EXHIBIT 10.31
SECOND AMENDED AND RESTATED
COLLATERAL ASSIGNMENT AND
SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED COLLATERAL ASSIGNMENT AND SECURITY
AGREEMENT (this "Collateral Assignment and Security Agreement"), dated as of
September 10, 2001, made by ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a Delaware corporation
(the "COMPANY"), in favor of WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia
corporation (the "HOLDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and the Holder are parties to that certain
Second Amended and Restated Note, dated as of October 1, 2000 (the "NOTE"), in a
principal amount of $34,500,000;
WHEREAS, pursuant to the Note, the Holder has agreed to make loans
to the Company upon the terms and subject to the conditions set forth therein;
and
WHEREAS, it is a condition to the obligation of the Holder to make
the loans to the Company under the Note that the Company shall have executed and
delivered this Agreement to the Holder.
NOW, THEREFORE, in consideration of the premises and to induce the
Holder to enter into the Note and to induce the Holder to make the loans to the
Company, the Company hereby agrees with the Holder as follows:
1. DEFINED TERMS.
1.1 DEFINITIONS.
(a) Unless otherwise defined herein, terms defined in the Note and
used herein shall have the meanings given to them in the Note, and the following
terms which are defined in the Uniform Commercial Code in effect in the State of
New York on the date hereof are used herein as so defined: Accounts,
Certificated Security, Chattel Paper, Documents, Equipment, General Intangibles,
Instruments, Inventory, Investment Property and Proceeds.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Collateral Assignment and Security Agreement, as
the same may be amended, supplemented or otherwise modified from time to
time.
"CODE": the Uniform Commercial Code as from time to time in effect
in the State of New York.
"COLLATERAL": as defined in Section 1.
"COPYRIGHTS": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished,
all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, and
(ii) the right to obtain all renewals thereof.
"COPYRIGHT LICENSES": any written agreement naming the Company as
licensor or licensee, granting any right under any Copyright, including,
without limitation, the grant of rights to manufacture, distribute,
exploit and sell materials derived from any Copyright.
"DEPOSIT ACCOUNTS": as defined in the Uniform Commercial Code of any
applicable jurisdiction and, in any event, including, without limitation,
any demand, time, savings, passbook or like account maintained with a
depositary institution.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
and all rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and
damages therefrom.
"OBLIGATIONS": the collective reference to the unpaid principal of
and interest on the loans made under the Note and all other obligations
and liabilities of the Company to the Holder, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Note
or this Agreement.
"PATENTS": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, (ii) all applications for
letters patent of the United States or any other country and all
divisions, continuations and continuations-in-part thereof and (iii) all
rights to obtain any reissues or extensions of the foregoing.
"PATENT LICENSE": all agreements, whether written or oral, providing
for the grant by or to the Company of any right to manufacture, use or
sell any invention covered in whole or in part by a Patent.
"RECEIVABLE": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"TRADEMARKS": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, and (ii) the right
to obtain all renewals thereof.
"TRADEMARK LICENSE" means any agreement, written or oral, providing
for the grant by or to the Company of any right to use any Trademark.
2
"VEHICLES" means all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title law
of any state and all tires and other appurtenances to any of the
foregoing.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) The words "hereof," "herein", "hereto" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection and Schedule references are to this Agreement unless otherwise
specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. GRANT OF SECURITY INTEREST. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, the Company hereby grants to
the Holder a security interest in all of the following property now owned or at
any time hereafter acquired by the Company or in which the Company now has or at
any time in the future may acquire any right, title or interest (collectively,
the "COLLATERAL"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property;
(k) all Vehicles;
(l) all other property not otherwise described above;
(m) all books and records pertaining to the Collateral; and
(n) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and
guarantees given by any person with respect to any of the
foregoing.
Notwithstanding anything to the contrary above or contained herein,
this Agreement shall not constitute an assignment or pledge of, or grant of
security interest in or lien on, any Collateral to the
3
extent that such assignment, pledge or grant of security interest or lien with
respect to such Collateral is prohibited by, constitutes a breach of, or results
in the termination of the terms of any contract, agreement, instrument or
indenture relating to such Collateral; provided that the foregoing limitation
shall not affect, limit, restrict or impair the grant by the Company of a
security interest pursuant to this Agreement in any Receivable or any money or
other amounts due or to become due or other right of payment under any such
contract, agreement, instrument or indenture.
3. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants that:
3.1 TITLE; NO OTHER LIENS. Except for the security interest granted
to the Holder pursuant to this Agreement, the Company owns each item of the
Collateral free and clear of any and all liens or claims of others, other than
liens expressly permitted by the Note. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as have been filed in favor of the Holder
pursuant to this Agreement.
3.2 PERFECTED FIRST PRIORITY LIENS. The security interests granted
pursuant to this Agreement upon completion of the filings and other actions
specified on SCHEDULE 1 will constitute perfected security interests in the
Collateral (other than security interest in vehicles granted hereunder which
shall not be required to be perfected) in favor of the Holder, as collateral
security for the Obligations and are prior to all other liens on the Collateral
in existence on the date hereof.
3.3 INVENTORY AND EQUIPMENT. The Inventory and the Equipment are
kept at the locations listed on SCHEDULE 2.
3.4 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE. The
Company's jurisdiction of organization is Delaware and its chief executive
office or sole place of business is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇.
4. COVENANTS. The Company covenants and agrees with the Holder that,
from and after the date of this Agreement until the Obligations shall have been
paid in full:
4.1 DELIVERY OF INSTRUMENTS, CERTIFICATED SECURITIES AND CHATTEL
PAPER. If any amount payable under or in connection with any of the Collateral
shall be or become evidenced by any Instrument, Certificated Security or Chattel
Paper, such Instrument, Certificated Security or Chattel Paper shall be
immediately delivered to the Holder, duly indorsed in a manner satisfactory to
the Holder, to be held as Collateral pursuant to this Agreement.
4.2 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
DOCUMENTATION.
(a) The Company shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in subsection 3.2 and shall defend such security interest against the
claims and demands of all persons whomsoever.
(b) The Company will furnish to the Holder from time to time
statements and schedules further identifying and describing the assets and
property of the Company and such other reports in connection therewith as the
Holder may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of
the Holder, and at the sole expense of the Company, the Company will promptly
and duly execute and deliver such further instruments and documents and take
such further actions as the Holder may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, (i) the filing of any
financing or continuation statements under the
4
Uniform Commercial Code (or other similar laws) in effect in any jurisdiction
with respect to the security interests created hereby and (ii) in the case of
Investment Property, Deposit Accounts and any other relevant Collateral, taking
any actions necessary to enable the Holder to obtain "control" (within the
meaning of the applicable Uniform Commercial Code) with respect thereto.
4.3 CHANGES IN LOCATIONS, NAME, ETC. The Company will not, except
upon 15 days' prior written notice to the Holder and delivery to the Holder of
(a) all additional executed financing statements and other documents reasonably
requested by the Holder to maintain the validity, perfection and priority of the
security interests provided for herein and (b) if applicable, a written
supplement to SCHEDULE 2 showing any additional location at which Inventory or
Equipment shall be kept:
(a) permit any of the Inventory or Equipment to be kept at a
location other than those listed on SCHEDULE 2;
(b) change its jurisdiction of organization or the location of its
chief executive office or sole place of business from that specified in
subsection ; or
(c) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Holder in connection with this
Agreement would become misleading.
4.4 NOTICES. The Company will advise the Holder promptly, in
reasonable detail, of:
(a) any lien (other than security interests created hereby) on any
of the Collateral which would adversely affect the ability of the Holder to
exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5. REMEDIES. If an Event of Default shall occur and be continuing,
the Holder may exercise, in addition to all other rights and remedies granted to
it in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the Code.
6. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7. AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the Company and the Holder.
8. NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. The Holder
shall not by any act (except by a written instrument pursuant to Section 7),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Event of Default. No failure to
exercise, nor any delay in exercising, on the part of the Holder, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Holder of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Holder
would otherwise have on any future occasion.
5
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.
9. ENFORCEMENT EXPENSES; INDEMNIFICATION.
(a) The Company agrees to pay or reimburse the Holder for all its
costs and expenses incurred in enforcing or preserving any rights under this
Agreement, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to the Holder.
(b) The Company agrees to pay, and to save the Holder harmless from,
any and all liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
(c) The Company agrees to pay, and to save the Holder harmless from,
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (other than those resulting from the gross negligence or willful
misconduct of the Holder) with respect to the execution, delivery, enforcement,
performance and administration of this Agreement.
(d) The agreements in this Section 9 shall survive repayment of the
Obligations and all other amounts payable under the Note.
10. RELEASES.
(a) At such time as the Obligations shall have been in full, the
Collateral shall be released from the liens created hereby, and this Agreement
and all obligations (other than those expressly stated to survive such
termination) of the Holder and the Company hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Company. At the request and
sole expense of the Company following any such termination, the Holder shall
deliver to the Company any Collateral held by the Holder hereunder, and execute
and deliver to the Company such documents as the Company shall reasonably
request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by the Company in a transaction permitted by the Note, then the
Holder, at the request and sole expense of the Company, shall execute and
deliver to the Company all releases or other documents reasonably necessary or
desirable for the release of the liens created hereby on such Collateral.
11. NOTICES. All notices, requests and demands to or upon the Holder
hereunder shall be effected in the manner provided for in the Note.
12. SECTION HEADINGS. The Section and subsection headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of the Company and shall inure to the benefit of the
Holder and its successors and assigns.
14. GOVERNING LAW. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
6
15. WAIVER OF JURY TRIAL. THE COMPANY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the undersigned has caused this Second Amended
and Restated Collateral Assignment and Security Agreement to be duly executed
and delivered as of the date first above written.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
7
SCHEDULE 1
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
UNIFORM COMMERCIAL CODE FILINGS
UCC-1 Financing Statements
8
SCHEDULE 2
INVENTORY AND EQUIPMENT
Item Location
---- --------
9