EXHIBIT (4)(l)(2)
GUARANTEE AND SECURITY AGREEMENT
dated as of
June 21, 2002
among
XEROX CORPORATION
THE SUBSIDIARY GUARANTORS PARTY HERETO
and
BANK ONE, NA
as Collateral Agent
TABLE OF CONTENTS
_______________
Page
----
Section 1. Definitions ........................................................... 2
-
Section 2. Guarantees by Guarantors .............................................. 13
--
Section 3. Representations and Warranties ........................................ 17
--
Section 4. The Security Interests ................................................ 20
--
Section 5. Further Assurances; Covenants ......................................... 23
--
Section 6. Recordable Intellectual Property ...................................... 24
--
Section 7. Pledged Securities .................................................... 26
--
Section 8. Collateral Account .................................................... 29
--
Section 9. Transfer of Record Ownership .......................................... 30
--
Section 10. Right to Vote Securities .............................................. 31
--
Section 11. General Authority ..................................................... 32
--
Section 12. Remedies upon Actionable Event of Default or Acceleration ............. 33
--
Section 13. Limitation on Duty of Collateral Agent in Respect of Collateral ....... 35
--
Section 14. Application of Proceeds ............................................... 35
--
Section 15. Concerning the Collateral Agent ....................................... 39
--
Section 16. Appointment of Co-Collateral Agents ................................... 40
--
Section 17. Expenses .............................................................. 41
--
Section 18. Taxes ................................................................. 41
--
Section 19. Termination of Security Interests; Release of Collateral .............. 42
--
Section 20. Additional Guarantors and Lien Grantors ............................... 43
--
Section 21. Notices ............................................................... 43
--
Section 22. Waivers, Non-Exclusive Remedies ....................................... 43
--
Section 23. Successors and Assigns ................................................ 44
--
Section 24. Changes in Writing .................................................... 44
--
Section 25. New York Law .......................................................... 44
--
Section 26. WAIVER OF JURY TRIAL .................................................. 44
--
Section 27. Severability .......................................................... 44
--
SCHEDULES:
Schedule 1 Pledged Securities
Schedule 2 Terms of Subordination
EXHIBITS:
Exhibit A Perfection Certificate
Exhibit B Form of Issuer Control Agreement
Exhibit C Guarantee and Security Agreement Supplement
Exhibit D Copyright Security Agreement
Exhibit E Patent Security Agreement
Exhibit F Trademark Security Agreement
GUARANTEE AND SECURITY AGREEMENT
AGREEMENT dated as of June __, 2002 (the "Agreement") among XEROX
CORPORATION ("Xerox"), the SUBSIDIARY GUARANTORS party hereto and BANK ONE, NA
as Collateral Agent (with its successors, the "Collateral Agent").
W I T N E S S E T H :
WHEREAS, Xerox, certain Overseas Borrowers, certain financial
institutions (each, a "Lender" and collectively, the "Lenders"), Bank One, NA,
as Administrative Agent, Collateral Agent and LC Issuing Bank, JPMorgan Chase
Bank, as Documentation Agent, and Citibank, N.A., as Syndication Agent, are
parties to an Amended and Restated Credit Agreement dated as of June __, 2002
(as the same has been and may be amended from time to time, the "Credit
Agreement"); and
WHEREAS, Xerox has agreed to secure (i) its CA Secured Obligations
(such term and other capitalized terms are defined in Section 1 below), (ii) the
ESOP Secured Obligations and (iii) the XCFI Secured Obligations by granting
security interests on its assets which constitute Collateral to the Collateral
Agent as provided in the Domestic Security Documents; and
WHEREAS, Xerox is willing to guarantee the Overseas CA Secured
Obligations and to secure its guarantee thereof by granting security interests
on its assets which constitute Collateral to the Collateral Agent as provided in
the Domestic Security Documents;
WHEREAS, Xerox is willing to cause each Subsidiary Guarantor to, and
each Subsidiary Guarantor is willing to, guarantee the foregoing obligations of
Xerox and the Overseas Borrowers and, in the case of each Secured Subsidiary
Guarantor, to secure its guarantee thereof by granting security interests on its
assets which constitute Collateral to the Collateral Agent as provided in the
Domestic Security Documents; and
WHEREAS, it is a condition to the effectiveness of the Credit Agreement
that the parties hereto enter into this Agreement to provide the guarantees and
security interests provided herein;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
(a) Terms Defined in Credit Agreement. Terms defined in the Credit
Agreement and not otherwise defined in subsection (b) or (c) of this Section
have, as used herein, the respective meanings provided for therein.
(b) Terms Defined in UCC. As used herein, each of the following terms has
the meaning specified in the UCC:
Term UCC
---- ---
Account 9-102
Authenticate 9-102
Certificated Security 8-102
Chattel Paper 9-102
Document 9-102
Entitlement Holder 8-102
Equipment 9-102
Financial Asset 8-102 & 103
General Intangibles 9-102
Instrument ▇-▇▇▇
▇▇▇▇▇▇▇▇▇ 9-102
Record 9-102
Securities Intermediary 8-102
Security 8-102 & 103
Security Entitlement 8-102
Supporting Obligations 9-102
Uncertificated Security 8-102
(c) Additional Definitions. The following additional terms, as used
herein, have the following meanings:
"Actionable Event of Default"means an Event of Default specified in clause
(a), (b), (h), (i) or (j) of Section 7.01 of the Credit Agreement.
"CA Percentage" means, at any time, (a) with respect to any Shared
Collateral that includes both ESOP Restricted Collateral and XCFI Restricted
Collateral, the portion, expressed as a percentage, that the amount of
outstanding CA Secured Obligations represents of the aggregate amount of all
outstanding Secured Obligations at such time, (b) with respect to any ESOP
Restricted Collateral that is not XCFI Restricted Collateral, the portion,
expressed as a percentage, that the amount of outstanding CA Secured Obligations
represents of the sum of the aggregate amount of all outstanding ESOP Secured
Obligations and CA Secured Obligations at such time and (c) with respect to any
XCFI Restricted Collateral that is not ESOP Restricted Collateral, the portion,
expressed as a percentage, that the amount of outstanding CA Secured
2
Obligations represents of the sum of the aggregate amount of all outstanding
XCFI Secured Obligations and CA Secured Obligations at such time.
"CA Permitted Liens" means the Security Interests and Liens on the
Collateral permitted to be created, to be assumed or to exist pursuant to
Section 6.02 of the Credit Agreement.
"CA Secured Obligations" means (a) all principal of and premium and
interest (including, without limitation, any interest ("Post-Petition Interest")
which accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of any Borrower (or
would accrue but for the operation of applicable bankruptcy or insolvency laws),
whether or not allowed or allowable as a claim in any such proceeding) on any
Loan outstanding from time to time or any LC Reimbursement Obligations under, or
any promissory note issued pursuant to, the Credit Agreement and (b) all other
amounts payable by any Borrower under the Credit Agreement or under any other
Loan Document (as the same may hereafter be amended, restated, supplemented or
otherwise modified from time to time) (including any Post-Petition Interest with
respect to such amounts).
"Collateral" means all property, whether now owned or hereafter acquired,
on which a Lien is granted or purports to be granted to the Collateral Agent
pursuant to the Domestic Security Documents. When used with respect to a
specific Lien Grantor, the term "Collateral" means all its property on which
such a Lien is granted or purports to be granted.
"Collateral Account" has the meaning specified in Section 8.
"Contingent CA Secured Obligation" means, at any time, any CA Secured
Obligation (or portion thereof) that is contingent in nature at such time,
including any CA Secured Obligation that is:
(i) an obligation to reimburse a Lender for drawings not yet made
under a Letter of Credit issued by it;
(ii) any other obligation (including any guarantee) that is
contingent in nature at such time; or
(iii) an obligation to provide collateral to secure any of the
foregoing types of obligations.
"Control", when used with respect to any Security or Security Entitlement,
has the meaning specified in UCC Section 8-106.
3
"Copyright License" means any agreement now or hereafter in existence
granting to any Lien Grantor, or pursuant to which any Lien Grantor grants to
any other Person, any right to use, copy, reproduce, distribute, prepare
derivative works, display or publish any records or other materials on which a
Copyright is in existence or may come into existence, including any agreement
identified in Schedule 1 to any Copyright Security Agreement.
"Copyright Security Agreement" means a Copyright Security Agreement,
substantially in the form of Exhibit D, executed and delivered by a Lien Grantor
in favor of the Collateral Agent for the benefit of the Secured Parties.
"Copyrights" means all the following: (i) all copyrights under the laws of
the United States or any other country (whether or not the underlying works of
authorship have been published), all registrations and recordings thereof, all
copyrightable works of authorship (whether or not published), and all
applications for copyrights under the laws of the United States or any other
country, including registrations, recordings and applications in the United
States Copyright Office or in any similar office or agency of the United States,
any State thereof or any other country or any political subdivision thereof,
including those described in Schedule 1 to any Copyright Security Agreement,
(ii) all renewals of any of the foregoing, (iii) all claims for, and rights to
▇▇▇ for, past or future infringements of any of the foregoing, and (iv) all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including damages and payments for past or
future infringements thereof.
"Covered Taxes" has the meaning specified in Section 18(a).
"Equity Interest" means (i) in the case of a corporation, any shares of its
capital stock, (ii) in the case of a limited liability company, an LLC Interest
therein, (iii) in the case of a partnership, any Partnership Interest therein,
(iv) in the case of any other business entity, any participation or other
interest in the equity or profits thereof or (v) any warrant, option or other
right to acquire any Equity Interest described in this definition.
"ESOP Guarantee Agreement" means the Guaranty and Agreement made by Xerox
dated as of October 1, 1993 (as amended from time to time) relating to the
Guaranteed ESOP Restructuring Notes due October 1, 2003 issued by Xerox
Corporation Employee Stock Ownership Plan Trust.
"ESOP Percentage" means, at any time, (a) with respect to any Shared
Collateral that includes both ESOP Restricted Collateral and XCFI Restricted
Collateral, the portion, expressed as a percentage, that the amount of
outstanding ESOP Secured Obligations represents of the aggregate amount of all
outstanding
4
Secured Obligations at such time and (b) with respect to any ESOP Restricted
Collateral that is not XCFI Restricted Collateral, the portion, expressed as a
percentage, that the amount of outstanding ESOP Secured Obligations represents
of the sum of the aggregate amount of all outstanding ESOP Secured Obligations
and CA Secured Obligations at such time.
"ESOP Restricted Collateral" means the Collateral of Xerox or any ESOP
Restricted Secured Subsidiary Guarantor (and any Proceeds of such Collateral
shall also constitute "ESOP Restricted Collateral").
"ESOP Restricted Secured Subsidiary Guarantor" means a Secured Subsidiary
Guarantor that is a "Restricted Subsidiary" under the ESOP Guarantee Agreement.
"ESOP Secured Obligations" means the obligations of Xerox under the ESOP
Guarantee Agreement and shall include all outstanding amounts of the loans
guaranteed under the ESOP Guarantee Agreement and accrued and unpaid interest
and other amounts owing with respect hereto.
"Guarantee" means, with respect to each Subsidiary Guarantor, its
Subsidiary Guarantee, and with respect to Xerox, the Xerox Guarantee.
"Guarantee and Security Agreement Supplement" means a Guarantee and
Security Agreement Supplement, substantially in the form of Exhibit C, signed
and delivered to the Collateral Agent for the purpose of adding a Domestic
Subsidiary as a party hereto pursuant to Section 20 and/or adding additional
property to the Collateral.
"Guarantors" means Xerox and the Subsidiary Guarantors.
"Intellectual Property" means (i) Patents, (ii) Patent Licenses, (iii)
Trademarks, (iv) Trademark Licenses, (v) Copyrights, (vi) Copyright Licenses,
(vii) confidential information, (viii) proprietary technology, (ix) trade
secrets, (x) domain names and (xi) mask works, and all rights in or under any of
the foregoing.
"Intellectual Property Filing" means (i) the filing of the applicable
Patent Security Agreement or Trademark Security Agreement with the United States
Patent and Trademark Office, together with an appropriately completed
recordation form, and (ii) the filing of the applicable Copyright Security
Agreement with the United States Copyright Office, together with an
appropriately completed recordation form, in each case sufficient to record the
Security Interests granted to the Collateral Agent in Recordable Intellectual
Property.
5
"Intellectual Property Security Agreement" means a Copyright Security
Agreement, a Patent Security Agreement or a Trademark Security Agreement.
"Issuer Control Agreement" means an Issuer Control Agreement substantially
in the form of Exhibit B (with any changes that the Collateral Agent shall have
approved).
"Lien Grantors" means Xerox and the Secured Subsidiary Guarantors.
"Liquid Investments" has the meaning specified in Section 8(d).
"LLC Interest" means a membership interest or similar interest in a limited
liability company.
"Non-Contingent CA Secured Obligation" means at any time any CA Secured
Obligation (or portion thereof) that is not a Contingent CA Secured Obligation
at such time.
"Overseas CA Secured Obligations" means the CA Secured Obligations of any
Overseas Borrower.
"Original Lien Grantor" means any Lien Grantor that grants a Lien on any of
its assets hereunder on the Effective Date.
"Partnership Interest" means a partnership interest, whether general or
limited.
"Patent License" means any agreement now or hereafter in existence granting
to any Lien Grantor, or pursuant to which any Lien Grantor grants to any other
Person, any right with respect to any Patent or any invention now or hereafter
in existence, whether patentable or not, whether a patent or application for
patent is in existence on such invention or not, and whether a patent or
application for patent on such invention may come into existence or not,
including any agreement identified in Schedule 1 to any Patent Security
Agreement.
"Patents" means (i) all letters patent and design letters patent of the
United States or any other country and all applications for letters patent or
design letters patent of the United States or any other country, including
applications 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, including those described in Schedule 1 to
any Patent Security Agreement, (ii) all reissues, divisions, continuations,
continuations in
6
part, revisions and extensions of any of the foregoing, (iii) all claims for,
and rights to ▇▇▇ for, past or future infringements of any of the foregoing and
(iv) all income, royalties, damages and payments now or hereafter due or payable
with respect to any of the foregoing, including damages and payments for past or
future infringements thereof.
"Patent Security Agreement" means a Patent Security Agreement,
substantially in the form of Exhibit E, executed and delivered by a Lien Grantor
in favor of the Collateral Agent for the benefit of the Secured Parties.
"Perfection Certificate" a certificate substantially in the form of Exhibit
A hereto, completed and supplemented with the schedules and attachments
contemplated thereby to the satisfaction of the Collateral Agent, and duly
executed by an executive officer of Xerox.
"Permitted Encumbrances" means (i) any legally valid prohibitions on
granting a security interest to the Collateral Agent as part of the Collateral
in the Equity Interests of any Qualified Turnaround Program Subsidiary pursuant
to any agreement entered into in connection with the Turnaround Program with or
for the benefit of any other Person owning or acquiring Equity Interests in such
a Subsidiary, to the extent the Qualification Requirements have been met with
respect to such prohibitions, (ii) (A) any legally valid contractual
restrictions in connection with the Turnaround Program that do not prohibit the
granting of a security interest in any Xerox Company's Equity Interests in a
Turnaround Program Subsidiary to the Collateral Agent as part of the Collateral
or (B) any legally valid contractual restrictions that do not prohibit the
granting of a security interest in any Xerox Company's Equity Interests in any
other Subsidiary that is not a Xerox Group Company, but, in each case, that
otherwise restrict the Transfer by the Collateral Agent of, or other rights
(including voting rights) and remedies of the Collateral Agent with respect to,
such Equity Interests as a consequence of restrictions imposed on the owner of
such Equity Interests (including put and call arrangements, rights of first
refusal, right of first offer, tag-along rights and other similar rights to
which such Equity Interest may be subject), (iii) any legally valid and
customary contractual restrictions on granting a security interest to the
Collateral Agent as part of the Collateral in the Equity Interests of any
Finance SPE or any Permitted Joint Venture created in connection with any
Qualified Receivables Transaction or that otherwise restrict the Transfer by the
Collateral Agent of, or other rights (including voting rights) and remedies of
the Collateral Agent with respect to, such Collateral, (iv) any legally valid
contractual restrictions on granting a security interest to the Collateral Agent
as part of the Collateral in the Equity Interests of any Third Party Vendor
Financing Subsidiary or any Permitted Joint Venture created in connection with
the Third Party Vendor Financing Program or that otherwise restrict the Transfer
by the Collateral Agent of, or other rights (including voting
7
rights) and remedies of the Collateral Agent with respect to, such Collateral,
(v) any legally valid contractual restrictions existing on the date hereof on
granting a security interest to the Collateral Agent as part of the Collateral
in any Equity Interest or General Intangible owned by any Original Lien Grantor,
or any legally valid contractual restrictions existing on the date hereof that
otherwise restrict the Transfer by the Collateral Agent of, or other rights
(including voting rights) and remedies of the Collateral Agent with respect to,
such Equity Interest or General Intangible, (vi) any legally valid contractual
restrictions permitted by Section 6.10 of the Credit Agreement on the grant of a
security interest to the Collateral Agent in any of the Collateral, or on the
Transfer by the Collateral Agent of any Collateral (including put and call
arrangements, rights of first refusal, right of first offer, tag-along rights
and other similar rights to which any Equity Interest may be subject) or (vii)
the terms of any legally valid provision of Applicable Law which (A) prohibits
the creation of a security interest in any property or asset, (B) requires the
consent of any third party to the creation of a security interest in any
property or asset, (C) gives rise to any right of termination (including,
without limitation, the abandonment, invalidation, or rendering unenforceable
any right, title or interest in any Intellectual Property) or default remedy by
reason of the creation of a security interest in any property or asset or (D)
does not prohibit the creation of a security interest in any property or asset
but otherwise restricts the Transfer by the Collateral Agent of any such
property or asset or any other rights and remedies of the Collateral Agent.
"Personal Property Collateral" means all property included in the
Collateral except Real Property Collateral.
"Pledged", when used in conjunction with any type of asset, means at
any time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time. For example, "Pledged Security" means
a Security that is included in the Collateral at such time.
"Proceeds" means all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, any Collateral, including without limitation all claims of the relevant
Lien Grantor against third parties for loss of, damage to or destruction of, or
for proceeds payable under, or unearned premiums with respect to, policies of
insurance in respect of, any Collateral, and any condemnation or requisition
payments with respect to any Collateral, in each case whether now existing or
hereafter arising.
"Real Property Collateral" means all real property included in the
Collateral.
8
"Recordable Intellectual Property" means Intellectual Property the
transfer of which is required to be recorded in the United States Patent and
Trademark Office or the United States Copyright Office in order to be effective
against subsequent third party transferees; provided, however, that the
following items shall not be considered "Recordable Intellectual Property"
hereunder: (i) Patents which are less than one year from their final expiration
date, (ii) Intellectual Property licenses, (iii) unregistered Copyrights and
(iv) Copyright applications.
"Release Conditions" means the following conditions for releasing all
the Guarantees and terminating all the Security Interests:
(i) all Revolving Commitments under the Credit Agreement
shall have expired or been terminated;
(ii) all Non-Contingent CA Secured Obligations shall have
been paid in full; and
(iii) no Contingent CA Secured Obligation shall remain
outstanding;
provided that the condition in clause (iii) shall not apply to outstanding
Letters of Credit if (x) no Event of Default has occurred and is continuing and
(y) Xerox or the applicable Borrower have granted to the Collateral Agent, for
the benefit of the Revolving Lenders (or, if the obligations of the Revolving
Lenders to reimburse the applicable LC Issuing Banks have been terminated, to
such LC Issuing Banks), a security interest in Liquid Investments (or causes a
bank acceptable to the Required Revolving Lenders or such LC Issuing Banks, as
the case may be, to issue a letter of credit naming the Collateral Agent or such
LC Issuing Banks as beneficiary) in an amount at least equal to 105% of the LC
Exposure (plus any accrued and unpaid interest thereon) as of the date of such
termination, on terms and conditions and pursuant to documentation reasonably
satisfactory to the Required Revolving Lenders or such LC Issuing Banks, as the
case may be.
"Restricted Collateral" means the Collateral of Xerox or any Restricted
Secured Subsidiary Guarantor (and any Proceeds of such Collateral shall also
constitute "Restricted Collateral").
"Restricted Secured Subsidiary Guarantor" means a Secured Subsidiary
Guarantor that is a "Specified Subsidiary" under the Reference Indenture (or if
the High Yield Indenture ceases to be the Reference Indenture, a corresponding
category under a new Reference Indenture).
9
"Secured Agreement", when used with respect to any Secured Obligation,
refers collectively to each instrument, agreement or other document that sets
forth obligations of Xerox, obligations of the Overseas Borrowers, obligations
of a Guarantor and/or rights of the holder with respect to such Secured
Obligation.
"Secured Guarantee" means, with respect to each Secured Subsidiary
Guarantor, its Subsidiary Guarantee, and with respect to Xerox, the Xerox
Guarantee.
"Secured Obligations" means the CA Secured Obligations, the ESOP
Secured Obligations and the XCFI Secured Obligations.
"Secured Parties" means (i) with respect to the CA Secured Obligations,
the Agents, the Lenders and the LC Issuing Banks, (ii) with respect to the ESOP
Secured Obligations, the holders of the ESOP Notes and (iii) with respect to the
XCFI Secured Obligations, the Trustee under each of the XCFI Indentures (and any
successor Trustee thereunder) for the benefit of the holders of the XCFI
Debentures.
"Secured Party Jurisdiction" means, with respect to any Secured Party:
(i) the jurisdiction under the laws of which such Secured
Party is organized or in which its principal office is located,
(ii) the jurisdiction in which its applicable lending office
is located, and
(iii) any jurisdiction in which it is treated as resident for
purposes of income or franchise taxes imposed on (or measured by) net
income (or is otherwise subject to such taxes) by reason of its
business activities and operations that are unrelated to the Credit
Agreement, the Existing Credit Agreement and the loans thereunder.
"Secured Subsidiary Guarantee" means, with respect to each Secured
Subsidiary Guarantor, its Subsidiary Guarantee.
"Secured Subsidiary Guarantor" means a Subsidiary Guarantor other than
XCC.
"Security Interests" means the security interests in the Collateral
granted under the Domestic Security Documents securing the Secured Obligations.
10
"Shared Collateral" means any Collateral that includes either ESOP
Restricted Collateral or XCFI Restricted Collateral, or both.
"State and Local Government Receivables" means Accounts (including
without limitation, proceeds of Inventory to the extent it also constitutes an
Account, and Chattel Paper, Documents and Instruments and proceeds thereof) that
are owed from state and local governments and their subdivisions within the
United States or its possessions or territories.
"Subsidiary Guarantee" means, with respect to each Subsidiary
Guarantor, its guarantee of the Secured Obligations under Section 2 hereof or
Section 1 of a Security Agreement Supplement.
"Subsidiary Guarantors" means each Domestic Subsidiary listed on the
signature pages hereof under the caption "Guarantors" and each Domestic
Subsidiary that shall, at any time after the date hereof, become a "Guarantor"
pursuant to Section 20.
"Third Party Vendor Financing Assets" means Equipment, Inventory and
related assets that is transferred to any Person under the Third Party Vendor
Financing Program.
"Trademark License" means any agreement now or hereafter in existence
granting to any Lien Grantor, or pursuant to which any Lien Grantor grants to
any other Person, any right to use any Trademark, including any agreement
identified in Schedule 1 to any Trademark Security Agreement.
"Trademarks" means: (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos, brand names, trade dress, prints and labels on which any of the
foregoing have appeared or appear, package and other designs, and all other
source or business identifiers, and all general intangibles of like nature, and
the rights in any of the foregoing which arise under applicable law, (ii) the
goodwill of the business symbolized thereby or associated therewith, (iii) all
registrations and applications in connection therewith, including registrations
and applications 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, including those described in
Schedule 1 to any Trademark Security Agreement, (iv) all renewals of any of the
foregoing, (v) all claims for, and rights to ▇▇▇ for, past or future
infringements of any of the foregoing and (vi) all income, royalties, damages
and payments now or hereafter due or payable with respect to any of the
foregoing, including damages and payments for past or future infringements
thereof.
11
"Trademark Security Agreement" means a Trademark Security Agreement,
substantially in the form of Exhibit F, executed and delivered by a Lien Grantor
in favor of the Collateral Agent for the benefit of the Secured Parties.
"Transferred Intellectual Property" means any Intellectual Property
(including without limitation, proceeds thereof) that was Transferred as
permitted by the Credit Agreement.
"Transferred Receivables" means Receivables that were Transferred in
connection with a Qualified Receivables Transaction or the Third Party Vendor
Financing Program.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection or the
priority of any Security Interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.
"Unrestricted Secured Subsidiary Guarantor" means a Secured Subsidiary
Guarantor that is not a Restricted Secured Subsidiary Guarantor.
"XCC Indentures" means any Indenture or other agreement governing
Capital Markets Debt of XCC.
"XCC Senior Obligations" means XCC's obligations under its Capital
Markets Debt outstanding as of the Effective Date.
"XCC Subordinated Obligations" means XCC's obligations under its
Subsidiary Guarantee.
"XCFI Indentures" means (a) that certain Trust Indenture dated as of
December 15, 1986, as supplemented and amended by the First through Fourth
Supplemental Trust Indentures, among Xerox Canada Finance Inc., Xerox Canada
Inc., Xerox Canada Holdings Inc. and National Trust Company, as Trustee and (b)
that certain Trust Indenture dated as of October 27, 1987, as supplemented and
amended by the First through Fourth Supplemental Trust Indentures, among Xerox
Canada Finance Inc., Xerox Canada Inc., Xerox Canada Holdings Inc. and National
Trust Company, as Trustee, in each case as amended, modified or supplemented
from time to time.
12
"XCFI Percentage" means, at any time, (a) with respect to any Shared
Collateral that includes both ESOP Restricted Collateral and XCFI Restricted
Collateral, the portion, expressed as a percentage, that the amount of
outstanding XCFI Secured Obligations represents of the aggregate amount of all
outstanding Secured Obligations at such time and (b) with respect to any XCFI
Restricted Collateral that is not ESOP Restricted Collateral, the portion,
expressed as a percentage, that the amount of outstanding XCFI Secured
Obligations represents of the sum of the aggregate amount of all outstanding
XCFI Secured Obligations and CA Secured Obligations at such time.
"XCFI Restricted Collateral" means the Restricted Collateral.
"XCFI Secured Obligations" means the obligations of Xerox under the
XCFI Indentures and shall include all amounts outstanding under the XCFI
Debentures and accrued and unpaid interest and other amounts owing with respect
thereto.
"Xerox Secured Obligations" means (i) the Secured Obligations of Xerox
and (ii) the Xerox Guarantee.
"Xerox Guarantee" means Xerox's guarantee of the Overseas CA Secured
Obligations under Section 2 hereof.
Section 2. Guarantees by Guarantors.
(a) Guarantees. (i) Xerox unconditionally guarantees the full and
punctual payment of each Overseas CA Secured Obligation when due (whether at
stated maturity, upon acceleration or otherwise). If an Overseas Borrower fails
to pay any Overseas CA Secured Obligation punctually when due, Xerox agrees that
it will forthwith on demand pay the amount not so paid at the place and in the
manner specified in the relevant Loan Document.
(ii) Each Subsidiary Guarantor unconditionally guarantees the full and
punctual payment of each Secured Obligation when due (whether at stated
maturity, upon acceleration or otherwise). If Xerox or any Overseas Borrower
fails to pay any Secured Obligation punctually when due, each Subsidiary
Guarantor agrees that it will forthwith on demand pay the amount not so paid at
the place and in the manner specified in the relevant Secured Agreement;
provided, however, that notwithstanding the foregoing, (A) the ESOP Secured
Obligations are only guaranteed by each ESOP Restricted Secured Subsidiary
Guarantor and no holder of any ESOP Secured Obligation shall have any claim
against, or Lien on any asset of, XCC or any Secured Subsidiary Guarantor that
is not an ESOP Restricted Secured Subsidiary Guarantor by virtue of this
Agreement and (B) the XCFI Secured Obligations are only guaranteed by each
13
Restricted Secured Subsidiary Guarantor and no holder of any XCFI Secured
Obligation shall have any claim against, or Lien on any asset of, XCC or any
Secured Subsidiary Guarantor that is not a Restricted Secured Subsidiary
Guarantor by virtue of this Agreement; provided, further, notwithstanding
anything to the contrary contained herein, the liability and obligation of (x)
each ESOP Restricted Secured Subsidiary Guarantor under this Section 2(a) with
respect to the ESOP Secured Obligations (but not any other Secured Obligations)
and (y) each Restricted Secured Subsidiary Guarantor under this Section 2(a)
with respect to the XCFI Secured Obligations (but not any other Secured
Obligations) shall not be enforced by any action or proceeding wherein damages
or any money judgment shall be sought against such ESOP Restricted Secured
Subsidiary Guarantor or such Restricted Secured Subsidiary Guarantor, as the
case may be, except a foreclosure by the Collateral Agent upon the ESOP
Restricted Collateral of such ESOP Restricted Secured Subsidiary Guarantor or
the XCFI Restricted Collateral of such Restricted Secured Subsidiary Guarantor,
as the case may be, and any judgment in any such foreclosure action shall be
enforceable by the Collateral Agent against such ESOP Restricted Collateral or
XCFI Restricted Collateral, as the case may be, only to the extent of the ESOP
Percentage of such ESOP Restricted Secured Subsidiary Guarantor's interest in
such ESOP Restricted Collateral, or only to the extent of the XCFI Percentage of
such Restricted Secured Subsidiary Guarantor's interest in such XCFI Restricted
Collateral, as the case may be, and the guarantee extended hereby for the
benefit of any holder of ESOP Secured Obligations or XCFI Secured Obligations is
provided to such holder under the express condition that the Collateral Agent
has no right to ▇▇▇ for, seek or demand any deficiency judgment against any ESOP
Restricted Secured Subsidiary Guarantor with respect to the ESOP Secured
Obligations (but not any other Secured Obligations), or against any Restricted
Secured Subsidiary Guarantor with respect to the XCFI Secured Obligations (but
not any other Secured Obligations), as the case may be, in any such foreclosure
action under or by reason of, or in connection with, this Agreement or otherwise
with respect to such guarantee. The obligations of each Subsidiary Guarantor
under this Section 2(a) shall be limited as provided in Section 2(i) below and,
in the case of XCC only, subordinated as provided in Section 2(j) below.
(b) Guarantees Unconditional. The obligations of each Guarantor under
its Guarantee shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of Xerox, any Overseas Borrower,
any other Guarantor or any other Person under any Secured Agreement, by
operation of law or otherwise;
14
(ii) any modification or amendment of or supplement to any
Secured Agreement;
(iii) any release, impairment, non-perfection or invalidity of
any direct or indirect security for any obligation of Xerox, any
Overseas Borrower, any other Guarantor or any other Person under any
Secured Agreement;
(iv) any change in the corporate existence, structure or
ownership of Xerox, any Overseas Borrower, any other Guarantor or any
other Person or any of their respective subsidiaries, or any
insolvency, bankruptcy, reorganization or other similar proceeding
affecting Xerox, any Overseas Borrower, any other Guarantor or any
other Person or any of their assets or any resulting release or
discharge of any obligation of Xerox, any Overseas Borrower, any other
Guarantor or any other Person under any Secured Agreement;
(v) the existence of any claim, set-off or other right that
such Guarantor may have at any time against Xerox, any Overseas
Borrower, any other Guarantor, any Secured Party or any other Person,
whether in connection with the Loan Documents or any unrelated
transactions, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or
against Xerox, any Overseas Borrower, any other Guarantor or any other
Person for any reason of any Secured Agreement, or any provision of
applicable law or regulation purporting to prohibit the payment of any
Secured Obligation by Xerox, any Overseas Borrower, any other Guarantor
or any other Person; or
(vii) any other act or omission to act or delay of any kind by
Xerox, any Overseas Borrower, any other Guarantor, any other party to
any Secured Agreement, any Secured Party or any other Person, or any
other circumstance whatsoever that might, but for the provisions of
this clause (vii), constitute a legal or equitable discharge of or
defense to any obligation of any Guarantor hereunder.
(c) Release of Guarantees. The Guarantees will be released in
accordance with Section 9.02 and 9.03 of the Credit Agreement, as the case may
be. In case of any release pursuant to Section 9.03 of the Credit Agreement, the
Collateral Agent shall be fully protected in relying on a certificate of Xerox
stating that the release of the Guarantee is in accordance with and permitted by
the terms of Section 9.03 of the Credit Agreement. If at any time any payment of
15
a Secured Obligation is rescinded or must be otherwise restored or returned upon
the insolvency or receivership of Xerox, any Overseas Borrower or otherwise, the
relevant Guarantee or Guarantees shall be reinstated with respect thereto as
though such payment had been due but not made at such time.
(d) Waiver by Guarantors. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any Person
against Xerox, any Overseas Borrower, any other Guarantor or any other Person.
(e) Subrogation. A Guarantor that makes a payment with respect to a
Secured Obligation hereunder shall be subrogated to the rights of the payee
against Xerox or the relevant Overseas Borrower with respect to such payment;
provided that no Guarantor shall enforce any payment by way of subrogation
against Xerox or the relevant Overseas Borrower, or by reason of contribution
against any other guarantor of such Secured Obligation, until all the Release
Conditions have been satisfied.
(f) Stay of Acceleration. If acceleration of the time for payment of
any Secured Obligation by Xerox or any Overseas Borrower is stayed by reason of
the insolvency or receivership of Xerox or the relevant Overseas Borrower or
otherwise, all Secured Obligations otherwise subject to acceleration under the
terms of any Secured Agreement shall nonetheless be payable by the relevant
Guarantors hereunder forthwith on demand by the Collateral Agent.
(g) Right of Set-Off. If any Secured Obligation is not paid promptly
when due, each of the Secured Parties and their respective Affiliates is
authorized, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other obligations at any time owing by such Secured Party or
Affiliate to or for the credit or the account of Xerox or any Secured Subsidiary
Guarantor against the obligations of such Guarantor under its Guarantee,
irrespective of whether or not such Secured Party shall have made any demand
thereunder and although such deposits and other obligations may be unmatured.
The rights of each Secured Party under this subsection are in addition to all
other rights and remedies (including other rights of setoff) that such Secured
Party may have.
(h) Continuing Guarantee. Each Guarantee is a continuing guarantee,
shall be binding on the relevant Guarantor and its successors and assigns, and
shall be enforceable by the Collateral Agent or the Secured Parties. If all or
part of any Secured Party's interest in any Secured Obligation is assigned or
otherwise transferred, the transferor's rights under each Guarantee, to the
extent applicable
16
to the obligation so transferred, shall automatically be transferred with such
obligation.
(i) Limitation on Obligations of Subsidiary Guarantor. The obligations
of each Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to
an aggregate amount equal to the largest amount that would not render such
Subsidiary Guarantee subject to avoidance under Section 548 of the United States
Bankruptcy Code or any comparable provisions of applicable law.
(j) XCC Guarantee Subordinated. The obligations of XCC under its
Subsidiary Guarantee shall be subordinated to the XCC Senior Obligations on the
terms set forth in Schedule 2.
Section 3. Representations and Warranties. Each Original Lien Grantor
represents and warrants as follows:
(a) Such Lien Grantor is duly organized, validly existing and
in good standing under the laws of the jurisdiction identified as its
jurisdiction of organization in the Perfection Certificate.
(b) The execution and delivery of this Agreement by such Lien
Grantor and the performance by it of its obligations under this
Agreement (i) are within its corporate or other powers, (ii) have been
duly authorized by all necessary corporate or other action, (iii)
require no consent or approval of, registration or filing with, any
Governmental Authority except (A) such as have been obtained or made
and are in full force and effect and (B) filings, recordings and
registrations necessary to perfect the Security Interests, (iv) do not
violate any Applicable Law or its organizational documents, (v) do not
violate any order of any Governmental Authority except in any such case
where such violation could not reasonably be expected to result in a
Material Adverse Effect, (vi) do not violate or result in a default
under any indenture or material agreement or other instrument binding
upon it (it being understood that any decrease in the consolidated net
worth of Xerox following any fixing of the Basket Lien Available Amount
could result in a default under various Debt agreements) and (vii) do
not result in any Lien on any of its properties other than the Security
Interests.
(c) This Agreement constitutes a valid and binding agreement
of such Lien Grantor, enforceable in accordance with its terms, except
as limited by (A) applicable bankruptcy, insolvency, fraudulent
conveyance or other similar laws affecting creditors' rights generally
and (B) general principles of equity, regardless of whether considered
in a proceeding at equity or at law.
17
(d) Schedule 1 sets forth (i) the name and jurisdiction of
organization of, and the ownership interest (including percentage owned
and number of shares or units) of such Lien Grantor in the Securities
that are Equity Interests and issued by, each of such Lien Grantor's
direct Subsidiaries as of the date hereof, which are required to be
included in the Collateral and (A) pledged pursuant to the Effective
Date Collateral and Guarantee Requirement or (B) in the case of
Securities that are Equity Interests and issued by any Restricted
Foreign Subsidiary, pledged pursuant to the Post-Closing Collateral and
Guarantee Requirement and (ii) all other Securities that are Equity
Interests and directly owned by such Lien Grantor as of the date hereof
that are required to be included in the Collateral and pledged pursuant
to this Agreement. As of the date hereof, such Lien Grantor holds all
such Securities directly (i.e., not through a subsidiary, a Securities
Intermediary or any other Person).
(e) All Pledged Securities owned by such Lien Grantor are
owned by it free and clear of any Lien other than (i) the Security
Interests, (ii the Permitted Encumbrances and (iii) any tax liens and
judgment liens that are CA Permitted Liens. None of such Pledged
Securities is subject to any option to purchase or similar right of any
Person other than the Permitted Encumbrances. Other than the Permitted
Encumbrances, such Lien Grantor is not and will not become a party to
or otherwise bound by any agreement (except the Loan Documents) which
restricts in any material manner the rights of any present or future
holder of any Pledged Securities with respect thereto.
(f) Except for the Disclosed Matters, such Lien Grantor has
good title to, or valid license or leasehold interests in, all of its
Collateral which is material to its business, free and clear of any
Liens other than (i) the CA Permitted Liens, (ii) the Permitted
Encumbrances and (iii) other defects that could not reasonably be
expected to result in a Material Adverse Effect.
(g) Other than financing statements, mortgages or other
similar or equivalent documents or instruments with respect to the
Security Interests and other CA Permitted Liens, or that are in respect
of consignments, sale of Accounts, operating leases or are otherwise
precautionary, no financing statement, mortgage, security agreement or
similar or equivalent document or instrument covering all or any part
of the Collateral is on file or of record in any jurisdiction in which
such filing or recording is effective to perfect or record a Lien on
such Collateral except (i) Liens that have been released and (ii) Liens
the obligations secured by which have been satisfied, in each case as
18
evidenced pursuant to the requirements of Section 4.01(f) of the Credit
Agreement. After the Effective Date, no Collateral owned by such Lien
Grantor will be in the possession or under the Control of any other
Person having a claim thereto or security interest therein, other than
CA Permitted Liens.
(h) The Security Interests in the United States on all
Personal Property Collateral which is subject to the UCC or which
constitutes Intellectual Property owned by such Lien Grantor (i) have
been validly created, (ii) will attach to each item of such Collateral
on the Effective Date (or, if such Lien Grantor first obtains rights
thereto on a later date, on such later date) and (iii) when so
attached, will constitute Collateral for the Secured Obligations or
Secured Guarantee of such Lien Grantor.
(i) When the relevant Mortgages have been duly executed and
delivered, the Security Interests on all Real Property Collateral owned
by such Lien Grantor as of the Effective Date will have been validly
created and will constitute Collateral for the Secured Obligations or
Secured Guarantee of such Lien Grantor.
(j) Xerox has heretofore delivered the Perfection Certificate
to the Collateral Agent. The information specified therein with the
respect to such Lien Grantor is correct and complete in all material
respects as of the Effective Date.
(k) When a UCC financing statement describing the Collateral
and naming such Lien Grantor as debtor in the form attached to the
Perfection Certificate has been filed in the office of the Secretary of
State in such Lien Grantor's jurisdiction of organization specified in
the Perfection Certificate, the Security Interests will constitute
perfected security interests in the Personal Property Collateral owned
by such Lien Grantor to the extent that a security interest therein may
be perfected by filing pursuant to the UCC, prior to all Liens and
rights of others therein except CA Permitted Liens. Except for (i) the
filing of such UCC financing statement (and the filing of UCC
continuation statements in respect thereof), (ii) the due recordation
of the Mortgages and (iii) the recording of the Copyright Security
Agreement, the Patent Security Agreement and the Trademark Security
Agreement in the United States Copyright Office and the United States
Patent and Trademark Office appropriately identifying the Recordable
Intellectual Property covered thereby, and except with respect to (x)
goods represented by a certificate of title and (y) receivables subject
to the Federal Assignment of Claims Act, no registration, recordation
or filing with any Governmental Authority is required in connection
with the execution or delivery of the
19
Domestic Security Documents or is necessary for the validity or
enforceability thereof or for the perfection or due recordation of the
Security Interests in the United States (with respect to Personal
Property Collateral, to the extent such Collateral is subject to the
UCC or constitutes Intellectual Property) or for the enforcement of the
Security Interests in the United States in such Collateral; provided,
however, that the registration of Copyrights in the United States
Copyright Office may be required to obtain a security interest therein
that is effective against subsequent transfers under federal copyright
law and, provided, further, that, to the extent that recordation of the
Security Interest in the United States Patent and Trademark Office or
the United States Copyright Office is necessary to perfect the Security
Interest or render it effective against subsequent third parties, such
recordations will not have been made with respect to the items that are
not Recordable Intellectual Property.
(l) The Collateral Agent has Control of the Financial Assets
and Security Entitlements (if any) held in the Collateral Account.
(m) As of the date hereof, the Inventory and Equipment are
insured in accordance with the requirements of the Credit Agreement.
Section 4. The Security Interests. (a) Xerox, in order to secure the
Xerox Secured Obligations, and each Secured Subsidiary Guarantor, in order to
secure its Secured Subsidiary Guarantee, grants to the Collateral Agent for the
benefit of the Secured Parties a continuing security interest in and to all of
its respective right, title and interest in the following property of Xerox, or
such Secured Subsidiary Guarantor, as the case may be, whether now owned or
existing or hereafter acquired or arising and regardless of where located, but
subject to the exclusions in Section 4(b):
(i) Accounts;
(ii) Chattel Paper;
(iii) Documents;
(iv) Equipment;
(v) General Intangibles;
(vi) Instruments;
(vii) Inventory;
20
(viii) Securities directly owned by such Original Lien Grantor and
issued by any subsidiary or Affiliate of such Original Lien Grantor or any
other issuer over which such Original Lien Grantor exercises Control;
(ix) The Collateral Account, all Financial Assets credited to the
Collateral Account from time to time and all Security Entitlements in
respect thereof, all cash deposited therein from time to time, and the
Liquid Investments made pursuant to Section 8(d);
(x) All books and records (including, without limitation, customer
lists, credit files, computer programs, printouts and other computer
materials and records) of such Original Lien Grantor pertaining to any of
the Collateral; and
(xi) All Proceeds of the Collateral described in Clauses 4(a)(i)
through 4(a)(x) hereof.
(b) The Collateral shall not include:
(i) rights of such Original Lien Grantor in respect of any property
or asset which is prohibited from being pledged to the Collateral Agent as
part of the Collateral by any Permitted Encumbrances;
(ii) Transferred Receivables and (A) security interests or liens and
property subject thereto purporting to secure payment of such Transferred
Receivables, (B) leases, guaranties, insurance and other arrangements
supporting payment of such Transferred Receivables, (C) rights to payment
and collections in respect of such Transferred Receivables, (D) books,
records and similar information relating to such Transferred Receivables or
the obligors thereon, (E) with respect to any such Transferred Receivables,
the transferee's interest in goods (including, without limitation,
Equipment or Inventory) the sale of which gave rise to such Transferred
Receivables and (F) if such Transferred Receivables arise from a lease
financing or installment sale transaction, the Equipment or Inventory that
is the subject of the underlying transaction and is transferred to a
Receivables SPE;
(iii) Transferred Intellectual Property;
(iv) State and Local Government Receivables of such Original Lien
Grantor;
(v) any Security owned by such Original Lien Grantor that is a
voting Equity Interest issued by a Foreign Subsidiary that is a corporation
21
for United States Federal income tax purposes, if and to the extent that
the Collateral pledged by Xerox to secure Xerox Secured Obligations or by
any other Lien Grantor to secure any guarantee of the Secured Obligations
pursuant to this Agreement or any other Domestic Security Document would
include in the aggregate more than 65% of the shares of any class of voting
securities of such Foreign Subsidiary (either directly or through any
entity that is a disregarded entity for such purposes); and
(vi) Third Party Vendor Financing Assets of such Original Lien
Grantor.
(c) With respect to each right to payment or performance included in the
Collateral from time to time, the Security Interest granted therein includes,
subject to Permitted Encumbrances, a continuing security interest in (i) any
Supporting Obligation that supports such payment or performance and (ii) any
Lien that (x) secures such right to payment or performance or (y) secures any
such Supporting Obligation.
(d) The Security Interests are granted as security only and shall not
subject the Collateral Agent or any Secured Party to, or transfer or in any way
affect or modify, any obligation or liability of any Lien Grantor with respect
to any of the Collateral or any transaction in connection therewith.
(e) Notwithstanding anything to the contrary contained herein or in any
other Loan Document, Liens on Restricted Collateral granted pursuant to this
Agreement and the other Domestic Security Documents will only secure, at any
time, an amount of the Secured Obligations not to exceed the Basket Lien
Available Amount at such time.
(f) It is the intention of the parties that the Liens granted pursuant to
this Agreement and the other Domestic Security Documents shall comply with (i)
Section 6.4 of the ESOP Guarantee Agreement and (ii) Section 20.8 of each of the
XCFI Indentures.
Section 5. Further Assurances; Covenants. Each Lien Grantor covenants as
follows:
(a) Such Lien Grantor will not (i) change its corporate, partnership,
company or other legal name or location (determined as provided in UCC Section
9-307), (ii) change its identity or corporate structure, (iii) change its
Federal Taxpayer Identification Number or (iv) become bound, as provided in UCC
Section 9-203(d) or otherwise, by a security agreement entered into by another
Person, except, if applicable, in accordance with Section 5.03(a) of the Credit
Agreement.
22
(b) Such Lien Grantor will, from time to time, at its expense, execute,
deliver, file and record any statement, assignment, instrument, document,
agreement or other paper and take any other reasonable action (including,
without limitation, any filings of financing or continuation statements under
the UCC) that from time to time is required under the UCC or with respect to
Recordable Intellectual Property to enable the Collateral Agent and the other
Secured Parties to obtain the full benefits of the Domestic Security Documents
or to enable the Collateral Agent to exercise and enforce any of its rights,
powers and remedies under the Domestic Security Documents with respect to any of
the Collateral. The Lien Grantor hereby authorizes the Collateral Agent to file
a Record or Records (as defined in the UCC), including, without limitation,
financing or continuation statements, and amendments thereto, in all
jurisdictions and with all filing offices as the Collateral Agent may determine,
in its sole discretion, are necessary or advisable to perfect the security
interest granted to the Collateral Agent herein without such Lien Grantor's
signature appearing thereon. Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner as
the Collateral Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to the Collateral Agent herein, including, without
limitation, describing such property as "all assets" or "all personal property."
Such Lien Grantor agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement is sufficient as a financing statement. Such Lien
Grantor constitutes the Collateral Agent its attorney-in-fact to execute and
file any filings required or so requested for the foregoing purposes, all acts
of such attorney being hereby ratified and confirmed; and such power, being
coupled with an interest, shall be irrevocable until all the Security Interests
granted by such Lien Grantor terminate pursuant to Section 19. Such Lien Grantor
shall pay the costs of, or reasonable costs incidental to, any recording or
filing of any financing or continuation statements or other documents recorded
or filed pursuant thereto concerning the Collateral.
(c) Upon the occurrence and during the continuance of an Event of Default,
if any Collateral is in the possession or control of a warehouseman, bailee or
agent, such Lien Grantor will upon request of the Required Lenders (i) notify
such warehouseman, bailee or agent of the relevant Security Interests, (ii)
instruct such warehouseman, bailee or agent to hold all such Collateral for the
Collateral Agent's account subject to the Collateral Agent's instructions and to
permit such Collateral to be removed by such Lien Grantor in the ordinary course
of business until the Collateral Agent notifies such warehouseman, bailee or
agent that an Event of Default has occurred and is continuing, (iii) use
reasonable commercial efforts (without incurring material obligations or
foregoing material rights) to cause such warehouseman, bailee or agent to
Authenticate a Record
23
acknowledging that it holds possession of such Collateral for the Collateral
Agent's benefit and (iv) make such Authenticated Record available to the
Collateral Agent.
(d) If an Actionable Event of Default shall have occurred and be
continuing, such Lien Grantor shall stamp or otherwise ▇▇▇▇ all books and
records relating to the Collateral in such manner, if any, as the Required
Lenders may reasonably require in order to reflect the Security Interests.
(e) Such Lien Grantor will, promptly upon request, provide to the
Collateral Agent all information and evidence in such Lien Grantor's possession,
or under such Lien Grantor's control, or that can be generated internally or, if
an Actionable Event of Default has occurred and is continuing, can otherwise be
obtained by such Lien Grantor, without unreasonable effort or expense, which the
Collateral Agent may reasonably request concerning the Collateral to enable the
Collateral Agent to enforce the provisions of the Domestic Security Documents.
(f) Such Lien Grantor will not Transfer, grant interests in, or grant any
option with respect to, any of its Collateral; provided that such Lien Grantor
may do any of the foregoing unless doing so would violate a covenant in the
Credit Agreement. Concurrently with any such Transfer (except a Transfer to
another Lien Grantor, a lease or a license) permitted by the foregoing proviso,
the Security Interests on such assets Transferred (but not in any Proceeds
arising from such Transfer) will cease immediately pursuant to Section 9.03 of
the Credit Agreement.
Section 6. Recordable Intellectual Property. Each Lien Grantor covenants as
follows:
(a) On the Effective Date (in the case of an Original Lien Grantor) or the
date on which it signs and delivers its first Security Agreement Supplement (in
the case of any other Lien Grantor), such Lien Grantor will sign and deliver to
the Collateral Agent Intellectual Property Security Agreements with respect to
all Recordable Intellectual Property then owned by it. Within 60 days after each
March 31 and September 30 after December 31, 2002, it will sign and deliver to
the Collateral Agent any Intellectual Property Security Agreement necessary to
grant Security Interests on all Recordable Intellectual Property owned by it on
such March 31 or September 30 that is not covered by any previous Intellectual
Property Security Agreement so signed and delivered by it. In each case, it will
promptly make all Intellectual Property Filings necessary to record the Security
Interests on such Recordable Intellectual Property; provided, however, that any
good faith omission to include any Recordable Intellectual Property in any such
Intellectual Property Security Agreement shall not constitute an Event of
Default if, within 15 days after the discovery by such Lien Grantor of such good
faith
24
omission, such Lien Grantor signs and delivers to the Collateral Agent
Intellectual Property Security Agreements with respect to such omitted
Recordable Intellectual Property and promptly makes all Intellectual Property
Fillings necessary to record the Security Interests on such omitted Recordable
Intellectual Property.
(b) Such Lien Grantor will notify the Collateral Agent promptly if it
knows that any application or registration relating to any material Recordable
Intellectual Property owned or licensed by it may become abandoned or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any adverse determination or development in, any proceeding
in the United States Copyright Office, the United States Patent and Trademark
Office or any court) regarding such Lien Grantor's ownership of such material
Recordable Intellectual Property, its right to register or patent the same, or
its right to keep and maintain the same, except where the occurrence of any of
the foregoing could not reasonably be expected to result in a Material Adverse
Effect. If any of such Lien Grantor's rights to any material Recordable
Intellectual Property are infringed, misappropriated or diluted by a third
party, such Lien Grantor will, unless such Lien Grantor shall reasonably
determine that such action would be of negligible value, economic or otherwise,
or the failure to take such action could not reasonably be expected to result in
a Material Adverse Effect, (i) promptly ▇▇▇ for infringement, misappropriation
or dilution and to recover any and all damages for such infringement,
misappropriation or dilution, (ii) take such other actions as such Lien Grantor
shall reasonably deem appropriate under the circumstances to protect such
material Recordable Intellectual Property and (iii) notify the Collateral Agent
thereof to the extent required by the Credit Agreement.
Unless an Actionable Event of Default shall exist and the Collateral Agent
shall have notified such Lien Grantor that the Lien Grantor's right to do so is
terminated, suspended or otherwise limited, the grant of Liens on Recordable
Intellectual Property pursuant hereto and the Intellectual Property Security
Agreements shall not preclude any Lien Grantor from entering into any Copyright
License, Patent License or Trademark License or, subject to Section 5, from
managing or maintaining its Recordable Intellectual Property in a manner that is
in the ordinary course of such Lien Grantor's business and consistent with such
Lien Grantor's historical practices as permitted by the Credit Agreement.
Section 7. Pledged Securities. Each Lien Grantor represents, warrants and
covenants as follows:
(a) Certificated Securities. (i) With respect to each Original Lien
Grantor, such Original Lien Grantor will deliver, (A) on the Effective Date, to
the Collateral Agent as Collateral hereunder all certificates representing
Pledged
25
Certificated Securities that are Equity Interests and (I) issued by any
Domestic Subsidiary or (II) representing any other Pledged Securities, in each
case, then directly owned by such Original Lien Grantor and identified on
Schedule 1 of this Agreement as required to be pledged as part of the Effective
Date Collateral and Guarantee Requirement, (B) in accordance with Section
5.13(a) of the Credit Agreement, within 90 days after the Effective Date, to the
Collateral Agent as Collateral hereunder all certificates representing Pledged
Certificated Securities that are Equity Interests and (I) issued by any
Restricted Foreign Subsidiary or (II) representing any other Pledged Securities,
in each case, then directly owned by such Original Lien Grantor and identified
on Schedule 1 of this Agreement as required to be pledged as part of the
Post-Closing Collateral and Guarantee Requirement and (C) in accordance with
Section 5.13(b) of the Credit Agreement, within 90 days after the Restatement
Date, to the Collateral Agent as Collateral hereunder all certificates
representing Pledged Certificated Securities that are Equity Interests and
issued by any Material Foreign Subsidiary then directly owned by such Original
Lien Grantor (to the extent that such Securities have not been pledged and
delivered pursuant to clause (i)(B)of this Section 7(a)).
(ii) With respect to any other Lien Grantor, such Lien Grantor will
deliver, on the date on which it signs and delivers its first Security Agreement
Supplement or, in the case of Pledged Certificated Securities that are Equity
Interests in any Foreign Subsidiary, as promptly as practicable, to the
Collateral Agent as Collateral hereunder all certificates representing Pledged
Certificated Securities that are Equity Interests then directly owned by such
Lien Grantor and required to be included in the Collateral.
(iii) After the pledge and delivery of Pledged Certificated Securities
described in clause (i) or (ii) of this Section 7(a), whenever such Original
Lien Grantor or such Lien Grantor, as the case may be, acquires any other
certificate representing a Pledged Certificated Security that are Equity
Interests and required to be included in the Collateral, such Original Lien
Grantor or such Lien Grantor, as the case may be, will promptly deliver such
certificate to the Collateral Agent as Collateral hereunder.
The provisions of this subsection are subject to the limitation in Section
7(g) in the case of Securities that are voting Equity Interests in a Foreign
Subsidiary and to the limitation in Section 7(h) in the case of Equity Interests
that are subject to Permitted Encumbrances.
(b) Uncertificated Securities. (i) With respect to each Original Lien
Grantor, such Original Lien Grantor will, (A) on the Effective Date, in respect
of each Pledged Uncertificated Security that is an Equity Interest and (I)
issued by any Domestic Subsidiary or (II) representing any other Pledged
Securities, in each case, then directly owned by such Original Lien Grantor and
identified on
26
Schedule 1 of this Agreement as required to be pledged as part of the Effective
Date Collateral and Guarantee Requirement, (B) in accordance with Section
5.13(a) of the Credit Agreement, within 90 days after the Effective Date, in
respect of each Pledged Uncertificated Security that is an Equity Interest and
(I) issued by any Restricted Foreign Subsidiary or (II) representing any other
Pledged Securities, in each case, then directly owned by such Original Lien
Grantor and identified on Schedule 1 of this Agreement as required to be pledged
as part of the Post-Closing Collateral and Guarantee Requirement and (C) in
accordance with Section 5.13(b) of the Credit Agreement, within 90 days after
the Restatement Date, in respect of each Pledged Uncertificated Security that is
an Equity Interest issued by any Material Foreign Subsidiary then directly owned
by such Original Lien Grantor (to the extent that such Security has not been
pledged pursuant to clause (i)(B) of this Section 7(b)), cause the issuer of any
such Pledged Uncertificated Security to either (x) register the Collateral Agent
as the registered owner of such security on the books and records of the issuer
or (y) enter into an Issuer Control Agreement with respect to such Security, in
each case as the Collateral Agent and such Original Lien Grantor may reasonably
agree; provided that any Equity Interest issued by Xerox (Austria) Holdings GmbH
shall not be required to be pledged.
(ii) With respect to any other Lien Grantor, such Lien Grantor will, on
the date on which it signs and delivers its first Security Agreement Supplement
or, in the case of Pledged Uncertificated Securities that are Equity Interests
in any Foreign Subsidiary, as promptly as practicable, in respect of each
Pledged Uncertificated Security that is an Equity Interest then directly owned
by such Lien Grantor and required to be included in the Collateral, cause the
issuer of any such Pledged Uncertificated Security to either (x) register the
Collateral Agent as the registered owner of such security on the books and
records of the issuer or (y) enter into an Issuer Control Agreement with respect
to such Security, in each case as the Collateral Agent and such Lien Grantor may
reasonably agree.
(iii) After the pledge of Pledged Uncertificated Securities described in
clause (i) or (ii) of this Section 7(b), whenever such Original Lien Grantor or
such Lien Grantor, as the case may be, acquires any other Pledged Uncertificated
Security that is an Equity Interest and required to be included in the
Collateral, such Original Lien Grantor or such Lien Grantor, as the case may be,
will promptly cause the issuer of any such Pledged Uncertificated Security to
either (x) register the Collateral Agent as the registered owner of such
security on the books and records of the issuer or (y) enter into an Issuer
Control Agreement with respect to such Security, in each case as the Collateral
Agent and such Original Lien Grantor or such Lien Grantor, as the case may be,
may reasonably agree.
The provisions of this subsection are subject to (X) the limitation in
Section 7(g) in the case of Securities that are voting Equity Interests in a
Foreign
27
Subsidiary, (Y) Section 9(c) and (Z) the limitation in Section 7(h) in the case
of Equity Interests that are subject to Permitted Encumbrances.
(c) Perfection as to Certificated Securities. When such Lien Grantor
delivers the certificate representing any Pledged Certificated Security that is
an Equity Interest and owned by it to the Collateral Agent and complies with
Section 7(e) in connection with such delivery, (i) the Security Interest on such
Pledged Certificated Security will be perfected under the UCC, subject to no
prior Liens or rights of others, (ii) the Collateral Agent will have Control of
such Pledged Certificated Security and (iii) the Collateral Agent will be a
protected purchaser (within the meaning of UCC Section 8-303) thereof if the
Collateral Agent does not have notice of any adverse claim to the applicable
security.
(d) Perfection as to Uncertificated Securities. When such Lien Grantor, the
Collateral Agent and the issuer of any Pledged Uncertificated Security that is
an Equity Interest and owned by such Lien Grantor enter into an Issuer Control
Agreement with respect thereto, or when the Collateral Agent is registered as
the registered owner of such Pledged Uncertificated Security, (i) the Security
Interest on such Pledged Uncertificated Security will be perfected under the
UCC, subject to no prior Liens or rights of others, (ii) the Collateral Agent
will have Control of such Pledged Uncertificated Security and (iii) the
Collateral Agent will be a protected purchaser (within the meaning of UCC
Section 8-303) thereof if the Collateral Agent does not have notice of any
adverse claim to the applicable security.
(e) Delivery of Pledged Certificates. Any certificate representing a
Pledged Certificated Security that is an Equity Interest, when delivered to the
Collateral Agent, will be in suitable form for transfer by delivery, or
accompanied by duly executed instruments of transfer or assignment in blank
signed by a Responsible Officer, all in form and substance reasonably
satisfactory to the Collateral Agent.
(f) Communications. If an Actionable Event of Default shall have occurred
and be continuing and the Collateral Agent shall have given notice to the Lien
Grantors that it elects to exercise the remedies provided in Section 12, such
Lien Grantor will promptly give to the Collateral Agent copies of any notices
and other communications received by it with respect to Pledged Securities that
are Equity Interests and registered in the name of such Lien Grantor or its
nominee.
(g) Foreign Subsidiaries. Such Lien Grantor will not be obligated to comply
with the provisions of this Section at any time with respect to any Security
that is a voting Equity Interest in a Foreign Subsidiary if and to the extent
(but only to the extent) that such Security is excluded from the Collateral at
such time pursuant to Section 4(b)(v).
28
(h) Equity Interests Subject to Permitted Encumbrances. Such Lien Grantor
will not be obligated to comply with the provisions of this Section at any time
with respect to any Equity Interest issued by any Person if and to the extent
(but only to the extent) that such Equity Interest is excluded from the
Collateral at such time pursuant to Section 4(b)(i).
(i) Such Lien Grantor shall hold directly, and not through any subsidiary,
Securities Intermediary or other Person, all Pledged Securities owned by it.
Section 8. Collateral Account. (a) There is hereby established with the
Collateral Agent, with respect to each Lien Grantor, a cash collateral account
(its "Collateral Account") in the name and under the exclusive control of the
Collateral Agent into which there shall be deposited from time to time after the
occurrence and during the continuance of an Actionable Event of Default and upon
notice from the Collateral Agent that it elects to exercise the remedies
provided in this Section 8 the cash proceeds of the Collateral required to be
delivered to the Collateral Agent pursuant to subsection 8(b) hereof or any
other provision of any Domestic Security Document. Any income received by the
Collateral Agent with respect to the balance from time to time standing to the
credit of each Collateral Account, including any interest or capital gains on
Liquid Investments, shall remain, or be deposited, in the Collateral Account.
All cash amounts on deposit in each Collateral Account from time to time after
the occurrence and during the continuance of an Event of Default, together with
any Liquid Investments from time to time made pursuant to subsection 8(d)
hereof, shall at all times be within the exclusive possession, dominion and
control of the Collateral Agent, shall constitute part of the Collateral
hereunder and shall not constitute payment of the Secured Obligations until
applied thereto as hereinafter provided.
(b) If an Actionable Event of Default shall have occurred and be continuing
and if so requested by the Required Lenders, each Lien Grantor shall instruct
all account debtors and other Persons obligated in respect of all Accounts then
included in the Collateral to make all payments in respect of the Accounts
either (i) directly to the Collateral Agent (by instructing that such payments
be remitted to a post office box which shall be in the name of such Lien Grantor
(with a notation that proceeds held therein are held in trust for and subject to
the Liens of the Secured Parties) and under the control of the Collateral Agent)
or (ii) under other arrangements, in form and substance satisfactory to the
Collateral Agent, pursuant to which such Lien Grantor shall have irrevocably
instructed such other bank (and such other bank shall have agreed) to remit all
proceeds of such payments directly to the Collateral Agent for deposit into the
Collateral Account or as the Collateral Agent may otherwise instruct such bank.
All such
29
payments made to the Collateral Agent shall be deposited in such Lien Grantor's
Collateral Account. In addition to the foregoing, such Lien Grantor agrees that
if the proceeds of any Collateral hereunder (including the payments made in
respect of Accounts) are received by it at a time when the foregoing provisions
of this Section 8(b) are in effect, such Lien Grantor shall as promptly as
possible deposit such proceeds into its Collateral Account. Until so deposited
into the Collateral Account, all such proceeds shall, during the continuation of
such Event of Default, be held in trust by such Lien Grantor for the Secured
Parties and shall not be commingled with any other funds or property of such
Lien Grantor.
(c) Upon acceleration of the Loans in accordance with the terms of the
Credit Agreement, the Collateral Agent shall, if so instructed by the Required
Lenders, apply or cause to be applied (subject to collection) any or all of the
balance from time to time standing to the credit of each Collateral Account in
the manner specified in Section 14.
(d) If an Actionable Event of Default shall have occurred and be
continuing, amounts on deposit in each Collateral Account, to the extent not
applied in the manner specified in Section 14 pursuant to paragraph (c) above,
shall be invested and re-invested from time to time in such Liquid Investments
as the relevant Lien Grantor shall determine, which Liquid Investments shall be
held in the name and be under the control of the Collateral Agent, provided that
the Collateral Agent shall, if instructed by the Required Lenders, liquidate any
such Liquid Investments and apply or cause to be applied the proceeds thereof to
the payment of the Secured Obligations in the manner specified in Section 14;
and provided further that the Collateral Agent shall, if so instructed by
relevant Lenders in the manner specified in Section 9.02 of the Credit
Agreement, liquidate any such Liquid Investments and release the proceeds
thereof to the relevant Lien Grantor. For this purpose, "Liquid Investments"
means Permitted Investments; provided that each Liquid Investment shall mature
within 30 days after it is acquired by the Collateral Agent.
Section 9. Transfer of Record Ownership. (a) If an Actionable Event of
Default shall have occurred and be continuing, the Collateral Agent may (and to
the extent that action by it is required, the relevant Lien Grantor, if directed
to do so by the Collateral Agent, will as promptly as practicable) cause each of
the Pledged Securities (or any portion thereof specified in such direction) to
be transferred of record into the name of the Collateral Agent or its nominee.
(b) Perfection upon Transfer of Record Ownership. If and when any Pledged
Security (whether certificated or uncertificated) owned by such Lien Grantor is
transferred of record into the name of the Collateral Agent or its nominee
pursuant to Section 7(b) or 9(a), (i) the Security Interest on such Pledged
Security will be perfected, subject to no prior Liens or rights of others, (ii)
the
30
Collateral Agent will have Control of such Pledged Security and (iii) the
Collateral Agent will be a protected purchaser (within the meaning of UCC
Section 8-303) thereof if the Collateral Agent does not have notice of any
adverse claim to the applicable security.
(c) Provisions Inapplicable after Transfer of Record Ownership. If the
provisions of Section 9(a) are implemented, Section 7(b) shall not thereafter
apply to any Pledged Security that is registered in the name of the Collateral
Agent or its nominee.
(d) Communications after Transfer of Record Ownership. The Collateral Agent
will promptly give to the relevant Lien Grantor copies of any notices and other
communications received by the Collateral Agent with respect to Pledged
Securities registered in the name of the Collateral Agent or its nominee.
Section 10. Right to Vote Securities. (a) Unless an Actionable Event of
Default shall have occurred and be continuing and the Collateral Agent shall
have notified such Lien Grantor that it elects to exercise the remedies provided
in this Section 10, each Lien Grantor will have the right, from time to time, to
vote and to give consents, ratifications and waivers with respect to any Pledged
Security owned by it, and the Collateral Agent will, upon receiving a written
request from such Lien Grantor, deliver to such Lien Grantor or as specified in
such request such proxies, powers of attorney, consents, ratifications and
waivers in respect of any such Pledged Security that is registered in the name
of the Collateral Agent or its nominee, in each case as shall be reasonably
requested by such Lien Grantor. Unless an Actionable Event of Default shall have
occurred and be continuing and the Collateral Agent shall have notified such
Lien Grantor that it elects to exercise the remedies provided in this Section
10, the Collateral Agent will have no right to take any action which the owner
of a Pledged Partnership Interest or Pledged LLC Interest is entitled to take
with respect thereto, except the right to receive payments and other
distributions to the extent provided herein.
(b) If an Actionable Event of Default shall have occurred and be continuing
and the Collateral Agent shall have notified such Lien Grantor that it elects to
exercise the remedies provided in this Section 10, the Collateral Agent will
have the right to the extent permitted by Applicable Law (and, in the case of
Collateral consisting of any Security that is subject to any Permitted
Encumbrances, by the relevant agreement or governing document to the extent of
any Permitted Encumbrances contained in such agreement or governing document) to
vote, to give consents, ratifications and waivers and to take any other action
with respect to the Pledged Securities (if any) with the same force and effect
as if the Collateral Agent were the absolute and sole owner thereof, and
31
each Lien Grantor will take all such action as the Collateral Agent may
reasonably request from time to time to give effect to such right.
Section 11. General Authority. Each Lien Grantor hereby irrevocably
appoints the Collateral Agent its true and lawful attorney, with full power of
substitution, in the name of such Lien Grantor, the Collateral Agent, the
Secured Parties or otherwise, for the use and benefit of the Secured Parties,
but at the Borrowers' expense, to the extent permitted by law to exercise, upon
the occurrence and during the continuance of an Actionable Event of Default or
upon acceleration of the Loans in accordance with the terms of the Credit
Agreement, all or any of the following powers with respect to all or any of the
Collateral:
(a) to demand, ▇▇▇ for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) upon acceleration of the Loans in accordance with the terms of the
Credit Agreement, to sell, transfer, assign or otherwise deal in or with
the same or the proceeds thereof, as fully and effectually as if the
Collateral Agent were the absolute owner of the Lien Grantor's right, title
and interest therein, and
(d) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that, except in the case of Personal Property Collateral that is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the Collateral Agent will give the relevant Lien
Grantor at least ten days' prior written notice of the time and place of any
public sale thereof or the time after which any private sale or other intended
disposition thereof will be made. Any such notice shall (i) contain the
information specified in UCC Section 9-613, (ii) be Authenticated and (iii) be
sent to the parties required to be notified pursuant to UCC Section 9-611(c);
provided that, if the Collateral Agent fails to comply with this sentence in any
respect, its liability for such failure shall be limited to the liability (if
any) imposed on it as a matter of law under the UCC.
Section 12. Remedies upon Actionable Event of Default or Acceleration. (a)
Upon acceleration of the Loans in accordance with the terms of the Credit
Agreement, the Collateral Agent may exercise (or cause its sub-agents to
exercise) any and all remedies available to it (or to such sub-agents) under the
Security Documents. Without limiting the generality of the foregoing, upon
acceleration of the Loans in accordance with the terms of the Credit Agreement,
32
the Collateral Agent may exercise (or cause its sub-agents to exercise) on
behalf of the Secured Parties all rights of a secured party after default under
the UCC (whether or not in effect in the jurisdiction where such rights are
exercised) with respect to any Personal Property Collateral and, in addition,
the Collateral Agent may, without being required to give any notice, except as
herein provided or as may be required by mandatory provisions of law, (i)
withdraw all cash and Liquid Investments in the Collateral Accounts and apply
such cash and Liquid Investments and other cash, if any, then held by it as
Collateral as specified in Section 14 and (ii) if there shall be no such cash or
Liquid Investments or if such cash and Liquid Investments shall be insufficient
to pay all the Secured Obligations in full, take possession of, sell, lease,
license or otherwise dispose of the Collateral or any part thereof at public or
private sale, for cash, upon credit or for future delivery, and at such price or
prices as the Collateral Agent may deem satisfactory. Any Secured Party may be
the purchaser of any or all of the Collateral so sold at any public sale (or, if
the Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations, at
any private sale). The relevant Lien Grantor will execute and deliver such
documents and take such other action as the Collateral Agent deems reasonably
necessary or proper in order that any such sale may be made in compliance with
law. Upon any such sale the Collateral Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the Collateral so sold to it absolutely
and free from any claim or right of whatsoever kind, including any equity or
right of redemption of the relevant Lien Grantor which may be waived, and such
Lien Grantor, to the extent permitted by law, hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any law
now existing or hereafter adopted. The notice (if any) of such sale required by
Section 11 shall comply with the requirements set forth in Section 11. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix in the notice of
such sale. At any such sale the Collateral may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may determine. The Collateral
Agent shall not be obligated to make any such sale pursuant to any such notice.
The Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In the case of any sale of all
or any part of the Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the selling price is paid
by the purchaser thereof, but the Collateral Agent shall not incur any liability
in the case of the failure of such purchaser to take up and pay for the
Collateral so sold and, in the case of any such failure, such Collateral may
again be sold upon like notice. The Collateral Agent, instead of exercising the
power of sale herein conferred upon it, may proceed by a suit or suits at law or
in equity to foreclose
33
the Security Interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.
(b) For the purpose of enforcing any and all rights and remedies under
the Security Documents upon the occurrence and during the continuance of an
Actionable Event of Default or upon acceleration of the Loans in accordance with
the terms of the Credit Agreement, as the case may be, the Collateral Agent may
(i) require any Lien Grantor to, and such Lien Grantor agrees that it will, at
its expense and upon the request of the Collateral Agent, forthwith take
reasonable steps to assemble all or any part of the Collateral as directed by
the Collateral Agent and make it available at a place designated by the
Collateral Agent which is, in its opinion, reasonably convenient to the
Collateral Agent and such Lien Grantor, whether at the premises of such Lien
Grantor or otherwise, (ii) to the extent permitted by applicable law, enter,
with or without process of law and without breach of the peace, any premise
where any of the Collateral is or may be located, and without charge or
liability to it seize and remove such Collateral from such premises, (iii) have
access to and use such Lien Grantor's books and records relating to the
Collateral upon reasonable prior notice and at reasonable times and (iv) prior
to the disposition of the Collateral, store or transfer it without charge in or
by means of any storage or transportation facility owned or leased by such Lien
Grantor, process, repair or recondition it or otherwise prepare it for
disposition in any manner and to the extent the Collateral Agent reasonably
deems appropriate and, in connection with such preparation and disposition, use
without charge any trademark, trade name, copyright, patent or technical process
used by such Lien Grantor in connection therewith and included in the
Collateral, subject, with respect to products being sold under Trademarks, to
standards of quality with respect to such products that are reasonably
comparable to those prevailing at the time of such Actionable Event of Default.
(c) The remedies specified in this Section 12 do not affect, and are in
addition to, remedies otherwise specified for or available to the Collateral
Agent or the Secured Parties under this Agreement or any other Loan Document,
including, but not limited to, remedies available upon the occurrence and during
the continuance of an Event of Default or Actionable Event of Default, as the
case may be.
(d) The Collateral Agent hereby agrees that, notwithstanding anything to
the contrary set forth herein, the exercise of rights and remedies by the
Collateral Agent pursuant to this Section 12 (or otherwise) with respect to any
Collateral may be subject to the effect of any Permitted Encumbrances.
Section 13. Limitation on Duty of Collateral Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
34
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Collateral Agent in good
faith.
Section 14. Application of Proceeds. (a)(i) Upon (A) acceleration of the
Loans in accordance with the terms of the Credit Agreement and (B) the exercise
of remedies by the Collateral Agent under Section 12 hereof, the proceeds of any
sale of, or other realization upon, all or any part of the Collateral, shall be
applied by the Collateral Agent as follows:
first, to pay the expenses of such sale or other realization,
including reasonable compensation to agents contemplated by Section 16
and counsel for the Collateral Agent, and all expenses, liabilities and
advances incurred or made by the Collateral Agent in connection with the
Domestic Security Documents, and then ratably to pay any other
unreimbursed expenses for which the Collateral Agent is to be reimbursed
pursuant to Section 17 hereof;
second, (w) in the case of proceeds of any sale of, or realization
upon, Shared Collateral that includes both ESOP Restricted Collateral and
XCFI Restricted Collateral remaining after the application of amounts
pursuant to clause first above, in ratable amounts as follows:
(I) the ESOP Percentage thereof shall be applied to pay (or provide
for the payment thereof pursuant to Section ) the ESOP Secured
Obligations in accordance with Section until payment in full of all ESOP
Secured Obligations shall have been made (or so provided for);
(II) the XCFI Percentage thereof shall be applied to pay (or
provide for the payment thereof pursuant to Section 14(b)) the XCFI
Secured Obligations in accordance with Section 14(a)(iii) until payment
in full of all XCFI Secured Obligations shall have been made (or so
provided for); and
(III) the CA Percentage thereof shall be applied to pay (or provide
for the payment thereof pursuant to Section 14(b)) the CA Secured
Obligations in accordance with Section 14(a)(iv) until payment in full of
all CA Secured Obligations shall have been made (or so provided for);
35
(x) in the case of proceeds of any sale of, or realization upon, ESOP
Restricted Collateral that is not XCFI Restricted Collateral remaining after the
application of amounts pursuant to clause first above, in ratable amounts as
follows:
(I) the ESOP Percentage thereof shall be applied to pay (or provide
for the payment thereof pursuant to Section 14(b)) the ESOP Secured
Obligations in accordance with Section 14(a)(ii) until payment in full of
all ESOP Secured Obligations shall have been made (or so provided for);
and
(II) the CA Percentage thereof shall be applied to pay (or provide
for the repayment thereof pursuant to Section 14(b)) the CA Secured
Obligations in accordance with Section 14(a)(iv) until payment in full of
all CA Secured Obligations shall have been made (or so provided for);
(y) in the case of proceeds of any sale of, or realization upon, XCFI
Restricted Collateral that is not ESOP Restricted Collateral remaining after the
application of amounts pursuant to clause first above, in ratable amounts as
follows:
(I) the XCFI Percentage thereof shall be applied to pay (or provide
for the payment thereof pursuant to Section 14 (b)) the XCFI Secured
Obligations in accordance with Section 14(a)(iii) until payment in full
of all XCFI Secured Obligations shall have been made (or so provided
for); and
(II) the CA Percentage thereof shall be applied to pay (or provide
for the repayment thereof pursuant to Section 14(b)) the CA Secured
Obligations in accordance with Section 14(a)(iv) until payment in full of
all CA Secured Obligations shall have been made (or so provided for); and
(z) in the case of proceeds of any sale of, or realization upon, any
Collateral that is not Shared Collateral remaining after the application of
amounts pursuant to clause first above, 100% thereof shall be applied to pay (or
provide for the payment thereof pursuant to Section 14(b)) the CA Secured
Obligations in accordance with Section 14(a)(iv) until payment in full of all CA
Secured Obligations shall have been made (or so provided for); and
finally, to pay to the relevant Lien Grantor, or as a court of
competent jurisdiction may direct, any surplus then remaining from the
proceeds of the Collateral owned by it.
36
(ii) All amounts required to be applied to pay (or provide for the
payment of) the ESOP Secured Obligations pursuant to Section 14(a)(i)
shall be applied by the Collateral Agent in the following order of
priorities:
first, to pay the unpaid principal of the ESOP Secured Obligations
ratably (or provide for the payment thereof pursuant to Section 14(b)),
until payment in full of the principal of all ESOP Secured Obligations
shall have been made (or so provided for);
second, to pay ratably all interest on the ESOP Secured
Obligations; and
third, to pay all other ESOP Secured Obligations ratably (or
provide for the payment thereof pursuant to Section 14(b)), until payment
in full of all such other ESOP Secured Obligations shall have been made
(or so provided for).
(iii) All amounts required to be applied to pay (or provide for the
payment of) the XCFI Secured Obligations pursuant to Section 14(a)(i)
shall be paid by the Collateral Agent to the Trustee under each of the
XCFI Indentures (and any successor Trustee thereunder) for application by
such Trustee in accordance with the provisions of each of the XCFI
Indentures (or provide for such payment pursuant to Section 14(b)), until
payment in full of all XCFI Secured Obligations shall have been made (or
so provided for).
(iv) All amounts required to be applied to pay (or provide for the
payment of) the CA Secured Obligations pursuant to Section 14(a)(i) shall
be applied by the Collateral Agent in the following order of priorities:
first, to ratably pay any unreimbursed expenses for which any
Secured Party is to be reimbursed pursuant to Section 9.04 of the Credit
Agreement, and any unpaid fees owing to the Agents under the Credit
Agreement;
second, to pay the unpaid principal of Tranche B Term Loans (or
provide for the payment thereof pursuant to Section 14(b)), until payment
in full of the principal of all Tranche B Term Loans shall have been made
(or so provided for);
third, to pay interest on Tranche B Term Loans, until payment in
full of all such interest shall have been made;
37
fourth, to pay ratably the unpaid principal of Revolving Loans,
Tranche A Term Loans and, if still outstanding, Tranche C Term Loans
(or provide for the payment thereof pursuant to Section ), until
payment in full of the principal of such Loans shall have been made (or
so provided for);
fifth, to pay ratably all interest and fees payable under the
Credit Agreement to Revolving Lenders, Tranche A Lenders and, if still
outstanding, Tranche C Lenders, until payment in full of all such
interest and fees shall have been made; and
sixth, to pay all other CA Secured Obligations ratably (or
provide for the payment thereof pursuant to Section ), until payment in
full of all such other CA Secured Obligations shall have been made (or
so provided for).
(v) The Collateral Agent may make distributions under clauses
(i), (ii) or (iii) above in cash or in kind or, on a ratable basis, in
any combination thereof.
(b) If at any time any portion of any monies collected or received by
the Collateral Agent would, but for the provisions of this Section 14(b), be
payable in respect of a Contingent CA Secured Obligation or any other Secured
Obligation that is not then due and payable (by reason of acceleration or
otherwise), the Collateral Agent shall not apply any monies to pay such Secured
Obligation but instead shall request the holder thereof, at least 10 days before
each proposed distribution hereunder, to notify the Collateral Agent as to the
maximum amount of such Secured Obligation if then ascertainable (e.g. in the
case of a Letter of Credit, the maximum amount available for subsequent drawings
thereunder, regardless of whether the conditions to drawing thereunder are then
satisfied). If the holder of such Secured Obligation does not notify the
Collateral Agent of the maximum ascertainable amount thereof at least two
Business Days before such distribution, such holder will not be entitled to
share in such distribution. If such holder does so notify the Collateral Agent
as to the maximum ascertainable amount thereof, the Collateral Agent will
allocate to such holder a portion of the monies to be distributed in such
distribution, calculated as if such Secured Obligation were outstanding and then
due and payable in such maximum ascertainable amount. However, the Collateral
Agent will not apply such portion of such monies to pay such Secured Obligation,
but instead will hold such monies or invest such monies in Liquid Investments.
All such monies and Liquid Investments and all proceeds thereof will constitute
Collateral hereunder, but will be subject to distribution in accordance with
this Section 14(b) rather than Section 14(a). The Collateral Agent will hold all
such monies and Liquid Investments and the net proceeds thereof in trust until
all or part of such Secured Obligation becomes due and payable (or, in the case
of a Contingent CA Secured Obligation,
38
becomes a Non-Contingent CA Secured Obligation), whereupon the Collateral Agent
at the request of the relevant Secured Party will apply the amount so held in
trust to pay such Secured Obligation; provided that, if the other Secured
Obligations theretofore paid pursuant to the same clause of Section 14(a) were
not paid in full, the Collateral Agent will apply the amount so held in trust to
pay the same percentage of such Secured Obligation as the percentage of such
other Secured Obligations theretofore paid pursuant to the same clause of
Section 14(a). If (i) the holder of such Secured Obligation shall advise the
Collateral Agent that no portion thereof (A) has not become due and payable or
(B) remains in the category of a Contingent CA Secured Obligation, as the case
may be, and (ii) the Collateral Agent still holds any amount held in trust
pursuant to this Section 14(b) in respect of such Secured Obligation (after
paying all amounts payable pursuant to the preceding sentence with respect to
any portions thereof that have become due and payable or become Non-Contingent
CA Secured Obligations, as the case may be), such remaining amount will be
applied by the Collateral Agent in the order of priorities set forth in the
relevant clause of Section 14(a).
(c) In making the payments and allocations required by this Section,
the Collateral Agent may rely upon information supplied to it pursuant to
Section 15(c). All distributions made by the Collateral Agent pursuant to this
Section shall be final (except in the event of manifest error) and the
Collateral Agent shall have no duty to inquire as to the application by any
Secured Party of any amount distributed to it.
(d) Notwithstanding anything to the contrary contained herein or in any
other Domestic Security Document, the aggregate amount of proceeds of all sales
of, and other realizations upon, Restricted Collateral applied pursuant to this
Section 14 shall not at any time exceed the Basket Lien Available Amount at such
time.
Section 15. Concerning the Collateral Agent. The provisions of Article
VIII of the Credit Agreement shall inure to the benefit of the Collateral Agent
in respect of this Agreement (as if the Collateral Agent were the Administrative
Agent referred to therein) and shall be binding upon the parties to the Credit
Agreement. In furtherance and not in derogation of the rights, privileges and
immunities of the Collateral Agent therein specified:
(a) The Collateral Agent is authorized to take all such action as
is provided to be taken by it as Collateral Agent hereunder and all
other action reasonably incidental thereto. As to any matters not
expressly provided for herein (including, without limitation, the
timing and methods of realization upon the Collateral) the Collateral
Agent shall act or refrain from acting in accordance with written
instructions from the Required
39
Lenders or, in the absence of such instructions, in accordance with its
discretion.
(b) The Collateral Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Security
Interests in any of the Collateral, whether impaired by operation of
law or by reason of any action or omission to act on its part under the
Security Documents. The Collateral Agent shall have no duty to
ascertain or inquire as to the performance or observance of any of the
terms of any Security Document by any Lien Grantor.
(c) For all purposes of the Domestic Security Documents,
including determining the amounts of the Secured Obligations and
whether a Secured Obligation is a Contingent CA Secured Obligation or
not, the Collateral Agent will be entitled to rely on information from
(i) its own records for information as to the Lender and Agents, their
Secured Obligations and actions taken by them, (ii) any Secured Party
for information as to its Secured Obligations and actions taken by it,
to the extent that the Collateral Agent has not obtained such
information from the foregoing sources, and (iii) Xerox, to the extent
that the Collateral Agent has not obtained information from the
foregoing sources.
Section 16. Appointment of Co-Collateral Agents. At any time or times,
upon prior written notice to Xerox and in order to (a) comply with any legal
requirement in any jurisdiction, (b) preserve or protect the Collateral, (c)
exercise remedies specified in this Agreement or (d) otherwise carry out duties
or exercise rights specified in this Agreement, the Collateral Agent may appoint
another bank or trust company or one or more other Persons, either to act as
co-agent or co-agents, jointly with the Collateral Agent, or to act as separate
agent or agents on behalf of the Secured Parties with such power and authority
as may be necessary for the effective operation of the provisions hereof and may
be specified in the instrument of appointment (which may, in the discretion of
the Collateral Agent, include provisions for the protection of such co-agent or
separate agent similar to the provisions of Section 15).
Section 17. Expenses. Xerox agrees that it will forthwith upon demand
pay to the Collateral Agent:
(i) the amount of any Taxes which the Collateral Agent may have
been required to pay by reason of the Security Interests or to free any
of the Collateral from any other Lien thereon; and
(ii) the amount of any and all reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel and, upon
the
40
occurrence and during the continuance of an Event of Default, of any
other experts, which the Collateral Agent may incur in connection with
(w) the administration or enforcement of the Security Documents,
including such expenses as are incurred to preserve the value of the
Collateral and the validity, perfection, rank and value of any Security
Interest, (x) the collection, sale or other disposition of any of the
Collateral, (y) the exercise by the Collateral Agent of any of the
rights conferred upon it under the Security Documents or (z) any Event
of Default.
Any such amount not paid on demand shall bear interest at the rate
applicable to Base Rate Loans from time to time plus 2% and shall be an
additional Secured Obligation hereunder.
Section 18. Taxes. Each Guarantor agrees that: (a) All payments of
Secured Obligations and all other amounts payable on, under or in respect of
this Agreement or any other Domestic Security Document by such Guarantor,
including, without limitation, amounts payable by such Guarantor under clause
(b) of this Section 18, shall be made free and clear of and without deduction
for all present and future Taxes (other than income or franchise taxes imposed
on (or measured by) the net income of a Secured Party by a Secured Party
Jurisdiction of that Secured Party) including any such Taxes imposed with
respect to this Agreement or any other Domestic Security Document, the
execution, registration, enforcement, notarization or other formalization of any
thereof, and any payments of principal, interest, charges, fees, commissions or
other amounts made on, under or in respect thereof (hereinafter called "Covered
Taxes"), provided that, if any Guarantor shall be required to deduct any Covered
Taxes from such payments, then (i) the sum payable will be increased as
necessary so that, after all required deductions (including deductions
applicable to additional sums payable under this Section) are made, each
relevant Secured Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Guarantor shall make such
deductions and (iii) such Guarantor shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law. The parties
agree to cooperate and provide information with respect to United States and
foreign withholding tax matters relating to payments under this Agreement in a
manner consistent with the principles of Section 2.16(e) of the Credit
Agreement, mutatis mutandis. The parties also agree that the provisions of
Section 2.16(f) of the Credit Agreement apply, mutatis mutandis, to Covered
Taxes that are deducted, withheld or paid by a Guarantor pursuant to this
Agreement.
(b) Each Guarantor shall indemnify each Secured Party, within 15
Business Days after written demand therefor, for the full amount of any Covered
Taxes paid or incurred by such Secured Party with respect to any payment by or
obligation of such Guarantor under or with respect to this Agreement or any
other
41
Domestic Security Document (including Covered Taxes imposed or asserted on
or attributable to amounts payable under this Section) and any expenses arising
therefrom or with respect thereto, whether or not such Covered Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Each Secured Party shall make a good faith effort to verify that such Covered
Taxes are correctly and legally imposed or asserted by the relevant Governmental
Authority. An officer's certificate as to the amount of any such payment
delivered to Xerox by a Secured Party on its own behalf, or by the Collateral
Agent on behalf of a Secured Party, shall be conclusive absent manifest error.
(c) Within 15 Business Days after any Guarantor pays any Covered Taxes
to a Governmental Authority, such Guarantor shall deliver to the Collateral
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment. Each Guarantor shall promptly furnish to each
Secured Party any other information, documents and receipts that the Secured
Party may from time to time reasonably request to establish to its satisfaction
that full and timely payment of all Covered Taxes has been made. The applicable
Guarantor will be deemed to have satisfied the requirement of this Section 18(c)
if it has furnished such information, documents and/or receipts to the
Collateral Agent.
(d) Notwithstanding paragraphs (a) and (b) above, the payment increases
and indemnities pursuant to those paragraphs will not apply to the payment of
any Secured Obligation to the extent that (in the absence of this paragraph (d))
the Secured Party would thereby receive a net cash payment in respect of that
Secured Obligation greater than if that Secured Obligation had been paid by the
relevant Borrower.
Section 19. Termination of Security Interests; Release of Collateral.
(a) Each Security Interest granted hereunder shall terminate, and all
rights to the relevant Collateral shall revert to the relevant Lien Grantor, if,
as and to the extent permitted by Section 9.02 and 9.03 of the Credit Agreement,
as the case may be.
(b) Notwithstanding any contrary provision of this Agreement, if at any
time prior to the termination of the Security Interests pursuant to this Section
19, the ESOP Secured Obligations are paid in full, all rights hereunder of the
holders of ESOP Secured Obligations shall simultaneously terminate, and none of
the Secured Subsidiary Guarantors shall thereafter be an ESOP Restricted Secured
Subsidiary Guarantor.
(c) Notwithstanding any contrary provision of this Agreement, if at any
time prior to the termination of the Security Interests pursuant to this Section
19,
42
the XCFI Secured Obligations are paid in full, all rights hereunder of the
holders of XCFI Secured Obligations shall simultaneously terminate.
(d) Upon any termination of a Security Interest or release of
Collateral, the Collateral Agent will, at the expense of the relevant Lien
Grantor, execute and deliver to such Lien Grantor such documents as such Lien
Grantor shall reasonably request to evidence the termination of such Security
Interest or the release and reassignment of such Collateral, as the case may be.
Section 20. Additional Guarantors and Lien Grantors. Any Domestic
Subsidiary may become a party hereto by signing and delivering to the Collateral
Agent a Guarantee and Security Agreement Supplement, whereupon such Subsidiary
shall become a "Subsidiary Guarantor" and a "Lien Grantor" as defined herein.
Section 21. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party at its address
or telex or facsimile number set forth on the signature pages hereof or at such
other address or facsimile number as such party may hereafter specify for the
purpose by notice to the Collateral Agent and Xerox. All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement will be deemed to have been given on the date of receipt.
Section 22. Waivers, Non-Exclusive Remedies. No failure on the part of
the Collateral Agent or any Secured Party to exercise, and no delay in
exercising and no course of dealing with respect to, any right or remedy under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise by the Collateral Agent or any Secured Party of any right under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other right or remedy. The rights and remedies in the Loan Documents are
cumulative and are not exclusive of any other rights or remedies provided by
law.
Section 23. Successors and Assigns. This Agreement is for the benefit
of the Collateral Agent and the Secured Parties and their successors and, in the
case of the Lenders, permitted assigns pursuant to Section 9.04 of the Credit
Agreement and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the obligation so
assigned, shall be automatically transferred with such obligation. This
Agreement shall be binding on Xerox, each Subsidiary Guarantor and its
successors and assigns.
43
Section 24. Changes in Writing. Neither this Agreement nor any provision
hereof may be waived, amended, modified or terminated except pursuant to an
agreement or agreements in writing entered into by the parties hereto, with the
consent of such Lenders as are required to consent thereto under Section 9.02 of
the Credit Agreement.
Section 25. New York Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than New York are governed by the
laws of such jurisdiction.
Section 26. WAIVER OF JURY TRIAL. EACH PARTY HERETO AND ANY OTHER SECURED
PARTY BY ITS ACCEPTANCE OF THE BENEFITS HEREOF OR BY SEEKING TO ENFORCE THIS
AGREEMENT WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO ANY SECURITY DOCUMENT OR ANY TRANSACTION
CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY), AND
EACH OF SUCH PARTIES (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
Section 27. Severability. If any provision of any Security Document is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of the Security Documents shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Collateral Agent and the Secured Parties in order to
carry out the intentions of the parties hereto as nearly as may be possible; and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XEROX CORPORATION
By:_________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Treasurer
BANK ONE, NA, as Collateral Agent
By:_________________________________
Name:
Title:
Subsidiary Guarantors:
VRN INC.
XEROX FINANCE, INC.
XEROX FINANCIAL SERVICES, INC.
XEROX CAPITAL MANAGEMENT LLC
By: Xerox Corporation, as sole member
XEROX INVESTMENT MANAGEMENT LLC
By: Xerox Capital Management LLC, as
sole member
By: Xerox Corporation, as sole
member
XEROX EXPORT, LLC
By: Xerox Corporation, as sole member
By:_______________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Titles: President & Treasurer of VRN Inc.,
President of Xerox Finance,Inc.,
Chairman & President of Xerox
Financial Services, Inc., and Vice
President & Treasurer of Xerox
Corporation
AMTX, INC.
XDI, INC.
By:_______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Titles: Chairman & President of AMTX, Inc.
and Chairman of XDI, Inc.
▇▇▇▇▇▇▇ COMPANY
By:_______________________________________
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CARMEL VALLEY, INC.
▇▇▇▇▇▇▇▇ SOFTWARE, INC.
INCONCERT, INC.
LIVEWORKS, INC.
SCC ▇▇▇▇▇▇ CORPORATION
TERABANK SYSTEMS, INC.
UPPERCASE, INC.
By:_______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Titles: Chairman, President & Treasurer of
Carmel Valley, Inc., President &
Treasurer of ▇▇▇▇▇▇▇▇ Software,
Inc., InConcert, Inc., LiveWorks,
Inc., SCC ▇▇▇▇▇▇ Corporation and
Uppercase, Inc., and President of
Terabank Systems, Inc.
PIXELCRAFT, INC.
By:_______________________________________
Name: Herve Gallaire
Title: Chairman, President & Treasurer
INTELLIGENT ELECTRONICS, INC.
INTELLINET, LTD.
RNTS, INC.
XEROX CONNECT, INC.
By:_______________________________________
Name: ▇▇▇▇▇▇ Hope
Title: Treasurer
JEREMIAD CO.
SECURITIES INFORMATION CENTER, INC.
XTENDED MEMORY SYSTEMS
By:_______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
XEROX INTERNATIONAL REALTY CORPORATION
XEROX REALTY CORP. (CALIFORNIA)
LANSDOWNE RESIDENTIAL LLC
By: Xerox Realty Corporation, as
sole member
XRC REALTY CORP. WEST
XEROX REALTY CORPORATION
By:_______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Titles: President of Xerox International
Realty Corporation, Xerox Realty
Corp. (California) and XRC Realty
Corp. West, and Chairman &
President of Xerox Realty
Corporation
LOW-COMPLEXITY
MANUFACTURING GROUP, INC.
PALO ALTO RESEARCH CENTER INCORPORATED
PAGECAM, INC.
XEROX COLORGRAFX SYSTEMS, INC.
XEROX IMAGING SYSTEMS, INC.
XESYSTEMS, INC.
By:_______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Titles: Vice President of Low-Complexity
Manufacturing Group, Inc. and Palo
Alto Research Center Incorporated,
Vice President & Treasurer of
PageCam, Inc., Chairman, President
& Treasurer of Xerox ColorgrafX
Systems, Inc. and Xerox Imaging
Systems, Inc., and Chairman of
XESystems, Inc.
PACIFIC SERVICES AND DEVELOPMENT
CORPORATION
By:_______________________________________
Name: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: President & Treasurer
TALEGEN HOLDINGS, INC.
TALEGEN PROPERTIES, INC.
By:_______________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Titles: Chairman, President & Treasurer of
Talegen Holdings, Inc. and
Chairman & President of Talegen
Properties, Inc.
VIA XEROX RELOCATION COMPANY,
INC.
By:_______________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
XE HOLDINGS, INC.
By:_______________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman, President & Treasurer
XEROX COLOR PRINTING, INC.
By:_______________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
XEROX CREDIT CORPORATION
By:_______________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President & Treasurer
XEROX INTERNATIONAL JOINT
MARKETING, INC.
By:_______________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
XEROX LATINAMERICAN HOLDINGS, INC.
By:_________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President & Treasurer
XEROX REAL ESTATE SERVICES, INC.
By:_________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
IGHI, INC.
By:_________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
SCHEDULE 1
PLEDGED SECURITIES
(as of the Effective Date)
Jurisdiction Number of
of Owner of Percentage Shares or
Issuer Organization Security Owned Units
------------- ---------------- ---------- ------------ ----------
S-1-1
SCHEDULE 2
TERMS OF SUBORDINATION
SECTION 1. Agreement to Subordinate. The XCC Subordinated Obligations are
subordinated in right of payment, to the extent and in the manner provided in
this Schedule 2, to the prior payment in full of all XCC Senior Obligations. The
subordination provisions are for the benefit of and enforceable by the holders
of XCC Senior Obligations or their designated representatives.
SECTION 2. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of XCC to creditors upon a total or partial
liquidation or a total or partial dissolution of XCC or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to XCC
or its property:
(1) holders of XCC Senior Obligations are entitled to receive payment
in full in cash of all XCC Senior Obligations, including all interest
accrued or accruing on XCC Senior Obligations after the commencement of any
bankruptcy, insolvency or reorganization or similar case or proceeding at
the contract rate (including, without limitation, any contract rate
applicable upon default) specified in the XCC Indentures, whether or not
the claim for the interest is allowed as a claim in the case or proceeding
with respect to the XCC Senior Obligation (only such payment constituting
"payment in full") before any holder of XCC Subordinated Obligations (the
"XCC Secured Parties") will be entitled to receive any payment of XCC
Subordinated Obligations; and
(2) until the XCC Senior Obligations are paid in full, any
distribution from the assets of XCC to which XCC Secured Parties would be
entitled but for these subordination provisions shall instead be made to
holders of XCC Senior Obligations as their interests may appear.
SECTION 3. Payment Default at Final Maturity. XCC shall not pay any XCC
Subordinated Obligations until such time as all the XCC Senior Obligations have
been paid in full when due.
SECTION 4. When Distribution Must Be Paid Over. If a payment or other
distribution is made to the XCC Secured Parties that because of these
subordination provisions should not have been made to them, the XCC Secured
Parties that receive the distribution shall hold it in trust for holders of XCC
Senior Obligations and pay it over to them as their interests may appear.
SECTION 5. Subrogation. A distribution made under these subordination
provisions to holders of XCC Senior Obligations which otherwise
S-2-1
would have been made to the XCC Secured Parties is not, as between XCC and the
XCC Secured Parties, a payment by XCC on XCC Senior Obligations. After all XCC
Senior Obligations are paid in full and until the XCC Subordinated Obligations
are paid in full, the XCC Secured Parties will be subrogated to the rights of
holders of XCC Senior Obligations to receive payments in respect of XCC Senior
Obligations, which, to the extent received by the XCC Secured Parties, do not
constitute, as between XCC and the XCC Secured Parties, payments by XCC on the
XCC Subordinated Obligations.
SECTION 6. Relative Rights; Subordination Not to Prevent Events of Default
or Limit Right to Accelerate. These subordination provisions define the relative
rights of the XCC Secured Parties and holders of XCC Senior Obligations and do
not impair, as between XCC and the XCC Secured Parties, the obligation of XCC,
which is absolute and unconditional, to pay principal of and interest on the XCC
Subordinated Obligations in accordance with their terms. The failure to make a
payment pursuant to the XCC Subordinated Obligations by reason of these
subordination provisions does not prevent the occurrence of a Default, nor do
these subordination provisions have any effect on the right of the XCC Secured
Parties or the Collateral Agent to accelerate the maturity of the XCC
Subordinated Obligations upon an Event of Default or prevent the Collateral
Agent or any XCC Secured Party from exercising its available remedies upon a
Default, subject to the rights of holders of XCC Senior Obligations to receive
distributions otherwise payable to the XCC Secured Parties.
SECTION 7. Subordination May Not Be Impaired by Company. No right of any
holder of XCC Senior Obligations to enforce the subordination of the XCC
Subordinated Obligations will be impaired by any act or failure to act by XCC or
by its failure to comply with this Schedule 2.
SECTION 8. Rights of Collateral Agent. The Collateral Agent may continue to
make payments on the XCC Subordinated Obligations and will not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than one Business Day prior to the date of such
payment, the Collateral Agent receives notice satisfactory to it from XCC or a
holder of XCC Senior Obligations that payments may not be made under this
Schedule 2.
SECTION 9. Collateral Agent Not Fiduciary for Holders of XCC Senior
Obligations. The Collateral Agent will not be deemed to owe any fiduciary duty
to the holders of XCC Senior Obligations and will not be liable to any such
holders if it mistakenly pays over or distribute to the XCC Secured Parties, or
to XCC or any other Person, any money or assets to which holders of XCC Senior
Obligations are entitled by virtue of this Schedule 2.
S-2-2
SECTION 10. Reliance by Holder of XCC Senior Obligations on Subordination
Provisions; No Waiver. (a) Each XCC Secured Party acknowledges and agrees that
these subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of XCC Senior Obligations, to acquire or to hold
such XCC Senior Obligations, and each holder of XCC Senior Obligations will be
deemed conclusively to have relied on these subordination provisions in
acquiring and holding such XCC Senior Obligations.
(b) The holders of XCC Senior Obligations may, at any time and from
time to time, without the consent of or notice to the Collateral Agent or the
XCC Secured Parties, without incurring any liability or responsibility to the
XCC Secured Parties, and without impairing the rights of holders of XCC Senior
Obligations under these subordination provisions, do any of the following:
(1) change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, XCC Senior Obligations or any instrument
evidencing the same or any agreement under which XCC Senior Obligations is
outstanding or secured;
(2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing XCC Senior Obligations;
(3) release any Person liable in any manner for the payment of XCC
Senior Obligations; or
(4) exercise or refrain from exercising any rights against XCC and any
other Person.
S-2-3
EXHIBIT A
to Security Agreement
PERFECTION CERTIFICATE
The undersigned is a duly authorized officer of XEROX CORPORATION
("Xerox"). With reference to the Guarantee and Security Agreement (the "Security
Agreement") dated as of _________, 2002 among XEROX CORPORATION, the Subsidiary
Guarantors party thereto and BANK ONE, NA, as Collateral Agent (terms defined
therein being used herein as therein defined), the undersigned certifies to the
Collateral Agent and each other Secured Party as follows:
A. Information Required for Filings and Searches for Prior Filings.
1. Jurisdiction of Organization. The jurisdiction of organization
of each Lien Grantor is set forth in Schedule 3.12 to the Credit Agreement.
2. Name. The exact legal name of each Lien Grantor as it appears
in its organizational documents is set forth in Schedule 3.12 to the Credit
Agreement.
3. Prior Names. (a) Set forth below is each other corporate or
other legal name that each of Xerox, Xerox Financial Services, Inc. ("XFSI"),
Intelligent Electronics, Inc. ("IEI") and Xerox Connect, Inc. ("XCI") has had
within the past 5 years, together with the date of the relevant change:
(b) Except as set forth in Schedule 1 hereto, none of Xerox, XFSI,
IEI or XCI has changed its corporate structure in any way within the past five
years.
4. Filing Office. In order to perfect, as of the Effective Date,
the Security Interests granted by each Lien Grantor, to the extent that such
Security Interests may be perfected by filing a financing statement pursuant to
the UCC, a duly signed financing statement on Form UCC-1, with the collateral
described as set forth on Schedule 2 hereto, should be on file with respect to
each such Lien Grantor in the Office of the Secretary of State in the
jurisdiction of organization of such Lien Grantor as set forth in Schedule 3.12
to the Credit Agreement.
B. Additional Information Required for Searches for Prior Filings
Under Old Article 9.
A-1
Current Locations. The chief executive office of each of Xerox,
XFSI, IEI and XCI is located at the following address:
Name of Lien Grantor Mailing Address County State
---------------------- -------------------- ------------- -------------
Xerox, XFSI, IEI and XCI [do] [do not] have a place of business in another
county of the State where their respective chief executive offices are located.
C. Search Reports.
A true copy of a file search report from the central UCC filing office
in each jurisdiction where Xerox, XFSI, IEI or XCI has any material assets with
respect to Xerox, XFSI, IEI or XCI, as applicable (searches in local filing
offices, if any, are not required), has been provided to the Collateral Agent.
This file search report covers Xerox and Material Domestic Subsidiaries which,
in aggregate and without giving effect to the Restatement, represent (1) more
than 90% of the total revenues of Xerox and Domestic Subsidiaries for Fiscal
Year ended December 31, 2001 and (2) more than 90% of the total assets of Xerox
and Domestic Subsidiaries as of December 31, 2001.
D. UCC Filings.
Schedule 3.12 to the Credit Agreement sets forth filing information
with respect to the filings referred to in Part A-4 above (including name,
jurisdiction of organization and federal employer identification number of each
Lien Grantor) and Schedule 3 hereto sets forth the address of the chief
executive office of each Lien Grantor. All filing fees and taxes payable in
connection with such filings will be paid by Xerox.
IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
__________, 2002
________________________________
Name:
Title:
A-2
Schedule 1
to Perfection Certificate
CHANGES IN CORPORATE STRUCTURE
A-3
Schedule 2
to Perfection Certificate
DESCRIPTION OF COLLATERAL
All personal property, provided that, upon the sale, disposition,
assignment, lease, license, conveyance or other transfer by the Debtor of
personal property (including the sale, disposition, assignment, lease, license,
conveyance or other transfer of accounts and other assets in connection with the
monetization or other financing of such accounts and other assets) from time to
time, such personal property shall be automatically released from the collateral
pursuant to Section 9.03 of the Credit Agreement dated as of June __, 2002 among
the Debtor, the Secured Party and the other borrowers, lenders and agents party
thereto.
A-4
Schedule 3
to Perfection Certificate
CHIEF EXECUTIVE OFFICES OF LIEN GRANTORS
Name of Lien Grantor Chief Executive Office
-------------------- ----------------------
A-5
EXHIBIT B
to Security Agreement
ISSUER CONTROL AGREEMENT
ISSUER CONTROL AGREEMENT dated as of ______, _____ among [NAME OF LIEN
GRANTOR] (with its successors, the "Lien Grantor"), BANK ONE, NA, as Collateral
Agent (with its successors, the "Secured Party"), and _________ (the "Issuer").
All references herein to the "UCC" refer to the Uniform Commercial Code as in
effect from time to time in [Issuer's jurisdiction of incorporation].
W I T N E S S E T H :
WHEREAS, the Lien Grantor is the registered holder of [specify Pledged
Uncertificated Securities issued by the Issuer] issued by the Issuer (the
"Securities");
WHEREAS, pursuant to a Guarantee and Security Agreement dated as of
[date of Security Agreement] (as such agreement may be amended and/or
supplemented from time to time, the "Security Agreement"), the Lien Grantor has
granted to the Secured Party a continuing security interest (the "Security
Interest") in all right, title and interest of the Lien Grantor in, to and under
the Securities, whether now existing or hereafter arising; and
WHEREAS, the parties hereto are entering into this Agreement in order
to perfect the Security Interest on the Securities;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Nature of Securities. The Issuer confirms that (i) the
Securities are "uncertificated securities" (as defined in Section 8-102 of the
UCC) and (ii) the Lien Grantor is registered on the books of the Issuer as the
registered holder of the Securities.
Section 2. Instructions. The Issuer agrees to comply with any
"instruction" (as defined in Section 8-102 of the UCC) originated by the Secured
Party and relating to the Securities without further consent by the Lien Grantor
or any other person. The Lien Grantor consents to the foregoing agreement by the
Issuer.
Section 3. Waiver of Lien; Waiver of Set-off. The Issuer waives any
security interest, lien or right of setoff that it may now have or hereafter
acquire
B-1
in or with respect to the Securities. The Issuer's obligations in respect of the
Securities will not be subject to deduction, set-off or any other right in favor
of any person other than the Secured Party.
Section 4. Choice of Law. This Agreement shall be governed by the laws of
[Issuer's jurisdiction of incorporation].
Section 5. Conflict with Other Agreements. There is no agreement (except
this Agreement) between the Issuer and the Lien Grantor with respect to the
Securities [except for [identify any existing other agreements] (the "Existing
Other Agreements")]. In the event of any conflict between this Agreement (or any
portion hereof) and any other agreement [(including any Existing Other
Agreement)] between the Issuer and the Lien Grantor with respect to the
Securities, whether now existing or hereafter entered into, the terms of this
Agreement shall prevail.
Section 6. Amendments. No amendment or modification of this Agreement or
waiver of any right hereunder shall be binding on any party hereto unless it is
in writing and is signed by all the parties hereto.
Section 7. Notice of Adverse Claims. Except for the claims and interests of
the Secured Party and the Lien Grantor in the Securities, the Issuer does not
know of any claim to, or interest in, the Securities. If any person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
attachment, execution or similar process) against the Securities, the Issuer
will promptly notify the Secured Party and the Lien Grantor thereof.
Section 8. Maintenance of Securities. In addition to, and not in lieu of,
the obligation of the Issuer to honor instructions as agreed in Section 2
hereof, the Issuer agrees as follows:
(i) Lien Grantor Instructions; Notice of Exclusive Control. So long as
the Issuer has not received a Notice of Exclusive Control (as defined
below), the Issuer may comply with instructions of the Lien Grantor or any
duly authorized agent of the Lien Grantor in respect of the Securities.
After the Issuer receives a written notice from the Secured Party that it
is exercising exclusive control over the Securities (a "Notice of Exclusive
Control"), the Issuer will cease complying with instructions of the Lien
Grantor or any of its agents.
(ii) Non-Cash Dividends and Distributions. After the Issuer receives a
Notice of Exclusive Control, the Issuer shall deliver to the Secured Party
all dividends, interest and other distributions paid or made upon or with
respect to the Securities.
B-2
(iii) Voting Rights. Until the Issuer receives a Notice of Exclusive
Control, the Lien Grantor shall be entitled to direct the Issuer with
respect to voting the Securities.
Section 9. Representations, Warranties and Covenants of the Issuer. The
Issuer makes the following representations, warranties and covenants:
(i) This Agreement is a valid and binding agreement of the Issuer
enforceable in accordance with its terms.
(ii) The Issuer has not entered into, and until the termination of
this Agreement will not enter into, any agreement with any other person
relating to the Securities pursuant to which it has agreed, or will agree,
to comply with instructions (as defined in Section 8-102 of the UCC) of
such person. The Issuer has not entered into any other agreement with the
Lien Grantor or the Secured Party purporting to limit or condition the
obligation of the Issuer to comply with instructions as agreed in Section 2
hereof.
Section 10. Successors. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
Section 11. Notices. Each notice, request or other communication given to
any party hereunder shall be in writing (which term includes facsimile or other
electronic transmission) and shall be effective (i) when delivered to such party
at its address specified below, (ii) when sent to such party by facsimile or
other electronic transmission, addressed to it at its facsimile number or
electronic address specified below, and such party sends back an electronic
confirmation of receipt or (iii) ten days after being sent to such party by
certified or registered United States mail, addressed to it at its address
specified below, with first class or airmail postage prepaid:
Lien Grantor:
Secured Party:
Issuer:
Any party may change its address, facsimile number and/or e-mail address for
purposes of this Section by giving notice of such change to the other parties in
the manner specified above.
Section 12. Termination. The rights and powers granted herein to the
Secured Party (i) have been granted in order to perfect the Security Interest,
(ii)
B-3
are powers coupled with an interest and (iii) will not be affected by any
bankruptcy of the Lien Grantor or any lapse of time. The obligations of the
Issuer hereunder shall continue in effect until the Secured Party has notified
the Issuer in writing that the Security Interest in the Securities has been
terminated pursuant to the Security Agreement, and the Secured Party agrees to
provide such notice of termination upon the request of the Lien Grantor on or
after such termination of the Security Interest.
Section 13. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
[NAME OF LIEN GRANTOR]
By:___________________________________
Name:
Title:
BANK ONE, NA, as Collateral Agent
By:___________________________________
Name:
Title:
[NAME OF ISSUER]
By:___________________________________
Name:
Title:
B-4
Exhibit A
to Issuer Control Agreement
[Letterhead of Secured Party]
[Date]
[Name and Address of Issuer]
Attention: ________________________
Re: Notice of Exclusive Control
Ladies and Gentlemen:
As referenced in the Issuer Control Agreement dated as of ______, ____
among [Name of Lien Grantor], us and you (a copy of which is attached), we
notify you that we will hereafter exercise exclusive control over [specify
Pledged Uncertificated Securities] registered in the name of [Name of Lien
Grantor] (the "Securities"). You are instructed not to accept any directions or
instructions with respect to the Securities from any person other than the
undersigned unless otherwise ordered by a court of competent jurisdiction.
You are instructed to deliver a copy of this notice by facsimile
transmission to [Name of Lien Grantor].
Very truly yours,
BANK ONE, NA, as Collateral Agent
By:___________________________________
Title:
cc: [Name of Lien Grantor]
B-5
EXHIBIT C
to Security Agreement
GUARANTEE AND SECURITY AGREEMENT SUPPLEMENT
GUARANTEE AND SECURITY AGREEMENT SUPPLEMENT dated as of _______, ____,
between [NAME OF LIEN GRANTOR] (the "Lien Grantor") and BANK ONE, NA, as
Collateral Agent.
WHEREAS, XEROX CORPORATION ("XEROX"), the Subsidiary Guarantors party
thereto and BANK ONE, NA, as Collateral Agent, are parties to a Guarantee and
Security Agreement dated as of ___________, 2002 (as heretofore amended and/or
supplemented, the "Security Agreement") under which (1) Xerox (a) secures
certain Secured Obligations, (b) guarantees Overseas CA Secured Obligations and
(c) secures its guarantee thereof, (2) the Subsidiary Guarantors guarantee
certain of the foregoing obligations and (3) the Secured Subsidiary Guarantors
secure their respective guarantees thereof;
WHEREAS, [name of Lien Grantor] desires to become [is] a party to the
Security Agreement as a Secured Subsidiary Guarantor and Lien Grantor
thereunder; and
WHEREAS, terms defined in the Security Agreement (or whose definitions are
incorporated by reference in Sections 1(a) and 1(b) of the Security Agreement)
and not otherwise defined herein have, as used herein, the respective meanings
provided for therein;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Secured Guarantee. The Lien Grantor unconditionally guarantees the full
and punctual payment of each Secured Obligation when due (whether at stated
maturity, upon acceleration or otherwise). If Xerox or any Overseas Borrower
fails to pay any Secured Obligation punctually when due, the Lien Grantor agrees
that it will forthwith on demand pay the amount not so paid at the place and in
the manner specified in the relevant Secured Agreement; provided, however, that
notwithstanding the foregoing, (A) if the Lien Grantor is not an ESOP Restricted
Secured Subsidiary Guarantor, then the ESOP Secured Obligations are not
guaranteed by the Lien Grantor and no holder of any ESOP Secured Obligation
shall have any claim against, or Lien on any asset of, the Lien Grantor by
virtue of this Guarantee and Security Agreement Supplement and (B) if the Lien
Grantor is not a Restricted Secured Subsidiary Guarantor, then the XCFI Secured
Obligations are not guaranteed by the Lien Grantor and no holder
C-1
of any XCFI Secured Obligation shall have any claim against, or Lien on any
asset of, the Lien Grantor by virtue of this Guarantee and Security Agreement
Supplement; provided, further, that if the Lien Grantor is an ESOP Restricted
Secured Subsidiary Guarantor or a Restricted Secured Subsidiary Guarantor, then
notwithstanding anything to the contrary contained herein, the liability and
obligation of the Lien Grantor under this Section 1 with respect to the ESOP
Secured Obligations (but not any other Secured Obligations) or with respect to
the XCFI Secured Obligations (but not any other Secured Obligations), as the
case may be, shall not be enforced by any action or proceeding wherein damages
or any money judgment shall be sought against the Lien Grantor, except a
foreclosure by the Collateral Agent upon the ESOP Restricted Collateral or the
XCFI Restricted Collateral, as the case may be, of the Lien Grantor, and any
judgment in any such foreclosure action shall be enforceable by the Collateral
Agent against such ESOP Restricted Collateral or such XCFI Restricted
Collateral, as the case may be, only to the extent of the ESOP Percentage of the
Lien Grantor's interest in such ESOP Restricted Collateral or only to the extent
of the XCFI Percentage of the Lien Grantor's interest in such XCFI Restricted
Collateral, as the case may be, and the guarantee extended hereby for the
benefit of any holder of ESOP Secured Obligations or XCFI Secured Obligations is
provided to such holder under the express condition that the Collateral Agent
has no right to ▇▇▇ for, seek or demand any deficiency judgement against the
Lien Grantor with respect to the ESOP Secured Obligations or the XCFI Secured
Obligations, as the case may be (but not any other Secured Obligations), in any
such foreclosure action under or by reason of, or in connection with, this
Guarantee and Security Agreement Supplement, the Security Agreement or otherwise
with respect to such guarantee. The Lien Grantor acknowledges that, by signing
this Security Agreement Supplement and delivering it to the Collateral Agent,
the Lien Grantor becomes a "Subsidiary Guarantor" and "Lien Grantor" for all
purposes of the Security Agreement and that its obligations under the foregoing
Secured Guarantee are subject to all the provisions of the Security Agreement
(including those set forth in Section 2 thereof) applicable to the obligations
of a Subsidiary Guarantor thereunder. The obligations of the Lien Grantor under
this Section 1 (and under Section 2(a) of the Security Agreement) shall be
limited as provided in Section 2(i) of the Security Agreement.
2. Grant of Security Interests. (a) In order to secure its Secured
Guarantee, the Lien Grantor grants to the Collateral Agent for the benefit of
the Secured Parties a continuing security interest in and to all of its right,
title and interest in the following property of the Lien Grantor, whether now
owned or existing or hereafter acquired or arising and regardless of where
located, but subject to the exclusions in Section 2(b) (the "New Collateral"):
(i) Accounts, (ii) Chattel Paper, (iii) Documents, (iv) Equipment, (v) General
Intangibles, (vi) Instruments, (vii) Inventory, (viii) Securities directly owned
by the Lien Grantor and issued by any subsidiary or Affiliate of the Lien
Grantor or any other issuer over which the Lien Grantor exercises Control, (ix)
the Collateral Account, all
C-2
Financial Assets credited to the Collateral Account from time to time and all
Security Entitlements in respect thereof, all cash deposited therein from time
to time, and the Liquid Investments made pursuant to Section 8(d) of the
Security Agreement, (x) all books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other computer
materials and records) of the Lien Grantor pertaining to any of the New
Collateral and (xi) all Proceeds of the New Collateral described in Clauses
2(a)(i) through 2(a)(x) hereof.
(b) The New Collateral shall not include:
(i) rights of the Lien Grantor in respect of any property
or asset which is prohibited from being pledged to the Collateral
Agent as part of the Collateral by any Permitted Encumbrances;
(ii) Transferred Receivables and (A) security interests or
liens and property subject thereto purporting to secure payment
of such Transferred Receivables, (B) leases, guaranties,
insurance and other arrangements supporting payment of such
Transferred Receivables, (C) rights to payment and collections in
respect of such Transferred Receivables, (D) books, records and
similar information relating to such Transferred Receivables or
the obligors thereon, (E) with respect to any such Transferred
Receivables, the transferee's interest in goods (including,
without limitation, Equipment or Inventory) the sale of which
gave rise to such Transferred Receivables and (F) if such
Transferred Receivables arise from a lease financing or
installment sale transaction, the Equipment or Inventory that is
the subject of the underlying transaction and is transferred to a
Receivables SPE;
(iii) Transferred Intellectual Property;
(iv) State and Local Government Receivables of the Lien
Grantor;
(v) any Security owned by the Lien Grantor that is a
voting Equity Interest issued by a Foreign Subsidiary that is a
corporation for United States Federal income tax purposes, if and
to the extent that the Collateral (including New Collateral)
pledged by Xerox to secure Xerox Secured Obligations or by any
other Lien Grantor to secure any guarantee of the Secured
Obligations of Xerox pursuant to the Security Agreement or any
other Domestic Security Document would include in the aggregate
more than 65% of the shares of any class of voting securities of
such Foreign
C-3
Subsidiary (either directly or through any entity that is a
disregarded entity for such purposes); and
(vi) Third Party Vendor Financing Assets of the Lien Grantor.
(c) With respect to each right to payment or performance included in the
New Collateral from time to time, the Security Interest granted therein
includes, subject to Permitted Encumbrances, a continuing security interest in
(i) any Supporting Obligation that supports such payment or performance and (ii)
any Lien that (x) secures such right to payment or performance or (y) secures
any such Supporting Obligation.
(d) The foregoing Security Interests are granted as security only and
shall not subject the Collateral Agent or any other Secured Party to, or
transfer or in any way affect or modify, any obligation or liability of the Lien
Grantor with respect to any of the New Collateral or any transaction in
connection therewith.
3. Delivery of Collateral. Concurrently with delivering this Guarantee
and Security Agreement Supplement to the Collateral Agent, the Lien Grantor is
complying with the provisions of either Section 7 or Section 9(a) (whichever is
applicable) of the Security Agreement with respect to Pledged Securities, in
each case if and to the extent included in the New Collateral at such time.
4. Party to Security Agreement. Upon delivering this Guarantee and
Security Agreement Supplement to the Collateral Agent, the Lien Grantor will
become a party to the Security Agreement and will thereafter have all the rights
and obligations of a Subsidiary Guarantor and a Lien Grantor thereunder and be
bound by all the provisions thereof as fully as if the Lien Grantor were one of
the original parties thereto.
5. Representations and Warranties. (a) Each of the representations and
warranties set forth in Sections 3, 5, 6, 7, 8 and 9 of the Security Agreement
is true as applied to the Lien Grantor and the New Collateral. For purposes of
the foregoing sentence, references in said Sections (and elsewhere in the
Security Agreement) to a "Lien Grantor" or "Original Lien Grantor" shall be
deemed to refer to the Lien Grantor, references to Schedules to the Security
Agreement shall be deemed to refer to the corresponding Schedules to this
Guarantee and Security Agreement Supplement, references to "Collateral" shall be
deemed to refer to the New Collateral, and references to the "Effective Date"
shall be deemed to refer to the date on which the Lien Grantor signs and
delivers this Guarantee and Security Agreement Supplement.
(b) Schedule 1 hereto sets forth (i) the name and jurisdiction of
organization of, and the ownership interest (including percentage owned and
C-4
number of shares or units) of the Lien Grantor in the Securities of, each of the
Lien Grantor's direct Subsidiaries as of the date hereof which are required to
be included in the New Collateral and pledged pursuant to the Security Agreement
and this Guarantee and Security Agreement Supplement and (ii) all other
Securities directly owned by the Lien Grantor that are required to be included
in the New Collateral and pledged pursuant to the Security Agreement and this
Guarantee and Security Agreement Supplement. The Lien Grantor holds all such
Securities directly (i.e., not through a subsidiary, a Securities Intermediary
or any other Person).
6. Governing Law. This Guarantee and Security Agreement Supplement shall
be construed in accordance with and governed by the laws of the State of New
York, except as otherwise required by mandatory provisions of law and except to
the extent that remedies provided by the laws of any jurisdiction other than New
York are governed by the laws of such jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee and
Security Agreement Supplement to be duly executed by their respective authorized
officers as of the day and year first above written.
[NAME OF LIEN GRANTOR]
By: ______________________________
Name:
Title:
BANK ONE, NA, as Collateral Agent
By: ______________________________
Name:
Title:
C-5
Schedule 1
to Guarantee and Security
Agreement Supplement
PLEDGED SECURITIES
Jurisdiction
of Percentage Number of
Issuer Organization Owned Shares or Units
--------------------- ------------------ ---------------- -----------------
C-6
EXHIBIT D
to Security Agreement
COPYRIGHT SECURITY AGREEMENT
(Copyrights, Copyright Registrations and Copyright Licenses)
WHEREAS, Xerox and each of its subsidiaries party hereto (each, a "Lien
Grantor") owns, or in the case of licenses is a party to, the Copyright
Collateral (as defined below);
WHEREAS, XEROX CORPORATION ("Xerox"), the Overseas Borrowers party thereto,
the Lenders party thereto, BANK ONE, NA, as Administrative Agent, Collateral
Agent and LC Issuing Bank, JPMORGAN CHASE BANK, as Documentation Agent and
CITIBANK, N.A., as Syndication Agent, are parties to a Credit Agreement dated as
of _________, 2002 (as amended from time to time, the "Credit Agreement"); and
WHEREAS, pursuant to (i) a Guarantee and Security Agreement dated as of
_________, 2002 (as amended and/or supplemented from time to time, the "Security
Agreement") among Xerox, the Subsidiary Guarantors party thereto and BANK ONE,
NA, as Collateral Agent for the Secured Parties referred to therein (in such
capacity, together with its successors in such capacity, the "Grantee"), and
(ii) certain other Domestic Security Documents (including this Copyright
Security Agreement), each Lien Grantor has secured certain of its obligations
(the "Secured Obligations") by granting to the Grantee for the benefit of such
Secured Parties a continuing security interest in personal property of that Lien
Grantor, including all right, title and interest of the Lien Grantor in and to
the Copyright Collateral (as defined below);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Lien Grantor grants to the
Grantee for the benefit of the Secured Parties (as defined in the Security
Agreement), to secure its Secured Obligations, a continuing security interest in
and to all of the Lien Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "Copyright Collateral"), except to the extent
(and only to the extent) prohibited by a Permitted Encumbrance (as defined in
the Security Agreement), whether now owned or existing or hereafter acquired or
arising:
(i) each Copyright (as defined in the Security Agreement) owned by the
Lien Grantor, including, without limitation, each Copyright registration
therefor referred to in Schedule 1 hereto;
D-1
(ii) each Copyright License (as defined in the Security Agreement) to
which the Lien Grantor is a party; and
(iii) all proceeds of, revenues from, and accounts and general
intangibles arising out of, the foregoing, including, without limitation,
all proceeds of and revenues from any claim by the Lien Grantor against
third parties for past, present or future infringement of any Copyright
(including, without limitation, any Copyright owned by the Lien Grantor and
identified in Schedule 1).
Each Lien Grantor hereby irrevocably appoints the Grantee its true and
lawful attorney, with full power of substitution, in the name of the Lien
Grantor, the Grantee, the Secured Parties or otherwise, for the use and benefit
of the Secured Parties, but at the Borrowers' (as defined in the Credit
Agreement) expense, to the extent permitted by law to exercise, upon the
occurrence and during the continuance of an Actionable Event of Default (as
defined in the Security Agreement) or upon acceleration of the Loans (as defined
in the Credit Agreement) in accordance with the terms of the Credit Agreement,
all or any of the following powers with respect to all or any of the Copyright
Collateral:
(a) to demand, ▇▇▇ for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds thereof, as fully and effectually as if the Grantee were the
absolute owner of the Lien Grantor's right, title and interest therein, and
(d) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto.
The foregoing security interest is granted in conjunction with the Security
Interests (as defined in the Security Agreement) granted by each Lien Grantor to
the Grantee pursuant to the Security Agreement. Each Lien Grantor acknowledges
and affirms that the rights and remedies of the Grantee with respect to the
security interest in the Copyright Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
IN WITNESS WHEREOF, each Lien Grantor has caused this Copyright Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
___ day of __________, ____.
D-2
[NAME OF LIEN GRANTORS]
By:
___________________________________
Name:
Title:
Acknowledged:
BANK ONE, NA, as Collateral Agent
By:
___________________________________
Name:
Title:
D-3
Schedule 1
to Copyright
Security Agreement
[NAME OF LIEN GRANTORS]
U.S. COPYRIGHT REGISTRATIONS
Registration No. Registration Date Title
---------------- ----------------- -----
D-4
EXHIBIT E
to Security Agreement
PATENT SECURITY AGREEMENT
(Patents, Patent Applications and Patent Licenses)
WHEREAS, XEROX CORPORATION ("Xerox") (the "Lien Grantor") owns, or in the
case of licenses is a party to, the Patent Collateral (as defined below);
WHEREAS, Xerox, the Overseas Borrowers party thereto, the Lenders party
thereto, BANK ONE, NA, as Administrative Agent, Collateral Agent and LC Issuing
Bank, JPMORGAN CHASE BANK, as Documentation Agent and CITIBANK, N.A., as
Syndication Agent, are parties to a Credit Agreement dated as of _________, 2002
(as amended from time to time, the "Credit Agreement"); and
WHEREAS, pursuant to (i) a Guarantee and Security Agreement dated as of
_________, 2002 (as amended and/or supplemented from time to time, the "Security
Agreement") among Xerox, the Subsidiary Guarantors party thereto and BANK ONE,
NA, as Collateral Agent for the Secured Parties referred to therein (in such
capacity, together with its successors in such capacity, the "Grantee"), and
(ii) certain other Domestic Security Documents (including this Patent Security
Agreement), the Lien Grantor has secured certain of its obligations (the
"Secured Obligations") by granting to the Grantee for the benefit of such
Secured Parties a continuing security interest in personal property of the Lien
Grantor, including all right, title and interest of the Lien Grantor in and to
the Patent Collateral (as defined below);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lien Grantor grants to the
Grantee for the benefit of the Secured Parties (as defined in the Security
Agreement), to secure the Secured Obligations, a continuing security interest in
and to all of the Lien Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "Patent Collateral"), except to the extent (and
only to the extent) prohibited by a Permitted Encumbrance (as defined in the
Security Agreement), whether now owned or existing or hereafter acquired or
arising:
(i) each Patent (as defined in the Security Agreement) owned by the
Lien Grantor, including, without limitation, each Patent referred to in
Schedule 1 hereto;
E-1
(ii) each Patent License (as defined in the Security Agreement) to
which the Lien Grantor is a party; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by the Lien
Grantor against third parties for past, present or future infringement of
any Patent owned by the Lien Grantor (including, without limitation, any
Patent identified in Schedule 1 hereto).
The Lien Grantor hereby irrevocably appoints the Grantee its true and
lawful attorney, with full power of substitution, in the name of the Lien
Grantor, the Grantee, the Secured Parties or otherwise, for the use and benefit
of the Secured Parties, but at the Borrowers' (as defined in the Credit
Agreement) expense, to the extent permitted by law to exercise, upon the
occurrence and during the continuance of an Actionable Event of Default (as
defined in the Security Agreement) or upon acceleration of the Loans (as defined
in the Credit Agreement) in accordance with the terms of the Credit Agreement,
all or any of the following powers with respect to all or any of the Patent
Collateral:
(a) to demand, ▇▇▇ for, collect, receive and give acquittance for
any and all monies due or to become due thereon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds thereof, as fully and effectually as if the Grantee were
the absolute owner of the Lien Grantor's right, title and interest therein,
and
(d) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto.
The foregoing security interest is granted in conjunction with the Security
Interests (as defined in the Security Agreement) granted by the Lien Grantor to
the Grantee pursuant to the Security Agreement. The Lien Grantor acknowledges
and affirms that the rights and remedies of the Grantee with respect to the
security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
E-2
IN WITNESS WHEREOF, the Lien Grantor has caused this Patent Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
____ day of ____________, ____.
[NAME OF LIEN GRANTOR]
By:
____________________________
Name:
Title:
Acknowledged:
BANK ONE, NA, as Collateral Agent
By:
__________________________________
Name:
Title:
E-3
Schedule 1
to Patent
Security Agreement
[NAME OF LIEN GRANTOR]
U.S. PATENTS AND DESIGN PATENTS
Patent No. Date Issued Title
------------------ ------------------- ------------------
U.S. PATENT APPLICATIONS
Docket No. Application No. Date Filed
------------------ ------------------- ------------------
E-4
EXHIBIT F
to Security Agreement
TRADEMARK SECURITY AGREEMENT
(Trademarks, Trademark Registrations, Trademark
Applications and Trademark Licenses)
WHEREAS, Xerox and each of its subsidiaries party hereto (each, a "Lien
Grantor") owns, or in the case of licenses is a party to, the Trademark
Collateral (as defined below);
WHEREAS, XEROX CORPORATION ("Xerox"), the Overseas Borrowers party thereto,
the Lenders party thereto, BANK ONE, NA, as Administrative Agent, Collateral
Agent and LC Issuing Bank, JPMORGAN CHASE BANK, as Documentation Agent and
CITIBANK, N.A., as Syndication Agent, are parties to a Credit Agreement dated as
of _________, 2002 (as amended from time to time, the "Credit Agreement"); and
WHEREAS, pursuant to (i) a Guarantee and Security Agreement dated as of
_________, 2002 (as amended and/or supplemented from time to time, the "Security
Agreement") among Xerox, the Subsidiary Guarantors party thereto and BANK ONE,
NA, as Collateral Agent for the Secured Parties referred to therein (in such
capacity, together with its successors in such capacity, the "Grantee"), and
(ii) certain other Domestic Security Documents (including this Trademark
Security Agreement), each Lien Grantor has secured certain of its obligations
(the "Secured Obligations") by granting to the Grantee for the benefit of such
Secured Parties a continuing security interest in personal property of that Lien
Grantor, including all right, title and interest of the Lien Grantor in and to
the Trademark Collateral (as defined below);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Lien Grantor grants to the
Grantee for the benefit of the Secured Parties (as defined in the Security
Agreement), to secure its Secured Obligations, a continuing security interest in
and to all of the Lien Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "Trademark Collateral"), except to the extent
(and only to the extent) prohibited by a Permitted Encumbrance (as defined in
the Security Agreement), whether now owned or existing or hereafter acquired or
arising:
(i) each Trademark (as defined in the Security Agreement) owned by the
Lien Grantor, including, without limitation, each Trademark
F-1
registration and application referred to in Schedule 1 hereto, and all of
the goodwill of the business symbolized by or associated with each
Trademark;
(ii) each Trademark License (as defined in the Security Agreement) to
which the Lien Grantor is a party, and all of the goodwill of the business
symbolized by or associated with each Trademark licensed pursuant thereto;
and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by the Lien
Grantor against third parties for past, present or future unfair
competition with, or violation of intellectual property rights in
connection with or injury to, or infringement or dilution of, any Trademark
owned by the Lien Grantor (including, without limitation, any Trademark
identified in Schedule 1 hereto), or for injury to the goodwill associated
with any of the foregoing.
Each Lien Grantor hereby irrevocably appoints the Grantee its true and
lawful attorney, with full power of substitution, in the name of the Lien
Grantor, the Grantee, the Secured Parties or otherwise, for the use and benefit
of the Secured Parties, but at the Borrowers' (as defined in the Credit
Agreement) expense, to the extent permitted by law to exercise, upon the
occurrence and during the continuance of an Actionable Event of Default (as
defined in the Security Agreement) or upon acceleration of the Loans (as defined
in the Credit Agreement) in accordance with the terms of the Credit Agreement,
all or any of the following powers with respect to all or any of the Trademark
Collateral:
(a) to demand, ▇▇▇ for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds thereof, as fully and effectually as if the Grantee were the
absolute owner of the Lien Grantor's right, title and interest therein, and
(d) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto.
The foregoing security interest is granted in conjunction with the Security
Interests (as defined in the Security Agreement) granted by each Lien Grantor to
the Grantee pursuant to the Security Agreement. Each Lien Grantor acknowledges
and affirms that the rights and remedies of the Grantee with respect
F-2
to the security interest in the Trademark Collateral granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
F-3
IN WITNESS WHEREOF, each Lien Grantor has caused this Trademark Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
____ day of __________, ____.
[NAME OF LIEN GRANTORS]
By:_____________________________________
Name:
Title:
Acknowledged:
BANK ONE, NA, as Collateral Agent
By:_______________________________
Name:
Title:
F-4
Schedule 1
to Trademark
Security Agreement
[NAME OF LIEN GRANTORS]
U.S. TRADEMARK REGISTRATIONS
TRADEMARK REG. NO. REG. DATE
--------- -------- ---------
U.S. TRADEMARK APPLICATIONS
TRADEMARK APPLICATION NO. DATE FILED
--------- --------------- ----------
F-5