Exhibit 10.11
FIRST AMENDED AND RESTATED SUBSIDIARY PLEDGE AND SECURITY AGREEMENT
This FIRST AMENDED AND RESTATED SUBSIDIARY PLEDGE AND SECURITY AGREEMENT
(as amended, supplemented, amended and restated or otherwise modified from time
to time, this "Security Agreement"), dated as of January 8, 2004, is made by
ALEXANDER CITY CASTING COMPANY, INC., a corporation organized and existing under
the laws of the State of Alabama, CAST-MATIC CORPORATION, a corporation
organized and existing under the laws of the State of Michigan, COLUMBUS
FOUNDRY, L.P., a limited partnership organized and existing under the laws of
the State of Delaware, DIVERSIFIED DIEMAKERS, INC., a corporation organized and
existing under the laws of the State of Delaware, GANTON TECHNOLOGIES INC., a
corporation organized and existing under the laws of the State of Illinois,
INTERMET HOLDING COMPANY, a corporation organized and existing under the laws of
the State of Delaware, INTERMET ILLINOIS, INC. formerly known as ▇▇▇▇▇▇ P.M.C.,
Incorporated, a corporation organized and existing under the laws of the State
of Illinois, INTERMET INTERNATIONAL, INC., a corporation organized and existing
under the laws of the State of Georgia, INTERMET U.S. HOLDING, INC., a
corporation organized and existing under the laws of the State of Delaware,
IRONTON IRON INC., a corporation organized and existing under the laws of the
State of Ohio, LYNCHBURG FOUNDRY COMPANY, a corporation organized and existing
under the laws of the Commonwealth of Virginia, NORTHERN CASTINGS CORPORATION, a
corporation organized and existing under the laws of the State of Georgia,
SUDBURY, INC., a corporation organized and existing under the laws of the State
of Delaware, SUDM, INC., a corporation organized and existing under the laws of
the State of Michigan, TOOL PRODUCTS, INC., a corporation organized and existing
under the laws of the State of Delaware, ▇▇▇▇▇▇ CASTINGS COMPANY, a corporation
organized and existing under the laws of the State of Delaware and ▇▇▇▇▇▇
HAVANA, INC., a corporation organized and existing under the laws of the State
of Delaware, and each other Subsidiary of INTERMET CORPORATION, a Georgia
corporation (the "Borrower"), that executes and delivers a supplement to this
Security Agreement from time to time (each individually, a "Grantor" and,
collectively, the "Grantors"), in favor of THE BANK OF NOVA SCOTIA ("Scotia
Capital"), as collateral agent under the Credit Agreement (together with its
successor(s) thereto in such capacity, the "Collateral Agent") for the benefit
of each of the Secured Parties (capitalized terms used herein have the meanings
set forth in or incorporated by reference in Article I).
W I T N E S S E T H :
WHEREAS, the Borrower, certain Lenders and the Administrative Agent are
parties to that certain $225,000,000 Five-Year Credit Agreement dated as of
November 5, 1999 (as amended through the Eighth Amendment dated as of December
19, 2003, the "Existing Loan Agreement");
WHEREAS, the Borrower, the Lenders and the Administrative Agent are
amending and restating the Existing Loan Agreement pursuant to a First Amended
and Restated Credit Agreement dated as of January 8, 2004 (as the same may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement");
WHEREAS, the Grantors guaranteed the obligations of the Borrower under the
Existing Loan Agreement and certain other obligations of the Borrower and its
Subsidiaries pursuant to the First Amended and Restated Guaranty Agreement dated
as of July 17, 2001 (the "Existing Guaranty Agreement");
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement that the Grantors amend and restate the Existing Guaranty Agreement
pursuant to a Second Amended and Restated Guaranty Agreement on the date hereof
(the "Guaranty Agreement");
WHEREAS, the Grantors have previously provided security for their
obligations under the Existing Guaranty Agreement pursuant to a Subsidiary
Pledge and Security Agreement dated as of July 17, 2001 (the "Existing Security
Agreement");
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement that each Grantor execute and deliver this Security Agreement which
shall amend and restate the Existing Security Agreement in its entirety with the
terms contained herein; and
WHEREAS, the Grantors intend that this Security Agreement not effect a
novation of their obligations under the Existing Security Agreement, but merely
a restatement, and where applicable, an amendment to the terms governing such
obligations.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees, for the
benefit of each Secured Party, that the Existing Security Agreement shall be
amended and restated in its entirety to read as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Borrower" is defined in the preamble.
"Capital Securities" means with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the date hereof.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in clause (b) of Section 4.3.2.
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"Collateral Agent" is defined in the preamble.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units,
display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral
devices and other related computer hardware;
(b) all software programs (including both source code, object code
and all related applications and data files), whether now owned, licensed
or leased or hereafter acquired by any Grantor, designed for use on the
computers and electronic data processing hardware described in clause (a)
above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through (c);
and
(e) all rights with respect to all of the foregoing, including any
and all copyrights, licenses, options, warranties, service contracts,
program services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of the
foregoing.
"Copyright Collateral" means all copyrights of each Grantor, whether
statutory or common law, registered or unregistered and whether published or
unpublished, now or hereafter in force throughout the world including all of
such Grantor's right, title and interest in and to all copyrights registered in
the United States Copyright Office or anywhere else in the world and also
including the copyrights referred to in Item A of Schedule V hereto, and
registrations and recordings thereof and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, including
each copyright license referred to in Item B of Schedule V hereto, the right to
▇▇▇ for past, present and future infringements of any of the foregoing, all
rights corresponding thereto, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"Credit Agreement" is defined in the second recital.
"Credit Party" means any of the Borrower and the Grantors.
"Default" means any condition or event which, with notice or lapse of time
or both, would constitute an Event of Default.
"Distributions" means all non-cash dividends paid on Capital Securities,
liquidating dividends paid on Capital Securities, shares of Capital Securities
resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends,
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mergers, consolidations, and all other distributions (whether similar or
dissimilar to the foregoing) on or with respect to any Capital Securities
constituting Collateral, but excluding Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Capital Securities constituting Collateral that are not a liquidating
dividend.
"Event of Default" means any Event of Default as defined in the Credit
Agreement.
"Existing Guaranty Agreement" is defined in third recital.
"Existing Loan Agreement" is defined in first recital.
"Existing Security Agreement" is defined in fifth recital.
"Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a state
thereof executed and delivered by any Consolidated Company pursuant to the terms
of this Agreement, in form and substance satisfactory to the Collateral Agent,
as may be necessary or desirable under the laws of organization or incorporation
of a Subsidiary thereof to further protect or perfect the Lien on and security
interest in any Collateral.
"Grantor" and "Grantors" are defined in the preamble.
"Guaranty Agreement" is defined in the fourth recital.
"including" means including, without limitation.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Intercompany Note" means a promissory note payable to any Grantor,
substantially in the form of Exhibit A hereto (with such modifications as agreed
to by the Collateral Agent), as amended, modified or supplemented from time to
time in accordance with clause (d) of Section 4.6, together with any notes
delivered in extension or renewal thereof or substitution therefor.
"Lien" means any mortgage, deed of trust, pledge, security interest, lien,
encumbrance, charge, hypothecation, assignment, deposit arrangement, title
retention, preferential property right, trust or other arrangement having the
practical effect of the foregoing and shall include the interest of a vendor or
lessor under any conditional sale agreement, capitalized lease or other title
retention agreement.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation for
filing and each patent and patent application referred to in Item A of
Schedule III hereto;
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(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
clause (a);
(c) all patent licenses, and other agreements providing a Grantor
with the right to use any items of the type referred to in clauses (a) and
(b) above, including each patent license referred to in Item B of Schedule
III hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to ▇▇▇ third parties for past, present or future infringements of
any patent or patent application, and for breach or enforcement of any
patent license.
"Primary Obligor" is defined in the Guaranty Agreement.
"Receivables" is defined in clause (c) of Section 2.1.
"Related Contracts" is defined in clause (c) of Section 2.1.
"Secured Obligations" means all "Guaranteed Obligations" (as defined in
the Guaranty Agreement).
"Secured Party" means any of the Collateral Agent and each of the other
agents (including the Administrative Agent), "Lenders" under the Credit
Agreement and their respective Affiliates, each counterparty to a Rate
Protection Agreement that is (or at the time such Rate Protection Agreement was
entered into, was) a Lender or an Affiliate thereof and any other Person
entitled to indemnification pursuant to Section 10.04 of the Credit Agreement.
"Securities Act" is defined in clause (a) of Section 6.2.
"Security Agreement" is defined in the preamble.
"Securities Control Agreement" means an agreement in form and substance
satisfactory to the Collateral Agent which provides for the Collateral Agent to
have "control" (as defined in Section 8-106 of the UCC, as such term relates to
investment property (other than certificated securities or commodity contracts),
or as used in Section 9-106 of the UCC, as such term relates to commodity
contracts).
"Specified Event" means the occurrence and continuance of a Default under
Section 8.07 of the Credit Agreement or any other Event of Default.
"Termination Date" means the date on which all Secured Obligations have
been paid in full and all commitments to make loans, issue letters of credit or
otherwise extend credit pursuant to the Credit Agreement have been terminated.
"Trademark Collateral" means:
(a) (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification
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marks, collective marks, logos and other source or business identifiers,
and all goodwill of the business associated therewith, now existing or
hereafter adopted or acquired including those referred to in Item A of
Schedule IV hereto, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether
pending or in preparation for filing, including registrations, recordings
and applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State thereof
or any other country or political subdivision thereof or otherwise, and
all common-law rights relating to the foregoing, and (ii) the right to
obtain all reissues, extensions or renewals of the foregoing (collectively
referred to as the "Trademark");
(b) all Trademark licenses for the grant by or to any Grantor of any
right to use any Trademark, including each Trademark license referred to
in Item B of Schedule IV hereto; and
(c) all of the goodwill of the business connected with the use of,
and symbolized by the items described in clause (a), and to the extent
applicable, clause (b);
(d) the right to ▇▇▇ third parties for past, present and future
infringements of any Trademark Collateral described in clause (a), and to
the extent applicable, clause (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by any Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, or for any injury to the goodwill
associated with the use of any such Trademark or for breach or enforcement
of any Trademark license and all rights corresponding thereto.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential, proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule VI hereto, and
including the right to ▇▇▇ for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York, except to the extent that the validity or the perfection
of the security interest hereunder, or remedies hereunder, in respect of any
particular Collateral are governed by the laws of a jurisdiction other than the
State of New York, in which case "UCC" means the Uniform Commercial Code as in
effect from time to time in such jurisdiction.
SECTION 1.2 Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
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SECTION 1.3 UCC Definitions. Unless otherwise defined herein or in the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the UCC, as the same shall be hereafter amended, are used in this
Security Agreement (whether or not capitalized herein), including its preamble
and recitals, with such meanings.
ARTICLE 2
SECURITY INTEREST
SECTION 2.1 Grant of Security Interest. Each Grantor hereby assigns,
pledges, hypothecates, charges, mortgages, delivers, and transfers to the
Collateral Agent, for its benefit and the ratable benefit of each other Secured
Party, and hereby grants to the Collateral Agent, for its benefit and the
ratable benefit of each other Secured Party, a continuing security interest in
all of the following property, whether tangible or intangible, whether now or
hereafter existing, owned or acquired by such Grantor, and wherever located
(collectively, the "Collateral"):
(a) (i) all investment property in which such Grantor has an
interest (including the Capital Securities of each issuer of such Capital
Securities described in Item B of Schedule I hereto) and (ii) all other
Capital Securities which are interests in limited liability companies or
partnerships in which such Grantor has an interest (including the Capital
Securities of each issuer of such Capital Securities described in Item B
of Schedule I hereto), in each case together with Dividends and
Distributions payable in respect of the Collateral described in the
foregoing clauses (a)(i) and (a)(ii);
(b) all goods, including all equipment, fixtures and inventory
in all of its forms;
(c) all accounts, contracts, contract rights, chattel paper,
documents, instruments, promissory notes (including all Intercompany
Notes, whether or not described in Item A of Schedule I hereto) and
general intangibles (including tax refunds and all payments intangibles)
of such Grantor, whether or not arising out of or in connection with the
sale or lease of goods or the rendering of services, and all rights of
such Grantor now or hereafter existing in and to all security agreements,
guaranties, leases and other contracts securing or otherwise relating to
any such accounts, contracts, contract rights, chattel paper, documents,
instruments, promissory notes, general intangibles and payment intangibles
(all of the foregoing collectively referred to as the "Receivables", and
any and all such security agreements, guaranties, leases and other
contracts collectively referred to as the "Related Contracts");
(d) all Intellectual Property Collateral;
(e) all letter of credit rights;
(f) all deposit accounts of such Grantor;
(g) all commercial tort claims in which such Grantor has
rights (including as a plaintiff);
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(h) the Collateral Account, all cash, checks, drafts, notes,
bills of exchange, money orders, other like instruments and all investment
property held in the Collateral Account (or in any sub-account thereof)
and all interest and earnings in respect thereof;
(i) all books, records, writings, data bases, information in
whatever form and other property relating to, used or useful in connection
with, evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section;
(j) all of such Grantor's other property and rights of any
kind and description and interests therein; and
(k) all products, offspring, rents, issues, profits, returns,
income, supporting obligations and proceeds of and from any and all of the
foregoing Collateral (including proceeds which constitute property of the
types described in clauses (a) through (j) above, and, to the extent not
otherwise included, all payments under insurance (whether or not the
Collateral Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect
to any of the foregoing Collateral;
Notwithstanding the foregoing, "Collateral" shall not include (i) any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would (A)
constitute a violation of a valid and enforceable restriction in favor of a
third party on such grant, unless and until any required consents shall have
been obtained (provided that each Grantor shall use all commercially reasonable
efforts to obtain such consents) or (B) give any other party to such contract,
instrument, license or other document the right to terminate its obligations
thereunder, unless and until any required consents shall have been obtained and
(ii) investment property consisting of Capital Securities of an issuer that is a
Foreign Subsidiary (other than a Foreign Subsidiary that (A) is treated as a
partnership under the Code or (B) is not treated as an entity that is separate
from (x) any Grantor, (y) any Person that is treated as a partnership under the
Code or (z) any "United States person" (as defined in Section 7701(a)(30) of the
Code)) of such Grantor, in excess of 65% of the total combined voting power of
all Capital Securities of each such Foreign Subsidiary; provided further,
however, that, in the event of any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase in of, any law or
regulation, directive or guideline of any Governmental Authority that could
reasonably be expected to alter the amount of United States federal income tax
that would otherwise be payable by such Grantor in the absence of such pledge,
the Collateral Agent or the Required Lenders may require such Grantor to pledge
such Capital Securities.
SECTION 2.2 Security for Obligations. This Security Agreement and the
Collateral in which the Secured Parties are granted a security interest in
hereunder secures the payment of all Secured Obligations now or hereafter
existing.
SECTION 2.3 Grantors Remain Liable. Anything herein to the contrary
notwithstanding
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(a) each Grantor will remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and
will perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not been
executed;
(b) the exercise by any Secured Party of any of its rights
hereunder will not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral; and
(c) no Secured Party will have any obligation or liability
under any contracts or agreements included in the Collateral by reason of
this Security Agreement, nor will any Secured Party be obligated to
perform any of the obligations or duties of any Grantor thereunder or to
take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 2.4 Dividends on Pledged Shares. In the event that any Dividend
with respect to any Capital Securities pledged hereunder is permitted to be paid
(in accordance with Section 7.05 of the Credit Agreement), such Dividend or
payment may be paid directly to the applicable Grantor. If any Dividend or
payment is paid in contravention of Section 7.05 of the Credit Agreement, such
Grantor shall hold the same segregated and in trust for the Collateral Agent
until paid to the Collateral Agent in accordance with Section 4.1.5 hereto.
SECTION 2.5 Security Interest Absolute, etc. This Security Agreement shall
in all respects be a continuing, absolute, unconditional and irrevocable grant
of security interest, and shall remain in full force and effect until the
Termination Date has occurred. All rights of the Secured Party and the security
interests granted to the Collateral Agent (for its benefit and the ratable
benefit of each other Secured Party) hereunder, and all obligations of each
Grantor hereunder, shall, in each case, be absolute, unconditional and
irrevocable irrespective of:
(a) surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition to, or consent to or
departure from, any other guaranty held by any Secured Party securing any
of the Secured Obligations;
(b) any change in the time, place or manner of payment of, or
in any other term of, all or any of the Secured Obligations, any waiver,
indulgence, renewal, extension, amendment or modification of, or addition,
consent or supplement to, or deletion from, or any other action or
inaction under or in respect of, the Credit Agreement, the other Credit
Documents, or any other documents, instruments or agreements relating to
the Secured Obligations or any other instrument or agreement referred to
therein or any assignment or transfer of any thereof;
(c) any lack of validity or enforceability of the Credit
Agreement, the other Credit Documents, or any other document, instrument
or agreement referred to therein or any assignment or transfer of any
thereof;
(d) any furnishing to the Secured Parties of any additional
security for the Secured Obligations, or any sale, exchange, release or
surrender of, or realization on, any security for the Secured Obligations;
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(e) any settlement or compromise of any of the Secured
Obligations, any security therefor, or any liability of any other party
with respect to the Secured Obligations, or any subordination of the
payment of the Secured Obligations to the payment of any other liability
of a Primary Obligor;
(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
any Grantor or a Primary Obligor, or any action taken with respect to this
Security Agreement by any trustee or receiver, or by any court, in any
such proceeding;
(g) any nonperfection of any security interest or lien on any
collateral, or any amendment or waiver of, consent to, or departure from,
any guaranty or security for all or any of the Secured Obligations;
(h) any application of sums paid by a Primary Obligor or any
other Person with respect to the Secured Obligations of such Primary
Obligor to the Secured Parties, regardless of what Secured Obligations of
such Primary Obligor remain unpaid;
(i) any act or failure to act by any Secured Party which may
adversely affect a Grantor's subrogation rights, if any, against a Primary
Obligor to recover payments made under this Security Agreement; and
(j) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Credit
Party, any surety or any guarantor (other than the Termination Date).
SECTION 2.6 Postponement of Subrogation, etc. Each Grantor agrees that it
will not exercise any rights which it may acquire by way of rights of
subrogation under any Credit Document to which it is a party, nor shall any
Grantor seek or be entitled to seek any contribution or reimbursement from any
Credit Party, in respect of any payment made under any Credit Document or
otherwise, until following the Termination Date. Any amount paid to any Grantor
on account of any such subrogation rights prior to the Termination Date shall be
held in trust for the benefit of the Secured Parties and shall immediately be
paid and turned over to the Collateral Agent for its benefit and the ratable
benefit of each other Secured Party in the exact form received by such Grantor
(duly endorsed in favor of the Collateral Agent, if required), to be credited
and applied against the Secured Obligations, whether matured or unmatured, in
accordance with Section 6.1; provided, however, that if any Grantor has made
payment to the Secured Parties of all or any part of the Secured Obligations and
the Termination Date has occurred, then at such Grantor's request, the
Collateral Agent (on behalf of the Secured Parties) will, at the expense of such
Grantor, execute and deliver to such Grantor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to such Grantor of an interest in the Secured
Obligations resulting from such payment. In furtherance of the foregoing, at all
times prior to the Termination Date, each Grantor shall refrain from taking any
action or commencing any proceeding against any Credit Party (or its successors
or assigns, whether in connection with a bankruptcy proceeding or otherwise) to
recover any amounts in respect of payments made under this Security Agreement to
any Secured Party.
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SECTION 2.7 Reinstatement. If any payment made in respect of any Secured
Obligations is rescinded or must otherwise be restored by any Secured Party and,
pursuant to Section 2.5, the security interest granted herein shall have
terminated, this Agreement and such security interest shall be reinstated and
otherwise restored all as though such payment had not been made.
SECTION 2.8 Continuing Security Interests. This Security Agreement amends
and restates the Existing Security Agreement. Except as specifically modified
hereby, nothing contained in this Security Agreement shall be construed to
release, cancel, terminate or otherwise affect adversely all or any part of the
security interest in the Collateral granted under the Existing Security
Agreement, which security interest has been continued and confirmed by the
Grantors hereunder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into the Credit Agreement
and the other Credit Documents as applicable, each Grantor represents and
warrants to each Secured Party as set forth below.
SECTION 3.1 As to Capital Securities of Subsidiaries. With respect to any
Subsidiary of any Grantor that is
(a) a corporation, business trust, joint stock company or
similar Person, all Capital Securities issued by such Subsidiary are duly
authorized and validly issued, fully paid and non-assessable, and
represented by a certificate; and
(b) a partnership or limited liability company, no Capital
Securities issued by such Subsidiary (i) are dealt in or traded on
securities exchanges or in securities markets, (ii) expressly provide that
such Capital Securities are a security governed by Article 8 of the UCC,
(iii) are held in a securities account, or (iv) are represented by a
certificate.
The percentage of the issued and outstanding Capital Securities of each
Subsidiary pledged by each Grantor hereunder are as set forth on Schedule I
hereto. Except as set forth in Schedule I hereto, no Grantor has any
Subsidiaries, the Capital Securities of which are not pledged pursuant to this
Security Agreement.
SECTION 3.2 Intercompany Notes. All Intercompany Notes have been duly
authorized, executed, endorsed, issued and delivered, and are the legal, valid
and binding obligation of the issuers thereof, and are not in default.
SECTION 3.3 Grantor Name, Location, etc. The jurisdiction in which each
Grantor is located for purposes of Sections 9-301 and 9-307 of the UCC is set
forth in Item A of Schedule II hereto. Set forth in Item B of Schedule II is
each location a secured party would have filed a UCC financing statement in the
past five years to perfect a security interest in equipment, inventory and
general intangibles owned by each Grantor. No Grantor has any trade names other
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than those set forth in Item C of Schedule II hereto. During the five years
preceding the date hereof, no Grantor has been known by any legal name different
from the one set forth on the signature page hereto, nor has such Grantor been
the subject of any merger, consolidation, conversion or other corporate
reorganization, except as set forth in Item D of Schedule II hereto. The name
set forth on the signature page is the true and correct name of such Grantor.
Each Grantor's federal taxpayer identification number is (and, during the four
months preceding the date hereof, such Grantor has not had a federal taxpayer
identification number different from that) set forth in Item E of Schedule II
hereto. No Grantor is a party to any federal, state or local government contract
except as set forth in Item F of Schedule II hereto. No Grantor maintains any
deposit accounts with any Person except as set forth in Item G of Schedule II
hereto.
SECTION 3.4 Ownership, No Liens, etc. Each Grantor owns its Collateral
free and clear of any Lien, except for Liens (a) created by this Security
Agreement, and, (b) in the case of Collateral other than Capital Securities of
any Subsidiary pledged hereunder, permitted by Section 7.02 of the Credit
Agreement. No effective financing statement or other filing similar in effect
covering any Collateral is on file in any recording office, except those filed
in favor of the Collateral Agent relating to this Security Agreement or those
filed in connection with Liens permitted by Section 7.02 of the Credit
Agreement.
SECTION 3.5 Possession of Inventory, etc. Each Grantor agrees that it will
maintain exclusive possession of its goods, instruments, promissory notes and
inventory, other than (a) inventory in transit in the ordinary course of
business, (b) inventory which is in the possession or control of a warehouseman,
bailee agent or other Person (other than a Person controlled by or under common
control with such Grantor) that has been notified of the security interest
created in favor of the Secured Parties pursuant to this Security Agreement, and
has agreed to hold such inventory subject to the Secured Parties' Lien and waive
any Lien held by it against such inventory, (c) instruments or promissory notes
(including any Intercompany Notes) that have been delivered to the Collateral
Agent pursuant to the terms hereof and (d) goods in the possession of another
Grantor.
SECTION 3.6 Negotiable Documents, Instruments and Chattel Paper. Each
Grantor has delivered to the Collateral Agent possession of all originals of all
negotiable documents, instruments and chattel paper owned or held by such
Grantor on the date hereof and agrees that it will, promptly following receipt,
deliver to the Collateral Agent possession of all originals of negotiable
documents, instruments and chattel paper that it acquires following the date
hereof.
SECTION 3.7 Intellectual Property Collateral. With respect to any material
Intellectual Property Collateral:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
(c) each Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral, including recordations of all of its interests in the Patent
Collateral and Trademark Collateral in the United States Patent
12
and Trademark Office and in corresponding offices throughout the world,
and its claims to the Copyright Collateral in the United States Copyright
Office and in corresponding offices throughout the world;
(d) each Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted rights
of any third party; and
(e) each Grantor has performed and will continue to perform
all acts and has paid and will continue to pay all required fees and taxes
to maintain each and every such item of Intellectual Property Collateral
in full force and effect throughout the world, as applicable.
Each Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor's
business.
SECTION 3.8 Validity, etc. This Security Agreement creates a valid
security interest in the Collateral securing the payment of the Secured
Obligations. Each Grantor has executed (where applicable) and delivered to the
Collateral Agent originals of all financing statements and other documents
suitable for filing and has paid the cost of filing or recording the same in all
public offices deemed appropriate by the Collateral Agent and has taken all of
the actions necessary to create perfected and (in the case of Capital Securities
of each Subsidiary pledged hereunder, subject to Section 7.02 of the Credit
Agreement) first priority security interest in the applicable Collateral. In the
case of Collateral comprised of (a) certificated securities or instruments, each
Grantor has delivered such Collateral to the Collateral Agent, duly endorsed in
blank and (b) uncertificated securities and other investment property (other
than certificated securities), each Grantor has taken such necessary actions to
cause the Collateral Agent to have "control" (as defined in Section 8-106 of the
UCC, as such term relates to investment property (other than certificated
securities or commodity contracts), or as used in Section 9-106 of the UCC, as
such term relates to commodity contracts) of such Collateral.
SECTION 3.9 Authorization, Approval, etc. Except as have been obtained or
made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required either
(a) for the grant by each Grantor of the security interest
granted hereby, the pledge by each Grantor of any Collateral pursuant
hereto or for the execution, delivery and performance of this Security
Agreement by each Grantor;
(b) for the perfection of or the exercise by any Secured Party
of its rights and remedies hereunder (except for whatever action is
necessary for filing in the appropriate offices); or
(c) for the exercise by the Collateral Agent of the voting or
other rights provided for in this Security Agreement, or, except with
respect to any securities
13
issued by a Subsidiary of any Grantor, as may be required in connection
with a disposition of such securities by laws affecting the offering and
sale of securities generally, the remedies in respect of the Collateral
pursuant to this Security Agreement.
SECTION 3.10 Compliance with Laws. Each Grantor is in compliance with the
requirements of all applicable laws (including the provisions of the Fair Labor
Standards Act), rules and regulations, the non-compliance with any of the Credit
Agreement which could reasonably be expected to materially and adversely affect
the value of the Collateral.
SECTION 3.11 Best Interests. It is in the best interests of each Grantor
to execute this Security Agreement inasmuch as such Grantor will, as a result of
being a Subsidiary of the Borrower, derive substantial direct and indirect
benefits from the Credit Agreement and the delivery of Rate Protection
Agreements between the Borrower, other Credit Parties and certain Secured
Parties and each Grantor agrees that the Secured Parties are relying on this
representation in agreeing to the Credit Agreement and such Rate Protection
Agreements.
SECTION 3.12 Representations and Warranties. Each Grantor represents and
warrants as to itself that all representations and warranties relating to it
contained in Sections 5.01 through 5.06 of the Credit Agreement are true and
correct.
ARTICLE 4
COVENANTS
Each Grantor covenants and agrees that, until the Termination Date has
occurred, such Grantor will perform, comply with and be bound by the obligations
set forth below.
SECTION 4.1 As to Investment Property and Intercompany Notes; Etc.
SECTION 4.1.1 Capital Securities of Subsidiaries. No Grantor will
allow any of its Subsidiaries that is
(a) a corporation, business trust, joint stock company or
similar Person, to issue uncertificated securities; and
(b) a partnership or limited liability company, to (i) issue
Capital Securities that are to be dealt in or traded on securities
exchanges or in securities markets, (ii) expressly provide in its Organic
Documents that its Capital Securities are securities governed by Article 8
of the UCC, (iii) place such Subsidiary's Capital Securities in a
securities account, or (iv) be represented by a certificate.
SECTION 4.1.2 Investment Property (other than Certificated
Securities). With respect to any investment property (other than certificated
securities) owned by any Grantor, such Grantor will cause a Securities Control
Agreement relating to such investment property to be executed and delivered by
such Grantor and the applicable securities intermediary in favor of the
Collateral Agent.
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SECTION 4.1.3 Stock Powers, etc. Each Grantor agrees that all
certificated securities delivered by such Grantor pursuant to this Security
Agreement will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Collateral Agent.
SECTION 4.1.4 Continuous Pledge. Each Grantor will deliver to the
Collateral Agent and at all times keep pledged to the Collateral Agent pursuant
hereto, on a first-priority, perfected basis all investment property
constituting Collateral, all Dividends and Distributions with respect thereto,
all Intercompany Notes (duly endorsed by such Grantor to the order of the
Collateral Agent), payment intangibles to the extent they are evidenced by a
document, instrument, promissory note or chattel paper, and all interest and
principal with respect to such Intercompany Notes and payment intangibles, and
all proceeds and rights from time to time received by or distributable to such
Grantor in respect of any of the foregoing Collateral. Each Grantor agrees that
it will, promptly following receipt thereof, deliver to the Collateral Agent
possession of all originals of negotiable documents, instruments, promissory
notes and chattel paper that it acquires following the Effective Date.
SECTION 4.1.5 Voting Rights; Dividends, etc. Each Grantor agrees:
(a) promptly upon receipt of notice of the occurrence and
continuance of a Specified Event from the Collateral Agent and without any
request therefor by the Collateral Agent, so long as such Specified Event
shall continue, to deliver (properly endorsed where required hereby or
requested by the Collateral Agent) to the Collateral Agent all Dividends
with respect to investment property, all interest, principal and other
cash payments on Intercompany Notes, other promissory notes and payment
intangibles, and all proceeds of the Collateral, in each case thereafter
received by such Grantor, all of which shall be held by the Collateral
Agent as additional Collateral; and
(b) immediately upon the occurrence and continuance of a
Specified Event and so long as the Collateral Agent has notified such
Grantor of the Collateral Agent's intention to exercise its voting power
under this clause, such Grantor agrees
(i) that the Collateral Agent may exercise (to the exclusion
of such Grantor) the voting power and all other incidental rights of
ownership with respect to any investment property or partnership and
limited liability company interest constituting Collateral and such
Grantor hereby grants the Collateral Agent an irrevocable proxy,
exercisable under such circumstances, to vote such investment
property or partnership and limited liability company interest; and
(ii) to promptly deliver to the Collateral Agent such
additional proxies and other documents as may be necessary to allow
the Collateral Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, payment
intangibles and proceeds which may at any time and from time to time be held by
any Grantor but which such Grantor is then obligated to deliver to the
Collateral Agent, shall, until delivery to the Collateral Agent, be held by such
Grantor separate and apart from its other property in trust for the Secured
15
Parties. The Collateral Agent agrees that unless a Specified Event shall have
occurred and be continuing and the Collateral Agent shall have given the notice
referred to in clause (b), each Grantor will have the exclusive voting power
with respect to any investment property or partnership and limited liability
company interest constituting Collateral and the Collateral Agent will, upon the
written request of such Grantor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by such Grantor which are
necessary to allow such Grantor to exercise that voting power; provided,
however, that no vote shall be cast, or consent, waiver, or ratification given,
or action taken by such Grantor that would impair any such Collateral or be
inconsistent with or violate any provision of any Credit Document.
SECTION 4.1.6 Organic Documents. No Grantor will amend, supplement
or otherwise modify or permit, consent to or suffer to occur any amendment,
supplement or modification of, any terms or provisions contained in, or
applicable to, any Organic Document of any Subsidiary that has issued Capital
Securities included in the Collateral if the effect thereof is to impair, or is
in any manner adverse to, the rights or interests of any Secured Party unless
consented to by the Collateral Agent.
SECTION 4.2 Name of Grantor. No Grantor will change its name or place of
incorporation or organization or federal taxpayer identification number except
upon 30 days' prior written notice to the Collateral Agent, and no Grantor shall
change its place of incorporation or organization from within the United States
of America to outside the United States of America. If any Grantor is organized
outside of the United States of America, it will not change its "location" as
determined in accordance with Sections 9-301 and 9-307 of the UCC and as set
forth in Item A of Schedule II hereto except upon 30 days' prior written notice
to the Collateral Agent.
SECTION 4.3 Goods; Receivables.
SECTION 4.3.1 As to Goods. Each Grantor shall
(a) keep all goods (other than goods sold in accordance with
Section 7.04 of the Credit Agreement) within the United States of
America;
(b) cause all equipment to be maintained and preserved in good
repair and working order, ordinary wear and tear excepted, and in
accordance with any manufacturer's manual; and forthwith, or in the
case of any material loss or damage to any of the equipment, as
quickly as practicable after the occurrence thereof, make or cause
to be made all repairs, replacements, and other improvements in
connection therewith which are necessary or desirable to such end;
and promptly furnish to the Collateral Agent a statement respecting
any material loss or damage to any of the equipment; and
(c) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
all equipment and inventory, except to the extent the validity
thereof is being contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been
set aside.
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SECTION 4.3.2 As to Receivables
(a) Each Grantor shall have the right to collect all
Receivables so long as no Specified Event shall have occurred and be
continuing.
(b) Upon (i) the occurrence and continuance of a Specified
Event or any other Event of Default and (ii) the delivery of written
notice by the Collateral Agent to each Grantor, all proceeds of
Collateral received by such Grantor shall be delivered in kind to
the Collateral Agent for deposit to a deposit account (the
"Collateral Account") of such Grantor maintained with the Collateral
Agent, and such Grantor shall not commingle any such proceeds, and
shall hold separate and apart from all other property, all such
proceeds in express trust for the benefit of the Secured Parties
until delivery thereof is made to the Collateral Agent.
(c) Following the delivery of notice pursuant to clause
(b)(ii) of this Section, the Collateral Agent shall have the right
to apply any amount in the Collateral Account to the payment of any
Secured Obligations which are due and payable.
(d) With respect to the Collateral Account, it is hereby
confirmed and agreed that (i) deposits in each Collateral Account
are subject to a security interest as contemplated hereby, (ii) each
such Collateral Account shall be under the sole dominion and control
of the Collateral Agent and (iii) the Collateral Agent shall have
the sole right of withdrawal over such Collateral Account.
SECTION 4.4 As to Collateral.
(a) Subject to clause (b) of this Section, each Grantor (i)
may in the ordinary course of its business, at its own expense, sell,
lease or furnish under the contracts of service any of the inventory
normally held by such Grantor for such purpose, and use and consume, in
the ordinary course of its business, any raw materials, work in process or
materials normally held by such Grantor for such purpose, (ii) will, at
its own expense, endeavor to collect, as and when due, all amounts due
with respect to any of the Collateral, including the taking of such action
with respect to such collection as the Collateral Agent may reasonably
request following the occurrence of a Specified Event or, in the absence
of such request, as such Grantor may deem advisable, and (iii) may grant,
in the ordinary course of business, to any party obligated on any of the
Collateral, any rebate, refund or allowance to which such party may be
lawfully entitled, and may accept, in connection therewith, the return of
goods, the sale or lease of which shall have given rise to such
Collateral.
(b) At any time following the occurrence and during the
continuance of a Specified Event, whether before or after the maturity of
any of the Secured Obligations, the Collateral Agent may (i) revoke any or
all of the rights of any Grantor set forth in clause (a), (ii) notify any
parties obligated on any of the Collateral to make payment to the
Collateral Agent of any amounts due or to become due thereunder and (iii)
enforce collection of any of the Collateral by suit or otherwise and
surrender, release, or exchange all or any part thereof, or compromise or
extend or renew for any period
17
(whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby.
(c) Upon request of the Collateral Agent following the
occurrence and during the continuance of a Specified Event, each Grantor
will, at its own expense, notify any parties obligated on any of the
Collateral to make payment to the Collateral Agent of any amounts due or
to become due thereunder.
(d) Each Grantor hereby authorizes the Collateral Agent to
endorse, in the name of such Grantor, any item, howsoever received by the
Collateral Agent, representing any payment on or other proceeds of any of
the Collateral.
SECTION 4.5 As to Intellectual Property Collateral. Except, in the case of
clauses (a)(i), (b) and (d) below, for any items marked with an asterisk in
Schedule III, IV or V hereto, which the Grantors do not currently use and do not
intend to use at any time in the future, each Grantor covenants and agrees to
comply with the following provisions as such provisions relate to any
Intellectual Property Collateral of such Grantor:
(a) such Grantor will not (i) do or fail to perform any act
whereby any of the Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable, (ii) permit any of its licensees
to (A) fail to continue to use any of the Trademark Collateral in order to
maintain all of the Trademark Collateral in full force free from any claim
of abandonment for non-use, (B) fail to maintain as in the past the
quality of products and services offered under all of the Trademark
Collateral, (C) fail to employ all of the Trademark Collateral registered
with any federal or state or foreign authority with an appropriate notice
of such registration, (D) adopt or use any other Trademark which is
confusingly similar or a colorable imitation of any of the Trademark
Collateral, (E) use any of the Trademark Collateral registered with any
federal, state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark
Collateral has been made or (F) do or permit any act or knowingly omit to
do any act whereby any of the Trademark Collateral may lapse or become
invalid or unenforceable, or (G) do or permit any act or knowingly omit to
do any act whereby any of the Copyright Collateral or any of the Trade
Secrets Collateral may lapse or become invalid or unenforceable or placed
in the public domain except upon expiration of the end of an unrenewable
term of a registration thereof, unless, in the case of any of the
foregoing requirements in clauses (i) or (ii), such Grantor shall either
(x) reasonably and in good faith determine that any of such Intellectual
Property Collateral is of negligible economic value to such Grantor, or
(y) have a valid business purpose to do otherwise;
(b) such Grantor shall promptly notify the Collateral Agent if
it knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property Collateral may
become abandoned or dedicated to the public or placed in the public domain
or invalid or unenforceable, or of any 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, the United States Copyright Office or any foreign counterpart
thereof or any court) regarding
18
such Grantor's ownership of any of the Intellectual Property Collateral,
its right to register the same or to keep and maintain and enforce the
same;
(c) in no event will such Grantor or any of its agents,
employees, designees or licensees file an application for the registration
of any Intellectual Property Collateral with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof,
unless it promptly informs the Collateral Agent, and upon request of the
Collateral Agent, executes and delivers all agreements, instruments and
documents as the Collateral Agent may reasonably request to evidence the
Collateral Agent's security interest in such Intellectual Property
Collateral;
(d) such Grantor will take all necessary steps, including in
any proceeding before the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, to maintain and pursue
any application (and to obtain the relevant registration) filed with
respect to, and to maintain any registration of, the Intellectual Property
Collateral, including the filing of applications for renewal, affidavits
of use, affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to the
extent that dedication, abandonment or invalidation is permitted under the
foregoing clause (a) or (b)); and
(e) such Grantor will promptly (but no less than quarterly)
execute and deliver to the Collateral Agent (as applicable) a Patent
Security Agreement, Trademark Security Agreement and/or Copyright Security
Agreement, as the case may be, in the forms of Exhibit B, Exhibit C and
Exhibit D hereto following its obtaining an interest in any such
Intellectual Property, and shall execute and deliver to the Collateral
Agent any other document required to acknowledge or register or perfect
the Secured Parties' interest in any part of such item of Intellectual
Property Collateral.
SECTION 4.6 Further Assurances, etc. Each Grantor will warrant and defend
the security interest herein granted unto the Secured Parties by such Grantor in
and to the Collateral (and all right, title and interest represented by such
Collateral) against the claims and demands of all Persons whomsoever. Each
Grantor agrees that, from time to time at its own expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or that the Collateral Agent may reasonably
request, in order to perfect, preserve and protect any security interest granted
or purported to be granted hereby or to enable any Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor:
(a) will from time to time upon the request of the Collateral
Agent, promptly deliver to the Collateral Agent such stock powers,
instruments and similar documents, satisfactory in form and substance to
the Collateral Agent, with respect to such Collateral as the Collateral
Agent may reasonably request and will, from time to time upon the request
of the Collateral Agent after the occurrence and during the continuance of
any Specified Event promptly transfer any Capital Securities constituting
19
Collateral into the name of any nominee designated by the Collateral Agent
for the ratable benefit of the Secured Parties; if any Collateral shall be
evidenced by an instrument, negotiable document, promissory note or
chattel paper, deliver and pledge to the Collateral Agent hereunder such
instrument, negotiable document or chattel paper duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to the Collateral Agent;
(b) will execute (if applicable) and file (or caused to be
filed) such financing statements or continuation statements, or amendments
thereto, and such other instruments or notices (including any assignment
of claim form under or pursuant to the federal assignment of claims
statute, 31 U.S.C. ss. 3726, any successor or amended version thereof or
any regulation promulgated under or pursuant to any version thereof), as
may be necessary or that the Collateral Agent may reasonably request in
order to perfect and preserve the security interests and other rights
granted or purported to be granted to the Collateral Agent or the other
Secured Parties hereby;
(c) hereby authorizes the Collateral Agent to file such
financing statements and other documents without its signature (to the
extent allowed by applicable law);
(d) shall not enter into any agreement amending, supplementing
or waiving any provision of any Intercompany Note (including any
underlying instrument pursuant to which such Intercompany Note is issued),
that compromises, releases or extends the time for payment of any
obligation of the maker thereof;
(e) not take or omit to take any action the taking or the
omission of which would result in any impairment or alteration of any
obligation of the maker of any Intercompany Note or payment intangible or
other instrument constituting Collateral;
(f) furnish to the Collateral Agent, from time to time at the
Collateral Agent's request, statements and schedules further identifying
and describing the Collateral and such other reports in connection with
the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail;
(g) will maintain or cause to be maintained with financially
sound and reputable insurers, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against
loss or damage of the kinds customarily insured against by reputable
companies in the same or similar businesses, such insurance to be of such
types and in such amounts as are customary for such companies under
similar circumstances;
(h) do all things reasonably requested by the Collateral Agent
in order to enable the Collateral Agent to have control (as such term is
defined in Article 8 and Article 9 of any applicable UCC relevant to the
creation, perfection or priority of Collateral consisting of deposit
accounts, accounts and letter of credit rights) over any Collateral; and
20
(i) notify the Collateral Agent if such Grantor reasonably
believes it is entitled to recover a commercial tort claim the value of
which is in excess of $1,000,000 and such Grantor shall take all such
action reasonably requested by the Collateral Agent to grant to the
Collateral Agent and perfect a security interest in such commercial tort
claim.
With respect to the foregoing and the grant of the security interest hereunder,
each Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral. Each Grantor agrees that a carbon, photographic or
other reproduction of this Security Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law. Each Grantor hereby authorizes the Collateral
Agent to file financing statements describing as the collateral covered thereby
"all of the debtor's personal property or assets" or words to that effect,
notwithstanding that such wording may be broader in scope than the Collateral
described in this Security Agreement.
SECTION 4.7 Deposit Accounts. From and after the date hereof, no Grantor
shall maintain any deposit account or deposit any items or amounts in any
deposit account, except: (i) deposit accounts maintained with the Collateral
Agent, or (ii) deposit accounts as to which each respective Grantor, the
Collateral Agent and the depositary bank have entered into a Control Agreement
that the depositary bank will comply with instructions originated by the
Collateral Agent directing disposition of the funds in the account without
further consent by such Grantor.
SECTION 4.8 Transfers and Other Liens. No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the
Credit Agreement; or
(b) create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure Indebtedness of any Person, except for the
security interest created by this Security Agreement and except as
permitted by the Credit Agreement.
ARTICLE 5
THE COLLATERAL AGENT
SECTION 5.1 Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent its attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Collateral Agent's discretion, following
the occurrence and during the continuance of a Specified Event, to take any
action and to execute any instrument which the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including:
(a) to ask, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;
21
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights
of the Collateral Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to Section
4.6).
Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2 Collateral Agent May Perform. If any Grantor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by such
Grantor pursuant to Section 6.4.
SECTION 5.3 Collateral Agent Has No Duty. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest (on behalf of the
Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to
any investment property, whether or not the Collateral Agent has or is
deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4 Reasonable Care. The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, that the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as any Grantor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Collateral Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care, provided, further that the Collateral Agent shall
have no liability to any Grantor or any Secured Party except to the extent
caused by its gross negligence or willful misconduct.
22
ARTICLE 6
REMEDIES
SECTION 6.1 Certain Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies available of a
secured party on default under the UCC (whether or not the UCC applies to
the affected Collateral) in addition to those described in Section 6.1(b)
below:
(i) require each Grantor to, and such Grantor hereby
agrees that it will, at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the Collateral
as directed by the Collateral Agent and make it available to the
Collateral Agent at a place to be designated by the Collateral Agent
which is reasonably convenient to both parties, and
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other
terms as the Collateral Agent may deem commercially reasonable. Each
Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten days prior notice to such Grantor of the time
and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) The Collateral Agent may
(i) transfer all or any part of the Collateral into the
name of the Collateral Agent or its nominee, with or without
disclosing that such Collateral is subject to the Lien hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Collateral Agent of any amount due
or to become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or any
part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any obligations of
any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in
any Grantor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
23
(vi) execute (in the name, place and stead of any
Grantor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or any of
the Collateral.
SECTION 6.2 Securities Laws. If the Collateral Agent shall determine to
exercise its right to sell all or any of the Collateral pursuant to Section 6.1,
each Grantor agrees that, upon request of the Collateral Agent, such Grantor
will, at its own expense:
(a) execute and deliver, and cause (or, with respect to any
issuer which is not a Subsidiary of such Grantor, use its best efforts to
cause) each issuer of the Collateral contemplated to be sold and the
directors, officers, managers, general partners and trustees thereof to
execute and deliver, all such instruments and documents, and do or cause
to be done all such other acts and things, as may be necessary or, in the
opinion of the Collateral Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as from time to time
amended (the "Securities Act"), and cause the registration statement
relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related prospectus
which, in the reasonable opinion of the Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act
and the rules and regulations of the SEC applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by the
Collateral Agent;
(c) cause (or, with respect to any issuer which is not a
Subsidiary of such Grantor, use its best efforts to cause) each such
issuer to make available to its security holders, as soon as practicable,
an earnings statement that will satisfy the provisions of Section 11(a) of
the Securities Act; and
(d) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof
valid and binding and in compliance with applicable law.
Each Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by any of the Secured Parties by reason of the
failure of such Grantor to perform any of the covenants contained in this
Section and, consequently, agrees that, if such Grantor shall fail to perform
any of such covenants, it shall pay, as liquidated damages and not as a penalty,
an amount equal to the value (as determined by an independent appraiser) of the
Collateral on the date the Collateral Agent shall demand compliance with this
Section.
SECTION 6.3 Compliance with Restrictions. Each Grantor agrees that
(a) in any sale of any of the Collateral whenever an Event of
Default shall have occurred and be continuing, the Collateral Agent is
hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is necessary in
order to (i) avoid any violation of applicable law
24
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders
and purchasers have certain qualifications, and restrict such prospective
bidders and purchasers to Persons who will represent and agree that they
are purchasing for their own account for investment and not with a view to
the distribution or resale of such Collateral), or (ii) obtain any
required approval of the sale or of the purchaser by any governmental
authority or official, and
(b) such Grantor further agrees that such compliance shall not
result in such sale being considered or deemed not to have been made in a
commercially reasonable manner, nor shall the Collateral Agent be liable
nor accountable to such Grantor for any discount allowed by the reason of
the fact that such Collateral is sold in compliance with any such
limitation or restriction; provided that the Collateral Agent acted in
compliance with Article 9 of the UCC.
SECTION 6.4 Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to indemnify the
Collateral Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Security Agreement
(including enforcement of this Security Agreement), except claims, losses
or liabilities resulting from the Collateral Agent's gross negligence or
wilful misconduct.
(b) Each Grantor will, upon demand, pay to the Collateral
Agent the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts and
agents, which the Collateral Agent may incur in connection with
(i) the administration of each Credit Document,
(ii) the custody, preservation, use or operation of, or
the sale of, collection from, or other realization upon, any of the
Collateral,
(iii) the exercise or enforcement of any of the rights
of the Collateral Agent or the Secured Parties hereunder, and
(iv) the failure by any Grantor to perform or observe
any of the provisions hereof.
(c) All of the foregoing fees, costs and expenses shall be
part of the Secured Obligations and shall be secured by the Collateral.
This Section 6.4 shall survive the termination of this Security Agreement.
SECTION 6.5 Protection of Collateral. The Collateral Agent may from time
to time, at its option, perform any act which any Grantor fails to perform after
being requested in writing so to perform by the Collateral Agent (it being
understood that no such request need be given after the occurrence and during
the continuance of an Event of Default) and the Collateral Agent may from time
to time take any other action which the Collateral Agent reasonably deems
necessary
25
for the maintenance, preservation or protection of any of the Collateral or of
its security interest therein.
SECTION 6.6 Application of Proceeds. All cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the proceeds of the Collateral shall be
applied by the Collateral Agent to payment of the Secured Obligations in the
following order unless a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all reasonable costs and expenses of
the Collateral Agent incurred in connection with the collection and
enforcement of the Secured Obligations or of the security interest granted
to the Collateral Agent pursuant to this Security Agreement;
(b) SECOND, to payment of that portion of the Secured
Obligations constituting accrued and unpaid interest and fees, pro rata
among the Secured Parties in accordance with the amount of such accrued
and unpaid interest and fees owing to each of them;
(c) THIRD, to payment of the principal of the Secured
Obligations (including without limitation Rate Protection Obligations
included in the Secured Obligations), pro rata among the Secured Parties
in accordance with the amount of such principal owing to each of them;
(d) FOURTH, to payment of any other Secured Obligations (other
than those listed above) pro rata among the Secured Parties in accordance
with the amounts owing to each of them; and
(e) FIFTH, the balance, if any, after all of the Secured
Obligations have been satisfied, to the applicable Grantor or to whosoever
may be lawfully entitled to receive them; provided, that prior to the
Termination Date, such balance may, in the discretion of the Collateral
Agent, be used by the Collateral Agent as additional collateral to be
applied at any time thereafter pursuant to this Section 6.6.
ARTICLE 7
MISCELLANEOUS PROVISIONS
SECTION 7.1 Credit Document. This Security Agreement is a "Credit
Document" executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof, including Article X thereof.
SECTION 7.2 Binding on Successors, Transferees and Assigns; Assignment.
This Security Agreement shall remain in full force and effect until the
Termination Date has occurred, shall be binding upon each Grantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided, however, that no Grantor may assign any of its obligations hereunder
without the prior written consent of the Collateral Agent. Without limiting the
foregoing, any Secured
26
Party may assign or otherwise transfer all or any portion of the Secured
Obligations held by it to any other Person, and such other Person shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Secured Party under this Security Agreement or otherwise,
subject, however, to any contrary provisions in such assignment or transfer, and
to the applicable provisions of the Credit Agreement.
SECTION 7.3 Amendments, etc. No amendment to or waiver of any provision of
this Security Agreement, nor consent to any departure by any Grantor from its
obligations under this Security Agreement, shall in any event be effective
unless the same shall be in writing and signed by the Collateral Agent (on
behalf of the Lenders or the Required Lenders or Super-Majority Lenders, as the
case may be, pursuant to Section 10.02 of the Credit Agreement) and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 7.4 Notices. All notices and other communications provided for
hereunder shall be given in the manner specified in the Credit Agreement (i) in
the case of the Collateral Agent, at the address specified for the
Administrative Agent in the Credit Agreement, and (ii) in the case of the
Grantors, at the respective addresses specified for such Grantor in this
Security Agreement (or as otherwise specified to the Collateral Agent in writing
given in the manner specified in the Credit Agreement).
SECTION 7.5 Foreign Pledge Agreements. Without limiting any of the rights,
remedies, privileges or benefits provided hereunder to the Collateral Agent for
its benefit and the ratable benefit of each other Secured Party, each Grantor
and the Collateral Agent hereby agree that the terms and provisions of this
Security Agreement in respect of any Collateral subject to the pledge or other
lien of a Foreign Pledge Agreement are, and shall be deemed to be, supplemental
and in addition to the rights, remedies, privileges and benefits provided to the
Secured Parties under such Foreign Pledge Agreement and under applicable law to
the extent consistent with applicable law; provided, that, in the event that the
terms of this Security Agreement conflict or are inconsistent with the
applicable Foreign Pledge Agreement or applicable law governing such Foreign
Pledge Agreement, (i) to the extent that the provisions of such Foreign Pledge
Agreement or applicable foreign law are, under applicable foreign law, necessary
for the creation, perfection or priority of the security interests in the
Collateral subject to such Foreign Pledge Agreement, the terms of such Foreign
Pledge Agreement or such applicable law shall be controlling and (ii) otherwise,
the terms hereof shall be controlling.
SECTION 7.6 Release of Liens. Upon (a) a Permitted Asset Sale of
Collateral, or (b) the occurrence of the Termination Date, the security
interests granted herein shall automatically terminate with respect to (i) such
Collateral (in the case of clause (a)) or (ii) all Collateral (in the case of
clause (b)). Upon such termination, the Collateral Agent will, at the applicable
Grantor's sole expense, deliver to such Grantor, without any representations,
warranties or recourse of any kind whatsoever, all terminated Collateral held by
the Collateral Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
SECTION 7.7 Additional Grantors. Upon the execution and delivery by any
other Person of a supplement in the form of Annex I hereto, such Person shall
become a "Grantor"
27
hereunder with the same force and effect as if it were originally a party to
this Security Agreement and named as a "Grantor" hereunder. The execution and
delivery of such supplement shall not require the consent of any other Grantor
hereunder, and the rights and obligations of each Grantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Grantor as a
party to this Security Agreement.
SECTION 7.8 No Waiver; Remedies. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. No notice to or demand on any Grantor in any case shall entitle
such Grantor to any other further notice or demand in any similar or other
circumstances or constitute a waiver of the rights of the Collateral Agent or
other Secured Parties to any other or further action in any circumstances
without notice or demand. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.9 Headings. The various headings of this Security Agreement are
inserted for convenience only, and shall not affect the meaning or
interpretation of this Security Agreement or any provisions hereof.
SECTION 7.10 Severability. Any provision of this Security Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such provision
and such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Security
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 7.11 Governing Law; Appointment Of Agent For Service Of Process;
Submission To Jurisdiction; Waiver of Jury Trial.
(a) THIS SECURITY AGREEMENT WILL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SECURITY AGREEMENT OR OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
SECURITY AGREEMENT, EACH GRANTOR HEREBY CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THE AFORESAID COURTS
SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE
COLLATERAL AGENT AND THE SECURED PARTIES WITH RESPECT TO THIS SECURITY
AGREEMENT OR ANY DOCUMENT RELATED
28
HERETO. EACH GRANTOR HEREBY IRREVOCABLY DESIGNATES UNITED STATES
CORPORATION COMPANY AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH GRANTOR
TO RECEIVE, FOR AND ON BEHALF OF SUCH GRANTOR, SERVICE OR PROCESS IN SUCH
JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SECURITY AGREEMENT OR ANY DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL
BE DEEMED COMPLETED THIRTY DAYS AFTER MAILING THEREOF TO SAID AGENT. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE
PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF PROCESS BY
MAIL TO THE RESPECTIVE GRANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT THE
FAILURE OF SUCH GRANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN
RESPECT OF THIS SECURITY AGREEMENT OR ANY DOCUMENT RELATED THERETO.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GRANTOR IN ANY OTHER
JURISDICTION. TO THE EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, SUCH GRANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
SECURITY AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR
HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
SECURITY AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR ANY MATTER ARISING IN
CONNECTION HEREUNDER OR THEREUNDER. EACH GRANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER CREDIT DOCUMENT TO WHICH IT IS A
PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR SUCH GRANTOR
ENTERING INTO THE CREDIT DOCUMENTS.
29
SECTION 7.12 Counterparts. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.13 Fraudulent Conveyance Limitation. Anything else in this
Security Agreement notwithstanding, the grant by the Borrower hereunder of a
security interest in the Collateral shall secure the Secured Obligations only
for the maximum amount that can be incurred without rendering this Security
Agreement void or voidable under applicable law relating to fraudulent
obligations, fraudulent conveyance or fraudulent transfer, and not any greater
amount.
SECTION 7.14 Previously Executed Documents. Except as specifically
provided herein, the documentation that has been previously executed and
delivered with respect to the security interest in the Collateral granted under
the Existing Security Agreement shall remain in full force and effect and is
hereby ratified and confirmed in all respects. The execution, delivery and
effectiveness of this Security Agreement shall not, except as expressly provided
herein or therein, operate as a waiver of any right, power or remedy of the
Collateral Agent or the Secured Parties under any such documentation, nor
constitute a waiver or modification of any provision of any such documentation.
SECTION 7.15 References to Existing Security Agreement. All references to
the Existing Security Agreement in the documentation that has been previously
executed and delivered with respect to the security interest in the Collateral
granted under the Existing Security Agreement shall be deemed to refer to this
Security Agreement.
30
SCHEDULE I
to Subsidiary Pledge and Security Agreement
([Name of Applicable Grantor])
Item A. Intercompany Notes
Maximum Amount of
Intercompany Loans
Maker Evidenced Thereby Date
----- ----------------- ----
Item B. Capital Securities
Common Stock
------------
Authorized Outstanding % of Shares
Issuer (corporate) Shares Shares Pledged
------------------ ---------- ----------- -----------
Limited Liability Company Interests
-----------------------------------
% of Limited Liability Type of Limited Liability
Issuer (limited liability company) Company Interests Pledged Company Interests Pledged
---------------------------------- ------------------------- -------------------------
Partnership Interests
---------------------
% of Partnership Type of Partnership
Issuer (partnership) Interests Pledged Interests Pledged
-------------------- ----------------- -----------------
S-1
SCHEDULE II
to Subsidiary Pledge and Security Agreement
Item A. Locations of each Grantor:
Name of Grantor: Location for purposes of UCC:
__________________________________ ________________________________________
[GRANTOR] [LOCATION]
Item B. Filing locations last five years
Name of Grantor: Filing locations last five years
__________________________________ ________________________________________
[GRANTOR] [LOCATION]
Item C. Trade names.
Name of Grantor: Trade Names:
__________________________________ ________________________________________
[GRANTOR]
Item D. Merger or other corporate reorganization.
Name of Grantor: Merger or other corporate reorganization:
__________________________________ ________________________________________
[GRANTOR]
S-2
Item E. Taxpayer ID numbers.
Name of Grantor: Taxpayer ID numbers:
__________________________________ ________________________________________
[GRANTOR]
Item F. Government Contracts:
Name of Grantor: Description of Contract:
__________________________________ ________________________________________
[GRANTOR]
Item G. Deposit Accounts:
Name of Grantor: Description of Deposit Account:
__________________________________ ________________________________________
[GRANTOR]
S-3
SCHEDULE III
to Subsidiary Pledge and Security Agreement
([Name of Applicable Subsidiary])
Item A. Patents
Issued Patents
(5)/Country Patent No. Issue Date Inventor(s) Title
----------- ---------- ---------- ----------- -----
Pending Patent Applications
(5)/Country Serial No. Filing Date Inventor(s) Title
----------- ---------- ----------- ----------- -----
Patent Applications in Preparation
Expected
(5)/Country Docket No. Filing Date Inventor(s) Title
----------- ---------- ----------- ----------- -----
Item B. Patent Licenses
(1)Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
------------- -------- -------- --------- ---------- -------
----------
(1) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-4
SCHEDULE IV
to Subsidiary Pledge and Security Agreement
([Name of Applicable Subsidiary])
Item A. Trademarks
Registered Trademarks
(2)Country Trademark Registration No. Registration Date
---------- --------- ---------------- -----------------
Pending Trademark Applications
(6)/Country Trademark Serial No. Filing Date
----------- --------- ---------- -----------
Trademark Applications in Preparation
Expected Products/
(6)/Country Trademark Docket No. Filing Date Services
----------- --------- ---------- ----------- ---------
Item B. Trademark Licenses
Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- --------- ----------
----------
(2) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-5
SCHEDULE V
to Subsidiary Pledge and Security Agreement
([Name of Applicable Subsidiary])
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
(7)/Country Registration No. Registration Date Author(s) Title
----------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
(7)/Country Serial No. Filing Date Author(s) Title
----------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
Expected
(7)/Country Docket No. Filing Date Author(s) Title
----------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
(3)Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
------------- -------- -------- --------- ---------- -------
----------
(3) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-6
SCHEDULE VI
to Subsidiary Pledge and Security Agreement
([Name of Applicable Subsidiary])
Trade Secret or Know-How Licenses
(4)Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
------------- -------- -------- --------- ---------- -------
none
----------
(4) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-7
EXHIBIT A
to Subsidiary Pledge and Security Agreement
DEMAND NOTE
$____________ ______ __, 200_
FOR VALUE RECEIVED, the undersigned, INTERMET CORPORATION, a Georgia
corporation (the "Maker"), promises to pay on demand to the order of [NAME OF
APPLICABLE SUBSIDIARY], a ____________ [corporation] (the "Payee"), the
principal sum of ____________________ DOLLARS ($____________) or such lesser
amount which equals the aggregate unpaid principal amount of all intercompany
loans made by the Payee to the Maker.
The unpaid principal amount of this demand note (this "Note") shall bear
interest at a rate equal to such rate per annum as shall be agreed upon from
time to time by the Payee and the Maker, payable at such times as shall be
agreed upon by the Payee and the Maker, and all payments of principal of and
interest on this Note shall be payable in same day or immediately available
funds in Dollars. Except as set forth in the next sentence, all payments on this
Note shall be made by the Maker to the Payee's account as notified to the Maker
from time to time, and shall be evidenced on the books and records of the Maker
and the Payee. The Maker hereby agrees that upon The Bank of Nova Scotia, as
collateral agent under the Security Agreement referenced below (including its
successors, transferees or assigns in such capacity, referred to as the
"Collateral Agent") notifying the Maker that a Specified Event has occurred and
is continuing (collectively referred to as a "Payment Event"), it will make (and
the Payee irrevocably instructs the Maker to make) all payments of principal and
accrued interest on this Note on demand to an account identified by the
Collateral Agent, and upon the delivery of such notice (which can include a
facsimile notice), the Collateral Agent shall have all rights of the Payee to
demand (and collect) payment of, and enforce all rights with respect to, the
Indebtedness evidenced by this Note.
This Note is one of the Intercompany Notes referred to in the First
Amended and Restated Subsidiary Pledge and Security Agreement, dated as of
January 8, 2004 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Security Agreement"), among various Persons
(including the Payee) and the Collateral Agent and has been pledged to the
Collateral Agent (for its benefit and the ratable benefit of each other Secured
Party) as security for the Secured Obligations. Unless otherwise defined herein
or the context otherwise requires, terms used in this Note have the meanings
provided in (or by reference in) the Security Agreement.
THIS NOTE IS DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). THE
MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE. THE
MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
S-8
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
INTERMET CORPORATION
By_________________________________
Name Printed:
Title:
Pay to the order of
THE BANK OF NOVA SCOTIA,
as Collateral Agent
[NAME OF APPLICABLE SUBSIDIARY]
By_________________________________
Name Printed:
Title:
S-9
EXHIBIT B
to Subsidiary Pledge and Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of
____________ ___, _____, is made between [NAME OF APPLICABLE SUBSIDIARY], a
____________ [corporation] (the "Grantor"), and THE BANK OF NOVA SCOTIA, as
collateral agent (together with its successor(s) thereto in such capacity, the
"Collateral Agent") for each of the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to the First Amended and Restated Credit Agreement dated
as of January 8, 2004 (as the same may hereafter be further amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Credit Agreement"), among various parties, including the Borrower, the
"Lenders" thereunder and Scotia Capital, as administrative and collateral agent,
such Lenders have agreed to make certain financial accommodations to the
Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a First Amended and Restated Subsidiary Pledge and Security
Agreement, dated as of January 8, 2004 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Security Agreement");
WHEREAS, pursuant to clause (e) of Section 4.5 of the Security Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Collateral Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Secured Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.
SECTION 2. Grant of Security Interest. The Grantor hereby pledges,
hypothecates, charges, mortgages and collaterally assigns to the Collateral
Agent, for its benefit and the ratable benefit of each other Secured Party, and
hereby grants to the Collateral Agent, for its benefit and the ratable benefit
of each other Secured Party, a continuing security interest in all of the
Grantor's right, title and interest in and to the following property, whether
now or hereafter existing or acquired by the Grantor (the "Patent Collateral"):
S-10
(a) all of its letters patent and applications for letters patent
throughout the world, including all patent applications in preparation for
filing and each patent and patent application referred to in Item A of
Schedule I attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
clause (a);
(c) all of its patent licenses, including each patent license
referred to in Item B of Schedule I attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to ▇▇▇ third parties for past, present or future infringements of
any patent or patent application, and for breach or enforcement of any
patent license.
Notwithstanding the foregoing, "Patent Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents relating to any of the foregoing Patent Collateral as to
which the grant of a security interest would (i) constitute a violation of a
valid and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained or (ii) give any
other party to such contract, instrument, license or other document the right to
terminate its obligations thereunder unless and until any required consents
shall have been obtained.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Patent Collateral with the United States Patent and
Trademark Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Collateral Agent for its
benefit and the ratable benefit of each Secured Party other under the Security
Agreement. The Security Agreement (and all rights and remedies of the Collateral
Agent and each Secured Party thereunder) shall remain in full force and effect
in accordance with its terms.
SECTION 4. Release of Liens. Upon (i) a Permitted Asset Sale of Patent
Collateral and (ii) the occurrence of the Termination Date, the security
interests granted herein shall automatically terminate with respect to (A) such
Patent Collateral (in the case of clause (i)) or (B) all terminated Patent
Collateral (in the case of clause (ii)). Upon any such termination, the
Collateral Agent will, at the Grantor's sole expense, deliver to the Grantor,
without any representations, warranties or recourse of any kind whatsoever, all
Patent Collateral held by the Collateral Agent hereunder, and execute and
deliver to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
S-11
SECTION 6. Credit Document. This Agreement is a "Credit Document" executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
S-12
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
[NAME OF APPLICABLE SUBSIDIARY]
By_________________________________
Name Printed:
Title:
THE BANK OF NOVA SCOTIA,
as Collateral Agent
By_________________________________
Name Printed:
Title:
S-13
SCHEDULE I
to Patent Security Agreement
Item A. Patents
Issued Patents
(10)/Country Patent No. Issue Date Inventor(s) Title
------------ ---------- ---------- ----------- -----
Pending Patent Applications
(10)/Country Serial No. Filing Date Inventor(s) Title
------------ ---------- ----------- ----------- -----
Patent Applications in Preparation
Expected
(10)/Country Docket No. Filing Date Inventor(s) Title
------------ ---------- ----------- ----------- -----
Item B. Patent Licenses
(5)Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
------------- -------- -------- --------- ---------- -------
----------
(5) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-14
EXHIBIT C
to Subsidiary Pledge and Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
____________ ___, _____, is made between [NAME OF APPLICABLE SUBSIDIARY], a
____________ [corporation] (the "Grantor"), and THE BANK OF NOVA SCOTIA, as
collateral agent (together with its successor(s) thereto in such capacity, the
"Collateral Agent") for each of the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to the First Amended and Restated Credit Agreement dated
as of January 8, 2004 (as the same may hereafter be further amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Credit Agreement"), among various parties, including the Borrower, the
"Lenders" thereunder and Scotia Capital, as administrative and collateral agent,
such Lenders have agreed to make certain financial accommodations to the
Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a First Amended and Restated Subsidiary Pledge and Security
Agreement, dated as of January 8, 2004 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Security Agreement");
WHEREAS, pursuant to clause (e) of Section 4.5 of the Security Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Collateral Agent a continuing security interest in all of the Trademark
Collateral (as defined below) to secure all Secured Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.
SECTION 2. Grant of Security Interest. The Grantor hereby pledges,
hypothecates, charges, mortgages and collaterally assigns to the Collateral
Agent, for its benefit and the ratable benefit of each other Secured Party, and
hereby grants to the Collateral Agent, for its benefit and the ratable benefit
of each other Secured Party, a continuing security interest in all of the
Grantor's right, title and interest in and to the following property, whether
now or hereafter existing or acquired by the Grantor (the "Trademark
Collateral"):
S-15
(a) all of its trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos and other source or
business identifiers, and all goodwill of the business associated
therewith, now existing or hereafter adopted or acquired including those
referred to in Item A of Schedule I attached hereto, whether currently in
use or not, all registrations and recordings thereof and all applications
in connection therewith, whether pending or in preparation for filing,
including registrations, recordings and applications in the United States
Patent and Trademark Office or in any office or agency of the United
States of America or any State thereof or any other country or political
subdivision thereof or otherwise, and all common-law rights relating to
the foregoing, and (ii) the right to obtain all reissues, extensions or
renewals of the foregoing (collectively referred to as the "Trademark");
(b) all Trademark licenses for the grant by or to the Grantor of any
right to use any Trademark, including each Trademark license referred to
in Item B of Schedule I attached hereto; and
(c) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clause (a), and to the extent
applicable clause (b);
(d) the right to ▇▇▇ third parties for past, present and future
infringements of any Trademark Collateral described in clause (a) and, to
the extent applicable, clause (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, or for any injury to the goodwill
associated with the use of any such Trademark or for breach or enforcement
of any Trademark license and all rights corresponding thereto.
Notwithstanding the foregoing, "Trademark Collateral" shall not include any
general intangibles or other rights arising under any contracts, instruments,
licenses or other documents relating to any of the foregoing Trademark
Collateral as to which the grant of a security interest would (i) constitute a
violation of a valid and enforceable restriction in favor of a third party on
such grant, unless and until any required consents shall have been obtained or
(ii) give any other party to such contract, instrument, license or other
document the right to terminate its obligations thereunder unless and until any
required consents shall have been obtained.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Trademark Collateral with the United States Patent
and Trademark Office and corresponding offices in other countries of the world.
The security interest granted hereby has been granted as a supplement to, and
not in limitation of, the security interest granted to the Collateral Agent for
its benefit and the ratable benefit of each other Secured Party under the
Security Agreement. The Security Agreement (and all rights and remedies of the
Collateral Agent and each Secured Party thereunder) shall remain in full force
and effect in accordance with its terms.
S-16
SECTION 4. Release of Liens. Upon (i) a Permitted Asset Sale of Trademark
Collateral and (ii) the occurrence of the Termination Date, the security
interests granted herein shall automatically terminate with respect to (A) such
terminated Trademark Collateral (in the case of clause (i)) or (B) all
terminated Trademark Collateral (in the case of clause (ii)). Upon any such
termination, the Collateral Agent will, at the Grantor's sole expense, deliver
to the Grantor, without any representations, warranties or recourse of any kind
whatsoever, all terminated Trademark Collateral held by the Collateral Agent
hereunder, and execute and deliver to the Grantor such documents as the Grantor
shall reasonably request to evidence such termination.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Trademark Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
SECTION 6. Credit Document. This Agreement is a "Credit Document" executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
S-17
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
[NAME OF APPLICABLE SUBSIDIARY]
By_________________________________
Name Printed:
Title:
THE BANK OF NOVA SCOTIA,
as Collateral Agent
By_________________________________
Name Printed:
Title:
S-18
SCHEDULE I
to Trademark Security Agreement
Item A. Trademarks
Registered Trademarks
(12)/Country Trademark Registration No. Registration Date
------------ --------- ---------------- -----------------
Pending Trademark Applications
(12)/Country Trademark Serial No. Filing Date
------------ --------- ---------- -----------
Trademark Applications in Preparation
Expected Products/
(12)/Country Trademark Docket No. Filing Date Services
------------ --------- ---------- ----------- --------
Item B. Trademark Licenses
(6)Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
------------- --------- -------- -------- --------- ----------
----------
(6) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-19
EXHIBIT D
to Subsidiary Pledge and Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
____________ ___, _____, is made between [NAME OF APPLICABLE SUBSIDIARY], a
____________ [corporation] (the "Grantor"), and THE BANK OF NOVA SCOTIA, as
collateral agent (together with its successor(s) thereto in such capacity, the
"Collateral Agent") for each of the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to the First Amended and Restated Credit Agreement dated
as of January 8, 2004 (as the same may hereafter be further amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Credit Agreement"), among various parties, including the Borrower, the
"Lenders" thereunder and Scotia Capital, as administrative and collateral agent,
such Lenders have agreed to make certain financial accommodations to the
Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a First Amended and Restated Subsidiary Pledge and Security
Agreement, dated as of January 8, 2004 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Security Agreement");
WHEREAS, pursuant to clause (e) of Section 4.5 of the Security Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Collateral Agent a continuing security interest in all of the Copyright
Collateral (as defined below) to secure all Secured Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.
SECTION 2. Grant of Security Interest. The Grantor hereby pledges,
hypothecates, charges, mortgages and collaterally assigns to the Collateral
Agent, for its benefit and the ratable benefit of each other Secured Party, and
hereby grants to the Collateral Agent, for its benefit and the ratable benefit
of each other Secured Party, a continuing security interest in all of the
Grantor's right, title and interest in and to the following Copyright Collateral
(as defined below), whether now or hereafter existing or acquired by the
Grantor.
S-20
"Copyright Collateral" means all copyrights of the Grantor, whether
statutory or common law, registered or unregistered and whether published or
unpublished, now or hereafter in force throughout the world including all of the
Grantor's right, title and interest in and to all copyrights registered in the
United States Copyright Office or anywhere else in the world and also including
the copyrights referred to in Item A of Schedule I attached hereto, and
registrations and recordings thereof and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, including
each copyright license referred to in Item B of Schedule I attached hereto, the
right to ▇▇▇ for past, present and future infringements of any of the foregoing,
all rights corresponding thereto, all extensions and renewals of any thereof and
all proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
Notwithstanding the foregoing, "Copyright Collateral" shall not include
any general intangibles or other rights arising under any contracts,
instruments, licenses or other documents relating to any of the foregoing
Copyright Collateral as to which the grant of a security interest would (i)
constitute a violation of a valid and enforceable restriction in favor of a
third party on such grant, unless and until any required consents shall have
been obtained or (ii) give any other party to such contract, instrument, license
or other document the right to terminate its obligations thereunder unless and
until any required consents shall have been obtained.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Copyright Collateral with the United States
Copyright Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Collateral Agent for its
benefit and the ratable benefit of each other Secured Party under the Security
Agreement. The Security Agreement (and all rights and remedies of the Collateral
Agent and each Secured Party thereunder) shall remain in full force and effect
in accordance with its terms.
SECTION 4. Release of Liens. Upon (i) a Permitted Asset Sale of Copyright
Collateral and (ii) the occurrence of the Termination Date, the security
interests granted herein shall automatically terminate with respect to (A) such
Copyright Collateral (in the case of clause (i)) or (B) all Copyright Collateral
(in the case of clause (ii)). Upon any such termination, the Collateral Agent
will, at the Grantor's sole expense, deliver to the Grantor, without any
representations, warranties or recourse of any kind whatsoever, all terminated
Copyright Collateral held by the Collateral Agent hereunder, and execute and
deliver to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Copyright Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
SECTION 6. Credit Document. This Agreement is a "Credit Document" executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
S-21
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
S-22
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
[NAME OF APPLICABLE SUBSIDIARY]
By________________________________
Name Printed:
Title:
THE BANK OF NOVA SCOTIA ,
as Collateral Agent
By________________________________
Name Printed:
Title:
S-23
SCHEDULE I
to Copyright Security Agreement
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
(14)/Country Registration No. Registration Date Author(s) Title
------------ ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
(14)/Country Serial No. Filing Date Author(s) Title
------------ ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
Expected
(14)/Country Docket No. Filing Date Author(s) Title
------------ ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
(7)Country or Effective Expiration
Territory Licensor Licensee Date Date
------------- -------- -------- --------- ----------
----------
(7) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-24
ANNEX I
to the Subsidiary Pledge and Security Agreement
This SUPPLEMENT, dated as of ____________ ___, _____ (this "Supplement"),
is to the First Amended and Restated Subsidiary Pledge and Security Agreement,
dated as of January 8, 2004 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Security Agreement"), among the
Grantors (such capitalized term, and other terms used in this Supplement, to
have the meanings set forth in Article I of the Security Agreement) from time to
time party thereto, in favor of THE BANK OF NOVA SCOTIA, as collateral agent
(together with its successor(s) thereto in such capacity, the "Collateral
Agent") for each of the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to the provisions of Section 7.7 of the Security
Agreement, each of the undersigned is becoming a Grantor under the Security
Agreement; and
WHEREAS, each of the undersigned desires to become a "Grantor" under the
Security Agreement.
NOW, THEREFORE, in consideration of the premises, and for other
consideration (the receipt and sufficiency of which is hereby acknowledged),
each of the undersigned agrees, for the benefit of each Secured Party, as
follows.
SECTION 1. Party to Security Agreement, etc. In accordance with the terms
of the Security Agreement, by its signature below each of the undersigned hereby
irrevocably agrees to become a Grantor under the Security Agreement with the
same force and effect as if it were an original signatory thereto and each of
the undersigned hereby (a) agrees to be bound by and comply with all of the
terms and provisions of the Security Agreement applicable to it as a Grantor and
(b) represents and warrants that the representations and warranties made by it
as a Grantor thereunder are true and correct as of the date hereof. In
furtherance of the foregoing, each reference to a "Grantor" and/or "Grantors" in
the Security Agreement shall be deemed to include each of the undersigned.
SECTION 2. Representations. Each of the undersigned Grantor hereby
represents and warrants that this Supplement has been duly authorized, executed
and delivered by it and that this Supplement and the Security Agreement
constitute the legal, valid and binding obligation of each of the undersigned,
enforceable against it in accordance with its terms.
SECTION 3. Full Force of Guaranty. Except as expressly supplemented
hereby, the Security Agreement shall remain in full force and effect in
accordance with its terms.
SECTION 4. Severability. Wherever possible each provision of this
Supplement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Supplement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Supplement or the Security
Agreement.
S-25
SECTION 5. Indemnity; Fees and Expense, etc. Without limiting the
provisions of any other Credit Document, each of the undersigned agrees to
reimburse the Collateral Agent for its reasonable out-of-pocket expenses
incurred in connection with this Supplement, including reasonable attorney's
fees and expenses of the Collateral Agent's counsel.
SECTION 6. Governing Law; Appointment Of Agent For Service Of Process;
Submission To Jurisdiction; Waiver of Jury Trial.
(a) THIS SUPPLEMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SUPPLEMENT OR
OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS SUPPLEMENT, EACH GRANTOR HEREBY CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THE AFORESAID
COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE
COLLATERAL AGENT AND THE SECURED PARTIES WITH RESPECT TO THIS SUPPLEMENT OR ANY
DOCUMENT RELATED HERETO. EACH GRANTOR HEREBY IRREVOCABLY DESIGNATES UNITED
STATES CORPORATION COMPANY AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH GRANTOR
TO RECEIVE, FOR AND ON BEHALF OF SUCH GRANTOR, SERVICE OR PROCESS IN SUCH
JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SUPPLEMENT
OR ANY DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY
DAYS AFTER MAILING THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND
BY THE SERVER OF PROCESS BY MAIL TO THE RESPECTIVE GRANTOR AT ITS ADDRESS SET
FORTH HEREIN, BUT THE FAILURE OF SUCH GRANTOR TO RECEIVE SUCH COPY SHALL NOT, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS
GRANTOR OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GRANTOR IN ANY
OTHER JURISDICTION. TO THE EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH GRANTOR
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH
S-26
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS SUPPLEMENT AND THE OTHER
CREDIT DOCUMENTS TO WHICH IT IS A PARTY.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS SUPPLEMENT OR ANY OTHER
CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
EACH GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER CREDIT
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR SUCH GRANTOR ENTERING INTO THE CREDIT DOCUMENTS.
SECTION 7. Counterparts. This Supplement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
S-27
IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
[NAME OF ADDITIONAL SUBSIDIARY]
By_________________________________
Name Printed:
Title:
[NAME OF ADDITIONAL SUBSIDIARY]
By_________________________________
Name Printed:
Title:
ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:
THE BANK OF NOVA SCOTIA,
as Collateral Agent
By_________________________________
Name Printed:
Title:
S-28
SCHEDULE I
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. Intercompany Notes
Maximum Amount of
Intercompany Loans
Maker Evidenced Thereby Date
----- ----------------- ----
Item B. Capital Securities
Common Stock
------------
Authorized Outstanding % of Shares
Issuer (corporate) Shares Shares Pledged
------------------ ---------- ------------ -----------
Limited Liability Company Interests
-----------------------------------
% of Limited Liability Type of Limited Liability
Issuer (limited liability company) Company Interests Pledged Company Interests Pledged
---------------------------------- ------------------------- -------------------------
Partnership Interests
---------------------
% of Partnership Type of Partnership
Issuer (partnership) Interests Pledged Interests Pledged
-------------------- ----------------- -----------------
S-29
SCHEDULE II
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. Locations of each Grantor:
Name of Grantor: Location for purposes of UCC:
_____________________________ _________________________________________
[GRANTOR] [LOCATION]
Item B. Filing locations last five years
Name of Grantor: Filing locations last five years
_____________________________ _________________________________________
[GRANTOR] [LOCATION]
Item C. Trade names.
Name of Grantor: Trade Names:
_____________________________ _________________________________________
[GRANTOR]
Item D. Merger or other corporate reorganization.
Name of Grantor: Merger or other corporate reorganization:
S-30
_____________________________ _________________________________________
[GRANTOR]
Item E. Taxpayer ID numbers.
Name of Grantor: Taxpayer ID numbers:
_____________________________ _________________________________________
[GRANTOR]
Item F. Government Contracts:
Name of Grantor: Description of Contract:
_____________________________ _________________________________________
[GRANTOR]
Item G. Deposit Accounts:
Name of Grantor: Description of Deposit Account:
_____________________________ _________________________________________
[GRANTOR]
S-31
SCHEDULE III
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. Patents
Issued Patents
(15)/Country Patent No. Issue Date Inventor(s) Title
------------ ---------- ---------- ----------- -----
Pending Patent Applications
(15)/Country Serial No. Filing Date Inventor(s) Title
------------ ---------- ----------- ----------- -----
Patent Applications in Preparation
Expected
(15)/Country Docket No. Filing Date Inventor(s) Title
------------ ---------- ----------- ----------- -----
Item B. Patent Licenses
(8)Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
------------- -------- -------- --------- ---------- -------
----------
(8) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-32
SCHEDULE IV
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. Trademarks
Registered Trademarks
(9)Country Trademark Registration No. Registration Date
---------- --------- ---------------- -----------------
Pending Trademark Applications
(16)/Country Trademark Serial No. Filing Date
------------ --------- ---------- -----------
Trademark Applications in Preparation
Expected Products/
(16)/Country Trademark Docket No. Filing Date Services
------------ --------- ---------- ----------- ---------
Item B. Trademark Licenses
(16)/Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
-------------- --------- -------- -------- --------- ----------
----------
(9) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-33
SCHEDULE V
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
(17)/Country Registration No. Registration Date Author(s) Title
------------ ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
(17)/Country Serial No. Filing Date Author(s) Title
------------ ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
Expected
(17)/Country Docket No. Filing Date Author(s) Title
------------ ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
(10)Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
-------------- -------- -------- --------- ---------- -------
----------
(10) List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
S-34
SCHEDULE VI
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Trade Secret or Know-How Licenses
(11)Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
-------------- -------- -------- --------- ---------- ------
----------
(11) *List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
S-35