Exhibit 10.4
AMENDED AND RESTATED
PLEDGE AND SECURITY AGREEMENT
This AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT dated as of August
15, 2001 (this "Agreement") is entered into by and among U.S. INDUSTRIES, INC.
(formerly known as USI, Inc.), a Delaware corporation ("USI"), USI GLOBAL
CORP., a Delaware corporation ("USI Global"), USI AMERICAN HOLDINGS, INC., a
Delaware corporation ("USI American"; USI, USI Global and USI American each
being referred to herein, individually, as a "Borrower" and, collectively, as
the "Borrowers"), each Subsidiary of USI listed on the signature pages hereof
(together with the Borrowers, each, individually, an "Initial Pledgor" and,
collectively, the "Initial Pledgors"), and each other Subsidiary of USI which
hereafter becomes a party to this Agreement pursuant to Section 22(b) hereof
(together with the Initial Pledgors, each, individually, a "Pledgor" and,
collectively, the "Pledgors"), WILMINGTON TRUST COMPANY, a Delaware banking
corporation (together with any successor corporate trustee appointed pursuant
to Article VII of the Collateral Trust Agreement referred to below, the
"Corporate Trustee"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual residing in the
State of Delaware (together with any successor individual trustee appointed
pursuant to Article VII of the Collateral Trust Agreement, the "Individual
Trustee" and, together with the Corporate Trustee, the "Collateral Trustees"),
the foregoing Collateral Trustees being trustees for the Secured Holders.
This Agreement amends and restates that certain Pledge and Security
Agreement dated as of April 30, 2001 by and among the Initial Pledgors (other
then the Rexair Obligors) and the Collateral Trustees. Capitalized terms used,
but not otherwise defined, herein have the meanings specified in the Collateral
Trust Agreement (defined below) and, unless otherwise defined in this Agreement
or in the Collateral Trust Agreement, terms defined in Article 8 or 9 of the
UCC and/or in the Federal Book Entry Regulations (as defined below) are used in
this Agreement as such terms are defined in such Article 8 or 9 and/or the
Federal Book Entry Regulations. "UCC" means the Uniform Commercial Code as in
effect, from time to time, in the State of New York; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority. "Federal Book Entry Regulations"
means (a) the federal regulations contained in Subpart B ("Treasury/Reserve
Automated Debt Entry System (TRADES)") governing book-entry securities
consisting of U.S. Treasury bonds, notes and bills and Subpart D ("Additional
Provisions") of 31 C.F.R. Part 357, 31 C.F.R. ss. 357.2, ss. 357.10 through ss.
357.14 and ss. 357.41 through ss. 357.44 and (b) to the extent substantially
identical to the federal regulations referred to in clause (a) above (as in
effect from time to time), the federal regulations governing other book-entry
securities.
Certain of the terms and provisions of this Agreement as herein amended
and restated have been updated to take into account the revisions to Article 9
of the UCC recently enacted in all 50 states and which became effective in New
York and most other states on July 1,
2001 (the "Modernizing Changes"). Although the collateral descriptions in
previously filed financing statements corresponded to the terms used in the UCC
before the Modernizing Changes, the parties hereto intend that such financing
statements and collateral descriptions will continue to be effective and will
relate to and cover the items and types of Collateral described herein (other
than as set forth in Section 9-108(e)(1) of the UCC).
PRELIMINARY STATEMENTS:
(1) Simultaneously herewith, the Borrowers, through JUSI Holdings,
Inc. ("JUSI"), a wholly owned Subsidiary, have acquired (the "Rexair
Acquisition") all of the outstanding capital stock of Rexair Holdings, Inc.
("Rexair Holdings") not owned by them immediately prior to such acquisition
and, in connection therewith, the Borrowers have agreed to cause, and have
herewith caused, (i) JUSI to deliver to the Collateral Trustees, as additional
collateral subject to this Agreement, 100% of the capital stock of Rexair
Holdings (as well as the 16% membership units of Strategic Industries, LLC)
owned by JUSI, (ii) Rexair Holdings to deliver to the Collateral Trustees, as
additional collateral subject to this Agreement, 100% of the capital stock of
Rexair, Inc. ("Rexair", and together with Rexair Holdings, collectively, the
"Rexair Obligors") and (ii) the Rexair Obligors to become parties to this
Agreement, the Collateral Trust Agreement and certain other Collateral
Documents as Pledgors, the Rexair Obligors having executed and delivered
herewith a Security Agreement Supplement pursuant to Section 22(b) hereof and
Section 9.15 of the Collateral Trust Agreement, 100% of the capital stock of
Rexair, a mortgage and certain other Collateral Documents;
(2) In connection with the Rexair Acquisition, the Credit Parties,
the Agents, the Debt Coordinator, the Collateral Trustees and the Pledgors have
entered into an Amendment, Restatement, General Provisions and Intercreditor
Agreement dated as of even date herewith (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Master Agreement"),
to provide for and coordinate the interests of the various Credit Parties and
to amend and restate the following agreements and related facilities, in
pertinent part, as follows:
(A) the Commitments of Bank of America, N.A., in its individual
capacity (in such capacity, "BofA") under the Credit Agreement dated as of
October 27, 2000, as previously amended (the "364-Day Credit Agreement "),
among the Borrowers and BofA, as administrative agent thereunder (in such
capacity, the "364-Day Agent") and as the sole lender thereunder, are
terminated and are replaced by an increase in BofA's Commitments under the
USI Credit Agreement (as hereinafter defined);
(B) the Credit Agreement dated as of December 12, 1996, as previously
amended (formerly referred to as the "5-Year Credit Agreement" and, as
amended and restated by the Master Agreement, and as further amended,
amended and restated, supplemented and otherwise modified from time to
time, hereinafter referred to as the "USI Credit Agreement "), among the
Borrowers, BofA, as administrative agent thereunder (in such capacity,
formerly referred to as the "5-Year Agent" and hereafter referred to as
the "USI Agent"), and the other USI Credit Parties (as defined in the
Collateral Trust Agreement) is amended and restated by the Master
Agreement to, inter alia, (i) increase the commitments of BofA thereunder
by the amount of its terminated commitments under the 364-Day Credit
Agreement and by an additional $30,000,000 to
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replace its also terminated commitments under a separate receivables
purchase agreement with the Borrowers, (ii) include among the
"Obligations" (as defined in the USI Credit Agreement) the obligations of
the Borrowers from time to time owing to individual USI Creditor Parties
or their Affiliates in respect of (A) deposit accounts that are from time
to time subject to the liens and security interests of this Agreement and
control agreements ("Controlled Deposit Accounts") in favor of the
Collateral Trustees maintained by the Borrowers or any of them with any
such Person, including, without limitation, those listed in the schedules
to the Pledge and Security Agreement, (B) automated clearing house and
other cash management services ("Cash Management Services") provided to
the Borrowers or any of them by any such Person and/or (C) any Secured
Hedge Agreements, (iii) modify and coordinate certain credit and other
provisions thereof and (iv) extend the maturity date thereunder to
November 30, 2002 (as the same may be further modified by agreement among
the Credit Parties, the "Maturity Date");
(C) the Credit Agreement dated as of March 24, 2000 (as previously
amended, and as amended and restated by the Master Agreement, and as
further amended, amended and restated, supplemented and otherwise modified
from time to time, hereinafter referred to as the "Rexair Credit
Agreement" and, together with the USI Credit Agreement, the "Credit
Agreements") among the Rexair Obligors, BofA, as administrative agent (in
such capacity, the "Rexair Agent"), and the Rexair Credit Parties (as
defined in the Collateral Trust Agreement) is amended and restated by the
Master Agreement to, inter alia, (i) include among the "Obligations" (as
defined in the Rexair Credit Agreement) the obligations of the Rexair
Obligors from time to time owing to individual Rexair Credit Parties or
their Affiliates in respect of (A) Controlled Deposit Accounts maintained
by the Rexair Obligors or any of them with any such Person in favor of the
Collateral Trustees (as defined in the Rexair Credit Agreement) or the
Collateral Trustees, including, without limitation, those listed on
schedules to the Rexair Collateral Documents and/or (B) Cash Management
Services provided to the Rexair Obligors or any of them by any such
Person, (ii) modify certain credit and other provisions thereof and (iii)
align the maturity date thereunder with the Maturity Date;
(D) the Guaranty dated as of March 24, 2000 (as previously amended,
as amended and restated by the Master Agreement and as hereafter further
amended, amended and restated, supplemented or otherwise modified, the
"Rexair Guaranty") by us, and USI Global, jointly and severally, in favor
of the Rexair Credit Parties and other persons is amended and restated to,
inter alia, (i) reaffirm and restate the guaranty thereunder of the
obligations of the Rexair Obligors to the Rexair Credit Parties and such
other Persons as amended and restated by the Master Agreement and (ii)
further commit the Borrowers to directly assume such obligations as direct
obligations to the extent not otherwise paid in full upon any future
disposition of the Rexair Obligors or of all or substantially all of their
assets; and
(E) the reimbursement and other obligations of the Borrowers to
certain USI Credit Parties (the "L/C Credit Parties") under the letters of
credit and bankers' acceptances referred to as Independent L/Cs described
in the Master Agreement (together with any roll-overs, extensions and
replacements thereof and any other permitted letters of credit and
bankers' acceptances from time to time issued by any of the L/C Credit
Parties, but not issued under the USI Credit Agreement, the "Independent
L/Cs") are,
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inter alia, made subject to committed letter of credit facilities of the
L/C Credit Parties under the Master Agreement (the "Independent L/C
Commitments") that are governed by certain credit and other provisions of
the Master Agreement and terminate on the Maturity Date.
(3) The Borrowers are also joint and several co-obligors with respect
to (i) those certain 7-1/4% Senior Notes due December 1, 2006 (as amended,
supplemented or otherwise modified and in effect on the date hereof and as the
same may hereafter be further amended, modified, extended, renewed, replaced,
restated or supplemented from time to time pursuant to the terms thereof, the
"7-1/4% Notes"), issued pursuant to that certain Indenture, dated as of
December 12, 1996 (as amended, supplemented or otherwise modified and in effect
on the date hereof and as the same may hereafter be further amended, modified,
extended, renewed, replaced, restated or supplemented from time to time
pursuant to the terms thereof, the "7-1/4% Note Indenture"), and (ii) those
certain 7-?% Senior Notes due October 15, 2003 (as amended, supplemented or
otherwise modified and in effect on the date hereof and as the same may
hereafter be further amended, modified, extended, renewed, replaced, restated
or supplemented from time to time pursuant to the terms thereof, the "7-?%
Notes" and, together with the 7-1/4% Notes, the "Notes"), issued pursuant to
that certain Indenture, dated as of October 27, 1998 (as amended, supplemented
or otherwise modified and in effect on the date hereof and as the same may
hereafter be further amended, modified, extended, renewed, replaced, restated,
or supplemented from time to time pursuant to the terms thereof, the "7-?% Note
Indenture" and, together with the 7-1/4% Note Indentures, the "Note
Indentures"). Pursuant to the "Limitation on Liens" provisions of each of the
Note Indentures, each Borrower has agreed not to incur, and not to permit its
Restricted Subsidiaries (as therein defined) to incur, certain Liens (as
therein defined) upon any of its property or assets to secure certain Debt (as
therein defined) without making effective provision whereby the obligations
under the Notes shall be secured equally and ratably with the Debt secured by
such Liens for so long as such Debt shall be so secured (the "Indenture Lien
Limitation").
(4) Pursuant to the Credit Agreements and the Master Agreement, each
Borrower and Rexair Obligor has agreed, subject to the Indenture Lien
Limitations, (i) to grant and to cause certain of its respective Subsidiaries
to grant, to the Collateral Trustees for the Equal and Ratable Benefit of the
Credit Parties and the other Secured Holders pursuant to this Agreement and the
other Collateral Documents liens on and security interests in all or
substantially all of its and each such Subsidiary's assets and property from
time to time owned by it or such Subsidiary.
(5) In connection with and pursuant to the Master Agreement, the
Pledgors, the Debt Coordinator, the Agents, the other Credit Parties and the
Collateral Trustees have entered into an Amended and Restated Collateral Trust
Agreement dated as of even date, amending and restating that certain Collateral
Trust Agreement dated as of April 30, 2001, as previously amended (as so
amended and restated, and as hereafter amended, amended and restated,
supplemented or otherwise modified, the "Collateral Trust Agreement") to
provide for and give further effect to the purposes of the Master Agreement
this Agreement, and the Pledgors have opened a collateral deposit account and
securities account, Account No. 55060 (the "Collateral Account"), with the
Corporate Trustee at its office at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, in the name of the Collateral Trustees
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and under the sole control and dominion of the Collateral Trustees and subject
to the terms of this Agreement, in addition to their other Controlled Deposit
Accounts.
(6) This Agreement is intended to grant to the Collateral Trustees,
in trust for the Equal and Ratable Benefit of the Secured Holders and their
respective Representatives, liens on and security interests in substantially
all of the personal property and assets of the Pledgors, and this Agreement and
the liens and security interests granted hereunder are conditions to the
agreement of each of the Credit Parties to enter into the Master Agreement and
the other agreements delivered in connection therewith and to continue pursuant
to the Master Agreement to make Loans, issue Letters of Credit and make other
extensions of credit and/or provide services from time to time to or for the
account of the Borrowers and the Rexair Obligors.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Credit Parties to continue to make Loans and issue Letters of Credit
for the account of the Borrowers and the Rexair Obligors under the Credit
Agreements and Independent L/C Commitments, to induce certain of the Credit
Parties or their Affiliates to enter into or maintain from time to time with or
for the account of any of the Pledgors, Secured Hedge Agreements, Deposit
Account Control Agreements and Cash Management Service Agreements, and in order
to comply with the Indenture Lien Limitation of each of the Note Indentures,
each Pledgor hereby agrees with the Collateral Trustees for the Equal and
Ratable Benefit of the Representatives and the Secured Holders as follows:
Section 1. Grant of Security. Each Pledgor hereby assigns and pledges
to the Collateral Trustees and hereby grants to the Collateral Trustees, in
each case, in trust pursuant to the Collateral Trust Agreement for the Equal
and Ratable Benefit of the Secured Holders and their Representatives to the
extent set forth in Section 2 of this Agreement, a lien on and a security
interest in all of such Pledgor's right, title and interest in and to the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired by such Pledgor, wherever located, and whether
now or hereafter existing or arising (collectively, the "Collateral"):
(a) all equipment in all of its forms (including, without limitation,
all manufacturing equipment, all office equipment and all motor vehicles
and other distribution equipment), all fixtures and all parts thereof and
all accessions thereto and all software related thereto, including
software that is imbedded in and is part of the equipment (any and all
such equipment, fixtures, parts, accessions and software being the
"Equipment");
(b) all inventory in all of its forms (including, without limitation,
(i) all raw materials and work in process therefor, finished goods thereof
and materials used or consumed in the manufacture, production, preparation
or shipping thereof, (ii) goods in which such Pledgor has an interest in
mass or a joint or other interest or right of any kind (including, without
limitation, goods in which such Pledgor has an interest or right as
consignee) and (iii) goods that are returned to or repossessed or stopped
in transit by such Pledgor), and all accessions thereto and products
thereof and documents therefor, and all software related thereto,
including software that is imbedded in and is part of the
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inventory (any and all such inventory, accessions, products and documents
being the "Inventory");
(c) all accounts, chattel paper (including tangible chattel paper and
electronic chattel paper), instruments (including promissory notes),
deposit accounts, letter-of-credit rights, software, general intangibles
(including payment intangibles) and other obligations of any kind, whether
or not arising out of or in connection with the sale or lease of goods or
the rendering of services and whether or not earned by performance, and
all rights now or hereafter existing in and to all supporting obligations
and in and to all security agreements, mortgages, liens, leases and other
contracts securing or otherwise relating to the foregoing property (any
and all of such accounts, chattel paper, instruments, deposit accounts,
letter-of-credit rights, software, general intangibles and other
obligations, to the extent not referred to in clause (d), (e) or (f)
below, being the "Receivables", and any and all such supporting
obligations, security agreements, mortgages, liens, leases and other
contracts being the "Related Contracts");
(d) the following (the "Security Collateral"):
(i) the Initial Pledged Shares and the certificates, if any,
representing the Initial Pledged Shares, and all dividends, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of the Initial Pledged Shares;
(ii) the Initial Pledged Debt and the instruments, if any,
evidencing the Initial Pledged Debt, and all interest, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of the Initial Pledged Debt;
(iii) all additional shares of stock or other equity interests
in any Person from time to time acquired by such Pledgor in any
manner (such shares and other interests, together with the Initial
Pledged Shares, being the "Pledged Shares"), and the certificates, if
any, representing such additional shares or other interests, and all
dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares or other interests; provided
that such Pledgor shall not be required to pledge, and the terms
"Pledged Shares" and "Security Collateral" used in this Agreement
shall not include, any shares of stock in any Foreign Corporation (as
hereinafter defined) owned or otherwise held thereby which, when
aggregated with all of the other shares of stock in such Foreign
Corporation pledged by such Pledgor, would result in 66% or more of
the shares of stock in such Foreign Corporation entitled to vote
(within the meaning of Treasury Regulation Section 1.956-2(c)(2)
promulgated under the Internal Revenue Code) (the "Voting Foreign
Stock") (on a fully diluted basis) being pledged to the Secured
Holders under this Agreement (although all of the shares of stock in
such Foreign Corporation not entitled to vote (within the meaning of
Treasury Regulation Section 1.956-2(c)(2) promulgated under the
Internal Revenue Code) (the "Non-Voting Foreign Stock") shall be
pledged by the Pledgor); provided
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further that if, as a result of any change in the tax laws of the
United States of America after the date of this Agreement, the pledge
by the Pledgors of any additional shares of stock in any such Foreign
Corporation to the Secured Holders under this Agreement would not
result in an increase in the net tax liabilities of such Pledgors,
then, promptly after the change in such laws, all such additional
shares of stock shall be so pledged under this Agreement (for
purposes of this Section 1(d)(iii), "Foreign Corporation" means, at
any time, any direct or indirect Subsidiary of each Pledgor organized
outside of the laws of the United States or any state or other
political subdivision thereof at such time that constitutes a
"controlled foreign corporation" under Section 957 of the Internal
Revenue Code);
(iv) all additional indebtedness from time to time owed to such
Pledgor (such indebtedness, together with the Initial Pledged Debt,
being the "Pledged Debt") and the instruments, if any, evidencing
such indebtedness, and all interest, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness;
(v) all Securities Accounts of such Pledgor, all Pledged
Security Entitlements with respect to all Pledged Financial Assets
from time to time credited to such Securities Accounts, and all
Pledged Financial Assets, and all dividends, interest, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of such Pledged Security Entitlements or such Pledged Financial
Assets; and
(vi) all other investment property (including, without
limitation, all (A) securities, whether certificated or
uncertificated, (B) security entitlements, (C) securities accounts,
(D) commodity contracts and (E) commodity accounts) in which such
Pledgor has now, or acquires from time to time hereafter, any right,
title or interest in any manner, and the certificates or instruments,
if any, representing or evidencing such investment property, and all
dividends, interest, distributions, value, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
investment property;
(e) the following (collectively, the "Account Collateral"):
(i) the Collateral Account, all financial assets from time to
time credited to the Collateral Account (including, without
limitation, all Cash Equivalents from time to time credited to the
Collateral Account), all dividends, interest, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
financial assets, and all funds held therein and all certificates and
instruments, if any, from time to time representing or evidencing the
Collateral Account;
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(ii) all other deposit accounts, including, without limitation,
each account listed in Schedule V, whether designated on such
Schedule V as a Concentration Account, Operating Account, Controlled
Deposit Account, Other Account or otherwise (each, a "Deposit
Account"), including each Cash Collateral Account (subject, in the
case of any Cash Collateral Account, to the priority claims of the
Secured Holders for whose primary benefit such Cash Collateral
Account is maintained pursuant to the terms of the Master Agreement),
all financial assets from time to time credited to each such Deposit
Account (including, without limitation, all Cash Equivalents from
time to time credited to such Deposit Account), all dividends,
interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such financial assets, and all funds held
therein and all certificates and instruments, if any, from time to
time representing or evidencing each Deposit Account;
(iii) all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time delivered to or
otherwise possessed by the Collateral Trustees for or on behalf of
such Pledgor, including, without limitation, those delivered or
possessed in substitution for or in addition to any or all of the
then existing Account Collateral; and
(iv) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Account Collateral;
(f) the following (collectively, the "Intellectual Property
Collateral"):
(i) all United States, international and foreign patents, patent
applications and statutory invention registrations, including,
without limitation, the patents set forth in Part A of Schedule IV
hereto (as such Schedule IV may be supplemented from time to time by
supplements to this Agreement, each such supplement being in
substantially the form of Exhibit E hereto (an "IP Security Agreement
Supplement"), executed and delivered by such Pledgor to the
Collateral Trustees from time to time), together with all reissues,
divisions, continuations, continuations-in-part, extensions and
reexaminations thereof, all inventions therein, all rights therein
provided by international treaties or conventions and all
improvements thereto, and all other rights of any kind whatsoever of
such Pledgor accruing thereunder or pertaining thereto (the
"Patents");
(ii) all trademarks (including, without limitation, service
marks), certification marks, collective marks, trade dress, logos,
domain names, product configurations, trade names, business names,
corporate names and other source identifiers, whether or not
registered, whether currently in use or not, including, without
limitation, all common law rights and registrations and applications
for registration thereof, including, without limitation, the
trademark registrations and trademark applications set forth in Part
B of Schedule IV hereto (as such Schedule
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IV may be supplemented from time to time by IP Security Agreement
Supplements executed and delivered by such Pledgor to the Collateral
Trustees from time to time), and all other marks registered in the
U.S. Patent and Trademark Office or in any office or agency of any
State or Territory of the United States or any foreign country (but
excluding any United States intent-to-use trademark application prior
to the filing and acceptance of a Statement of Use or an Amendment to
allege use in connection therewith to the extent that a valid
security interest may not be taken in such an intent-to-use trademark
application under applicable law), and all rights therein provided by
international treaties or conventions, all reissues, extensions and
renewals of any of the foregoing, together in each case with the
goodwill of the business connected therewith and symbolized thereby,
and all rights corresponding thereto throughout the world and all
other rights of any kind whatsoever of such Pledgor accruing
thereunder or pertaining thereto (the "Trademarks");
(iii) all copyrights, copyright applications, copyright
registrations and like protections in each work of authorship,
whether statutory or common law, whether published or unpublished,
any renewals or extensions thereof, all copyrights of works based on,
incorporated in, derived from, or relating to works covered by such
copyrights, including, without limitation, the copyright
registrations and copyright applications set forth in Part C of
Schedule IV hereto (as such Schedule IV may be supplemented from time
to time by IP Security Agreement Supplements executed and delivered
by such Pledgor to the Collateral Trustees from time to time),
together with all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Pledgor accruing
thereunder or pertaining thereto (the "Copyrights");
(iv) all confidential and proprietary information, including,
without limitation, know-how, trade secrets, manufacturing and
production processes and techniques, inventions, research and
development information, technical data, financial, marketing and
business data, pricing and cost information, business and marketing
plans and customer and supplier lists and information (the "Trade
Secrets");
(v) all software, including computer software programs and
databases (including, without limitation, source code, object code
and all related applications and data files), firmware, and
documentation and materials relating thereto, and all rights with
respect to the foregoing, together with any and all options,
warranties, service contracts, program services, test rights,
maintenance rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, additions or
model conversions of any of the foregoing (the "Computer Software");
(vi) all license agreements, permits, authorizations and
franchises, whether with respect to the Patents, Trademarks,
Copyrights, Trade Secrets or Computer Software, or with respect to
the patents, trademarks, copyrights, trade secrets, computer software
or other proprietary right of any other Person,
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including, without limitation, the license agreements set forth in
Part D of Schedule IV hereto (as such Schedule IV may be supplemented
from time to time by IP Security Agreement Supplements executed and
delivered by such Pledgor to the Collateral Trustees from time to
time), and all income, royalties and other payments now or hereafter
due and/or payable with respect thereto, subject, in each case, to
the terms of such license agreements, permits, authorizations and
franchises (the "Licenses"); and
(vii) any and all claims for damages for past, present and
future infringement, misappropriation or breach with respect to the
Patents, Trademarks, Copyrights, Trade Secrets, Computer Software or
Licenses, with the right, but not the obligation, to ▇▇▇ for and
collect, or otherwise recover, such damages;
(g) all commercial tort claims described in Schedule VII (the
"Commercial Tort Claims Collateral");
(h) all books and records (including, without limitation, customer
lists, credit files, computer programs, software, printouts and other
computer materials and records) of such Pledgor pertaining to any of the
Collateral; and
(i) all proceeds of, collateral for, and supporting obligations
relating to, any and all of the Collateral (including, without limitation,
proceeds, collateral and supporting obligations that constitute property
of the types described in clauses (a) through (h) of this Section 1 and
this clause (i)) and, to the extent not otherwise included, all (A)
payments under insurance (whether or not the Collateral Trustees are the
loss payees 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, (B) commercial tort claims and (C) cash.
Notwithstanding anything to the contrary contained in this Section 1,
the following property shall be excluded from the lien and security interest
granted hereunder:
(i) any contract, agreement or other document (and any contract
rights arising thereunder) to which any of the Pledgors is a party on the
date hereof and any similar contract or agreement entered into by any
Pledgor after the date hereof with the prior written consent of the
Required Representatives, in each case, shall be excluded from the lien
and security interest granted by such Pledgor under this Section 1 to the
extent that the assignment thereof, or the creation of a lien and security
interest therein, would constitute a breach of the terms of such contract,
agreement or other document, or would permit any party to such contract,
agreement or other document to terminate such contract rights or agreement
(all such contracts, agreements and other documents being the "Excluded
Agreements"); provided, however, that (1) the exclusion from the lien and
security interest granted by such Pledgor hereunder of any contract rights
of any of the Pledgors under one or more of the Excluded Agreements shall
not limit, restrict or impair the grant by such Pledgor of the lien and
security interest in any accounts or receivables arising under any such
Excluded Agreement or any payments due or to become due thereunder, and
(2) any of the Excluded Agreements shall automatically cease to be
10
excluded from this Section 1 at such time as, (A) the prohibition of
assignment or of the creation of a lien and security interest in such
agreement is no longer in effect or is rendered ineffective as a matter of
law or (B) the applicable Pledgor has obtained the consent of the other
parties to such agreement to the assignment of, or creation of a lien and
security interest in, the contract rights of such Pledgor thereunder;
(ii) any license, permit or authorization from any Governmental
Authority in favor of any Pledgor shall be excluded from the lien and
security interest granted by such Pledgor under this Section 1 to the
extent that the assignment thereof or the creation of a lien and security
interest therein would constitute a breach of the terms of such license,
permit or authorization or would require any separate license, permit or
authorization or would otherwise terminate such license, permit or
authorization (all of the licenses, permits and authorizations referred to
herein being the "Excluded Authorizations"); provided, however, that any
of the Excluded Authorizations shall cease to be excluded from this
Section 1 at such time as (1) the prohibition of assignment or of the
creation of a lien and security interest in such license, permit or
authorization is no longer in effect or is rendered ineffective as a
matter of law or (2) the applicable Pledgor has obtained the consent of
the applicable Governmental Authority to the assignment of, or creation of
a lien and security interest in, such license, permit or authorization of
such Pledgor; and
(iii) any property of a Pledgor which is subject to any Lien which
such Pledgor is permitted to enter into pursuant to the terms of Section
6.02(a)(iv) or (if not permitted by the lease terms) 6.02(a)(v) of the
Master Agreement, to the extent that such Pledgor has agreed not to
further encumber such property (all such property being "Other Excluded
Property"), shall be excluded from the lien and security interest granted
by such Pledgor under this Section 1; provided, however, that any such
Other Excluded Property shall cease to be excluded from this Section 1 if,
at any time, the prohibition of assignment or the creation of a lien and
security interest in such property is no longer in effect by reason of an
amendment, waiver or other modification of the applicable Security
Instrument or the release or satisfaction of such Security Instrument.
In addition, nothing in this Agreement shall be deemed to require any
Pledgor to seek the consent of any Person or Governmental Authority to the
assignment of, or the creation of a lien on or a security interest in, any
Excluded Agreement, Excluded Authorization or Other Excluded Property.
Section 2. Security for Secured Obligations.
(a) This Agreement secures (i) in the case of any Collateral granted
by a Pledgor that is a Borrower or a Restricted Subsidiary, the payment
and performance of all the Secured Obligations (as defined in the
Collateral Trust Agreement) of the Pledgors now or hereafter existing
under the Secured Agreements, for the Equal and Ratable Benefit of all of
the Secured Holders thereof and their Representatives and (ii) in the case
of any Collateral granted by a Pledgor that is an Unrestricted Subsidiary
Pledgor, the payment and performance of all the Secured Obligations of the
Pledgors now or hereafter existing under the Secured Agreements, other
than any Secured Obligations arising under
11
or in respect of the 7-1/4% Notes and the 7-1/8% Notes, for the Equal and
Ratable Benefit of the Secured Holders thereof and their respective
Representatives under such Secured Agreements, but not for the benefit of
any Note Holders or their Representatives.
(b) With respect to any Rexair Collateral, the Lien created by this
Agreement and the other Collateral Documents (not including any Rexair
Collateral Documents) shall be, until all Rexair Debt is repaid in full
and all commitments thereunder terminated, a second priority Lien,
subordinate to the prior Lien of the Rexair Collateral Documents.
Section 3. Pledgors Remain Liable. Anything herein to the contrary
notwithstanding,
(a) each Pledgor shall remain liable under the contracts and
agreements included in such Pledgor's Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed,
(b) the exercise by the Collateral Trustees of any of the rights
hereunder shall not release any Pledgor from any of its duties or
obligations under the contracts and agreements included in the Collateral
and
(c) neither the Collateral Trustees nor any Secured Holder shall have
any obligation or liability under the contracts and agreements included in
the Collateral by reason of this Agreement or any Secured Agreement, nor
shall the Collateral Trustees or any Secured Holder be obligated to
perform any of the obligations or duties of any Pledgor thereunder or to
take any action to collect or enforce any claim for payment assigned
hereunder.
Section 4. Delivery and Control of Security Collateral. So long as
any Bank Exposure (as defined in the Master Agreement) shall remain unpaid or
outstanding, or any Secured Hedge Agreement shall be in effect, or any Bank
shall have any Commitment (as defined in the Master Agreement) under the Credit
Agreements:
(a) All certificates or instruments representing or evidencing
Security Collateral shall be delivered to and held by or on behalf of the
Collateral Trustees pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance satisfactory
to the Collateral Trustees. Upon the occurrence and during the continuance
of an Actionable Default, the Collateral Trustees shall have the right, at
any time in their discretion and without notice to any Pledgor, to
transfer to or to register in the name of the Collateral Trustees or any
of their nominees any or all of the Security Collateral, subject only to
the revocable rights specified in Section 12(a). In addition, the
Collateral Trustees shall have the right at any time to exchange
certificates or instruments representing or evidencing Security Collateral
for certificates or instruments of smaller or larger denominations. Also,
the Collateral Trustees shall have the right at any time to convert
Security Collateral consisting of financial assets credited to any
Securities
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Account of any Pledgor to Security Collateral consisting of financial
assets held directly by the Collateral Trustees, and to convert Security
Collateral consisting of financial assets held directly by the Collateral
Trustees to Security Collateral consisting of financial assets credited to
such Securities Account.
(b) With respect to any Security Collateral in which any Pledgor has
any right, title or interest and that constitutes an uncertificated
security, such Pledgor will cause the issuer thereof either (i) to
register the Collateral Trustees as the registered owner of such security
or (ii) to agree in an authenticated record with such Pledgor and the
Collateral Trustees that such issuer will comply with instructions with
respect to such security originated by the Collateral Trustees without
further consent of such Pledgor, such authenticated record to be in form
and substance satisfactory to the Collateral Trustees. Each Pledgor which
has issued any Security Collateral to any other Pledgor hereby agrees with
such other Pledgor and the Collateral Trustees that it will comply with
instructions with respect to such Security Collateral originated by the
Collateral Trustees without further consent of such other Pledgor.
(c) With respect to any Security Collateral in which any Pledgor has
any right, title or interest and that constitutes a security entitlement,
such Pledgor will cause the securities intermediary with respect to such
security entitlement either (i) to identify in its records the Collateral
Trustees as the entitlement holder of such security entitlement against
such securities intermediary or (ii) to agree in an authenticated record
with such Pledgor and the Collateral Trustees that such securities
intermediary will comply with entitlement orders (that is, notifications
communicated to such securities intermediary directing transfer or
redemption of the financial asset to which such Pledgor has a security
entitlement) originated by the Collateral Trustees without further consent
of such Pledgor, such authenticated record to be in substantially the form
of Exhibit C hereto or otherwise in form and substance satisfactory to the
Collateral Trustees (such agreement being a "Securities Account Control
Agreement"). Each Pledgor agrees that it will not establish or open any
additional securities account in addition to those listed in Part C of
Schedule I hereto, unless the Collateral Trustee shall have received at
least 10 days' prior notice of such addition in an authenticated record
and shall have received a Securities Account Control Agreement (or a
supplement to an existing Securities Account Control Agreement) covering
such new securities account, and upon the receipt by the Collateral
Trustees of such Securities Account Control Agreement (or supplement),
Part C of Schedule I hereto shall be automatically amended to include such
securities account. Each Pledgor agrees that it will not terminate any
Securities Account unless the Collateral Trustees and the Required
Representatives shall have received at least 10 days' prior notice of such
termination in an authenticated record (and, upon such termination, Part C
of Schedule I hereto shall be automatically amended to delete such
Securities Account).
(d) No Pledgor will change or add any securities intermediary that
maintains any securities account in which any of the Collateral is
credited or carried, or change or add any such securities account, in each
case without first complying with the above provisions of this Section 4
in order to perfect the security interest granted hereunder in such
Collateral.
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Section 5. Maintaining the Pledged Accounts. So long as any Bank
Exposure shall remain unpaid or outstanding, or any Secured Hedge Agreement
shall be in effect, or any Bank shall have any Commitment under the Credit
Agreements:
(a) Each Pledgor will maintain all Account Collateral only with banks
(the "Controlled Account Banks") that have agreed, in a record
authenticated by the Pledgor, the Collateral Trustees and the Controlled
Account Bank, to (i) comply with instructions originated by the Collateral
Trustees directing the disposition of funds in the Account Collateral
without the further consent of the Pledgor and (ii) waive or subordinate
in favor of the Collateral Trustees all claims of the Controlled Account
Bank (including claims by way of a security interest, right of setoff or
right of recoupment) to the Account Collateral, which authenticated record
shall be substantially in the form of Exhibit A hereto, or shall otherwise
be in form and substance satisfactory to the Collateral Trustees (each a
"Deposit Account Control Agreement"); provided, however, that this Section
5(a) shall not at any time apply to any Deposit Accounts (the "Other
Deposit Accounts") to the extent such accounts are permitted pursuant to
Section 6.01(n) of the Master Agreement to be maintained with institutions
located in the United States other than Permitted Account Banks (as
defined in the Master Agreement).
(b) If requested by the Required Representatives upon or during the
continuance of a Default, each Pledgor will (i) immediately instruct each
Person obligated at any time to make any payment to such Pledgor for any
reason to make such payment to an Other Deposit Account or a Controlled
Deposit Account and (ii) deposit in a Controlled Deposit Account or pay to
the Collateral Trustees for deposit in a Controlled Deposit Account, at
the end of each Business Day, all proceeds of Collateral and all other
cash of such Pledgor.
(c) Concurrently with or promptly after entering into a Deposit
Account Control Agreement with any Controlled Account Bank, each Pledgor
will instruct such Controlled Account Bank to transfer to a Controlled
Deposit Account designated on Schedule V as a Cash Concentration Account
(each, a "Cash Concentration Account"), at the end of each Business Day,
in same day funds an amount equal to the credit balance of each other
Controlled Deposit Account or Other Deposit Account. If any Pledgor shall
fail to give any such instructions to any Controlled Account Banks, the
Collateral Trustees may do so without further notice to any Pledgor.
(d) Each Pledgor agrees that it will not maintain any deposit
accounts other than a Deposit Account listed in Schedule V hereto or an
Other Deposit Account, unless the Collateral Trustees shall have received
at least 10 days' prior written notice of such addition and shall have
received a Deposit Account Control Agreement authenticated by such new
Controlled Account Bank and such Pledgor, or a supplement to an existing
Deposit Account Control Agreement covering such new Controlled Deposit
Account, as the case may be (and, upon the receipt by the Collateral
Trustees of such Deposit Account Control Agreement or supplement, Schedule
V hereto shall be automatically amended to include such new Controlled
Deposit Account and, if any, such new Controlled Account Bank. Each
Pledgor agrees that it will not terminate any bank as a Controlled Account
Bank or terminate any Deposit Account Control Agreement,
14
Controlled Deposit Account, other Deposit Account or Account Collateral,
except that the Pledgor may terminate an Other Deposit Account, and
terminate a bank as a Controlled Account Banks with respect to such Other
Deposit Account, if it gives the Collateral Trustees at least 10 days'
prior written notice of such termination (and, upon such termination,
Schedule V hereto shall be automatically amended to delete such Controlled
Account Bank, Controlled Deposit Account or Other Deposit Account).
(e) Upon any termination by a Pledgor of any Controlled Deposit
Account or Other Deposit Account, or any Controlled Account Banks with
respect thereto, such Pledgor will immediately notify all Persons that
were making payments to such Controlled Deposit Account or Other Deposit
Account to make all future payments to another Controlled Deposit Account
or Other Deposit Account listed in Schedule V (as amended from time to
time, including pursuant to Section 5(d) hereof). Each Pledgor agrees to
terminate any or all Account Collateral and Deposit Account Control
Agreements upon request by the Collateral Trustees.
(f) So long as no Actionable Default shall have occurred and be
continuing, the Collateral Trustees will, to the extent funds are
available in a Cash Concentration Account or the Collateral Account,
direct the applicable Controlled Account Bank to transfer amounts on
deposit in a Cash Concentration Account or Collateral Account to an
operating account (each, an "Operating Account") to the extent necessary
to pay all checks drawn on, and all amounts otherwise withdrawn from, the
Operating Account.
(g) The Collateral Trustees shall have sole right to direct the
disposition of funds with respect to each of the Deposit Accounts; and it
shall be a term and condition of each of Deposit Accounts, notwithstanding
any term or condition to the contrary in any other agreement relating to
such Deposit Accounts, that no amount (including interest on Cash
Equivalents credited thereto) will be paid or released to or for the
account of, or withdrawn by or for the account of, the Borrower or any
other Person from such Deposit Accounts, as the case may be, without the
prior written consent of the Collateral Trustees.
(h) Subject to the applicable provisions of the Collateral Trust
Agreement, the Collateral Trustees may, at any time that an Actionable
Default shall have occurred and be continuing, and without notice to, or
consent from, the Pledgor, (i) transfer, or direct the transfer of, funds
from the Account Collateral to satisfy the Pledgor's obligations under the
Loan Documents and (ii) transfer, or direct the transfer of, funds from
any or all of the Deposit Accounts to the Collateral Account.
Section 6. Investing of Amounts in the Cash Concentration Accounts,
the Collateral Account and the Cash Collateral Accounts. So long as the
Collateral Trustees shall not have received a notice of Actionable Default
pursuant to the Collateral Trust Agreement the Collateral Trustees will,
subject to the provisions of Sections 5, 7 and 20, from time to time direct the
applicable Controlled Account Bank to (a) invest amounts received with respect
to the Collateral Account, the Cash Concentration Account and each Cash
Collateral Account in Cash Equivalents as the Borrower may select, provided,
that amounts received in respect of the Cash Collateral Accounts may only be
invested in Permitted Cash Equivalents (as defined in the
15
Master Agreement) credited to (A) the applicable Cash Concentration Account,
Collateral Account or Cash Collateral Account, or (B) in the case of Cash
Equivalents consisting of Securities Collateral, a securities account subject
to a Securities Account Control Agreement, credited to such Collateral Account,
Cash Concentration Account or Cash Collateral Account and (b) invest interest
paid on the Cash Equivalents referred to in clause (a) above, and reinvest
other proceeds of any such Cash Equivalents that may mature or be sold, in each
case in such Cash Equivalents credited in the same manner. Interest and
proceeds that are not invested or reinvested in Cash Equivalents as provided
above shall be deposited and held in the relevant Cash Concentration Account,
Collateral Account or Cash Collateral Account. In addition, the Collateral
Trustees shall have the right at any time to direct the applicable Controlled
Account Banks to exchange such Cash Equivalents for similar Cash Equivalents of
smaller or larger determinations, or for other Cash Equivalents, credited to
such Collateral Account, Cash Concentration Account or Cash Collateral Account,
as the case may be.
Section 7. Release of Amounts. So long as the Collateral Trustees
shall not have received a notice of Actionable Default, the Collateral Trustees
will direct the applicable Controlled Account Bank (which direction may be in
the form of a revocable standing instruction) to pay and release to or at the
order of the Borrower or Pledgor, or to the Debt Coordinator at the request of
such Borrower or Pledgor, funds from time to time on deposit in the Collateral
Account and other Deposit Accounts, to be applied to the repayment or Permanent
Reduction (as defined in the Master Agreement) of Senior Debt Exposure (as
defined in the Master Agreement) or as otherwise permitted under the Master
Agreement.
Section 8. Maintaining Electronic Chattel Paper and Letter-of-Credit
Rights and Giving Notice of Commercial Tort Claims. So long as any Bank
Exposure shall remain unpaid or outstanding, or any Secured Hedge Agreement
shall be in effect, or any Bank shall have any Commitment under the Credit
Agreements.
(a) Each Pledgor will maintain all electronic chattel paper so that
the Collateral Trustees have control of the electronic chattel paper in
the manner specified in Section 9-105 of the UCC;
(b) Each Pledgor will maintain all letter-of-credit rights assigned
to the Collateral Trustees so that the Collateral Trustees have control of
the letter-of-credit rights in the manner specified in Section 9-107 of
the UCC; and
(c) Each Pledgor will promptly give notice to the Collateral Trustees
of any commercial tort claim that may arise in the future and will
promptly execute or otherwise authenticate a supplement to this Agreement,
and otherwise take all necessary action, to subject such commercial tort
claim to the first priority lien of this Agreement.
Section 9. Representations and Warranties. Each Pledgor represents
and warrants as follows:
(a) The Pledgor's exact legal name, as defined in Section 9-503(a) of
the UCC, is correctly set forth on the signature page of this Agreement.
The Pledgor is an organization of the type specified in Schedule III to
this Agreement and is organized and
16
in good standing under the laws of the jurisdiction specified in such
Schedule III. The Pledgor has not previously changed its name, identity or
corporate structure, except as disclosed in Schedule IIIA hereto.
(b) All of the Equipment and Inventory of such Pledgor are located at
the places specified in Schedule II hereto, as such Schedule II may be
amended from time to time pursuant to Section 11(a). Set forth in Part A
of Schedule II for each Pledgor is a complete and accurate list of all
real property owned by such Pledgor, showing as of the date hereof the
street address, county or other relevant jurisdiction, state, record owner
and book value thereof. Set forth in Part B of Schedule II for each
Pledgor is a complete and accurate list of all leases of real property
under which any Pledgor is the lessee, showing as of the date hereof the
street address, county or other relevant jurisdiction, state, lessor,
lessee, expiration date and annual rental cost thereof. Set forth in Part
C of Schedule II for each Pledgor is a complete and accurate list of all
warehouses and other locations (other than as set forth in Part A or B of
such Schedule II) where such Pledgor stores any of its Inventory or
Equipment, showing as of the date hereof the street address, county or
other relevant jurisdiction, for such warehouseman or other bailee, and
the nature of its contractual or other relationship with such Pledgor. The
Pledgor is located (within the meaning of Section 9-307 of the UCC) in the
state or jurisdiction set forth in Schedule III hereto. Such Pledgor's
federal tax identification number and organizational identification number
are set forth opposite such Pledgor's name in Schedule III hereto. The
Pledgor has not changed the location of its equipment and inventory, its
chief executive office, its location (within the meaning of Section 9-307
of the UCC), its federal tax identification number and its organizational
identification number, except as disclosed in Schedule IIIA. All Security
Collateral consisting of certificated securities and instruments have been
delivered to the Collateral Trustees. None of the Receivables or Related
Contracts is evidenced by a promissory note or other instrument that has
not been delivered to the Collateral Trustees.
(c) Such Pledgor is the legal and beneficial owner of the Collateral
of such Pledgor free and clear of any Lien, claim, option or right of
others, except for the security interest created under this Agreement and
other Liens permitted to exist under the Credit Agreements. No effective
financing statement or other instrument similar in effect covering all or
any part of such Collateral or listing such Pledgor or any trade name of
such Pledgor as debtor is on file in any recording office, except such as
may have been filed in favor of the Collateral Trustees relating to the
Collateral Documents. Such Pledgor has the trade names listed on Part B of
Schedule V hereto.
(d) Such Pledgor has exclusive possession and control of the
Equipment and Inventory, other than Inventory and Equipment stored at any
locations specified in Parts B and C of Schedule II (as such Schedule II
may be amended from time to time pursuant to Section 11(a)), in which case
such Pledgor shall seek to obtain a landlord's or warehouseman's agreement
substantially in the form of Exhibit B hereto (or otherwise in form and
substance satisfactory to the Required Representatives).
(e) The Pledged Shares issued by Affiliates of such Pledgor and
pledged by such Pledgor hereunder have been duly authorized and validly
issued and are fully paid
17
and non-assessable. The Pledged Debt issued by Affiliates of such Pledgor
and pledged by such Pledgor hereunder has been duly authorized,
authenticated or issued and delivered, is the legal, valid and binding
obligation of the issuers thereof, is evidenced by one or more promissory
notes (which notes have been delivered to the Collateral Trustees) and is
not in default.
(f) The Initial Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I hereto as of the date hereof. The Initial Pledged Debt
constitutes all of the outstanding indebtedness owed to such Pledgor by
the issuers thereof and is outstanding, as of the date hereof, in the
principal amount indicated on Schedule I hereto as of the date hereof.
(g) All of the investment property owned by such Pledgor as of the
date hereof is listed on Schedule I hereto.
(h) Such Pledgor has no deposit accounts, other than the Account
Collateral listed on Schedule V hereto, as such Schedule V may be amended
from time to time pursuant to Section 5(d), and legal, binding and
enforceable Deposit Account Control Agreements (with respect to such
Pledgor) are in effect for each deposit account that constitutes Account
Collateral, except to the extent such Deposit Account Control Agreements
are not required by Section 5(a). Such Pledgor has instructed all existing
obligors to make all payments to either a Controlled Deposit Account or an
Other Deposit Account to the extent required by Section 5(b).
(i) All filings and other actions necessary (including actions
necessary to obtain control of Collateral as provided in Sections 9-104,
9-105, 9-106 and 9-107 of the UCC) or reasonably desirable to perfect and
protect the security interest in the Collateral of such Pledgor created
under this Agreement have been duly made or taken and are in full force
and effect, and this Agreement creates in favor of the Collateral Trustees
for the Equal and Ratable Benefit of the Secured Holders and their
Representatives a valid and, together with such filings and other actions,
perfected security interest in the Collateral of such Pledgor, securing
the payment of the Secured Obligations, subject only to Permitted Liens.
(j) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the grant by such Pledgor of the
assignment, pledge and security interest granted hereunder or for the
execution, delivery or performance of this Agreement and the Collateral
Trust Agreement by such Pledgor, (ii) the perfection or maintenance of the
assignment, pledge and security interest created hereunder (including the
first priority nature of such assignment, pledge or security interest),
except for (A) the filing of financing and continuation statements under
the Uniform Commercial Code, which financing statements have been duly
filed and are in full force and effect, (B) the recordation of the
Intellectual Property Security Agreements referred to in Section 11(f)
with the U.S. Patent and Trademark Office and the U.S. Copyright Office,
which Agreements have been duly recorded and are in full force and effect,
(C) the actions described in Section 4 with respect to Security
Collateral, which actions have been taken
18
and are in full force and effect, and (D) the execution of Pledged Account
Letters by the Controlled Account Banks, or (iii) for the exercise by the
Collateral Trustees of their voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of
any portion of the Security Collateral by laws affecting the offering and
sale of securities generally.
(k) The Inventory that has been produced or distributed by such
Pledgor has been produced in all material respects in compliance with all
requirements of applicable law, including, without limitation, to the
extent applicable, the Fair Labor Standards Act.
(l) As to itself and its Intellectual Property Collateral:
(i) Except with respect to any Immaterial IP Collateral (as
hereinafter defined), the rights of such Pledgor in or to the
Intellectual Property Collateral do not conflict with, misappropriate
or infringe upon the intellectual property rights of any third party,
and no claim has been asserted that the use of such Intellectual
Property Collateral does or may infringe upon the intellectual
property rights of any third party.
(ii) Such Pledgor is the exclusive owner of the entire and
unencumbered right, title and interest in and to its Intellectual
Property Collateral, as described on Schedule IV hereto, and is
entitled to use all such Intellectual Property Collateral without
limitation, subject only to the license terms of the Licenses.
(iii) The Intellectual Property Collateral set forth on Schedule
IV hereto includes all of the patents, patent applications, trademark
registrations and applications, copyright registrations and
applications and Licenses owned by such Pledgor.
(iv) The Intellectual Property Collateral is subsisting and has
not been adjudged invalid or unenforceable in whole or part and, to
the best of such Pledgor's knowledge, is valid and enforceable. Such
Pledgor is not aware of any uses of any item of Intellectual Property
Collateral that could be expected to lead to such item becoming
invalid or unenforceable.
(v) Except with respect to (A) any Immaterial IP Collateral or
(B) any other Intellectual Property Collateral as to which the
Required Representatives have determined pursuant to a written
agreement that the cost and expense of perfecting and maintaining the
lien hereunder is disproportionately high relative to the fair market
value of such Intellectual Property Collateral as determined in good
faith by USI, such Pledgor has made or performed, all filings,
recordings and other acts and has paid all required fees and taxes to
maintain and protect its interest in each and every item of
Intellectual Property Collateral in full force and effect throughout
the world, and to protect and maintain its interest therein,
including, without limitation, recordations of any of its interests
in the Patents and
19
Trademarks with the U.S. Patent and Trademark Office and in
corresponding national and international patent offices, and
recordation of any of its interests in the Copyrights with the U.S.
Copyright Office and in corresponding national and international
copyright offices. Such Pledgor has used proper statutory notice in
connection with its use of each patent, trademark and copyright of
the Intellectual Property Collateral.
(vi) Except with respect to any Immaterial IP Collateral, no
action, suit, investigation, litigation or proceeding has been
asserted or is pending or threatened against such Pledgor (i) based
upon or challenging or seeking to deny or restrict the use of any of
the Intellectual Property Collateral or (ii) alleging that any
services provided by, processes used by, or products manufactured or
sold by such Pledgor infringe upon or misappropriate any patent,
trademark, copyright or any other proprietary right of any third
party. To the best of such Pledgor's knowledge, no Person is engaging
in any activity that infringes upon or misappropriates the
Intellectual Property Collateral, other than any Immaterial IP
Collateral, or upon the rights of such Pledgor therein. Except as set
forth on Schedule IV hereto, such Pledgor has not granted any
license, release, covenant not to ▇▇▇, non-assertion assurance, or
other right to any Person with respect to any part of the
Intellectual Property Collateral. The consummation of the
transactions contemplated by the Collateral Trust Agreement will not
result in the termination or impairment of any of the Intellectual
Property Collateral, other than any Immaterial IP Collateral.
(vii) Except any License that constitutes or exists in respect
of Immaterial IP Collateral: (A) each License is to the best of such
Pledgor's knowledge, valid and binding and in full force and effect
and represents the entire agreement between the respective licensor
and licensee with respect to the subject matter of such License; (B)
with respect only to each License entered into after the date hereof,
except Standardized Commercial licenses not subject to substantial
negotiation or as otherwise may be agreed to in writing by the
Required Representatives, such License is not an Excluded Agreement
or Other Excluded Property and such License will not cease to be
valid and binding and in full force and effect on terms identical to
those currently in effect as a result of the rights and interest
granted herein, nor will the grant of such rights and interest
constitute a breach or default under such License or otherwise give
the licensor or licensee a right to terminate such License; (C) such
Pledgor has not received any notice of termination or cancellation
under such License; (D) such Pledgor has not received any notice of a
breach or default under such License, which breach or default has not
been cured; (E) such Pledgor has not granted to any other third party
any rights, adverse or otherwise, under such License; and (F) neither
such Pledgor nor any other party to such License is in breach or
default in any material respect, and no event has occurred that, with
notice or lapse of time or both, would constitute such a breach or
default or permit termination, modification or acceleration under
such License.
20
(viii) To the best of such Pledgor's knowledge, (A) none of the
Trade Secrets of such Pledgor has been used, divulged, disclosed or
appropriated to the detriment of such Pledgor for the benefit of any
other Person other than such Pledgor; (B) no employee, independent
contractor or agent of such Pledgor has misappropriated any trade
secrets of any other Person in the course of the performance of his
or her duties as an employee, independent contractor or agent of such
Pledgor; and (C) no employee, independent contractor or agent of such
Pledgor is in default or breach of any term of any employment
agreement, non-disclosure agreement, assignment of inventions
agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such Pledgor's
Intellectual Property Collateral.
(ix) Certain items of Intellectual Property Collateral, the fair
market value of which does not individually exceed [$25,000] or in
the aggregate exceed [$500,000] (as reasonably determined in good
faith by USI as of the date hereof, and as of each date on which
Schedule IV is supplemented pursuant to the terms hereof), have been
designated as such on Schedule IV hereto (such items, together with
such other Intellectual Property Collateral as the USI Agent and USI
agree are not material, the "Immaterial IP Collateral"). The
Immaterial IP Collateral, both individually and in the aggregate, is
not necessary in any material respect to the continued conduct by any
Pledgor of its business as such business is conducted on the date
hereof or as the same may hereafter be conducted from time to time.
Section 10. Further Assurances. (a) Each Pledgor agrees that from
time to time, at the expense of such Pledgor, such Pledgor will promptly
execute and deliver (or otherwise authenticate and deliver) all further
instruments and documents, and take all further action, that may be necessary
or reasonably desirable, or that the Collateral Trustees may reasonably
request, in order to perfect and protect any pledge, assignment or security
interest granted or purported to be granted by such Pledgor hereunder or to
enable the Collateral Trustees to exercise and enforce their rights and
remedies hereunder with respect to any Collateral of such Pledgor. Without
limiting the generality of the foregoing, each Pledgor will promptly with
respect to Collateral of such Pledgor: (i) ▇▇▇▇ conspicuously each document
included in Inventory, each chattel paper included in Receivables, each Related
Contract and, at the request of the Collateral Trustees or the Required
Representatives, each of its records pertaining to such Collateral with a
legend, in form and substance satisfactory to the Collateral Trustees,
indicating that such document, chattel paper, Related Contract or Collateral is
subject to the security interest granted hereby; (ii) if any such Collateral
shall be evidenced by a promissory note or other instrument, deliver and pledge
to the Collateral Trustees hereunder such note or instrument duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Trustees; (iii) execute or
authenticate and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
reasonably desirable, or as the Collateral Trustees may reasonably request, in
order to perfect and preserve the security interest granted or purported to be
granted by such Pledgor hereunder; (iv) deliver and pledge to the Collateral
Trustees for the benefit of the Secured Holders certificates representing
Security Collateral that constitutes certificated securities, accompanied by
undated stock or bond powers executed in blank; (v) take all action necessary
to insure that
21
the Collateral Trustees have control of Collateral consisting of deposit
accounts, electronic chattel paper, investment property and letter-of-credit
rights as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC; and
(vi) deliver to the Collateral Trustees evidence that all other action that the
Collateral Trustees may deem reasonably necessary or desirable in order to
perfect and protect the security interest created by such Pledgor under this
Agreement has been taken. From time to time upon request by the Collateral
Trustees, each Pledgor will, at such Pledgor's expense, cause to be delivered
to the Collateral Trustees, for the benefit of the Secured Holders and their
Representatives, an opinion of counsel, from outside counsel reasonably
satisfactory to the Collateral Trustees, as to such matters relating to the
transactions contemplated hereby as the Collateral Trustees may reasonably
request.
(b) Each Pledgor hereby authorizes the Collateral Trustees to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral of such Pledgor without the
signature of such Pledgor. A photocopy or other reproduction of this Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) Each Pledgor will furnish to the Collateral Trustees from time to
time statements and schedules further identifying and describing the Collateral
of such Pledgor and such other reports in connection with such Collateral as
the Collateral Trustees may reasonably request, all in reasonable detail.
(d) The Borrowers will furnish to the Collateral Trustees, on or
prior to each of the first and the fifth anniversary of the Effective Date (but
not more than six months prior thereto), at any time upon the request of the
Collateral Trustees, an opinion of counsel acceptable to the Required
Representatives to the effect that all financing or continuation statements
have been filed, and all other action has been taken (including action
necessary to give the Collateral Trustees control over the Collateral as
provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC), to perfect
continuously from the date which is 90 days from the date hereof the security
interest granted hereunder.
Section 11. As to Equipment and Inventory. (a) Each Pledgor will keep
the Equipment and Inventory of such Pledgor (other than Inventory sold in the
ordinary course of business) at the places therefor specified in Section 9(b)
or, upon 30 days' prior written notice to the Collateral Trustees, at such
other places designated by the Pledgor in such notice. Upon the giving of such
notice, Schedule II hereto shall be automatically amended to add any new
locations specified in the notice.
(b) Each Pledgor will cause the Equipment of such Pledgor to be
maintained and preserved in the same condition, repair and working order as
when new, ordinary wear and tear excepted, and in accordance with any
manufacturer's manual, and will forthwith, or in the case of any loss or damage
to any of such Equipment as soon as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements and other improvements in
connection therewith that are necessary or desirable to such end. Each Pledgor
will promptly furnish to the Collateral Trustees and the Representatives a
statement respecting any loss or damage exceeding [$5,000,000] to any of the
Equipment or Inventory of such Pledgor.
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(c) Each Pledgor will pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including, without limitation, claims for labor, materials and
supplies) against, the Equipment and Inventory of such Pledgor, except to the
extent payment thereof is not required by Section 7.06 of the USI Credit
Agreement. In producing its Inventory, each Pledgor will comply with all
requirements of applicable law, including, without limitation, to the extent
applicable, the Fair Labor Standards Act.
Section 12. Insurance. (a) Each Pledgor will, at its own expense,
maintain insurance with respect to the Equipment and Inventory of such Pledgor
in such amounts, against such risks, in such form and with such insurers as is
customarily maintained by companies similarly situated to such Pledgor. Each
such policy shall at all times (i) name such Pledgor and the Collateral
Trustees as insured parties thereunder (without any representation or warranty
by or obligation upon the Collateral Trustees) as their interests may appear,
(ii) contain the agreement by the insurer that any loss thereunder shall be
payable to the Collateral Trustees following notice from the Collateral
Trustees of an Actionable Default, notwithstanding any action, inaction or
breach of representation or warranty by such Pledgor, (iii) provide that there
shall be no recourse against the Collateral Trustees for payment of premiums or
other amounts with respect thereto and (iv) provide that at least 30 days'
prior written notice of cancellation or of lapse shall be given to the
Collateral Trustees by the insurer. Each Pledgor will, if so requested by the
Collateral Trustees, deliver to the Collateral Trustees original or duplicate
policies of such insurance and, as often as the Collateral Trustees may
reasonably request, a report of a reputable insurance broker with respect to
such insurance. Further, each Pledgor will, at the request of the Collateral
Trustees, duly execute and deliver instruments of assignment of such insurance
policies to comply with the requirements of Section 11 and cause the insurers
to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance maintained by any
Pledgor pursuant to this Section 12 may be paid directly to the Person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory when subsection (c) of this Section
12 is not applicable, the applicable Pledgor will make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance properly received by or released to such Pledgor shall be
used by such Pledgor, except as otherwise required hereunder or by the Credit
Agreements, to pay or as reimbursement for the costs of such repairs or
replacements.
(c) So long as no Actionable Default shall have occurred and be
continuing, all insurance payments received by the Collateral Trustees in
connection with any loss, damage or destruction of any Inventory or Equipment
will be released by the Collateral Trustees to the applicable Pledgor. Upon the
occurrence and during the continuance of any Actionable Default, all insurance
payments in respect of such Equipment or Inventory shall be paid to the
Collateral Trustees and shall, as directed by the Required Representatives, (i)
be released to the applicable Pledgor to be applied as set forth in the first
sentence of this subsection (c) or (ii) be held as additional Collateral
hereunder or applied as specified in Section 20(b).
Section 13. Post-Closing Changes; Bailees; Receivables and Related
Contracts. (a) Each Pledgor will not change its name, identity, corporate
structure, federal tax identification
23
number, organizational identification number, or location from those set forth
in Section 9(a) of this Agreement without first giving at least 30 days'
advance written notice to the Collateral Trustees and taking all action
required by the Collateral Trustees for the purpose of perfecting or protecting
the liens granted by this Agreement. Each Pledgor will not become bound by a
security agreement signed or authenticated by another Person (determined as
provided in Section 9-203(d) of the UCC) without giving the Collateral Trustees
30 days' prior written notice thereof and taking all action required by the
Collateral Trustees to insure that the perfection and first priority nature of
the Collateral Trustees' lien on the Collateral will be maintained. Each
Pledgor will also keep the originals of the Related Contracts to which such
Pledgor is a party and all originals of all chattel paper that evidence
Receivables of such Pledgor at the locations therefor specified in Section 9(a)
or, upon 30 days' prior written notice to the Collateral Trustees, at such
other locations designated in such notice. Each Pledgor will hold and preserve
its records relating to the Collateral, the Related Contracts and chattel
paper, and will permit representatives of the Collateral Trustees at any time
during normal business hours to inspect and make abstracts from such records
and other documents.
(b) If any material portion of its Collateral is at any time in the
possession or control of a warehouseman, bailee or agent, or if the Collateral
Trustees so request, such Pledgor will (i) notify such warehouseman, bailee or
agent of the security interests, (ii) instruct such warehouseman, bailee or
agent to hold all such Collateral for the Collateral Trustees' account subject
to the Collateral Trustees' instructions (which shall permit such Collateral to
be removed by such Pledgor in the ordinary course of business until the
Collateral Trustees notify such warehouseman, bailee or agent that an
Actionable Default has occurred and is continuing), (iii) using commercially
reasonable efforts, cause such warehouseman, bailee or agent to authenticate a
record acknowledging that it holds possession of such Collateral for the
Collateral Trustees' benefit and (iv) make such authenticated record available
to the Collateral Trustees.
(c) Except as otherwise provided in this subsection (c), each Pledgor
will continue to collect, at its own expense, all amounts due or to become due
such Pledgor under the Receivables and the Related Contracts. In connection
with such collections, such Pledgor may take (and, at the Collateral Trustees'
direction, will take) such action as such Pledgor or the Collateral Trustees
may reasonably deem necessary or advisable to enforce collection of the
Receivables and the Related Contracts; provided, however, that the Collateral
Trustees shall have the right at any time, upon the occurrence and during the
continuance of an Actionable Default and upon written notice to such Pledgor of
its intention to do so, to notify the Account Obligors under any Receivables or
Related Contracts of the assignment of such Receivables or Related Contracts to
the Collateral Trustees and to direct such Account Obligors to make payment of
all amounts due or to become due to such Pledgor thereunder directly to the
Collateral Trustees and, upon such notification and at the expense of such
Pledgor, to enforce collection of any such Receivables or Related Contracts,
and to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Pledgor might have done, and to otherwise
exercise all rights with respect to such Receivables and Related Contracts,
including, without limitation, those set forth in Section 9-607 of the UCC.
After receipt by any Pledgor of the notice from the Collateral Trustees
referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including instruments) received by such Pledgor in respect of the
Receivables and the Related Contracts of such Pledgor shall be received in
trust for the benefit of the Collateral Trustees hereunder, shall be segregated
from other funds of such Pledgor and shall
24
be forthwith paid over to the Collateral Trustees in the same form as so
received (with any necessary indorsement) to be deposited in the Collateral
Account and (ii) such Pledgor will not adjust, settle or compromise the amount
or payment of any Receivable or amount due on any Related Contract, release
wholly or partly any Account Obligor thereof, or allow any credit or discount
thereon. No Pledgor will permit or consent to the subordination of its right to
payment under any of the Receivables or the Related Contracts to any other
indebtedness or obligations of the Account Obligor thereof.
Section 14. As to Intellectual Property Collateral. (a) With respect
to each item of its Intellectual Property Collateral set forth on Schedule IV,
other than any Immaterial IP Collateral, each Pledgor agrees to take, at its
expense, all necessary steps, including, without limitation, in the U.S. Patent
and Trademark Office, the U.S. Copyright Office and any other governmental
authority, to (i) maintain the validity and enforceability of each such item of
Intellectual Property Collateral and maintain each such item of Intellectual
Property Collateral in full force and effect and (ii) pursue the registration
and maintenance of each patent, trademark, or copyright registration or
application, now or hereafter included in such Intellectual Property Collateral
of such Pledgor, including, without limitation, the payment of required fees
and taxes, the filing of responses to office actions issued by the U.S. Patent
and Trademark Office, the U.S. Copyright Office or other governmental
authorities, the filing of applications for renewal or extension, the filing of
affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing of
divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings. No Pledgor shall, without the
written consent of the Required Representatives, discontinue use of or
otherwise abandon any Intellectual Property Collateral, other than any
Immaterial IP Collateral, or abandon any right to file an application for
letters, patent, trademark, or copyright, unless such Pledgor shall have
previously determined that such use or the pursuit or maintenance of such
Intellectual Property Collateral is no longer desirable in the conduct of such
Pledgor's business and that the loss thereof would not be reasonably likely to
have a Material Adverse Effect (as defined in the Credit Agreements), in which
case, such Pledgor will give prompt notice of any such abandonment to the
Collateral Trustees and the Representatives.
(b) Each Pledgor agrees promptly (and, in any case, on or prior to
the date of the next quarterly compliance certificate delivered pursuant to
Section 7.02(a) of the USI Credit Agreement) to notify the Collateral Trustees
and the Representatives if such Pledgor learns (i) that any item of the
Intellectual Property Collateral may have become abandoned, placed in the
public domain, or invalid or unenforceable, or of any adverse determination or
development regarding such Pledgor's ownership of any of the Intellectual
Property Collateral or its right to register the same or to keep and maintain
and enforce the same, or (ii) of any adverse determination or the institution
of any proceeding (including, without limitation, the institution of any
proceeding in the U.S. Patent and Trademark Office or any court) regarding any
item of the Intellectual Property Collateral.
(c) Except with respect to any Immaterial IP Collateral, in the event
that any Pledgor becomes aware that any item of the Intellectual Property
Collateral is being infringed or misappropriated by a third party, such Pledgor
shall promptly (and, in any case, on or prior to the date of the next quarterly
compliance certificate delivered pursuant to Section 7.02(a) of the USI
25
Credit Agreement) notify the Collateral Trustees and the Representatives and
shall take such actions, at its expense, as such Pledgor or the Required
Representatives deems reasonable and appropriate under the circumstances to
protect such Intellectual Property Collateral, including, without limitation,
suing for infringement or misappropriation and for an injunction against such
infringement or misappropriation.
(d) Each Pledgor shall use proper statutory notice in connection with
its use of each item of its Intellectual Property Collateral, other than any
Immaterial IP Collateral. No Pledgor shall do or permit any act or knowingly
omit to do any act whereby any of its Intellectual Property Collateral, other
than any Immaterial IP Collateral, may lapse or become invalid or unenforceable
or placed in the public domain.
(e) Each Pledgor shall take all steps which it or the Collateral
Trustees or the Required Representatives deem reasonable and appropriate under
the circumstances to preserve and protect each item of its Intellectual
Property Collateral, other than any Immaterial IP Collateral, including,
without limitation, maintaining the quality of any and all products or services
used or provided in connection with any of the Trademarks, consistent with the
quality of the products and services as of the date hereof, and taking all
steps necessary to ensure that all licensed users of any of the Trademarks use
such consistent standards of quality.
(f) With respect to its Intellectual Property Collateral, each
Pledgor agrees to execute or otherwise authenticate an agreement, in
substantially the form set forth in Exhibit D hereto (an "Intellectual Property
Security Agreement"), for recording the security interest granted hereunder to
the Collateral Trustees in such Intellectual Property Collateral with the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authorities necessary to perfect the security interest hereunder
in such Intellectual Property Collateral.
(g) Each Pledgor agrees that, should it obtain an ownership interest
in any item of the type set forth in Section 1(f) which is not on the date
hereof a part of the Intellectual Property Collateral (the "After-Acquired
Intellectual Property"), (i) the provisions of Section 1 shall automatically
apply thereto, (ii) any such After-Acquired Intellectual Property and, in the
case of trademarks, the goodwill of the business connected therewith or
symbolized thereby shall automatically become part of the Intellectual Property
Collateral subject to the terms and conditions of this Agreement with respect
thereto, (iii) such Pledgor shall give prompt (and, in any case, on or prior to
the date of the next quarterly compliance certificate delivered pursuant to
Section 7.02(a) of the USI Credit Agreement) written notice thereof to the
Collateral Trustees in accordance herewith and (iv) such Pledgor shall execute
and deliver to the Collateral Trustees, or otherwise authenticate, an IP
Security Agreement Supplement in substantially the form of Exhibit E hereto
covering such After-Acquired Intellectual Property as "Additional Collateral"
thereunder and as defined therein, and shall record such IP Security Agreement
Supplement with the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authorities necessary to perfect the security
interest hereunder in such After-Acquired Intellectual Property.
Section 15. Voting Rights; Dividends; Etc. (a) So long as no
Actionable Default shall have occurred and be continuing:
26
(i) Each Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to any Security Collateral of such
Pledgor for any purpose; provided, however, that such Pledgor will not
exercise or refrain from exercising any such right if such action would
have a material adverse effect on the value of such Security Collateral.
(ii) Each Pledgor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the
Security Collateral of such Pledgor if and to the extent that the payment
thereof is not otherwise prohibited by the terms of the Secured
Agreements; provided, however, that any and all dividends, interest and
other distributions paid or payable other than in cash in respect of, and
instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security Collateral
shall be, and shall be forthwith delivered to the Collateral Trustees to
hold as, Security Collateral and shall, if received by such Pledgor, be
received in trust for the benefit of the Collateral Trustees, be
segregated from the other property or funds of such Pledgor and be
forthwith delivered to the Collateral Trustees as Security Collateral in
the same form as so received (with any necessary indorsement).
(iii) The Collateral Trustees will execute and deliver (or cause to
be executed and delivered) to each Pledgor all such proxies and other
instruments as such Pledgor may reasonably request for the purpose of
enabling such Pledgor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Actionable
Default:
(i) All rights of each Pledgor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise
be entitled to exercise pursuant to Section 15(a)(i) shall, upon notice to
such Pledgor by the Collateral Trustees, cease and (y) to receive the
dividends, interest and other distributions that it would otherwise be
authorized to receive and retain pursuant to Section 15(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in
the Collateral Trustees, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual
rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.
(ii) All dividends, interest and other distributions that are
received by any Pledgor contrary to the provisions of paragraph (i) of
this Section 15(b) shall be received in trust for the benefit of the
Collateral Trustees, shall be segregated from other funds of such Pledgor
and shall be forthwith paid over to the Collateral Trustees as Security
Collateral in the same form as so received (with any necessary
indorsement).
(iii) The Collateral Trustees shall be authorized to send to each
Securities Intermediary as defined in and under any Control Agreement a
Notice of Exclusive Control as defined in and under such Control
Agreement.
27
Section 16. Transfers and Other Liens; Additional Shares. (a) Each
Pledgor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Secured Agreements, or (ii) create
or suffer to exist any Lien upon or with respect to any of the Collateral of
such Pledgor, except for the pledge, assignment and security interest created
under this Agreement and Liens permitted under the Secured Agreements.
(b) Each Pledgor agrees that it will (i) cause each issuer of the
Pledged Shares pledged by such Pledgor not to issue any stock or other
securities in addition to or in substitution for the Pledged Shares issued by
such issuer, except to such Pledgor, and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
shares of stock or other securities of each issuer of the Pledged Shares.
Section 17. Collateral Trustees Appointed Attorney-in-Fact. Each
Pledgor hereby irrevocably appoints the Collateral Trustees such Pledgor's
attorneys-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor or otherwise, from time to time, upon the
occurrence and during the continuance of an Actionable Default, in the
Collateral Trustees' discretion, to take any action and to execute any
instrument that the Collateral Trustees may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Collateral Trustees pursuant to Section 12;
(b) to ask for, 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;
(c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) or (b) above;
and
(d) to file any claims or take any action or institute any
proceedings that the Collateral Trustees may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
compliance with the terms and conditions of any Related Contract or the
rights of the Collateral Trustees with respect to any of the Collateral.
Section 18. Collateral Trustees May Perform. If any Pledgor fails to
perform any agreement contained herein, the Collateral Trustees may, but
without any obligation to do so and without notice, itself perform, or cause
performance of, such agreement, and the expenses of the Collateral Trustees
incurred in connection therewith shall be payable by the Borrowers under
Section 21(b).
Section 19. Collateral Trustees' Duties. The powers conferred on the
Collateral Trustees hereunder are solely to protect the Secured Holders'
interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
28
Collateral Trustees shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not any Secured
Holder has or is deemed to have knowledge of such matters, or as to the taking
of any necessary steps to preserve rights against any parties or any other
rights pertaining to any Collateral. The Collateral Trustees shall be deemed to
have exercised reasonable care in the custody and preservation of any
Collateral in their possession if such Collateral is accorded treatment
substantially equal to that which they accord their own property.
Section 20. Remedies. If any Actionable Default shall have occurred
and be continuing:
(a) The Collateral Trustees may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to them, all the rights and remedies of a secured
party upon default under the UCC (whether or not the UCC applies to the
affected Collateral) and also may: (i) require each Pledgor to, and each
Pledgor hereby agrees that it will at its expense and upon request of the
Collateral Trustees forthwith, assemble all or part of the Collateral as
directed by the Collateral Trustees and make it available to the
Collateral Trustees at a place and time to be designated by the Collateral
Trustees that is reasonably convenient to both parties; (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
Trustees' offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Trustees may deem
commercially reasonable; (iii) occupy any premises owned or leased by any
of the Pledgors where the Collateral or any part thereof is assembled or
located for a reasonable period in order to effectuate its rights and
remedies hereunder or under law, without obligation to such Pledgor in
respect of such occupation; and (iv) exercise any and all rights and
remedies of any of the Pledgors under or in connection with the Collateral
or otherwise in respect of the Collateral, including, without limitation,
(A) any and all rights of such Pledgor to demand or otherwise require
payment of any amount under, or performance of any provision of, the
Receivables, the Related Contracts and the other Collateral, (B) withdraw,
or cause or direct the withdrawal, of all funds with respect to the
Account Collateral and (C) exercise all other rights and remedies with
respect to the Receivables, Related Contracts and the other Collateral,
including, without limitation, those set forth in Section 9-607 of the
UCC. Each Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to such Pledgor 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 Trustees
shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Collateral Trustees 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. The Collateral Trustees shall
exercise such rights and remedies in accordance with and subject to the
terms of the Collateral Trust Agreement.
(b) Any cash held by or on behalf of the Collateral Trustees and all
cash proceeds received by or on behalf of the Collateral Trustees in
respect of any sale of,
29
collection from, or other realization upon all or any part of the
Collateral may be deposited to the Collateral Account and disbursed
pursuant to the Collateral Trust Agreement.
(c) All payments received by any Pledgor under or in connection with
any Receivables or Related Contracts or otherwise in respect of the
Collateral shall be received in trust for the benefit of the Collateral
Trustees, shall be segregated from other funds of such Pledgor and shall
be forthwith paid over to the Collateral Trustees in the same form as so
received (with any necessary indorsement).
(d) The Collateral Trustees may, without notice to any Pledgor,
except as required by law and at any time or from time to time, charge,
set off and otherwise apply all or any part of the Secured Obligations
against any funds held in the Collateral Account or in any other
Controlled Deposit Account or Other Deposit Account related thereto.
(e) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Pledgor, the goodwill of the
business connected with, and symbolized by, any Trademarks subject to such
sale or other disposition shall be included therein, and such Pledgor
shall supply to the Collateral Trustees or its designee such Pledgor's
know-how and expertise, and documents and things relating to any
Intellectual Property Collateral subject to such sale or other
disposition, and such Pledgor's customer lists and other records and
documents relating to such Intellectual Property Collateral and to the
manufacture, distribution, advertising and sale of products and services
of such Pledgor.
Section 21. Indemnity and Expenses. (a) Each Borrower agrees to
indemnify, defend and save and hold harmless each Collateral Trustee, each
Representative and each Secured Holder and each of their Affiliates and their
respective officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against, and shall pay on demand, any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct.
(b) Each Borrower will upon demand pay to each Collateral Trustee the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that
such Collateral Trustee may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the Collateral of
such Pledgor, (iii) the exercise or enforcement of any of the rights of such
Collateral Trustee, any Representative or any Secured Holder hereunder or (iv)
the failure by such Pledgor to perform or observe any of the provisions hereof.
30
Section 22. Amendments; Waivers; Additional Pledgors; Etc. (a) No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Pledgor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Trustees, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Collateral
Trustees or any other Secured Holder 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 such right preclude any other or further exercise
thereof or the exercise of any other right.
(b) Upon the execution and delivery (or authentication and delivery)
by any Person of a security agreement supplement in substantially the form of
Exhibit H to the Master Agreement (each, a "Security Agreement Supplement"),
(i) such Person shall be referred to as an "Additional Pledgor" and shall be
and become a Pledgor hereunder and each reference in this Agreement and the
other Loan Documents to "Pledgor" shall also mean and be a reference to such
Additional Pledgor, and (ii) the supplemental schedules I, II, III, IV, V, VI,
and VII attached to each Security Agreement Supplement shall be incorporated
into and become a part of and supplement Schedules I, II, III, IV, V, VI, and
VII, respectively, hereto, and the Collateral Trustees may attach such
supplemental schedules to such Schedules; and each reference to such Schedules
shall mean and be a reference to such Schedules as supplemented pursuant to
each Security Agreement Supplement.
Section 23. Notices; Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopier
or telex communication) and mailed, telegraphed, telecopied, telexed or
delivered as provided in the Collateral Trust Agreement.
Section 24. Continuing Security Interest; Assignments Under the
Credit Agreements. This Agreement shall create a continuing security interest
in the Collateral and shall (a) remain in full force and effect until released
as provided in Section 8.02 of the Collateral Trust Agreement, (b) be binding
upon each Pledgor, its successors and assigns and (c) inure, together with the
rights and remedies of the Collateral Trustees hereunder, to the Equal and
Ratable Benefit of the Secured Holders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Credit Party may assign or otherwise transfer all or any
portion of its rights and obligations under each of the Credit Agreements
(including, without limitation, all or any portion of its Commitments, the
Loans owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Credit Party herein or otherwise,
in each case as provided in the applicable provisions of each of the Credit
Agreements.
Section 25. Release; Termination. All or any portion of the
Collateral shall be released by the Collateral Trustees solely on the terms and
subject to the conditions set forth in Article VIII of the Collateral Trust
Agreement.
Section 26. Security Interest Absolute. The obligations of each
Pledgor (other than any Borrower) under this Agreement are independent of the
Secured Obligations of any Borrower under or in respect of the Secured
Agreements, and a separate action or actions may be
31
brought and prosecuted against each such Pledgor to enforce this Agreement,
irrespective of whether any action is brought against any Borrower or whether
such Pledgor or any other Pledgor is joined in any such action or actions. All
rights of the Collateral Trustees, the Representatives and the other Secured
Holders and the pledge, assignment and security interest hereunder, and all
obligations of each such Pledgor hereunder, shall be irrevocable, absolute and
unconditional irrespective of, and each such Pledgor hereby irrevocably waives
(to the maximum extent permitted by applicable law) any defenses it may now
have or may hereafter acquire in any way relating to, any or all of the
following:
(a) any lack of validity or enforceability of any Secured Agreement
or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations of any Borrower under
or in respect of the Secured Agreements or any other amendment or waiver
of or any consent to any departure from any Secured Agreement, including,
without limitation, any increase in the Secured Obligations resulting from
the extension of additional credit to any Borrower or any of its
Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral
or any other collateral, or any taking, release or amendment or waiver of
or consent to departure from any guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations,
or any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations under or in respect
of the Secured Agreements or any other assets of any Borrower or any of
its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Borrower or any of its Subsidiaries;
(f) any failure of any Secured Holder or any Representative to
disclose to any Pledgor any information relating to the business,
condition (financial or otherwise), operations, performance, assets,
nature of assets, liabilities or prospects of any other Pledgor now or
hereafter known to such Secured Holder or such Representative (each
Pledgor waiving any duty on the part of the Secured Holders or any
Representative to disclose such information);
(g) the failure of any other Person to execute this Agreement or any
other Collateral Document, guaranty or agreement or the release or
reduction of liability of any Pledgor with respect to the Secured
Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Holder that might otherwise constitute a
defense available to, or a discharge of, such Pledgor or any other Pledgor
or a third party pledgor of a security interest.
32
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded
or must otherwise be returned by any Secured Holder or by any other Person upon
the insolvency, bankruptcy or reorganization of any Borrower or otherwise, all
as though such payment had not been made.
Section 27. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
Section 28. Mortgages. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of
any mortgage and the terms of such mortgage are inconsistent with the terms of
this Agreement, then with respect to such Collateral, the terms of such
mortgage shall be controlling in the case of fixtures and real estate leases,
letting and licenses of, and contracts and agreements relating to the lease of,
real property, and the terms of this Agreement shall be controlling in the case
of all other Collateral.
Section 29. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
S-1
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
▇▇▇▇ TRUE TEMPER PROPERTIES, INC.
▇▇▇▇ TRUE TEMPER, INC.
ARCHITECTURAL AREA LIGHTING, INC.
ARROW CONSOLIDATED CORPORATION
ASTERIA COMPANY
BATHCRAFT INC.
▇▇▇▇▇▇ BROTHERS, INC.
▇▇▇▇▇▇▇▇ MANUFACTURING CORP.
CARLSBAD CORP.
COLUMBIA LIGHTING, INC.
COLUMBIA LIGHTING-LCA, INC.
COLUMBIA LIGHTING MFG., CO.
COLUMBIA LIGHTING PROPERTIES, INC.
COLUMBIA MATERIALS, LLC
COMPAX CORP.
DUAL-LITE INC.
DUAL-LITE MANUFACTURING, INC.
ELJER INDUSTRIES, INC.
ELJER PLUMBINGWARE, INC.
ENVIRONMENTAL ENERGY COMPANY
EZ HOLDINGS, INC.
▇▇▇▇ CONCRETE PRODUCTS, INC.
GATSBY SPAS, INC.
HL CAPITAL CORP.
IXL MANUFACTURING COMPANY, INC.
JACUZZI INC.
JACUZZI WHIRLPOOL BATH, INC.
JUSI HOLDINGS, INC.
▇▇▇ LIGHTING INC.
KLI, INC.
LCA GROUP INC.
LCA (NS) INC.
LIGHTING CORPORATION OF AMERICA,
INC.
LOKELANI DEVELOPMENT CORPORATION
LUXOR INDUSTRIES, INC.
MAILI KAI LAND DEVELOPMENT
S-2
CORPORATION
MOBILITE INC.
NEPCO OF AUSTRALIA, INC.
NEPCO OF CANADA, INC.
NEPCO OF FORD HEIGHTS, INC.
NEPCO OF ▇▇▇▇▇▇, INC.
NEPCO OF PAKISTAN, INC.
▇▇▇▇▇▇ UNIVERSAL HOLDINGS INC.
OUTDOOR PRODUCTS LLC
PH PROPERTY DEVELOPMENT COMPANY
PRESCOLITE LITE CONTROLS, INC.
PRESCOLITE, INC.
PROGRESS LIGHTING INC.
PROGRESSIVE LIGHTING, INC. (NC)
PROGRESSIVE LIGHTING, INC. (SC)
PROGRESS LIGHTING PROPERTIES, INC.
REDMONT, INC.
REXAIR HOLDINGS, INC.
REXAIR, INC.
SANITARY-DASH MANUFACTURING CO.,
INC.
SELKIRK CANADA U.S.A., INC.
SELKIRK EUROPE U.S.A., INC.
SELKIRK, INC.
▇▇▇▇▇▇▇▇▇ LIGHTING, INC.
STRATEGIC CAPITAL MANAGEMENT, INC.
STREAMWOOD CORPORATION
SUNDANCE SPAS, INC.
TA LIQUIDATION CORP.
TRIMFOOT CO.
TT LIQUIDATION CORP.
UGE LIQUIDATION INC.
UNITED STATES BRASS CORP.
U.S. INDUSTRIES, INC.
USI AMERICAN HOLDINGS, INC.
USI ATLANTIC CORP.
USI CAPITAL, INC.
USI FUNDING, INC.
USI GLOBAL CORP.
USI PROPERTIES, INC.
USI REALTY CORP.
ZURCO, INC.
ZURNACQ OF CALIFORNIA, INC.
S-3
▇▇▇▇ (CAYMAN ISLANDS), INC.
▇▇▇▇ CONSTRUCTORS, INC.
▇▇▇▇ DEVCO, INC.
▇▇▇▇ ▇▇▇ SERVICES, INC.
▇▇▇▇ GOLF HOLDING CORPORATION
▇▇▇▇ INDUSTRIES, INC.
By: /s/
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
N
Schedule I to the Pledge and
Security Agreement
PLEDGED SHARES, PLEDGED DEBT, AND SECURITIES ACCOUNTS
Part A
Pledged Shares
===============================================================================
Percentage
Stock of
Class of Par Certificate Number Outstanding
Pledgor Stock Issuer Stock Value No(s). of Shares Shares
===============================================================================
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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-------------------------------------------------------------------------------
===============================================================================
Part B
Pledged Debt
================================================================================
Outstanding
Debt Description of Debt Certificate Final Principal
Pledgor Issuer Debt No(s). Maturity Amount
================================================================================
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================================================================================
Part C
Securities Accounts
================================================================================
Name and Address of
Pledgor Securities Account Institution Securities Account Name and Number
================================================================================
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================================================================================
Schedule II to the Pledge and
Security Agreement
LOCATIONS OF EQUIPMENT AND INVENTORY
[Name of Pledgor]
A. Owned Locations:
B. Leased Locations:
C. Other Locations (Describe):
[Name of Pledgor]
A. Owned Locations:
B. Leased Locations:
C. Other Locations (Describe):
[Etc.]
Schedule III to the Pledge and
Security Agreement
LOCATION, CHIEF EXECUTIVE OFFICE, FEDERAL TAX IDENTIFICATION
NUMBER AND ORGANIZATIONAL IDENTIFICATION NUMBER
Grantor Location Jurisdiction Chief Federal Tax Organizational
------- -------- of Executive Identification I.D. No.
Organization Office Number --------
------------ ------- -------
Schedule IIIA to the
Security Agreement
CHANGES IN LOCATION OF EQUIPMENT AND INVENTORY, ETC.
Changes in the Location of Equipment and Inventory
Changes in the Name, Identity or Corporate Structure
Changes in Location
Changes in the Chief Executive Office
Changes in the Federal Tax I.D. No.
Changes in the Organizational I.D. No.
Schedule IV to the Pledge and
Security Agreement
PATENTS, TRADEMARKS AND
TRADE NAMES, COPYRIGHTS AND LICENSES
Part A
Pledgor Patents Country Patent No. Applic. No. Filing Date Issue Date
------- ------- ------- ---------- ----------- ----------- ----------
Part B
Trademarks and Reg. Applic. Filing Issue
Pledgor Trade Names Country ▇▇▇▇ No. No. Date Date
------- ----------- ------- ---- --- --- ---- ----
Part C
Filing Issue
Pledgor Copyrights Country Title Reg. No. Applic. No. Date Date
------- ---------- ------- ----- -------- ----------- ---- ----
Part D
Pledgor Licenses Title Date Parties
------- -------- ----- ---- -------
Schedule V to the Pledge and
Security Agreement
ACCOUNT COLLATERAL
================================================================================
Name and Address of Controlled Mailing Address of
Grantor Account Banks Pledged Account Account Number
================================================================================
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================================================================================
Schedule V to the Pledge and
Security Agreement
ACCOUNT COLLATERAL NOT SUBJECT TO DEPOSIT ACCOUNT CONTROL AGREEMENT
======================================================
Grantor Name and Address Account Number
of Bank
======================================================
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======================================================
Schedule VI to the Pledge and
Security Agreement
COMMERCIAL TORT CLAIMS
[Describe nature of claims - see Comment 5 to UCC 9-108]
EXECUTION COPY
AMENDED AND RESTATED
PLEDGE AND SECURITY AGREEMENT
Dated as of August 15, 2001
Amending and Restating
the Pledge and Security Agreement
by
the Pledgors referred to herein
as Pledgors
to
WILMINGTON TRUST COMPANY
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
as Collateral Trustees
T a b l e o f C o n t e n t s
Section Page
Section 1. Grant of Security..................................................5
Section 2. Security for Secured Obligations..................................11
Section 3. Pledgors Remain Liable............................................12
Section 4. Delivery and Control of Security Collateral.......................12
Section 5. Maintaining the Pledged Accounts..................................14
Section 6. Investing of Amounts in the Cash Concentration Accounts,
the Collateral Account and the Cash Collateral Accounts...........15
Section 7. Release of Amounts.................................................16
Section 8. Maintaining Electronic Chattel Paper and Letter-of-Credit Rights
and Giving Notice of Commercial Tort Claims........................16
Section 9. Representations and Warranties.....................................16
Section 10. Further Assurances................................................21
Section 11. As to Equipment and Inventory.....................................22
Section 12. Insurance.........................................................23
Section 13. Post-Closing Changes; Bailees; Receivables and Related Contracts..23
Section 14. As to Intellectual Property Collateral............................25
Section 15. Voting Rights; Dividends; Etc.....................................26
Section 16. Transfers and Other Liens; Additional Shares.....................28
Section 17. Collateral Trustees Appointed Attorney-in-Fact...................28
Section 18. Collateral Trustees May Perform..................................28
Section 19. Collateral Trustees' Duties......................................28
Section 20. Remedies.........................................................29
Section 21. Indemnity and Expenses...........................................30
Section 22. Amendments; Waivers; Additional Pledgors; Etc....................31
Section 23. Notices; Etc.....................................................31
Section 24. Continuing Security Interest; Assignments Under the Credit
Agreements.......................................................31
Section 25. Release; Termination.............................................31
Section 26. Security Interest Absolute.......................................31
Section 27. Execution in Counterparts........................................33
Section 28. Mortgages........................................................33
Section 29. Governing Law....................................................33
Schedules
Schedule I - Pledged Shares, Pledged Debt, and Securities Accounts
Schedule II - Locations of Equipment and Inventory
Schedule III - Location, Chief Executive Office, Jurisdiction of
Organization, Federal Tax Identification Number and
Organizational Identification Number
Schedule IIIA - Changes in Locations of Equipment and Inventory, Etc.
Schedule IV - Patents, Trademarks and Trade Names, Copyrights and Licenses
Schedule V - Account Collateral
Schedule VI - Account Collateral not Subject to Deposit Account Control
Agreement
Schedule VII - Commercial Tort Claims Collateral
Exhibits
Exhibit A - Form of Deposit Account Control Agreement
Exhibit B - Form of Landlord's Consent and Agreement
Exhibit C - Form of Securities Account Control Agreement (Securities
Account)
Exhibit D - Form of Intellectual Property Security Agreement
Exhibit E - Form of Intellectual Property Security Agreement Supplement
