EXHIBIT 10.2
U.S. GUARANTEE AND COLLATERAL AGREEMENT
dated and effective as of
February 28, 2003,
among
TRW AUTOMOTIVE HOLDINGS CORP.,
TRW AUTOMOTIVE INTERMEDIATE HOLDINGS CORP.,
TRW AUTOMOTIVE ACQUISITION CORP.,
each other Subsidiary of Holdings
identified herein,
and
JPMORGAN CHASE BANK,
as Collateral Agent
2
Table of Contents
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ARTICLE I
SECTION 1.01. Credit Agreement........................................................................ 4
SECTION 1.02. Other Defined Terms..................................................................... 5
ARTICLE II
SECTION 2.01. Guarantee...............................................................................10
SECTION 2.02. Guarantee of Payment....................................................................10
SECTION 2.03. No Limitations, Etc.....................................................................10
SECTION 2.04. Reinstatement...........................................................................12
SECTION 2.05. Agreement To Pay; Subrogation
SECTION 2.06. Information.............................................................................12
SECTION 2.07. Maximum Liability.......................................................................12
ARTICLE III
SECTION 3.01. Pledge..................................................................................13
SECTION 3.02. Delivery of the Pledged Collateral......................................................14
SECTION 3.03. Representations, Warranties and Covenants...............................................15
SECTION 3.04. Certification of Limited Liability Company and Limited Partnership Interests............17
SECTION 3.05. Registration in Nominee Name; Denominations.............................................17
SECTION 3.06. Voting Rights; Dividends and Interest, etc..............................................18
ARTICLE IV
SECTION 4.01. Security Interest.......................................................................20
SECTION 4.02. Representations and Warranties..........................................................22
SECTION 4.03. Covenants...............................................................................25
SECTION 4.04. Other Actions...........................................................................28
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral..........................31
ARTICLE V
SECTION 5.01. Remedies Upon Default...................................................................33
SECTION 5.02. Application of Proceeds.................................................................35
SECTION 5.03. Grant of License to Use Intellectual Property...........................................36
SECTION 5.04. Securities Act, etc.....................................................................37
ARTICLE VI
SECTION 6.01. Indemnity and Subrogation...............................................................39
SECTION 6.02. Contribution and Subrogation............................................................39
SECTION 6.03. Subordination...........................................................................39
ARTICLE VII
SECTION 7.01. Notices.................................................................................40
SECTION 7.02. Security Interest Absolute..............................................................40
SECTION 7.03. Survival of Agreement ..................................................................41
SECTION 7.04. Binding Effect; Several Agreement.......................................................41
SECTION 7.05. Successors and Assigns..................................................................41
SECTION 7.06. Collateral Agent's Fees and Expenses;
Indemnification........................................................................................42
3
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact.............................................43
SECTION 7.08. GOVERNING LAW...........................................................................44
SECTION 7.09. Waivers; Amendment......................................................................44
SECTION 7.10. WAIVER OF JURY TRIAL....................................................................44
SECTION 7.11. Severability............................................................................45
SECTION 7.12. Counterparts............................................................................45
SECTION 7.13. Headings................................................................................45
SECTION 7.14. Jurisdiction; Consent to Service of Process.............................................45
SECTION 7.15. Termination or Release..................................................................46
SECTION 7.16. Additional Subsidiaries.................................................................47
SECTION 7.17. Right of Set-off........................................................................47
Schedules
Schedule I Subsidiary Parties
Schedule II Capital Stock; Debt Securities
Schedule III Intellectual Property
Schedule IV Limited Liability Company Interests
Exhibits
Exhibit I Form of Supplement to the U.S. Guarantee and Collateral Agreement
Exhibit II Form of U.S. Perfection Certificate
4
U.S. GUARANTEE AND COLLATERAL AGREEMENT dated and effective
as of February 28, 2003 (this "Agreement"), among TRW AUTOMOTIVE
HOLDINGS CORP., a Delaware corporation ("Holdings"), TRW
AUTOMOTIVE INTERMEDIATE HOLDINGS CORP., a Delaware corporation
("Intermediate Holdings"), TRW AUTOMOTIVE ACQUISITION CORP., a
Delaware corporation (the "U.S. Borrower"), each other subsidiary
of Holdings identified herein (each, a "Subsidiary Party"), TRW
AUTOMOTIVE FINANCE (LUXEMBOURG) S.A ▇.▇. ("▇▇▇▇▇") and JPMORGAN
CHASE BANK, a New York banking corporation ("JPMCB"), as
Collateral Agent (in such capacity, the "Collateral Agent") for
the Secured Parties (as defined below).
Reference is made to the Credit Agreement dated as of February 27, 2003
(as amended, supplemented, waived or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, Intermediate Holdings, the U.S. Borrower,
the Foreign Subsidiary Borrowers party thereto, the Lenders party thereto (the
"Lenders"), JPMCB, as Administrative Agent and Collateral Agent, Credit Suisse
First Boston, acting through its Cayman Islands Branch, ▇▇▇▇▇▇ Commercial Paper
Inc., and Deutsche Bank Securities Inc., as Co-Syndication Agents, and Bank of
America, N.A., as Documentation Agent. The Lenders have agreed to extend credit
to the Borrowers subject to the terms and conditions set forth in the Credit
Agreement. The obligations of the Lenders to extend such credit are conditioned
upon, among other things, the execution and delivery of this Agreement.
Holdings, Intermediate Holdings and the Subsidiary Parties are affiliates of the
Borrowers, will derive substantial benefits from the extension of credit to the
Borrowers pursuant to the Credit Agreement and are willing to execute and
deliver this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this
Agreement and not otherwise defined herein have the respective meanings assigned
thereto in the Credit Agreement. All terms defined in the New York UCC
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(as defined herein) and not defined in this Agreement have the meanings
specified therein. The term "instrument" shall have the meaning specified in
Article 9 of the New York UCC.
(b) The rules of construction specified in Section 1.02 of the Credit
Agreement also apply to this Agreement.
SECTION 1.02. Other Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Account Debtor" means any person who is or who may become obligated to
any Guarantor under, with respect to or on account of an Account.
"Article 9 Collateral" has the meaning assigned to such term in Section
4.01.
"Cash Account" shall mean a deposit or cash account with a Lender.
"Collateral" means Article 9 Collateral and Pledged Collateral.
"Copyright License" means any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Guarantor or that any Guarantor otherwise has the right
to license, or granting any right to any Guarantor under any Copyright now or
hereafter owned by any third party, and all rights of any Guarantor under any
such agreement.
"Copyrights" means all of the following now owned or hereafter acquired
by any Guarantor: (a) all copyright rights in any work subject to the copyright
laws of the United States or any other country, whether as author, assignee,
transferee or otherwise; and (b) all registrations and applications for
registration of any such Copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office, including
those listed on Schedule III.
"Credit Agreement" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Federal Securities Laws" has the meaning assigned to such term in
Section 5.04.
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"▇▇▇▇▇" has the meaning assigned to such term in the preliminary
statement of this Agreement.
"General Intangibles" means all "General Intangibles" as defined in the
New York UCC, including all choses in action and causes of action and all other
intangible personal property of any Guarantor of every kind and nature (other
than Accounts) now owned or hereafter acquired by any Guarantor, including
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap
Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Guarantor to secure payment by an Account Debtor of any of the Accounts.
"Guarantors" means Holdings, Intermediate Holdings, the U.S. Borrower,
and the Subsidiary Parties.
"Guaranteed Obligations" means all Obligations other than Obligations
of the Polish Borrowers.
"Intellectual Property" means all intellectual and similar property of
every kind and nature now owned or hereafter acquired by any Guarantor,
including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade
secrets, domain names, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"License" means any Patent License, Trademark License, Copyright
License or other license or sublicense agreement to which any Guarantor is a
party.
"Loan Document Obligations" means (a) the due and punctual payment by
each Borrower of (i) the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans made to such Borrower, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by such Borrower under the Credit Agreement in
respect of any
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Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) and
obligations to provide cash collateral, (iii) each payment required to be made
by such Borrower in respect of any Ancillary Credit Extension, when and as due,
including the principal of and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
any loans thereunder, overdrafts, reimbursement of guarantees and obligations to
provide cash collateral, and (iv) all other monetary obligations of such
Borrower to any of the Secured Parties under the Credit Agreement and each of
the other Loan Documents, including obligations to pay fees, expense and
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of each Borrower under or pursuant to the Credit Agreement and each
of the other Loan Documents and (c) the due and punctual payment and performance
of all the obligations of each other Loan Party under or pursuant to this
Agreement and each of the other Loan Documents.
"New York UCC" means the Uniform Commercial Code as from time to time
in effect in the State of New York.
"Obligations" means (a) the Loan Document Obligations, (b) the due and
punctual payment and performance of all obligations of each Loan Party under
each Swap Agreement that (i) is in effect on the Closing Date with a
counterparty that is a Lender or an Affiliate of a Lender as of the Closing Date
or (ii) is entered into after the Closing Date with any counterparty that is a
Lender or an Affiliate of a Lender at the time such Swap Agreement is entered
into and (c) the due and punctual payment and performance of all obligations in
respect of overdrafts and related liabilities owed to a Lender or any of its
Affiliates and arising from treasury, depositary and cash management services in
connection with any automated clearinghouse transfers of funds.
"Patent License" means any written agreement, now or hereafter in
effect, granting to any third party any
8
right to make, use or sell any invention on which a Patent, now or hereafter
owned by any Guarantor or that any Guarantor otherwise has the right to license,
is in existence, or granting to any Guarantor any right to make, use or sell any
invention on which a Patent, now or hereafter owned by any third party, is in
existence, and all rights of any Guarantor under any such agreement.
"Patents" means all of the following now owned or hereafter acquired by
any Guarantor: (a) all letters patent of the United States or the equivalent
thereof in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country, including those listed on Schedule III, and (b)
all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.
"Permitted Encumbrances" means the Liens permitted pursuant to Sections
6.02(e), (f), (g), (h), (k), (p) and (q) of the Credit Agreement.
"Pledged Collateral" has the meaning assigned to such term in Section
3.01.
"Pledged Debt Securities" has the meaning assigned to such term in
Section 3.01.
"Pledged Securities" means any promissory notes, stock certificates or
other certificated securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.
"Pledged Stock" has the meaning assigned to such term in Section 3.01.
"Pledgor" shall mean each Guarantor and ▇▇▇▇▇.
"Polish Borrowers" shall mean TRW Polska Sp. zo.o., TRW Braking Systems
Polska Sp. zo.o., TRW Safety Systems Poland Sp. zo.o. and TRW Steering Systems
Poland Sp. zo.o.
"Secured Parties" means (a) the Lenders (and any Affiliate of a Lender
to which any obligation referred to
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in clause (c) of the definition of the term "Obligations" is owed), (b) the
Administrative Agent, (c) each Ancillary Lender, (d) each Issuing Bank, (e) each
counterparty to any Swap Agreement entered into with a Loan Party the
obligations under which constitute Obligations, (f) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document
and (g) the successors and assigns of each of the foregoing.
"Security Interest" has the meaning assigned to such term in Section
4.01.
"Subsidiary Party" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Trademark License" means any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Guarantor or that any Guarantor otherwise has the right
to license, or granting to any Guarantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Guarantor under any
such agreement.
"Trademarks" means all of the following now owned or hereafter acquired
by any Guarantor: (a) all trademarks, service marks, corporate names, company
names, business names, fictitious business names, trade styles, trade dress,
logos, other source or business identifiers, designs and general intangibles of
like nature, now existing or hereafter adopted or acquired, all registrations
and recordings thereof (if any), and all registration and recording applications
filed in connection therewith, including registrations and registration
applications in the United States Patent and Trademark Office or any similar
offices in any State of the United States or any other country or any political
subdivision thereof, and all extensions or renewals thereof, including those
listed on Schedule III, (b) all goodwill associated therewith or symbolized
thereby and (c) all other assets, rights and interests that uniquely reflect or
embody such goodwill.
"U.S. Perfection Certificate" means a certificate substantially in the
form of Exhibit II, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by a Financial Officer of
the U.S. Borrower and the chief legal officer of the U.S. Borrower.
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ARTICLE II
Guarantee
---------
SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees,
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, the due and punctual payment and performance of the
Guaranteed Obligations. Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Guaranteed Obligation. Each
Guarantor waives presentment to, demand of payment from and protest to any
Borrower or any other Loan Party of any of the Guaranteed Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment.
SECTION 2.02. Guarantee of Payment. Each Guarantor further agrees that
its guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the payment
of the Guaranteed Obligations or to any balance of any deposit account or credit
on the books of the Collateral Agent or any other Secured Party in favor of any
Borrower or any other person.
SECTION 2.03. No Limitations, Etc. (a) Except for termination of a
Guarantor's obligations hereunder as expressly provided for in Section 2.07 or
Section 7.15, the obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor hereunder
shall not be discharged or impaired or otherwise affected by: (i) the failure of
the Administrative Agent, the Collateral Agent or any other Secured Party to
assert any claim or demand or to exercise
11
or enforce any right or remedy under the provisions of any Loan Document or
otherwise; (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document or any other
agreement, including with respect to any other Guarantor under this Agreement;
(iii) the failure to perfect any security interest in, or the release of, any
security held by the Collateral Agent or any other Secured Party for the
Guaranteed Obligations; (iv) any default, failure or delay, wilful or otherwise,
in the performance of the Guaranteed Obligations; or (v) any other act or
omission that may or might in any manner or to any extent vary the risk of any
Guarantor or otherwise operate as a discharge of any Guarantor as a matter of
law or equity (other than the indefeasible payment in full in cash of all the
Guaranteed Obligations). Each Guarantor expressly authorizes the Secured Parties
to take and hold security for the payment and performance of the Guaranteed
Obligations, to exchange, waive or release any or all such security (with or
without consideration), to enforce or apply such security and direct the order
and manner of any sale thereof in their sole discretion or to release or
substitute any one or more other guarantors or obligors upon or in respect of
the Guaranteed Obligations, all without affecting the obligations of any
Guarantor hereunder.
(b) To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of any Borrower or any
other Loan Party or the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
any Borrower or any other Loan Party, other than the indefeasible payment in
full in cash of all the Guaranteed Obligations. The Collateral Agent and the
other Secured Parties may, at their election, foreclose on any security held by
one or more of them by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Guaranteed Obligations, make any other accommodation with any
Borrower or any other Loan Party or exercise any other right or remedy available
to them against any Borrower or any other Loan Party, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been fully and indefeasibly paid in full
in cash. To the fullest extent permitted by applicable law, each Guarantor
waives any defense arising out of any such election even though such election
operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
any
12
Borrower or any other Loan Party, as the case may be, or any security.
SECTION 2.04. Reinstatement. Each Guarantor agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Guaranteed Obligation is
rescinded or must otherwise be restored by the Administrative Agent or any other
Secured Party upon the bankruptcy or reorganization of any Borrower, any other
Loan Party or otherwise.
SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against any Guarantor by virtue
hereof, upon the failure of any Borrower or any other Loan Party to pay any
Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each
Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the
Collateral Agent for distribution to the applicable Secured Parties in cash the
amount of such unpaid Guaranteed Obligation. Upon payment by any Guarantor of
any sums to the Collateral Agent as provided above, all rights of such Guarantor
against such Borrower, or other Loan Party or any other Guarantor arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subject to Article VI.
SECTION 2.06. Information. Each Guarantor assumes all responsibility
for being and keeping itself informed of the financial condition and assets of
each Borrower and each other Loan Party, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Collateral Agent or the other Secured Parties will have
any duty to advise such Guarantor of information known to it or any of them
regarding such circumstances or risks.
SECTION 2.07. Maximum Liability. 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 which can be guaranteed by such Guarantor under applicable federal
and state laws relating to the insolvency of debtors (after giving effect to the
right of contribution established in Section 6.02).
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ARTICLE III
Pledge of Securities
--------------------
SECTION 3.01. Pledge. As security for the payment or performance, as
the case may be, in full of the Obligations, each Pledgor hereby assigns and
pledges to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a
security interest in all of such Pledgor's right, title and interest in, to and
under (a) in the case of each Pledgor that is a Guarantor, the shares of capital
stock and other Equity Interests owned by it and listed on Schedule II and any
other Equity Interests obtained in the future by such Guarantor and the
certificates representing all such Equity Interests (the "Pledged Stock");
provided that the Pledged Stock shall not include (i) more than 65% of the
issued and outstanding voting Equity Interests of any Foreign Subsidiary (other
than ▇▇▇▇▇, of which all the issued and outstanding Equity Interests will be
pledged), (ii) to the extent applicable law requires that a Subsidiary of such
Guarantor issue directors' qualifying shares, such shares or nominee or other
similar shares, (iii) any Equity Interests with respect to which the Collateral
and Guarantee Requirement or the other paragraphs of Section 5.10 of the Credit
Agreement need not be satisfied by reason of Section 5.10(h) of the Credit
Agreement, (iv) any Equity Interests of a Subsidiary to the extent that, as of
the Closing Date, and for so long as, such a pledge of such Equity Interests
would violate a contractual obligation binding on such Equity Interests, (v) any
Equity Interests of a Subsidiary of a Guarantor acquired after the Closing Date
pursuant to Section 6.04(j) of the Credit Agreement if, and to the extent that,
and for so long as, (A) a pledge of such Equity Interests would violate
applicable law or any contractual obligation binding upon such Subsidiary and
(B) such law or obligation existed at the time of the acquisition thereof and
was not created or made binding upon such Subsidiary in contemplation of or in
connection with the acquisition of such Subsidiary (provided, that the foregoing
clause (B) shall not apply in the case of a joint venture, including a joint
venture that
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is a Subsidiary) or (vi) any Equity Interests of a person that is not a
Subsidiary; (b)(i) the debt securities listed opposite the name of such Pledgor
on Schedule II, (ii) any debt securities in the future issued to such Pledgor
and (iii) the promissory notes and any other instruments, if any, evidencing
such debt securities (the "Pledged Debt Securities"); (c) subject to Section
3.06, all payments of principal or interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of, in exchange for or upon the conversion of, and all other proceeds
received in respect of, the securities referred to in clauses (a) and (b) above;
(d) subject to Section 3.06, all rights and privileges of such Pledgor with
respect to the securities and other property referred to in clauses (a), (b) and
(c) above; and (e) all proceeds of any of the foregoing (the items referred to
in clauses (a) through (e) above being collectively referred to as the "Pledged
Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Pledgor
agrees promptly to deliver or cause to be delivered to the Collateral Agent, for
the ratable benefit of the Secured Parties, any and all Pledged Securities to
the extent such Pledged Securities, in the case of promissory notes or other
instruments evidencing Indebtedness, are required to be delivered pursuant to
paragraph (b) of this Section 3.02.
(b) Each Pledgor will cause any Indebtedness for borrowed money having
an aggregate principal amount that has a Dollar Equivalent in excess of
$10,000,000 (other than intercompany current liabilities incurred in the
ordinary course of business in connection with the cash management operations of
the U.S. Borrower and the Subsidiaries) owed to such Pledgor by any person to be
evidenced by a duly executed promissory note that is pledged and delivered to
the Collateral Agent, for the ratable benefit of the Secured Parties, pursuant
to the terms hereof.
(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities
required to be delivered pursuant to the foregoing paragraphs (a) and (b) of
this
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Section 3.02 shall be accompanied by stock powers or note powers, as applicable,
duly executed in blank or other instruments of transfer reasonably satisfactory
to the Collateral Agent and by such other instruments and documents as the
Collateral Agent may reasonably request and (ii) all other property composing
part of the Pledged Collateral delivered pursuant to the terms of this Agreement
shall be accompanied by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents as the Collateral
Agent may reasonably request. Each delivery of Pledged Securities shall be
accompanied by a schedule describing the securities, which schedule shall be
attached hereto as Schedule II and made a part hereof; provided that failure to
attach any such schedule hereto shall not affect the validity of such pledge of
such Pledged Securities. Each schedule so delivered shall supplement any prior
schedules so delivered.
SECTION 3.03. Representations, Warranties and Covenants. The Pledgors,
jointly and severally, represent, warrant and covenant to and with the
Collateral Agent, for the ratable benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the issued and
outstanding shares of each class of the Equity Interests of the issuer
thereof represented by such Pledged Stock and includes all Equity
Interests, debt securities and promissory notes or instruments evidencing
Indebtedness required to be pledged hereunder in order to satisfy the
Collateral and Guarantee Requirement;
(b) the Pledged Stock and Pledged Debt Securities (solely with respect
to Pledged Debt Securities issued by a person that is not a subsidiary of
Holdings or an Affiliate of any such subsidiary to the best of each
Pledgor's knowledge) have been duly and validly authorized and issued by
the issuers thereof and (i) in the case of Pledged Stock, are fully paid
and nonassessable and (ii) in the case of Pledged Debt Securities (solely
with respect to Pledged Debt Securities issued by a person that is not a
subsidiary of Holdings or an Affiliate of any such subsidiary to the best
of each Pledgor's knowledge) are legal, valid and binding obligations of
the issuers thereof;
(c) except for the security interests granted hereunder, each Pledgor
(i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner,
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beneficially and of record, of the Pledged Securities indicated on Schedule
II as owned by such Pledgor, (ii) holds the same free and clear of all
Liens, other than Liens created by this Agreement and Liens permitted by
Section 6.02 of the Credit Agreement or arising by operation of law, (iii)
will make no assignment, pledge, hypothecation or transfer of, or create or
permit to exist any security interest in or other Lien on, the Pledged
Collateral, other than pursuant to a transaction permitted by the Credit
Agreement and other than Liens created by this Agreement and Permitted
Encumbrances and (iv) will defend its title or interest hereto or therein
against any and all Liens (other than Liens created by this Agreement and
Permitted Encumbrances), however arising, of all persons;
(d) except for restrictions and limitations imposed by the Loan
Documents or securities laws generally or otherwise permitted to exist
pursuant to the terms of the Credit Agreement, the Pledged Collateral is
and will continue to be freely transferable and assignable, and none of the
Pledged Collateral is or will be subject to any option, right of first
refusal, shareholders agreement, charter or by-law provisions or
contractual restriction of any nature that might prohibit, impair, delay or
otherwise affect the pledge of such Pledged Collateral hereunder, the sale
or disposition thereof pursuant hereto or the exercise by the Collateral
Agent of rights and remedies hereunder;
(e) each Pledgor has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or
contemplated;
(f) no consent or approval of any Governmental Authority, any
securities exchange or any other person was or is necessary to the validity
of the pledge effected hereby (other than such as have been obtained and
are in full force and effect);
(g) by virtue of the execution and delivery by the Pledgors of this
Agreement, when any Pledged Securities are delivered to the Collateral
Agent, for the ratable benefit of the Secured Parties, in accordance with
this Agreement, the Collateral Agent will obtain, for the ratable benefit
of the Secured Parties, a legal, valid and perfected first priority lien
upon and security interest in such Pledged
17
Securities as security for the payment and performance of the Obligations;
and
(h) the pledge effected hereby is effective to vest in the Collateral
Agent, for the ratable benefit of the Secured Parties, the rights of the
Collateral Agent in the Pledged Collateral as set forth herein.
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests. Each interest in any limited liability company or limited
partnership controlled by any Guarantor and pledged hereunder shall be
represented by a certificate, shall be a "security" within the meaning of
Article 8 of the New York UCC and shall be governed by Article 8 of the New York
UCC; provided, however, that in the case of (a) the limited liability company
interests set forth on Schedule IV, the U.S. Borrower shall cause such interests
to be represented by a certificate, to be a "security" within the meaning of
Article 8 of the New York UCC and to be governed by Article 8 of the New York
UCC, in each case not later than 20 Business Days after the Closing Date and (b)
any limited liability company or limited partnership that, in either case, is a
Wholly Owned Subsidiary formed or acquired after the Closing Date, the U.S.
Borrower shall cause such interests to be represented by a certificate, to be a
"security" within the meaning of Article 8 of the New York UCC and to be
governed by Article 8 of the New York UCC, in each case not later than 20
Business Days after the date of formation or acquisition thereof, as applicable.
SECTION 3.05. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
sole and absolute discretion) to hold the Pledged Securities in the name of the
applicable Pledgor, endorsed or assigned in blank or in favor of the Collateral
Agent or, if an Event of Default shall have occurred and be continuing, in its
own name as pledgee or the name of its nominee (as pledgee or as sub-agent).
Each Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. The Collateral Agent shall at all times
have the right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with
this Agreement. Each Pledgor shall use its commercially reasonable efforts to
cause any Loan Party that is not a party to this Agreement to comply with a
request by the Collateral Agent, pursuant to this Section 3.05, to exchange
certificates representing Pledged
18
Securities of such Loan Party for certificates of smaller or larger
denominations.
SECTION 3.06. Voting Rights; Dividends and Interest, etc. (a) Unless
and until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms of
this Agreement, the Credit Agreement and the other Loan Documents; provided
that such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any
Pledged Securities, the rights and remedies of any of the Collateral Agent
or the other Secured Parties under this Agreement, the Credit Agreement or
any other Loan Document or the ability of the Secured Parties to exercise
the same.
(ii) The Collateral Agent shall promptly execute and deliver to each
Pledgor, or cause to be executed and delivered to such Pledgor, all such
proxies, powers of attorney and other instruments as such Pledgor may
reasonably request for the purpose of enabling such Pledgor to exercise the
voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) Each Pledgor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Securities to the extent and only to
the extent that such dividends, interest, principal and other distributions
are permitted by, and otherwise paid or distributed in accordance with, the
terms and conditions of the Credit Agreement, the other Loan Documents and
applicable laws; provided that any noncash dividends, interest, principal
or other distributions that would constitute Pledged Securities, whether
resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Securities or
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party
or otherwise, shall be and become part of the Pledged Collateral, and, if
received by any Pledgor, shall not be commingled by
19
such Pledgor with any of its other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the benefit of the
Collateral Agent, for the ratable benefit of the Secured Parties, and shall
be forthwith delivered to the Collateral Agent, for the ratable benefit of
the Secured Parties, in the same form as so received (endorsed in a manner
reasonably satisfactory to the Collateral Agent).
(b) Upon the occurrence and during the continuance of an Event of
Default and after notice by the Collateral Agent to the relevant Pledgors of the
Collateral Agent's intention to exercise its rights hereunder, all rights of any
Pledgor to dividends, interest, principal or other distributions that such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) of this Section
3.06 shall cease, and all such rights shall thereupon become vested, for the
ratable benefit of the Secured Parties, in the Collateral Agent which shall have
the sole and exclusive right and authority to receive and retain such dividends,
interest, principal or other distributions. All dividends, interest, principal
or other distributions received by any Pledgor contrary to the provisions of
this Section 3.06 shall not be commingled by such Pledgor with any of its other
funds or property but shall be held separate and apart therefrom, shall be held
in trust for the benefit of the Collateral Agent, for the ratable benefit of the
Secured Parties, and shall be forthwith delivered to the Collateral Agent, for
the ratable benefit of the Secured Parties, in the same form as so received
(endorsed in a manner reasonably satisfactory to the Collateral Agent). Any and
all money and other property paid over to or received by the Collateral Agent
pursuant to the provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral Agent upon
receipt of such money or other property and shall be applied in accordance with
the provisions of Section 5.02. After all Events of Default have been cured or
waived and the U.S. Borrower has delivered to the Collateral Agent a certificate
to that effect, the Collateral Agent shall promptly repay to each Pledgor
(without interest) all dividends, interest, principal or other distributions
that such Pledgor would otherwise be permitted to retain pursuant to the terms
of paragraph (a)(iii) of this Section 3.06 and that remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default and after notice by the Collateral Agent to the relevant Pledgors of the
Collateral Agent's intention to exercise its rights hereunder, all
20
rights of any Pledgor to exercise the voting and/or consensual rights and powers
it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06,
and the obligations of the Collateral Agent under paragraph (a)(ii) of this
Section 3.06, shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, for the ratable benefit of the Secured Parties, which
shall have the sole and exclusive right and authority to exercise such voting
and consensual rights and powers; provided that, unless otherwise directed by
the Required Lenders, the Collateral Agent shall have the right from time to
time following and during the continuance of an Event of Default to permit the
Pledgors to exercise such rights. After all Events of Default have been cured or
waived and the U.S. Borrower has delivered to the Collateral Agent a certificate
to that effect, each Pledgor shall have the right to exercise the voting and/or
consensual rights and powers that such Pledgor would otherwise be entitled to
exercise pursuant to the terms of paragraph (a)(i) above.
ARTICLE IV
Security Interests in Personal Property
---------------------------------------
SECTION 4.01. Security Interest. (a) As security for the payment or
performance, as the case may be, in full of the Obligations, each Guarantor
hereby assigns and pledges to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest (the "Security Interest") in all right,
title and interest in or to any and all of the following assets and properties
now owned or at any time hereafter acquired by such Guarantor or in which such
Guarantor now has or at any time in the future may acquire any right, title or
interest (collectively, the "Article 9 Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
21
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) all Letter-of-Credit Rights;
(xi) all Commercial Tort Claims;
(xii) all books and records pertaining to the Article 9 Collateral; and
(xiii) to the extent not otherwise included, all proceeds, Supporting
Obligations and products of any and all of the foregoing and all collateral
security and guarantees given by any person with respect to any of the
foregoing.
Notwithstanding anything to the contrary in this Agreement, this Agreement shall
not constitute a grant of a security interest in (a) any vehicle covered by a
certificate of title or ownership, (b) any assets (including Equity Interests)
with respect to which the Collateral and Guarantee Requirement or the other
paragraphs of Section 5.10 of the Credit Agreement need not be satisfied by
reason of Section 5.10(h) of the Credit Agreement, (c) any assets (including
Equity Interests) to the extent that, as of the Closing Date, and for so long
as, such grant of a security interest would violate a contractual obligation
binding on such asset, (d) any Equity Interests of any person acquired by a
Guarantor after the Closing Date pursuant to Section 6.04(j) of the Credit
Agreement if, and to the extent that, and for so long as, (A) such grant of a
security interest would violate applicable law or any contractual obligation
binding upon such Equity Interests and (B) such law or obligation existed at the
time of the acquisition thereof and was not created or made binding upon such
Equity Interests in contemplation of or in connection with the acquisition of
such Subsidiary (provided, that the foregoing clause (B) shall not apply in the
case of a joint venture, including a joint venture that is a Subsidiary) or (e)
any Letter of Credit Rights to the extent any Guarantor is required by
applicable law to apply the proceeds of a drawing of such Letter of Credit for a
specified purpose.
22
(b) Each Guarantor hereby irrevocably authorizes the Collateral Agent
at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) with respect to the
Article 9 Collateral or any part thereof and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (i) whether such Guarantor is an organization, the type of
organization and any organizational identification number issued to such
Guarantor, (ii) in the case of a financing statement filed as a fixture filing,
a sufficient description of the real property to which such Article 9 Collateral
relates and (iii) a description of collateral that describes such property in
any other manner as the Collateral Agent may reasonably determine is necessary
or advisable to ensure the perfection of the security interest in the Article 9
Collateral granted under this Agreement, including describing such property as
"all assets" or "all property". Each Guarantor agrees to provide such
information to the Collateral Agent promptly upon request.
The Collateral Agent is further authorized to file with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) such documents as
may be necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Guarantor, without the signature of any Guarantor, and naming any Guarantor or
the Guarantors as debtors and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Guarantor with respect to or
arising out of the Article 9 Collateral.
SECTION 4.02. Representations and Warranties. The Guarantors jointly
and severally represent and warrant to the Collateral Agent and the Secured
Parties that:
(a) Each Guarantor has good and valid rights in and title to the
Article 9 Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to
the Collateral Agent the Security Interest in such Article 9 Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with
23
the terms of this Agreement, without the consent or approval of any other
person other than any consent or approval that has been obtained and is in
full force and effect.
(b) The U.S. Perfection Certificate has been duly prepared, completed
and executed and the information set forth therein, including the exact
legal name of each Guarantor, is correct and complete, in all material
respects, as of the Closing Date. Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the
Article 9 Collateral have been prepared by the Collateral Agent based upon
the information provided to the Collateral Agent in the U.S. Perfection
Certificate for filing in each governmental, municipal or other office
specified in Schedule 5 to the U.S. Perfection Certificate (or specified by
notice from the U.S. Borrower to the Collateral Agent after the Closing
Date in the case of filings, recordings or registrations required by
Section 5.10 of the Credit Agreement), and constitute all the filings,
recordings and registrations (other than filings required to be made in the
United States Patent and Trademark Office and the United States Copyright
Office in order to perfect the Security Interest in Article 9 Collateral
consisting of United States Patents, United States registered Trademarks
and United States registered Copyrights) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the
ratable benefit of the Secured Parties) in respect of all Article 9
Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided
under applicable law with respect to the filing of continuation statements
or amendments. Each Guarantor represents and warrants that a fully executed
agreement in the form hereof containing a description of all Article 9
Collateral consisting of Intellectual Property with respect to United
States Patents (and Patents for which United States registration
applications are pending), United States registered Trademarks (and
Trademarks for which United States registration applications are pending)
24
and United States registered Copyrights (and Copyrights for which United
States registration applications are pending) has been delivered to the
Collateral Agent for recording with the United States Patent and Trademark
Office and the United States Copyright Office pursuant to 35 U.S.C. ss.
261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and the regulations
thereunder, as applicable, and reasonably requested by the Collateral
Agent, to protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, in respect of all Article 9
Collateral consisting of such Intellectual Property in which a security
interest may be perfected by recording with the United States Patent and
Trademark Office and the United States Copyright Office, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to
perfect the Security Interest with respect to any Article 9 Collateral
consisting of Patents, Trademarks and Copyrights (or registration or
application for registration thereof) acquired or developed after the date
hereof).
(c) The Security Interest constitutes (i) a legal and valid security
interest in all the Article 9 Collateral securing the payment and
performance of the Obligations, (ii) subject to the filings described in
Section 4.02(b), a perfected security interest in all Article 9 Collateral
in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United
States (or any political subdivision thereof) and its territories and
possessions pursuant to the Uniform Commercial Code or other applicable law
in such jurisdictions and (iii) a security interest that shall be perfected
in all Article 9 Collateral in which a security interest may be perfected
upon the receipt and recording of this Agreement with the United States
Patent and Trademark Office and the United States Copyright Office, as
applicable. The Security Interest is and shall be prior to any other Lien
on any of the Article 9 Collateral, other than Liens expressly permitted
pursuant to Section 6.02 of the Credit Agreement or arising by operation of
law.
(d) The Article 9 Collateral is owned by the Guarantors free and clear
of any Lien, other than Liens expressly permitted pursuant to Section 6.02
of the Credit Agreement or arising by operation of law.
25
None of the Guarantors has filed or consented to the filing of (i) any
financing statement or analogous document under the Uniform Commercial Code
or any other applicable laws covering any Article 9 Collateral, (ii) any
assignment in which any Guarantor assigns any Article 9 Collateral or any
security agreement or similar instrument covering any Article 9 Collateral
with the United States Patent and Trademark Office or the United States
Copyright Office or (iii) any assignment in which any Guarantor assigns any
Article 9 Collateral or any security agreement or similar instrument
covering any Article 9 Collateral with any foreign governmental, municipal
or other office, which financing statement or analogous document,
assignment, security agreement or similar instrument is still in effect,
except, in each case, for Liens expressly permitted pursuant to Section
6.02 of the Credit Agreement.
(e) None of the Guarantors holds any Commercial Tort Claim
individually in excess of $1,000,000 as of the Closing Date except as
indicated on the U.S. Perfection Certificate.
(f) All Accounts have been originated by the Guarantors and all
Inventory has been acquired by the Guarantors in the ordinary course of
business.
SECTION 4.03. Covenants. (a) Each Guarantor agrees promptly to notify
the Collateral Agent in writing of any change (i) in its corporate name, (ii) in
its identity or type of organization or corporate structure, (iii) in its
Federal Taxpayer Identification Number or organizational identification number
or (iv) in its jurisdiction of organization. Each Guarantor agrees promptly to
provide the Collateral Agent with certified organizational documents reflecting
any of the changes described in the immediately preceding sentence. Each
Guarantor agrees not to effect or permit any change referred to in the first
sentence of this paragraph (a) unless all filings have been made under the
Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected first priority security interest in all the Article 9
Collateral, for the ratable benefit of the Secured Parties. Each Guarantor
agrees promptly to notify the Collateral Agent if any material portion of the
Article 9 Collateral owned or held by such Guarantor is damaged or destroyed.
26
(b) Each Guarantor shall, at its own expense, take any and all actions
necessary to defend title to the Article 9 Collateral against all persons and to
defend the Security Interest of the Collateral Agent, for the ratable benefit of
the Secured Parties, in the Article 9 Collateral and the priority thereof
against any Lien not expressly permitted pursuant to Section 6.02 of the Credit
Agreement.
(c) Each Guarantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Collateral Agent may from time to time
reasonably request to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement, the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Article 9 Collateral that is in excess of $5,000,000 shall be or
become evidenced by any promissory note or other instrument, such note or
instrument shall be immediately pledged and delivered to the Collateral Agent,
for the ratable benefit of the Secured Parties, duly endorsed in a manner
satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Guarantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Guarantors,
to supplement this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks; provided that any Guarantor shall
have the right, exercisable within 30 days after it has been notified by the
Collateral Agent of the specific identification of such Article 9 Collateral, to
advise the Collateral Agent in writing of any inaccuracy of the representations
and warranties made by such Guarantor hereunder with respect to such Article 9
Collateral. Each Guarantor agrees that it will use its commercially reasonable
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Article 9 Collateral within 30 days after the date it has been notified
by the Collateral Agent of the specific identification of such Article 9
Collateral.
(d) After the occurrence of an Event of Default and during the
continuance thereof, to verify under reasonable procedures the validity, amount,
quality, quantity, value, condition and status of, or any other
27
matter relating to, the Article 9 Collateral, including, in the case of Accounts
or Article 9 Collateral in the possession of any third person, by contacting
Account Debtors or the third person possessing such Article 9 Collateral for the
purpose of making such a verification. The Collateral Agent shall have the right
to share any information it gains from such inspection or verification with any
Secured Party.
(e) At its option, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Article 9 Collateral and not permitted pursuant
to Section 6.02 of the Credit Agreement, and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Guarantor fails to do
so as required by the Credit Agreement or this Agreement, and each Guarantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
reasonable payment made or any reasonable expense incurred by the Collateral
Agent pursuant to the foregoing authorization; provided, however, that nothing
in this Section 4.03(e) shall be interpreted as excusing any Guarantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any
Guarantor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.
(f) Each Guarantor (rather than the Collateral Agent or any Secured
Party) shall remain liable for the observance and performance of all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral and each
Guarantor jointly and severally agrees to indemnify and hold harmless the
Collateral Agent and the Secured Parties from and against any and all liability
for such performance.
(g) None of the Guarantors shall make or permit to be made an
assignment, pledge or hypothecation of the Article 9 Collateral or shall grant
any other Lien in respect of the Article 9 Collateral, except as expressly
permitted by the Credit Agreement. None of the Guarantors shall make or permit
to be made any transfer of the Article 9 Collateral and each Guarantor shall
remain at all times in possession of the Article 9 Collateral owned by it,
except as permitted by the Credit Agreement.
28
(h) None of the Guarantors will, without the Collateral Agent's prior
written consent, grant any extension of the time of payment of any Accounts
included in the Article 9 Collateral, compromise, compound or settle the same
for less than the full amount thereof, release, wholly or partly, any person
liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, credits, discounts, compromises or settlements
granted or made in the ordinary course of business and consistent with its
current practices and in accordance with reasonably prudent and standard
practice used in industries that are the same as or similar to those in which
such Guarantor is engaged.
(i) The Guarantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory and
Equipment in accordance with the requirements set forth in Section 5.02 of the
Credit Agreement. Each Guarantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Guarantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Guarantor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto. In the event that any Guarantor at any time or times shall fail
to obtain or maintain any of the policies of insurance required hereby or to pay
any premium in whole or part relating thereto, the Collateral Agent may, without
waiving or releasing any obligation or liability of the Guarantors hereunder or
any Event of Default, in its sole discretion, obtain and maintain such policies
of insurance and pay such premium and take any other actions with respect
thereto as the Collateral Agent reasonably deems advisable. All sums disbursed
by the Collateral Agent in connection with this Section 4.03(j), including
reasonable attorneys' fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Guarantors to the Collateral
Agent and shall be additional Obligations secured hereby.
SECTION 4.04. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
for the ratable benefit of the Secured Parties, the Collateral Agent's security
interest in the Article 9 Collateral, each Guarantor agrees, in each case at
such Guarantor's own
29
expense, to take the following actions with, respect to the following Article 9
Collateral:
(a) Instruments and Tangible Chattel Paper. If any Guarantor shall at
any time hold or acquire any Instruments or Tangible Chattel Paper
evidencing an amount in excess of $5,000,000, such Guarantor shall
forthwith endorse, assign and deliver the same to the Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed in
blank as the Collateral Agent may from time to time reasonably request.
(b) Cash Accounts. Commencing not later than 120 days after the
Closing Date, the U.S. Borrower shall cause not less than 85% of the cash
held in the United States, Canada, Mexico and Europe by the U.S. Borrower
and the Wholly Owned Subsidiaries to be maintained in Cash Accounts at all
times. The U.S. Borrower shall use its commercially reasonable efforts to
cause as promptly as practicable after the Closing Date the cash held
outside the United States, Canada, Mexico and Europe by the U.S. Borrower
and the Wholly Owned Subsidiaries to be maintained in Cash Accounts.
Notwithstanding anything to the contrary in this Agreement, the Guarantors
shall not be required to enter into control arrangements with respect to,
or provide control of, any deposit or cash account, or any property or
interests contained in such accounts.
(c) Investment Property. Except to the extent otherwise provided in
Article III, if any Guarantor shall at any time hold or acquire any
Certificated Security, such Guarantor shall forthwith endorse, assign and
deliver the same to the Collateral Agent, accompanied by such instruments
of transfer or assignment duly executed in blank as the Collateral Agent
may from time to time specify. If any security now or hereafter acquired by
any Guarantor is uncertificated and is issued to such Guarantor or its
nominee directly by the issuer thereof, upon the Collateral Agent's
reasonable request and following the occurrence of an Event of Default,
such Guarantor shall promptly notify the Collateral Agent of such
uncertificated securities and pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, either (i) cause
the issuer to agree to comply with instructions from the Collateral Agent
as to such security, without further consent of any Guarantor or such
nominee, or (ii) cause the issuer to register the Collateral Agent as the
registered owner
30
of such security. If any security, whether certificated or uncertificated,
or other Investment Property now or hereafter acquired by any Guarantor are
held by such Guarantor or its nominee through a securities intermediary or
commodity intermediary, such Guarantor shall immediately notify the
Collateral Agent thereof and, at the Collateral Agent's request and option,
pursuant to an agreement in form and substance reasonably satisfactory to
the Collateral Agent, either (A) cause such securities intermediary or
commodity intermediary, as applicable, to agree, in the case of a
securities intermediary, to comply with entitlement orders or other
instructions from the Collateral Agent to such securities intermediary as
to such securities or other Investment Property or, in the case of a
commodity intermediary, to apply any value distributed on account of any
commodity contract as directed by the Collateral Agent to such commodity
intermediary, in each case without further consent of any Guarantor or such
nominee, or (B) in the case of Financial Assets or other Investment
Property held through a securities intermediary, arrange for the Collateral
Agent to become the entitlement holder with respect to such Investment
Property, for the ratable benefit of the Secured Parties, with such
Guarantor being permitted, only with the consent of the Collateral Agent,
to exercise rights to withdraw or otherwise deal with such Investment
Property. The Collateral Agent agrees with each of the Guarantors that the
Collateral Agent shall not give any such entitlement orders or instructions
or directions to any such issuer, securities intermediary or commodity
intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by any Guarantor, unless an Event of Default
has occurred and is continuing or, after giving effect to any such
withdrawal or dealing rights, would occur. The provisions of this paragraph
(c) shall not apply to any Financial Assets credited to a securities
account for which the Collateral Agent is the securities intermediary.
(d) Commercial Tort Claims. If any Guarantor shall at any time hold or
acquire a Commercial Tort Claim in an amount reasonably estimated to exceed
$10,000,000, such Guarantor shall promptly notify the Collateral Agent
thereof in a writing signed by such Guarantor, including a summary
description of such claim, and grant to the Collateral Agent in writing a
security interest therein and in the proceeds thereof, all upon the terms
of this Agreement, with such
31
writing to be in form and substance reasonably satisfactory to the
Collateral Agent.
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Guarantor agrees that it will not do any act or omit to do
any act (and will exercise commercially reasonable efforts to prevent its
licensees from doing any act or omitting to do any act) whereby any Patent that
is necessary to the normal conduct of such Guarantor's business may become
invalidated or dedicated to the public, and agrees that it shall take
commercially reasonable steps with respect to any products covered by any such
Patent as necessary and sufficient to establish and preserve its rights under
applicable patent laws.
(b) Each Guarantor will, and will use its commercially reasonable
efforts to cause its licensees or its sublicensees to, for each Trademark
necessary to the normal conduct of such Guarantor's business, (i) maintain such
Trademark in full force free from any claim of abandonment or invalidity for
non-use, (ii) maintain the quality of products and services offered under such
Trademark, (iii) display such Trademark with notice of federal or foreign
registration or claim of trademark or service ▇▇▇▇ to the extent necessary and
sufficient to establish and preserve its rights under applicable law and (iv)
not knowingly use or knowingly permit the use of such Trademark in violation of
any third-party rights.
(c) Each Guarantor will, and will use its commercially reasonable
efforts to cause its licensees or its sublicensees to, for each work covered by
a Copyright necessary to the normal conduct of such Guarantor's business,
continue to publish, reproduce, display, adopt and distribute the work with
appropriate copyright notice as necessary and sufficient to establish and
preserve its rights under applicable copyright laws.
(d) Each Guarantor shall notify the Collateral Agent promptly if it
knows or has reason to know that any Patent, Trademark or Copyright necessary to
the normal conduct of such Guarantor's business may become abandoned, lost or
dedicated to the public, or of any materially adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
United States Copyright Office, any court or any similar office of any country)
regarding such Guarantor's ownership of any such Patent, Trademark or
32
Copyright, its right to register the same or its right to keep and maintain the
same.
(e) Each Guarantor, either itself or through any agent, employee,
licensee or designee, shall (i) inform the Collateral Agent on a semi-annual
basis of each application by itself, or through any agent, employee, licensee or
designee, for any Patent with the United States Patent and Trademark Office and
each registration of any Trademark or Copyright with the United States Patent
and Trademark Office, the United States Copyright Office or any office or agency
in any political subdivision of the United States or in any other country or any
political subdivision thereof filed during the preceding six-month period, and
(ii) upon the reasonable request of the Collateral Agent, execute and deliver
any and all agreements, instruments, documents and papers as the Collateral
Agent may reasonably request to evidence the Collateral Agent's security
interest in such Patent, Trademark or Copyright.
(f) Each Guarantor shall take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof to maintain and pursue each application relating
to any Patent, Trademark and/or Copyright (and to obtain the relevant grant or
registration) necessary to the normal conduct and to maintain (i) each issued
Patent and (ii) the registrations of each Trademark and each Copyright that is
necessary to the normal conduct of such Guarantor's business, including timely
filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if consistent with good
business judgment, to initiate opposition, interference and cancelation
proceedings against third parties.
(g) In the event that any Guarantor knows or has reason to know that
any Article 9 Collateral consisting of a Patent, Trademark or Copyright
necessary to the normal conduct of its business has been or is about to be
infringed, misappropriated or diluted by a third party, such Guarantor shall
promptly notify the Collateral Agent and shall, if consistent with good business
judgment, promptly ▇▇▇ for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
and take such other actions as are appropriate under the circumstances to
protect such Article 9 Collateral.
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(h) Upon and during the continuance of an Event of Default, each
Guarantor shall use commercially reasonable efforts to obtain all requisite
consents or approvals from the licensor under each Copyright License, Patent
License or Trademark License to effect the assignment of all such Guarantor's
right, title and interest thereunder to the Collateral Agent or its designee.
ARTICLE V
Remedies
--------
SECTION 5.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Pledgor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Guarantors to the Collateral Agent or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or a nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers thereunder cannot be obtained) and (b)
with or without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to enter any premises where the Article 9 Collateral may
be located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the applicable Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Pledgor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future
34
delivery as the Collateral Agent shall deem appropriate. The Collateral Agent
shall be authorized in connection with any sale of a security (if it deems it
advisable to do so) pursuant to the foregoing to restrict the prospective
bidders or purchasers to persons who represent and agree that they are
purchasing such security for their own account, for investment, and not with a
view to the distribution or sale thereof. Upon consummation of any such sale of
Collateral pursuant to this Section 5.01 the Collateral Agent shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives and releases (to the extent permitted by law) all
rights of redemption, stay, valuation and appraisal that such Pledgor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.
The Collateral Agent shall give the applicable Pledgors 10 Business
Days' written notice (which each Pledgor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or the portion thereof, to be sold may be sold
in one lot as an entirety or in separate parcels, as the Collateral Agent may
(in its sole and absolute discretion) determine. The Collateral Agent shall not
be obligated to make any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In the case of any sale of all or any part of the Collateral made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the
35
purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in the event that any such purchaser or purchasers shall fail to take
up and pay for the Collateral so sold and, in the case of any such failure, such
Collateral may be sold again upon notice given in accordance with provisions
above. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section 5.01, any Secured Party may bid for or purchase for
cash, free (to the extent permitted by law) from any right of redemption, stay,
valuation or appraisal on the part of any Pledgor (all such rights being also
hereby waived and released to the extent permitted by law), the Collateral or
any part thereof offered for sale and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Pledgor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Pledgor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section 5.01 shall be deemed to conform to the commercially
reasonable standards as provided in Section 9-610(b) of the New York UCC or its
equivalent in other jurisdictions.
SECTION 5.02. Application of Proceeds. The Collateral Agent shall apply
the proceeds, moneys or balances of any collection or sale of Collateral, as
well as any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Applicable Agent and the Collateral Agent in connection with such
collection or sale or otherwise in connection with this Agreement, any
other Loan Document or any of the Obligations, including all court costs
and the fees and expenses of its agents and legal counsel, the repayment of
all advances made by the Applicable Agent and the Collateral Agent
hereunder or under any other Loan Document on behalf
36
of any Pledgor and any other costs or expenses incurred in connection with
the exercise of any right or remedy hereunder or under any other Loan
Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance
with the respective amounts of the Obligations owed to them on the date of
any such distribution); and
THIRD, to the Pledgors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 5.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Agreement at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, each Guarantor hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to any Guarantor) to use, license or sublicense any of the
Article 9 Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Guarantor, wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
may be exercised, at the option of the Collateral Agent, upon the occurrence and
during the continuation of an Event of Default; provided that any license,
sublicense or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Guarantors notwithstanding any
subsequent cure of an Event of Default.
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SECTION 5.04. Securities Act, etc. In view of the position of the
Pledgors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar federal statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with respect
to any disposition of the Pledged Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Pledgor acknowledges and agrees that in light of such restrictions
and limitations, the Collateral Agent, in its sole and absolute discretion, (a)
may proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws or, to the extent applicable, Blue Sky
or other state securities laws and (b) may approach and negotiate with a single
potential purchaser to effect such sale. Each Pledgor acknowledges and agrees
that any such sale might result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions. In the
event of any such sale, the Collateral Agent shall incur no responsibility or
liability for selling all or any part of the Pledged Collateral at a price that
the Collateral Agent, in its sole and absolute discretion, may in good ▇▇▇▇▇
▇▇▇▇ reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 5.04 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.
SECTION 5.05. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Collateral Agent desires to sell any of the Pledged Collateral at a
38
public sale, it will, at any time and from time to time, upon the written
request of the Collateral Agent, use its commercially reasonable efforts to take
or to cause the issuer of such Pledged Collateral to take such action and
prepare, distribute and/or file such documents, as are required or advisable in
the reasonable opinion of counsel for the Collateral Agent to permit the public
sale of such Pledged Collateral. Each Pledgor further agrees to indemnify,
defend and hold harmless the Administrative Agent, each other Secured Party, any
underwriter and their respective officers, directors, affiliates and controlling
persons from and against all loss, liability, expenses, costs of counsel
(including reasonable fees and expenses to the Collateral Agent of legal
counsel), and claims (including the costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Pledgor or the issuer of such Pledged Collateral by the Collateral Agent
or any other Secured Party expressly for use therein. Each Pledgor further
agrees, upon such written request referred to above, to use its commercially
reasonable efforts to qualify, file or register, or cause the issuer of such
Pledged Collateral to qualify, file or register, any of the Pledged Collateral
under the Blue Sky or other securities laws of such states as may be reasonably
requested by the Collateral Agent and keep effective, or cause to be kept
effective, all such qualifications, filings or registrations. Each Pledgor will
bear all costs and expenses of carrying out its obligations under this Section
5.05. Each Pledgor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 5.05 only and that
such failure would not be adequately compensable in damages and, therefore,
agrees that its agreements contained in this Section 5.05 may be specifically
enforced.
ARTICLE VI
39
Indemnity, Subrogation and Subordination
----------------------------------------
SECTION 6.01. Indemnity and Subrogation. In addition to all such rights
of indemnity and subrogation as the Guarantors may have under applicable law
(but subject to Section 6.03), each Borrower agrees that (a) in the event a
payment shall be made by any Guarantor under this Agreement in respect of any
Obligation of such Borrower, such Borrower shall indemnify such Guarantor for
the full amount of such payment and such Guarantor shall be subrogated to the
rights of the person to whom such payment shall have been made to the extent of
such payment and (b) in the event any assets of any Guarantor shall be sold
pursuant to this Agreement or any other Security Document to satisfy in whole or
in part an Obligation of a Borrower, such Borrower shall indemnify such
Guarantor in an amount equal to the greater of the book value or the fair market
value of the assets so sold.
SECTION 6.02. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Guarantor hereunder in respect of any
Obligation or assets of any other Guarantor shall be sold pursuant to any
Security Document to satisfy any Obligation owed to any Secured Party and such
other Guarantor (the "Claiming Guarantor") shall not have been fully indemnified
by the applicable Borrower as provided in Section 6.01, the Contributing
Guarantor shall indemnify the Claiming Guarantor in an amount equal to the
amount of such payment or the greater of the book value or the fair market value
of such assets, as applicable, in each case multiplied by a fraction of which
the numerator shall be the net worth of such Contributing Guarantor on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 7.16, the date of the supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the
rights of such Claiming Guarantor under Section 6.01 to the extent of such
payment.
SECTION 6.03. Subordination. (a)Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 6.01 and
6.02 and all other rights of indemnity, contribution or subrogation of the
Pledgor under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in
40
cash of the Obligations. No failure on the part of any Borrower or any Guarantor
to make the payments required by Sections 6.01 and 6.02 (or any other payments
required under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Guarantor with respect to its obligations
hereunder, and each Guarantor shall remain liable for the full amount of the
obligations of such Guarantor hereunder.
(b) Each Guarantor hereby agrees that all Indebtedness and other
monetary obligations owed by it to any other Guarantor or any Subsidiary shall
be fully subordinated to the indefeasible payment in full in cash of the
Obligations.
ARTICLE VII
Miscellaneous
-------------
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to any Subsidiary Party or to ▇▇▇▇▇ shall be given to it in care of
the U.S. Borrower, with such notice to be given as provided in Section 9.01 of
the Credit Agreement.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest, the security interest in the Pledged
Collateral and all obligations of each Pledgor hereunder shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Credit Agreement, any other Loan Document, any agreement with respect to any of
the Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of
41
the Obligations or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of the
Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and the
issuance of any Letters of Credit, regardless of any investigation made by any
Lender or on its behalf and notwithstanding that the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender may have had notice or
knowledge of any Default or Event of Default or incorrect representation or
warranty at the time any credit is extended under the Credit Agreement, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under any
Loan Document is outstanding and unpaid or any Letter of Credit is outstanding
and so long as the Commitments have not expired or terminated.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any party to this Agreement when a counterpart hereof
executed on behalf of such party shall have been delivered to the Administrative
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such party and the
Collateral Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such party, the Collateral Agent and the other
Secured Parties and their respective permitted successors and assigns, except
that no party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each party and may be amended, modified,
supplemented, waived or released with respect to any party without the approval
of any other party and without affecting the obligations of any other party
hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
permitted
42
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Pledgor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective permitted
successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.
(a) The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.05 of
the Credit Agreement.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Pledgor jointly and severally agrees to indemnify the
Collateral Agent and the other Indemnitees (as defined in Section 9.05 of the
Credit Agreement) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of, (i) the
execution, delivery or performance of this Agreement or any other Loan Document
or any agreement or instrument contemplated hereby or thereby, the performance
by the parties hereto and thereto of their respective obligations thereunder or
the consummation of the Transactions and other transactions contemplated hereby,
(ii) the use of proceeds of the Loans or the use of any Letter of Credit or
(iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, or to the Collateral, whether or not any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts
43
due under this Section 7.06 shall be payable on written demand therefor.
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Pledgor, (a) to receive,
endorse, assign or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part
thereof; (b) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (c) to ask for, demand,
▇▇▇ for, collect, receive and give acquittance for any and all moneys due or to
become due under and by virtue of any Collateral; (d) to sign the name of any
Pledgor on any invoice or ▇▇▇▇ of lading relating to any of the Collateral; (e)
to send verifications of Accounts to any Account Debtor; (f) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (g) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (h) to notify, or to require any
Guarantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, that nothing herein contained shall
be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby.
The Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually
44
received as a result of the exercise of the powers granted to them herein, and
neither they nor their officers, directors, employees or agents shall be
responsible to any Pledgor for any act or failure to act hereunder, except for
their own gross negligence or wilful misconduct.
SECTION 7.08. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.09. Waivers; Amendment. (a) No failure or delay by the
Applicable Agent, the Collateral Agent, any Issuing Bank or any Lender in
exercising any right, power or remedy hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy, or any abandonment or discontinuance of steps
to enforce such a right, power or remedy, preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The rights, powers
and remedies of the Administrative Agent, the Collateral Agent, any Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights, powers or remedies that they would otherwise
have. No waiver of any provision of this Agreement or consent to any departure
by any Loan Party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section 7.09, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan or the issuance of a Letter of Credit shall not be construed as a waiver
of any Default or Event of Default, regardless of whether the Administrative
Agent, the Collateral Agent, any Lender or any Issuing Bank may have had notice
or knowledge of such Default or Event of Default at the time. No notice or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Loan Party or Loan Parties with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 9.08 of the Credit Agreement.
SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN
45
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.10.
SECTION 7.11. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 7.04.
SECTION 7.13. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each
party to this Agreement hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding
46
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Collateral Agent, any
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against any Pledgor, or
its properties, in the courts of any jurisdiction.
(b) Each party to this Agreement hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
SECTION 7.15. Termination or Release. (a) This Agreement, the
guarantees made herein, the Security Interest and all other security interests
granted hereby shall terminate when all the Obligations have been indefeasibly
paid in full in cash and the Lenders have no further commitment to lend under
the Credit Agreement, the Revolving L/C Exposure has been reduced to zero and
each Issuing Bank has no further obligations to issue Letters of Credit under
the Credit Agreement.
(b) A Subsidiary Party shall automatically be released from its
obligations hereunder and the security interests in the Collateral of such
Subsidiary Party shall be automatically released upon the consummation of any
transaction permitted by the Credit Agreement as a result of which such
Subsidiary Party ceases to be a subsidiary of Holdings; provided that the
Required Lenders shall have consented to such transaction (to the extent such
consent is required by the Credit Agreement) and the terms of such consent did
not provide otherwise.
(c) Upon any sale or other transfer by any Pledgor of any Collateral
that is permitted under the Credit Agreement to any person that is not a
Pledgor, or upon the effectiveness of any written consent to the release of the
security interest granted hereby in any Collateral pursuant to Section 9.08 of
the Credit Agreement, the security interest in such Collateral shall be
automatically released.
47
(d) In connection with any termination or release pursuant to paragraph
(a), (b) or (c) of this Section 7.15, the Collateral Agent shall execute and
deliver to any Pledgor, at such Pledgor's, expense all documents that such
Pledgor shall reasonably request to evidence such termination or release. Any
execution and delivery of documents pursuant to this Section 7.15 shall be
without recourse to or warranty by the Collateral Agent.
SECTION 7.16. Additional Subsidiaries. Upon execution and delivery by
the Collateral Agent and any subsidiary that is required to become a party
hereto by Section 5.10 of the Credit Agreement of an instrument in the form of
Exhibit I hereto, such subsidiary shall become a Subsidiary Party hereunder with
the same force and effect as if originally named as a Subsidiary Party herein.
The execution and delivery of any such instrument shall not require the consent
of any other party to this Agreement. The rights and obligations of each party
to this Agreement shall remain in full force and effect notwithstanding the
addition of any new party to this Agreement.
SECTION 7.17. Right of Set-off. If an Event of Default shall have
occurred and be continuing, each Lender and each Issuing Bank is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender or such Issuing Bank to or for the credit or the
account of any party to this Agreement against any of and all the obligations of
such party now or hereafter existing under this Agreement owed to such Lender or
such Issuing Bank, irrespective of whether or not such Lender or such Issuing
Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section 7.17
are in addition to other rights and remedies (including other rights of set-off)
that such Lender or such Issuing Bank may have.
48
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
TRW AUTOMOTIVE HOLDINGS CORP.,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
TRW AUTOMOTIVE INTERMEDIATE
HOLDINGS CORP.,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
TRW AUTOMOTIVE ACQUISITION CORP.,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I HERETO,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
JPMORGAN CHASE BANK, as
Collateral Agent,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
49
Schedule I to
the Guarantee and
Collateral Agreement
Subsidiary Parties
50
Schedule II to
the Guarantee and
Collateral Agreement
EQUITY INTERESTS
Number Number and Percentage
of Issuer Registered Class of of Equity
Certificate Owner Equity Interest Interests
----------- ----- --------------- ---------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
51
Schedule III to
Guarantee and
Collateral Agreement
COPYRIGHTS OWNED BY [NAME OF Guarantor]
[Make a separate page of Schedule III for each Guarantor and state if no
copyrights are owned. List in numerical order by Registration No.]
U.S. Copyright Registrations
----------------------------
Title Reg. No. Author
----- -------- ------
Pending U.S. Copyright Applications for Registration
----------------------------------------------------
Title Author Class Date Filed
----- ------ ----- ----------
52
Schedule III
to Guarantee and
Collateral Agreement
PATENTS OWNED BY [NAME OF Guarantor]
[Make a separate page of Schedule III for each Guarantor and state if no patents
are owned. List in numerical order by Patent No./Patent Application No.]
U.S. Patent Registrations
-------------------------
Patent Numbers Issue Date
-------------- ----------
U.S. Patent Applications
------------------------
Patent Application No. Filing Date
---------------------- -----------
53
Schedule III
to Guarantee and
Collateral Agreement
TRADEMARKS OWNED BY [NAME OF Guarantor]
[Make a separate page of Schedule III for each Guarantor and state if no
trademarks are owned. List in numerical order by trademark
registration/application no.]
U.S. Trademark Registrations
----------------------------
▇▇▇▇ Reg. Date Reg. No.
---- --------- --------
U.S. Trademark Applications
---------------------------
▇▇▇▇ Filing Date Application No.
---- ----------- ---------------
54
Exhibit I
to Guarantee and
Collateral Agreement
SUPPLEMENT NO. __ dated as of (this "Supplement"), to
the U.S. Guarantee and Collateral Agreement dated as of
February [ ], 2003 (the "U.S. Guarantee and Collateral
Agreement"), among [ ], a [Delaware]
[corporation] and JPMORGAN CHASE BANK, a New York banking
corporation ("JPMCB"), as Collateral Agent (in such
capacity, the "Collateral Agent") for the Secured Parties
(as defined herein).
A. Reference is made to the Credit Agreement dated as of February [ ],
2003 (as amended, supplemented, waived or otherwise modified from time to time,
the "Credit Agreement"), among Holdings, Intermediate Holdings, the U.S.
Borrower, the Foreign Subsidiary Borrowers party thereto, the Lenders party
thereto (the "Lenders"), JPMCB, as Administrative Agent and Collateral Agent,
Credit Suisse First Boston, acting through its Cayman Islands Branch, ▇▇▇▇▇▇
Commercial Paper Inc., and Deutsche Bank Securities Inc., as Co-Syndication
Agents, and Bank of America, N.A., as Documentation Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement and the U.S.
Guarantee and Collateral Agreement referred to therein.
C. The Guarantors have entered into the U.S. Guarantee and Collateral
Agreement in order to induce the Lenders to make Loans and each Issuing Bank to
issue Letters of Credit. Section 7.16 of the U.S. Guarantee and Collateral
Agreement provides that additional Subsidiaries may become Subsidiary Parties
under the U.S. Guarantee and Collateral Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Subsidiary (the
"New Subsidiary") is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Party under the U.S.
Guarantee and Collateral Agreement in order to induce the Lenders to make
additional Loans and each Issuing Bank to issue additional Letters of Credit and
as consideration
55
for Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Subsidiary agree as
follows:
SECTION 1. In accordance with Section 7.16 of the U.S. Guarantee and
Collateral Agreement, the New Subsidiary by its signature below becomes a
Subsidiary Party and a Guarantor under the U.S. Guarantee and Collateral
Agreement with the same force and effect as if originally named therein as a
Subsidiary Party and a Guarantor, and the New Subsidiary hereby (a) agrees to
all the terms and provisions of the U.S. Guarantee and Collateral Agreement
applicable to it as a Subsidiary Party and Guarantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Guarantor thereunder are true and correct, in all material respects, on and as
of the date hereof. In furtherance of the foregoing, the New Subsidiary, as
security for the payment and performance in full of the Obligations (as defined
in the U.S. Guarantee and Collateral Agreement), does hereby create and grant to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, their successors and assigns, a security interest in and Lien
on all the New Subsidiary's right, title and interest in and to the Collateral
(as defined in the U.S. Guarantee and Collateral Agreement) of the New
Subsidiary. Each reference to a "Subsidiary Party" or a "Guarantor" in the U.S.
Guarantee and Collateral Agreement shall be deemed to include the New
Subsidiary. The U.S. Guarantee and Collateral Agreement is hereby incorporated
herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to (i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors' rights
generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (iii)
implied covenants of good faith and fair dealing.
SECTION 3. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original but all of which when taken together
shall constitute but one contract. This Supplement shall become
56
effective when (a) the Collateral Agent shall have received a counterpart of
this Supplement that bears the signature of the New Subsidiary and (b) the
Collateral Agent has executed a counterpart hereof.
SECTION 4. The New Subsidiary hereby represents and warrants that (a)
set forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Article 9 Collateral of the New Subsidiary, (b) set
forth on Schedule II attached hereto is a true and correct schedule of all the
Pledged Securities of the New Subsidiary and (c) set forth under its signature
hereto, is the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office.
SECTION 5. Except as expressly supplemented hereby, the U.S. Guarantee
and Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the U.S. Guarantee and Collateral Agreement shall not in any way
be affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the U.S. Guarantee and Collateral
Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, disbursements and other charges of counsel for
the Collateral Agent.
57
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have
duly executed this Supplement to the U.S. Guarantee and Collateral Agreement as
of the day and year first above written.
[Name Of New Subsidiary],
by
------------------------------
Name:
Title:
Legal Name:
Jurisdiction of
Formation:
Location of Chief
Executive Office:
JPMORGAN CHASE BANK, as
Collateral Agent,
by
------------------------------
Name:
Title:
58
Schedule I
to Supplement No.___ to the
Guarantee and
Collateral Agreement
LOCATION OF ARTICLE 9 COLLATERAL
Description Location
----------- --------
59
Schedule II to
Supplement No. __
to the Guarantee and
Collateral Agreement
Pledged Securities of the New Subsidiary
----------------------------------------
EQUITY INTERESTS
Number and
Number Class of
of Issuer Registered Equity Percentage of
Certificate Owner Interests Equity Interests
----------- ----- --------- ----------------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
OTHER PROPERTY