Exhibit 10.16
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GUARANTEE AND COLLATERAL AGREEMENT
dated as of
February 14, 2003,
among
▇▇▇▇▇▇ SCIENTIFIC INTERNATIONAL INC.,
▇▇▇▇▇▇ SCIENTIFIC COMPANY L.L.C.,
CERTAIN OTHER SUBSIDIARIES OF
▇▇▇▇▇▇ SCIENTIFIC INTERNATIONAL INC.
and
JPMORGAN CHASE BANK,
as Collateral Agent
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TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Credit Agreement.................................................................. 1
SECTION 1.02. Other Defined Terms............................................................... 1
ARTICLE II
Guarantee
SECTION 2.01. Guarantee......................................................................... 6
SECTION 2.02. Guarantee of Payment.............................................................. 7
SECTION 2.03. No Limitations.................................................................... 7
SECTION 2.04. Reinstatement..................................................................... 8
SECTION 2.05. Agreement To Pay; Subrogation..................................................... 8
SECTION 2.06. Information....................................................................... 9
ARTICLE III
Pledge of Securities
SECTION 3.01. Pledge............................................................................ 9
SECTION 3.02. Delivery of the Pledged Collateral................................................ 10
SECTION 3.03. Representations, Warranties and
Covenants....................................................................... 10
SECTION 3.04. Certification of Limited Liability Company
and Limited Partnership Interests............................................... 12
SECTION 3.05. Registration in Nominee Name;
Denominations................................................................... 12
SECTION 3.06. Voting Rights; Dividends and Interest............................................. 13
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01. Security Interest................................................................. 15
SECTION 4.02. Representations and Warranties.................................................... 17
SECTION 4.03. Covenants......................................................................... 20
SECTION 4.04. Other Actions..................................................................... 25
SECTION 4.05. Covenants Regarding Patent,
Trademark and Copyright Collateral.............................................. 28
SECTION 4.06. Covenants Regarding Intercompany Debt............................................. 31
ARTICLE V
Remedies; Certain Sharing Arrangements
SECTION 5.01. Remedies Upon Default............................................................. 31
SECTION 5.02. Application of Proceeds........................................................... 33
SECTION 5.03. Grant of License to Use Intellectual
Property........................................................................ 34
SECTION 5.04. Securities Act.................................................................... 34
SECTION 5.05. Registration...................................................................... 35
SECTION 5.06. Senior Note Obligations........................................................... 36
SECTION 5.07. Security Interests of the Company................................................. 36
ARTICLE VI
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and Subrogation......................................................... 37
SECTION 6.02. Contribution and Subrogation...................................................... 37
SECTION 6.03. Subordination..................................................................... 38
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices........................................................................... 38
SECTION 7.02. Security Interest Absolute........................................................ 38
SECTION 7.03. Survival of Agreement............................................................. 39
SECTION 7.04. Binding Effect; Several Agreement................................................. 39
SECTION 7.05. Successors and Assigns............................................................ 40
SECTION 7.06. Collateral Agent's Fees and Expenses;
Indemnification................................................................. 40
SECTION 7.07. Collateral Agent Appointed
Attorney-in-Fact................................................................ 41
SECTION 7.08. APPLICABLE LAW.................................................................... 42
SECTION 7.09. Waivers; Amendment................................................................ 42
SECTION 7.10. WAIVER OF JURY TRIAL.............................................................. 42
SECTION 7.11. Severability...................................................................... 43
SECTION 7.12. Counterparts...................................................................... 43
SECTION 7.13. Headings.......................................................................... 43
SECTION 7.14. Jurisdiction; Consent to Service
of Process...................................................................... 43
SECTION 7.15. Termination or Release............................................................ 44
SECTION 7.16. Additional Subsidiaries........................................................... 45
SECTION 7.17. Right of Set-off.................................................................. 45
SECTION 7.18. Collateral Sharing Agreement...................................................... 46
SCHEDULES:
Schedule I Initial Subsidiary Parties
Schedule II Equity Interests
Schedule III Intellectual Property
EXHIBITS:
Exhibit I Form of Supplement
GUARANTEE AND COLLATERAL AGREEMENT dated as of February
14, 2003, among ▇▇▇▇▇▇ SCIENTIFIC INTERNATIONAL INC.,
▇▇▇▇▇▇ SCIENTIFIC COMPANY L.L.C., CERTAIN OTHER
SUBSIDIARIES OF ▇▇▇▇▇▇ SCIENTIFIC INTERNATIONAL INC. and
JPMORGAN CHASE BANK, as Collateral Agent.
Reference is made to the Credit Agreement dated as of February 14,
2003 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among ▇▇▇▇▇▇ Scientific International Inc. (the "Company"),
▇▇▇▇▇▇ Scientific Company L.L.C. (the "Initial Borrower"), the Lenders party
thereto and JPMorgan Chase Bank, as Administrative 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. 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
SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this
Agreement and not otherwise defined herein have the meanings specified in the
Credit Agreement. All terms defined in the New York UCC (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 1.03 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 Grantor under, with respect to or on account of an Account.
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"Article 9 Collateral" has the meaning assigned to such term in
Section 4.01.
"Collateral" means Article 9 Collateral and Pledged Collateral.
"Collateral Account" has the meaning assigned to such term in the
Collateral Sharing Agreement.
"Company" has the meaning assigned to such term in the preliminary
statement of this Agreement.
"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 Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" means all of the following now owned or hereafter
acquired by any Grantor: (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.
"Excluded Contracts" means one or more General Intangibles,
Copyright Licenses, Patent Licenses, Trademark Licenses or other contracts
between any Grantor and one or more other Persons (other than the Company or a
Subsidiary) that by their terms would be breached by the grant of the security
interests created pursuant to the terms of this Agreement; provided that the
term "Excluded Contracts" shall not include any rights for money due or to
become due pursuant to any Excluded Contract.
"Federal Securities Laws" has the meaning assigned to such term in
Section 5.04.
"Grantors" means (i) the Company, (ii) the Initial Borrower, (iii)
the Subsidiary Parties that are Domestic Loan Parties, (iv) FSWH Company LLC, as
owner of all Equity Interests in FSI Receivables Company LLC, a Receivables
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Subsidiary, but only for so long as it holds any such Equity Interests and (v)
any Subsidiary that is not a Domestic Loan Party but that holds Equity Interests
in FSI Receivables Company LLC or any other Receivables Subsidiary, but only for
so long as such other Subsidiary holds any such Equity Interests.
"Guarantors" means (i) the Company, (ii) the Initial Borrower and
(iii) the Subsidiary Parties that are Domestic Loan Parties other than any
Foreign Subsidiary Holding Company.
"Initial Borrower" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Intellectual Property" means all intellectual and similar property
of every kind and nature now owned or hereafter acquired by any Grantor,
including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade
secrets, 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.
"Intercompany Debt" means any Indebtedness of the Company or any
Subsidiary owing to any Grantor.
"Intercompany Note" means any promissory note or other instrument
evidencing Intercompany Debt.
"License" means any Patent License, Trademark License, Copyright
License, including those listed on Schedule III.
"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, when and as due, whether at maturity, by acceleration,
upon one or more dates when prepayment is required under the Credit Agreement or
otherwise, (ii) each payment required to be made by any Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral, and (iii) all other monetary obligations
of any Borrower to any of the Secured
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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), and (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.
"New York UCC" means the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations" means (a) Loan Document Obligations and (b) the due
and punctual payment and performance of all obligations of the Company and any
of its Subsidiaries under each Swap Agreement that (i) is in effect on the
Effective Date with a counterparty that is a Lender or an Affiliate of a Lender
as of the Effective Date or (ii) is entered into after the Effective Date with
any counterparty that is a Lender or an Affiliate of a Lender at the time such
Swap Agreement is entered into.
"Patent License" means any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
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 Grantor under
any such agreement.
"Patents" means all of the following now owned or hereafter acquired
by any Grantor: (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.
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"Pledged Collateral" 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.
"Proceeds" has the meaning specified in Section 9-102 of the New
York UCC.
"Restricted Collateral" means Collateral that constitutes a
"Principal Property" or "shares of stock or indebtedness of any Restricted
Subsidiary", in each case within the meaning of and as defined in the Senior
Note Indenture.
"Secured Parties" means (a) the Administrative Agent, (b) the
Collateral Agent, (c) the Lenders, (d) the Issuing Banks, (e) each counterparty
to any Swap Agreement with the Company or any Subsidiary the obligations under
which constitute Obligations, (f) the beneficiaries of each indemnification
obligation undertaken by any Loan Party under any Loan Document, (g) solely with
respect to Restricted Collateral, the Senior Note Trustee for the benefit of the
holders of the Senior Note Obligations and (h) the successors and assigns of
each of the foregoing.
"Security Interest" has the meaning assigned to such term in Section
4.01.
"Senior Note Indenture" means the Indenture dated as of December 5,
1995, between the Company and the Senior Note Trustee.
"Senior Note Obligations" means the due and punctual payment by the
Company of the principal of, and premium, if any, 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 Senior Notes, when and as due, whether at
maturity, by acceleration, upon one or more dates when prepayment is required
under the Senior Notes Indenture or otherwise.
"Senior Notes" means the 7-1/8% senior notes due December 15, 2005,
of the Company issued pursuant to the
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Senior Note Indenture and outstanding on the Effective Date (or issued pursuant
to the transfer or exchange of such senior notes outstanding on the Effective
Date).
"Senior Note Trustee" means Mellon Bank, N.A. as Trustee under the
Senior Note Indenture and any successor in such capacity.
"Subsidiary Parties" means (a) the Subsidiaries identified on
Schedule I and (b) each other Subsidiary that becomes a party to this Agreement
as a Grantor or a Guarantor after the Effective Date, but excluding any such
Subsidiary that ceases to be a party to this Agreement in accordance with
Section 7.15.
"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 Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" means all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
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, 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.
"Triggering Event" has the meaning assigned to such term in the
Collateral Sharing Agreement.
ARTICLE II
Guarantee
SECTION 2.01. Guarantee. Each Guarantor unconditionally and
irrevocably guarantees, jointly with the
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other Guarantors and severally, as a primary obligor and not merely as a surety,
the due and punctual payment and performance of the Obligations. Each Guarantor
further agrees that the 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 Obligation.
Each of the Guarantors waives presentment to, demand of payment from and protest
to any of the Borrowers or any other Loan Party of any of the Obligations, and
also waives notice of acceptance of its guarantee and notice of protest for
nonpayment.
SECTION 2.02. Guarantee of Payment. Each of the Guarantors 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 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. (a) Except for termination of a
Guarantor's obligations hereunder as expressly provided in 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 set-off, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the 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 Collateral Agent or any other Secured Party
to assert any claim or demand or to enforce any right or remedy under the
provisions of any Loan Document or otherwise (other than a defense of payment or
performance); (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 release of any security held by the Collateral Agent or any other
Secured Party for the Obligations or any of them; (iv) any default, failure or
delay, wilful or otherwise, in the performance of the 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
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indefeasible payment in full in cash of all the Obligations). Each Guarantor
expressly authorizes the Secured Parties to take and hold security for the
payment and performance of the 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 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 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 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 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 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 Borrower or any other Loan
Party, as the case may be, or any security.
SECTION 2.04. Reinstatement. Each of the Guarantors 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 Obligation is
rescinded or must otherwise be restored by the Collateral 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
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virtue hereof, upon the failure of any Borrower or any other Loan Party to pay
any 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, without duplication, to
the Collateral Agent for distribution to the applicable Secured Parties in cash
the amount of such unpaid Obligation. Upon payment by any Guarantor of any sums
to the Collateral Agent as provided above, all rights of such Guarantor against
any Borrower or any other Loan Party 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 each Borrower's and each other Loan
Party's financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the 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.
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 and, subject to Section 5.06, the
Senior Note Obligations, each Grantor hereby pledges to the Collateral Agent,
its successors and assigns, for the benefit of the Secured Parties, and hereby
grants to the Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, a security interest in, all of such Grantor's right, title
and interest in, to and under (a) the shares of capital stock and other Equity
Interests of any Material Subsidiary or Receivables Subsidiary directly owned by
it and listed on Schedule II and any other Equity Interests in a Material
Subsidiary or Receivables Subsidiary obtained in the future by such Grantor and
the certificates, if any, representing all such Equity Interests (the "Pledged
Stock"); provided that, subject to Section 5.15 of the Credit Agreement, the
Pledged Stock shall not include more than 65% of the issued and outstanding
voting Equity Interests of any Foreign Subsidiary Holding Company or any Foreign
Subsidiary; (b) all other property that may be
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delivered to and held by the Collateral Agent pursuant to the terms of this
Agreement; (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 Grantor 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 (f) above
being collectively referred to as the "Pledged Collateral"); subject, however,
to the terms, covenants and conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Grantor
agrees promptly to deliver or cause to be delivered to the Collateral Agent any
and all Pledged Securities.
(b) Upon delivery to the Collateral Agent, (i) any Pledged
Securities shall be accompanied by stock powers 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 comprising part of the Pledged Collateral
shall be accompanied by proper instruments of assignment duly executed by the
applicable Grantor 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
Grantors jointly and severally represent, warrant and covenant to and with the
Collateral Agent, for the 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 the Pledged Stock and correctly sets forth all
Equity Interests required to be pledged hereunder in order to satisfy the
Collateral and Guarantee Requirement;
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(b) the Pledged Stock has been duly and validly authorized and
issued by the issuers thereof and is fully paid and nonassessable;
(c) except for the security interests granted hereunder, each of the
Grantors (i) is and, subject to any transfers made in compliance with the
Credit Agreement, will continue to be the direct owner, beneficially and
of record, of the Pledged Securities indicated on Schedule II as owned by
such Grantor, (ii) holds the same free and clear of all Liens, other than
Liens created by this Agreement, Permitted Encumbrances and transfers made
in compliance with the Credit Agreement, (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
Liens created by this Agreement, Permitted Encumbrances and transfers made
in compliance with the Credit Agreement, and (iv) will defend its title or
interest thereto or therein against any and all Liens (other than the
Liens created by this Agreement and Permitted Encumbrances), however
arising, of all Persons whomsoever;
(d) except for restrictions and limitations imposed by the Loan
Documents or securities laws generally, 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 would 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 of the Grantors has the power and authority to pledge the
Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated;
(f) no consent of any other Person (including stockholders,
partners, members or creditors of any Grantor) and no consent or approval
of any Governmental Authority (except with respect to the Pledged Stock in
any Foreign Subsidiary to the extent consent or approval of a Governmental
Authority is required by applicable law), 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 or the
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failure of which to be obtained would not impair the pledge effected
hereby or the rights or remedies of the Secured Parties); and
(g) by virtue of the execution and delivery by the Grantors of this
Agreement, when any Pledged Securities are delivered to the Collateral
Agent in accordance with this Agreement accompanied by stock powers or
other instruments of transfer duly endorsed in blank, assuming the
continuing possession of such Pledged Securities by the Collateral Agent,
the Collateral Agent will obtain a legal, valid and perfected first
priority lien upon and security interest in such Pledged Securities as
security for the payment and performance of the Obligations and, subject
to Section 5.06, the Senior Note Obligations; provided that, in the case
of Pledged Stock in any Foreign Subsidiary, the legality, validity or
perfection of the lien thereon and security interest therein may also be
subject to the laws of the jurisdiction where such Foreign Subsidiary is
organized.
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 Grantor 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.
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 its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
Agent; provided that prior to the occurrence of a Default, the Collateral Agent
shall not exercise its right to hold a Pledged Security in its name or the name
of its nominee unless (a) such Pledged Security specifies the Collateral Agent
or its nominee as the holder thereof when such security is delivered to the
Collateral Agent or (b) the exercise of such right is necessary to create or
perfect a security interest in Equity Interests of a Foreign Subsidiary or a
Foreign Subsidiary Holding Company. Each Grantor 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 Grantor. Upon
the occurrence and during the continuation of a Default, the Collateral Agent
shall have the right to
13
exchange the certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.
SECTION 3.06. Voting Rights; Dividends and Interest. (a) Unless and
until an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have notified the Grantors that their rights under this
Section are being suspended:
(i) Each Grantor 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 would materially and adversely impair any Pledged Securities or the
rights and remedies of any of the Collateral Agent or the other Secured
Parties under this Agreement or the Credit Agreement or any other Loan
Document or the ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to each Grantor,
or cause to be executed and delivered to such Grantor, all such proxies,
powers of attorney and other instruments as such Grantor may reasonably
request for the purpose of enabling such Grantor to exercise the voting
and/or consensual rights and powers it is entitled to exercise pursuant to
subparagraph (i) above.
(iii) Each Grantor 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
14
be and become part of the Pledged Collateral, and, if received by any
Grantor, shall be held in trust for the benefit of the Collateral Agent
and shall be forthwith delivered to the Collateral Agent in the same form
as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, after the Collateral Agent shall have notified the Grantors of the
suspension of their rights under paragraph (a)(iii) of this Section 3.06, then
all rights of any Grantor to dividends, interest, principal or other
distributions that such Grantor is authorized to receive pursuant to paragraph
(a)(iii) of this Section 3.06 shall cease, and all such rights shall thereupon
become vested 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 Grantor contrary to the provisions of this Section 3.06 shall be
held in trust for the benefit of the Collateral Agent, shall be segregated from
other property or funds of such Grantor and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with any necessary
endorsement). 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 applicable Grantor or Grantors have
delivered to the Collateral Agent a certificate to that effect, the Collateral
Agent shall promptly repay to each Grantor (without interest) all dividends,
interest, principal or other distributions that such Grantor 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, after the Collateral Agent shall have notified the Grantors of the
suspension of their rights under paragraph (a)(i) of this Section 3.06, then all
rights of any Grantor to exercise the voting and 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, which shall have the sole and exclusive right and authority to
exercise
15
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 Grantors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Grantors
suspending their rights under paragraph (a) of this Section 3.06 (i) may be
given by telephone if promptly confirmed in writing, (ii) may be given to one or
more of the Grantors at the same or different times and (iii) may suspend the
rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by the Collateral Agent in its
sole and absolute discretion) and without waiving or otherwise affecting the
Collateral Agent's rights to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is
continuing.
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 and, subject to
Section 5.06, the Senior Note Obligations, each Grantor hereby pledges to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, and hereby grants to the Collateral Agent, its successors and assigns,
for the benefit of the Secured Parties, a security interest (the "Security
Interest") in, all of its right, title or interest in or to any and all of the
following assets and properties 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 "Article 9 Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
16
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) all Fixtures;
(xi) all books and records pertaining to the Article 9 Collateral;
(xii) 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; and
(xiii) the Collateral Account and all accounts or investments held
therein or created thereunder.
Notwithstanding the foregoing, the term "Article 9 Collateral" shall not include
(i) any Receivables or Related Security that, in each case, have been sold or
otherwise transferred in connection with, or are subject to any Liens created
pursuant to or in accordance with, any Permitted Receivables Financing, (ii) any
Excluded Contracts, (iii) any Equipment that constitutes motor vehicles or that,
as of the date hereof, is subject to a Lien set forth in Schedule 6.02 of the
Credit Agreement but only to the extent that (and so long as) the terms of such
Lien specifically prohibit the granting of a prior, pari passu or junior Lien
and security interest in such Equipment, and then only so long as the
obligations secured by such Lien remain outstanding after which time such
Equipment shall be subject to the security interests and Liens created by this
Agreement, (iv) subject to Section 5.15 of the Credit Agreement, more than 65%
of the issued and outstanding voting Equity Interests of any Foreign Subsidiary
Holding Company or any Foreign Subsidiary, (v) Equity Interests in Immaterial
Subsidiaries and (vi) any asset or property that is owned by a Grantor as of the
date hereof or that is purchased or otherwise acquired (including through a
Permitted Acquisition) in accordance with the terms of the Credit Agreement
subject to an existing Lien permitted by Section 6.02 of the Credit Agreement or
a contractual restriction if the terms of such Lien or contractual restriction
would prohibit the grant of a Lien in such asset or property under this
Agreement, so long as such Lien or contractual restriction has not been granted
to and/or does not run to the benefit of any Loan Party or any Affiliate of any
Loan Party and such restriction is permitted by Section 6.09 of the Credit
Agreement.
17
(b) Each Grantor 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 Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor and (ii) in
the case of a financing statement filed as a fixture filing or covering Article
9 Collateral constituting minerals or the like to be extracted or timber to be
cut, a sufficient description of the real property to which such Article 9
Collateral relates. Each Grantor agrees to provide such information to the
Collateral Agent promptly upon request.
Each Grantor also ratifies its authorization for the Collateral
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
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
Grantor as modified, delivered, prepared or supplemented from time to time by
the Credit Agreement and naming any Grantor or the Grantors 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 Grantor with respect to or arising
out of the Article 9 Collateral.
SECTION 4.02. Representations and Warranties. The Grantors jointly
and severally represent and warrant to the Collateral Agent and the Secured
Parties that:
(a) Except for the Security Interest granted pursuant to this
Agreement and the other Liens permitted to exist on such Grantor's Article
9 Collateral by the Credit Agreement, each Grantor has good and valid
rights in and title to the Article 9 Collateral owned by it with respect
to which it has
18
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 the terms of this Agreement, without
the consent or approval of any other Person other than any consent or
approval that has been obtained or the failure of which to have been
obtained would not impair the Security Interest or the rights or remedies
of the Secured Parties.
(b) The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal
name of each Grantor, is correct and complete as of the Effective Date.
The 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
prepared by the Collateral Agent based upon the information provided to
the Collateral Agent in the Perfection Certificate for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate (or specified by notice from the Company to the
Collateral Agent after the Effective Date in the case of filings,
recordings or registrations required by Section 5.03(a) or 5.12 of the
Credit Agreement) are 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 ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Patents, Trademarks and 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
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. Each Grantor
shall ensure that a fully executed agreement in the form hereof and
containing a description of all Article 9 Collateral consisting of
Intellectual Property shall have been received so that the Collateral
Agent may record such agreement as soon as
19
practicable after the execution of this Agreement with respect to United
States Patents and United States registered Trademarks (and Trademarks for
which United States registration applications are pending) and as soon as
practicable after the execution of this Agreement with respect to United
States registered Copyrights have been delivered to the Collateral Agent
for recording by the United States Patent and Trademark Office and the
United States Copyright Office pursuant to 35 U.S.C. Section 261, 15
U.S.C. Section 1060 or 17 U.S.C. Section 205 and the regulations
thereunder, as applicable, to protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral
Agent (for the benefit of the Secured Parties) in respect of all Article 9
Collateral consisting of Patents, Trademarks and Copyrights in which a
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 (other
than the filing of Uniform Commercial Code financing statements as
described above and 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 and, subject to Section 5.06, the Senior
Note Obligations, (ii) subject to the filings and recordings 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) subject to the filings and recordings
described in Section 4.02(b), 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
pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C.
Section 205 and the regulations
20
thereunder, as applicable. The Security Interest is and shall be prior to
any other Lien on any of the Article 9 Collateral, other than Permitted
Encumbrances that have priority as a matter of law and Liens expressly
permitted to be prior to the Security Interest pursuant to clause (c), (d)
or (e) of Section 6.02 of the Credit Agreement.
(d) The Article 9 Collateral is owned by the Grantors free and clear
of any Lien, other than Liens expressly permitted pursuant to Section 6.02
of the Credit Agreement. None of the Grantors 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 Grantor 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
Grantor 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. None of the Grantors
hold any commercial tort claim in an amount reasonably estimated to exceed
$500,000 as of the Effective Date except as indicated on the Perfection
Certificate.
SECTION 4.03. Covenants. (a) Each Grantor agrees to maintain, at its
own cost and expense, such complete and accurate records with respect to the
Article 9 Collateral owned by it as is consistent with its current practices and
in accordance with such prudent and standard practices used in industries that
are the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Article 9 Collateral, and, at
such time or times as the Collateral Agent may reasonably request, promptly to
prepare and deliver to the Collateral Agent a duly certified schedule or
schedules in form and detail satisfactory to the Collateral Agent showing the
identity, amount and location of any and all Article 9 Collateral.
(b) Each Grantor shall, at its own expense, take any and all actions
necessary to defend title to the
21
Article 9 Collateral against all Persons and to defend the Security Interest of
the Collateral Agent 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 Grantor 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, but subject to the other terms of this
Agreement (including the proviso in Section 4.05(e)). If any amount payable
under or in connection with any of the Article 9 Collateral in excess of
$500,000 shall be or become evidenced by any promissory note or other instrument
(other than Intercompany Notes), such note or instrument shall be immediately
pledged and delivered to the Collateral Agent, duly endorsed in a manner
satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, 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
Grantor shall have the right, exercisable within 10 days after it has been
notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its best 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 Collateral
within 30 days after the date it has been notified by the Collateral Agent of
the specific identification of such Collateral.
(d) The Collateral Agent and its representatives shall have the
right, at the Collateral Agent's own cost and expense (unless a Default has
occurred and is continuing, in which case the Grantors shall pay such expenses),
to inspect the Article 9 Collateral, all records related thereto (and
22
to make extracts and copies from such records) and the premises upon which any
of the Article 9 Collateral is located, to discuss the Grantors' affairs with
the officers of the Grantors and their independent accountants and to verify
under reasonable procedures, in accordance with Section 5.09 of the Credit
Agreement, the validity, amount, quality, quantity, value, condition and status
of, or any other 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, in coordination with the applicable Grantor, Account Debtors or
the third person possessing such Article 9 Collateral for the purpose of making
such a verification; provided that the Collateral Agent shall not be entitled to
contact any such Account Debtor unless a Default has occurred and is continuing.
The Collateral Agent shall have the absolute 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 in each case to the
extent any Grantor fails to do so as required by the Credit Agreement or this
Agreement, and each Grantor jointly and severally agrees to reimburse the
Collateral Agent on demand for any payment made or any expense incurred by the
Collateral Agent pursuant to the foregoing authorization except that, unless a
Default has occurred and is continuing, no such tax, assessment, charge or levy
need be paid or satisfied if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of such Grantor;
provided, that nothing in this paragraph shall be interpreted as excusing any
Grantor 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 Grantor 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) If at any time any Grantor shall take a security interest in any
property of an Account Debtor or any other Person to secure payment and
performance of an Account that is Article 9 Collateral, such Grantor shall
promptly assign such security interest to the Collateral Agent. Such assignment
need not be filed of public record
23
unless necessary to continue the perfected status of the security interest
against creditors of and transferees from the Account Debtor or other Person
granting the security interest.
(g) Each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral, all in
accordance with the terms and conditions thereof, and each Grantor 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.
(h) None of the Grantors 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 Grantors shall make or permit to
be made any transfer of the Article 9 Collateral, except as expressly permitted
by the Credit Agreement, and each Grantor shall remain at all times in
possession of the Article 9 Collateral owned by it, except that unless and until
the Collateral Agent shall notify the Grantors that an Event of Default shall
have occurred and be continuing and that during the continuance thereof the
Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of
any Article 9 Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Article 9
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document. Without limiting the
generality of the foregoing, each Grantor agrees that it shall not permit any
Inventory to be in the possession or control of any warehouseman, agent, bailee,
or processor at any time unless such warehouseman, bailee, agent or processor
shall have been notified of the Security Interest and shall have acknowledged in
writing, in form and substance reasonably satisfactory to the Collateral Agent,
that such warehouseman, agent, bailee or processor holds the Inventory for the
benefit of the Collateral Agent subject to the Security Interest and shall act
upon the instructions of the Collateral Agent without further consent from the
Grantor, and that such warehouseman, agent, bailee or processor further agrees
to waive and release any Lien held by it with respect to such Inventory, whether
arising by operation of law or otherwise.
(i) None of the Grantors will, without the Collateral Agent's prior
written consent, grant any
24
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, compromises, settlements, releases, credits or discounts granted or
made in the ordinary course of business and consistent with its current
practices and in accordance with such prudent and standard practice used in
industries that are the same as or similar to those in which such Grantor is
engaged.
(j) The Grantors, at their own expense, shall maintain or cause to
be maintained insurance covering physical loss or damage to their Inventory and
Equipment to the extent and in the manner provided in Section 5.07 of the Credit
Agreement; provided that all policies or certificates with respect to such
insurance (and any other insurance maintained by such Grantor) (i) shall be
endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as additional insured and loss payee) and (ii) shall state that such insurance
policies shall not be canceled or revised in any material respect without at
least 10 Business Days prior written notice thereof by the insurer to the
Collateral Agent. Certified copies of such policies or certificates shall be
deposited with the Collateral Agent. Each Grantor irrevocably makes, constitutes
and appoints the Collateral Agent (and all officers, employees or agents
designated by the Collateral Agent) as such Grantor'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 Grantor 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 Grantor 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 Grantors 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 deems advisable. All sums disbursed by the
Collateral Agent in connection with this paragraph, including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto, shall
be payable, upon
25
demand, by the Grantors to the Collateral Agent and shall be additional
Obligations secured hereby.
(k) Each Grantor shall maintain, in form and manner reasonably
satisfactory to the Collateral Agent, records of its Chattel Paper and its
books, records and documents evidencing or pertaining thereto.
SECTION 4.04. Other Actions. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Security Interest, each Grantor agrees, in each case at such
Grantor's own expense, to take the following actions with respect to the
following Article 9 Collateral:
(a) Instruments. If any Grantor shall at any time hold or acquire
any Instruments included in the Article 9 Collateral (other than
Intercompany Notes) evidencing an obligation in excess of $500,000, such
Grantor 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) Deposit Accounts. For each deposit account that any Grantor at
any time opens or maintains, such Grantor shall, if a Default has occurred
and is continuing and at the request of the Collateral Agent, either (i)
cause the depositary bank to agree to comply at any time with instructions
from the Collateral Agent to such depositary bank directing the
disposition of funds from time to time credited to such deposit account,
without further consent of such Grantor or any other Person, pursuant to
an agreement reasonably satisfactory to the Collateral Agent, or (ii)
arrange for the Collateral Agent to become the customer of the depositary
bank with respect to the deposit account, with the Grantor being
permitted, only with the consent of the Collateral Agent, to exercise
rights to withdraw funds from such deposit account. The Collateral Agent
agrees with each Grantor that the Collateral Agent shall not give any such
instructions or withhold any withdrawal rights from any Grantor unless an
Event of Default has occurred and is continuing, or, after giving effect
to any withdrawal, would occur. The provisions of this paragraph shall not
apply to (A) any deposit account for which any Grantor, the depositary
bank and the Collateral Agent have entered into a cash collateral
agreement specially negotiated among such Grantor, the depositary bank and
the Collateral Agent
26
for the specific purpose set forth therein, (B) deposit accounts for which
the Collateral Agent is the depositary and (C) deposit accounts subject to
lockbox arrangements in connection with any Permitted Receivables
Financing.
(c) Investment Property. Except to the extent otherwise provided in
Article III, if any Grantor shall at any time hold or acquire any
certificated securities (other than Intercompany Notes) with a face amount
(in the case of debt securities) or fair market value (in the case of
equity securities) of $500,000 or more, such Grantor shall, within 10
Business Days, notify the Collateral Agent and, upon request of the
Collateral Agent, promptly 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 Grantor shall at any time hold or acquire any
uncertificated securities that are issued to such Grantor or its nominee
directly by the issuer thereof and have a face amount (in the case of debt
securities) or fair market value (in the case of equity securities) of
$500,000 or more, such Grantor shall, within 10 Business Days, notify the
Collateral Agent and, upon request of the Collateral Agent, promptly
either (i) cause the issuer to agree to comply with instructions from the
Collateral Agent as to such securities, without further consent of any
Grantor or such nominee, or (ii) arrange for the Collateral Agent to
become the registered owner of the securities. If any Grantor shall at any
time hold any securities, whether certificated or uncertificated, or other
investment property with a face amount (in the case of debt securities or
other investment property in the nature of debt securities) or fair market
value (in the case of equity securities or other investment property in
the nature of equity securities) of $500,000 or more, through a securities
intermediary or commodity intermediary, such Grantor shall, within 10
Business Days, notify the Collateral Agent and, upon request of the
Collateral Agent, promptly either (A) cause such securities intermediary
or (as the case may be) commodity intermediary to agree to comply with
entitlement orders or other instructions from the Collateral Agent to such
securities intermediary as to such security entitlements, or (as the case
may be) 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 Grantor or such
nominee, or (B) in the
27
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, with the
Grantor 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 Grantors 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 Grantor, unless an Event of
Default has occurred and is continuing, or, after giving effect to any
such investment and withdrawal rights, would occur. The provisions of this
paragraph shall not apply to any financial assets credited to a securities
account for which the Collateral Agent is the securities intermediary. The
covenants and agreements of the Grantors contained in this subparagraph
(c) shall not apply to Equity Interests in Immaterial Subsidiaries or,
subject to Section 5.15 of the Credit Agreement, more than 65% of the
issued and outstanding voting Equity Interests of any Foreign Subsidiary
Holding Company or any Foreign Subsidiary.
(d) Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic
chattel paper or any "transferable record", as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act
as in effect in any relevant jurisdiction, in each case, securing or
evidencing an obligation in excess of $500,000, such Grantor shall
promptly notify the Collateral Agent thereof and, at the request of the
Collateral Agent, shall take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control under New York
UCC Section 9-105 of such electronic chattel paper or control under
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Collateral Agent agrees with such Grantor that
the Collateral Agent will arrange, pursuant to procedures reasonably
satisfactory to the Collateral Agent and so long as such procedures will
not result in the Collateral Agent's loss of control,
28
for the Grantor to make alterations to the electronic chattel paper or
transferable record permitted under UCC Section 9-105 or, as the case may
be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions
Act for a party in control to allow without loss of control, unless an
Event of Default has occurred and is continuing or would occur after
taking into account any action by such Grantor with respect to such
electronic chattel paper or transferable record.
(e) Letter of Credit Rights. If any Grantor is at any time a
beneficiary under a letter of credit now or hereafter issued in favor of
such Grantor with a face amount in excess of $500,000, such Grantor shall
promptly notify the Collateral Agent thereof and, at the request and
option of the Collateral Agent, such Grantor shall, pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral
Agent, either (i) arrange for the issuer and any confirmer of such letter
of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under the letter of credit or (ii) arrange for the
Collateral Agent to become the transferee beneficiary of the letter of
credit, with the Collateral Agent agreeing, in each case, that the
proceeds of any drawing under the letter of credit are to be paid to the
applicable Grantor unless an Event of Default has occurred or is
continuing.
(f) Commercial Tort Claims. If any Grantor shall at any time hold or
acquire a commercial tort claim in an amount reasonably estimated to
exceed $500,000, the Grantor shall promptly notify the Collateral Agent
thereof in a writing signed by such Grantor including a summary
description of such claim and grant to the Collateral Agent in such
writing a security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Collateral Agent.
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not do any act or omit do to
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 material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue
29
to ▇▇▇▇ any products covered by a Patent that is material to the conduct of such
Grantor's business with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor'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 to the extent necessary and sufficient to
establish and preserve its maximum 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 Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a material Copyright, continue to
publish, reproduce, display, adopt and distribute the work with appropriate
copyright notice as necessary and sufficient to establish and preserve its
maximum rights under applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent promptly if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its 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 or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or its
right to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any
agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, 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, unless it promptly
informs the Collateral Agent, and, upon request of the Collateral Agent,
executes and delivers 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,
30
Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent as
its attorney-in-fact to execute and file such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power, being coupled with an interest, is irrevocable; provided that with
respect to a Patent, Trademark or Copyright that is registered in a jurisdiction
outside of the United States, the applicable Grantor shall only be required to
evidence the Collateral Agent's security interest if the Collateral Agent so
requests and if the cost of evidencing such security interest is not
disproportionate to the value of such Patent, Trademark or Copyright.
(f) Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, 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 material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if required of advisable in the exercise of good business judgment,
to initiate opposition, interference and cancelation proceedings against third
parties.
(g) In the event that any Grantor has reason to believe that any
Article 9 Collateral consisting of a Patent, Trademark or Copyright material to
the conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if required of advisable in the exercise of 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.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or approvals
by the licensor of each Copyright License, Patent License or Trademark License
to effect the assignment of all such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.
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SECTION 4.06. Covenants Regarding Intercompany Debt. (a) Each
Grantor agrees that, except for the Security Interest granted hereunder, it will
not grant a security interest in or pledge any Intercompany Debt owing to it,
including any Intercompany Debt that is evidenced by a promissory note or other
instrument, and if such Intercompany Debt is evidenced by a promissory note or
other instrument, such Grantor or the Company will retain physical possession of
any such promissory note or other instrument.
(b) Each Grantor agrees that, if an Event of Default has occurred
and is continuing and the Collateral Agent or any other Secured Party has begun
to exercise rights or remedies under this Agreement, such Grantor will cause any
Intercompany Debt owing to it to be evidenced by a promissory note or other
instrument and shall deliver all such notes or other instruments to the
Collateral Agent accompanied by proper instruments of assignment duly executed
by the applicable Grantor and such other instruments or documents as the
Collateral Agent may reasonably request.
ARTICLE V
Remedies; Certain Sharing Arrangements
SECTION 5.01. Remedies Upon Default. Upon the occurrence and during
the continuance of an Event of Default or a Triggering Event, each Grantor
agrees to deliver each item of Article 9 Collateral to the Collateral Agent on
demand, and it is agreed that the Collateral Agent shall have the right to take
any 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 Grantors
to the Collateral Agent, or to license or sublicense, whether general, special
or otherwise, and whether on an exclusive or 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 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,
32
generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting the generality
of the foregoing, each Grantor 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 delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized at any such sale of securities (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale 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 sale of the
Collateral shall hold the property sold absolutely, free from any claim or right
on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and appraisal which such
Grantor 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 Grantors 10 days'
written notice (which each Grantor 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 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
33
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 case any sale of all or any
part of the Collateral is 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 purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to this Agreement, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and (unless such Collateral
is not Restricted Collateral or the Senior Note Obligations are no longer
outstanding at the time) may make payment on account thereof by using any
Obligation then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor 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 Grantor 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 or Triggering Events 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. (a) The Collateral Agent
shall apply the proceeds of any collection or sale of Collateral, including any
Collateral consisting of cash, in the order and manner specified in the
Collateral Sharing Agreement.
34
(b) The Collateral Agent shall have absolute discretion as to the
time of application of any such proceeds in accordance with the Collateral
Sharing 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 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 Grantor hereby grants to the
Collateral Agent an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sublicense any of the Article 9 Collateral consisting of Intellectual Property
now owned or hereafter acquired by such Grantor, and 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 only be exercised, at the option of the
Collateral Agent, upon the occurrence and during the continuation of an Event of
Default or a Triggering Event; provided that any license, sublicense or other
transaction entered into by the Collateral Agent in accordance herewith shall be
binding upon the Grantors notwithstanding any subsequent cure of an Event of
Default.
SECTION 5.04. Securities Act. In view of the position of the
Grantors 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 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 Grantor
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
35
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
Grantor recognizes that in light of such restrictions and limitations the
Collateral Agent may, with respect to any sale of the Pledged Collateral if
necessary under the Federal Securities Laws, limit the purchasers to those who
will agree, among other things, to acquire such Pledged Collateral for their own
account, for investment, and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that in light of such restrictions
and limitations, the Collateral Agent, in its sole and absolute discretion and
in conformity with applicable laws (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 and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Grantor 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. Each Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default or a Triggering
Event, if for any reason the Collateral Agent desires to sell any of the Pledged
Collateral at a public sale, it will, at any time and from time to time, upon
the written request of the Collateral Agent, use its best 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 Grantor further agrees to indemnify,
36
defend and hold harmless the Collateral 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, without limitation, 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 alleged untrue statement or omission based upon information
furnished in writing to such Grantor or the issuer of such Pledged Collateral by
the Collateral Agent or any other Secured Party expressly for use therein. Each
Grantor further agrees, upon such written request referred to above, to use its
best 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 requested by the
Collateral Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. Each Grantor will bear all costs and
expenses of carrying out its obligations under this Section 5.05. Each Grantor
acknowledges that there is no adequate remedy at law for failure by it to comply
with the provisions of this Section 5.05 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.
SECTION 5.06. Senior Note Obligations. Notwithstanding anything to
the contrary in this Agreement, (a) the Senior Note Obligations are secured
solely by the Restricted Collateral and (b) the grant of any Lien on the
Restricted Collateral to secure the Senior Note Obligations is solely intended
to comply with Section 1010 of the Senior Note Indenture and shall be effective
to the extent (and only to the extent) required by such Section.
SECTION 5.07. Security Interests of the Company. Notwithstanding
anything to the contrary in this Agreement, for the purposes of Article III and
Article IV of this Agreement, the pledges and Security Interests granted by the
Company in its capacity as a Grantor pursuant to this Agreement shall be deemed
to secure only its obligations as a Guarantor under Article II of this Agreement
and, if it is
37
a Borrower, its Obligations in its capacity as a Borrower; provided that the
foregoing shall not apply if the Company becomes the Term Loan Borrower and
assumes the obligations of the Initial Borrower under the Credit Agreement.
Unless and until the Company becomes a Borrower under the Credit Agreement,
nothing herein shall be construed as effecting any guarantee of Indebtedness of
the Company by any Subsidiary.
ARTICLE VI
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, then 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 Grantor shall be sold
pursuant to this Agreement or any other Security Document to satisfy in whole or
in part an Obligation or Senior Note Obligation of such Borrower, then such
Borrower shall indemnify such Grantor 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 and
Grantor (a "Contributing Party") 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 Grantor shall be sold pursuant to any Security
Document to satisfy any Obligation or Senior Note Obligation owed to any Secured
Party and such other Guarantor or Grantor (the "Claiming Party") shall not have
been fully indemnified by the applicable Borrower or Borrowers as provided in
Section 6.01, the Contributing Party shall indemnify the Claiming Party 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 the case may be, in each case
multiplied by a fraction of which the numerator shall be the net worth of the
Contributing Party on the date hereof and the denominator shall be the aggregate
net worth of all the Guarantors and Grantors on the date hereof (or, in the case
of any Guarantor or Grantor becoming a party hereto pursuant to Section 7.16,
the date of the supplement hereto executed and delivered by such
38
Guarantor or Grantor). Any Contributing Party making any payment to a Claiming
Party pursuant to this Section 6.02 shall be subrogated to the rights of such
Claiming Party 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 and Grantors under
Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the part
of any Borrower or any Guarantor or Grantor 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 or Grantor with respect to its obligations hereunder, and each
Guarantor and Grantor shall remain liable for the full amount of the obligations
of such Guarantor or Grantor hereunder.
(b) Each Guarantor and Grantor hereby agrees that all Indebtedness
and other monetary obligations owed by it to any other Guarantor, Grantor or any
other 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 10.01 of the Credit Agreement. All communications and
notices hereunder to the Initial Borrower or any Subsidiary Party shall be given
to it in care of the Company as provided in Section 10.01 of the Credit
Agreement.
SECTION 7.02. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the Security Interest, the grant of a security
interest in the Pledged Collateral and all obligations of each Grantor and
Guarantor 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
39
the Credit Agreement, any other Loan Document or any other agreement or
instrument (other than this Agreement), (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 the Obligations, or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Grantor or Guarantor in respect of the Obligations or this Agreement (other than
the indefeasible payment in full in cash of all the Obligations).
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
issuance of any Letters of Credit, regardless of any investigation made by any
Lender or on its behalf and notwithstanding that the Collateral Agent, any
Issuing Bank or any Lender may have had notice or knowledge of any 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 Loan Party when a counterpart hereof executed
on behalf of such Loan Party shall have been delivered to the Collateral Agent
and a counterpart hereof shall have been executed on behalf of the Collateral
Agent, and thereafter shall be binding upon such Loan Party and the Collateral
Agent and their respective permitted successors and assigns, and shall inure to
the benefit of such Loan Party, the Collateral Agent and the other Secured
Parties and their respective permitted successors and assigns, except that no
Loan 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 Loan Party and may be amended, modified, supplemented,
waived or released with respect to any Loan Party without the approval of any
other
40
Loan Party and without affecting the obligations of any other Loan 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 successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of any Guarantor or Grantor or the Collateral
Agent that are contained in this Agreement shall bind and inure to the benefit
of their respective 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 10.03 of
the Credit Agreement.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Grantor and each Guarantor jointly and severally
agrees to indemnify the Collateral Agent and the other Indemnitees (as defined
in Section 10.03 of the Credit Agreement) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of, the execution, delivery
or performance of this Agreement or any claim, litigation, investigation or
proceeding relating hereto, 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 resulted from the gross negligence or wilful
misconduct of such Indemnitee or any of its Related Parties.
(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, or any investigation made by or on behalf
of the Collateral Agent or any other Secured Party. All amounts due under this
Section 7.06 shall be payable on written demand therefor accompanied by an
invoice or other summary of the amount or amounts payable.
41
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact. Each
Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor 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; provided that the Collateral Agent
agrees not to exercise such power unless an Event of Default or a Triggering
Event shall have occurred and be continuing. 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 or a Triggering Event, with
full power of substitution either in the Collateral Agent's name or in the name
of such Grantor (a) to receive, endorse, assign and/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 Article 9 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 Pledged Collateral; (d) to sign the name of any Grantor on any invoice or
▇▇▇▇ of lading relating to any of the Collateral; (e) to send verifications of
Accounts Receivable 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 Grantor 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 received as a
42
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
Grantor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.
SECTION 7.08. APPLICABLE LAW. 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
Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights 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, 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
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Collateral Agent, any Lender or any Issuing
Bank may have had notice or knowledge of such Default at the time.
(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 10.02 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 ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
43
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.
SECTION 7.11. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 7.12. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute a single contract (subject to Section 7.04), and shall
become effective as provided in Section 7.04. Delivery of an executed signature
page to this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 7.13. Headings. Article and Section headings used herein are
for the purpose 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
of the Loan Parties hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to any Loan
Document, 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
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 or
any other Loan Document shall affect any right that the Administrative Agent,
the
44
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 Grantor or Guarantor or its properties in the courts of any
jurisdiction.
(b) Each of the Loan Parties 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 court referred to in paragraph (a) of this Section. 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.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
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 Loan Document Obligations (other
than unliquidated contingent liabilities in respect of indemnification
obligations) have been indefeasibly paid in full and the Lenders have no further
commitment to lend under the Credit Agreement, the LC Exposure has been reduced
to zero and the Issuing Banks have no further obligations to issue Letters of
Credit under the Credit Agreement.
(b) A Subsidiary Party shall automatically be released from its
obligations hereunder (including its guarantee, if any, pursuant to Article II)
and the Security Interest in the Collateral owned by 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; provided that the Required Lenders shall have consented to such
transaction (to the extent required by the Credit Agreement) and the terms of
such consent did not provide otherwise.
(c) Subject to Section 6.12 of the Collateral Sharing Agreement,
upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit
45
Agreement to any Person that is not a Grantor, or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 10.02 of the Credit Agreement, the security
interest in such Collateral shall be automatically released.
(d) In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor's expense, all documents that such Grantor 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, other than any warranty stating that the
Security Interest created hereunder is, subject to any necessary filings or
recordations, being terminated by such termination or release.
SECTION 7.16. Additional Subsidiaries. Pursuant to Section 5.12 of
the Credit Agreement, each Domestic Loan Party that was not in existence or not
a Domestic Loan Party on the Effective Date is required to enter in this
Agreement as a Subsidiary Party. Upon execution and delivery by the Collateral
Agent and a Subsidiary 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
Guarantor or Grantor hereunder. The rights and obligations of each Guarantor or
Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Subsidiary Party as a 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 of its Affiliates 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 obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any
Subsidiary Party against any of and all the obligations of such Subsidiary Party
now or hereafter existing under this agreement owed to such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of set-off) which such Lender may have.
46
SECTION 7.18. Collateral Sharing Agreement. Each Grantor agrees to
be bound by the terms of the Collateral Sharing Agreement and, without limiting
the generality of the foregoing, expressly agrees that all obligations and
liabilities of a "Grantor" thereunder apply to such Grantor with the same force
and effect as if such Grantor were a signatory thereto. Article II of the
Collateral Sharing Agreement shall apply to this Agreement and any actions taken
or permitted to be taken by the Collateral Agent hereunder. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of the Collateral Sharing Agreement, the terms and conditions of
the Collateral Sharing Agreement shall control.
47
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
▇▇▇▇▇▇ SCIENTIFIC INTERNATIONAL INC.,
by
______________________________
Name:
Title:
▇▇▇▇▇▇ SCIENTIFIC COMPANY L.L.C.,
by ▇▇▇▇▇▇ Scientific
International Inc.,
manager and sole member
by
______________________________
Name:
Title:
▇▇▇▇-▇▇▇▇▇▇ INSTRUMENT COMPANY,
by
______________________________
Name:
Title:
▇▇▇▇▇▇ CLINICAL SERVICES INC.,
by
______________________________
Name:
Title:
48
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.C.,
by ▇▇▇▇▇▇ Scientific
International Inc.,
manager and sole member
by
______________________________
Name:
Title:
▇▇▇▇▇▇ SCIENTIFIC WORLDWIDE INC.,
by
______________________________
Name:
Title:
FSWH COMPANY LLC,
by
______________________________
Name:
Title:
JPMORGAN CHASE BANK,
as Collateral Agent,
by
______________________________
Name:
Title:
SCHEDULE I
to the Guarantee and
Collateral Agreement
INITIAL SUBSIDIARY PARTIES
▇▇▇▇-▇▇▇▇▇▇ Instrument Company
▇▇▇▇▇▇ Clinical Services Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.C.
▇▇▇▇▇▇ Scientific Worldwide Inc.
FSWH Company LLC
SCHEDULE II
to the Guarantee and
Collateral Agreement
EQUITY INTERESTS
Number and
Class of Percentage
Number of Registered Equity of Equity
Issuer Certificate Owner Interest Interests
------ ----------- ----- -------- ---------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
SCHEDULE III
to the Guarantee and
Collateral Agreement
U.S. COPYRIGHTS OWNED BY [NAME OR GRANTOR]
[Make a separate page of Schedule III for each Grantor 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
----- ------ ----- ----------
Non-U.S. Copyright Registrations
[List in alphabetical order by country/numerical order by
Registration No. within each country]
Country Title Reg. No. Author
------- ----- -------- ------
Non-U.S. Pending Copyright Applications for Registration
[List in alphabetical order by country.]
Date
Country Title Author Class Filed
------- ----- ------ ----- -----
SCHEDULE III
to the Guarantee and
Collateral Agreement
LICENSES
[Make a separate page of Schedule III for each Grantor, and state if any Grantor
is not a party to a license/sublicense.]
PART I
LICENSES/SUBLICENSEES OF [NAME OF GRANTOR]
AS LICENSOR ON DATE HEREOF
A. Copyrights
[List U.S. copyrights in numerical order by Registration No. List non-U.S.
copyrights by country in alphabetical order with Registration Nos. within each
country in numerical order.]
U.S. Copyrights
Licensee Date of Title of
Name and License/ U.S.
Address Sublicense Copyright Author Reg. No.
------- ---------- --------- ------ --------
Non-U.S. Copyrights
Licensee Date of Title of
Name and License/ Non-U.S. Reg.
Country Address Sublicensee Copyrights Author No.
------- ------- ----------- ---------- ------ ---
B. Patents
[List U.S. patent nos. and U.S. patent application nos. in numerical order. List
non-U.S. patent nos. and non-U.S. application in alphabetical order by country,
with numbers within each country in numerical order.]
SCHEDULE III
to the Guarantee and
Collateral Agreement
U.S. Patents
Licensee Name Date of License/
and Address Sublicense Issue Date Patent No.
----------- ---------- ---------- ----------
Schedule III
to Guarantee and
Collateral Agreement
U.S. Patent Applications
Licensee Name Date of License/
and address Sublicense Date Filed Application No.
----------- ---------- ---------- ---------------
Non-U.S. Patents
Licensee Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ----------- ---------- ---- ----------
Non-U.S. Patent Applications
Licensee Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- ----------- ---------- ----- ---
C. Trademarks
[List U.S. trademark nos. and U.S. trademark application nos. in numerical
order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark
nos. within each country in numerical order.]
U.S. Trademarks
Licensee Name Date of License/
and Address Sublicense U.S. ▇▇▇▇ Reg. Date Reg. No.
----------- ---------- --------- --------- --------
Schedule III
to Guarantee and
Collateral Agreement
U.S. Trademark Applications
Licensee Name Date of License/ Date Application
and Address Sublicense U.S. ▇▇▇▇ Filed No.
----------- ---------- --------- ----- ---
Non-U.S. Trademarks
Date of
Licensee Name License/ Non-U.S.
Country and Address Sublicense ▇▇▇▇ Reg. Date Reg. No.
------- ----------- ---------- ---- --------- --------
Non-U.S. Trademark Applications
Date of
Licensee Name License/ Non-U.S. Date Application
Country and Address Sublicense ▇▇▇▇ Filed No.
------- ----------- ---------- ---- ----- ---
D. Others
Licensee Name Date of License/ Subject
and Address Sublicense Matter
----------- ---------- ------
SCHEDULE III
to the Guarantee and
Collateral Agreement
Non-U.S. Trademark Applications
Licensee Date of
Name License/ Non-U.S. Date Application
Country and Address Sublicense ▇▇▇▇ Filed No.
------- ----------- ---------- ---- ----- ---
D. Others
Licensee Name Date of License/ Subject
and Address Sublicense Matter
----------- ---------- ------
Schedule III
to the Guarantee and
Collateral Agreement
PART II
LICENSEES/SUBLICENSEES OF [NAME OF GRANTOR]
AS LICENSEE ON DATE HEREOF
A. Copyrights
[List U.S. copyrights in numerical order by Registration No. List non-U.S.
copyrights by country in alphabetical order, with Registration Nos. within each
country in numerical order.]
U.S. Copyrights
Licensor Date of Title of
Name and License/ U.S.
Address Sublicense Copyright Author Reg. No.
------- ---------- --------- ------ --------
Non-U.S. Copyrights
Licensor Date of Title of
Name and License/ Non-U.S. Reg.
Country Address Sublicensee Copyrights Author No.
------- ------- ----------- ---------- ------ ---
B. Patents
[List U.S. patent nos. and U.S. patent application nos. in numerical order. List
non-U.S. patent nos. and non-U.S. application nos. in alphabetical order by
country with patent nos. within each country in numerical order.]
U.S. Patents
Date of
Licensor Name License/
and Address Sublicense Issue Date Patent No.
----------- ---------- ---------- ----------
SCHEDULE III
to the Guarantee and
Collateral Agreement
Non-U.S. Patents
Date of
Licensor Name License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ----------- ---------- ---- ----------
Non-U.S. Patent Applications
Date of
Licensor Name License/ Date Application
Country and Address Sublicense Filed No.
------- ----------- ---------- ----- ---
C. Trademarks
[List U.S. trademark nos. and U.S. trademark application nos. in numerical
order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark
nos. within each country in numerical order.]
U.S. Trademarks
Date of
Licensor Name License/ Reg. Reg.
and Address Sublicense U.S. ▇▇▇▇ Date No.
----------- ---------- --------- ---- ---
U.S. Trademark Applications
Date of
Licensor Name License/ Date Application
and Address Sublicense U.S. ▇▇▇▇ Filed No.
----------- ---------- --------- ----- ---
Non-U.S. Trademarks
Licensor Date of
Name License/ Non-U.S. Reg. Reg.
Country and Address Sublicense ▇▇▇▇ Date No.
------- ----------- ---------- ---- ---- ---
Schedule III
to Guarantee and
Collateral Agreement
U.S. Trademark Applications
Date of
Licensee Name License/ Date Application
and Address Sublicense U.S. ▇▇▇▇ Filed No.
----------- ---------- --------- ----- ---
Non-U.S. Trademarks
Licensee Date of
Name License/ Non-U.S. Reg. Reg.
Country and Address Sublicense ▇▇▇▇ Date No.
------- ----------- ---------- ---- ---- ---
Non-U.S. Trademark Applications
Licensee Date of
Name License/ Non-U.S. Date Application
Country and Address Sublicense ▇▇▇▇ Filed No.
------- ----------- ---------- ---- ----- ---
D. Others
Licensee Name Date of License/ Subject
and Address Sublicense Matter
----------- ---------- ------
Schedule III
to the Guarantee and
Collateral Agreement
U.S. Patent Applications
Licensor Name Date of License/
and address Sublicense Date Filed Application No.
----------- ---------- ---------- ---------------
Schedule III
to the Guarantee and
Collateral Agreement
PATENTS OWNED BY [NAME OF GRANTOR]
[Make a separate page of Schedule III for each Grantor 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
---------------------- -----------
Non-U.S. Patent Registrations
[List in alphabetical order by country/numerical order by Patent No. within each
country]
Country Issue Date Patent No.
------- ---------- ----------
Non-U.S. Patent Registrations
[List in alphabetical order by country/numerical order by Application No. within
each country]
Country Filing Date Patent Application No.
------- ----------- ----------------------
SCHEDULE III
to the Guarantee and
Collateral Agreement
TRADEMARK/TRADE NAMES OWNED BY [NAME OF GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no
trademarks/trade names 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.
---- ----------- ---------------
State Trademark Registrations
[List in alphabetical order by state/numerical order by trademark no. within
each country]
State ▇▇▇▇ Filing Date Application No.
----- ---- ----------- ---------------
Non-U.S. Trademark Registrations
[List in alphabetical order by country/numerical order by trademark no. within
each country]
Country ▇▇▇▇ Reg. Date Reg. No.
------- ---- --------- --------
SCHEDULE III
to the Guarantee and
Collateral Agreement
Non-U.S. Trademark Applications
[List in alphabetical order by country/numerical order by application no.]
Application
Country ▇▇▇▇ Application Date No.
------- ---- ---------------- ---
Trade Names
Country(s) Where Used Trade Names
--------------------- -----------
EXHIBIT I to the
Guarantee and
Collateral Agreement
Supplement No. __ dated as of [ ], to the
Guarantee and Collateral Agreement dated as of February
14, 2003, among ▇▇▇▇▇▇ Scientific International Inc.,
▇▇▇▇▇▇ Scientific Company L.L.C., certain other
Subsidiaries of ▇▇▇▇▇▇ Scientific International Inc. and
JPMorgan Chase Bank, as Collateral Agent.
A. Reference is made to the Credit Agreement dated as of February
14, 2003 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among ▇▇▇▇▇▇ Scientific International Inc. (the "Company"),
▇▇▇▇▇▇ Scientific Company L.L.C., the Lenders party thereto and JPMorgan Chase
Bank, as Administrative 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
Collateral Agreement referred to therein.
C. The Guarantors and Grantors have entered into the Collateral
Agreement in order to induce the Lenders to make Loans and the Issuing Banks to
issue Letters of Credit. Section 7.16 of Collateral Agreement provides that
additional Subsidiaries of the Company may become Subsidiary Parties under the
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 Collateral Agreement in order to induce the
Lenders to make additional Loans and the Issuing Banks to issue additional
Letters of Credit and as consideration 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 Collateral
Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party
under the Collateral Agreement and the Collateral Sharing Agreement with the
same force and effect as if originally named therein as a Subsidiary Party and
the New Subsidiary hereby (a) agrees to all the terms and provisions of the
Collateral Agreement and the Collateral Sharing Agreement applicable to it as a
Subsidiary Party thereunder and (b) represents and warrants
2
that the representations and warranties made by it as a Grantor and, if
applicable, a Guarantor thereunder are true and correct 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 Collateral
Agreement) and, subject to Section 5.06, the Senior Note Obligations (as defined
in the Collateral Agreement), does hereby create and grant to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, their
successors and assigns, a security interest in and lien on all of the New
Subsidiary's right, title and interest in and to the Collateral (as defined in
the Collateral Agreement) of the New Subsidiary. Each reference to a "Grantor"
and, if applicable, a "Guarantor" in the Collateral Agreement and the Collateral
Sharing Agreement shall be deemed to include the New Subsidiary. The Collateral
Agreement and the Collateral Sharing Agreement are 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 applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
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 Collateral of the New Subsidiary and (b) 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.
3
SECTION 5. Except as expressly supplemented hereby, the Collateral
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Any provision of this Supplement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or any provision in the Collateral Agreement; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 7.01 of the 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, other charges and disbursements of
counsel for the Collateral Agent.
4
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have
duly executed this Supplement to the 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:
SCHEDULE I
to Supplement No.__
to the Guarantee and
Collateral Agreement
LOCATION OF COLLATERAL
Description Location
----------- --------
SCHEDULE II
to Supplement No.___
to the Guarantee and
Collateral Agreement
Pledged Securities of the New Subsidiary
EQUITY INTERESTS
Number and
Class of Percentage
Number of Registered Equity of Equity
Issuer Certificate Owner Interests Interests
------ ----------- ----- --------- ---------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
INTELLECTUAL PROPERTY