[CONFORMED COPY]
SECURITY AGREEMENT
Dated as of August 16, 2002
from
The Grantors referred to herein
AS GRANTORS
to
BANK OF AMERICA, N.A.
AS COLLATERAL AGENT
TABLE OF CONTENTS
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PAGE
SECTION 1. DEFINITIONS........................................................2
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SECTION 2. GRANT OF SECURITY..................................................5
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SECTION 3. SECURITY FOR OBLIGATIONS..........................................12
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SECTION 4. GRANTORS REMAIN LIABLE............................................13
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SECTION 5. DELIVERY AND CONTROL OF SECURITY COLLATERAL.......................13
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SECTION 6. MAINTAINING THE ACCOUNT COLLATERAL................................15
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SECTION 7. INVESTING OF AMOUNTS IN THE LC COLLATERAL ACCOUNT.................16
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SECTION 8. MAINTAINING LETTER OF CREDIT RIGHTS AND GIVING NOTICE OF
COMMERCIAL TORT CLAIMS..............................................17
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SECTION 9. REPRESENTATIONS AND WARRANTIES....................................17
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SECTION 10. FURTHER ASSURANCES...............................................20
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SECTION 11. POST-CLOSING CHANGES; COLLECTIONS ON ASSIGNED AGREEMENTS,
RECEIVABLES AND RELATED CONTRACTS...................................21
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SECTION 12. AS TO INTELLECTUAL PROPERTY COLLATERAL...........................22
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SECTION 13. VOTING RIGHTS; DIVIDENDS; ETC....................................24
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SECTION 14. AS TO LETTER-OF-CREDIT RIGHTS....................................25
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SECTION 15. INSURANCE RECEIVABLES............................................26
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SECTION 16. TRANSFERS AND OTHER LIENS........................................26
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SECTION 17. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT......................26
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SECTION 18. COLLATERAL AGENT MAY PERFORM.....................................27
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SECTION 19. THE COLLATERAL AGENT'S DUTIES....................................27
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SECTION 20. REMEDIES.........................................................28
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SECTION 21. INDEMNITY AND EXPENSES...........................................35
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SECTION 22. EFFECTIVENESS....................................................35
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SECTION 23. AMENDMENTS; WAIVERS; COLLATERAL AGENT ACTIONS; ADDITIONAL
GRANTORS; ETC.......................................................35
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SECTION 24. NOTICES; ETC.....................................................36
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SECTION 25. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE CREDIT
AGREEMENT...........................................................37
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SECTION 26. RELEASE; TERMINATION.............................................37
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SECTION 27. SECURITY INTEREST ABSOLUTE.......................................38
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SECTION 28. EXECUTION IN COUNTERPARTS........................................39
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SECTION 29. THE MORTGAGES....................................................40
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SECTION 30. GOVERNING LAW....................................................40
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SECTION 31. LIMITATION OF LIABILITY..........................................40
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PAGE
Schedules
Schedule I - Pledged Equity
Schedule II - Pledged Debt
Schedule III - Patents, Trademarks and Trade Names and Copyrights
Schedule IV - Account Collateral
Schedule V - Commercial Tort Claims
Schedule VI-A - Secured Hedging Agreements
Schedule VI-B - Original Secured Cash Management Agreements
Schedule VII - Insurance Receivables
Exhibits
Exhibit A - Form of Security Agreement Supplement
Exhibit B - Form of Account Control Agreement (Deposit
Account/Securities Account)
Exhibit C - Form of Consent and Agreement (Insurance Receivables)
Exhibit D - Form of Securities Account Control Agreement (Securities
Account)
Exhibit E - Form of Intellectual Property Security Agreement
Exhibit F - Form of Intellectual Property Security Agreement
Supplement
Exhibit G - Form of Perfection Certificate
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SECURITY AGREEMENT
SECURITY AGREEMENT dated as of August 16, 2002 made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
LLC, a Delaware limited liability company (the "COMPANY"), the other Persons
listed on the signature pages hereof and the Additional Grantors (as defined in
Section 23(B)) (the Company, the Persons so listed and the Additional Grantors
being, collectively, the "GRANTORS"), to BANK OF AMERICA, N.A. ("BANK OF
AMERICA"), as Collateral Agent (together with any successor collateral agent
appointed pursuant to Article VIII of the Credit Agreement (as hereinafter
defined), the "COLLATERAL AGENT").
PRELIMINARY STATEMENTS.
(1) Certain of the Grantors have entered into a Third Amended and
Restated Term Loan and Revolving Credit Agreement dated as of August 2, 2002
(said Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT"), with the Lenders and the Agents (each as defined therein).
(2) It is a condition precedent to the making of Loans by the Lenders
and the issuance of Letters of Credit by the LC Issuer under the Credit
Agreement and the entry into the Secured Hedging Agreements (as hereinafter
defined) and the Secured Cash Management Agreements (as hereinafter defined) by
the Lender Parties party thereto that the Grantors shall have entered into this
Agreement in order to grant to the Collateral Agent for the benefit of the
Secured Parties (as hereinafter defined) a security interest in the Collateral
(as hereinafter defined).
(3) The Grantors have agreed to grant, and pursuant to this Agreement
have granted, an equal and ratable security interest in and to the Restricted
Collateral (as hereinafter defined) to secure the Senior Note Obligations (as
hereinafter defined) to the extent required by the Indenture.
(4) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Loans and the LC Issuer to issue Letters of Credit
under the Credit Agreement and to induce the Lender Parties party thereto to
enter into the Secured Hedging Agreements and the Secured Cash Management
Agreements, each Grantor hereby agrees with the Collateral Agent for the benefit
of the Secured Parties as follows:
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SECTION 1. DEFINITIONS. (a) Terms defined in the Credit Agreement and
not otherwise defined in this Agreement are used in this Agreement as defined in
the Credit Agreement.
(b) Unless otherwise defined in this Agreement or in the Credit
Agreement, terms defined in Article 8 or 9 of the UCC (as defined below) are
used in this Agreement as such terms are defined in such Article 8 or 9.
(c) The following additional terms have the following meanings:
"CARIBE LETTER" means the Letter Agreement dated July 17, 2001 from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ International Corporation to Banco Mercantil C.A. Banco Universal
relating to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Caribe Corporation, C.A.
"CASH MANAGEMENT AGREEMENTS" means agreements in respect of any
overdrafts and related liabilities arising from treasury, depository and cash
management services or in connection with any automated clearing house transfers
of funds between any Grantor and a Person that was, as of the Effective Date (in
the case of Cash Management Agreements listed on Schedule VI-B) or the date of
designation of such Cash Management Agreement as an Additional Secured
Obligation (in the case of Cash Management Agreements designated as Additional
Secured Obligations pursuant to Section 3(B)), as the case may be, a Lender or
an Affiliate of a Lender.
"COMPANY SUBSIDIARY" means any Grantor that is a corporation,
partnership, association, company, joint-stock company or business trust of
which securities having ordinary voting power, in the absence of contingencies,
to elect at least a majority of directors, are owned directly or indirectly by
the Company.
"CONSOLIDATED NET TANGIBLE ASSETS" has the meaning ascribed thereto
in the Indenture.
"DEBT" has the meaning ascribed thereto in the Indenture.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
"LENDER PARTIES" means any holder of any Obligation or any Additional
Secured Obligation.
"PERFECTION CERTIFICATE" means, with respect to any Grantor, a
certificate substantially in the form of Exhibit G, completed and supplemented
with the
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schedules contemplated thereby to the reasonable satisfaction of the Collateral
Agent, and signed by an officer of such Grantor.
"POST-PETITION INTEREST" means any interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Company (or would accrue but for the
operation of applicable bankruptcy or insolvency laws), whether or not such
interest is allowed or allowable as a claim in any such proceeding.
"PRINCIPAL PROPERTY" means any facility owned by the Company or any
Company Subsidiary, in each case, the gross book value of which on the date of
determination exceeds 1% of Consolidated Net Tangible Assets.
"RESTRICTED COLLATERAL" means any Collateral consisting of Principal
Property of the Company or any Company Subsidiary, or any shares of stock or
Debt of any Company Subsidiary.
"SECURED PARTIES" means the Lender Parties and the Senior
Noteholders.
"SENIOR NOTEHOLDERS" means the holders from time to time of the
Senior Notes.
"SENIOR NOTE OBLIGATIONS" means all indebtedness, obligations and
liabilities of the Company and the other Grantors to the Senior Noteholders from
time to time arising under or in connection with or related to (including under
any guaranty of) or evidenced by the Senior Notes or the Indenture, and all
extensions or renewals thereof, whether such indebtedness, obligations or
liabilities are direct or indirect, otherwise secured or unsecured, joint or
several, absolute or contingent, due or to become due, whether for payment or
performance, now, existing or hereafter arising. Without limitation of the
foregoing, such indebtedness, obligations and liabilities include the principal
amount of the Senior Notes, premium, interest (including Post-Petition
Interest), fees, indemnities or expenses under or in connection with (including
all guaranties of) the Senior Notes or the Indenture, and all extensions and
renewals thereof, whether or not such indebtedness, obligations or liabilities
were made in compliance with the terms and conditions of the Indenture or in
excess of the obligation of the Senior Noteholders to lend. Senior Note
Obligations shall remain Senior Note Obligations notwithstanding any assignment
or transfer or any subsequent assignment or transfer of any of the Senior Note
Obligations or any interest therein.
"TRUSTEE" means ▇▇▇▇▇▇ Trust and Savings Bank, as trustee (or any
successor in such capacity) for the Senior Noteholders.
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"UCC" means the Uniform Commercial Code as in effect, from time to
time, in the State of New York; PROVIDED that, if 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 the State of New York, "UCC" means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non perfection or priority.
"UNRESTRICTED COLLATERAL" means all Collateral other than Restricted
Collateral.
(d) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
Account Collateral 2(a)(vi)
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Account Control Agreement 6(a)
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Additional Grantor 23(b)
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Additional Secured Obligation 3(b)
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After-Acquired Intellectual Property 12(d)
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Agreement Collateral 2(a)(v)
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Asbestos Policy 15
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Assigned Agreements 2(a)(v)
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Bank of America Introduction
Collateral 2
Collateral Agent Introduction
Collateral Deposit Account 2(a)(vi)(A)
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Commercial Tort Claims Collateral 2(a)(viii)
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Company Introduction
Computer Software 2(a)(vii)(E)
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Copyrights 2(a)(vii)(C)
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Credit Agreement Preliminary Statement
Equipment 2(a)(i)
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Grantors Introduction
Indemnified Party 21
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Initial Pledged Debt 2(a)(iv)(B)
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Initial Pledged Equity 2(a)(iv)(A)
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Insurance Receivables 2(a)(x)
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Intellectual Property Collateral 2(a)(vii)
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Intellectual Property Security Agreement 12(c)
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Inventory 2(a)(ii)
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IP Security Agreement Supplement 2(a)(vii)(A)
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LC Collateral Account 2(a)(vi)(A)(2)
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Licenses 2(a)(vii)(F)
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Original Secured Cash Management 3(a)
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Agreements
Other Deposit Accounts 2(a)(vi)(A)(3)
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Patents 2(a)(vii)(A)
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Pledged Account Banks 6(a)
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Pledged Debt 2(a)(iv)(D)
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Pledged Equity 2(a)(iv)(C)
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Receivables 2(a)(iii)
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Related Contracts 2(a)(iii)
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Release Conditions 6
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Secured Cash Management Agreements 3(b)
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Secured Hedging Agreements 3(a)
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Secured Obligations 3(a)
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Securities Account Control Agreement 5(c)
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Securities Act 20(g)(i)
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Security Agreement Supplement 23(b)
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Security Collateral 2(a)(iv)
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Subagent 19(c)
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Trade Secrets 2(a)(vii)(D)
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Trademarks 2(a)(vii)(B)
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SECTION 2. GRANT OF SECURITY. (a) Subject to subsection (b) below,
each Grantor hereby pledges to the Collateral Agent, for the benefit of the
Secured Parties, and hereby grants to the Collateral Agent, for the benefit of
the Secured Parties, a security interest in such Grantor's right, title and
interest in and to the following, in each case, as to each type of property
described below, whether now owned or hereafter acquired by such Grantor,
wherever located, and whether now or hereafter existing or arising
(collectively, the "COLLATERAL"):
(i) all equipment in all of its forms, including, without
limitation, all machinery, tools, motor vehicles, vessels, aircraft,
furniture and fixtures, and all parts thereof and all accessions
thereto and all
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software related thereto, including, without limitation, software
that is imbedded in and is part of the equipment (any and all such
property being the "EQUIPMENT");
(ii) all inventory in all of its forms, including, without
limitation, (A) all raw materials, work in process, finished goods
and materials used or consumed in the manufacture, production,
preparation or shipping thereof, (B) goods in which such Grantor has
an interest in mass or a joint or other interest or right of any kind
(including, without limitation, goods in which such Grantor has an
interest or right as consignee) and (C) goods that are returned to or
repossessed or stopped in transit by such Grantor, and all accessions
thereto and products thereof and documents therefor, and all software
related thereto, including, without limitation, software that is
imbedded in and is part of the inventory (any and all such property
being the "INVENTORY");
(iii) all accounts (including, without limitation,
health-care-insurance receivables), chattel paper (including, without
limitation, tangible chattel paper and electronic chattel paper),
instruments (including, without limitation, promissory notes),
deposit accounts, letter-of-credit rights, general intangibles
(including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of
services and whether or not earned by performance, and all rights now
or hereafter existing in and to all supporting obligations and in and
to all security agreements, mortgages, Liens, leases, letters of
credit and other contracts securing or otherwise relating to the
foregoing property (any and all of such accounts, chattel paper,
instruments, deposit accounts, letter-of-credit rights, general
intangibles and other obligations, to the extent not referred to in
clauses (iv), (v) or (vi) below, being the "RECEIVABLES", and any and
all such supporting obligations, security agreements, mortgages,
Liens, leases, letters of credit and other contracts being the
"RELATED CONTRACTS");
(iv) the following (the "SECURITY COLLATERAL"):
(A) the shares of stock or other Equity Interests
(the "INITIAL PLEDGED EQUITY") set forth opposite such
Grantor's name on and as otherwise described in Schedule I
hereto and issued by the Persons named therein, and the
certificates, if any, representing the Initial Pledged
Equity, and all dividends, distributions, return of
capital, cash, instruments and other property from time to
time received, receivable or otherwise distributed in
respect of or in
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exchange for any or all of the Initial Pledged Equity and
all subscription warrants, rights or options issued thereon
or with respect thereto;
(B) the indebtedness (the "INITIAL PLEDGED DEBT")
owed to such Grantor (including the indebtedness in a
principal amount of $1,000,000 or more set forth opposite
such Grantor's name on and as otherwise described in
Schedule II hereto and issued by the obligors named
therein), and the instruments, if any, evidencing the
Initial Pledged Debt, and all interest, cash, instruments
and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for
any or all of the Initial Pledged Debt;
(C) all additional shares of stock and other Equity
Interests of or in any issuer of the Initial Pledged
Equity, any Subsidiary directly owned by such Grantor, or
any successor entity from time to time acquired by such
Grantor in any manner (such shares and other Equity
Interests, together with the Initial Pledged Equity, being
the "PLEDGED EQUITY"), and the certificates, if any,
representing such additional shares or other Equity
Interests, and all dividends, distributions, return of
capital, cash, instruments and other property from time to
time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares or
other Equity Interests and all subscription warrants,
rights or options issued thereon or with respect thereto;
(D) all additional indebtedness from time to time
owed to such Grantor (such indebtedness, together with the
Initial Pledged Debt, being the "PLEDGED DEBT") and the
instruments, if any, evidencing such indebtedness, and all
interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such
indebtedness; and
(E) all other investment property (including, without
limitation, all securities (whether certificated or
uncertificated), security entitlements, securities
accounts, commodity contracts and commodity accounts) in
which such Grantor has now, or acquires from time to time
hereafter, any right, title or interest in any manner, and
the certificates or instruments, if any, representing or
evidencing such investment property, and all dividends,
distributions, return of capital, interest, distributions,
value, cash,
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instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of such investment property and all
subscription warrants, rights or options issued thereon or
with respect thereto;
(v) all contracts or agreements to which any Grantor is a party, in
each case as such contracts or agreements may be amended, amended and
restated, supplemented or otherwise modified from time to time
(collectively, the "ASSIGNED AGREEMENTS"), including, without
limitation, (i) all rights of such Grantor to receive moneys due and
to become due under or pursuant to the Assigned Agreements, (ii) all
rights of such Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) claims of such Grantor for damages arising out of
or for breach of or default under the Assigned Agreements and (iv)
the right of such Grantor to terminate the Assigned Agreements, to
perform thereunder and to compel performance and otherwise exercise
all remedies thereunder (all such Collateral being the "AGREEMENT
COLLATERAL");
(vi) the following (collectively, the "ACCOUNT COLLATERAL"):
(A) (1) the collateral deposit account, Account No.
24900750 (the "COLLATERAL DEPOSIT ACCOUNT"), with Bank of
America at its office at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇- 0001, in the name of the Collateral Agent and under
the sole control and dominion of the Collateral Agent and
subject to the terms of this Agreement, (2) a letter of
credit collateral deposit account, Account No.
249-00011-1-8 CAC (the "LC COLLATERAL ACCOUNT"), with Bank
of America at its office at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇, in the name of the Collateral Agent and
under the sole control and dominion of the Collateral Agent
and subject to the terms of this Agreement, (3) all other
deposit accounts from time to time maintained with any
Lender or an Affiliate of a Lender listed on Schedule IV
hereto (the "OTHER DEPOSIT ACCOUNTS"), each in the name of
a Grantor and subject to the terms of this Agreement, and
(4) all funds and financial assets from time to time
credited thereto (including, without limitation, all
Temporary Cash Investments), all interest, dividends,
distributions, cash, instruments and other property from
time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such funds
and financial assets, and all certificates and instruments,
if any, from time to time
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representing or evidencing the Collateral Deposit Account,
the LC Collateral Account and the Other Deposit Accounts;
(B) all promissory notes, certificates of deposit,
deposit accounts, checks and other instruments from time to
time delivered to or otherwise possessed by the Collateral
Agent for or on behalf of such Grantor; and
(C) all interest, dividends, distributions, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account
Collateral; and
(vii) the following (collectively, the "INTELLECTUAL PROPERTY
COLLATERAL"):
(A) all United States, international and foreign
patents, patent applications, utility models, and statutory
invention registrations, including, without limitation, the
patents and patent applications set forth in Schedule III
hereto (as such Schedule III may be supplemented from time
to time by supplements to this Agreement, each such
supplement being in substantially the form of Exhibit F
hereto (an "IP SECURITY AGREEMENT SUPPLEMENT"), executed
and delivered by such Grantor to the Collateral Agent from
time to time), together with all reissues, divisions,
continuations, continuations-in-part, extensions and
reexaminations thereof, all inventions therein, all rights
therein provided by international treaties or conventions
and all improvements thereto, and all other rights of any
kind whatsoever of such Grantor accruing thereunder or
pertaining thereto (the "PATENTS");
(B) all trademarks (including, without limitation,
service marks), certification marks, collective marks,
trade dress, logos, domain names, product configurations,
trade names, business names, corporate names and other
source identifiers, whether or not registered, whether
currently in use or not, including, without limitation, all
common law rights and registrations and applications for
registration thereof, including, without limitation, the
trademark registrations and trademark applications set
forth in Schedule III hereto (as such Schedule III may be
supplemented from time to time by IP Security Agreement
Supplements executed and delivered by such Grantor to the
Collateral Agent from time to
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time), and all other marks registered in the U.S. Patent
and Trademark Office or in any office or agency of any
State or Territory of the United States or any foreign
country (but excluding any United States intent-to-use
trademark application prior to the filing and acceptance of
a Statement of Use or an Amendment to allege use in
connection therewith to the extent that a valid security
interest may not be taken in such an intent-to-use
trademark application under applicable law), and all rights
therein provided by international treaties or conventions,
all renewals of any of the foregoing, together in each case
with the goodwill of the business connected therewith and
symbolized thereby, and all rights corresponding thereto
throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or
pertaining thereto (the "TRADEMARKS");
(C) all copyrights, copyright applications, copyright
registrations and like protections in each work of
authorship, whether statutory or common law, whether
published or unpublished, any renewals or extensions
thereof, all copyrights of works based on, incorporated in,
derived from, or relating to works covered by such
copyrights, including, without limitation, the copyright
registrations and copyright applications set forth in
Schedule III hereto (as such Schedule III may be
supplemented from time to time by IP Security Agreement
Supplements executed and delivered by such Grantor to the
Collateral Agent from time to time), together with all
rights corresponding thereto throughout the world and all
other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto (the
"COPYRIGHTS");
(D) all proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and
production processes and techniques, inventions, research
and development information, technical data, financial,
marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier
lists and information (the "TRADE SECRETS");
(E) all software, including, without limitation,
computer software programs and databases (including,
without limitation, source code, object code and all
related applications and data files), firmware, and
documentation and materials relating thereto, and all
rights with respect to the foregoing, together with any and
all options, warranties, service contracts, program
services, test rights, maintenance rights, improvement
rights, renewal rights and
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indemnifications and any substitutions, replacements,
additions or model conversions of any of the foregoing (the
"COMPUTER SOFTWARE");
(F) all license agreements, permits, authorizations
and franchises, whether with respect to the Patents,
Trademarks, Copyrights, Trade Secrets or Computer Software,
or with respect to the patents, trademarks, copyrights,
trade secrets, computer software or other proprietary right
of any other Person, and all income, royalties and other
payments now or hereafter due and/or payable to such
Grantor with respect thereto, subject, in each case, to the
terms of such license agreements, permits, authorizations
and franchises (the "LICENSES"); and
(G) any and all claims for damages for past, present
and future infringement, misappropriation or breach with
respect to the Patents, Trademarks, Copyrights, Trade
Secrets, Computer Software or Licenses, with the right, but
not the obligation, to ▇▇▇ for and collect, or otherwise
recover, such damages;
(viii) all commercial tort claims described in Schedule V hereto
(collectively, the "COMMERCIAL TORT CLAIMS COLLATERAL");
(ix) all books and records (including, without limitation, customer
lists, credit files, computer programs, software, printouts and other
computer materials and records) of such Grantor pertaining to any of
the Collateral;
(x) all rights to reimbursement or other payment under or in respect
of any insurance policy (any and all such property being the
"INSURANCE RECEIVABLES"); and
(xi) all proceeds of, collateral for, and supporting obligations
relating to, any and all of the Collateral (including, without
limitation, proceeds, collateral and supporting obligations that
constitute property of the types described in clauses (a) through (j)
of this Section 2 and this clause (k) and, to the extent not
otherwise included, all (A) payments under Property Insurance
Policies (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the
foregoing Collateral, (B) tort claims, including, without limitation,
all commercial tort claims and (C) cash.
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(b) Notwithstanding the foregoing, the Collateral shall not
include:
(i) any accounts receivable and related assets that are subject to a
security interest (including a security interest arising by virtue of
a sale thereof) permitted by the Credit Agreement and created in
connection with a Securitization Transaction;
(ii) any voting Equity Interests in any Foreign Subsidiary in excess
of 66% of all voting Equity Interests in such Foreign Subsidiary;
(iii) motor vehicles and other assets the perfection of a security
interest in which is subject to a certificate of title statute in the
relevant jurisdiction;
(iv) Equipment and other assets (x) leased by a Grantor under a lease
that prohibits the granting of a Lien on such Equipment or other
assets or (y) owned by a Grantor and subject to a Lien permitted
under the Credit Agreement if the terms of such Lien prohibit the
granting of another security interest in such Equipment or other
assets;
(v) any general intangibles or other rights arising under any
agreement, contract, instrument, lease, license or other document
(including any of the Assigned Agreements and/or Related Contracts)
if (but only to the extent that) the grant of a security interest
therein would constitute a violation of a valid and enforceable
restriction in favor of a third party, unless and until all required
consents shall have been obtained, PROVIDED that, upon the request of
the Collateral Agent, each Grantor shall use all reasonable efforts
to obtain any such required consent that is reasonably obtainable.
SECTION 3. SECURITY FOR OBLIGATIONS. (a) This Agreement secures, in
the case of each Grantor, (i) the payment of the Obligations (including
Post-Petition Interest thereon), (ii) all obligations in respect of the Hedging
Agreements and other agreements listed on Schedule VI-A ("SECURED HEDGING
AGREEMENTS") and the Cash Management Agreements listed on Schedule VI-B (the
"ORIGINAL SECURED CASH MANAGEMENT AGREEMENTS") and, in each case, all interest
(including Post-Petition Interest) thereon, (iii) all obligations designated by
the Company as Additional Secured Obligations pursuant to Section 3(b)
(including Post-Petition Interest thereon) and (iv) solely with respect to
Restricted Collateral of such Grantor, the Senior Note Obligations (including
Post-Petition Interest thereon) (the obligations described in clauses (i)
through (iv) of this subsection (a) and any Additional Secured Obligations (as
defined below), collectively, the "SECURED OBLIGATIONS").
12
(b) The Company may from time to time designate its obligations
under any Cash Management Agreement (together with the Original Cash Management
Agreements, the "SECURED CASH MANAGEMENT AGREEMENTS") as an additional Secured
Obligation (an "ADDITIONAL SECURED OBLIGATION") for purposes hereof by
delivering to the Collateral Agent a certificate signed by a Responsible Officer
that identifies such Cash Management Agreement, specifying the name and address
of the other party thereto (which must be a Lender or an Affiliate of a Lender
at the time of such designation) and the expiration date thereof, and states
that the Company's obligations thereunder are designated as Secured Obligations
for purposes hereof.
SECTION 4. GRANTORS REMAIN LIABLE. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Collateral Agent
of any of the rights hereunder shall not release any Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
SECTION 5. DELIVERY AND CONTROL OF SECURITY COLLATERAL. (a) All
certificates or instruments representing or evidencing Security Collateral
constituting Pledged Equity or Pledged Debt in a principal amount of $1,000,000
or more shall be delivered to and held by or on behalf of the Collateral Agent
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance reasonably satisfactory to the Collateral Agent, and
no certificates shall be issued with respect to any entity which has Pledged
Equity hereunder unless such certificates are duly pledged promptly thereafter
to the Collateral Agent as and to the extent required hereunder. Upon prior
written notice to the Company (and, in the case of the Pledged Equity in Foreign
Holdings, subject to any required approval from the Bermuda Monetary Authority),
the Collateral Agent shall have the right, at any time in its discretion, to
transfer to or to register in the name of the Collateral Agent or any of its
nominees any or all of the Security Collateral, subject only to the revocable
rights specified in Section 13(a), in each case to the extent required to ensure
the perfection of the Collateral Agent's security interest or, upon the
occurrence of an Event of Default, to exercise any remedies hereunder. In
addition, in connection with any exercise of remedies by the Collateral Agent
hereunder, the Collateral
13
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security Collateral for certificates or instruments
of smaller or larger denominations.
(b) With respect to any Security Collateral constituting Pledged
Equity of a Subsidiary or joint venture in which any Grantor has any right,
title or interest and that constitutes an uncertificated security, such Grantor
will cause the issuer thereof (or in the case of an issuer that is not a
Subsidiary, such Grantor will use its reasonable efforts to cause the issuer
thereof) either (i) to register the Collateral Agent as the registered owner of
such security or (ii) to agree in an authenticated record with such Grantor and
the Collateral Agent that, upon the occurrence and during the continuance of an
Event of Default, such issuer will comply with instructions with respect to such
security originated by the Collateral Agent without further consent of such
Grantor, such authenticated record to be in form and substance reasonably
satisfactory to the Collateral Agent.
(c) With respect to any Security Collateral in which any Grantor has
any right, title or interest valued at $1,000,000 or more and that constitutes a
security entitlement in which the Collateral Agent is not the entitlement
holder, such Grantor will cause the securities intermediary with respect to such
security entitlement either (i) to identify in its records the Collateral Agent
as the entitlement holder of such security entitlement against such securities
intermediary or (ii) to agree in an authenticated record with such Grantor and
the Collateral Agent that, upon notice from the Collateral Agent of the
occurrence and continuance of an Event of Default, such securities intermediary
will comply with entitlement orders (that is, notifications communicated to such
securities intermediary directing transfer or redemption of the financial asset
to which such Grantor has a security entitlement) originated by the Collateral
Agent without further consent of such Grantor, such authenticated record to be
in substantially the form of Exhibit D hereto or otherwise in form and substance
reasonably satisfactory to the Collateral Agent (such agreement being a
"SECURITIES ACCOUNT CONTROL AGREEMENT").
(d) No Grantor will change or add any securities intermediary that
maintains any securities account in which any of the Security Collateral is
credited or carried, or change or add any such securities account, in each case
without first complying with the above provisions of this Section 5 in order to
perfect the security interest granted hereunder in such Collateral.
(e) Notwithstanding anything to the contrary set forth in this
Agreement (including this Section 5), it is understood and agreed that (i) with
respect to Security Collateral constituting uncertificated securities issued by
the Perryville III Trust, the applicable Grantor shall comply with the
provisions of this Section 5 as
14
promptly as practicable after the Effective Date, (ii) with respect to Security
Collateral constituting certificated securities issued by HFM Tray Canada Ltd.,
the applicable Grantor shall only be required to use commercially reasonable
efforts to comply with the provisions of this Section 5 as promptly as
practicable after the Effective Date, and (iii) with respect to Security
Collateral constituting Pledged Equity of Foreign Subsidiaries, the applicable
Grantors shall comply with the provisions of this Section 5 as promptly as
practicable after the Effective Date, except that in the case of this clause
(ii) no Grantor shall be required to take any such action that would be contrary
to the local law applicable to any such Foreign Subsidiary or which would
require such Grantor or Foreign Subsidiary to seek approval from any local
governmental authority having jurisdiction over such Foreign Subsidiary.
SECTION 6. MAINTAINING THE ACCOUNT COLLATERAL. Until (i) all Loans
and other Obligations of the Grantors have been paid, (ii) no Letters of Credit
remain outstanding, (iii) no Secured Hedging Agreements or Secured Cash
Management Agreements remain in effect, (iv) no Lender has any Commitment and
(v) either (x) all Senior Note Obligations have been paid or (y) the Collateral
Agent has received an opinion of counsel to the Grantors in form and substance
satisfactory to the Collateral Agent that the Senior Notes are not required to
be secured by any of the Collateral (the satisfaction of all such conditions,
the satisfaction of the "RELEASE CONDITIONS"):
(a) Except as contemplated by Section 6.16 of the Credit Agreement,
each Grantor will maintain all Account Collateral only with a Lender or an
Affiliate of a Lender (a "PLEDGED ACCOUNT BANK") that has agreed, in a record
authenticated by the Grantor, the Collateral Agent and the Pledged Account Bank,
to (i) comply with instructions originated by the Collateral Agent directing the
disposition of funds in the Account Collateral maintained with such Pledged
Account Bank without the further consent of the Grantor and (ii) waive or
subordinate in favor of the Collateral Agent all claims of such Pledged Account
Bank (including, without limitation, claims by way of a security interest, lien
or right of setoff or right of recoupment) to the Account Collateral, which
authenticated record shall be substantially in the form of Exhibit B hereto, or
shall otherwise be in form and substance satisfactory to the Collateral Agent
(the "ACCOUNT CONTROL AGREEMENT").
(b) Except to the extent set forth in an applicable Account Control
Agreement, if any, the Collateral Agent shall have sole right to direct the
disposition of funds with respect to each of the Collateral Deposit Account and
the LC Collateral Account; and it shall be a term and condition of each of the
Collateral Deposit Account and the LC Collateral Account, subject solely to any
term to the contrary set forth in an applicable Account Control Agreement, if
any,
15
that no amount (including, without limitation, interest on Temporary Cash
Investments credited thereto) will be paid or released to or for the account of,
or withdrawn by or for the account of, the Company or any other Person from the
Collateral Deposit Account or the LC Collateral Account, as the case may be.
(c) So long as no Event of Default shall have occurred and be
continuing, the Collateral Agent will pay and release to the Company or at its
order or, at the request of the Company, to the Administrative Agent to be
applied to the Obligations of the Company (or, to the extent permitted by the
Credit Agreement, to the Trustee to be applied to the Senior Note Obligations),
(x) in the case of the LC Collateral Account, such amount, if any, as is then on
deposit in the LC Collateral Account to the extent permitted to be released
under the terms of the Credit Agreement and (y) in the case of the Collateral
Deposit Account, the amount, if any, by which the aggregate principal amount of
the Cash and Temporary Cash Investments credited to the Collateral Deposit
Account exceeds the aggregate amount of the outstanding Secured Obligations at
such time.
(d) Notwithstanding anything to the contrary set forth in this
Agreement (including this Section 6), it is understood and agreed that (i) with
respect to Account Collateral maintained with National Westminster Bank, the
applicable Grantors shall close the applicable accounts within three weeks of
the Effective Date and transfer any amounts contained therein to other accounts
satisfying the requirements of this Section 6, and (ii) with respect to Account
Collateral maintained with ABN AMRO Bank, N.V., the applicable Grantors shall
use commercially reasonable efforts to comply with the provisions of this
Section 6 as promptly as practicable after the Effective Date.
SECTION 7. INVESTING OF AMOUNTS IN THE LC COLLATERAL ACCOUNT. The
Collateral Agent will, subject to the provisions of Sections 6, 6(c) and 20,
from time to time (a) invest amounts received with respect to the LC Collateral
Account in such Temporary Cash Investments credited to (A) the LC Collateral
Account as the Company may select or (B) in the case of Temporary Cash
Investments consisting of Securities Collateral, a securities account in which
the Collateral Agent is the securities intermediary or a securities account
subject to a Securities Account Control Agreement, and (b) invest interest paid
on the Temporary Cash Investments referred to in clause (a) above, and reinvest
other proceeds of any such Temporary Cash Investments that may mature or be
sold, in each case in such Temporary Cash Investments credited in the same
manner. Interest and proceeds that are not invested or reinvested in Temporary
Cash Investments as provided above shall be deposited and held in the LC
Collateral Account.
16
SECTION 8. MAINTAINING LETTER OF CREDIT RIGHTS AND GIVING NOTICE OF
COMMERCIAL TORT CLAIMS. Until the Release Conditions have been satisfied:
(a) Each Grantor will promptly give notice to the Collateral Agent
of any letter-of-credit rights of $5,000,000 or more in respect of any letter of
credit that may arise in the future and will promptly execute or otherwise
authenticate a supplement to this Agreement, and otherwise take all action
reasonably requested by the Collateral Agent, to subject such letter-of-credit
rights to the security interest created under this Agreement (including, without
limitation, using its commercially reasonably efforts to maintain all
letter-of-credit rights assigned to the Collateral Agent so that the Collateral
Agent has control of such letter-of-credit rights in the manner specified in
Section 9-107 of the UCC); and
(b) Each Grantor will promptly give notice to the Collateral Agent
of any commercial tort claim of $5,000,000 or more that may arise in the future
and will promptly execute or otherwise authenticate a supplement to this
Agreement, and otherwise take all action reasonably requested by the Collateral
Agent, to subject such commercial tort claim to the security interest created
under this Agreement.
SECTION 9. REPRESENTATIONS AND WARRANTIES. Each Grantor represents
and warrants as follows:
(a) Such Grantor's exact legal name (as defined in Section 9-503(a)
of the UCC) and location (within the meaning of Section 9-307 of the UCC) is
correctly set forth in its Perfection Certificate. The information set forth in
such Grantor's Perfection Certificate is true and accurate in all respects.
(b) All Security Collateral consisting of certificated securities
and instruments that constitute Pledged Equity or Pledged Debt in a principal
amount of $1,000,000 or more have been delivered to the Collateral Agent.
(c) Such Grantor is the legal and beneficial owner of the Collateral
of such Grantor free and clear of any Lien or adverse claim, except for the
security interest created under this Agreement or permitted under the Credit
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of such Collateral or listing such Grantor or
any trade name of such Grantor as debtor is on file in any recording office,
except such as may have been filed in favor of the Collateral Agent relating to
the Loan Documents or as otherwise permitted under the Credit Agreement.
(d) The Pledged Equity pledged by such Grantor hereunder in any
Subsidiary has been duly authorized and validly issued and is fully paid and non
17
assessable. The Pledged Debt of any Subsidiary pledged by such Grantor hereunder
(i) has been duly authorized, authenticated or issued and delivered and (ii) is
the legal, valid and binding obligation of the issuer thereof, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws, now or hereafter in effect, relating to or affecting the enforcement of
creditors' rights generally and except that the remedy of specific performance
and other equitable remedies are subject to judicial discretion.
(e) The Initial Pledged Equity pledged by such Grantor constitutes
the percentage of the issued and outstanding shares of stock or other Equity
Interest of the issuers thereof indicated on Schedule I hereto. The Initial
Pledged Debt listed on Schedule II hereto constitutes all of the outstanding
indebtedness in a principal amount of $1,000,000 or more as of the date hereof
which is evidenced by a promissory note or other instrument owed to such Grantor
by the issuers thereof.
(f) This Agreement creates in favor of the Collateral Agent for the
benefit of the Secured Parties a valid and, together with such filings and other
actions required under this Agreement and actions that may be required in
foreign jurisdictions with respect to Equity Interests in Foreign Subsidiaries,
perfected first priority security interest (subject to any Liens otherwise
permitted under the Credit Agreement) in the Collateral of such Grantor,
securing the payment of the Secured Obligations.
(g) No material authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the grant by such Grantor of the
assignment, pledge and security interest granted hereunder or for the execution,
delivery or performance of this Agreement by such Grantor, except (y) as the
performance of this Agreement by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ International Corporation may be
limited by the Caribe Letter and (z) for actions that may be required in foreign
jurisdictions with respect to Equity Interests in Foreign Subsidiaries, (ii) the
perfection or maintenance of the assignment, pledge and security interest
created hereunder (including the first priority nature of such assignment,
pledge or security interest), except for (w) the filing of financing and
continuation statements under the UCC, which financing statements will promptly
be duly filed and in full force and effect, and actions that may be required in
foreign jurisdictions with respect to Equity Interests in Foreign Subsidiaries,
(x) the recordation of the Intellectual Property Security Agreements referred to
in Section 12(c) with the U.S. Patent and Trademark Office and the U.S.
Copyright Office, which Agreements will promptly be duly recorded and in full
force and effect, and similar filings and/or actions that may be required in
foreign jurisdictions with respect to foreign Intellectual Property Collateral,
(y) in the case of Parent and Foreign Holdings, the
18
filing of this Agreement as a "charge" under the Companies Act of 1981, Bermuda,
to ensure the priority purported to be created hereby and (z) the actions
described in Section 5 with respect to Security Collateral, which actions have
been or will promptly be taken and in full force and effect, or (iii) the
exercise by the Collateral Agent of its voting or other rights provided for in
this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as (w) may be required in connection with the disposition of
any portion of the Security Collateral by laws affecting the offering and sale
of securities generally or as may be required by the UCC, (x) with respect to
any Collateral owned by Parent or Foreign Holdings, may be required from the
Bermuda Monetary Authority, (y) may be required from Banco Mercantil C.A. Banco
Universal under the Caribe Letter and (z) may be required in foreign
jurisdictions with respect to Equity Interests in Foreign Subsidiaries.
(h) The Inventory that has been produced or distributed by such
Grantor has been produced in compliance with all applicable requirements of the
Fair Labor Standards Act.
(i) As to itself and its Intellectual Property Collateral:
(i) The rights of such Grantor in or to any material Intellectual
Property Collateral do not conflict with, misappropriate or infringe
the intellectual property rights of any third party, and no claim has
been asserted that the use of such Intellectual Property Collateral
does or may infringe the intellectual property rights of any third
party, except for any such misappropriations, infringements or claims
that would not have a material impact on the overall value of all of
the Collateral.
(ii) Such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to any material
Intellectual Property Collateral and is entitled to use all such
Intellectual Property Collateral without limitation, subject only to
the license terms of the Licenses.
(iii) The Intellectual Property Collateral set forth on Schedule III
hereto includes all of the material United States-issued patents,
patent applications, trademark registrations and applications and
copyright registrations and applications owned by such Grantor.
(iv) Such Grantor has made or performed all reasonable and necessary
filings, recordings and other acts and has paid all required fees and
taxes to maintain and protect its interest in each and every material
item of Intellectual Property Collateral in full force and effect,
and to
19
protect and maintain its interest therein including, without
limitation, recordations of any of its interests in the Patents and
Trademarks with the U.S. Patent and Trademark Office, and recordation
of any of its interests in the Copyrights with the U.S. Copyright
Office. Such Grantor has used proper statutory notice in connection
with its use of each material patent, trademark and copyright of the
Intellectual Property Collateral, except for any such notices which
the failure of the Grantor to give would not have a material impact
on the overall value of all of the Collateral.
(j) As of the date hereof, no Grantor has any commercial tort claim
(as defined in Section 9-102(13) of the UCC) of $5,000,000 or more other than
those listed in Schedule V hereto.
SECTION 10. FURTHER ASSURANCES. (a) Each Grantor agrees that from
time to time, at the expense of such Grantor, such Grantor will promptly execute
and deliver, or otherwise authenticate, all further instruments and documents,
and take all further action that may be necessary (including, without
limitation, actions necessary to obtain control of Collateral (including
letter-of-credit rights) as provided in Sections 9-104, 9-105, 9-106 and 9-107
of the UCC), or that the Collateral Agent may reasonably request, in order to
perfect and protect any pledge or security interest granted or purported to be
granted by such Grantor hereunder or to enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral of
such Grantor; PROVIDED that (x) no Grantor shall be required to take any such
action either: (i) with respect to Intellectual Property Collateral, in a
foreign jurisdiction or (ii) with respect to any Collateral, under the Federal
Assignment of Claims Act (or any similar state of local statute) and (y) with
respect to any action that requires the consent of a third party, a Grantor
shall only be required to use commercially reasonable efforts to obtain such
consent. Without limiting the generality of the foregoing but subject to the
proviso above, each Grantor will promptly with respect to Collateral of such
Grantor: (i) if any Pledged Debt in a principal amount of $1,000,000 or more
shall be evidenced by a promissory note or other instrument, deliver and pledge
to the Collateral Agent hereunder such note or instrument duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance reasonably satisfactory to the Collateral Agent; (ii) execute or
authenticate and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices with respect to the Intellectual
Property Collateral, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the security
interest granted or purported to be granted by such Grantor hereunder; (iii)
deliver and pledge to the Collateral Agent for benefit of the Secured Parties
certificates representing Pledged Equity that constitutes certificated
securities, accompanied by undated stock powers executed in blank; and (iv)
deliver to the Collateral
20
Agent evidence that all other action that the Collateral Agent may deem
reasonably necessary or desirable in order to perfect and protect the security
interest created by such Grantor under this Agreement has been taken.
(b) Each Grantor hereby authorizes the Collateral Agent to file one
or more financing or continuation statements, and amendments thereto, including,
without limitation, one or more financing statements indicating that such
financing statements cover all assets or all personal property (or words of
similar effect) of such Grantor, in each case without the signature of such
Grantor, and regardless of whether any particular asset described in such
financing statements falls within the scope of the UCC or the granting clause of
this Agreement. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. Each Grantor
ratifies its authorization for the Collateral Agent to have filed such financing
statements, continuation statements or amendments filed prior to the date
hereof. The Collateral Agent will deliver to the Company copies of any such
financing statements, continuation statements and amendments filed by it after
the Effective Date.
(c) Each Grantor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
of such Grantor and such other reports in connection with such Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.
(d) The Company agrees that:
(i) If the Company shall have filed its quarterly report on Form
10-Q for the fiscal quarter ended June 28, 2002 on or prior to the
Effective Date, the Company shall as soon as possible thereafter file
with the Securities and Exchange Commission a current report on Form
8-K or a revised quarterly report on Form 10-Q containing a balance
sheet that is substantially consistent with the balance sheet
delivered to the Administrative Agent pursuant to Section 4.01(i) of
the Credit Agreement.
(ii) If the Company shall not have filed its quarterly report on Form
10-Q for the fiscal quarter ended June 28, 2002 on or prior to the
Effective Date, the Company shall when it files such report with the
Securities and Exchange Commission include therein a balance sheet
that is substantially consistent with the balance sheet delivered to
the Administrative Agent pursuant to Section 4.01(i) of the Credit
Agreement.
SECTION 11. POST-CLOSING CHANGES; COLLECTIONS ON ASSIGNED AGREEMENTS,
RECEIVABLES AND RELATED CONTRACTS. (a) No Grantor will change its (i) legal
name,
21
(ii) location (within the meaning of Section 9-307 of the UCC) or (iii) federal
taxpayer identification number from those set forth in its Perfection
Certificate without first giving at least 15 days' prior written notice to the
Collateral Agent and taking all action reasonably required by the Collateral
Agent for the purpose of perfecting or protecting the security interest granted
by this Agreement. No Grantor will become bound by a security agreement
authenticated by another Person that is not a Grantor (determined as provided in
Section 9-203(d) of the UCC) without giving the Collateral Agent 30 days' prior
written notice thereof and taking all action required by the Collateral Agent to
ensure that the perfection and first priority nature of the Collateral Agent's
security interest in the Collateral will be maintained.
(b) The Collateral Agent shall have the right at any time, upon the
occurrence and during the continuance of an Event of Default and upon written
notice to such Grantor of its intention to do so, to notify the Obligors under
any Assigned Agreements, Receivables and Related Contracts of the assignment of
such Assigned Agreements, Receivables and Related Contracts to the Collateral
Agent and to direct such Obligors to make payment of all amounts due or to
become due to such Grantor thereunder directly to the Collateral Agent and, upon
such notification and at the expense of such Grantor, to enforce collection of
any such Assigned Agreements, Receivables and Related Contracts, to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Grantor might have done, and to otherwise exercise all
rights with respect to such Assigned Agreements, Receivables and Related
Contracts, including, without limitation, those set forth set forth in Section
9-607 of the UCC. After receipt by any Grantor of the notice from the Collateral
Agent referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including, without limitation, instruments) received by such Grantor
in respect of the Assigned Agreements, Receivables and Related Contracts of such
Grantor shall be received in trust for the benefit of the Collateral Agent
hereunder, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Collateral Agent in the same form as so received
(with any necessary indorsement) to be deposited in the Collateral Deposit
Account and either (A) released to such Grantor on the terms set forth in
Section 6(C) so long as no Event of Default shall have occurred and be
continuing or (B) if any Event of Default shall have occurred and be continuing,
applied as provided in Section 20(C) at the direction of the Required Lenders
and (ii) such Grantor will not adjust, settle or compromise the amount or
payment of any Receivable or amount due on any Assigned Agreement or Related
Contract, release wholly or partly any Obligor thereof, or allow any credit or
discount thereon.
SECTION 12. AS TO INTELLECTUAL PROPERTY COLLATERAL. (a) With respect
to each material item of its Intellectual Property Collateral, each Grantor
agrees,
22
unless such Grantor shall have previously determined that such use or the
pursuit or maintenance of such Intellectual Property Collateral is no longer
desirable in the conduct of such Grantor's business and that the loss thereof
would not be reasonably likely to have a Material Adverse Effect, (x) to take,
at its expense, all necessary steps, including, without limitation, in the U.S.
Patent and Trademark Office and the U.S. Copyright Office, to (i) maintain the
validity and enforceability of each such item of Intellectual Property
Collateral and maintain each such item of Intellectual Property Collateral in
full force and effect, and (ii) pursue the registration and maintenance of each
patent, trademark, or copyright registration or application, now or hereafter
included in such Intellectual Property Collateral of such Grantor, including,
without limitation, the payment of required fees and taxes, the filing of
responses to office actions issued by the U.S. Patent and Trademark Office or
the U.S. Copyright Office, the filing of applications for renewal or extension,
the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the
filing of divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings, and (y) not to, without the
written consent of the Collateral Agent (which will not be unreasonably withheld
or delayed), discontinue use of or otherwise abandon any Intellectual Property
Collateral, or abandon any right to file an application for letters patent,
trademark, or copyright.
(b) In the event that any Grantor becomes aware that any material
item of the Intellectual Property Collateral is being infringed or
misappropriated by a third party in a manner that would have a material impact
on the overall value of all of the Collateral, such Grantor shall promptly
notify the Collateral Agent and shall take such actions, at its expense, as such
Grantor reasonably deems appropriate under the circumstances to protect such
Intellectual Property Collateral.
(c) With respect to its Intellectual Property Collateral, each
Grantor agrees to execute or otherwise authenticate an agreement, in
substantially the form set forth in Exhibit E hereto (an "INTELLECTUAL PROPERTY
SECURITY AGREEMENT"), for recording the security interest granted hereunder to
the Collateral Agent in such Intellectual Property Collateral with the U.S.
Patent and Trademark Office and the U.S. Copyright Office necessary to perfect
the security interest hereunder in such Intellectual Property Collateral.
(d) Each Grantor agrees that, should it obtain an ownership interest
in any item of the type set forth in Section 2(a)(vii) that is not on the date
hereof a part of the Intellectual Property Collateral (the "AFTER-ACQUIRED
INTELLECTUAL PROPERTY"), (i) the provisions of Section 2 shall automatically
apply thereto, (ii) any such After-Acquired Intellectual Property and, in the
case of trademarks,
23
the goodwill of the business associated therewith or symbolized thereby, shall
automatically become part of the Intellectual Property Collateral subject to the
terms and conditions of this Agreement with respect thereto and (iii) with
respect to any such Intellectual Property Collateral that is registered in the
U.S. Patent and Trademark Office or the U.S. Copyright Office, such Grantor
shall (A) give to the Collateral Agent written notice thereof on a quarterly
basis, (B) execute and deliver to the Collateral Agent, or otherwise
authenticate, an IP Security Agreement Supplement covering such After-Acquired
Intellectual Property as "ADDITIONAL COLLATERAL" thereunder and as defined
therein and (C) record such IP Security Agreement Supplement with the U.S.
Patent and Trademark Office or the U.S. Copyright Office.
SECTION 13. VOTING RIGHTS; DIVIDENDS; ETC. (a) So long as no Event of
Default shall have occurred and be continuing and such Grantor has not received
the notice referred to in subsection (b) below:
(i) Each Grantor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Security Collateral
consisting of Pledged Equity and Pledged Debt of such Grantor or any
part thereof for any purpose other than originate Entitlement Orders
(as defined in any Securities Account Control Agreement) with respect
to the Securities Accounts; PROVIDED, HOWEVER, that such Grantor will
not exercise or refrain from exercising any such right if such action
would constitute an Event of Default under the Credit Agreement.
(ii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the
Security Collateral of such Grantor if and to the extent that the
payment thereof is not otherwise prohibited by the terms of the Loan
Documents; PROVIDED, HOWEVER, that any and all dividends, interest
and other distributions paid or payable other than in cash in respect
of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security
Collateral shall be, and (to the extent it constitutes Pledged Debt
in a principal amount of $1,000,000 or more) shall be forthwith
delivered to the Collateral Agent to hold as, Security Collateral and
shall, if received by such Grantor, be received in trust for the
benefit of the Collateral Agent, be segregated from the other
property or funds of such Grantor and be forthwith delivered to the
Collateral Agent as Security Collateral in the same form as so
received (with any necessary indorsement).
(iii) The Collateral Agent will execute and deliver (or cause to be
executed and delivered) to each Grantor all such proxies and other
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instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it
is entitled to exercise pursuant to paragraph (i) above and to
receive the dividends or interest payments that it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default and upon notice to the Grantors:
(i) All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 13(A)(I) shall,
upon notice to such Grantor by the Collateral Agent, cease and (y) to
receive the dividends, interest and other distributions that it would
otherwise be authorized to receive and retain pursuant to Section
13(A)(II) shall automatically cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise or refrain from exercising
such voting and other consensual rights and to receive and hold as
Security Collateral such dividends, interest and other distributions.
(ii) All dividends, interest and other distributions that are
received by any Grantor contrary to the provisions of paragraph (i)
of this Section 13(B) shall be received in trust for the benefit of
the Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent as
Security Collateral in the same form as so received (with any
necessary indorsement).
(iii) The Collateral Agent shall be authorized to send to each
Securities Intermediary as defined in and under any Securities
Account Control Agreement a Notice of Exclusive Control as defined in
and under such Securities Account Control Agreement.
SECTION 14. AS TO LETTER-OF-CREDIT RIGHTS. (a) Each Grantor, by
granting a security interest in its Receivables consisting of letter-of-credit
rights in respect of any letter of credit of $5,000,000 or more to the
Collateral Agent, intends to (and hereby does) assign to the Collateral Agent
its rights (including its contingent rights) to the proceeds of all Related
Contracts consisting of such letters of credit of which it is or hereafter
becomes a beneficiary. Upon the request of the Collateral Agent, each Grantor
will promptly use its commercially reasonable efforts to cause the issuer of
each such letter of credit and each nominated person (if any) with respect
thereto to consent to such assignment of the proceeds thereof and deliver
written evidence of such consent to the Collateral Agent.
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(b) Upon the occurrence and during the continuance of an Event of
Default, each Grantor will, promptly upon request by the Collateral Agent, (i)
notify (and such Grantor hereby authorizes the Collateral Agent to notify) the
issuer and each nominated person with respect to each of the Related Contracts
consisting of letters of credit of $5,000,000 or more that the proceeds thereof
have been assigned to the Collateral Agent hereunder and any payments due or to
become due in respect thereof are to be made directly to the Collateral Agent or
its designee and (ii) arrange for the Collateral Agent to become the transferee
beneficiary of such letter of credit.
SECTION 15. INSURANCE RECEIVABLES. (a) Schedule VII hereto lists as
of the date hereof each insurance policy that covers claims relating to asbestos
liability under which any Grantor is a beneficiary or otherwise entitled to
reimbursement or payment (any such policy, an "ASBESTOS POLICY"). Each Grantor
shall use its commercially reasonable efforts to notify each insurance company
that is the issuer of any Asbestos Policy of, and deliver to the Collateral
Agent a consent and acknowledgment, in substantially the form of Exhibit C
hereto or otherwise in form and substance satisfactory to the Collateral Agent,
from each such insurance company to, the assignment of the receivables under
such Asbestos Policy to the Collateral Agent pursuant to this Agreement.
(b) If any Grantor becomes a beneficiary or otherwise entitled to
reimbursement or payment under any Asbestos Policy, such Grantor shall use its
commercially reasonable efforts to notify the insurance company that is issuer
of such Asbestos Policy of, and deliver to the Collateral Agent a consent and
acknowledgment, in substantially the form of Exhibit C hereto or otherwise in
form and substance satisfactory to the Collateral Agent, from such insurance
company to, the assignment of the receivables under such Asbestos Policy to the
Collateral Agent pursuant to this Agreement.
SECTION 16. TRANSFERS AND OTHER LIENS. Each Grantor agrees that it
will not (i) sell, assign or otherwise dispose of, or grant any option with
respect to, any of the Collateral, other than sales, assignments and other
dispositions of Collateral, and options relating to Collateral, permitted under
the terms of the Credit Agreement, or (ii) create or suffer to exist any Lien
upon or with respect to any of the Collateral of such Grantor except for the
pledge, assignment and security interest created under this Agreement and Liens
permitted under the Credit Agreement.
SECTION 17. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's attorney in
fact, with full authority in the place and stead of such Grantor and in the name
of such Grantor or otherwise, from time to time upon the occurrence and during
the
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continuance of an Event of Default, in the Collateral Agent's discretion, to
take any action and to execute any instrument that the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:
(a) to obtain and adjust insurance required to be paid to the
Collateral Agent pursuant to the Credit Agreement,
(b) to ask for, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above, and
(d) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem reasonably necessary or desirable
for the collection of any of the Collateral or otherwise to enforce compliance
with the terms and conditions of any Assigned Agreement or the rights of the
Collateral Agent with respect to any of the Collateral.
SECTION 18. COLLATERAL AGENT MAY PERFORM. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may, but shall not
be obligated to, perform, or cause performance of, such agreement, and the
expenses of the Collateral Agent incurred in connection therewith shall be
payable by such Grantor under Section 21; PROVIDED that, unless the Collateral
Agent determines that the circumstances do not so permit, the Collateral Agent
shall notify such Grantor of any such action ten Business Days' prior to taking,
or causing to be taken, such action.
SECTION 19. THE COLLATERAL AGENT'S DUTIES. (a) The powers conferred
on the Collateral Agent hereunder are solely to protect the Secured Parties'
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Collateral
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not any Secured Party has
or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.
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(b) Except for the obligation of the Collateral Agent to make
distributions in respect of the Senior Note Obligations under Section 20(c)(ii),
none of the Lender Parties shall be under any fiduciary, contractual or other
duty to the Senior Noteholders or the Trustee.
(c) Anything contained herein to the contrary notwithstanding, the
Collateral Agent may from time to time, when the Collateral Agent deems it to be
necessary, appoint one or more subagents (each a "SUBAGENT") for the Collateral
Agent hereunder with respect to all or any part of the Collateral. In the event
that the Collateral Agent so appoints any Subagent with respect to any
Collateral, (i) the assignment and pledge of such Collateral and the security
interest granted in such Collateral by each Grantor hereunder shall be deemed
for purposes of this Security Agreement to have been made to such Subagent, in
addition to the Collateral Agent, for the benefit of the Secured Parties, as
security for the Secured Obligations of such Grantor, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent hereunder
with respect to such Collateral, and (iii) the term "COLLATERAL AGENT," when
used herein in relation to any rights, powers, privileges, interests and
remedies of the Collateral Agent with respect to such Collateral, shall include
such Subagent; PROVIDED, HOWEVER, that no such Subagent shall be authorized to
take any action with respect to any such Collateral unless and except to the
extent expressly authorized in writing by the Collateral Agent.
(d) The provisions of Article VIII of the Credit Agreement shall
inure to the benefit of the Collateral Agent in respect of this Agreement and
shall be binding upon the parties hereto in such respect.
SECTION 20. REMEDIES. If either (x) any Event of Default shall have
occurred and be continuing and the Required Lenders shall have so instructed the
Collateral Agent or (y) (i) the maturity of the Senior Notes shall have been
accelerated and/or the principal of the Senior Notes shall not have been paid at
maturity, (ii) such condition shall have continued for 60 consecutive days and
(iii) holders of a majority of the Senior Note Obligations shall have so
instructed the Collateral Agent:
(a) The Collateral Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon default
under the UCC (whether or not the UCC applies to the affected Collateral) and
also may: (i) require each Grantor to, and each Grantor hereby agrees that it
will at its expense and upon request of the Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Collateral Agent and make it
available to the
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Collateral Agent at a place and time to be designated by the Collateral Agent
that is reasonably convenient to both parties; (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Collateral Agent may deem commercially reasonable; (iii) occupy any
premises owned or leased by any of the Grantors where the Collateral or any part
thereof is assembled or located for a reasonable period in order to effectuate
its rights and remedies hereunder or under law, without obligation to such
Grantor in respect of such occupation; and (iv) exercise any and all rights and
remedies of any of the Grantors under or in connection with the Collateral, or
otherwise in respect of the Collateral, including, without limitation, (A) any
and all rights of such Grantor to demand or otherwise require payment of any
amount under, or performance of any provision of, the Assigned Agreements, the
Receivables, the Related Contracts and the other Collateral, (B) withdraw, or
cause or direct the withdrawal, of all funds with respect to the Account
Collateral and (C) exercise all other rights and remedies with respect to the
Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, including, without limitation, those set forth in Section 9-607 of
the UCC. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to such Grantor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) The Collateral Agent may, without notice to, or consent from,
the Grantor, (i) transfer, or direct the transfer of, funds from the Account
Collateral to satisfy the Grantor's Obligations (and, to the extent contemplated
by the Credit Agreement, the Senior Note Obligations) and (ii) transfer, or
direct the transfer of, funds from the Other Deposit Accounts to the Collateral
Deposit Account or the LC Collateral Account. The Collateral Agent shall notify
the Grantor promptly following any such transfer or direction; PROVIDED that the
failure to give such notice shall not affect the validity of such transfer or
direction.
(c) Any cash held by or on behalf of the Collateral Agent and all
cash proceeds received by or on behalf of the Collateral Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied in whole or in part by the Collateral Agent for the benefit of the
Secured Parties against, all or any part of the Secured Obligations, in the
following manner:
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(i) in the case of Unrestricted Collateral:
(A) to pay the expenses of such sale or disposition,
including reasonable compensation to agents of and counsel
for the Collateral Agent, and all reasonable expenses,
liabilities and advances incurred or made by the Collateral
Agent in connection with the Security Documents, and any
other amounts then due and payable to the Collateral Agent
pursuant to Section 21 or Section 10.06 of the Credit
Agreement;
(B) to pay ratably all fees payable in respect of the
Term Loans, until payment in full of all such fees shall
have been made;
(C) to pay ratably all interest (including
Post-Petition Interest) on the Term Loans, until payment in
full of all such interest shall have been made;
(D) to pay ratably the unpaid principal of the Term
Loans, until payment in full of the principal of all Term
Loans shall have been made;
(E) to pay ratably all other amounts in respect of
the Term Loans, until payment in full of all such amounts
shall have been made;
(F) to pay ratably all fees payable in respect of the
Revolving Credit Loans, the Secured Hedging Agreements and
the Secured Cash Management Agreements, until payment in
full of all such fees shall have been made;
(G) to pay ratably all interest (including
Post-Petition Interest) on the Revolving Credit Loans and
under the Secured Hedging Agreements and the Secured Cash
Management Agreements, until payment in full of all such
interest shall have been made;
(H) to pay ratably the unpaid principal of the
Revolving Credit Loans and any unreimbursed amounts in
respect of any Letter of Credit Obligations, and the
principal amount of the obligations under the Secured
Hedging Agreements and the Secured Cash Management
Agreements, and to Cash Collateralize ratably the remaining
Letter of Credit Obligations up to the
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aggregate amount of such Letter of Credit Obligations then
outstanding, until payment in full of such principal and
other amounts and such Cash Collateralization shall have
been made; PROVIDED that in the event that any such Letter
of Credit is drawn, the Collateral Agent shall pay to the
L/C Issuer that issued such Letter of Credit the amount
held in the LC Collateral Account in respect of such Letter
of Credit and PROVIDED FURTHER that, to the extent that the
Letter of Credit Obligations are permanently reduced
pursuant to Section 2.12 of the Credit Agreement or
otherwise and as a result thereof the amount of the
Collateral in the LC Collateral Account shall exceed the
aggregate amount of the Letter of Credit Obligations then
outstanding, such excess amount of such Collateral shall be
applied in accordance with the remaining order of priority
set out in this Section 20(c)(i);
(I) to pay ratably all other amounts in respect of
the Revolving Credit Loans, the Secured Hedging Agreements
and the Secured Cash Management Agreements, until payment
in full of all such amounts shall have been made; and
(J) to pay to the applicable Grantor or to whomsoever
may be lawfully entitled to receive any surplus from the
proceeds of the Collateral owned by it.
(ii) in the case of Restricted Collateral:
(A) to pay the expenses of such sale or disposition,
including reasonable compensation to agents of and counsel
for the Collateral Agent, and all reasonable expenses,
liabilities and advances incurred or made by the Collateral
Agent in connection with the Security Documents, and any
other amounts then due and payable to the Collateral Agent
pursuant to Section 21 or Section 10.06 of the Credit
Agreement;
(B) to pay ratably all fees payable in respect of the
Term Loans, until payment in full of all such fees shall
have been made;
(C) to pay ratably all interest (including
Post-Petition Interest) on the Term Loans, until payment in
full of all such interest shall have been made;
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(D) to pay ratably the unpaid principal of the Term
Loans, until payment in full of the principal of all Term
Loans shall have been made;
(E) to pay ratably all other amounts in respect of
the Term Loans, until payment in full of all such amounts
shall have been made;
(F) to pay ratably any unpaid drawings on Letters of
Credit and thereafter to Cash Collateralize ratably the
then- remaining Letter of Credit Obligations, until such
payment and Cash Collateralization shall have been made;
PROVIDED that in the event that any such Letter of Credit
is drawn, the Collateral Agent shall pay to the L/C Issuer
that issued such Letter of Credit the amount held in the LC
Collateral Account in respect of such Letter of Credit, and
PROVIDED FURTHER that, to the extent that any such Letter
of Credit Obligations are permanently reduced pursuant to
Section 2.12 of the Credit Agreement or otherwise and as a
result thereof the amount of the Collateral in the LC
Collateral Account shall exceed the then-remaining
aggregate Letter of Credit Obligations, such excess amount
of such Collateral shall be applied in accordance with the
remaining order of priority set out in this Section
20(c)(ii);
(G) to pay (or provide for the payment of) ratably
all amounts in respect of the Revolving Credit Loans, the
Secured Hedging Agreements, the Secured Cash Management
Agreements and the Senior Note Obligations, until payment
in full of all such amounts shall have been made; and
(H) to pay to the applicable Grantor or to whomsoever
may be lawfully entitled to receive any surplus from the
proceeds of the Collateral owned by it.
PROVIDED that, for purposes of this Section 20, the amount owing to any such
Lender Party pursuant to any Secured Hedging Agreement to which it is a party
(other than any amount therefore accrued and unpaid) shall be deemed to be equal
to the maximum aggregate amount (after giving effect to any netting agreements)
that such Lender Party would be entitled to receive if such Secured Hedging
Agreement were terminated at such time.
(d) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Collateral shall be
32
received in trust for the benefit of the Collateral Agent, shall be segregated
from other funds of such Grantor and shall be forthwith paid over to the
Collateral Agent in the same form as so received (with any necessary
indorsement).
(e) The Collateral Agent may, without notice to any Grantor except
as required by law and at any time or from time to time, charge, set off and
otherwise apply all or any part of the Secured Obligations against any funds
held with respect to the Account Collateral or in any other deposit account.
(f) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill of the business
connected with and symbolized by any Trademarks subject to such sale or other
disposition shall be included therein, and such Grantor shall supply to the
Collateral Agent or its designee such Grantor's know-how and expertise, and
documents and things relating to any Intellectual Property Collateral subject to
such sale or other disposition, and such Grantor's customer lists and other
records and documents relating to such Intellectual Property Collateral and to
the manufacture, distribution, advertising and sale of products and services of
such Grantor.
(g) If the Collateral Agent shall determine to exercise its right to
sell all or any of the Security Collateral of any Grantor pursuant to this
Section 20, each Grantor agrees that, upon request of the Collateral Agent, such
Grantor will, at its own expense:
(i) if such Security Collateral constitutes Pledged Equity of a
Subsidiary of such Grantor, execute and deliver, and cause the issuer
of such Pledged Equity contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things,
as may be necessary or, in the opinion of the Collateral Agent,
advisable to register such Pledged Equity under the provisions of the
Securities Act of 1933 (as amended from time to time, the "SECURITIES
ACT"), to cause the registration statement relating thereto to become
effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and
supplements thereto and to the related prospectus that, in the
opinion of the Collateral Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules
and regulations of the Securities and Exchange Commission applicable
thereto;
(ii) use its best efforts to qualify such Security Collateral under
the state securities or "Blue Sky" laws and to obtain all necessary
33
governmental approvals for the sale of such Security Collateral, as
requested by the Collateral Agent;
(iii) cause each such issuer of such Security Collateral to make
available to its security holders, as soon as practicable, an
earnings statement that will satisfy the provisions of Section 11(a)
of the Securities Act; and
(iv) do or cause to be done all such other acts and things as may be
necessary to make such sale of such Security Collateral or any part
thereof valid and binding and in compliance with applicable law.
Notwithstanding the foregoing, the Collateral Agent is authorized, in connection
with any such sale, if it deems it advisable to do so, (A) to restrict the
prospective bidders on or purchasers of any of such Security Collateral to a
limited number of sophisticated investors who will represent and agree that they
are purchasing for their own account for investment and not with a view to the
distribution or sale of any of such Security Collateral, (B) to cause to be
placed on certificates for any or all of such Security Collateral or on any
other securities pledged hereunder a legend to the effect that such security has
not been registered under the Securities Act and may not be disposed of in
violation of the provisions of the Securities Act, and (C) to impose such other
limitations or conditions in connection with any such sale as the Collateral
Agent deems necessary or advisable in order to comply with the Securities Act or
any other law. The parties acknowledge and agree that only under very unusual
circumstances, if ever, would the Collateral Agent be required to register such
Security Collateral under the Securities Act in order to effect a commercially
reasonable sale.
(h) The Collateral Agent is authorized, in connection with any sale
of Security Collateral pursuant to this Section 20, to deliver or otherwise
disclose to any prospective purchaser of such Security Collateral: (i) any
registration statement or prospectus, and all supplements and amendments
thereto, prepared pursuant to subsection (g)(i) above; and (ii) any other
information in its possession relating to such Security Collateral.
(i) Each Grantor acknowledges the impossibility of ascertaining the
amount of damages that would be suffered by the Secured Parties by reason of the
failure by such Grantor to perform any of the covenants contained in subsection
(g) above and, consequently, agrees that, if such Grantor shall fail to perform
any of such covenants, the Collateral Agent shall have the right of specific
performance.
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SECTION 21. INDEMNITY AND EXPENSES. Each Grantor agrees to indemnify,
defend and save and hold harmless each Secured Party and each of their
Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
SECTION 22. EFFECTIVENESS. This Agreement shall become effective on
the Effective Date (as defined in the Credit Agreement) immediately after the
satisfaction of the conditions to effectiveness of the Credit Agreement set
forth in Section 4.01 thereof (including without limitation the delivery of the
balance sheet referred to in subsection (i) thereof), and at such time the
Pledge Agreement dated as of May 25, 2001 between the pledgors party thereto and
Bank of America N.A. (as successor to Bank of America National Trust and Savings
Association), as collateral agent, shall automatically be terminated and
replaced hereby.
SECTION 23. AMENDMENTS; WAIVERS; COLLATERAL AGENT ACTIONS; ADDITIONAL
GRANTORS; ETC. (a) No amendment or waiver of any provision of this Agreement,
and no consent to any departure by any Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Collateral
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Collateral Agent or any other Secured Party to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. Except as otherwise
provided in Section 20, the Collateral Agent shall take instructions from the
Required Lenders as to all matters (or from all Lenders in the circumstances
specified in the proviso to Section 10.03 of the Credit Agreement). Any such
action, including any release of Collateral, shall be binding on the Senior
Noteholders; PROVIDED that the prior written consent of the Trustee shall be
required to amend (y) Section 20(c)(ii) in a manner adverse to the Senior
Noteholders or (y) the definition of "Restricted Collateral" in a manner adverse
to the Senior Noteholders if and to the extent that the other Secured Parties
would continue to have a Lien on the Restricted Collateral after giving effect
to such amendment.
35
(b) Upon the execution and delivery, or authentication, by any
Person of a security agreement supplement in substantially the form of Exhibit A
hereto (each a "SECURITY AGREEMENT SUPPLEMENT"), (i) such Person shall be
referred to as an "ADDITIONAL GRANTOR" and shall be and become a Grantor
hereunder, and each reference in this Agreement and the other Loan Documents to
"GRANTOR" shall also mean and be a reference to such Additional Grantor, and
each reference in this Agreement and the other Loan Documents to "COLLATERAL"
shall also mean and be a reference to the Collateral of such Additional Grantor,
and (ii) the supplemental schedules XII attached to each Security Agreement
Supplement shall be incorporated into and become a part of and supplement
Schedules XII, respectively, hereto, and the Collateral Agent may attach such
supplemental schedules to such Schedules; and each reference to such Schedules
shall mean and be a reference to such Schedules as supplemented pursuant to each
Security Agreement Supplement.
SECTION 24. NOTICES; ETC. (a) GENERAL. Unless otherwise expressly
provided herein, all notices and other communications provided for hereunder
shall be in writing (including by facsimile transmission). All such written
notices shall be mailed, faxed or delivered to the applicable address, facsimile
number or (subject to subsection (c) below) electronic mail address, as set
forth in or designated pursuant to Section 10.05 of the Credit Agreement. All
such notices and other communications shall be deemed to be given or made upon
the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii)(A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; PROVIDED, HOWEVER, that notices and other communications
to the Collateral Agent shall not be effective until actually received by the
Collateral Agent.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Collateral
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
parties hereto. The Collateral Agent may also require that any such documents
and signatures be confirmed by a manually-signed original thereof; PROVIDED,
HOWEVER, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.
(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
information as provided in Section 5.01 of the Credit Agreement and to
distribute
36
Collateral Documents for execution by the parties thereto, and may not be used
for any other purpose.
(d) RELIANCE BY COLLATERAL AGENT. The Collateral Agent shall be
entitled to rely and act upon any notices purportedly given by or on behalf of
any Grantor even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. Each Grantor shall indemnify the
Collateral Agent and its Affiliates from all losses and liabilities, and all
reasonable costs and expenses, resulting from the reliance by such Person on
each notice purportedly given by or on behalf of such Grantor absent gross
negligence or willful misconduct. All communications with the Collateral Agent
may be recorded by the Collateral Agent, and each of the parties hereto hereby
consents to such recording.
(e) The Collateral Agent may rely on any notice (whether or not such
notice is made in a manner permitted or required by this Agreement or any Loan
Document) purportedly made by or on behalf of the Company (including acting on
behalf of any other Grantor) or any other Grantor, and the Collateral Agent
shall not have any duty to verify the identity or authority of any Person giving
such notice.
SECTION 25. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE
CREDIT AGREEMENT. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the
satisfaction of the Release Conditions, (b) be binding upon each Grantor, its
successors and assigns and (c) inure, together with the rights and remedies of
the Collateral Agent hereunder, to the benefit of the Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Secured Party may assign or otherwise transfer
all or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the Loans
owing to it and the Note or Notes, if any, held by it) or in respect of the
Senior Notes to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party
herein or otherwise, in each case as provided in Section 10.14 of the Credit
Agreement or as applied to the Senior Notes.
SECTION 26. RELEASE; TERMINATION. (a) Upon any sale, lease, transfer
or other disposition of any item of Collateral of any Grantor to any Person
other than another Grantor (or a Subsidiary that is required to be a Grantor) in
a transaction which is permitted by the terms of the Loan Documents, such
Collateral will be sold, leased, transferred or otherwise disposed of free and
clear of the Liens
37
created hereby, and the Collateral Agent will, at such Grantor's expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby. Each Grantor acknowledges and
agrees that the Collateral Agent shall be entitled to conclusively rely on a
certification by the Company with respect to the matters set forth in this
Section 26.
(b) Upon the satisfaction of the Release Conditions, the pledge and
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantor. At any time and from time to
time prior to such termination, the Collateral Agent shall release any
Collateral in accordance with Section 10.03(b) of the Credit Agreement. If at
any time prior to such termination, the Indenture or the obligation of the
Company to provide equal and ratable security thereunder is terminated, the
rights of the Senior Noteholders and the Trustee hereunder shall simultaneously
terminate. Upon any such termination or release, the Collateral Agent will, at
the applicable Grantor's expense, execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination
or release, as the case may be.
SECTION 27. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and the other Secured Parties and the pledge, assignment and security
interest hereunder, and all obligations of each Grantor hereunder, shall be
irrevocable, absolute and unconditional irrespective of, and each Grantor hereby
irrevocably waives (to the maximum extent permitted by applicable law) any
defenses it may now have or may hereafter acquire in any way relating to, any or
all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other Obligations of
any other Credit Party under or in respect of the Loan Documents or any other
amendment or waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Secured Obligations resulting
from the extension of additional credit to any Credit Party or any of its
Subsidiaries or otherwise;
(c) any taking, exchange, release or non perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Obligations;
38
(d) any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations, or
any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other Obligations of
any other Credit Party under or in respect of the Loan Documents or any other
assets of any Credit Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Credit Party or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Credit Party
any information relating to the business, condition (financial or otherwise),
operations, performance, assets, nature of assets, liabilities or prospects of
any other Credit Party now or hereafter known to such Secured Party (each
Grantor waiving any duty on the part of the Secured Parties to disclose such
information);
(g) the failure of any other Person to execute this Agreement or any
other Collateral Document, guaranty or agreement or the release or reduction of
liability of any Grantor or other grantor or surety with respect to the Secured
Obligations;
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
any Secured Party that might otherwise constitute a defense available to, or a
discharge of, such Grantor or any other Grantor or a third party grantor of a
security interest; or
(i) (i) any defense arising by reason of any claim or defense based
upon an election of remedies by any Secured Party that in any manner impairs,
reduces, releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of such Grantor or other
rights of such Grantor to proceed against any of the other Credit Parties, any
other guarantor or any other Person or any Collateral and (ii) any defense based
on any right of set-off or counterclaim against or in respect of the Obligations
of such Grantor hereunder.
SECTION 28. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
39
SECTION 29. THE MORTGAGES. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of any
Mortgage and the terms of such Mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such Mortgage
shall be controlling in the case of fixtures and real estate leases, letting and
licenses of, and contracts and agreements relating to the lease of, real
property, and the terms of this Agreement shall be controlling in the case of
all other Collateral.
SECTION 30. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 31. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by The Bank of New York, not individually or personally but solely as Owner
Trustee of the Perryville III Trust, in the exercise of the powers and authority
conferred and vested in it, (b) the representations, undertakings and agreements
herein made on the part of the Perryville III Trust are made and intended not as
personal representations, undertakings and agreements by The Bank of New York,
but are made and intended for the purpose of binding only the Perryville III
Trust, (c) nothing herein contained shall be construed as creating any liability
on The Bank of New York, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties who are signatories to this Agreement and by any
Person claiming by, through or under such parties and (d) under no circumstances
shall The Bank of New York be personally liable for the payment of any
indebtedness or expenses of the Perryville III Trust or the other Grantors or be
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Perryville III Trust or the other Grantors
under this Agreement.
40
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
ATTEST: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC
By: Foreign Holdings Ltd.,
its sole member
By /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- ------------------------------------
Title: Vice President Title: Vice President and Treasurer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ USA CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ POWER GROUP,
INC. (formerly known as ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ENERGY
INTERNATIONAL, INC.)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENERGY
CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INC. (formerly known
as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ US
HOLDINGS, INC.)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INTERNATIONAL
HOLDINGS, INC.
FOREIGN HOLDINGS LTD.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LTD.
EQUIPMENT CONSULTANTS, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASIA LIMITED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL &
FINANCE CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CONSTRUCTORS, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DEVELOPMENT
CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENERGY
MANUFACTURING, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENERGY
SERVICES, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENVIRESPONSE, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENVIRONMENTAL
CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FACILITIES
MANAGEMENT, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INTERNATIONAL
CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ POWER SYSTEMS, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PYROPOWER, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ REAL ESTATE
DEVELOPMENT CORP.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ REALTY SERVICES,
INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VIRGIN ISLANDS, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, INC.
FW MORTSHAL, INC.
FW TECHNOLOGIES HOLDING, LLC
HFM INTERNATIONAL, INC.
PROCESS CONSULTANTS, INC.
PYROPOWER OPERATING SERVICES
COMPANY, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Authorized Person
PERRYVILLE III TRUST
By: THE BANK OF NEW YORK, not in
its individual capacity but solely in
its capacity as the Owner Trustee of
the Perryville III Trust
By: /S/ ▇▇▇▇▇▇ MATE
---------------------------------------
Title: Assistant Vice President
SCHEDULE I TO THE
SECURITY AGREEMENT
PLEDGED EQUITY
CLASS OF PERCENTAGE OF
EQUITY PAR CERTIFICATE NUMBER OF OUTSTANDING
GRANTOR ISSUER INTEREST VALUE NO(S) SHARES SHARES
=============== ================== ================== ============== ===================== ================== ==================
SCHEDULE II TO THE
SECURITY AGREEMENT
PLEDGED DEBT
OUTSTANDING
DESCRIPTION OF DEBT CERTIFICATE FINAL PRINCIPAL
GRANTOR DEBT ISSUER DEBT NO(S). MATURITY AMOUNT
===================== ================== ========================== =========================== ================== ==============
SCHEDULE III TO THE
SECURITY AGREEMENT
UNITED STATES PATENTS, TRADEMARKS AND
TRADE NAMES AND COPYRIGHTS
GRANTOR PATENTS PATENT NO. APPLIC. NO. FILING DATE ISSUE DATE
------- ------- ---------- ----------- ----------- ----------
TRADEMARKS AND
GRANTOR TRADE NAMES ▇▇▇▇ REG. NO. APPLIC. NO. FILING DATE ISSUE DATE
------- ----------- ---- -------- ----------- ----------- ----------
GRANTOR COPYRIGHTS TITLE REG. NO. APPLIC. NO. FILING DATE ISSUE DATE
------- ---------- ----- -------- ----------- ----------- ----------
SCHEDULE IV TO THE
SECURITY AGREEMENT
ACCOUNT COLLATERAL
NAME AND ADDRESS
OF PLEDGED ACCOUNT MAILING ADDRESS OF
GRANTOR BANK PLEDGED ACCOUNT ACCOUNT NUMBER
============================= ============================ ============================ ============================
SCHEDULE V TO THE
SECURITY AGREEMENT
COMMERCIAL TORT CLAIMS
[DESCRIBE NATURE OF CLAIM(S)-SEE COMMENT 5 TO SECTION 9-108 OF THE UCC]
SCHEDULE VI TO THE
SECURITY AGREEMENT
ADDITIONAL SECURED OBLIGATIONS
SCHEDULE VII TO THE
SECURITY AGREEMENT
INSURANCE RECEIVABLES
EXHIBIT A TO THE
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
[Date of Security Agreement
Supplement]
Bank of America, N.A.,
as the Collateral Agent for the
Secured Parties referred to in the
Credit Agreement referred to below
Agency Management - Mail CA5-701-05-19
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇, Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC
Ladies and Gentlemen:
Reference is made to (i) the Third Amended and Restated Term Loan and
Revolving Credit Agreement dated as of August 2, 2002 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC, a Delaware limited liability corporation,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ USA Corporation, a Delaware corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Power
Group, Inc. a Delaware corporation, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Energy Corporation, a
Delaware corporation, the Guarantors party thereto, the Lenders party thereto,
Bank of America, N.A., as Administrative Agent and Collateral Agent (together
with any successor collateral agent appointed pursuant to Article VIII of the
Credit Agreement, the "COLLATERAL AGENT"), and (ii) the Security Agreement dated
as of August 16, 2002 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "SECURITY AGREEMENT") made by the
Grantors from time to time party thereto in favor of the Collateral Agent for
the Secured Parties. Terms defined in the Credit Agreement or the Security
Agreement and not otherwise defined herein are used herein as defined in the
Credit Agreement or the Security Agreement.
SECTION 1. GRANT OF SECURITY. The undersigned hereby pledges to the
Collateral Agent, for the benefit of the Secured Parties, and hereby grants to
the Collateral Agent, for the benefit of the Secured Parties, a security
interest in, all of its right, title and interest in and to all of the
Collateral of the undersigned, whether now owned or hereafter acquired by the
undersigned, wherever located
Exhibit A - page 1
and whether now or hereafter existing or arising, including, without limitation,
the property and assets of the undersigned set forth on the attached
supplemental schedules to the Schedules to the Security Agreement.
SECTION 2. SECURITY FOR OBLIGATIONS. The pledge and grant of a
security interest in the Collateral by the undersigned under this Security
Agreement Supplement and the Security Agreement secures the payment of all
Secured Obligations of the undersigned, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise.
SECTION 3. SUPPLEMENTS TO SECURITY AGREEMENT SCHEDULES. The
undersigned has attached hereto supplemental Schedules I through VII to
Schedules I through VII, respectively, to the Security Agreement, and the
undersigned hereby certifies, as of the date first above written, that such
supplemental schedules have been prepared by the undersigned in substantially
the form of the equivalent Schedules to the Security Agreement and are complete
and correct.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The undersigned hereby
makes each representation and warranty set forth in Section 9 of the Security
Agreement (as supplemented by the attached supplemental schedules) to the same
extent as each other Grantor.
SECTION 5. OBLIGATIONS UNDER THE SECURITY AGREEMENT. The undersigned
hereby agrees, as of the date first above written, to be bound as a Grantor by
all of the terms and provisions of the Security Agreement to the same extent as
each of the other Grantors. The undersigned further agrees, as of the date first
above written, that each reference in the Security Agreement to an "Additional
Grantor" or a "Grantor" shall also mean and be a reference to the undersigned.
SECTION 6. GOVERNING LAW. This Security Agreement Supplement shall
be governed by, and construed in accordance with, the laws of the State of New
York.
Very truly yours,
[NAME OF ADDITIONAL GRANTOR]
By__________________________
Title:
Exhibit A - page 2
Exhibit A - page 3
Address for notices:
--------------------------
--------------------------
Exhibit A - page 4
EXHIBIT B TO THE
SECURITY AGREEMENT
FORM OF ACCOUNT CONTROL AGREEMENT
(DEPOSIT ACCOUNT/SECURITIES ACCOUNT)
ACCOUNT CONTROL AGREEMENT (this "AGREEMENT") dated as of _________
200_, among ____________, a ____________ (the "GRANTOR"), Bank of America, N.A.,
a national banking association, as Collateral Agent (the "SECURED PARTY"), and
____________, a ____________ ("____________"), as securities intermediary and
depository bank (the "ACCOUNT HOLDER").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security interest
(the "SECURITY INTEREST") in the following accounts maintained by the Account
Holder for the Grantor (each, an "ACCOUNT" and collectively, the "ACCOUNTS"):
[Insert account numbers and other identifying information.]
(2) Terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of New York ("N.Y. UNIFORM COMMERCIAL CODE") are used in
this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. THE ACCOUNTS. The Account Holder represents and warrants
to, and agrees with, the Secured Party that:
(a) The Account Holder maintains each Account for the Grantor, and
all property (including, without limitation, all funds and financial assets)
held by the Account Holder for the account of the Grantor are, and will continue
to be, credited to an Account in accordance with instructions given by the
Grantor (unless otherwise provided herein).
(b) To the extent that funds are credited to any Account, such
Account is a deposit account; and to the extent that financial assets are
credited to any Account, such Account is a securities account. The Account
Holder is (i) the bank with which each Account is maintained and (ii) the
securities intermediary with respect to financial assets held in any Account.
The Grantor is (x) the
Exhibit B - page 1
Account Holder's customer with respect to the Accounts and (y) the entitlement
holder with respect to financial assets credited from time to time to any
Account.
(c) Notwithstanding any other agreement to the contrary, the Account
Holder's jurisdiction with respect to each Account for purposes of the N.Y.
Uniform Commercial Code is, and will continue to be for so long as the Security
Interest shall be in effect, the State of New York.
(d) Attached as Exhibit A hereto are statements of the respective
Accounts as of the date hereof showing the property credited to each Account.
(e) The Account Holder does not know of any claim to or interest in
any Account or any property (including, without limitation, funds and financial
assets) credited to any Account, except for claims and interests of the parties
referred to in this Agreement.
SECTION 2. CONTROL BY SECURED PARTY. The Account Holder will comply
with (i) all instructions directing disposition of the funds in any and all of
the Accounts, (ii) all notifications and entitlement orders that the Account
Holder receives directing it to transfer or redeem any financial asset in any
and all of the Accounts, and (iii) all other directions concerning any and all
of the Accounts, including, without limitation, directions to distribute to the
Secured Party proceeds of any such transfer or redemption or interest or
dividends on property in any and all of the Accounts (any such instruction,
notification or direction referred to in clause (i), (ii) or (iii) above being
an "ACCOUNT DIRECTION"), in each case of clauses (i), (ii) and (iii) above
originated by the Secured Party without further consent by the Grantor or any
other Person.
SECTION 3. GRANTOR'S RIGHTS IN ACCOUNTS.
(a) Except as otherwise provided in this Section 3, the Account
Holder will comply with Account Directions and other directions concerning each
Account originated by the Grantor without further consent by the Secured Party.
(b) Until the Account Holder receives a notice from the Secured
Party that the Secured Party will exercise exclusive control over any Account (a
"NOTICE OF EXCLUSIVE CONTROL" with respect to such Account), the Account Holder
(i) will comply with the Account Directions and other directions concerning each
Account originated by the Grantor and (ii) may distribute to the Grantor all
interest and regular cash dividends on property (including, without limitation,
funds and financial assets) in such Account.
Exhibit B - page 2
(c) If the Account Holder receives from the Secured Party a Notice
of Exclusive Control with respect to any Account, the Account Holder will comply
only with Account Directions originated by the Secured Party and will cease:
(i) complying with Account Directions or other directions
concerning such Account originated by the Grantor and
(ii) distributing to the Grantor interest and dividends on property
(including, without limitation, funds and financial assets) in such
Account.
SECTION 4. PRIORITY OF SECURED PARTY'S SECURITY INTEREST. (a) The
Account Holder (i) subordinates to the Security Interest and in favor of the
Secured Party any security interest, lien, or right of recoupment or setoff that
the Account Holder may have, now or in the future, against any Account or
property (including, without limitation, any funds and financial assets)
credited to any Account, and (ii) agrees that it will not exercise any right in
respect of any such security interest or lien or any such right of recoupment or
setoff until the Security Interest is terminated, except that the Account Holder
(A) will retain its prior security interest and lien on property credited to any
Account, (B) may exercise any right in respect of such security interest or
lien, and (C) may exercise any right of recoupment or setoff against any
Account, in the case of clauses (A), (B) and (C) above, to secure or to satisfy,
and only to secure or to satisfy, payment (x) for such property, (y) for its
customary fees and expenses for the routine maintenance and operation of such
Account, and (z) if such Account is a deposit account, for the face amount of
any items that have been credited to such Account but are subsequently returned
unpaid because of uncollected or insufficient funds.
(b) The Account Holder will not enter into any other agreement with
any Person relating to Account Directions or other directions with respect to
the Account.
SECTION 5. STATEMENTS, CONFIRMATIONS, AND NOTICES OF ADVERSE CLAIMS.
(a) Upon the request of the Secured Party, the Account Holder will send copies
of all statements and confirmations for each Account simultaneously to the
Secured Party and the Grantor.
(b) When the Account Holder knows of any claim or interest in any
Account or any property (including, without limitation, funds and financial
assets) credited to any Account other than the claims and interests of the
parties referred to in this Agreement, the Account Holder will promptly notify
the Secured Party and the Grantor of such claim or interest.
Exhibit B - page 3
SECTION 6. THE ACCOUNT HOLDER'S RESPONSIBILITY. (a) Except for
permitting a withdrawal, delivery, or payment in violation of Section 3, the
Account Holder will not be liable to the Secured Party for complying with
Account Directions or other directions concerning any Account from the Grantor
that are received by the Account Holder before the Account Holder receives and
has a reasonable opportunity to act on a Notice of Exclusive Control.
(b) The Account Holder will not be liable to the Grantor or the
Secured Party for complying with a Notice of Exclusive Control or with an
Account Direction or other direction concerning any Account originated by the
Secured Party, even if the Grantor notifies the Account Holder that the Secured
Party is not legally entitled to issue the Notice of Exclusive Control or
Account Direction or such other direction unless the Account Holder takes the
action after it is served with an injunction, restraining order, or other legal
process enjoining it from doing so, issued by a court of competent jurisdiction,
and had a reasonable opportunity to act on the injunction, restraining order or
other legal process.
(c) This Agreement does not create any obligation of the Account
Holder except for those expressly set forth in this Agreement and, in the case
of any Account that is a securities account, in Part 5 of Article 8 of the N.Y.
Uniform Commercial Code and, in the case of any Account that is a deposit
account, in Article 4 of the N.Y. Uniform Commercial Code. In particular, the
Account Holder need not investigate whether the Secured Party is entitled under
the Secured Party's agreements with the Grantor to give an Account Direction or
other direction concerning any Account or a Notice of Exclusive Control. The
Account Holder may rely on notices and communications it believes given by the
appropriate party.
SECTION 7. INDEMNITY. The Grantor will indemnify the Account Holder,
its officers, directors, employees and agents against claims, liabilities and
expenses arising out of this Agreement (including, without limitation,
reasonable attorney's fees and disbursements), except to the extent the claims,
liabilities or expenses are caused by the Account Holder's gross negligence or
willful misconduct as found by a court of competent jurisdiction in a final,
non-appealable judgment.
SECTION 8. TERMINATION; SURVIVAL. (a) The Secured Party may terminate
this Agreement by notice to the Account Holder and the Grantor. If the Secured
Party notifies the Account Holder that the Security Interest has terminated,
this Agreement will immediately terminate.
(b) The Account Holder may terminate this Agreement on 30 days'
prior notice to the Secured Party and the Grantor, PROVIDED that before such
termination
Exhibit B - page 4
the Account Holder and the Grantor, unless otherwise agreed to by the Secured
Party, shall make arrangements to transfer the property (including, without
limitation, all funds and financial assets) credited to each Account to another
Account Holder that shall have executed, together with the Grantor, a control
agreement in favor of the Secured Party in respect of such property in
substantially the form of this Agreement or otherwise in form and substance
satisfactory to the Secured Party.
(c) Sections 6 and 7 will survive termination of this Agreement.
SECTION 9. GOVERNING LAW. This Agreement and, notwithstanding
anything to the contrary in any agreement between the Account Holder and the
Grantor, each Account will be governed by the law of the State of New York. The
Account Holder and the Grantor may not change the law governing any Account
without the Secured Party's express prior written agreement.
SECTION 10. ENTIRE AGREEMENT. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral agreements, of the
parties concerning its subject matter.
SECTION 11. AMENDMENTS. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by the party
to be charged.
SECTION 12. FINANCIAL ASSETS. The Account Holder agrees with the
Secured Party and the Grantor that, to the fullest extent permitted by
applicable law, all property (other than funds) credited from time to time to
any Account will be treated as financial assets under Article 8 of the N.Y.
Uniform Commercial Code.
SECTION 13. NOTICES. A notice or other communication to a party under
this Agreement will be in writing (except that Account Directions may be given
orally), will be sent to the party's address set forth under its name below or
to such other address as the party may notify the other parties and will be
effective on receipt.
SECTION 14. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Grantor, the Secured Party and the
Account Holder, and thereafter shall be binding upon and inure to the benefit of
the Grantor, the Secured Party and the Account Holder and their respective
successors and assigns.
Exhibit B - page 5
SECTION 15. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.
* * *
Exhibit B - page 6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
[NAME OF GRANTOR]
By
-----------------------------------
Name:
Title:
Address:
----------------------------------
----------------------------------
BANK OF AMERICA, N.A., as
Collateral Agent
By -----------------------------------
Name:
Title:
Address:
-------------------------------------
-------------------------------------
[NAME OF ACCOUNT HOLDER]
By -----------------------------------
Name:
Title:
Address:
---------------------------------------
---------------------------------------
Exhibit B - page 7
EXHIBIT A
[Statements of the various Accounts showing the property credited to
each Account]
Exhibit B - page 8
EXHIBIT C TO THE
SECURITY AGREEMENT
FORM OF CONSENT AND AGREEMENT
The undersigned (the "INSURER") hereby acknowledges and consents to
the grant by [Name of Grantor] (the "GRANTOR") to Bank of America, N.A. (the
"COLLATERAL AGENT"), as collateral agent for the lenders and other secured
parties under the Security Agreement dated as of August 16, 2002 among the
Grantor, the other lien grantors party thereto and the Collateral Agent, of a
security interest in the following insurance policies (the "POLICIES") with the
Insurer for which the Grantor is the beneficiary or otherwise entitled to
reimbursement or payment:
[list policy numbers and other identifying information]
Until the Insurer shall have received written notice from the
Collateral Agent that an "Event of Default" under the Credit Agreement dated as
of August 2, 2002, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC and certain of its affiliates (as
co-borrowers and guarantors), the lenders party thereto and Bank of America,
N.A., as administrative agent and collateral agent, shall have occurred, the
Insurer shall pay any proceeds under the Policies to the Grantor.
[NAME OF INSURER]
By: ___________________________
Name:
Title:
Exhibit C - page 1
EXHIBIT D TO THE
SECURITY AGREEMENT
FORM OF SECURITIES ACCOUNT CONTROL AGREEMENT
(Securities Account)
CONTROL AGREEMENT dated as of _________, 200_ among ____________, a
____________(the "GRANTOR"), Bank of America, N.A., a national banking
association, as Collateral Agent (the "SECURED PARTY") and ____________, a
____________ ("____________"), as securities intermediary (the "SECURITIES
INTERMEDIARY").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security interest
(the "SECURITY INTEREST") in account no. ____________ maintained by the
Securities Intermediary for the Grantor (the "ACCOUNT").
(2) Terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of New York ("N.Y. UNIFORM COMMERCIAL CODE") are used in
this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. THE ACCOUNT. The Securities Intermediary represents and
warrants to, and agrees with, the Grantor and the Secured Party that:
(a) The Securities Intermediary maintains the Account for the
Grantor, and all property held by the Securities Intermediary for the
account of the Grantor is, and will continue to be, credited to the
Account.
(b) The Account is a securities account. The Securities Intermediary
is the securities intermediary with respect to the property credited
from time to time to the Account. The Grantor is the entitlement
holder with respect to the property credited from time to time to the
Account.
(c) The State of New York is, and will continue to be, the
Securities Intermediary's jurisdiction of organization for purposes
of Section 8-110(e) of the UCC so long as the Security Interest shall
remain in effect.
Exhibit D - page 1
(d) Exhibit A attached hereto is a statement of the property
credited to the Account on the date hereof.
(e) The Securities Intermediary does not know of any claim to or
interest in the Account or any property credited to the Account,
except for claims and interests of the parties referred to in this
Agreement.
SECTION 2. CONTROL BY SECURED PARTY. The Securities Intermediary will
comply with all notifications it receives directing it to transfer or redeem any
property in the Account (each an "ENTITLEMENT ORDER") or other directions
concerning the Account (including, without limitation, directions to distribute
to the Secured Party proceeds of any such transfer or redemption or interest or
dividends on property in the Account) originated by the Secured Party without
further consent by the Grantor or any other person.
SECTION 3. GRANTOR'S RIGHTS IN ACCOUNT.
(a) Except as otherwise provided in this Section 3, the Securities
Intermediary will comply with Entitlement Orders originated by the Grantor
without further consent by the Secured Party.
(b) Until the Securities Intermediary receives a notice from the
Secured Party that the Secured Party will exercise exclusive control over the
Account (a "NOTICE OF EXCLUSIVE CONTROL"), the Securities Intermediary (i) will
comply with the Account Directions and other directions concerning each Account
originated by the Grantor and (ii) may distribute to the Grantor all interest
and regular cash dividends on property in the Account.
(c) If the Securities Intermediary receives from the Secured Party a
Notice of Exclusive Control, the Securities Intermediary will cease:
(i) complying with Entitlement Orders or other directions
concerning the Account originated by the Grantor and
(ii) distributing to the Grantor interest and dividends on property
in the Account.
SECTION 4. PRIORITY OF SECURED PARTY'S SECURITY INTEREST. (a) The
Securities Intermediary subordinates in favor of the Secured Party any security
interest, lien, or right of setoff it may have, now or in the future, against
the Account or property in the Account, except that the Securities Intermediary
will retain its prior lien on property in the Account to secure payment for
property purchased for the Account and normal commissions and fees for the
Account.
Exhibit D - page 2
(b) The Securities Intermediary will not agree with any Person not
party to this Agreement that the Securities Intermediary will comply with
Entitlement Orders originated by such Person.
SECTION 5. STATEMENTS, CONFIRMATIONS, AND NOTICES OF ADVERSE CLAIMS.
(a) Upon the request of the Secured Party, the Securities Intermediary will send
copies of all statements and confirmations for the Account simultaneously to the
Grantor and the Secured Party.
(b) When the Securities Intermediary knows of any claim or interest
in the Account or any property credited to the Account other than the claims and
interests of the parties referred to in this Agreement, the Securities
Intermediary will promptly notify the Secured Party and the Grantor of such
claim or interest.
SECTION 6. THE SECURITIES INTERMEDIARY'S RESPONSIBILITY. (a) Except
for permitting a withdrawal, delivery, or payment in violation of Section 3, the
Securities Intermediary will not be liable to the Secured Party for complying
with Entitlement Orders or other directions concerning the Account from the
Grantor that are received by the Securities Intermediary before the Securities
Intermediary receives and has a reasonable opportunity to act on a Notice of
Exclusive Control.
(b) The Securities Intermediary will not be liable to the Grantor or
the Secured Party for complying with a Notice of Exclusive Control or with an
Entitlement Order or other direction concerning the Account originated by the
Secured Party, even if the Grantor notifies the Securities Intermediary that the
Secured Party is not legally entitled to issue the Notice of Exclusive Control
or Entitlement Order or such other direction unless the Securities Intermediary
takes the action after it is served with an injunction, restraining order, or
other legal process enjoining it from doing so, issued by a court of competent
jurisdiction, and had a reasonable opportunity to act on the injunction,
restraining order or other legal process.
(c) This Agreement does not create any obligation of the Securities
Intermediary except for those expressly set forth in this Agreement and in Part
5 of Article 8 of the N.Y. Uniform Commercial Code. In particular, the
Securities Intermediary need not investigate whether the Secured Party is
entitled under the Secured Party's agreements with the Grantor or Secured Party
to give an Entitlement Order or other direction concerning the Account or a
Notice of Exclusive Control. The Securities Intermediary may rely on notices and
communications it believes given by the appropriate party.
SECTION 7. INDEMNITY. The Grantor will indemnify the Securities
Intermediary, its officers, directors, employees and agents against claims,
Exhibit D - page 3
liabilities and expenses arising out of this Agreement (including, without
limitation, reasonable attorney's fees and disbursements), except to the extent
the claims, liabilities or expenses are caused by the Securities Intermediary's
gross negligence or willful misconduct as found by a court of competent
jurisdiction in a final, non-appealable judgment.
SECTION 8. TERMINATION; SURVIVAL. (a) The Secured Party may terminate
this Agreement by notice to the Securities Intermediary and the Grantor. If the
Secured Party notifies the Securities Intermediary that the Security Interest
has terminated, this Agreement will immediately terminate.
(b) The Securities Intermediary may terminate this Agreement on 30
days' prior notice to the Secured Party and the Grantor, PROVIDED that before
such termination the Securities Intermediary and the Grantor shall, unless
otherwise agreed to by the Secured Party, make arrangements to transfer the
property in the Account to another securities intermediary that shall have
executed, together with the Grantor, a control agreement in favor of the Secured
Party in respect of such property in substantially the form of this Agreement or
otherwise in form and substance satisfactory to the Secured Party.
(c) Sections 6 and 7 will survive termination of this Agreement.
- -
SECTION 9. GOVERNING LAW. This Agreement and, notwithstanding
anything to the contrary in any agreement between the Securities Intermediary
and the Grantor, the Account will be governed by the law of the State of New
York. The Securities Intermediary and the Grantor may not change the law
governing the Account without the Secured Party's express prior written
agreement.
SECTION 10. ENTIRE AGREEMENT. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral agreements, of the
parties concerning its subject matter.
SECTION 11. AMENDMENTS. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by the party
to be charged.
SECTION 12. FINANCIAL ASSETS. The Securities Intermediary agrees with
the Secured Party and the Grantor that, to the fullest extent permitted by
applicable law, all property credited from time to time to the Account will be
treated as financial assets under Article 8 of the N.Y. Uniform Commercial Code.
SECTION 13. NOTICES. A notice or other communication to a party under
this Agreement will be in writing (except that Entitlement Orders may be given
Exhibit D - page 4
orally), will be sent to the party's address set forth under its name below or
to such other address as the party may notify the other parties and will be
effective on receipt.
SECTION 14. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Grantor, the Secured Party and the
Securities Intermediary, and thereafter shall be binding upon and inure to the
benefit of the Grantor, the Secured Party and the Securities Intermediary and
their respective successors and assigns.
SECTION 15. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.
Exhibit D - page 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
[NAME OF GRANTOR]
By
---------------------------------------
Title:
Address:
------------------------------------------
------------------------------------------
BANK OF AMERICA, N.A., as
Collateral Agent
By
---------------------------------------
Title:
Address:
------------------------------------------
------------------------------------------
[NAME OF SECURITIES
INTERMEDIARY]
By
----------------------------------------
Title:
Address:
------------------------------------------
------------------------------------------
Exhibit D - page 6
EXHIBIT E TO THE
SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "IP
SECURITY AGREEMENT") dated ____________, 200_, is made by the Persons listed on
the signature pages hereof (collectively, the "GRANTORS") in favor of Bank of
America, N.A., as Collateral Agent (the "COLLATERAL AGENT") for the Secured
Parties (as defined in the Credit Agreement referred to below).
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC, a Delaware limited liability
corporation, and the Co-Borrowers and Guarantors party thereto have entered into
the Third Amended and Restated Term Loan and Revolving Credit Agreement dated as
of August 2, 2002 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), with the Lenders party
thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent.
Terms defined in the Credit Agreement or the Security Agreement referred to
below and not otherwise defined herein are used herein as defined in the Credit
Agreement or the Security Agreement.
WHEREAS, as a condition precedent to the making of Loans by the
Lenders and the issuance of Letters of Credit by the LC Issuer under the Credit
Agreement, the entry into Hedging Agreements by the Lender Parties party
thereto, the entry into Cash Management Agreements by the Lender Parties party
thereto from time to time, each Grantor has executed and delivered that certain
Security Agreement dated as of August 16, 2002 made by the Grantors to the
Collateral Agent (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "SECURITY AGREEMENT").
WHEREAS, under the terms of the Security Agreement, the Grantors have
granted a security interest in, among other property, certain intellectual
property of the Grantors to the Collateral Agent for the benefit of the Secured
Parties, and have agreed as a condition thereof to execute this IP Security
Agreement for recording with the U.S. Patent and Trademark Office and the United
States Copyright Office.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees as follows:
SECTION 1. GRANT OF SECURITY. Each Grantor hereby grants to the
Collateral Agent for the benefit of the Secured Parties a security interest in
and to
Exhibit E - page 1
all of such Grantor's right, title and interest in and to the following (the
"COLLATERAL"):
(i) the United States patents and patent applications set forth in
Schedule A hereto together with all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations
thereof, and all rights therein provided by international treaties or
conventions (the "PATENTS");
(ii) the United States trademark and service ▇▇▇▇ registrations and
applications set forth in Schedule B hereto (the "TRADEMARKS");
(iii) the United States copyright registrations and applications set
forth in Schedule C hereto (the "COPYRIGHTS");
(iv) any and all claims for damages for past, present and future
infringement, misappropriation or breach with respect to the Patents,
Trademarks and Copyrights, with the right, but not the obligation, to
▇▇▇ for and collect, or otherwise recover, such damages; and
(v) any and all proceeds of the foregoing.
SECTION 2. SECURITY FOR OBLIGATIONS. The grant of a security interest
in, the Collateral by each Grantor under this IP Security Agreement secures the
payment of all Secured Obligations (as defined in the Security Agreement) of
such Grantor now or hereafter existing, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise.
SECTION 3. RECORDATION. Each Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Security Agreement.
SECTION 4. EXECUTION IN COUNTERPARTS. This IP Security Agreement may
be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 5. GRANTS, RIGHTS AND REMEDIES. This IP Security Agreement
has been entered into in conjunction with the provisions of the Security
Agreement. Each Grantor does hereby acknowledge and confirm that the grant of
the security interest hereunder to, and the rights and remedies of, the
Collateral Agent with respect to the Collateral are more fully set forth in the
Security
Exhibit E - page 2
Agreement, the terms and provisions of which are incorporated herein by
reference as if fully set forth herein.
SECTION 6. GOVERNING LAW. This IP Security Agreement shall be
governed by, and construed in accordance with, the laws of the State of
New York.
Exhibit E - page 3
IN WITNESS WHEREOF, each Grantor has caused this IP Security
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC
By
------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ USA CORPORATION
By
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ POWER GROUP,
INC.
By
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENERGY
CORPORATION
By
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
By
-------------------------------------
Name:
Title:
Exhibit E - page 4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DEVELOPMENT
CORPORATION
By
------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President and Treasurer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENVIRONMENTAL
CORPORATION
By
------------------------------------
Name:
Title:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Exhibit E - page 5
EXHIBIT F TO THE
SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
SUPPLEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this "IP
SECURITY AGREEMENT SUPPLEMENT") dated
____________, 200_, is made by the Person listed on the signature page hereof
(the "GRANTOR") in favor of Bank of America, N.A., as Collateral Agent (the
"COLLATERAL AGENT") for the Secured Parties (as defined in the Credit Agreement
referred to below).
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC, a Delaware limited liability company,
and the Co-Borrowers and Guarantors party thereto have entered into a Third
Amended and Restated Term Loan and Revolving Credit Agreement dated as of August
2, 2002 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT") with the Lenders party thereto and
the Bank of America, N.A., as Administrative Agent and Collateral Agent. Terms
defined in the Credit Agreement or the Security Agreement referred to below and
not otherwise defined herein are used herein as defined in the Credit Agreement
or the Security Agreement.
WHEREAS, pursuant to the Credit Agreement, the Grantor and certain
other Persons have executed and delivered that certain Security Agreement dated
as of August 16, 2002 made by the Grantor and such other Persons to the
Collateral Agent (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "SECURITY AGREEMENT") and that certain
Intellectual Property Security Agreement dated ____________, 200_ (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"IP SECURITY AGREEMENT").
WHEREAS, under the terms of the Security Agreement, the Grantor has
granted a security interest in the Additional Collateral (as defined in Section
1 below) of the Grantor to the Collateral Agent for the benefit of the Secured
Parties and has agreed as a condition thereof to execute this IP Security
Agreement Supplement for recording with the U.S. Patent and Trademark Office and
the United States Copyright Office.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as follows:
Exhibit F - page 1
SECTION 1. CONFIRMATION OF GRANT OF SECURITY. The Grantor hereby
grants to the Collateral Agent for the benefit of the Secured Parties a security
interest in and to all of the Grantor's right, title and interest in and to the
following (the "ADDITIONAL COLLATERAL"):
(i) The United States patents and patent applications set forth in
Schedule A hereto, together with all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations
thereof, and all rights therein provided by international treaties or
conventions (the "PATENTS");
(ii) The United States trademark and service ▇▇▇▇ registrations and
applications set forth in Schedule B hereto (the "TRADEMARKS");
(iii) The United States copyright registrations and applications set
forth in Schedule C hereto (the "COPYRIGHTS");
(iv) any and all claims for damages for past, present and future
infringement, misappropriation or breach with respect to the Patents,
Trademarks and Copyrights, with the right, but not the obligation, to
▇▇▇ for and collect, or otherwise recover, such damages; and
(v) any and all proceeds of the foregoing.
SECTION 2. SUPPLEMENT TO SECURITY AGREEMENT. Schedule III to the
Security Agreement is, effective as of the date hereof, hereby supplemented to
add to such Schedule the Additional Collateral.
SECTION 3. SECURITY FOR OBLIGATIONS. The grant of a security interest
in the Additional Collateral by the Grantor under this IP Security Agreement
Supplement secures the payment of all Secured Obligations (as defined in the
Security Agreement) of the Grantor now or hereafter existing, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise.
SECTION 4. RECORDATION. The Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Security Agreement Supplement.
SECTION 5. GRANTS, RIGHTS AND REMEDIES. This IP Security Agreement
Supplement has been entered into in conjunction with the provisions of the
Security Agreement. The Grantor does hereby acknowledge and confirm that the
grant of the security interest hereunder to, and the rights and remedies of, the
Exhibit F - page 2
Collateral Agent with respect to the Additional Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth herein.
SECTION 6. GOVERNING LAW. This IP Security Agreement Supplement
shall be governed by, and construed in accordance with, the laws of the State of
New York.
Exhibit F - page 3
IN WITNESS WHEREOF, the Grantor has caused this IP Security Agreement
Supplement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
[NAME OF GRANTOR]
By
------------------------------------
Name:
Title:
Address for Notices:
------------------------------------
------------------------------------
------------------------------------
[ADD ACKNOWLEDGMENT FORM IF NEEDED]
Exhibit F - page 4
EXHIBIT G TO THE
SECURITY AGREEMENT
FORM OF PERFECTION CERTIFICATE
The undersigned is a duly authorized officer of [NAME OF LIEN
GRANTOR] (the "LIEN GRANTOR"). With reference to the Security Agreement dated as
of August 16, 2002 among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC, the Grantors party thereto and Bank
of America, N.A., 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 UNDER REVISED UCC
AND SEARCHES FOR PRIOR FILINGS THEREUNDER.
1. JURISDICTION OF ORGANIZATION. The Lien Grantor is a [corporation]
organized under the laws of ____________.
2. NAME. The exact corporate name of the Lien Grantor as it appears
in its [certificate of incorporation] is as follows:
3. PRIOR NAMES. (a) Set forth below is each other [corporate] name
that the Lien Grantor has had since its organization, together with the date of
the relevant change:
(b) Except for the corporate restructuring of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Corporation in May 2001 or else as set forth in Schedule I hereto, the Lien
Grantor has not changed its [corporate] structure1 in any way within the past
five years.
(c) None of the Lien Grantor's Collateral was acquired from another
Person within the past [five years], except:
(i) property sold to the Lien Grantor by another Person in
the ordinary course of such other Person's business;
(ii) property with respect to which the Security Interests
are to be perfected by taking possession or control thereof;
--------
(1) Changes in corporate structure would include mergers and
consolidations, as well as any change in the Lien Grantor's form of
organization. If any such change has occurred, include in Schedule I the
information required by Part A of this certificate as to each constituent party
to a merger or consolidation and any other predecessor organization.
Exhibit G - page 1
(iii) property acquired in transactions described in
Schedule II hereto; and
(iv) other property having an aggregate fair market value
not exceeding $____________.
4. FILING OFFICE. In order to perfect the Security Interests granted
by the Lien Grantor, a duly signed financing statement on Form UCC-1, with the
collateral described as set forth on Schedule III hereto, should be on file in
the office of the Secretary of State of ____________.
B. ADDITIONAL INFORMATION REQUIRED FOR FILINGS UNDER OLD UCC
AND SEARCHES FOR PRIOR FILINGS THEREUNDER.
1. CURRENT LOCATIONS. (a) The chief executive office of the Lien
Grantor is located at the following address:
Mailing Address County State
-------------------------------------------------------------------------------
The Lien Grantor [does] [does not] have a place of business in another county of
the State listed above.
(b) The following are all places of business of the Lien Grantor not
identified above:
Mailing Address County State
---------------------------------------------------------- ---------------------
(c) The following are all locations not identified above where the
Lien Grantor maintains any Inventory:2
Mailing Address County State
---------------------------------------------------------- ---------------------
--------
(2) In the alternative, if the Lien Grantor certifies that the value
of the Inventory is a small amount, then the locations of the Inventory do not
need to be listed under clauses (c) and (d).
Exhibit G - page 2
(d) The following are the names and addresses of all Persons (other
than the Lien Grantor) that have possession of any of the Lien Grantor's
Inventory:1
Mailing Address County State
---------------------------------------------------------- ---------------------
2. PRIOR LOCATIONS. (a) Set forth below is the information required
by paragraphs (a) and (b) of Part B-1 above with respect to each other location
or place of business maintained by the Lien Grantor at any time during the past
five years:
(b) Set forth below is the information required by paragraphs (c) and
(d) of Part B-1 above with respect to each other location or bailee where or
with whom any of the Lien Grantor's Inventory has been lodged at any time during
the past four months:
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
____________, 200_.
----------------------------------------------------------
Name:
Title:
Exhibit G - page 3
SCHEDULE III
TO PERFECTION CERTIFICATE
DESCRIPTION OF COLLATERAL
All assets of the Debtor whether now owned or hereafter acquired and wherever
located, and all proceeds thereof, but otherwise subject to the limitations set
forth in the Security Agreement, dated as of August 16, 2002, among the Debtor,
certain affiliates thereof and the Secured Party, as collateral agent (as in
effect from time to time).
Exhibit G - page 4