Exhibit 10.2
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AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
made by
NBTY, INC.
and the other Grantors parties hereto
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of April 16, 1999
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TABLE OF CONTENTS
Page
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SECTION 1 DEFINED TERMS 1
1.1 Definitions 1
1.2 Other Definitional Provisions 6
SECTION 2 GUARANTEE 6
2.1 Guarantee 6
2.2 Right of Contribution 7
2.3 No Subrogation 7
2.4 Amendments, etc. with respect to the Borrower Obligations 7
2.5 Guarantee Absolute, Irrevocable and Unconditional 8
2.6 Reinstatement 9
2.7 Payments 9
SECTION 3 GRANT OF SECURITY INTEREST 9
SECTION 4 REPRESENTATIONS AND WARRANTIES 10
4.1 Representations in Credit Agreement 10
4.2 Title; No Other Liens 10
4.3 Perfected First Priority Liens 10
4.4 Chief Executive Office 11
4.5 Inventory and Equipment 11
4.6 Farm Products 11
4.7 Pledged Securities 11
4.8 Receivables 11
4.9 Intellectual Property 12
SECTION 5 COVENANTS 12
5.1 Covenants in Credit Agreement 12
5.2 Delivery of Instruments and Chattel Paper 12
5.3 Maintenance of Insurance 13
5.4 Payment of Obligations 13
5.5 Maintenance of Perfected Security Interest; Further
Documentation 13
5.6 Changes in Locations, Name, etc. 14
5.7 Notices 14
5.8 Pledged Securities 14
5.9 Receivables 16
5.10 Intellectual Property 16
SECTION 6 REMEDIAL PROVISIONS 17
6.1 Certain Matters Relating to Receivables 17
6.2 Communications with Obligors; Grantors Remain Liable 18
6.3 Pledged Stock 18
6.4 Proceeds to be Turned Over To Administrative Agent 19
6.5 Application of Proceeds 20
6.6 Code and Other Remedies 20
6.7 Private Sales 21
6.8 Waiver; Deficiency 21
SECTION 7 THE ADMINISTRATIVE AGENT 22
7.1 Administrative Agent's Appointment as Attorney-in-Fact,
etc. 22
7.2 Duty of Administrative Agent 23
7.3 Execution of Financing Statements 24
7.4 Authority of Administrative Agent 24
SECTION 8 MISCELLANEOUS 24
8.1 Amendments in Writing 24
8.2 Notices 24
8.3 No Waiver by Course of Conduct; Cumulative Remedies 25
8.4 Enforcement Expenses; Indemnification 25
8.5 Successors and Assigns 25
8.6 Set-Off 26
8.7 Counterparts 26
8.8 Severability 26
8.9 Section Headings 26
8.10 Integration 27
8.11 GOVERNING LAW 27
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally: 27
8.13 Acknowledgements. Each Grantor hereby acknowledges that: 27
8.14 WAIVER OF JURY TRIAL 28
8.15 Additional Grantors 28
8.16 Judgment 28
8.17 Releases 29
SCHEDULES
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect Security
Interests
Schedule 4 Location of Jurisdiction of Organization and Chief
Executive Office
Schedule 5 Location of Inventory and Equipment
Schedule 6 Copyrights and Copyright Licenses; Patents and Patent
Licenses; Trademark and Trademark Licenses
Schedule 7 Existing Prior Liens
ANNEXES
Annex 1 Assumption Agreement
AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of
April 16, 1999, made by each of the signatories hereto, other than the
Administrative Agent (together with any other entity that may become a
party hereto as provided herein, the "Grantors"), in favor of THE CHASE
MANHATTAN BANK, as Administrative Agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions (the
"Lenders") from time to time parties to the Amended and Restated Credit and
Guarantee Agreement, dated as of April 16, 1999 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among
NBTY, INC., a Delaware corporation (the "Company"), the Foreign Subsidiary
Borrower party thereto (together with the Company, the "Borrowers"), the
Lenders and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Borrowers, the Administrative Agent and certain grantors
are parties to that certain Guarantee and Collateral Agreement, dated as of
September 23, 1997 (as in effect on the date hereof prior to the
effectiveness of this Agreement, the "Existing Guarantee Agreement");
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to amend and restate the Existing Credit Agreement and to make
extensions of credit to the Borrowers upon the terms and subject to the
conditions set forth therein;
WHEREAS, each Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Grantors in connection with the
operation of their respective businesses;
WHEREAS, the Borrowers and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the
Lenders to amend and restate the Existing Guarantee Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Lenders, to amend and restate the
Existing Guarantee Agreement in its entirety to read as follows:
SECTION 1 DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms 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, Chattel Paper, Documents,
Equipment, Farm Products, Instruments and Inventory.
(b) The following terms shall have the following meanings:
"Agreement": this Amended and Restated Guarantee and Collateral
Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
"Borrower Obligations": in respect of any Borrower, the collective
reference to the unpaid principal of and interest on the Loans made to such
Borrower, the Reimbursement Obligations of such Borrower and all other
obligations and liabilities of such Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the
Credit Agreement after the maturity of such Loans and Reimbursement
Obligations and interest accruing at the then applicable rate provided in
the Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to such Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding, and including, with respect to the
Company, its guarantee obligations pursuant to Section 10 of the Credit
Agreement) to the Administrative Agent or any Lender (or, in the case of
any Hedge Agreement referred to below, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, this Agreement, the other Loan
Documents, any Letter of Credit or any Hedge Agreement entered into by such
Borrower with any Lender (or any Affiliate of any Lender) or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or to the
Lenders that are required to be paid by such Borrower pursuant to the terms
of any of the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.
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"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright, to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its right,
title and interest in such Copyright License is not prohibited by such
Copyright License without the consent of any other party thereto, would not
give any other party to such Copyright License the right to terminate its
obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from the
other parties thereto (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents); provided, that
the foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this Agreement in
any money or other amounts due or to become due under any such Copyright
License.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements,
instruments and indentures in any form, and portions thereof, to which such
Grantor is a party or under which such Grantor has any right, title or
interest or to which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Grantor to damages arising
thereunder and (iii) all rights of such Grantor to perform and to exercise
all remedies thereunder, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its right,
title and interest in such contract, agreement, instrument or indenture is
not prohibited by such contract, agreement, instrument or indenture without
the consent of any other party thereto, would not give any other party to
such contract, agreement, instrument or indenture the right to terminate
its obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from the
other parties thereto (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents); provided, that
the foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this Agreement in
any Receivable or any money or other amounts due or to become due under any
such contract, agreement, instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations of all Borrowers and
(ii) all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement or any other Loan Document to
which such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that
are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).
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"Guarantors": the collective reference to each Grantor other than the
Company.
"Hedge Agreements": as to any Person, all interest rate swaps, caps
or collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
and all rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"Intercompany Note": any promissory note evidencing loans made by any
Grantor to the Company or any of its Subsidiaries (other than the
promissory note, dated as of October 18, 1997, evidencing the 9.5% loan
made by the Company to Holland & ▇▇▇▇▇▇▇ Holdings Limited in the amount of
[POUND]53,000,000).
"Issuers": the collective reference to each issuer of a Pledged
Security.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of each Borrower, its Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in Schedule 6, (ii) all
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to in Schedule
6, and (iii) all rights to obtain any reissues or extensions of the
foregoing.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell
any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6, to the extent
the grant by such Grantor of a security interest pursuant to this Agreement
in its right, title and interest in such Patent License is not prohibited
by such Patent License without the consent of any other party thereto,
would not give any other party to such Patent License the right to
terminate its obligations thereunder, or is permitted with consent if all
necessary consents to such grant of a security interest have been obtained
from the other parties thereto (it being understood that the foregoing
shall not be deemed to obligate such Grantor to obtain such consents);
provided, that the foregoing limitation shall not affect, limit, restrict
or impair the grant by such Grantor of a security interest pursuant to this
Agreement in any money or other amounts due or to become due under any such
Patent License.
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"Pledged Notes": all Intercompany Notes at any time issued to any
Grantor and all other promissory notes issued to or held by any Grantor
(other than promissory notes issued in connection with extensions of trade
credit by any Grantor in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged Notes
and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever pledged pursuant to subsection 8.9 of the Credit
Agreement.
"Proceeds": all "proceeds" as such term is defined in Section 9-
306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Securities, collections thereon
or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6, and (ii) the
right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred to
in Schedule 6, to the extent the grant by such Grantor of a security
interest pursuant to this Agreement in its right, title and interest in
such Trademark License is not prohibited by such Trademark License without
the consent of any other party thereto, would not give any other party to
such Trademark License the right to terminate its obligations thereunder,
or is permitted with consent if all necessary consents to such grant of a
security interest have been obtained from the other parties thereto (it
being understood that the foregoing shall not be deemed to obligate such
Grantor to obtain such consents); provided, that the foregoing limitation
shall not affect, limit, restrict or impair the grant by such Grantor of a
security interest pursuant to this Agreement in any money or other amounts
due or to become due under any such Trademark License.
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"Vehicles": all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any
state.
1 2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2 GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, absolutely, unconditionally and irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Borrower Obligations of all Borrowers.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount 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 2.2).
(c) Each Guarantor agrees that the Borrower Obligations of one or
more Borrowers may at any time and from time to time exceed the amount of
the liability of such Guarantor hereunder without impairing the guarantee
contained in this Section 2 or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.
(d) Subject to reinstatement as provided in Section 2.6, the
guarantee contained in this Section 2 shall remain in full force and effect
until all the Borrower Obligations and the obligations of each Guarantor
under the guarantee contained in this Section 2 shall have been satisfied
by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time
during the term of the Credit Agreement the Borrowers may be free from any
Borrower Obligations.
(e) No payment made by any Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from any Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or
from time to time in reduction of or in payment of any of the Borrower
Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder
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which shall, notwithstanding any such payment (other than any payment made
by such Guarantor in respect of such Borrower Obligations or any payment
received or collected from such Guarantor in respect of such Borrower
Obligations), remain liable for the Borrower Obligations of all Borrowers
up to the maximum liability of such Guarantor hereunder until (subject to
reinstatement as provided in Section 2.6) all Borrower Obligations are paid
in full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment. Each Guarantor's
right of contribution shall be subject to the terms and conditions of
Section 2.3. The provisions of this Section 2.2 shall in no respect limit
the obligations and liabilities of any Guarantor to the Administrative
Agent and the Lenders, and each Guarantor shall remain liable to the
Administrative Agent and the Lenders for the full amount guaranteed by such
Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Administrative Agent or any Lender, no Guarantor shall be entitled
to be subrogated to any of the rights of the Administrative Agent or any
Lender against any Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative Agent
or any Lender for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement
from any Borrower or any other Guarantor in respect of payments made by
such Guarantor hereunder, until all amounts owing to the Administrative
Agent and the Lenders by the Borrowers on account of the Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and
the Commitments are terminated. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Borrower Obligations shall not have been paid in full, such amount shall be
held by such Guarantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Borrower Obligations, whether matured or unmatured, in
such order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Borrower Obligations made by the Administrative Agent or any Lender may be
rescinded by the Administrative Agent or such Lender and any of the
Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Lender, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended,
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modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Majority Lenders or all Lenders, as the case
may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent
or any Lender for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect
or insure any Lien at any time held by it as security for the Borrower
Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
2.5 Guarantee Absolute, Irrevocable and Unconditional. Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Borrower Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon the guarantee
contained in this Section 2 or acceptance of the guarantee contained in
this Section 2; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrowers and any
of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have
been had or consummated in reliance upon the guarantee contained in this
Section 2. Each Guarantor waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon any Borrower or
any of the Guarantors with respect to the Borrower Obligations. Each
Guarantor understands and agrees that the guarantee contained in this
Section 2 shall be construed as a continuing, absolute, irrevocable and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of
the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time
to time held by the Administrative Agent or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance)
which may at any time be available to or be asserted by any Borrower or any
other Person against the Administrative Agent or any Lender, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of
any Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of any Borrower for the
Borrower Obligations, or of such Guarantor under the guarantee contained in
this Section 2, in bankruptcy or in any other instance. When making any
demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Administrative Agent or any Lender may, but
shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against any Borrower, any
other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Lender to make
any such demand, to pursue such other rights or remedies or to collect any
payments from any Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of any Borrower, any other Guarantor
or any other Person or any such collateral security, guarantee or right of
offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative
Agent or any Lender against any Guarantor. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
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2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative
Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Borrower or any Guarantor, or upon or
as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, any Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments
had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in the currency in which such payment is due pursuant to the
Credit Agreement at the relevant payment office specified in the Credit
Agreement.
SECTION 3 GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Administrative
Agent, for the ratable benefit of the Lenders, and hereby grants to the
Administrative Agent, for the ratable benefit of the Lenders, a security
interest in, all of the following property now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at
any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of such Grantor's Obligations,:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
(f) all Instruments;
(g) all Intellectual Property;
(h) all Inventory;
(i) all Pledged Securities;
(j) all books and records pertaining to the Collateral; and
(k) 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.
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SECTION 4 REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby
represents and warrants to the Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 6 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents
to which such Guarantor is a party, each of which is hereby incorporated
herein by reference, are true and correct, and the Administrative Agent and
each Lender shall be entitled to rely on each of them as if they were fully
set forth herein, provided that each reference in each such representation
and warranty to the Company's knowledge shall, for the purposes of this
Section 4.1, be deemed to be a reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interest granted
to the Administrative Agent for the ratable benefit of the Lenders pursuant
to this Agreement and the other Liens permitted to exist on the Collateral
by the Credit Agreement, such Grantor owns each item of the Collateral free
and clear of any and all Liens or claims of others except Liens permitted
to exist pursuant to the Credit Agreement. No financing statement or other
public notice with respect to all or any part of the Collateral is on file
or of record in any public office, except such as have been filed in favor
of the Administrative Agent, for the ratable benefit of the Lenders,
pursuant to this Agreement or as are permitted by the Credit Agreement.
4.3 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and
other documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) will constitute
valid perfected security interests in all of the Collateral located in New
York State in favor of the Administrative Agent, for the ratable benefit of
the Lenders, as collateral security for such Grantor's Obligations,
enforceable in accordance with the terms hereof against all creditors of
such Grantor and any Persons purporting to purchase any Collateral from
such Grantor and are prior to all other Liens on the Collateral in
existence on the date hereof except for (i) unrecorded Liens permitted by
the Credit Agreement which have priority over the Liens on the Collateral
by operation of law and (ii) Liens described on Schedule 7 and except to
the extent that filings outside the United States might be required to
perfect such security interest in non-U.S. intellectual property.
4.4 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief
executive office or sole place of business are specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof, the Inventory and
the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
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4.6 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.7 Pledged Securities. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of
all classes of the Capital Stock of each Issuer owned by such Grantor,
except that the shares of Pledged Stock of any Issuer which is a Foreign
Subsidiary constitute no more than 65% of all the issued and outstanding
Capital Stock of such Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and, to the extent the same are shares of Capital Stock of a
corporation, are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing. No obligor
with respect to any Pledged Note has any defense or counterclaim with
respect to such Pledged Note or any payment thereunder.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder,
free of any and all Liens or options in favor of, or claims of, any other
Person, except the security interest created by this Agreement.
4.8 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent.
(b) Receivables in respect of which a Governmental Authority is the
obligor do not constitute more than 5%, in face amount, of all Receivables.
(c) The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.9 Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, to the best of such Grantor's knowledge, all
material Intellectual Property is valid, subsisting, unexpired and
enforceable, has not been abandoned and does not infringe the intellectual
property rights of any other Person.
(c) Except as set forth in Schedule 6, on the date hereof, none of
the Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.
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(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity
of, or such Grantor's rights in, any Intellectual Property in any respect
that could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any Intellectual Property or such Grantor's
ownership interest therein, or (ii) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
SECTION 5 COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each Guarantor,
such Guarantor shall comply with and perform each covenant set forth in the
Credit Agreement applicable thereto as if such Guarantor were a party to
the Credit Agreement.
5.2 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of the Collateral in excess of $1,000,000
shall be or become evidenced by any Instrument or Chattel Paper, such
Instrument or Chattel Paper shall be immediately delivered to the
Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring
the Inventory, Equipment and Vehicles against loss by fire, explosion,
theft and such other casualties as may be reasonably satisfactory to the
Administrative Agent and (ii) insuring such Grantor, the Administrative
Agent and the Lenders against liability for personal injury and property
damage relating to such Inventory, Equipment and Vehicles, such policies to
be in such form and amounts and having such coverage as may be reasonably
satisfactory to the Administrative Agent and the Lenders.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall
be effective until at least 30 days after receipt by the Administrative
Agent of written notice thereof, (ii) name the Administrative Agent as
insured party or loss payee, (iii) if reasonably requested by the
Administrative Agent, include a breach of warranty clause and (iv) be
reasonably satisfactory in all other respects to the Administrative Agent.
(c) The Borrower shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect to such
insurance during the month of February in each calendar year and such
supplemental reports with respect thereto as the Administrative Agent may
from time to time reasonably request.
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5.4 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent,
as the case may be, all taxes, assessments and governmental charges or
levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with respect
thereto have been provided on the books of such Grantor and such
proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any
interest therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest
created by this Agreement as a perfected security interest having at least
the priority described in Section 4.3 and shall defend such security
interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such
Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, the filing of any financing
or continuation statements under the Uniform Commercial Code (or other
similar laws) in effect in any jurisdiction with respect to the security
interests created hereby.
5.6 Changes in Locations, Name, etc. Such Grantor will not, except
upon 15 days' prior written notice to the Administrative Agent and delivery
to the Administrative Agent of (a) all additional executed financing
statements and other documents reasonably requested by the Administrative
Agent to maintain the validity, perfection and priority of the security
interests provided for herein and (b) if applicable, a written supplement
to Schedule 5 showing any additional location at which Inventory or
Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5;
(ii) change the location of its chief executive office or sole
place of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Administrative
Agent in connection with this Agreement would become misleading.
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5.7 Notices. Such Grantor will advise the Administrative Agent and
the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral
which would adversely affect the ability of the Administrative Agent
to exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.8 Pledged Securities. (a) If such Grantor shall become entitled
to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution
in connection with any reclassification, increase or reduction of capital
or any certificate issued in connection with any reorganization), option or
rights in respect of the Capital Stock of any Issuer, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any shares
of the Pledged Stock, or otherwise in respect thereof, such Grantor shall
accept the same as the agent of the Administrative Agent and the Lenders,
hold the same in trust for the Administrative Agent and the Lenders and
deliver the same forthwith to the Administrative Agent in the exact form
received, duly indorsed by such Grantor to the Administrative Agent, if
required, together with an undated stock power covering such certificate
duly executed in blank by such Grantor and with, if the Administrative
Agent so requests, signature guaranteed, to be held by the Administrative
Agent, subject to the terms hereof, as additional collateral security for
the Obligations, provided that the foregoing shall not require any Grantor
to so deliver any such Capital Stock of any Issuer which is a Foreign
Subsidiary if, as a result thereof, the Capital Stock of such Foreign
Subsidiary pledged hereunder would exceed 65% of all Capital Stock of such
Foreign Subsidiary. Any sums paid upon or in respect of the Pledged
Securities upon the liquidation or dissolution of any Issuer shall be paid
over to the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of
capital shall be made on or in respect of the Pledged Securities or any
property shall be distributed upon or with respect to the Pledged
Securities pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected
security interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Grantor, such Grantor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or property in trust
for the Lenders, segregated from other funds of such Grantor, as additional
collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any
nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of
any nature of any Issuer, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Pledged
Securities or Proceeds thereof (except pursuant to a transaction expressly
permitted by the Credit Agreement), (iii) create, incur or permit to exist
any Lien or
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option in favor of, or any claim of any Person with respect to, any of the
Pledged Securities or Proceeds thereof, or any interest therein, except for
the security interests created by this Agreement or (iv) enter into any
agreement or undertaking restricting the right or ability of such Grantor
or the Administrative Agent to sell, assign or transfer any of the Pledged
Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to
the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative
Agent promptly in writing of the occurrence of any of the events described
in Section 5.8(a) with respect to the Pledged Securities issued by it and
(iii) the terms of Section 6.3(c) shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section
6.3(c) with respect to the Pledged Securities issued by it.
5.9 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or
settle any Receivable for less than the full amount thereof, (iii) release,
wholly or partially, any Person liable for the payment of any Receivable,
(iv) allow any credit or discount whatsoever on any Receivable or (v)
amend, supplement or modify any Receivable in any manner that could
adversely affect the value thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or
calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of the then outstanding Receivables.
5.10 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each
and every trademark class of goods applicable to its current line as
reflected in its current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of abandonment
for non-use, (ii) maintain as in the past the quality of products and
services offered under such Trademark, (iii) use such Trademark with any
appropriate notice of registration and all other notices and legends
required by applicable Requirements of Law, (iv) not adopt or use any ▇▇▇▇
which is confusingly similar or a colorable imitation of such Trademark
unless the Administrative Agent, for the ratable benefit of the Lenders,
shall obtain a perfected security interest in such ▇▇▇▇ pursuant to this
Agreement, and (v) not (and not permit any licensee or sublicensee thereof
to) do any act or knowingly omit to do any act whereby such Trademark may
become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of such Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through
15
licensees) do any act whereby any material portion of such Copyrights may
fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, or the validity of, any material Intellectual
Property or such Grantor's right to register the same or to own and
maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in any State of the United States, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may reasonably request to evidence the Administrative
Agent's and the Lenders' security interest in any Copyright, Patent or
Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any State of the United States, to maintain and
pursue each application (and to obtain the relevant registration) and to
maintain each registration of material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use
and affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall
(i) take such actions as such Grantor shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) if
such Intellectual Property is of material economic value, promptly notify
the Administrative Agent after it learns thereof and ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate
and to recover any and all damages for such infringement, misappropriation
or dilution.
SECTION 6 REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Administrative
Agent shall have the right to make test verifications of the Receivables in
any manner and through any
16
medium that it reasonably considers advisable, and each Grantor shall
furnish all such assistance and information as the Administrative Agent may
require in connection with such test verifications. At any time and from
time to time (but not more frequently than once per fiscal quarter), upon
the Administrative Agent's request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the Administrative Agent's
direction and control, and the Administrative Agent may curtail or
terminate said authority at any time and only at any time after the
occurrence and during the continuance of an Event of Default. If required
by the Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within
two Business Days) deposited by such Grantor in the exact form received,
duly indorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for
the account of the Lenders only as provided in Section 0, and (ii) until so
turned over, shall be held by such Grantor in trust for the Administrative
Agent and the Lenders, segregated from other funds of such Grantor. Each
such deposit of Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments
included in the deposit.
(c) At the Administrative Agent's request, at any time after the
occurrence and during the continuance of an Event of Default, each Grantor
shall deliver to the Administrative Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave
rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables.
(b) Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Receivables that the Receivables have
been assigned to the Administrative Agent for the ratable benefit of the
Lenders and that payments in respect thereof shall be made directly to the
Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by
the Administrative Agent or any Lender of
17
any payment relating thereto, nor shall the Administrative Agent or any
Lender be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take
any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may be entitled
at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given
notice to the relevant Grantor of the Administrative Agent's intent to
exercise its corresponding rights pursuant to Section 6.3(b), each Grantor
shall be permitted to receive all cash dividends paid in respect of the
Pledged Stock and all payments made in respect of the Pledged Notes, in
each case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Credit
Agreement, and to exercise all voting and corporate rights with respect to
the Pledged Securities; provided, however, that no vote shall be cast or
corporate right exercised or other action taken which, in the
Administrative Agent's reasonable judgment, would impair the Collateral or
which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Agreement or any other Loan
Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent
shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Pledged Securities and make
application thereof to the Obligations in such order as the Credit
Agreement shall prescribe, and (ii) any or all of the Pledged Securities
shall be registered in the name of the Administrative Agent or its nominee,
and the Administrative Agent or its nominee may thereafter exercise (x) all
voting, corporate and other rights pertaining to such Pledged Securities at
any meeting of shareholders of the relevant Issuer or Issuers or otherwise
and (y) any and all rights of conversion, exchange and subscription and any
other rights, privileges or options pertaining to such Pledged Securities
as if it were the absolute owner thereof (including, without limitation,
the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of any Issuer, or
upon the exercise by any Grantor or the Administrative Agent of any right,
privilege or option pertaining to such Pledged Securities, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Securities with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to
account for property actually received by it, but the Administrative Agent
shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to comply with any
instruction received by it from the Administrative Agent in writing that
(i) states that an Event of Default has occurred and is continuing and (ii)
is otherwise in accordance with the terms of this Agreement, without any