GUARANTY AND COLLATERAL AGREEMENT made by AFTERMARKET TECHNOLOGY CORP. and certain of its Subsidiaries in favor of BANK OF AMERICA, N.A., as Administrative Agent Dated as of March 21, 2006
EXHIBIT
10.2
made
by
and
certain of its Subsidiaries
in
favor
of
BANK
OF
AMERICA, N.A.,
as
Administrative Agent
Dated
as
of March 21, 2006
Page
|
SECTION
1.
|
DEFINED
TERMS
|
1
|
|
1.1
|
Definitions
|
1
|
|
1.2
|
Other
Definitional Provisions
|
4
|
|
SECTION
2.
|
GUARANTEE
|
5
|
|
2.1
|
Guarantee
|
5
|
|
2.2
|
Right
of Contribution
|
5
|
|
2.3
|
No
Subrogation
|
6
|
|
2.4
|
Amendments,
etc. with respect to the Obligations
|
6
|
|
2.5
|
Subordination
|
7
|
|
2.6
|
Guarantee
Absolute and Unconditional
|
7
|
|
2.7
|
Reinstatement
|
8
|
|
2.8
|
Payments
|
8
|
|
SECTION
3.
|
GRANT
OF SECURITY INTEREST
|
8
|
|
SECTION
4.
|
REPRESENTATIONS
AND WARRANTIES
|
9
|
|
4.1
|
Representations
in Credit Agreement
|
9
|
|
4.2
|
Title;
No Other Liens
|
10
|
|
4.3
|
Perfected
First Priority Liens
|
10
|
|
4.4
|
Jurisdiction
of Organization; Chief Executive Office
|
10
|
|
4.5
|
Inventory
and Equipment
|
11
|
|
4.6
|
Farm
Products
|
11
|
|
4.7
|
Investment
Property
|
11
|
|
4.8
|
Receivables
|
11
|
|
4.9
|
Intellectual
Property
|
11
|
|
4.10
|
Commercial
Tort Claims
|
12
|
|
SECTION
5.
|
COVENANTS
|
12
|
|
5.1
|
Covenants
in Credit Agreement
|
12
|
|
5.2
|
Delivery
of Instruments, Certificated Securities and Chattel Paper
|
12
|
|
5.3
|
Maintenance
of Insurance
|
13
|
|
5.4
|
Payment
of Obligations
|
13
|
|
5.5
|
Maintenance
of Perfected Security Interest; Further Documentation
|
13
|
|
5.6
|
Changes
in Locations, Name, etc
|
14
|
|
5.7
|
Notices
|
14
|
|
5.8
|
Investment
Property
|
15
|
|
5.9
|
Receivables
|
16
|
|
5.10
|
Intellectual
Property
|
16
|
|
SECTION
6.
|
REMEDIAL
PROVISIONS
|
17
|
|
6.1
|
Certain
Matters Relating to Receivables
|
17
|
|
6.2
|
Communications
with Obligors; Domestic Loan Parties Remain Liable
|
18
|
|
6.3
|
Pledged
Stock
|
19
|
i
TABLE
OF CONTENTS
(continued)
Page
|
6.4
|
Proceeds
to be Turned Over To Agent
|
20
|
|
6.5
|
Application
of Proceeds
|
20
|
|
6.6
|
Code
and Other Remedies
|
20
|
|
6.7
|
Registration
Rights
|
21
|
|
6.8
|
Deficiency
|
22
|
|
SECTION
7.
|
THE
ADMINISTRATIVE AGENT
|
22
|
|
7.1
|
Agent’s
Appointment as Attorney-in-Fact, etc
|
22
|
|
7.2
|
Duty
of the Administrative Agent
|
24
|
|
7.3
|
Execution
of Financing Statements
|
24
|
|
7.4
|
Authority
of the Administrative Agent
|
24
|
|
|
|
|
|
SECTION
8.
|
MISCELLANEOUS
|
25
|
|
8.1
|
Amendments
in Writing
|
25
|
|
8.2
|
Notices
|
25
|
|
8.3
|
No
Waiver by Course of Conduct; Cumulative Remedies
|
25
|
|
8.4
|
Enforcement
Expenses; Indemnification
|
25
|
|
8.5
|
Successors
and Assigns
|
26
|
|
8.6
|
Set-Off
|
26
|
|
8.7
|
Foreign
Currency
|
26
|
|
8.8
|
Counterparts
|
27
|
|
8.9
|
Severability
|
27
|
|
8.10
|
Section
Headings
|
27
|
|
8.11
|
Integration
|
27
|
|
8.12
|
GOVERNING
LAW
|
27
|
|
8.13
|
Submission
To Jurisdiction; Waivers
|
27
|
|
8.14
|
Acknowledgements
|
28
|
|
8.15
|
WAIVER
OF JURY TRIAL
|
28
|
|
8.16
|
Additional
Domestic Loan Parties
|
28
|
|
8.17
|
Releases
|
28
|
|
SCHEDULES
|
|
|
Schedule
1
|
Notice
Addresses
|
|
Schedule
2
|
Investment
Property
|
|
Schedule
3
|
Perfection
Matters
|
|
Schedule
4
|
Jurisdictions
of Organization and Chief Executive Offices
|
|
Schedule
5
|
Inventory
and Equipment Locations
|
|
Schedule
6
|
Intellectual
Property
|
|
Schedule
7
|
Existing
Lien
|
|
Schedule
8
|
Commercial
Tort Claims
|
ii
GUARANTY
AND
COLLATERAL AGREEMENT, dated as of March 21, 2006, made by each of the
signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Domestic
Loan Parties”),
in
favor of Bank of America, N.A., as Administrative Agent (in such capacity,
the
“Administrative
Agent”)
for
the banks and other financial institutions (the “Lenders”)
from
time to time parties to the Credit Agreement, dated as of March 21, 2006
(as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”),
among
Aftermarket Technology Corp., a Delaware corporation (the “Company”),
certain Subsidiaries of the Company party thereto (each a “Designated
Borrower”
and,
together with the Company, the “Borrowers”
and,
each a “Borrower”),
each
lender from time to time party thereto (collectively, the “Lenders”
and
individually, a “Lender”),
Bank
of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer,
and
JPMorgan Chase Bank, N.A., as Syndication Agent and L/C Issuer.
W
I T
N E S S E T H:
WHEREAS,
pursuant to the Credit Agreement, the Lenders have severally agreed to make
extensions of credit to the Borrowers upon the terms and subject to the
conditions set forth therein;
WHEREAS,
the
Company and the Designated Borrowers are members of an affiliated group of
companies that includes each other Domestic Loan Party;
WHEREAS,
the
proceeds of the extensions of credit under the Credit Agreement will be used
in
part to enable the Borrowers to make valuable transfers to one or more of
the
other Domestic Loan Parties in connection with the operation of their respective
businesses;
WHEREAS,
the
Borrowers and the other Domestic Loan Parties are engaged in related businesses,
and each Domestic Loan Party will derive substantial direct and indirect
benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS,
it
is a condition precedent to the obligation of the Lenders to make their
respective extensions of credit to the Borrowers under the Credit Agreement
that
the Domestic Loan Parties shall have executed and delivered this Agreement
to
the Administrative Agent for the ratable benefit of the Lenders;
NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrowers
thereunder, each Domestic Loan Party hereby agrees with the Administrative
Agent, for the ratable benefit of the Lenders, as follows:
SECTION
1. DEFINED
TERMS
1.1 Definitions.
(a) Unless otherwise defined herein, terms defined in the Credit Agreement
and
used herein shall have the meanings given to them in the Credit Agreement,
and
the following terms are used herein as defined in the New York UCC: Accounts,
Certificated Security, Commercial Tort Claims, Chattel Paper, Deposit Accounts,
Documents, Equipment, Farm Products, Fixtures, Instruments, Inventory, Letter
of
Credit Rights, Securities Accounts and Supporting Obligations.
1
|
(b)
|
The
following terms shall have the following
meanings:
|
“Agreement”:
this
Guaranty and Collateral Agreement, as the same may be amended, supplemented
or
otherwise modified from time to time.
“Collateral”:
as
defined in Section 3.
“Collateral
Account”:
any
collateral account established by the Administrative Agent as provided in
Section 6.1 or 6.4.
“Copyrights”:
(i)
all copyrights arising under the laws of the United States, any other country
or
any political subdivision thereof, whether registered or unregistered and
whether published or unpublished (including, without limitation, those listed
in
Schedule 6),
all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain
all renewals thereof.
“Copyright
Licenses”:
any
written agreement naming any Domestic Loan Party as licensor or licensee
(including, without limitation, those listed in Schedule
6),
granting any right under any Copyright, including, without limitation, the
grant
of rights to manufacture, distribute, exploit and sell materials derived
from
any Copyright.
“Foreign
Subsidiary”:
any
Subsidiary organized under the laws of any jurisdiction outside the United
States of America.
“Foreign
Subsidiary Voting Stock”:
the
voting Capital Stock of any Foreign Subsidiary.
“General
Intangibles”:
all
“general intangibles” as such term is defined in Section 9-102(a)(42) of the
Uniform Commercial Code in effect in the State of New York on the date hereof
and, in any event, including, without limitation, with respect to any Domestic
Loan Party, all contracts, agreements, instruments and indentures in any
form,
and portions thereof, to which such Domestic Loan Party is a party or under
which such Domestic Loan Party has any right, title or interest or to which
such
Domestic Loan Party or any property of such Domestic Loan Party is subject,
as
the same may from time to time be amended, supplemented or otherwise modified,
including, without limitation, (i) all rights of such Domestic Loan Party
to
receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of such Domestic Loan Party to damages arising
thereunder and (iii) all rights of such Domestic Loan Party to perform and
to
exercise all remedies thereunder, in each case to the extent the grant by
such
Domestic Loan Party of a security interest pursuant to this Agreement in
its
right, title and interest in such contract, agreement, instrument or indenture
is not prohibited by such contract, agreement, instrument or indenture without
the consent of any other party thereto, would not give any other party to
such
contract, agreement, instrument or indenture the right to terminate its
obligations thereunder, or is permitted with consent if all necessary consents
to such grant of a security interest have been
obtained
2
from
the
other parties thereto (it being understood that the foregoing shall not be
deemed to obligate such Domestic Loan Party to obtain such consents);
provided,
that
the foregoing limitation shall not affect, limit, restrict or impair the
grant
by such Domestic Loan Party of a security interest pursuant to this Agreement
in
any Receivable or any money or other amounts due or to become due under any
such
contract, agreement, instrument or indenture.
“Intellectual
Property”:
the
collective reference to all rights, priorities and privileges relating to
intellectual property, whether arising under United States, multinational
or
foreign laws or otherwise, including, without limitation, the Copyrights,
the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and
the
Trademark Licenses, and all rights to ▇▇▇ at law or in equity for any
infringement or other impairment thereof, including the right to receive
all
proceeds and damages therefrom.
“Intercompany
Note”:
any
promissory note evidencing loans made by any Domestic Loan Party to the Company
or any of its Subsidiaries.
“Investment
Property”:
the
collective reference to (a) all “investment property” as such term is defined in
Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary
Voting Stock excluded from the definition of “Pledged Stock”) and (b) whether or
not constituting “investment property” as so defined, all Pledged Notes and all
Pledged Stock.
“Issuers”:
the
collective reference to each issuer of any Investment Property.
“New
York UCC”:
the
Uniform Commercial Code as from time to time in effect in the State of New
York.
“Non-Control
Accounts”:
means
all Deposit Accounts (other than payroll accounts and zero balance accounts)
and
Securities Accounts of the Domestic Loan Parties over which the Administrative
Agent does not have “control” (within the meaning of the applicable Uniform
Commercial Code).
“Obligations”:
as
defined in the Credit Agreement.
“Patents”:
(i)
all letters patent of the United States, any other country or any political
subdivision thereof, all reissues and extensions thereof and all goodwill
associated therewith, including, without limitation, any of the foregoing
referred to in Schedule
6,
(ii)
all applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedule
6,
and
(iii) all rights to obtain any reissues or extensions of the
foregoing.
“Patent
License”:
all
agreements, whether written or oral, providing for the grant by or to any
Domestic Loan Party of any right to manufacture, use or sell any invention
covered in whole or in part by a Patent, including, without limitation, any
of
the foregoing referred to in Schedule
6.
3
“Pledged
Notes”:
all
promissory notes listed on Schedule
2,
all
Intercompany Notes at any time issued to any Domestic Loan Party and all
other
promissory notes issued to or held by any Domestic Loan Party (other than
promissory notes issued in connection with extensions of trade credit by
any
Domestic Loan Party in the ordinary course of business).
“Pledged
Stock”:
the
shares of Capital Stock listed on Schedule
2,
together with any other shares, stock certificates, options, interests or
rights
of any nature whatsoever in respect of the Capital Stock of any Person that
may
be issued or granted to, or held by, any Domestic Loan Party while this
Agreement is in effect; provided
that in
no event shall more than 65% of the total outstanding Foreign Subsidiary
Voting
Stock of any Foreign Subsidiary be required to be pledged
hereunder.
“Proceeds”:
all
“proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC
and, in any event, shall include, without limitation, all dividends or other
income from the Investment Property, collections thereon or distributions
or
payments with respect thereto.
“Receivable”:
any
right to payment for goods sold or leased or for services rendered, whether
or
not such right is evidenced by an Instrument or Chattel Paper and whether
or not
it has been earned by performance (including, without limitation, any
Account).
“Securities
Act”:
the
Securities Act of 1933, as amended.
“Trademarks”:
(i)
all trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, domain names, logos
and
other source or business identifiers, and all goodwill associated therewith,
now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of
the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
including, without limitation, any of the foregoing referred to in Schedule
6,
and
(ii) the right to obtain all renewals thereof.
“Trademark
License”:
any
agreement, whether written or oral, providing for the grant by or to any
Domestic Loan Party of any right to use any Trademark, including, without
limitation, any of the foregoing referred to in Schedule
6.
1.2 Other
Definitional Provisions.
(a) The
words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and
not to
any particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.
(b) The
meanings given to terms defined herein shall be equally applicable to both
the
singular and plural forms of such terms.
4
(c) Where
the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Domestic Loan Party, shall refer to such Domestic Loan
Party’s Collateral or the relevant part thereof.
SECTION
2. GUARANTEE
2.1
Guarantee.
(a)
Each of the Domestic Loan Parties that are not Borrowers hereby, jointly
and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by each other Loan Party when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations.
(b) Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Domestic Loan Party hereunder and under the other
Loan
Documents shall in no event exceed the amount which can be guaranteed by
such
Domestic Loan Party under applicable federal and state laws relating to
the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2); provided,
that
this paragraph shall not limit the obligations of the Borrowers under the
Credit
Agreement.
(c) Each
Domestic Loan Party agrees that the Obligations may at any time and from
time to
time exceed the amount of the liability of such Domestic Loan Party hereunder
without impairing the guarantee contained in this Section 2 or affecting
the
rights and remedies of the Administrative Agent or any Lender
hereunder.
(d) The
guarantee contained in this Section 2 shall remain in full force and effect
until all the Obligations (other than Related Credit Arrangements) and
the
obligations of each Domestic Loan Party under the guarantee contained in
this
Section 2 shall have been satisfied by payment in full, no Letter of Credit
shall be outstanding and the Commitments shall be terminated, notwithstanding
that from time to time during the term of the Credit Agreement the Borrowers
may
be free from any Obligations.
(e) No
payment made by the Borrowers, any of the other Domestic Loan Parties,
any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrowers, any of the other Domestic Loan
Parties,
any other guarantor or any other Person by virtue of any action or proceeding
or
any set-off or appropriation or application at any time or from time to
time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce,
release or otherwise affect the liability of any Domestic Loan Party hereunder
which shall, notwithstanding any such payment (other than any payment made
by
such Domestic Loan Party in respect of the Obligations or any payment received
or collected from such Domestic Loan Party in respect of the Obligations),
remain liable for the Obligations up to the maximum liability of such Domestic
Loan Party hereunder until the Obligations (other than Related Credit
Arrangements) are paid in full, no Letter of Credit shall be outstanding
and the
Commitments are terminated.
2.2 Right
of Contribution.
Each
Domestic Loan Party hereby agrees that to the extent that a Domestic Loan
Party
that is not a Borrower shall have paid more than its proportionate share
of any
payment made hereunder, such Domestic Loan Party shall be entitled to seek
and
receive contribution from and against any other Domestic Loan Party
5
hereunder
which has not paid its proportionate share of such payment. Each Domestic
Loan
Party’s right of contribution shall be subject to the terms and conditions of
Section 2.3. The provisions of this Section 2.2 shall in no respect limit
the
obligations and liabilities of any Domestic Loan Party to the Administrative
Agent and the Lenders, and each Domestic Loan Party shall remain liable to
the
Administrative Agent and the Lenders for the full amount guaranteed by such
Domestic Loan Party hereunder.
2.3 No
Subrogation.
Notwithstanding any payment made by any Domestic Loan Party hereunder or
any
set-off or application of funds of any Domestic Loan Party by the Administrative
Agent or any Lender, no Domestic Loan Party shall be entitled to be subrogated
to any of the rights of the Administrative Agent or any Lender against the
Borrowers or any other Domestic Loan Party or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender
for
the payment of the Obligations, nor shall any Domestic Loan Party seek or
be
entitled to seek any contribution or reimbursement from the Borrowers or
any
other Domestic Loan Party in respect of payments made by such Domestic Loan
Party hereunder, until all amounts owing to the Administrative Agent and
the
Lenders by the Borrowers on account of the Obligations (other than Related
Credit Arrangements) are paid in full, no Letter of Credit shall be outstanding
and the Commitments are terminated. If any amount shall be paid to any Domestic
Loan Party on account of such subrogation rights at any time when all of
the
Obligations shall not have been paid in full, such amount shall be held by
such
Domestic Loan Party in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Domestic Loan Party, and shall, forthwith
upon receipt by such Domestic Loan Party, be turned over to the Administrative
Agent in the exact form received by such Domestic Loan Party (duly indorsed
by
such Domestic Loan Party to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order
as
the Administrative Agent, with the consent of the Required Lenders, may
determine.
2.4 Amendments,
etc. with respect to the Obligations.
Each
Domestic Loan Party shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Domestic Loan Party and without
notice to or further assent by any Domestic Loan Party, any demand for payment
of any of the Obligations made by the Administrative Agent or any Lender
may be
rescinded by the Administrative Agent or such Lender and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon
or for
any part thereof, or any collateral security or guarantee therefor or right
of
offset with respect thereto, may, from time to time, in whole or in part,
be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented
or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time
to
time, and any collateral security, guarantee or right of offset at any time
held
by the Administrative Agent or any Lender for the payment of the Obligations
may
be sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect
or
insure any Lien at any time held by it as security for the Obligations or
for
the guarantee contained in this Section 2 or any property subject
thereto.
6
2.5 Subordination.
Each
Domestic Loan Party hereby subordinates the payment of all obligations and
indebtedness of any Borrower owing to such Domestic Loan Party, whether now
existing or hereafter arising, including but not limited to any obligation
of
any Borrower to such Domestic Loan Party as subrogee of the Administrative
Agent
or the Lenders or resulting from such Domestic Loan Party’s performance under
this Guaranty and Collateral Agreement, to the indefeasible payment in full
in
cash of all Obligations. If the Administrative Agent so requests, any such
obligation or indebtedness of the Borrowers to a Domestic Loan Party shall
be
enforced and performance received by such Domestic Loan Party as trustee
for the
Administrative Agent and the Lenders and the proceeds thereof shall be paid
over
to the Administrative Agent on account of the Obligations, but without reducing
or affecting in any manner the liability of such Domestic Loan Party under
this
Guaranty and Collateral Agreement.
2.6 Guarantee
Absolute and Unconditional.
Each
Domestic Loan Party waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon the guarantee contained
in this Section 2 or acceptance of the guarantee contained in this Section
2;
the Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived,
in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrowers and any of the other Domestic Loan Parties, on the
one
hand, and the Administrative Agent and the Lenders, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance
upon
the guarantee contained in this Section 2. Each Domestic Loan Party waives
diligence, presentment, protest, demand for payment and notice of default
or
nonpayment to or upon the Borrowers or any of the other Domestic Loan Parties
with respect to the Obligations. Each Domestic Loan Party understands and
agrees
that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard
to
(a) the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Obligations or any other collateral security therefor
or
guarantee or right of offset with respect thereto at any time or from time
to
time held by the Administrative Agent or any Lender, (b) any defense, set-off
or
counterclaim (other than a defense of payment or performance) which may at
any
time be available to or be asserted by any Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrowers or such Domestic
Loan
Party) which constitutes, or might be construed to constitute, an equitable
or
legal discharge of the Borrowers for the Obligations, or of such Domestic
Loan
Party under the guarantee contained in this Section 2, in bankruptcy or in
any
other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Domestic Loan Party, the
Administrative Agent or any Lender may, but shall be under no obligation
to,
make a similar demand on or otherwise pursue such rights and remedies as
it may
have against any Borrower, any other Domestic Loan Party or any other Person
or
against any collateral security or guarantee for the Obligations or any right
of
offset with respect thereto, and any failure by the Administrative Agent
or any
Lender to make any such demand, to pursue such other rights or remedies or
to
collect any payments from any Borrower, any other Domestic Loan Party or
any
other Person or to realize upon any such collateral security or guarantee
or to
exercise any such right of offset, or any release of any Borrower, any other
Domestic Loan Party or any other Person or any such collateral security,
guarantee or right of offset, shall not relieve any Domestic Loan Party of
any
obligation or liability hereunder, and shall not impair or affect the rights
and
7
remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Lender against any Domestic Loan Party. For the purposes hereof
“demand” shall include the commencement and continuance of any legal
proceedings.
2.7 Reinstatement.
The
guarantee contained in this Section 2 shall continue to be effective, or
be
reinstated, as the case may be, if at any time payment, or any part thereof,
of
any of the Obligations is rescinded or must otherwise be restored or returned
by
the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Borrower or any other Domestic
Loan Party, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, any Borrower or any
other
Domestic Loan Party or any substantial part of its property, or otherwise,
all
as though such payments had not been made.
2.8 Payments.
Each
Domestic Loan Party hereby guarantees that payments hereunder will be paid
to
the Administrative Agent without set-off or counterclaim in Dollars at the
office of the Administrative Agent set forth in the Credit Agreement. The
obligations hereunder shall not be affected by any acts of any legislative
body
or governmental authority affecting the Borrowers, including but not limited
to,
any restrictions on the conversion of currency or repatriation or control
of
funds or any total or partial expropriation of any Borrower’s property, or by
economic, political, regulatory or other events in the countries where any
Borrower is located.
SECTION
3. GRANT
OF
SECURITY INTEREST
Each
Domestic Loan
Party hereby assigns and transfers to the Administrative Agent, and hereby
grants to the Administrative Agent, for the ratable benefit of the Lenders,
a
security interest in, all of the following property now owned or at any time
hereafter acquired by such Domestic Loan Party or in which such Domestic
Loan
Party now has or at any time in the future may acquire any right, title or
interest (collectively, the “Collateral”), as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations:
(a) all
Accounts;
(b)
all
Chattel Paper;
(c)
all
Commercial Tort Claims identified on Schedule 8;
(d)
all
Deposit Accounts;
(e)
all
Documents;
(f)
all
Equipment;
(g)
all
Fixtures;
(h)
all
General Intangibles;
8
(i)
all
Instruments;
(j)
all
Intellectual Property;
(k)
all
Inventory;
(l)
all
Investment Property;
(m)
all
Letter of Credit Rights;
(n)
all
other
property not otherwise described above;
(o)
all
books
and records pertaining to the Collateral; and
(p) to
the
extent not otherwise included, all Proceeds, Supporting Obligations and products
of any and all of the foregoing and all collateral security and guarantees
given
by any Person with respect to any of the foregoing;
provided,
however,
that
(i) Collateral hereunder shall not include any real property leases (except
to
the extent rights under such leases are covered by the Uniform Commercial
Code)
or other real property, and (ii) notwithstanding any of the other provisions
set
forth in this Section 3, this Agreement shall not constitute a grant of a
security interest in any property to the extent that such grant of a security
interest is prohibited by any Laws of a Governmental Authority, requires
a
consent not obtained of any Governmental Authority pursuant to such Laws
or is
prohibited by, or constitutes a breach or default under or results in the
termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing or giving rise
to
such property or, in the case of any Investment Property, Pledged Stock or
Pledged Note, any applicable shareholder or similar agreement, except to
the
extent that such Laws or the term in such contract, license, agreement,
instrument or other document or shareholder or similar agreement providing
for
such prohibition, breach, default or termination or requiring such consent
is
ineffective under Sections 9-406, 9-407 or 9-408 of the New York UCC or other
applicable law; provided,
further,
that
for purposes of the foregoing, it is understood and agreed that upon request
of
the Administrative Agent, the applicable Domestic Loan Party will use its
commercially reasonable efforts to obtain a consent if permissible by the
applicable Laws or the applicable contract, license, agreement, instrument
or
other document to the extent necessary to permit the Administrative Agent
to
dispose of related goods included in the Collateral.
SECTION
4. REPRESENTATIONS
AND WARRANTIES
To
induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrowers
thereunder, each Domestic Loan Party hereby represents and warrants to the
Administrative Agent and each Lender that:
4.1 Representations
in Credit Agreement.
In the
case of each Domestic Loan Party other than the Borrowers, the representations
and warranties set forth in Article V of the Credit Agreement as they relate
to
such Domestic Loan Party or to the Loan Documents to which such Domestic
Loan
Party is a party, each of which is hereby incorporated herein
9
by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, provided
that
each reference in each such representation and warranty to the Borrower’s
knowledge shall, for the purposes of this Section 4.1, be deemed to be a
reference to such Domestic Loan Party’s knowledge.
4.2 Title;
No Other Liens.
Except
for the security interest granted to the Administrative Agent for the ratable
benefit of the Lenders pursuant to this Agreement and the other Liens permitted
to exist on the Collateral by the Credit Agreement, such Domestic Loan Party
owns each item of the Collateral free and clear of any and all Liens or claims
of others. No financing statement or other public notice with respect to
all or
any part of the Collateral is on file or of record in any public office,
except
such as have been filed in favor of the Administrative Agent, for the ratable
benefit of the Lenders, pursuant to this Agreement or as are permitted by
the
Credit Agreement. For the avoidance of doubt, it is understood and agreed
that
any Domestic Loan Party may, as part of its business, grant licenses to third
parties to use Intellectual Property owned or developed by a Domestic Loan
Party. For purposes of this Agreement and the other Loan Documents, such
licensing activity shall not constitute a “Lien” on such Intellectual Property.
Each of the Administrative Agent and each Lender understands that any such
licenses may be exclusive to the applicable licensees, and such exclusivity
provisions may limit the ability of the Administrative Agent to utilize,
sell,
Lease or transfer the related Intellectual Property or otherwise realize
value
from such Intellectual Property pursuant hereto.
4.3 Perfected
First Priority Liens.
The
security interests granted pursuant to this Agreement upon completion of
the
filings and other actions specified on Schedule
3
(which,
in the case of all filings and other documents referred to on said Schedule,
have been delivered to the Administrative Agent in completed and duly executed
form) will constitute valid perfected security interests in all of the
Collateral (provided
that,
with respect to the Foreign Subsidiary Voting Stock of any Foreign Subsidiary
pledged hereunder, the security interest therein may not constitute a valid
perfected security interest under laws other than those of the United States)
in
favor of the Administrative Agent, for the ratable benefit of the Lenders
as
collateral security for such Domestic Loan Party’s Obligations, enforceable in
accordance with the terms hereof against all creditors of such Domestic Loan
Party and any Persons purporting to purchase any Collateral from such Domestic
Loan Party (except for dispositions permitted under the Loan Documents) and
are
prior to all other Liens on the Collateral in existence on the date hereof
except for (i) unrecorded Liens permitted by the Credit Agreement which have
priority over the Liens on the Collateral by operation of law and (ii) Liens
described on Schedule
7.
4.4 Jurisdiction
of Organization; Chief Executive Office.
On the
date hereof, such Domestic Loan Party’s jurisdiction of organization,
identification number from the jurisdiction of organization (if any), and
the
location of such Domestic Loan Party’s chief executive office or sole place of
business or principal residence, as the case may be, are specified on
Schedule
4.
Such
Domestic Loan Party has furnished to the Administrative Agent a certified
charter, certificate of incorporation or other organization document and
long-form good standing certificate as of a date which is recent to the date
hereof.
10
4.5 Inventory
and Equipment.
On the
date hereof, the Inventory and the Equipment (other than mobile goods) are
kept
at the locations listed on Schedule
5.
4.6 Farm
Products.
None of
the Collateral constitutes, or is the Proceeds of, Farm Products.
4.7 Investment
Property.
(a) The
shares of Pledged Stock pledged by such Domestic Loan Party hereunder constitute
all the issued and outstanding shares of all classes of the Capital Stock
of
each Issuer owned by such Domestic Loan Party or, in the case of Foreign
Subsidiary Voting Stock, 65% of all the issued and outstanding Foreign
Subsidiary Voting Stock of each Issuer owned by such Domestic Loan
Party.
(b) All
the
shares of the Pledged Stock have been duly and validly issued and are fully
paid
and nonassessable.
(c) Each
of
the Pledged Notes constitutes the legal, valid and binding obligation of
the
obligor with respect thereto, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding
in
equity or at law) and an implied covenant of good faith and fair
dealing.
(d) Such
Domestic Loan Party is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free
of
any and all Liens or options in favor of, or claims of, any other Person,
except
the security interest created by this Agreement.
4.8 Receivables.
(a) No
amount in excess of $100,000 payable to such Domestic Loan Party under or
in
connection with any Receivable is evidenced by any Instrument or Chattel
Paper
which has not been delivered to the Administrative Agent.
(b) None
of
the obligors on any material amount of Receivables is a Governmental
Authority.
(c) The
amounts represented by such Domestic Loan Party to the Lenders from time
to time
as owing to such Domestic Loan Party in respect of the Receivables will at
such
times be accurate in all material respects.
4.9 Intellectual
Property.
(a)
Schedule
6
lists
all Intellectual Property that is registered or subject to a pending application
for registration and is owned by such Domestic Loan Party in its own name
on the
date hereof.
(b) On
the
date hereof, all material Intellectual Property is valid, subsisting, unexpired
and enforceable, has not been abandoned and does not infringe the intellectual
property rights of any other Person in any material respect.
11
(c) Except
as
set forth in Schedule
6,
on the
date hereof, none of the Intellectual Property is the subject of any licensing
or franchise agreement pursuant to which such Domestic Loan Party is the
licensor or franchisor.
(d) No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or such Domestic Loan
Party’s rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No
action
or proceeding is pending, or, to the knowledge of such Domestic Loan Party,
threatened, on the date hereof (i) seeking to limit, cancel or question the
validity of any Intellectual Property or such Domestic Loan Party’s ownership
interest therein, or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Intellectual Property.
4.10
Commercial
Tort Claims.
As of
the date hereof, Schedule
8
lists
all Commercial Tort Claims of such Domestic Loan Party having a value of
more
than $100,000 that it has elected to prosecute in its reasonable business
judgment. If any Domestic Loan Party shall at any time hold or acquire a
Commercial Tort Claim that it has elected to prosecute in its reasonable
business judgment having a value together with all other Commercial Tort
Claims
of all Domestic Loan Parties in which the Administrative Agent does not have
a
security interest in excess of $250,000 in the aggregate, such Domestic Loan
Party shall promptly notify the Administrative Agent in writing signed by
such
Domestic Loan Party of the brief details thereof and grant to the Administrative
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 Administrative Agent.
SECTION
5. COVENANTS
Each
Domestic
Loan Party covenants and agrees with the Administrative Agent and the Lenders
that, from and after the date of this Agreement until the Obligations (other
than Related Credit Arrangements) shall have been paid in full, no Letter
of
Credit shall be outstanding and the Commitments shall have
terminated:
5.1 Covenants
in Credit Agreement.
Each
Domestic Loan Party shall take, or shall refrain from taking, as the case
may
be, each action that is necessary to be taken or not taken, as the case may
be,
so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Domestic Loan Party
or any
of its Subsidiaries.
5.2 Delivery
of Instruments, Certificated Securities and Chattel Paper.
If any
amount in excess of $100,000 payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated Security
or Chattel Paper, such Instrument, Certificated Security or Chattel Paper
shall
be immediately delivered to the Administrative Agent, duly indorsed in a
manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant
to
this Agreement.
12
5.3 Maintenance
of Insurance.
(a)
Such Domestic Loan Party will maintain, with financially sound and reputable
companies, insurance policies (i) insuring the Inventory and Equipment against
loss by fire, explosion, theft and such other casualties as may be reasonably
satisfactory to the Administrative Agent and (ii) to the extent requested
by the
Administrative Agent, insuring such Domestic Loan Party, the Administrative
Agent and the Lenders against liability for personal injury and property
damage
relating to such Inventory and Equipment, such policies to be in such form
and
amounts and having such coverage as may be reasonably satisfactory to the
Administrative Agent and the Lenders.
(b) All
such
insurance shall, in the case of any general liability, property and casualty,
business interruption or umbrella liability insurance, provide for not less
than
30 days’ prior notice to the Administrative Agent of cancellation of such
insurance (or providing for such other notice of cancellation as shall be
reasonably acceptable to the Administrative Agent), (ii) in the case of any
general liability, property and casualty, business interruption or umbrella
liability insurance name the Administrative Agent as insured party or loss
payee, as applicable, and (iii) be reasonably satisfactory in all other respects
to the Administrative Agent.
(c) If
requested by the Administrative Agent, the Company shall deliver to the
Administrative Agent and the Lenders a report of a reputable insurance broker
with respect to such insurance substantially concurrently with each delivery
of
the Company’s audited annual financial statements and such supplemental reports
with respect thereto as the Administrative Agent may from time to time
reasonably request.
5.4 Payment
of Obligations.
Such
Domestic Loan Party will pay and discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the Collateral
or in
respect of income or profits therefrom, as well as all claims of any kind
(including, without limitation, claims for labor, materials and supplies)
against or with respect to the Collateral, except (i) for taxes, assessments,
charges or levies that, if unpaid, could not result in a material impairment
of
any Collateral or its value and (ii) that no such tax, assessment, charge
or
levy need be paid if the amount or validity thereof is currently being contested
in good faith by appropriate proceedings, reserves in conformity with GAAP
with
respect thereto have been provided on the books of such Domestic Loan Party
and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5 Maintenance
of Perfected Security Interest; Further Documentation.
(a)
Such Domestic Loan Party shall maintain the security interest created by
this
Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against
the
claims and demands of all Persons whomsoever, subject to the rights of such
Domestic Loan Party under the Loan Documents to dispose of the
Collateral.
(b) Such
Domestic Loan Party will furnish to the Administrative Agent and the Lenders
from time to time statements and schedules further identifying and describing
the assets and property of such Domestic Loan Party and such other reports
in
connection therewith as the Administrative Agent may reasonably request,
all in
reasonable detail.
13
(c) Subject
to Section 5.5(d), at any time and from time to time, upon the written request
of the Administrative Agent, and at the sole expense of such Domestic Loan
Party, such Domestic Loan Party will promptly and duly execute and deliver,
and
have recorded, such further instruments and documents and take such further
actions as the Administrative Agent may reasonably request for the purpose
of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, (i) filing any
financing or continuation statements under the Uniform Commercial Code (or
other
similar laws) in effect in any jurisdiction with respect to the security
interests created hereby and (ii) in the case of Deposit Accounts, Investment
Property (including Securities Accounts), Letter-of-Credit Rights and any
other
relevant Collateral, taking any actions necessary to enable the Administrative
Agent to obtain “control” (within the meaning of the applicable Uniform
Commercial Code) with respect thereto (including, where applicable, the
execution of “control agreements”).
(d) In
the
case of Deposit Accounts and Securities Accounts, the Administrative Agent
will
not require “control” over (i) payroll accounts, (ii) zero balance accounts or
(iii) so long as no Default or Event of Default has occurred and is continuing,
Non-Control Accounts in which the aggregate balance is less than both (x)
$5,000,000 at any one time and (y) $2,500,000 in aggregate average daily
balance
for the most recent monthly reporting period (such amounts constituting the
“Account Threshold Amount”). The Company shall promptly notify the
Administrative Agent at any time the aggregate balance in Non-Control Accounts
exceeds the Account Threshold Amount, such notice to identify the financial
institutions and related account numbers and balances.
5.6 Changes
in Locations, Name, etc.
(a) Such
Domestic Loan Party will not, except upon 15 days’ prior written notice to the
Administrative Agent and delivery to the Administrative Agent of all additional
executed financing statements and other documents reasonably requested by
the
Administrative Agent to maintain the validity, perfection and priority of
the
security interests provided for herein:
(i) change its jurisdiction of organization from that referred to in Section 4.4; or
(ii) change
its
name.
(b) Such
Domestic Loan Party may permit any of the Inventory or Equipment to be kept
at a
location other than those listed on Schedule
5,
so long
as such location is in the United States and such Domestic Loan Party, upon
request by the Administrative Agent, provides to the Administrative Agent
a
written supplement to Schedule 5 showing any additional location at which
Inventory or Equipment shall be kept and delivers to the Administrative Agent
all additional executed financing statements and other documents reasonably
requested by the Administrative Agent to maintain the validity, perfection
and
priority of the security interests provided for herein.
5.7
Notices.
Such
Domestic Loan Party will advise the Administrative Agent and the Lenders
promptly, in reasonable detail, of:
14
(a) any
Lien
(other than security interests created hereby or Liens permitted under the
Credit Agreement) on any of the Collateral which would adversely affect the
ability of the Administrative Agent to exercise any of its remedies hereunder;
and
(b) of
the
occurrence of any other event which could reasonably be expected to have
a
material adverse effect on the aggregate value of the Collateral or on the
security interests created hereby.
5.8 Investment
Property.
(a) If
such Domestic Loan Party shall become entitled to receive or shall receive
any
certificate (including, without limitation, any certificate representing
a
dividend or a distribution in connection with any reclassification, increase
or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Capital Stock of any
Issuer,
whether in addition to, in substitution of, as a conversion of, or in exchange
for, any shares of the Pledged Stock, or otherwise in respect thereof, such
Domestic Loan Party shall accept the same as the agent of the Administrative
Agent and the Lenders, hold the same in trust for the Administrative Agent
and
the Lenders and deliver the same forthwith to the Administrative Agent in
the
exact form received, duly indorsed by such Domestic Loan Party to the
Administrative Agent, if required, together with an undated stock power covering
such certificate duly executed in blank by such Domestic Loan Party and with,
if
the Administrative Agent so requests, signature guaranteed, to be held by
the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations, provided
that
such Domestic Loan Party shall not be required to deliver any certificates,
options or rights in excess of 65% of the Foreign Subsidiary Voting Stock
of any
Foreign Subsidiary. Any sums paid upon or in respect of the Investment Property
upon the liquidation or dissolution of any Issuer (other than a Subsidiary
that
is liquidated or dissolved in a transaction permitted under Section 7.04
of the
Credit Agreement) shall be paid over to the Administrative Agent to be held
by
it hereunder as additional collateral security for the Obligations, and in
case
any distribution of capital shall be made on or in respect of the Investment
Property or any property shall be distributed upon or with respect to the
Investment Property pursuant to the recapitalization or reclassification
of the
capital of any Issuer or pursuant to the reorganization thereof, the property
so
distributed shall, unless otherwise subject to a perfected first priority
security interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Domestic Loan Party, such Domestic Loan Party shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money
or
property in trust for the Administrative Agent and the Lenders or otherwise
subject such money or property to a perfected first priority security interest
in favor of the Administrative Agent as additional collateral security for
the
Obligations.
(b) Without
the prior written consent of the Administrative Agent, such Domestic Loan
Party
will not (i) vote to enable, or take any other action to permit, any Issuer
to
issue any Capital Stock of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any Capital
Stock of any nature of any Issuer, (ii) sell, assign, transfer, exchange,
or
otherwise dispose of, or grant any option with respect to, the Investment
Property or Proceeds thereof (except pursuant to a transaction expressly
permitted by the Credit Agreement), (iii) create, incur or permit to exist
any
Lien or option in favor of, or any claim of any Person with respect to, any
of
the Investment
15
Property,
or any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the
right
or ability of such Domestic Loan Party or the Administrative Agent to sell,
assign or transfer any of the Investment Property.
(c) In
the
case of each Domestic Loan Party which is an Issuer, such Issuer agrees that
(i)
it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms
are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a)
with
respect to the Investment Property issued by it and (iii) the terms of Sections
6.3(c) and 6.7 shall apply to it, mutatis
mutandis,
with
respect to all actions that may be required of it pursuant to Section 6.3(c)
or
6.7 with respect to the Investment Property issued by it.
5.9 Receivables.
(a)
Other than in the ordinary course of business, such Domestic Loan Party will
not
(i) grant any extension of the time of payment of any Receivable, (ii)
compromise or settle any Receivable for less than the full amount thereof,
(iii)
release, wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any Receivable
or
(v) amend, supplement or modify any Receivable in any manner that could
adversely affect the value thereof.
(b) Such
Domestic Loan Party will deliver to the Administrative Agent a copy of each
material demand, notice or document received by it that questions or calls
into
doubt the validity or enforceability of more than 5% of the aggregate amount
of
the then outstanding Receivables.
5.10 Intellectual
Property.
(a)
Such Domestic Loan Party (either itself or through licensees) will (i) continue
to use each material Trademark on its trademark class of goods in order to
maintain such Trademark in full force free from any claim of abandonment
for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by applicable
Laws, (iv) not adopt or use any ▇▇▇▇ which is confusingly similar or a colorable
imitation of such Trademark unless the Administrative Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest in such
▇▇▇▇
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby
such
Trademark may become invalidated or impaired in any way.
(b) Such
Domestic Loan Party (either itself or through licensees) will not do any
act, or
omit to do any act, whereby any material Patent may become forfeited, abandoned
or dedicated to the public.
(c) Such
Domestic Loan Party (either itself or through licensees) (i) will employ
each
material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby
any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Domestic Loan Party will not (either itself or through licensees) do
any
act whereby any material portion of the Copyrights may fall into the public
domain.
16
(d) Such
Domestic Loan Party (either itself or through licensees) will not do any
act
that knowingly uses any material Intellectual Property to infringe in any
material respect the intellectual property rights of any other
Person.
(e) Such
Domestic Loan Party will notify the Administrative Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any
such
determination or development in, any proceeding in the United States Patent
and
Trademark Office, the United States Copyright Office or any court or tribunal
in
any country) regarding such Domestic Loan Party’s ownership of, or the validity
of, any material Intellectual Property or such Domestic Loan Party’s right to
register the same or to own and maintain the same.
(f) Whenever
such Domestic Loan Party, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office,
the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Domestic Loan Party shall
report such filing to the Administrative Agent within five Business Days
after
the last day of the fiscal quarter in which such filing occurs. Upon request
of
the Administrative Agent, such Domestic Loan Party shall execute and deliver,
and have recorded, any and all agreements, instruments, documents, and papers
as
the Administrative Agent may request to evidence the Administrative Agent’s and
the Lenders’ security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Domestic Loan Party relating thereto
or
represented thereby.
(g) Such
Domestic Loan Party will take all reasonable and necessary steps, including,
without limitation, in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or
agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and
to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use
and
affidavits of incontestability.
(h) In
the
event that any material Intellectual Property is infringed, misappropriated
or
diluted by a third party, such Domestic Loan Party shall (i) take such actions
as such Domestic Loan Party shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value and if such infringement,
misappropriation or dilution could reasonably be expected to have a Material
Adverse Effect, promptly notify the Administrative Agent after it learns
thereof.
SECTION
6. REMEDIAL
PROVISIONS
6.1 Certain
Matters Relating to Receivables.
(a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Domestic Loan Party shall furnish all such assistance
and
information as the Administrative Agent may require in
17
connection
with such test verifications. At any time and from time to time, upon the
Administrative Agent’s request, at any time after the occurrence and during the
continuance of an Event of Default and at the expense of the relevant Domestic
Loan Party, such Domestic Loan Party shall cause independent public accountants
or others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The
Administrative Agent hereby authorizes each Domestic Loan Party to collect
such
Domestic Loan Party’s Receivables, subject to the Administrative Agent’s
direction and control, and the Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance
of an
Event of Default. If required by the Administrative Agent at any time after
the
occurrence and during the continuance of an Event of Default, any payments
of
Receivables, when collected by any Domestic Loan Party, (i) shall be forthwith
(and, in any event, within two Business Days) deposited by such Domestic
Loan
Party in the exact form received, duly indorsed by such Domestic Loan Party
to
the Administrative Agent if required, in a Collateral Account maintained
under
the sole dominion and control of the Administrative Agent, subject to withdrawal
by the Administrative Agent for the account of the Lenders only as provided
in
Section 6.5, and (ii) until so turned over, shall be held by such Domestic
Loan
Party in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Domestic Loan Party. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
(c) At
the
Administrative Agent’s request at and after the occurrence and during the
continuance of an Event of Default, each Domestic Loan Party shall deliver
to
the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
6.2 Communications
with Obligors; Domestic Loan Parties Remain Liable.
(a) The
Administrative Agent in its own name or in the name of others may at any
time
communicate with obligors under the Receivables to verify with them to the
Administrative Agent’s satisfaction the existence, amount and terms of any
Receivables, provided
that the
Administrative Agent will not make communications in its own name unless
an
Event of Default has occurred and is continuing.
(b) Upon
the
written request of the Administrative Agent at any time after the occurrence
and
during the continuance of an Event of Default, each Domestic Loan Party shall
notify obligors on the Receivables that the Receivables and the Contracts
have
been assigned to the Administrative Agent for the ratable benefit of the
Lenders
and that payments in respect thereof shall be made directly to the
Administrative Agent.
(c) Anything
herein to the contrary notwithstanding, each Domestic Loan Party shall remain
liable under each of the Receivables to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the Administrative
Agent nor any Lender shall have any obligation or liability under any Receivable
(or any agreement giving rise thereto), by reason of or arising out of this
Agreement or the receipt by the
18
Administrative
Agent or any Lender of any payment relating thereto, nor shall the
Administrative Agent or any Lender be obligated in any manner to perform
any of
the obligations of any Domestic Loan Party under or pursuant to any Receivable
(or any agreement giving rise thereto) to make any payment, to make any inquiry
as to the nature or the sufficiency of any payment received by it or as to
the
sufficiency of any performance by any party thereunder, to present or file
any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
6.3 Pledged
Stock.
(a)
Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given written notice to the relevant Domestic
Loan Party of the Administrative Agent’s intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Domestic Loan Party shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice,
to
the extent permitted in the Credit Agreement, and to exercise all voting
and
corporate or other organizational rights with respect to the Investment
Property; provided,
however,
that no
vote shall be cast or corporate or other organizational right exercised or
other
action taken which, in the Administrative Agent’s reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any
other
Loan Document.
(b) If
an
Event of Default shall occur and be continuing and the Administrative Agent
shall give written notice of its intent to exercise such rights to the relevant
Domestic Loan Party, (i) the Administrative Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Investment Property and make application thereof to the Obligations
in
such order as the Administrative Agent may determine, and (ii) any or all
of the
Investment Property shall be registered in the name of the Administrative
Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such
Investment Property at any meeting of shareholders of the relevant Issuer
or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including,
without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Domestic
Loan Party or the Administrative Agent of any right, privilege or option
pertaining to such Investment Property, and in connection therewith, the
right
to deposit and deliver any and all of the Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency
upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it,
but
the Administrative Agent shall have no duty to any Domestic Loan Party to
exercise any such right, privilege or option and shall not be responsible
for
any failure to do so or delay in so doing.
(c) Each
Domestic Loan Party hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Domestic Loan Party hereunder to (i)
comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and is continuing and
(y)
is otherwise in
19
accordance
with the terms of this Agreement, without any other or further instructions
from
such Domestic Loan Party, and each Domestic Loan Party agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Administrative Agent.
6.4 Proceeds
to be Turned Over To Agent.
In
addition to the rights of the Administrative Agent and the Lenders specified
in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing and the Administrative Agent shall give written
notice of its intent to exercise such rights to the relevant Domestic Loan
Party, all Proceeds received by any Domestic Loan Party consisting of cash,
checks and cash equivalents shall be held by such Domestic Loan Party in
trust
for the Administrative Agent and the Lenders and shall, forthwith upon receipt
by such Domestic Loan Party, be turned over to the Administrative Agent in
the
exact form received by such Domestic Loan Party (duly indorsed by such Domestic
Loan Party to the Administrative Agent, if required). All Proceeds received
by
the Administrative Agent hereunder shall be held by the Administrative Agent
in
a Collateral Account maintained under its sole dominion and control. All
Proceeds while held by the Administrative Agent in a Collateral Account (or
by
such Domestic Loan Party in trust for the Administrative Agent and the Lenders)
shall continue to be held as collateral security for all the Obligations
and
shall not constitute payment thereof until applied as provided in Section
6.5.
6.5 Application
of Proceeds.
At such
intervals as may be agreed upon by the Company and the Administrative Agent,
or,
if an Event of Default shall have occurred and be continuing, at any time
at the
Administrative Agent’s election, the Administrative Agent may apply all or any
part of Proceeds constituting Collateral, whether or not held in any Collateral
Account, in payment of the Obligations in the order set forth in Section
8.03 of
the Credit Agreement, and each Domestic Loan Party irrevocably waives the
right
to direct the application of such payments and proceeds.
6.6 Code
and Other Remedies.
If an
Event of Default shall occur and be continuing, the Administrative Agent,
on
behalf of the Lenders, may exercise, in addition to all other rights and
remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights
and
remedies of a secured party under the New York UCC or any other applicable
law.
Without limiting the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Domestic Loan Party or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived),
may
in such circumstances forthwith collect, receive, appropriate and realize
upon
the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing),
in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any Lender or elsewhere upon
such
terms and conditions as it may deem advisable and at such prices as it may
deem
best, for cash or on credit or for future delivery without assumption of
any
credit risk. The Administrative Agent or any Lender shall have the right
upon
any such public sale or sales, and, to the extent permitted by law, upon
any
such private sale or sales, to
20
purchase
the whole or any part of the Collateral so sold, free of any right or equity
of
redemption in any Domestic Loan Party, which right or equity is hereby waived
and released. Each Domestic Loan Party further agrees, at the Administrative
Agent’s request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Domestic Loan Party’s premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by
it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care
or
safekeeping of any of the Collateral or in any way relating to the Collateral
or
the rights of the Administrative Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys’ fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Administrative
Agent, with the consent of the Required Lenders, may elect, and only after
such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-615(a)(3) of the New York UCC, need the Administrative Agent account for
the
surplus, if any, to any Domestic Loan Party. To the extent permitted by
applicable law, each Domestic Loan Party waives all claims, damages and demands
it may acquire against the Administrative Agent or any Lender arising out
of the
exercise by them of any rights hereunder. If any notice of a proposed sale
or
other disposition of Collateral shall be required by law, such notice shall
be
deemed reasonable and proper if given at least 10 days before such sale or
other
disposition.
6.7 Registration
Rights.
(a) If
the Administrative Agent shall determine to exercise its right to sell any
or
all of the Pledged Stock pursuant to Section 6.6, and if in the opinion of
the
Administrative Agent it is necessary or advisable to have the Pledged Stock,
or
that portion thereof to be sold, registered under the provisions of the
Securities Act, the relevant Domestic Loan Party will cause the Issuer thereof
to (i) execute and deliver, and cause the directors and officers of such
Issuer
to execute and deliver, all such instruments and documents, and do or cause
to
be done all such other acts as may be, in the opinion of the Administrative
Agent, necessary or advisable to register the Pledged Stock, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use
its
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date
of the
first public offering of the Pledged Stock, or that portion thereof to be
sold,
and (iii) make all amendments thereto and/or to the related prospectus which,
in
the opinion of the Administrative Agent, are necessary or advisable, all
in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto.
Each
Domestic Loan Party agrees to cause such Issuer to comply with the provisions
of
the securities or “Blue Sky” laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) that will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each
Domestic Loan Party recognizes that the Administrative Agent may be unable
to
effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private
sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Domestic Loan Party acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a
public
sale and,
21
notwithstanding
such circumstances, agrees that any such private sale shall be deemed to
have
been made in a commercially reasonable manner. The Administrative Agent shall
be
under no obligation to delay a sale of any of the Pledged Stock for the period
of time necessary to permit the Issuer thereof to register such securities
for
public sale under the Securities Act, or under applicable state securities
laws,
even if such Issuer would agree to do so.
(c) Each
Domestic Loan Party agrees to use its best efforts to do or cause to be done
all
such other acts as may be necessary to make such sale or sales of all or
any
portion of the Pledged Stock pursuant to this Section 6.7 valid and binding
and
in compliance with any and all other applicable Laws. Each Domestic Loan
Party
further agrees that a breach of any of the covenants contained in this Section
6.7 will cause irreparable injury to the Administrative Agent and the Lenders,
that the Administrative Agent and the Lenders have no adequate remedy at
law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against such
Domestic Loan Party, and such Domestic Loan Party hereby waives and agrees
not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under
the
Credit Agreement.
6.8 Deficiency.
Each
Domestic Loan Party shall remain liable for any deficiency if the proceeds
of
any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
SECTION
7. THE
ADMINISTRATIVE AGENT
7.1 Agent’s
Appointment as Attorney-in-Fact, etc.
(a)
Each Domestic Loan Party hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Domestic Loan Party and
in
the name of such Domestic Loan Party or in its own name, for the purpose
of
carrying out the terms of this Agreement, to take any and all appropriate
action
and to execute any and all documents and instruments which may be necessary
or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Domestic Loan Party hereby gives the
Administrative Agent the power and right, on behalf of such Domestic Loan
Party,
without notice to or assent by such Domestic Loan Party, to do any or all
of the
following:
(i) in
the
name of such Domestic Loan Party or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable or with respect
to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate
by the
Administrative Agent for the purpose of collecting any and all such moneys
due
under any Receivable or with respect to any other Collateral whenever
payable;
(ii) in
the
case of any Intellectual Property, execute and deliver, and have recorded,
any
and all agreements, instruments, documents and papers as the Administrative
Agent may request to evidence the Administrative Agent’s and the Lenders’
security interest in such Intellectual Property and the goodwill and general
intangibles of such Domestic Loan Party relating thereto or represented
thereby;
22
(iii) pay
or
discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of
this
Agreement and pay all or any part of the premiums therefor and the costs
thereof;
(iv) execute,
in connection with any sale provided for in Section 6.6 or 6.7, any
indorsements, assignments or other instruments of conveyance or transfer
with
respect to the Collateral; and
(v) (1)
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to
the
Administrative Agent or as the Administrative Agent shall direct; ask or
demand
for, collect, and receive payment of and receipt for, any and all moneys,
claims
and other amounts due or to become due at any time in respect of or arising
out
of any Collateral; sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with
any
of the Collateral; commence and prosecute any suits, actions or proceedings
at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of
any Collateral; defend any suit, action or proceeding brought against such
Domestic Loan Party with respect to any Collateral; settle, compromise or
adjust
any such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem appropriate;
assign
any Copyright, Patent or Trademark (along with the goodwill of the business
to
which any such Copyright, Patent or Trademark pertains), throughout the world
for such term or terms, on such conditions, and in such manner, as the
Administrative Agent shall in its sole discretion determine; and generally,
sell, transfer, pledge and make any agreement with respect to or otherwise
deal
with any of the Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and do, at the
Administrative Agent’s option and such Domestic Loan Party’s expense, at any
time, or from time to time, all acts and things which the Administrative
Agent
deems necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Lenders’ security interests therein and to effect
the intent of this Agreement, all as fully and effectively as such Domestic
Loan
Party might do.
Anything
in this
Section 7.1(a) to the contrary notwithstanding, the Administrative Agent
agrees
that it will not exercise any rights under the power of attorney provided
for in
this Section 7.1(a) unless an Event of Default shall have occurred and be
continuing.
(b) If
any
Domestic Loan Party fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance
or
compliance, with such agreement.
23
(c) The
expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon
at a
rate per annum equal to the highest rate per annum at which interest would
then
be payable on any category of past due Base Rate Loans under the Credit
Agreement, from the date of payment by the Administrative Agent to the date
reimbursed by the relevant Domestic Loan Party, shall be payable by such
Domestic Loan Party to the Administrative Agent on demand.
(d) All
powers, authorizations and agencies contained in this Agreement are coupled
with
an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
7.2 Duty
of the Administrative Agent.
The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section
9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner
as
the Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent, any Lender nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so
or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Domestic Loan Party or any other Person or to take
any
other action whatsoever with regard to the Collateral or any part thereof.
The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent’s and the Lenders’ interests in the
Collateral and shall not impose any duty upon the Administrative Agent or
any
Lender to exercise any such powers. The Administrative Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result
of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Domestic Loan
Party
for any act or failure to act hereunder, except for their own gross negligence
or willful misconduct.
7.3 Execution
of Financing Statements.
Pursuant to any applicable law, each Domestic Loan Party authorizes the
Administrative Agent to file or record financing statements and other filing
or
recording documents or instruments with respect to the Collateral without
the
signature of such Domestic Loan Party in such form and in such offices as
the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. Each Domestic
Loan
Party authorizes the Administrative Agent to use the collateral description
“all
personal property” or “all assets” in any such financing statements. Each
Domestic Loan Party hereby ratifies and authorizes the filing by the
Administrative Agent of any financing statement with respect to the Collateral
made prior to the date hereof.
7.4 Authority
of the Administrative Agent.
Each
Domestic Loan Party acknowledges that the rights and responsibilities of
the
Administrative Agent under this Agreement with respect to any action taken
by
the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall,
as
between the Administrative Agent and the Lenders, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist
from
time to time among them, but, as between the Administrative Agent and the
Domestic Loan Parties,
24
the
Administrative Agent shall be conclusively presumed to be acting as agent
for
the Lenders with full and valid authority so to act or refrain from acting,
and
no Domestic Loan Party shall be under any obligation, or entitlement, to
make
any inquiry respecting such authority.
SECTION
8. MISCELLANEOUS
8.1 Amendments
in Writing.
None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except in accordance with Section 10.02 of the Credit
Agreement.
8.2 Notices.
All
notices, requests and demands to or upon the Administrative Agent or any
Domestic Loan Party hereunder shall be effected in the manner provided for
in
Section 10.02 of the Credit Agreement; provided that any such notice, request
or
demand to or upon any Domestic Loan Party shall be addressed to such Domestic
Loan Party at its notice address set forth on Schedule
1.
8.3 No
Waiver by Course of Conduct; Cumulative Remedies.
Neither
the Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise
be
deemed to have waived any right or remedy hereunder or to have acquiesced
in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single
or
partial exercise of any right, power or privilege hereunder shall preclude
any
other or further exercise thereof or the exercise of any other right, power
or
privilege. A waiver by the Administrative Agent or any Lender of any right
or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive
of any
other rights or remedies provided by law.
8.4 Enforcement
Expenses; Indemnification.
i)
Each
Domestic Loan Party agrees to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in collecting
against such Domestic Loan Party under the guarantee contained in Section
2 or
otherwise enforcing or preserving any rights under this Agreement and the
other
Loan Documents to which such Domestic Loan Party is a party, including, without
limitation, the reasonable fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender and of counsel
to the Administrative Agent.
(b) Each
Domestic Loan Party agrees to pay, and to save the Administrative Agent and
the
Lenders harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes
which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement
to
the extent the Company would be required to do so pursuant to Section 10.04
of
the Credit Agreement.
(c) Each
Domestic Loan Party agrees to pay, and to save the Administrative Agent and
the
Lenders harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Company
would
be required to do so pursuant to Section 10.04 of the Credit
Agreement.
25
(d) The
agreements in this Section 8.4 shall survive repayment of the Obligations
and
all other amounts payable under the Credit Agreement and the other Loan
Documents.
8.5 Successors
and Assigns.
This
Agreement shall be binding upon the successors and assigns of each Domestic
Loan
Party and shall inure to the benefit of the Administrative Agent and the
Lenders
and their successors and assigns; provided that (i) no Domestic Loan Party
may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Administrative Agent and
(ii)
this Section 8.5 is subject to Section 8.17(b).
8.6 Set-Off.
Each
Domestic Loan Party hereby irrevocably authorizes the Administrative Agent
and
each Lender at any time and from time to time while an Event of Default pursuant
to Section 8.01(a) of the Credit Agreement shall have occurred and be
continuing, without notice to such Domestic Loan Party or any other Domestic
Loan Party, any such notice being expressly waived by each Domestic Loan
Party,
to set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held
or
owing by the Administrative Agent or such Lender to or for the credit or
the
account of such Domestic Loan Party, or any part thereof in such amounts
as the
Administrative Agent or such Lender may elect, against and on account of
the
obligations and liabilities of such Domestic Loan Party to the Administrative
Agent or such Lender hereunder and claims of every nature and description
of the
Administrative Agent or such Lender against such Domestic Loan Party, in
any
currency, whether arising hereunder, under the Credit Agreement, any other
Loan
Document or otherwise, as the Administrative Agent or such Lender may elect,
whether or not the Administrative Agent or any Lender has made any demand
for
payment and although such obligations, liabilities and claims may be contingent
or unmatured. As security for the Obligations, each Domestic Loan Party hereby
grants a security interest to each Lender in all deposits of such Domestic
Loan
Party with such Lender. The Administrative Agent and each Lender shall notify
such Domestic Loan Party promptly of any such set-off and the application
made
by the Administrative Agent or such Lender of the proceeds thereof, provided
that the
failure to give such notice shall not affect the validity of such set-off
and
application. The rights of the Administrative Agent and each Lender under
this
Section 8.6 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Administrative Agent or such
Lender may have.
8.7 Foreign
Currency.
If the
Administrative Agent so notifies a Domestic Loan Party in writing, at the
Administrative Agent’s sole and absolute discretion, payments under this
Guaranty and Collateral Agreement shall be the U.S. Dollar equivalent of
the
Obligations or any portion thereof, determined as of the date payment is
made.
If any claim arising under or related to this Guaranty and Collateral Agreement
is reduced to judgment denominated in a currency (the “Judgment Currency”) other
than the currencies in which the
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Obligations
are denominated or the currencies payable hereunder (collectively the
“Obligations Currency”), the judgment shall be for the equivalent in the
Judgment Currency of the amount of the claim denominated in the Obligations
Currency included in the judgment, determined as of the date of judgment.
The
equivalent of any Obligations Currency amount in any Judgment Currency shall
be
calculated at the spot rate for the purchase of the Obligations Currency
with
the Judgment Currency quoted by the Administrative Agent in the place of
the
Administrative Agent’s choice at or about 8:00 a.m. on the date for
determination specified above. Each Domestic Loan Party shall indemnify the
Administrative Agent and the Lenders and hold the Administrative Agent and
the
Lenders harmless from and against all loss or damage resulting from any change
in exchange rates between the date any claim is reduced to judgment and the
date
of payment thereof by the Domestic Loan Parties or any failure of the amount
of
any such judgment to be calculated as provided in this paragraph.
8.8 Counterparts.
This
Agreement may be executed by one or more of the parties to this Agreement
on any
number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
8.9 Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision
in any
other jurisdiction.
8.10 Section
Headings.
The
Section headings used in this Agreement are for convenience of reference
only
and are not to affect the construction hereof or be taken into consideration
in
the interpretation hereof.
8.11 Integration.
This
Agreement and the other Loan Documents represent the agreement of the Domestic
Loan Parties, the Administrative Agent and the Lenders with respect to the
subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender relative
to subject matter hereof and thereof not expressly set forth or referred
to
herein or in the other Loan Documents.
8.12 GOVERNING
LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
8.13 Submission
To Jurisdiction; Waivers.
Each
Domestic Loan Party hereby irrevocably and unconditionally:
(a) submits
for itself and its property in any legal action or proceeding relating to
this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents
that any such action or proceeding may be brought in such courts and waives
any
objection that it may now or hereafter have to the venue of any such action
or
proceeding in any such court or that such action or proceeding was brought
in an
inconvenient court and agrees not to plead or claim the same;
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(c) agrees
that service of process in any such action or proceeding may be effected
by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Domestic Loan Party at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees
that nothing herein shall affect the right to effect service of process in
any
other manner permitted by law or shall limit the right to ▇▇▇ in any other
jurisdiction; and waives, to the maximum extent not prohibited by law, any
right
it may have to claim or recover in any legal action or proceeding referred
to in
this Section any special, exemplary, punitive or consequential
damages.
8.14 Acknowledgements.
Each
Domestic Loan Party hereby acknowledges that:
(a) it
has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;
(b) neither
the Administrative Agent nor any Lender has any fiduciary relationship with
or
duty to any Domestic Loan Party arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between
the
Domestic Loan Parties, on the one hand, and the Administrative Agent and
Lenders, on the other hand, in connection herewith or therewith is solely
that
of debtor and creditor; and
(c) no
joint
venture is created hereby or by the other Loan Documents or otherwise exists
by
virtue of the transactions contemplated hereby among the Lenders or among
the
Domestic Loan Parties and the Lenders.
8.15 WAIVER
OF JURY TRIAL.
EACH
DOMESTIC LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.16 Additional
Domestic Loan Parties.
Each
Subsidiary of the Company that is required to become a party to this Agreement
pursuant to Section 6.13 of the Credit Agreement shall become a Domestic
Loan
Party for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1
hereto.
8.17 Releases.
(a) At
such time as the Loans, the Reimbursement Obligations and the other Obligations
(other than Obligations in respect of Related Credit Arrangements) shall
have
been paid in full, the Commitments have been terminated and no Letters of
Credit
shall be outstanding, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each
Domestic Loan Party hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Domestic Loan Parties. At the request
28
and
sole
expense of any Domestic Loan Party following any such termination, the
Administrative Agent shall deliver to such Domestic Loan Party any Collateral
held by the Administrative Agent hereunder, and execute and deliver to such
Domestic Loan Party such documents as such Domestic Loan Party shall reasonably
request to evidence such termination.
(b) If
any of
the Collateral shall be sold, transferred or otherwise disposed of by any
Domestic Loan Party in a transaction permitted by the Credit Agreement, then
the
Administrative Agent, at the request and sole expense of such Domestic Loan
Party, shall execute and deliver to such Domestic Loan Party all releases
or
other documents reasonably necessary or desirable for the release of the
Liens
created hereby on such Collateral. At the request and sole expense of the
Company, a Domestic Loan Party shall be released from its obligations hereunder
in the event that all the Capital Stock of such Domestic Loan Party shall
be
sold, transferred or otherwise disposed of in a transaction permitted by
the
Credit Agreement; provided
that the
Company shall have delivered to the Administrative Agent, at least ten Business
Days prior to the date of the proposed release, a written request for release
identifying the relevant Domestic Loan Party and the terms of the sale or
other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Company stating
that such transaction is in compliance with the Credit Agreement and the
other
Loan Documents.
* * *
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IN
WITNESS WHEREOF, each of the undersigned has caused this Guaranty and Collateral
Agreement to be duly executed and delivered as of the date first above
written.
|
By: /s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice
President
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AARON’S
AUTOMOTIVE PRODUCTS, INC.
ACI
ELECTRONICS HOLDING CORP.
ACI
ELECTRONICS INVESTMENT CORP.
ATC
INFORMATION SERVICES, INC.
ATS
REMANUFACTURING, INC.
AUTOCRAFT
INDUSTRIES, INC.
AUTOCRAFT
REMANUFACTURING CORP.
PROFORMANCE
POWERTRAIN PRODUCTS, INC.
By: /s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice
President
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ATC
LOGISTICS & ELECTRONICS, L.P.
By: ACI
ELECTRONICS HOLDING CORP.,
its
General
Partner
By: /s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice
President
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