Exhibit 10.5
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U.S. SECURITY AGREEMENT
By
NORCRAFT COMPANIES, L.P.,
as Borrower,
NORCRAFT HOLDINGS, L.P.,
NORCRAFT FINANCE CORP.,
and
THE OTHER GUARANTORS PARTY HERETO,
as Guarantors
and
UBS AG, STAMFORD BRANCH,
as Collateral Agent
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Dated as of October 21, 2003
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TABLE OF CONTENTS
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PREAMBLE......................................................................1
RECITALS......................................................................1
AGREEMENT.....................................................................2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions....................................................2
SECTION 1.2. Interpretation................................................10
SECTION 1.3. Resolution of Drafting Ambiguities............................10
SECTION 1.4. Perfection Certificate........................................10
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Pledge........................................................11
SECTION 2.2. Obligations...................................................12
SECTION 2.3. Security Interest.............................................12
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral................13
SECTION 3.2. Perfection of Uncertificated Securities Collateral............13
SECTION 3.3. Financing Statements and Other Filings; Maintenance of
Perfected Security Interest................................13
SECTION 3.4. Other Actions.................................................14
SECTION 3.5. Joinder of Additional Guarantors..............................19
SECTION 3.6. Supplements; Further Assurances...............................19
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1. Title..........................................................20
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SECTION 4.2. Validity of Security Interest.................................20
SECTION 4.3. Defense of Claims/Transferability of Pledged Collateral.......20
SECTION 4.4. Other Financing Statements....................................20
SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction of
Organization...............................................21
SECTION 4.6. Location of Inventory and Equipment...........................21
SECTION 4.7. Due Authorization and Issuance................................21
SECTION 4.8. Consents, etc.................................................22
SECTION 4.9. Pledged Collateral............................................22
SECTION 4.10. Insurance.....................................................22
SECTION 4.11. Payment of Taxes; Compliance with Laws; Contesting Liens;
Claims.....................................................22
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral....................23
SECTION 5.2. Voting Rights; Distributions; etc.............................23
SECTION 5.3. Operative Agreements..........................................24
SECTION 5.4. Defaults, etc.................................................24
SECTION 5.5. Certain Agreements of Pledgors As Issuers and Holders of
Equity Interests...........................................25
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License..............................................25
SECTION 6.2. Protection of Collateral Agent's Security.....................25
SECTION 6.3. After-Acquired Property.......................................26
SECTION 6.4. Modifications.................................................27
SECTION 6.5. Litigation....................................................27
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records........................................27
SECTION 7.2. Legend........................................................28
SECTION 7.3. Modification of Terms, etc....................................28
SECTION 7.4. Collection....................................................28
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ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral...............................29
ARTICLE IX
REMEDIES
SECTION 9.1. Remedies......................................................29
SECTION 9.2. Notice of Sale................................................31
SECTION 9.3. Waiver of Notice and Claims...................................31
SECTION 9.4. Certain Sales of Pledged Collateral...........................31
SECTION 9.5. No Waiver; Cumulative Remedies................................32
SECTION 9.6. Certain Additional Actions Regarding Intellectual Property....33
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS/APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral Dispositions.......33
SECTION 10.2. Application of Proceeds.......................................33
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent...................................34
SECTION 11.2. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact...........................................35
SECTION 11.3. Continuing Security Interest; Assignment......................35
SECTION 11.4. Termination; Release..........................................35
SECTION 11.5. Modification in Writing.......................................36
SECTION 11.6. Notices.......................................................36
SECTION 11.7. GOVERNING LAW.................................................36
SECTION 11.8. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF
JURY TRIAL.................................................36
SECTION 11.9. Severability of Provisions....................................37
SECTION 11.10. Execution in Counterparts.....................................37
SECTION 11.11. Business Days.................................................37
SECTION 11.12. Waiver of Stay................................................37
SECTION 11.13. No Claims Against Collateral Agent............................38
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SECTION 11.14. No Release....................................................38
SECTION 11.15. Obligations Absolute..........................................38
SIGNATURES
EXHIBIT 1 Form of Issuers Acknowledgment
EXHIBIT 2 Form of Securities Pledge Amendment
EXHIBIT 3 Form of Joinder Agreement
EXHIBIT 4 Form of Control Agreement Concerning Securities Accounts
EXHIBIT 5 Form of Control Agreement Concerning Deposit Accounts
EXHIBIT 6 Form of Copyright Security Agreement
EXHIBIT 7 Form of Patent Security Agreement
EXHIBIT 8 Form of Trademark Security Agreement
EXHIBIT 9 Form of Bailee's Letter
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U.S. SECURITY AGREEMENT
U.S. SECURITY AGREEMENT dated as of October 21, 2003 (as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, the "Agreement") made by NORCRAFT
COMPANIES, L.P., a Delaware limited partnership (the "Borrower") and THE
GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO (the "Original Guarantors") OR
FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the
"Additional Guarantors," and together with the "Original Guarantors," the
"Guarantors"), as pledgors, assignors and debtors (the Borrower, together with
the Guarantors, in such capacities and together with any successors in such
capacities, the "Pledgors," and each, a "Pledgor"), in favor of the UBS AG,
STAMFORD BRANCH, in its capacity as collateral agent pursuant to the Credit
Agreement (as hereinafter defined), as pledgee, assignee and secured party (in
such capacities and together with any successors in such capacities, the
"Collateral Agent").
R E C I T A L S :
A. The Borrower, the Collateral Agent, the Guarantors and the lending
institutions listed therein as lenders (the "Lenders") have, in connection with
the execution and delivery of this Agreement, entered into that certain credit
agreement, dated as of October 21, 2003 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement").
B. Each Original Guarantor has, pursuant to the Credit Agreement,
among other things, unconditionally guaranteed the Obligations.
C. The Borrower and each Original Guarantor will receive substantial
benefits from the execution, delivery and performance of the obligations under
the Credit Agreement and the other Loan Documents and each is, therefore,
willing to enter into this Agreement.
D. Each Pledgor is or, as to Pledged Collateral (as hereinafter
defined) acquired by such Pledgor after the date hereof will be, the legal
and/or beneficial owner of the Pledged Collateral pledged by it hereunder.
E. This Agreement is given by each Pledgor in favor of the Collateral
Agent for the benefit of the Secured Parties (as hereinafter defined) to secure
the payment and performance of all of the Obligations.
F. It is a condition to the obligations of the Lenders to make the
Loans under the Credit Agreement and a condition to The Issuing Bank issuing
Letters of Credit under the Credit Agreement that each Pledgor execute and
deliver the applicable Loan Documents, including this Agreement.
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A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Collateral Agent hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions.
(a) Unless otherwise defined herein or in the Credit Agreement, terms
used herein that are defined in the UCC shall have the meanings assigned to them
in the UCC.
(b) Terms used but not otherwise defined herein that are defined in
the Credit Agreement shall have the meanings given to them in the Credit
Agreement.
(c) The following terms shall have the following meanings:
"Acquisition Document Rights" shall mean, with respect to each
Pledgor, collectively, all of such Pledgor's rights, title and interest in, to
and under the Acquisition Documents, including, without limitation (i) all
rights and remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief pursuant to or in
respect of the Acquisition Documents, (ii) all rights and remedies relating to
monetary damages, including indemnification rights and remedies, and claims for
monetary damages under or in respect of the agreements, documents and
instruments referred to in the Acquisition Documents or related thereto and
(iii) all proceeds, collections, recoveries and rights of subrogation with
respect to the foregoing.
"Additional Guarantors" shall have the meaning assigned to such term
in the Preamble hereof.
"Additional Pledged Interests" shall mean, collectively, with respect
to each Pledgor, (i) all options, warrants, rights, agreements, additional
membership, partnership or other equity interests of whatever class of any
issuer of Initial Pledged Interests or any interest in any such issuer, together
with all rights, privileges, authority and powers of such Pledgor relating to
such interests in each such issuer or under the Operative Agreement of any such
issuer, and the certificates, instruments and agreements representing such
membership, partnership or other interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such membership, partnership or other equity interests from time to time
acquired by such Pledgor in any manner and (ii) all membership, partnership or
other equity interests, as applicable, of each limited liability company,
partnership or other entity (other than a corporation) hereafter acquired or
formed by such Pledgor and all options, warrants, rights,
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agreements, additional membership, partnership or other equity interests of
whatever class of such limited liability company, partnership or other entity,
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests or under the Operative Agreement of any such issuer,
and the certificates, instruments and agreements representing such membership,
partnership or other equity interests and any and all interest of such Pledgor
in the entries on the books of any financial intermediary pertaining to such
membership, partnership or other interests, from time to time acquired by such
Pledgor in any manner.
"Additional Pledged Shares" shall mean, collectively, with respect to
each Pledgor, (i) all options, warrants, rights, agreements, additional shares
of capital stock of whatever class of any issuer of the Initial Pledged Shares
or any other equity interest in any such issuer, together with all rights,
privileges, authority and powers of such Pledgor relating to such interests
issued by any such issuer under the Operative Agreement of any such issuer, and
the certificates, instruments and agreements representing such interests and any
and all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such interests, from time to time acquired by such
Pledgor in any manner and (ii) all the issued and outstanding shares of capital
stock of each corporation hereafter acquired or formed by such Pledgor and all
options, warrants, rights, agreements or additional shares of capital stock of
whatever class of such corporation, together with all rights, privileges,
authority and powers of such Pledgor relating to such shares or under the
Operative Agreement of such corporation, and the certificates, instruments and
agreements representing such shares and any and all interest of such Pledgor in
the entries on the books of any financial intermediary pertaining to such
shares, from time to time acquired by such Pledgor in any manner.
"Agreement" shall have the meaning assigned to such in the Preamble
hereof.
"Bailee Letter" shall be an agreement in form substantially similar to
Exhibit 9 annexed hereto.
"Borrower" shall have the meaning assigned to such term in the
Preamble hereof.
"Claims" shall mean any and all property and other taxes, assessments
and special assessments, levies, fees and all governmental charges imposed upon
or assessed against, and all claims (including, without limitation, landlords',
carriers', mechanics', workmen's, repairmen's, laborers', materialmen's,
suppliers' and warehousemen's Liens and other claims arising by operation of
law) against, all or any portion of the Pledged Collateral.
"Collateral Account" shall mean a collateral account or sub-account
established and maintained in accordance with the provisions of Section 9.01 of
the Credit Agreement and all property from time to time on deposit in the
Collateral Account.
"Collateral Agent" shall have the meaning assigned to such term in the
Preamble hereof.
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"Commodity Account Control Agreement" shall mean a commodity account
control agreement in a form that is reasonably satisfactory to the
Administrative Agent.
"Contested Liens" shall mean, collectively, any Liens incurred in
respect of any Claims to the extent that the amounts owing in respect thereof
are not yet delinquent or are being contested and otherwise comply with the
provisions of Section 4.11 hereof; provided, however, that such Liens shall in
all respects be subject and subordinate in priority to the Lien and security
interest created and evidenced by this Agreement, except if and to the extent
that the law or regulation creating, permitting or authorizing such Lien
provides that such Lien must be superior to the Lien and security interest
created and evidenced hereby.
"Contracts" shall mean, collectively, with respect to each Pledgor,
all sale, service, performance, equipment or property lease contracts,
agreements and grants and all other contracts, agreements or grants (in each
case, whether written or oral, or third party or intercompany), between such
Pledgor and third parties, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
"Control" shall mean (i) in the case of each Deposit Account,
"control," as such term is defined in Section 9-104 of the UCC, and (ii) in the
case of any Security Entitlement, "control," as such term is defined in Section
8-106 of the UCC and (iii) in the case of any Commodity Contract, "control," as
such term is defined in Section 9-106 of the UCC.
"Control Agreements" shall mean, collectively, the Deposit Account
Control Agreement, the Securities Account Control Agreement and the Commodity
Account Control Agreement.
"Copyrights" shall mean, collectively, with respect to each Pledgor,
all copyrights (whether statutory or common law, whether established or
registered in the United States or any other country or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished) and all copyright registrations and applications made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or
assigned to such Pledgor, including, without limitation, the copyrights,
registrations and applications listed in Schedule 15(b) annexed to the
Perfection Certificate, together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor's use of such
copyrights, (ii) reissues, renewals, continuations and extensions thereof, (iii)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to ▇▇▇ for past,
present or future infringements thereof.
"Copyright Security Agreement" shall mean an agreement substantially
in the form annexed hereto as Exhibit 6.
"Credit Agreement" shall have the meaning assigned to such term in
Recital A hereof.
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"Deposit Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 5.
"Deposit Accounts" shall mean, collectively, with respect to each
Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and in
any event shall include, without limitation, the LC Sub-Account and the
Collateral Account and all accounts and sub-accounts relating to any of the
foregoing accounts and (ii) all cash, funds, checks, notes and instruments from
time to time on deposit in any of the accounts or sub-accounts described in
clause (i) of this definition.
"Distributions" shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
"Excluded Property" shall mean Special Property other than the
following:
(a) the right to receive any payment of money (including, without
limitation, Accounts, General Intangibles and Payment Intangibles) or any
other rights referred to in Sections 9-406(f), 9-407(a) or 9-408(a) of the
UCC to the extent that such sections of the UCC are effective to limit the
prohibitions which make such property "Special Property"; and
(b) any Proceeds, substitutions or replacements of any Special
Property (unless such Proceeds, substitutions or replacements would
constitute Special Property).
"General Intangibles" shall mean, collectively, with respect to each
Pledgor, all "general intangibles," as such term is defined in the UCC, of such
Pledgor and, in any event, shall include, without limitation, (i) all of such
Pledgor's rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Pledged
Collateral or the Mortgaged Property, (iii) any and all other rights, claims,
choses-in-action and causes of action of such Pledgor against any other person
and the benefits of any and all collateral or other security given by any other
person in connection therewith, (iv) all guarantees, endorsements and
indemnifications on, or of, any of the Pledged Collateral or any of the
Mortgaged Property, (v) all lists, books, records, correspondence, ledgers,
print-outs, files (whether in printed form or stored electronically), tapes and
other papers or materials containing information relating to any of the Pledged
Collateral or any of the Mortgaged Property, including, without limitation, all
customer or tenant lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, appraisals, recorded knowledge, surveys,
studies, engineering reports, test reports, manuals, standards, processing
standards, performance standards, catalogs, research data, computer and
automatic machinery software and programs and the like, field repair data,
accounting information pertaining to such Pledgor's operations or any of the
Pledged Collateral or any of the Mortgaged Property and all media in which or on
which any of
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the information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of such information,
knowledge, records or data, (vi) all licenses, consents, permits, variances,
certifications, authorizations and approvals, however characterized, of any
Governmental Authority (or any person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Pledged
Collateral or any of the Mortgaged Property including, without limitation,
building permits, certificates of occupancy, environmental certificates,
industrial permits or licenses and certificates of operation and (vii) all
rights to reserves, deferred payments, deposits, refunds, indemnification of
claims to the extent the foregoing relate to any Pledged Collateral or Mortgaged
Property and claims for tax or other refunds against any Governmental Authority
relating to any Pledged Collateral or any of the Mortgaged Property.
"Goodwill" shall mean, collectively, with respect to each Pledgor, the
goodwill connected with such Pledgor's business including, without limitation,
(i) all goodwill connected with the use of and symbolized by any Trademark in
which such Pledgor has any interest, (ii) all know-how, trade secrets, customer
and supplier lists, proprietary information, inventions, methods, procedures,
formulae, descriptions, compositions, technical data, drawings, specifications,
name plates, catalogs, confidential information and the right to limit the use
or disclosure thereof by any person, pricing and cost information, business and
marketing plans and proposals, consulting agreements, engineering contracts and
such other assets which relate to such goodwill and (iii) all product lines of
such Pledgor's business.
"Guarantors" shall have the meaning assigned to such term in the
Preamble hereof.
"Initial Pledged Interests" shall mean, with respect to each Pledgor,
all membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer described in Schedule 12 annexed to
the Perfection Certificate, together with all rights, privileges, authority and
powers of such Pledgor in and to each such issuer or under the Operative
Agreement of each such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests.
"Initial Pledged Shares" shall mean, collectively, with respect to
each Pledgor, the issued and outstanding shares of capital stock of each issuer
described in Schedule 12 annexed to the Perfection Certificate together with all
rights, privileges, authority and powers of such Pledgor relating to such
interests in each such issuer or under the Operative Agreement of each such
issuer, and the certificates, instruments and agreements representing such
shares of capital stock and any and all interest of such Pledgor in the entries
on the books of any financial intermediary pertaining to the Initial Pledged
Shares.
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"Instruments" shall mean, collectively, with respect to each Pledgor,
all "instruments," as such term is defined in Article 9, rather than Article 3,
of the UCC, and shall include, without limitation, all promissory notes, drafts,
bills of exchange or acceptances.
"Intellectual Property Collateral" shall mean, collectively, the
Patents, Trademarks, Copyrights, Licenses and Goodwill.
"Intercompany Notes" shall mean, with respect to each Pledgor, all
intercompany notes described in Schedule 13 annexed to the Perfection
Certificate and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or agreements evidencing such intercompany notes, and
all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.
"Investment Property" shall mean a security, whether certificated or
uncertificated, security entitlement, securities account, commodity contract or
commodity account, excluding, however, the Securities Collateral.
"Joinder Agreement" shall mean an agreement substantially in the form
annexed hereto as Exhibit 3.
"Lenders" shall have the meaning assigned to such term in Recital A
hereof.
"Licenses" shall mean, collectively, with respect to each Pledgor, all
license and distribution agreements with, and covenants not to ▇▇▇, any other
party with respect to any Patent, Trademark or Copyright or any other patent,
trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
including, without limitation, the license and distribution agreements listed in
Schedules 15(a) and 15(b) annexed to the Perfection Certificate, together with
any and all (i) renewals, extensions, supplements and continuations thereof,
(ii) income, fees, royalties, damages, claims and payments now and hereafter due
and/or payable thereunder and with respect thereto including, without
limitation, damages and payments for past, present or future infringements or
violations thereof, (iii) rights to ▇▇▇ for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trademarks or Copyrights or any other
patent, trademark or copyright.
"Mortgaged Property" shall have the meaning assigned to such term in
the Mortgages.
"Operative Agreement" shall mean (i) in the case of any limited
liability company or partnership or other non-corporate entity, any membership
or partnership agreement or other organizational agreement or document thereof
and (ii) in the case of any corporation, any charter or certificate of
incorporation and by-laws thereof.
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"Patents" shall mean, collectively, with respect to each Pledgor, all
patents issued or assigned to and all patent applications and registrations made
by such Pledgor (whether established or registered or recorded in the United
States or any other country or any political subdivision thereof), including,
without limitation, those patents, patent applications and registrations listed
in Schedule 15(a) annexed to the Perfection Certificate, together with any and
all (i) rights and privileges arising under applicable law with respect to such
Pledgor's use of any patents, (ii) inventions and improvements described and
claimed therein, (iii) reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable thereunder and with respect
thereto including, without limitation, damages and payments for past, present or
future infringements thereof, (v) rights corresponding thereto throughout the
world and (vi) rights to ▇▇▇ for past, present or future infringements thereof.
"Patent Security Agreement" shall mean an agreement substantially in
the form annexed hereto as Exhibit 7.
"Perfection Certificate" shall mean that certain perfection
certificate dated October 21, 2003, executed and delivered by each Pledgor in
favor of the Collateral Agent for the benefit of the Secured Parties, and each
other Perfection Certificate (which shall be in form and substance reasonably
acceptable to the Collateral Agent) executed and delivered by the applicable
Guarantor in favor of the Collateral Agent for the benefit of the Secured
Parties contemporaneously with the execution and delivery of each Joinder
Agreement executed in accordance with Section 3.5 hereof, in each case, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with the Credit Agreement or upon the request of
the Collateral Agent, which request, unless an Event of Default has occurred and
is continuing, shall occur no more often than once every three months.
"Pledge Amendment" shall have the meaning assigned to such term in
Section 5.1 hereof.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2.1 hereof.
"Pledged Interests" shall mean, collectively, the Initial Pledged
Interests and the Additional Pledged Interests; provided, however, that to the
extent applicable, Pledged Interests shall not include any interest which is not
required to be pledged pursuant to subsection 5.10(b) of the Credit Agreement.
"Pledged Securities" shall mean, collectively, the Pledged Interests,
the Pledged Shares and the Successor Interests.
"Pledged Shares" shall mean, collectively, the Initial Pledged Shares
and the Additional Pledged Shares; provided, however, that Pledged Shares shall
not include any shares which are not required to be pledged pursuant to
subsection 5.10(b) of the Credit Agreement.
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"Pledgor" shall have the meaning assigned to such term in the Preamble
hereof.
"Secured Parties" shall mean, collectively, the Administrative Agent,
the Collateral Agent, each other Agent, the Lenders and each party to a Hedging
Obligation relating to the Loans and up to $50.0 million of Senior Subordinated
Notes if at the date of entering into such Hedging Obligation such person was a
Lender or an Affiliate of a Lender and such person executes and delivers to the
Administrative Agent a letter agreement in form and substance acceptable to the
Administrative Agent pursuant to which such person (i) appoints the Collateral
Agent as its agent under the applicable Loan Documents and (ii) agrees to be
bound by the provisions of Section 9.03 of the Credit Agreement.
"Securities Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 4.
"Securities Collateral" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"Special Property" shall mean:
(a) any permit, lease or license held by any Pledgor that validly
prohibits the creation by such Pledgor of a security interest therein;
(b) any permit, lease or license held by any Pledgor to the extent
that any Requirement of Law applicable thereto prohibits the creation of a
security interest therein; and
(c) Equipment owned by any Pledgor on the date hereof or hereafter
acquired that is subject to a Lien securing a Purchase Money Obligation or
Capital Lease Obligation permitted to be incurred pursuant to the
provisions of the Credit Agreement if the contract or other agreement in
which such Lien is granted (or the documentation providing for such
Purchase Money Obligation or Capital Lease Obligation) validly prohibits
the creation of any other Lien on such Equipment;
provided, however, that in each case described in clauses (a), (b) and (c) of
this definition, such property shall constitute "Special Property" only to the
extent and for so long as such permit, lease, license, contract or other
agreement or Requirement of Law applicable thereto validly prohibits the
creation of a Lien on such property in favor of the Collateral Agent and, upon
the termination of such prohibition (howsoever occurring), such property shall
cease to constitute "Special Property."
"Successor Interests" shall mean, collectively, with respect to each
Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company, partnership or other entity owned by such Pledgor (unless such
successor is such Pledgor itself) formed by or resulting from any consolidation
or merger in which any person listed in Schedule 1(a) annexed to the Perfection
Certificate is not
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the surviving entity; provided, however, that to the extent applicable, Succesor
Interests shall not include any shares or interests which are not required to be
pledged pursuant to subsection 5.10(b) of the Credit Agreement.
"Trademarks" shall mean, collectively, with respect to each Pledgor,
all trademarks (including service marks), slogans, logos, certification marks,
trade dress, uniform resource locations (URL's), domain names, corporate names
and trade names, whether registered or unregistered, owned by or assigned to
such Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the United
States or any other country or any political subdivision thereof), including,
without limitation, the registrations and applications listed in Schedule 15(a)
annexed to the Perfection Certificate, together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor's use of
any trademarks, (ii) reissues, continuations, extensions and renewals thereof,
(iii) income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including, without limitation,
damages, claims and payments for past, present or future infringements thereof,
(iv) rights corresponding thereto throughout the world and (v) rights to ▇▇▇ for
past, present and future infringements thereof.
"Trademark Security Agreement" shall mean an agreement substantially
in the form annexed hereto as Exhibit 8.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, however, that if by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of the
Collateral Agent's and the Secured Parties' security interest in any item or
portion of the Pledged Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect from time to time in such
other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions relating to
such provisions.
SECTION 1.2. Interpretation. The rules of interpretation specified in
the Credit Agreement shall be applicable to this Agreement.
SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Collateral Agent) shall not be employed in the
interpretation hereof.
SECTION 1.4. Perfection Certificate. The Collateral Agent and each
Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto are and shall
at all times remain a part of this Agreement.
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ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Pledge. As collateral security for the payment and
performance in full of all the Obligations, each Pledgor hereby pledges and
grants to the Collateral Agent for the benefit of the Secured Parties, a lien on
and security interest in and to all of the right, title and interest of such
Pledgor in, to and under the following property, wherever located, whether now
existing or hereafter arising or acquired from time to time (collectively, the
"Pledged Collateral"):
(i) all Accounts;
(ii) all Equipment, Goods, Inventory and Fixtures;
(iii) all Documents, Instruments and Chattel Paper;
(iv) all Letters of Credit and Letter-of-Credit Rights;
(v) all Securities Collateral;
(vi) all Collateral Accounts;
(vii) all Investment Property;
(viii) all Intellectual Property Collateral;
(ix) the Commercial Tort Claims described on Schedule 16 to the
Perfection Certificate;
(x) all General Intangibles;
(xi) all Deposit Accounts;
(xii) all Acquisition Documents and Acquisition Document Rights;
(xiii) all Supporting Obligations;
(xiv) all books and records relating to the Pledged Collateral; and
(xv) to the extent not covered by clauses (i) through (xiv) of this
sentence, all other personal property of such Pledgor, whether
tangible or intangible and all Proceeds and products of each of
the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of, each of the
foregoing, any and all proceeds of any insurance, indemnity,
warranty
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or guaranty payable to such Pledgor from time to time with
respect to any of the foregoing.
Notwithstanding anything to the contrary contained in clauses (i)
through (xv) above, the security interest created by this Agreement shall not
extend to, and the term "Pledged Collateral" shall not include, any Excluded
Property and (i) the Pledgors shall from time to time at the request of the
Collateral Agent give written notice to the Collateral Agent identifying in
reasonable detail any material Special Property (and stating in such notice that
such Special Property constitutes "Excluded Property") and shall provide to the
Collateral Agent such other information regarding such Special Property as the
Collateral Agent may reasonably request and (ii) from and after the Closing
Date, no Pledgor shall permit to become effective in any document creating,
governing or providing for any permit, lease or license, a provision that would
prohibit the creation of a Lien on such permit, lease or license in favor of the
Collateral Agent unless such Pledgor believes, in its reasonable judgment, that
such prohibition is usual and customary in transactions of such type.
SECTION 2.2. Obligations. This Agreement secures, and the Pledged
Collateral is collateral security for, the payment and performance in full when
due of the Obligations.
SECTION 2.3. Security Interest. (a) Each Pledgor hereby irrevocably
authorizes the Collateral Agent at any time and from time to time to file in any
relevant jurisdiction any initial financing statements (including fixture
filings) and amendments thereto that contain the information required by Article
9 of the Uniform Commercial Code of each applicable jurisdiction for the filing
of any financing statement or amendment relating to the Pledged Collateral,
including, without limitation, (i) whether such Pledgor is an organization, the
type of organization and any organizational identification number issued to such
Pledgor, (ii) any financing or continuation statements or other documents
without the signature of such Pledgor where permitted by law, including, without
limitation, the filing of a financing statement describing the Pledged
Collateral as "all assets in which the Pledgor now owns or hereafter acquires
rights" and (iii) in the case of a financing statement filed as a fixture filing
or covering Pledged Collateral constituting minerals or the like to be extracted
or timber to be cut, a sufficient description of the real property to which such
Pledged Collateral relates. Each Pledgor agrees to provide all information
described in the immediately preceding sentence to the Collateral Agent promptly
upon request.
(b) Each Pledgor hereby ratifies its authorization for the Collateral
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto relating to the Pledged Collateral if filed prior to the date
hereof.
(c) Each Pledgor hereby further authorizes the Collateral Agent to
file filings relating to the Pledged Collateral with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country), including without limitation, this
Agreement, the Copyright Security Agreement, the Patent Security Agreement and
the Trademark Security Agreement, or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the security
interest granted by such
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Pledgor hereunder, without the signature of such Pledgor, and naming such
Pledgor, as debtor, and the Collateral Agent, as secured party.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral. Each
Pledgor represents and warrants that all certificates, agreements or instruments
representing or evidencing the Securities Collateral in existence on the date
hereof have been delivered to the Collateral Agent in suitable form for transfer
by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that the Collateral Agent has a perfected first priority
security interest therein. Each Pledgor hereby agrees that all certificates,
agreements or instruments representing or evidencing Securities Collateral
acquired by such Pledgor after the date hereof, shall immediately upon receipt
thereof by such Pledgor be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto. All certificated Securities Collateral shall
be in suitable form for transfer by delivery or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. The Collateral Agent shall have
the right, at any time upon the occurrence and during the continuance of any
Event of Default, to endorse, assign or otherwise transfer to or to register in
the name of the Collateral Agent or any of its nominees or endorse for
negotiation any or all of the Securities Collateral, without any indication that
such Securities Collateral is subject to the security interest hereunder. In
addition, upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right at any time to exchange certificates
representing or evidencing Securities Collateral for certificates of smaller or
larger denominations.
SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each
Pledgor represents and warrants that the Collateral Agent has a perfected first
priority security interest in all uncertificated Pledged Securities pledged by
it hereunder that is in existence on the date hereof. Each Pledgor hereby agrees
that if any of the Pledged Securities are at any time not evidenced by
certificates of ownership, then each applicable Pledgor shall, to the extent
permitted by applicable law if necessary or desirable to perfect a security
interest in such Pledged Securities, cause such pledge to be recorded on the
equityholder register or the books of the issuer, cause the issuer to execute
and deliver to the Collateral Agent an acknowledgment of the pledge of such
Pledged Securities substantially in the form of Exhibit 1 annexed hereto,
execute any customary pledge forms or other documents necessary or appropriate
to complete the pledge and give the Collateral Agent the right to transfer such
Pledged Securities under the terms hereof and, upon request, provide to the
Collateral Agent an opinion of counsel, in form and substance reasonably
satisfactory to the Collateral Agent, confirming such pledge and perfection
thereof.
SECTION 3.3. Financing Statements and Other Filings; Maintenance of
Perfected Security Interest. Each Pledgor represents and warrants that all
filings, registrations and
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recordings necessary to create and perfect the security interest granted by it
to the Collateral Agent in respect of the Pledged Collateral have been delivered
to the Collateral Agent in completed and, to the extent necessary, duly executed
form for filing in each governmental, municipal or other office specified in
Schedule 7 annexed to the Perfection Certificate. Each Pledgor agrees that at
the sole cost and expense of the Pledgors, (i) such Pledgor will maintain the
security interest created by this Agreement in the Pledged Collateral as a
perfected first priority security interest and shall defend such security
interest against the claims and demands of all persons except Permitted
Collateral Liens, (ii) such Pledgor shall furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Pledged Collateral and such other reports in connection with the Pledged
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail and (iii) at any time and from time to time, upon the written request of
the Collateral Agent, such Pledgor shall promptly and duly execute and deliver,
and file and have recorded, such further instruments and documents and take such
further action as the Collateral Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and the rights and
powers herein granted, including the filing of any financing statements,
continuation statements and other documents (including the Agreement) under the
Uniform Commercial Code (or other similar laws) in effect in any jurisdiction
with respect to the security interest created hereby and the execution and
delivery of Control Agreements, all in form reasonably satisfactory to the
Collateral Agent and in such offices (including, without limitation, the United
States Patent and Trademark Office) wherever required by law to perfect,
continue and maintain a valid, enforceable, first priority security interest in
the Pledged Collateral as provided herein and to preserve the other rights and
interests granted to the Collateral Agent hereunder, as against third parties,
with respect to the Pledged Collateral.
SECTION 3.4. Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent's security interest in the Pledged Collateral, each Pledgor
represents (as to itself) as follows and agrees, in each case at such Pledgor's
own expense, to take the following actions with respect to the following Pledged
Collateral:
(a) Instruments and Tangible Chattel Paper. As of the date hereof (i)
no amount payable under or in connection with any of the Pledged
Collateral, in the aggregate for all Pledgors in excess of $500,000, is
evidenced by any Instrument or Tangible Chattel Paper other than such
Instruments and Tangible Chattel Paper listed in Schedule 13 annexed to the
Perfection Certificate and (ii) each Instrument and each item of Tangible
Chattel Paper listed in Schedule 13 annexed to the Perfection Certificate
has been properly endorsed, assigned and delivered to the Collateral Agent,
accompanied by instruments of transfer or assignment duly executed in
blank. If any amount payable under or in connection with any of the Pledged
Collateral, in the aggregate for all Pledgors in excess of $500,000, shall
be evidenced by any Instrument or Tangible Chattel Paper, the Pledgor
acquiring such Instrument or Tangible Chattel Paper shall forthwith
endorse, assign and deliver the same to the Collateral Agent, accompanied
by such instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time specify.
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(b) Deposit Accounts. Such Pledgor has neither opened nor maintains
any Deposit Accounts other than the accounts listed in Schedule 17 annexed
to the Perfection Certificate and, (ii) except as the Collateral Agent may
otherwise agree, the Collateral Agent has a perfected first priority
security interest in each Deposit Account listed in Schedule 17 annexed to
the Perfection Certificate by Control. No Pledgor shall hereafter establish
and maintain any Deposit Account unless (1) the applicable Pledgor shall
have given the Collateral Agent 30 days' prior written notice (or such
lesser notice period as the Collateral Agent may agree to) of its intention
to establish such new Deposit Account with a Bank, (2) such Bank shall be
reasonably acceptable to the Collateral Agent and, (3) except as the
Collateral Agent may otherwise agree, such Bank and such Pledgor shall have
duly executed and delivered to the Collateral Agent a Deposit Account
Control Agreement with respect to such Deposit Account substantially in the
form of Exhibit 5 annexed hereto or reasonably satisfactory to the
Collateral Agent. Each Pledgor agrees that at the time it establishes any
additional Deposit Accounts it shall, except as the Collateral Agent may
otherwise agree, enter into a duly authorized, executed and delivered
Deposit Account Control Agreement with respect to such Deposit Account
substantially in the form of Exhibit 5 annexed hereto or reasonably
satisfactory to the Collateral Agent. The Collateral Agent agrees with each
Pledgor that the Collateral Agent shall not give any instructions pursuant
to any Deposit Account Control Agreement or withhold any withdrawal rights
from such Pledgor with respect to funds from time to time credited to any
Deposit Account unless an Event of Default has occurred and is continuing
(except, if the Collateral Agent is the Bank, the Collateral Agent may take
such actions pursuant to the operating agreement(s) governing such Deposit
Account). The provisions of this Section 3.4(b) shall not apply to the
Collateral Account. No Pledgor shall grant Control of any Deposit Account
to any person other than the Collateral Agent. Notwithstanding the
foregoing, each applicable Pledgor shall, and shall cause each of its
Subsidiaries to, as expeditiously as possible, but in no event later than
the 60th day following the Closing Date (unless the Administrative Agent,
in its sole discretion, shall agree to a later date), to the extent
required under this subsection 3.4(b) unless the Collateral Agent shall
otherwise agree, endorse, execute and deliver, or cause to be endorsed,
executed and delivered, as applicable, all other certificates, agreements
(including Control Agreements), or instruments necessary to perfect the
Collateral Agent's security interest in each Deposit Account listed, as of
the date hereof, on Schedule 17 annexed to the Perfection Certificate,
together with all consents from all banks and other financial institutions
in which such Deposit Account is located.
(c) Investment Property. (i) Each Pledgor (1) has no Securities
Accounts or Commodity Accounts other than those listed in Schedule 17
annexed to the Perfection Certificate and the Collateral Agent has a
perfected first priority security interest in such Securities Accounts and
Commodity Accounts by Control, (2) does not hold, own or have any interest
in any certificated securities or uncertificated securities other than
those constituting Pledged Securities and those maintained in Securities
Accounts or Commodity Accounts listed in Schedule 17 annexed to the
Perfection Certificate and (3) as of the
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date hereof, has entered into a duly authorized, executed and delivered
Securities Account Control Agreement, substantially in the form of Exhibit
4 annexed hereto, or a Commodity Account Control Agreement, in a form
reasonably satisfactory to the Administrative Agent, with respect to each
Securities Account or Commodity Account listed in Schedule 17 annexed to
the Perfection Certificate, as applicable.
(ii) If any Pledgor shall at any time hold or acquire any
certificated securities constituting Investment Property, in the aggregate
for all Pledgors in excess of $25,000, such Pledgor shall promptly (a)
endorse, assign and deliver the same to the Collateral Agent, accompanied
by such instruments of transfer or assignment duly executed in blank, all
in form and substance reasonably satisfactory to the Collateral Agent or
(b) deliver such securities into a Securities Account with respect to which
a Control Agreement is in effect in favor of the Collateral Agent. If any
securities now or hereafter acquired by any Pledgor constituting Investment
Property, in the aggregate for all Pledgors in excess of $25,000, are
uncertificated and are issued to such Pledgor or its nominee directly by
the issuer thereof, such Pledgor shall promptly notify the Collateral Agent
thereof and pursuant to an agreement in form and substance satisfactory to
the Collateral Agent, either (a) use commercially reasonable efforts to
cause the issuer to agree to comply with instructions from the Collateral
Agent as to such securities, without further consent of any Pledgor or such
nominee, (b) cause a Security Entitlement with respect to such
uncertificated security to be held in a Securities Account with respect to
which the Collateral Agent has Control or (c) arrange for the Collateral
Agent to become the registered owner of the securities. Pledgor shall not
hereafter establish and maintain any Securities Account or Commodity
Account with any Securities Intermediary or Commodity Intermediary unless
(1) the applicable Pledgor shall have given the Collateral Agent 30 days'
prior written notice of its intention to establish such new Securities
Account or Commodity Account with such Securities Intermediary or Commodity
Intermediary, (2) such Securities Intermediary or Commodity Intermediary
shall be reasonably acceptable to the Collateral Agent and (3) such
Securities Intermediary or Commodity Intermediary, as the case may be, and
such Pledgor shall have duly executed and delivered a Control Agreement
with respect to such Securities Account or Commodity Account, as the case
may be. Each Pledgor shall accept any cash and Investment Property, in the
aggregate for all Pledgors in excess of $25,000, for the benefit of the
Collateral Agent and within one (1) Business Day of actual receipt thereof,
deposit any cash or Investment Property and any new securities,
instruments, documents or other property by reason of ownership of the
Investment Property (other than payments of a kind described in Section 7.4
hereof) received by it into a Controlled Account. The Collateral Agent
agrees with each Pledgor that the Collateral Agent shall not give any
Entitlement Orders or instructions or directions to any issuer of
uncertificated securities, Securities Intermediary or Commodity
Intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by such Pledgor, unless an Event of Default
has occurred and is continuing, or, after giving effect to any such
investment and withdrawal rights of such Pledgor would occur (except, if
the Collateral Agent is the Securities Intermediary or Commodities
Intermediary, the Collateral Agent may take such actions pursuant to the
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operating agreement(s) governing such Securities Account or Commodities
Account, as the case may be). No Pledgor shall grant control over any
Investment Property to any person other than the Collateral Agent.
(iii) As between the Collateral Agent and the Pledgors, the
Pledgors shall bear the investment risk with respect to the Investment
Property and Pledged Securities, and the risk of loss of, damage to, or the
destruction of the Investment Property and Pledged Securities, whether in
the possession of, or maintained as a security entitlement or deposit by,
or subject to the control of, the Collateral Agent, a Securities
Intermediary, Commodity Intermediary, any Pledgor or any other person;
provided, however, that nothing contained in this Section 3.4(c) shall
release or relieve the Collateral Agent, any Securities Intermediary or
Commodity Intermediary of its duties and obligations to the Pledgors or any
other person under any Control Agreement or under applicable law. Each
Pledgor shall promptly pay all Claims and fees of whatever kind or nature
with respect to the Investment Property and Pledged Securities pledged by
it under this Agreement. In the event any Pledgor shall fail to make such
payment contemplated in the immediately preceding sentence, the Collateral
Agent may do so for the account of such Pledgor and the Pledgors shall
promptly reimburse and indemnify the Collateral Agent from all costs and
expenses incurred by the Collateral Agent under this Section 3.4(c) in
accordance with Section 11.03 of the Credit Agreement.
(d) Electronic Chattel Paper and Transferable Records. As of the date
hereof no amount payable under or in connection with any of the Pledged
Collateral, in the aggregate in excess of $500,000, is evidenced by any
Electronic Chattel Paper or any "transferable record" (as that term is
defined in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction) other than such
Electronic Chattel Paper and transferable records listed in Schedule 13
annexed to the Perfection Certificate. If any amount payable under or in
connection with any of the Pledged Collateral, in the aggregate for all
Pledgors in excess of $500,000, shall at any time be evidenced by any
Electronic Chattel Paper or any transferable record, the Pledgor acquiring
such Electronic Chattel Paper or transferable record shall promptly notify
the Collateral Agent thereof and shall take such action as the Collateral
Agent may reasonably request to vest in the Collateral Agent control under
UCC Section 9-105 of such Electronic Chattel Paper or control under Section
201 of the Federal Electronic Signatures in Global and National Commerce
Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Collateral Agent agrees with such Pledgor that the
Collateral Agent will arrange, pursuant to procedures reasonably
satisfactory to the Collateral Agent and so long as such procedures will
not result in the Collateral Agent's loss of control, for the Pledgor to
make alterations to the Electronic Chattel Paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act of
Section 16 of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of Default has
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occurred and is continuing or would occur after taking into account any
action by such Pledgor with respect to such Electronic Chattel Paper or
transferable record.
(e) Letter-of-Credit Rights. If any Pledgor is at any time a
beneficiary under Letters of Credit now or hereafter issued in favor of
such Pledgor, other than Letters of Credit issued pursuant to the Credit
Agreement, in amounts in the aggregate for all Pledgors in excess of
$500,000, such Pledgor shall promptly notify the Collateral Agent thereof
and such Pledgor shall, at the request of the Collateral Agent, pursuant to
an agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) arrange for the issuer and any confirmer of
such Letter of Credit to consent to an assignment to the Collateral Agent
of the proceeds of any drawing under the Letter of Credit or (ii) arrange
for the Collateral Agent to become the transferee beneficiary of such
Letter of Credit, with the Collateral Agent agreeing, in each case, that
the proceeds of any drawing under the Letter of Credit are to be applied as
provided in the Credit Agreement.
(f) Commercial Tort Claims. As of the date hereof each Pledgor hereby
represents and warrants that it holds no Commercial Tort Claims. If any
Pledgor shall at any time hold or acquire Commercial Tort Claims having a
value in the aggregate for all Pledgors in excess of $500,000, such Pledgor
shall immediately notify the Collateral Agent in writing signed by such
Pledgor of the brief details thereof and grant to the Collateral Agent in
such writing a security interest therein and in the Proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Collateral Agent.
(g) Landlord Access Agreements/Bailee Letters. Each Pledgor shall use
its commercially reasonable efforts to obtain as soon as practicable after
the date hereof with respect to each location set forth in Schedule 4.01(m)
annexed to the Credit Agreement, where such Pledgor maintains Pledged
Collateral, a waiver of bailee's lien (substantially in the form of Exhibit
9 annexed hereto) and/or a landlord access agreement, as applicable, and
use commercially reasonable efforts to obtain a Bailee Letter, landlord
access agreement and/or landlord's lien waiver, as applicable, from all
such bailees and landlords, as applicable, who from time to time have
possession of Pledged Collateral in the ordinary course of such Pledgor's
business and if reasonably requested by the Collateral Agent. A waiver of
bailee's lien shall not be required if the value of the Pledged Collateral
held by such bailee is less than $25,000, provided that the aggregate value
of the Pledged Collateral held by all bailees who have not delivered a
Bailee Letter is less than $250,000 in the aggregate for all Pledgors.
(h) Motor Vehicles. Upon the request of the Collateral Agent, each
Pledgor shall deliver to the Collateral Agent originals of the certificates
of title or ownership for the motor vehicles covered by Certificates of
Title or ownership owned by it with the Collateral Agent listed as
lienholder therein. Such requirement shall apply to the Pledgors only if
any such motor vehicle has a fair market value over $50,000, provided
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that the fair market value of all such motor vehicles as to which any
Pledgor has not delivered a certificate of title or ownership is over
$500,000.
SECTION 3.5. Joinder of Additional Guarantors. The Pledgors shall
cause each Subsidiary of the Borrower which, from time to time, after the date
hereof shall be required to pledge any assets to the Collateral Agent for the
benefit of the Secured Parties pursuant to the provisions of the Credit
Agreement, (a) to execute and deliver to the Collateral Agent (i) a Joinder
Agreement substantially in the form of Exhibit 3 annexed hereto within thirty
(30) Business Days on which it was acquired or created and (ii) a Perfection
Certificate, in each case, within thirty (30) Business Days of the date on which
it was acquired or created or (b) in the case of a Subsidiary organized outside
of the United States required to pledge any assets to the Collateral Agent
pursuant to the Credit Agreement, execute and deliver such documentation as the
Collateral Agent shall reasonably request and, in each case, upon such execution
and delivery, such Subsidiary shall constitute a "Guarantor" and a "Pledgor" for
all purposes hereunder with the same force and effect as if originally named as
a Guarantor and Pledgor herein. The execution and delivery of such Joinder
Agreement shall not require the consent of any Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor and Pledgor as a party to this
Agreement.
SECTION 3.6. Supplements; Further Assurances. Each Pledgor shall take
such further actions, and to execute and deliver to the Collateral Agent such
additional assignments, agreements, supplements, powers and instruments, as the
Collateral Agent may in its reasonable judgment deem necessary or appropriate,
wherever required by law, in order to perfect, preserve and protect the security
interest in the Pledged Collateral as provided herein and the rights and
interests granted to the Collateral Agent hereunder, to carry into effect the
purposes hereof or better to assure and confirm unto the Collateral Agent the
Pledged Collateral or permit the Collateral Agent to exercise and enforce its
rights, powers and remedies hereunder with respect to any Pledged Collateral.
Without limiting the generality of the foregoing, each Pledgor shall make,
execute, endorse, acknowledge, file or refile and/or deliver to the Collateral
Agent from time to time upon reasonable request such lists, descriptions and
designations of the Pledged Collateral, copies of warehouse receipts, receipts
in the nature of warehouse receipts, bills of lading, documents of title,
vouchers, invoices, schedules, confirmatory assignments, supplements, additional
security agreements, conveyances, financing statements, transfer endorsements,
powers of attorney, certificates, reports and other assurances or instruments.
If an Event of Default has occurred and is continuing, the Collateral Agent may
institute and maintain, in its own name or in the name of any Pledgor, such
suits and proceedings as the Collateral Agent may be advised by counsel shall be
necessary or expedient to prevent any impairment of the security interest in or
the perfection thereof in the Pledged Collateral. All of the foregoing shall be
at the sole cost and expense of the Pledgors. The Pledgors and the Collateral
Agent acknowledge that this Agreement is intended to grant to the Collateral
Agent for the benefit of the Secured Parties a security interest in and Lien
upon the Pledged Collateral and shall not constitute or create a present
assignment of any of the Pledged Collateral.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants as follows:
SECTION 4.1. Title. Except for the security interest granted to the
Collateral Agent for the ratable benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, each Pledgor owns and, as to Pledged Collateral
acquired by it from time to time after the date hereof, will own the rights in
each item of Pledged Collateral pledged by it hereunder free and clear of any
and all Liens or claims of others other than Permitted Collateral Liens. No
financing statement or other public notice with respect to all or any part of
the Pledged Collateral is on file or of record in any public office, except such
as have been filed in favor of the Collateral Agent pursuant to this Agreement,
as are permitted by the Credit Agreement or financing statements or public
notices relating to the termination statements listed on Schedule 9 to the
Perfection Certificate. No person other than the Collateral Agent has control or
possession of all or any part of the Pledged Collateral, except as permitted by
the Credit Agreement.
SECTION 4.2. Validity of Security Interest. The security interest in
and Lien on the Pledged Collateral granted to the Collateral Agent for the
benefit of the Secured Parties hereunder constitutes (a) a legal and valid
security interest in all the Pledged Collateral securing the payment and
performance of the Obligations, and (b) subject to the filings and other actions
described in Schedule 7 annexed to the Perfection Certificate a perfected
security interest in all the Pledged Collateral. The security interest and Lien
granted to the Collateral Agent for the benefit of the Secured Parties pursuant
to this Agreement in and on the Pledged Collateral will at all times constitute
a perfected, continuing first priority security interest therein, superior and
prior to the rights of all other persons therein subject only to Permitted
Collateral Liens.
SECTION 4.3. Defense of Claims/Transferability of Pledged Collateral.
Each Pledgor shall, at its own cost and expense, defend title to the Pledged
Collateral pledged by it hereunder and the security interest therein and Lien
thereon granted to the Collateral Agent and the priority thereof against all
claims and demands of all persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Collateral Agent or any other
Secured Party other than Permitted Collateral Liens (other than Contested
Liens). There is no agreement, and no Pledgor shall enter into any agreement or
take any other action, that would reasonably be expected to restrict the
transferability of any of the Pledged Collateral or otherwise impair or conflict
in any material respect with such Pledgors' obligations or the rights of the
Collateral Agent hereunder.
SECTION 4.4. Other Financing Statements. There is no (nor will there
be any) valid or effective financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Pledged Collateral other
than financing statements relating to Permitted Collateral Liens. So long as any
of the Obligations remain unpaid, no Pledgor shall execute, authorize or permit
to be filed in any
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public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to any
Pledged Collateral, except financing statements filed or to be filed in respect
of and covering the security interests granted by such Pledgor to the holder of
the Permitted Collateral Liens.
SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction of
Organization. (a) Such Pledgor shall comply with the provisions of Section
5.12(a) of the Credit Agreement.
(b) The Collateral Agent may rely on opinions of counsel as to whether
any or all UCC financing statements of the Pledgors need to be amended as a
result of any of the changes described in Section 5.12(a) of the Credit
Agreement. If any Pledgor fails to provide information to the Collateral Agent
about such changes on a timely basis, the Collateral Agent shall not be liable
or responsible to any party for any failure to maintain a perfected security
interest in such Pledgor's property constituting Pledged Collateral, for which
the Collateral Agent needed to have information relating to such changes. The
Collateral Agent shall have no duty to inquire about such changes if any Pledgor
does not inform the Collateral Agent of such changes, the parties acknowledging
and agreeing that it would not be feasible or practical for the Collateral Agent
to search for information on such changes if such information is not provided by
any Pledgor.
SECTION 4.6. Location of Inventory and Equipment. Such Pledgor shall
not move any material Equipment or Inventory to any location other than one
within the continental United States until such Pledgor shall have taken all
action reasonably satisfactory to the Collateral Agent to maintain the
perfection and priority of the security interest of the Collateral Agent for the
benefit of the Secured Parties in the Pledged Collateral intended to be granted
hereby, including, without limitation, using commercially reasonable efforts to
obtain waivers of landlord's or warehousemen's and/or bailee's liens with
respect to such new location, if applicable, and if requested by the Collateral
Agent. Pledgor agrees to provide the Collateral Agent with prompt notice
following the movement of any material Equipment or Inventory to any location
other than one within the continental United States that is listed in such
Schedules of the Perfection Certificate with respect to such Pledgor.
Notwithstanding the foregoing, such Pledgor may contribute Equipment or
Inventory to any Foreign Subsidiary that is a Guarantor and move such Equipment
and/or Inventory to a location at which such Foreign Subsidiary is permitted to
maintain such Equipment and/or Inventory, and otherwise in accordance with the
terms of the applicable Security Documents.
SECTION 4.7. Due Authorization and Issuance. All of the Initial
Pledged Shares issued by the Borrower's Subsidiaries have been, and to the
extent any Pledged Shares are hereafter issued, such Pledged Shares will be,
upon such issuance, duly authorized, validly issued and fully paid and
non-assessable. All of the Initial Pledged Interests have been fully paid for,
and there is no amount or other obligation owing by any Pledgor to any issuer of
the Initial Pledged Interests in exchange for or in connection with the issuance
of the Initial Pledged Interests or any Pledgor's status as a partner or a
member of any issuer of the Initial Pledged Interests.
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SECTION 4.8. Consents, etc. In the event that the Collateral Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Collateral Agent, such
Pledgor agrees to use its best efforts to assist and aid the Collateral Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.
SECTION 4.9. Pledged Collateral. All information set forth herein,
including the schedules annexed hereto, and all information contained in any
documents, schedules and lists heretofore, including without limitation, the
Perfection Certificate and the schedules thereto, delivered to any Secured Party
in connection with this Agreement, in each case, relating to the Pledged
Collateral, is accurate and complete in all material respects. The Pledged
Collateral described on the schedules annexed to the Perfection Certificate
constitutes all of the property of such type of Pledged Collateral owned or held
by the Pledgors as of the date hereof.
SECTION 4.10. Insurance. In the event that the proceeds of any
insurance claim are paid after the Collateral Agent has exercised its right to
foreclose after an Event of Default such Net Cash Proceeds shall be paid to the
Collateral Agent to satisfy any deficiency remaining after such foreclosure.
SECTION 4.11. Payment of Taxes; Compliance with Laws; Contesting
Liens; Claims. Each Pledgor represents and warrants that all Claims imposed upon
or assessed against the Pledged Collateral have been paid and discharged except
to the extent such Claims constitute a Lien not yet due and payable, which is a
Contested Lien or a Permitted Collateral Lien. Each Pledgor shall comply with
all Requirements of Law applicable to the Pledged Collateral the failure to
comply with which would, individually or in the aggregate, have a Material
Adverse Effect. Each Pledgor may at its own expense contest the validity, amount
or applicability of any Claims so long as the contest thereof shall be conducted
in accordance with, and permitted pursuant to the provisions of, the Credit
Agreement. Notwithstanding the foregoing provisions of this Section 4.11, (i) no
contest of any such obligation may be pursued by such Pledgor if such contest
would reasonably be expected to expose the Collateral Agent or any other Secured
Party to (A) any possible criminal liability or (B) any additional civil
liability for failure to comply with such obligations unless such Pledgor shall
have furnished a bond or other security therefor satisfactory to the Collateral
Agent, or such Secured Party, as the case may be and (ii) if at any time payment
or performance of any obligation contested by such Pledgor pursuant to this
Section 4.11 shall become necessary to prevent the imposition of remedies
because of non-payment, such Pledgor shall pay or perform the same, in
sufficient time to prevent the imposition of remedies in respect of such default
or prospective default.
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ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral. Each Pledgor
shall, upon obtaining any Pledged Securities or Intercompany Notes of any
person, accept the same for the benefit of the Collateral Agent and forthwith
deliver to the Collateral Agent a pledge amendment, duly executed by such
Pledgor, in substantially the form of Exhibit 2 annexed hereto (each, a "Pledge
Amendment"), and the certificates and other documents required under Section 3.1
and Section 3.2 hereof in respect of the additional Pledged Securities or
Intercompany Notes which are to be pledged pursuant to this Agreement, and
confirming the attachment of the Lien hereby created on and in respect of such
additional Pledged Securities or Intercompany Notes. Each Pledgor hereby
authorizes the Collateral Agent to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Securities or Intercompany Notes listed on
any Pledge Amendment delivered to the Collateral Agent shall for all purposes
hereunder be considered Pledged Collateral.
SECTION 5.2. Voting Rights; Distributions; etc.
(i) So long as no Event of Default shall have occurred and be
continuing:
(A) Each Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Securities Collateral or any part
thereof for any purpose not inconsistent with the terms or purposes hereof,
the Credit Agreement or any other document evidencing the Obligations;
provided, however, that no Pledgor shall in any event exercise such rights
in any manner which may have a Material Adverse Effect.
(B) Each Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Lien hereof, any and all Distributions, but
only if and to the extent made in accordance with the provisions of the
Credit Agreement; provided, however, that any and all such Distributions
consisting of rights or interests in the form of securities shall be
forthwith delivered to the Collateral Agent to hold as Pledged Collateral
and shall, if received by any Pledgor, be received for the benefit of the
Collateral Agent, be segregated from the other property or funds of such
Pledgor and be forthwith delivered to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary
endorsement).
(C) The Collateral Agent shall be deemed without further action or
formality to have granted to each Pledgor all necessary consents relating
to voting rights and shall, if necessary, upon written request of any
Pledgor and at the sole cost and expense of the Pledgors, from time to time
execute and deliver (or cause to be executed and delivered) to such Pledgor
all such instruments as such Pledgor may reasonably request in order to
permit such Pledgor to exercise the voting and other rights which it is
entitled to exercise
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pursuant to Section 5.2(i)(A) hereof and to receive the Distributions which
it is authorized to receive and retain pursuant to Section 5.2(i)(B)
hereof.
(ii) Upon the occurrence and during the continuance of any Event of
Default:
(A) All rights of each Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to
Section 5.2(i)(A) hereof shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall thereupon have the sole
right to exercise such voting and other consensual rights.
(B) All rights of each Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to Section 5.2(i)(B)
hereof shall cease and all such rights shall thereupon become vested in the
Collateral Agent, which shall thereupon have the sole right to receive and
hold as Pledged Collateral such Distributions.
(iii) Each Pledgor shall, at its sole cost and expense, from time to
time execute and deliver to the Collateral Agent appropriate instruments as the
Collateral Agent may request in order to permit the Collateral Agent to exercise
the voting and other rights which it may be entitled to exercise pursuant to
Section 5.2(i)(A) hereof and to receive all Distributions which it may be
entitled to receive under Section 5.2(i)(B) hereof.
(iv) All Distributions which are received by any Pledgor contrary to
the provisions of Section 5.2(i)(B) hereof shall be received for the benefit of
the Collateral Agent, shall be segregated from other funds of such Pledgor and
shall be forthwith delivered over to the Collateral Agent as Pledged Collateral
in the same form as so received (with any necessary endorsement).
SECTION 5.3. Operative Agreements. Each Pledgor has delivered to the
Collateral Agent true, correct and complete copies of the Operative Agreements.
The Operative Agreements are in full force and effect, have not as of the date
hereof been amended or modified except as disclosed to the Collateral Agent, and
there is no existing default by any party thereunder or any event which, with
the giving of notice of passage of time or both, would constitute a default by
any party thereunder. Each Pledgor shall deliver to the Collateral Agent a copy
of any notice of default given or received by it under any Operative Agreement
within fifteen (15) days after such Pledgor gives or receives such notice. No
Pledgor will terminate or agree to terminate any Operative Agreement or make any
amendment or modification to any Operative Agreement which may have a Material
Adverse Effect including electing to treat any Pledged Interests of such Pledgor
as a security under Section 8-103 of the UCC.
SECTION 5.4. Defaults, etc. Such Pledgor is not in default in the
payment of any portion of any mandatory capital contribution, if any, required
to be made under any agreement to which such Pledgor is a party relating to the
Pledged Securities pledged by it, and such Pledgor is not in violation of any
other material provisions of any such agreement to which such Pledgor is a
party, or otherwise in default or violation thereunder. No Securities Collateral
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pledged by such Pledgor is subject to any defense, offset or counterclaim, nor
have any of the foregoing been asserted or alleged against such Pledgor by any
person with respect thereto, and as of the date hereof, there are no
certificates, instruments, documents or other writings (other than the Operative
Agreements and certificates, if any, delivered to the Collateral Agent) which
evidence any Pledged Securities of such Pledgor.
SECTION 5.5. Certain Agreements of Pledgors As Issuers and Holders of
Equity Interests.
(i) In the case of each Pledgor which is an issuer of Securities
Collateral, such Pledgor agrees to be bound by the terms of this Agreement
relating to the Securities Collateral issued by it and will comply with such
terms insofar as such terms are applicable to it.
(ii) In the case of each Pledgor which is a partner in a partnership,
limited liability company or other entity, such Pledgor hereby consents to the
extent required by the applicable Operative Agreement to the pledge by each
other Pledgor, pursuant to the terms hereof, of the Pledged Interests in such
partnership, limited liability company or other entity and, upon the occurrence
and during the continuance of an Event of Default, to the transfer of such
Pledged Interests to the Collateral Agent or its nominee and to the substitution
of the Collateral Agent or its nominee as a substituted partner or member in
such partnership, limited liability company or other entity with all the rights,
powers and duties of a general partner or a limited partner or member, as the
case may be.
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License. For the purpose of enabling the
Collateral Agent, only upon the occurrence and during the continuance of an
Event of Default, to exercise rights and remedies under Article IX hereof at
such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, and for no other purpose, each Pledgor hereby grants to the
Collateral Agent, to the extent assignable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to such
Pledgor) to use, assign, license or sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Pledgor, wherever the same
may be located. Such license shall include access to all media in which any of
the licensed items may be recorded or stored and to all computer programs used
for the compilation or printout hereof.
SECTION 6.2. Protection of Collateral Agent's Security. On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i) promptly
following its becoming aware thereof, notify the Collateral Agent of (A) any
materially adverse determination in any proceeding in the United States Patent
and Trademark Office or the United States Copyright Office with
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respect to any material Patent, Trademark or Copyright or (B) the institution of
any proceeding or any adverse determination in any federal, state or local court
or administrative body regarding such Pledgor's claim of ownership in or right
to use any of the Intellectual Property Collateral material to the use and
operation of the Pledged Collateral or Mortgaged Property, its right to register
such Intellectual Property Collateral or its right to keep and maintain such
registration in full force and effect, (ii) use commercially reasonable efforts
to maintain and protect the Intellectual Property Collateral material to the use
and operation of the Pledged Collateral or Mortgaged Property as presently used
and operated and as contemplated by the Credit Agreement, (iii) not permit to
lapse or become abandoned any Intellectual Property Collateral material to the
use and operation of the Pledged Collateral or Mortgaged Property as presently
used and operated and as contemplated by the Credit Agreement, and not settle or
compromise any pending or future litigation or administrative proceeding with
respect to such Intellectual Property Collateral, in each case except as shall
be consistent with commercially reasonable business judgment, (iv) upon such
Pledgor obtaining knowledge thereof, promptly notify the Collateral Agent in
writing of any event which may be reasonably expected to materially and
adversely affect the value or utility of the Intellectual Property Collateral or
any portion thereof material to the use and operation of the Pledged Collateral
or Mortgaged Property, the ability of such Pledgor or the Collateral Agent to
dispose of the Intellectual Property Collateral or any portion thereof or the
rights and remedies of the Collateral Agent in relation thereto including,
without limitation, a levy or threat of levy or any legal process against the
Intellectual Property Collateral or any portion thereof, (v) not license the
Intellectual Property Collateral other than licenses entered into by such
Pledgor in, or incidental to, the ordinary course of business or otherwise not
prohibited by the Credit Agreement, or amend or permit the amendment of any of
the licenses in a manner that materially and adversely affects the right to
receive payments thereunder, or in any manner that would materially impair the
value of the Intellectual Property Collateral or the Lien on and security
interest in the Intellectual Property Collateral intended to be granted to the
Collateral Agent for the benefit of the Secured Parties, without the consent of
the Collateral Agent, not to be unreasonably withheld, (vi) diligently keep
adequate records respecting the Intellectual Property Collateral and (vii)
furnish to the Collateral Agent from time to time upon the Collateral Agent's
reasonable request therefor detailed statements and amended schedules further
identifying and describing the Intellectual Property Collateral and such other
materials evidencing or reports pertaining to the Intellectual Property
Collateral as the Collateral Agent may from time to time request, which request,
unless an Event of Default has occurred an is continuing, or a Material Adverse
Effect has occurred, shall occur no more often than once every three months.
SECTION 6.3. After-Acquired Property. If any Pledgor shall, at any
time before the Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of the Credit
Agreement or the Security Documents, survive the termination thereof), (i)
obtain any rights to any additional Intellectual Property Collateral or (ii)
become entitled to the benefit of any additional Intellectual Property
Collateral or any renewal or extension thereof, including any reissue, division,
continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions
hereof shall automatically apply thereto and any such item enumerated in clause
(i) or (ii) of this Section 6.3 with respect to such Pledgor shall automatically
constitute
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Intellectual Property Collateral if such would have constituted Intellectual
Property Collateral at the time of execution hereof and be subject to the Lien
and security interest created by this Agreement without further action by any
party. Each Pledgor shall promptly (i) provide to the Collateral Agent written
notice of any of the foregoing and (ii) confirm the attachment of the Lien and
security interest created by this Agreement to any rights described in clauses
(i) and (ii) of the immediately preceding sentence of this Section 6.3 by
execution of an instrument in form reasonably acceptable to the Collateral
Agent.
SECTION 6.4. Modifications. Each Pledgor authorizes the Collateral
Agent to modify this Agreement by amending Schedules 15(a) and 15(b) annexed to
the Perfection Certificate to include any Intellectual Property Collateral
acquired or arising after the date hereof of such Pledgor including, without
limitation, any of the items listed in Section 6.3 hereof.
SECTION 6.5. Litigation. Unless there shall occur and be continuing
any Event of Default, each Pledgor shall have the right to commence and
prosecute in its own name, as the party in interest, for its own benefit and at
the sole cost and expense of the Pledgors, such applications for protection of
the Intellectual Property Collateral and suits, proceedings or other actions to
prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the Intellectual
Property Collateral. Upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent shall have the right but shall in no way be
obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Collateral Agent or
the Secured Parties to enforce the Intellectual Property Collateral and any
license thereunder. In the event of such suit, each Pledgor shall, at the
reasonable request of the Collateral Agent, do any and all lawful acts and
execute any and all documents requested by the Collateral Agent in aid of such
enforcement and the Pledgors shall promptly reimburse and indemnify the
Collateral Agent, as the case may be, for all costs and expenses incurred by the
Collateral Agent in the exercise of its rights under this Section 6.5 in
accordance with Section 11.03 of the Credit Agreement. In the event that the
Collateral Agent shall elect not to bring suit to enforce the Intellectual
Property Collateral, each Pledgor agrees, at the reasonable request of the
Collateral Agent, to take all commercially reasonable actions necessary, whether
by suit, proceeding or other action, to prevent the infringement,
counterfeiting, unfair competition, dilution, diminution in value of or other
damage to any of the Intellectual Property Collateral by others (to the extent
the foregoing would have a Material Adverse Effect) and for that purpose agrees
to diligently maintain any suit, proceeding or other action against any person
so infringing necessary to prevent such infringement.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records. Each Pledgor shall keep and
maintain at its own cost and expense complete records of each Account, in a
manner consistent with pru-
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dent business practice, including, without limitation, records of all payments
received, all credits granted thereon, all merchandise returned and all other
documentation relating thereto. Each Pledgor shall, at such Pledgor's sole cost
and expense, upon the Collateral Agent's demand made at any time after the
occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Accounts, including, without limitation, all documents
evidencing Accounts and any books and records relating thereto to the Collateral
Agent or to its representatives (copies of which evidence and books and records
may be retained by such Pledgor). Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent may transfer a full and complete
copy of any Pledgor's books, records, credit information, reports, memoranda and
all other writings relating to the Accounts to and for the use by any person
that has acquired or is contemplating acquisition of an interest in the Accounts
or the Collateral Agent's security interest therein without the consent of any
Pledgor.
SECTION 7.2. Legend. Each Pledgor shall legend, at the request of the
Collateral Agent made at any time after the occurrence of any Event of Default
or a Material Adverse Effect, and in form and manner satisfactory to the
Collateral Agent, the Accounts and the other books, records and documents of
such Pledgor evidencing or pertaining to the Accounts with an appropriate
reference to the fact that the Accounts have been assigned to the Collateral
Agent for the benefit of the Secured Parties and that the Collateral Agent has a
security interest therein.
SECTION 7.3. Modification of Terms, etc. No Pledgor shall rescind or
cancel any obligations evidenced by any Account or modify any term thereof or
make any adjustment with respect thereto except in the ordinary course of
business consistent with prudent business practice, or extend or renew any such
obligations except in the ordinary course of business consistent with prudent
business practice or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto or sell any Account or interest therein except in
the ordinary course of business consistent with prudent business practice
without the prior written consent of the Collateral Agent. Each Pledgor shall
timely fulfill all obligations on its part to be fulfilled under or in
connection with the Accounts.
SECTION 7.4. Collection. Each Pledgor shall cause to be collected from
the account debtor of each of the Accounts, as and when due in the ordinary
course of business consistent with prudent business practice (including, without
limitation, Accounts that are delinquent, such Accounts to be collected in
accordance with generally accepted commercial collection procedures), any and
all amounts owing under or on account of such Account (other than the collection
of Accounts which, consistent with prudent business practice, the Pledgor
determines should not be collected), and apply forthwith upon receipt thereof
all such amounts as are so collected to the outstanding balance of such Account,
except that any Pledgor may, with respect to an Account, allow in the ordinary
course of business (i) a refund or credit due as a result of returned or damaged
or defective merchandise and (ii) such extensions of time to pay amounts due in
respect of Accounts and such other modifications of payment terms or settlements
in respect of Accounts as shall be commercially reasonable in the circumstances,
all in accordance with such Pledgor's ordinary course of business consistent
with its collection practices as in effect from time to time. The costs and
expenses (including, without limitation, reasonable attorneys'
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fees) of collection, in any case, whether incurred by any Pledgor, the
Collateral Agent or any Secured Party, shall be paid by the Pledgors.
ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral. No Pledgor shall sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral pledged by it hereunder except as permitted by the
Credit Agreement.
ARTICLE IX
REMEDIES
SECTION 9.1. Remedies. Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent may from time to time exercise in
respect of the Pledged Collateral, in addition to the other rights and remedies
provided for herein or otherwise available to it:
(i) Personally, or by agents or attorneys, immediately take possession
of the Pledged Collateral or any part thereof, from any Pledgor or any other
person who then has possession of any part thereof with or without notice or
process of law, and for that purpose may, to the maximum extent permitted by
applicable law, enter upon any Pledgor's premises where any of the Pledged
Collateral is located, remove such Pledged Collateral, remain present at such
premises to receive copies of all communications and remittances relating to the
Pledged Collateral and use in connection with such removal and possession any
and all services, supplies, aids and other facilities of any Pledgor;
(ii) Demand, ▇▇▇ for, collect or receive any money or property at any
time payable or receivable in respect of the Pledged Collateral including,
without limitation, instructing the obligor or obligors on any agreement,
instrument or other obligation constituting part of the Pledged Collateral to
make any payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent, and in connection with any of the
foregoing, compromise, settle, extend the time for payment and make other
modifications with respect thereto; provided, however, that in the event that
any such payments are made directly to any Pledgor, prior to receipt by any such
obligor of such instruction, such Pledgor shall segregate all amounts received
pursuant thereto for the benefit of the Collateral Agent and shall promptly (but
in no event later than two (2) Business Days after receipt thereof) pay such
amounts to the Collateral Agent;
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(iii) Sell, assign, grant a license to use or otherwise liquidate, or
direct any Pledgor to sell, assign, grant a license to use or otherwise
liquidate, any and all investments made in whole or in part with the Pledged
Collateral or any part thereof, and take possession of the proceeds of any such
sale, assignment, license or liquidation in a manner consistent with Article X
hereof;
(iv) Take possession of the Pledged Collateral or any part thereof, by
directing any Pledgor in writing to deliver the same to the Collateral Agent at
any place or places so designated by the Collateral Agent and reasonably
convenient to the Pledgors, in which event such Pledgor shall at its own
expense: (A) forthwith cause the same to be moved to the place or places
designated by the Collateral Agent and therewith delivered to the Collateral
Agent, (B) store and keep any Pledged Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral Agent and
(C) while the Pledged Collateral shall be so stored and kept, provide such
security and maintenance services as shall be necessary to protect the same and
to preserve and maintain them in good condition. Each Pledgor's obligation to
deliver the Pledged Collateral as contemplated in this Section 9.1(iv) is of the
essence hereof. Upon application to a court of equity having jurisdiction, the
Collateral Agent shall be entitled to a decree requiring specific performance by
any Pledgor of such obligation;
(v) Withdraw all moneys, instruments, securities and other property in
any bank, financial securities, deposit or other account of any Pledgor
constituting Pledged Collateral for application to the Obligations as provided
in Article X hereof;
(vi) Retain and apply the Distributions to the Obligations as provided
in Article X hereof;
(vii) Exercise any and all rights as beneficial and legal owner of the
Pledged Collateral, including, without limitation, perfecting assignment of and
exercising any and all voting, consensual and other rights and powers with
respect to any Pledged Collateral; and
(viii) All the rights and remedies of a secured party on default under
the UCC, and the Collateral Agent may also in its sole discretion, without
notice except as specified in Section 9.2 hereof, sell, assign or grant a
license to use the Pledged Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the
Collateral Agent may deem commercially reasonable. The Collateral Agent or any
other Secured Party or any of their respective Affiliates may be the purchaser,
licensee, assignee or recipient of any or all of the Pledged Collateral at any
such sale and shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold, assigned or licensed at such sale, to use and apply any
of the Obligations owed to such person as a credit on account of the purchase
price of any Pledged Collateral payable by such person at such sale. Each
purchaser, assignee, licensee or recipient at any such sale shall acquire the
property sold, assigned or licensed absolutely free from any claim or right on
the part of any Pledgor, and each Pledgor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay and/or ap
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praisal which it now has or may at any time in the future have under any rule of
law or statute now existing or hereafter enacted. The Collateral Agent shall not
be obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Pledgor hereby waives, to the fullest extent permitted by
law, any claims against the Collateral Agent arising by reason of the fact that
the price at which any Pledged Collateral may have been sold, assigned or
licensed at such a private sale was less than the price which might have been
obtained at a public sale, even if the Collateral Agent accepts the first offer
received and does not offer such Pledged Collateral to more than one offeree.
SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and agrees
that, to the extent notice of sale or other disposition of Pledged Collateral
shall be required by law, ten (10) days' prior notice to such Pledgor of the
time and place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially reasonable
notification of such matters. No notification need be given to any Pledgor if it
has signed, after the occurrence and during the continuance of an Event of
Default, a written statement renouncing or modifying any right to notification
of sale or other intended disposition.
SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby waives,
to the fullest extent permitted by applicable law, notice or judicial hearing in
connection with the Collateral Agent's taking possession or the Collateral
Agent's disposition of any of the Pledged Collateral, including, without
limitation, any and all prior notice and hearing for any prejudgment remedy or
remedies and any such right which such Pledgor would otherwise have under law,
and each Pledgor hereby further waives, to the fullest extent permitted by
applicable law: (i) all damages occasioned by such taking of possession, (ii)
all other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Collateral Agent's rights
hereunder and (iii) all rights of redemption, appraisal, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law. The
Collateral Agent shall not be liable for any incorrect or improper payment made
pursuant to this Article IX in the absence of gross negligence or willful
misconduct. Any sale of, or the grant of options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of the applicable
Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Pledgor and against any and all persons claiming or
attempting to claim the Pledged Collateral so sold, optioned or realized upon,
or any part thereof, from, through or under such Pledgor.
SECTION 9.4. Certain Sales of Pledged Collateral.
(i) Each Pledgor recognizes that, by reason of certain prohibitions
contained in law, rules, regulations or orders of any Governmental Authority,
the Collateral Agent may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those who meet the
requirements of such Governmental Authority. Each Pledgor acknowledges that any
such sales may be at prices and on terms less favorable to the Collateral Agent
than those obtainable through a public sale without such restrictions, and,
notwithstanding
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such circumstances, agrees that any such restricted sale shall be deemed to have
been made in a commercially reasonable manner and that, except as may be
required by applicable law, the Collateral Agent shall have no obligation to
engage in public sales.
(ii) Each Pledgor recognizes that, by reason of certain prohibitions
contained in 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 Securities Collateral and Investment Property, to limit purchasers to
persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the
Collateral Agent 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, agrees 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 Securities Collateral or 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 agree to do so.
(iii) If the Collateral Agent determines to exercise its right to sell
any or all of the Securities Collateral or Investment Property, upon written
request, the applicable Pledgor shall from time to time furnish to the
Collateral Agent all such information as the Collateral Agent may request in
order to determine the number of securities included in the Securities
Collateral or Investment Property which may be sold by the Collateral Agent as
exempt transactions under the Securities Act and the rules of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.
(iv) Each Pledgor further agrees that a breach of any of the covenants
contained in this Section 9.4 will cause irreparable injury to the Collateral
Agent and other Secured Parties, that the Collateral Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 9.4 shall be
specifically enforceable against such Pledgor, and such Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.
SECTION 9.5. No Waiver; Cumulative Remedies.
(i) No failure on the part of the Collateral Agent to exercise, no
course of dealing with respect to, and no delay on the part of the Collateral
Agent in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy; nor shall the Collateral Agent be
required to look first to, enforce or exhaust any other security, collateral or
guaranties. The remedies herein provided are cumulative and are not exclusive of
any remedies provided by law.
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(ii) In the event that the Collateral Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Collateral Agent, then and in every such case, the Pledgors, the
Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged
Collateral (except for determinations made in such proceedings), and all rights,
remedies and powers of the Collateral Agent and the other Secured Parties shall
continue as if no such proceeding had been instituted (except for determinations
made in such proceedings).
SECTION 9.6. Certain Additional Actions Regarding Intellectual
Property. If any Event of Default shall have occurred and be continuing, upon
the written demand of Collateral Agent, each Pledgor shall execute and deliver
to Collateral Agent an assignment or assignments of the registered Patents,
Trademarks and/or Copyrights and such other documents as are necessary to carry
out the intent and purposes hereof. Within five (5) Business Days of written
notice thereafter from Collateral Agent, each Pledgor shall make available to
Collateral Agent, to the extent within such Pledgor's power and authority, such
personnel in such Pledgor's employ on the date of the Event of Default as
Collateral Agent may reasonably designate to permit such Pledgor to continue,
directly or indirectly, to produce, advertise and sell the products and services
sold by such Pledgor under the registered Patents, Trademarks and/or Copyrights,
and such persons shall be available to perform their prior functions on
Collateral Agent's behalf.
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS/APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral Dispositions.
The Pledgors shall take all actions required by the Credit Agreement with
respect to any Net Cash Proceeds of any Casualty Event or from the sale or
disposition of any Pledged Collateral.
SECTION 10.2. Application of Proceeds. The 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 pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, together with any other sums
then held by the Collateral Agent pursuant to this Agreement, in accordance with
the Credit Agreement.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent.
(i) The Collateral Agent has been appointed as collateral agent
pursuant to the Credit Agreement. The actions of the Collateral Agent hereunder
are subject to the provisions of the Credit Agreement. The Collateral Agent
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of the Pledged
Collateral), in accordance with this Agreement and the Credit Agreement. The
Collateral Agent may employ agents and attorneys-in-fact in connection herewith
and shall not be liable for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Collateral Agent may resign
and a successor Collateral Agent may be appointed in the manner provided in the
Credit Agreement. Upon the acceptance of any appointment as the Collateral Agent
by a successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent under this Agreement, and the retiring
Collateral Agent shall thereupon be discharged from its duties and obligations
under this Agreement. After any retiring Collateral Agent's resignation, the
provisions hereof shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was the Collateral Agent.
(ii) The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if such Pledged Collateral is accorded treatment substantially equivalent to
that which the Collateral Agent, in its individual capacity, accords its own
property consisting of similar instruments or interests, it being understood
that neither the Collateral Agent nor any of the Secured Parties shall have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Securities Collateral, whether or not the Collateral Agent or any other Secured
Party has or is deemed to have knowledge of such matters or (ii) taking any
necessary steps to preserve rights against any person with respect to any
Pledged Collateral.
(iii) The Collateral Agent shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel selected by it.
(iv) If any item of Pledged Collateral also constitutes collateral
granted to the Collateral Agent under any other deed of trust, mortgage,
security agreement, pledge or instrument of any type, in the event of any
conflict between the provisions hereof and the provisions of such other deed of
trust, mortgage, security agreement, pledge or instrument of any type in re-
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spect of such collateral, Collateral Agent, in its sole discretion, shall select
which provision or provisions shall control.
SECTION 11.2. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained
in this Agreement (including, without limitation, such Pledgor's covenants to
(i) pay the premiums in respect of all required insurance policies hereunder,
(ii) pay Claims, (iii) make repairs, (iv) discharge Liens or (v) pay or perform
any obligations of such Pledgor under any Pledged Collateral) or if any
representation or warranty on the part of any Pledgor contained herein shall be
breached, the Collateral Agent may (but shall not be obligated to) do the same
or cause it to be done or remedy any such breach, and may expend funds for such
purpose; provided, however, that Collateral Agent shall in no event be bound to
inquire into the validity of any tax, lien, imposition or other obligation which
such Pledgor fails to pay or perform as and when required hereby and which such
Pledgor does not contest in accordance in accordance with the provision of
Section 4.11 hereof. Any and all amounts so expended by the Collateral Agent
shall be paid by the Pledgors in accordance with the provisions of Section 11.03
of the Credit Agreement. Neither the provisions of this Section 11.2 nor any
action taken by Collateral Agent pursuant to the provisions of this Section 11.2
shall prevent any such failure to observe any covenant contained in this
Agreement nor any breach of representation or warranty from constituting an
Event of Default. Each Pledgor hereby appoints the Collateral Agent its
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, or otherwise, upon the occurrence and during the
continuance of an Event of Default, in the Collateral Agent's discretion to take
any action and to execute any instrument consistent with the terms of the Credit
Agreement, this Agreement and the other Security Documents which the Collateral
Agent may deem necessary or advisable to accomplish the purposes hereof. The
foregoing grant of authority is a power of attorney coupled with an interest and
such appointment shall be irrevocable for the term hereof. Each Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.
SECTION 11.3. Continuing Security Interest; Assignment. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(i) be binding upon the Pledgors, their respective successors and assigns and
(ii) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent and the other Secured Parties
and each of their respective successors, transferees and assigns. No other
persons (including, without limitation, any other creditor of any Pledgor) shall
have any interest herein or any right or benefit with respect hereto. Without
limiting the generality of the foregoing clause (ii), any Secured Party may
assign or otherwise transfer any indebtedness held by it secured by this
Agreement to any other person, and such other person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party,
herein or otherwise, subject however, to the provisions of the Credit Agreement
and any Hedging Obligation.
SECTION 11.4. Termination; Release. The Pledged Collateral shall be
released from the Lien of this Agreement in accordance with the provisions of
the Credit Agreement. Upon termination hereof or any release of Pledged
Collateral in accordance with the provisions
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of the Credit Agreement, the Collateral Agent shall, upon the request and at the
sole cost and expense of the Pledgors, promptly assign, transfer and deliver to
Pledgor, against receipt and without recourse to or warranty by the Collateral
Agent except as to the fact that the Collateral Agent has not encumbered the
released assets, such of the Pledged Collateral to be released (in the case of a
release) as may be in possession of the Collateral Agent and as shall not have
been sold or otherwise applied pursuant to the terms hereof, and, with respect
to any other Pledged Collateral, proper documents and instruments (including
UCC-3 termination statements or releases) acknowledging the termination hereof
or the release of such Pledged Collateral, as the case may be.
SECTION 11.5. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same shall
be made in accordance with the terms of the Credit Agreement. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by any Pledgor from the terms
of any provision hereof shall be effective only in the specific instance and for
the specific purpose for which made or given. Except where notice is
specifically required by this Agreement or any other document evidencing the
Obligations, no notice to or demand on any Pledgor in any case shall entitle any
Pledgor to any other or further notice or demand in similar or other
circumstances.
SECTION 11.6. Notices. Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrower set forth in the Credit Agreement and as to the Collateral Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 11.6.
SECTION 11.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 11.8. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER
OF JURY TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH RESPECT
TO THIS AGREEMENT MAY BE BROUGHT IN THE SUPREME COURT OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS OF ANY THEREOF, AND BY
EXECUTION AND DELIVERY HEREOF, EACH PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH PLEDGOR AGREES
THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POST-
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AGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN THE CREDIT AGREEMENT OR
AT SUCH OTHER ADDRESS OF WHICH THE COLLATERAL AGENT SHALL HAVE BEEN NOTIFIED
PURSUANT THERETO. IF ANY AGENT APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT
SERVICE, SUCH PLEDGOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE
COLLATERAL AGENT TO BRING PROCEEDINGS AGAINST ANY PLEDGOR IN THE COURTS OF ANY
OTHER JURISDICTION.
THE PLEDGORS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 11.9. Severability of Provisions. Any provision hereof 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.10. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
SECTION 11.11. Business Days. In the event any time period or any date
provided in this Agreement ends or falls on a day other than a Business Day,
then such time period shall be deemed to end and such date shall be deemed to
fall on the next succeeding Business Day, and performance herein may be made on
such Business Day, with the same force and effect as if made on such other day.
SECTION 11.12. Waiver of Stay. Each Pledgor covenants (to the extent
it may lawfully do so) that in the event that such Pledgor or any property or
assets of such Pledgor shall hereafter become the subject of a voluntary or
involuntary proceeding under the Code or such Pledgor shall otherwise be a party
to any federal or state bankruptcy, insolvency, moratorium or similar proceeding
to which the provisions relating to the automatic stay under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code or any similar provision in any such law is
applicable, then, in any such case, whether or not the Collateral Agent has
commenced foreclosure proceedings under this Agreement, such Pledgor shall not,
and each Pledgor hereby expressly waives their right to (to the extent it may
lawfully do so) at any time insist upon, plead or in any whatsoever, claim or
take the benefit or advantage of any such automatic stay or such similar
provision as it relates to the exercise of any of the rights and remedies
(including, without limitation, any foreclosure proceedings) available to the
Collateral Agent as provided in this Agreement, in any other Collateral Document
or any other document evidencing the Obligations. Each Pledgor further covenants
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(to the extent it may lawfully do so) that it will not hinder, delay or impede
the execution of any power granted herein to the Collateral Agent, but will
suffer and permit the execution of every such power as though no law relating to
any stay or similar provision had been enacted.
SECTION 11.13. No Claims Against Collateral Agent. Nothing contained
in this Agreement shall constitute any consent or request by the Collateral
Agent, express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Pledged
Collateral or any part thereof, nor as giving any Pledgor any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against the Collateral Agent in respect thereof
or any claim that any Lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the Lien
hereof.
SECTION 11.14. No Release. Nothing set forth in this Agreement shall
relieve any Pledgor from the performance of any term, covenant, condition or
agreement on such Pledgor's part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any person under or in
respect of any of the Pledged Collateral or shall impose any obligation on the
Collateral Agent or any other Secured Party to perform or observe any such term,
covenant, condition or agreement on such Pledgor's part to be so performed or
observed or shall impose any liability on the Collateral Agent or any other
Secured Party for any act or omission on the part of such Pledgor relating
thereto or for any breach of any representation or warranty on the part of such
Pledgor contained in this Agreement, the Credit Agreement or the other Loan
Documents, or under or in respect of the Pledged Collateral or made in
connection herewith or therewith. The obligations of each Pledgor contained in
this Section 11.14 shall survive the termination hereof and the discharge of
such Pledgor's other obligations under this Agreement, the Credit Agreement and
the other Loan Documents.
SECTION 11.15. Obligations Absolute. To the fullest extent permitted
by applicable law, all obligations of each Pledgor hereunder shall be absolute
and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any other Pledgor;
(ii) any lack of validity or enforceability of the Credit Agreement,
any Hedging Obligation or any other Loan Document, or any other agreement
or instrument relating thereto against any other Pledgor;
(iii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement, any
Hedging Obligation or any other Loan Document or any other agreement or
instrument relating thereto;
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(iv) any pledge, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Obligations;
(v) any exercise, non-exercise or waiver of any right, remedy, power
or privilege under or in respect hereof, the Credit Agreement, any Hedging
Obligation or any other Loan Document except as specifically set forth in a
waiver granted pursuant to the provisions of Section 11.5 hereof; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Pledgor.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have caused
this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
NORCRAFT COMPANIES, L.P.,
as Pledgor
By: NORCRAFT GP, L.L.C.,
as General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Person
NORCRAFT HOLDINGS, L.P.,
as Pledgor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Person
NORCRAFT FINANCE CORP.,
as Pledgor
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇
Title: Vice President
S-1
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UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Associate Director, Banking
Products Services, US
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate Director Banking
Products Services, US