Exhibit T3C3
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of ____________, 2003, among REPTRON
ELECTRONICS, INC., a Florida corporation (the "Issuer"), each subsidiary of the
Issuer listed on Schedule I hereto (each such subsidiary individually a
"Subsidiary" or a "Guarantor" and, collectively, the "Subsidiaries" or the
"Guarantors"; the Guarantors and the Issuer are referred to collectively herein
as the "Grantors") and ______________________, NATIONAL ASSOCIATION, a national
banking association ("Trustee"), as trustee under the Indenture referred to
below and as collateral agent (in such capacity, the "Collateral Agent") for the
Secured Parties (as defined herein).
W I T N E S S E T H:
WHEREAS, pursuant to the terms, conditions and provisions of the
Indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), among the Issuer, the
Guarantors and the Trustee, as trustee, the Issuer is issuing $____,000,000
aggregate principal amount of Senior Secured Notes due 2008 (collectively, the
"Notes") which will be guaranteed on a senior secured basis by each of the
Guarantors;
WHEREAS, pursuant to the Loan and Security Agreement dated as of
October 10, 2002 (as amended, supplemented or otherwise modified from time to
time, the "Existing Loan Agreement"), among the Issuer, certain lenders, and
_________________________, as agent for such lenders (the "Credit Agent"), the
Issuer has granted to the Credit Agent a first-priority lien and security
interest in the Collateral (as defined below);
WHEREAS, the Issuer, the Collateral Agent and the Credit Agent have
entered into an Intercreditor Agreement, dated as of the date hereof (the
"Intercreditor Agreement"), pursuant to which the lien and security interest in
the Collateral granted by this Agreement are and shall be subordinated in all
respects to the lien and security interest in the Collateral granted pursuant
to, and all terms and conditions of, the Senior Lender Documents (as defined
below);
WHEREAS, each Grantor is executing and delivering this Agreement
pursuant to the terms of the Indenture to induce the Trustee to enter into the
Indenture; and
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Agreement.
NOW, THEREFORE, for and in consideration of the premises, and of the
mutual covenants herein contained, and in order to induce the Trustee to enter
into the Indenture, each Grantor and the Collateral Agent, on behalf of itself
and each Secured Party (and each of their respective successors or assigns),
hereby agree as follows:
EXHIBIT H
ARTICLE I
DEFINITIONS
Section 1.01 Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall have
the meanings set forth in the Indenture.
Section 1.02 Definition of Certain Terms Used Herein. As used herein,
the following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"Accounts" shall mean all present and future rights of any Grantor to
payment of a monetary obligation, whether or not earned by performance, which is
not evidenced by chattel paper or an instrument, (a) for property that has been
or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for
services rendered or to be rendered, (c) for a secondary obligation incurred or
to be incurred, or (d) arising out of the use of a credit or charge card or
information contained on or for use with the card.
"Affiliate" shall mean, with respect to a specified Person, any other
Person which directly or indirectly, through one or more intermediaries,
controls or is controlled by or is under common control with such Person, and
without limiting the generality of the foregoing, includes (i) any Person which
beneficially owns or holds fifteen (15%) percent or more of any class of Voting
Stock of such Person or other equity interests in such Person, (a) any Person of
which such Person beneficially owns or holds fifteen (15%) percent or more of
any class of Voting Stock or in which such Person beneficially owns or holds
fifteen (15%) percent or more of the equity interests and (b) any director or
executive officer of such Person. For the purposes of this definition, the term
"control" (including with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of Voting Stock, by agreement or otherwise.
"Collateral" shall mean all personal and real property and fixtures,
and interests in property and fixtures, of each Grantor, whether now owned or
hereafter acquired or existing, and wherever located, including the following:
(a) all Accounts;
(b) all General Intangibles, including, without limitation,
all Intellectual Property;
(c) all goods, including, without limitation, Inventory and
Equipment;
(d) all Real Property and fixtures;
(e) all chattel paper, including, without limitation, all
tangible and electronic chattel paper;
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(f) all instruments, including, without limitation, all
promissory notes;
(g) all documents;
(h) all deposit accounts;
(i) all letters of credit, banker's acceptances and similar
instruments and including all letter-of-credit rights;
(j) all supporting obligations and all present and future
liens, security interests, rights, remedies, title and interest in, to and in
respect of Receivables and other Collateral, including (i) rights and remedies
under or relating to guaranties, contracts of suretyship, letters of credit and
credit and other insurance related to the Collateral, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (iv) deposits by and property of Account Debtors or
other persons securing the obligations of Account Debtors;
(k) all (i) investment property (including Securities, whether
certificated or uncertificated, Securities Accounts, Security Entitlements,
Commodity Contracts or Commodity Accounts) and (ii) monies, credit balances,
deposits and other property of each Grantor now or hereafter held or received by
or in transit to agent, any lender or their Affiliates under any First-Lien
Credit Facility or at any other depository or other institution from or for the
account of any Grantor, whether for safekeeping, pledge, custody, transmission,
collection or otherwise;
(l) all commercial tort claims;
(m) to the extent not otherwise described above, all
Receivables and all Pledged Collateral;
(n) all Records; and
(o) all products and proceeds of the foregoing, in any form,
including insurance proceeds and all claims against third parties for loss or
damage to or destruction of or other involuntary conversion of any kind or
nature of any or all of the other Collateral.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an option
on a commodity futures contract, a commodity option or any other contract that,
in each case, is (a) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to the
federal commodities laws or (b) traded on a foreign commodity board of trade,
exchange or market, and is carried on the books of a Commodity Intermediary for
a Commodity Customer.
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"Commodity Customer" shall mean a Person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Copyright License" shall mean any written agreement, now or hereafter
in effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following: (a) all copyright rights
in any work subject to the copyright laws of the United States or any other
country, whether as author, assignee, transferee or otherwise, and (b) all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule II.
"Discharge of Senior Lender Claims" shall have the meaning assigned to
such term in the Intercreditor Agreement.
"Entitlement Holder" shall mean a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such Person is the
Entitlement Holder.
"Equipment" shall mean all of each Grantor's now owned and hereafter
acquired equipment, wherever located, including machinery, data processing and
computer equipment (whether owned or licensed and including embedded software),
vehicles, tools, furniture, fixtures, all attachments, accessions and property
now or hereafter affixed thereto or used in connection therewith, and
substitutions and replacements thereof, wherever located.
"Existing Loan Agreement" shall have the meaning assigned to such term
in the recitals of this Agreement.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a
Person or a share, participation or other interest in a Person or in property or
an enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a Person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
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"First-Lien Termination Date" shall mean, subject to Section 5.6 of the
Intercreditor Agreement, the date on which the Discharge of Senior Lender Claims
occurs.
"Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles" shall mean all "general intangibles" (as defined
in the UCC) of any Grantor and shall include choses in action and causes of
action and all other assignable intangible personal property of any Grantor of
every kind and nature (other than Receivables) now owned or hereafter acquired
by any Grantor, including corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, Hedging Agreements and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the
Receivables.
"Hedging Agreement" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indenture Documents" shall mean the Indenture, the Notes, this
Agreement, the other Security Documents and the Intercreditor Agreement, as such
agreements may be amended, supplemented or otherwise modified from time to time.
"Intellectual Property" shall mean each Grantor's now owned and
hereafter arising or acquired: Patents, Patent Licenses, Copyrights, works which
are the subject matter of Copyrights, Copyright Licenses, Trademarks, and
licenses and rights to use any of the foregoing; all extensions, renewals,
reissues, divisions, continuations, and continuations-in-part of any of the
foregoing; all rights to ▇▇▇ for past, present and future infringement of any of
the foregoing; inventions, trade secrets, formulae, processes, compounds,
drawings, designs, blueprints, surveys, reports, manuals, and operating
standards; goodwill (including any goodwill associated with any trademark or the
license of any trademark); customer and other lists in whatever form maintained;
trade secret rights, copyright rights, rights in works of authorship, domain
names and domain name registration; software and contract rights relating to
computer software programs, in whatever form created or maintained.
"Intellectual Property" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter acquired
by any Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"Intercreditor Agreement" shall have the meaning assigned to such term
in the recitals of this Agreement.
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"Inventory" shall mean all of each Grantor's now owned and hereafter
existing or acquired goods, wherever located, which (a) are leased by a Grantor
as lessor; (b) are held by a Grantor for sale or lease or to be furnished under
a contract of service; (c) are furnished by a Grantor under a contract of
service; or (d) consist of raw materials, work in process, finished goods or
materials used or consumed in its business.
"Investment Property" shall mean all Securities (whether certificated
or uncertificated), Security Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of any Grantor, whether now owned or hereafter
acquired by any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule III (other than those license agreements in
existence on the date hereof and listed on Schedule III and those license
agreements entered into after the date hereof, which by their terms prohibit
assignment or a grant of a security interest by such Grantor as licensee
thereunder).
"Obligations" shall mean all obligations of the Issuer and the
Guarantors under the Indenture, the Notes and the other Indenture Documents,
including obligations to the Trustee and the Collateral Agent, whether for
payment of principal of, interest on or additional interest, if any, on the
Notes and all other monetary obligations of the Issuer and the Guarantors under
the Indenture, the Notes and the other Indenture Documents, whether for fees,
expenses, indemnification or otherwise.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or any
other country, all registrations and recordings thereof, and all applications
for letters patent of the United States or any other country, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country, including
those listed on Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in the
form of Annex 2 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by an Officer of the Issuer.
"Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation, limited liability company, limited liability
partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
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"Pledged Collateral" shall mean (a) the Pledged Equity Interests, (b)
the Pledged Debt Securities, (c) all other property that has been or may be
delivered to and held by the Collateral Agent pursuant to the terms hereof; (d)
subject to Section 5.02 hereof, all payments of principal or interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed, in respect of, in exchange for or upon the
conversion of the Securities referred to in clauses (a) and (b) above; (e)
subject to Section 5.02 hereof, all rights and privileges of such Grantor with
respect to the Securities and other property referred to in clauses (a), (b),
(c) and (d) above; and (f) all proceeds of any of the foregoing.
"Pledged Equity Interests" shall mean all shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a Person
in which any Grantor now or in the future has or shall have any interest and the
certificates representing same; provided that the Pledged Equity Interests shall
not include, to the extent that applicable law requires that a Subsidiary of
such Grantor issue directors' qualifying shares, such qualifying shares.
"Pledged Debt Securities" shall mean (a) all debt securities owned by
any Grantor, (b) any debt securities in the future issued to or acquired by such
Grantor and (c) the promissory notes and any other instruments evidencing such
debt securities.
"Proceeds" shall mean "proceeds" (as defined in the UCC) of any Grantor
and shall include any consideration received from the sale, exchange, license,
lease or other disposition of any asset or property that constitutes Collateral,
any value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral, and shall include,
(a) any claim of any Grantor against any third party for (and the right to ▇▇▇
and recover for and the rights to damages or profits due or accrued arising out
of or in connection with) (i) past, present or future infringement of any Patent
now or hereafter owned by any Grantor, or licensed under a Patent License, (ii)
past, present or future infringement or dilution of any Trademark now or
hereafter owned by any Grantor or licensed under a Trademark License or injury
to the goodwill associated with or symbolized by any Trademark now or hereafter
owned by any Grantor, (iii) past, present or future breach of any License and
(iv) past, present or future infringement of any Copyright now or hereafter
owned by any Grantor or licensed under a Copyright License and (b) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.
"Real Property" shall mean all now owned and hereafter acquired real
property of each Grantor, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located.
"Receivables" shall mean all of the following now owned or hereafter
arising or acquired property of each Grantor: (a) all Accounts; (b) all
interest, fees, late charges, penalties, collection fees and other amounts due
or to become due or otherwise payable in connection with any Account; (c) all
payment intangibles of a Grantor; (d) letters of credit, indemnities,
guarantees, security or other deposits and proceeds thereof issued payable to a
Grantor or otherwise in favor
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of or delivered to a Grantor in connection with any Account; or (e) all other
accounts, contract rights, chattel paper, instruments, notes, General
Intangibles and other forms of obligations owing to a Grantor, whether from the
sale and lease of goods or other property, licensing of any property (including
Intellectual Property or other General Intangibles), rendition of services or
from loans or advances by a Grantor or to or for the benefit of any third person
(including loans or advances to any Affiliates or subsidiaries of a Grantor) or
otherwise associated with any Accounts, Inventory or General Intangibles of a
Grantor (including, without limitation, choses in action, causes of action, tax
refunds, tax refund claims, any funds which may become payable to a Grantor in
connection with the termination of any employee benefit plan and any other
amounts payable to a Grantor from any employee benefit plan, rights and claims
against carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, casualty or any similar types of insurance and
any proceeds thereof and proceeds of insurance covering the lives of employees
on which a Grantor is a beneficiary).
"Records" shall mean all of each Grantor's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral or any Account
Debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of a Grantor with respect to the
foregoing maintained with or by any other Person).
"Secured Parties" shall mean the Trustee, the Collateral Agent, each
Holder and the successors and assigns of each of the foregoing.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a Financial Asset
is or may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property interests of
an Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Security Intermediary" shall mean (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains Securities Accounts for others and is acting in that capacity.
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"Senior Lender Claims" shall have the meaning assigned to such term in
the Intercreditor Agreement.
"Senior Lender Documents" shall have the meaning assigned to such term
in the Intercreditor Agreement.
"Trademark License" shall mean any written agreement, now or hereafter
in effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following: (a) all trademarks,
service marks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or
business identifiers, designs and General Intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United
States Patent and Trademark Office, any State of the United States or any
similar offices in any other country or any political subdivision thereof, and
all extensions or renewals thereof, including those listed on Schedule V, (b)
all goodwill associated therewith or symbolized thereby and (c) all other
assets, rights and interests that uniquely reflect or embody such goodwill.
"Voting Stock" shall mean, with respect to any Person, (a) one (1) or
more classes of capital stock of such Person having general voting powers to
elect at least a majority of the board of directors, managers or trustees of
such Person, irrespective of whether at the time capital stock of any other
class or classes have or might have voting power by reason of the happening of
any contingency, and (b) any capital stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
capital stock of such Person described in clause (a) of this definition.
Section 1.03 Terms Defined in UCC. All terms used herein which are
defined in the UCC shall have the meanings given therein unless otherwise
defined in this Agreement.
Section 1.04 Rules of Interpretation. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and
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Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
ARTICLE II
SECURITY INTEREST
Section 2.01 Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title and interest
in, to and under the Collateral (the "Security Interest"). Without limiting the
foregoing, in accordance with, and to the extent consistent with, the terms of
the Intercreditor Agreement, the Collateral Agent is hereby authorized to file
one or more financing statements (including fixture filings), continuation
statements, filings with the United States Patent and Trademark Office or United
States Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantors, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
Section 2.02 No Assumption of Liability. The Security Interest is
granted as security only and shall not subject the Collateral Agent or any other
Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Collateral.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantors jointly and severally represent and warrant to the Collateral Agent
and the Secured Parties that:
Section 3.01 Title and Authority. Each Grantor has good and valid
rights in and title to the Collateral with respect to which it has purported to
grant a Security Interest hereunder and has full power and authority to grant to
the Collateral Agent the Security Interest in such Collateral pursuant hereto
and to execute, deliver and perform its obligations in accordance with the terms
of this Agreement, without the consent or approval of any other Person other
than any consent or approval which has been obtained.
Section 3.02 Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete in all material respects. Fully executed Uniform Commercial
Code financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the
Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate,
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which are all the filings, recordings and registrations (other than filings
required to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the Security Interest in
Collateral consisting of United States Patents, Trademarks and Copyrights) that
are necessary to publish notice of and protect the validity of and to establish
a legal, valid and perfected second-priority security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements.
(b) Each Grantor shall ensure that fully executed security
agreements in the form hereof (or short-form supplements to this Agreement in
form and substance satisfactory to the Collateral Agent) and containing a
description of all Collateral consisting of Intellectual Property shall have
been received and recorded within three months after the execution of this
Agreement with respect to United States Patents and United States registered
Trademarks (and Trademarks for which United States registration applications are
pending) and within one month after the execution of this Agreement with respect
to United States registered Copyrights have been delivered to the Collateral
Agent for recording by the United States Patent and Trademark Office and the
United States Copyright Office pursuant to 35 U.S.C. Section 261, 15 U.S.C.
Section 1060 or 17 U.S.C. Section 205 and the regulations thereunder, as
applicable, and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction in the United States (or any political subdivision
thereof) and its territories and possessions, to protect the validity of and to
establish a legal, valid and perfected second-priority security interest in
favor of the Collateral Agent (for the ratable benefit of the Secured Parties)
in respect of all Collateral consisting of Patents, Trademarks and Copyrights in
which a security interest may be perfected by filing, recording or registration
in the United States (or any political subdivision thereof) and its territories
and possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction (other than such actions as
are necessary to perfect the Security Interest with respect to any Collateral
consisting of Patents, Trademarks and Copyrights (or registration or application
for registration thereof) acquired or developed after the date hereof).
Section 3.03 Validity and Perfection of Security Interest. The Security
Interest constitutes (a) a legal and valid second-priority security interest in
all the Collateral securing the payment and performance of the Obligations, (b)
subject to the filings described in Section 3.02 above, a perfected
second-priority security interest in all Collateral in which a security interest
may be perfected by filing, recording or registering a financing statement or
analogous document in the United States (or any political subdivision thereof)
and its territories and possessions pursuant to the UCC or other analogous
applicable law in such jurisdictions, (c) a second-priority security interest
that shall be perfected in all Collateral in which a security interest may be
perfected upon the receipt and recording of this Agreement with the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable, within the three month period (commencing as of the date hereof)
pursuant to 35 U.S.C. Section 261 or 15 U.S.C. Section 1060 or the one month
period (commencing as of the date hereof) pursuant to 17 U.S.C. Section 205 and
otherwise as may be required to pursuant to the laws of any other necessary
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jurisdiction in the United States (or any political subdivision thereof) and its
territories and possessions and (d) upon delivery to the Collateral Agent of the
Pledged Collateral, including certificates or other documents representing or
evidencing the Pledged Collateral, in accordance with this Agreement, a valid
and perfected second-priority lien upon and security interest in such Pledged
Collateral. The Security Interest is and shall be a second-priority Security
Interest, prior to any other Lien on any of the Collateral, other than (x) Liens
securing Senior Lender Claims or (y) any other Permitted Liens.
Section 3.04 Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for (x) Liens securing Senior Lender
Claims and (y) any other Permitted Liens. The Grantor has not filed or consented
to the filing of (a) any financing statement or analogous document under the UCC
or any other applicable laws covering any Collateral, (b) any assignment in
which any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with the United States Patent and Trademark
Office or the United States Copyright Office or (c) any assignment in which any
Grantor assigns any Collateral or any security agreement or similar instrument
covering any Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
(x) Liens securing Senior Lender Claims and (y) any other Permitted Liens.
Section 3.05 Pledged Collateral. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulation T, U or X of the Federal
Reserve Board or any successor thereto as of the date hereof.
ARTICLE IV
COVENANTS
Section 4.01 Records. Each Grantor agrees to maintain, at its own cost
and expense, such complete and accurate records with respect to the Collateral
owned by it as is consistent with its current practices, but in any event to
include complete accounting records indicating all payments and proceeds
received with respect to any part of the Collateral, and, at such time or times
as the Collateral Agent may reasonably request, promptly to prepare and deliver
to the Collateral Agent an updated Perfection Certificate, noting all material
changes, if any, since the date of the most recent Perfection Certificate.
Section 4.02 Protection of Security. Each Grantor shall, at its own
cost and expense, take any and all actions necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
other than Permitted Liens.
Section 4.03 Further Assurances. Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Collateral
Agent, in accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, may from time to time request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and
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delivery of this Agreement, the granting of the Security Interest and the filing
of any financing statements (including fixture filings) or other documents in
connection herewith or therewith.
Section 4.04 Inspection and Verification. The Collateral Agent and such
Persons as the Collateral Agent may reasonably designate shall have the right to
inspect the Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Collateral is
located, at reasonable times and intervals during normal business hours upon
reasonable advance notice to the respective Grantor and to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of the Collateral.
Section 4.05 Taxes; Encumbrances. In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, at its option, the
Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted under the Indenture, and may pay for the
maintenance and preservation of the Collateral, in each case to the extent any
Grantor fails to do so as required by the Indenture or this Agreement, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand
for any payment made or any expense incurred by the Collateral Agent pursuant to
the foregoing authorization; provided, however, that nothing in this Section
4.05 shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Indenture Documents.
Section 4.06 Assignment of Security Interest. If at any time any
Grantor shall take a security interest in any property of an Account Debtor or
any other Person to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest to the Collateral Agent to the
extent permitted by any contracts or arrangements to which such property is
subject. Such assignment need not be filed of public record unless necessary to
continue the perfected status of the security interest against creditors of and
transferees from the Account Debtor or other Person granting the security
interest.
Section 4.07 Continuing Obligations of the Grantors. Each Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.
Section 4.08 Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
expressly permitted by the Indenture. None of the Grantors shall make or permit
to be made any transfer of the Collateral and each Grantor shall remain at all
times in possession of the Collateral owned by it, except that (a) Inventory may
be sold in the ordinary course of business and (b) unless and until the
Collateral Agent shall notify the Grantors that an Event of Default shall have
occurred and be continuing and that
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during the continuance thereof the Grantors shall not sell, convey, lease,
assign, transfer or otherwise dispose of any Collateral (which notice may be
given by telephone if promptly confirmed in writing), the Grantors may use and
dispose of the Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Indenture or any other Indenture Document.
Without limiting the generality of the foregoing, each Grantor agrees that it
shall not permit any material Inventory to be in the possession or control of
any warehouseman, bailee, agent or processor at any time unless such
warehouseman, bailee, agent or processor shall have been notified of the
Security Interest and shall have agreed in writing to hold the Inventory subject
to the Security Interest and the instructions of the Credit Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) and to waive and
release any Lien held by it with respect to such Inventory, whether arising by
operation of law or otherwise.
Section 4.09 Limitation on Modification of Accounts. None of the
Grantors will, without the prior written consent of the Credit Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) grant any
extension of the time of payment of any of the Receivables, compromise, compound
or settle the same for less than the full amount thereof, release, wholly or
partly, any Person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices.
Section 4.10 Insurance. The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to
the Inventory and Equipment with financially sound and reputable insurance
companies in such amounts (with no greater risk retention) and against such
risks as are customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations.
Subject to the Intercreditor Agreement, each Grantor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Grantor's true and lawful
agent (and attorney-in-fact) for the purpose, during the continuance of an Event
of Default, of making, settling and adjusting claims in respect of Collateral
under policies of insurance, endorsing the name of such Grantor on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
Subject to the Intercreditor Agreement, in the event that any Grantor at any
time or times shall fail to obtain or maintain any of the policies of insurance
required hereby or to pay any premium in whole or part relating thereto, the
Collateral Agent may, without waiving or releasing any obligation or liability
of the Grantors hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any
other actions with respect thereto as the Collateral Agent deems advisable.
Subject to the Intercreditor Agreement, all sums disbursed by the Collateral
Agent in connection with this Section 4.10, including reasonable attorneys'
fees, court costs, expenses and other charges relating thereto, shall be
payable, upon demand, by the Grantors to the Collateral Agent and shall be
additional Obligations secured hereby.
Section 4.11 Legend. If any Receivables of any Grantor are evidenced by
chattel paper, such Grantor shall legend, in form and manner satisfactory to the
Credit Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent), such Receivables and its books, records and documents
evidencing or pertaining thereto with an appropriate reference to the fact
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that such Receivables have been assigned to the Credit Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) for the benefit
of the Secured Parties and that the Credit Agent has a security interest
therein.
Section 4.12 Covenants Regarding Patent, Trademark and Copyright
Collateral.
(a) Each Grantor agrees that it will not, nor will it permit
any of its licensees to, do any act, or omit to do any act, whereby any Patent
which is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees that it shall continue to
▇▇▇▇ any products covered by a Patent with the relevant patent number as
necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws pursuant to which each such Patent is issued.
(b) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark sufficient to preclude any
findings of abandonment, (iii) display such Trademark with notice of Federal or
foreign registration to the extent necessary and sufficient to establish and
preserve its maximum rights under applicable law pursuant to which each such
Trademark is issued and (iv) not knowingly use or knowingly permit the use of
such Trademark in violation of any third party rights.
(c) Each Grantor (either itself or through licensees) will,
for each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws pursuant to which each such Copyright is issued.
(d) Each Grantor shall notify the Collateral Agent immediately
if it knows or has reason to know that any Patent, Trademark or Copyright
material to the conduct of its business may become abandoned, lost or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
(e) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, unless it promptly
informs the Collateral Agent, and, in accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, upon request of the
Collateral Agent, executes and delivers any and all agreements, instruments,
documents and papers as the Collateral Agent may request to evidence and perfect
the Collateral Agent's security interest in such Patent, Trademark or Copyright,
and each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to
execute and file such
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writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that
any Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly ▇▇▇ for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default,
each Grantor shall use its best efforts to obtain all requisite consents or
approvals from the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all of such Grantor's right, title
and interest thereunder to the Credit Agent (or, if the First-Lien Termination
Date has occurred, the Collateral Agent) or its designee for the benefit of the
Secured Parties in accordance with the Intercreditor Agreement.
Section 4.13 Delivery of Pledged Collateral.
(a) Each Grantor agrees promptly to deliver or cause to be
delivered to the Credit Agent (or, if the First-Lien Termination Date has
occurred, to the Collateral Agent) any and all Pledged Collateral, including any
and all certificates or other instruments or documents representing the Pledged
Collateral.
(b) Each Grantor will cause any Indebtedness for borrowed
money owed to the Grantor by any Person to be evidenced by a duly executed
promissory note that is pledged hereunder and delivered to the Credit Agent (or,
if the First-Lien Termination Date has occurred, to the Collateral Agent) for
the benefit of the Secured Parties pursuant to the terms hereof.
(c) Upon delivery to the Credit Agent (or, if the First-Lien
Termination Date has occurred, to the Collateral Agent), the Pledged Collateral
shall be accompanied by stock powers duly executed in blank or other instruments
of transfer satisfactory to the Credit Agent (or, if the First-Lien Termination
Date has occurred, to the Collateral Agent) and by such other instruments and
documents as the Credit Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent) may reasonably request. Each delivery of Pledged
Collateral shall be
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accompanied by an updated Perfection Certificate delivered to the Collateral
Agent describing the securities theretofore and then being pledged hereunder,
which shall supersede any prior Perfection Certificate so delivered.
ARTICLE V
PLEDGED COLLATERAL
Section 5.01 Registration in Nominee Name; Denominations. Subject to
the Intercreditor Agreement, the Collateral Agent, on behalf of the Secured
Parties, shall have the right (in its sole and absolute discretion) to hold the
Pledged Collateral in its own name as pledgee, the name of its nominee (as
pledgee or as sub-agent) or the name of the Grantors, endorsed or assigned in
blank or in favor of the Collateral Agent. Each Grantor will promptly give to
the Collateral Agent copies of any notices or other communications received by
it with respect to Pledged Collateral registered in the name of such Grantor.
The Collateral Agent shall at all times have the right to exchange the
certificates representing Pledged Collateral for certificates of smaller or
larger denominations for any purpose consistent with this Agreement.
Section 5.02 Voting Rights; Dividends and Interest, etc.
(a) Subject to the Intercreditor Agreement, unless and until
an Event of Default shall have occurred and be continuing:
(i) each Grantor shall be entitled to exercise
any and all voting and/or other consensual rights and powers
inuring to an owner of Pledged Collateral or any part thereof
for any purpose consistent with the terms of this Agreement,
the Indenture and the other Indenture Documents; provided,
however, that such Grantor shall not exercise any such right
if the result thereof could materially and adversely affect
the rights inuring to a holder of the Pledged Collateral or
the rights and remedies of any of the Secured Parties under
this Agreement or the Indenture or any other Indenture
Document or the ability of the Secured Parties to exercise the
same;
(ii) the Collateral Agent shall execute and
deliver to each Grantor, or cause to be executed and delivered
to each Grantor, all such proxies, powers of attorney and
other instruments as such Grantor may reasonably request for
the purpose of enabling such Grantor to exercise the voting
and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above and to receive the cash
dividends it is entitled to receive pursuant to subparagraph
(iii) below; and
(iii) each Grantor shall be entitled to receive
and retain any and all cash dividends, interest and principal
paid on the Pledged Collateral to the extent and only to the
extent that such cash dividends, interest and principal are
permitted by, and otherwise paid in accordance with, the terms
and conditions of the Indenture, the other Indenture Documents
and applicable laws. All noncash dividends, interest and
principal, and all dividends, interest and principal paid or
payable in cash or otherwise in connection with a partial or
total liquidation or dissolution,
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return of capital, capital surplus or paid-in surplus, and all
other distributions (other than distributions referred to in
the preceding sentence) made on or in respect of the Pledged
Collateral, whether paid or payable in cash or otherwise,
whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of the
issuer of any Pledged Collateral or received in exchange for
Pledged Collateral or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer
may be a party or otherwise, shall be and become part of the
Collateral, and, if received by any Grantor, shall not be
commingled by such Grantor with any of its other funds or
property but shall be held separate and apart therefrom, shall
be held in trust for the benefit of the Collateral Agent and
shall be forthwith delivered to the Collateral Agent for the
benefit of the Secured Parties in the same form as so received
(with any necessary endorsement).
(b) Subject to the Intercreditor Agreement, upon the
occurrence and during the continuance of an Event of Default, all rights of any
Grantor to dividends, interest or principal that such Grantor is authorized to
receive pursuant to paragraph (a)(iii) above shall cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall subject to
the provisions of this paragraph (b) have the sole and exclusive right and
authority to receive and retain such dividends, interest or principal. All
dividends, interest or principal received by the Grantor contrary to the
provisions of this Section 5.02 shall be held in trust for the benefit of the
Collateral Agent, shall be segregated from other property or funds of such
Grantor and shall be forthwith delivered to the Collateral Agent upon demand in
the same form as so received (with any necessary endorsement). Any and all money
and other property paid over to or received by the Collateral Agent pursuant to
the provisions of this paragraph (b) shall be retained by the Collateral Agent
in an account to be established by the Collateral Agent upon receipt of such
money or other property and shall be applied in accordance with the provisions
of Article VII. After all Events of Default have been cured or waived, the
Collateral Agent shall promptly repay to each Grantor all cash dividends,
interest or principal (without interest), that such Grantor would otherwise be
permitted to retain pursuant to the terms of paragraph (a)(iii) above and which
remain in such account.
(c) Subject to the Intercreditor Agreement, upon the
occurrence and during the continuance of an Event of Default, all rights of any
Grantor to exercise the voting and consensual rights and powers it is entitled
to exercise pursuant to paragraph (a)(i) of this Section 5.02, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this Section
5.02, shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to
exercise such voting and consensual rights and powers, provided that, unless the
Collateral Agent shall have received written objections from Holders of at least
25% in principal amount of the Notes, the Collateral Agent shall have the right
from time to time following and during the continuance of an Event of Default to
permit the Grantors to exercise such rights. After all Events of Default have
been cured or waived, each Grantor will have the right to exercise the voting
and consensual rights and powers that it would otherwise be entitled to exercise
pursuant to the terms of paragraph (a)(i) above.
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ARTICLE VI
POWER OF ATTORNEY
Each Grantor irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent)
as such Grantor's true and lawful agent and attorney-in-fact, and in such
capacity the Collateral Agent shall have the right, with power of substitution
for each Grantor and in each Grantor's name or otherwise, for the use and
benefit of the Collateral Agent and the Secured Parties, upon the occurrence and
during the continuance of an Event of Default (a) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof; (b)
to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of any Grantor on
any invoice or ▇▇▇▇ of lading relating to any of the Collateral; (d) to send
verifications of Receivables to any Account Debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent or
any Secured Party to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent or any Secured
Party, or to present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the moneys due or to become due
in respect thereof or any property covered thereby, and no action taken or
omitted to be taken by the Collateral Agent or any Secured Party with respect to
the Collateral or any part thereof shall give rise to any defense, counterclaim
or offset in favor of any Grantor or to any claim or action against the
Collateral Agent or any Secured Party. It is understood and agreed that the
appointment of the Collateral Agent as the agent and attorney-in-fact of the
Grantors for the purposes set forth above is coupled with an interest and is
irrevocable. The provisions of this Section shall in no event relieve any
Grantor of any of its obligations hereunder or under any other Indenture
Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Indenture Document, by law or otherwise.
Notwithstanding anything in this Article VI to the contrary, the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Article VI unless it does so in accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement.
ARTICLE VII
REMEDIES
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Section 7.01 Remedies upon Default. In accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement, upon the
occurrence and during the continuance of an Event of Default, each Grantor
agrees to deliver each item of Collateral to the Collateral Agent on demand, and
it is agreed that the Collateral Agent shall have the right to take any of or
all the following actions at the same or different times: (a) with respect to
any Collateral consisting of Intellectual Property, on demand, to cause the
Security Interest to become an assignment, transfer and conveyance of any of or
all such Collateral by the applicable Grantors to the Collateral Agent (except
to the extent assignment, transfer or conveyance thereof would result in a loss
of said Intellectual Property), or to license or sublicense, whether general,
special or otherwise, and whether on an exclusive or non-exclusive basis, any
such Collateral throughout the world on such terms and conditions and in such
manner as the Collateral Agent shall determine (other than in violation of any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
UCC or other applicable law. Without limiting the generality of the foregoing,
in accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, each Grantor agrees that the Collateral Agent shall
have the right, subject to the mandatory requirements of applicable law, to sell
or otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. The Collateral Agent shall give the Grantors 10 days' written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the Uniform Commercial Code as in effect in the State of New
York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice (if any) of such sale. At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by
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announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any Obligation
then due and payable to such Secured Party from any Grantor as a credit against
the purchase price, and such Secured Party may, upon compliance with the terms
of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. For purposes hereof a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Collateral Agent shall be free to carry out such sale pursuant to
such agreement and no Grantor shall be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver.
Section 7.02 Application of Proceeds. In accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement, the Collateral
Agent shall apply the proceeds of any collection or sale of the Collateral, as
well as any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by Trustee or
the Collateral Agent (in its capacity as such hereunder or under any other
Indenture Document) in connection with such collection or sale or otherwise in
connection with this Agreement or any of the Obligations, including all court
costs and the reasonable fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Trustee or the Collateral Agent hereunder
or under any other Indenture Document on behalf of any Grantor and any other
costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Indenture Document and any other amounts due
to the Trustee or the Collateral Agent under Section 7.07 of the Indenture;
SECOND, to the payment in full of the Obligations owed to the Holders
(the amounts so applied to be distributed among the Holders pro rata in
accordance with the amounts of the Obligations owed to Holders on the date of
any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct. The Collateral Agent shall have
absolute discretion as to the time of application of any such proceeds, moneys
or balances in accordance with this Agreement. The Collateral Agent may fix a
record date and payment date for any payment to
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Holders pursuant to this Section 7.02. At least 15 days before such record date,
the Collateral Agent shall mail to each Holder and the Issuer a notice that
states the record date, the payment and amount to be paid. Upon any sale of the
Collateral by the Collateral Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the
Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such officer or
be answerable in any way for the misapplication thereof.
Section 7.03 Grant of License to Use Intellectual Property. In
accordance with, and to the extent consistent with, the Intercreditor Agreement,
for the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Article at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sub-license any of the Collateral consisting of Intellectual Property now owned
or hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The use of such license
by the Collateral Agent shall be exercised, at the option of the Collateral
Agent (if the First-Lien Termination Date has occurred), upon the occurrence and
during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.
Section 7.04 Securities Act, etc. In view of the position of the
Grantors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion, (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale, in either case in accordance with a valid exemption from
registration under the Federal Securities Laws. Each Grantor acknowledges and
agrees that any
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such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions. In the event of
any such sale, the Collateral Agent shall incur no responsibility or liability
for selling all or any part of the Pledged Collateral at a price that the
Collateral Agent, in its sole and absolute discretion, may in good ▇▇▇▇▇ ▇▇▇▇
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 7.04 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 12.02 of the Indenture. All communications and notices
hereunder to any Guarantor shall be given to it at its address or telecopy
number set forth on Schedule I, with a copy to the Issuer.
Section 8.02 Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Indenture, any other Indenture Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Indenture, any other Indenture Document or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.
Section 8.03 Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the issuance of the Notes and resale of the
Notes by any Holder, regardless of any investigation made by such Holder or on
its behalf, and shall continue in full force and effect until this Agreement
shall terminate.
Section 8.04 Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the other Indenture
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Documents. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.
Section 8.05 Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
Section 8.06 Collateral Agent's Fees and Expenses; Indemnification. In
accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, (a) each Grantor jointly and severally agrees to pay
upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, disbursements and other charges of its
counsel and of any experts or agents, which the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to
perform or observe any of the provisions hereof applicable to it.
(b) Without limitation of its indemnification obligations
under the other Indenture Documents, each Grantor jointly and severally agrees
to indemnify the Collateral Agent, the Trustee, the Holders and each Affiliate
of the foregoing Persons (each such Person being called an "Indemnitee")
against, and hold each of them harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable fees,
disbursements and other charges of counsel, incurred by or asserted against any
of them arising out of, in any way connected with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating hereto or to the Collateral, whether or not
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section 8.06 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Indenture
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Notes, the invalidity or unenforceability of any term or
provision of this Agreement or any other Indenture Document, or any
investigation made by or on behalf of the Collateral Agent or any Holder. All
amounts due under this Section 8.06 shall be payable on written demand therefor.
Section 8.07 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
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Section 8.08 Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Trustee and the Holders under the other
Indenture Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provisions of this
Agreement or any other Indenture Document or consent to any departure by any
Grantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Grantor in any case shall entitle such Grantor or any
other Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except (i) in accordance with the Indenture pursuant
to an agreement or agreements in writing entered into by the Collateral Agent
and the Grantor or Grantors with respect to which such waiver, amendment or
modification is to apply, or (ii) as otherwise provided in the Intercreditor
Agreement.
Section 8.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER INDENTURE
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER INDENTURE DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 8.09.
Section 8.10 Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 8.11 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section 8.04),
and shall become effective as provided in Section 8.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
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Section 8.12 Headings. Article and Section headings used herein are for
the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 8.13 Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Indenture Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Collateral Agent, the Trustee or any Holder may otherwise have to
bring any action or proceeding relating to this Agreement or the other Indenture
Documents against any Grantor or its properties in the courts of any
jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Indenture Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 8.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
Section 8.14 Termination. (a) This Agreement and the Security Interest
shall terminate at the time provided in Section 10.08 of the Indenture, at which
time the Collateral Agent shall execute and deliver to the Grantors, at the
Grantors' expense, all Uniform Commercial Code termination statements and
similar documents, including, without limitation, authorization for the Grantors
to file Uniform Commercial Code termination statements, which the Grantors shall
reasonably request to evidence such termination. Any execution and delivery of
termination statements or documents pursuant to this Section 8.14 shall be
without recourse to or warranty by the Collateral Agent. A Grantor shall
automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Grantor shall be automatically released in
the event that such Grantor ceases to be a Guarantor pursuant to a transaction
permitted under the Indenture, at which time the Collateral Agent shall execute
and deliver to any Grantor, at such Grantor's expense, all documents that such
Grantor shall reasonably request to evidence such release.
(b) If any of the Collateral shall become subject to the
release provisions set forth in Section 10.03 of the Indenture or Section 5.1 of
the Intercreditor Agreement, such Collateral shall be automatically released
from the Security Interest to the extent provided in Section 10.03
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of the Indenture or Section 5.1 of the Intercreditor Agreement, as applicable.
The Collateral Agent shall execute and deliver to the Grantors, at the Grantors'
expense, all Uniform Commercial Code termination statements and similar
documents which the Grantor shall reasonable request to evidence the termination
of the Security Interest in such Collateral.
Section 8.15 Additional Grantors. If, pursuant to Sections 4.11 and
11.06 of the Indenture, the Issuer is required to cause any Subsidiary of the
Issuer that is not a Grantor to enter in to this Agreement as a Grantor, upon
execution and delivery by the Collateral Agent and such Subsidiary of an
instrument in the form of Annex 3 hereto, such Subsidiary shall become a Grantor
hereunder with the same force and effect as if originally named as a Grantor
herein. The execution and delivery of any such instrument shall not require the
consent of any Grantor hereunder. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor as a party to this Agreement.
Section 8.16 Subject to Intercreditor Agreement. Notwithstanding
anything herein to the contrary, the lien and security interest granted to the
Collateral Agent pursuant to this Agreement and the exercise of any right or
remedy by the Collateral Agent hereunder are subject to the provisions of the
Intercreditor Agreement. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
REPTRON ELECTRONICS, INC.,
By:____________________________________
Name:
Title:
[EACH OF THE OTHER GUARANTORS LISTED
ON SCHEDULE I HERETO,]
By:____________________________________
Name:
Title:
_______________________________________
NATIONAL ASSOCIATION,
as Collateral Agent,
By:____________________________________
Name:
Title:
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Schedule I to the Security Agreement
SUBSIDIARY GUARANTORS
List Names List Addresses
Schedule I
Schedule II to the Security Agreement
COPYRIGHTS
Schedule II
Schedule III to the Security Agreement
LICENSES
Schedule III
Schedule IV to the Security Agreement
PATENTS
Schedule IV
Schedule V to the Security Agreement
TRADEMARKS
Schedule V
Annex 1 to the Security Agreement
[FORM OF]
PERFECTION CERTIFICATE
Reference is made to (a) the Indenture dated as of ____________, 2003
(as amended, supplemented or otherwise modified from time to time, the
"Indenture"), among Reptron Electronics, Inc., a Florida corporation (the
"Issuer"), the Guarantors and _____________, National Association, a national
banking association ("Trustee"), as trustee, (b) the Security Agreement dated as
of _____________, 2003, among the Issuer, the Guarantors and Trustee, as
collateral agent (in such capacity, the "Collateral Agent"), and (c) the
Intercreditor Agreement dated as of _____________, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement"), among the Issuer, the Collateral Agent and the Credit Agent.
Capitalized terms used but not defined herein have the meanings assigned to them
in the Indenture or the Security Agreement, as applicable.
The undersigned, an Officer of the Issuer, hereby certifies to the
Collateral Agent and each other Secured Party as follows:
1. Names. (a) The exact legal name of each Grantor, as such name
appears in its respective certificate of formation, is as follows:
(b) Set forth below is each other legal name each Grantor
has had in the past five years, together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor
has changed its identity or corporate structure in any way within the past five
years. Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include
in Schedule 1 the information required by Sections 1 and 2 of this certificate
as to each acquiree or constituent party to a merger or consolidation.
(d) The following is a list of all other names (including
trade names or similar appellations) used by each Grantor or any of its
divisions or other business units in connection with the conduct of its business
or the ownership of its properties at any time during the past five years:
(e) Set forth below is the organizational identification
number, if any, issued by the jurisdiction of formation of each Grantor that is
a registered organization:
(f) Set forth below is the Federal Taxpayer
Identification Number of each Grantor:
2. Current Locations. (a) The chief executive office of each
Grantor is located at the address set forth opposite its name below:
Annex 1
Grantor Mailing Address County State
------- --------------- ------ -----
(b) Set forth below opposite the name of each Grantor are
all locations where such Grantor maintains any books or records relating to any
Receivables or General Intangibles (with each location at which Chattel Paper,
if any, is kept being indicated by an "*"):
Grantor Mailing Address County State
------- --------------- ------ -----
(c) The jurisdiction of formation of each Grantor that is
a registered organization is set forth opposite its name below:
Grantor Jurisdiction
------- ------------
(a) Set forth below opposite the name of each Grantor are
all the locations where such Grantor maintains any Inventory or Equipment or
other Collateral not identified above:
Grantor Mailing Address County State
------- --------------- ------ -----
(b) Set forth below opposite the name of each Grantor are
all the places of business of such Grantor not identified in paragraph (a), (b),
(c) or (d) above:
Grantor Mailing Address County State
------- --------------- ------ -----
(c) Set forth below opposite the name of each Grantor are
the names and addresses of all Persons other than such Grantor that have
possession of any of the Collateral of such Grantor:
Grantor Mailing Address County State
------- --------------- ------ -----
Annex 1
3. Unusual Transactions. All Accounts have been originated by the
Grantors and all Inventory has been acquired by the Grantors in the ordinary
course of business.
4. File Search Reports. File search reports have been obtained
from each Uniform Commercial Code filing office identified with respect to such
Grantor in Section 2 hereof, and such search reports reflect no liens against
any of the Collateral other than those permitted under the Indenture.
5. UCC Filings. UCC financing statements in substantially the
form of Schedule 5 hereto have been prepared for filing in the proper Uniform
Commercial Code filing office in the jurisdiction in which each Grantor is
located and, to the extent any of the Collateral is comprised of fixtures in the
proper local jurisdiction, as set forth with respect to such Grantor in Section
2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a
schedule setting forth, with respect to the filings described in Section 5
above, each filing and the filing office in which such filing is to be made.
7. Stock Ownership and other Equity Interests. Attached hereto as
Schedule 7 is a true and correct list of all the issued and outstanding stock,
partnership interests, limited liability company membership interests or other
equity interests owned by the Issuer and each Subsidiary of the Issuer. Also set
forth on Schedule 7 is each equity investment of the Issuer or any Subsidiary of
the Issuer that represents 50% or less of the equity of the entity in which such
investment was made.
8. Debt Instruments. Attached hereto as Schedule 8 is a true and
correct list of all instruments, including any promissory notes, and other
evidence of indebtedness held by the Issuer and each Subsidiary of the Issuer,
including all intercompany notes between the Issuer and each Subsidiary of the
Issuer and each Subsidiary of the Issuer and each other such Subsidiary.
9. Advances. Attached hereto as Schedule 9 is (a) a true and
correct list of all advances made by the Issuer to any Subsidiary of the Issuer
or made by any Subsidiary of the Issuer to the Issuer or to any other Subsidiary
of the Issuer (other than those identified on Schedule 8), which advances will
be on and after the date hereof evidenced by one or more intercompany notes
pledged to the Collateral Agent under the Security Agreement and (b) a true and
correct list of all unpaid intercompany transfers of goods sold and delivered by
or to the Issuer or any Subsidiary of the Issuer.
10. Mortgage Filings. Attached hereto as Schedule 10 is a schedule
setting forth, with respect to each Mortgaged Property, (a) the exact name of
the Person that owns such property as such name appears in its certificate of
incorporation or other organizational document, (b) if different from the name
identified pursuant to clause (a), the exact name of the current record owner of
such property reflected In the records of the filing office for such property
identified pursuant to the following clause and (c) the filing office in which a
Mortgage with respect to such property must be filed or recorded in order for
the Collateral Agent to obtain a perfected security interest therein.
Annex 1
11. Intellectual Property. Attached hereto as Schedule 11(A) is a
schedule setting forth all of each Grantor's Patents and registered Trademarks
and Patent and Trademark applications, including the name of the registered
owner or applicant, as applicable, and the registration or application number,
as applicable, of each Patent and registered Trademark or Patent or Trademark
application owned by any Grantor, in proper form for filing with the United
States Patent and Trademark Office, and a schedule setting forth all of each
Grantor's material Patent Licenses and material Trademark Licenses. Attached
hereto as Schedule 11(B) is a schedule setting forth all of each Grantor's
registered Copyrights, including the name of the registered owner and the
registration number of each Copyright owned by any Grantor, in proper form for
filing with the United States Copyright Office, and a schedule setting forth all
of each Grantor's material Copyright Licenses that grant rights with respect to
registered Copyrights.
IN WITNESS WHEREOF, the undersigned have duly executed this certificate
on this [ ]th day of _______, 2003.
REPTRON ELECTRONICS, INC.,
By:_________________________
Name:
Title:
Annex 1
Annex 2 to the Security Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the Security Agreement dated as
of _________, 2003, among Reptron Electronics, Inc., a Florida corporation (the
"Issuer"), each subsidiary of the Issuer listed on Schedule I thereto (each such
subsidiary individually a "Subsidiary" or a "Guarantor" and, collectively, the
"Subsidiaries" or the "Guarantors"; the Guarantors and the Issuer are referred
to collectively herein as the "Grantors") and ____________________, National
Association, a national banking association ("Trustee"), as trustee under the
Indenture referred to below and as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined therein).
A. Reference is made to (a) the Indenture dated as of
___________, 2003 (as amended, supplemented or otherwise modified from time to
time, the "Indenture"), among the Issuer, the Guarantors and Trustee, as
trustee, and (b) the Intercreditor Agreement dated as of _____________, 2003 (as
amended, supplemented or otherwise modified from time to time, the
"Intercreditor Agreement"), among the Issuer, the Collateral Agent and the
Credit Agent.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement and the
Indenture.
C. The Grantors have entered into the Security Agreement in order
to induce the Trustee to enter into the Indenture. Pursuant to Section 4.11 of
the Indenture, the Issuer is required to cause certain of its Subsidiaries that
are not Grantors to enter in to this Agreement as Grantors. Section 8.15 of the
Security Agreement provides that such Subsidiaries may become Grantors under the
Security Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary (the "New Grantor") is executing
this Supplement in accordance with the requirements of the Indenture to become a
Grantor under the Security Agreement.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 8.15 of the Security Agreement,
the New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof except to
the extent a representation and warranty expressly relates solely to a specific
date in which case such representation and warranty shall be true and correct on
such date. In furtherance of the foregoing, the New Grantor, as security for the
payment and performance in full of the Obligations (as defined in the Security
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, their successors and
assigns, a security interest in and lien on all of the New Grantor's right,
title and interest in and to the Collateral of the New Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the New
Grantor. The Security Agreement is hereby incorporated herein by reference.
Annex 2
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 8.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below, with a copy to the Issuer.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
Annex 2
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
[NAME OF NEW GRANTOR],
By:______________________________
Name:
Title:
Address:
_________________________________
NATIONAL ASSOCIATION,
as Collateral Agent,
By:______________________________
Name:
Title:
Annex 2
Schedule I
to Supplement No. [ ]
to the Security Agreement
LOCATION OF COLLATERAL
Description Location
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