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EXHIBIT 10.4
[SUPPLEMENTAL
FACILITY]
GUARANTEE AND COLLATERAL AGREEMENT
made by
ANC RENTAL CORPORATION
and certain of its Subsidiaries
in favor of
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of June 30, 2000
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TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS.......................................................1
1.1 Definitions.........................................................1
1.2 Other Definitional Provisions.......................................7
SECTION 2. GUARANTEE...........................................................8
2.1 Guarantee...........................................................8
2.2 Right of Contribution...............................................8
2.3 Subordination of Subrogation........................................9
2.4 Amendments, etc. with respect to the Borrower Obligations...........9
2.5 Guarantee Absolute and Unconditional...............................10
2.6 Reinstatement......................................................10
2.7 Payments...........................................................11
SECTION 3. GRANT OF SECURITY INTEREST.........................................11
SECTION 4. REPRESENTATIONS AND WARRANTIES.....................................12
4.1 Representations in Credit Agreement................................12
4.2 Title; No Other Liens..............................................12
4.3 Perfected Second Priority Liens....................................13
4.4 Chief Executive Office.............................................13
4.5 Inventory and Equipment............................................13
4.6 Farm Products......................................................13
4.7 Pledged Securities.................................................13
4.8 Receivables........................................................14
4.9 Contracts..........................................................14
4.10 Intellectual Property..............................................15
SECTION 5. COVENANTS..........................................................16
5.1 Covenants in Credit Agreement......................................16
5.2 Delivery of Instruments and Chattel Paper..........................16
5.3 Maintenance of Insurance...........................................16
5.4 Payment of Obligations.............................................17
5.5 Maintenance of Perfected Security Interest; Further
Documentation......................................................17
5.6 Changes in Locations, Name, etc....................................18
5.7 Notices............................................................19
5.8 Investment Property................................................19
5.9 Receivables........................................................21
5.10 Contracts..........................................................22
5.11 Intellectual Property..............................................22
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5.12 Mortgages..........................................................24
SECTION 6. REMEDIAL PROVISIONS................................................24
6.1 Certain Matters Relating to Receivables............................24
6.2 Communications with Obligors; Grantors Remain Liable...............25
6.3 Pledged Stock......................................................25
6.4 Proceeds to be Turned Over To Administrative Agent.................26
6.5 Application of Proceeds............................................27
6.6 Code and Other Remedies............................................27
6.7 Registration Rights................................................28
6.8 Waiver; Deficiency.................................................29
6.9 Rights of Perfection...............................................29
SECTION 7. THE ADMINISTRATIVE AGENT...........................................30
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc........30
7.2 Duty of Administrative Agent.......................................32
7.3 Execution of Financing Statements..................................32
7.4 Authority of Administrative Agent..................................32
7.5 Access to Premises.................................................33
SECTION 8. MISCELLANEOUS......................................................33
8.1 Amendments in Writing..............................................33
8.2 Notices............................................................33
8.3 No Waiver by Course of Conduct; Cumulative Remedies................33
8.4 Enforcement Expenses; Indemnification..............................33
8.5 Successors and Assigns.............................................34
8.6 Set-Off............................................................34
8.7 Counterparts.......................................................34
8.8 Severability.......................................................35
8.9 Section Headings...................................................35
8.10 Integration........................................................35
8.11 GOVERNING LAW......................................................35
8.12 Submission To Jurisdiction; Waivers................................35
8.13 Acknowledgments....................................................36
8.14 Additional Grantors................................................36
8.15 Releases...........................................................36
8.16 Perfection of Security Interests...................................37
8.17 Intercreditor......................................................37
8.18 Conflicts with Borrowing Base Facility Guarantee and
Collateral Agreement...............................................37
8.19 WAIVER OF JURY TRIAL...............................................37
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Schedules
Schedule 1 Notice Address of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect
Security Interest
Schedule 4 Jurisdiction of Incorporation and Location of Chief
Executive Office
Schedule 5 Locations of Inventory and Equipment
Schedule 6 Intellectual Property
Schedule 7 Contracts
Schedule 8 Existing Prior Liens
Annexes
Annex I Assumption Agreement
Annex II Acknowledgment and Consent
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GUARANTEE AND COLLATERAL AGREEMENT, dated as of June 30, 2000,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of ▇▇▇▇▇▇
COMMERCIAL PAPER INC., as administrative agent for the Lenders referred to below
and as collateral agent for the Secured Parties referred to below (in such
capacities, the "Administrative Agent"), for the benefit of the Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to the Amended and Restated Credit
Agreement, dated as of June 30, 2000 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among ANC Rental
Corporation, a Delaware corporation (the "Borrower"), the Lenders, ▇▇▇▇▇▇
Brothers Inc., as advisor, lead arranger and book manager, ▇▇▇▇▇▇ Commercial
Paper Inc., as syndication agent and administrative agent, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, each Grantor 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 Borrower under the
Credit Agreement that the Grantors 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
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Lenders, as follows:
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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 which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Certificated Security, Chattel Paper,
Documents, Equipment, Farm Products, Goods, Instruments and Inventory.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Credit Agreement Obligations": the collective
reference to the unpaid principal of and interest on the Loans and all
other obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and interest
accruing at the then applicable rate provided in the Credit Agreement
and fees and expenses, in each case arising after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or
not a claim for post-filing or post-petition interest, fees and
expenses is allowed in such proceeding) to the Administrative Agent or
any Lender, whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Borrower
pursuant to the terms of any of the foregoing agreements).
"Borrower Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge Agreement after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to any Lender or any affiliate
of any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, any Specified Hedge
Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the relevant Lender or
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affiliate thereof that are required to be paid by the Borrower pursuant
to the terms of any Specified Hedge Agreement.
"Borrower Obligations": the collective reference to (i) the
Borrower Credit Agreement Obligations, and (ii) the Borrower Hedge
Agreement Obligations.
"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.
"Concentration Account": as defined in the Borrowing Base
Credit Agreement.
"Contracts": the contracts and agreements listed in Schedule 7
(as the same may be amended, supplemented or otherwise modified from
time to time) and all other contracts and agreements entered into
hereafter by any Grantor, including, without limitation, (i) all rights
of any Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all rights of any Grantor to damages
arising thereunder and (iii) all rights of any Grantor to perform and
to exercise all remedies thereunder.
"Copyright Licenses": any present and future written agreement
naming any Grantor 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.
"Copyrights": (i) all now owned or hereafter acquired
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.
"Deposit Account": all "Deposit Accounts", as defined in the
Uniform Commercial Code of any applicable jurisdiction, whether now
owned or hereafter acquired, and, in any event, including, without
limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution.
"Excluded Assets": any contract, General Intangible, Copyright
License, Patent License or Trademark License ("Intangible Assets"), in
each case to the extent the grant by the relevant Grantor of a security
interest pursuant to this Agreement in such Grantor's right, title and
interest in such Intangible Asset (i) is prohibited by any contract,
agreement, instrument or indenture governing such Intangible Asset,
(ii) would give any
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other party to such contract, agreement, instrument or indenture the
right to terminate its obligations thereunder or (iii) is permitted
only with the consent of another party, if such consent has not been
obtained; provided, that any Receivable or any money or other amounts
due or to become due under any such contract, agreement, instrument or
indenture shall not constitute Excluded Assets.
"Excluded Vehicles": all Vehicles purchased with the proceeds
of Vehicle Debt.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of
any Foreign Subsidiary.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9-106 of the Uniform Commercial Code in effect in
the State of New York on the date hereof whether now owned or hereafter
acquired and, in any event, including, without limitation, with respect
to any Grantor, all contracts (including without limitation, any Hedge
Agreements), agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights
of such Grantor to damages arising thereunder and (iii) all rights of
such Grantor to perform and to exercise all remedies thereunder.
"Guarantor Hedge Agreement Obligations": as to any Guarantor,
the collective reference to all obligations and liabilities of such
Guarantor (including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge Agreement after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such
Guarantor, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to any Lender or any affiliate
of any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, any Specified Hedge
Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the relevant Lender or affiliate that are required to be
paid by such Guarantor pursuant to the terms of any Specified Hedge
Agreement).
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Guarantor Hedge Agreement Obligations
and (ii) all obligations and liabilities of such Guarantor which may
arise under or in connection with this Agreement (including, without
limitation, Section 2) or any other Loan Document to which such
Guarantor is a party, in each case whether on account of guarantee
obligations,
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reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Lenders that are
required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Intellectual Property": the collective reference to all
present and future 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 Grantor to the Borrower or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
present and future "investment property" as such term is defined in
Section 9-115 of the Uniform Commercial Code in effect in the State of
New York on the date hereof (other than any Foreign Subsidiary Voting
Stock excluded from the definition of "Pledged Stock") and (ii) whether
or not constituting "investment property" as so defined, all Pledged
Securities.
"Issuers": the collective reference to each issuer of a
Pledged Security.
"LLC Agreements": the operating agreements with respect to
each LLC Issuer.
"LLC Issuers": Alamo Rent-A-Car, LLC, a Delaware limited
liability company and all other limited liability companies that become
party hereto pursuant to Section 5.9 of the Credit Agreement and
Section 8.14 of this Agreement.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patent License": all present and future agreements, whether
written or oral, providing for the grant by or to any Grantor 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.
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"Patents": all now owned and hereafter arising or acquired (i)
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.
"Pledged LLC Interests": the present and future ownership of
the Borrower in each LLC Issuer and all present and future right, title
and interest in, to and under each LLC Agreement with respect thereto
and all present and future rights of the Borrower to receive payments
of money or other distributions of payments arising out of or in
connection with its ownership interest and its rights under each LLC
Agreement.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor.
"Pledged Securities": the collective reference to the Pledged
Notes, the Pledged Stock and the Pledged LLC Interests.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other present and future shares, stock
certificates, options 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 Grantor while this Agreement is in effect; provided that
in no event shall (a) more than 65% of the total outstanding Foreign
Subsidiary Voting Stock of any Foreign Subsidiary or (b) the Capital
Stock of any Inactive Subsidiary, any Finance Company or any Insurance
Company be required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event, including, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
"Receivable": any present and future 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).
"Secured Parties": the collective reference to each Lender
under the Credit Agreement, the Administrative Agent and each Lender to
which Obligations in respect of any Specified Hedge Agreement are
owing.
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"Securities Act": the Securities Act of 1933, as amended.
"Specified Collateral": (i) all Investment Property, (ii) all
Intellectual Property in which the Administrative Agent shall have a
perfected security interest by virtue of filing in the United States
Patent and Trademark Office or the United States Copyright Office,
(iii) all Collateral in which the Administrative Agent shall have a
perfected security interest by virtue of filing UCC financing
statements in the state of organization of each Grantor and the state
and county where the principal place of business of each Grantor is
located and (iv) all Mortgaged Properties in which the Administrative
Agent will have a perfected security interest by virtue of recording
mortgages on Mortgaged Properties located in all States other than New
York and Florida.
"Trademark License": any present and future agreement, whether
written or oral, providing for the grant by or to any Grantor of any
right to use any Trademark, including, without limitation, any of the
foregoing referred to in Schedule 6.
"Trademarks": all now owned and hereafter arising or acquired
(i) trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, 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) right to obtain all renewals thereof.
"Vehicles": all now owned or hereafter acquired cars, trucks,
trailers, construction and earth moving equipment and other vehicles
covered by a certificate of title law of any state and all tires and
other appurtenances to any of the foregoing.
1.2 Other Definitional Provisions. 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.
(a) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(b) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
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SECTION 2. GUARANTEE
2.1 Guarantee. (a) The Guarantors hereby, jointly and
severally, unconditionally, absolutely and irrevocably, guarantee to the
Administrative Agent, for the ratable benefit of the Secured Parties and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount, under
applicable federal and state laws relating to the insolvency of debtors, that
would result in the avoidance or illegality of the Obligations of such Guarantor
hereunder and under the Loan Documents (after giving effect to the right of
contribution established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may
at any time and from time to time exceed the amount of the liability of such
Guarantor 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) Unless otherwise released in accordance with Section 8.15,
the guarantee contained in this Section 2 shall remain in full force and effect
until all the Borrower Obligations and the obligations of each Guarantor under
the guarantee contained in this Section 2 shall have been paid in full in cash
or other immediately available funds and the Revolving Credit Commitments shall
have been terminated, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the Guarantors, 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 Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until all of the Borrower Obligations
shall have been paid in full in cash or other immediately available funds and
the Revolving Credit Commitments shall have been terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which has
not paid its proportionate
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share of such payment. Each Guarantor'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 Guarantor to
the Administrative Agent and the Lenders, and each Guarantor shall remain liable
to the Administrative Agent and the Lenders for the full amount guaranteed by
such Guarantor hereunder.
2.3 Subordination of Subrogation. Notwithstanding any payment
made by any Guarantor hereunder or any set-off or application of funds of any
Guarantor by the Administrative Agent or any Lender, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any Lender against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative Agent or any
Lender for the payment of the Borrower Obligations, nor shall any Guarantor seek
or be entitled to seek any contribution, reimbursement or indemnification from
the Borrower or any other Guarantor in respect of payments made by such
Guarantor hereunder, until all amounts owing to the Administrative Agent and the
Lenders by the Borrower on account of the Borrower Obligations shall have been
paid in full in cash or other immediately available funds and the Revolving
Credit Commitments shall have been terminated. If any amount shall be paid to
any Guarantor on account of such subrogation or similar rights at any time when
all of the Borrower Obligations shall not have been paid in full in cash or
other immediately available funds, such amount shall be held by such Guarantor
in trust for the Administrative Agent and the Lenders, segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower 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 Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure,
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perfect or insure any Lien at any time held by it as security for the Borrower
Obligations or for the guarantee contained in this Section 2 or any property
subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower 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 Borrower
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
Borrower and any of the Guarantors, 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 Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or any of the Guarantors with respect to the Borrower Obligations. Each
Guarantor 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 (1) the validity or enforceability of the Credit
Agreement or any other Loan Document, any of the Borrower 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, (2) 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
the Borrower or any other Person against the Administrative Agent or any Lender,
or (3) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor 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 Guarantor, 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 the Borrower, any other Guarantor or any other Person or against
any collateral security or guarantee for the Borrower 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 the Borrower, any other Guarantor 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 the Borrower, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or
any Lender against any Guarantor. For the purposes hereof, "demand" shall
include the commencement and continuance of any legal proceedings.
2.6 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 Borrower Obligations is
rescinded or must otherwise
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be restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Payment Office specified in the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
following property now owned or at any time hereafter acquired by such Grantor
or in which such Grantor 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 such Grantor's
Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) the Collateral Account (and all cash, money and
instruments at any time on deposit in the Collateral Account, all investments
made and interest earned in respect of such cash and monies and all proceeds of
any of the foregoing);
(d) the Concentration Account (and all cash, money and
instruments at any time on deposit in the Concentration Account, all investments
made and interest earned in respect of such cash and monies and all proceeds of
any of the foregoing);
(e) all Contracts;
(f) all Deposit Accounts;
(g) all Documents;
(h) all Equipment;
(i) all General Intangibles;
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(j) all Instruments;
(k) all Intellectual Property;
(l) all Inventory;
(m) all Investment Property;
(n) all Vehicles;
(o) all Goods and other property not otherwise described
above;
(p) all books and records pertaining to the Collateral; and
(q) to the extent not otherwise included, all Proceeds 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, that notwithstanding the foregoing, the Collateral shall not include
the Excluded Assets or the Excluded Vehicles.
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 Borrower thereunder, each Grantor hereby represents
and warrants to the Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein 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 Guarantor'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 Grantor 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
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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.
4.3 Perfected Second 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 or will be delivered to the
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Specified Collateral (other than
Inventory and Equipment constituting Specified Collateral maintained at
locations where there is (i) less than $20,000 aggregate book value of Inventory
and Equipment maintained at each such location and (ii) an aggregate book value,
as to all Inventory and Equipment maintained at such locations, not to exceed
$200,000) in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for such Grantor's Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Specified Collateral from
such Grantor and are prior to all other Liens on the Specified Collateral in
existence on the date hereof except for Liens permitted by the Credit Agreement
which have priority over the Liens on the Specified Collateral by operation of
law.
4.4 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization, the location of such Grantor's chief executive
office or sole place of business and such Grantor's federal employer
identification number are specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods and Inventory and Equipment
maintained at locations where there is (A) less than $20,000 aggregate book
value of Inventory and Equipment maintained at each such location and (B) an
aggregate book value, as to all Inventory and Equipment maintained at such
locations, not to exceed $200,000) 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 Pledged Securities. (a) Except as set forth on Schedule
4.7, the shares of Pledged Stock pledged by such Grantor hereunder constitute
all the issued and outstanding shares of all classes of the Capital Stock of
each Issuer owned by such Grantor or, in the case of Republic ▇▇▇ ▇▇▇▇▇▇
Partner, Inc., 65% of its Capital Stock or, in the case of Foreign Subsidiary
Voting Stock, 65% of the outstanding Foreign Subsidiary Voting Stock of each
other relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
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(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, except as limited by 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 Grantor 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 (i) the security interest created by this Agreement, (ii)
the security interest created pursuant to the Borrowing Base Credit Agreement
and (iii) the Liens permitted by the Credit Agreement arising by operation of
law or permitted by Section 6.3(o) of the Credit Agreement.
(e) The Borrower is the registered owner of all of the
ownership interest in each LLC Issuer, and the Borrower constitutes the only
"member" of each LLC Issuer. The ownership interest of the Borrower in each LLC
Issuer has been duly and validly issued and is fully paid and non-assessable and
constitutes the Borrower's entire interest in such LLC Issuer. With respect to
the ownership interest in each LLC Issuer held by the Borrower, upon the
Administrative Agent's request, the Borrower shall execute and deliver written
instructions to such LLC Issuer to register the pledge, security interest and
lien arising hereunder in such ownership interest in the registration books
maintained by such LLC Issuer.
4.8 Receivables. (a) No amount payable to such Grantor under
or in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent (or a bailee
appointed by the Administrative Agent) to the extent required by Section 5.2.
(b) None of the obligors on any Receivable is a Governmental
Authority, except for Receivables constituting not more than 5% of the face
amount of all Receivables.
(c) The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables will at
such times be accurate within $100,000 as to all such Receivables.
4.9 Contracts. (a) No consent of any party (other than such
Grantor) to any material Contract is required, or purports to be required, in
connection with the execution, delivery and performance of this Agreement.
(b) Each material Contract is in full force and effect and
constitutes a valid and legally enforceable obligation of the parties thereto,
except as limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
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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.
(c) No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of any of the
material Contracts by any party thereto other than those which have been duly
obtained, made or performed and other than those with respect to which the
failure to obtain, make or perform could not reasonably be expected to have a
Material Adverse Effect, are in full force and effect and do not subject the
scope of any such Contract to any material adverse limitation, either specific
or general in nature.
(d) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to each material Contract is in default in
the performance or observance of any of the terms thereof in any manner that, in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of such Grantor in, to and
under all material Contracts are not subject to any defenses, offsets,
counterclaims or claims that, in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(f) Such Grantor has delivered to the Administrative Agent a
complete and correct copy of each material Contract, including all amendments,
supplements and other modifications thereto.
(g) No amount payable to such Grantor under or in connection
with any material Contract is evidenced by any Instrument or Chattel Paper which
has not been delivered to the Administrative Agent (or a bailee appointed by the
Administrative Agent).
(h) None of the parties to any Contract is a Governmental
Authority.
4.10 Intellectual Property. (a) Schedule 6 lists all
Intellectual Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property of
such Grantor described on Schedule 6 is valid, subsisting, unexpired and
enforceable, has not been abandoned and, to the knowledge of such Grantor, does
not infringe the intellectual property rights of any other Person.
(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 Grantor is the licensor or franchisor.
(d) Except as otherwise disclosed in the schedules to the
Credit Agreement, no holding, decision or judgment has been rendered by any
Governmental Authority which would
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limit, cancel or question the validity of, or such Grantor's rights in, any
Intellectual Property in any respect that could reasonably be expected to have a
Material Adverse Effect.
(e) Except as otherwise disclosed in the schedules to the
Credit Agreement, no material action or proceeding is pending, or, to the
knowledge of such Grantor, threatened, on the date hereof seeking to limit,
cancel or question the validity of any material Intellectual Property or such
Grantor's ownership interest therein which, if adversely determined, would have
a material adverse effect on the value of any Intellectual Property.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative
Agent and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full in cash or other immediately available
funds and the Revolving Credit Commitments shall have been terminated:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor 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 Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any amount
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 (or a bailee appointed by the
Administrative Agent), duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement,
provided, that, so long as no Default or Event of Default exists, the Grantors
shall not be obligated to deliver to the Administrative Agent (or a bailee
appointed by the Administrative Agent) any Instruments or Chattel Paper held by
any Grantor at any time to the extent that the aggregate face amount of all such
Instruments and Chattel Paper held by all Grantors at such time does not exceed
$250,000.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain,
with financially sound and reputable companies, insurance policies (i) insuring
the Inventory, Equipment and Vehicles against loss by fire, explosion, theft and
such other casualties comparable in scope and coverage as insurance maintained
by companies engaged in the same or similar businesses and (ii) insuring such
Grantor, the Administrative Agent and the Lenders against liability for personal
injury and property damage relating to such Inventory, Equipment and Vehicles,
such policies to be in such form and amounts and having such coverage as are
usually maintained by companies engaged in the same or similar businesses.
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(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (ii) if reasonably requested by
the Administrative Agent, include a breach of warranty clause and (iii) comply
with Section 5.3(a). Such Grantor shall cause the Administrative Agent to be
named as a loss payee and additional insured (but without any liability for any
premiums) under such insurance and shall obtain non-contributory lender's loss
payable endorsements to all insurance policies in form and substance
satisfactory to the Administrative Agent. Such lender's loss payable
endorsements shall specify that (A) the proceeds of such insurance shall be
payable to the Administrative Agent as its interest may appear and (B) the
Administrative Agent shall be paid regardless of any act or omission of any
Grantor or its Affiliates, provided that if such Grantor, after using its best
efforts, is unable to obtain the specification referred to in clause (B) above,
such Grantor will have sixty days to use its best efforts to obtain insurance
with such specification.
(c) The Borrower shall deliver to the Administrative Agent a
report of a reputable insurance broker with respect to such insurance
substantially concurrently with the delivery by the Borrower to the
Administrative Agent of its audited financial statements for each fiscal year
and such supplemental reports with respect thereto as the Administrative Agent
may from time to time reasonably request.
5.4 Payment of Obligations. Such Grantor 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 that no such charge 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 Grantor 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 Grantor shall maintain the security interest created by
this Agreement in respect of Specified Collateral as a perfected security
interest having at least the priority described in Section 4.3; provided, that
(i) with respect to Intellectual Property, such Grantor shall only be required
(A) to maintain, evidence and record, or to assist the Administrative Agent in
connection with the enforcement of its security interest with, the United States
Patent and Trademark Office and the United States Copyright Office, or such
other applicable Governmental Authority of the United States, or any state,
local governmental or political subdivision thereof, and (B) to file UCC
financing statements and maintain and continue the effectiveness thereof and
(ii) with respect to the Pledged Securities that are certificated securities,
such Grantor shall only be required to (A) deliver to the Administrative Agent
(or a bailee appointed by the Administrative Agent) the original of such
certificated securities, together with stock powers in blank indorsed to the
Administrative Agent
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or a bailee appointed by the Administrative Agent, and (B) to file UCC financing
statements and maintain and continue the effectiveness thereof; provided further
that, after the occurrence and during the continuance of an Event of Default,
such Grantor shall also maintain the security interests perfected pursuant to
Section 6.9 as perfected security interests. Such Grantor shall defend such
security interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor 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 Grantor and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor 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) the filing of 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, (ii) in the case of Investment Property, Deposit Accounts 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 and (iii) in the case of any
Pledged Notes, delivering the original of such Pledged Notes to the
Administrative Agent (or a bailee appointed by the Administrative Agent), duly
indorsed in a manner satisfactory to the Administrative Agent.
5.6 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice (or, in the case of the occurrence of
the events described in clauses (i) and (iii) below, not less than 15 days
written notice after the date of such occurrence) to the Administrative Agent
and delivery to the Administrative Agent of (a) 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 or as the Administrative Agent may deem
reasonably necessary or desirable to protect its interest in the Collateral or
its ability to realize thereon and (b) if applicable, a written supplement to
Schedule 5 showing any additional location at which Inventory or Equipment shall
be kept:
(i) permit any of the Inventory or Equipment (other than (A)
Inventory sold or disposed of in the ordinary course of business and
Equipment which is obsolete or disposed of pursuant to the Credit
Agreement and (B) Equipment and Inventory which (x) is being repaired
and (y) has an aggregate book value, as to all such Equipment and
Inventory, not to exceed $500,000) to be kept at a location other than
those listed on Schedule 5;
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(ii) change its jurisdiction of organization or the location
of its chief executive office or sole place of business from that
referred to in Section 4.4; or
(iii) change its name, identity or corporate structure.
5.7 Notices. Such Grantor will advise the Administrative Agent
and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral which would
materially adversely affect the ability of the Administrative Agent to exercise
any of its remedies hereunder;
(b) 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; and
(c) each material demand, notice or document received by it
relating in any way to any material Contract that questions the validity or
enforceability of such Contract.
5.8 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock 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 Grantor 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 (or a bailee appointed by the
Administrative Agent) in the exact form received, duly indorsed by such Grantor
to the Administrative Agent (or a bailee appointed by the Administrative Agent),
if required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if required by the terms of such
stock certificate, signature guaranteed, to be held by the Administrative Agent
(or a bailee appointed by the Administrative Agent), subject to the terms
hereof, as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent (or a
bailee appointed by 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 security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent (or a bailee
appointed by 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 Pledged
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Securities shall be received by such Grantor, such Grantor shall, until such
money or property is paid or delivered to the Administrative Agent (or a bailee
appointed by the Administrative Agent), hold such money or property in trust for
the Lenders, segregated from other funds of such Grantor, as additional
collateral security for the Obligations. Notwithstanding the foregoing, the
Grantors shall not be required to pay over to the Administrative Agent or
deliver to the Administrative Agent (or any bailee appointed by the
Administrative Agent) as Collateral any proceeds of any liquidation or
dissolution of any Issuer, or any distribution of capital or property in respect
of any Investment Property, to the extent that (i) such liquidation, dissolution
or distribution, if treated as a Disposition of the relevant Issuer, would be
permitted by the Credit Agreement and (ii) the proceeds thereof are applied
toward prepayment of Loans and reduction of Revolving Credit Commitments to the
extent required by the Credit Agreement.
(b) Without the prior written consent of the Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any stock or other equity securities of any nature of
any Issuer (except pursuant to a transaction expressly permitted by the Credit
Agreement), (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 Property or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or permitted under Section 6.3(n) of the Credit Agreement or (iv)
enter into any agreement or undertaking restricting the right or ability of such
Grantor or the Administrative Agent to sell, assign or transfer any of the
Pledged Securities or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement).
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities 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 Pledged Securities 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 Pledged Securities issued by it.
(d) Each Issuer that is a partnership or a limited liability
company (i) confirms that none of the terms of any equity interest issued by it
provides that such equity interest is a "security" within the meaning of
Sections 8-102 and 8-103 of the New York UCC (a "Security"), (ii) agrees that it
will take no action to cause or permit any such equity interest to become a
Security, (iii) agrees that it will not issue any certificate representing any
such equity interest and (iv) agrees that if, notwithstanding the foregoing, any
such equity interest shall be or become a Security, such Issuer will (and the
Grantor that holds such equity interest hereby instructs such Issuer to) comply
with instructions originated by the Administrative Agent without further consent
by such Grantor.
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(e) Without the prior written consent of the Administrative
Agent, the Borrower shall not permit any LLC Issuer directly or indirectly to
issue, sell, grant, assign or otherwise dispose of any additional membership
interest of such LLC Issuer or of any option or warrant with respect thereto or
amend the articles of organization or operating agreement of such LLC Issuer to
limit or restrict permissible activities in which such LLC Issuer may engage or
take any action to withdraw the authority of or to limit or restrict the
authority of such LLC Issuer's managers or officers or pay any interim
distribution and cash or other assets to any member, except as permitted in the
Credit Agreement. Any distribution by any LLC Issuer other than as permitted
under the Credit Agreement shall comply with applicable law and the applicable
LLC Agreement. The Borrower shall promptly notify the Administrative Agent of
the occurrence of any events specified in the LLC Agreements that may result in
any LLC Issuer's dissolution or liquidation
(f) By execution and delivery hereof by the Borrower, each
LLC Agreement, to the extent it does not already reflect the following, is
hereby amended: (i) to permit the Borrower to pledge and assign any and all
membership interests in (or other ownership interest of) such LLC Issuer
(including, without limitation, the Pledged LLC Interests) to the Administrative
Agent; and (ii) to permit the Administrative Agent to be admitted to such LLC
Issuer as a member thereof upon the transfer of the membership interests to the
Administrative Agent without compliance by the Administrative Agent or any other
Person with any of the conditions or other requirements of such LLC Agreement
and without conferring upon such LLC Issuer or any other member thereof any
option to acquire the membership interests so transferred to the Administrative
Agent or its designees. The Borrower agrees to take such action and execute such
further documents as the Administrative Agent may from time to time request in
order to give effect to the foregoing provisions of this Section. Nothing herein
shall be construed to make the Administrative Agent liable as a member of any
LLC Issuer and the Administrative Agent by virtue of this Agreement or otherwise
shall not have any of the duties, obligations or liabilities of a member of such
LLC Issuer. The parties hereto expressly agree that this Agreement shall not be
construed as creating a partnership or joint venture among the Administrative
Agent and/or each LLC Issuer.
5.9 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice and as otherwise permitted under the
Credit Agreement, such Grantor 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 materially adversely affect the value thereof.
(b) Such Grantor 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.
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(c) The Administrative Agent shall have the right at any time
or times in its own name or in the name of a nominee of the Administrative Agent
to verify the validity, amount and terms of any Receivables or Contracts by
mail, telephone, facsimile transmission or otherwise, but shall not contact the
same customers on a repeated basis and shall only do so on a periodic basis in
accordance with the customary practices of the Administrative Agent and with the
sole purpose to verify such information.
(d) No payment shall be made in respect of Receivables,
except payments remitted in accordance with Section 6.11 of the Borrowing Base
Credit Agreement.
(e) None of the transactions giving rise to Receivables in an
aggregate amount in excess of $200,000 will violate any applicable Federal,
State or local laws or regulations (such that any such violation would in any
way adversely affect the obligation of the account debtor, counterparty or other
obligor to make payments to such Grantor in respect of such Receivable or would
adversely affect the ability of such Grantor to collect any such payments in
respect of such Receivable), all documentation relating thereto will be legally
sufficient under such laws and regulations and all such documentation will be
legally enforceable in accordance with its terms in all material respects,
except as limited by 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.
5.10 Contracts. (a) Such Grantor will perform and comply in
all material respects with all its obligations under all of its material
Contracts.
(b) Such Grantor will not amend, modify, terminate or waive
any provision of any material Contract in any manner which could reasonably be
expected to materially adversely affect the value of such Contract as
Collateral.
(c) Such Grantor will exercise promptly and diligently each
and every material right which it may have under each material Contract (other
than any right of termination).
5.11 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists 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 Requirements of Law and
(iv) 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, unless (i) the Administrative Agent shall have received
prompt written notice of such Grantor's abandonment or failure to maintain any
such Intellectual Property, (ii) any such Intellectual Property is no longer
used in the business of such Grantor, and shall not be affixed to, or used in
connection with the use of, any of the
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Collateral and (iii) any such Intellectual Property shall not otherwise be
material to the business of such Grantor in any respect and shall have little or
no value.
(b) Such Grantor (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, unless (i) the Administrative
Agent shall have received prompt written notice of such Grantor's abandonment or
failure to maintain any such Intellectual Property, (ii) any such Intellectual
Property is no longer used in the business of such Grantor or used in connection
with the use of, any of the Collateral and (iii) any such Intellectual Property
shall not otherwise be material to the business of such Grantor in any respect
and shall have little or no value.
(c) Such Grantor (either itself or through licensees), (i)
will employ each material Copyright, (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 and (iii) will not do any act whereby any material portion of
the Copyrights may fall into the public domain, unless (i) the Administrative
Agent shall have received prompt written notice of such Grantor's abandonment or
failure to maintain any such Intellectual Property, (ii) any such Intellectual
Property is no longer used in the business of such Grantor or used in connection
with the use of, any of the Collateral and (iii) any such Intellectual Property
shall not otherwise be material to the business of such Grantor in any respect
and shall have little or no value.
(d) Such Grantor (either itself or through licensees) will
not do any act that knowingly uses any material Intellectual Property to
infringe the intellectual property rights of any other Person.
(e) Such Grantor 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 Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, 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 Grantor
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 Grantor 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
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Agent's and the Lenders' security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
(g) Such Grantor 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 relating to any material Intellectual
Property (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 (except to the extent that abandonment, impairment or
invalidation is permitted under the foregoing clauses (a) through (c)).
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
5.12 Mortgages. Subject to Section 8.16, in the event that at
any time the aggregate principal amount of all Loans then outstanding is less
than the amount stated to be secured by any Mortgage recorded with the
applicable Governmental Authority of the State of New York, the Borrower shall,
or shall cause the Grantor that is the mortgagor under any such Mortgage to, pay
the mortgage recording tax in respect of such Mortgage under the Applicable Law
in the State of New York prior to requesting any additional Loans under the
Credit Agreement.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default, to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
At any time and from time to time after the occurrence and during the
continuance of an Event of Default, upon the Administrative Agent's request and
at the expense of the relevant Grantor, such Grantor 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 Grantor
to collect such Grantor's Receivables, subject to the Administrative Agent's
direction and control after the
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occurrence and during the continuance of an Event of Default, 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 Grantor, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor 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 Grantor in trust for the Administrative Agent and the Lenders, segregated
from other funds of such Grantor. 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, each Grantor shall
deliver to the Administrative Agent (or a bailee appointed by 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; Grantors Remain Liable. (a)
Upon the request of the Administrative Agent at any time after the occurrence
and during the continuance of an Event of Default, each Grantor shall notify
obligors on the Receivables and parties to the Contracts 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.
(b) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables (or any agreement
giving rise thereto) and Contracts 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) or Contract by reason of or arising out
of this Agreement or the receipt by the 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 Grantor
under or pursuant to any Receivable (or any agreement giving rise thereto) or
Contract, 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 notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant
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to Section 6.3(b), each Grantor 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 rights with
respect to the Pledged Securities.
(b) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise such rights
to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Securities and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of the
Pledged Securities 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 Pledged
Securities 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 Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities 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 Grantor 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 Grantor hereby authorizes and instructs each Issuer
of any Pledged Securities pledged by such Grantor hereunder to (1) 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 accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (2) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Administrative Agent.
(d) Upon the occurrence of an Event of Default and by prior
written notice thereof to any LLC Issuer and the Borrower, (i) the
Administrative Agent may transfer the membership interests of the Borrower into
the name of the Administrative Agent and (ii) the Administrative Agent shall be
admitted as a member of such LLC Issuer in the place of the Borrower.
6.4 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and
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the Lenders specified in Section 6.1 with respect to payments of Receivables, if
an Event of Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and other near-cash items shall be held by
such Grantor in trust for the Administrative Agent and the Lenders, segregated
from other funds of such Grantor, and shall, forthwith upon receipt by such
Grantor, be turned over to the Administrative Agent in the exact form received
by such Grantor (duly indorsed by such Grantor 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 Grantor 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 Borrower 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, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:
First, to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;
Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in
respect of the Obligations, pro rata among the Lenders according to the
amounts of the Obligations then due and owing and remaining unpaid to
the Lenders;
Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, pro rata among the Lenders
according to the amounts of the Obligations then held by the Lenders;
and
Fourth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full in cash or other immediately
available funds and the Revolving Credit Commitments shall have been
terminated shall be paid over to the Borrower or to whomsoever may be
lawfully entitled to receive the same.
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 Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such
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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 purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in any Grantor, which right
or equity is hereby waived and released. Each Grantor 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 Grantor'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 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 9-504(1)(c) of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor 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 good faith judgment 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
Grantor 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 Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the
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Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each Grantor 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
Grantor 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,
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 Grantor 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
Requirements of Law. Each Grantor 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 Grantor, and such Grantor 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 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of the
New York UCC. Each Grantor 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.
6.9 Rights of Perfection. Each Grantor acknowledges that, upon
the occurrence and during the continuance of an Event of Default and in addition
to the rights and remedies provided under this Agreement and applicable law, the
Administrative Agent may, at the expense of such Grantor, take any action in
respect of the Collateral deemed necessary by the Administrative Agent to (a)
perfect the security interests granted hereunder and (b) record mortgages on any
Mortgaged Properties.
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SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact,
etc. (a) Each Grantor 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 Grantor and in the name of
such Grantor 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 Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:
(i) in the name of such Grantor 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 Contract 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 Contract 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 Grantor relating thereto or represented thereby;
(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) (10 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; (2) 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; (3) 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; (4) commence and prosecute any suits, actions or
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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; (50 defend any
suit, action or proceeding brought against such Grantor with respect
to any Collateral; (6) 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; (7) 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 (8) 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
Grantor'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
Grantor 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, except, that, the
Administrative Agent may, at any time and consistent with the verification
procedures described in Section 5.9(c), (A) sign any Grantor's name on any
verification of Receivables sent to an account debtor or any obligor in respect
thereof and (B) execute in the name of any Grantor and file any UCC financing
statements or amendments thereto. Each Grantor hereby releases the
Administrative Agent and its officers, employees and designees from any
liabilities arising from any act or acts under this power of attorney and in
furtherance thereof, whether of omission or commission, except as a result of
the Administrative Agent's own gross negligence or willful misconduct as
determined pursuant to a final non-appealable order of the court of competent
jurisdiction. The Administrative Agent may, at its option, upon notice to any
Grantor, cure any default by such Grantor under any material agreement with a
third party that affects the Collateral, its value or the ability of the
Administrative Agent to collect, sell or otherwise dispose of the Collateral or
the rights and remedies of the Administrative Agent with respect thereto.
(b) If any Grantor 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.
(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 rate per annum then
applicable to Base Rate Loans under the Credit Agreement, from the date of
payment by the Administrative Agent to the date reimbursed by the relevant
Grantor, shall be payable by such Grantor to the Administrative Agent on demand
(or the Administrative Agent may, at its option, charge such amounts to any loan
account of a Grantor maintained by the Administrative Agent).
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(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. 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 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 Grantor 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 Grantor 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 Section
9-402 of the New York UCC and any other applicable law, each Grantor 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 Grantor 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. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor
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 Grantors, 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 Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
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7.5 Access to Premises. From time to time as requested by the
Administrative Agent, the Administrative Agent or its designee shall have access
to each Grantor's premises during normal business hours and after notice to such
Grantor, or at any time without notice to any Grantor if a Default or Event of
Default exists or has occurred and is continuing, for the purposes of verifying
and auditing the Collateral and the books and records of such Grantor. Each
Grantor shall promptly furnish to the Administrative Agent such copies of such
books and records or extracts therefrom as the Administrative Agent may
reasonably request.
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
by a written instrument executed by each affected Grantor and the Administrative
Agent, provided that any provision of this Agreement imposing obligations on any
Grantor may be waived by the Administrative Agent in a written instrument
executed by the Administrative Agent.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 9.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor 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. (a) Each Guarantor
agrees to pay, or reimburse each Lender and the Administrative Agent for, all
its costs and expenses incurred in collecting against such Guarantor 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 Guarantor is a
party, including, without limitation, the fees and disbursements of counsel to
each Lender and of counsel to the Administrative Agent.
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(b) Each Guarantor 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.
(c) Each Guarantor 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 Borrower would be required to do so pursuant to
Section 9.5 of the Credit Agreement.
(d) The agreements in this Section 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 Grantor and shall inure to the benefit
of the Administrative Agent and the Lenders and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender, without prior notice to such Grantor, any
such notice being expressly waived by such Grantor to the extent permitted by
applicable law, upon any amount becoming due and payable by such Grantor in
respect of such Grantor's Obligations (whether at the stated maturity, by
acceleration or otherwise), to set off and appropriate and apply against such
amount 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 such Lender or any branch or
agency thereof to or for the credit or the account of such Grantor. The
Administrative Agent and each Lender shall notify such Grantor (and in the case
of such set-off by any Lender, such Lender shall notify the Administrative
Agent) 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 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.
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8.8 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.
8.9 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.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, 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.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor 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;
(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
Grantor 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
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(e) 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.
8.13 Acknowledgments. Each Grantor 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 Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, 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 Grantors and the Lenders.
8.14 Additional Grantors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to Section 5.9 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans and the other
Obligations (other than Borrower Hedge Agreement Obligations and the Guarantor
Hedge Agreement Obligations) shall have been paid in full in cash or other
immediately available funds and the Revolving Credit Commitments shall have been
terminated, the Collateral shall be automatically 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 Grantor hereunder shall automatically 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 Grantors to the extent not prohibited by
applicable law. At the request and sole expense of any Grantor following any
such termination, to the extent not prohibited by applicable law, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor 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 Borrower, a
Subsidiary
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Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock or substantially all of the assets of such Subsidiary
Guarantor shall be sold, transferred or otherwise disposed of in a transaction
permitted by the Credit Agreement (including by way of merger or consolidation).
In the event that any Subsidiary is released from its obligations hereunder
pursuant to this Section 8.15, any Mortgage granted by such Subsidiary to the
Administrative Agent shall also be released.
8.16 Perfection of Security Interests. Notwithstanding
anything in this Agreement and the Credit Agreement to the contrary with respect
to the perfection of security interests, but subject to Section 6.9, unless an
Event of Default has occurred and is continuing, the parties hereto have agreed
that the Administrative Agent will not (i) perfect its security interest in any
Mortgaged Property located in the State of New York or Florida and (ii) with
respect to Accounts, Contracts, Equipment, General Intangibles and Inventory,
file UCC financing statements in jurisdictions other than (A) the State of
organization of each Grantor and (B) the State and county location of each
Grantor's principal place of business.
8.17 Intercreditor Agreement. Notwithstanding anything in this
Agreement to the contrary, (a) the terms and provisions of this Agreement in
respect of the Collateral are subject to the Intercreditor Agreement and (b)
with respect to the delivery of Collateral which may be perfected by possession
by the secured party with respect thereto, or which is required pursuant to the
terms of this Agreement, such delivery shall be deemed to have been complied
with so long as such delivery is made to the Borrowing Base Administrative Agent
and held subject to Section 2(b) of the Intercreditor Agreement.
8.18 Conflicts with Borrowing Base Facility Guarantee and
Collateral Agreement. Notwithstanding anything in this Agreement to the
contrary, in the event that any Grantor's obligations under this Agreement
(including, without limitation, under Section 6 hereof) shall conflict or
otherwise be inconsistent with its obligations under the Guarantee and
Collateral Agreement (as defined in the Borrowing Base Credit Agreement, and, as
used herein, the "Borrowing Base Collateral Agreement"), such Grantor shall be
deemed to have complied with its obligations hereunder to the extent such
Grantor complies with its corresponding obligations under the Borrowing Base
Collateral Agreement and, upon such compliance with the obligations under the
Borrowing Base Collateral Agreement, shall be relieved from its corresponding
obligations under this Agreement.
8.19 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF
THE BENEFITS HEREOF, EACH AGENT AND EACH LENDER, 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.
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IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered as of the date first above written.
ANC RENTAL CORPORATION,
as Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Treasurer
ALAMO RENT-A-CAR (CANADA), INC.
ALAMO RENT-A-CAR, LLC
LIABILITY MANAGEMENT COMPANIES
HOLDING, INC.
NATIONAL CAR RENTAL LICENSING, INC.
NATIONAL CAR RENTAL SYSTEM, INC.
REPUBLIC ▇▇▇ ▇▇▇▇▇▇ PARTNER, INC.
REPUBLIC INDUSTRIES AUTOMOTIVE
RENTAL GROUP (BELGIUM) INC.
SPIRIT RENT-A-CAR, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Treasurer
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ALAMO RENT-A-CAR MANAGEMENT, LP
By: ARC-GP, Inc., its general partner
ANC COLLECTOR CORPORATION
ANC FINANCIAL, LP
By: ANC Financial GP Corporation, its general partner
ARC-GP, INC.
ARC-TM, INC.
NCR AFFILIATE SERVICER, INC.
NCRAS MANAGEMENT, LP
By: NCRAS-GP, Inc., its general partner
NCRAS-GP, INC.
SRAC MANAGEMENT, LP
By: SRAC-GP, Inc., its general partner
SRAC-GP, INC.
SRAC-TM, INC.
By: /s/ O. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
----------------------------------------------
Name: O. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Title: Vice President and Assistant Secretary
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