EXHIBIT 10.2
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GUARANTEE AND COLLATERAL AGREEMENT
dated as of
January 3, 2005,
among
The Dress Barn, Inc.,
THE SUBSIDIARIES OF The Dress Barn, Inc.
IDENTIFIED HEREIN
and
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
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TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Credit Agreement...........................................................................1
SECTION 1.02. Other Defined Terms........................................................................1
ARTICLE II
Guarantee
SECTION 2.01. Guarantee 5
SECTION 2.02. Guarantee of Payment.......................................................................5
SECTION 2.03. No Limitations.............................................................................5
SECTION 2.04. Reinstatement..............................................................................6
SECTION 2.05. Agreement To Pay; Subrogation..............................................................6
SECTION 2.06. Information................................................................................6
ARTICLE III
Pledge of Securities
SECTION 3.01. Pledge 7
SECTION 3.02. Delivery of the Pledged Collateral.........................................................7
SECTION 3.03. Representations, Warranties and Covenants..................................................8
SECTION 3.04. Certification of Limited Liability Company and Limited Partnership Interests...............9
SECTION 3.05. Registration in Nominee Name; Denominations................................................9
SECTION 3.06. Voting Rights; Dividends and Interest.....................................................10
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01. Security Interest.........................................................................12
SECTION 4.02. Representations and Warranties............................................................13
SECTION 4.03. Covenants 15
SECTION 4.04. Other Actions.............................................................................18
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral............................21
ARTICLE V
Remedies
SECTION 5.01. Remedies Upon Default.....................................................................23
SECTION 5.02. Application of Proceeds...................................................................24
SECTION 5.03. Grant of License to Use Intellectual Property.............................................25
SECTION 5.04. Securities Act............................................................................25
SECTION 5.05. Registration..............................................................................26
ARTICLE VI
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and Subrogation.................................................................26
SECTION 6.02. Contribution and Subrogation..............................................................27
SECTION 6.03. Subordination.............................................................................27
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices 28
SECTION 7.02. Waivers; Amendment........................................................................28
SECTION 7.03. Collateral Agent's Fees and Expenses; Indemnification.....................................28
SECTION 7.04. Successors and Assigns....................................................................29
SECTION 7.05. Survival of Agreement.....................................................................29
SECTION 7.06. Counterparts; Effectiveness; Several Agreement............................................29
SECTION 7.07. Severability..............................................................................30
SECTION 7.08. Right of Set-Off..........................................................................30
SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of Process................................30
SECTION 7.10. WAIVER OF JURY TRIAL......................................................................31
SECTION 7.11. Headings 31
SECTION 7.12. Security Interest Absolute................................................................31
SECTION 7.13. Termination or Release....................................................................32
SECTION 7.14. Additional Subsidiaries...................................................................32
SECTION 7.15. Collateral Agent Appointed Attorney-in-Fact...............................................32
SCHEDULES:
Schedule I........Subsidiary Parties
Schedule II.......Pledged Stock; Debt Securities
Schedule III......Intellectual Property
Schedule IV.......Insurance Requirements
EXHIBITS:
Exhibit I.........Form of Supplement
Exhibit II........Form of Perfection Certificate
GUARANTEE AND COLLATERAL AGREEMENT (this
"Agreement"), dated as of January 3, 2005, among THE
DRESS BARN, INC., a Connecticut corporation, the
subsidiaries of THE DRESS BARN, INC. identified
herein and JPMORGAN CHASE BANK, N.A. ("JPMCB"), as
Collateral Agent (in such capacity, the "Collateral
Agent").
Reference is made to the Credit Agreement dated as of January
3, 2005 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among The Dress Barn, Inc. (the "Borrower"), the Lenders
party thereto and JPMCB, as Administrative Agent. The Lenders have agreed to
extend credit to the Borrower subject to the terms and conditions set forth in
the Credit Agreement. The obligations of the Lenders to extend such credit are
conditioned upon, among other things, the execution and delivery of this
Agreement. The Subsidiary Parties (as defined below) are affiliates of the
Borrower, will derive substantial benefits from the extension of credit to the
Borrower pursuant to the Credit Agreement and are willing to execute and deliver
this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:
ARTICLE I.........
Definitions
SECTION 1.01. ...Credit Agreement. (a) Capitalized terms used in this Agreement
and not otherwise defined herein have the meanings specified in the Credit
Agreement. All terms defined in the New York UCC (as defined herein) and not
defined in this Agreement have the meanings specified therein. The term
"instrument" shall have the meaning specified in Article 9 of the New York UCC.
(b) The rules of construction specified in Section 1.03 of the Credit Agreement
also apply to this Agreement.
SECTION 1.02. ...Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"Account Debtor" means any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an account.
"Article 9 Collateral" has the meaning assigned to such term
in Section 4.01.
"Collateral" means Article 9 Collateral and Pledged Collateral.
"Copyright License" means any written agreement, now or
hereafter in effect, granting any right to any third party under any copyright
now or hereafter owned by any Grantor or that such Grantor otherwise has the
right to license, or granting any right to any Grantor under any copyright now
or hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" means all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule III.
"Credit Agreement" has the meaning assigned to such term in
the preliminary statement of this Agreement.
"Federal Securities Laws" has the meaning assigned to such
term in Section 5.04.
"General Intangibles" means all "General Intangibles" as
defined in the New York UCC, including all choses in action and causes of action
and all other intangible personal property of every kind and nature (other than
accounts) now owned or hereafter acquired by any Grantor, including all rights
and interests in partnerships, limited partnerships, limited liability companies
and other unincorporated entities, corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Hedging Agreements and other agreements),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any letter of credit, guarantee, claim, security interest or other security
held by or granted to any Grantor to secure payment by an Account Debtor of any
of the accounts.
"Grantors" means the Borrower and the Subsidiary Parties.
"Guarantors" means the Subsidiary Parties.
"Intellectual Property" means all intellectual and similar
property of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"License" means any Patent License, Trademark License,
Copyright License or other license or sublicense agreement to which any Grantor
is a party, including those listed on Schedule III.
"Loan Document Obligations" means (a) the due and punctual
payment by the Borrower of (i) the principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, (ii) each payment
required to be made by the Borrower under the Credit Agreement in respect of any
Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide cash
collateral and (iii) all other monetary obligations of the Borrower to any of
the Secured Parties under the Credit Agreement and each of the other Loan
Documents, including obligations to pay fees, expense reimbursement obligations
and indemnification obligations, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), (b) the due and
punctual performance of all other obligations of the Borrower under or pursuant
to the Credit Agreement and each of the other Loan Documents and (c) the due and
punctual payment and performance of all the obligations of each other Loan Party
under or pursuant to this Agreement and each of the other Loan Documents.
"New York UCC" means the Uniform Commercial Code as from time
to time in effect in the State of New York.
"Obligations" means (a) Loan Document Obligations and (b) the
due and punctual payment and performance of all obligations of each Loan Party
under each Hedging Agreement that (i) is in effect on the Effective Date with a
counterparty that is a Lender or an Affiliate of a Lender as of the Effective
Date or (ii) is entered into after the Effective Date with any counterparty that
is a Lender or an Affiliate of a Lender at the time such Hedging Agreement is
entered into and (c) the due and punctual payment and performance of all
obligations in respect of overdrafts and related liabilities owed to the
Administrative Agent (in its individual capacity) or any of its Affiliates and
arising from treasury, depositary and cash management services.
"Patent License" means any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a patent, now or hereafter owned by any Grantor or that any
Grantor otherwise has the right to license, is in existence, or granting to any
Grantor any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.
"Patents" means all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or the
equivalent thereof in any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or the
equivalent thereof in any other country, including registrations, recordings and
pending applications in the United States Patent and Trademark Office or any
similar offices in any other country, including those listed on Schedule III and
(b) all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.
"Perfection Certificate" means a certificate substantially in
the form of Exhibit II, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by a Financial Officer and
the chief legal officer of the Borrower.
"Pledged Collateral" has the meaning assigned to such term in
Section 3.01.
"Pledged Debt Securities" has the meaning assigned to such
term in Section 3.01.
"Pledged Securities" means any promissory notes, stock
certificates or other securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.
"Pledged Stock" has the meaning assigned to such term in
Section 3.01.
"Proceeds" has the meaning specified in Section 9-102 of the
New York UCC.
"Secured Parties" means (a) the Lenders, (b) the
Administrative Agent, (c) the Collateral Agent, (d) any Issuing Bank, (e) each
counterparty to any Hedging Agreement with a Loan Party the obligations under
which constitute Obligations, (f) the beneficiaries of each indemnification
obligation undertaken by any Loan Party under any Loan Document and (g) the
permitted successors and assigns of each of the foregoing.
"Security Interest" has the meaning assigned to such term in
Section 4.01.
"Subsidiary Parties" means (a) the Subsidiaries identified on
Schedule I and (b) each other Subsidiary that becomes a party to this Agreement
as a Subsidiary Party after the Effective Date.
"Trademark License" means any written agreement, now or
hereafter in effect, granting to any third party any right to use any trademark
now or hereafter owned by any Grantor or that any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.
"Trademarks" means all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
ARTICLE II........
Guarantee
SECTION 2.01. ...Guarantee. Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Obligations. Each
of the Guarantors further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any extension or
renewal of any Obligation. Each of the Guarantors waives presentment to, demand
of payment from and protest to the Borrower or any other Loan Party of any of
the Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment.
SECTION 2.02. ...Guarantee of Payment. Each of the Guarantors further agrees
that its guarantee hereunder constitutes a guarantee of payment when due and not
of collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the payment
of the Obligations or to any balance of any deposit account or credit on the
books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other Person.
SECTION 2.03. ...No Limitations. (a) Except for termination of a Guarantor's
obligations hereunder as expressly provided in Section 7.13, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by (i) the failure of the Collateral Agent or any other Secured Party
to assert any claim or demand or to enforce any right or remedy under the
provisions of any Loan Document or otherwise; (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, any Loan Document or any other agreement, including with respect to any
other Guarantor under this Agreement; (iii) the release of any security held by
the Collateral Agent or any other Secured Party for the Obligations or any of
them; (iv) any default, failure or delay, wilful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations). Each Guarantor
expressly authorizes the Collateral Agent to take and hold security for the
payment and performance of the Obligations, to exchange, waive or release any or
all such security (with or without consideration), to enforce or apply such
security and direct the order and manner of any sale thereof in its sole
discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.
(b) To the fullest extent permitted by applicable law, each Guarantor waives any
defense based on or arising out of any defense of the Borrower or any other Loan
Party or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower or any
other Loan Party, other than the indefeasible payment in full in cash of all the
Obligations. The Collateral Agent and the other Secured Parties may, at their
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in lieu
of foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with the Borrower or any other Loan Party or exercise any other
right or remedy available to them against the Borrower or any other Loan Party,
without affecting or impairing in any way the liability of any Guarantor
hereunder, except to the extent the Obligations have been fully and indefeasibly
paid in full in cash. To the fullest extent permitted by applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other Loan Party, as the case may be, or any
security.
SECTION 2.04. ...Reinstatement. Each of the Guarantors agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by the Collateral Agent or any other Secured Party
upon the bankruptcy or reorganization of the Borrower, any other Loan Party or
otherwise.
SECTION 2.05. ...Agreement To Pay; Subrogation. In furtherance of the foregoing
and not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Borrower or any other Loan Party to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Collateral Agent for
distribution to the applicable Secured Parties in cash the amount of such unpaid
Obligation. Upon payment by any Guarantor of any sums to the Collateral Agent as
provided above, all rights of such Guarantor against the Borrower or any other
Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.
SECTION 2.06. ...Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's and each other Loan Party's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Collateral Agent or the other Secured Parties will have any duty to advise
such Guarantor of information known to it or any of them regarding such
circumstances or risks.
ARTICLE III.......
Pledge of Securities
SECTION 3.01. ...Pledge. As security for the payment or performance, as the case
may be, in full of the Obligations, each Grantor hereby assigns and pledges to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, and hereby grants to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, a security interest in,
all of such Grantor's right, title and interest in, to and under (a) the shares
of capital stock and other Equity Interests owned by it, including but not
limited to those listed on Schedule II and any other Equity Interests obtained
in the future by such Grantor and the certificates, if any, representing all
such Equity Interests (the "Pledged Stock"); provided that the Pledged Stock
shall not include (i) Equity Interests of the SPE or (ii) more than 65% of the
issued and outstanding voting Equity Interests of any Foreign Subsidiary; (b)(i)
the debt securities listed opposite the name of such Grantor on Schedule II,
(ii) any debt securities in the future issued to such Grantor and (iii) the
promissory notes and any other instruments evidencing such debt securities (the
"Pledged Debt Securities"); (c) all other property that may be delivered to and
held by the Collateral Agent pursuant to the terms of this Section 3.01; (d)
subject to Section 3.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (a) and (b) above; (e) subject to Section 3.06, all rights and
privileges of such Grantor with respect to the securities and other property
referred to in clauses (a), (b), (c) and (d) above; and (f) all Proceeds of any
of the foregoing (the items referred to in clauses (a) through (f) above being
collectively referred to as the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all
right, title, interest, powers, privileges and preferences pertaining or
incidental thereto, unto the Collateral Agent, its successors and assigns, for
the ratable benefit of the Secured Parties, forever; subject, however, to the
terms, covenants and conditions hereinafter set forth (including Section 7.13).
SECTION 3.02. ...Delivery of the Pledged Collateral. (a) Each Grantor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all
certificated Pledged Securities.
(b) Each Grantor will cause any Indebtedness for borrowed money owed to such
Grantor by any Person in an amount in excess of $250,000 to be evidenced by a
duly executed promissory note that is pledged and delivered to the Collateral
Agent pursuant to the terms hereof.
(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be
accompanied by stock powers duly executed in blank or other instruments of
transfer reasonably satisfactory to the Collateral Agent and by such other
instruments and documents as the Collateral Agent may reasonably request and
(ii) all other property comprising part of the Pledged Collateral shall be
accompanied by proper instruments of assignment duly executed by the applicable
Grantor and such other instruments or documents as the Collateral Agent may
reasonably request. Each delivery of Pledged Securities shall be accompanied by
a schedule describing the securities, which schedule shall be attached hereto as
Schedule II and made a part hereof; provided that failure to attach any such
schedule hereto shall not affect the validity of such pledge of such Pledged
Securities. Each schedule so delivered shall supplement any prior schedules so
delivered.
SECTION 3.03. ...Representations, Warranties and Covenants. The Grantors jointly
and severally represent, warrant and covenant to and with the Collateral Agent,
for the benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the issued and
outstanding units of each class of the Equity Interests of the issuer thereof
represented by such Pledged Stock and includes all Equity Interests, debt
securities and promissory notes required to be pledged hereunder in order to
satisfy the Collateral and Guarantee Requirement;
(b) the Pledged Stock and Pledged Debt Securities have been duly and validly
authorized and issued by the issuers thereof and (i) in the case of Pledged
Stock, are fully paid and nonassessable, and (ii) in the case of Pledged Debt
Securities, are legal, valid and binding obligations of the issuers thereof;
(c) except for the security interests granted hereunder, each of the Grantors
(i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedule II as owned by such Grantor, (ii)
holds the same free and clear of all Liens, other than Liens created by this
Agreement, Permitted Encumbrances and transfers made in compliance with the
Credit Agreement, (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or permit to exist any security interest in or other Lien
on, the Pledged Collateral, other than Liens created by this Agreement,
Permitted Encumbrances and transfers made in compliance with the Credit
Agreement and (iv) will defend its title or interest thereto or therein against
any and all Liens (other than the Lien created by this Agreement and Permitted
Encumbrances), however arising, of all Persons whomsoever;
(d) except for restrictions and limitations imposed by the Loan Documents or
securities laws generally, the Pledged Collateral is and will continue to be
freely transferable and assignable, and none of the Pledged Collateral (other
than Pledged Collateral representing less than all of the Equity Interests of a
Person) is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Collateral Agent of rights and remedies hereunder;
(e) each of the Grantors has the requisite power and authority to pledge the
Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated;
(f) no consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
of the Pledged Collateral effected hereby (other than such as have been obtained
and are in full force and effect and except with respect to Pledged Collateral
in the form of Equity Interests in joint ventures);
(g) by virtue of the execution and delivery by the Grantors of this Agreement,
when any Pledged Securities are delivered to the Collateral Agent in accordance
with this Agreement, the Collateral Agent will obtain a legal, valid and
perfected first priority lien upon and security interest in such Pledged
Securities as security for the payment and performance of the Obligations; and
(h) the pledge effected hereby is effective to vest in the Collateral Agent, for
the benefit of the Secured Parties, the rights of the Collateral Agent in the
Pledged Collateral as set forth herein.
SECTION 3.04. ...Certification of Limited Liability Company and Limited
Partnership Interests. On the date hereof, no Equity Interest in any limited
liability company or limited partnership controlled by any Grantor and pledged
hereunder (the "Existing LLC/Partnership Interests") is represented by a
certificate. Each Grantor agrees that (a) if any Existing LLC/Partnership
Interest controlled by such Grantor shall become represented by a certificate,
it shall cause such certificate to be promptly delivered to the Administrative
Agent and shall cause the applicable limited liability company or partnership
agreement to be amended so as to treat the Equity Interest represented by such
certificate as a "security" within the meaning of Article 8 of the UCC and to
provide that such security shall be governed by Article 8 of the UCC and (b)
each interest in any limited liability company or partnership acquired by such
Grantor after the date hereof shall be represented by a certificate (which shall
be promptly delivered to the Administrative Agent after such Grantor's
acquisition thereof), shall be a "security" within the meaning of Article 8 of
the UCC and shall be governed by Article 8 of the UCC.
SECTION 3.05. ...Registration in Nominee Name; Denominations. The Collateral
Agent, on behalf of the Secured Parties, shall hold the Pledged Securities in
the name of the applicable Grantor, endorsed or assigned in blank or in favor of
the Collateral Agent, but following the occurrence and during the continuance of
an Event of Default shall have the right (in its sole and absolute discretion)
to hold the Pledged Securities in its own name as pledgee, or in the name of its
nominee (as pledgee or as sub-agent). Each Grantor will promptly give to the
Collateral Agent copies of any material notices or other communications received
by it with respect to Pledged Securities registered in the name of such Grantor.
The Collateral Agent shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any reasonable purpose consistent with this Agreement.
SECTION 3.06. ...Voting Rights; Dividends and Interest. (a) Unless and until an
Event of Default shall have occurred and be continuing and the Collateral Agent
shall have notified the Grantors that their rights under this Section 3.06 are
being suspended (which notice shall be deemed to have been given immediately
upon the occurrence of an Event of Default with respect to the Borrower under
paragraph (h) or (i) of Article VII of the Credit Agreement):
(i) Each Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or
any part thereof for any purpose consistent with the terms of this
Agreement, the Credit Agreement and the other Loan Documents; provided that
such rights and powers shall not be exercised in any manner that could
reasonably be expected to materially and adversely affect the rights
inuring to a holder of any Pledged Securities or the rights and remedies of
any of the Collateral Agent or the other Secured Parties under this
Agreement or the Credit Agreement or any other Loan Document or the ability
of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall promptly execute and deliver to each
Grantor, or cause to be executed and delivered to such Grantor, all
such proxies, powers of attorney and other instruments as such Grantor
may reasonably request for the purpose of enabling such Grantor to
exercise the voting and/or consensual rights and powers it is entitled
to exercise pursuant to subparagraph (i) above.
(iii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Securities to the extent and
only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Credit Agreement, the
other Loan Documents and applicable laws; provided that any noncash
dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received
in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled
by such Grantor with any of its other funds or property but shall be
held separate and apart therefrom, shall be held in trust for the
benefit of the Collateral Agent and shall be forthwith delivered to
the Collateral Agent in the same form as so received (with any
necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified (or shall be deemed to
have notified) the Grantors of the suspension of their rights under
paragraph (a)(iii) of this Section 3.06, then all rights of any Grantor
to dividends, interest, principal or other distributions that such
Grantor is authorized to receive pursuant to paragraph (a)(iii) of this
Section 3.06 shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to receive and retain such dividends, interest,
principal or other distributions. All dividends, interest, principal or
other distributions received by any Grantor contrary to the provisions
of this Section 3.06 shall be held in trust for the benefit of the
Collateral Agent, shall be segregated from other property or funds of
such Grantor and shall be forthwith delivered to the Collateral Agent
upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or
received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Collateral Agent in an account
to be established by the Collateral Agent upon receipt of such money or
other property and shall be applied in accordance with the provisions
of Section 5.02. After all Events of Default have been cured or waived
and the Borrower has delivered to the Collateral Agent a certificate to
that effect, the Collateral Agent shall promptly repay to each Grantor
(without interest) all dividends, interest, principal or other
distributions that such Grantor would otherwise be permitted to retain
pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and
that remain in such account.
(c) Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified (or shall be deemed to
have notified) the Grantors of the suspension of their rights under
paragraph (a)(i) of this Section 3.06, then all rights of any Grantor
to exercise the voting and consensual rights and powers it is entitled
to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this
Section 3.06, shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to exercise such voting and consensual rights and
powers; provided that, unless otherwise directed by the Required
Lenders, the Collateral Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit
the Grantors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Grantors suspending the
Grantors' rights under paragraph (a) of this Section 3.06 (i) may be
given by telephone if promptly confirmed in writing, (ii) may be given
to one or more of the Grantors at the same or different times and (iii)
may suspend the rights of the Grantors under paragraph (a)(i) or
paragraph (a)(iii) in part without suspending all such rights (as
specified by the Collateral Agent in its sole and absolute discretion)
and without waiving or otherwise affecting the Collateral Agent's
rights to give additional notices from time to time suspending other
rights so long as an Event of Default has occurred and is continuing.
ARTICLE IV........
Security Interests in Personal Property
SECTION 4.01. ...Security Interest. (a) As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest (the "Security Interest") in, all right, title or
interest in or to any and all of the following assets and properties now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "Article 9 Collateral"):
(i) all accounts;
(ii) all chattel paper;
(iii) all cash and deposit accounts;
(iv) all documents;
(v) all equipment;
(vi) all General Intangibles;
(vii) all instruments;
(viii) all inventory;
(ix) all investment property;
(x) all letter-of-credit rights;
(xi) all commercial tort claims;
(xii) all books and records pertaining to the Article 9 Collateral; and
(xiii) to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
Notwithstanding the foregoing, the Article 9 Collateral shall not include any
assets which contain a valid and enforceable prohibition on the creation of a
security interest therein so long as such prohibition remains in effect and is
valid notwithstanding Sections 9-406 and 9-408 of the applicable Uniform
Commercial Code.
(b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time
and from time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Article 9 Collateral
or any part thereof and amendments thereto that (i) indicate the Collateral as
all assets of such Grantor or words of similar effect and (ii) contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (A) whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor and (B) in
the case of a financing statement filed as a fixture filing, a sufficient
description of the real property to which such Article 9 Collateral relates.
Each Grantor agrees to provide such information to the Collateral Agent promptly
upon request.
Each Grantor also ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.
The Collateral Agent is further authorized to file with the
United States Patent and Trademark Office or United States Copyright Office (or
any successor office or any similar office in any other country) such documents
as may be necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or arising out of the
Article 9 Collateral.
SECTION 4.02. ...Representations and Warranties. The Grantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties,
subject to the last paragraph of this Section 4.02, that:
(a) Each Grantor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent the
Security Interest in such Article 9 Collateral pursuant hereto and to execute,
deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other Person other than any
consent or approval that has been obtained.
(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein, including the exact legal name of each
Grantor and the jurisdiction of organization of each Grantor, is correct and
complete in all material respects as of the Effective Date. Uniform Commercial
Code financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the
Article 9 Collateral prepared by the Collateral Agent based upon the information
provided to the Collateral Agent in the Perfection Certificate for filing in
each governmental, municipal or other office specified in Section 2 of the
Perfection Certificate (or specified by notice from the Borrower to the
Collateral Agent after the Effective Date in the case of filings, recordings or
registrations required by Section 5.03 or 5.13 of the Credit Agreement) are all
the filings, recordings and registrations (other than filings required to be
made in the United States Patent and Trademark Office and the United States
Copyright Office in order to perfect the Security Interest in Article ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Patents, Trademarks and Copyrights) that
are necessary to publish notice of and protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Article 9
Collateral in which the Security Interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements. Each Grantor represents and warrants that a fully
executed agreement in the form hereof (or a fully executed short-form agreement
in form and substance reasonably satisfactory to the Collateral Agent) and
containing a description of all Article 9 Collateral consisting of Intellectual
Property with respect to United States Patents (and Patents for which United
States registration applications are pending), United States registered
Trademarks (and Trademarks for which United States registration applications are
pending) and United States registered Copyrights (and all pending registrations
therefor) has been delivered to the Collateral Agent for recording by the United
States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C. Section
205 and the regulations thereunder, as applicable, to protect the validity of
and to establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Article 9 Collateral consisting of Patents, Trademarks and Copyrights in
which a security interest may be perfected by filing, recording or registration
in the United States (or any political subdivision thereof) and its territories
and possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary (other than such
actions as are necessary to perfect the Security Interest with respect to any
Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or
registration or application for registration thereof) acquired or developed
after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid security interest in
all the Article 9 Collateral securing the payment and performance of the
Obligations, (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all Article 9 Collateral in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code and (iii) a security interest that shall be perfected in all
Article 9 Collateral in which a security interest may be perfected upon the
receipt and recording of this Agreement (or the short-form agreement referenced
in paragraph (b) above) with the United States Patent and Trademark Office and
the United States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. Section 261 or 15
U.S.C. Section 1060 or the one month period (commencing as of the date hereof)
pursuant to 17 U.S.C. Section 205. The Security Interest is and shall be prior
to any other Lien on any of the Article 9 Collateral, other than Liens expressly
permitted to be prior to the Security Interest pursuant to Section 6.02 of the
Credit Agreement.
(d) The Article 9 Collateral is owned by the Grantors free and clear of any
Lien, except for Liens expressly permitted pursuant to Section 6.02 of the
Credit Agreement. None of the Grantors has filed or consented to the filing of
(i) any financing statement or analogous document under the Uniform Commercial
Code or any other applicable laws covering any Article 9 Collateral, (ii) any
assignment in which any Grantor assigns any Collateral or any security agreement
or similar instrument covering any Article 9 Collateral with the United States
Patent and Trademark Office or the United States Copyright Office or (iii) any
assignment in which any Grantor assigns any Article 9 Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement.
Notwithstanding the above, any such representation or warranty
with respect to the Company or its subsidiaries shall be deemed made solely to
the best knowledge of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ (it being
understood and agreed that the foregoing knowledge qualification shall apply
only to such representations and warranties made on the Effective Date and not
to any representations and warranties made hereunder on any other date)
SECTION 4.03. ...Covenants. (a) Each Grantor agrees promptly to notify the
Collateral Agent in writing of any change (i) in corporate name, (ii) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Article 9 Collateral
owned by it or any office or facility at which Article 9 Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in its identity or type of organization or corporate structure, (iv) in
its Federal Taxpayer Identification Number or organizational identification
number or (v) in its jurisdiction of organization. Each Grantor agrees to
promptly provide the Collateral Agent with certified organizational documents
reflecting any of the changes described in the first sentence of this paragraph.
Each Grantor agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected first priority security interest in all the Article 9 Collateral to
the same extent as existed immediately prior to such change. Each Grantor agrees
promptly to notify the Collateral Agent if any material portion of the Article 9
Collateral owned or held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense, such complete
and accurate records with respect to the Article 9 Collateral owned by it as is
prudent in the conduct of its business, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
the Article 9 Collateral, and, at such time or times as the Collateral Agent may
reasonably request, promptly to prepare and deliver to the Collateral Agent a
duly certified schedule or schedules in form and detail reasonably satisfactory
to the Collateral Agent showing the identity, amount and location of any and all
Article 9 Collateral.
(c) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 5.01(a) of the Credit
Agreement, the Borrower shall deliver to the Collateral Agent a certificate
executed by a Financial Officer and the chief legal officer of the Borrower
setting forth the information required pursuant to the Perfection Certificate or
confirming that there has been no material change in such information since the
date of such certificate or the date of the most recent certificate delivered
pursuant to this Section 4.03(c). Each certificate delivered pursuant to this
Section 4.03(c) shall identify in the format of Schedule III all Intellectual
Property of any Grantor in existence on the date thereof and not then listed on
such Schedules or previously so identified to the Collateral Agent.
(d) Each Grantor shall, at its own expense, take any and all commercially
reasonable actions necessary to defend title to all material portions of the
Article 9 Collateral against all Persons and to defend the Security Interest of
the Collateral Agent in all material portions of the Article 9 Collateral and
the priority thereof against any Lien not expressly permitted pursuant to
Section 6.02 of the Credit Agreement.
(e) Each Grantor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Collateral Agent may from time to time reasonably
request to better assure, preserve, protect and perfect the Security Interest
and the rights and remedies created hereby, including the payment of any fees
and taxes required in connection with the execution and delivery of this
Agreement, the granting of the Security Interest and the filing of any financing
statements (including fixture filings) or other documents in connection herewith
or therewith. If any amount payable to any Grantor under or in connection with
any of the Article 9 Collateral shall be or become evidenced by any promissory
note or other instrument, such note or instrument shall be promptly pledged and
delivered to the Collateral Agent, duly endorsed in a manner consistent with
Section 3.02.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Schedule III or adding
additional schedules hereto to specifically identify any asset or item that may
constitute Copyrights, Licenses, Patents or Trademarks; provided that any
Grantor shall have the right, exercisable within 10 days after it has been
notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its best efforts to take
such action as shall be reasonably necessary in order that all representations
and warranties hereunder shall be true and correct in all material respects with
respect to such Collateral within 30 days after the date it has been notified by
the Collateral Agent of the specific identification of such Collateral.
(f) The Collateral Agent and such Persons as the Collateral Agent may reasonably
designate shall have the right, upon reasonable prior written notice and during
normal business hours (but in no event more than once each fiscal quarter unless
a Default has occurred and is continuing), at the Grantors' own cost and
expense, to inspect the Article 9 Collateral, all records related thereto (and
to make extracts and copies from such records) and the premises upon which any
of the Article 9 Collateral is located, to discuss the Grantors' affairs with
the officers of the Grantors and their independent accountants and to verify
under reasonable procedures the validity, amount, quality, quantity, value,
condition and status of, or any other matter relating to, the Article 9
Collateral, including, in the case of accounts or Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such a
verification. The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.
(g) At its option, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Article 9 Collateral and not expressly
permitted pursuant to Section 6.02 of the Credit Agreement (and shall notify the
Borrower upon any such discharge), and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Grantor fails to do
so as required by the Credit Agreement or this Agreement, and each Grantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
payment made or any reasonable expense incurred by the Collateral Agent pursuant
to the foregoing authorization; provided that nothing in this paragraph shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.
(h) If at any time any Grantor shall take a security interest in any property of
an Account Debtor or any other Person to secure payment and performance of an
account in excess of $250,000, such Grantor shall promptly assign such security
interest to the Collateral Agent. Such assignment need not be filed of public
record unless necessary to continue the perfected status of the security
interest against creditors of and transferees from the Account Debtor or other
Person granting the security interest.
(i) As between each Grantor, the Collateral Agent and the Secured Parties, each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral, all in accordance with the
terms and conditions thereof, and each Grantor jointly and severally agrees to
indemnify and hold harmless the Collateral Agent and the Secured Parties from
and against any and all liability for such performance.
(j) None of the Grantors shall make or permit to be made an assignment, pledge
or hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral, except as permitted by the Credit
Agreement. None of the Grantors shall make or permit to be made any transfer of
the Article 9 Collateral and each Grantor shall remain at all times in
possession of the Article 9 Collateral owned by it, except that unless and until
the Collateral Agent shall notify the Grantors that an Event of Default shall
have occurred and be continuing and that during the continuance thereof the
Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of
any Article 9 Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Article 9
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document.
(k) None of the Grantors will, without the Collateral Agent's prior written
consent, grant any extension of the time of payment of any accounts included in
the Article 9 Collateral, compromise, compound or settle the same for less than
the full amount thereof, release, wholly or partly, any Person liable for the
payment thereof or allow any credit or discount whatsoever thereon, other than
extensions, compromises, settlements, releases, credits or discounts granted or
made in good faith in the prudent conduct of the business of such Grantor.
(l) The Grantors, at their own expense, shall maintain or cause to be maintained
insurance covering physical loss or damage to the inventory and equipment in
accordance with the requirements set forth in Schedule IV hereto and Section
5.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents designated
by the Collateral Agent) as such Grantor's true and lawful agent (and
attorney-in-fact) for the purpose, upon the occurrence and during the
continuance of an Event of Default, of making, settling and adjusting claims in
respect of Article 9 Collateral under policies of insurance, endorsing the name
of such Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or under the Credit Agreement or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with
this paragraph, including reasonable attorneys' fees, court costs, expenses and
other charges relating thereto, shall be payable, upon demand, by the Grantors
to the Collateral Agent and shall be additional Obligations secured hereby.
(m) Each Grantor shall maintain, in form and manner reasonably satisfactory to
the Collateral Agent, records of its chattel paper and its books, records and
documents evidencing or pertaining thereto.
SECTION 4.04. ...Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Grantor agrees, in each case at such Grantor's own
expense, to take the following actions with respect to the following Article 9
Collateral:
(a) Instruments. If any Grantor shall at any time hold or acquire any
instruments, such Grantor shall forthwith endorse, assign and deliver the same
to the Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to time
reasonably request, other than instruments that do not individually or in the
aggregate exceed $250,000.
(b) Deposit Accounts. For each deposit account that any Grantor at any time
opens or maintains, such Grantor shall, on or prior to February 28, 2005, either
(i) cause the depositary bank to agree to comply with instructions from the
Collateral Agent to such depositary bank directing the disposition of funds from
time to time credited to such deposit account, without further consent of such
Grantor or any other Person, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, or (ii) arrange for the
Collateral Agent to become the customer of the depositary bank with respect to
such deposit account, with the Grantor being permitted, only with the reasonable
consent of the Collateral Agent, to exercise rights to withdraw funds from such
deposit account. The Collateral Agent agrees with each Grantor that the
Collateral Agent shall not give any such instructions or withhold any withdrawal
rights from any Grantor unless an Event of Default has occurred and is
continuing, or, after giving effect to any withdrawal would occur. The
provisions of this paragraph shall not apply to (A) any deposit account for
which any Grantor, the depositary bank and the Collateral Agent have entered
into a cash collateral agreement specially negotiated among such Grantor, the
depositary bank and the Collateral Agent for the specific purpose set forth
therein, (B) any retail store deposit account that (x) is not a concentration or
a cash sweep account and (y) has a monthly average balance of less than
$500,000, (C) any payroll account, (D) any medical or insurance reimbursement
account and (E) any deposit account for which the Collateral Agent is the
depositary.
(c) Investment Property. Except to the extent otherwise provided in Article III,
if any Grantor shall at any time hold or acquire any certificated securities,
such Grantor shall forthwith endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as the Collateral Agent may from time to time specify. If any
securities now or hereafter acquired by any Grantor are "uncertificated
securities" (as defined in Section 8-102(18) of the New York UCC) and are issued
to such Grantor or its nominee directly by the issuer thereof, such Grantor
shall promptly notify the Collateral Agent thereof and, at the Collateral
Agent's request and option, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, either (i) use its best efforts
to cause the issuer to agree to comply with instructions from the Collateral
Agent as to such securities, without further consent of any Grantor or such
nominee or (ii) arrange for the Collateral Agent to become the registered owner
of the securities. If any securities, whether certificated or uncertificated, or
other investment property now or hereafter acquired by any Grantor are held by
such Grantor or its nominee through a securities intermediary or commodity
intermediary, such Grantor shall promptly notify the Collateral Agent thereof
and, at the Collateral Agent's request and option, pursuant to an agreement in
form and substance satisfactory to the Collateral Agent, either (i) use its best
efforts to cause such securities intermediary or (as the case may be) commodity
intermediary to agree to comply with entitlement orders or other instructions
from the Collateral Agent to such securities intermediary as to such security
entitlements, or (as the case may be) to apply any value distributed on account
of any commodity contract as directed by the Collateral Agent to such commodity
intermediary, in each case without further consent of any Grantor or such
nominee, or (ii) in the case of financial assets (as governed by Article 8 of
the New York UCC) or other investment property held through a securities
intermediary, arrange for the Collateral Agent to become the entitlement holder
with respect to such investment property, with the Grantor being permitted, only
with the consent of the Collateral Agent, to exercise rights to withdraw or
otherwise deal with such investment property. The Collateral Agent agrees with
each of the Grantors that the Collateral Agent shall not give any such
entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing rights by any Grantor, unless an Event
of Default has occurred and is continuing, or, after giving effect to any such
investment and withdrawal rights, would occur. The provisions of this paragraph
shall not apply to any financial assets credited to a securities account for
which the Collateral Agent is the securities intermediary.
(d) Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic chattel
paper or any "transferable record," as that term is defined in Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, such Grantor shall promptly notify the Collateral Agent
thereof and, at the request of the Collateral Agent, shall take such action as
the Collateral Agent may reasonably request to vest in the Collateral Agent
control under New York UCC Section 9-105 of such electronic chattel paper or
control under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Collateral Agent agrees with such Grantor that the
Collateral Agent will arrange, pursuant to procedures reasonably satisfactory to
the Collateral Agent and so long as such procedures will not result in the
Collateral Agent's loss of control, for the Grantor to make alterations to 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 or Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of control, unless
an Event of Default has occurred and is continuing or would occur after taking
into account any action by such Grantor with respect to such electronic chattel
paper or transferable record.
(e) Letter-of-Credit Rights. If any Grantor is at any time a beneficiary under a
letter of credit now or hereafter issued in favor of such Grantor, such Grantor
shall promptly notify the Collateral Agent thereof and, at the request and
option of the Collateral Agent, such Grantor shall, pursuant to an agreement in
form and substance reasonably satisfactory to the Collateral Agent, either (i)
arrange for the issuer and any confirmer of such letter of credit to consent to
an assignment to the Collateral Agent of the proceeds of any drawing under the
letter of credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be paid to the applicable Grantor unless an Event of Default has
occurred or is continuing.
(f) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a
commercial tort claim in an amount reasonably estimated to exceed $1,000,000,
the Grantor shall promptly notify the Collateral Agent thereof in a writing
signed by such Grantor, including a summary description of such claim, and grant
to the Collateral Agent in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance reasonably satisfactory to the Collateral Agent.
SECTION 4.05. ...Covenants Regarding Patent, Trademark and Copyright Collateral.
(a) Each Grantor agrees that it will not do any act or omit do to any act (and
will exercise commercially reasonable efforts to prevent its licensees from
doing any act as omitting to do any act) whereby any Patent that is material to
the conduct of such Grantor's business may become invalidated or dedicated to
the public, and agrees that it shall continue to ▇▇▇▇ any products covered by a
Patent with the relevant patent number as necessary and sufficient to establish
and preserve its maximum rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its sublicensees)
will, for each Trademark material to the conduct of such Grantor's business, (i)
maintain such Trademark in full force free from any claim of abandonment or
invalidity for non-use, (ii) maintain the quality of products and services
offered under such Trademark, (iii) display such Trademark with notice of
Federal or foreign registration to the extent applicable and reasonably
necessary and sufficient to establish and preserve its maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the use of such
Trademark in violation of any third party rights.
(c) Each Grantor (either itself or through its licensees or sublicensees) will,
for each work covered by a Copyright material to the conduct of such Grantor's
business, continue to publish, reproduce, display, adopt and distribute the work
with appropriate copyright notice as necessary and sufficient to establish and
preserve its maximum rights under applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent promptly if it knows or
reasonably suspects that any Patent, Trademark or Copyright material to the
conduct of such Grantor's business may become abandoned, lost or dedicated to
the public, or of any materially adverse determination or development (including
the institution of, or any determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any such Patent, Trademark or Copyright, its right to register the same, or
its right to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any agent, employee,
licensee or designee, file an application for any Patent, Trademark or Copyright
(or for the registration of any Trademark or Copyright) with the United States
Patent and Trademark Office, United States Copyright Office or any office or
agency in any political subdivision of the United States or in any other country
or any political subdivision thereof, unless it promptly informs the Collateral
Agent, and, upon request of the Collateral Agent, executes and delivers any and
all agreements, instruments, documents and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's security interest in such
Patent, Trademark or Copyright, and each Grantor hereby appoints the Collateral
Agent as its attorney-in-fact to execute and file such writings for the
foregoing purposes, all lawful acts of such attorney being hereby ratified and
confirmed; such power, being coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, to maintain and pursue each material application relating
to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant
or registration) and to maintain each issued Patent and each registration of the
Trademarks and Copyrights that is material to the conduct of any Grantor's
business, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with such Grantor's reasonable business judgment, to initiate
opposition, interference and cancelation proceedings against third parties.
(g) In the event that any Grantor knows or reasonably suspects that any Article
9 Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with such Grantor's reasonable
business judgment, promptly ▇▇▇ for infringement, misappropriation or dilution
and to recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as are appropriate under the circumstances
to protect such Article 9 Collateral.
(h) Upon the occurrence and during the continuance of an Event of Default, each
Grantor shall use its commercially reasonable efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all such Grantor's right, title
and interest thereunder to the Collateral Agent or its designee.
SECTION 4.06. ...Breakage Prepayment Accounts. With respect to each Breakage
Prepayment Account created pursuant to Section 2.11(g) of the Credit Agreement,
the Borrower hereby assigns and pledges to the Collateral Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, and hereby grants
to the Collateral Agent, its successors and assigns, for the ratable benefit of
the Secured Parties, a security interest in all right, title or interest in or
to any amount deposited in such Breakage Prepayment Account now owned or at any
time hereafter acquired by such Borrower or in which such Borrower now has or at
any time in the future may acquire any right, title or interest. Each deposit in
any Breakage Prepayment Account shall be held by the Collateral Agent as
collateral for the payment and performance of the obligations of the Loan
Parties under this Agreement and the other Loan Documents. The security interest
described in this Section 4.06 shall for all purposes be included in the
definition of Security Interest set forth in Section 4.01 and the Breakage
Prepayment Accounts described in this Section 4.06 and all of the Proceeds
thereof shall be included in the definition of Article 9 Collateral set forth in
Section 4.01.
ARTICLE V.........
Remedies
SECTION 5.01. ...Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, it is agreed that the Collateral Agent shall
have the right to take any of or all the following actions at the same or
different times: (a) with respect to any Article 9 Collateral consisting of
Intellectual Property, on demand, to cause the Security Interest to become an
assignment, transfer and conveyance of any of or all such Article 9 Collateral
by the applicable Grantors to the Collateral Agent, or to license or sublicense,
whether general, special or otherwise, and whether on an exclusive or
nonexclusive basis, any such Article 9 Collateral throughout the world on such
terms and conditions and in such manner as the Collateral Agent shall determine
(other than in violation of any then-existing licensing arrangements to the
extent that waivers cannot be obtained), and (b) with or without legal process
and with or without prior notice or demand for performance, to take possession
of the Article 9 Collateral and without liability for trespass to enter any
premises where the Article 9 Collateral may be located for the purpose of taking
possession of or removing the Article 9 Collateral and, generally, to exercise
any and all rights afforded to a secured party under the Uniform Commercial Code
or other applicable law. Without limiting the generality of the foregoing, each
Grantor agrees that the Collateral Agent shall have the right, subject to the
mandatory requirements of applicable law, to sell or otherwise dispose of all or
any part of the Collateral at a public or private sale or at any broker's board
or on any securities exchange, for cash, upon credit or for future delivery as
the Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale of securities (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale of Collateral shall
hold the property sold absolutely, free from any claim or right on the part of
any Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the applicable Grantors 10
days' written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may in
its sole and absolute discretion determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Agreement, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to any Grantor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled, subject to Section 5.02, to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section 5.01 shall be deemed to conform to the commercially
reasonable standards as provided in Section 9-610(b) of the New York UCC or its
equivalent in other jurisdictions.
SECTION 5.02. ...Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of, or foreclosure or other realization upon,
any Collateral, including any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Administrative Agent and the Collateral Agent in connection with
such collection or sale or otherwise in connection with this Agreement,
any other Loan Document or any of the Obligations, including all court
costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Administrative Agent or the
Collateral Agent hereunder or under any other Loan Document on behalf
of any Grantor and any other costs or expenses incurred in connection
with the exercise of any right or remedy hereunder or under any other
Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 5.03. ...Grant of License to Use Intellectual Property. For the purpose
of enabling the Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sublicense any
of the Article 9 Collateral consisting of Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
may be exercised, at the option of the Collateral Agent, only upon the
occurrence and during the continuation of an Event of Default; provided that any
license, sublicense or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.
SECTION 5.04. ...Securities Act. In view of the position of the Grantors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
"blue sky" or other state securities laws or similar laws analogous in purpose
or effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Grantor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such sale
were a public sale without such restrictions. In the event of any such sale, the
Collateral Agent shall incur no responsibility or liability for selling all or
any part of the Pledged Collateral at a price that the Collateral Agent, in its
sole and absolute discretion, may in good ▇▇▇▇▇ ▇▇▇▇ reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might have been realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached. The provisions of
this Section 5.04 will apply notwithstanding the existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.
SECTION 5.05. ...Registration. Each Grantor agrees that, upon the occurrence and
during the continuance of an Event of Default, if for any reason the Collateral
Agent desires to sell any of the Pledged Collateral at a public sale, it will,
at any time and from time to time, upon the written request of the Collateral
Agent, use its best efforts to cooperate in any public sale effectuated by the
Collateral Agent to permit the public sale of such Pledged Collateral. Each
Grantor will bear all costs and expenses of carrying out its obligations under
this Section 5.05. Each Grantor acknowledges that there is no adequate remedy at
law for failure by it to comply with the provisions of this Section 5.05 and
that such failure would not be adequately compensable in damages, and therefore
agrees that its agreements contained in this Section 5.05 may be specifically
enforced.
ARTICLE VI........
Indemnity, Subrogation and Subordination
SECTION 6.01. ...Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 6.03), the Borrower agrees that (a) in the event a payment
shall be made by any Guarantor under this Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the Person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Grantor shall be sold pursuant to this Agreement or any other Security Document
to satisfy in whole or in part an obligation owed to any Secured Party, the
Borrower shall indemnify such Grantor in an amount equal to the greater of the
book value or the fair market value of the assets so sold.
SECTION 6.02. ...Contribution and Subrogation. Each Guarantor and Grantor (a
"Contributing Party") agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Guarantor hereunder in respect of any
Obligation or assets of any other Grantor shall be sold pursuant to any Security
Document to satisfy any Obligation owed to any Secured Party and such other
Guarantor or Grantor (the "Claiming Party") shall not have been fully
indemnified by the Borrower as provided in Section 6.01, the Contributing Party
shall indemnify the Claiming Party in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Party on the date hereof
and the denominator shall be the aggregate net worth of all the Guarantors and
Grantors on the date hereof (or, in the case of any Guarantor or Grantor
becoming a party hereto pursuant to Section 7.14, the date of the supplement
hereto executed and delivered by such Guarantor or Grantor). Any Contributing
Party making any payment to a Claiming Party pursuant to this Section 6.02 shall
be subrogated to the rights of such Claiming Party under Section 6.01 to the
extent of such payment.
SECTION 6.03. ...Subordination. (a) Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors and Grantors under
Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the part
of the Borrower or any Guarantor or Grantor to make the payments required by
Sections 6.01 and 6.02 (or any other payments required under applicable law or
otherwise) shall in any respect limit the obligations and liabilities of any
Guarantor or Grantor with respect to its obligations hereunder, and each
Guarantor and Grantor shall remain liable for the full amount of the obligations
of such Guarantor or Grantor hereunder.
(b) Each Guarantor and Grantor hereby agrees that all Indebtedness and other
monetary obligations owed by it to any other Guarantor, Grantor or any other
Subsidiary shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations.
ARTICLE VII.......
Miscellaneous
SECTION 7.01. ...Notices. All communications and notices hereunder shall (except
as otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Party shall be given to it in care of the Borrower as provided
in Section 9.01 of the Credit Agreement.
SECTION 7.02. ...Waivers; Amendment. (a) No failure or delay by the Collateral
Agent, any Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent, the Issuing Banks and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 7.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Collateral Agent, any Lender or any Issuing
Bank may have had notice or knowledge of such Default at the time. No notice or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement.
SECTION 7.03. ...Collateral Agent's Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.03 of
the Credit Agreement.
(b) Without limitation of its indemnification obligations under the other Loan
Documents, each Grantor and each Guarantor jointly and severally agrees to
indemnify the Collateral Agent and the other Indemnitees (as defined in Section
9.03 of the Credit Agreement) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the reasonable fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating to
any of the foregoing agreement or instrument contemplated hereby, or to the
Collateral, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 7.03 shall be payable on written demand therefor.
SECTION 7.04. ...Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor, Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
SECTION 7.05. ...Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and the other Secured Parties
at the time made and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any Lender or other Secured Party or on
its behalf and notwithstanding that the Collateral Agent, any Issuing Bank or
any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.
SECTION 7.06. ...Counterparts; Effectiveness; Several Agreement. This Agreement
may be executed in counterparts, each of which shall constitute an original but
all of which when taken together shall constitute a single contract. Delivery of
an executed signature page to this Agreement by facsimile transmission shall be
as effective as delivery of a manually signed counterpart of this Agreement.
This Agreement shall become effective as to any Loan Party when a counterpart
hereof executed on behalf of such Loan Party shall have been delivered to the
Collateral Agent and a counterpart hereof shall have been executed on behalf of
the Collateral Agent, and thereafter shall be binding upon such Loan Party and
the Collateral Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such Loan Party, the Collateral Agent and the
other Secured Parties and their respective successors and assigns, except that
no Loan Party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void), except as expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each Loan Party and may be amended, modified,
supplemented, waived or released with respect to any Loan Party without the
approval of any other Loan Party and without affecting the obligations of any
other Loan Party hereunder.
SECTION 7.07. ...Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7.08. ...Right of Set-Off. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any
Subsidiary Party against any of and all the obligations of such Subsidiary Party
now or hereafter existing under this Agreement owed to such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender under
this Section 7.08 are in addition to other rights and remedies (including other
rights of set-off) which such Lender may have.
SECTION 7.09. ...Governing Law; Jurisdiction; Consent to Service of Process. (a)
This Agreement shall be construed in accordance with and governed by the law of
the State of New York.
(b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Collateral Agent, any Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against any Grantor or Guarantor, or its properties in the courts of any
jurisdiction.
(c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section 7.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 7.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 7.10. ...WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.10.
SECTION 7.11. ...Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 7.12. ...Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor and Guarantor hereunder
shall be, subject to the last paragraph of clause (a) of Section 4.01, absolute
and unconditional irrespective of (a) any lack of validity or enforceability of
the Credit Agreement, any other Loan Document, any agreement with respect to any
of the Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument, (c) any exchange, release or
nonperfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Grantor or Guarantor in respect of the Obligations or this Agreement.
SECTION 7.13. ...Termination or Release. (a) This Agreement, the Guarantees made
herein, the Security Interest and all other security interests granted hereby
shall terminate when all the Loan Document Obligations have been indefeasibly
paid in full and the Lenders have no further commitment to lend under the Credit
Agreement, the LC Exposure has been reduced to zero and no Issuing Bank has any
further obligations to issue Letters of Credit under the Credit Agreement. In
connection with any termination or release pursuant to this paragraph, the
Collateral Agent shall execute and deliver to any Grantor, at such Grantor's
expense, all documents that such Grantor shall reasonably request to evidence
such termination or release. Any execution and delivery of documents pursuant to
this Section 7.13 shall be without recourse to or warranty by the Collateral
Agent.
(b) Release of any Subsidiary Party from its obligations hereunder and of the
Security Interest in any Collateral shall be governed by Section 9.15 of the
Credit Agreement.
SECTION 7.14. ...Additional Subsidiaries. Pursuant to Section 5.12 of the Credit
Agreement, each Subsidiary of a Loan Party that was not in existence or not a
Subsidiary on the date of the Credit Agreement and is not a Foreign Subsidiary
is required to enter in this Agreement as a Subsidiary Party upon becoming such
a Subsidiary. Upon execution and delivery by the Collateral Agent and a
Subsidiary of an instrument in the form of Exhibit I hereto, such Subsidiary
shall become a Subsidiary Party hereunder with the same force and effect as if
originally named as a Subsidiary Party herein. The execution and delivery of any
such instrument shall not require the consent of any other Loan Party hereunder.
The rights and obligations of each Loan Party hereunder shall remain in full
force and effect notwithstanding the addition of any new Loan Party as a party
to this Agreement.
SECTION 7.15. ...Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Grantor (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof; (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral; (c) to sign the
name of any Grantor on any invoice or ▇▇▇▇ of lading relating to any of the
Collateral; (d) to send verifications of accounts receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral; (g)
to notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
wilful misconduct.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
THE DRESS BARN, INC.,
By:
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
D.B.R., INC.,
By:
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
dbx, INC.,
By:
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
dress barn credit management, llc,
By: THE DRESS BARN, INC., its sole member
By:
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
maurices incorporated,
By
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
the men's company, INC.,
By
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
JPMORGAN CHASE BANK, N.A., as Collateral Agent,
By
---------------------------------------------
Name:
Title:
Schedule I to
the Guarantee and
Collateral Agreement
SUBSIDIARY PARTIES
D.B.R., Inc., a Delaware corporation
DBX, Inc., a New York corporation
Dress Barn Credit Management, LLC, a Virginia limited liability company
Maurices Incorporated, a Delaware corporation
The Men's Company, Inc., a Delaware corporation
Schedule II to
the Guarantee and
Collateral Agreement
EQUITY INTERESTS
Number and
Number of Registered Class of Percentage
Issuer Certificate Owner Equity Interest of Equity Interests
DEBT SECURITIES
--------------------------------------------------------------------------------
Principal
Issuer Amount Date of Note Maturity Date
--------------------------------------------------------------------------------
Schedule III to
the Guarantee and
Collateral Agreement
COPYRIGHTS OWNED BY [NAME OR GRANTOR]
[Make a separate page of ScheduleIII for each Grantor and state if no copyrights
are owned. List in numerical order by Registration No.]
U.S. Copyright Registrations
Title Reg. No. Author
Pending U.S. Copyright Applications for Registration
Title Author Class Date Filed
Non-U.S. Copyright Registrations
[List in alphabetical order by country/numerical order by Registration No.
within each country.]
Country Title Reg. No. Author
------- ----- -------- ------
Non-U.S. Pending Copyright Applications for Registration
[List in alphabetical order by country.]
Country Title Author Class Date Filed
LICENSES
[Make a separate page of Schedule III for each Grantor, and state if any Grantor
is not a party to a license/sublicense.]
I. Licenses/Sublicensees of [Name of Grantor] as Licensor on Date Hereof
A. Copyrights
[List U.S. copyrights in numerical order by Registration No. List non-U.S.
copyrights by country in alphabetical order with Registration Nos. within each
country in numerical order.]
U.S. Copyrights
Title of
Licensee Name Date of License/ U.S.
and Address Sublicense Copyright Author Reg. No.
----------- ---------- --------- ------ --------
Non-U.S. Copyrights
Date of Title of
Licensee Name License/ Non-U.S.
Country and Address Sublicensee Copyrights Author Reg. No.
------- ----------- ----------- ---------- ------ --------
B. Patents
[List U.S. patent nos. and U.S. patent application nos. in numerical order. List
non-U.S. patent nos. and non-U.S. application in alphabetical order by country,
withnumbers within each country in numerical order.]
U.S. Patents
Licensee Name Date of License/
and Address Sublicense Issue Date Patent No.
----------- ---------- ---------- ----------
U.S. Patent Applications
Licensee Name Date of License/
and address Sublicense Date Filed Application No.
----------- ---------- ---------- ---------------
Non-U.S. Patents
Licensee Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ----------- ---------- ----
Non-U.S. Patent Applications
Licensee Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- ----------- ---------- ----- ---
C. Trademarks
[List U.S. trademark nos. and U.S. trademark application nos. in numerical
order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark
nos. within each country in numerical order.]
U.S. Trademarks
Licensee Name Date of License/
and Address Sublicense U.S. ▇▇▇▇ Reg. Date Reg. No.
----------- ---------- --------- --------- --------
U.S. Trademark Applications
Licensee Name Date of License/ Application
and Address Sublicense U.S. ▇▇▇▇ Date Filed No.
----------- ---------- --------- ---------- ---
Non-U.S. Trademarks
Licensee Name Date of License/ Non-U.S.
Country and Address Sublicense ▇▇▇▇ Reg. Date Reg. No.
------- ----------- ---------- ---- --------- --------
Non-U.S. Trademark Applications
Licensee Name Date of License/ Non-U.S. Date Application
Country and Address Sublicense ▇▇▇▇ Filed No.
------- ----------- ---------- ---- ----- ---
D. Others
Licensee Name Date of License/ Subject
and Address Sublicense Matter
II. Licensees/Sublicenses of [Name of Grantor] as Licensee on Date Hereof
A. Copyrights
[List U.S. copyrights in numerical order by Registration No. List non-U.S.
copyrights by country in alphabetical order, with Registration Nos. within each
country in numerical order.]
U.S. Copyrights
Licensor Name and Date of License/ Title of
Address Sublicense U.S. Copyright Author Reg. No.
------- ---------- -------------- ------ --------
Non-U.S. Copyrights
Date of Title of
Licensor Name License/ Non-U.S.
Country and Address Sublicensee Copyrights Author Reg. No.
B. Patents
[List U.S. patent nos. and U.S. patent application nos. in numerical order. List
non-U.S. patent nos. and non-U.S. application nos. in alphabetical order by
country with patent nos. within each country in numerical order.]
U.S. Patents
Date of
Licensor Name License/
and Address Sublicense Issue Date Patent No.
----------- ---------- ---------- ----------
U.S. Patent Applications
Licensor Name Date of License/
and Address Sublicense Date Filed Application No.
----------- ---------- ---------- ---------------
Non-U.S. Patents
Licensor Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ----------- ---------- ---- ----------
Non-U.S. Patent Applications
Licensor Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- ----------- ---------- ----- ---
C. Trademarks
[List U.S. trademark nos. and U.S. trademark application nos. in numerical
order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark
nos. within each country in numerical order.]
U.S. Trademarks
Licensor Name Date of License/
and Address Sublicense U.S. ▇▇▇▇ Reg. Date Reg. No.
----------- ---------- --------- --------- --------
U.S. Trademark Applications
Licensor Name Date of License/ Date Application
and Address Sublicense U.S. ▇▇▇▇ Filed No.
----------- ---------- --------- ----- ---
Non-U.S. Trademarks
Licensor Name Date of License/ Non-U.S.
Country and Address Sublicense ▇▇▇▇ Reg. Date Reg. No.
------- ----------- ---------- ---- --------- --------
Non-U.S. Trademark Applications
Licensor Name Date of License/ Non-U.S. Date Application
Country and Address Sublicense ▇▇▇▇ Filed No.
------- ----------- ---------- ---- ----- ---
D. Others
Date of License/
Licensor Name and Address Sublicense Subject Matter
PATENTS OWNED BY [NAME OF GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no patents
are owned. List in numerical order by Patent No./Patent Application No.]
U.S. Patent Registrations
Patent Numbers Issue Date
U.S. Patent Applications
Patent Application No. Filing Date
Non-U.S. Patent Registrations
[List in alphabetical order by country/numerical order by Patent No. within each
country.]
Country Issue Date Patent No.
------- ---------- ----------
Non-U.S. Patent Registrations
[List in alphabetical order by country/numerical order by Application No. within
each country.]
Country Filing Date Patent Application No.
------- ----------- ----------------------
TRADEMARK/TRADE NAMES OWNED BY [NAME OF GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no
trademarks/trade names are owned. List in numerical order by trademark
registration/application no.]
U.S. Trademark Registrations
▇▇▇▇ Reg. Date Reg. No.
---- --------- --------
U.S. Trademark Applications
▇▇▇▇ Filing Date Application No.
---- ----------- ---------------
State Trademark Registrations
[List in alphabetical order by state/numerical order by trademark no. within
each state.]
State ▇▇▇▇ Filing Date Application No.
----- ---- ----------- ---------------
Non-U.S. Trademark Registrations
[List in alphabetical order by country/numerical order by trademark no. within
each country.]
Country ▇▇▇▇ Reg. Date Reg. No.
------- ---- --------- --------
Non-U.S. Trademark Applications
[List in alphabetical order by country/numerical order by application no.]
Country ▇▇▇▇ Application Date Application No.
------- ---- ---------------- ---------------
Trade Names
Country(s) Where Used Trade Names
2
Schedule IV to
the Guarantee and
Collateral Agreement
Insurance Requirements
(a) The Borrower will, and will cause each Subsidiary Party
to, maintain (or cause to be maintained on its behalf), with
financially sound and reputable insurance companies:
(i) fire, boiler and machinery, and extended coverage
insurance, on a replacement cost basis, with respect to all personal
property and improvements to real property (in each case constituting
Collateral), in such amounts as are customarily maintained by companies
in the same or similar business operating in the same or similar
locations;
(ii) commercial general liability insurance against claims for
bodily injury, death or property damage occurring upon, about or in
connection with the use of any properties owned, occupied or controlled
by it, providing coverage on an occurrence basis with a combined single
limit of not less than $1,000,000 and including the broad form CGL
endorsement;
(iii) business interruption insurance, insuring against loss of
gross earnings for the agreed upon aggregate amount of not less than
$40,000,000 arising from any risks or occurrences required to be
covered by insurance pursuant to clause (i) above; and
(iv) such other insurance as may be required by law.
Deductibles or self-insured retention shall not exceed $250,000 for fire, boiler
and machinery and extended coverage policies, $250,000 for commercial general
liability policies or $250,000 plus a 24-hour waiting period for business
interruption policies.
(b) Fire, boiler and machinery and extended coverage policies
maintained with respect to any Collateral shall be endorsed or otherwise amended
to include (i) a lenders' loss payable clause in favor of the Collateral Agent
and providing for losses thereunder to be payable to the Collateral Agent or its
designee, (ii) a provision to the effect that neither any Loan Party, the
Collateral Agent nor any other party shall be a coinsurer and (iii) such other
provisions as the Collateral Agent may reasonably require from time to time to
protect the interests of the Lenders, except with respect to the Distribution
Center. Commercial general liability policies shall be endorsed to name the
Collateral Agent as an additional insured. Business interruption policies shall
name the Collateral Agent as loss payee, except with respect to the Distribution
Center. Each such policy referred to in this paragraph also shall provide that
it shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium except upon not less than 10 days' prior written notice thereof by the
insurer to the Collateral Agent (giving the Collateral Agent the right to cure
defaults in the payment of premiums) or (ii) for any other reason except upon
not less than 30 days' prior written notice thereof by the insurer to the
Collateral Agent. The Borrower shall deliver to the Collateral Agent, prior to
the cancellation, modification or nonrenewal of any such policy of insurance,
evidence of the renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Collateral Agent) together with evidence
reasonably satisfactory to the Collateral Agent of payment of the premium
therefore at such time payment is made.
3
Exhibit I to the
Guarantee and
Collateral Agreement
SUPPLEMENT NO. __ dated as of [ ] (this
"Supplement"), to the Guarantee and Collateral
Agreement dated as of January 3, 2005, among THE
DRESS BARN, INC., a Connecticut corporation (the
"Borrower"), each subsidiary of the Borrower listed
on Schedule I thereto (each such subsidiary
individually a "Subsidiary Guarantor" and
collectively, the "Subsidiary Guarantors"; the
Subsidiary Guarantors and the Borrower are referred
to collectively herein as the "Grantors") and
JPMORGAN CHASE BANK, N.A. ("JPMCB"), as Collateral
Agent (in such capacity, the "Collateral Agent").
A. Reference is made to the Credit Agreement dated as of
January 3, 2005 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, the lenders from time to time
party thereto and, JPMCB, as Administrative Agent.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement
and the Collateral Agreement referred to therein.
C. The Grantors have entered into the Collateral Agreement in
order to induce the Lenders to make Loans and the Issuing Banks to issue Letters
of Credit. Section 7.14 of Collateral Agreement provides that additional
Subsidiaries may become Subsidiary Parties under the Collateral Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Subsidiary") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Subsidiary
Party under the Collateral Agreement in order to induce the Lenders to make
additional Loans and the Issuing Banks to issue additional Letters of Credit and
as consideration for Loans previously made and Letters of Credit previously
issued.
Accordingly, the Collateral Agent and the New Subsidiary agree
as follows:
SECTION 1. In accordance with Section 7.14 of the Collateral
Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party
(and accordingly, becomes a Guarantor and Grantor), Grantor and Guarantor under
the Collateral Agreement with the same force and effect as if originally named
therein as a Subsidiary Party and the New Subsidiary hereby (a) agrees to all
the terms and provisions of the Collateral Agreement applicable to it as a
Subsidiary Party, Grantor and Guarantor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Grantor and
Guarantor thereunder are true and correct in all material respects on and as of
the date hereof. In furtherance of the foregoing, the New Subsidiary, as
security for the payment and performance in full of the Obligations (as defined
in the Collateral Agreement), does hereby create and grant to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, their
successors and assigns, a security interest in and lien on all of the New
Subsidiary's right, title and interest in and to the Collateral (as defined in
the Collateral Agreement) of the New Subsidiary. Each reference to a "Guarantor"
or "Grantor" in the Collateral Agreement shall be deemed to include the New
Subsidiary. The Collateral Agreement is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants
that (a) set forth on Schedule I attached hereto is a true and correct schedule
of the location of any and all Collateral of the New Subsidiary and (b) set
forth under its signature hereto, is the true and correct legal name of the New
Subsidiary, its jurisdiction of formation and the location of its chief
executive office.
SECTION 5. Except as expressly supplemented hereby, the
Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Collateral Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 7.01 of the Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Subsidiary and the Collateral
Agent have duly executed this Supplement to the Collateral Agreement as of the
day and year first above written.
[Name Of New Subsidiary],
by
---------------------------------------------
Name:
Title:
Legal Name:
Jurisdiction of Formation:
Location of Chief Executive office:
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
by
---------------------------------------------
Name:
Title:
2
Schedule I
to the Supplement No. __ to the
Guarantee and
Collateral Agreement
LOCATION OF COLLATERAL
Description Location
EQUITY INTERESTS
Number and
Number of Registered Class of Percentage
Issuer Certificate Owner Equity Interests of Equity Interests
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
INTELLECTUAL PROPERTY