Exhibit 4.6
GUARANTEE AND COLLATERAL AGREEMENT
made by
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CORPORATION,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.,
and certain of their Subsidiaries
in favor of
JPMORGAN CHASE BANK,
as Collateral Agent
Dated as of December 20, 2001
Table of Contents
Page
Section 1. DEFINED
TERMS...................................................................................1
1.1
Definitions.............................................................................1
1.2 Other Definitional
Provisions..............................................................................5
Section 2.
Guarantee...............................................................................5
2.1
Guarantee...............................................................................5
2.2 Right of
Contribution............................................................................6
2.3 No
Subrogation.............................................................................6
2.4 Amendments, etc. with respect to the Borrower
Obligations.............................................................................6
2.5 Guarantee Absolute and
Unconditional...........................................................................7
2.6
Reinstatement...........................................................................8
2.7
Payments................................................................................8
Section 3. GRANT OF SECURITY
INTEREST................................................................................8
Section 4. REPRESENTATIONS AND
WARRANTIES..............................................................................9
4.1 Title; No Other
Liens...................................................................................9
4.2 Perfected First Priority
Liens...................................................................................9
4.3 Jurisdiction of Organization; Chief Executive
Office..................................................................................9
4.4 Inventory and
Equipment..............................................................................10
4.5 Farm
Products...............................................................................10
4.6 Investment
Property...............................................................................10
4.7
Receivables............................................................................10
4.8 Intellectual
Property...............................................................................10
Section 5.
COVENANTS..............................................................................11
5.1 Delivery of Instruments, Certificated Securities and Chattel
Paper..................................................................................11
5.2 Maintenance of
Insurance..............................................................................11
5.3 Payment of
Obligations............................................................................12
5.4 Maintenance of Perfected Security Interest; Further
Documentation..........................................................................12
5.5 Changes in Locations, Name,
etc....................................................................................12
5.6
Notices................................................................................12
5.7 Investment
Property...............................................................................13
5.8
Receivables............................................................................14
5.9 Intellectual
Property...............................................................................14
Section 6. REMEDIAL
PROVISIONS.............................................................................15
6.1 Certain Matters Relating to
Receivables............................................................................15
6.2 Communications with Obligors; Grantors Remain
Liable.................................................................................16
6.3 Pledged
Stock..................................................................................16
6.4 Proceeds to be Turned Over To Collateral
Agent..................................................................................17
6.5 Application of
Proceeds...............................................................................17
6.6 Code and Other
Remedies...............................................................................18
6.7 Investment
Property...............................................................................18
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6.8
Deficiency.............................................................................19
Section 7. THE COLLATERAL
AGENT..................................................................................19
7.1 Collateral Agent's Appointment as Attorney-in-Fact,
etc....................................................................................19
7.2 Duty of Collateral
Agent..................................................................................21
7.3 Execution of Financing
Statements.............................................................................21
7.4 Authority of Collateral
Agent..................................................................................21
Section 8.
MISCELLANEOUS..........................................................................22
8.1 Amendments in
Writing................................................................................22
8.2
Notices................................................................................22
8.3 No Waiver by Course of Conduct; Cumulative
Remedies...............................................................................22
8.4 Enforcement Expenses;
Indemnification........................................................................22
8.5 Successors and
Assigns................................................................................23
8.6
Set-Off................................................................................23
8.7
Counterparts...........................................................................23
8.8
Severability...........................................................................23
8.9 Section
Headings...............................................................................24
8.10
Integration............................................................................24
8.11 GOVERNING
LAW....................................................................................24
8.12 Submission To Jurisdiction;
Waivers................................................................................24
8.13
Acknowledgements.......................................................................24
8.14 Additional
Grantors...............................................................................25
8.15
Releases...............................................................................25
8.16 WAIVER OF JURY
TRIAL..................................................................................25
SCHEDULES
Schedule 1........Notice Addresses
Schedule 1.1......Cash Management Service Agreements
Schedule 2........Investment Property
Schedule 3........Perfection Matters
Schedule 3(c).....Commercial Tort Claims
Schedule 4........Jurisdictions of Organization, Identification Numbers and
Chief Executive Offices
Schedule 5........Inventory and Equipment Locations
Schedule 6........Intellectual Property
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of December 20, 2001, 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 Collateral Agent (in such capacity, the "Collateral Agent") for the
Secured Parties (defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Holdings, the Company, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canada Inc. ("C&A
Canada"), ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Ltd. ("C&A Plastics"; and collectively with
C&A Canada, the "Canadian Borrowers"), certain financial institutions (the
"Lenders"), Credit Suisse First Boston, as Syndication Agent, Deutsche Banc
Alex. ▇▇▇▇▇ Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation, as Co-Documentation
Agents, ▇.▇. ▇▇▇▇▇▇ Bank Canada, as Canadian Administrative Agent, and JPMorgan
Chase Bank ("JPMorgan"), as Administrative Agent, have entered into the Credit
Agreement, dated as of December 20, 2001 (such agreement as it may be amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; capitalized terms defined therein and not otherwise defined herein
being used herein as therein defined), pursuant to which Lenders have made
certain commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to the Company and the Canadian
Borrowers;
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement that the Grantors shall have granted the security interests and
undertaken the obligations contemplated by this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and in order to
induce the Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Grantor hereby agrees with the
Collateral Agent as follows:
Section 1. DEFINED TERMS
1.1. Definitions. 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 are used herein as defined in the New
York UCC: Accounts, Certificated Security, Chattel Paper, Commercial Tort
Claims, Documents, Equipment, Farm Products, Instruments, Inventory, Letter of
Credit Rights and Supporting Obligations.
(a) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to any and all obligations
of (i) each of the Company and the Canadian Borrowers under the Credit
Agreement, the Notes, the Letters of Credit, and the other Loan Documents,
including, without limitation, the principal of, and premium, if any, and
interest (including without limitation, interest that, but for the filing of a
petition in bankruptcy with
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respect to the Company or the Canadian Borrowers would accrue on such
obligations, whether a claim is allowed against the Company or the Canadian
Borrowers for interest in any such proceeding) on, all Loans, drawings under the
Letters of Credit and payments for early termination and the fees, costs,
expenses (including, without limitation, reasonable legal fees and expenses of
counsel), indemnities and liabilities of whatsoever nature now or hereafter
made, incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising, of the Company or the
Canadian Borrowers under or in connection with the Loan Documents, including
those arising under successive borrowing transactions under the Credit Agreement
which shall either continue such obligations of the Company or the Canadian
Borrowers or from time to time renew them after they have been satisfied, (ii)
the Company and the Canadian Borrowers under Lender Interest Rate Agreements and
(iii) the Company and the Canadian Borrowers under Lender Cash Management
Service Agreements (up to an aggregate principal amount under all such
agreements of $25,000,000).
"Cash Management Service Agreements": shall mean (a) the agreements listed
on Schedule 1.1 and any refinancings thereof or other service agreements the
borrowings under which are used to fund overdrafts of any subsidiary of Holdings
or to serve any such subsidiary's cash management needs or for similar purposes,
and (b) any guarantees of such agreements.
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the Collateral
Agent as provided in Section 6.1 or 6.4.
"Copyright Licenses": any written agreement naming any Grantor as licensor
or licensee (including, without limitation, those listed in Schedule 6),
granting any right under any Copyright, including, without limitation, the grant
of rights to manufacture, distribute, exploit and sell materials derived from
any Copyright.
"Copyrights": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"Deposit Account": as defined in the Uniform Commercial Code of any
applicable jurisdiction and, in any event, including, without limitation, any
demand, time, savings, passbook or like account maintained with a depositary
institution.
"Foreign Subsidiary": any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting capital stock of any Foreign
Subsidiary.
"General Intangibles": all "general intangibles" as such term is defined in
Section 9-102(a)(42) of the New York UCC and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements, instruments
and indentures 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,
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supplemented 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 damages arising
thereunder and (iii) all rights of such Grantor to perform 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 the Collateral Agent or to the Secured Parties that are required to be paid
by such Guarantor pursuant to the terms of this Agreement or any other Loan
Document to which such Guarantor is a party).
"Guarantors": the collective reference to each Grantor.
"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 and the Trademark 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.
"Intercompany Note": any promissory note evidencing loans made by any
Grantor to Holdings 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 New York UCC
(other than any Foreign Subsidiary Voting Stock excluded from the definition of
"Pledged Stock") and (ii) whether or not constituting "investment property" as
so defined, all Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any Investment
Property.
"Lender Cash Management Service Agreements": all Cash Management Service
Agreements entered into by any Loan Party or Restricted Subsidiary with any
Lender (or any Affiliate of any Lender).
"Lender Interest Rate Agreements": all Interest Rate Agreements entered
into by any Borrower with any Lender (or any Affiliate of any Lender).
"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 Company, the Borrower Obligations of
the Company, 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 6.
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"Patents": (i) all letters patent of the United States, any other country
or any political subdivision thereof, all reissues and extensions thereof and
all goodwill associated therewith, including, without limitation, any of the
foregoing referred to in Schedule 6, (ii) all applications for letters patent of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in Schedule 6, and (iii) all rights to obtain any reissues
or extensions of the foregoing.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).
"Pledged Stock": the shares of capital stock listed on Schedule 2, together
with any other shares, stock certificates, options, interests or rights of any
nature whatsoever in respect of the capital stock of any person that may be
issued or granted to, or held by, any Grantor while this Agreement is in effect;
provided that in no event shall (i) more than 66% of the total outstanding
Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be
pledged hereunder in support of the Borrower Obligations of the Company and (ii)
any directors' qualifying shares be required to be pledged hereunder to the
extent that applicable law requires that any Grantor issue such qualifying
shares. The pledge of the capital stock of Waterstone Insurance, Inc. shall be
subject to such restrictions as are imposed by applicable law, regulation or
regulatory policy.
"Proceeds": all "proceeds" as such term is defined in Section 9-102(a)(64)
of the New York UCC and, in any event, shall include, without limitation, all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account); provided that any such right which is sold pursuant to
a Permitted Receivables Financing shall not be included in the term "Receivable"
for so long as such right is subject to a Permitted Receivables Financing.
"Reimbursement Obligation": the obligation of the Borrowers to reimburse
the Issuing Lender pursuant to Section 2.22 of the Credit Agreement for amounts
drawn under Letters of Credit.
"Requirement of Law": as to any person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
person or any of its property or to which such person or any of its property is
subject.
"Secured Parties": the collective reference to (a) the Lenders (including
in their capacities as counterparties to Interest Rate Agreements and Cash
Management Service Agreements), (b) any Affiliates of any Lenders in their
capacities as counterparties to Interest Rate Agreements and Cash Management
Service Agreements, (c) the Issuing Banks, (d) the Administrative Agent and (e)
the Collateral Agent.
"Securities Act": the Securities Act of 1933, as amended.
"Subsidiary Guarantor": each Guarantor other than Holdings and the Company.
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"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 6.
"Trademarks": (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
including, without limitation, any of the foregoing referred to in Schedule 6,
and (ii) the right to obtain all renewals thereof.
1.2. Other Definitional Provisions. 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.
(a) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(b) 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.
Section 2 Guarantee
2.1 Guarantee. Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Collateral Agent, for the
benefit of the Secured Parties and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrowers when due (whether at the stated maturity, by acceleration or
otherwise) of the Borrower Obligations.
(a) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(b) Each Guarantor agrees that the Borrower Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 2 or affecting the
rights and remedies of the Collateral Agent or any Secured Party hereunder.
(c) The guarantee contained in this Section 2 shall remain in full force
and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 (other than
Obligations in respect of Lender Interest Rate Agreements and Lender Cash
Management Service Agreements) shall have been satisfied by payment in full
(other than contingent obligations which, pursuant to the terms of this
Agreement or the Credit Agreement, survive the
6
termination of this Agreement and the Credit Agreement and the repayment of the
Loans), no Letter of Credit shall be outstanding and the Commitments shall be
terminated, notwithstanding that from time to time during the term of the Credit
Agreement the Borrowers may be free from any Borrower Obligations.
(d) No payment made by any of the Borrowers, any of the Guarantors, any
other guarantor or any other person or received or collected by the Collateral
Agent or any Secured Party from any of the Borrowers, 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 Lender Interest Rate Agreements and Lender Cash
Management Service Agreements) are paid in full (other than contingent
obligations which, pursuant to the terms of this Agreement or the Credit
Agreement, survive the termination of this Agreement and the Credit Agreement
and the repayment of the Loans), no Letter of Credit shall be outstanding and
the Commitments are terminated
2.2 Right of Contribution. Each Subsidiary Guarantor hereby agrees that to
the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section 2.2
shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the Collateral Agent and the Secured Parties, and each Subsidiary
Guarantor shall remain liable to the Collateral Agent and the Secured Parties
for the full amount guaranteed by such Subsidiary Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Collateral Agent or any Secured Party, no Guarantor shall be entitled to be
subrogated to any of the rights of the Collateral Agent or any Secured Party
against any Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Collateral Agent or any Secured Party
for the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from any Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Collateral Agent and the Secured Parties by the
Borrowers on account of the Borrower Obligations (other than Obligations in
respect of Lender Interest Rate Agreements and Lender Cash Management Service
Agreements) are paid in full (other than contingent obligations which, pursuant
to the terms of this Agreement or the Credit Agreement, survive the termination
of this Agreement and the Credit Agreement and the repayment of the Loans), no
Letter of Credit shall be outstanding and the Commitments are terminated. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Borrower Obligations shall not have been paid in full,
such amount shall be held by such Guarantor in trust for the Collateral Agent
and the Secured Parties, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the
Collateral Agent in the exact form received by such Guarantor (duly indorsed by
such Guarantor to the Collateral Agent, if required), to be applied against the
Borrower Obligations, whether matured or unmatured, in such order as the
Collateral Agent may determine.
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2.4 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 the Collateral Agent or any Secured Party may be rescinded
by the Collateral Agent or 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, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Collateral Agent or any
Secured Party, the Credit Agreement, the other Loan Documents, the Lender Cash
Management Service Agreements, the Lender Interest Rate Agreements and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Collateral
Agent (or the Required Lenders, all Lenders or the relevant Lender, or as such
other Loan Document or document requires, 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 the Collateral Agent or any Secured Party for the payment of
the Borrower Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Collateral Agent nor any 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.
2.5 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 the Collateral Agent or 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 any of the Borrowers and
any of the Guarantors, on the one hand, and the Collateral Agent 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 any of the Borrowers 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 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 the Collateral Agent or any Secured Party, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by any
Borrower or any other person against the Collateral Agent or any Secured Party,
or (c) any other circumstance whatsoever (with or without notice to or knowledge
of such Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of such Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Collateral Agent or 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 any Borrower, any other Guarantor or any other person or against
any collateral security or guarantee for any Borrower Obligations or any right
of offset with respect thereto, and any failure by the Collateral Agent or any
Secured Party to make any such demand, to pursue such other rights or remedies
or to collect any payments from any 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 any Borrower, any other
Guarantor or any other person or any such collateral security, guarantee or
right of offset, shall
8
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 the Collateral Agent or any Secured Party
against any Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
2.6 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 the Collateral Agent or any Secured Party
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
any 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, any
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will
be paid to the Collateral Agent without set-off or counterclaim in dollars at
the Funding Office.
Section 3 GRANT OF SECURITY INTEREST
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, each Grantor hereby assigns and transfers to the
Collateral Agent, and hereby grants to the Collateral Agent, for the benefit of
the Secured Parties, a security interest in, all of the following property 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"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Commercial Tort Claims as set forth on Schedule 3(c);
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property;
(l) all Letter-of-Credit Rights;
9
(m) all Receivables;
(n) all other property not otherwise described above;
(o) all books and records pertaining to the Collateral; and
(p) to the extent not otherwise included, all Proceeds, Supporting
Obligations and products of any and all of the foregoing and all collateral
security and guarantees given by any person with respect to any of the
foregoing.
Notwithstanding the foregoing, Collateral shall not include any Excluded
Collateral and no Grantor shall be deemed to have granted a security interest
in, any of such Grantor's right, title or interest in any Excluded Collateral.
Section 4 REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Administrative Agent, and the Canadian
Administrative Agent to enter into the Credit Agreement and to make and continue
the Loans and other extensions of credit thereunder, each Grantor hereby
represents and warrants to the Collateral Agent and each Secured Party that:
4.1 Title; No Other Liens. Except for the security interest granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement and the other Liens permitted to exist on the Collateral by Section
6.04 of the Credit Agreement, such Grantor owns or has a valid interest in each
item of the Collateral free and clear of any and all Liens or claims of others.
No financing statement 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 Collateral Agent, for the benefit of the Secured
Parties, pursuant to this Agreement or as are permitted by the Credit Agreement.
4.2 Perfected First Priority Liens. The security interests granted pursuant
to this Agreement (a) upon completion of the filings and other actions specified
on Schedule 3 (which, in the case of all filings and other documents referred to
on said Schedule, have been delivered or will be delivered to the Collateral
Agent in completed and duly executed form) will constitute valid perfected
security interests in all of the Collateral (other than Collateral which is of
the type not subject to Article 8 and Article 9 of the New York UCC) in favor of
the Collateral Agent, for the benefit of the Secured Parties, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
effecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceeding in equity or
at law) and an implied covenant of good faith and fair dealing, against all
creditors of such Grantor and any persons purporting to purchase any Collateral
from such Grantor and (b) are or will be prior to all other Liens on the
Collateral in existence on the date hereof except for unrecorded Liens permitted
by the Credit Agreement which have priority over the Liens on the Collateral by
operation of law.
4.3 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
Collateral Agent a certified charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date which
is recent to the date hereof.
10
4.4 Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
5.
4.5 Farm Products. None of the Collateral constitutes, or is the Proceeds
of, Farm Products.
4.6 Investment Property. The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the capital stock of each Issuer owned by such Grantor, except as
otherwise set forth on Schedule 2.
(a) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
(b) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(c) Such Grantor is the record and beneficial owner of, and has good title
to, the Investment Property pledged by it hereunder, free of any and all Liens
or options in favor of, or claims of, any other person, except the security
interest created by this Agreement.
4.7 Receivables. No amount payable to such Grantor under or in connection
with any Receivable for an amount payable in excess of $25,000 is evidenced by
any Instrument or Chattel Paper which has not been delivered to the Collateral
Agent.
(a) None of the obligors on any Receivables for an amount payable in excess
of $25,000 is a Governmental Authority.
(b) The amounts represented by such Grantor to the Secured Parties from
time to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.8 Intellectual Property. Schedule 6 lists all Intellectual Property owned
by such Grantor in its own name on the date hereof.
(a) On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws effecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing, has not been abandoned and does not infringe the intellectual property
rights of any other person.
(b) Except as set forth in Schedule 6, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(c) No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of, or such
Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
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(d) 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, or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Intellectual Property.
Section 5 COVENANTS
Each Grantor covenants and agrees with the Collateral Agent and the Secured
Parties that, from and after the date of this Agreement until the Obligations
(other than Obligations in respect of Lender Interest Rate Agreements and Lender
Cash Management Service Agreements) shall have been paid in full (other than
contingent obligations which, pursuant to the terms of this Agreement or the
Credit Agreement, survive the termination of this Agreement and the Credit
Agreement and the repayment of the Loans), no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If
any amount payable in excess of $250,000 under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated Security
or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall
be promptly delivered to the Collateral Agent, duly indorsed in a manner
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Agreement.
5.2 Maintenance of Insurance. Such Grantor will maintain, with financially
sound and reputable companies, insurance policies (i) insuring the Inventory and
Equipment against loss by fire, explosion, theft and such other casualties and
(ii) insuring such Grantor, the Collateral Agent and the Secured Parties against
liability for personal injury and property damage relating to such Inventory and
Equipment, such policies to be in such form and amounts and having such coverage
as may be reasonably satisfactory to the Collateral Agent and the Secured
Parties.
(a) All such insurance shall (i) name the Collateral Agent as insured party
or loss payee, (ii) if reasonably requested by the Collateral Agent, include a
breach of warranty clause and (iii) be reasonably satisfactory in all other
respects to the Collateral Agent.
5.3 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 taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
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 interest
therein.
5.4 Maintenance of Perfected Security Interest; Further Documentation. Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section
4.2 and shall defend such security interest against the claims and demands of
all persons whomsoever.
(a) Such Grantor will furnish to the Collateral Agent and the Secured
Parties from time to time statements and schedules further identifying and
describing the assets and property of such Grantor
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and such other reports in connection therewith as the Collateral Agent may
reasonably request, all in reasonable detail.
(b) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole reasonable expense of such Grantor, such
Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Collateral 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, (i) filing 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 and (ii) in the case of Investment Property, Deposit Accounts,
Letter-of-Credit Rights and any other relevant Collateral, taking any actions
necessary to enable the Collateral Agent to obtain "control" (within the meaning
of the applicable Uniform Commercial Code) with respect thereto.
5.5 Changes in Locations, Name, etc. Such Grantor will not, except upon 15
days' prior written notice to the Collateral Agent and delivery to the
Collateral Agent of all additional executed financing statements and other
documents reasonably requested by the Collateral Agent to maintain the validity,
perfection and priority of the security interests provided for herein:
(i) change its jurisdiction of organization or the location of its
chief executive office or sole place of business or principal residence
from that referred to in Section 4.3; or
(ii) change its name.
5.6 Notices. Such Grantor will advise the Collateral Agent and the Secured
Parties promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Collateral Agent to exercise any of its
remedies hereunder; and
(b) of 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.
5.7 Investment Property. If such Grantor shall become entitled to receive
or shall receive any certificate (including, without limitation, any certificate
representing a 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 of any Issuer of Pledged Stock, whether in addition to, in substitution
of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Collateral Agent and the Secured Parties, hold the same in trust for the
Collateral Agent and the Secured Parties and deliver the same forthwith to the
Collateral Agent in the exact form received, duly indorsed by such Grantor to
the Collateral Agent, if required, together with an undated stock power covering
such certificate duly executed in blank by such Grantor and with, if the
Collateral Agent so requests, signature guaranteed, to be held by the Collateral
Agent, subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Investment Property upon
the liquidation or dissolution of any Issuer shall be paid over to the
Collateral 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 Investment Property or any property shall be distributed upon
or with respect to the Investment Property pursuant to the recapitalization or
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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 Collateral Agent, be delivered to
the Collateral 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 Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Collateral Agent, hold such money or property in trust for the Collateral
Agent and the Secured Parties, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.
(a) Without the prior written consent of the Collateral Agent, such Grantor
will not (i) except as permitted by Article VI of the Credit Agreement, vote to
enable, or take any other action to permit, any Issuer of Pledged Stock to issue
any capital stock of any nature or to issue any other securities convertible
into or granting the right to purchase or exchange for any capital stock of any
nature of any Issuer of Pledged Stock, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Investment
Property or Proceeds thereof (except 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 or (iv) enter into any
agreement or undertaking restricting the right or ability of such Grantor or the
Collateral Agent to sell, assign or transfer any of the Investment Property or
Proceeds thereof.
(b) 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 Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Collateral Agent promptly in writing
of the occurrence of any of the events described in Section 5.7(a) with respect
to the Investment Property 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
Investment Property issued by it.
5.8 Receivables. 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 adversely affect the value thereof.
(a) Such Grantor will deliver to the Collateral Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables.
5.9 Intellectual Property. 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
except to the extent failure to do so could not reasonably be expected to
adversely effect the value of such Trademark, (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
Collateral Agent, for the benefit of the Secured Parties, shall obtain a
perfected security interest in such ▇▇▇▇ pursuant to this Agreement, and (v) not
(and not
14
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.
(a) 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.
(b) 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 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.
(c) 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.
(d) Such Grantor will notify the Collateral Agent and the Secured Parties
promptly 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.
(e) 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 Collateral Agent within fifteen Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Collateral Agent, such Grantor shall execute and deliver, and have recorded, any
and all agreements, instruments, documents, and papers as the Collateral Agent
may request to evidence the Collateral Agent's and the Secured Parties' security
interest in any Copyright, Patent or Trademark and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby.
(f) 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 the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(g) 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, promptly notify the
Collateral Agent after it learns thereof and ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
Section 6. REMEDIAL PROVISIONS
15
6.1 Certain Matters Relating to Receivables. The Collateral Agent shall
have the right at any time after the occurrence and during the continuance of an
Event of Default 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 Collateral Agent may
reasonably require in connection with such test verifications. At any time after
the occurrence and during the continuance of an Event of Default, upon the
Collateral Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
Collateral Agent to furnish to the Collateral Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.
(a) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor's Receivables, subject to the Collateral Agent's direction and control,
and the Collateral 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 Collateral 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 five Business
Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor to the Collateral Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Collateral Agent, subject
to withdrawal by the Collateral 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 Collateral Agent and 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.
(b) At the Collateral Agent's request, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. The Collateral
Agent in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Collateral Agent's
satisfaction the existence, amount and terms of any Receivables.
(a) Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Collateral Agent for the benefit of the Secured Parties and that payments in
respect thereof shall be made directly to the Collateral Agent.
(b) 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. Neither the
Collateral Agent nor any 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 the Collateral Agent or any
Secured Party of any payment relating thereto, nor shall the Collateral Agent or
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
16
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.
6.3 Pledged Stock. Unless an Event of Default shall have occurred and be
continuing and the Collateral Agent shall have given notice (which notice need
not be given if any of the events of the type described in paragraphs (g) and
(h) of Article VII of the Credit Agreement shall have occurred with respect to
such Grantor) to the relevant Grantor of the Collateral 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 Stock
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 or other organizational rights with respect to the
Investment Property; provided, however, that no vote shall be cast or corporate
or other organizational right exercised or other action taken which, in the
Collateral 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.
(a) If an Event of Default shall occur and be continuing and the Collateral
Agent shall give notice (which notice need not be given if any of the events of
the type described in paragraphs (g) and (h) of Article VII of the Credit
Agreement shall have occurred with respect to such Grantor) of its intent to
exercise such rights to the relevant Grantor or Grantors, (i) the Collateral
Agent shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Investment Property and make application
thereof to the Obligations in the manner set forth in Section 6.5, and (ii) any
or all of the Investment Property shall be registered in the name of the
Collateral Agent or its nominee, and the Collateral Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining to
such Investment Property at any meeting of shareholders of the relevant Issuer
or Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Grantor or
the Collateral Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it and for any acts of gross
negligence or willful misconduct with respect to such property, but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing except for any acts of gross negligence or willful misconduct
in connection with such exercise, failure or delay.
(b) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Collateral 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
Investment Property directly to the Collateral Agent.
6.4 Proceeds to be Turned Over To Collateral Agent. In addition to the
rights of the Collateral Agent and the Secured Parties specified in Section 6.1
with respect to payments of
17
Receivables, if an Event of Default shall occur and be continuing, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by such Grantor in trust for the Collateral Agent and the Secured
Parties, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Collateral Agent in the exact
form received by such Grantor (duly indorsed by such Grantor to the Collateral
Agent, if required). All Proceeds received by the Collateral Agent hereunder
shall be held by the Collateral Agent in a Collateral Account maintained under
its sole dominion and control. All Proceeds while held by the Collateral Agent
in a Collateral Account (or by such Grantor in trust for the Collateral Agent
and 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. Except as expressly provided elsewhere in this
Agreement, all proceeds received by the Collateral Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Collateral Agent, be held by the Collateral Agent
as Collateral for, and/or then, or at any time thereafter, be applied in full or
in part by the Collateral Agent against, the Obligations in the following order
of priority:
FIRST: to the payment of all costs and expenses of such sale, collection or
other realization, including reasonable compensation to the Collateral Agent and
its agents and counsel, and all other expenses, liabilities and advances made or
incurred by the Collateral Agent in connection therewith, and all amounts for
which the Collateral Agent is entitled to indemnification hereunder and all
advances made by the Collateral Agent hereunder for the account of any Grantor,
and the payment of all costs and expenses paid or incurred by the Collateral
Agent in connection with the exercise of any right or remedy hereunder, all in
accordance with Section 8.4 and the applicable Loan Documents;
SECOND: ratably, to the payment or collateralization in full of the
Obligations; and
THIRD: after payment in full of the amounts specified in the preceding two
subparagraphs of this Section 6.5, to the payment to or upon the order of the
Grantors, or to whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
6.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Collateral 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 or any other applicable law. Without limiting the generality of
the foregoing, the Collateral 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 upon the occurrence and during the continuance of an Event
of Default forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, 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 the Collateral Agent or 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. The Collateral Agent or any Secured Party, as agent for and
representative of the Secured Parties (but not any Secured Party or Secured
Parties in its or their respective individual capacities unless Lenders as
provided in Section 9.08 of the Credit Agreement shall otherwise agree in
writing) shall have the right upon any such public sale or sales, and, to the
extent
18
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 Grantor
further agrees, at the Collateral Agent's request, to assemble the Collateral
and make it available to the Collateral Agent at places which the Collateral
Agent shall reasonably select, whether at such Grantor's premises or elsewhere.
The Collateral 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 Collateral Agent and the Secured Parties hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Collateral Agent
may elect, and only after such application and after the payment by the
Collateral Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the
Collateral Agent account for the surplus, if any, to any Grantor. To the extent
permitted by applicable law, each Grantor waives all claims, damages and demands
it may acquire against the Collateral Agent or any Secured Party arising out of
the exercise by them of any rights hereunder. If any notice of a proposed sale
or other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition.
6.7 Investment Property. The Grantors recognize that, by reason of certain
prohibitions contained in the Securities Act of 1933, as from time to time
amended (the "Securities Act"), and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Investment Property conducted without prior registration or qualification
of such Pledged Collateral under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other things, to
acquire the Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof. The Grantors acknowledge that
any such private sales may be at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act) and, notwithstanding such circumstances, the Grantors agree
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Investment
Property for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would, or should, agree to so register it.
(a) If the Collateral Agent determines to exercise its right to sell any or
all of the Investment Property, upon written request, the Grantors shall and
shall cause each issuer of any Pledged Stock to be sold hereunder from time to
time to furnish to the Collateral Agent all such information as the Collateral
Agent may request in order to determine the number of shares and other
instruments included in the Investment Property which may be sold by the
Collateral Agent in exempt transactions under the Securities Act and the rules
and regulations of the Securities and Exchange Commission thereunder, as the
same are from time to time in effect.
6.8 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
the Collateral Agent or any Secured Party to collect such deficiency.
19
Section 7. THE COLLATERAL AGENT
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. Each Grantor
hereby irrevocably constitutes and appoints the Collateral 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 gives the
Collateral 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 indorse 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 Collateral 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 Collateral Agent may reasonably request to evidence the
Collateral Agent's and 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 indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) 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 Collateral Agent or as the Collateral Agent
shall direct; 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; sign and
indorse 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;
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; defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Collateral Agent may deem reasonably
appropriate; 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 Collateral Agent shall in its sole discretion
determine; and
20
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 Collateral Agent were the absolute owner thereof for all purposes, and
do, at the Collateral Agent's option and such Grantor's expense, at any
time, or from time to time, all acts and things which the Collateral Agent
deems necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's 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
Collateral Agent agrees that 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.
(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The reasonable expenses of the Collateral 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 highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Credit Agreement, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral 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 Collateral Agent. The Collateral 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 Collateral Agent deals with similar
property for its own account. Neither the Collateral Agent, any Secured Party
nor any of their respective officers, directors, employees or agents 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 Collateral Agent and the Secured Parties
hereunder are solely to protect the Collateral Agent's and the Secured Parties'
interests in the Collateral and shall not impose any duty upon the Collateral
Agent or any Secured Party to exercise any such powers. The Collateral Agent and
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, employees or agents 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. Pursuant to any applicable law, each
Grantor authorizes the Collateral Agent to file or record financing statements
and other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the Collateral Agent reasonably determines appropriate to perfect the
security interests of the Collateral Agent under this Agreement. Each Grantor
authorizes the Collateral Agent to use in any such financing statements the
following collateral description: "All personal property other than Excluded
Collateral (as defined in the Credit Agreement, dated as of December 20, 2001,
among ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., a Delaware corporation, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Canada Inc., a Canadian corporation, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Ltd., a Canadian
21
corporation, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation, a Delaware corporation, the financial
institutions parties thereto, Credit Suisse First Boston, as syndication agent,
Deutsche Banc Alex. ▇▇▇▇▇ Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation, as
co-documentation agents, JPMorgan Chase Bank, as administrative agent, and ▇.▇.
▇▇▇▇▇▇ Bank Canada, as Canadian administrative agent, as amended, supplemented
or otherwise modified from time to time). A copy of the Credit Agreement is on
file with the Secured Party." Each Grantor hereby ratifies and authorizes the
filing by the Collateral Agent of any financing statement with respect to the
Collateral made prior to the date hereof.
7.4 Authority of Collateral Agent. Each Grantor acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral 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 Collateral Agent and the 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
Collateral Agent and the Grantors, the Collateral 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.
(a) The Secured Parties agree that this Agreement may be enforced only by
the action of the Collateral Agent acting upon the instructions of the Lenders,
as provided in Section 9.08 of the Credit Agreement, and that no Secured Party
shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereunder, it being
understood and agreed that such rights and remedies may be exercised by the
Collateral Agent for the benefit of the Secured Parties upon the terms of this
Agreement.
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 9.08 of the Credit Agreement. Any waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given.
8.2 Notices. All notices, requests and demands to or upon the Collateral
Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 9.01 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. Neither the
Collateral Agent nor any 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 the Collateral Agent or 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 the Collateral Agent or 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 the Collateral Agent or such Secured Party would
22
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. Each Guarantor agrees to pay or
reimburse each Secured Party and the Collateral Agent 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 to each
Secured Party and of counsel to the Collateral Agent.
(a) Each Guarantor agrees to pay, and to save the Collateral Agent and 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 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.
(b) Each Guarantor agrees to pay, and to save the Collateral Agent and 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
Company would be required to do so pursuant to Section 9.05 of the Credit
Agreement.
(c) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
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
Collateral Agent and 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
Collateral Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Collateral
Agent and each Secured Party at any time and from time to time while an Event of
Default 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 the Collateral Agent or such Secured Party to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the Collateral
Agent or such Secured Party may elect, against and on account of the obligations
and liabilities of such Grantor to the Collateral Agent or such Secured Party
hereunder and claims of every nature and description of the Collateral Agent or
such Secured Party against such Grantor, in any currency, whether arising
hereunder, under the Credit Agreement, any other Loan Document or otherwise, as
the Collateral Agent or such Secured Party may elect, whether or not the
Collateral Agent or any Secured Party has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Collateral Agent and each Secured Party shall notify such Grantor
promptly of any such set-off and the application made by the Collateral Agent or
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 the Collateral Agent and each Secured Party under this Section 8.6 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Collateral Agent or such Secured Party may have.
23
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.
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 Collateral Agent and the Secured Parties with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Collateral Agent or any
Secured Party relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Loan Documents.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.11 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
Collateral 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.
24
8.12 Acknowledgements. 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) neither the Collateral Agent nor any 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 Collateral Agent and Secured Parties, on
the other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(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.
8.13 Additional Grantors. Each Subsidiary of Holdings that is required to
become a party to this Agreement pursuant to Section 5.18 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.
8.14 Releases. At such time as the Loans, the Reimbursement Obligations and
the other Obligations (other than Obligations in respect of Lender Interest Rate
Agreements and Lender Cash Management Service Agreements) shall have been paid
in full (other than contingent obligations which, pursuant to the terms of this
Agreement or the Credit Agreement survive the termination of this Agreement and
the Credit Agreement and the repayment of Loans), the Commitments have been
terminated 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 Collateral 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 Collateral Agent
shall promptly deliver to such Grantor any Collateral held by the Collateral
Agent hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
(a) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Collateral 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 Company, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the capital stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Company shall have delivered to the Collateral 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
sale or other disposition in reasonable detail, including the price thereof and
any expenses in connection therewith, together with a certification by the
Company stating that such transaction is in compliance with the Credit Agreement
and the other Loan Documents.
WAIVER OF JURY TRIAL. EACH GRANTOR 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.
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.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CORPORATION
by __________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PRODUCTS CO.
by _________________________________
Name:
Title:
DURA CONVERTIBLE SYSTEMS, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INTERNATIONAL CORPORATION
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PLASTICS, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ASSET SERVICES, INC.
by _________________________________
Name:
Title:
CW MANAGEMENT CORPORATION
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ SERVICES, INC.
by _________________________________
Name:
Title:
SAF SERVICES CORPORATION
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ (GIBRALTAR) LIMITED
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CARPET & ACOUSTICS
(TN), INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ AUTOMOTIVE
INTERNATIONAL, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ EUROPE, INC.
by _________________________________
Name:
Title:
AMCO CONVERTIBLE FABRICS, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ACCESSORY MATS, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ AUTOMOTIVE MATS, LLC
by _________________________________
Name:
Title:
AKRO MATS, LLC
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CARPET & ACOUSTICS (MI), INC.
by _________________________________
Name:
Title:
COMET ACOUSTICS, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇ GROUP, L.L.C.
by _________________________________
Name:
Title:
BRUT PLASTICS, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ FABRICS, INC.
by _________________________________
Name:
Title:
JPS AUTOMOTIVE, INC.
by _________________________________
Name:
Title:
TEXTRON AUTOMOTIVE INTERIORS INC.
by _________________________________
Name:
Title:
TEXTRON AUTOMOTIVE EXTERIORS INC.
by _________________________________
Name:
Title:
TEXTRON PROPERTIES INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ INTERIORS INC.
by _________________________________
Name:
Title:
TEXTRON AUTOMOTIVE (ARGENTINA) INC.
by _________________________________
Name:
Title:
TEXTRON AUTOMOTIVE (ASIA) INC.
by _________________________________
Name:
Title:
TEXTRON AUTOMOTIVE OVERSEAS INVESTMENT INC.
by _________________________________
Name:
Title:
TEXTRON AUTOMOTIVE INTERNATIONAL SERVICES INC.
by _________________________________
Name:
Title:
M&C ADVANCED PROCESSES, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ DEVELOPMENT COMPANY
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ADVANCED PROCESSES, INC.
by _________________________________
Name:
Title:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ CANADA DOMESTIC HOLDING COMPANY
by _________________________________
Name:
Title:
▇▇▇▇▇▇ DEVELOPMENT COMPANY
by _________________________________
Name:
Title:
GREFAB, INC.
by _________________________________
Name:
Title:
WICKES ASSET MANAGEMENT, INC.
by _________________________________
Name:
Title:
WICKES MANUFACTURING COMPANY
by _________________________________
Name:
Title:
JPMORGAN CHASE BANK, as Collateral Agent
by _________________________________
Name:
Title:
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇)
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule 1
[TO BE COMPLETED BY COMPANY]
NOTICE ADDRESSES OF GUARANTORS
NAME OF GUARANTOR ADDRESS
Schedule 1.1
[TO BE COMPLETED BY COMPANY]
EXISTING CASH MANAGEMENT SERVICE AGREEMENTS
Schedule 2
[TO BE COMPLETED BY COMPANY]
DESCRIPTION OF INVESTMENT PROPERTY
Pledged Stock:
Issuer Class of Stock Stock Certificate No. No. of Shares
------------------------------- --- --------------------- -- ---------------------------- --
-------------------------------
Pledged Notes:
Issuer Payee Principal
Amount
----------------------------------------------------- - -- ----------------------------- --
-------------------------------
Schedule 3
[TO BE COMPLETED BY COMPANY]
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
DEBTOR JURISDICTION
------ ------------
Patent and Trademark Filings
Actions with respect to Pledged Stock and Pledged Notes
Other Actions
Schedule 3(c)
[TO BE COMPLETED BY COMPANY]
COMMERCIAL TORT CLAIMS
Schedule 4
[TO BE COMPLETED BY COMPANY]
LOCATION OF JURISDICTION OF ORGANIZATION
AND CHIEF EXECUTIVE OFFICE, AND IDENTIFICATION NUMBER
Grantor Jurisdiction of Identification Location of Chief
Organization Number Executive Office
Schedule 5
[TO BE COMPLETED BY COMPANY]
LOCATIONS OF INVENTORY AND EQUIPMENT
Grantor Address County State
Schedule 6
[TO BE COMPLETED BY COMPANY]
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of December __, 2001 (the "Agreement"), made by
the Grantors parties thereto for the benefit of JPMorgan Chase Bank, as
Collateral Agent. The undersigned agrees for the benefit of the Collateral Agent
and the Secured Parties as follows:
1 The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2 The undersigned will notify the Collateral Agent promptly in writing of
the occurrence of any of the events described in Section 5.7(a) of the
Agreement.
3 The terms of Sections 6.3(c) and 6.7 of the Agreement 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 of the Agreement.
[NAME OF ISSUER]
By:_______________________________________
Name:
Title:
Address for Notices:
-----------------------------------------
-----------------------------------------
-----------------------------------------
Fax:
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200_, made by
______________________________ (the "Additional Grantor"), in favor of JPMORGAN
CHASE BANK, as collateral agent (in such capacity, the "Collateral Agent") for
the Secured Parties as defined in the Guarantee and Collateral Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Guarantee and Collateral Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., a Delaware corporation (the
"Company"), ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canada Inc., a Canadian corporation ("▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ Canada"), ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics, Ltd., a Canadian corporation
("▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Plastics", and collectively with ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Canada, the
"Canadian Borrowers"), ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ corporation, a Delaware corporation
("Holdings"), the financial institutions parties thereto (the "Lenders"),
Deutsche Banc Alex. ▇▇▇▇▇ Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation, as
co-documentation agents (in such capacity, the "Co-Documentation Agents"),
Credit Suisse First Boston, as syndication agent (in such capacity, the
"Syndication Agent"), JPMorgan Chase Bank, as administrative agent (in such
capacity, the "Administrative Agent") and The Chase Manhattan Bank of Canada, as
Canadian administrative agent (in such capacity, the "Canadian Administrative
Agent") have entered into a Credit Agreement, dated as of December __, 2001 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, in connection with the Credit Agreement, Holdings, the Company and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Guarantee and Collateral Agreement, dated as of December __, 2001 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Collateral Agent for the benefit of
the Secured Parties;
WHEREAS, the Credit Agreement requires the Additional Grantor to become a
party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in the Schedules to the Guarantee and
Collateral Agreement. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral Agreement is true and correct on and as the date hereof
(after giving effect to this Assumption Agreement) as if made on and as of such
date.
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:___________________________
Name:
Title:
-2-
Annex 1-A to
Assumption Agreement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 3(c)
Supplement to Schedule 4
Supplement to Schedule 5
Supplement to Schedule 6