EXHIBIT 10.7
Exhibit V
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[FORM OF] PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this "Agreement") is dated as of
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January 31, 2000 and entered into by and among Levi ▇▇▇▇▇▇▇ & Co., a Delaware
corporation ("Company"), each of the undersigned direct and indirect
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Subsidiaries of Company (each of such undersigned Subsidiaries being a
"Subsidiary Grantor" and collectively, "Subsidiary Grantors") and each
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Additional Grantor that may become a party hereto after the date hereof in
accordance with Section 20 hereof (Company, each Subsidiary Grantor, and each
Additional Grantor being a "Grantor" and collectively, "Grantors") and Bank of
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America, N.A. as Collateral Agent for and representative of (in such capacity
herein called "Secured Party") Agent and the several financial institutions
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("Banks") from time to time party to the Credit Agreement referred to below.
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PRELIMINARY STATEMENTS
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A. Pursuant to the Amended and Restated 1997 364 Day Credit
Agreement dated as of January 31, 2000 (said Amended and Restated 1997 364 Day
Credit Agreement, as amended to the date hereof, and as it may hereafter be
further amended, modified, or supplemented from time to time, being the "Credit
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Agreement"; the terms defined therein and not otherwise defined herein being
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used herein as therein defined), by and among Company, the several financial
institutions from time to time party thereto (collectively, "Banks"); the
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several financial institutions party thereto as Senior Managing Agents;, the
several financial institutions party thereto as Managing Agents; the several
financial institutions party thereto as Co-Agents; Bank of America, N.A. as
Agent (in such capacity, "Agent"); and Bank of America, N.A. as Collateral Agent
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(in such capacity, "Collateral Agent"), Banks have made certain commitments,
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subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company.
B. Subsidiary Grantors have executed and delivered that certain
Guaranty dated the date hereof (said Guaranty, as amended to the date hereof,
and as it may hereafter be further amended, modified, or supplemented from time
to time, being the "Guaranty") in favor of Secured Party for the benefit of
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Banks and Agent, pursuant to which each Subsidiary Grantor has guarantied the
prompt payment and performance when due of all obligations of Company under the
Credit Agreement.
C. It is a condition precedent to the effectiveness of the Credit
Agreement that Grantors listed on the signature pages hereof shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Banks to enter into the Credit Agreement, each Grantor hereby
agrees with Secured Party as follows:
Section 1. Grant of Security. Each Grantor hereby assigns to Secured
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Party, and hereby grants to Secured Party a security interest in, all of such
Grantor's right, title and
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interest in and to the following, in each case whether now or hereafter
existing, whether tangible or intangible, or in which such Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"Collateral"):
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(a) all equipment in all of its forms, all parts thereof and all
accessions thereto (any and all such equipment, parts and accessions being the
"Equipment");
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(b) all inventory in all of its forms, including (i) all goods held by
such Grantor for sale or lease or to be furnished under contracts of service or
so leased or furnished, (ii) all raw materials, work in process, finished goods,
and materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in such Grantor's business, (iii) all goods in which
such Grantor has an interest in mass or a joint or other interest or right of
any kind, and (iv) all goods which are returned to or repossessed by such
Grantor and all accessions thereto and products thereof (collectively, the
"Inventory") and all negotiable and non-negotiable documents of title (including
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without limitation warehouse receipts, dock receipts and bills of lading) issued
by any Person covering any Inventory (any such negotiable document of title
being a "Negotiable Document of Title");
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(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of any kind
owned by or owing to such Grantor and all rights in, to and under all security
agreements, leases and other contracts securing or otherwise relating to any
such accounts, contract rights, chattel paper, documents, instruments, general
intangibles or other obligations (any and all such accounts, contract rights,
chattel paper, documents, instruments, general intangibles and other obligations
being the "Accounts", and any and all such security agreements, leases and other
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contracts being the "Related Contracts");
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(d) all deposit accounts ("Deposit Accounts"), together with (i) all
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amounts on deposit from time to time in such deposit accounts and (ii) all
interest, cash, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing, including Deposit Accounts listed on Schedule 1(d);
(e) the "Securities Collateral", which term means:
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(i) all shares of stock, partnership interests, interests
in joint ventures, limited liability company interests and all other equity
interests now or hereafter owned by such Grantor in any Person that is, or
becomes, a direct Subsidiary of such Grantor, including all securities
convertible into, and rights, warrants, options and other rights to
purchase or otherwise acquire, any of the foregoing now or hereafter owned
by such Grantor, including those owned on the date hereof and described on
Schedule 1(e)(i), and the certificates or other instruments representing
any of the foregoing and any interest of such Grantor in the entries on the
books of any securities intermediary pertaining thereto (the "Pledged
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Shares"), and all dividends, distributions, returns of capital, cash,
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warrants, options, rights, instruments, rights to vote or manage the
business of such Person pursuant to organizational documents governing the
rights and obligations of the stockholders, partners, members or other
owners thereof and other property or proceeds
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from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such Pledged Shares; provided, that if
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the issuer of any of such Pledged Shares is a controlled foreign
corporation (used hereinafter as such term is defined in Section 957(a) or
a successor provision of the Internal Revenue Code), the Pledged Shares
shall not include any shares of stock of such issuer in excess of the
number of shares of such issuer possessing up to but not exceeding 65% of
the voting power of all classes of Capital Stock entitled to vote of such
issuer, and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Pledged
Shares;
(ii) all indebtedness from time to time owed to such Grantor
by any obligor that is, or becomes, a direct or indirect Subsidiary of such
Grantor, including the indebtedness described on Schedule 1(e)(ii) and
issued by the obligors named therein, and the instruments evidencing such
indebtedness (the "Pledged Debt"), and all interest, cash, instruments and
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other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Debt; and
(iii) all other investment property as that term is defined
in the Uniform Commercial Code ("UCC") of any relevant jurisdiction, of
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such Grantor;
(f) the "Intellectual Property Collateral", which term means:
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(i) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) in and to all trademarks,
service marks, designs, logos, indicia, tradenames, trade dress, corporate
names, company names, business names, fictitious business names, trade
styles and/or other source and/or business identifiers and applications
pertaining thereto, owned by such Grantor, or hereafter adopted and used,
in its business (including, without limitation, the trademarks specifically
identified in Schedule 1(f)(i), as the same may be amended pursuant hereto
from time to time) (collectively, the "Trademarks"), all registrations that
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have been or may hereafter be issued or applied for thereon in the United
States and any state thereof and in foreign countries (including, without
limitation, the registrations and applications specifically identified in
Schedule 1(f)(i), as the same may be amended pursuant hereto from time to
time) (the "Trademark Registrations"), all common law and other rights in
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and to the Trademarks in the United States and any state thereof and in
foreign countries (the "Trademark Rights"), and all goodwill of such
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Grantor's business symbolized by the Trademarks and associated therewith
(the "Associated Goodwill");
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(ii) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) in and to all patents and
patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned or held by such Grantor and all patents and patent
applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned by such Grantor in whole or in part (including,
without limitation, the patents and patent
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applications listed in Schedule 1(f)(ii), as the same may be amended
pursuant hereto from time to time), all rights corresponding thereto
(including, without limitation, the right, exercisable only upon the
occurrence and during the continuation of an Event of Default, to ▇▇▇ for
past, present and future infringements in the name of such Grantor or in
the name of Secured Party or Banks), and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof (all
of the foregoing being collectively referred to as the "Patents"); and
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(iii) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) under copyright in various
published and unpublished works of authorship including computer programs,
computer data bases, other computer software, layouts, trade dress,
drawings, designs, writings, and formulas owned by such Grantor (including,
without limitation, the registered works listed on Schedule 1(f)(iii), as
the same may be amended pursuant hereto from time to time) (collectively,
the "Copyrights"), all copyright registrations issued to such Grantor and
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applications for copyright registration that have been or may hereafter be
issued or applied for thereon by such Grantor in the United States and any
state thereof and in foreign countries (including the registrations listed
on Schedule 1(f)(iii), as the same may be amended pursuant hereto from time
to time) (collectively, the "Copyright Registrations"), all common law and
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other rights in and to the Copyrights in the United States and any state
thereof and in foreign countries including all copyright licenses (but with
respect to such copyright licenses, only to the extent permitted by such
licensing arrangements) (the "Copyright Rights"), including each of the
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Copyrights, rights, titles and interests in and to the Copyrights, all
derivative works and other works protectable by copyright, which are
presently, or in the future may be, owned, created (as a work for hire for
the benefit of such Grantor), authored (as a work for hire for the benefit
of such Grantor), or acquired by such Grantor, in whole or in part, and all
Copyright Rights with respect thereto and all Copyright Registrations
therefor, heretofore or hereafter granted or applied for, and all renewals
and extensions thereof, throughout the world, including the right to renew
and extend such Copyright Registrations and Copyright Rights and to
register works protectable by copyright and the right to ▇▇▇ for past,
present and future infringements of the Copyrights and Copyright Rights;
(g) all information used or useful or arising from the business
including all goodwill, trade secrets, trade secret rights, know-how, customer
lists, processes of production, ideas, confidential business information,
techniques, processes, formulas, and all other proprietary information;
(h) to the extent not included in any other paragraph of this Section
1, all other general intangibles (including tax refunds, rights to payment or
performance, choses in action and judgments taken on any rights or claims
included in the Collateral);
(i) all plant fixtures, business fixtures and other fixtures and
storage and office facilities, and all accessions thereto and products thereof;
(j) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information
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relating to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon; and
(k) all proceeds, products, rents and profits of or from any and all
of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "proceeds" includes whatever is receivable
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or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in (i) any of such Grantor's rights or interests in any license,
contract or agreement to which such Grantor is a party or any of its rights or
interests thereunder or any of its rights or interests in other property to the
extent, but only to the extent, that such a grant would, under the terms of such
license, contract or agreement or otherwise, result in a breach of the terms of,
or constitute a default under any license, contract or agreement to which such
Grantor is a party (other than to the extent that any such term would be
rendered ineffective pursuant to the UCC or any other applicable law (including
the Bankruptcy Code) or principles of equity) or any Negative Pledge permitted
under the Credit Agreement on such rights or interests; provided, that
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immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect and (ii) any real property leasehold, unless
a Grantor has executed a leasehold mortgage or leasehold deed of trust covering
such real property leasehold.
Notwithstanding anything herein to the contrary, neither Company nor any
Grantor shall be deemed to have granted a security interest in (i) any Principal
Property, (ii) any Capital Stock of any Restricted Subsidiary or (iii) any
Pledged Debt of or issued by any Restricted Subsidiary.
Section 2. Security for Obligations.
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(a) This Agreement secures, and the Collateral assigned by each
Grantor is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code), of all Secured Obligations of such
Grantor. "Secured Obligations" means:
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(i) with respect to Company, all obligations and
liabilities of every nature of Company now or hereafter existing under or
arising out of or in connection with the Credit Agreement and the other
Loan Documents, and
(ii) with respect to each Subsidiary Grantor and Additional
Grantor, all obligations and liabilities of every nature of such Grantors
now or hereafter existing under or arising out of or in connection with the
Guaranty;
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in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company or any other Grantor,
would accrue on such obligations, whether or not a claim is allowed against
Company or such Grantor for such interest in the related bankruptcy proceeding),
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Secured
Party, Agent or any Bank as a preference, fraudulent transfer or otherwise, and
all obligations of every nature of Grantors now or hereafter existing under this
Agreement.
(b) Any and all security interests, liens, rights and interest
of Secured Party in and to any or all of the Collateral are subordinated to any
and all security interests, liens, rights and interest of the several financial
institutions party to the Bridge Credit Agreement from time to time in and to
any or all of the Collateral pursuant to the Intercreditor Agreement.
Section 3. Grantors Remain Liable.
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Anything contained herein to the contrary notwithstanding, (a) each Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts, licenses, and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
Section 4. Representations and Warranties.
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Each Grantor represents and warrants as follows:
(a) Ownership of Collateral. Except as expressly permitted by
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the Credit Agreement and for the security interest created by this Agreement,
such Grantor owns the Collateral owned by such Grantor free and clear of any
Lien. Except as expressly permitted by the Credit Agreement and such as may have
been filed in favor of Secured Party relating to this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office.
(b) Locations of Equipment and Inventory. All of the Equipment
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and Inventory is, as of the date hereof, or in the case of each Additional
Grantor, the date of the applicable counterpart entered into pursuant to Section
20 hereof (each, a "Counterpart") located at the places specified in Schedule
4(b), except for Inventory which, in the ordinary course of business, is in
transit either (i) from a supplier or a processor to a Grantor, (ii) between the
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locations specified in Schedule 4(b), (iii) from a supplier or a Grantor to a
processor, or (iv) to customers of a Grantor.
(c) Office Locations. The chief place of business, the chief
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executive office and the office where such Grantor keeps its records regarding
the Accounts and all originals of all chattel paper that evidence Accounts are,
as of the date hereof, and have been for the four month period preceding the
date hereof, or, in the case of an Additional Grantor, the date of the
applicable Counterpart, located at the locations set forth on Schedule 4(c);
(d) Names. No Grantor (or predecessor by merger or otherwise of
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such Grantor) has, within the four month period preceding the date hereof, or,
in the case of an Additional Grantor, the date of the applicable Counterpart,
had a different name from the name of such Grantor listed or the signature pages
hereof, except the names listed in Schedule 4(d) annexed hereto.
(e) Delivery of Certain Collateral. Except as permitted by
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Section 6.11 of the Credit Agreement, all certificates or instruments (excluding
checks) evidencing, comprising or representing the Collateral (including,
without limitation, the Securities Collateral) have been delivered to Secured
Party duly endorsed or accompanied by duly executed instruments of transfer or
assignment in blank.
(f) Securities Collateral. (i) All of the Pledged Shares
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described on Schedule 1(e)(i) have been duly authorized and validly issued and
are fully paid and non-assessable; (ii) all of the Pledged Debt described on
Schedule 1(e)(ii) has been duly authorized, authenticated or issued, and
delivered and is the legal, valid and binding obligation of the issuers thereof
and is not in default; (iii) the Pledged Shares constitute all of the issued and
outstanding shares of stock or other equity interests of each issuer thereof
(subject to the proviso to Section 1(e)(i) hereof with respect to shares of a
foreign controlled corporation), and there are no outstanding warrants, options
or other rights to purchase, or other agreements outstanding with respect to, or
property that is now or hereafter convertible into, or that requires the
issuance or sale of, any Pledged Shares; (iv) the Pledged Debt constitutes all
of the issued and outstanding intercompany indebtedness evidenced by a
promissory note of the respective issuers thereof owing to such Grantor; (v)
Schedule 1(e)(i) sets forth all of the Pledged Shares owned by each Grantor on
the date hereof; and (vi) Schedule 1(e)(ii) sets forth all of the Pledged Debt
in existence on the date hereof.
(g) Intellectual Property Collateral.
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(i) a true and complete list of all Trademark
Registrations and Trademark applications owned by such Grantor, in whole or
in part, that are material to such Grantor's business, is set forth in
Schedule 1(f)(i);
(ii) a true and complete list of all Patents owned by
such Grantor, in whole or in part, that are material to such Grantor's
business is set forth in Schedule 1(f)(ii);
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(iii) a true and complete list of all Copyright
Registrations and applications for Copyright Registrations owned by such
Grantor, in whole or in part, is set forth in Schedule 1(f)(iii);
(iv) after reasonable inquiry, such Grantor is not
aware of any pending or threatened claim by any third party that any of the
Intellectual Property Collateral owned, held or used by such Grantor is
invalid or unenforceable that is reasonably likely to have a Material
Adverse Effect; and
(v) no effective security interest or other Lien
covering all or any part of the Intellectual Property Collateral is on file
in the United States Patent and Trademark Office or the United States
Copyright Office.
(h) Perfection. The security interests in the Collateral granted
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to Secured Party for the ratable benefit of Banks and Agent hereunder constitute
valid security interests in the Collateral, securing the payment of the Secured
Obligations. Upon (i) the filing of UCC financing statements naming each Grantor
as "debtor", naming Secured Party as "secured party" and describing the
Collateral in the filing offices with respect to such Grantor set forth on
Schedule 4(h), (ii) in the case of the Securities Collateral consisting of
certificated securities or evidenced by instruments, delivery of the
certificates representing such certificated securities and delivery of such
instruments to Secured Party, in each case duly endorsed or accompanied by duly
executed instruments of assignment or transfer in blank, (iii) in the case of
the Intellectual Property Collateral, in addition to the filing of such UCC
financing statements, the filing of a Grant of Trademark Security Interest,
substantially in the form of Exhibit I, and a Grant of Patent Security Interest,
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substantially in the form of Exhibit II, with the United States Patent and
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Trademark Office and the filing of a Grant of Copyright Security Interest,
substantially in the form of Exhibit III, with the United States Copyright
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Office (each such Grant of Trademark Security Interest, Grant of Patent Security
Interest and Grant of Copyright Security Interest being referred to herein as a
"Grant"), the security interests in the Collateral granted to Secured Party for
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the ratable benefit of Banks and Agent will constitute perfected security
interests therein, to the extent such security interests may be perfected by
filing in the United States or possession, prior to all other Liens (except for
Liens expressly permitted by the Credit Agreement), and all filings and other
actions necessary or desirable to perfect and protect such security interest
have been duly made or taken.
Section 5. Further Assurances.
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(a) Generally. Each Grantor agrees that from time to time, at
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the expense of Grantors, such Grantor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor will: (i) at the reasonable request of
Secured Party, ▇▇▇▇ conspicuously each item of chattel paper included in the
Accounts, each Related Contract and, at the reasonable request of Secured Party,
each of its records pertaining to the Collateral, with a legend, in form and
substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security
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interest granted hereby, (ii) at the reasonable request of Secured
Party, deliver and pledge to Secured Party hereunder all promissory notes and
other instruments (including checks) and all original counterparts of chattel
paper constituting Collateral, duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party, (iii) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as Secured Party may request, in order to perfect and
preserve the security interests granted or purported to be granted hereby, (iv)
furnish to Secured Party from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as Secured Party may reasonably request, all in reasonable
detail, (v) if requested by Co-Agents, promptly after the acquisition by such
Grantor of any item of Equipment that is covered by a certificate of title under
a statute of any jurisdiction under the law of which indication of a security
interest on such certificate is required as a condition of perfection thereof,
execute and file with the registrar of motor vehicles or other appropriate
authority in such jurisdiction an application or other document requesting the
notation or other indication of the security interest created hereunder on such
certificate of title, (vi) within 45 days after the end of each fiscal quarter
of Company, deliver to Secured Party copies of all such applications or other
documents filed during such fiscal quarter and copies of all such certificates
of title issued during such fiscal quarter indicating the security interest
created hereunder in the items of Equipment covered thereby, (vii) at any
reasonable time, upon request by Secured Party, exhibit the Collateral to and
allow inspection of the Collateral by Secured Party, or persons designated by
Secured Party, and (viii) at Secured Party's request, appear in and defend any
action or proceeding that may affect such Grantor's title to or Secured Party's
security interest in all or any part of the Collateral. Each Grantor hereby
authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the signature of any Grantor. Each Grantor agrees that a
carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by such Grantor shall be sufficient as a financing statement
and may be filed as a financing statement in any and all jurisdictions.
(b) Securities Collateral. Without limiting the generality of
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the foregoing Section 5(a), each Grantor agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder,
promptly (and in any event within ten Business Days) deliver to Secured Party a
Pledge Supplement, duly executed by such Grantor, in substantially the form of
Exhibit IV (a "Pledge Supplement"), in respect of the additional Pledged Shares
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or Pledged Debt to be pledged pursuant to this Agreement. Upon each delivery of
a Pledge Supplement to Secured Party, the representations and warranties
contained in subsections (i)-(iv) of Section 4(g) hereof shall be deemed to have
been made by such Grantor as to the Securities Collateral described in such
Pledge Supplement as of the date thereof. Each Grantor hereby authorizes Secured
Party to attach each Pledge Supplement to this Agreement and agrees that all
Pledged Shares or Pledged Debt of such Grantor listed on any Pledge Supplement
shall for all purposes hereunder be considered Collateral of such Grantor;
provided, the failure of any Grantor to execute a Pledge Supplement with respect
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to any additional Pledged Shares or Pledged Debt pledged pursuant to this
Agreement shall not impair the security interest of Secured Party therein or
otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
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(c) Intellectual Property Collateral. Without limiting the
generality of the foregoing Section 5(a), if any Grantor shall hereafter obtain
rights to any new Intellectual Property Collateral or become entitled to the
benefit of (i) any patent application or patent or any reissue, division,
continuation, renewal, extension or continuation-in-part of any Patent or any
improvement of any Patent or (ii) any Copyright Registration, application for
Copyright Registration or renewals or extension of any Copyright, then in any
such case, the provisions of this Agreement shall automatically apply thereto.
Each Grantor shall, within 45 days after the end of each fiscal quarter of
Company, notify Secured Party in writing of any of the foregoing rights acquired
by such Grantor after the date hereof or the date of the last such notice, as
the case may be, and of (i) any Trademark Registrations issued or application
for a Trademark Registration or application for a Patent made, and (ii) any
Copyright Registrations issued or applications for Copyright Registration made,
in any such case, after the date hereof. Within 45 days after the end of each
fiscal quarter of Company during which any Grantor files an application for any
(1) Trademark Registration; (2) Patent; and (3) Copyright Registration, each
Grantor shall execute and deliver to Secured Party and record in all places
where a Grant is recorded an IP Supplement, substantially in the form of Exhibit
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V (an "IP Supplement"), pursuant to which such Grantor shall grant to Secured
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Party a security interest to the extent of its interest in such Intellectual
Property Collateral; provided, if, in the reasonable judgment of such Grantor,
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after due inquiry, granting such interest would result in the grant of a
Trademark Registration or Copyright Registration in the name of Secured Party,
such Grantor shall give written notice to Secured Party on the day on which such
Grantor would otherwise be required to record the IP Supplement and the filing
shall instead be undertaken as soon as practicable but in no case later than
immediately following the grant of the applicable Trademark Registration or
Copyright Registration, as the case may be. Upon delivery to Secured Party of an
IP Supplement, Schedules 1(f)(i), 1(f)(ii), and 1(f)(iii) hereto and Schedule A
to each Grant, as applicable, shall be deemed modified to include reference to
any right, title or interest in any existing Intellectual Property Collateral or
any Intellectual Property Collateral included on Schedule A to such IP
Supplement. Each Grantor hereby authorizes Secured Party to modify this
Agreement without the signature or consent of any Grantor by attaching Schedules
1(f)(i), 1(f)(ii), and 1(f)(iii), as applicable, that have been modified to
include such Intellectual Property Collateral or to delete any reference to any
right, title or interest in any Intellectual Property Collateral in which any
Grantor no longer has or claims any right, title or interest; provided, the
--------
failure of any Grantor to execute an IP Supplement with respect to any
additional Intellectual Property Collateral pledged pursuant to this Agreement
shall not impair the security interest of Secured Party therein or otherwise
adversely affect the rights and remedies of Secured Party hereunder with respect
thereto.
Section 6. Certain Covenants of Grantors.
---------------------------------------------
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral,
except where such violation would not have a Material Adverse Effect;
V-1O
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 30 days of such change;
(c) give Secured Party 30 days' prior written notice of any
change in such Grantor's chief place of business, chief executive office or
residence or the office where such Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) except as otherwise not prohibited by the Credit Agreement,
pay promptly when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
services, materials and supplies) against, the Collateral.
Section 7. Special Covenants With Respect to Equipment and
--------------------------------------------------------------
Inventory.
----------
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at
the places therefor specified on Schedule 4(b), or upon 30 days' prior written
notice to Secured Party, at such other places in jurisdictions where all action
that may be necessary or desirable, or that Secured Party may request, in order
to perfect and protect any security interest granted or purported to be granted
hereby, or to enable Secured Party to exercise and enforce its rights and
remedies hereunder, with respect to such Equipment and Inventory shall have been
taken;
(b) except as otherwise permitted by Section 6.6 of the Credit
Agreement, cause the Equipment owned by such Grantor to be maintained and
preserved in the same condition, repair and working order as when new, ordinary
wear and tear excepted, and in accordance with such Grantor's past practices,
and shall forthwith make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such
end. Each Grantor shall promptly furnish to Secured Party a statement
respecting any material loss or damage to the Equipment owned by such Grantor,
but only to the extent that such loss or damage is material to the Equipment
owned by Company and its Subsidiaries, taken as a whole;
(c) keep correct and accurate records of Inventory owned by such
Grantor, itemizing and describing the kind, type and quantity of such Inventory,
and such Grantor's cost therefor;
(d) if any Inventory is in the possession or control of any of
such Grantor's agents or processors, within 30 days of the Closing Date (with
respect to existing agents or processors) and promptly after any such Inventory
comes into the possession or control of such Grantor's agents or processors
(with respect to future agents or processors), instruct such agent or processor
to hold all such Inventory for the account of Secured Party and subject to the
instructions of Secured Party, and use commercially reasonable efforts, but at
no out-of-pocket cost to such Grantor, to obtain waivers or bailee letters in
form and substance reasonably
V-11
satisfactory to Collateral Agent from all public warehouses in which Inventory
is maintained and all such agents or processors; and
(e) each Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.
Section 8. Special Covenants with respect to Accounts and Related
------------------------------------------------------
Contracts.
---------
(a) Each Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the locations therefor set forth on Schedule 4(d) or, upon
30 days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured Party to
exercise and enforce its rights and remedies hereunder, with respect to such
Accounts and Related Contracts shall have been taken. Each Grantor will hold and
preserve such records and chattel paper and will permit representatives of
Secured Party at any time during normal business hours to inspect and make
abstracts from such records and chattel paper, and each Grantor agrees to render
to Secured Party, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Promptly upon the
request of Secured Party, each Grantor shall deliver to Secured Party complete
and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than three (3) years from
the date on which each Account of such Grantor arose, maintain (i) complete
records of such Account, including records of all payments received, credits
granted and merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this Section 8(c), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts and Related Contracts. In
connection with such collections, each Grantor may take (and, [upon the
occurrence and during the continuance of an Event of Default] at Secured Party's
direction, shall take) such action as such Grantor or Secured Party may deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the right
-------- -------
at any time, upon the occurrence and during the continuation of an Event of
Default and upon written notice to such Grantor of its intention to do so, to
notify the account debtors or obligors under any Accounts of the assignment of
such Accounts to Secured Party and to direct such account debtors or obligors to
make payment of all amounts due or to become due to such Grantor thereunder
directly to Secured Party, to notify each Person maintaining a lockbox or
similar arrangement to which account debtors or obligors under any Accounts have
been directed to make payment to remit all amounts representing collections on
checks and other payment items from time to time sent to or deposited in such
lockbox or other arrangement directly to Secured Party and, upon such
notification and at the expense of Grantors, to enforce collection of any such
Accounts and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as such Grantor might have done. After
receipt by such Grantor of the notice from Secured Party referred to in the
proviso to the preceding sentence, (i) all amounts and proceeds (including
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checks and other instruments) received by such Grantor in respect of the
Accounts and the Related Contracts shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 16 hereof, and (ii) such Grantor shall not
adjust, settle or compromise the amount or payment of any Account, or release
wholly or partly any account debtor or obligor thereof, or allow any credit or
discount thereon.
Section 9. Special Covenants With Respect to the Securities
------------------------------------------------
Collateral.
----------
(a) Delivery. Each Grantor agrees that all certificates or
---------
instruments representing or evidencing the Securities Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and shall
be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by such Grantor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Secured Party shall have the right at any time
to exchange certificates or instruments representing or evidencing Securities
Collateral for certificates or instruments of smaller or larger denominations.
(b) Covenants. Each Grantor shall (i) not, except as otherwise
----------
not prohibited by the Credit Agreement, permit any issuer of Pledged Shares to
merge or consolidate unless all the outstanding Capital Stock or other equity
interests of the surviving or resulting Person is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding shares of any other constituent
corporation; provided, if the surviving or resulting Person upon any such merger
--------
or consolidation involving an issuer of Pledged Shares which is a controlled
foreign corporation is a controlled foreign corporation, then such Grantor shall
only be required to pledge outstanding Capital Stock of such surviving or
resulting Person possessing up to but not exceeding 65% of the voting power of
all classes of Capital Stock of such issuer entitled to vote; (ii) cause each
issuer of Pledged Shares not to issue any stock, other equity interests or other
securities in addition to or in substitution for the Pledged Shares issued by
such issuer, except to such Grantor; (iii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all additional shares
of stock, other equity interests or other securities of each issuer of Pledged
Shares; (iv) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all shares of stock or other equity interests of
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct Subsidiary of such Grantor; provided, notwithstanding
--------
anything contained in this subsection (iv) to the contrary, such Grantor shall
only be required to pledge the outstanding Capital Stock of a controlled foreign
corporation possessing up to but not exceeding 65% of the voting power of all
classes of Capital Stock of such controlled foreign corporation entitled to vote
and any such Grantor shall not be required to pledge the Capital Stock of any
Restricted Subsidiary; (v) pledge hereunder, immediately upon their issuance,
any and all instruments or other evidences of additional indebtedness from time
to time owed to such Grantor by any obligor on the Pledged Debt; provided,
--------
notwithstanding anything contained in this subsection (v) to the contrary, any
such Grantor shall not be required to pledge any such instruments or other
evidences of additional indebtedness owed to such Grantor by any Restricted
Subsidiary; (vi) pledge hereunder, immediately upon their issuance, any and all
instruments or other evidences of indebtedness from time to time owed to such
Grantor by any
V-13
Person that after the date of this Agreement becomes, as a result of any
occurrence, a direct or indirect Subsidiary of such Grantor; provided,
--------
notwithstanding anything contained in this subsection (vi) to the contrary, any
such Grantor shall not be required to pledge any such instruments or other
evidences of indebtedness owed to such Grantor by any Restricted Subsidiary;
(vii) promptly notify Secured Party of any event of which such Grantor becomes
aware causing loss or depreciation in the value of the Securities Collateral
that has a Material Adverse Effect; and (viii), at the request of Secured Party,
promptly execute and deliver to Secured Party an agreement providing for the
control, as that term is defined in the UCC, by Secured Party of all securities
entitlements and securities accounts of such Grantor.
(c) Voting and Distributions. So long as no Event of Default
-------------------------
shall have occurred and be continuing, (i) each Grantor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Securities Collateral or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the Credit Agreement; provided, no Grantor shall
--------
exercise or refrain from exercising any such right if Secured Party shall have
notified such Grantor that, in Secured Party's reasonable judgment, such action
would have a Material Adverse Effect; and provided further, such Grantor shall
----------------
give Secured Party at least five Business Days' prior written notice of the
manner in which it intends to exercise, or the reasons for refraining from
exercising, any such right (it being understood, however, that neither (A) the
voting by such Grantor of any Pledged Shares for or such Grantor's consent to
the election of directors or other members of a governing body of an issuer of
Pledged Shares at a regularly scheduled annual or other meeting of stockholders
or holders of equity interests or with respect to incidental matters at any such
meeting, nor (B) such Grantor's consent to or approval of any action otherwise
not prohibited under this Agreement and the Credit Agreement shall be deemed
inconsistent with the terms of this Agreement or the Credit Agreement within the
meaning of this Section, and no notice of any such voting or consent need be
given to Secured Party); (ii) each Grantor shall be entitled to receive and
retain, and to utilize free and clear of the lien of this Agreement, any and all
dividends, other distributions and interest paid in respect of the Securities
Collateral; provided, any and all (A) dividends, distributions and interest paid
--------
or payable other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for,
any Securities Collateral, (B) dividends and other distributions paid or payable
in cash in respect of any Securities Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise
distributed in respect of principal or in redemption of or in exchange for any
Securities Collateral, shall be, and shall forthwith be delivered to Secured
Party to hold as, Securities Collateral and shall, if received by such Grantor,
be received in trust for the benefit of Secured Party, be segregated from the
other property or funds of such Grantor and be forthwith delivered to Secured
Party as Securities Collateral in the same form as so received (with all
necessary endorsements); and (iii) Secured Party shall promptly execute and
deliver (or cause to be executed and delivered) to such Grantor all such
proxies, dividend payment orders and other instruments as such Grantor may from
time to time reasonably request for the purpose of enabling such Grantor to
exercise the voting and other consensual rights which it is entitled to exercise
pursuant to subsection (i) above and to receive the dividends, distributions,
principal or interest payments which it is authorized to receive and retain
pursuant to subsection (ii) above.
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Upon the occurrence and during the continuation of an Event of Default, (i)
upon written notice from Secured Party to any Grantor, all rights of such
Grantor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant hereto shall cease, and all such
rights shall thereupon become vested in Secured Party who shall thereupon have
the sole right to exercise such voting and other consensual rights; (ii) all
rights of such Grantor to receive the dividends, other distributions and
interest payments which it would otherwise be authorized to receive and retain
pursuant hereto shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to receive and hold as
Securities Collateral such dividends, other distributions and interest payments;
and (iii) all dividends, principal, interest payments and other distributions
which are received by such Grantor contrary to the provisions of subsection (ii)
of the immediately preceding paragraph or subsection (ii) above shall be
received in trust for the benefit of Secured Party, shall be segregated from
other funds of such Grantor and shall forthwith be paid over to Secured Party as
Securities Collateral in the same form as so received (with any necessary
endorsements).
In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies, dividend
payment orders and other instruments as Secured Party may from time to time
reasonably request, and (ii) without limiting the effect of subsection (i)
above, each Grantor hereby grants to Secured Party an irrevocable proxy to vote
the Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled (including
giving or withholding written consents of shareholders or other holders of
equity interests, calling special meetings of shareholders or other holders of
equity interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Shares on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Shares or any officer or agent
thereof), upon the occurrence of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations.
(d) Investment Property. Company shall not maintain any investment
-------------------
property with any financial or other institution unless such institution has
executed a control agreement in form and substance reasonably satisfactory to
Collateral Agent.
Section 10. Special Covenants With Respect to the Intellectual
--------------------------------------------------
Property Collateral.
-------------------
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the
Intellectual Property Collateral and at all times keep at least one
complete set of its records concerning such Collateral at its chief
executive office or principal place of business;
(ii) use commercially reasonable efforts so as not to permit the
inclusion in any contract to which it hereafter becomes a party of any
provision that could or might in any way impair or prevent the creation of
a security interest in, or the
V-15
assignment of, such Grantor's rights and interests in any property included
within the definitions of any Intellectual Property Collateral acquired
under such contracts;
(iii) take any and all reasonable steps to protect the secrecy of
all trade secrets relating to the products and services sold or delivered
under or in connection with the Intellectual Property Collateral,
including, without limitation, where appropriate entering into
confidentiality agreements with employees and labeling and restricting
access to secret information and documents;
(iv) use proper statutory notice in connection with its use of
any of the Intellectual Property Collateral, except where the failure to
give such notice would not have a Material Adverse Effect;
(v) use a commercially appropriate standard of quality (which
may be consistent with such Grantor's past practices) in the manufacture,
sale and delivery of products and services sold or delivered under or in
connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured
Party's reasonable request statements and schedules further identifying and
describing any Intellectual Property Collateral and such other reports in
connection with such Collateral, all in reasonable detail.
(b) Except as otherwise provided in this Section 10, each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor in respect of the Intellectual Property Collateral or any
portion thereof. In connection with such collections, each Grantor may take
(and, after the occurrence and during the continuance of any Event of Default at
Secured Party's reasonable direction, shall take) such action as such Grantor or
Secured Party may deem reasonably necessary or advisable to enforce collection
of such amounts; provided, Secured Party shall have the right at any time, upon
--------
the occurrence and during the continuation of an Event of Default and upon
written notice to such Grantor of its intention to do so, to notify the obligors
with respect to any such amounts of the existence of the security interest
created hereby and to direct such obligors to make payment of all such amounts
directly to Secured Party, and, upon such notification and at the expense of
such Grantor, to enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by any Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence
and during the continuation of any Event of Default, (i) all amounts and
proceeds (including checks and other instruments) received by each Grantor in
respect of amounts due to such Grantor in respect of the Intellectual Property
Collateral or any portion thereof shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 16 hereof, and (ii) such Grantor shall not
adjust, settle or compromise the amount or payment of any such amount or release
wholly or partly any obligor with respect thereto or allow any credit or
discount thereon.
V-16
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its commercially reasonable judgment, decides
otherwise, (i) any application relating to any of the Intellectual Property
Collateral owned, held or used by such Grantor and identified on Schedules
1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is pending as of the date of
this Agreement, (ii) any Copyright Registration on any existing or future
unregistered but copyrightable works (except for works of nominal commercial
value or with respect to which such Grantor has determined in the exercise of
its commercially reasonable judgment that it shall not seek registration), (iii)
application on any future patentable but unpatented innovation or invention
comprising Intellectual Property Collateral, and (iv) any Trademark opposition
and cancellation proceedings, renew Trademark Registrations and Copyright
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Intellectual Property Collateral. Any
expenses incurred in connection therewith shall be borne solely by Grantors.
Subject to the foregoing, each Grantor shall give Secured Party written notice
of any abandonment of any Intellectual Property Collateral registered with a
Governmental Authority or any pending patent application or any Patent within 45
days after the end of each fiscal quarter of Company.
(d) Except as provided herein, each Grantor shall have the right to
commence and prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other actions for
infringement, unfair competition, dilution, misappropriation or other damage,
or reexamination or reissue proceedings as are necessary to protect the
Intellectual Property Collateral. Secured Party shall provide, at such
Grantor's expense, all reasonable and necessary cooperation in connection with
any such suit, proceeding or action including, without limitation, joining as a
necessary party. Each Grantor shall, within 45 days after the end of each
fiscal quarter of Company, notify Secured Party of the institution of, or of
any adverse determination likely to have a Material Adverse Effect in, any
proceeding (whether in the United States Patent and Trademark Office, the United
States Copyright Office or any federal, state, local or foreign court) or
regarding such Grantor's ownership, right to use, or interest in any
Intellectual Property Collateral. Each Grantor shall provide to Secured Party
any information with respect thereto requested by Secured Party.
(e) In addition to, and not by way of limitation of, the granting of a
security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuation of an Event of Default, hereby
assigns, transfers and conveys to Secured Party the nonexclusive right and
license to use all trademarks, tradenames, copyrights, patents or technical
processes (including, without limitation, the Intellectual Property Collateral)
owned or used by such Grantor that relate to the Collateral and any other
collateral granted by such Grantor as security for the Secured Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable Secured Party to realize on the Collateral in accordance with this
Agreement and to enable any transferee or assignee of the Collateral to enjoy
the benefits of the Collateral; provided, however, the license granted under
-------- -------
this Section shall not be construed to limit such Grantor's ability to take
reasonable steps, in accordance with its then current business practices, to
protect and preserve the Trademarks, the Trademark Registrations, the Trademark
Rights and the Associated Goodwill. This right shall inure to the benefit of
all successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license shall be granted free of charge, without
V-17
requirement that any monetary payment whatsoever be made to such Grantor. In
addition, each Grantor hereby grants to Secured Party and its employees,
representatives and agents the right to visit such Grantor's and any of its
Affiliate's or subcontractor's plants, facilities and other places of business
that are utilized in connection with the manufacture, production, inspection,
storage or sale of products and services sold or delivered under any of the
Intellectual Property Collateral (or which were so utilized during the prior six
month period), and to inspect the quality control and all other records relating
thereto upon reasonable advance written notice to such Grantor and at reasonable
dates and times and as often as may be reasonably requested. To the extent that
the Credit Agreement permits any Grantor to license the Intellectual Property
Collateral, Secured Party shall promptly enter into a non-disturbance agreement
or other similar arrangement, at such Grantor's request and expense, with such
Grantor and any licensee of any Intellectual Property Collateral permitted
hereunder in form and substance reasonably satisfactory to Secured Party
pursuant to which (i) Secured Party shall agree not to disturb or interfere with
such licensee's rights under its license agreement with such Grantor so long as
such licensee is not in default thereunder, and (ii) such licensee shall
acknowledge and agree that the Intellectual Property Collateral licensed to it
is subject to the security interest created in favor of Secured Party and the
other terms of this Agreement.
Section 11. Secured Party Appointed Attorney-in-Fact.
----------------------------------------
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, Secured Party or otherwise, from time to time in
Secured Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to Agent under the Credit Agreement;
(b) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, ▇▇▇ for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with Sections 11(a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral;
(e) except as otherwise permitted by Section 6.5 of the Credit
Agreement, to pay or discharge taxes or Liens (other than Liens permitted under
this Agreement or the Credit Agreement) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Secured Party in its
V-18
sole discretion, any such payments made by Secured Party to become obligations
of such Grantor to Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party's option and Grantors' expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect, preserve or
realize upon the Collateral and Secured Party's security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
Section 12. Secured Party May Perform.
-------------------------
If any Grantor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
Grantors under Section 17(b) hereof.
Section 13. Standard of Care.
----------------
The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property.
Section 14. Remedies.
--------
(a) Generally. If any Event of Default (as defined in the Credit
----------
Agreement) shall have occurred and be continuing, Secured Party may exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral), and also may (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of Secured Party
forthwith, assemble all or part of the Collateral as directed by Secured Party
and make it available to Secured Party at a place to be designated by Secured
Party that is reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of
V-19
such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding subsection (iii) and collecting
any Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, (vi) exercise
dominion and control over and refuse to permit further withdrawals from any
Deposit Account maintained with Secured Party or any Bank constituting a part of
the Collateral and (vii) without notice to any Grantor, transfer to or to
register in the name of Secured Party or any of its nominees any or all of the
Securities Collateral. Secured Party or any Bank may be the purchaser of any or
all of the Collateral at any such sale and Secured Party, as agent for and
representative of Banks (but not any Bank in its individual capacity unless
Majority Banks shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.
Secured Party shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Each Grantor hereby waives any claims
against Secured Party arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Collateral to more than one
offeree. If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantors shall be jointly and
severally liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency. Each Grantor further agrees that a
breach of any of the covenants contained in this Section will cause irreparable
injury to Secured Party, that Secured Party has no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against such
Grantor, and each Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities.
(b) Securities Collateral.
----------------------
(i) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, and regulations
promulgated thereunder, (the "Securities Act") and applicable state
--------------
securities laws, Secured Party may be compelled, with respect to any sale
of all or any part of the Securities Collateral conducted without prior
registration or qualification of such Securities Collateral under the
Securities Act
V-20
and/or such state securities laws, to limit purchasers to those who will
agree, among other things, to acquire the Securities Collateral for their
own account, for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges that any such private sales may
be at prices and on terms less favorable than those obtainable through a
public sale without such restrictions (including a public offering made
pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances and the registration rights granted to
Secured Party by such Grantor pursuant hereto, each Grantor agrees that any
such private sale shall be deemed to have been made in a commercially
reasonable manner and that Secured Party shall have no obligation to engage
in public sales and no obligation to delay the sale of any Securities
Collateral for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it. If Secured Party
determines to exercise its right to sell any or all of the Securities
Collateral, upon written request, each Grantor shall and shall cause each
issuer of any Pledged Shares to be sold hereunder from time to time to
furnish to Secured Party all such information as Secured Party may request
in order to determine the number of shares and other instruments included
in the Securities Collateral which may be sold by Secured Party in exempt
transactions under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from time to
time in effect.
(ii) If Secured Party shall determine to exercise its right to
sell all or any of the Securities Collateral pursuant to this Section, each
Grantor agrees that, upon request of Secured Party (which request may be
made by Secured Party in its sole discretion), such Grantor will, at its
own expense (A) execute and deliver, and cause each issuer of the
Securities Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as
may be necessary or, in the opinion of Secured Party, advisable to register
such Securities Collateral under the provisions of the Securities Act and
to cause the registration statement relating thereto to become effective
and to remain effective for such period as prospectuses are required by law
to be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of Secured Party, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto; (B) use its best efforts to qualify the
Securities Collateral under all applicable state securities or "Blue Sky"
laws and to obtain all necessary governmental approvals for the sale of the
Securities Collateral, as requested by Secured Party; (C) cause each such
issuer to make available to its security holders, as soon as practicable,
an earnings statement which will satisfy the provisions of Section 11(a) of
the Securities Act; (D) do or cause to be done all such other acts and
things as may be necessary to make such sale of the Securities Collateral
or any part thereof valid and binding and in compliance with applicable
law; and (E) bear all reasonable costs and expenses, including reasonable
attorneys' fees, of carrying out its obligations under this Section.
V-21
(iii) Without limiting the generality of Sections 10.4 and 10.5
of the Credit Agreement, in the event of any public sale described herein,
each Grantor agrees to indemnify and hold harmless (to the maximum extent
permitted under the Securities Act or other applicable law) Secured Party
and each Bank and each of their respective directors, officers, employees
and agents from and against any loss, fee, cost, expense, damage, liability
or claim, joint or several, to which any such Persons may become subject or
for which any of them may be liable, under the Securities Act or otherwise,
insofar as such losses, fees, costs, expenses, damages, liabilities or
claims (or any litigation commenced or threatened in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, registration
statement, prospectus or other such document published or filed in
connection with such public sale, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will (to the maximum extent
permitted under the Securities Act or other applicable law) reimburse
Secured Party and such other Persons for any legal or other expenses
reasonably incurred by Secured Party and such other Persons in connection
with any litigation, of any nature whatsoever, commenced or threatened in
respect thereof (including any and all fees, costs and expenses whatsoever
reasonably incurred by Secured Party and such other Persons and counsel for
Secured Party and such other Persons in investigating, preparing for,
defending against or providing evidence, producing documents or taking any
other action in respect of, any such commenced or threatened litigation or
any claims asserted). This indemnity shall be in addition to any liability
which any Grantor may otherwise have and shall extend upon the same terms
and conditions to each Person, if any, that controls Secured Party or such
Persons within the meaning of the Securities Act.
Section 15. Additional Remedies for Intellectual Property Collateral.
--------------------------------------------------------
(a) Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, (i) Secured
Party shall have the right (but not the obligation) to bring suit, in the name
of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and each Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in Sections 10.4 and 10.5 of
the Credit Agreement and Section 17 hereof, as applicable, in connection with
the exercise of its rights under this Section, and, to the extent that Secured
Party shall elect not to bring suit to enforce any Intellectual Property
Collateral as provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement of any of the Intellectual Property Collateral by
others and for that purpose agrees to use its commercially reasonable judgment
in maintaining any action, suit or proceeding against any Person so infringing
reasonably necessary to prevent such infringement; (ii) upon written demand from
Secured Party, each Grantor shall execute and deliver to Secured Party an
assignment or assignments of the Intellectual Property Collateral and such other
documents as are necessary or appropriate to carry out the intent and purposes
of this Agreement; (iii) each Grantor agrees that such an assignment and/or
recording shall be applied to reduce the Secured
V-22
Obligations outstanding only to the extent that Secured Party (or any Bank)
receives cash proceeds in respect of the sale of, or other realization upon, the
Intellectual Property Collateral; and (iv) within five Business Days after
written notice from Secured Party, each Grantor shall make available to Secured
Party, to the extent within such Grantor's power and authority, such personnel
in such Grantor's employ on the date of such Event of Default as Secured Party
may reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell the
products and services sold or delivered by such Grantor under or in connection
with the Trademarks, Trademark Registrations and Trademark Rights, such persons
to be available to perform their prior functions on Secured Party's behalf and
to be compensated by Secured Party at such Grantor's expense on a per diem, pro-
rata basis consistent with the salary and benefit structure applicable to each
as of the date of such Event of Default.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, Secured Party shall promptly execute and deliver
to such Grantor such assignments as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to Secured Party
as aforesaid, subject to any disposition thereof that may have been made by
Secured Party; provided, after giving effect to such reassignment, Secured
--------
Party's security interest granted pursuant hereto, as well as all other rights
and remedies of Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
-------- -------
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Liens expressly permitted by the Credit Agreement.
Section 16. Application of Proceeds.
-----------------------
Except as expressly provided elsewhere in this Agreement and in the
Intercreditor Agreement, all proceeds received by Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral shall be applied in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder
for the account of Grantors, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the
ratable benefit of the holders thereof) and, as to obligations arising
under the Credit Agreement, as provided in the Credit Agreement; and
V-23
THIRD: To the payment to or upon the order of Company, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
Section 17. Indemnity and Expenses.
----------------------
(a) Grantors jointly and severally agree to indemnify Secured Party
and each Bank from and against any and all claims, losses and liabilities in any
way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including without limitation enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Bank's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Subject to Section 6.7 of the Credit Agreement, Grantors jointly
and severally agree to pay to Secured Party upon demand (i) the amount of any
and all reasonable costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with the administration of this Agreement or the failure by
any Grantor to perform or observe any of the provisions hereof and (ii) the
amount of any and all costs and expenses, including the fees and expenses of its
counsel and of any experts and agents, that Secured Party may incur in
connection with the exercise or enforcement of any of the rights of Secured
Party hereunder.
(c) The obligations of Grantors in this Section 17 shall (i) survive
the termination of this Agreement and the discharge of Grantors' other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents, and (ii) as to any Grantor that is a party to a Guaranty, be subject
to the provisions of Section 1(b) thereof.
Section 18. Continuing Security Interest; Transfer of Loans;
------------------------------------------------
Termination and Release.
-----------------------
(a) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Secured Obligations and the cancellation or termination of the
Commitments, (ii) be binding upon Grantors and their respective successors and
assigns, and (iii) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing subsection (iii), but
subject to the provisions of Sections 10.7 and 10.8 of the Credit Agreement, any
Bank may assign or otherwise transfer any Loans held by it to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Banks herein or otherwise.
(b) Upon the payment in full of all Secured Obligations and the
cancellation or termination of the Commitments, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
applicable Grantors. Upon any such termination Secured Party will, at Grantors'
expense, execute and deliver to Grantors such documents as Grantors shall
reasonably request to evidence such termination. In addition, upon the proposed
sale, transfer or other disposition of any Collateral by a Grantor in accordance
with the Credit Agreement for which such Grantor desires to obtain a security
interest release from Secured
V-24
Party, such Grantor shall deliver an officers' certificate (i) stating that the
Collateral subject to such disposition is being sold, transferred or otherwise
disposed of in compliance with the terms of the Credit Agreement, and (ii)
specifying the Collateral being sold, transferred or otherwise disposed of in
the proposed transaction. Upon the receipt of such officers' certificate,
Secured Party shall, at such Grantor's expense, so long as Secured Party has no
reason to believe that the officers' certificate delivered by such Grantor with
respect to such sale is not true and correct, execute and deliver such releases
of its security interest in such Collateral which is to be so sold, transferred
or disposed of, as may be reasonably requested by such Grantor.
Section 19. Secured Party as Agent.
----------------------
(a) Secured Party has been appointed to act as Secured Party
hereunder by Banks. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
--------
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 14 hereof in accordance with the instructions of Majority Banks.
(b) Secured Party shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor collateral agent pursuant to Section 9.10 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Collateral Agent under
Section 9.10 of the Credit Agreement by a successor collateral agent, that
successor collateral agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed Secured
Party under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed collateral agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
Section 20. Additional Grantors.
-------------------
The initial Subsidiary Grantors hereunder shall be such of the Subsidiaries
of Company as are signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Subsidiaries of Company may become
parties hereto as additional Grantors (each an
V-25
"Additional Grantor"), by executing a counterpart substantially in the form of
------------------
Exhibit VI to this Agreement. Upon delivery of any such counterpart to Secured
----------
Party, notice of which is hereby waived by Grantors, each such Additional
Grantor shall be a Grantor and shall be as fully a party hereto as if such
Additional Grantor were an original signatory hereto. Each Grantor expressly
agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Agent not to cause any Subsidiary of Company to become an Additional
Grantor hereunder. This Agreement shall be fully effective as to any Grantor
that is or becomes a party hereto regardless of whether any other Person becomes
or fails to become or ceases to be a Grantor hereunder.
Section 21. Amendments; Etc.
---------------
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Grantors;
provided this Agreement may be modified by the execution of a counterpart by an
--------
Additional Grantor in accordance with Section 20 hereof and Grantors hereby
waive any requirement of notice of or consent to any such amendment. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
Section 22. Notices.
-------
(a) Unless otherwise specifically provided in this Agreement, all
notices, requests and other communications provided for hereunder shall be in
writing (including, unless the context expressly otherwise provides,
telegraphic, telex, facsimile transmission or cable communication, provided that
--------
any matter transmitted by facsimile transmission (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed promptly by a hard
copy original thereof) and mailed, telegraphed, telexed, sent by facsimile
transmission, or delivered, to the address or number specified for notices on
the applicable signature page hereof; or, as to any Grantor or Collateral Agent,
to such other address as shall be designated by such party in a written notice
to the other parties, and as to each other party, at such other address as shall
be designated by such party in a written notice to each Grantor and Collateral
Agent.
(b) All such notices and communications shall, when transmitted by
overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be
effective when delivered for overnight delivery or to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, or if delivered, upon delivery.
Section 23. Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or
V-26
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
Section 24. Severability.
------------
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 25. Headings.
--------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
Section 26. Governing Law; Terms; Rules of Construction.
-------------------------------------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined. The rules of construction set
forth in Section 1.2 of the Credit Agreement shall be applicable to this
Agreement mutatis mutandis.
Section 27. Consent to Jurisdiction and Service of Process.
----------------------------------------------
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH GRANTOR, SECURED PARTY, AGENT AND BANKS EACH CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH GRANTOR, SECURED PARTY, AGENT AND BANKS EACH IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
--------------------
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH GRANTOR, SECURED PARTY, AGENT
AND BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
V-27
Section 28. Waiver of Jury Trial.
--------------------
EACH GRANTOR, BANKS, AGENT AND SECURED PARTY EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, COLLATERAL AGENT-
RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GRANTOR, BANKS, AGENT AND SECURED PARTY
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 29. Counterparts.
------------
This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
[Remainder of page intentionally left blank]
V-28
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
LEVI ▇▇▇▇▇▇▇ & CO.
By: _________________________________
Name:________________________________
Title:_______________________________
Each of the entities listed on Schedule A annexed
----------
hereto
By: _________________________________
on behalf of each of the entities listed on
Schedule A annexed hereto
----------
Name:________________________________
Title:_______________________________
BANK OF AMERICA, N.A., as Collateral
Agent, as Secured Party
By:__________________________________
Name:________________________________
Title:_______________________________
V-29
Schedule A
----------
Name Notice Address for each Subsidiary
---- ----------------------------------
Grantor
-------
V-Sch. A-1
Schedule 1(d) to
----------------
Pledge and Security Agreement
-----------------------------
Deposit Accounts
----------------
V-Sch. 1(d)-1
Schedule 1(e)(i) to
-------------------
Pledge and Security Agreement
-----------------------------
--------------------------------------------------------------------------------------------------------
PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
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V-Sch. 1(e)(i)-1
--------------------------------------------------------------------------------------------------------
PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
--------------------------------------------------------------------------------------------------------
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V-Sch. 1(e)(i)-2
Schedule 1(e)(ii) to
--------------------
Pledge and Security Agreement
-----------------------------
--------------------------------------------------------------------------------------------------------
AMOUNT OF
DEBT ISSUER PAYEE INDEBTEDNESS
========================================================================================================
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
V-Sch. 1(e)(ii)-1
Schedule 1(f)(i) to
-------------------
Pledge And Security Agreement
-----------------------------
U.S. Trademarks:
---------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
Foreign Trademarks:
------------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
V-Sch. 1(f)(i)-1
Schedule 1(f)(ii) to
--------------------
Pledge and Security Agreement
-----------------------------
U.S. Patents Issued:
-------------------
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
---------- ---------- --------- -------- -----
U.S. Patents Pending:
--------------------
Applicant's Date Application
Name Filed Number Invention [Inventor]
---- ----- ------ --------- --------
Foreign Patents Issued:
----------------------
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
---------- ---------- --------- -------- -----
V-Sch. 1(f)(ii)-1
Foreign Patents Pending:
-----------------------
Applicant's Date Application
Name Filed Number Invention [Inventor]
---- ----- ------ --------- ----------
V-Sch. 1(f)(ii)-2
Schedule 1(f)(iii) to
---------------------
Pledge and Security Agreement
-----------------------------
U.S. Copyrights:
---------------
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Foreign Copyright Registrations:
-------------------------------
Country Title Registration No. Date of Issue Registered Owner
------- ----- ---------------- ------------- ----------------
Pending U.S. Copyright Registrations & Applications:
----------------------------------------------------
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- ------------------
Pending Foreign Copyright Registrations & Applications:
--------------------------------------------------------
Country Title Registration No. Date of Issue [Registered Owner]
------- ----- ---------------- ------------- ----------------
V-Sch. 1(f)(iii)-1
Schedule 4(b) to
----------------
Pledge and Security Agreement
-----------------------------
Locations of Equipment and Inventory
------------------------------------
Name of Grantor Locations of Equipment and Inventory
--------------- ------------------------------------
V-Sch. 4(b)-1
Schedule 4(c) to
----------------
Pledge and Security Agreement
-----------------------------
Office Locations
----------------
Name of Grantor Office Locations
--------------- ----------------
V-Sch. 4(c)-1
Schedule 4(d) to
----------------
Pledge and Security Agreement
-----------------------------
Other Names
-----------
Name of Grantor Other Names
--------------- -----------
V-Sch. 4(d)-1
Schedule 4(h) to
----------------
Pledge and Security Agreement
-----------------------------
Filing Offices
--------------
Grantor Filing Offices
------- --------------
V-Sch. 4(h)-1
Exhibit I to
------------
Pledge and Security Agreement
-----------------------------
[FORM OF] GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns and
-------
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and
WHEREAS, Levi ▇▇▇▇▇▇▇ & Co., a Delaware corporation, has entered into the
Amended and Restated 1997 364 Day Credit Agreement dated as of January 31, 2000
(said Amended and Restated 1997 364 Day Credit Agreement, as amended to the date
hereof, and as it may hereafter be further amended, modified, or supplemented
from time to time, being the "Credit Agreement"; the terms defined therein and
----------------
not otherwise defined herein being used herein as therein defined) with the
several financial institutions from time to time party thereto (collectively,
"Banks"); the several financial institutions party thereto as Senior Managing
------
Agents; the several financial institutions party thereto as Managing Agents; the
several financial institutions party thereto as Co-Agents; Bank of America, N.A.
as Agent for Banks; and Bank of America, N.A. as Collateral Agent for Banks (in
such capacity, "Secured Party") pursuant to which Banks have made certain
-------------
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company; and
[WHEREAS, Grantor has executed and delivered that certain Guaranty dated as
of February 1, 2000 (said Guaranty, as it may hereafter be amended, modified, or
supplemented from time to time, being the "Guaranty") in favor of Secured Party
--------
for the benefit of Banks and Agent, pursuant to which Grantor has guarantied the
prompt payment and performance when due of all obligations of Company under the
Credit Agreement and the other Loan Documents; and]
WHEREAS, pursuant to the terms of a Pledge and Security Agreement dated as
of January 31, 2000 (as amended, modified, or supplemented from time to time,
the "Pledge and Security Agreement"), among Grantor, Secured Party and the other
-----------------------------
grantors named therein, Grantor has agreed to create in favor of Secured Party a
secured and protected interest in, and Secured Party has agreed to become a
secured creditor with respect to, the Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Pledge and Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "Trademark Collateral"):
--------------------
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise but only to the extent permitted by agreements
governing such license or other use) in and to all trademarks, service
marks, designs, logos, indicia, tradenames,
V-I-1
trade dress, corporate names, company names, business names, fictitious
business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by such Grantor, or
hereafter adopted and used, in its business (including, without limitation,
the trademarks specifically identified in Schedule A) (collectively, the
"Trademarks"), all registrations that have been or may hereafter be issued
----------
or applied for thereon in the United States and any state thereof and in
foreign countries (including, without limitation, the registrations and
applications specifically identified in Schedule A) (the "Trademark
---------
Registrations"), all common law and other rights (but in no event any of
-------------
the obligations) in and to the Trademarks in the United States and any
state thereof and in foreign countries (the "Trademark Rights"), and all
----------------
goodwill of such Grantor's business symbolized by the Trademarks and
associated therewith (the "Associated Goodwill"); and
-------------------
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Trademark Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Trademark Collateral. For purposes of this Grant of Trademark
Security Interest, the term "proceeds" includes whatever is receivable or
--------
received when Trademark Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under, any license,
contract or agreement to which Grantor is a party or any Negative Pledge
permitted by the Credit Agreement on such rights or interests; provided, that
--------
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Trademark Collateral shall include, and Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Pledge and Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
V-I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the __ day of _______, 2000.
[NAME OF GRANTOR]
By:_____________________________
Name:___________________________
Title:__________________________
V-I-3
Schedule A to
-------------
Grant of Trademark Security Interest
------------------------------------
United States
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
V-Sch. A-1
Exhibit II to
-------------
Pledge and Security Agreement
-----------------------------
[FORM OF] GRANT OF PATENT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns and
-------
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and
WHEREAS, Levi ▇▇▇▇▇▇▇ & Co., a Delaware corporation, has entered into the
Amended and Restated 1997 364 Day Credit Agreement dated as of January 31, 2000
(said Amended and Restated 1997 364 Day Credit Agreement, as amended to the date
hereof, and as it may hereafter be further amended, modified, or supplemented
from time to time, being the "Credit Agreement"; the terms defined therein and
----------------
not otherwise defined herein being used herein as therein defined) with the
several financial institutions from time to time party thereto (collectively,
"Banks"); the several financial institutions party thereto as Senior Managing
------
Agents; the several financial institutions party thereto as Managing Agents; the
several financial institutions party thereto as Co-Agents; Bank of America, N.A.
as Agent for Banks; and Bank of America, N.A. as Collateral Agent for Banks (in
such capacity, "Secured Party") pursuant to which Banks have made certain
-------------
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company; and
[WHEREAS, Grantor has executed and delivered that certain Guaranty dated as
of February 1, 2000 (said Guaranty, as it may hereafter be amended, modified, or
supplemented from time to time, being the "Guaranty") in favor of Secured Party
--------
for the benefit of Banks and Agent, pursuant to which Grantor has guarantied the
prompt payment and performance when due of all obligations of Company under the
Credit Agreement and the other Loan Documents; and]
WHEREAS, pursuant to the terms of a Pledge and Security Agreement dated as
of January 31, 2000 (as amended, modified, or supplemented from time to time,
the "Pledge and Security Agreement"), among Grantor, Secured Party and the other
-----------------------------
grantors named therein, Grantor has agreed to create in favor of Secured Party a
secured and protected interest in, and Secured Party has agreed to become a
secured creditor with respect to, the Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Pledge and Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "Patent Collateral"):
-----------------
(i) all rights, title and interest (including rights acquired pursuant to a
license or otherwise but only to the extent permitted by agreements
governing such license or other use) in and to all patents and patent
applications and rights and interests in patents and
V-II-1
patent applications under any domestic or foreign law that are presently,
or in the future may be, owned or held by such Grantor and all patents and
patent applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned by such Grantor in whole or in part (including,
without limitation, the patents and patent applications listed in Schedule
--------
A), all rights (but not obligations) corresponding thereto to ▇▇▇ for past,
-
present and future infringements and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof (all
of the foregoing being collectively referred to as the "Patents"); and
-------
(ii) all proceeds, products, rents and profits of or from any and all of
the foregoing Patent Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Patent Collateral. For purposes of this Grant of Patent Security Interest,
the term "proceeds" includes whatever is receivable or received when Patent
--------
Collateral or proceeds are sold, exchanged, collected or otherwise disposed
of, whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Patent Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under, any license,
contract or agreement to which Grantor is a party or any Negative Pledge
permitted by the Credit Agreement on such rights or interests; provided, that
--------
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Patent Collateral shall include, and Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Pledge and Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
V-II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ____________, 2000.
[NAME OF GRANTOR]
By:__________________________
Name:________________________
Title:_______________________
V-II-3
Schedule A to
-------------
Grant of Patent Security Interest
---------------------------------
Patents Issued:
--------------
Patent No. Issue Date Invention Inventor Registered Owner
---------- ---------- --------- -------- ----------------
Patents Pending:
---------------
Applicant's Date Application
Name Filed Number Invention Inventor
---- ----- ------ --------- --------
V-Sch. A-1
Exhibit III to
--------------
Pledge and Security Agreement
-----------------------------
[FORM OF] GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns and
-------
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and
WHEREAS, Levi ▇▇▇▇▇▇▇ & Co., a Delaware corporation, has entered into the
Amended and Restated 1997 364 Day Credit Agreement dated as of January 31, 2000
(said Amended and Restated 1997 364 Day Credit Agreement, as amended to the date
hereof, and as it may hereafter be further amended, modified, or supplemented
from time to time, being the "Credit Agreement"; the terms defined therein and
----------------
not otherwise defined herein being used herein as therein defined) with the
several financial institutions from time to time party thereto (collectively,
"Banks"); the several financial institutions party thereto as Senior Managing
-----
Agents; the several financial institutions party thereto as Managing Agents; the
several financial institutions party thereto as Co-Agents; Bank of America, N.A.
as Agent for Banks; and Bank of America, N.A. as Collateral Agent for Banks (in
such capacity, "Secured Party") pursuant to which Banks have made certain
-------------
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company; and
[WHEREAS, Grantor has executed and delivered that certain Guaranty dated as
of February 1, 2000 (said Guaranty, as it may hereafter be amended, modified, or
supplemented from time to time, being the "Guaranty") in favor of Secured Party
--------
for the benefit of Banks and Agent, pursuant to which Grantor has guarantied the
prompt payment and performance when due of all obligations of Company under the
Credit Agreement and the other Loan Documents; and]
WHEREAS, pursuant to the terms of a Pledge and Security Agreement dated as
of January 31, 2000 (as amended, modified, or supplemented from time to time,
the "Pledge and Security Agreement"), among Grantor, Secured Party and the other
-----------------------------
grantors named therein, Grantor has agreed to create in favor of Secured Party a
secured and protected interest in, and Secured Party has agreed to become a
secured creditor with respect to, the Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Pledge and Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "Copyright Collateral"):
--------------------
(i) all rights, title and interest (including rights acquired pursuant to a
license or otherwise but only to the extent permitted by agreements
governing such license or other use) under copyright in various published
and unpublished works of authorship including,
V-III-1
without limitation, computer programs, computer data bases, other computer
software layouts, trade dress, drawings, designs, writings, and formulas
(including, without limitation, the works listed on Schedule A, as the same
----------
may be amended pursuant hereto from time to time) (collectively, the
"Copyrights"), all copyright registrations issued to Grantor and
----------
applications for copyright registration that have been or may hereafter be
issued or applied for thereon in the United States and any state thereof
and in foreign countries (including, without limitation, the registrations
listed on Schedule A, as the same may be amended pursuant hereto from time
----------
to time) (collectively, the "Copyright Registrations"), all common law and
-----------------------
other rights in and to the Copyrights in the United States and any state
thereof and in foreign countries including all copyright licenses (but with
respect to such copyright licenses, only to the extent permitted by such
licensing arrangements) (the "Copyright Rights"), including, without
----------------
limitation, each of the Copyrights, rights, titles and interests in and to
the Copyrights, all derivative works and other works protectable by
copyright, which are presently, or in the future may be, owned, created (as
a work for hire for the benefit of Grantor), authored (as a work for hire
for the benefit of Grantor), or acquired by Grantor, in whole or in part,
and all Copyright Rights with respect thereto and all Copyright
Registrations therefor, heretofore or hereafter granted or applied for, and
all renewals and extensions thereof, throughout the world, including, the
right (but not the obligation) to renew and extend such Copyright
Registrations and Copyright Rights and to register works protectable by
copyright and the right (but not the obligation) to ▇▇▇ in the name of such
Grantor or in the name of Secured Party or Banks for past, present and
future infringements of the Copyrights and Copyright Rights; and
(ii) all proceeds, products, rents and profits of or from any and all of
the foregoing Copyright Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Copyright Collateral. For purposes of this Grant of Copyright
Security Interest, the term "proceeds" includes whatever is receivable or
--------
received when Copyright Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Copyright Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under, any license,
contract or agreement to which Grantor is a party or any Negative Pledge
permitted by the Credit Agreement on such rights or interests; provided, that
--------
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Copyright Collateral shall include, and Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are
V-III-2
more fully set forth in the Pledge and Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
[The remainder of this page intentionally left blank.]
V-III-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ___________, 2000.
[NAME OF GRANTOR]
By:______________________________
Name:____________________________
Title:___________________________
V-III-4
Schedule A to
-------------
Grant of Copyright Security Interest
------------------------------------
U.S. Copyrights:
---------------
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Pending U.S. Copyright Registrations & Applications:
---------------------------------------------------
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- -------------------
V-Sch. A-1
Exhibit IV to
-------------
Pledge and Security Agreement
-----------------------------
[FORM OF] PLEDGE SUPPLEMENT
This Pledge Supplement, dated __________________, is delivered pursuant to
the Pledge and Security Agreement, dated January 31, 2000, between Levi ▇▇▇▇▇▇▇
& Co., a Delaware corporation, the other Grantors named therein, and Bank of
America, N.A. (as it may be from time to time amended, modified, or
supplemented, the "Pledge and Security Agreement"). Capitalized terms used
-----------------------------
herein not otherwise defined herein shall have the meanings ascribed thereto in
the Pledge and Security Agreement.
Grantor hereby agrees that the [Pledged Shares] [Pledged Debt] listed on
the schedule attached hereto shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed
and delivered by its duly authorized officer as of _______________.
[GRANTOR]
By:______________________________
Name:____________________________
Title:___________________________
V-IV-1
Exhibit V to
------------
Pledge and Security Agreement
-----------------------------
[FORM OF] IP SUPPLEMENT
This IP SUPPLEMENT, dated _____________, is delivered pursuant to and
supplements (i) the Pledge and Security Agreement, dated as of January 31, 2000
(as it may be from time to time amended, modified, or supplemented, the "Pledge
------
and Security Agreement"), among Levi ▇▇▇▇▇▇▇ & Co., a Delaware corporation, the
----------------------
other Grantors named therein, and Bank of America, N.A., as Secured Party, and
(ii) the [Grant of Trademark Security Interest] [Grant of Patent Security
Interest] [Grant of Copyright Security Interest] dated as of ___________, 2000
(the "Grant") executed by Grantor. Capitalized terms used herein not otherwise
-----
defined herein shall have the meanings ascribed thereto in the Grant.
["Grantor"] grants to Secured Party a security interest in all of Grantor's
right, title and interest in and to the [Trademark Collateral] [Patent
Collateral] [Copyright Collateral] listed on Schedule A attached hereto. All
such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be
deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright
Collateral] and shall be hereafter subject to each of the terms and conditions
of the Pledge and Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed
and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By:______________________________
Name:____________________________
Title:___________________________
V-V-1
Exhibit VI to
-------------
Pledge And Security Agreement
-----------------------------
[FORM OF] COUNTERPART
This COUNTERPART (this "Counterpart"), dated _______, is delivered pursuant
-----------
to Section 20 of the Pledge and Security Agreement referred to below. The
undersigned hereby agrees that this Counterpart may be attached to the Pledge
and Security Agreement, dated as of January 31, 2000 (as it may be from time to
time amended, modified, or supplemented, the "Pledge and Security Agreement";
-----------------------------
capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed therein), among Levi ▇▇▇▇▇▇▇ & Co., a Delaware corporation,
the other Grantors named therein, and Bank of America, N.A., as Secured Party.
The undersigned by executing and delivering this Counterpart hereby becomes a
Grantor under the Pledge and Security Agreement in accordance with Section 20
thereof and agrees to be bound by all of the terms thereof. Without limiting
the generality of the foregoing, the undersigned hereby:
(i) authorizes the Secured Party to add the information set forth on
the Schedules to this Agreement to the correlative Schedules attached to
the Pledge and Security Agreement;
(ii) agrees that all Collateral of the undersigned, including the
items of property described on the Schedules hereto, shall become part of
the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the Pledge
and Security Agreement, as amended hereby, to the extent relating to the
undersigned.
[NAME OF ADDITIONAL GRANTOR]
By:______________________________
Name:____________________________
Title:___________________________
V-VI-1
