Exhibit 10.14
GUARANTY AND SECURITY AGREEMENT (SECOND LIEN)
CSAV, INC.
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GUARANTY, PLEDGE AND SECURITY AGREEMENT
Dated as of July 21, 2006
among
CSAV, INC.
and
Each Other Grantor
From Time to Time Party Hereto
and
ALLIED CAPITAL CORPORATION,
as Second Lien Collateral Agent
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINED TERMS.................................................. 1
Section 1.1 Definitions............................................. 1
Section 1.2 Certain Other Terms..................................... 4
ARTICLE II GUARANTY...................................................... 5
Section 2.1 Guaranty................................................ 5
Section 2.2 Limitation of Guaranty.................................. 5
Section 2.3 Contribution............................................ 5
Section 2.4 Authorization; Other Agreements......................... 6
Section 2 5 Guaranty Absolute and Unconditional 6
Section 2.6 Waivers................................................. 7
Section 2.7 Reliance................................................ 7
ARTICLE III GRANT OF SECURITY INTEREST................................... 8
Section 3.1 Collateral.............................................. 8
Section 3.2 Grant of Security Interest in Collateral................ 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................ 8
Section 4.1 Title; No Other Liens................................... 9
Section 4.2 Perfection and Priority................................. 9
Section 4.3 Jurisdiction of Organization; Chief Executive Office.... 9
Section 4.4 Locations of Inventory, Equipment and Books and
Records................................................. 9
Section 4.5 Pledged Collateral...................................... 10
Section 4.6 Instruments and Tangible Chattel Paper Formerly
Accounts................................................ 10
Section 4.7 Intellectual Property................................... 10
Section 4.8 Commercial Tort Claims.................................. 11
Section 4.9 Specific Collateral..................................... 11
Section 4.10 Enforcement............................................. 11
Section 4.11 Representations and Warranties of the Credit Agreement.. 11
ARTICLE V COVENANTS...................................................... 11
Section 5.1 Maintenance of Perfected Security Interest; Further
Documentation and Consents.............................. 11
Section 5.2 Changes in Locations, Name, Etc......................... 12
Section 5.3 Pledged Collateral...................................... 13
Section 5.4 Accounts................................................ 13
Section 5.5 Commodity Contracts..................................... 14
Section 5.6 Delivery of Instruments and Tangible Chattel Paper and
Control of Investment Property, Letter-of-Credit Rights
and Electronic Chattel Paper............................ 14
Section 5.7 Intellectual Property................................... 14
Section 5.8 Notices................................................. 15
Section 5.9 Notice of Commercial Tort Claims........................ 15
Section 5.10 Controlled Securities Account........................... 16
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE VI REMEDIAL PROVISIONS........................................... 16
Section 6.1 Code and Other Remedies................................. 16
Section 6.2 Accounts and Payments in Respect of General
Intangibles............................................. 19
Section 6.3 Pledged Collateral...................................... 20
Section 6.4 Proceeds to be Turned over to and Held by Agent......... 21
Section 6.5 Sale of Pledged Collateral.............................. 21
Section 6.6 Deficiency.............................................. 22
ARTICLE VII THE AGENT.................................................... 22
Section 7.1 Agent's Appointment as Attorney-in-Fact................. 22
Section 7.2 Authorization to File Financing Statements.............. 23
Section 7.3 Authority of Agent...................................... 24
Section 7.4 Duty; Obligations and Liabilities....................... 24
ARTICLE VIII MISCELLANEOUS............................................... 25
Section 8.1 Reinstatement........................................... 25
Section 8.2 Release of Collateral................................... 25
Section 8.3 Independent Obligations................................. 25
Section 8.4 No Waiver by Course of Conduct.......................... 26
Section 8.5 Amendments in Writing................................... 26
Section 8.6 Additional Grantors; Additional Pledged Collateral...... 26
Section 8.7 Notices................................................. 26
Section 8.8 Successors and Assigns.................................. 26
Section 8.9 Counterparts............................................ 26
Section 8.10 Severability............................................ 27
Section 8.11 Governing Law........................................... 27
Section 8.12 Waiver of Jury Trial.................................... 27
Section 8.13 Intercreditor Agreement................................. 27
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ANNEXES AND SCHEDULES
Annex 1 Form of Pledge Amendment
Annex 2 Form of Joinder Agreement
Annex 3 Form of Intellectual Property Security Agreement
Schedule 1 Commercial Tort Claims
Schedule 2 Filings
Schedule 3 Jurisdiction of Organization; Chief Executive Office
Schedule 4 Location of Inventory and Equipment
Schedule 5 Pledged Collateral
Schedule 6 Intellectual Property
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GUARANTY, PLEDGE AND SECURITY AGREEMENT, dated as of July 21, 2006, by
CSAV, Inc. (the "Borrower"). CSAV Holding Corp. ("Holdings") and each of the
other entities listed on the signature pages hereof or that becomes a party
hereto pursuant to Section 8.6 (together with the Borrower, the "Grantors"), in
favor Allied Capital Corporation, a Maryland corporation ("Allied"), as Second
Lien Collateral Agent, together with its successors and permitted assigns, for
the Lenders (each as defined in the Credit Agreement referred to below) and each
other Secured Party (as defined herein).
WITNESSETH:
WHEREAS, pursuant to the Second Lien Credit Agreement dated as of July 21,
2006 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement") among the Borrower, Holdings, the
other Persons party hereto that are designated as a "Credit Party", General
Electric Capital Corporation, as Agent, the Second Lien Collateral Agent and the
several financial institutions from time to time party to this Agreement
(collectively, the "Lenders" and individually each a "Lender"), the Lenders have
severally agreed to make the Second Lien Term Loan to the Borrower upon the
terms and subject to the conditions set forth therein;
WHEREAS, each Grantor (other than the Borrower) has agreed to guaranty the
Obligations (as defined in the Credit Agreement) of the Borrower;
WHEREAS, each Grantor will derive substantial direct and indirect benefits
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders to
make their respective extensions of credit to the Borrower under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Second Lien Collateral Agent;
NOW, THEREFORE, in consideration of the premises and to induce the Lenders,
the Second Lien Collateral Agent and the Agent to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby agrees with the Second
Lien Collateral Agent as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. (a) Capital terms used herein without definition
are used as defined in the Credit Agreement.
(b) The following terms have the meanings given to them in the UCC and
terms used herein without definition that are defined in the UCC have the
meanings given to them in the UCC (such meanings to be equally applicable to
both the singular and plural forms of the terms defined): "account", "account
debtor", "as-extracted collateral", "certificated security", "chattel paper",
"commercial tort claim", "commodity contract", "deposit account", "electronic
chattel paper", "equipment", "farm products", "fixture", "general intangible",
"goods", "healthcare-insurance receivable", "instruments", "inventory",
"investment property", "letter-of-credit right", "proceeds", "record",
"securities account", "security", "supporting obligation" and "tangible chattel
paper".
GUARANTY AND SECURITY AGREEMENT
[CSAV]
(c) The following terms shall have the following meanings:
"Agreement" means this Guaranty, Pledge and Security Agreement.
"Applicable IP Office" means the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency
within or outside the United States.
"Cash Collateral Account" means a deposit account or securities
account subject, in each instance, to a Control Agreement.
"Collateral" has the meaning specified in Section 3.1.
"Controlled Securities Account" means each securities account
(including all financial assets held therein and all certificates and
instruments, if any, representing or evidencing such financial assets) that is
the subject of an effective Control Agreement.
"Excluded Equity" means any voting stock in excess of 65% of the
outstanding voting stock of any Foreign Subsidiary, which, pursuant to the terms
of the Credit Agreement, is not required to guaranty the Obligations and the
equity interests of Chief Hong Kong to the extent not required to be pledged to
Second Lien Collateral Agent pursuant to the terms of Section 4.13 of the Credit
Agreement. For the purposes of this definition, "voting stock" means, with
respect to any issuer, the issued and outstanding shares of each class of Stock
of such issuer entitled to vote (within the meaning of Treasury Regulations
Section 1.956-2(c)(2)).
"Excluded Property" means, collectively, (i) Excluded Equity, (ii) any
permit or license or any Contractual Obligation entered into by any Grantor (A)
that prohibits or requires the consent of any Person other than the Borrower and
its Affiliates which has not been obtained as a condition to the creation by
such Grantor of a Lien on any right, title or interest in such permit, license
or Contractual Obligation or any Stock or Stock Equivalent related thereto or
(B) to the extent that any Requirement of Law applicable thereto prohibits the
creation of a Lien thereon, but only, with respect to the prohibition in (A) and
(B), to the extent, and for as long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the UCC or any other
Requirement of Law, (iii) Property owned by any Grantor that is subject to a
purchase money Lien or a Capital Lease permitted under the Credit Agreement if
the Contractual Obligation pursuant to which such Lien is granted (or in the
document providing for such Capital Lease) prohibits or requires the consent of
any Person other than the Borrower and its Affiliates which has not been
obtained as a condition to the creation of any other Lien on such equipment and
(iv) any "intent to use" Trademark applications for which a statement of use has
not been filed (but only until such statement is filed); provided, however,
"Excluded Property" shall not include any proceeds, products, substitutions or
replacements of Excluded Property (unless such proceeds, products, substitutions
or replacements would otherwise constitute Excluded Property).
"Guaranteed Obligations" has the meaning set forth in Section 2.1.
"Guarantor" means each Grantor other than the Borrower.
"Guaranty" means the guaranty of the Guaranteed Obligations made by
the Guarantors as set forth in this Agreement.
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"Internet Domain Name" means all right, title and interest (and all
related IP Ancillary Rights) arising under any Requirement of Law in or relating
to Internet domain names.
"Material Intellectual Property" means Intellectual Properly that is
owned by or licensed to a Grantor and material to the conduct of any Grantor's
business.
"Pledged Certificated Stock" means all certificated securities and any
other Stock or Stock Equivalent of any Person evidenced by a certificate,
instrument or other similar document (as defined in the UCC), in each case owned
by any Grantor, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, including all Stock and Stock
Equivalents listed on Schedule 5. Pledged Certificated Stock excludes any
Excluded Properly and any Cash Equivalents that are not held in Controlled
Securities Accounts to the extent permitted by Section 5.10 hereof.
"Pledged Collateral" means, collectively, the Pledged Stock and the
Pledged Debt Instruments.
"Pledged Debt Instruments" means all right, title and interest of any
Grantor in instruments evidencing any Indebtedness owed to such Grantor or other
obligations, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, including all Indebtedness
described on Schedule 5, issued by the obligors named therein. Pledged Debt
Instruments excludes any Cash Equivalents that are not held in Controlled
Securities Accounts to the extent permitted by Section 5.10 hereof.
"Pledged Investment Property" means any investment property of any
Grantor, and any distribution of property made on, in respect of or in exchange
for the foregoing from time to time, other than any Pledged Stock or Pledged
Debt Instruments. Pledged Investment Property excludes any Cash Equivalents that
are not held in Controlled Securities Accounts to the extent permitted by
Section 5.10 hereof.
"Pledged Stock" means all Pledged Certificated Stock and all Pledged
Uncertificated Stock.
"Pledged Uncertificated Stock" means any Stock or Stock Equivalent of
any Person that is not Pledged Certificated Stock, including all right, title
and interest of any Grantor as a limited or general partner in any partnership
not constituting Pledged Certificated Stock or as a member of any limited
liability company, all right, title and interest of any Grantor in, to and under
any Organization Document of any partnership or limited liability company to
which it is a party, and any distribution of property made on, in respect of or
in exchange for the foregoing from time to time, including in each case those
interests set forth on Schedule 5, to the extent such interests are not
certificated. Pledged Certificated Stock excludes any Excluded Property and any
Cash Equivalents that are not held in Controlled Securities Accounts to the
extent permitted by Section 5.10 hereof.
"Secured Party" means the Second Lien Collateral Agent, each Lender,
each other Indemnitee and each other holder of any Obligation of a Credit Party.
"Software" means (a) all computer programs, including source code and
object code versions, (b) all data, databases and compilations of data, whether
machine readable or
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otherwise, and (c) all documentation, training materials and configurations
related to any of the foregoing.
"Subsidiary Guarantor" means any Guarantor that is a Subsidiary of the
Borrower.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the State of New York; provided, however, that, in the event that, by reason
of mandatory provisions of any applicable Requirement of Law, any of the
attachment, perfection or priority of the Second Lien Collateral Agent's or any
other Secured Party's security interest in any Collateral is governed by the
Uniform Commercial Code of a jurisdiction other than the State of New York,
"UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of the definitions related to or
otherwise used in such provisions.
"Vehicles" means all vehicles covered by a certificate of title law of
any state.
Section 1.2 Certain Other Terms.
(a) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The terms
"herein", "hereof and similar terms refer to this Agreement as a whole and not
to any particular Article, Section or clause in this Agreement. References
herein to an Annex, Schedule, Article, Section or clause refer to the
appropriate Annex or Schedule to, or Article, Section or clause in this
Agreement. Where the context requires, provisions relating to any Collateral
when used in relation to a Grantor shall refer to such Grantor's Collateral or
any relevant part thereof.
(b) Other Interpretive Provisions.
(i) Defined Terms. Unless otherwise specified herein or therein,
all terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant
hereto.
(ii) The Agreement. The words "hereof", "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(iii) Certain Common Terms. The term "including" is not limiting
and means "including without limitation."
(iv) Performance; Time. Whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be due or
required to be satisfied on a day other than a Business Day, such
performance shall be made or satisfied on the next succeeding Business Day.
In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding", and the word "through" means "to
and including." If any provision of this Agreement refers to any action
taken or to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be interpreted to encompass any and all means,
direct or indirect, of taking, or not taking, such action.
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(v) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments, including this
Agreement and the other Loan Documents, shall be deemed to include all
subsequent amendments, thereto, restatements and substitutions thereof and
other modifications and supplements thereto which are in effect from time
to time, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document.
(vi) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions related
thereto or consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
ARTICLE II
GUARANTY
Section 2.1 Guaranty. To induce the Lenders to make the Second Lien Term
Loan, each Guarantor hereby, jointly and severally, absolutely, unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety, the
full and punctual payment when due, whether at stated maturity or earlier, by
reason of acceleration, mandatory prepayment or otherwise in accordance with any
Loan Document, of all the Obligations of the Borrower whether existing on the
date hereof or hereinafter incurred or created (the "Guaranteed Obligations").
This Guaranty by each Guarantor hereunder constitutes a guaranty of payment and
not of collection.
Section 2.2 Limitation of Guaranty. Any term or provision of this Guaranty
or any other Loan Document to the contrary notwithstanding, the maximum
aggregate amount for which any Subsidiary Guarantor shall be liable hereunder
shall not exceed the maximum amount for which such Subsidiary Guarantor can be
liable without rendering this Guaranty or any other Loan Document, as it relates
to such Subsidiary Guarantor, subject to avoidance under applicable Requirements
of Law relating to fraudulent conveyance or fraudulent transfer (including the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and
Section 548 of title 11 of the United States Code or any applicable provisions
of comparable Requirements of Law) (collectively, "Fraudulent Transfer Laws").
Any analysis of the provisions of this Guaranty for purposes of Fraudulent
Transfer Laws shall take into account the right of contribution established in
Section 2.3 and, for purposes of such analysis, give effect to any discharge of
intercompany debt as a result of any payment made under the Guaranty.
Section 2.3 Contribution. To the extent that any Subsidiary Guarantor shall
be required hereunder to pay any portion of any Guaranteed Obligation exceeding
the greater of (a) the amount of the value actually received by such Subsidiary
Guarantor from the Second Lien Term Loan and other Obligations and (b) the
amount such Subsidiary Guarantor would otherwise have paid if such Subsidiary
Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding
the amount thereof repaid by the Borrower and Holdings) in the same proportion
as such Subsidiary Guarantor's net worth on the date enforcement is sought
hereunder bears to the aggregate net worth of all the Subsidiary Guarantors on
such date, then such Guarantor shall be reimbursed by such other Subsidiary
Guarantors for the amount of such excess, pro rata, based on the respective net
worth of such other Subsidiary Guarantors on such date.
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Section 2.4 Authorization; Other Agreements. The Secured Parties are hereby
authorized, without notice to or demand upon any Guarantor and without
discharging or otherwise affecting the obligations of any Guarantor hereunder
and without incurring any liability hereunder, from time to time, to do each of
the following:
(a) (i) modify, amend, supplement or otherwise change, (ii) accelerate
or otherwise change the time of payment or (iii) waive or otherwise consent to
noncompliance with, any Guaranteed Obligation or any Loan Document;
(b) apply to the Guaranteed Obligations any sums by whomever paid or
however realized to any Guaranteed Obligation in such order as provided in the
Loan Documents;
(c) refund at any time any payment received by any Secured Party in
respect of any Guaranteed Obligation;
(d) (i) sell, exchange, enforce, waive, substitute, liquidate,
terminate, release, abandon, fail to perfect, subordinate, accept, substitute,
surrender, exchange, affect, impair or otherwise alter or release any Collateral
for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii)
receive, take and hold additional Collateral to secure any Guaranteed
Obligation, (iii) add, release or substitute any one or more other Guarantors,
makers or endorsers of any Guaranteed Obligation or any part thereof and (iv)
otherwise deal in any manner with the Borrower and any other Guarantor, maker or
endorser of any Guaranteed Obligation or any part thereof; and
(e) settle, release, compromise, collect or otherwise liquidate the
Guaranteed Obligations.
Section 2.5 Guaranty Absolute and Unconditional. Each Guarantor hereby
waives and agrees not to assert any defense, whether arising in connection with
or in respect of any of the following or otherwise, and hereby agrees that its
obligations under this Guaranty are irrevocable, absolute and unconditional and
shall not be discharged as a result of or otherwise affected by any of the
following (which may not be pleaded and evidence of which may not be introduced
in any proceeding with respect to this Guaranty, in each case except as
otherwise agreed in writing by the Agent):
(a) the invalidity or unenforceability of any obligation of the
Borrower or any other Guarantor under any Loan Document or any other agreement
or instrument relating thereto (including any amendment, consent or waiver
thereto), or any security for, or other guaranty of, any Guaranteed Obligation
or any part thereof, or the lack of perfection or continuing perfection or
failure of priority of any security for the Guaranteed Obligations or any part
thereof;
(b) the absence of (i) any attempt to collect any Guaranteed
Obligation or any part thereof from the Borrower or any other Guarantor or other
action to enforce the same or (ii) any action to enforce any Loan Document or
any Lien thereunder;
(c) the failure by any Person to take any steps to perfect and
maintain any Lien on, or to preserve any rights with respect to, any Collateral;
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(d) any workout, insolvency, bankruptcy proceeding, reorganization,
arrangement, liquidation or dissolution by or against the Borrower, any other
Guarantor or any of the Borrower's other Subsidiaries or any procedure,
agreement, order, stipulation, election, action or omission thereunder,
including any discharge or disallowance of, or bar or stay against collecting,
any Guaranteed Obligation (or any interest thereon) in or as a result of any
such proceeding;
(e) any foreclosure, whether or not through judicial sale, and any
other Sale of any Collateral or any election following the occurrence of an
Event of Default by any Secured Party to proceed separately against any
Collateral in accordance with such Secured Party's rights under any applicable
Requirement of Law; or
(f) any other defense, setoff, counterclaim or any other circumstance
that might otherwise constitute a legal or equitable discharge of the Borrower,
any other Guarantor or any of the Borrower's other Subsidiaries, in each case
other than the payment in full of the Guaranteed Obligations.
Section 2.6 Waivers. Each Guarantor hereby unconditionally and irrevocably
waives and agrees not to assert any claim, defense, setoff or counterclaim based
on diligence, promptness, presentment, requirements for any demand or notice
hereunder including any of the following: (a) any demand for payment or
performance and protest and notice of protest; (b) any notice of acceptance; (c)
any presentment, demand, protest or further notice or other requirements of any
kind with respect to any Guaranteed Obligation (including any accrued but unpaid
interest thereon) becoming immediately due and payable; and (d) any other notice
in respect of any Guaranteed Obligation or any part thereof, and any defense
arising by reason of any disability or other defense of the Borrower or any
other Guarantor. Each Guarantor further unconditionally and irrevocably agrees
not to (x) enforce or otherwise exercise any right of subrogation or any right
of reimbursement or contribution or similar right against the Borrower or any
other Guarantor by reason of any Loan Document or any payment made thereunder or
(y) assert any claim, defense, setoff or counterclaim it may have against any
other Credit Party or set off any of its obligations to such other Credit Party
against obligations of such Credit Party to such Guarantor. No obligation of any
Guarantor hereunder shall be discharged other than by complete performance.
Section 2.7 Reliance. Each Guarantor hereby assumes responsibility for
keeping itself informed of the financial condition of the Borrower, each other
Guarantor and any other guarantor, maker or endorser of any Guaranteed
Obligation or any part thereof, and of all other circumstances bearing upon the
risk of nonpayment of any Guaranteed Obligation or any part thereof that
diligent inquiry would reveal, and each Guarantor hereby agrees that no Secured
Party shall have any duty to advise any Guarantor of information known to it
regarding such condition or any such circumstances. In the event any Secured
Party, in its sole discretion, undertakes at any time or from time to time to
provide any such information to any Guarantor, such Secured Party shall be under
no obligation to (a) undertake any investigation not a part of its regular
business routine, (b) disclose any information that such Secured Party, pursuant
to accepted or reasonable commercial finance or banking practices, wishes to
maintain confidential or (c) make any future disclosures of such information or
any other information to any Guarantor.
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ARTICLE III
GRANT OF SECURITY INTEREST
Section 3.1 Collateral. For the purposes of this Agreement, all of the
following property now owned or at any time hereafter acquired by a Grantor or
in which a Grantor now has or at any time in the future may acquire any right,
title or interests is collectively referred to as the "Collateral":
(a) all accounts, chattel paper, deposit accounts, documents (as
defined in the UCC), equipment, general intangibles, instruments, inventory,
investment property, letter of credit rights and any supporting obligations
related to any of the foregoing;
(b) the commercial tort claims described on Schedule 1 and on any
supplement thereto received by the Second Lien Collateral Agent pursuant to
Section 5.9;
(c) all books and records pertaining to the other property described
in this Section 3.1;
(d) all property of such Grantor held by any Secured Party, including
all property of every description, in the custody of or in transit to such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Grantor or as to which such Grantor may have any right or
power, including but not limited to cash;
(e) all other goods (including but not limited to fixtures) and
personal property of such Grantor, whether tangible or intangible and wherever
located; and
(f) to the extent not otherwise included, all proceeds of the
foregoing;
Section 3.2 Grant of Security Interest in Collateral. Each Grantor, as
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations of
such Grantor (the "Secured Obligations"), hereby mortgages, pledges and
hypothecates to the Second Lien Collateral Agent for the benefit of the Secured
Parties, and grants to the Second Lien Collateral Agent for the benefit of the
Secured Parties a Lien on and security interest in, all of its right, title and
interest in, to and under the Collateral of such Grantor; provided, however,
notwithstanding the foregoing, no Lien or security interest is hereby granted on
any Excluded Property; provided, further, that if and when any property shall
cease to be Excluded Property, a Lien on and security in such property shall be
deemed granted therein. Each Grantor hereby represents and warrants that the
Excluded Property, when taken as a whole, is not material to the business
operations or financial condition of the Grantors, taken as a whole.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Second Lien Collateral Agent and the Agent to
enter into the Loan Documents, each Grantor hereby represents and warrants each
of the following to the Agent, the Second Lien Collateral Agent, the Lenders and
the other Secured Parties:
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Section 4.1 Title; No Other Liens. Except for the Lien granted to the
Second Lien Collateral Agent pursuant to this Agreement and other Permitted
Liens (except for those Permitted Liens not permitted to exist on any
Collateral) under any Loan Document (including Section 4.2 hereof), such Grantor
owns each item of the Collateral free and clear of any and all Liens or claims
of others. Such Grantor (a) is the record and beneficial owner of the Collateral
pledged by it hereunder constituting instruments or certificates and (b) has
rights in or the power to transfer each other item of Collateral in which a Lien
is granted by it hereunder, free and clear of any other Lien.
Section 4.2 Perfection and Priority. The security interest granted pursuant
to this Agreement constitutes a valid and continuing perfected security interest
in favor of the Second Lien Collateral Agent in all Collateral subject, for the
following Collateral, to the occurrence of the following: (i) in the case of all
Collateral in which a security interest may be perfected by filing a financing
statement under the UCC, the completion of the filings and other actions
specified on Schedule 2 (which, in the case of all filings and other documents
referred to on such schedule, have been delivered to the Second Lien Collateral
Agent in completed and duly authorized form), (ii) with respect to any deposit
account, the execution of Control Agreements, (iii) in the case of all
Copyrights, Trademarks and Patents for which UCC filings are insufficient, all
appropriate filings having been made with the United States Copyright Office or
the United States Patent and Trademark Office, as applicable, (iv) in the case
of letter-of-credit rights that are not supporting obligations of Collateral,
the execution of a Contractual Obligation granting control to the Second Lien
Collateral Agent over such letter-of-credit rights, (v) in the case of
electronic chattel paper, the completion of all steps necessary to grant control
to the Second Lien Collateral Agent over such electronic chattel paper and (vi)
in the case of Vehicles, the actions required under Section 5.1(e). Such
security interest shall be prior to all other Liens on the Collateral except for
Permitted Liens having priority over the Second Lien Collateral Agent's Lien by
operation of law, liens permitted pursuant to subsection 5.1(q) of the Credit
Agreement or liens permitted pursuant to subsections 5.1(e), (g), (h), (i) or
(k) of the Credit Agreement upon (i) in the case of all Pledged Certificated
Stock, Pledged Debt Instruments and Pledged Investment Property, the delivery
thereof to the Second Lien Collateral Agent of such Pledged Certificated Stock,
Pledged Debt Instruments and Pledged Investment Properly consisting of
instruments and certificates, in each case properly endorsed for transfer to the
Second Lien Collateral Agent or in blank, (ii) in the case of all Pledged
Investment Property not in certificated form, the execution of Control
Agreements with respect to such investment property and (iii) in the case of all
other instruments and tangible chattel paper that are not Pledged Certificated
Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery
thereof to the Second Lien Collateral Agent of such instruments and tangible
chattel paper. Except as set forth in this Section 4.2, all actions by each
Grantor necessary or desirable to protect and perfect the Lien granted hereunder
on the Collateral have been duly taken.
Section 4.3 Jurisdiction of Organization; Chief Executive Office. Such
Grantor's jurisdiction of organization, legal name and organizational
identification number, if any, and the location of such Grantor's chief
executive office or sole place of business, in each case as of the date hereof,
is specified on Schedule 3 and such Schedule 3 also lists all jurisdictions of
incorporation, legal names and locations of such Grantor's chief executive
office or sole place of business for the five years preceding the date hereof.
Section 4.4 Locations of Inventory. Equipment and Books and Records. On the
date hereof, such Grantor's inventory and equipment (other than inventory or
equipment in transit) and
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books and records concerning the Collateral are kept at the locations listed on
Schedule 4 and such Schedule 4 also lists the locations of such inventory,
equipment and books and records for the five years preceding the date hereof.
Section 4.5 Pledged Collateral The Pledged Stock pledged by such Grantor
hereunder (i) is listed on Schedule 5 and constitutes that percentage of the
issued and outstanding equity of all classes of each issuer thereof as set forth
on Schedule 5, (ii) has been duly authorized, validly issued and is fully paid
and nonassessable (other than Pledged Stock in limited liability companies and
partnerships) and (iii) constitutes the legal, valid and binding obligation of
the obligor with respect thereto, enforceable in accordance with its terms.
(b) As of the Closing Date, all Pledged Collateral (other than Pledged
Uncertificated Stock) and all Pledged Investment Property consisting of
instruments and certificates has been delivered to the Second Lien Collateral
Agent in accordance with Section 5.3(a) or the First Lien Agent in accordance
with Section 5.3(a) of the Guaranty, Pledge and Security Agreement dated the
date hereof among the Borrower, Holdings, each other "Grantor" party thereto and
First Lien Agent (the "First Lien Guaranty and Security Agreement").
(c) Subject to the terms of the Closing Date Intercreditor Agreement,
upon the occurrence and during the continuance of an Event of Default, the
Second Lien Collateral Agent shall be entitled to exercise all of the rights of
the Grantor granting the security interest in any Pledged Stock, and a
transferee or assignee of such Pledged Stock shall become a holder of such
Pledged Stock to the same extent as such Grantor and be entitled to participate
in the management of the issuer of such Pledged Stock and, upon the transfer of
the entire interest of such Grantor, such Grantor shall, by operation of law,
cease to be a holder of such Pledged Stock.
Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts. No
amount payable to such Grantor under or in connection with any account is
evidenced by any instrument or tangible chattel paper that has not been
delivered to the Second Lien Collateral Agent, properly endorsed for transfer,
to the extent delivery is required by Section 5.6(a) or the First Lien Agent in
accordance with Section 5.6(a) of the First Lien Guaranty and Security
Agreement.
Section 4.7 Intellectual Property
(a) Schedule 6 sets forth a true and complete list of the following
Intellectual Property such Grantor owns, licenses or otherwise has the right to
use: (i) Intellectual Property that is registered or subject to applications for
registration, (ii) Internet Domain Names and (iii) Material Intellectual
Property and material Software, separately identifying that owned and licensed
to such Grantor and including for each of the foregoing items (1) the owner, (2)
the title, (3) the jurisdiction in which such item has been registered or
otherwise arises or in which an application for registration has been filed, (4)
as applicable, the registration or application number and registration or
application date and (5) any IP Licenses or other rights (including franchises)
granted by the Grantor with respect thereto.
(b) On the Closing Date, all Material Intellectual Property owned by
such Grantor is valid, in full force and effect, subsisting, unexpired and
enforceable, and no Material Intellectual Property has been abandoned. No breach
or default of any material IP License shall be caused by any of the following,
and none of the following shall limit or impair the ownership, use, validity or
enforceability of, or any rights of such Grantor in, any Material Intellectual
Property: (i) the consummation of the transactions contemplated by any Loan
Document or
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(ii) any holding, decision, judgment or order rendered by any Governmental
Authority. Except as set forth on Schedule 6 hereof, there are no pending (or,
to the knowledge of such Grantor, threatened) actions, investigations, suits,
proceedings, audits, claims, demands, orders or disputes challenging the
ownership, use, validity, enforceability of, or such Grantor's rights in, any
Material Intellectual Property of such Grantor. To such Grantor's knowledge, no
Person has been or is infringing, misappropriating, diluting, violating or
otherwise impairing any Intellectual Property of such Grantor. Such Grantor, and
to such Grantor's knowledge each other party thereto, is not in material breach
or default of any material IP License.
Section 4.8 Commercial Tort Claims. The only commercial tort claims of any
Grantor existing on the date hereof (regardless of whether the amount, defendant
or other material facts can be determined and regardless of whether such
commercial tort claim has been asserted, threatened or has otherwise been made
known to the obligee thereof or whether litigation has been commenced for such
claims) are those listed on Schedule 1, which sets forth such information
separately for each Grantor.
Section 4.9 Specific Collateral. None of the Collateral is or is proceeds
or products of farm products, as-extracted collateral, health-care-insurance
receivables or timber to be cut.
Section 4.10 Enforcement. No Permit, notice to or filing with any
Governmental Authority or any other Person or any consent from any Person is
required for the exercise by the Second Lien Collateral Agent of its rights
(including voting rights) provided for in this Agreement or the enforcement of
remedies in respect of the Collateral pursuant to this Agreement, including the
transfer of any Collateral, except as may be required in connection with the
disposition of any portion of the Pledged Collateral by laws affecting the
offering and sale of securities generally or any approvals that may be required
to be obtained from any bailees or landlords to collect the Collateral.
Section 4.11 Representations and Warranties of the Credit Agreement. The
representations and warranties as to such Grantor and its Subsidiaries made in
Article III (Representations and Warranties) of the Credit Agreement are true
and correct on each date as required by Section 2.2 of the Credit Agreement.
ARTICLE V
COVENANTS
Each Grantor agrees with the Second Lien Collateral Agent to the following,
as long as any Obligation or Commitment remains outstanding (other than
contingent indemnification Obligations to the extent no claim giving rise
thereto has been asserted):
Section 5.1 Maintenance of Perfected Security Interest; Further
Documentation and Consents. (a) Generally. Such Grantor shall (i) not use or
permit any Collateral to be used unlawfully or in violation of any provision of
any Loan Document, any Related Agreement, any Requirement of Law or any policy
of insurance covering the Collateral and (ii) not enter into any Contractual
Obligation or undertaking restricting the right or ability of such Grantor or
the Second Lien Collateral Agent to sell, assign, convey or transfer any
Collateral if such restriction would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
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(b) Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in Section 4.2 and shall defend such security interest and such
priority against the claims and demands of all Persons.
(c) Such Grantor shall furnish to the Second Lien Collateral Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other documents in connection with the Collateral as the
Second Lien Collateral Agent may reasonably request, all in reasonable detail
and in form and substance satisfactory to the Second Lien Collateral Agent.
(d) At any time and from time to time, upon the written request of the
Second Lien Collateral Agent, such Grantor shall, for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, (i) promptly and duly execute and deliver, and have recorded,
such further documents, including an authorization to file (or, as applicable,
the filing) of any financing statement or amendment under the UCC (or other
filings under similar Requirements of Law) in effect in any jurisdiction with
respect to the security interest created hereby and (ii) take such further
action as the Second Lien Collateral Agent may reasonably request, including (A)
using its best efforts to secure all approvals necessary or appropriate for the
assignment to or for the benefit of the Second Lien Collateral Agent of any
Contractual Obligation, including any IP License, held by such Grantor and to
enforce the security interests granted hereunder and (B) executing and
delivering any Control Agreements with respect to deposit accounts and
securities accounts.
(e) If requested by the Second Lien Collateral Agent, the Grantor
shall arrange for the Second Lien Collateral Agent's priority security interest
(subject only to the security interest in favor of the First Lien Agent) to be
noted on the certificate of title of each Vehicle and shall file any other
necessary documentation in each jurisdiction that the Second Lien Collateral
Agent shall deem advisable to perfect its security interests in any Vehicle.
(f) To ensure that any of the Excluded Property set forth in clause
(ii) of the definition of "Excluded Property" becomes part of the Collateral,
such Grantor shall use its reasonable best efforts to obtain any required
consents from any Person other than the Borrower and its Affiliates with respect
to any permit or license or any Contractual Obligation with such Person entered
into by such Grantor that requires such consent as a condition to the creation
by such Grantor of a Lien on any right, title or interest in such permit,
license or Contractual Obligation or any Stock or Stock Equivalent related
thereto.
Section 5.2 Changes in Locations, Name, Etc. Except upon thirty (30) days'
prior written notice to the Second Lien Collateral Agent and delivery to the
Second Lien Collateral Agent of (a) all documents reasonably requested by the
Second Lien Collateral Agent to maintain the validity, perfection and priority
of the security interests provided for herein and (b) if applicable, a written
supplement to Schedule 4 showing any additional locations at which inventory or
equipment shall be kept, such Grantor shall not do any of the following:
(i) permit any inventory or equipment to be kept at a location
other than those listed on Schedule 4, except for inventory or equipment in
transit;
(ii) change its jurisdiction of organization or its location, in
each case from that referred to in Section 4.3; or
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(iii) change its legal name or organizational identification
number, if any, or corporation, limited liability company, partnership or
other organizational structure to such an extent that any financing
statement filed in connection with this Agreement would become misleading.
Section 5.3 Pledged Collateral. (a) Delivery of Pledged Collateral. Subject
to the terms of the Closing Date Intercreditor Agreement, such Grantor shall (i)
deliver to the Second Lien Collateral Agent (or the First Lien Agent, as the
case may be), in suitable form for transfer and in form and substance
satisfactory to the Second Lien Collateral Agent, (A) all Pledged Certificated
Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments
evidencing Pledged Investment Property and (ii) maintain all other Pledged
Investment Property in a Controlled Securities Account.
(b) Event of Default. Subject to the terms of the Closing Date
Intercreditor Agreement, during the continuance of an Event of Default, the
Second Lien Collateral Agent shall have the right, at any time in its discretion
and without notice to the Grantor, to (i) transfer to or to register in its name
or in the name of its nominees any Pledged Collateral or any Pledged Investment
Property and (ii) exchange any certificate or instrument representing or
evidencing any Pledged Collateral or any Pledged Investment Property for
certificates or instruments of smaller or larger denominations.
(c) Cash Distributions with respect to Pledged Collateral. Subject to
the terms of the Closing Date Intercreditor Agreement, except as provided in
Article VI and subject to the limitations set forth in the Credit Agreement,
such Grantor shall be entitled to receive all cash distributions paid in respect
of the Pledged Collateral.
(d) Voting Rights. Subject to the terms of the Closing Date
Intercreditor Agreement, except as provided in Article VI, such Grantor shall be
entitled to exercise all voting, consent and corporate, partnership, limited
liability company and similar rights with respect to the Pledged Collateral;
provided, however, that no vote shall be cast, consent given or right exercised
or other action taken by such Grantor that would impair the Collateral or be
inconsistent with or result in any violation of any provision of any Loan
Document.
Section 5.4 Accounts.
(a) Such Grantor shall not, other than in the ordinary course of
business, (i) grant any extension of the time of payment of any account, (ii)
compromise or settle any account for less than the full amount thereof, (iii)
release, wholly or partially, any Person liable for the payment of any account,
(iv) allow any credit or discount on any account or (v) amend, supplement or
modify any account in any manner that could adversely affect the value thereof.
(b) So long as an Event of Default is continuing, the Second Lien
Collateral Agent shall have the right to make test verifications of the Accounts
in any manner and through any medium that it reasonably considers advisable, and
such Grantor shall furnish all such assistance and information as the Second
Lien Collateral Agent may reasonably require in connection therewith. At any
time and from time to time, upon the Second Lien Collateral Agent's reasonable
request, such Grantor shall cause independent public accountants or others
satisfactory to the Second Lien Collateral Agent to furnish to the Second Lien
Collateral Agent reports showing reconciliations, aging and test verifications
of, and trial balances for, the accounts.
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Section 5.5 Commodity Contracts. Such Grantor shall not have any commodity
contract unless subject to a Control Agreement.
Section 5.6 Delivery of Instruments and Tangible Chattel Paper and Control
of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper.
(a) If any amount in excess of $100,000 payable under or in connection with any
Collateral owned by such Grantor shall be or become evidenced by an instrument
or tangible chattel paper other than such instrument delivered in accordance
with Section 5.3(a) and in the possession of the Second Lien Collateral Agent or
the First Lien Agent pursuant to the First Lien Guaranty and Pledge Agreement as
the case may be, such Grantor shall ▇▇▇▇ all such instruments and tangible
chattel paper with the following legend: "This writing and the obligations
evidenced or secured hereby are subject to the security interest of General
Electric Capital Corporation, as Second Lien Collateral Agent" and, at the
request of the Second Lien Collateral Agent, subject to the terms of the Closing
Date Intercreditor Agreement shall immediately deliver such instrument or
tangible chattel paper to the Second Lien Collateral Agent, duly indorsed in a
manner satisfactory to the Second Lien Collateral Agent.
(b) Such Grantor shall not grant "control" (within the meaning of such
term under Article 9-106 of the UCC) over any investment property to any Person
other than the Second Lien Collateral Agent or the First Lien Agent.
(c) If such Grantor is or becomes the beneficiary of a letter of
credit that is (i) not a supporting obligation of any Collateral and (ii) in
excess of $100,000, such Grantor shall promptly, and in any event within two (2)
Business Days after becoming a beneficiary, notify the Second Lien Collateral
Agent thereof and enter into a Contractual Obligation with the Second Lien
Collateral Agent, the issuer of such letter of credit or any nominated person
with respect to the letter-of-credit rights under such letter of credit. Subject
to the terms of the Closing Date Intercreditor Agreement, such Contractual
Obligation shall assign such letter-of-credit rights to the Second Lien
Collateral Agent and such assignment shall be sufficient to grant control for
the purposes of Section 9-107 of the UCC (or any similar section under any
equivalent UCC). Such Contractual Obligation shall also direct all payments
thereunder to a Cash Collateral Account. The provisions of the Contractual
Obligation shall be in form and substance reasonably satisfactory to the Second
Lien Collateral Agent.
(d) If any amount in excess of $100,000 payable under or in connection
with any Collateral owned by such Grantor shall be or become evidenced by
electronic chattel paper, subject to the terms of the Closing Date Intercreditor
Agreement, such Grantor shall take all steps necessary to grant the Second Lien
Collateral Agent control of all such electronic chattel paper for the purposes
of Section 9-105 of the UCC (or any similar section under any equivalent UCC)
and all "transferable records" as defined in each of the Uniform Electronic
Transactions Act and the Electronic Signatures in Global and National Commerce
Act.
Section 5.7 Intellectual Property. (a) Within thirty (30) days after any
change to Schedule 6 for such Grantor, such Grantor shall provide the Second
Lien Collateral Agent notification thereof and the short-form intellectual
property agreements and assignments as described in this Section 5.7 and other
documents that the Second Lien Collateral Agent reasonably requests with respect
thereto.
(b) Such Grantor shall (and shall cause all its licensees to) (i) (1)
continue to use each Trademark included in the Material Intellectual Property in
order to maintain such
14
Trademark in full force and effect with respect to each class of goods for which
such Trademark is currently used, free from any claim of abandonment for
non-use, (2) maintain at least the same standards of quality of products and
services offered under such Trademark as are currently maintained, (3) use such
Trademark with the appropriate notice of registration and all other notices and
legends required by applicable Requirements of Law, (4) not adopt or use any
other Trademark that is confusingly similar or a colorable imitation of such
Trademark unless the Second Lien Collateral Agent shall obtain a perfected
security interest in such other Trademark pursuant to this Agreement and (ii)
not do any act or omit to do any act whereby (w) such Trademark (or any goodwill
associated therewith) may become destroyed, invalidated, impaired or harmed in
any way, (x) any Patent included in the Material Intellectual Property may
become forfeited, misused, unenforceable, abandoned or dedicated to the public,
(y) any portion of the Copyrights included in the Material Intellectual Property
may become invalidated, otherwise impaired or fall into the public domain or (z)
any Trade Secret that is Material Intellectual Property may become publicly
available or otherwise unprotectable.
(c) Such Grantor shall notify the Second Lien Collateral Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any Material Intellectual Property may become
forfeited, misused, unenforceable, abandoned or dedicated to the public, or of
any adverse determination or development regarding the validity or
enforceability or such Grantor's ownership of, interest in, right to use,
register, own or maintain any Material Intellectual Property (including the
institution of, or any such determination or development in, any proceeding
relating to the foregoing in any Applicable IP Office). Such Grantor shall take
all actions that are necessary or reasonably requested by the Second Lien
Collateral Agent to maintain and pursue each application (and to obtain the
relevant registration or recordation) and to maintain each registration and
recordation included in the Material Intellectual Property.
(d) Such Grantor shall not knowingly do any act or omit to do any act
to infringe, misappropriate, dilute, violate or otherwise impair the
Intellectual Property of any other Person. In the event that any Material
Intellectual Property of such Grantor is or has been infringed, misappropriated,
violated, diluted or otherwise impaired by a third party, such Grantor shall
take such action as it reasonably deems appropriate under the circumstances in
response thereto, including promptly bringing suit and recovering all damages
therefor.
(e) Such Grantor shall execute and deliver to the Second Lien
Collateral Agent in form and substance reasonably acceptable to the Second Lien
Collateral Agent and suitable for (i) filing in the Applicable IP Office the
short-form intellectual property security agreements in the form attached hereto
as Annex 3 for all Copyrights, Trademarks, Patents and IP Licenses of such
Grantor and (ii) recording with the appropriate Internet domain name registrar,
a duly executed form of assignment for all Internet Domain Names of such Grantor
(together with appropriate supporting documentation as may be requested by the
Second Lien Collateral Agent).
Section 5.8 Notices. Such Grantor shall promptly notify the Second Lien
Collateral Agent in writing of its acquisition of any interest hereafter in
property that is of a type where a security interest or lien must be or may be
registered, recorded or filed under, or notice thereof given under, any federal
statute or regulation.
Section 5.9 Notice of Commercial Tort Claims. Such Grantor agrees that, if
it shall acquire any interest in any commercial tort claim (whether from another
Person or because such commercial tort claim shall have come into existence),
(i) such Grantor shall, immediately upon
15
such acquisition, deliver to the Second Lien Collateral Agent, in each case in
form and substance satisfactory to the Second Lien Collateral Agent, a notice of
the existence and nature of such commercial tort claim and a supplement to
Schedule 1 containing a specific description of such commercial tort claim, (ii)
Section 3.1 shall apply to such commercial tort claim and (iii) such Grantor
shall execute and deliver to the Second Lien Collateral Agent, in each case in
form and substance satisfactory to the Second Lien Collateral Agent, any
document, and take all other action, deemed by the Second Lien Collateral Agent
to be reasonably necessary or appropriate for the Second Lien Collateral Agent
to obtain, on behalf of the Lenders, a perfected security interest having at
least the priority set forth in Section 4.2 in all such commercial tort claims.
Any supplement to Schedule 1 delivered pursuant to this Section 5.9 shall, after
the receipt thereof by the Second Lien Collateral Agent, become part of Schedule
1 for all purposes hereunder other than in respect of representations and
warranties made prior to the date of such receipt.
Section 5.10 Controlled Securities Account. Each Grantor shall deposit all
of its Cash Equivalents in securities accounts that are Controlled Securities
Accounts except for Cash Equivalents the aggregate value of which does not
exceed $25,000.
ARTICLE VI
REMEDIAL PROVISIONS
Section 6.1 Code and Other Remedies, (a) UCC Remedies. Subject to the terms
of the Closing Date Intercreditor Agreement, during the continuance of an Event
of Default, the Second Lien Collateral Agent may exercise, in addition to all
other rights and remedies granted to it in this Agreement and in any other
instrument or agreement securing, evidencing or relating to any Secured
Obligation, all rights and remedies of a secured party under the UCC or any
other applicable law.
(b) Disposition of Collateral. Without limiting the generality of the
foregoing, the Second Lien Collateral Agent may, subject to the terms of the
Closing Date Intercreditor Agreement, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), during the continuance of any Event of Default (personally or
through its agents or attorneys), (i) enter upon the premises where any
Collateral is located, without any obligation to pay rent, through self-help,
without judicial process, without first obtaining a final judgment or giving any
Grantor or any other Person notice or opportunity for a hearing on the Second
Lien Collateral Agent's claim or action, (ii) collect, receive, appropriate and
realize upon any Collateral and (iii) sell, assign, convey, transfer, grant
option or options to purchase and deliver any Collateral (enter into Contractual
Obligations to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of any Secured
Party or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Second Lien Collateral Agent shall
have the right, upon any such public sale or sales and, to the extent permitted
by the UCC and other applicable Requirements of Law, upon any such private sale,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption of any Grantor, which right or equity is hereby waived
and released.
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(c) Management of the Collateral. Each Grantor further agrees, that,
during the continuance of any Event of Default, subject to the terms of the
Closing Date Intercreditor Agreement, (i) at the Second Lien Collateral Agent's
request, it shall assemble the Collateral and make it available to the Second
Lien Collateral Agent at places that the Second Lien Collateral Agent shall
reasonably select, whether at such Grantor's premises or elsewhere, (ii) without
limiting the foregoing, the Second Lien Collateral Agent also has the right to
require that each Grantor store and keep any Collateral pending further action
by the Second Lien Collateral Agent and, while any such Collateral is so stored
or kept, provide such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain such Collateral in good condition,
(iii) until the Second Lien Collateral Agent is able to sell, assign, convey or
transfer any Collateral, the Second Lien Collateral Agent shall have the right
to hold or use such Collateral to the extent that it deems appropriate for the
purpose of preserving the Collateral or its value or for any other purpose
deemed appropriate by the Second Lien Collateral Agent and (iv) the Second Lien
Collateral Agent may, if it so elects, seek the appointment of a receiver or
keeper to take possession of any Collateral and to enforce any of the Second
Lien Collateral Agent's remedies (for the benefit of the Secured Parties), with
respect to such appointment without prior notice or hearing as to such
appointment. The Second Lien Collateral Agent shall not have any obligation to
any Grantor to maintain or preserve the rights of any Grantor as against third
parties with respect to any Collateral while such Collateral is in the
possession of the Second Lien Collateral Agent.
(d) Application of Proceeds. The Second Lien Collateral Agent shall
apply the cash proceeds of any action taken by it pursuant to this Section 6.1,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any Collateral
or in any way relating to the Collateral or the rights of the Second Lien
Collateral Agent and any other Secured Party hereunder, including reasonable
attorneys' fees and disbursements, to the payment in whole or in part of the
Secured Obligations, as set forth in the Credit Agreement, and only after such
application and after the payment by the Second Lien Collateral Agent of any
other amount required by any Requirement of Law, need the Second Lien Collateral
Agent account for the surplus, if any, to any Grantor.
(e) Direct Obligation. Neither the Second Lien Collateral Agent nor
any other Secured Party shall be required to make any demand upon, or pursue or
exhaust any right or remedy against, any Grantor, any other Credit Party or any
other Person with respect to the payment of the Obligations or to pursue or
exhaust any right or remedy with respect to any Collateral therefor or any
direct or indirect guaranty thereof. All of the rights and remedies of the
Second Lien Collateral Agent and any other Secured Party under any Loan Document
shall be cumulative, may be exercised individually or concurrently and not
exclusive of any other rights or remedies provided by any Requirement of Law. To
the extent it may lawfully do so, each Grantor absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to assert
against the Second Lien Collateral Agent or any Lender, any valuation, stay,
appraisement, extension, redemption or similar laws and any and all rights or
defenses it may have as a surety, now or hereafter existing, arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of any Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least ten (10) days before such sale
or other disposition.
(f) Commercially Reasonable. To the extent that applicable
Requirements of Law impose duties on the Second Lien Collateral Agent to
exercise remedies in a
17
commercially reasonable manner, each Grantor acknowledges and agrees that it is
not commercially unreasonable for the Second Lien Collateral Agent to do any of
the following:
(i) fail to incur significant costs, expenses or other
Liabilities reasonably deemed as such by the Second Lien Collateral Agent
to prepare any Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products
for disposition;
(ii) fail to obtain Permits, or other consents, for access to any
Collateral to sell or for the collection or sale of any Collateral, or, if
not required by other Requirements of Law, fail to obtain Permits or other
consents for the collection or disposition of any Collateral;
(iii) fail to exercise remedies against account debtors or other
Persons obligated on any Collateral or to remove Liens on any Collateral or
to remove any adverse claims against any Collateral;
(iv) advertise dispositions of any Collateral through
publications or media of general circulation, whether or not such
Collateral is of a specialized nature, or to contact other Persons, whether
or not in the same business as any Grantor, for expressions of interest in
acquiring any such Collateral;
(v) exercise collection remedies against account debtors and
other Persons obligated on any Collateral, directly or through the use of
collection agencies or other collection specialists, hire one or more
professional auctioneers to assist in the disposition of any Collateral,
whether or not such Collateral is of a specialized nature, or, to the
extent deemed appropriate by the Second Lien Collateral Agent, obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist the Second Lien Collateral Agent in the collection
or disposition of any Collateral, or utilize Internet sites that provide
for the auction of assets of the types included in the Collateral or that
have the reasonable capacity of doing so, or that match buyers and sellers
of assets to dispose of any Collateral;
(vi) dispose of assets in wholesale rather than retail markets;
(vii) disclaim disposition warranties, such as title, possession
or quiet enjoyment; or
(viii) purchase insurance or credit enhancements to insure the
Second Lien Collateral Agent against risks of loss, collection or
disposition of any Collateral or to provide to the Second Lien Collateral
Agent a guaranteed return from the collection or disposition of any
Collateral.
Each Grantor acknowledges that the purpose of this Section 6.1(f) is to provide
a non-exhaustive list of actions or omissions that are commercially reasonable
when exercising remedies against any Collateral and that other actions or
omissions by the Secured Parties shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section 6.1(f). Without
limitation upon the foregoing, nothing contained in this Section 6.1(f) shall be
construed to grant any rights to any Grantor or to impose any duties on the
Second Lien Collateral Agent
18
that would not have been granted or imposed by this Agreement or by applicable
Requirements of Law in the absence of this Section 6.1(f).
(g) IP Licenses. For the purpose of enabling the Second Lien
Collateral Agent to exercise rights and remedies under this Section 6.1
(including in order to take possession of, collect, receive, assemble, process,
appropriate, remove, realize upon, sell, assign, convey, transfer or grant
options to purchase any Collateral) at such time as the Second Lien Collateral
Agent shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to the Second Lien Collateral Agent, for the benefit of
the Secured Parties, (i) an irrevocable, nonexclusive, worldwide license
(exercisable without payment of royalty or other compensation to such Grantor),
including in such license the right to sublicense, use and practice any
Intellectual Property now owned or hereafter acquired by such Grantor and access
to all media in which any of the licensed items may be recorded or stored and to
all Software and programs used for the compilation or printout thereof and (ii)
an irrevocable license (without payment of rent or other compensation to such
Grantor) to use, operate and occupy all real Property owned, operated, leased,
subleased or otherwise occupied by such Grantor.
Section 6.2 Accounts and Payments in Respect of General Intangibles.
Subject to the terms of the Closing Date Intercreditor Agreement, (a) In
addition to, and not in substitution for, any similar requirement in the Credit
Agreement, if required by the Second Lien Collateral Agent at any time during
the continuance of an Event of Default, any payment of accounts or payment in
respect of general intangibles, when collected by any Grantor, shall be promptly
(and, in any event, within two (2) Business Days) deposited by such Grantor in
the exact form received, duly indorsed by such Grantor to the Second Lien
Collateral Agent, in a Cash Collateral Account, subject to withdrawal by the
Second Lien Collateral Agent as provided in Section 6.4. Until so turned over,
such payment shall be held by such Grantor in trust for the Second Lien
Collateral Agent (or the First Lien Agent, as the case may be), segregated from
other funds of such Grantor. Each such deposit of proceeds of accounts and
payments in respect of general intangibles shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.
(b) At any time during the continuance of an Event of Default:
(i) each Grantor shall, upon the Second Lien Collateral Agent's
request, deliver to the Second Lien Collateral Agent all original and other
documents evidencing, and relating to, the Contractual Obligations and
transactions that gave rise to any account or any payment in respect of
general intangibles, including all original orders, invoices and shipping
receipts and notify account debtors that the accounts or general
intangibles have been collaterally assigned to the Second Lien Collateral
Agent and that payments in respect thereof shall be made directly to the
Second Lien Collateral Agent;
(ii) the Second Lien Collateral Agent may, without notice, at any
time during the continuance of an Event of Default, limit or terminate the
authority of a Grantor to collect its accounts or amounts due under general
intangibles or any thereof and, in its own name or in the name of others,
communicate with account debtors to verify with them to the Second Lien
Collateral Agent's satisfaction the existence, amount and terms of any
account or amounts due under any general intangible. In addition, the
Second Lien Collateral Agent may at any time enforce such Grantor's rights
against such account debtors and obligors of general intangibles; and
19
(iii) each Grantor shall take all actions, deliver all documents
and provide all information necessary or reasonably requested by the Second
Lien Collateral Agent to ensure any Internet Domain Name is registered.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each account and each payment in respect of general
intangibles to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. No Secured Party shall have any obligation or
liability under any agreement giving rise to an account or a payment in respect
of a general intangible by reason of or arising out of any Loan Document or the
receipt by any Secured Party of any payment relating thereto, nor shall any
Secured Party be obligated in any manner to perform any obligation of any
Grantor under or pursuant to any agreement giving rise to an account or a
payment in respect of a general intangible, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts that may have been assigned to it or to which it may be
entitled at any time or times.
Section 6.3 Pledged Collateral. (a) Voting Rights. Subject to the terms of
the Closing Date Intercreditor Agreement, during the continuance of an Event of
Default, upon notice by the Second Lien Collateral Agent to the relevant Grantor
or Grantors, the Second Lien Collateral Agent or its nominee may exercise (A)
any voting, consent, corporate and other right pertaining to the Pledged
Collateral at any meeting of shareholders, partners or members, as the case may
be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B)
any right of conversion, exchange and subscription and any other right,
privilege or option pertaining to the Pledged Collateral as if it were the
absolute owner thereof (including the right to exchange at its discretion any
Pledged Collateral upon the merger, amalgamation, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or equivalent
structure of any issuer of Pledged Stock, the right to deposit and deliver any
Pledged Collateral with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Second Lien
Collateral Agent may determine), all without liability except to account for
property actually received by it; provided, however, that the Second Lien
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.
(b) Proxies. In order to permit the Second Lien Collateral Agent to
exercise the voting and other consensual rights that it may be entitled to
exercise pursuant hereto and to receive all dividends and other distributions
that it may be entitled to receive hereunder, (i) each Grantor shall promptly
execute and deliver (or cause to be executed and delivered) to the Second Lien
Collateral Agent all such proxies, dividend payment orders and other instruments
as the Second Lien Collateral Agent may from time to time reasonably request and
(ii) without limiting the effect of clause (i) above, such Grantor hereby grants
to the Second Lien Collateral Agent an irrevocable proxy to vote all or any part
of the Pledged Collateral and to exercise all other rights, powers, privileges
and remedies to which a holder of the Pledged Collateral would be entitled
(including giving or withholding written consents of shareholders, partners or
members, as the case may be, calling special meetings of shareholders, partners
or members, as the case may be, and voting at such meetings), which proxy shall
be effective, automatically and without the necessity of any action (including
any transfer of any Pledged Collateral on the record books of the issuer
thereof) by any other person (including the issuer of such Pledged Collateral
20
or any officer or agent thereof) during the continuance of an Event of Default
and which proxy shall only terminate upon the payment in full of the Secured
Obligations (other than contingent indemnification obligations to the extent no
claim giving rise thereto has been asserted).
(c) Authorization of Issuers. Subject to the terms of the Closing Date
Intercreditor Agreement, each Grantor hereby expressly irrevocably authorizes
and instructs, without any further instructions from such Grantor, each issuer
of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with
any instruction received by it from the Second Lien Collateral Agent in writing
that states that an Event of Default is continuing and is otherwise in
accordance with the terms of this Agreement and each Grantor agrees that such
issuer shall be fully protected from Liabilities to such Grantor in so complying
and (ii) unless otherwise expressly permitted hereby or the Credit Agreement,
pay any dividend or make any other payment with respect to the Pledged
Collateral directly to the Second Lien Collateral Agent.
Section 6.4 Proceeds to be Turned over to and Held by Second Lien
Collateral Agent. Subject to the terms of the Closing Date Intercreditor
Agreement, unless otherwise expressly provided in the Credit Agreement or this
Agreement, all proceeds of any Collateral received by any Grantor hereunder in
cash or Cash Equivalents shall be held by such Grantor in trust for the Second
Lien Collateral Agent and the other Secured Parties, segregated from other funds
of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over
to the Second Lien Collateral Agent in the exact form received (with any
necessary endorsement). Subject to the terms of the Closing Date Intercreditor
Agreement, all such proceeds of Collateral and any other proceeds of any
Collateral received by the Second Lien Collateral Agent in cash or Cash
Equivalents shall be held by the Second Lien Collateral Agent (or First Lien
Agent, as the case may be) in a Cash Collateral Account. All proceeds being held
by the Second Lien Collateral Agent in a Cash Collateral Account (or by such
Grantor in trust for the Second Lien Collateral Agent) shall continue to be held
as collateral security for the Secured Obligations and shall not constitute
payment thereof until applied as provided in the Credit Agreement.
Section 6.5 Sale of Pledged Collateral. (a) Each Grantor recognizes that
the Second Lien Collateral Agent may be unable to effect a public sale of any
Pledged Collateral by reason of certain prohibitions contained in the Securities
Act and applicable state or foreign securities laws or otherwise or may
determine that a public sale is impracticable, not desirable or not commercially
reasonable and, accordingly, may resort to one or more private sales thereof to
a restricted group of purchasers that shall be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Second Lien Collateral Agent shall
be under no obligation to delay a sale of any Pledged Collateral for the period
of time necessary to permit the issuer thereof to register such securities for
public sale under the Securities Act or under applicable state securities laws
even if such issuer would agree to do so.
(b) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of any
portion of the Pledged Collateral pursuant to Section 6.1 and this Section 6.5
valid and binding and in compliance with all applicable Requirements of Law.
Each Grantor further agrees that a breach of any covenant contained herein will
cause irreparable injury to the Second Lien Collateral Agent and other Secured
Parties, that the Second Lien Collateral Agent and the other Secured Parties
have no
21
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained herein shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defense against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred under the Credit Agreement.
Each Grantor waives any and all rights of contribution or subrogation upon the
sale or disposition of all or any portion of the Pledged Collateral by Second
Lien Collateral Agent.
Section 6.6 Deficiency. Each Grantor shall remain liable for any deficiency
if the proceeds of any sale or other disposition of any Collateral are
insufficient to pay the Secured Obligations and the fees and disbursements of
any attorney employed by the Second Lien Collateral Agent or any other Secured
Party to collect such deficiency.
ARTICLE VII
THE SECOND LIEN COLLATERAL AGENT
Section 7.1 Second Lien Collateral Agent's Appointment as Attorney-in-Fact.
(a) Each Grantor hereby irrevocably constitutes and appoints the Second Lien
Collateral Agent and any Related Person thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
the Loan Documents, to take any appropriate action and to execute any document
or instrument that may be necessary or desirable to accomplish the purposes of
the Loan Documents, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Second Lien Collateral Agent and its Related Persons
the power and right, on behalf of such Grantor, without notice to or assent by
such Grantor, to do any of the following when an Event of Default shall be
continuing:
(i) in the name of such Grantor, in its own name or otherwise,
take possession of and indorse and collect any check, draft, note,
acceptance or other instrument for the payment of moneys due under any
account or general intangible or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law
or equity or otherwise deemed appropriate by the Second Lien Collateral
Agent for the purpose of collecting any such moneys due under any account
or general intangible or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property owned by or
licensed to the Grantors, execute, deliver and have recorded any document
that the Second Lien Collateral Agent may request to evidence, effect,
publicize or record the Second Lien Collateral Agent's security interest in
such Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against any Collateral, effect any repair or pay any insurance
called for by the terms of the Credit Agreement (including all or any part
of the premiums therefor and the costs thereof);
(iv) execute, in connection with any sale provided for in Section
6.1 or Section 6.5, any document to effect or otherwise necessary or
appropriate in relation to evidence the Sale of any Collateral; or
22
(v) (A) subject to the terms of the Closing Date Intercreditor
Agreement, direct any party liable for any payment under any Collateral to
make payment of any moneys due or to become due thereunder directly to the
Second Lien Collateral Agent or as the Second Lien Collateral Agent shall
direct, (B) ask or demand for, and collect and receive payment of and
receipt for, any moneys, claims and other amounts due or to become due at
any time in respect of or arising out of any Collateral, (C) sign and
indorse any invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading, storage or
warehouse receipt, draft against debtors, assignment, verification, notice
and other document in connection with any Collateral, (D) commence and
prosecute any suit, action or proceeding at law or in equity in any court
of competent jurisdiction to collect any Collateral and to enforce any
other right in respect of any Collateral, (E) defend any actions, suits,
proceedings, audits, claims, demands, orders or disputes brought against
such Grantor with respect to any Collateral, (F) settle, compromise or
adjust any such actions, suits, proceedings, audits, claims, demands,
orders or disputes and, in connection therewith, give such discharges or
releases as the Second Lien Collateral Agent may deem appropriate, (G)
assign any Intellectual Property owned by the Grantors or any IP Licenses
of the Grantors throughout the world on such terms and conditions and in
such manner as the Second Lien Collateral Agent shall in its sole
discretion determine, including the execution and filing of any document
necessary to effectuate or record such assignment and (H) generally, sell,
assign, convey, transfer or ▇▇▇▇▇ ▇ ▇▇▇▇ on, make any Contractual
Obligation with respect to and otherwise deal with, any Collateral as fully
and completely as though the Second Lien Collateral Agent were the absolute
owner thereof for all purposes and do, at the Second Lien Collateral
Agent's option, at any time or from time to time, all acts and things that
the Second Lien Collateral Agent deems necessary to protect, preserve or
realize upon any Collateral and the Secured Parties' security interests
therein and to effect the intent of the Loan Documents, all as fully and
effectively as such Grantor might do.
(vi) If any Grantor fails to perform or comply with any
Contractual Obligation contained herein, the Second Lien Collateral Agent,
at its option, but without any obligation so to do, may perform or comply,
or otherwise cause performance or compliance, with such Contractual
Obligation.
(b) The expenses of the Second Lien Collateral Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate set forth in subsection 1.3(c) of the Credit
Agreement, from the date of payment by the Second Lien Collateral Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Second Lien Collateral Agent on demand.
(c) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue of this Section 7.1. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
Section 7.2 Authorization to File Financing Statements. Each Grantor
authorizes the Second Lien Collateral Agent and its Related Persons, at any time
and from time to time, to file or record financing statements, amendments
thereto, and other filing or recording documents or instruments with respect to
any Collateral in such form and in such offices as the Second Lien Collateral
Agent reasonably determines appropriate to perfect the security interests of the
Second Lien Collateral Agent under this Agreement, and such financing statements
and amendments may
23
described the Collateral covered thereby as "all assets of the debtor". A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction. Such Grantor also hereby ratifies its
authorization for the Second Lien Collateral Agent to have filed any initial
financing statement or amendment thereto under the UCC (or other similar laws)
in effect in any jurisdiction if filed prior to the date hereof.
Section 7.3 Authority of Second Lien Collateral Agent. Each Grantor
acknowledges that the rights and responsibilities of the Second Lien Collateral
Agent under this Agreement with respect to any action taken by the Second Lien
Collateral Agent or the exercise or non-exercise by the Second Lien Collateral
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Second Lien Collateral Agent and the other Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the Second
Lien Collateral Agent and the Grantors, the Second Lien Collateral Agent shall
be conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation or entitlement to make any inquiry respecting such
authority.
Section 7.4 Duty; Obligations and Liabilities. (a) Duty of Second Lien
Collateral Agent. The Second Lien Collateral Agent's sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession shall be to deal with it in the same manner as the Second Lien
Collateral Agent deals with similar property for its own account. The powers
conferred on the Second Lien Collateral Agent hereunder are solely to protect
the Second Lien Collateral Agent's interest in the Collateral and shall not
impose any duty upon the Second Lien Collateral Agent to exercise any such
powers. The Second Lien Collateral Agent shall be accountable only for amounts
that it receives as a result of the exercise of such powers, and neither it nor
any of its Related Persons shall be responsible to any Grantor for any act or
failure to act hereunder, except for their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. In
addition, the Second Lien Collateral Agent shall not be liable or responsible
for any loss or damage to any Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any warehousemen, carrier,
forwarding agency, consignee or other bailee if such Person has been selected by
the Second Lien Collateral Agent in good faith.
(b) Obligations and Liabilities with respect to Collateral. No Secured
Party and no Related Person thereof shall be liable for failure to demand,
collect or realize upon any Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to any Collateral. The powers conferred on the Second
Lien Collateral Agent hereunder shall not impose any duty upon any other Secured
Party to exercise any such powers. The other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their respective officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
24
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Reinstatement. Each Grantor agrees that, if any payment made by
any Credit Party or other Person and applied to the Secured Obligations is at
any time annulled, avoided, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of any Collateral are required to be returned by any Secured Party
to such Credit Party, its estate, trustee, receiver or any other party,
including any Grantor, under any bankruptcy law, state or federal law, common
law or equitable cause, then, to the extent of such payment or repayment, any
Lien or other Collateral securing such liability shall be and remain in full
force and effect, as fully as if such payment had never been made. If, prior to
any of the foregoing, (a) any Lien or other Collateral securing such Grantor's
liability hereunder shall have been released or terminated by virtue of the
foregoing or (b) any provision of the Guaranty hereunder shall have been
terminated, cancelled or surrendered, such Lien, other Collateral or provision
shall be reinstated in full force and effect and such prior release,
termination, cancellation or surrender shall not diminish, release, discharge,
impair or otherwise affect the obligations of any such Grantor in respect of any
Lien or other Collateral securing such obligation or the amount of such payment.
Section 8.2 Release of Collateral. (a) At the time provided in subsection
8.10(b)(iii) of the Credit Agreement, the Collateral shall be released from the
Lien created hereby and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Second Lien Collateral
Agent and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. Each Grantor is hereby authorized to
file UCC amendments at such time evidencing the termination of the Liens so
released. At the request of any Grantor following any such termination, the
Second Lien Collateral Agent shall deliver to such Grantor any Collateral of
such Grantor held by the Second Lien Collateral Agent hereunder and execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination.
(b) If the Second Lien Collateral Agent shall be directed or permitted
pursuant to subsection 8.10(b) of the Credit Agreement to release any Lien or
any Collateral, such Collateral shall be released from the Lien created hereby
to the extent provided under, and subject to the terms and conditions set forth
in, such subsection. In connection therewith, the Second Lien Collateral Agent,
at the request of any Grantor, shall execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such release.
(c) At the time provided in subsection 8.10(a) of the Credit Agreement
and at the request of the Borrower, a Grantor shall be released from its
obligations hereunder in the event that all the Stock and Stock Equivalents of
such Grantor shall be sold to any Person that is not an Affiliate of Holdings,
the Borrower and the Subsidiaries of the Borrower in a transaction permitted by
the Loan Documents.
Section 8.3 Independent Obligations. The obligations of each Grantor
hereunder are independent of and separate from the Secured Obligations and the
Guaranteed Obligations. If any Secured Obligation or Guaranteed Obligation is
not paid when due, or upon any Event of Default, the Second Lien Collateral
Agent may, subject to the terms of the Closing Date Intercreditor Agreement, at
its sole election, proceed directly and at once, without notice, against any
Grantor and any Collateral to collect and recover the full amount of any Secured
Obligation
25
or Guaranteed Obligation then due, without first proceeding against any other
Grantor, any other Credit Party or any other Collateral and without first
joining any other Grantor or any other Credit Party in any proceeding.
Section 8.4 No Waiver by Course of Conduct. No Secured Party shall by any
act (except by a written instrument pursuant to Section 8.6), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of any Secured Party, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by any Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that such
Secured Party would otherwise have on any future occasion.
Section 8.5 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 9.1 of the Credit Agreement; provided, however, that
annexes to this Agreement may be supplemented (but no existing provisions may be
modified and no Collateral may be released) through Pledge Amendments and
Joinder Agreements, in substantially the form of Annex 1 and Annex 2,
respectively, in each case duly executed by the Second Lien Collateral Agent and
each Grantor directly affected thereby.
Section 8.6 Additional Grantors; Additional Pledged Collateral. (a) Joinder
Agreements. If, at the option of the Borrower or as required pursuant to Section
4.13(b) of the Credit Agreement, the Borrower shall cause any Subsidiary that is
not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and
deliver to the Second Lien Collateral Agent a Joinder Agreement substantially in
the form of Annex 2 and shall thereafter for all purposes be a party hereto and
have the same rights, benefits and obligations as a Grantor party hereto on the
Closing Date.
(b) Pledge Amendments. To the extent any Pledged Collateral has not
been delivered as of the Closing Date, such Grantor shall deliver a pledge
amendment duly executed by the Grantor in substantially the form of Annex 1
(each, a "Pledge Amendment"). Such Grantor authorizes the Second Lien Collateral
Agent to attach each Pledge Amendment to this Agreement.
Section 8.7 Notices. All notices, requests and demands to or upon the
Second Lien Collateral Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 9.2 of the Credit Agreement; provided, however,
that any such notice, request or demand to or upon any Grantor shall be
addressed to the Borrower's notice address set forth in such Section 9.2.
Section 8.8 Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit of
each Secured Party and their successors and assigns; provided, however, that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Second Lien Collateral
Agent.
Section 8.9 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed
26
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Signature pages may be detached from
multiple separate counterparts and attached to a single counterpart. Delivery of
an executed signature page of this Agreement by facsimile transmission or by
Electronic Transmission shall be as effective as delivery of a manually executed
counterpart hereof.
Section 8.10 Severability. Any provision of this Agreement being held
illegal, invalid or unenforceable in any jurisdiction shall not affect any part
of such provision not held illegal, invalid or unenforceable, any other
provision of this Agreement or any part of such provision in any other
jurisdiction.
Section 8.11 Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
Section 8.12 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER
FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12.
EACH GRANTOR AGREES TO BE BOUND BY THE PROVISIONS OF SUBSECTION 9.18(b) AND
(c) OF THE CREDIT AGREEMENT.
Section 8.13 Intercreditor Agreement
Second Lien Collateral Agent, First Lien Agent, Grantors and Borrower have
entered into that certain Intercreditor Agreement of event date hereof (as the
same may be amended, restated, supplemented or otherwise modified from time to
time pursuant to the terms thereof, the "Closing Date Intercreditor Agreement").
To the extent any provision of this Agreement conflicts with the Closing Date
Intercreditor Agreement, the Closing Date Intercreditor Agreement shall control.
Without limiting the generality of the foregoing, until the First Lien Loan
Termination Date (as such term is defined in the Closing Date Intercreditor
Agreement), (a) any assignment or transfer of Collateral hereunder to Second
Lien Collateral Agent shall be to the First Lien Agent, (b) any request or
consent of Second Lien Collateral Agent required or made hereunder shall be
deemed to be required or made by the First Lien Agent, (c) any deliver of any
Collateral or any other item to Second Lien Collateral Agent required hereunder
shall be to the First Lien Agent, (d) any right of the Second Lien Collateral
Agent to require a Grantor to cause the Second Lien Collateral Agent to obtain
exclusive Control of any Investment Property shall be vested in the First Lien
Agent, (e) any right of the Second Lien Collateral Agent to assert any claims on
behalf of a Grantor shall be vested in the First Lien Agent, (f) the Second Lien
Collateral Agent (or its nominee) shall not exercise any rights pursuant to its
appointment as attorney-in-fact pursuant to Section 7.1 hereof, (g) Second Lien
Collateral Agent shall not
27
exercise any voting or other consensual rights set forth in Section 5.3(d)
hereof and (h) all items required to be delivered to Second Lien Collateral
Agent hereunder, including without limitation, stock certificates,
distributions, dividends, instruments, chattel paper or other property paid or
payable with respect to any of the Collateral shall be delivered to First Lien
Agent as contractual representative for purposes of perfection for the Second
Lien Collateral Agent and Lenders.
[SIGNATURE PAGE FOLLOWS]
28
IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and
Security Agreement to be duly executed and delivered as of the date first above
written.
CSAV, INC., a Massachusetts corporation
as a Grantor
By: /s/ ▇▇▇▇▇ ▇. MONEY
------------------------------------
Name: ▇▇▇▇▇ ▇. MONEY
Title: CLERK
CSAV HOLDING CORP., a Delaware
corporation, as a Grantor
By: /s/ ▇▇▇▇▇ ▇. MONEY
------------------------------------
Name: ▇▇▇▇▇ ▇. MONEY
Title: TREASURER & SECRETARY
DECADE INDUSTRIES, INC., A Minnesota
corporation, as a Grantor
By: /s/ ▇▇▇▇▇ ▇. MONEY
------------------------------------
Name: ▇▇▇▇▇ ▇. MONEY
Title: SECRETARY
Guaranty, Pledge and Security Agreement-Second Lien
ACCEPTED AND AGREED
as of the date first above written:
ALLIED CAPITAL CORPORATION,
as Second Lien Collateral Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Principal
Guaranty, Pledge and Security Agreement-Second Lien
ANNEX 1
TO
GUARANTY, PLEDGE AND SECURITY AGREEMENT(1)
FORM OF PLEDGE AMENDMENT
This Pledge Amendment, dated as of _____________ __, 20___, is delivered
pursuant to Section 8.6 of the Guaranty, Pledge and Security Agreement, dated as
of July 21, 2006, by CSAV, Inc. (the "Borrower"), the undersigned Grantor and
the other Affiliates of the Borrower from time to time party thereto as Grantors
in favor of Allied Capital Corporation, as Second Lien Collateral Agent for the
Secured Parties referred to therein (the "Guaranty and Security Agreement").
Capitalized terms used herein without definition are used as defined in the
Guaranty and Security Agreement.
The undersigned hereby agrees that this Pledge Amendment may be attached to
the Guaranty, Pledge and Security Agreement and that the Pledged Collateral
listed on Annex 1-A to this Pledge Amendment shall be and become part of the
Collateral referred to in the Guaranty and Security Agreement and shall secure
all Obligations of the undersigned.
The undersigned hereby represents and warrants that each of the
representations and warranties contained in Sections 4.1, 4.2, 4.5 and 4.10 of
the Guaranty, Pledge and Security Agreement is true and correct and as of the
date hereof as if made on and as of such date.
[GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
----------
To be used for pledge of Additional Pledged Collateral by existing Grantor.
SECOND LIEN GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
▇▇-▇
▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
NUMBER OF
SHARES,
UNITS OR
ISSUER CLASS CERTIFICATE NO(S). PAR VALUE INTERESTS
------ ----- ------------------ --------- ---------
PLEDGED DEBT INSTRUMENTS
CERTIFICATE FINAL PRINCIPAL
ISSUER DESCRIPTION OF DEBT NO(S). MATURITY AMOUNT
------ ------------------- ----------- -------- ---------
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
A1-2
ACKNOWLEDGED AND AGREED
as of the date first above written:
ALLIED CAPITAL CORPORATION
as Second Lien Collateral Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
▇▇-▇
▇▇▇▇▇ ▇
▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ SECURITY AGREEMENT
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of _____________ __, 20__, is delivered
pursuant to Section 8.6 of the Guaranty, Pledge and Security Agreement, dated as
of July 21, 2006, by CSAV, Inc. (the "Borrower") and the Affiliates of the
Borrower from time to time party thereto as Grantors in favor of the Allied
Capital Corporation, as Second Lien Collateral Agent for the Secured Parties
referred to therein (the "Guaranty and Security Agreement"). Capitalized terms
used herein without definition are used as defined in the Guaranty and Security
Agreement.
By executing and delivering this Joinder Agreement, the undersigned, as
provided in Section 8.6 of the Guaranty and Security Agreement, hereby becomes a
party to the Guaranty and Security Agreement as a Grantor thereunder with the
same force and effect as if originally named as a Grantor therein and, without
limiting the generality of the foregoing, as collateral security for the prompt
and complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of the undersigned, hereby
mortgages, pledges and hypothecates to the Second Lien Collateral Agent for the
benefit of the Secured Parties, and grants to the Second Lien Collateral Agent
for the benefit of the Secured Parties a lien on and security interest in, all
of its right, title and interest in, to and under the Collateral of the
undersigned and expressly assumes all obligations and liabilities of a Grantor
thereunder. The undersigned hereby agrees to be bound as a Grantor for the
purposes of the Guaranty and Security Agreement.
The information set forth in Annex 1-A is hereby added to the information
set forth in Schedules 1 through 6 to the Guaranty and Security Agreement. By
acknowledging and agreeing to this Joinder Agreement, the undersigned hereby
agree that this Joinder Agreement may be attached to the Guaranty and Security
Agreement and that the Pledged Collateral listed on Annex 1-A to this Joinder
Amendment shall be and become part of the Collateral referred to in the Guaranty
and Security Agreement and shall secure all Secured Obligations of the
undersigned.
The undersigned hereby represents and warrants that each of the
representations and warranties contained in Article IV of the Guaranty and
Security Agreement applicable to it is true and correct on and as the date
hereof as if made on and as of such date.
IN WITNESS WHEREOF, THE UNDERSIGNED HAS CAUSED THIS JOINDER AGREEMENT TO BE
DULY EXECUTED AND DELIVERED AS OF THE DATE FIRST ABOVE WRITTEN.
[Additional Grantor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
A2-1
ACKNOWLEDGED AND AGREED
as of the date first above written:
[EACH GRANTOR PLEDGING ADDITIONAL
COLLATERAL]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ALLIED CAPITAL CORPORATION as Second
Lien Collateral Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
▇▇-▇
▇▇▇▇▇ ▇
▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as
of _________________, 20__, is made by each of the entities listed on the
signature pages hereof (each a "Grantor" and, collectively, the "Grantors"), in
favor of Allied Capital Corporation ("Allied"), as collateral agent (in such
capacity, together with its successors and permitted assigns, the "Second Lien
Collateral Agent") for the Lenders (as defined in the Credit Agreement referred
to below) and the other Secured Parties.
WITNESSETH:
WHEREAS, pursuant to the Second Lien Credit Agreement, dated as of July 21,
2006 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among CSAV, Inc., a Massachusetts
corporation ("Borrower"), CSAV Holding Corp., a Delaware corporation
("Holdings"), the other Persons party hereto that are designated as a "Credit
Party", General Electric Capital Corporation, as administrative agent for the
several financial institutions from time to time party to the Credit Agreement
(collectively, the "Lenders" and individually each a "Lender") and for itself as
a Lender, the Second Lien Collateral Agent, as collateral agent for the Lenders
and for itself as a Lender and such Lenders, the Lenders have severally agreed
to make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, each Grantor (other than the Borrower) has agreed, pursuant to a
Guaranty, Pledge and Security Agreement of even date herewith in favor of the
Second Lien Collateral Agent (the "Guaranty and Security Agreement"), to
guarantee the Obligations (as defined in the Credit Agreement) of the Borrower;
and
WHEREAS, all of the Grantors are party to the Guaranty and Security
Agreement pursuant to which the Grantors are required to execute and deliver
this [Copyright] [Patent] [Trademark] Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Lenders
and the Second Lien Collateral Agent to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Second Lien Collateral Agent as
follows:
Section 1. Defined Terms. Capitalized terms used herein without definition
are used as defined in the Guaranty and Security Agreement.
Section 2. Grant of Security Interest in [Copyright] [Trademark] [Patent]
Collateral. Each Grantor, as collateral security for the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges
and hypothecates to the Second Lien Collateral Agent for the benefit of the
Secured Parties, and grants to the Second Lien Collateral Agent for the benefit
of the Secured Parties a Lien on and security interest in, all of its right,
title and interest in, to and under the following Collateral of such Grantor
(the "[Copyright] [Patent] [Trademark] Collateral"):
A3-1
(a) [all of its Copyrights and all IP Licenses providing for the grant
by or to such Grantor of any right under any Copyright, including, without
limitation, those referred to on Schedule 1 hereto;
(b) all renewals, reversions and extensions of the foregoing; and
(c) all income, royalties, proceeds and Liabilities at any time due or
payable or asserted under and with respect to any of the foregoing, including,
without limitation, all rights to ▇▇▇ and recover at law or in equity for any
past, present and future infringement, misappropriation, dilution, violation or
other impairment thereof.]
or
(a) [all of its Patents and all IP Licenses providing for the grant by
or to such Grantor of any right under any Patent, including, without limitation,
those referred to on Schedule 1 hereto;
(b) all reissues, reexaminations, continuations,
continuations-in-part, divisionals, renewals and extensions of the foregoing;
and
(c) all income, royalties, proceeds and Liabilities at any time due or
payable or asserted under and with respect to any of the foregoing, including,
without limitation, all rights to ▇▇▇ and recover at law or in equity for any
past, present and future infringement, misappropriation, dilution, violation or
other impairment thereof.]
or
(a) [all of its Trademarks and all IP Licenses providing for the grant
by or to such Grantor of any right under any Trademark, including, without
limitation, those referred to on Schedule 1 hereto;
(b) all renewals and extensions of the foregoing;
(c) all goodwill of the business connected with the use of, and
symbolized by, each such Trademark; and
(d) all income, royalties, proceeds and Liabilities at any time due or
payable or asserted under and with respect to any of the foregoing, including,
without limitation, all rights to ▇▇▇ and recover at law or in equity for any
past, present and future infringement, misappropriation, dilution, violation or
other impairment thereof.]
Section 3. Guaranty and Security Agreement. The security interest granted
pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted
in conjunction with the security interest granted to the Second Lien Collateral
Agent pursuant to the Guaranty and Security Agreement and each Grantor hereby
acknowledges and agrees that the rights and remedies of the Second Lien
Collateral Agent with respect to the security interest in the [Copyright]
[Patent] [Trademark] Collateral made and granted hereby are more fully set forth
in the Guaranty and Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
A3-2
Section 4. Grantor Remains Liable. Each Grantor hereby agrees that,
anything herein to the contrary notwithstanding, such Grantor shall assume full
and complete responsibility for the prosecution, defense, enforcement or any
other necessary or desirable actions in connection with their [Copyrights]
[Patents] [Trademarks] and IP Licenses subject to a security interest hereunder.
Section 5. Counterparts. This [Copyright] [Patent] [Trademark] Security
Agreement may be executed in any number of counterparts and by different parties
in separate 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. Signature pages may be detached from multiple separate counterparts
and attached to a single counterpart.
Section 6. Governing Law. This [Copyright] [Patent] [Trademark] Security
Agreement and the rights and obligations of the parties hereto shall be governed
by, and construed and interpreted in accordance with, the law of the State of
New York.
Section 7. Intercreditor Agreement. Second Lien Collateral Agent, First
Lien Agent, Grantors and Borrower have entered into that certain Intercreditor
Agreement of event date hereof (as the same may be amended, restated,
supplemented or otherwise modified from time to time pursuant to the terms
thereof, the "Closing Date Intercreditor Agreement"). To the extent any
provision of this Agreement conflicts with the Closing Date Intercreditor
Agreement, the Closing Date Intercreditor Agreement shall control.
[SIGNATURE PAGES FOLLOW]
A3-3
IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent]
[Trademark] Security Agreement to be executed and delivered by its duly
authorized officer as of the date first set forth above.
Very truly yours,
[GRANTOR]
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------