EXHIBIT 10.3
[FIRST LIEN SECURITY AGREEMENT]
EXHIBIT M
TO CREDIT AGREEMENT
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AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
By
PGT INDUSTRIES, INC.
and
THE GUARANTORS PARTY HERETO
and
UBS AG, STAMFORD BRANCH,
as Collateral Agent
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Dated as of January 29, 2004
Amended and Restated as of February 14, 2006
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TABLE OF CONTENTS
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PREAMBLE ................................................................................................ 1
RECITALS ................................................................................................ 1
AGREEMENT ............................................................................................... 2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions................................................................................. 2
SECTION 1.2. Interpretation.............................................................................. 11
SECTION 1.3. Resolution of Drafting Ambiguities.......................................................... 11
SECTION 1.4. Perfection Certificate...................................................................... 11
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Security Interests................................................................. 11
SECTION 2.2. Filings..................................................................................... 13
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral.............................................. 14
SECTION 3.2. Perfection of Uncertificated Securities Collateral.......................................... 14
SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected Security Interest.......... 15
SECTION 3.4. Other Actions............................................................................... 16
SECTION 3.5. Joinder of Additional Guarantors............................................................ 20
SECTION 3.6. Supplements; Further Assurances............................................................. 21
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1. Title....................................................................................... 21
SECTION 4.2. Validity of Security Interest............................................................... 22
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SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral.................................... 22
SECTION 4.4. Other Financing Statements.................................................................. 22
SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction of Organization........................ 23
SECTION 4.6. Location of Inventory and Equipment......................................................... 23
SECTION 4.7. Due Authorization and Issuance.............................................................. 23
SECTION 4.8. Consents, etc............................................................................... 24
SECTION 4.9. Pledged Collateral.......................................................................... 24
SECTION 4.10. Insurance................................................................................... 24
SECTION 4.11. Payment of Taxes; Compliance with Laws; Contesting Liens; Claims............................ 24
SECTION 4.12. Access to Pledged Collateral, Books and Records; Other Information.......................... 24
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral.................................................. 25
SECTION 5.2. Voting Rights; Distributions; etc........................................................... 25
SECTION 5.3. Defaults, etc............................................................................... 26
SECTION 5.4. Certain Agreements of Pledgors as Issuers and Holders of Equity Interests................... 27
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License............................................................................ 27
SECTION 6.2. Protection of Collateral Agent's Security................................................... 28
SECTION 6.3. After-Acquired Property..................................................................... 28
SECTION 6.4. Litigation.................................................................................. 29
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records...................................................................... 30
SECTION 7.2. Legend...................................................................................... 30
SECTION 7.3. Modification of Terms, etc.................................................................. 30
SECTION 7.4. Collection.................................................................................. 30
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ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral............................................................. 31
ARTICLE IX
REMEDIES
SECTION 9.1. Remedies.................................................................................... 31
SECTION 9.2. Notice of Sale.............................................................................. 33
SECTION 9.3. Waiver of Notice and Claims................................................................. 33
SECTION 9.4. Certain Sales of Pledged Collateral......................................................... 34
SECTION 9.5. No Waiver; Cumulative Remedies.............................................................. 35
SECTION 9.6. Certain Additional Actions Regarding Intellectual Property.................................. 36
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral Dispositions..................................... 36
SECTION 10.2. Application of Proceeds..................................................................... 36
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent................................................................. 36
SECTION 11.2. Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact................... 37
SECTION 11.3. Continuing Security Interest; Assignment.................................................... 38
SECTION 11.4. Termination; Release........................................................................ 38
SECTION 11.5. Modification in Writing..................................................................... 39
SECTION 11.6. Notices..................................................................................... 39
SECTION 11.7. Governing Law; Consent to Jurisdiction and Service of Process; Waiver of Jury Trial......... 39
SECTION 11.8. Severability of Provisions.................................................................. 40
SECTION 11.9. Execution in Counterparts................................................................... 40
SECTION 11.10. Business Days............................................................................... 40
SECTION 11.11. Waiver of Stay.............................................................................. 41
SECTION 11.12. No Credit for Payment of Taxes or Imposition................................................ 41
SECTION 11.13. No Claims Against Collateral Agent.......................................................... 41
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SECTION 11.14. No Release.................................................................................. 41
SECTION 11.15. Obligations Absolute........................................................................ 42
SECTION 11.16. Intercreditor Agreement..................................................................... 42
SIGNATURES ................................................................................................ S-1
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AMENDED AND RESTATED FIRST LIEN PLEDGE AND SECURITY AGREEMENT
AMENDED AND RESTATED FIRST LIEN PLEDGE AND SECURITY AGREEMENT dated
as of January 29, 2004 and amended and restated as of February 14, 2006 (as
further amended, amended and restated, supplemented or otherwise modified from
time to time in accordance with the provisions hereof, the "Agreement") made by
PGT INDUSTRIES, INC., a Florida corporation ("PGT Industries" or the
"Borrower"), and THE GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO (the
"Original Guarantors") OR FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A
JOINDER AGREEMENT (the "Additional Guarantors," and together with the Original
Guarantors, the "Guarantors"), as pledgors, assignors and debtors (the Borrower,
together with the Guarantors, in such capacities and together with any
successors in such capacities, the "Pledgors," and each, a "Pledgor"), in favor
of UBS AG, STAMFORD BRANCH, in its capacity as collateral agent (in such
capacity and together with any successor in such capacity, the "Collateral
Agent") on behalf of the Secured Parties (as defined in the Credit Agreement)
pursuant to the Credit Agreement (as hereinafter defined), as pledgee, assignee
and secured party.
RECITALS:
A. PGT Industries, the Original Guarantors, the Collateral Agent and
the Lenders (as defined therein) (the "Lenders") have, in connection with the
execution and delivery of this Agreement, entered into that certain Second
Amended and Restated Credit Agreement, dated as of January 29, 2004, as amended
and restated as of February 9, 2004, as amended by Amendment No. 1 thereto,
dated as of May 25, 2005 and as further amended by Amendment No. 2 thereto,
dated as of September 19, 2005 and as further amended and restated as of
February 14, 2006 (as further amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement").
B.Each Original Guarantor has, pursuant to the Credit Agreement,
unconditionally guaranteed the Obligations.
C.The Borrower and each Original Guarantor has and will continue to
receive substantial benefits from the execution, delivery and performance of the
obligations under the Credit Agreement and the other Loan Documents and each is,
therefore, willing to enter into this Agreement.
D.Each Pledgor is or, as to Pledged Collateral (as hereinafter
defined) acquired by such Pledgor after the Closing Date will be, the legal
and/or beneficial owner of the Pledged Collateral pledged by it hereunder.
E.This Agreement is given by each Pledgor in favor of the Collateral
Agent for the benefit of the Secured Parties to secure the payment and
performance of all of the Obligations.
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▇.▇▇ connection with the First Credit Agreement, JLL Window Company
and the other pledgors named therein executed and delivered to the Collateral
Agent a pledge and security agreement, dated the Closing Date (the "Original
Security Agreement").
▇.▇▇ is a condition to the obligations of the Lenders to make the
Loans under the Credit Agreement and a condition to the Issuing Bank issuing
Letters of Credit under the Credit Agreement that each Pledgor execute and
deliver the applicable Loan Documents (as defined in the Credit Agreement),
including this Agreement.
H.Pursuant to Section 11.5 of the Original Security Agreement, the
Original Security Agreement is being amended and restated concurrently with the
Amendment and Restatement Effective Date under the Credit Agreement hereby with
the consent of the Required Lenders under the Original Credit Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Collateral Agent hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions.
(a) Unless otherwise defined herein or in the Credit Agreement,
capitalized terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC.
(b) Terms used but not otherwise defined herein that are defined in
the Credit Agreement shall have the meanings given to them in the Credit
Agreement. Sections 1.03 and 1.05 of the Credit Agreement shall apply herein
mutatis mutandis.
(c) The following terms shall have the following meanings:
"Acquisition Document Rights" shall mean, with respect to each
Pledgor, collectively, all of such Pledgor's rights, title and interest in, to
and under the Acquisition Documents, including (i) all rights and remedies
relating to monetary damages, including indemnification rights and remedies, and
claims for damages or other relief pursuant to or in respect of the Acquisition
Documents, (ii) all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for monetary damages under or in
respect of the agreements, documents and instruments referred to in the
Acquisition Documents or related
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thereto and (iii) all proceeds, collections, recoveries and rights of
subrogation with respect to the foregoing.
"Additional Guarantors" shall have the meaning assigned to such term
in the Preamble hereof.
"Additional Pledged Interests" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional membership, partnership or other equity interests of whatever class
of any issuer of Initial Pledged Interests or any interest in any such issuer,
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of any such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other equity
interests from time to time acquired by such Pledgor in any manner and (ii) all
membership, partnership or other equity interests, as applicable, of each
limited liability company, partnership or other entity (other than a
corporation) hereafter acquired or formed by such Pledgor and all options,
warrants, rights, agreements, additional membership, partnership or other equity
interests of whatever class of such limited liability company, partnership or
other entity, together with all rights, privileges, authority and powers of such
Pledgor relating to such interests or under any Organizational Document of any
such issuer, and the certificates, instruments and agreements representing such
membership, partnership or other equity interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other interests, from time to time
acquired by such Pledgor in any manner.
"Additional Pledged Shares" shall mean, collectively, with respect
to each Pledgor, (i) all options, warrants, rights, agreements, additional
shares of capital stock of whatever class of any issuer of the Initial Pledged
Shares or any other equity interest in any such issuer, together with all
rights, privileges, authority and powers of such Pledgor relating to such
interests issued by any such issuer under any Organizational Document of any
such issuer, and the certificates, instruments and agreements representing such
interests and any and all interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to such interests, from time to time
acquired by such Pledgor in any manner and (ii) all the issued and outstanding
shares of capital stock of each corporation hereafter acquired or formed by such
Pledgor and all options, warrants, rights, agreements or additional shares of
capital stock of whatever class of such corporation, together with all rights,
privileges, authority and powers of such Pledgor relating to such shares or
under any Organizational Document of such corporation, and the certificates,
instruments and agreements representing such shares and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such shares, from time to time acquired by such Pledgor in any
manner.
"Agreement" shall have the meaning assigned to such term in the
Preamble hereof.
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"Bailee Letter" shall be an agreement in form substantially similar
to Exhibit 9 annexed hereto.
"Bank" shall have the meaning assigned to it in Section 9-102 of the
UCC.
"Claims" shall mean any and all property and other taxes,
assessments and special assessments, levies, fees and all governmental charges
imposed upon or assessed against, and landlords', carriers', mechanics',
workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral.
"Collateral Account" shall mean each account number set forth on
Schedule 16 annexed to the Perfection Certificate, each in the name set forth
opposite such account number and established and maintained at the financial
institution set forth opposite such account name and number, and all property
from time to time on deposit in the Collateral Account.
"Collateral Agent" shall have the meaning set forth in the preamble.
"Commodity Account Control Agreement" shall mean a commodity account
control agreement in a form that is reasonably satisfactory to the Collateral
Agent.
"Contested Liens" shall mean, collectively, any Liens incurred in
respect of any Claims to the extent that the amounts owing in respect thereof
are not yet delinquent or are being contested and otherwise comply with the
provisions of Section 4.11 hereof; provided, however, that such Liens shall in
all respects be subject and subordinate in priority to the Lien and security
interest created by this Agreement, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien provides that such Lien
must be superior to the Lien and security interest created and evidenced hereby.
"Contracts" shall mean, collectively, with respect to each Pledgor,
all sale, service, performance, equipment or property lease contracts,
agreements and grants and all other contracts, agreements or grants (in each
case, whether written or oral, or third party or intercompany), between such
Pledgor and third parties, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
"Control" shall mean (i) in the case of each Deposit Account,
"control," as such term is defined in Section 9-104 of the UCC, and (ii) in the
case of any Security Entitlement, "control," as such term is defined in Section
8-106 of the UCC and (iii) in the case of any Commodity Contract, "control," as
such term is defined in Section 9-106 of the UCC.
"Control Agreements" shall mean, collectively, the Deposit Account
Control Agreements, the Securities Account Control Agreements and the Commodity
Account Control Agreements.
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"Copyright Security Agreement" shall mean an agreement substantially
in the form annexed hereto as Exhibit 6.
"Copyrights" shall mean, collectively, with respect to each Pledgor,
all copyrights (whether statutory or common law, whether established or
registered in the United States or any other country or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished) and all copyright registrations and applications made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or
assigned to such Pledgor, together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor's use of such
copyrights, (ii) renewals and extensions thereof, (iii) income, fees, royalties,
damages, claims and payments now or hereafter due and/or payable with respect
thereto, including damages and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the world
and (v) rights to ▇▇▇ for past, present or future infringements thereof.
"Credit Agreement" shall have the meaning assigned to such term in
Recital A hereof.
"Deposit Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 5 or such other form that is
reasonably satisfactory to the Collateral Agent.
"Deposit Accounts" shall mean, collectively, with respect to each
Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and in
any event shall include the Collateral Account and all accounts and sub-accounts
relating to any of the foregoing accounts and (ii) all cash, funds, checks,
notes and instruments from time to time on deposit in any of the accounts or
sub-accounts described in clause (i) of this definition.
"Distributions" shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
"Excluded Account" shall mean (a) any Deposit Account maintained
solely for payroll and/or employee benefit purposes, and (b) any Deposit
Account, Securities Account or Commodities Account maintained solely to cash
collateralize unrealized losses on Hedging Obligations; provided that the
counterparty to such Hedging Obligation has a Lien permitted under such Section
6.02(p) of the Credit Agreement on such Account or the property on deposit
therein.
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"Excluded Property" shall mean:
(a) any permit, lease, license, contract or other agreement held by
any Pledgor or any contract or agreement to which any Pledgor is a party
(including any rights thereunder) that validly prohibits the creation by
such Pledgor of a security interest therein or under the terms of which
the creation of a security interest therein shall constitute or result (i)
in the abandonment, invalidation or unenforceability of any right, title
or interest of any Pledgor therein or (ii) in a breach or termination
pursuant to the terms of, or a default under, any such lease, license,
contract, property rights or agreement (other than any such permit, lease,
license, contract or other agreement, the terms of which prohibiting
creation of a security interest or having the result described in clauses
(i) and (ii) above would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code) or principles of equity);
(b) any permit, lease, license, contract or other agreement held by
any Pledgor to the extent that any Requirement of Law applicable thereto
prohibits the creation of a security interest therein (other than any such
permit, lease, license, contract or other agreement, to the extent that
any Requirement of Law applicable thereto prohibiting the creation of a
security interest therein would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor
provision or provisions) of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity);
and
(c) Equipment owned by any Pledgor on the Amendment and Restatement
Effective Date or thereafter acquired that is subject to a Lien securing a
Purchase Money Obligation or Capital Lease Obligation permitted to be
incurred pursuant to the provisions of the Credit Agreement if the
contract or other agreement in which such Lien is granted (or the
documentation providing for such Purchase Money Obligation or Capital
Lease Obligation) validly prohibits the creation of any other Lien on such
Equipment;
provided, however, that in each case described in clauses (a), (b) and (c) of
this definition, such property shall constitute "Excluded Property" only to the
extent and for so long as such permit, lease, license, contract or other
agreement or Requirement of Law applicable thereto validly prohibits the
creation of a Lien on such property in favor of the Collateral Agent and, upon
the termination of such prohibition (howsoever occurring), such property shall
cease to constitute "Excluded Property."
"General Intangibles" shall mean, collectively, with respect to each
Pledgor, all "general intangibles," as such term is defined in the UCC, of such
Pledgor and, in any event, shall include (i) all of such Pledgor's rights, title
and interest in, to and under all insurance policies and Contracts, (ii) all
know-how and warranties relating to any of the Pledged Collateral or the
Mortgaged Property, (iii) any and all other rights, claims, choses-in-action and
causes of action of such Pledgor against any other person and the benefits of
any and all collateral or other
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security given by any other person in connection therewith, (iv) all guarantees,
endorsements and indemnifications on, or of, any of the Pledged Collateral or
any of the Mortgaged Property, (v) all lists, books, records, correspondence,
ledgers, printouts, files (whether in printed form or stored electronically),
tapes and other papers or materials containing information relating to any of
the Pledged Collateral or any of the Mortgaged Property, including all customer
or tenant lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, appraisals, recorded knowledge, surveys,
studies, engineering reports, test reports, manuals, standards, processing
standards, performance standards, catalogs, research data, computer and
automatic machinery software and programs and the like, field repair data,
accounting information pertaining to such Pledgor's operations or any of the
Pledged Collateral or any of the Mortgaged Property and all media in which or on
which any of the information or knowledge or data or records may be recorded or
stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data, (vi) all licenses, consents, permits,
variances, certifications, authorizations and approvals, however characterized,
of any Governmental Authority (or any person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Pledged
Collateral or any of the Mortgaged Property including building permits,
certificates of occupancy, environmental certificates, industrial permits or
licenses and certificates of operation (vii) all rights to reserves, deferred
payments, deposits, refunds, indemnification of claims to the extent the
foregoing relate to any Pledged Collateral or Mortgaged Property and claims for
tax or other refunds against any Governmental Authority relating to any Pledged
Collateral or any of the Mortgaged Property and (viii) Goodwill.
"Goodwill" shall mean, collectively, with respect to each Pledgor,
the goodwill connected with such Pledgor's business including (i) all goodwill
connected with the use of and symbolized by any Trademark in which such Pledgor
has any interest, and (ii) all know-how, trade secrets, customer and supplier
lists, proprietary information, inventions, methods, procedures, formulae,
descriptions, compositions, technical data, drawings, specifications, name
plates, catalogs, confidential information and the right to limit the use or
disclosure thereof by any person, pricing and cost information, business and
marketing plans and proposals, consulting agreements, engineering contracts and
such other assets which relate to such goodwill.
"Guarantors" shall have the meaning assigned to such term in the
Preamble hereof.
"Initial Pledged Interests" shall mean, with respect to each
Pledgor, all membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer described in Schedule 11 annexed to
the Perfection Certificate, together with all rights, privileges, authority and
powers of such Pledgor in and to each such issuer or under any Organizational
Document of each such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests.
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"Initial Pledged Shares" shall mean, collectively, with respect to
each Pledgor, the issued and outstanding shares of capital stock of each issuer
described in Schedule 11 annexed to the Perfection Certificate together with all
rights, privileges, authority and powers of such Pledgor relating to such
interests in each such issuer or under any Organizational Document of each such
issuer, and the certificates, instruments and agreements representing such
shares of capital stock and any and all interest of such Pledgor in the entries
on the books of any financial intermediary pertaining to the Initial Pledged
Shares.
"Instruments" shall mean, collectively, with respect to each
Pledgor, all "instruments," as such term is defined in Article 9 of the UCC, and
shall include all promissory notes, drafts, bills of exchange or acceptances.
"Intellectual Property Collateral" shall mean, collectively, the
Patents, Trademarks, Copyrights and Licenses.
"Intercompany Notes" shall mean, with respect to each Pledgor, all
intercompany notes described in Schedule 12 annexed to the Perfection
Certificate and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or agreements evidencing such intercompany notes, and
all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.
"Investment Property" shall mean all securities, whether
certificated or uncertificated, Security Entitlements, Securities Accounts,
Commodity Contracts or Commodity Accounts, excluding, however, the Securities
Collateral.
"Joinder Agreement" shall mean an agreement substantially in the
form annexed hereto as Exhibit 3.
"Lenders" shall have the meaning assigned to such term in Recital A
hereof.
"Licenses" shall mean, collectively, with respect to each Pledgor,
all license and distribution agreements with, and covenants not to ▇▇▇, any
other party with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future violations
thereof, (iii) rights to ▇▇▇ for past, present and future violations thereof and
(iv) other rights to use, exploit or practice any or all of the Patents,
Trademarks or Copyrights or any other patent, trademark or copyright of third
parties.
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"March 2006 Note" means that certain note, made by Secura Screen
Inc. in favor of Borrower, which matures on March 15, 2006 and is identified on
Schedule 12 to the Perfection certificate.
"Mortgaged Property" shall have the meaning assigned to such term in
the Mortgages.
"Original Guarantors" shall have the meaning assigned to such term
in the Preamble hereof.
"Original Security Agreement" shall have the meaning assigned to
such term in Recital F hereof.
"Patent Security Agreement" shall mean an agreement substantially in
the form annexed hereto as Exhibit 7.
"Patents" shall mean, collectively, with respect to each Pledgor,
all patents issued or assigned to and all patent applications and registrations
made by such Pledgor (whether established or registered or recorded in the
United States or any other country or any political subdivision thereof),
together with any and all (i) rights and privileges arising under applicable law
with respect to such Pledgor's use of any patents, (ii) inventions and
improvements described and claimed therein, (iii) reissues, divisionals,
continuations, extensions and continuations-in-part thereof, (iv) income, fees,
royalties, damages, claims and payments now or hereafter due and/or payable
thereunder and with respect thereto including damages and payments for past,
present or future infringements thereof, (v) rights corresponding thereto
throughout the world and (vi) rights to ▇▇▇ for past, present or future
infringements thereof.
"Perfection Certificate" shall mean that certain perfection
certificate dated February 14, 2006, executed and delivered by each Pledgor in
favor of the Collateral Agent for the benefit of the Secured Parties, and each
other Perfection Certificate (which shall be in form and substance reasonably
acceptable to the Collateral Agent) executed and delivered by the applicable
Guarantor in favor of the Collateral Agent for the benefit of the Secured
Parties contemporaneously with the execution and delivery of each Joinder
Agreement executed in accordance with Section 3.5 hereof, in each case, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with the Credit Agreement or upon the request of
the Collateral Agent.
"Pledge Amendment" shall have the meaning assigned to such term in
Section 5.1 hereof.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2.1(b) hereof.
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"Pledged Interests" shall mean, collectively, the Initial Pledged
Interests and the Additional Pledged Interests;
"Pledged Securities" shall mean, collectively, the Pledged
Interests, the Pledged Shares and the Successor Interests.
"Pledged Shares" shall mean, collectively, the Initial Pledged
Shares and the Additional Pledged Shares.
"Pledgor" shall have the meaning assigned to such term in the
Preamble hereof.
"Securities Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 4 or such other form that is
reasonably satisfactory to the Collateral Agent.
"Securities Collateral" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"Security Interest" shall have the meaning assigned to such term in
Section 2.2.
"Successor Interests" shall mean, collectively, with respect to each
Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company, partnership or other entity owned by such Pledgor (unless such
successor is such Pledgor itself) formed by or resulting from any consolidation
or merger in which any person listed in Schedule 1(a) annexed to the Perfection
Certificate is not the surviving entity.
"Trademark Security Agreement" shall mean an agreement substantially
in the form annexed hereto as Exhibit 8.
"Trademarks" shall mean, collectively, with respect to each Pledgor,
all trademarks (including service marks), slogans, logos, certification marks,
trade dress, domain names, corporate names and trade names, whether registered
or unregistered, owned by or assigned to such Pledgor and all registrations and
applications for the foregoing (whether statutory or common law and whether
established or registered in the United States or any other country or any
political subdivision thereof), together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor's use of
any trademarks and all goodwill of the business connected with the use of any
symbolized by any Trademarks, (ii) extensions and renewals thereof, (iii)
income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to ▇▇▇ for past,
present and future infringements thereof.
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"UCC" shall mean the Uniform Commercial Code as in effect on the
Closing Date in the State of New York; provided, however, that if by reason of
mandatory provisions of law, any or all of the perfection or priority of the
Collateral Agent's and the Secured Parties' security interest in any item or
portion of the Pledged Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect on the Closing Date in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or priority and for purposes of definitions relating to such
provisions.
SECTION 1.2. Interpretation. The rules of interpretation specified
in the Credit Agreement (including Section 1.03 thereof) shall be applicable to
this Agreement.
SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Collateral Agent) shall not be employed in the
interpretation hereof.
SECTION 1.4. Perfection Certificate. The Collateral Agent and each
Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto are and shall
at all times remain a part of this Agreement.
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Security Interests.
(a) As collateral security for the payment and performance in full
of all of the Obligations, each Pledgor hereby confirms the pledge and grant to
the Collateral Agent for the benefit of the Secured Parties pursuant to the
Original Security Agreement, and in furtherance thereof hereby pledges and
grants to the Collateral Agent for the benefit of the Secured Parties a lien on
and security interest in and to all of the right, title and interest of such
Pledgor in, to and under the Pledged Collateral. The Liens granted hereunder to
secure the Obligations are collectively referred to herein as the "Security
Interest."
(b) "Pledged Collateral" shall mean all of the following, in each
case, wherever located, whether now existing or hereafter arising or acquired
from time to time:
(i) all Accounts;
(ii) all Equipment, Goods, Inventory and Fixtures;
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(iii) all Documents, Instruments and Chattel Paper;
(iv) all Letters of Credit and Letter-of-Credit Rights;
(v) all Securities Collateral;
(vi) all Collateral Accounts;
(vii) all Investment Property;
(viii) all Intellectual Property Collateral;
(ix) the Commercial Tort Claims described on Schedule 15 to the
Perfection Certificate;
(x) all General Intangibles;
(xi) all Deposit Accounts;
(xii) all Acquisition Documents and Acquisition Document Rights;
(xiii) all Supporting Obligations;
(xiv) all books and records relating to any or all of the foregoing;
and
(xv) to the extent not covered by clauses (i) through (xiv) of this
sentence, all other personal property of such Pledgor, whether tangible or
intangible and all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Pledgor from time to time
with respect to any of the foregoing.
Notwithstanding anything to the contrary contained in clauses (i)
through (xv) above, the security interest created by this Agreement shall not
extend to, and the term "Pledged Collateral" shall not include, (a) any Excluded
Property, (b) any Equity Interests of a Foreign Subsidiary to the extent not
required to be pledged pursuant to Section 5.11 of the Credit Agreement and (c)
applications for trademarks or service marks filed pursuant to Section
1051(1)(b) of the ▇▇▇▇▇▇ Act on the basis of the Pledgor's "intent-to-use" such
trademark or service ▇▇▇▇ until such time as Pledgor has filed, and the U.S.
Patent and Trademark Office accepts, an amendment to allege use or a statement
of use pursuant to Section 1051(c) or 1051(d) of the ▇▇▇▇▇▇ Act, at which time
any such intent-to-use trademark or service ▇▇▇▇ application shall automatically
be included in the Pledged Collateral, and Pledgor agrees, notwithstanding
Section 6.02 of the Credit Agreement, not to grant any consensual Lien in such
intent-to-use application, unless and until such time as such intent-to-use
application is included in the Pledged Collateral; and (i) the Pledgors shall
from time to time at the request of the Collateral Agent give written notice
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to the Collateral Agent identifying in reasonable detail the Excluded Property
(and stating in such notice that such property constitutes "Excluded Property")
and shall provide to the Collateral Agent such other information regarding the
Excluded Property as the Collateral Agent may reasonably request and (ii) from
and after the Closing Date, no Pledgor shall permit to become effective in any
document creating, governing or providing for any material permit, lease or
license, a provision that would prohibit the creation of a Lien on such permit,
lease or license in favor of the Collateral Agent unless such Pledgor believes,
in its reasonable judgment, that such prohibition is usual and customary in
transactions of such type.
(c) This Agreement amends and restates the Original Security
Agreement. The obligations of the Pledgors under the Original Security Agreement
and the grant of security interest in the Collateral by the Pledgors under the
Original Security Agreement shall continue under this Agreement and shall not in
any event be terminated, extinguished or annulled, but shall hereafter be
governed by this Agreement. It is understood and agreed that the Original
Security Agreement is being amended and restated by entry into this Agreement by
the consent of the Required Lenders in accordance with Section 11.5 hereof and
pursuant to their approval of the amendment and restatement of the Credit
Agreement on the Amendment and Restatement Effective Date.
SECTION 2.2. Filings.
(a) Each Pledgor hereby irrevocably authorizes the Collateral Agent
at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings), amendments thereto and
terminations thereof that contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment relating to the Pledged Collateral, including
(i) whether such Pledgor is an organization, the type of organization and any
organizational identification number issued to such Pledgor, (ii) any financing
or continuation statements or other documents without the signature of such
Pledgor where permitted by law, including the filing of a financing statement
describing the Pledged Collateral as "all assets in which the Pledgor now owns
or hereafter acquires rights and all proceeds thereof" and (iii) in the case of
a financing statement filed as a fixture filing or covering Pledged Collateral
constituting minerals or the like to be extracted or timber to be cut, a
sufficient description of the real property to which such Pledged Collateral
relates. Each Pledgor agrees to provide all information described in the
immediately preceding sentence to the Collateral Agent promptly upon its
request.
(b) Each Pledgor hereby further authorizes the Collateral Agent to
file 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), the Copyright Security Agreement, the Patent Security Agreement and
the Trademark Security Agreement, or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the security
interest granted by such Pledgor hereunder, without the signature of such
Pledgor, and naming such Pledgor, as debtor, and the Collateral Agent, as
secured party.
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ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral. Each
Pledgor represents and warrants that all certificates, agreements or instruments
representing or evidencing the Securities Collateral (other than Distributions
in the form of Instruments) in existence on the Amendment and Restatement
Effective Date have been delivered to the Collateral Agent in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that the Collateral Agent has a perfected First Priority
security interest (subject to Permitted Collateral Liens) therein. Each Pledgor
hereby agrees that all certificates, agreements or instruments representing or
evidencing Securities Collateral (other than Distributions in the form of
Instruments) acquired by such Pledgor after the Amendment and Restatement
Effective Date shall promptly upon receipt thereof by such Pledgor be delivered
to and held by or on behalf of the Collateral Agent pursuant hereto. All
certificated Securities Collateral shall be in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default, to endorse,
assign or otherwise transfer to or to register in the name of the Collateral
Agent or any of its nominees or endorse for negotiation any or all of the
Securities Collateral, without any indication that such Securities Collateral is
subject to the security interest hereunder. In addition, upon the occurrence and
during the continuance of an Event of Default, the Collateral Agent shall have
the right at any time to exchange certificates representing or evidencing
Securities Collateral for certificates of smaller or larger denominations.
SECTION 3.2. Perfection of Uncertificated Securities Collateral.
Each Pledgor represents and warrants that, upon the filing of all UCC financing
statements naming each Pledgor as "debtor" and the Collateral Agent as "secured
party" and describing the Pledged Collateral in the filing offices set forth
opposite such Pledgor's name on Schedule 7 annexed to the Perfection Certificate
(as such schedule may be amended or supplemented from time to time), the
Collateral Agent will have a perfected First Priority security interest (subject
to Permitted Collateral Liens) in all uncertificated Pledged Securities pledged
by such Pledgor hereunder that are in existence on the Amendment and Restatement
Effective Date. Each Pledgor hereby agrees that if any of the Pledged Securities
are at any time not evidenced by certificates of ownership, then each applicable
Pledgor shall, to the extent permitted by applicable law, (i) if necessary or
desirable to perfect a security interest in such Pledged Securities, cause such
pledge to be recorded on the equityholder register or the books of the issuer,
cause the issuer to execute and deliver to the Collateral Agent an
acknowledgment of the pledge of such Pledged Securities substantially in the
form of Exhibit 1 annexed hereto, execute any customary pledge forms or other
documents necessary or appropriate to complete the pledge and give the
Collateral Agent the
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right to transfer such Pledged Securities under the terms hereof and, upon
request, provide to the Collateral Agent an opinion of counsel, in form and
substance reasonably satisfactory to the Collateral Agent, confirming such
pledge and perfection thereof and (ii) after the occurrence and during the
continuance of an Event of Default, use its commercially reasonable efforts to
cause such Pledged Securities to become certificated and delivered to the
Collateral Agent in accordance with the provisions of Section 3.1.
SECTION 3.3. Financing Statements and Other Filings; Maintenance of
Perfected Security Interest. Each Pledgor represents and warrants that all
filings necessary to perfect the security interest granted by it to the
Collateral Agent in respect of the Pledged Collateral have been delivered to the
Collateral Agent in completed and, to the extent necessary or appropriate, duly
executed form for filing in each governmental, municipal or other office
specified in Schedule 7 annexed to the Perfection Certificate; provided,
however, that the subsequent recordation of one or more of the documents
attached hereto as Exhibit 6, 7 or 8 may be necessary to perfect the security
interest in any issued registrations and applications for other U.S. Copyrights,
Patents or Trademarks that are acquired by any of the Pledgors after the date of
the Security Agreement and additional filings and/or other actions may be
necessary to perfect the Collateral Agent's security interest in any Copyrights,
Patents or Trademarks that are created under the laws of jurisdictions outside
the United States. Each Pledgor agrees that at the sole cost and expense of the
Pledgors, (i) such Pledgor will maintain the security interest created by this
Agreement in the Pledged Collateral as a perfected First Priority security
interest (subject to Permitted Collateral Liens) to the extent such priority and
perfection may be legally obtained and maintained and shall defend such security
interest against the claims and demands of all persons except Permitted
Collateral Liens, (ii) such Pledgor shall furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Pledged Collateral and such other reports in connection with the Pledged
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail, and (iii) at any time and from time to time, upon the written request of
the Collateral Agent, such Pledgor shall promptly and duly execute and deliver,
and file and have recorded, such further instruments and documents and take such
further action as the Collateral Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and the rights and
powers herein granted, including the filing of any financing statements,
continuation statements and other documents under the Uniform Commercial Code
(or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby and the execution and delivery of Control
Agreements, all in form reasonably satisfactory to the Collateral Agent and in
such offices (including the United States Patent and Trademark Office and the
United States Copyright Office) wherever reasonably required by law to perfect,
continue and maintain a valid, enforceable, First Priority security interest in
the Pledged Collateral (subject to Permitted Collateral Liens) as provided
herein to the extent such perfection and priority may be achieved by the filing
of such documents and to preserve the other rights and interests granted to the
Collateral Agent hereunder, as against third parties, with respect to the
Pledged Collateral.
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SECTION 3.4. Other Actions. In order to further ensure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interests in the Pledged Collateral,
each Pledgor represents and warrants (as to itself) as follows and agrees, in
each case at such Pledgor's own expense, to take the following actions with
respect to the following Pledged Collateral:
(a) Instruments and Tangible Chattel Paper. (i) No amounts payable
under or in connection with any of the Pledged Collateral are evidenced by
any Instrument or Tangible Chattel Paper other than such Instruments and
Tangible Chattel Paper listed in Schedule 12 annexed to the Perfection
Certificate and (ii) each Instrument and each item of Tangible Chattel
Paper listed in Schedule 12 annexed to the Perfection Certificate has been
properly endorsed, assigned and delivered to, or otherwise subjected to
the control of, the Collateral Agent, accompanied by instruments of
transfer or assignment duly executed in blank (other than the March 2006
Note). If any amount then payable under or in connection with any of the
Pledged Collateral shall be evidenced by any Instrument or Tangible
Chattel Paper, and such amount, together with all amounts payable
evidenced by any Instrument or Tangible Chattel Paper not previously
delivered to the Collateral Agent exceeds $500,000 in the aggregate for
all Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel
Paper shall forthwith endorse, assign and deliver the same to, or
otherwise subjected to the control of, the Collateral Agent, accompanied
by such instruments of transfer or assignment duly executed in blank as
the Collateral Agent may from time to time specify. Notwithstanding the
foregoing, the Pledgors shall not be required to deliver the March 2006
Note to the Collateral Agent unless and until such delivery is required b
Section 5.14 of the Credit Agreement.
(b) Deposit Accounts. (i) Each Pledgor has neither opened nor
maintains any Deposit Accounts other than the accounts listed in Schedule
16 annexed to the Perfection Certificate and (ii) the Collateral Agent has
a perfected First Priority security interest in each Deposit Account
listed in Schedule 16 annexed to the Perfection Certificate by Control
(other than Excluded Accounts). No Pledgor shall hereafter establish and
maintain any Deposit Account unless (1) the applicable Pledgor shall have
given the Collateral Agent 15 days' prior written notice of its intention
to establish such new Deposit Account with a Bank, (2) such Bank shall be
reasonably acceptable to the Collateral Agent and (3) such Bank and such
Pledgor shall have duly executed and delivered to the Collateral Agent a
Deposit Account Control Agreement with respect to such Deposit Account
(other than an Excluded Account). Each Pledgor agrees that at the time it
establishes any additional Deposit Accounts (other than Excluded Accounts)
it shall enter into a duly authorized, executed and delivered Deposit
Account Control Agreement with respect to such Deposit Account. The
Collateral Agent agrees with each Pledgor that the Collateral Agent shall
not give any instructions directing the disposition of funds from time to
time credited to any Deposit Account or withhold any withdrawal rights
from such Pledgor with respect to funds from time to time credited to any
Deposit Account unless an Event of Default has occurred and is continuing.
The provisions of this Section 3.4(b) shall not
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apply to the Collateral Account or to any other Deposit Accounts for which
the Collateral Agent is the Bank. No Pledgor shall grant Control of any
Deposit Account (other than a Deposit Account which is deemed an Excluded
Account pursuant to clause (b) of the definition of "Excluded Account") to
any person other than the Collateral Agent and the Second Lien Collateral
Agent. Notwithstanding anything to the contrary herein, no Pledgor shall
be required to deliver a Deposit Account Control Agreement with respect to
the Deposit Accounts designated on Schedule 16 to the Perfection
Certificate as Deposit Accounts to be closed by Borrower; provided that
such Deposit Account are permanently closed not later than ninety (90)
days following the Amendment and Restatement Effective Date.
(c) Investment Property. (i) Each Pledgor (1) has no Securities
Accounts or Commodity Accounts other than those listed in Schedule 16
annexed to the Perfection Certificate and the Collateral Agent has a
perfected First Priority security interest (subject to Permitted
Collateral Liens) in such Securities Accounts and Commodity Accounts
(other than Excluded Accounts) by Control, (2) does not hold, own or have
any interest in any certificated securities or uncertificated securities
other than those constituting Pledged Securities and those maintained in
Securities Accounts or Commodity Accounts listed in Schedule 16 annexed to
the Perfection Certificate and (3) as of the Amendment and Restatement
Effective Date, has entered into a duly authorized, executed and delivered
Securities Account Control Agreement or a Commodity Account Control
Agreement with respect to each Securities Account or Commodity Account
listed in Schedule 16 annexed to the Perfection Certificate (other than
Excluded Accounts), as applicable.
(ii) If any Pledgor shall at any time hold or acquire any
certificated securities constituting Investment Property, such Pledgor
shall promptly (a) endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly
executed in blank, all in form and substance reasonably satisfactory to
the Collateral Agent or (b) deliver such securities into a Securities
Account with respect to which a Control Agreement is in effect in favor of
the Collateral Agent. If any securities now or hereafter acquired by any
Pledgor constituting Investment Property are uncertificated and are issued
to such Pledgor or its nominee directly by the issuer thereof, such
Pledgor shall promptly notify the Collateral Agent thereof and pursuant to
an agreement in form and substance satisfactory to the Collateral Agent,
either (a) cause the issuer to agree to comply with instructions from the
Collateral Agent as to such securities, without further consent of any
Pledgor or such nominee, (b) cause a Security Entitlement with respect to
such uncertificated security to be held in a Securities Account with
respect to which the Collateral Agent has Control or (c) arrange for the
Collateral Agent to become the registered owner of the securities. Pledgor
shall not hereafter establish and maintain any Securities Account or
Commodity Account with any Securities Intermediary or Commodity
Intermediary unless (1) the applicable Pledgor shall have given the
Collateral Agent 30 days' (or such shorter period as the Collateral Agent
may approve) prior written notice of its intention to establish such new
Securities Account or Commodity Account
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with such Securities Intermediary or Commodity Intermediary, (2) such
Securities Intermediary or Commodity Intermediary shall be reasonably
acceptable to the Collateral Agent and (3) such Securities Intermediary or
Commodity Intermediary, as the case may be, and such Pledgor shall have
duly executed and delivered a Control Agreement with respect to such
Securities Account or Commodity Account, as the case may be, upon which
Schedule 16 shall be deemed to be amended to cover such additional
Collateral. Each Pledgor shall accept any cash and Investment Property in
trust for the benefit of the Collateral Agent and within three (3)
Business Days of actual receipt thereof, deposit any cash or Investment
Property and any new securities, instruments, documents or other property
by reason of ownership of the Investment Property (other than payments of
a kind described in Section 7.4 hereof) received by it into a Controlled
Account. The Collateral Agent agrees with each Pledgor that the Collateral
Agent shall not give any Entitlement Orders or instructions or directions
to any issuer of uncertificated securities, Securities Intermediary or
Commodity Intermediary, and shall not withhold its consent to the exercise
of any withdrawal or dealing rights by such Pledgor, unless an Event of
Default has occurred and is continuing, or, after giving effect to any
such investment and withdrawal rights would occur. The provisions of this
Section 3.4(c) shall not apply to any Financial Assets credited to a
Securities Account for which the Collateral Agent is the Securities
Intermediary. No Pledgor shall grant control over any Investment Property
(other than a Deposit Account which is deemed an Excluded Account pursuant
to clause (b) of the definition of "Excluded Account") to any person other
than the Collateral Agent and the Second Lien Collateral Agent.
(iii) As between the Collateral Agent and the Pledgors, the Pledgors
shall bear the investment risk with respect to the Investment Property and
Pledged Securities, and the risk of loss of, damage to, or the destruction
of the Investment Property and Pledged Securities, whether in the
possession of, or maintained as a security entitlement or deposit by, or
subject to the control of, the Collateral Agent, a Securities
Intermediary, Commodity Intermediary, any Pledgor or any other person;
provided, however, that nothing contained in this Section 3.4(c) shall
release or relieve any Securities Intermediary or Commodity Intermediary
of its duties and obligations to the Pledgors or any other person under
any Control Agreement or under applicable law. Each Pledgor shall promptly
pay all Claims and fees of whatever kind or nature with respect to the
Investment Property and Pledged Securities pledged by it under this
Agreement. In the event any Pledgor shall fail to make such payment
contemplated in the immediately preceding sentence, the Collateral Agent
may do so for the account of such Pledgor and the Pledgors shall promptly
reimburse and indemnify the Collateral Agent from all costs and expenses
incurred by the Collateral Agent under this Section 3.4(c) in accordance
with Section 11.03 of the Credit Agreement.
(d) Electronic Chattel Paper and Transferable Records. No amount
under or in connection with any of the Pledged Collateral is evidenced by
any Electronic Chattel Paper or any "transferable record" (as that term is
defined in Section 201 of the Federal
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Electronic Signatures in Global and National Commerce Act, or in Section
16 of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction) other than such Electronic Chattel Paper and transferable
records listed in Schedule 12 annexed to the Perfection Certificate. If
any amount payable under or in connection with any of the Pledged
Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel Paper
or transferable record shall promptly notify the Collateral Agent thereof
and shall take such action as the Collateral Agent may reasonably request
to vest in the Collateral Agent control under UCC Section 9-105 of such
Electronic Chattel Paper or control under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or, as the case
may be, Section 16 of the Uniform Electronic Transactions Act, as so in
effect in such jurisdiction, of such transferable record. The requirement
in the preceding sentence shall apply to the extent that such amount,
together with all amounts payable evidenced by Electronic Chattel Paper or
any transferable record in which the Collateral Agent has not been vested
control within the meaning of the statutes described in this sentence
exceeds $500,000 in the aggregate for all Pledgors. The Collateral Agent
agrees with such Pledgor that the Collateral Agent will arrange, pursuant
to procedures satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent's loss of control, for
the Pledgor to make alterations to the Electronic Chattel Paper or
transferable record permitted under UCC Section 9-105 or, as the case may
be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions
Act for a party in control to allow without loss of control, unless an
Event of Default has occurred and is continuing or would occur after
taking into account any action by such Pledgor with respect to such
Electronic Chattel Paper or transferable record.
(e) Letter-of-Credit Rights. If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor of
such Pledgor, other than a Letter of Credit issued pursuant to the Credit
Agreement, such Pledgor shall promptly notify the Collateral Agent thereof
and such Pledgor shall, at the request of the Collateral Agent, pursuant
to an agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) arrange for the issuer and any confirmer of
such Letter of Credit to consent to an assignment to the Collateral Agent
of the proceeds of any drawing under the Letter of Credit or (ii) arrange
for the Collateral Agent to become the transferee beneficiary of such
Letter of Credit, with the Collateral Agent agreeing, in each case, that
the proceeds of any drawing under the Letter of Credit are to be applied
as provided in the Credit Agreement. The actions in the preceding sentence
shall be taken to the extent that the amount under such Letter of Credit,
together with all amounts under Letters of Credit for which the actions
described above in clause (i) and (ii) have not been taken, exceeds
$500,000 in the aggregate for all Pledgors.
(f) Commercial Tort Claims. As of the Amendment and Restatement
Effective Date each Pledgor hereby represents and warrants that it holds
no Commercial Tort
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Claims other than those listed in Schedule 15 annexed to the Perfection
Certificate. If any Pledgor shall at any time hold or acquire a Commercial
Tort Claim having a value together with all other Commercial Tort Claims
of all Pledgors in which the Collateral Agent does not have a security
interest in excess of $500,000 in the aggregate, such Pledgor shall
immediately notify the Collateral Agent in writing signed by such Pledgor
of the brief details thereof and grant to the Collateral Agent in such
writing a security interest therein and in the Proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Collateral Agent.
(g) Landlord's Access Agreements/Bailee Letters. Each Pledgor shall
use commercially reasonable efforts to obtain a Bailee Letter, Landlord
Access Agreement and/or landlord's lien waiver, as applicable, from all
such bailees and landlords, as applicable, who from time to time have
possession of Pledged Collateral in the ordinary course of such Pledgor's
business and if reasonably requested by the Collateral Agent. A waiver of
bailee's lien shall not be required if the value of the Pledged Collateral
held by such bailee is less then $250,000, provided that the aggregate
value of the Pledged Collateral held by all bailees who have not delivered
a Bailee Letter is less than $500,000 in the aggregate.
(h) Motor Vehicles. Upon the request of the Collateral Agent, each
Pledgor shall deliver to the Collateral Agent originals of the
certificates of title or ownership for the motor vehicles (and any other
Equipment covered by Certificates of Title or ownership) owned by it with
the Collateral Agent listed as lienholder therein. Such requirement shall
apply to the Pledgors if any such motor vehicle (or any such other
Equipment) is valued at over $150,000, provided that the value of all such
motor vehicles (and such Equipment as to which any Pledgor has not
delivered a Certificate of Title or ownership) is over $1,000,000.
SECTION 3.5. Joinder of Additional Guarantors. The Pledgors shall
cause each Subsidiary of the Borrower which, from time to time, after the
Amendment and Restatement Effective Date shall be required to pledge any assets
to the Collateral Agent for the benefit of the respective Secured Parties
pursuant to the provisions of the Credit Agreement, (a) in the case of a
Subsidiary organized in the United States, to execute and deliver to the
Collateral Agent (i) a Joinder Agreement substantially in the form of Exhibit 3
annexed hereto within thirty (30) Business Days (or such longer period agreed to
by the Collateral Agent in its sole discretion) of the date on which it was
acquired or created and (ii) a Perfection Certificate, in each case, within
thirty (30) Business Days (or such longer period agreed to by the Collateral
Agent in its sole discretion) of the date on which it was acquired or created,
or (b) in the case of a Subsidiary organized outside of the United States
required to pledge any assets to the Collateral Agent, to execute and deliver
such documentation as the Collateral Agent shall reasonably request and, in each
case, upon such execution and delivery, such Subsidiary shall constitute a
"Guarantor" and a "Pledgor" for all purposes hereunder with the same force and
effect as if originally named as a Guarantor and Pledgor herein. The execution
and delivery of such Joinder Agreements shall
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not require the consent of any Pledgor hereunder. The rights and obligations of
each Pledgor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor or Borrower and Pledgor as a party to this
Agreement.
SECTION 3.6. Supplements; Further Assurances. Each Pledgor shall
take such further actions, and execute and deliver to the Collateral Agent such
additional assignments, agreements, supplements, powers and instruments, as the
Collateral Agent may in its reasonable judgment deem necessary or appropriate,
wherever required by law, in order to perfect, preserve and protect the security
interest in the Pledged Collateral as provided herein and the rights and
interests granted to the Collateral Agent hereunder, to carry into effect the
purposes hereof or better to assure and confirm unto the Collateral Agent the
Pledged Collateral or permit the Collateral Agent to exercise and enforce its
rights, powers and remedies hereunder with respect to any Pledged Collateral.
Without limiting the generality of the foregoing, each Pledgor shall make,
execute, endorse, acknowledge, file or refile and/or deliver to the Collateral
Agent from time to time upon reasonable request such lists, descriptions and
designations of the Pledged Collateral, copies of warehouse receipts, receipts
in the nature of warehouse receipts, bills of lading, documents of title,
vouchers, invoices, schedules, confirmatory assignments, supplements, additional
security agreements, conveyances, financing statements, transfer endorsements,
powers of attorney, certificates, reports and other assurances or instruments as
the Collateral Agent shall reasonably request. If an Event of Default has
occurred and is continuing, the Collateral Agent may institute and maintain, in
its own name or in the name of any Pledgor, such suits and proceedings as the
Collateral Agent may be advised by counsel shall be necessary or expedient to
prevent any impairment of the security interest in or the perfection thereof in
the Pledged Collateral. All of the foregoing shall be at the sole cost and
expense of the Pledgors.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants as follows:
SECTION 4.1. Title. Except for the security interest granted to the
Collateral Agent for the ratable benefit of the Secured Parties pursuant to this
Agreement and Permitted Collateral Liens, such Pledgor owns and, as to Pledged
Collateral acquired by it from time to time after the Amendment and Restatement
Effective Date, will own the rights in each item of Pledged Collateral pledged
by it hereunder free and clear of any and all Liens or claims of others other
than Permitted Collateral Liens. In addition, no Liens or claims exist on the
Securities Collateral, other than as permitted by Section 6.02 of the Credit
Agreement. Such Pledgor has not filed, nor authorized any third party to file a
financing statement or other public notice with respect to all or any part of
the Pledged Collateral on file or of record in any public office, except such as
have been filed in favor of the Collateral Agent pursuant to this Agreement or
as are permitted by the Credit Agreement or financing statements or public
notices relating to the ter-
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mination statements listed on Schedule 9 to the Perfection Certificate. No
person other than the Collateral Agent has control or possession of all or any
part of the Pledged Collateral, except as permitted by the Credit Agreement.
SECTION 4.2. Validity of Security Interest. The security interest in
and Lien on the Pledged Collateral granted to the Collateral Agent for the
benefit of the Secured Parties hereunder constitutes and will at all time
constitute (a) a legal and valid security interest in all the Pledged Collateral
securing the payment and performance of the Obligations, and (b) subject to the
filing of (i) the Patent Security Agreement and the Trademark Security Agreement
in the U.S. Patent and Trademark Office within three months of the date of such
grant (ii) the Copyright Security Agreement in the U.S. Copyright Office within
one month after its execution, and (iii) the appropriate Uniform Commercial Code
financing statements, and any other filings and actions described in Schedule 7
annexed to the Perfection Certificate, a perfected continuing security interest
in all the Pledged Collateral (other than the Pledged Collateral in which a
security interest cannot be perfected under the UCC or other applicable law),
provided, however, that the subsequent recordation of one or more of the
documents attached hereto as Exhibit 6, 7 or 8 may be necessary to perfect the
security interest in any issued registrations and applications for other U.S.
Copyrights, Patents or Trademarks that are acquired by any of the Pledgors after
the date of the this Agreement and additional filings and/or other actions may
be necessary to perfect the Collateral Agent's security interest in any
Copyrights, Patents or Trademarks that are created under the laws of
jurisdictions outside the United States.
SECTION 4.3. Defense of Claims; Transferability of Pledged
Collateral. Each Pledgor shall, at its own cost and expense, defend title to the
Pledged Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Collateral Agent and the priority thereof against
all claims and demands of all persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Collateral Agent or any other
Secured Party other than Permitted Collateral Liens (other than Contested
Liens). There is no agreement, and no Pledgor shall enter into any agreement or
take any other action, that would restrict the transferability of any of the
Pledged Collateral or otherwise impair or conflict with such Pledgors'
obligations or the rights of the Collateral Agent hereunder.
SECTION 4.4. Other Financing Statements. It has not filed, nor
authorized any third party to file (nor will there be any) valid or effective
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Pledged Collateral other than financing statements and other
statements and instruments relating to Permitted Collateral Liens. So long as
any of the Obligations remain unpaid, no Pledgor shall execute, authorize or
permit to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction)
relating to any Pledged Collateral, except financing statements and other
statements and instruments filed or to be filed in respect of and covering the
security interests granted by such Pledgor to the holder of the Permitted
Collateral Liens.
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SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction of
Organization.
(a) It shall comply with the provisions of Section 5.13(a) of the
Credit Agreement.
(b) The Collateral Agent may rely on opinions of counsel as to
whether any or all UCC financing statements of the Pledgors need to be amended
as a result of any of the changes described in Section 5.13(a) of the Credit
Agreement. If any Pledgor fails to provide information to the Collateral Agent
about such changes on a timely basis, the Collateral Agent shall not be liable
or responsible to any party for any failure to maintain a perfected security
interest in such Pledgor's property constituting Pledged Collateral, for which
the Collateral Agent needed to have information relating to such changes. The
Collateral Agent shall not have any duty to inquire about such changes if any
Pledgor does not inform the Collateral Agent of such changes, the parties
acknowledging and agreeing that it would not be feasible or practical for the
Collateral Agent to search for information on such changes if such information
is not provided by any Pledgor.
SECTION 4.6. Location of Inventory and Equipment. It shall not move
any Equipment or Inventory to any location other than any location that is
listed in the relevant Schedules to the Perfection Certificate unless (i) it
shall have given the Collateral Agent not less than 30 days' prior written
notice (or such lesser notice period agreed to by the Collateral Agent in its
sole discretion) (in the form of an Officers' Certificate) of its intention so
to do, clearly describing such new location and providing such other information
in connection therewith as the Collateral Agent may request and (ii) with
respect to such new location, such Pledgor shall have taken all action
reasonably satisfactory to the Collateral Agent to maintain the perfection and
priority of the security interests of the Collateral Agent for the benefit of
the Secured Parties in the Pledged Collateral intended to be granted hereby,
including using commercially reasonable efforts to obtain waivers of landlord's
or warehousemen's and/or bailee's liens with respect to such new location, if
applicable, and if requested by the Collateral Agent. Such Pledgor agrees to
provide the Collateral Agent with prompt notice following the movement of any
Equipment (except for Equipment which is in the process of being moved to a
location listed in the Schedules to the Perfection Certificate and which is
temporarily located at another location) or Inventory to any location other than
one that is listed in the relevant Schedules to the Perfection Certificate.
SECTION 4.7. Due Authorization and Issuance. All of the Initial
Pledged Shares have been, and to the extent any Pledged Shares are hereafter
issued, such Pledged Shares will be, upon such issuance, duly authorized,
validly issued and fully paid and non-assessable. All of the Initial Pledged
Interests have been fully paid for, and there is no amount or other obligation
owing by any Pledgor to any issuer of the Initial Pledged Interests in exchange
for or in connection with the issuance of the Initial Pledged Interests or any
Pledgor's status as a partner or a member of any issuer of the Initial Pledged
Interests.
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SECTION 4.8. Consents, etc. In the event that the Collateral Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Collateral Agent, such
Pledgor agrees to use its best efforts to assist and aid the Collateral Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.
SECTION 4.9. Pledged Collateral. All information set forth herein,
including the schedules annexed hereto, and all information contained in any
documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto, in connection
with this Agreement, in each case, relating to the Pledged Collateral, is
accurate and complete in all material respects as of the time given. The Pledged
Collateral described on the schedules annexed to the Perfection Certificate
constitutes all of the property of such type of Pledged Collateral owned or held
by the Pledgors as of the Amendment and Restatement Effective Date.
SECTION 4.10. Insurance. In the event that the proceeds of any
insurance claim are paid after the Collateral Agent has exercised its right to
foreclose after an Event of Default, such Net Cash Proceeds shall be paid to the
Collateral Agent to satisfy any deficiency remaining after such foreclosure.
SECTION 4.11. Payment of Taxes; Compliance with Laws; Contesting
Liens; Claims. Each Pledgor represents and warrants that all Claims imposed upon
or assessed against the Pledged Collateral have been paid and discharged except
to the extent such Claims constitute a Lien not yet due and payable which is a
Contested Lien or a Permitted Collateral Lien. Each Pledgor shall comply with
all Requirements of Law applicable to the Pledged Collateral the failure to
comply with which would, individually or in the aggregate, have a Material
Adverse Effect. Each Pledgor may at its own expense contest the validity, amount
or applicability of any Claims so long as the contest thereof shall be conducted
in accordance with, and permitted pursuant to the provisions of, the Credit
Agreement. Notwithstanding the foregoing provisions of this Section 4.11, (i) no
contest of any such obligation may be pursued by such Pledgor if such contest
would expose the Collateral Agent or any other Secured Party to (A) any possible
criminal liability or (B) any additional civil liability for failure to comply
with such obligations unless such Pledgor shall have furnished a bond or other
security therefor satisfactory to the Collateral Agent, or such Secured Party,
as the case may be and (ii) if at any time payment or performance of any
obligation contested by such Pledgor pursuant to this Section 4.11 shall become
necessary to prevent the imposition of remedies because of non-payment, such
Pledgor shall pay or perform the same in sufficient time to prevent the
imposition of remedies in respect of such default or prospective default.
SECTION 4.12. Access to Pledged Collateral, Books and Records; Other
Information. Upon reasonable request to each Pledgor, the Collateral Agent, its
agents, accountants
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and attorneys shall have full and free access to visit and inspect, as
applicable, during normal business hours and such other reasonable times as may
be requested by the Collateral Agent all of the Pledged Collateral and Mortgaged
Property including all of the books, correspondence and records of such Pledgor
relating thereto. The Collateral Agent and its representatives may examine the
same, take extracts therefrom and make photocopies thereof, and such Pledgor
agrees to render to the Collateral Agent, at such Pledgor's cost and expense,
such clerical and other assistance as may be reasonably requested by the
Collateral Agent with regard thereto. Such Pledgor shall, at any and all times,
within a reasonable time after written request by the Collateral Agent, furnish
or cause to be furnished to the Collateral Agent, in such manner and in such
detail as may be reasonably requested by the Collateral Agent, additional
information with respect to the Pledged Collateral.
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral. Each
Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of
any person, accept the same in trust for the benefit of the Collateral Agent and
forthwith deliver to the Collateral Agent a pledge amendment, duly executed by
such Pledgor, in substantially the form of Exhibit 2 annexed hereto (each, a
"Pledge Amendment"), and the certificates and other documents required under
Section 3.1 and Section 3.2 hereof in respect of the additional Pledged
Securities or Intercompany Notes which are to be pledged pursuant to this
Agreement, and confirming the attachment of the Lien hereby created on and in
respect of such additional Pledged Securities or Intercompany Notes. Each
Pledgor hereby authorizes the Collateral Agent to attach each Pledge Amendment
to this Agreement and agrees that all Pledged Securities or Intercompany Notes
listed on any Pledge Amendment delivered to the Collateral Agent shall for all
purposes hereunder be considered Pledged Collateral.
SECTION 5.2. Voting Rights; Distributions; etc.
(i) So long as no Event of Default shall have occurred and be
continuing:
(A) Each Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Securities Collateral or any
part thereof for any purpose not inconsistent with the terms or purposes
hereof, the Credit Agreement or any other document evidencing the
Obligations; provided, however, that no Pledgor shall in any event
exercise such rights in any manner which could reasonably be expected to
have a Material Adverse Effect.
(B) Each Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Lien hereof, any and all Distributions, but
only if and to the extent made in
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accordance with the provisions of the Credit Agreement; provided, however,
that any and all such Distributions consisting of rights or interests in
the form of securities shall be forthwith delivered to the Collateral
Agent to hold as Pledged Collateral and shall, if received by any Pledgor,
be received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of such Pledgor and be
forthwith delivered to the Collateral Agent as Pledged Collateral in the
same form as so received (with any necessary endorsement).
(ii) The Collateral Agent shall be deemed without further action or
formality to have granted to each Pledgor all necessary consents relating to
voting rights and shall, if necessary, upon written request of any Pledgor and
at the sole cost and expense of the Pledgors, from time to time execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
instruments as such Pledgor may reasonably request in order to permit such
Pledgor to exercise the voting and other rights which it is entitled to exercise
pursuant to Section 5.2(i)(A) hereof and to receive the Distributions which it
is authorized to receive and retain pursuant to Section 5.2(i)(B) hereof.
(iii) Upon the occurrence and during the continuance of any Event of
Default:
(A) All rights of each Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to
Section 5.2(i)(A) hereof shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall thereupon have the sole
right to exercise such voting and other consensual rights.
(B) All rights of each Pledgor to receive Distributions which it
would otherwise be authorized to receive and retain pursuant to Section
5.2(i)(B) hereof shall cease and all such rights shall thereupon become
vested in the Collateral Agent, which shall thereupon have the sole right
to receive and hold as Pledged Collateral such Distributions.
(iv) Each Pledgor shall, at its sole cost and expense, from time to
time execute and deliver to the Collateral Agent appropriate instruments as the
Collateral Agent may request in order to permit the Collateral Agent to exercise
the voting and other rights which it may be entitled to exercise pursuant to
Section 5.2(i)(A) hereof and to receive all Distributions which it may be
entitled to receive under Section 5.2(i)(B) hereof.
(v) All Distributions which are received by any Pledgor contrary to
the provisions of Section 5.2(i)(B) hereof shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of such
Pledgor and shall immediately be paid over to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary endorsement).
SECTION 5.3. Defaults, etc. Such Pledgor represents and warrants
that (a) it is not in default in the payment of any portion of any mandatory
capital contribution, if any, re-
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quired to be made under any agreement to which such Pledgor is a party relating
to the Pledged Securities pledged by it, and such Pledgor is not in violation of
any other provisions of any such agreement to which such Pledgor is a party, or
otherwise in default or violation thereunder, and (b) no Securities Collateral
pledged by such Pledgor is subject to any defense, offset or counterclaim, nor
have any of the foregoing been asserted or alleged against such Pledgor by any
person with respect thereto, and as of the Amendment and Restatement Effective
Date, there are no certificates, instruments, documents or other writings (other
than the Organizational Documents and certificates, if any, delivered to the
Collateral Agent) which evidence any Pledged Securities of such Pledgor.
SECTION 5.4. Certain Agreements of Pledgors as Issuers and Holders
of Equity Interests.
(i) In the case of each Pledgor which is an issuer of Securities
Collateral, such Pledgor agrees to be bound by the terms of this Agreement
relating to the Securities Collateral issued by it and will comply with such
terms insofar as such terms are applicable to it.
(ii) In the case of each Pledgor which is a partner in a
partnership, limited liability company or other entity, such Pledgor hereby
consents to the extent required by the applicable Organizational Document to the
pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged
Interests in such partnership, limited liability company or other entity and,
upon the occurrence and during the continuance of an Event of Default, to the
transfer of such Pledged Interests to the Collateral Agent or its nominee and to
the substitution of the Collateral Agent or its nominee as a substituted partner
or member in such partnership, limited liability company or other entity with
all the rights, powers and duties of a general partner or a limited partner or
member, as the case may be.
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License. For the purpose of enabling the
Collateral Agent, during the continuance of an Event of Default, to exercise
rights and remedies under Article IX hereof at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, each Pledgor hereby grants to the Collateral Agent, to the extent
assignable, an irrevocable during the term of this Agreement, non-exclusive
license to use, assign, license or sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Pledgor, wherever the same
may be located; provided, however, that (i) in the case of Trademarks and any
property of similar nature, the foregoing shall be subject to sufficient rights
to quality control and inspection in favor of the applicable Pledgor to avoid
the risk of invalidation of said Trademarks and property of a similar nature and
(ii) the
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foregoing license grant is subject to any exclusive licenses granted by any
Pledgor in compliance with the provisions of this Agreement prior to the
occurrence of an Event of Default. Such license shall include access to all
media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout hereof.
SECTION 6.2. Protection of Collateral Agent's Security. On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i) promptly
following its becoming aware thereof, notify the Collateral Agent of (A) any
materially adverse determination in any proceeding in the United States Patent
and Trademark Office or the United States Copyright Office with respect to any
material Patent, Trademark or Copyright or (B) the institution of any proceeding
or any adverse determination in any federal, state or local court or
administrative body regarding such Pledgor's claim of ownership in or right to
use any of the Intellectual Property Collateral material to the business of such
Pledgor, its right to register such Intellectual Property Collateral or its
right to keep and maintain such registration in full force and effect, (ii)
maintain the Intellectual Property Collateral material to the business of such
Pledgor as presently used and operated and as contemplated by the Credit
Agreement, (iii) not permit to lapse or become abandoned any Intellectual
Property Collateral material to the business of such Pledgor as presently used
and operated and as contemplated by the Credit Agreement, and not settle or
compromise any pending or future litigation or administrative proceeding with
respect to such Intellectual Property Collateral, in each case except as shall
be consistent with commercially reasonable business judgment, (iv) upon such
Pledgor obtaining knowledge thereof, promptly notify the Collateral Agent in
writing of any event which may be reasonably expected to materially and
adversely affect the value or utility of the Intellectual Property Collateral or
any portion thereof material to the business of such Pledgor, the ability of
such Pledgor or the Collateral Agent to dispose of the Intellectual Property
Collateral material to the business of such Pledgor or any portion thereof or
the rights and remedies of the Collateral Agent in relation thereto including a
levy or threat of levy or any legal process against the Intellectual Property
Collateral material to the business of such Pledgor or any portion thereof, (v)
not license the Intellectual Property Collateral other than licenses entered
into by such Pledgor in, or incidental to, the ordinary course of business, or
amend or permit the amendment of any of the licenses in a manner that materially
and adversely affects the right to receive payments thereunder, or in any manner
that would materially impair the value of the Intellectual Property Collateral
material to the business of such Pledgor or the Lien on and security interest in
the Intellectual Property Collateral intended to be granted to the Collateral
Agent for the benefit of the Secured Parties, without the consent of the
Collateral Agent, and (vi) furnish to the Collateral Agent from time to time
upon the Collateral Agent's request therefor reasonably detailed statements and
amended schedules further identifying and describing the Intellectual Property
Collateral and such other materials evidencing or reports pertaining to the
Intellectual Property Collateral as the Collateral Agent may from time to time
reasonably request.
SECTION 6.3. After-Acquired Property. If any Pledgor shall, at any
time before the Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of the Credit
Agreement or the Security Documents, survive
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the termination thereof), (i) obtain any rights to any additional Intellectual
Property Collateral or (ii) become entitled to the benefit of any additional
Intellectual Property Collateral or any renewal or extension thereof, including
any reissue, divisional, continuation, or continuation-in-part of any
Intellectual Property Collateral, or any improvement on any Intellectual
Property Collateral, the provisions hereof shall automatically apply thereto and
any such item enumerated in clause (i) or (ii) of this Section 6.3 with respect
to such Pledgor shall automatically constitute Intellectual Property Collateral
if such would have constituted Intellectual Property Collateral at the time of
execution hereof and be subject to the Lien and security interest created by
this Agreement without further action by any party. Each Pledgor shall promptly
(i) provide to the Collateral Agent written notice of any Intellectual Property
Collateral which is the subject of a registration or application and is acquired
by, filed by or issued to such Pledgor after the date hereof and (ii) confirm
the attachment of the Lien and security interest created by this Agreement to
any rights described in clauses (i) and (ii) of the immediately preceding
sentence of this Section 6.3 by execution of an instrument in form reasonably
acceptable to the Collateral Agent and the filing of any instruments or
statements as shall be reasonably necessary to preserve, protect or perfect the
Collateral Agent's security interests in such Intellectual Property Collateral.
Further, each Pledgor authorizes the Collateral Agent to modify this Agreement
by amending Schedules 14(a) and 14(b) annexed to the Perfection Certificate to
include any such Intellectual Property Collateral acquired or arising after the
Amendment and Restatement Effective Date of such Pledgor.
SECTION 6.4. Litigation. Unless there shall occur and be continuing
any Event of Default, each Pledgor shall have the right to commence and
prosecute in its own name, as the party in interest, for its own benefit and at
the sole cost and expense of the Pledgors, such applications for protection of
the Intellectual Property Collateral and suits, proceedings or other actions to
prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the Intellectual
Property Collateral. Upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent shall have the right but shall in no way be
obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Collateral Agent or
the Secured Parties to enforce the Intellectual Property Collateral. In the
event of such suit, each Pledgor shall, at the reasonable request of the
Collateral Agent, do any and all lawful acts and execute any and all documents
reasonably requested by the Collateral Agent in aid of such enforcement and the
Pledgors shall promptly reimburse and indemnify the Collateral Agent for all
costs and expenses incurred by the Collateral Agent in the exercise of its
rights under this Section 6.4 in accordance with Section 11.03 of the Credit
Agreement. In the event that the Collateral Agent shall elect not to bring such
suit to enforce the Intellectual Property Collateral, each Pledgor agrees, at
the reasonable request of the Collateral Agent, to take all commercially
reasonable actions necessary, whether by suit, proceeding or other action, to
prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value of or other damage to any of the Intellectual Property
Collateral by others and for that purpose agrees to use commercially reasonable
efforts to diligently maintain any suit, proceeding or other action against any
person so infringing necessary to prevent such infringement.
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ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records. Each Pledgor shall keep and
maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Each Pledgor shall, at such Pledgor's sole
cost and expense, upon the Collateral Agent's demand made at any time after the
occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Accounts, including all documents evidencing Accounts and
any books and records relating thereto to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Pledgor). Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent may transfer a full and complete copy of any
Pledgor's books, records, credit information, reports, memoranda and all other
writings relating to the Accounts to and for the use by any person that has
acquired or is contemplating acquisition of an interest in the Accounts or the
Collateral Agent's security interest therein without the consent of any Pledgor.
SECTION 7.2. Legend. Each Pledgor shall legend, at the reasonable
request of the Collateral Agent and in form and manner reasonably satisfactory
to the Collateral Agent, the Accounts and the other books, records and documents
of such Pledgor evidencing or pertaining to the Accounts with an appropriate
reference to the fact that the Accounts have been assigned to the Collateral
Agent for the benefit of the Secured Parties and that the Collateral Agent has
security interests therein.
SECTION 7.3. Modification of Terms, etc. No Pledgor shall rescind or
cancel any obligations evidenced by any Account or modify any term thereof or
make any adjustment with respect thereto except in the ordinary course of
business consistent with prudent business practice, or extend or renew any such
obligations except in the ordinary course of business consistent with prudent
business practice or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto or sell any Account or interest therein except in
the ordinary course of business consistent with prudent business practice
without the prior written consent of the Collateral Agent. Each Pledgor shall in
all material respects timely fulfill all obligations on its part to be fulfilled
under or in connection with the Accounts.
SECTION 7.4. Collection. Each Pledgor shall cause to be collected
from the Account Debtor of each of the Accounts, as and when due in the ordinary
course of business and consistent with prudent business practice (including
Accounts that are delinquent, such Accounts to be collected in accordance with
generally accepted commercial collection procedures), any and all amounts owing
under or on account of such Account, and apply forthwith upon receipt thereof
all such amounts as are so collected to the outstanding balance of such Account,
except that any Pledgor may, with respect to an Account, allow in the ordinary
course of business (i) a
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refund or credit due as a result of returned or damaged or defective merchandise
and (ii) such extensions of time to pay amounts due in respect of Accounts and
such other modifications of payment terms or settlements in respect of Accounts
as shall be commercially reasonable in the circumstances, all in accordance with
such Pledgor's ordinary course of business consistent with its collection
practices as in effect from time to time. The reasonable costs and expenses
(including attorneys' fees) of collection, in any case, whether incurred by any
Pledgor, the Collateral Agent or any Secured Party, shall be paid by the
Pledgors.
ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral. No Pledgor shall sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral pledged by it hereunder except as permitted by the
Credit Agreement.
ARTICLE IX
REMEDIES
SECTION 9.1. Remedies. Upon the occurrence and during the
continuance of any Event of Default the Collateral Agent may from time to time
exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it, the following
remedies:
(i) Personally, or by agents or attorneys, immediately take
possession of the Pledged Collateral or any part thereof, from any Pledgor
or any other person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon any
Pledgor's premises where any of the Pledged Collateral is located, remove
such Pledged Collateral, remain present at such premises to receive copies
of all communications and remittances relating to the Pledged Collateral
and use in connection with such removal and possession any and all
services, supplies, aids and other facilities of any Pledgor;
(ii) Demand, ▇▇▇ for, collect or receive any money or property at
any time payable or receivable in respect of the Pledged Collateral
including instructing the obligor or obligors on any agreement, instrument
or other obligation constituting part of the Pledged Collateral to make
any payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent, and in connection with any of
the foregoing, compromise, settle, extend the time for payment and make
other modi-
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fications with respect thereto; provided, however, that in the event that
any such payments are made directly to any Pledgor, prior to receipt by
any such obligor of such instruction, such Pledgor shall segregate all
amounts received pursuant thereto in trust for the benefit of the
Collateral Agent and shall promptly (but in no event later than one (1)
Business Day after receipt thereof) pay such amounts to the Collateral
Agent;
(iii) Sell, assign, grant a license to use or otherwise liquidate,
or direct any Pledgor to sell, assign, grant a license to use or otherwise
liquidate, any and all investments made in whole or in part with the
Pledged Collateral or any part thereof, and take possession of the
proceeds of any such sale, assignment, license or liquidation;
(iv) Take possession of the Pledged Collateral or any part thereof,
by directing any Pledgor in writing to deliver the same to the Collateral
Agent at any place or places so designated by the Collateral Agent, in
which event such Pledgor shall at its own expense: (A) forthwith cause the
same to be moved to the place or places designated by the Collateral Agent
and therewith delivered to the Collateral Agent, (B) store and keep any
Pledged Collateral so delivered to the Collateral Agent at such place or
places pending further action by the Collateral Agent and (C) while the
Pledged Collateral shall be so stored and kept, provide such security and
maintenance services as shall be necessary to protect the same and to
preserve and maintain them in good condition. Each Pledgor's obligation to
deliver the Pledged Collateral as contemplated in this Section 9.1(iv) is
of the essence hereof. Upon application to a court of equity having
jurisdiction, the Collateral Agent shall be entitled to a decree requiring
specific performance by any Pledgor of such obligation;
(v) Withdraw all moneys, instruments, securities and other property
in any bank, financial securities, deposit or other account of any Pledgor
constituting Pledged Collateral for application to the Obligations as
provided in Article X hereof;
(vi) Retain and apply the Distributions to the Obligations as
provided in Article X hereof;
(vii) Exercise any and all rights as beneficial and legal owner of
the Pledged Collateral, including perfecting assignment of and exercising
any and all voting, consensual and other rights and powers with respect to
any Pledged Collateral; and
(viii) Exercise all the rights and remedies of a secured party on
default under the UCC, and the Collateral Agent may also in its sole
discretion, without notice except as specified in Section 9.2 hereof,
sell, assign or grant a license to use the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices
and upon such other terms as the Collateral Agent may deem commercially
reasonable. The Collateral Agent or any other Secured Party or any of
their respective Affiliates may be the purchaser, licensee, assignee or
re-
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cipient of any or all of the Pledged Collateral at any such sale and shall
be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Pledged Collateral
sold, assigned or licensed at such sale, to use and apply any of the
Obligations owed to such person as a credit on account of the purchase
price of any Pledged Collateral payable by such person at such sale. Each
purchaser, assignee, licensee or recipient at any such sale shall acquire
the property sold, assigned or licensed absolutely free from any claim or
right on the part of any Pledgor, and each Pledgor hereby waives, to the
fullest extent permitted by law, all rights of redemption, stay and/or
appraisal which it 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 not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. The Collateral Agent may
adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Each
Pledgor hereby waives, to the fullest extent permitted by law, any claims
against the Collateral Agent arising by reason of the fact that the price
at which any Pledged Collateral may have been sold, assigned or licensed
at such a private sale was less than the price which might have been
obtained at a public sale, even if the Collateral Agent accepts the first
offer received and does not offer such Pledged Collateral to more than one
offeree.
SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and agrees
that, to the extent notice of sale or other disposition of Pledged Collateral
shall be required by law, ten (10) days' prior notice to such Pledgor of the
time and place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially reasonable
notification of such matters. No notification need be given to any Pledgor if it
has signed, after the occurrence of an Event of Default, a statement renouncing
or modifying any right to notification of sale or other intended disposition.
SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby
waives, to the fullest extent permitted by applicable law, notice or judicial
hearing in connection with the Collateral Agent's taking possession or the
Collateral Agent's disposition of any of the Pledged Collateral, including any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law: (i)
all damages occasioned by such taking of possession, (ii) all other requirements
as to the time, place and terms of sale or other requirements with respect to
the enforcement of the Collateral Agent's rights hereunder and (iii) all rights
of redemption, appraisal, valuation, stay, extension or moratorium now or
hereafter in force under any applicable law. The Collateral Agent shall not be
liable for any incorrect or improper payment made pursuant to this Article IX in
the absence of gross negligence or willful misconduct. Any sale of, or the grant
of options to purchase, or any other realization upon, any Pledged Collateral
shall operate to divest all right, title, interest, claim and demand, either at
law or in equity, of the applicable Pledgor therein and thereto, and shall be a
perpetual bar both at law and in equity against such Pledgor and against any and
all persons claim-
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ing or attempting to claim the Pledged Collateral so sold, optioned or realized
upon, or any part thereof, from, through or under such Pledgor.
SECTION 9.4. Certain Sales of Pledged Collateral.
(i) Each Pledgor recognizes that, by reason of certain prohibitions
contained in law, rules, regulations or orders of any Governmental Authority,
the Collateral Agent may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those who meet the
requirements of such Governmental Authority. Each Pledgor acknowledges that any
such sales may be at prices and on terms less favorable to the Collateral Agent
than those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such restricted sale shall
be deemed to have been made in a commercially reasonable manner and that, except
as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales.
(ii) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act, and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Securities Collateral and Investment Property, to limit purchasers to
persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the
Collateral Agent than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a registration
statement under the Securities Act), and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Securities Collateral or Investment Property for the period of time necessary to
permit the issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities laws,
even if such issuer would agree to do so.
(iii) Notwithstanding the foregoing, each Pledgor shall, upon the
occurrence and during the continuance of any Event of Default, at the reasonable
request of the Collateral Agent, for the benefit of the Collateral Agent, cause
any registration, qualification under or compliance with any Federal or state
securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of
the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including
registration under the Securities Act (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with all other requirements of any Governmental
Authority. Each Pledgor shall use its commercially reason-
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able efforts to cause the Collateral Agent to be kept advised in writing as to
the progress of each such registration, qualification or compliance and as to
the completion thereof, shall furnish to the Collateral Agent such number of
prospectuses, offering circulars or other documents incident thereto as the
Collateral Agent from time to time may request, and shall indemnify and shall
cause the issuer of the Securities Collateral to indemnify the Collateral Agent
and all others participating in the distribution of such Securities Collateral
against all claims, losses, damages and liabilities caused by any untrue
statement (or alleged untrue statement) of a material fact contained therein (or
in any related registration statement, notification or the like) or by any
omission (or alleged omission) to state therein (or in any related registration
statement, notification or the like) a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iv) If the Collateral Agent determines to exercise its right to
sell any or all of the Securities Collateral or Investment Property, upon
written request, the applicable Pledgor shall from time to time furnish to the
Collateral Agent all such information as the Collateral Agent may request in
order to determine the number of securities included in the Securities
Collateral or Investment Property which may be sold by the Collateral Agent as
exempt transactions under the Securities Act and the rules of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.
(v) Each Pledgor further agrees that a breach of any of the
covenants contained in this Section 9.4 will cause irreparable injury to the
Collateral Agent and other Secured Parties, that the Collateral Agent and the
other Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
9.4 shall be specifically enforceable against such Pledgor, and such Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred and is continuing.
SECTION 9.5. No Waiver; Cumulative Remedies.
(i) No failure on the part of the Collateral Agent to exercise, no
course of dealing with respect to, and no delay on the part of the Collateral
Agent in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy; nor shall the Collateral Agent be
required to look first to, enforce or exhaust any other security, collateral or
guaranties. The remedies herein provided are cumulative and are not exclusive of
any remedies provided by law.
(ii) In the event that the Collateral Agent shall have instituted
any proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Collateral Agent, then and in every such case, the Pledgors, the
Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights,
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remedies and powers of the Collateral Agent and the other Secured Parties shall
continue as if no such proceeding had been instituted.
SECTION 9.6. Certain Additional Actions Regarding Intellectual
Property. If any Event of Default shall have occurred and be continuing, upon
the written demand of the Collateral Agent, each Pledgor shall execute and
deliver to the Collateral Agent an assignment or assignments of the registered
Patents, Trademarks and/or Copyrights and Goodwill and such other documents as
are necessary or appropriate to carry out the intent and purposes hereof. Within
five (5) Business Days of written notice thereafter from the Collateral Agent,
each Pledgor shall make available to the Collateral Agent, to the extent within
such Pledgor's power and authority, such personnel in such Pledgor's employ on
the date of the Event of Default as the Collateral Agent may reasonably
designate to permit such Pledgor to continue, directly or indirectly, to
produce, advertise and sell the products and services sold by such Pledgor under
the registered Patents, Trademarks and/or Copyrights.
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral
Dispositions. The Pledgors shall take all actions required by the Credit
Agreement with respect to any Net Cash Proceeds of any Casualty Event or from
the sale or disposition of any Pledged Collateral.
SECTION 10.2. Application of Proceeds. The proceeds received by the
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, together with any other sums
then held by the Collateral Agent pursuant to this Agreement, in accordance with
the Credit Agreement and the Intercreditor Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent.
(i) The Collateral Agent has been appointed as collateral agent
pursuant to the Credit Agreement. The actions of the Collateral Agent hereunder
are subject to the provisions of the Credit Agreement. The Collateral Agent
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain
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from taking action (including the release or substitution of the Pledged
Collateral), in accordance with this Agreement and the Credit Agreement. The
Collateral Agent may employ agents and attorneys-in-fact in connection herewith
and shall not be liable for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Collateral Agent may resign
and a successor Collateral Agent may be appointed in the manner provided in the
Credit Agreement. Upon the acceptance of any appointment as the Collateral Agent
by a successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent under this Agreement, and the retiring
Collateral Agent shall thereupon be discharged from its duties and obligations
under this Agreement. After any retiring Collateral Agent's resignation, the
provisions hereof shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was a Collateral Agent.
(ii) The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment substantially
equivalent to that which the Collateral Agent, in its individual capacity,
accords its own property consisting of similar instruments or interests, it
being understood that neither the Collateral Agent nor any of the Secured
Parties shall have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Securities Collateral, whether or not the Collateral Agent or
any other Secured Party has or is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve rights against any person with
respect to any Pledged Collateral.
(iii) The Collateral Agent shall be entitled to rely upon any
written notice, statement, certificate, order or other document or any telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper person, and, with respect to all matters pertaining to
this Agreement and its duties hereunder, upon advice of counsel selected by it.
(iv) If any item of Pledged Collateral also constitutes collateral
granted to the Collateral Agent under any other deed of trust, mortgage,
security agreement, pledge or instrument of any type, in the event of any
conflict between the provisions hereof and the provisions of such other deed of
trust, mortgage, security agreement, pledge or instrument of any type in respect
of such collateral, the Collateral Agent, in its sole discretion, shall select
which provision or provisions shall control.
SECTION 11.2. Collateral Agent May Perform; Collateral Agent
Appointed Attorney-in-Fact. If any Pledgor shall fail to perform any covenants
contained in this Agreement (including such Pledgor's covenants to (i) pay the
premiums in respect of all required insurance policies hereunder, (ii) pay
Claims, (iii) make repairs, (iv) discharge Liens or (v) pay or perform any
obligations of such Pledgor under any Pledged Collateral) or if any
representation or warranty on the part of any Pledgor contained herein shall be
breached, the Collateral Agent may
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(but shall not be obligated to) do the same or cause it to be done or remedy any
such breach, and may expend funds for such purpose; provided, however, that the
Collateral Agent shall in no event be bound to inquire into the validity of any
tax, lien, imposition or other obligation which such Pledgor fails to pay or
perform as and when required hereby and which such Pledgor does not contest in
accordance with the provisions of Section 4.11 hereof. Any and all amounts so
expended by the Collateral Agent shall be paid by the Pledgors in accordance
with the provisions of Section 11.03 of the Credit Agreement. Neither the
provisions of this Section 11.2 nor any action taken by the Collateral Agent
pursuant to the provisions of this Section 11.2 shall prevent any such failure
to observe any covenant contained in this Agreement nor any breach of
representation or warranty from constituting an Event of Default. Each Pledgor
hereby appoints the Collateral Agent its attorney-in-fact, with full authority
in the place and stead of such Pledgor and in the name of such Pledgor, or
otherwise, from time to time in the Collateral Agent's discretion to take any
action and to execute any instrument consistent with the terms of the Credit
Agreement, this Agreement and the other Security Documents which the Collateral
Agent may deem necessary or advisable to accomplish the purposes hereof. The
foregoing grant of authority is a power of attorney coupled with an interest and
such appointment shall be irrevocable for the term hereof. Each Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.
SECTION 11.3. Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors, their respective successors and
assigns and (ii) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No
other persons (including any other creditor of any Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Credit Agreement and any Hedging
Agreement.
SECTION 11.4. Termination; Release. The Pledged Collateral shall be
released from the Lien of this Agreement in accordance with the provisions of
Section 6.05 or 6.06, as applicable, of the Credit Agreement and the provisions
of the Intercreditor Agreement. When all the Obligations have been paid in full
and the Commitments of the Lenders to make any Loan or to issue any Letter of
Credit under the Credit Agreement shall have expired or been sooner terminated
and all Letters of Credit have been terminated or cash collateralized in
accordance with the provisions of the Credit Agreement, this Agreement shall
terminate. Subject to the Intercreditor Agreement, upon termination hereof or
any release of Pledged Collateral in accordance with the provisions of the
Credit Agreement, the Collateral Agent shall, upon the request and at the sole
cost and expense of the Pledgors, assign, transfer and deliver to the applicable
Pledgor, against receipt and without recourse to or warranty by the Collateral
Agent except as to the fact that the Collateral Agent has not encumbered the
released assets, such of the Pledged Collateral
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to be released (in the case of a release) as may be in possession of the
Collateral Agent and as shall not have been sold or otherwise applied pursuant
to the terms hereof, and, with respect to any other Pledged Collateral, proper
documents and instruments (including UCC-3 termination statements or releases)
acknowledging the termination hereof or the release of such Pledged Collateral,
as the case may be.
SECTION 11.5. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same shall
be made in accordance with the terms of the Credit Agreement and unless in
writing and signed by the Collateral Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement or any other document evidencing the Obligations, no notice to or
demand on any Pledgor in any case shall entitle any Pledgor to any other or
further notice or demand in similar or other circumstances.
SECTION 11.6. Notices. Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrower set forth in the Credit Agreement and as to the Collateral Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 11.6.
SECTION 11.7. Governing Law; Consent to Jurisdiction and Service of
Process; Waiver of Jury Trial.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York, without regard to conflicts of law
principles that would require the application of the laws of another
jurisdiction.
(b) Each Pledgor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Credit Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or the Credit Agreement shall affect any right that
the Collateral
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Agent may otherwise have to bring any action or proceeding relating to this
Agreement or the Credit Agreement against any Pledgor or its properties in the
courts of any jurisdiction.
(c) Each Pledgor 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 Credit Agreement
in any court referred to in Section 11.09(b) of the Credit Agreement. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in any action or proceeding arising out of or relating to this Agreement
or the Credit Agreement, in the manner provided for notices (other than
telecopy) in Section 11.01 of the Credit Agreement. Nothing in this Agreement or
the Credit Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by applicable law.
(e) Waiver of Jury Trial. Each Pledgor hereby waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
any legal proceeding directly or indirectly arising out of or relating to this
Agreement or the Credit Agreement (whether based on contract, tort or any other
theory). Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section.
SECTION 11.8. Severability of Provisions. Any provision hereof which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.9. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
SECTION 11.10. Business Days. In the event any time period or any
date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.
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SECTION 11.11. Waiver of Stay. Each Pledgor covenants (to the extent
it may lawfully do so) that in the event that such Pledgor or any property or
assets of such Pledgor shall hereafter become the subject of a voluntary or
involuntary proceeding under the Code or such Pledgor shall otherwise be a party
to any federal or state bankruptcy, insolvency, moratorium or similar proceeding
to which the provisions relating to the automatic stay under Section 362 of the
Code or any similar provision in any such law is applicable, then, in any such
case, whether or not the Collateral Agent has commenced foreclosure proceedings
under this Agreement, such Pledgor shall not, and each Pledgor hereby expressly
waives their right to (to the extent it may lawfully do so) at any time insist
upon, plead or in any whatsoever, claim or take the benefit or advantage of any
such automatic stay or such similar provision as it relates to the exercise of
any of the rights and remedies (including any foreclosure proceedings) available
to the Collateral Agent as provided in this Agreement, in any other Security
Document or any other document evidencing the Obligations. Each Pledgor further
covenants (to the extent it may lawfully do so) that it will not hinder, delay
or impede the execution of any power granted herein to the Collateral Agent, but
will suffer and permit the execution of every such power as though no law
relating to any stay or similar provision had been enacted.
SECTION 11.12. No Credit for Payment of Taxes or Imposition. Such
Pledgor shall not be entitled to any credit against the principal, premium, if
any, or interest payable under the Credit Agreement, and such Pledgor shall not
be entitled to any credit against any other sums which may become payable under
the terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.
SECTION 11.13. No Claims Against Collateral Agent. Nothing contained
in this Agreement shall constitute any consent or request by the Collateral
Agent, express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Pledged
Collateral or any part thereof, nor as giving any Pledgor any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against the Collateral Agent in respect thereof
or any claim that any Lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the Lien
hereof.
SECTION 11.14. No Release. Nothing set forth in this Agreement shall
relieve any Pledgor from the performance of any term, covenant, condition or
agreement on such Pledgor's part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any person under or in
respect of any of the Pledged Collateral or shall impose any obligation on the
Collateral Agent or any other Secured Party to perform or observe any such term,
covenant, condition or agreement on such Pledgor's part to be so performed or
observed or shall impose any liability on the Collateral Agent or any other
Secured Party for any act or omission on the part of such Pledgor relating
thereto or for any breach of any representation or warranty on the part of such
Pledgor contained in this Agreement, the Credit Agreement or the other Loan
Documents, or under or in respect of the Pledged Collateral or made in
connec-
-42-
tion herewith or therewith. The obligations of each Pledgor contained in this
Section 11.14 shall survive the termination hereof and the discharge of such
Pledgor's other obligations under this Agreement, the Credit Agreement and the
other Loan Documents.
SECTION 11.15. Obligations Absolute. All obligations of each Pledgor
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Pledgor;
(ii) any lack of validity or enforceability of the Credit Agreement,
any Hedging Agreement or any other Loan Document, or any other agreement
or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to any departure from the Credit Agreement,
any Hedging Agreement or any other Loan Document or any other agreement or
instrument relating thereto;
(iv) any pledge, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Obligations;
(v) any exercise, non-exercise or waiver of any right, remedy, power
or privilege under or in respect hereof, the Credit Agreement, any Hedging
Agreement or any other Loan Document except as specifically set forth in a
waiver granted pursuant to the provisions of Section 11.5 hereof; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Pledgor.
SECTION 11.16. Intercreditor Agreement. In the event of a conflict
between the terms of the Intercreditor Agreement and this Agreement, the terms
of the Intercreditor Agreement shall govern and control.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
S-1
IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have
caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
PGT INDUSTRIES, INC.,
as Pledgor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
and Treasurer
S-2
JLL WINDOW HOLDINGS, INC.,
as Pledgor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
and Treasurer
S-3
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇ Oh
--------------------------
Name: ▇▇▇▇▇▇ Oh
Title: Associate Director,
Banking Products
Services, US
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director,
Banking Products
Services, US
S-4
UBS AG, STAMFORD BRANCH, as Second Lien Collateral Agent under the Original
Security Agreement, acknowledges and accepts the amendment and restatement of
this Agreement as set forth herein.
UBS AG, STAMFORD BRANCH,
as Second Lien Collateral Agent under the
Original Security Agreement
By: /s/ ▇▇▇▇▇▇ Oh
--------------------------
Name: ▇▇▇▇▇▇ Oh
Title: Associate Director,
Banking Products
Services, US
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director,
Banking Products
Services, US