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EXHIBIT (4f)
GUARANTEE AND COLLATERAL AGREEMENT
made by
▇▇▇▇▇▇▇ CORPORATION
and certain of its Subsidiaries
in favor of
WACHOVIA BANK, N.A.,
as Collateral Agent
Dated as of December 14, 2001
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Table of Contents
Page
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SECTION 1. DEFINED TERMS................................................................................... 2
1.1 Definitions..................................................................................... 2
1.2 Other Definitional Provisions.................................................................. 10
SECTION 2. Guarantee...................................................................................... 11
2.1 Guarantee...................................................................................... 11
2.2 Right of Contribution.......................................................................... 12
2.3 No Subrogation................................................................................. 12
2.4 Amendments, etc. with respect to the Borrower Obligations...................................... 12
2.5 Guarantee Absolute and Unconditional........................................................... 13
2.6 Reinstatement.................................................................................. 13
2.7 Payments....................................................................................... 14
SECTION 3. GRANT OF SECURITY INTEREST..................................................................... 14
SECTION 4. REPRESENTATIONS AND WARRANTIES................................................................. 15
4.1 Title; No Other Liens.......................................................................... 15
4.2 Perfected First Priority Liens................................................................. 15
4.3 Jurisdiction of Organization; Chief Executive Office........................................... 16
4.4 Inventory and Equipment........................................................................ 16
4.5 Farm Products.................................................................................. 16
4.6 Investment Property............................................................................ 16
4.7 Receivables.................................................................................... 16
4.8 Intellectual Property.......................................................................... 16
4.9 Guarantor Representations...................................................................... 16
SECTION 5. COVENANTS...................................................................................... 17
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper............................. 17
5.2 Maintenance of Insurance....................................................................... 17
5.3 Payment of Obligations......................................................................... 18
5.4 Maintenance of Perfected Security Interest; Further Documentation.............................. 18
5.5 Changes in Locations, Name, etc................................................................ 19
5.6 Notices........................................................................................ 19
5.7 Investment Property............................................................................ 19
5.8 Intellectual Property.......................................................................... 20
5.9 Additional Collateral, etc..................................................................... 21
5.10 Company Covenants.............................................................................. 23
SECTION 6. REMEDIAL PROVISIONS............................................................................ 24
6.1 Certain Matters Relating to Receivables........................................................ 24
6.2 Communications with Obligors; Grantors Remain Liable........................................... 24
6.3 Pledged Stock.................................................................................. 25
6.4 Intellectual Property.......................................................................... 26
6.5 Proceeds to be Turned Over To Collateral Agent................................................. 26
6.6 Application of Proceeds........................................................................ 26
6.7 Code and Other Remedies........................................................................ 27
6.8 Certain Restrictions on the Public Sale of Pledged Stock....................................... 27
6.9 Deficiency..................................................................................... 28
SECTION 7. THE COLLATERAL AGENT........................................................................... 28
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc........................................ 28
7.2 Duty of Collateral Agent....................................................................... 29
7.3 Execution of Financing Statements.............................................................. 30
7.4 Authority of Collateral Agent.................................................................. 30
SECTION 8. MISCELLANEOUS.................................................................................. 30
8.1 Amendments in Writing.......................................................................... 30
8.2 Notices........................................................................................ 30
8.3 No Waiver by Course of Conduct; Cumulative Remedies............................................ 31
8.4 Expenses; Indemnification...................................................................... 31
8.5 Successors and Assigns......................................................................... 32
8.6 Set-Off........................................................................................ 32
8.7 Counterparts................................................................................... 33
8.8 Severability................................................................................... 33
8.9 Section Headings............................................................................... 33
8.10 Integration.................................................................................... 33
8.11 GOVERNING LAW.................................................................................. 33
8.12 Submission To Jurisdiction; Waivers............................................................ 33
8.13 Acknowledgements............................................................................... 34
8.14 Additional Grantors............................................................................ 34
8.15 Releases....................................................................................... 34
8.16 WAIVER OF JURY TRIAL........................................................................... 35
SCHEDULES
Schedule 1 Notice Addresses 38
Schedule 2 Investment Property 39
Schedule 3 Perfection Matters 45
Schedule 4 Jurisdictions of Organization and Chief Executive Offices 50
Schedule 5 Inventory and Equipment Locations 51
Schedule 6 Intellectual Property 56
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of December 14, 2001, made
by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of WACHOVIA
BANK, N.A., as Collateral Agent (in such capacity, the "Collateral Agent") for
the Secured Parties (as defined below).
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ Corporation, an Alabama corporation (the "Company"),
and certain of its subsidiaries are parties to the Transaction Documents (as
defined below), pursuant to which the Secured Parties have made extensions of
credit to the Company and such subsidiaries;
WHEREAS, the Company has requested that the Secured Parties agree to
certain modifications to the Transaction Documents and to continue making loans
and other financial accommodations available to the Company;
WHEREAS, the Company is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Transaction
Documents have been and will be used in part to enable the Company to make
valuable transfers to one or more of the other Grantors in connection with the
operation of their respective businesses;
WHEREAS, the Company and the other Grantors are engaged in related
businesses, and each Grantor has derived and will continue to derive substantial
direct and indirect benefit from the extensions of credit under the Transaction
Documents; and
WHEREAS, it is a condition precedent to the agreement of the Secured
Parties to make the requested modifications to the Transaction Documents and to
continue making loans and other financial accommodations available to the
Company that the Grantors shall have executed and delivered this Agreement to
the Collateral Agent for the ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce the
Collateral Agent and the Secured Parties to make the requested modifications to
the Transaction Documents and to continue making loans and other financial
accommodations available to the Company, each Grantor hereby agrees with the
Collateral Agent, for the ratable benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) The following terms are used herein as defined in
the UCC: Accounts, Certificated Security, Chattel Paper, Documents, Equipment,
Farm Products, General Intangibles, Instruments, Inventory and Supporting
Obligations.
(b) The following terms shall have the following meanings:
"1992 Notes": the Notes issued by the Company, pursuant to,
and as defined in, the Note Agreements each dated as of December 1, 1992, in the
original aggregate principal amount of $75,000,000 due August 31, 2002, the
holders of which are Teachers, AllState, Connecticut General, and Prudential.
"1995 Notes": the Notes issued by the Company, pursuant to,
and as defined in, the Note Agreement dated as of December 7, 1995, in the
original principal amount of $100,000,000 due November 30, 2008, the sole holder
of which is Prudential.
"1997 Notes": the Notes issued by the Company, pursuant to,
and as defined in, the Note Agreement dated as of August 28, 1997, in the
original principal amount of $125,000,000 due August 28, 2007, the sole holder
of which is Prudential.
"Actionable Default": an Event of Default under any
Transaction Document (other than one resulting solely from an Event of Default
under any Security Documents that is waived by Collateral Agent at the direction
of the Required Secured Parties) in consequence of which a Secured Party is
authorized to accelerate the maturity and demand payment of the outstanding
Secured Debt owing to it under such Transaction Document.
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Aliant": Aliant Bank.
"AllState": AllState Life Insurance Company.
"AmSouth": AmSouth Bank.
"Bank": any bank that is a Revolver Bank or a Cash Management
Services Provider.
"Borrower": each of the Company and ▇▇▇▇▇▇▇ Europe Limited.
"Borrower Obligations": with respect to each Borrower, the
collective reference to the unpaid principal of and interest on the Secured Debt
and all other obligations and liabilities of such Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the
applicable Transaction Documents after the maturity of the Secured Debt and
interest accruing at the then applicable rate provided in the applicable
Transaction Documents after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
such Borrower, whether or not a claim for post
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-filing or post-petition interest is allowed in such proceeding) to the
Collateral Agent or any Secured Party, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, any Transaction Document, this
Agreement, the other Security Documents or any other document made, delivered or
given in connection with any of the foregoing, in each case whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Collateral Agent or to the Secured Parties that are required
to be paid by such Borrower pursuant to the terms of any of the foregoing
agreements).
"Business Day": any day except a Saturday, Sunday, or any
other day on which commercial banks in Georgia and New York are authorized by
law to close.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Management Agreements": any and all agreements between
an Obligor, on the one hand, and any Cash Management Services Provider, on the
other hand, whether now or hereafter in effect, pursuant to which such Cash
Management Services Provider provides Cash Management Services.
"Cash Management Obligations": the liabilities and obligations
of any Obligor to any Bank that arises out of or relates to any depository
account relationship or other cash management services provided by a bank
(including any lockbox, dominion account, wire transfer, or ACH privileges).
"Cash Management Services": the cash management services for
operating, collection, payroll and trust accounts of the Company and/or its
Subsidiaries provided by any Cash Management Services Provider and/or its
affiliates, including automatic clearinghouse services, control disbursement
services, electronic funds transfer services, information reporting services,
lockbox services, stop payment services, and wire transfer services.
"Cash Management Services Provider": any Creditor or affiliate
thereof which provides Cash Management Services to the Company and/or any of its
Subsidiaries under any of the Cash Management Agreements or otherwise relating
to any of the Cash Management Services, in its capacity as the provider of such
services.
"Chase": JPMorgan Chase Bank (formerly The Chase Manhattan
Bank).
"Chase Swaps": the foreign exchange forward rate agreements
provided to the Company by Chase pursuant to the ISDA Master Agreement and
Schedules dated as of July 24, 2001.
"Collateral Agent": Wachovia, in its capacity as collateral
agent for Secured Parties under the Intercreditor Agreement and the Security
Documents, together with its successors in such capacity.
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"Collateral Reserve Account": an account established at
Wachovia for the purpose of receiving payments or proceeds to be held, invested,
and distributed in accordance with the terms of this Agreement.
"Collateral": as defined in Section 3.
"Comerica": Comerica Bank.
"Connecticut General": Connecticut General Life Insurance
Company.
"Consolidated Operating Profits": for any period, the
Operating Profits of the Company and its Consolidated Subsidiaries.
"Consolidated Total Assets": at any time, the total assets of
the Company and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Company and its Consolidated Subsidiaries, prepared in accordance with
GAAP.
"Consolidated Subsidiary": at any date, any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Company in its consolidated financial statements
as of such date.
"Copyrights": (i) all copyrights arising under the laws of the
United States, whether registered or unregistered and whether published or
unpublished (including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to obtain
all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in Schedule
6), granting any right under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell materials derived
from any Copyright.
"Creditors": each Bank, the Swaps Lender, each Letter of
Credit Issuer, each Noteholder and Term Lender.
"Deposit Account": as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without limitation,
any demand, time, savings, passbook or like account maintained with a depositary
institution.
"Documentation Agent": First Union, in its capacity as
documentation agent under the Revolver Bank Documents.
"Dollars": and the sign "$" lawful money of the United States
of America.
"Domestic Subsidiary": any Subsidiary of the Company organized
under the laws of any jurisdiction within the United States of America.
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"Elcatex": Elasticos Centroamericanos Textiles, S.A. de C.V.
"Elcatex Guarantee": the Guarantee Agreement, dated as of
August 4, 2000, from the Company in favor of SunTrust.
"Environmental Indemnity Agreement": the Environmental
Indemnity Agreement, dated as of December 14, 2001, among the Company, Cross
Creek Apparel, LLC, DeSoto ▇▇▇▇▇, Inc. and the Collateral Agent.
"Environmental Laws": as defined in the Environmental
Indemnity Agreement.
"Event of Default": any event or condition that constitutes an
event of default or equivalent event under any of the Transaction Documents or
Security Documents.
"Excluded Domestic Subsidiary": any Domestic Subsidiary that
is not a Significant Domestic Subsidiary.
"First Union": First Union National Bank, a national bank.
"First Union Letters of Credit": the letters of credit at any
time issued by First Union for the account of one or more Obligors and for the
benefit of a supplier of Obligors.
"Fiscal Quarter": any fiscal quarter of the Company.
"Foreign Subsidiary": any Subsidiary of the Company organized
under the laws of any jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of
any Foreign Subsidiary.
"Governmental Authority": the government of the United States
of America, any other nation or political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or any
other Transaction Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Collateral Agent or to the Secured
Parties that are required to be paid by such Guarantor pursuant to the terms of
this Agreement or any other Security Document).
"Guarantors": the collective reference to each Grantor other
than the Company.
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"Insolvency Proceeding": any action, case, or proceeding
commenced by or against a Person, or any agreement of such Person, for (i) the
entry of an order for relief under any chapter of the United States Bankruptcy
Code or other insolvency or debt adjustment law (whether state, federal, or
foreign); (ii) the appointment of a receiver, trustee, liquidator, or other
custodian for such Person or any part of its properties; (iii) an assignment or
trust mortgage for the benefit of creditors of such Person; or (iv) the
liquidation, dissolution, or winding up of the affairs of such Person.
"Insurance Proceeds": the proceeds of any property or casualty
insurance covering any of the Collateral.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property arising
under United States law, including, without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to ▇▇▇ at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to the Company or any of its Subsidiaries.
"Intercreditor Agreement": the Intercreditor and Agency
Agreement, dated as of December 14, 2001, among the Secured Parties and the
Collateral Agent.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(50) of the UCC
(other than any Foreign Subsidiary Voting Stock excluded from the definition of
"Pledged Stock") and (ii) whether or not constituting "investment property" as
so defined, all Pledged Notes, all Pledged Stock and all Pledged Bonds.
"Issuers": the collective reference to each issuer of any
Investment Property.
"Letter of Credit Issuer": each of (i) First Union in its
capacity as the issuer of the First Union Letters of Credit and (ii) SunTrust in
its capacity as issuer of the SunTrust Letters of Credit.
"Letters of Credit": the First Union Letters of Credit and the
SunTrust Letters of Credit.
"LC Obligations": on any date of determination thereof, an
amount (in Dollars) equal to the sum of (i) all amounts then due and payable by
any Obligor on such date by reason of any payment made on or before such date by
the issuer of a Letter of Credit, plus (ii) the aggregate undrawn amount of all
Letters of Credit then outstanding.
"Lien": any interest in any property securing an obligation
owed to, or a claim by, a Person other than the owner of the property, whether
such interest is based upon common law, a statute or contract, including (i) any
lien, security interest or security title arising from a mortgage, deed of
trust, deed to secure debt, pledge, security agreement, conditional sale,
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consignment, lease, or bailment for security purposes; (ii) liens obtained by
judgment or in any judicial proceeding; and (iii) liens conferred or authorized
in any Insolvency Proceeding.
"Mortgage": a mortgage, deed of trust, deed to secure debt, or
other agreement executed by an Obligor to grant and convey to Collateral Agent a
Lien upon any interest in real property of an Obligor.
"Note Agreements": the note agreements pursuant to which the
1992 Notes, the 1995 Notes and the 1997 Notes were issued.
"Noteholders": the holders of the 1992 Notes, 1995 Notes, and
1997 Notes.
"Notes": 1992 Notes, 1995 Notes, and 1997 Notes.
"Obligations": (i) in the case of each Borrower, its Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations.
"Obligors": the Borrowers and the Guarantors.
"Operating Profits": as applied to any Person for any period,
the operating income of such Person for such period, as determined in accordance
with GAAP.
"Party": a Person who is, on the date hereof, or thereafter
becomes a party to this Agreement.
"Patents": (i) all letters patent of the United States, all
reissues and extensions thereof and all goodwill associated therewith,
including, without limitation, any of the foregoing referred to in Schedule 6,
(ii) all applications for letters patent of the United States and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any of the foregoing referred to in Schedule 6, and (iii) all rights to obtain
any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use or
sell any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
"Person": an individual, a partnership, a joint venture, a
corporation, a limited liability corporation or partnership, a trust, limited
liability company, an unincorporated organization and a government or any
department or agency thereof.
"Pledged Bonds": the Industrial Development Revenue Bonds,
listed on Schedule 2.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory notes
issued in connection with extensions of trade credit by any Grantor in the
ordinary course of business).
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"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options,
interests or rights of any nature whatsoever in respect of the Capital Stock of
any Person that may be issued or granted to, or held by, any Grantor while this
Agreement is in effect; provided that in no event shall more than 65% of the
total outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the UCC and, in any event, shall include, without limitation,
all dividend or other income from the Investment Property, collections thereon
or distributions or payments with respect thereto.
"Properties": the facilities and properties owned, leased or
operated by the Company and its Subsidiaries.
"Prudential": The Prudential Insurance Company of America.
"Receivable": any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Revolver Administrative Agent": Wachovia, in its capacity as
administrative agent for the Revolver Banks.
"Revolver Agents": the Revolver Administrative Agent,
Syndication Agent, and Documentation Agent.
"Revolver Bank Documents": the Revolver Credit Agreement and
all other instruments and agreements evidencing or securing loans and other
extensions of credit made by Revolver Banks to Revolver Borrowers under the
Revolver Credit Agreement.
"Revolver Banks": each "Bank" from time to time as such term
is defined in the Revolver Credit Agreement, which as of the date hereof, is
Wachovia, SunTrust, First Union, AmSouth Bank, Chase, Comerica and Aliant.
"Revolver Borrowers": The Company and ▇▇▇▇▇▇▇ Europe Limited,
a corporation organized under the laws of the United Kingdom.
"Revolver Commitment": for each Revolver Bank on any date, the
aggregate amount of such Revolver Bank's commitments under the Revolver Credit
Agreement on such date.
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"Revolver Credit Agreement": the Credit Agreement, dated as of
October 15, 1999, among the Company, ▇▇▇▇▇▇▇ Europe Limited, the Revolver Agents
and the Revolver Banks, as the same may be amended from time to time.
"▇▇▇▇▇▇▇ Financial": ▇▇▇▇▇▇▇ Financial Services, Inc., a
Delaware corporation.
"Securities Act": the Securities Act of 1933, as amended.
"Secured Debt": indebtedness owing to any of the Secured
Parties under any of the Transaction Documents, including any LC Obligations and
any Cash Management Obligations and including any net swap amounts or swap
termination amounts owing from time to time with respect to the Swaps.
"Security Documents": this Agreement and all other security
agreements, Mortgages, collateral assignments, and other agreements securing,
with the lien granted in favor of Collateral Agent, all of the Secured Debt for
the benefit of Secured Parties.
"Secured Parties": the Creditors and Revolver Agents.
"Significant Domestic Subsidiary": on any date of
determination, each Domestic Subsidiary, which either individually or together
with its own subsidiaries accounted for more than 2% of the Consolidated
Operating Profits during the four Fiscal Quarters immediately preceding the date
of determination or has assets that represent more than 2% of Consolidated Total
Assets at the end of the most recent Fiscal Year immediately preceding the date
of determination.
"Subsidiary": any corporation or other entity of which the
Capital Stock having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by any Person.
"SunTrust": SunTrust Bank, a Georgia banking corporation
formerly known as Trust Company Bank.
"SunTrust Letters of Credit": Letters of Credit issued prior
to the date hereof by SunTrust for the account of one or more Obligors and for
the benefit of a supplier of Obligors.
"SunTrust Loan Agreement": Term Loan/Bankers' Acceptance
Agreement dated as of June 30, 1995, between the Company and SunTrust.
"SunTrust/▇▇▇▇▇▇▇ Swap Agreement": the ISDA Master Agreement
and Schedule dated as of June 19, 1995, between Trust Company Bank (now
SunTrust) and the Company.
"SunTrust Swaps": the interest rate swaps provided pursuant to
the SunTrust/▇▇▇▇▇▇▇ Swap Agreement.
"Swaps": the Chase Swaps and the SunTrust Swaps.
"Swaps Lender": Chase in its capacity as party to the Chase
Swaps.
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"Syndication Agent": SunTrust, in its capacity as syndication
agent under the Revolver Bank Documents.
"Teachers": Teachers Insurance and Annuity Association of
America.
"Term Lender": SunTrust in its capacity as party to the Term
Lender Loan Documents.
"Term Lender Loan Documents": the SunTrust Loan Agreement, the
SunTrust Letters of Credit, the SunTrust/▇▇▇▇▇▇▇ Swap Agreement and the Elcatex
Guarantee, and all other instruments and agreements executed by the Company in
connection therewith.
"Trademarks": (i) all United States trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States or any State thereof, and all
common-law rights related thereto, including, without limitation, any of the
foregoing referred to in Schedule 6, and (ii) the right to obtain all renewals
thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Schedule 6.
"Transaction Documents": the following instruments and
agreements evidencing or securing Secured Debt owing to Secured Parties: the
Notes Agreements, the First Union Letters of Credit, the Revolver Bank
Documents, the Chase Swaps, the Cash Management Agreements, the Term Lender Loan
Documents and the Security Documents, as the same may be amended from time to
time.
"UCC": the Uniform Commercial Code as from time to time in
effect in the State of Georgia.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title law of any
state.
"Wachovia": Wachovia Bank, N.A., a national bank.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
(d) All references to any instrument or agreement, including any of the
Security Documents or any of the other Transaction Documents, shall include any
and all modifications thereto and any and all extensions or renewals thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Collateral Agent,
for the ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by each Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any Transaction Document or other Security
Document to the contrary notwithstanding, the maximum liability of each
Guarantor hereunder and under the Transaction Documents or other Security
Document shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to the insolvency of
debtors (after giving effect to the right of contribution established in Section
2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any time
and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Collateral Agent or any Secured Party
hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letters of Credit shall be outstanding and the
Revolver Commitments shall be terminated, notwithstanding that from time to time
during the term of the Transaction Documents each Borrower may be free from any
Borrower Obligations.
(e) No payment made by a Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Collateral Agent
or any Secured Party from a Borrower, any of the Guarantors, any other guarantor
or any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Borrower Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Borrower Obligations or any payment received or
collected from such Guarantor in respect of the Borrower Obligations), remain
liable for the Borrower Obligations up to the maximum liability of such
Guarantor hereunder until the Borrower Obligations are paid in full, no Letters
of Credit shall be outstanding and the Revolver Commitments are terminated.
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2.2 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Collateral Agent and the Secured Parties, and each
Guarantor shall remain liable to the Collateral Agent and the Secured Parties
for the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Collateral Agent or any Secured Party, no Guarantor shall be entitled to be
subrogated to any of the rights of the Collateral Agent or any Secured Party
against a Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Collateral Agent or any Secured Party
for the payment of the Borrower Obligations of any Borrower, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from a
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Collateral Agent and the Secured
Parties by any Borrower on account of the Borrower Obligations of each Borrower
are paid in full, no Letters of Credit shall be outstanding and the Revolver
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations of each Borrower shall not have been paid in full, such amount shall
be held by such Guarantor in trust for the Collateral Agent and the Secured
Parties, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Collateral Agent in the
exact form received by such Guarantor (duly indorsed by such Guarantor to the
Collateral Agent, if required), to be applied against the Borrower Obligations
of each Borrower, whether matured or unmatured, in the order specified in the
Intercreditor Agreement.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Collateral Agent or any Secured Party may be rescinded
by the Collateral Agent or such Secured Party and any of the Borrower
Obligations continued, and the Borrower Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Collateral Agent or any
Secured Party, and the Transaction Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Collateral Agent (or the Required
Secured Parties or all Secured Parties, as the case may be) may deem advisable
from time to time, and any collateral security, guarantee or right of offset at
any time held by the Collateral Agent or any Secured Party for the payment of
the Borrower Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Collateral Agent nor any Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.
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2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by the Collateral Agent or any
Secured Party upon the guarantee contained in this Section 2 or acceptance of
the guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between a Borrower and any of the
Guarantors, on the one hand, and the Collateral Agent and the Secured Parties,
on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon a Borrower or any of the Guarantors with
respect to the Borrower Obligations. Each Guarantor understands and agrees that
the guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Transaction Documents or any Security
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Collateral Agent or any Secured Party, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by a Borrower
or any other Person against the Collateral Agent or any Secured Party, or (c)
any other circumstance whatsoever (with or without notice to or knowledge of a
Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of a Borrower for its Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Collateral Agent or any Secured Party may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against a Borrower, any other Guarantor or any other Person or against any
collateral security or guarantee for the Borrower Obligations or any right of
offset with respect thereto, and any failure by the Collateral Agent or any
Secured Party to make any such demand, to pursue such other rights or remedies
or to collect any payments from a Borrower, any other Guarantor or any other
Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of a Borrower, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Collateral Agent or any
Secured Party against any Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings. Each
Guarantor further waives any right such Guarantor may have, by statute or
otherwise, to require any of the Secured Parties to institute suit against a
Borrower or any other Guarantor after notice or demand from such Guarantor or to
seek recourse first against a Borrower or any other Guarantor, or to realize
upon any Collateral, as a condition to enforcing such Guarantor's liability and
obligations hereunder.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Collateral Agent or any Secured
Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of a Borrower or any Guarantor, or upon or as a result of the
appointment of a
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receiver, intervenor or conservator of, or trustee or similar officer for, a
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Collateral Agent without set-off or counterclaim in Dollars
(or in such other currency as the relevant Transaction Document requires) at
such office of the Collateral Agreement as the Collateral Agent may specify in
writing to the Company from time to time.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Collateral
Agent, and hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations,:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents (other than title documents with respect to
Vehicles);
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property;
(k) all books and records pertaining to the Collateral; and
(l) to the extent not otherwise included, all Proceeds, Supporting
Obligations and products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to any of the
foregoing; provided, however, that Collateral shall not include property of a
Grantor which requires action outside the United States to perfect a security
interest therein under United States law; and
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provided further, that notwithstanding any of the other provisions set forth in
this Section 3, this Agreement shall not constitute a grant of a security
interest in any property to the extent that such grant of a security interest is
prohibited by any Requirements of Law of a Governmental Authority, requires a
consent not obtained of any Governmental Authority pursuant to such Requirement
of Law or is prohibited by, or constitutes a breach or default under or results
in the termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing or giving rise to
such property or, in the case of any Investment Property, Pledged Stock or
Pledged Note, any applicable shareholder or similar agreement, except to the
extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document or shareholder or similar agreement
providing for such prohibition, breach, default or termination or requiring such
consent is ineffective under applicable law.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Collateral Agent and the Secured Parties to make
certain requested modifications to the Transaction Documents, each Grantor
hereby represents and warrants to the Collateral Agent and each Secured Party
that:
4.1 Title; No Other Liens. Except for the security interest granted to
the Collateral Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Transaction Documents, such Grantor owns each item of the Collateral free and
clear of any and all Liens or claims of others. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except (a) such as have been filed in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to
this Agreement or (b) as are permitted by the Transaction Documents. For the
avoidance of doubt, it is understood and agreed that any Grantor may, as part of
its business, grant licenses to third parties to use Intellectual Property owned
or developed by a Grantor. For purposes of this Agreement and the other Security
Documents, such licensing activity shall not constitute a "Lien" on such
Intellectual Property. Each of the Collateral Agent and each Secured Party
understands that any such licenses may be exclusive to the applicable licensees,
and such exclusivity provisions may limit the ability of the Collateral Agent to
utilize, sell, lease or transfer the related Intellectual Property or otherwise
realize value from such Intellectual Property pursuant hereto.
4.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Collateral Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral, except as otherwise provided in Section 3
hereof, in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, as collateral security for such Grantor's Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor and any
Persons purporting to purchase any Collateral from such Grantor and (b) are
prior to all other Liens on the Collateral in existence on the date hereof
except for Liens permitted by the Transaction Documents which have priority over
the Liens on the Collateral by operation of law.
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4.3 Jurisdiction of Organization; Chief Executive Office. On the date
hereof, such Grantor's jurisdiction of organization, identification number from
the jurisdiction of organization (if any), and the location of such Grantor's
chief executive office or sole place of business or principal residence, as the
case may be, are specified on Schedule 4.
4.4 Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
5.
4.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other Person,
except the security interest created by this Agreement or such other Liens
permitted under the Transaction Documents.
4.7 Receivables. No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Collateral Agent.
4.8 Intellectual Property. (a) Schedule 6 lists all registered
Intellectual Property owned by such Grantor in its own name on the date hereof.
(b) Except as set forth in Schedule 6, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
4.9 Guarantor Representations. In the case of each Guarantor:
(a) Such Guarantor (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has the
corporate or other organizational power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (iii) is duly qualified
as a foreign corporation or other entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification and (iv) is in compliance
with all Requirements of Law except in the case of subparagraphs (iii) and (iv)
above only, to the extent that the failure to comply therewith could not have a
material adverse effect on the validity or enforceability of (x) the Transaction
Documents, this Agreement or the other Security Documents or (y) the rights or
remedies of the Collateral Agent or the Secured Parties hereunder or thereunder.
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(b) Such Guarantor has the corporate or other organizational power and
authority, and the legal right, to make, deliver and perform the Transaction
Documents and the Security Documents to which it is a party and has taken all
necessary corporate or other organizational action to authorize the execution,
delivery and performance of the Transaction Documents and the Security Documents
to which it is a party. No consent or authorization of, filing with, notice to
or other act by or in respect of, any Governmental Authority or any other Person
is required (except as contemplated in the Security Documents) in connection
with the execution, delivery, performance, validity or enforceability of the
Transaction Documents and the Security Documents to which the Company is a
party. This Agreement has been, and each other Transaction Documents and
Security Document to which it is a party will be, duly executed and delivered on
behalf of such Guarantor. This Agreement constitutes, and each other Transaction
Document and Security Document to which it is a party when executed and
delivered will constitute, a legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(c) The execution, delivery and performance of the Transaction
Documents and the Security Documents to which such Guarantor is a party will not
violate any Requirement of Law of such Guarantor or of any of its Subsidiaries
and will not result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues pursuant to any such
Requirement of Law (other than pursuant to this Agreement).
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent
and the Secured Parties that, from and after the date of this Agreement until
the Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Revolver Commitments shall have terminated:
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper.
If any amount payable under or in connection with any of the Collateral shall be
or become evidenced by any Instrument, Certificated Security or Chattel Paper,
such Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Collateral Agent, duly indorsed in a manner satisfactory to the
Collateral Agent, to be held as Collateral pursuant to this Agreement.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Collateral Agent and (ii) to
the extent requested by the Collateral Agent, insuring such Grantor, the
Collateral Agent and the Secured Parties against liability for personal injury
and property damage relating to such Inventory and Equipment, such policies to
be in such form and amounts and having such coverage as may be reasonably
satisfactory to the Collateral Agent and the Secured Parties.
17
(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Collateral Agent of written notice
thereof, (ii) name the Collateral Agent as insured party or loss payee, (iii) if
reasonably requested by the Collateral Agent, include a breach of warranty
clause and (iv) be reasonably satisfactory in all other respects to the
Collateral Agent.
(c) Notwithstanding the foregoing, unless an Event of Default shall
have occurred and be continuing, (i) each Grantor shall have the right to adjust
and settle any insurance claims and be entitled to retain any Insurance Proceeds
received by it and (ii) the Collateral Agent shall deliver to the applicable
Grantor any Insurance Proceeds received by it; provided that each Grantor shall
promptly apply all Insurance Proceeds to repair and/or replace the Collateral so
damaged or destroyed in such manner as the Grantor shall determine in its
reasonable business judgment.
5.3 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.4 Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.2 and shall defend such security interest against the claims and
demands of all Persons whomsoever (except for the Collateral Agent or the
Secured Parties), subject to the rights of such Grantor under the Transaction
Documents to dispose of the Collateral.
(b) Such Grantor will furnish to the Collateral Agent and the Secured
Parties from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Collateral Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts, and any other
relevant Collateral, taking any actions necessary to enable the Collateral Agent
to obtain "control" (within the meaning of the applicable Uniform Commercial
Code) with respect thereto.
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5.5 Changes in Locations, Name, etc. Such Grantor will not, except upon
15 days' prior written notice to the Collateral Agent and delivery to the
Collateral Agent of (a) all additional executed financing statements and other
documents reasonably requested by the Collateral Agent to maintain the validity,
perfection and priority of the security interests provided for herein and (b) if
applicable, a written supplement to Schedule 5 showing any additional location
at which Inventory or Equipment shall be kept:
(i) change its jurisdiction of organization from that referred to in
Section 4.3; or
(ii) change its name.
5.6 Notices. Such Grantor will advise the Collateral Agent and the
Secured Parties promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Transaction Documents) on any of the Collateral which would
adversely affect the ability of the Collateral Agent to exercise any of its
remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the security interests created
hereby.
5.7 Investment Property. (a) If such Grantor shall become entitled to
receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Collateral Agent
and the Secured Parties, hold the same in trust for the Collateral Agent and the
Secured Parties and deliver the same forthwith to the Collateral Agent in the
exact form received, duly indorsed by such Grantor to the Collateral Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor to be held by the Collateral Agent, subject to
the terms hereof, as additional collateral security for the Obligations. After
the occurrence of an Event of Default, any sums paid upon or in respect of the
Investment Property upon the liquidation or dissolution of any Issuer shall be
paid over to the Collateral Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of capital
shall be made on or in respect of the Investment Property or any property shall
be distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof after the occurrence of an Event of Default, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Collateral Agent, be delivered to the Collateral Agent
to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Investment Property shall be received by such Grantor after the
occurrence of an Event of Default, such Grantor shall, until such money or
property is paid or delivered to the Collateral Agent, hold such money or
property in trust for the Collateral Agent and the Secured Parties, segregated
from other funds of such Grantor, as additional collateral security for the
Obligations.
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(b) Without the prior written consent of the Collateral Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any Capital Stock of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any Capital
Stock of any nature of any Issuer, unless such additional Capital Stock is
pledged to the Collateral Agent, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Investment
Property or Proceeds thereof (except pursuant to a transaction expressly
permitted by the Transaction Documents), (iii) create, incur or permit to exist
any Lien or option in favor of, or any claim of any Person with respect to, any
of the Investment Property or Proceeds thereof, or any interest therein, except
for the security interests created by this Agreement or as expressly permitted
by the Transaction Documents or (iv) enter into any agreement or undertaking
restricting the right or ability of (x) such Grantor to ▇▇▇▇▇ ▇ ▇▇▇▇ on any of
the Investment Property in favor of the Collateral Agent or (y) the Collateral
Agent to sell, assign or transfer any of the Investment Property or Proceeds
thereof after the occurrence of an Event of Default.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Collateral Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) with
respect to the Investment Property issued by it and (iii) the terms of Sections
6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions
that may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the
Investment Property issued by it.
5.8 Intellectual Property. (a) Such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark on each and every
trademark class of goods applicable to its current line as reflected in its
current catalogs, brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment for non-use other than those
which have been or are hereafter abandoned pursuant to the reasonable business
judgment of the applicable Grantor, (ii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by applicable
Requirements of Law, (iii) not adopt or use any ▇▇▇▇ which is confusingly
similar or a colorable imitation of such Trademark unless the Collateral Agent,
for the ratable benefit of the Secured Parties, shall obtain a perfected
security interest in such ▇▇▇▇ pursuant to this Agreement, and (iv) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become invalidated or impaired in any way
unless such Grantor shall do such act or knowingly omit to do such act in the
reasonable business judgment of the applicable Grantor.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any act whereby
any material portion of the Copyrights may fall into the public domain.
20
(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Collateral Agent and the Secured
Parties immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office or the United States Copyright Office) regarding such Grantor's
ownership of, or the validity of, any material Intellectual Property or such
Grantor's right to register the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office
or the United States Copyright Office, such Grantor shall report such filing to
the Collateral Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Collateral Agent, such
Grantor shall execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Collateral Agent may request to
evidence the Collateral Agent's and the Secured Parties' security interest in
any Copyright, Patent or Trademark and the goodwill and general intangibles of
such Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office or the United States Copyright Office, to maintain and
pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Collateral Agent after it learns thereof and ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution
in accordance with such Grantor's reasonable business judgment.
5.9 Additional Collateral, etc. (a) With respect to any property
acquired after the date hereof by any Grantor (other than (x) property of a
Grantor which requires action outside the United States to perfect a security
interest therein under United States law, (y) any property described in
paragraph (b), (c) or (d) below and (z) any property subject to a Lien expressly
permitted by Section 5.17(c) of the Revolver Credit Agreement) as to which the
Collateral Agent, for the benefit of the Secured Parties, does not have a
perfected Lien, such Grantor shall promptly (i) execute and deliver to the
Collateral Agent such amendments to this Agreement or such other documents as
the Collateral Agent deems necessary or advisable to grant to the Collateral
Agent, for the benefit of the Secured Parties, a security interest in such
property and
21
(ii) take all actions necessary or advisable to grant to the Collateral Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in such property, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by this Agreement
or by law or as may be requested by the Collateral Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $500,000 acquired after
the date hereof by any Grantor (other than (x) any such real property located
outside the United States of America and (y) any such real property subject to a
Lien expressly permitted by the Transaction Documents), such Grantor shall
promptly (i) execute and deliver a first priority Mortgage, in favor of the
Collateral Agent, for the benefit of the Secured Parties, covering such real
property, (ii) if requested by the Collateral Agent, provide the Secured Parties
with (x) title and extended coverage insurance covering such real property in an
amount at least equal to the purchase price of such real property (or such other
amount as shall be reasonably specified by the Collateral Agent) as well as a
current ALTA survey thereof, together with a surveyor's certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the Collateral
Agent in connection with such Mortgage, each of the foregoing in form and
substance reasonably satisfactory to the Collateral Agent and (iii) if requested
by the Collateral Agent, deliver to the Collateral Agent legal opinions relating
to the matters described above, which opinions shall be in form and substance
similar in scope to those delivered to the Collateral Agent on the date hereof
and which are otherwise reasonably satisfactory to the Collateral Agent.
(c) With respect to any new Significant Domestic Subsidiary created or
acquired after the date hereof by any Grantor (which, for the purposes of this
paragraph (c), shall include any existing Subsidiary that ceases to be an
Excluded Domestic Subsidiary), such Grantor shall promptly (i) execute and
deliver to the Collateral Agent such amendments to this Agreement as the
Collateral Agent deems necessary or advisable to grant to the Collateral Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in the Capital Stock of such new Subsidiary that is owned by any
Grantor, (ii) deliver to the Collateral Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the relevant Grantor, (iii) cause such
new Subsidiary (A) to become a party to this Agreement, (B) to take such actions
necessary or advisable to grant to the Collateral Agent for the benefit of the
Secured Parties a perfected first priority security interest in the Collateral
described in this Agreement with respect to such new Subsidiary, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by this Agreement or by law or as may be requested by the
Collateral Agent and (C) to deliver to the Collateral Agent a Secretary's
certificate of such Subsidiary, in form and substance reasonably satisfactory to
the Collateral Agent, with appropriate insertions and attachments, and (iv) if
requested by the Collateral Agent, deliver to the Collateral Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance similar in scope to those delivered to the Collateral Agent
on the date hereof and which are otherwise reasonably satisfactory to the
Collateral Agent.
(d) With respect to any new Foreign Subsidiary (other than a Subsidiary
of a Foreign Subsidiary) created or acquired after the date hereof by any
Grantor, such Grantor shall promptly (i) execute and deliver to the Collateral
Agent such amendments to this Agreement as the Collateral Agent deems necessary
or advisable to grant to the Collateral Agent, for the benefit of
22
the Secured Parties, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by any such Grantor (provided that in
no event shall more than 65% of the total outstanding voting Capital Stock of
any such new Subsidiary be required to be so pledged), (ii) deliver to the
Collateral Agent the certificates representing such Capital Stock, together with
undated stock powers, in blank, executed and delivered by a duly authorized
officer of the relevant Grantor, and take such other action as may be necessary
or, in the opinion of the Collateral Agent, desirable to perfect the Collateral
Agent's security interest therein, and (iii) if requested by the Collateral
Agent, deliver to the Collateral Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance similar in scope
to those delivered to the Collateral Agent on the date hereof and which are
otherwise reasonably satisfactory to the Collateral Agent.
5.10 Company Covenants. (a) The Company agrees that it shall deliver or
cause its Subsidiaries to deliver to the Collateral Agent the following items
after the date hereof:
(i) no later than the date that is 60 days after the date hereof, all
certificates or other instruments representing ownership interest in the Pledged
Stock on Schedule 2 to the extent that such Pledged Stock is represented by a
certificate or other such instrument, along with a Supplement to such Schedule
2; and
(b) The Company agrees that it shall complete or cause its Subsidiaries
to complete the following actions after the date hereof:
(i) no later than the date that is 60 days after the date hereof,
quitclaim to the appropriate parties, at its sole cost and expense, all of its
right, title and interest in and to those certain portions of its property
located in Mt. Airy, North Carolina containing right-of-ways, all in accordance
with all applicable zoning and subdivision requirements.
(c) The Company agrees that it shall complete the following in a timely
manner, it being understood that the failure to complete the following shall not
result in an Event of Default so long as the Company uses its reasonable
efforts:
(i) have The City of Alexander City, Alabama, quitclaim all of its
rights, title and interest in and to those certain rights-of-way owned by the
City and lying and being within the property owned by the Company and known as
the Alexander City Main Campus;
(ii) have the Industrial Development Board of the City of ▇▇▇▇▇▇▇▇▇▇
(the "IDB"), subordinate the IDB's fee title interest in and to the property
known as the Montgomery Distribution Center and more particularly described in
Exhibit A to that certain Alabama Leasehold Mortgage, Security Agreement and
Assignment of Rents and Leases between the Company and Collateral Agent; and
(iii) secure the release of record of the following Deeds of Trust:
(A) Deed of Trust by and among Quality ▇▇▇▇▇, Inc. as
"Grantor" and J. ▇▇▇▇▇▇ ▇▇▇▇, Jr., as "Trustee" for
Northwestern Bank as "Beneficiary", securing
$6,500,000.00 and filed for record on August 21, 1980
in the Records of the Register of Deeds for Surry
County, N.C., in Book 350, page 998;
23
(B) Deed of Trust by and between Quality ▇▇▇▇▇, Inc. as
"Grantor" and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as "Trustee" for
BarClaysAmerican/Commercial, Inc. as "Beneficiary",
securing $3,000,000.00 and filed for record on
September 5, 1980 in the Records of the Register of
Deeds for Surry County, N.C., in Book 351, page 751;
and
(C) Deed of Trust by and among Quality ▇▇▇▇▇, Inc. and
▇▇▇▇ Island Development Corporation, collectively as
"Grantors", and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, collectively as "Trustees" for
BarClaysAmerican/Commercial, Inc. as "Note Holder or
Beneficiary", securing $1,500,000.00 and filed for
record on February 13, 1984 in Book 401, page 967,
aforementioned Records, as amended by that certain
Amendment to Deed of Trust filed for record on March
28, 1984 in the Records of the Register of Deeds for
Surry County, N.C., in Book 403, page 25;
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Collateral Agent
hereby authorizes each Grantor to collect such Grantor's Receivables, subject to
the Collateral Agent's direction and control, including, with respect to any
Receivables for which the obligor thereon is a Governmental Authority, any
direction to comply with the Assignment of Claims Act of 1940 or such relevant
or analogous state law or regulation in respect of such Receivables, and the
Collateral Agent may curtail or terminate said authority at any time after the
occurrence and during the continuance of an Event of Default. If required by the
Collateral Agent at any time after the occurrence and during the continuance of
an Event of Default, any payments of Receivables, when collected by any Grantor,
(i) shall be forthwith (and, in any event, within two Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in the Collateral Reserve Account, subject to
withdrawal by the Collateral Agent for the account of the Secured Parties only
as provided in Section 6.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Collateral Agent and the Secured Parties, segregated
from other funds of such Grantor. Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(b) At the Collateral Agent's request, upon the occurrence of an Event
of Default each Grantor shall deliver to the Collateral Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Collateral Agent in its own name or in the name of others may at any time after
the occurrence and during the continuance of an Event of Default communicate
with obligors under the Receivables to verify with them to the Collateral
Agent's satisfaction the existence, amount and terms of any Receivables.
24
(b) Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Collateral Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under the Receivables to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the Collateral
Agent nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) or Contract by reason of or
arising out of this Agreement or the receipt by the Collateral Agent or any
Secured Party of any payment relating thereto, nor shall the Collateral Agent or
any Secured Party be obligated in any manner to perform any of the obligations
of any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred
and be continuing and the Collateral Agent shall have given notice to the
relevant Grantor of the Collateral Agent's intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive
all cash dividends paid in respect of the Pledged Stock and all payments made in
respect of the Pledged Notes, in each case paid in the normal course of business
of the relevant Issuer and consistent with past practice, to the extent
permitted in the Transaction Documents, and to exercise all voting and corporate
or other organizational rights with respect to the Investment Property;
provided, however, that no vote shall be cast or corporate or other
organizational right exercised or other action taken which, in the Collateral
Agent's reasonable judgment, would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Transaction
Documents, this Agreement or any other Security Document.
(b) If an Event of Default shall occur and be continuing and the
Collateral Agent shall give prior written notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Collateral Agent shall have
the right to receive any and all cash dividends, payments or other Proceeds paid
in respect of the Investment Property and make application thereof to the
Obligations in the order specified in the Intercreditor Agreement, and (ii) any
or all of the Investment Property shall be registered in the name of the
Collateral Agent or its nominee, and the Collateral Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining to
such Investment Property at any meeting of shareholders of the relevant Issuer
or Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Grantor or
the Collateral Agent of any right, privilege or
25
option pertaining to such Investment Property, and in connection therewith, the
right to deposit and deliver any and all of the Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it, but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Collateral Agent in writing that (x) states
that an Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) after receipt of such instruction
unless otherwise expressly permitted hereby, pay any dividends or other payments
with respect to the Investment Property directly to the Collateral Agent.
6.4 Intellectual Property. If an Event of Default shall occur and be
continuing, each Grantor hereby agrees to grant to the Collateral Agent a
non-exclusive, assignable, sublicenseable right and license to use all such
Intellectual Property to the extent necessary or desirable to complete
work-in-progress and to facilitate the sale (including advertising and
promotional activities related thereto) of all Collateral in the possession or
control of such Grantor as of the date of the Event of Default (or for which
such Grantor has executed a binding agreement on or before the Event of Default
to accept delivery) bearing or subject to such licensed Intellectual Property.
6.5 Proceeds to be Turned Over To Collateral Agent. In addition to the
rights of the Collateral Agent and the Secured Parties specified in Section 6.1
with respect to payments of Receivables, if an Event of Default shall occur and
be continuing, all Proceeds received by any Grantor consisting of cash, checks
and other near-cash items shall be held by such Grantor in trust for the
Collateral Agent and the Secured Parties, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Collateral Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Collateral Agent, if required). All Proceeds received by
the Collateral Agent hereunder shall be held by the Collateral Agent in the
Collateral Reserve Account pursuant to the Intercreditor Agreement. All Proceeds
while held by the Collateral Agent in the Collateral Reserve Account (or by such
Grantor in trust for the Collateral Agent and the Secured Parties) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 6.5.
6.6 Application of Proceeds. At the intervals specified in the
Intercreditor Agreement, the Collateral Agent may apply all or any part of
Proceeds constituting Collateral, whether or not held in the Collateral Reserve
Account, in payment of the Obligations in the order specified in the
Intercreditor Agreement, and any part of such funds which the Collateral Agent
elects not so to apply and deems not required as collateral security for the
Obligations shall be paid over from time to time by the Collateral Agent to the
Company or to whomsoever may be lawfully entitled to receive the same. Any
balance of such Proceeds remaining after the Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Revolver Commitments
shall
26
have terminated shall be paid over to the Company or to whomsoever may be
lawfully entitled to receive the same.
6.7 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, including the Intercreditor Agreement, all rights
and remedies of a secured party under the UCC or any other applicable law.
Without limiting the generality of the foregoing, and in accordance with the
terms of the Intercreditor Agreement, the Collateral Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Collateral Agent or any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Collateral Agent or any Secured Party shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Collateral
Agent's request, to assemble the Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably select,
whether at such Grantor's premises or elsewhere. The Collateral Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 6.6,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Collateral Agent and the Secured Parties hereunder, including, without
limitation, reasonable attorneys' fees and disbursements actually incurred, to
the payment in whole or in part of the Obligations, in such order as the
Collateral Agent may elect, and only after such application and after the
payment by the Collateral Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615(a)(3) of the UCC, need the
Collateral Agent account for the surplus, if any, to any Grantor. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.
6.8 Certain Restrictions on the Public Sale of Pledged Stock. Each
Grantor recognizes that the Collateral Agent may be unable to effect a public
sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a
27
commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
6.9 Deficiency. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the fees and disbursements of any attorneys employed
by the Collateral Agent or any Secured Party to collect such deficiency.
SECTION 7. THE COLLATERAL AGENT
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Collateral Agent the power and right, on behalf of such Grantor, without notice
to or assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or Contract or with respect to any other Collateral and file any
claim or take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Collateral Agent for the purpose of
collecting any and all such moneys due under any Receivable or Contract or
with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver, and
have recorded, any and all agreements, instruments, documents and papers as
the Collateral Agent may request to evidence the Collateral Agent's and the
Secured Parties' security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral
28
Agent or as the Collateral Agent shall direct; (2) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (5) defend any suit,
action or proceeding brought against such Grantor with respect to any
Collateral; (6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases
as the Collateral Agent may deem appropriate; (7) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which any
such Copyright, Patent or Trademark pertains), throughout the world for
such term or terms, on such conditions, and in such manner, as the
Collateral Agent shall in its sole discretion determine; and (8) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and do,
at the Collateral Agent's option and such Grantor's expense, at any time,
or from time to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's and the Secured Parties' security interests therein and
to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due Base Rate Loans under
the Revolver Credit Agreement, from the date of payment by the Collateral Agent
to the date reimbursed by the relevant Grantor, shall be payable by such Grantor
to the Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
7.2 Duty of Collateral Agent. The Collateral Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal
with it in the same manner as the Collateral Agent deals with similar property
for its own account. Neither the Collateral Agent, any Secured Party nor any of
their respective officers, directors, employees or agents shall be liable for
failure
29
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Collateral Agent and the Secured Parties hereunder are
solely to protect the Collateral Agent's and the Secured Parties' interests in
the Collateral and shall not impose any duty upon the Collateral Agent or any
Secured Party to exercise any such powers. The Collateral Agent and the Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3 Execution of Financing Statements. Pursuant to any applicable law,
each Grantor authorizes the Collateral Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such form and in such
offices as the Collateral Agent determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement. Each Grantor authorizes
the Collateral Agent to use the collateral description "all personal property to
the extent located in the United States" in any such financing statements. Each
Grantor hereby ratifies and authorizes the filing by the Collateral Agent of any
financing statement with respect to the Collateral made prior to the date
hereof.
7.4 Authority of Collateral Agent. Each Grantor acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Secured
Parties, be governed by the Intercreditor Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Collateral Agent and the Grantors, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority and such Grantor shall be entitled to rely upon any releases,
certificates and waivers executed by the Collateral Agent without liability to
the Secured Parties.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
signed written agreement by and among each Grantor and the Collateral Agent.
8.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 22 of the Intercreditor Agreement; provided that any
such notice, request or demand to or upon any Grantor shall be addressed to such
Grantor at its notice address set forth on Schedule 1.
30
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Collateral Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Actionable Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Collateral Agent or any Secured Party, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Agent or any Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or such Secured Party would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.4 Expenses; Indemnification. (a) Each Grantor agrees (i) to pay or
reimburse the Collateral Agent for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Security Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of counsel to the Collateral Agent and the Secured Parties and filing and
recording fees and expenses, (ii) to pay or reimburse each Secured Party and the
Collateral Agent for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other
Security Documents and any such other documents, including the fees and
disbursements of counsel to each Secured Party and of counsel to the Collateral
Agent actually incurred, (iii) to pay, indemnify, and hold each Secured Party
and the Collateral Agent harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, that may be payable or determined
to be payable in connection with the execution and delivery of, or consummation
or administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Security Documents and any such other documents, and
(iv) to pay, indemnify, and hold each Secured Party and the Collateral Agent and
their respective officers, directors, employees, affiliates, agents and
controlling persons (each, an "Indemnitee") harmless from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Security Documents and any such other documents,
including (other than any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Company and its Subsidiaries or any of the Properties, the
indemnification with respect to which shall be governed by the Environmental
Indemnity Agreement) the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against the
Company and its Subsidiaries under any this Agreement or the other Security
Documents (all the foregoing in this clause (iv), collectively, the "Indemnified
Liabilities"), provided, that the Company shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the
31
gross negligence or willful misconduct of such Indemnitee. An Indemnitee shall
not settle or compromise any Indemnified Liability without the consent of the
indemnifying Grantor, such consent not to be unreasonably withheld or delayed.
So long as no Event of Default has occurred and is continuing, the applicable
Grantor shall have the right, at its expense, to assume the defense of any
Indemnified Liability with counsel reasonably satisfactory to the applicable
Indemnitee; provided, however, that if the applicable Grantor fails to assume
such defense in a timely manner, the applicable Indemnitee may so assume such
defense. Notwithstanding anything to the contrary herein, the Grantors shall
not, in connection with any claims, actions or proceedings, or separate but
substantially similar or related claims, actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
obligated to reimburse the Indemnitees for the legal fees and expenses of more
than one firm of attorneys (in addition to one firm of attorneys acting as local
counsel) except to the extent that actual or potential conflicts interest exist
between Indemnitees with respect to such claims, actions or proceedings that
would require separate counsel. All amounts due under this Section 8.4 shall be
payable not later than 10 days after written demand therefor. Statements payable
by the Company pursuant to this Section 8.4 shall be submitted to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇) (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), at the
address of the Company set forth on Schedule 1, or to such other Person or
address as may be hereafter designated by the Company in a written notice to the
Collateral Agent.
(b) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Transaction Documents and
the other Security Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Collateral Agent and the Secured Parties and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Collateral Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Collateral
Agent and each Secured Party at any time and from time to time while an Event of
Default shall have occurred and be continuing, without notice to such Grantor or
any other Grantor, any such notice being expressly waived by each Grantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Collateral Agent or such Secured Party to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the Collateral
Agent or such Secured Party may elect, against and on account of the obligations
and liabilities of such Grantor to the Collateral Agent or such Secured Party
hereunder and claims of every nature and description of the Collateral Agent or
such Secured Party against such Grantor, in any currency, whether arising
hereunder, under any Transaction Document or otherwise, as the Collateral Agent
or such Secured Party may elect, whether or not the Collateral Agent or any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Collateral Agent and
each Secured Party shall notify such Grantor promptly of any such set-off and
the application made by the Collateral Agent or such Secured Party of the
proceeds thereof, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights
32
of the Collateral Agent and each Secured Party under this Section 8.6 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Collateral Agent or such Secured Party may have.
8.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.10 Integration. The Transaction Documents, this Agreement and the
other Security Documents represent the agreement of the Grantors, the Collateral
Agent and the Secured Parties with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Collateral Agent or any Secured Party relative to subject matter hereof
and thereof not expressly set forth or referred to herein or in the other
Security Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF GEORGIA.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to the Transaction Documents, this Agreement and the other
Security Documents to which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general jurisdiction of
the courts of the State of Georgia, the courts of the United States of America
for the Northern District of Georgia, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that the courts of the State of Georgia , the courts of the
United States of America for the Northern District of Georgia, and appellate
courts from any thereof shall be exclusive with respect to any legal action or
proceeding relating to the Transaction Documents, this Agreement and the other
Security Documents to which it is a party brought by any or all of the Grantors
against the Collateral Agent or any Secured Party;
33
(d) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Collateral Agent shall have been notified pursuant thereto;
(e) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to ▇▇▇
in any other jurisdiction; and
(f) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of the Transaction Documents, this Agreement and the other Security
Documents to which it is a party;
(b) neither the Collateral Agent nor any Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the Transaction Documents, and the
relationship between the Grantors, on the one hand, and the Collateral Agent and
Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor;
(c) no joint venture is created hereby or by the Transaction Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties; and
(d) the terms of each of the Transaction Documents to which it is a
party are hereby ratified and its obligations thereunder are hereby reaffirmed.
8.14 Additional Grantors. Each Subsidiary of the Company that is
required to become a party to this Agreement pursuant to Section 5.10 shall
become a Grantor for all purposes of this Agreement upon execution and delivery
by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Secured Debt and the other
Obligations shall have been paid in full (other than contingent indemnity
obligations which survive the repayment of the Secured Debt by their terms but
with respect to which no amounts are then owing), the Revolver Commitments have
been terminated and no Letters of Credit shall be outstanding, and the
Collateral Agent shall have received the written consent or directions of the
Secured Parties in accordance with Section 14 of the Intercreditor Agreement,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Collateral Agent and each Grantor hereunder shall terminate,
all without delivery of any instrument or performance of any act by any party,
and all rights to the Collateral shall revert to the Grantors. At the request
and sole expense of any Grantor following any such termination, the Collateral
Agent shall deliver to such Grantor any Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
34
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Transaction
Documents, then the Collateral Agent, at the request and sole expense of such
Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Company, a
Subsidiary of the Company who is a Guarantor hereunder shall be released from
its obligations hereunder in the event that all the Capital Stock of such
Subsidiary shall be sold, transferred or otherwise disposed of in a transaction
permitted by the Transaction Documents; provided that the Company shall have
delivered to the Collateral Agent, at least five Business Days prior to the date
of the proposed release, a written request for release identifying the relevant
Subsidiary and the terms of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a certification by the Company stating that such transaction is in
compliance with the applicable Transaction Document, this Agreement and the
other Security Documents.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
35
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
▇▇▇▇▇▇▇ CORPORATION
By:
----------------------------------
Name:
Title:
CROSS CREEK APPAREL, LLC
By: CROSS CREEK HOLDINGS, INC.,
its sole member and manager
By:
----------------------------------
Name:
Title:
CROSS CREEK HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
DESOTO ▇▇▇▇▇, INC.
By:
----------------------------------
Name:
Title:
▇▇▇▇▇▇▇ FINANCIAL SERVICES, INC.
By:
----------------------------------
Name:
Title:
36
▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC.
By:
----------------------------------
Name:
Title:
RINTEL PROPERTIES, INC
By:
----------------------------------
Name:
Title:
ACCEPTED IN ATLANTA, GEORGIA:
WACHOVIA BANK, N.A., as Collateral Agent
By:
--------------------------------------
Name:
Title:
37
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
Notice Address for All Grantors:
▇▇▇▇▇▇▇ Corporation
Attn: Legal Department
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
38
Schedule 2
DESCRIPTION OF INVESTMENT PROPERTY
PLEDGED STOCK:
▇▇▇▇▇▇▇ CORPORATION
Certificated Pledged Stock
Issuer Class of Stock Stock Certificate No No. of Shares
Alexander City Flying Common 1 1,000
Service, Inc.
Cross Creek Holdings, Inc. Common 1 1,000
DeSoto ▇▇▇▇▇, Inc. Common 1 ▇▇▇
▇▇▇▇▇ ▇▇▇ Apparel Company Common 20 1,000
RINTEL Properties, Inc. Common 1 1,000
▇▇▇▇▇▇▇ Asset Management, Inc. Common 1 800
▇▇▇▇▇▇▇ Athletic, Inc. Common 1 100
▇▇▇▇▇▇▇ Athletic West, Inc. Common 1 100
▇▇▇▇▇▇▇ Financial Services, Common 1 1,000
Inc.
▇▇▇▇▇▇▇ Foreign Sales Ltd. Common 1 0.65+
---------------------------------------------------------------------------------------------------------------
--------------------------------
+ Numbers indicate pledged shares, which represent 65% of issued shares,
although share certificates reflect larger number.
39
▇▇▇▇▇▇▇ Servicing Co., Inc. Common 1 1,000
JERZEES Yucatan, S.A. de C.V. Common UNO-B-II-1 22,055.8+
JERZEES Campeche, S.A. de C.V. Common UNO-B-1 32.5+
Athletic ▇▇ ▇▇▇▇▇▇▇, ▇.▇. de Common 3 Serie "A" 32,500+
C.V.
Cross Creek de Honduras, S.A Common 001 16.25+
de C.V.
JERZEES Buena Vista, S.A. Common 001 16.25+
JERZEES de Honduras, S.A. de Common 001 16.25+
C.V.
RUServicios, S.A. Common 001 16.25+
Eagle R Holdings Limited Common 12 12,000,000
Eagle R Holdings Limited Common 14 2,464,557++
▇▇▇▇▇▇▇ Spain, S.L.* Common [__] [__]
▇▇▇▇▇▇▇ Mexico, S.A. de C.V.* Common [__] [__]
▇▇▇▇▇▇▇ Japan KK* Common [__] [__]
▇▇▇▇▇▇▇ Italy Srl* Common [__] [__]
JERZEES Choloma, S.A.* Common [__] [__]
---------------------------------------------------------------------------------------------------------------
--------------------------------
++ Certificate No. 14 represents 10,253,164 shares, 2,464,557 of which are
pledged hereunder.
* Certificate to be delivered to the Collateral Agent along with a
supplement to Schedule 2 after the effective date of the grant of
security interest in such Pledged Stock accordance with Section 5.10
40
Servicios ▇▇▇▇▇▇▇, ▇.▇. de Common [__] [__]
C.V.*
▇▇▇▇▇▇▇ Corp. Far East Common [__] [__]
Limited*
▇▇▇▇▇▇▇ Corp. Canada Limited. Common C-1 65+
▇▇▇▇▇▇▇ Corp. Australia Ltd.* Common [__] [__]
---------------------------------------------------------------------------------------------------------------
Uncertificated Pledged Stock of domestic subsidiaries
100% of the membership interests of Jerzees Apparel, LLC
100% of the membership interests of ▇▇▇▇▇▇▇ Yarn LLC
99% of the membership interests of ▇▇▇▇▇▇▇ Apparel, LLC
Uncertificated Pledged Stock of foreign subsidiaries
65% of the ownership interests of ▇▇▇▇▇▇▇ Co-Op LLC
65% of the ownership interests of ▇▇▇▇▇▇▇ CZ s.r.o.
65% of the ownership interests of ▇▇▇▇▇▇▇ do Brasil, Ltda.
65% of the ownership interests of ▇▇▇▇▇▇▇ France SARL
65% of the ownership interests of ▇▇▇▇▇▇▇ Germany GmbH
CROSS CREEK HOLDINGS, INC.
Certificated Pledged Stock
None
Uncertificated Pledged Stock
100% of the membership interests of Cross Creek Apparel, LLC
CROSS CREEK APPAREL, LLC
Certificated Pledged Stock
Issuer Class of Stock Stock Certificate No No. of Shares
▇▇▇▇▇▇▇ Asset Management, Inc Common 4 140
41
Cross Creek ▇▇ ▇▇▇▇▇▇▇, ▇.▇ Common 3 - Serie "A" 32,500+
de C.V.
---------------------------------------------------------------------------------------------------------------
Uncertificated Pledged Stock
None
DESOTO ▇▇▇▇▇, INC.
Certificated Pledged Stock
Issuer Class of Stock Stock Certificate No No. of Shares
▇▇▇▇▇▇▇ Asset Management, Inc. Common 5 60
---------------------------------------------------------------------------------------------------------------
Uncertificated Pledged Stock
None
▇▇▇▇▇▇▇ FINANCIAL SERVICES, INC.
Certificated Pledged Stock
None
Uncertificated Pledged Stock
1% of the membership interests of ▇▇▇▇▇▇▇ Apparel, LLC
RINTEL PROPERTIES, INC.
None
▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC.
Certificated Pledged Stock
None
Uncertificated Pledged Stock
65% of the ownership interests of ▇▇▇▇▇▇▇ Holdings Europe B.V.
42
PLEDGED NOTES:
Issuer Payee Principal Amount
----------------------------- ------------------- ----------------
RUServicios, Sociedad Anonima ▇▇▇▇▇▇▇ Corporation US $5,000,000.00
PLEDGED BONDS:
1. Industrial Development Revenue Bond (Kinder-Care Specialty Retail
Group, Inc. Project) 1989 Series A No. AR-2 issued by The Industrial
Development Board of the City of ▇▇▇▇▇▇▇▇▇▇ to ▇▇▇▇▇▇▇ Corporation in
the initial principal amount of $15,730,336.04.
2. Industrial Development Revenue Bond (Enstar Specialty Retail, Inc.
Project) 1990 Series B No. BR-2 issued by The Industrial Development
Board of the City of ▇▇▇▇▇▇▇▇▇▇ to ▇▇▇▇▇▇▇ Corporation in the initial
principal amount of $1,600,000.
3. Development Authority of Columbus, Georgia Industrial Development
Revenue Bond (▇▇▇▇▇▇▇ Corporation Project) Series 1995 No. R-1 issued
by the Development Authority of Columbus, Georgia to ▇▇▇▇▇▇▇
Corporation in the initial principal amount of $35,000,000.
43
Supplement to
Schedule 2
DESCRIPTION OF INVESTMENT PROPERTY
PLEDGED STOCK:
▇▇▇▇▇▇▇ CORPORATION
Certificated Pledged Stock
Issuer Class of Stock Stock Certificate No No. of Shares
▇▇▇▇▇▇▇ Spain, S.L. Common N/A (certificate represents 325+
share numbers 1-498 and 500)
▇▇▇▇▇▇▇ Mexico, S.A. de C.V. Common 1 2,434,347.5+
(Capital
Variable)
▇▇▇▇▇▇▇ Mexico, S.A. de ▇.▇. ▇▇▇▇▇▇ ▇ ▇▇▇,▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇)
▇▇▇▇▇▇▇ ▇▇▇▇▇ K.K. Common 0001 ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ K.K. Common 0002 30+
▇▇▇▇▇▇▇ Italy S.r.l. Common 1 .65+
JERZEES Choloma S.A. Common 1.1 16.25+
Servicios ▇▇▇▇▇▇▇, ▇.▇. de Common 1 32.5+
▇.▇.
▇▇▇▇▇▇▇ Corp. Far East, Common 3 650+
Limited
▇▇▇▇▇▇▇ Corp. Australia Pty Common 10 199
Ltd
▇▇▇▇▇▇▇ Corporation Common 1 1000
---------------------------------------------------------------------------------------------------------------
-------------------
+ Numbers indicate pledged shares, which represent 65% of issued shares,
although share certificates reflect larger number.
44
Schedule 3
FILINGS AND OTHER ACTIONS REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
Debtor: ▇▇▇▇▇▇▇ Corporation
Secured Party: Wachovia Bank, N.A., as Collateral Agent
--------------------------------------------
Jurisdiction
--------------------------------------------
Alabama, Secretary of State
--------------------------------------------
Arkansas, Secretary of State
--------------------------------------------
California, Secretary of State
--------------------------------------------
Colorado Secretary of State
--------------------------------------------
Florida, Secretary of State
--------------------------------------------
Georgia, ▇▇▇▇ County
--------------------------------------------
Illinois Secretary of State
--------------------------------------------
Kansas, Secretary of State
--------------------------------------------
Mississippi, Secretary of State
--------------------------------------------
Mississippi, Clay County
--------------------------------------------
Mississippi, Coahoma County
--------------------------------------------
Mississippi, ▇▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Missouri, Secretary of State
--------------------------------------------
Montana, Secretary of State
--------------------------------------------
New Jersey, Secretary of State
45
--------------------------------------------
New York, Secretary of State
--------------------------------------------
North Carolina, Secretary of State
--------------------------------------------
Ohio, Secretary of State
--------------------------------------------
Oklahoma, Oklahoma County
--------------------------------------------
Pennsylvania Secretary of State
--------------------------------------------
South Carolina, Secretary of State
--------------------------------------------
Texas, Secretary of State
--------------------------------------------
Virginia, Secretary of State
--------------------------------------------
Debtor: DeSoto ▇▇▇▇▇, Inc.
Secured Party: Wachovia Bank, N.A., as Collateral Agent
--------------------------------------------
Jurisdiction
--------------------------------------------
Alabama, Secretary of State
--------------------------------------------
Arkansas, Secretary of State
--------------------------------------------
California, Secretary of State
--------------------------------------------
Colorado Secretary of State
--------------------------------------------
Florida, Secretary of State
--------------------------------------------
Georgia, ▇▇▇▇ County
--------------------------------------------
Illinois Secretary of State
--------------------------------------------
Kansas, Secretary of State
--------------------------------------------
Mississippi, Secretary of State
--------------------------------------------
Mississippi, Clay County
--------------------------------------------
Mississippi, Coahoma County
--------------------------------------------
Mississippi, ▇▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Missouri, Secretary of State
46
--------------------------------------------
Montana, Secretary of State
--------------------------------------------
New Jersey, Secretary of State
--------------------------------------------
New York, Secretary of State
--------------------------------------------
North Carolina, Secretary of State
--------------------------------------------
Ohio, Secretary of State
--------------------------------------------
Oklahoma, Oklahoma County
--------------------------------------------
Pennsylvania Secretary of State
--------------------------------------------
South Carolina, Secretary of State
--------------------------------------------
Texas, Secretary of State
--------------------------------------------
Virginia, Secretary of State
--------------------------------------------
Debtor: Cross Creek Apparel, LLC
Secured Party: Wachovia Bank, N.A., as Collateral Agent
--------------------------------------------
Jurisdiction
--------------------------------------------
Alabama, Secretary of State
--------------------------------------------
Florida, Secretary of State
--------------------------------------------
Georgia, ▇▇▇▇ County
--------------------------------------------
Mississippi, Secretary of State
--------------------------------------------
Mississippi, Clay County
--------------------------------------------
Mississippi, Coahoma County
--------------------------------------------
Mississippi, ▇▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
North Carolina, Secretary of State
--------------------------------------------
Debtor: Cross Creek Holdings, Inc.
Secured Party: Wachovia Bank, N.A., as Collateral Agent
--------------------------------------------
Jurisdiction
--------------------------------------------
Alabama, Secretary of State
--------------------------------------------
Delaware, Secretary of State
--------------------------------------------
Florida, Secretary of State
--------------------------------------------
Georgia, ▇▇▇▇ County
--------------------------------------------
Mississippi, Secretary of State
--------------------------------------------
Mississippi, Clay County
--------------------------------------------
Mississippi, Coahoma County
--------------------------------------------
Mississippi, ▇▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
47
Debtor: ▇▇▇▇▇▇▇ Financial Services, Inc.
Secured Party: Wachovia Bank, N.A., as Collateral Agent
--------------------------------------------
Jurisdiction
--------------------------------------------
Alabama, Secretary of State
--------------------------------------------
Delaware, Secretary of State
--------------------------------------------
Florida, Secretary of State
--------------------------------------------
Georgia, ▇▇▇▇ County
--------------------------------------------
Mississippi, Secretary of State
--------------------------------------------
Mississippi, Clay County
--------------------------------------------
Mississippi, Coahoma County
--------------------------------------------
Mississippi, ▇▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
Mississippi, ▇▇▇▇▇ County
--------------------------------------------
48
Debtor: ▇▇▇▇▇▇▇ Asset Management, Inc.
Secured Party: Wachovia Bank, N.A., as Collateral Agent
--------------------------------------------
Jurisdiction
--------------------------------------------
Alabama, Secretary of State
--------------------------------------------
Delaware, Secretary of State
--------------------------------------------
Georgia, ▇▇▇▇ County
Debtor: RINTEL Properties, Inc.
Secured Party: Wachovia Bank, N.A., as Collateral Agent
--------------------------------------------
Jurisdiction
--------------------------------------------
Alabama, Secretary of State
--------------------------------------------
Delaware, Secretary of State
--------------------------------------------
Georgia, ▇▇▇▇ County
Patent and Trademark Filings
Notice and Confirmation of Grant of Security Interest to be filed in the
United States Patent and Trademark Office as appropriate
Actions with respect to Pledged Stock, Pledged Notes and Pledged Bonds
Take delivery of all Pledged Stock represented by an instrument or
certificate, all Pledged Notes and all Pledged Bonds
49
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Jurisdiction of Location of Chief Organization
Grantor Organization/Incorporation Executive Office Number
------- -------------------------- ----------------- ------------
▇▇▇▇▇▇▇ Corporation Alabama ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇/▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cross Creek Apparel, LLC North Carolina Highway 52 South 0575026
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Cross Creek Holdings, Inc. Delaware ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2942114
9th Floor-DE 5403
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DeSoto ▇▇▇▇▇, Inc. Alabama ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇/▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Financial Services, Inc. Delaware ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1436522
Suite 1271
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Asset Management, Inc. Delaware ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RINTEL Properties, Inc. Delaware ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2942116
9th Floor - DE 5403
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
50
Schedule 5
LOCATIONS OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
▇▇▇▇▇▇▇ Corporation (1) ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(Alexander City Complex)
(2) ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
(Brundidge Plant)
(3) ▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
(▇▇▇▇▇▇▇▇▇▇ ▇▇)
(4) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
(Columbus DC)
(5) ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇
(Coosa River Complex)
(6) CaliforniaMart
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇
(Leased Office)
(7) Empire State Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
(Leased Office)
(8) ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇
(Leased Office)
(9) ▇▇▇-▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
(Leased Office)
51
(10) Dothan Warehouse
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Leased Warehouse)
(11) Montgomery Warehouse LLC
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Leased Warehouse)
(12) ▇▇▇▇▇▇ Warehousing
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(Leased Warehouse)
(13) New Site Packaging, LLC
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
(Leased Warehouse)
(14) Rain Tree Business Center
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
(Leased Office)
(15) ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇
(Leased Office)
(16) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Leased Office)
(17) Wideworld Sportswear
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(18) Authentic Brands (DEMCO)
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
52
(19) JMW Sales Co. Inc.
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(20) Greensboro Apparel
▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(21) North River Apparel
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(22) Heritage Sportswear
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(23) Iris Apparel
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(24) Intex Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(25) Key Buffalo
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(26) Embroidery Plus
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(27) Quality Apparel
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
53
(28) Quaker Boy
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(29) Royal Park
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(30) Royal Park
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(31) Virginia Garment
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(32) Wrightenberry ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(33) Triad Packaging & Distribution
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(34) Quality Embroidery
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(35) Factory Screenworks
#▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
(Contractor)
(36) The Shirt Factory
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Contractor)
54
Cross Creek Apparel, LLC (1) ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
(2) Riverside Drive
Mt. Airy, NC
(Cloth Plant/CC Knitting)
(3) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
(Leased Office)
(4) ▇▇▇▇ Warehouse
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇
(Leased Warehouse)
(5) Gold Leaf Warehouse
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇
(Leased Warehouse)
(6) Big ▇▇▇▇▇ Warehouse
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇
(Leased Warehouse)
DeSoto ▇▇▇▇▇, Inc. (1) ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(2) ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Dyeing/Finishing/Warehouse)
▇▇▇▇▇▇▇ Financial Services, Inc. None
Cross Creek Holdings, Inc. None
▇▇▇▇▇▇▇ Asset Management, Inc. None
RINTEL Properties, Inc. None
55
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
▇▇▇▇▇▇▇ CORPORATION - U.S. COPYRIGHTS
----------------------------------------------------------------------------------------------------------------------
DESCRIPTION REGISTRATION NO. ISSUE DATE
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Athletic Team Specialist Catalog/1979 TX-152-984 12/5/1978
----------------------------------------------------------------------------------------------------------------------
The Little T Shirt that Made Good TX-1-417-069 8/28/1984
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Athletic R Logo 200-F-0154 9/25/2000
----------------------------------------------------------------------------------------------------------------------
CROSS CREEK APPAREL, LLC - U.S. COPYRIGHTS
----------------------------------------------------------------------------------------------------------------------
DESCRIPTION REGISTRATION NO. ISSUE DATE
----------------------------------------------------------------------------------------------------------------------
Cross Creek Bogey Man (embroidery VA-639-939 5/31/1994
design on shirt)
----------------------------------------------------------------------------------------------------------------------
PATENTS AND PATENT LICENSES
▇▇▇▇▇▇▇ CORPORATION - U.S. PATENT APPLICATIONS
----------------------------------------------------------------------------------------------------------------------
DESCRIPTION APPLICATION NO. DATE FILED
----------------------------------------------------------------------------------------------------------------------
Garment Portion Processing Assembly 09/620,052 7/20/2000
----------------------------------------------------------------------------------------------------------------------
Bale Processing Assembly 09/620,795 7/21/2000
----------------------------------------------------------------------------------------------------------------------
Improved Dye Machine Festooner 09/501,389 2/9/2000
----------------------------------------------------------------------------------------------------------------------
Pebble Fabric 09/835,902 4/16/2001
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ CORPORATION - U.S. PATENT REGISTRATIONS
----------------------------------------------------------------------------------------------------------------------
DESCRIPTION APPLICATION NO. DATE FILED
----------------------------------------------------------------------------------------------------------------------
Method for Inspecting, Detecting and 4,864,150 9/5/1989
Distinguishing Sides of Fabrics
----------------------------------------------------------------------------------------------------------------------
Method and Apparatus for Sensing the 4,799,613 1/24/1989
Preferred Side of Garment Portions
----------------------------------------------------------------------------------------------------------------------
Automatic Garment Portion Loader 4,693,460 9/15/1987
----------------------------------------------------------------------------------------------------------------------
Automatic Garment Portion Loader 4,633,604 1/6/1987
----------------------------------------------------------------------------------------------------------------------
56
TRADEMARKS AND TRADEMARK LICENSES
TRADEMARKS
▇. ▇▇▇▇▇▇▇ Corporation Registrations
---------------------------------------------------------------------------------------------------------------------------------
JURISDICTION MARKS CLASS REG DATE REG NO.
---------------------------------------------------------------------------------------------------------------------------------
USA Discus 25 01/17/1978 1082718
---------------------------------------------------------------------------------------------------------------------------------
USA Discus and design 25 06/24/1997 2074559
---------------------------------------------------------------------------------------------------------------------------------
USA Discus Athletic and design 25 09/10/1996 1999602
---------------------------------------------------------------------------------------------------------------------------------
USA Discus Athletic and design 25 05/28/1996 1976957
---------------------------------------------------------------------------------------------------------------------------------
USA Discus Athletic 25 05/28/1996 1976958
---------------------------------------------------------------------------------------------------------------------------------
USA Discus Athletic and design 25 07/23/1991 1651552
---------------------------------------------------------------------------------------------------------------------------------
USA Sport by Discus Athletic and design 25 11/18/1997 2114356
---------------------------------------------------------------------------------------------------------------------------------
USA Sport by Discus Athletic 25 11/04/1997 2110858
---------------------------------------------------------------------------------------------------------------------------------
USA Discus Classic Athletic 25 03/09/1999 2230217
---------------------------------------------------------------------------------------------------------------------------------
USA Discus Sport and design 25 10/12/1999 2285724
---------------------------------------------------------------------------------------------------------------------------------
USA Discus Sport 25 12/08/1998 2209372
---------------------------------------------------------------------------------------------------------------------------------
USA Discus Thrower design 25 02/18/1997 2039121
---------------------------------------------------------------------------------------------------------------------------------
II. ▇▇▇▇▇▇▇ Corporation Applications and Unregistered Names
▇▇▇▇▇▇▇ Corp.
▇▇▇▇▇▇▇ Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Fabrics
III. Cross Creek Apparel, LLC Registrations
---------------------------------------------------------------------------------------------------------------------------------
JURISDICTION MARKS CLASS REG DATE REG NO.
---------------------------------------------------------------------------------------------------------------------------------
USA Quality ▇▇▇▇▇ and design 25 05/31/1983 1240419
---------------------------------------------------------------------------------------------------------------------------------
USA Recherche 42 08/09/1983 1,247,738
---------------------------------------------------------------------------------------------------------------------------------
IV. Cross Creek Apparel, LLC Applications and Unregistered Names
None
V. DeSoto ▇▇▇▇▇, Inc., Registrations
None
57
VI. DeSoto ▇▇▇▇▇, Inc., Applications and Unregistered Names
DeSoto ▇▇▇▇▇
VII. Cross Creek Holdings, Inc., Registrations
None
VIII. Cross Creek Holdings, Inc., Applications and Unregistered Names
None
IX. ▇▇▇▇▇▇▇ Financial Services, Inc., Registrations
None
▇. ▇▇▇▇▇▇▇ Financial Services, Inc., Applications and Unregistered Names
None
XI. ▇▇▇▇▇▇▇ Asset Management, Inc. Registrations
---------------------------------------------------------------------------------------------------------------------------------
JURISDICTION MARKS CLASS REG DATE REG NO.
---------------------------------------------------------------------------------------------------------------------------------
USA 4C - design 25 12/29/1998 2,213,930
---------------------------------------------------------------------------------------------------------------------------------
USA Athletic Club 25 01/07/1997 2028087
---------------------------------------------------------------------------------------------------------------------------------
USA Bargain Bag 25 06/20/1995 1900754
---------------------------------------------------------------------------------------------------------------------------------
USA Big Foot and Design 25 07/10/1990 1605660
---------------------------------------------------------------------------------------------------------------------------------
USA Bridgeport 25 12/03/1991 1667205
---------------------------------------------------------------------------------------------------------------------------------
USA Built to Last 25 08/01/1989 1550238
---------------------------------------------------------------------------------------------------------------------------------
USA ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇/▇▇/▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇ Castle Design 25 04/19/1994 1831412
---------------------------------------------------------------------------------------------------------------------------------
USA Concentric Circles and Double Ovals Design 25 03/09/1993 1756943
---------------------------------------------------------------------------------------------------------------------------------
USA Country Cottons 24 09/17/1985 1360689
---------------------------------------------------------------------------------------------------------------------------------
USA Cross Creek & ('bogey man') design 25 04/22/1997 2,054,178
---------------------------------------------------------------------------------------------------------------------------------
USA Cross Creek & ('bogey man') design 25 04/22/1997 2,054,179
---------------------------------------------------------------------------------------------------------------------------------
USA Cross Creek 25 10/07/1975 1022095
---------------------------------------------------------------------------------------------------------------------------------
USA DD and design (Four Old Time Football 25 08/20/1991 1654384
Players design)
---------------------------------------------------------------------------------------------------------------------------------
USA DeSoto Outdoors and Design 25 01/19/1993 1747193
---------------------------------------------------------------------------------------------------------------------------------
USA Desoto Player's Club 25 01/02/1990 1575150
---------------------------------------------------------------------------------------------------------------------------------
USA Desoto Player's Club and design (old time 25 07/30/1996 1,989,417
football players w/words)
---------------------------------------------------------------------------------------------------------------------------------
58
---------------------------------------------------------------------------------------------------------------------------------
JURISDICTION ▇▇▇▇ CLASS REG DATE REG NO.
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
USA Focus Design 25 06/13/1989 1543669
---------------------------------------------------------------------------------------------------------------------------------
USA Get Tough 18 & 25 04/22/1997 2,055,798
---------------------------------------------------------------------------------------------------------------------------------
USA Get Tough R ▇▇▇▇▇▇▇ Athletic 18 & 25 02/04/1997 2,035,968
---------------------------------------------------------------------------------------------------------------------------------
USA Golf is War Do Battle in Cross Creek and 25 09/22/1998 2,190,594
design
---------------------------------------------------------------------------------------------------------------------------------
USA High Cotton (stylized) 25 04/24/1990 1593129
---------------------------------------------------------------------------------------------------------------------------------
USA Huntley of York 25 11/15/1977 1077467
---------------------------------------------------------------------------------------------------------------------------------
USA Jerzees 25 02/22/2000 2322101
---------------------------------------------------------------------------------------------------------------------------------
USA Jerzees 25 04/14/1992 1683032
---------------------------------------------------------------------------------------------------------------------------------
USA Jerzees Activewear Z and design 25 07/04/2000 2363671
---------------------------------------------------------------------------------------------------------------------------------
USA Jerzees logo 25 05/29/1984 1280293
---------------------------------------------------------------------------------------------------------------------------------
USA Jerzees Cotton Sweats 25 06/23/1992 1696178
---------------------------------------------------------------------------------------------------------------------------------
USA Jerzees World Class and design 25 07/02/1996 1983435
---------------------------------------------------------------------------------------------------------------------------------
USA Lady Player 25 03/15/1994 1826428
---------------------------------------------------------------------------------------------------------------------------------
USA Design - four men in top hats 25 01/30/1990 1580207
---------------------------------------------------------------------------------------------------------------------------------
USA Participant 25 05/11/1999 2,245,153
---------------------------------------------------------------------------------------------------------------------------------
USA Performance Cushion 25 02/28/1995 1880688
---------------------------------------------------------------------------------------------------------------------------------
USA Performance Club 25 06/06/1995 1897592
---------------------------------------------------------------------------------------------------------------------------------
USA Player's Pride 25 01/03/1995 1871967
---------------------------------------------------------------------------------------------------------------------------------
USA Player's Performance 25 03/01/1994 1824475
---------------------------------------------------------------------------------------------------------------------------------
USA Pro Cotton 25 05/23/1989 1540603
---------------------------------------------------------------------------------------------------------------------------------
USA Qualitized 25 07/24/1962 734966
---------------------------------------------------------------------------------------------------------------------------------
USA R logo 25 12/02/1997 2118119
---------------------------------------------------------------------------------------------------------------------------------
USA R logo 25 10/29/1974 996847
---------------------------------------------------------------------------------------------------------------------------------
USA R logo 25 11/05/1974 997505
---------------------------------------------------------------------------------------------------------------------------------
USA R logo 24 12/09/1975 1026794
---------------------------------------------------------------------------------------------------------------------------------
USA R ▇▇▇▇▇▇▇ Athletic (and design) 25 12/09/1997 2120076
---------------------------------------------------------------------------------------------------------------------------------
USA R ▇▇▇▇▇▇▇ Athletic/High Cotton 25 10/28/1986 1415076
---------------------------------------------------------------------------------------------------------------------------------
USA R ▇▇▇▇▇▇▇ Athletic 18 & 25 11/07/1995 1932436
---------------------------------------------------------------------------------------------------------------------------------
USA Red Eagle Trading Co. 25 08/14/2001 2477855
---------------------------------------------------------------------------------------------------------------------------------
USA Red Eagle Trading Co. By Jerzees and design 25 09/04/2001 2484965
---------------------------------------------------------------------------------------------------------------------------------
USA ▇▇▇▇▇▇▇ National & design 25 08/27/1985 1356767
---------------------------------------------------------------------------------------------------------------------------------
USA Softwick 24 07/10/2001 2467822
---------------------------------------------------------------------------------------------------------------------------------
USA Super Sweats 25 06/23/1981 1158184
---------------------------------------------------------------------------------------------------------------------------------
USA The Exceptional Shirt 25 05/01/1984 1276266
---------------------------------------------------------------------------------------------------------------------------------
USA The Experience Shows 25 09/08/1992 1713836
---------------------------------------------------------------------------------------------------------------------------------
USA The Golfer and Design 25 06/21/1988 1493214
---------------------------------------------------------------------------------------------------------------------------------
59
---------------------------------------------------------------------------------------------------------------------------------
USA The Worker and Design 25 01/26/1993 1748611
---------------------------------------------------------------------------------------------------------------------------------
USA Three Rivers 25 09/17/1996 2001576
---------------------------------------------------------------------------------------------------------------------------------
USA TOURTECH 25 08/11/1998 2,180,235
---------------------------------------------------------------------------------------------------------------------------------
USA Tweed Fleece 25 12/07/1999 1199072
---------------------------------------------------------------------------------------------------------------------------------
USA YorkTown 25 08/11/1964 775016
---------------------------------------------------------------------------------------------------------------------------------
USA Z CLASS 25 11/06/2001 2504093
---------------------------------------------------------------------------------------------------------------------------------
USA ZT 25 12/05/2000 2411447
---------------------------------------------------------------------------------------------------------------------------------
USA ZT and design 25 08/07/2001 2475783
---------------------------------------------------------------------------------------------------------------------------------
XII. ▇▇▇▇▇▇▇ Asset Management, Inc. Applications and Unregistered Names
---------------------------------------------------------------------------------------------------------------------------------
Jurisdiction Marks Class Date Filed Serial No.
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
USA R logo 25 02/27/2001 76216732
---------------------------------------------------------------------------------------------------------------------------------
USA C C design 25 07/21/2000 76093889
---------------------------------------------------------------------------------------------------------------------------------
USA HERCUFIBRE 24 05/25/2001 76263343
---------------------------------------------------------------------------------------------------------------------------------
USA JERZEES rectangle design 25 10/16/01 76325996
---------------------------------------------------------------------------------------------------------------------------------
USA Jerzees CaZuals and design 25 08/28/2000 76118145
---------------------------------------------------------------------------------------------------------------------------------
USA JERZEES OUTDOORS 25 07/21/2000 76093890
---------------------------------------------------------------------------------------------------------------------------------
USA Performance Pique 25 06/05/2001 76266784
---------------------------------------------------------------------------------------------------------------------------------
USA ▇▇▇▇▇▇▇ 25 08/18/2000 76112386
---------------------------------------------------------------------------------------------------------------------------------
USA ▇▇▇▇▇▇▇ Athletic 25, 28 02/27/2001 76/216841
---------------------------------------------------------------------------------------------------------------------------------
USA The Radiator 25 10/16/2000 76/148492
---------------------------------------------------------------------------------------------------------------------------------
USA Storm Power 25 10/29/2001 76/330765
---------------------------------------------------------------------------------------------------------------------------------
USA Stretch Power 25 10/29/2001 76/330789
---------------------------------------------------------------------------------------------------------------------------------
USA TRANSFORMX 25 08/17/2001 76301400
---------------------------------------------------------------------------------------------------------------------------------
USA Z and Diamond design 35 02/16/2001 76214510
---------------------------------------------------------------------------------------------------------------------------------
USA Z and Diamond design 25 02/16/2001 76214511
---------------------------------------------------------------------------------------------------------------------------------
XIII. RINTEL Properties, Inc. Registrations
None
XIV. RINTEL Properties, Inc., Applications and Unregistered Names
None
TRADEMARK LICENSES
LICENSES WHERE A GRANTOR IS LICENSOR:
60
AB COMPETITION AGREEMENT
BRILLIANCE ELEMENT LICENSE AGREEMENT
D'LIGHT NV AGREEMENT
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RINTEL Properties, Inc.)
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▇▇▇▇▇▇▇ Corporation, DeSoto ▇▇▇▇▇, Inc. and Cross Creek Apparel, LLC)
LICENSES WHERE A GRANTOR IS LICENSEE:
RINTEL PROPERTIES, INC. AGREEMENTS (RINTEL Properties, Inc. sublicenses to
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FAB-CON MACHINERY DEVELOPMENT CORP.
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MAJOR LEAGUE BASEBALL PROPERTIES, INC.
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AIR FORCE UNIVERSITY
AKRON, U/
ALABAMA, U/
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GEORGIA , U/
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NEW MEXICO ST UNIV.
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ORAL ▇▇▇▇▇▇▇ UNIVERSITY
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WASHINGTON, U/
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▇▇▇▇▇ STATE UNIVERSITY
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WESTERN ILLINOIS UNIV.
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WISCONSIN, U/
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WYOMING, U/
YOUNGSTOWN STATE UNIV.
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Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200_, made by
______________________________ (the "Additional Grantor"), in favor of WACHOVIA
BANK, N.A., as collateral agent (in such capacity, the "Collateral Agent") for
the banks and other financial institutions or entities (the "Secured Parties")
parties to the Intercreditor Agreement referred to below. All capitalized terms
not defined herein shall have the meaning ascribed to them in such Intercreditor
Agreement.
W I T N E S S E T H :
WHEREAS, the Secured Parties and the Collateral Agent have entered into
a Intercreditor Agreement, dated as of December 14, 2001 (as amended,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement");
WHEREAS, in connection with the Intercreditor Agreement and the
Transaction Documents (as defined in the Guarantee and Collateral Agreement),
the Company and certain of its Affiliates (other than the Additional Grantor)
have entered into the Guarantee and Collateral Agreement, dated as of December
14, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Guarantee and Collateral Agreement") in favor of the Collateral Agent for the
benefit of the Secured Parties;
WHEREAS, Section 5.9(c) of the Guarantee and Collateral Agreement
requires the Additional Grantor to become a party to the Guarantee and
Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in the Schedules to the Guarantee and
Collateral Agreement. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral Agreement is true and correct on and as the date hereof
(after giving effect to this Assumption Agreement) as if made on and as of such
date.
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2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF GEORGIA.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:___________________________
Name:
Title:
69
Annex 1-A to
Assumption Agreement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 4
Supplement to Schedule 5
Supplement to Schedule 6
70