GUARANTEE AND COLLATERAL AGREEMENT made by GRITEL HOLDING CO., INC. TELEPHONICS CORPORATION and certain of its Subsidiaries in favor of JPMORGAN CHASE BANK, N.A., as Administrative Agent Dated as of March 31, 2008
EXECUTION
VERSION
made
by
GRITEL
HOLDING CO., INC.
TELEPHONICS
CORPORATION
and
certain of its Subsidiaries
in
favor
of
JPMORGAN
CHASE BANK, N.A.,
as
Administrative Agent
Dated
as
of March 31, 2008
TABLE
OF
CONTENTS
|
Section
1.
|
DEFINED
TERMS
|
1
|
|
1.1
|
Definitions
|
1
|
|
1.2
|
Other
Definitional Provisions
|
5
|
|
Section
2.
|
GURANTEE
|
5
|
|
2.1
|
Guarantee
|
5
|
|
2.2
|
Right
of Contribution
|
6
|
|
2.3
|
No
Subrogation
|
6
|
|
2.4
|
Amendments,
etc. with respect to the Borrower Obligations
|
7
|
|
2.5
|
Guarantee
Absolute and Unconditional
|
7
|
|
2.6
|
Reinstatement
|
8
|
|
2.7
|
Payments
|
8
|
|
Section
3.
|
GRANT
OF SECURITY INTEREST
|
8
|
|
Section
4.
|
REPRESENTATIONS
AND WARRANTIES
|
10
|
|
4.1
|
Title;
No Other Liens
|
10
|
|
4.2
|
Perfected
First Priority Liens
|
10
|
|
4.3
|
Jurisdiction
of Organization; Chief Executive Office
|
11
|
|
4.4
|
Inventory
and Equipment
|
11
|
|
4.5
|
Farm
Products
|
11
|
|
4.6
|
Investment
Property
|
11
|
|
4.7
|
Receivables
|
11
|
|
4.8
|
Intellectual
Property
|
|
|
Section
5.
|
COVENANTS
|
12
|
|
5.1
|
Delivery
of Instruments, Certificated Securities and Chattel Paper
|
12
|
|
5.2
|
Maintenance
of Insurance
|
12
|
|
5.3
|
Maintenance
of Perfected Security Interest; Further Documentation
|
13
|
|
5.4
|
Changes
in Name, etc
|
13
|
|
5.5
|
Notices
|
13
|
|
5.6
|
Investment
Property
|
13
|
|
5.7
|
Intellectual
Property
|
15
|
|
5.8
|
Receivables
|
16
|
|
Section
6.
|
REMEDIAL
PROVISIONS
|
16
|
|
6.1
|
Certain
Matters Relating to Receivables
|
16
|
|
6.2
|
Communications
with Obligors; Grantors Remain Liable
|
17
|
|
6.3
|
Pledged
Stock
|
17
|
|
6.4
|
Proceeds
to be Turned Over To Administrative Agent
|
18
|
|
6.5
|
Application
of Proceeds
|
18
|
|
6.6
|
Code
and Other Remedies
|
19
|
|
6.7
|
Registration
Rights
|
20
|
|
6.8
|
Subordination
|
21
|
|
6.9
|
Deficiency
|
21
|
i
|
Section
7.
|
THE
ADMINISTRATIVE AGENT
|
21
|
|
7.1
|
Administrative
Agent’s Appointment as Attorney-in-Fact, etc
|
21
|
|
7.2
|
Duty
of Administrative Agent
|
23
|
|
7.3
|
Execution
of Financing Statements
|
23
|
|
7.4
|
Authority
of Administrative Agent
|
23
|
|
|
||
|
Section
8.
|
MISCELLANEOUS
|
24
|
|
8.1
|
Amendments
in Writing
|
24
|
|
8.2
|
Notices
|
24
|
|
8.3
|
No
Waiver by Course of Conduct; Cumulative Remedies
|
24
|
|
8.4
|
Enforcement
Expenses; Indemnification
|
24
|
|
8.5
|
Successors
and Assigns
|
25
|
|
8.6
|
Set-Off
|
25
|
|
8.7
|
Counterparts
|
25
|
|
8.8
|
Severability
|
25
|
|
8.9
|
Section
Headings
|
25
|
|
8.10
|
Integration
|
25
|
|
8.11
|
GOVERNING
LAW
|
25
|
|
8.12
|
Submission
To Jurisdiction; Waivers
|
26
|
|
8.13
|
Acknowledgements
|
26
|
|
8.14
|
Additional
Grantors
|
26
|
|
8.15
|
Releases
|
26
|
|
8.16
|
WAIVER
OF JURY TRIAL
|
27
|
SCHEDULES
| Schedule 1 |
Notice
Addresses
|
| Schedule 2 |
Investment
Property
|
| Schedule 3 |
Perfection
Matters
|
| Schedule 4 |
Jurisdictions
of Organization and Chief Executive
Offices
|
| Schedule 5 |
Inventory
and Equipment Locations
|
| Schedule 6 |
Intellectual
Property
|
ii
GUARANTEE
AND COLLATERAL AGREEMENT, dated as of March 31, 2008, made by each of the
signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Grantors”),
in
favor of JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity,
the “Administrative
Agent”)
for
the banks and other financial institutions or entities (the “Lenders”)
from
time to time parties to the Credit Agreement, dated as of March 31, 2008 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”),
among
Gritel Holding Co., Inc. (“Holdings”),
Telephonics Corporation (the “Borrower”),
the
Lenders and the Administrative Agent.
WITNESSETH:
WHEREAS,
pursuant to the Credit Agreement, the Lenders have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS,
the Borrower is a member of an affiliated group of companies that includes
each
other Grantor;
WHEREAS,
the proceeds of the extensions of credit under the Credit Agreement will be
used
in part to enable the Borrower to make valuable transfers to one or more of
the
other Grantors in connection with the operation of their respective
businesses;
WHEREAS,
the Borrower and the other Grantors are engaged in related businesses, and
each
Grantor will derive substantial direct and indirect benefit from the making
of
the extensions of credit under the Credit Agreement; and
WHEREAS,
it is a condition precedent to the obligation of the Lenders to make their
respective extensions of credit to the Borrower under the Credit Agreement
that
the Grantors shall have executed and delivered this Agreement to the
Administrative Agent for the ratable benefit of the Secured
Parties;
NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Secured Parties, as follows:
SECTION
1. DEFINED
TERMS
1.1 Definitions.
(a) Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement, and the following
terms are used herein as defined in the New York UCC: Accounts, Certificated
Security, Chattel Paper, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory, Letter-of-Credit Rights and Supporting
Obligations.
2
(b) The
following terms shall have the following meanings:
“Agreement”:
this
Guarantee and Collateral Agreement, as the same may be amended, supplemented
or
otherwise modified from time to time.
“Borrower
Obligations”:
the
collective reference to the unpaid principal of and interest on the Loans and
reimbursement obligations and all other obligations and liabilities of the
Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Loans
and reimbursement obligations and interest accruing at the then applicable
rate
provided in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender (or, in the case of any Specified Cash Management Agreement
or any Specified Swap Agreement, any Affiliate of any Lender), whether direct
or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents, any Letter of
Credit, any Specified Swap Agreement, any Specified Cash Management Agreement,
or any other document made, delivered or given in connection with any of the
foregoing, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent
or
to the Lenders that are required to be paid by the Borrower pursuant to the
terms of any of the foregoing agreements).
“Collateral”:
as
defined in Section 3.
“Collateral
Account”:
any
collateral account established by the Administrative Agent as provided in
Section 6.1 or 6.4.
“Copyrights”:
(i)
all copyrights arising under the laws of the United States, any other country
or
any political subdivision thereof , whether registered or unregistered and
whether published or unpublished (including, without limitation, those listed
in
Schedule 6), all registrations and recordings thereof, and all applications
in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, and (ii)
the
right to obtain all renewals thereof.
“Copyright
Licenses”:
any
written agreement naming any Grantor as licensor or licensee (including, without
limitation, those listed in Schedule 6), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture, distribute,
exploit and sell materials derived from any Copyright.
“Deposit
Account”:
as
defined in the Uniform Commercial Code of any applicable jurisdiction and,
in
any event, including, without limitation, any demand, time, savings, passbook
or
like account maintained with a depositary institution.
3
“Foreign
Subsidiary”:
any
Subsidiary organized under the laws of any jurisdiction outside the United
States of America.
“Foreign
Subsidiary Voting Stock”:
the
voting Capital Stock of any Foreign Subsidiary.
“Guarantor
Obligations”:
with
respect to any Guarantor, all obligations and liabilities of such Guarantor
which may arise under or in connection with this Agreement (including, without
limitation, Section 2), the Credit Agreement (including, without limitation,
Article III of the Credit Agreement) or any other Loan Document, any Specified
Swap Agreement or any Specified Cash Management Agreement to which such
Guarantor is a party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by such
Guarantor pursuant to the terms of this Agreement, the Credit Agreement or
any
other Loan Document).
“Guarantors”:
the
collective reference to each Grantor other than the Borrower.
“Intellectual
Property”:
the
collective reference to all rights, priorities and privileges relating to
intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to ▇▇▇ at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
“Intercompany
Note”:
any
promissory note evidencing loans made by any Grantor to Holdings or any of
its
Subsidiaries.
“Investment
Property”:
the
collective reference to (i) all “investment property” as such term is defined in
Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary
Voting Stock excluded from the definition of “Pledged Stock”) and (ii) whether
or not constituting “investment property” as so defined, all Pledged Notes and
all Pledged Stock.
“Issuers”:
the
collective reference to each issuer of any Investment Property.
“New
York UCC”:
the
Uniform Commercial Code as from time to time in effect in the State of New
York.
“Obligations”:
(i) in
the case of the Borrower, the Borrower Obligations, and (ii) in the case of
each
Guarantor, its Guarantor Obligations.
“Patents”:
(i)
all letters patent of the United States, any other country or any political
subdivision thereof, all reissues and extensions thereof and all goodwill
associated therewith, including, without limitation, any of the foregoing
referred to in Schedule
6,
(ii)
all applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedule
6,
and
(iii) all rights to obtain any reissues or extensions of the foregoing.
4
“Patent
License”:
all
written agreements, providing for the grant by or to any Grantor of any right
to
manufacture, use or sell any invention covered in whole or in part by a Patent,
including, without limitation, any of the foregoing referred to in Schedule
6.
“Pledged
Notes”:
all
promissory notes listed on Schedule
2,
all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued
in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).
“Pledged
Stock”:
the
shares of Capital Stock listed on Schedule
2,
together with any other shares, stock certificates, options, interests or rights
of any nature whatsoever in respect of the Capital Stock of any Person that
may
be issued or granted to, or held by, any Grantor while this Agreement is in
effect; provided
that in
the case of Capital Stock of any Foreign Subsidiary, Pledged Stock shall be
limited to no more than 66% of the total outstanding Foreign Subsidiary Voting
Stock of such Foreign Subsidiary.
“Proceeds”:
all
“proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC
and, in any event, shall include, without limitation, all dividends or other
income from the Investment Property, collections thereon or distributions or
payments with respect thereto.
“Receivable”:
any
right to payment for goods sold or leased or for services rendered, whether
or
not such right is evidenced by an Instrument or Chattel Paper and whether or
not
it has been earned by performance (including, without limitation, any
Account).
“Secured
Parties”:
the
collective reference to the Administrative Agent, the Lenders and any affiliate
of any Lender or other Person to which Borrower Obligations or Guarantor
Obligations, as applicable, are owed.
“Securities
Act”:
the
Securities Act of 1933, as amended.
“Specified
Cash Management Agreement”:
any
agreement providing for treasury, depositary or cash management services,
including in connection with any automated clearing house transfers of funds
or
any similar transactions between any Loan Party and any Lender or Affiliate
thereof, which has been designated by such Lender and the Borrower, by notice
to
the Administrative Agent not later than 90 days after the execution and delivery
by such Loan Party of such Specified Cash Management Agreement, as a “Specified
Cash Management Agreement”.
“Specified
Swap Agreement”:
any
Swap Agreement in respect of interest rates or currency exchange rates entered
into by any Loan Party and any Person that is a Lender or an Affiliate of a
Lender at the time such Swap Agreement is entered into, which has been
designated by such Lender and the Borrower, by notice to the Administrative
Agent not later than 90 days after the execution and delivery by such Loan
Party
of such Specified Swap Agreement, as a “Specified Swap Agreement”.
5
“Subsidiary
Guarantors”:
the
collective reference to all Guarantors other than Holdings.
“Trademarks”:
(i)
all trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers, and all goodwill associated therewith, now existing
or
hereafter adopted or acquired, all registrations and recordings thereof, and
all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule
6,
and
(ii) the right to obtain all renewals thereof.
“Trademark
License”:
any
written agreements providing for the grant by or to any Grantor of any right
to
use any Trademark, including, without limitation, any of the foregoing referred
to in Schedule
6.
1.2 Other
Definitional Provisions.
(a)
The
words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not
to
any particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.
(b) The
meanings given to terms defined herein shall be equally applicable to both
the
singular and plural forms of such terms.
(c) Where
the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or the
relevant part thereof.
SECTION
2. GUARANTEE
2.1 Guarantee.
(a)
Each of
the Subsidiary Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit
of
the Secured Parties and their respective successors, indorsees, transferees
and
assigns, the prompt and complete payment and performance by the Borrower when
due (whether at the stated maturity, by acceleration or otherwise) of the
Borrower Obligations. Each Subsidiary Guarantor hereby further agrees that
its
guarantee under this Section constitutes a guarantee of payment when due and
not
of collection, and waives any right to require that any resort be taken by
the
Administrative Agent or any Secured Party to any of the security held for
payment of the Borrower Obligations or to any balance of any deposit account
or
credit on the books of the Administrative Agent or any Secured Party in favor
of
the Borrower or any other person.
(b) Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Subsidiary Guarantor hereunder and under the other
Loan Documents shall in no event exceed the amount which can be guaranteed
by
such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
6
(c) Each
Subsidiary Guarantor agrees that the Borrower Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent or any Lender hereunder.
(d) The
guarantee contained in this Section 2 shall remain in full force and effect
until all the Borrower Obligations and the obligations of each Subsidiary
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full (other than contingent indemnification obligations
not then due or asserted), no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Borrower
Obligations.
(e) No
payment made by the Borrower, any of the Guarantors, any other guarantor or
any
other Person or received or collected by the Administrative Agent or any Lender
from the Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation
or
application at any time or from time to time in reduction of or in payment
of
the Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Subsidiary Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Subsidiary
Guarantor in respect of the Borrower Obligations or any payment received or
collected from such Subsidiary Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Subsidiary Guarantor hereunder until the Borrower Obligations
are paid in full (other than contingent indemnification obligations not then
due
or asserted), no Letter of Credit shall be outstanding and
the
Commitments are terminated.
2.2 Right
of Contribution.
Each
Subsidiary Guarantor hereby agrees that to the extent that a Subsidiary
Guarantor shall have paid more than its proportionate share of any payment
made
hereunder, such Subsidiary Guarantor shall be entitled to seek and receive
contribution from and against any other Subsidiary Guarantor hereunder which
has
not paid its proportionate share of such payment. Each Subsidiary Guarantor’s
right of contribution shall be subject to the terms and conditions of Section
2.3. The provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of any Subsidiary Guarantor to the Administrative
Agent and the Lenders, and each Subsidiary Guarantor shall remain liable to
the
Administrative Agent and the Lenders for the full amount guaranteed by such
Subsidiary Guarantor hereunder.
2.3 No
Subrogation.
Notwithstanding any payment made by any Subsidiary Guarantor hereunder or any
set-off or application of funds of any Subsidiary Guarantor by the
Administrative Agent or any Lender, no Subsidiary Guarantor shall be entitled
to
be subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender
for
the payment of the Borrower Obligations, nor shall any Subsidiary Guarantor
seek
or be entitled to seek any contribution or reimbursement from the Borrower
or
any other Guarantor in respect of payments made by such Subsidiary Guarantor
hereunder, until all amounts owing to the Administrative Agent and the Lenders
by the Borrower on account of the Borrower Obligations are paid in full (other
than contingent indemnification obligations not then due or asserted), no Letter
of Credit shall be outstanding and the Commitments are terminated. If any amount
shall be paid to any Subsidiary Guarantor on account of such subrogation rights
at any time when all of the Borrower Obligations shall not have been paid in
full (other than contingent indemnification obligations not then due or
asserted), such amount shall be held by such Subsidiary Guarantor in trust
for
the Administrative Agent and the Lenders, segregated from other funds of such
Subsidiary Guarantor, and shall, forthwith upon receipt by such Subsidiary
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to
the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
7
2.4 Amendments,
etc. with respect to the Borrower ObligationsEach
Subsidiary Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Subsidiary Guarantor and without
notice to or further assent by any Subsidiary Guarantor, any demand for payment
of any of the Borrower Obligations made by the Administrative Agent or any
Lender may be rescinded by the Administrative Agent or such Lender and any
of
the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, subject to the applicable requirements
of the Credit Agreement and the other Loan Documents, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released
by
the Administrative Agent or any Lender, and the Credit Agreement and the other
Loan Documents and any other documents executed and delivered in connection
therewith may, subject to the applicable requirements of the Credit Agreement
and other Loan Documents, be amended, modified, supplemented or terminated,
in
whole or in part, as the Administrative Agent (or the Required Lenders or all
Lenders, as the case may be) may deem reasonably necessary from time to time,
and any collateral security, guarantee or right of offset at any time held
by
the Administrative Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither
the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or any property subject thereto.
2.5 Guarantee
Absolute and Unconditional.
Each
Subsidiary Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Borrower Obligations and notice of or proof
of reliance by the Administrative Agent or any Lender upon the guarantee
contained in this Section 2 or acceptance of the guarantee contained in this
Section 2; the Borrower Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section
2;
and all dealings between the Borrower and any of the Subsidiary Guarantors,
on
the one hand, and the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. To the extent permitted
by applicable law, each Subsidiary Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon
the
Borrower or any of the Subsidiary Guarantors with respect to the Borrower
Obligations. Each Subsidiary Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee
or
right of offset with respect thereto at any time or from time to time held
by
the Administrative Agent or any Lender; (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower or any other Person against the
Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or such Subsidiary
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Borrower Obligations, or of such
Subsidiary Guarantor under the guarantee contained in this Section 2, in
bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Subsidiary
Guarantor, the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Subsidiary Guarantor
or
any other Person or against any collateral security or guarantee for the
Borrower Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Lender to make any such demand,
to
pursue such other rights or remedies or to collect any payments from the
Borrower, any other Subsidiary Guarantor or any other Person or to realize
upon
any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower, any other Subsidiary Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Subsidiary Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent
or
any Lender against any Subsidiary Guarantor. For the purposes hereof “demand”
shall include the commencement and continuance of any legal
proceedings.
8
2.6 Reinstatement.
The
guarantee contained in this Section 2 shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof,
of
any of the Borrower Obligations is rescinded or must otherwise be restored
or
returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
2.7 Payments.
Each
Subsidiary Guarantor hereby guarantees that payments hereunder will be paid
to
the Administrative Agent without set-off or counterclaim in Dollars at the
Funding Office.
SECTION
3. GRANT
OF
SECURITY INTEREST
Each
Grantor hereby assigns and transfers to the Administrative Agent, and hereby
grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, a security interest in, all of the following property now owned or
at
any time hereafter acquired by such Grantor or in which such Grantor now has
or
at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”),
as
collateral security for the prompt and complete payment and performance when
due
(whether at the stated maturity, by acceleration or otherwise) of such Grantor’s
Obligations:
9
(a) all
Accounts;
(b) all
Chattel Paper;
(c) all
Deposit
Accounts;
(d) all
Documents;
(e) all
Equipment;
(f) all
Fixtures;
(g) all
General
Intangibles;
(h) all
Instruments;
(i) all
Intellectual Property;
(j) all
Inventory;
(k) all
Investment Property;
(l) all
Letter-of-Credit Rights;
(m) all
other
tangible and intangible personal property not otherwise described
above
(n) all
books and
records pertaining to the Collateral; and
(o) to
the
extent not otherwise included, all Proceeds, Supporting Obligations and products
of any and all of the foregoing and all collateral security and guarantees
given
by any Person with respect to any of the foregoing;
provided,
however,
that
notwithstanding any of the other provisions set forth in this Section 3, this
Agreement shall not constitute a grant of a security interest in (i) any
leasehold interest in real property, (ii) any property to the extent that such
grant of a security interest is prohibited by any Requirements of Law of a
Governmental Authority, requires a consent not obtained of any Governmental
Authority pursuant to such Requirement of Law or conflicts with or is prohibited
by, or constitutes a breach or default under or results in the termination
of or
requires any consent not obtained under, any contract, license, agreement,
instrument or other document evidencing or giving rise to such property or,
in
the case of any Investment Property, Pledged Stock or Pledged Note, any
applicable shareholder or similar agreement, except to the extent that such
Requirement of Law or the term in such contract, license, agreement, instrument
or other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law, and (iii) any Collateral that constitutes
Equipment subject to a certificate of title statute. It is hereby understood
and
agreed that any property described in the preceding proviso, and any property
that is otherwise expressly excluded from any clause in this section above,
and
any property specifically excluded from any defined term used in any clause
of
this section above, shall be excluded from the definition of “Collateral”.
10
SECTION
4. REPRESENTATIONS
AND WARRANTIES
To
induce
the Administrative Agent and the Lenders to enter into the Credit Agreement
and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby represents and warrants to the
Administrative
Agent
and each Lender that:
4.1 Title;
No Other Liens.
Except
for the security interest granted to the Administrative Agent for the ratable
benefit of the Secured Parties pursuant to this Agreement and the other Liens
permitted to exist on the Collateral by the Credit Agreement, such Grantor
owns
each item of the Collateral free and clear of any and all Liens or claims of
others. No financing statement or other public notice with respect to all or
any
part of the Collateral is on file or of record in any public office, except
(i)
such as have been filed in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, pursuant to this Agreement or as are permitted
by the Credit Agreement, (ii) financing statements which have been filed without
the consent of the Grantor and with respect to which no Lien has been created,
and (iii) financing statements which have been terminated. For the avoidance
of
doubt, it is understood and agreed that any Grantor may, as part of its
business, grant licenses to third parties to use Intellectual Property owned
or
developed by a Grantor. For purposes of this Agreement and the other Loan
Documents, such licensing activity shall not constitute a “Lien” on such
Intellectual Property. Each of the Administrative Agent and each Lender
understands that any such licenses may be exclusive to the applicable licensees,
and such exclusivity provisions may limit the ability of the Administrative
Agent to utilize, sell, lease or transfer the related Intellectual Property
or
otherwise realize value from such Intellectual Property pursuant
hereto.
4.2 Perfected
First Priority Liens.
(a)
This
Agreement is effective to create in favor of the Administrative Agent, for
the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral. In the case of the Pledged Stock, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent,
in
the case of the other Collateral, when financing statements and other filings
specified in Schedule 3 hereto in appropriate form are filed in the offices
specified on Schedule 3 and, in case of property acquired after the date hereof,
any other action required pursuant to Section 6.11 of the Credit Agreement,
the
security interests created pursuant to this Agreement shall constitute valid
perfected security interests in such Collateral and the proceeds thereof (to
the
extent a security interest in such Collateral can be perfected through the
filing of such financing statements or the delivery of such Pledged Stock or
the
taking of such other actions required pursuant to Section 6.11 of the Credit
Agreement) as security for the Obligations.
(b) The
security interests created pursuant to this Agreement are prior to all other
Liens on the Collateral in existence on the date hereof except for Liens
permitted by the Credit Agreement which have priority over the Liens on the
Collateral by operation of law.
11
4.3 Jurisdiction
of Organization; Chief Executive Office.
On the
date hereof, such Grantor’s jurisdiction of organization, identification number
from the jurisdiction of organization (if any), and the location of such
Grantor’s chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long form good standing
certificate as of a date which is recent to the date hereof.
4.4 Inventory
and Equipment.
On the
date hereof, the Inventory and the Equipment (other than mobile goods) are
kept
at the locations listed on Schedule 5.
4.5 Farm
Products.
None of
the Collateral constitutes, or is the Proceeds of, Farm Products.
4.6 Investment
Property.
(a)
The
shares of Pledged Stock pledged by such Grantor hereunder constitute all the
issued and outstanding shares of all classes of the Capital Stock of each Issuer
directly owned by such Grantor or, in the case of Foreign Subsidiary Voting
Stock, if less, 66% (or such lesser percentage representing the percentage
owned
by such Grantor) of the outstanding Foreign Subsidiary Voting Stock of each
relevant Issuer.
(b) All
the
shares of the Pledged Stock have been duly and validly issued and , to the
extent applicable, are fully paid and nonassessable.
(c) Each
of
the Pledged Notes constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding
in
equity or at law) and an implied covenant of good faith and fair
dealing.
(d) Such
Grantor
is the record and beneficial owner of, and has good and marketable title to,
the
Investment Property pledged by it hereunder, free of any and all Liens or
options in favor of, or claims of, any other Person, except Liens permitted
by
the Credit Agreement and the security interest created by this
Agreement.
4.7 Receivables.
The
amounts represented by such Grantor to the Lenders from time to time as owing
to
such Grantor in respect of the Receivables will at such times be accurate in
all
material respects.
4.8 Intellectual
Property.
(a)Schedule
6 lists all registered
Intellectual
Property owned by such Grantor in its own name on the date
hereof.
(b) Except
as
set forth in Schedule 6, to the knowledge of such Grantor, on
the date
hereof, all
material Intellectual Property owned by such Grantor is valid, subsisting,
unexpired and enforceable, has not been abandoned and does
not
infringe the intellectual property rights of any other Person.
(c) Except
as
set forth in Schedule 6, on the date hereof, no
Intellectual Property owned by such Grantor is
the
subject of any licensing or franchise agreement pursuant to which such
Grantor
is the licensor or franchisor, excluding all Intellectual Property that
is the
subject of an express or implied non-exclusive license granted to a third
Person
in such Grantor’s ordinary course of business.
12
(d) To
the
knowledge of such Grantor, no
holding,
decision or judgment has been rendered by any Governmental Authority which
would
limit, cancel or question the validity of, or such Grantor’s rights in,
any
Intellectual Property owned by such Grantor in
any
respect that could reasonably be expected to have a Material Adverse
Effect.
(e) No
action
or proceeding is pending, or, to the knowledge of such Grantor, threatened,
on
the date hereof (i) seeking to limit, cancel or question the validity
of any
Intellectual
Property owned by such Grantor
or such
Grantor’s ownership interest therein, or (ii) which, if adversely determined,
could have a material adverse effect on the value of such
Grantor’s Intellectual Property.
SECTION
5. COVENANTS
Each
Grantor covenants and agrees with the Administrative Agent and the Lenders
that,
from and after the date of this Agreement until the Obligations shall have
been
paid in full (other than contingent indemnification obligations not then due
or
asserted), no Letter of Credit shall be outstanding and the Commitments shall
have terminated:
5.1 Delivery
of Instruments, Certificated Securities and Chattel Paper.
Upon
the occurrence and during the continuance of an Event of Default, if any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be promptly delivered
to the Administrative Agent, duly indorsed in a manner reasonably satisfactory
to the Administrative Agent, to be held as Collateral pursuant to this
Agreement. No Grantor will deliver possession of any Instrument, Certificated
Security or Chattel Paper to any Person (other the Administrative Agent) in
connection with the creation of a Lien on such Instrument, Certificated Security
or Chattel Paper, as applicable.
5.2 Maintenance
of
Insurance.
(a)
Such
Grantor will maintain, with financially sound and reputable companies, insurance
policies (i) insuring the Inventory and Equipment against loss by fire,
explosion, theft and such other casualties as may be reasonably satisfactory
to
the Administrative Agent and (ii) to the extent reasonably requested by the
Administrative Agent, insuring such Grantor, the Administrative Agent and the
Lenders against liability for personal injury and property damage relating
to
such Inventory and Equipment, such policies to be in such form and amounts
and
having such coverage as may be reasonably satisfactory to the Administrative
Agent.
(b) All
such
insurance shall (i) provide that no cancellation, material reduction in amount
or material change in coverage thereof shall be effective until at least 30
days
after receipt by the Administrative Agent of written notice thereof, (ii) name
the Administrative Agent as insured party or loss payee, and (iii) be reasonably
satisfactory in all other respects to the Administrative Agent.
13
(c) The
Borrower shall deliver to the Administrative Agent and the Lenders a report
of a
reputable insurance broker with respect to such insurance substantially
concurrently with each delivery of the Borrower’s audited annual financial
statements and such supplemental reports with respect thereto as the
Administrative Agent may from time to time reasonably request.
5.3 Maintenance
of Perfected Security Interest; Further Documentation.
(a)
Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section
4.2 and shall defend such security interest against the claims and demands
of
all Persons claiming the same security interest or any interest therein adverse
to the Administrative Agent, subject to the rights of such Grantor under the
Loan Documents to dispose of the Collateral.
(b) Such
Grantor will furnish to the Administrative Agent and the Lenders from time
to
time statements and schedules further identifying and describing the assets
and
property of such Grantor and such other reports in connection therewith as
the
Administrative Agent may reasonably request, all in reasonable
detail.
(c) At
any
time and from time to time, upon the reasonable written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor
will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the
full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts, Letter-of-Credit
Rights and any other relevant Collateral, taking any actions necessary to enable
the Administrative Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.
5.4 Changes
in Name, etc.
Such
Grantor will not, except upon 15 days’ prior written notice to the
Administrative Agent and delivery to the Administrative Agent of all additional
executed financing statements and other documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the
security interests provided for herein, (i) change its jurisdiction of
organization or the location of its chief executive office or sole place of
business or principal residence from that referred to in Section 4.3 or (ii)
change its name.
5.5 Notices.
Such
Grantor will advise the Administrative Agent and the Lenders promptly, in
reasonable detail, of any Lien (other than security interests created hereby
or
Liens permitted under the Credit Agreement) on any of the Collateral which
would
adversely affect the ability of the Administrative Agent to exercise any of
its
remedies hereunder.
5.6 Investment
Property.
(a)
If such
Grantor shall become entitled to receive or shall receive any certificate
(including, without limitation, any certificate representing a dividend or
a
distribution in connection with any reclassification, increase or reduction
of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Capital Stock of any Issuer, whether in addition
to,
in substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same
in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations, except to the extent that
any of the foregoing actions could result in more than 66% of the total
outstanding Foreign Subsidiary Voting Stock being pledged hereunder. If an
Event
of Default shall have occurred and be continuing, any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it hereunder
as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Investment
Property or any property shall be distributed upon or with respect to the
Investment Property pursuant to the recapitalization or reclassification of
the
capital of any Issuer or pursuant to the reorganization thereof, the property
so
distributed shall, unless otherwise subject to a perfected security interest
in
favor of the Administrative Agent, be delivered to the Administrative Agent
to
be held by it hereunder as additional collateral security for the Obligations.
Upon the occurrence and during the continuance of an Event of Default, if any
sums of money or property so paid or distributed in respect of the Investment
Property shall be received by such Grantor, such Grantor shall, until such
money
or property is paid or delivered to the Administrative Agent, hold such money
or
property in trust for the Administrative Agent and the Lenders, segregated
from
other funds of such Grantor, as additional collateral security for the
Obligations.
14
(b) Without
the prior written consent of the Administrative Agent, such Grantor will not
(i)
vote to enable, or take any other action to permit, any Issuer to issue any
Capital Stock of any nature or to issue any other securities convertible into
or
granting the right to purchase or exchange for any Capital Stock of any nature
of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose
of,
or grant any option with respect to, the Investment Property or Proceeds
thereof, (iii) create, incur or permit to exist any Lien or option in favor
of,
or any claim of any Person with respect to, any of the Investment Property
or
Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent
to
sell, assign or transfer any of the Investment Property or Proceeds thereof;
provided
that no
such consent shall be required for (a) a Holdings Change in Control Transaction
or any other transaction expressly permitted by the Credit Agreement, or (b)
the
issuance of any Capital Stock of Holdings (or, after a Holdings Change in
Control Transactions, the Borrower) or any other securities convertible into
or
granting the right to purchase or exchange for any such Capital Stock of in
connection with management compensation, management incentive plans or similar
management compensation arrangements.
(c) In
the
case of each Grantor which is an Issuer, such Issuer agrees that (i) it will
be
bound by the terms of this Agreement relating to the Investment Property issued
by it and will comply with such terms insofar as such terms are applicable
to
it, (ii) it will notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5.7(a) with respect to
the
Investment Property issued by it and (iii) the terms of Sections 6.3(c) and
6.7
shall apply to it, mutatis mutandis,
with
respect to all actions that may be required of it pursuant to Section 6.3(c)
or
6.7 with respect to the Investment Property issued by it.
15
5.7 Intellectual
Property.
(a)
Such
Grantor (either itself or through licensees) will (i) in its reasonable business
judgment, continue to use each material Trademark owned
by
such Grantor consistent with past practice,
in order
to maintain such Trademark in full force free from any claim of abandonment
for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark in
material compliance with applicable
Requirements of Law, (iv)
not
adopt or use any ▇▇▇▇ which is confusingly similar or a colorable imitation
of
such Trademark unless the Administrative Agent, for the ratable benefit of
the
Secured Parties, shall obtain a perfected security interest in such ▇▇▇▇
pursuant to this Agreement,
and (v)
not (and not knowingly permit any licensee or sublicensee thereof to) do any
act
or knowingly omit to do any act whereby
such Trademark is likely to become invalidated or abandoned,
in each
case, except as could not reasonably be expected to have a Material Adverse
Effect.
(b) Such
Grantor (either itself or through licensees) will not (and will not knowingly
permit any licensee or sublicense thereof to) do any act, or knowingly omit
to
do any act, whereby any
material Patent owned
by
such Grantor is
likely
to become forfeited, abandoned or dedicated to the public,
except
as could not reasonably be expected to have a Material Adverse
Effect.
(c) Such
Grantor (either itself or through licensees) will not
(and
will not knowingly permit any licensee or sublicensee thereof to) do any act
or
knowingly omit to do any act whereby any material portion of the Copyrights
owned by such Grantor
is
likely to fall into the public domain or become abandoned, except as could
not
reasonably be expected to have a Material Adverse Effect.
(d) Such
Grantor (either itself or through licensees) will not (and will not knowingly
permit any licensee or sublicense thereof to) do any act that knowingly
uses
any
material Intellectual Property owned by such Grantor to infringe the
intellectual property rights of any other Person.
(e) Such
Grantor will notify the Administrative Agent and the Lenders immediately if
it
knows that any application or
registration relating to any material Intellectual Property owned by such
Grantor
(i) may
become forfeited,
abandoned
or
dedicated to the public or (ii) is the subject of any ruling of invalidity
or
final rejection by any applicable Government Authority.
(f) Whenever
such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual
Property owned by such Grantor with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency
in
any other country or any political subdivision thereof, such Grantor shall
report such filing to the Administrative Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon the
reasonable request of the Administrative Agent, such Grantor shall execute
and
deliver, and have recorded, any and all agreements, instruments, documents,
and
papers as the Administrative Agent may reasonably request to evidence the
Administrative Agent’s and the Lenders’ security interest in any Copyright,
Patent or Trademark owned by such Grantor and the goodwill and general
intangibles of such Grantor relating thereto or represented
thereby.
16
(g) Such
Grantor
will
take all reasonable and necessary steps, including, without limitation, in
any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country
or
any political subdivision thereof, to maintain and pursue each application
(and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual
Property owned by such Grantor, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.
(h) In
the
event that any material Intellectual
Property owned by such Grantor is
infringed, misappropriated or diluted by a third party, such Grantor
shall
(i) take
such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Grantor’s Intellectual Property and (ii) if such
Grantor’s Intellectual Property is of material economic value, promptly notify
the Administrative Agent after it learns thereof and,
where
appropriate, as such Grantor reasonably deems appropriate under the
circumstances,
▇▇▇ for
infringement, misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution.
5.8 Receivables.
With
respect to any Receivables owed by any Governmental Authority, from time to
time
upon the reasonable request by the Administrative Agent, such Grantor will
deliver to the Administrative Agent a schedule setting forth a true and complete
list of all Receivables owed by any Governmental Authority to such Grantor
and
will take such actions as the Administrative Agent may reasonably request to
comply with any applicable requirements of the Assignment of Claims Act of
1940.
SECTION
6. REMEDIAL
PROVISIONS
6.1 Certain
Matters Relating to Receivables.
(a)
If an
Event of Default shall have occurred and be continuing, upon the Administrative
Agent’s reasonable request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others reasonably
satisfactory to the Administrative Agent to furnish to the Administrative Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.
(b) The
Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, subject to the Administrative Agent’s direction and control, and
the Administrative Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default. If
required by the Administrative Agent at any time after the occurrence and during
the continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within
five
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for
the
account of the Lenders only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Grantor. Each such deposit
of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the
deposit.
17
(c) If
an
Event of Default has occurred and be continuing, each Grantor shall deliver
to
the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
6.2 Communications
with Obligors; Grantors Remain Liable.
(a)
The
Administrative Agent, in its own name or in the name of others, may at any
time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent’s satisfaction the existence, amount and terms of any
Receivables.
(b) Upon
the
reasonable request of the Administrative Agent at any time after the occurrence
and during the continuance of an Event of Default, each Grantor shall notify
obligors on the Receivables that the Receivables have been assigned to the
Administrative Agent for the benefit of the Secured Parties and that payments
in
respect thereof shall be made directly to the Administrative Agent.
(c) Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Receivables to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the Administrative
Agent nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out
of
this Agreement or the receipt by the Administrative Agent or any Secured Party
of any payment relating thereto, nor shall the Administrative Agent or any
Secured Party be obligated in any manner to perform any of the obligations
of
any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take
any
action to enforce any performance or to collect the payment of any amounts
which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 Pledged
Stock.
(a)
Unless
an Event of Default shall have occurred and be continuing and the Administrative
Agent shall have given written notice to the relevant Grantor of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to
Section 6.3(b), each Grantor shall be permitted to receive all cash dividends
paid in respect of the Pledged Stock and all payments made in respect of the
Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent permitted
in
the Credit Agreement, and to exercise all voting and corporate or other
organizational rights with respect to the Investment Property.
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(b) If
an
Event of Default has occurred and be continuing, the Administrative Agent shall
give written notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Administrative Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Investment Property and make application thereof to the Obligations
in
such order as the Administrative Agent may determine, and (ii) any or all of
the
Investment Property shall be registered in the name of the Administrative Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such
Investment Property at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Grantor
or
the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege
or
option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each
Grantor hereby authorizes and instructs each Issuer of any Investment Property
pledged by such Grantor hereunder to (i) comply with any instruction received
by
it from the Administrative Agent in writing that (x) states that an Event of
Default has occurred and is continuing and (y) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from
such
Grantor, and each Grantor agrees that each Issuer shall be fully protected
in so
complying.
6.4 Proceeds
to be Turned Over To Administrative Agent.
If an
Event of Default shall have occurred and be continuing, all Proceeds received
by
any Grantor consisting of cash, checks and other near-cash items shall be held
by such Grantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Administrative Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Administrative
Agent, if required). All Proceeds received by the Administrative Agent hereunder
shall be held by the Administrative Agent in a Collateral Account maintained
under its sole dominion and control. All Proceeds while held by the
Administrative Agent in a Collateral Account (or by such Grantor in trust for
the Administrative Agent and the Lenders) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.
6.5 Application
of Proceeds.
If an
Event of Default shall have occurred and be continuing, at any time at the
Administrative Agent's election, the Administrative Agent may apply all or
any
part of Proceeds constituting Collateral, whether or not held in any Collateral
Account, and any proceeds of the guarantees set forth in Section 2 of this
Agreement and Article III of the Credit Agreement, in payment of the Obligations
in the following order:
19
First,
to pay
incurred and unpaid out-of-pocket fees and expenses of the Administrative Agent
required to be paid under the Loan Documents;
Second,
to the
Administrative Agent, for application by it towards payment of amounts then
due
and owing and remaining unpaid in respect of the Obligations, pro rata
among
the Secured Parties according to the amounts of the Obligations then due and
owing and remaining unpaid to the Secured Parties;
Third,
to the
Administrative Agent, for application by it towards prepayment of the
Obligations, pro rata
among
the Secured Parties according to the amounts of the Obligations then held by
the
Secured Parties; and
Fourth,
any
balance remaining after the Obligations shall have been paid in full (other
than
contingent indemnification obligations not then due or asserted), no Letters
of
Credit shall be outstanding and the Commitments shall have terminated shall
be
paid over to the Borrower or to whomsoever may be lawfully entitled to receive
the same.
6.6 Code
and Other Remedies.
If an
Event of Default shall occur and be continuing, the Administrative Agent, on
behalf of the Lenders, may exercise, in addition to all other rights and
remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the New York UCC or any other applicable
law.
Without limiting the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in
one
or more parcels at commercially reasonable public or private sale or sales,
at
any exchange, broker’s board or office of the Administrative Agent or any
Secured Party or elsewhere upon such terms and conditions as it may deem
necessary and at such prices as it may deem best, for cash or on credit or
for
future delivery without assumption of any credit risk. The Administrative Agent
or any Secured Party shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right
or
equity of redemption in any Grantor, which right or equity is hereby waived
and
released. Each Grantor further agrees, at the Administrative Agent’s reasonable
request, to assemble the Collateral and make it available to the Administrative
Agent at places which the Administrative Agent shall reasonably select, whether
at such Grantor’s premises or elsewhere. The Administrative Agent shall apply
the net proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable out-of-pocket costs and expenses of every kind incurred
in connection therewith or incidental to the care or safekeeping of any of
the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys’ fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Administrative Agent may elect, and
only after such application and after the payment by the Administrative Agent
of
any other amount required by any provision of law, including, without
limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale
or
other disposition of Collateral shall be required by law, such notice shall
be
deemed reasonable and proper if given at least 10 days before such sale or
other
disposition.
20
6.7 Registration
Rights.
(a)
Upon the
occurrence and during the continuance of an Event of Default, if the
Administrative Agent shall determine to exercise its right to sell any or all
of
the Pledged Stock pursuant to Section 6.6, and if in the reasonable opinion
of
the Administrative Agent it is necessary or advisable to have the Pledged Stock,
or that portion thereof to be sold, registered under the provisions of the
Securities Act, the relevant Grantor will use its commercially reasonable best
efforts to cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as
may
be, in the reasonable opinion of the Administrative Agent, necessary or
advisable to register the Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) cause the registration
statement relating thereto to become effective and to remain effective for
a
period of six months from the date of the first public offering of the Pledged
Stock, or that portion thereof to be sold, and (iii) make all amendments thereto
and/or to the related prospectus which, in the opinion of the Administrative
Agent, are necessary or advisable, all in conformity with the requirements
of
the Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to use commercially
reasonable best efforts to cause such Issuer to comply with the provisions
of
the securities or “Blue Sky” laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each
Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and
not
with a view to the distribution or resale thereof. Each Grantor acknowledges
and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale. The Administrative Agent shall
be under no obligation to delay a sale of any of the Pledged Stock for the
period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each
Grantor agrees to use its commercially reasonable best efforts to do or cause
to
be done all such other acts as may be necessary to make such sale or sales
of
all or any portion of the Pledged Stock pursuant to this Section 6.7 valid
and
binding and in compliance with any and all other applicable Requirements of
Law.
Each Grantor further agrees that a breach of any of the covenants contained
in
this Section 6.7 will cause irreparable injury to the Administrative Agent
and
the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 6.7 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred under the Credit
Agreement.
21
6.8 Subordination.
Each
Grantor hereby agrees that, if an Event of Default shall have occurred and
be
continuing, unless otherwise agreed by the Administrative Agent, all
Indebtedness owing by it to any Subsidiary of the Borrower shall be fully
subordinated to the indefeasible payment in full in cash of such Grantor’s
Obligations.
6.9 Deficiency.
Each
Grantor shall remain liable for any deficiency if the proceeds of any sale
or
other disposition of the Collateral are insufficient to pay its Obligations
and
the reasonable out-of-pocket fees and disbursements of any attorneys employed
by
the Administrative Agent or any Lender to collect such deficiency.
SECTION
7. THE
ADMINISTRATIVE AGENT
7.1 Administrative
Agent’s Appointment as Attorney-in-Fact, etc.
(a)
Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent
and
any officer or agent thereof, with full power of substitution, as its true
and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and
all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement,
and,
without limiting the generality of the foregoing, each Grantor hereby gives
the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following (provided
that anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power
of attorney provided for in this Section 7.1(a) unless an Event of Default
shall
have occurred and be continuing):
(i) in
the
name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any Receivable or with respect to any other
Collateral and file any claim or take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under any
Receivable or with respect to any other Collateral whenever
payable;
(ii) in
the
case of any Intellectual Property, execute and deliver, and have recorded,
any
and all agreements, instruments, documents and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent’s and the
Lenders’ security interest in such Intellectual Property and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby;
22
(iii) pay
or
discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or provide any insurance called for by the terms
of this Agreement and pay all or any part of the premiums therefor and the
costs
thereof;
(iv) execute,
in connection with any sale provided for in Section 6.6 or 6.7, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and
(v) (1) direct
any party liable for any payment under any of the Collateral to make payment
of
any and all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (2)
ask or demand for, collect, and receive payment of and receipt for, any and
all
moneys, claims and other amounts due or to become due at any time in respect
of
or arising out of any Collateral; (3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4)
commence
and prosecute any suits, actions or proceedings at law or in equity in any
court
of competent jurisdiction to collect the Collateral or any portion thereof
and
to enforce any other right in respect of any Collateral; (5) defend
any suit, action or proceeding brought against such Grantor with respect to
any
Collateral; (6)
settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent may
deem
appropriate; (7)
assign
any Copyright, Patent or Trademark (along with the goodwill of the business
to
which any such Trademark pertains), throughout the world for such term or terms,
on such conditions, and in such manner, as the Administrative Agent shall in
its
sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
the
Administrative Agent were the absolute owner thereof for all purposes, and
do,
at the Administrative Agent’s option and such Grantor’s expense, at any time, or
from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Lenders’ security interests therein and to effect
the intent of this Agreement, all as fully and effectively as such Grantor
might
do..
(b) If
any
Grantor fails to perform or comply with any of its agreements contained herein,
the Administrative Agent, at its option, but without any obligation so to do,,
may give such Grantor written notice of such failure to perform or comply,
and
if such Grantor fails to perform or comply within five Business Days of
receiving such notice (or if the Administrative Agent reasonably determines
that
harm to the Collateral or to the security interest of the Administrative Agent
hereunder could result prior to the end of such five Business Day period),
then
the Administrative Agent may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(c) The
reasonable out-of-pocket expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the highest rate per annum
at
which interest would then be payable on any category of past due ABR Loans
under
the Credit Agreement, from the date of payment by the Administrative Agent
to
the date reimbursed by the relevant Grantor, shall be payable by such Grantor
to
the Administrative Agent on demand
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(d) To
the
extent permitted by applicable law, each Grantor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated or the security
interests created hereby are released.
7.2 Duty
of Administrative Agent.
The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner
as
the Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent, any Lender nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so
or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely
to
protect the Administrative Agent’s and the Lenders’ interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful
misconduct.
7.3 Execution
of Financing Statements.
Pursuant to any applicable law, each Grantor authorizes the Administrative
Agent
to file or record financing statements and other filing or recording documents
or instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. Each Grantor authorizes the Administrative Agent to use the
collateral description “all personal property” in any such financing statements.
Each Grantor hereby ratifies and authorizes the filing by the Administrative
Agent of any financing statement with respect to the Collateral made prior
to
the date hereof.
7.4 Authority
of Administrative Agent.
Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent
of any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement shall, as between
the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting,
and
no Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
24
SECTION
8. MISCELLANEOUS
8.1 Amendments
in Writing.
None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except in accordance with Section 10.02 of the Credit
Agreement.
8.2 Notices.
All
notices, requests and demands to or upon the Administrative Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 10.01 of
the
Credit Agreement; provided that any such notice, request or demand to or upon
any Guarantor shall be addressed to such Guarantor at its notice address set
forth on Schedule 1.
8.3 No
Waiver by Course of Conduct; Cumulative Remedies.
Neither
the Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise
be
deemed to have waived any right or remedy hereunder or to have acquiesced in
any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude
any
other or further exercise thereof or the exercise of any other right, power
or
privilege. A waiver by the Administrative Agent or any Lender of any right
or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any
other rights or remedies provided by law.
8.4 Enforcement
Expenses; Indemnification.
(a)
Each
Guarantor agrees to pay or reimburse each Lender and the Administrative Agent
for all its costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 of this Agreement or the guarantee
contained in Article III of the Credit Agreement, as applicable, or otherwise
enforcing or preserving any rights under this Agreement and the other Loan
Documents to which such Guarantor is a party, including, without limitation,
the
reasonable fees and disbursements of counsel (including the allocated fees
and
expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent.
(b) Each
Guarantor agrees to pay, and to save the Administrative Agent and the Lenders
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may
be
payable or determined to be payable with respect to any of the Collateral or
in
connection with any of the transactions contemplated by this
Agreement.
(c) Each
Guarantor agrees to pay, and to save the Administrative Agent and the Lenders
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and Article III of the Credit
Agreement to the extent the Borrower would be required to do so pursuant to
Section 10.03 of the Credit Agreement.
25
(d) The
agreements in this Section 8.4 shall survive repayment of the Obligations and
all other amounts payable under the Credit Agreement and the other Loan
Documents.
8.5 Successors
and Assigns.
This
Agreement shall be binding upon the successors and assigns of each Grantor
and
shall inure to the benefit of the Administrative Agent and the Lenders and
their
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the
prior
written consent of the Administrative Agent.
8.6 Set-Off.
If an
Event of Default shall have occurred and be continuing, each Lender shall have
the right, without notice to any Grantor, any such notice being expressly waived
by each Grantor to the extent permitted by applicable law, upon any Obligations
becoming due and payable by any Grantor (whether at the stated maturity, by
acceleration or otherwise), to set-off and appropriate and apply to the payment
of such Obligations any and all deposits (general or special, time or demand,
provisional or final, but excluding, to the extent not permitted by law, trust
accounts, employee benefit accounts, payroll and withholding accounts and
similar accounts), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute
or
contingent, matured or unmatured, at any time held or owing by such Lender,
any
affiliate thereof or any of their respective branches or agencies to or for
the
credit or the account of such Grantor. Each Lender agrees promptly to notify
the
relevant Grantor and the Administrative Agent after any such application made
by
such Lender, provided that the failure to give such notice shall not affect
the
validity of such application.
8.7 Counterparts.
This
Agreement may be executed by one or more of the parties to this Agreement on
any
number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
8.8 Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
8.9 Section
Headings.
The
Section headings used in this Agreement are for convenience of reference only
and are not to affect the construction hereof or be taken into consideration
in
the interpretation hereof.
8.10 Integration.
This
Agreement and the other Loan Documents represent the agreement of the Grantors,
the Administrative Agent and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations
or
warranties by the Administrative Agent or any Lender relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the
other
Loan Documents.
8.11 GOVERNING
LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
26
8.12 Submission
To Jurisdiction; Waivers.
Each
Grantor hereby irrevocably and unconditionally:
(a) submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the
courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents
that any such action or proceeding may be brought in such courts and waives
any
objection that it may now or hereafter have to the venue of any such action
or
proceeding in any such court or that such action or proceeding was brought
in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Grantor at its address referred
to in Section 8.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees
that nothing herein shall affect the right to effect service of process in
any
other manner permitted by law or shall limit the right to ▇▇▇ in any other
jurisdiction; and
(e) waives,
to
the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.
8.13 Acknowledgements.
Each
Grantor hereby acknowledges that:
(a) it
has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;
(b) neither
the Administrative Agent nor any Lender has any fiduciary relationship with
or
duty to any Grantor arising out of or in connection with this Agreement or
any
of the other Loan Documents, and the relationship between the Grantors, on
the
one hand, and the Administrative Agent and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
(c) no
joint
venture is created hereby or by the other Loan Documents or otherwise exists
by
virtue of the transactions contemplated hereby among the Lenders or among the
Grantors and the Lenders.
8.14 Additional
Grantors.
Each
Subsidiary of the Borrower that is required to become a party to this Agreement
pursuant to Section 6.11 of the Credit Agreement shall become a Grantor for
all
purposes of this Agreement upon execution and delivery by such Subsidiary of
an
Assumption Agreement in the form of Annex 1 hereto.
8.15 Releases.
(a) Immediately
and automatically upon the consummation of a Holdings Change in Control
Transaction, Holdings shall be released entirely from its obligations under
this
Agreement, the Credit Agreement, , and all other Loan Documents (including,
without limitation, the guarantee set forth in Article III of the Credit
Agreement) all without delivery of any instrument or performance of any act
by
Holdings, and any Collateral pledged by Holdings (including, without limitation,
any Pledged Stock pledged by Holdings) pursuant to the terms of this Agreement,
the Credit Agreement, and any other Loan Document shall be released from any
and
all Liens and any and all other security interests created hereby and thereby,
and any and all rights thereto shall thereupon automatically revert to
Holdings
27
(b) At
such
time as the Obligations shall have been paid in full (other than contingent
indemnification obligations not then due or asserted and obligations in respect
of Specified Swap Agreements and Specified Cash Management Agreements not then
due or asserted), no Letter of Credit shall be outstanding and the Commitments
have expired or terminated, the Collateral shall be released from any and all
Liens created hereby, and any Guarantor Obligation (other than those expressly
stated to survive such termination) shall thereupon immediately terminate,
all
without delivery of any instrument or performance of any act by any party.
(c) If
any of
the Collateral shall be sold, transferred or otherwise disposed of by any
Grantor in a transaction permitted by the Credit Agreement or that has been
consented to in accordance with Section 10.02 of the Credit Agreement, then
the
Administrative Agent, at the request and the sole expense of such Grantor,
shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary for the release of any Liens created hereby on such Collateral.
8.16 WAIVER
OF JURY TRIAL.
EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN
ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.
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TELEPHONICS
CORPORATION,
as Grantor
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| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ |
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| Title: President | ||
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GRITEL
HOLDING CO., INC., as Grantor
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| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
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| Title: Sec. | ||