business from that referred to in Section 4.4; or
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(b) change its legal name, identity or structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become seriously misleading.
5.7. Notices. Such Grantor will advise the Administrative
Agent promptly, in reasonable detail, of:
(a) any Lien (other than any Permitted Lien) on any material
portion of the Collateral which would adversely affect the ability of the
Administrative Agent to exercise any of its remedies hereunder; and
(b) the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby taken as a whole.
5.8. Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock or other ownership certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Capital Stock or other Pledged Equity Interest of
any Issuer, whether in addition to, in substitution of, as a conversion of, or
in exchange for, any shares of or other ownership interests in the Pledged
Securities, or otherwise in respect thereof, such Grantor shall accept the same
as the agent of the Secured Parties, hold the same in trust for the Secured
Parties and deliver the same forthwith to the Administrative Agent in the exact
form received, duly endorsed by such Grantor to the Administrative Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and to be held by the Administrative Agent,
subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Pledged Securities upon the
liquidation or dissolution of any Issuer shall be paid over to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Securities shall be
received by such Grantor, such Grantor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Secured Parties, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock, partnership interests, limited liability
company interests or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock, partnership interests, limited liability company interests or other
equity securities of any nature of any Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, any of
the Investment Property or Proceeds thereof or any interest therein (except, in
each case, pursuant to a transaction expressly permitted by the Credit
Agreement), (iii) create, incur or permit to exist any Lien or option in favor
of, or any claim of any Person with respect to, any of the Investment Property
or Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement, (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any of the Investment Property or Proceeds thereof or
any interest therein or (v) without (a) the
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prior written notice to the Administrative Agent and (b) such Grantor taking all
steps necessary or advisable to establish the Administrative Agent's "control"
thereof, cause or permit any Issuer of any Pledged Partnership Interests or
Pledged LLC Interests which are not securities (for purposes of the UCC) on the
date hereof to elect or otherwise take any action to cause such Pledged
Partnership Interests or Pledged LLC Interests to be treated as securities for
purposes of the UCC.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it. In addition, each Grantor which
is either an Issuer or an owner of any Pledged Security hereby consents to the
grant by each other Grantor of the security interest hereunder in favor of the
Administrative Agent and to the transfer of any Pledged Security to the
Administrative Agent or its nominee upon the occurrence or during the
continuation of an Event of Default and to the substitution of the
Administrative Agent or its nominee as a partner, member or shareholder of the
Issuer of the related Pledged Security. The Administrative Agent agrees to
notify any Grantor before transferring the Pledged Securities pledged by such
Grantor into the name of the Administrative Agent pursuant to this section.
5.9. Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could materially adversely affect the
value thereof.
(b) Such Grantor will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of outstanding Receivables
constituting a material portion of the Collateral.
5.10. Intellectual Property. (a) Such Grantor (either itself
or through licensees) will (i) continue to use each material Trademark on each
and every trademark class of goods applicable to its current line as reflected
in its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark and take all necessary steps to ensure that all licensed users of such
Trademark maintain as in the past such quality, (iii) use such Trademark with
the appropriate notice of registration and all other notices and legends
required by applicable Requirements of Law, (iv) not adopt or use any ▇▇▇▇ which
is confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such ▇▇▇▇ pursuant to this Agreement and
the Intellectual Property Security Agreement, and (v) not (and not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby such Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not
do any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
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otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.
(d) Such Grantor (either itself or through licensees) will not
do any act that knowingly uses any material Intellectual Property to infringe
the intellectual property rights of any other Person.
(e) Except with respect to any Patent, Trademark or Copyright
the invalidity of which would not have a Material Adverse Effect, such Grantor
(either itself or through licensees) will use proper statutory notice in
connection with the use of each Patent, Trademark and Copyright included in the
Intellectual Property.
(f) Such Grantor will notify the Administrative Agent as
promptly as practicable if it knows, or has reason to know, that any application
or registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(g) As promptly as practicable upon such Grantor's acquisition
or creation of any copyrightable work, invention, trademark or other similar
property that is material to the business of Grantor, apply for registration
thereof with the United States Copyright Office, the United States Patent and
Trademark Office and any other appropriate office. Whenever such Grantor, either
by itself or through any agent, employee, licensee or designee, shall file an
application for the registration of any Intellectual Property with the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, such Grantor shall report such filing to the Administrative Agent
concurrently with the next delivery of the Compliance Certificate pursuant to
Section 6.2(b) of the Credit Agreement for the fiscal quarter in which such
filing occurs. Upon request of the Administrative Agent, such Grantor shall
execute and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the Administrative Agent may request to evidence the
Secured Parties' security interest in any Copyright, Patent, Trademark or other
Intellectual Property and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby.
(h) Except as provided in Section 5.10(i), such Grantor will
take all reasonable and necessary steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of
material Intellectual Property, including, without limitation, the payment of
required fees and taxes, the filing of responses to office actions issued by the
United States Patent and Trademark Office and the United States Copyright
Office, the filing of applications for renewal or extension, the filing of
affidavits of use and affidavits of incontestability, the filing of divisional,
continuation, continuation-in-part, reissue, and renewal applications or
extensions, the payment of maintenance fees, and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings.
(i) Such Grantor (either itself or through licensees) will
not, without the prior written consent of the Administrative Agent, discontinue
use of or otherwise abandon any Intellectual Property, or abandon any
application or any right to file an application for letters patent, trademark,
or copyright, unless such Grantor, in its reasonable business judgment,
determines that such use or the pursuit or
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maintenance of such Intellectual Property is no longer desirable in the conduct
of such Grantor's business and that the loss thereof could not reasonably be
expected to have a Material Adverse Effect.
(j) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, take such actions as are
reasonably appropriate under the circumstances, including, as appropriate, ▇▇▇
for infringement, misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution and promptly notify the Administrative Agent after
it takes any action to ▇▇▇ for infringement, misappropriation or dilution, to
seek injunctive relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or promptly notify the
Administrative Agent of any decision not to pursue or take any such action.
(k) Such Grantor agrees that, should it obtain an ownership
interest in any item of intellectual property which is not now a part of the
Intellectual Property Collateral (the "After-Acquired Intellectual Property"),
(i) the provisions of Section 3 shall automatically apply thereto, (ii) any such
After-Acquired Intellectual Property, and in the case of trademarks, the
goodwill of the business connected therewith or symbolized thereby, shall
automatically become part of the Intellectual Property Collateral, (iii) it
shall give prompt (and, in any event concurrently with the next delivery of the
Compliance Certificate pursuant to Section 6.2(b) of the Credit Agreement for
the fiscal quarter in which such Grantor acquires such ownership interest)
written notice thereof to the Administrative Agent in accordance herewith, and
(iv) it shall provide the Administrative Agent promptly (and, in any event
concurrently with the next delivery of the Compliance Certificate pursuant to
Section 6.2(b) of the Credit Agreement for the fiscal quarter in which such
Grantor acquires such ownership interest) with an amended Schedule 5 hereto and
take the actions specified in Section 5.10(m).
(l) Such Grantor agrees to execute an Intellectual Property
Security Agreement with respect to its Intellectual Property in substantially
the form of Exhibit B-1 in order to record the security interest granted herein
to the Administrative Agent for the ratable benefit of the Secured Parties with
the United States Patent and Trademark Office, the United States Copyright
Office, and any other applicable Governmental Authority.
(m) Such Grantor agrees to execute an After-Acquired
Intellectual Property Security Agreement with respect to its After-Acquired
Intellectual Property in substantially the form of Exhibit B-2 in order to
record the security interest granted herein to the Administrative Agent for the
ratable benefit of the Secured Parties with the United States Patent and
Trademark Office, the United States Copyright Office, and any other applicable
Governmental Authority.
(n) Such Grantor shall take all steps reasonably necessary to
protect the secrecy of all material Trade Secrets, including, without
limitation, entering into confidentiality agreements with employees and labeling
and restricting access to secret information and documents.
5.11. Commercial Tort Claims. If such Grantor shall obtain an
interest in any Commercial Tort Claim with an estimated value in excess of
$25,000, such Grantor shall within 30 days of obtaining such interest sign and
deliver documentation acceptable to the Administrative Agent granting a security
interest under the terms and provisions of this Agreement in and to such
Commercial Tort Claim.
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SECTION 6. REMEDIAL PROVISIONS
6.1. Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
After an Event of Default has occurred and is continuing, at any time and from
time to time, upon the Administrative Agent's request and at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, and each Grantor hereby agrees to continue
to collect all amounts due or to become due to such Grantor under the
Receivables and any Supporting Obligation and diligently exercise each material
right it may have under any Receivable and any Supporting Obligation, in each
case, at its own expense; provided, however, that the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default. If required by the Administrative Agent
at any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Grantor, (i) shall
be forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly endorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Secured Parties only as provided
in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Secured Parties, segregated from other funds of such Grantor. Each
such deposit of Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.
6.2. Communications with Obligors; Grantors Remain Liable. (a)
The Administrative Agent in its own name or in the name of others may at any
time during reasonable business hours after the occurrence and during the
continuance of an Event of Default communicate with obligors under the
Receivables to verify with them to the Administrative Agent's satisfaction the
existence, amount and terms of any Receivables.
(b) If an Event of Default shall have occurred and be
continuing, the Administrative Agent may at any time notify, or require any
Grantor to so notify, the Account Debtor or counterparty on any Receivable of
the security interest of the Administrative Agent therein. In addition, after
the occurrence and during the continuance of an Event of Default, the
Administrative Agent may upon written notice to the applicable Grantor, notify,
or require any Grantor to notify, the Account Debtor or counterparty to make all
payments under the Receivables directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. No Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by any Secured Party of any payment relating
thereto, nor shall any Secured Party be obligated in any manner to perform any
of the obligations of any Grantor under or pursuant to any Receivable (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
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6.3. Pledged Securities. (a) Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the relevant Grantor of the Administrative Agent's intent to exercise
its corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged Equity
Interests and all payments made in respect of the Pledged Notes, in each case
paid in the normal course of business of the relevant Issuer and consistent with
past practice, to the extent permitted in the Credit Agreement, and to exercise
all voting and corporate rights with respect to the Pledged Securities not
inconsistent with the purposes of this Agreement; provided, however, that no
vote shall be cast or corporate or other ownership right exercised or other
action taken which, in the Administrative Agent's reasonable judgment, would
materially impair the Collateral or which would be inconsistent with or result
in any violation of any provision of the Credit Agreement, this Agreement or any
other Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to invoke the
provisions of this Section 6.3(b) to the relevant Grantor(s): (i) all rights of
each Grantor to exercise or refrain from exercising the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
hereto shall cease and all such rights shall thereupon become vested in the
Administrative Agent who shall thereupon have the sole right, but shall be under
no obligation, to exercise or refrain from exercising such voting and other
consensual rights and (ii) the Administrative Agent shall have the right to
transfer all or any portion of the Investment Property to its name or the name
of its nominee or agent. In addition, the Administrative Agent shall have the
right at any time to exchange any certificates or instruments representing any
Investment Property for certificates or instruments of smaller or larger
denominations. In order to permit the Administrative Agent to exercise the
voting and other consensual rights which it may be entitled to exercise pursuant
hereto and to receive all dividends and other distributions which it may be
entitled to receive hereunder each Grantor shall promptly execute and deliver
(or cause to be executed and delivered) to the Administrative Agent all proxies,
dividend payment orders and other instruments as the Administrative Agent may
from time to time reasonably request and each Grantor acknowledges that the
Administrative Agent may utilize the power of attorney set forth herein.
(c) Each Grantor hereby authorizes and instructs each Issuer
of any Pledged Securities pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Administrative Agent.
6.4. Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Secured Parties specified in Section 6.1 with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of cash, Cash
Equivalents, checks and other near-cash items shall be held by such Grantor in
trust for the Secured Parties, segregated from other funds of such Grantor, and
shall, forthwith upon receipt by such Grantor, be turned over to the
Administrative Agent in the exact form received by such Grantor (duly endorsed
by such Grantor to the Administrative Agent, if required). All Proceeds received
by the Administrative Agent hereunder shall be held by the Administrative Agent
in a Collateral Account maintained under its sole dominion and control. All
Proceeds while held by the Administrative Agent in a Collateral Account (or by
such Grantor in trust for the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.
6.5. Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing,
24
at any time at the Administrative Agent's election, the Administrative Agent
may, notwithstanding the provisions of Section 2.11 of the Credit Agreement,
apply all or any part of the net Proceeds (after deducting costs and expenses as
provided in Section 6.6(b) hereof) constituting Collateral realized through the
exercise by the Administrative Agent of its remedies hereunder, whether or not
held in any Collateral Account, and any proceeds of the guarantee set forth in
Section 2, in payment of the Obligations in the following order:
First, to the Administrative Agent, to pay incurred and unpaid
fees and expenses of the Secured Parties under the Loan Documents
permitted under Section 10.5 of the Credit Agreement or Section 8.4
hereof;
Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in
respect of the Obligations, pro rata among the Secured Parties
according to the amounts of the Obligations then due and owing and
remaining unpaid to the Secured Parties;
Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, pro rata among the Lenders
according to the amounts of the Obligations then held by the Lenders;
and
Fourth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated or expired shall
be paid over to the Borrower or to whomsoever may be lawfully entitled
to receive the same.
6.6. Code and Other Remedies. (a) If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Secured
Parties, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the
New York UCC (whether or not the
New York UCC applies to the
affected Collateral) or its rights under any other applicable law or in equity.
Without limiting the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, license,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange,
broker's board or office of any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
Each Secured Party shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each purchaser at any such sale shall hold the property sold absolutely free
from any claim or right on the part of any Grantor, and each Grantor hereby
waives (to the extent permitted by applicable law) all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Administrative
Agent may adjourn any public or private sale from time to time
25
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Administrative Agent may sell the Collateral without giving any warranties as to
the Collateral. The Administrative Agent may specifically disclaim or modify any
warranties of title or the like. This procedure will not be considered to
adversely effect the commercial reasonableness of any sale of the Collateral.
Each Grantor agrees that it would not be commercially unreasonable for the
Administrative Agent to dispose of the Collateral or any portion thereof by
using Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets. Each Grantor hereby waives any
claims against the Administrative Agent arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if the
Administrative Agent accepts the first offer received and does not offer such
Collateral to more than one offeree. Each Grantor further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it available
to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Grantor's premises or elsewhere. The
Administrative Agent shall have the right to enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process.
(b) The Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Secured Parties hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-615(a) of the
New York UCC, need the Administrative Agent account for the
surplus, if any, to any Grantor. If the Administrative Agent sells any of the
Collateral upon credit, the Grantor will be credited only with payments actually
made by the purchaser and received by the Administrative Agent and applied to
indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, the Administrative Agent may resell the Collateral and the Grantor
shall be credited with proceeds of the sale. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against any Secured Party arising out of the exercise by them of any
rights hereunder.
(c) In the event of any Disposition of any of the Intellectual
Property and if an Event of Default shall have occurred and be continuing, the
goodwill of the business connected with and symbolized by any Trademarks subject
to such Disposition shall be included, and the applicable Grantor shall supply
the Administrative Agent or its designee with such Grantor's know-how and
expertise, and with documents and things embodying the same, relating to the
manufacture, distribution, advertising and sale of products or the provision of
services relating to any Intellectual Property subject to such Disposition, and
such Grantor's customer lists and other records and documents relating to such
Intellectual Property and to the manufacture, distribution, advertising and sale
of such products and services.
6.7. Registration Rights. (a) If the Administrative Agent
shall determine to exercise its right to sell any or all of the Pledged Equity
Interests or the Pledged Debt Securities pursuant to Section 6.6, and if in the
opinion of the Administrative Agent it is necessary or advisable to have the
Pledged Equity Interests or the Pledged Debt Securities, or that portion thereof
to be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Equity Interests or the Pledged Debt Securities, or that
portion thereof to be sold, under the provisions of the Securities Act, (ii) use
its best
26
efforts to cause the registration statement relating thereto to become effective
and to remain effective for a period of one year from the date of the first
public offering of the Pledged Equity Interests or the Pledged Debt Securities,
or that portion thereof to be sold, provided, that the Administrative Agent
shall furnish to the relevant Grantor such information regarding the
Administrative Agent as shall be required in connection with such registration
and requested by such Grantor in writing, and (iii) make all amendments thereto
and/or to the related prospectus which, in the opinion of the Administrative
Agent, are necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the SEC applicable thereto.
Each Grantor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each Grantor recognizes that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Equity Interests or
the Pledged Debt Securities, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Administrative Agent shall be under no obligation to
delay a sale of any of the Pledged Equity Interests or the Pledged Debt
Securities for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Equity Interests or the Pledged Debt
Securities pursuant to this Section 6.7 valid and binding and in compliance with
any and all other applicable Requirements of Law. Each Grantor further agrees
that a breach of any of the covenants contained in this Section 6.7 will cause
irreparable injury to the Secured Parties, that the Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing under the Credit Agreement or a defense of payment.
6.8. Waiver; Deficiency. Each Grantor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Obligations and the fees and
disbursements of any attorneys employed by any Secured Party to collect such
deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1. Administrative Agent's Appointment as Attorney-in-Fact,
Etc. (a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby
27
gives the Administrative Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or with respect to any other Collateral
and file any claim or take any other action or proceeding in any court
of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under
any Receivable or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property,
execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Administrative Agent may
request to evidence the Secured Parties' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, effect any repairs or
any insurance called for by the terms of this Agreement and pay all or
any part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided
for in Section 6.6 or 6.7, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
and
(v) (1) direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent
may deem appropriate; (7) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative
Agent shall in its sole discretion determine; and (8) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes,
and do, at the Administrative Agent's option and such Grantor's
expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Secured Parties' security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary
notwithstanding, the Administrative Agent agrees that, except as provided in
Section 7.1(b), it will not exercise any rights under the power of attorney
provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.
28
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement; provided, however, that unless
and Event of Default has occurred and is continuing or time is of the essence,
the Administrative Agent shall not exercise this power without first making
demand on the Grantor and the Grantor failing to immediately comply therewith.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Loans that are Base Rate
Loans under the Credit Agreement, from the date of payment by the Administrative
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2. Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, nor any other Secured Party nor any of their respective
officers, directors, partners, employees, agents, attorneys and other advisors,
attorneys-in-fact or affiliates shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Secured Parties hereunder are solely to protect the Secured
Parties' interests in the Collateral and shall not impose any duty upon any
Secured Party to exercise any such powers. The Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
7.3. Execution of Financing Statements. Each Grantor hereby
authorizes the Administrative Agent to file or record financing or continuation
statements, and assignments and amendments thereto, and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor (to the extent permitted by applicable law) in such
form and in such offices as the Administrative Agent reasonably determines
appropriate to perfect or maintain the perfection of the security interests of
the Administrative Agent under this Agreement. Each Grantor agrees that such
financing statements may describe the collateral in the same manner as described
in the Security documents or as "all assets" or "all personal property" of the
undersigned, whether now owned or hereafter existing or acquired by the
undersigned or such other description as the Administrative Agent, in its sole
judgment, determines is necessary or advisable. A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction. Each Grantor hereby ratifies any such financing statement filed
prior to the date hereof by the Administrative Agent, if any.
7.4. Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by
29
the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the other Secured Parties, be governed by
the Credit Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Administrative Agent and
the Grantors, the Administrative Agent shall be conclusively presumed to be
acting as agent for the Secured Parties with full and valid authority so to act
or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
7.5. Appointment of Co-Collateral Agents. At any time or from
time to time and upon written notice to the Grantors, in order to comply with
any Requirement of Law, the Administrative Agent may appoint another bank or
trust company or one of more other persons, either to act as co-agent or agents
on behalf of the Secured Parties with such power and authority as may be
necessary for the effectual operation of the provisions hereof and which may be
specified in the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for indemnification and similar
protections of such co-agent or separate agent).
SECTION 8. MISCELLANEOUS
8.1. Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with Section 10.1 of the Credit Agreement.
8.2. Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3. No Waiver by Course of Conduct; Cumulative Remedies. No
Secured Party shall by any act (except by a written instrument pursuant to
Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of any
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which such Secured Party would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4. Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Lender and the Administrative Agent (in the case
of each Lender, after the occurrence and during the continuance of an Event of
Default) for all its costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Section 2 or otherwise enforcing or
preserving any rights under this Agreement and the other Loan Documents to which
such Guarantor is a party, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel (but not both outside and in-house counsel)) to each Secured Party and
of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or
30
other taxes which may be payable or determined to be payable with respect to any
of the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 10.5 of the Credit Agreement.
(d) The agreements in this Section shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
(e) Each Guarantor agrees that the provisions of Section 2.19
of the Credit Agreement are hereby incorporated herein by reference, mutatis
mutandis, and each Secured Party shall be entitled to rely on each of them as if
they were fully set forth herein.
8.5. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Secured Parties and their successors and assigns; provided that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.
8.6. Set-Off. Each Grantor hereby irrevocably authorizes each
Secured Party at any time and from time to time while an Event of Default
pursuant to Section 8(a) of the Credit Agreement shall have occurred and be
continuing, without notice to such Grantor or any other Grantor, any such notice
being expressly waived by each Grantor, to set-off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party to or for the credit
or the account of such Grantor, or any part thereof in such amounts as such
Secured Party may elect, against and on account of the obligations and
liabilities of such Grantor to such Secured Party hereunder and claims of every
nature and description of such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as such Secured Party may elect, whether or not any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Secured Party shall
notify such Grantor promptly of any such set-off and the application made by
such Secured Party of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Secured Party under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which such
Secured Party may have.
8.7. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
31
8.9. Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10. Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the other
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by any Secured
Party relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12. Submission to Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
8.13. Acknowledgments. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to which
it is a party;
(b) no Secured Party has any fiduciary relationship with or
duty to any Grantor arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between the Grantors, on the
one hand, and the Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
32
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Secured Parties or among the Grantors and the Secured Parties.
8.14. Additional Grantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 6.9 of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.15. Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations (other than Obligations in
respect of any Hedge Agreement) shall have been paid in full, the Commitments
have been terminated or expired and no Letters of Credit shall be outstanding,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be Disposed of by any
Grantor in a transaction permitted by the Credit Agreement, then the
Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral. At the request and sole expense of the Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be Disposed of in a
transaction permitted by the Credit Agreement; provided that the Borrower shall
have delivered to the Administrative Agent, at least ten Business Days prior to
the date of the proposed release, a written request for release identifying the
relevant Subsidiary Guarantor and the terms of the Disposition in reasonable
detail, including the price thereof and any expenses in connection therewith,
together with a certification by the Borrower stating that such transaction is
in compliance with the Credit Agreement and the other Loan Documents and that
the Proceeds of such Disposition will be applied in accordance therewith.
(c) Each Grantor acknowledges that it is not authorized to
file any financing statement or amendment or termination statement with respect
to any financing statement originally filed in connection herewith without the
prior written consent of the Administrative Agent subject to such Grantor's
rights under Section 9-509(d)(2) of the New York UCC.
8.16. WAIVER OF JURY TRIAL. EACH GRANTOR AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
33
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
RENT-A-CENTER, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
RENT-A-CENTER EAST, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
RENT-A-CENTER TEXAS, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Secretary
RENT-A-CENTER TEXAS, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
RENT-A-CENTER ADDISON, L.L.C.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
COLORTYME, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
RENT-A-CENTER WEST, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
RENT-A-CENTER INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
GET IT NOW, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
RAC NATIONAL PRODUCT SERVICE, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
RAINBOW RENTALS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
RAC RR, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
35
JPMORGAN CHASE BANK, as Administrative
Agent
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
36