Exhibit 10.6
SECURITY AND PLEDGE AGREEMENT
- INTEGRITY PUBLISHERS, INC. -
THIS SECURITY AND PLEDGE AGREEMENT, (this "Security Agreement") is made
and effective as of March 30, 2002, by INTEGRITY PUBLISHERS, INC. ("Grantor"),
in favor of LASALLE BANK NATIONAL ASSOCIATION as Administrative Agent (including
any successor, participant, assignee, pledgee or transferee thereof,
"Administrative Agent"), for itself and the Lenders (as defined in the Credit
Agreement referred to below).
R E C I T A L S
WHEREAS, pursuant to that certain Credit Agreement by and among
Borrower, Lenders and Administrative Agent dated as of April 25, 2001 (as may be
amended from time to time, "Credit Agreement"), Grantor is required to have
executed and delivered this Security Agreement encumbering all of Grantor's
tangible and intangible personal property assets in favor of Administrative
Agent; and
WHEREAS, Grantor has determined that it is in its best interest to
execute this Security Agreement inasmuch as Grantor will derive substantial
direct and indirect benefits from the funding of the Advances by Lenders
pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged) and intending to be legally bound
hereby, Grantor and Administrative Agent hereby agree as follows:
ARTICLE 1: SECURITY INTEREST, COLLATERAL ASSIGNMENT AND PLEDGE
1.1. Grant of Security. Grantor hereby collaterally assigns and pledges
to Administrative Agent, and hereby grants to Administrative Agent a present,
absolute, unconditional and continuing security interest in, all of the
following property, assets and equity interests, whether or not such property
and assets are covered by Article 9 of the applicable UCC (collectively, and
including all Pledged Collateral, "Collateral"):
a. Fixtures and Improvements. All of Grantor's fixtures and
improvements to real property in all of its forms, including the following: all
buildings, structures, furnishings, and all heating, electrical, lighting, power
and air conditioning equipment, and all antennas, transmitters, receivers and
related equipment, and all other equipment that under applicable law constitutes
a fixture, and all parts thereof and all accessions, additions, attachments,
improvements, substitutions and replacements thereto and therefor (any and all
of the foregoing being the "Fixtures"); and
b. Equipment (and Computer Hardware). All of Grantor's
equipment in all of its forms, including the following: all machinery, tools,
motor vehicles, furniture and furnishings, and all antennas, transmitters,
receivers and related equipment, all communications, telecommunications,
switches and related equipment, and all computer and other electronic data
processing hardware, integrated computer systems, central processing units,
memory units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral devices
and other related computer hardware, and all documentation manuals and materials
with respect to such hardware, and all rights with respect to all of the
foregoing, including any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights and indemnifications, and any
model conversions of any of the foregoing, and all parts thereof and all
accessions, additions, parts (including replacement parts), attachments,
improvements, substitutions and replacements thereto and therefor (any and all
of the foregoing being the "Equipment"); and
c. Inventory. All of Grantor's inventory in all of its forms,
including the following: (1) all raw materials and work in process therefor,
finished goods thereof, and materials used or consumed in the preparation,
manufacture, creation or production thereof, and (2) all goods in which Grantor
has an interest in mass or a joint or other interest or right of any kind
(including goods in which Grantor has an interest or right as consignee), and
(3) all goods which are returned to or repossessed by Grantor, and in each
instance all accessions thereto, products thereof and documents therefor (any
and all of the foregoing being the "Inventory"); and
d. Receivables, Accounts, Contracts, Money, Instruments,
Chattel Paper and Related Documents. All of Grantor's accounts, receivables,
cash collateral accounts, lock box accounts, other deposit accounts, security
deposits, advance payments, contracts, contract rights, leases, licenses,
insurance policies, chattel paper, documents, instruments (whether or not
negotiable), money, general intangibles and other obligations of any kind, and
whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services (any and all of the foregoing being the "Contract
Rights"), and all rights of Grantor in and to all agreements, security
agreements, guaranties, leases and other contracts securing or otherwise
relating to any such Contract Rights (any and all such security agreements,
guaranties, leases and other contracts being the "Related Contracts"); and
e. Intellectual Property. Without limiting any of the
foregoing, all of Grantor's intellectual and information related property,
rights and assets, including the following (collectively, "Intellectual Property
Collateral"):
1. Computer Software and Data. (a) All software programs and
data bases (including source code, object code and all related applications and
data files) owned, licensed or leased by Grantor, and (b) all firmware
associated therewith or with any of the Equipment, and (c) all documentation and
materials (including all flow charts, logic diagrams, algorithms, manuals,
guides, instructions, indices, abstracts and specifications) with respect to
such software and firmware, and (d) all rights with respect to all of the
foregoing, including any and all copyrights, trademarks, licenses, options,
warranties, service contracts, program services, test rights, maintenance
rights, support rights, improvement rights, renewal rights and indemnifications,
and any substitutions, replacements, additions or model conversions of any of
the foregoing (collectively, "Computer Software Collateral"), and
2. Copyrights. All tangible and/or copyrightable works of
authorship including, without limitation, all musical compositions, including
all lyrics, music and titles thereof, and sound recordings, and all copyrights
of Grantor in each work or authorship and derivative works thereof, whether
published or unpublished and whether or not the same also constitutes a trade
secret, whether statutory or common law, registered or unregistered, throughout
the world, including all of Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world, and all applications for registration thereof, whether pending or in
preparation, and all copyright licenses, and all treaty and convention rights,
and all moral, attribution and/or integrity rights associated therewith, and
further including the right to ▇▇▇ for past, present and future infringements of
any thereof, all rights corresponding thereto throughout the world, and all
goodwill associated therewith, all extensions, supplemental registrations,
continuations and renewals of any thereof, and all proceeds of the foregoing,
including licenses, fees, royalties, income, payments, claims, damages and
proceeds of suit (collectively, "Copyright Collateral"), and
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3. Patents. All patents and like protections, including all
improvements, divisions, continuations, renewals, re-examinations, reissues,
extensions and continuations-in-part of the same, and all applications for
patent, whether pending or in preparation, all patent licenses, the right to ▇▇▇
for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, and all goodwill associated
therewith, all extensions, continuations and renewals of any thereof, and all
proceeds of the foregoing, including licenses, fees, royalties, income,
payments, claims, damages and proceeds of suit (collectively, "Patent
Collateral"), and
4. Trademarks. (a) All trademarks, service marks, trade names,
corporate names, company names, business names, operating names, domain names,
fictitious business names, trade styles, certification marks, collective marks,
call signs, logos, other source of business identifiers, prints, labels and
goods on which any of the foregoing appear or have appeared, designs (including
product designs) and general intangibles of a like nature (any and all of the
foregoing being the "Trademarks"), anywhere in the world, whether registered or
not and whether currently in use or not, all registrations and recordings
thereof and all applications to register the same, whether pending or in
preparation for filing, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any office or agency of the
United States of America or any State thereof or any foreign country, and (b)
all Trademark licenses, and (c) all reissues, extensions or renewals of any of
the foregoing, and (d) all of the goodwill of the business connected with the
use of, and symbolized by, the items described in the foregoing, and (e) all
proceeds, fees, royalties, income or payments of, and rights associated with,
the foregoing, including any claim by Grantor against third parties for past,
present or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, or for any injury to the goodwill associated
with the use of any such Trademark or for breach or enforcement of any Trademark
license (collectively, "Trademark Collateral"), and
5. Trade Secrets. All common law and statutory trade secrets
and all other confidential or proprietary or useful information and all know-how
obtained by or used in or contemplated at any time for use in Grantor's business
(any and all of the foregoing being the "Trade Secrets"), whether or not such
Trade Secret has been reduced to a writing or other tangible form, including all
documents and things embodying, incorporating or referring in any way to such
Trade Secrets, all Trade Secret licenses, and including the right to ▇▇▇ for and
to enjoin and to collect damages for the actual or threatened misappropriation
of any Trade Secret and for the breach or enforcement of any such Trade Secret
license (collectively, "Trade Secret Collateral"); and
f. Publication, Programming and Production-Related Property. Without
limiting any of the foregoing, all of Grantor's right, title, interest and
benefits in, to and under (a) all books, writings, journals, articles and
publications, and (b) all customer, subscriber, prospect, inquiry, circulation,
marketing, advertising, publicity, promotional and programming files, lists,
records, documents, contracts and agreements, including all files, lists and
records of active, expired, prospective, trial and conditional customers and
subscribers, and all files, lists and records of current, former and prospective
advertisers, and all internally generated, purchased and rented mailing lists
(but only to the extent of Grantor's rights therein), and all promotional
letters, catalogues, flyers, reply cards, sales materials, promotional
materials, sample mailing pieces, artwork, drawings, advertising materials,
space advertising and any similar materials, and (c) all publication rights,
programming rights, editorial rights, promotional rights, advertising rights,
licensing rights, distribution and redistribution rights, and printing and
reprinting rights (and any and all agreements, contracts, documents and
materials in any way governing or relating to any of the foregoing rights), and
(d) all editorial, publishing, programming, manufacturing, prepublication and
post-publication, royalty, sales, pricing, cost and promotional files, lists,
records and documents, and (e) all indices, abstracts, compilations, summaries,
glossaries and archives of or for any of the foregoing items, and (f) all other
information and property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the foregoing
property identified in this clause or elsewhere in this Section 1.1 and
regardless of whether such property is embodied in a tangible or intangible
medium; and
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g. Licenses and Authorizations. Without limiting any of the
foregoing, all of Grantor's right, title, interest and benefits in, to and under
all present and future Licenses, Authorizations and other rights for the
construction, development, operation and ownership of its business and
properties and all proceeds of such Licenses, Authorizations and other rights,
and all rights of Grantor in and to all agreements, security agreements,
guaranties, leases and other contracts securing or otherwise relating to any
such Licenses, Authorizations and other rights; and
h. Other General Intangibles. Without limiting any of the
foregoing, but subject to Section 1.4 hereof including the express limitations
set forth therein, all of Grantor's right, title, interest and benefits in, to
and under all other general intangibles, wherever arising, including the
following: (a) all corporate, partnership, limited liability company and joint
venture investments and other interests in and to any other entity (including
all ownership rights and interests in Grantor's subsidiaries, whether or not
such rights and interests are certificated), and the proceeds and general
intangibles related thereto (including all dividends, distributions, capital
accounts and proceeds thereof), and (b) all leasehold interests (whether as
lessee or as lessor) and all related rights thereunder and proceeds thereof, and
(c) all tax refunds and other refunds or rights to receive payment from U.S.
federal, state, or local governments or from foreign governments, whether or not
arising out of or in connection with the sale or lease of goods or the rendering
of services, and (d) all settlements, judgments and other awards (whether or not
resulting from judicial or arbitration proceedings) and all tort and contract
claims and causes of action; and all rights of Grantor in and to all security
agreements, guaranties, leases and other contracts securing or otherwise
relating to any such general intangibles; and
i. Securities and Investment Property. Without limiting any of
the foregoing, all of Grantor's right, title, interest and benefits in, to and
under all stocks, options, warrants, bonds, and other securities, security
entitlements, securities accounts, financial assets and other investment
property (including all such securities representing ownership in Grantor's
subsidiaries), and the proceeds and general intangibles related thereto
(including all dividends and distributions); and
j. Other General Property. All of Grantor's other property and
rights of every kind and description and interests therein; and
k. Products and Proceeds. All products, offspring, rents,
issues, profits, returns, refunds, income and proceeds of and from any and all
of the foregoing Collateral, including the following: all proceeds of the
Licenses and Authorizations, all proceeds that constitute property of the types
described in this Section 1.1, all proceeds deposited from time to time in any
lock boxes of Grantor, and, to the extent not otherwise included, all payments,
unearned premiums and cash or surrender value under insurance policies (whether
or not Administrative Agent or any Lender is a loss payee or additional insured
thereof), and any indemnity, warranty or guaranty payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral;
in each instance (whether or not expressly specified above), wherever located,
and whether now existing, owned, leased or licensed or hereafter acquired ,
leased, licensed, arising, developed, generated, adopted or created for or by
Grantor, and howsoever Grantor's interest therein may arise or appear (whether
by ownership, security interest, claim or otherwise).
Provided, however, notwithstanding the foregoing, in the event
that the Grantor's rights in or with respect to any Collateral consisting of (A)
Related Contracts, (B) Contract Rights, (C) Equipment that is subject to a prior
leasehold interest or security interest in favor of a third party which
prohibits the Grantor from encumbering its interest in such Equipment, or (D) a
general intangible, in each case, would be forfeited or would become void,
voidable, terminable or revocable, or if the Grantor would be
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deemed to have breached, violated or defaulted under any Related Contract,
solely as a consequence of the collateral assignment or grant of a security
interest created by this Agreement (collectively, the "Excepted Collateral"),
then such Collateral shall be excepted and excluded from the Security Interest
granted by this Agreement and the related definitions of Accounts, Contract
Rights, Related Contracts, Receivables, Inventory and Equipment contained in
this Agreement, as applicable, but only to the extent necessary to avoid such
forfeiture, voidness, voidability, terminability, revocability, breach,
violation or default and only in the event that any such breach, violation,
default or other event cannot be remedied by the Grantor using its good faith
efforts (but without any obligation to make any expenditures of money or
commence legal proceedings) unless any such provision in any Assigned Contract
shall not be effective in accordance with Section 9-318(4) of the UCC or any
other Applicable Law. And further provided, however, notwithstanding the
foregoing, the grant of security interest, collateral assignment and pledge
under this Agreement shall not include or apply to "margin stock" within the
meaning of the FRB's Margin Regulations acquired with the proceeds of the Term
Loan A Facility.
1.2. Security for Secured Obligations. This Security Agreement secures
the payment and performance in full of (a) all obligations (monetary or
otherwise) of Borrower and each other Obligor now or hereafter existing under
the Credit Agreement or any other Loan Document as well as under any other
agreement with Administrative Agent or any Lender to extend credit to Borrower
(whether for principal, interest, costs, fees, expenses, protective advances or
otherwise), and (b) all obligations (monetary or otherwise) of Grantor now or
hereafter existing under this Security Agreement or any other Loan Document (all
such obligations under Clauses "(a)" and "(b)" being referred to collectively as
the "Secured Obligations").
1.3. Continuing Security Interest; Assignment; Termination. This
Security Agreement creates a continuing security interest in and collateral
assignment and pledge of the Collateral and will remain in full force and effect
until terminated as described below in this Section. This Security Agreement is
binding upon Grantor and its successors, transferees and assignees, and
(together with the rights and remedies of Administrative Agent hereunder) inures
to the benefit of Administrative Agent and its successors, transferees,
participants and assignees. Without limiting the generality of the foregoing,
except to the extent restricted under the Credit Agreement, Administrative Agent
and each Lender may assign, syndicate, participate or otherwise transfer (in
whole or in part, and without Grantor's consent) any Loan Document and any
indebtedness thereunder to any other Person, and such other Person or entity
will thereupon become vested with all the rights and benefits in respect thereof
granted to Administrative Agent or such Lender under any such Loan Document
(including this Security Agreement) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer. The security interest,
collateral assignment and pledge granted herein will terminate (and all rights
to the Collateral will revert to Grantor) upon satisfaction of the following
conditions: (a) payment and performance in full of all Secured Obligations
(unconditionally and indefeasibly) and (b) the termination of the Credit
Agreement (and the Facilities thereunder). Upon any such termination,
Administrative Agent (at Grantor's request and sole expense) (a) will promptly
execute and deliver to Grantor (without any representation, warranty or recourse
of any kind whatsoever) such documents as Grantor may reasonably request and
provide to Administrative Agent to evidence such termination, and (b) will
promptly deliver to Grantor or to another Person that Administrative Agent
reasonably believes may be entitled thereto (without any representation,
warranty or recourse of any kind whatsoever) all stock certificates and
instruments representing or evidencing Collateral being physically held by
Administrative Agent hereunder.
1.4. Equity Pledge.
▇. ▇▇▇▇▇ of Security Interest. Pursuant to Section 1.1,
without limiting the generality thereof, Grantor pledges, hypothecates, assigns,
charges, mortgages, delivers, and transfers to Administrative Agent and grants
to Administrative Agent a present, absolute, unconditional and continuing
security interest in all of the following property (collectively, "Pledged
Equity Collateral"):
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1. All Pledged Equity currently owned by
Grantor; provided, however, Grantor shall
not be required by the terms hereof to grant
to the Administrative Agent a security
interest with respect to a Subsidiary that
is not a Domestic Subsidiary to the extent
that, as a result thereof, more than 65% of
the Pledged Equity of such Subsidiary would
then be pledged to the Administrative Agent
for the benefit of the Lenders; and
2. All Pledged Equity issued from time to time
hereafter to Grantor; provided, however,
Grantor shall not be required by the terms
hereof to grant to the Administrative Agent
a security interest with respect to a
subsidiary that is not a Domestic Subsidiary
to the extent that, as a result thereof,
more than 65% of the Pledged Equity would
then be pledged to the Administrative Agent
for the benefit of the Lenders; and
3. All other Pledged Equity Property
(including, all options and warrants for
Pledged Equity) owned by Grantor, whether
now or hereafter delivered to Administrative
Agent in connection with this Security
Agreement; and
4. All Dividends, Distributions, capital
accounts, and other payments and rights with
respect to any Pledged Equity Property
received or receivable by Grantor; and
5. All proceeds of any of the foregoing; and
in each case, whether now existing or owned or hereafter acquired by Grantor and
howsoever Grantor's interest therein may arise or appear (whether by ownership,
security interest, claim or otherwise).
b. Delivery of Pledged Equity Property. To the extent that any
of the Collateral is evidenced by a certificate or instrument, then all such
certificates or instruments (a) must be delivered to and held by or on behalf of
Administrative Agent pursuant hereto, and (b) must be in suitable form for
transfer by delivery, and (c) must be accompanied by all necessary powers,
appointments and instruments of transfer or assignment, duly executed in blank.
c. Dividends and Distributions on Pledged Shares. Except as
otherwise provided in the Credit Agreement (including but not limited to Section
5.10 thereof), all Dividends, Distributions, non-Dividend cash payments, and
proceeds thereof paid or payable to Grantor must be paid directly to
Administrative Agent (properly endorsed if required hereby or requested by
Administrative Agent) as additional Collateral hereunder, unless and until
Administrative Agent has terminated this Security Agreement as provided in
Section 1.3. All Dividends, Distributions, cash payments, and proceeds that at
any time and from time to time may be delivered to Grantor but which Grantor is
then obligated to deliver to Administrative Agent, until delivery to
Administrative Agent, must be held by Grantor (a) in trust for Administrative
Agent and (b) separate, segregated and apart from its other property.
1.5. Collateral Assignment of Contracts.
▇. ▇▇▇▇▇ of Security Interest. Pursuant to Section 1.1 (and
subject to the limitations set forth in the last paragraph thereof), without
limiting the generality thereof, Grantor collaterally assigns to Administrative
Agent all of Grantor's right, title and interest in and to all of Grantor's
contracts, licenses, leases and other agreements and all rights, interests,
powers, privileges and other benefits thereunder (including the rights to
receive all proceeds and payments under each such contract, license, lease and
other agreement). This assignment of each contract, license, lease and other
agreement constitutes a fully perfected, absolute, unconditional and present
assignment, provided, however, that prior to the occurrence of an Event of
Default,
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Grantor may exercise any rights and powers under and may receive all payments
and enjoy all other benefits of each such contract, license, lease and other
agreement, subject to the terms and provisions of this Security Agreement and
the other Loan Documents.
b. Administrative Agent's Right to Cure. After an Event of
Default and during the continuation thereof, Administrative Agent shall have the
right (but not the obligation) to cure or remedy any breach or default under any
contract, license, lease or other agreement on the part of Grantor. The exercise
by Administrative Agent of any of its rights hereunder will not release Grantor
from any of its duties or obligations under any such contracts, licenses, leases
or other agreements included in the Collateral. Neither Administrative Agent nor
any Lender has any obligation or liability under any such contracts, licenses,
leases or other agreements included in the Collateral by reason of this Security
Agreement, nor is Administrative Agent or any Lender obligated to perform any of
the obligations or duties of Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
1.6. Collateral Interest in Certain Intellectual Property.
Notwithstanding the language of Section 1.1, Administrative Agent's interest in
Copyrights, Patents and Trademarks (and any applications therefor) is as a
security interest and pledge and not as an absolute assignment.
ARTICLE 2: REPRESENTATIONS AND WARRANTIES
Grantor hereby represents and warrants to Administrative Agent as set
forth in this Article.
2.1. Location of Collateral. Except as identified on Schedule 2.1, all
of the Equipment and Inventory of Grantor is located at the address set forth
below the name of Grantor on the signature page hereof. Except as identified on
Schedule 2.1, within the four months preceding the date of this Security
Agreement, none of the Equipment or Inventory has been located at any place
other than at such address. The principal places of business and chief executive
office of Grantor and the offices where Grantor keeps its records concerning the
Contract Rights and Related Contracts are located at the address identified on
Schedule 2.1.
2.2. Operating Names. Except as identified on Schedule 2.2, during the
preceding six (6) years, Grantor has not been (a) operating under or known by
any legal or trade name different from the one set forth on the signature page
hereto or (b) the subject of any merger or other corporate reorganization.
2.3. Ownership; No Liens. Except as identified on Schedule 2.3, Grantor
is the sole and exclusive owner of or has the irrevocable, exclusive and
transferable right to possess and use the Collateral, and Grantor has full
authority to pledge, assign and grant a security interest in the Collateral. The
Collateral is free and clear of any Lien except (a) the security interest,
collateral assignment and pledge created by this Security Agreement and (b) as
otherwise permitted by the Credit Agreement. No effective financing statement or
other instrument similar in effect covering all or any part of the Collateral is
on file in any recording office, except (1) financing statements and
intellectual property security agreements filed in favor of Administrative Agent
relating to this Security Agreement and (2) such other financing statements and
instruments as identified on Schedule 2.3 and (3) as otherwise permitted by the
Credit Agreement.
2.4. Government Contracts. Except as identified on Schedule 2.4,
Grantor is not a party to any Federal, state or local government contract
(either domestic or foreign).
2.5. Negotiable Documents, Instruments, Certificated Securities and
Chattel Paper. Grantor will deliver possession of all originals of each of the
following owned or held property (duly endorsed in blank, if requested by
Administrative Agent) to Administrative Agent: (a) certificated securities, to
be delivered contemporaneously with the execution of this Security Agreement;
and (b) negotiable documents, instruments and chattel paper (other than checks
received in the ordinary course of business) to be delivered immediately
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upon request by Administrative Agent.
2.6. Intellectual Property Collateral. With respect to each item of
Intellectual Property Collateral:
a. Such Intellectual Property Collateral is subsisting, valid
and enforceable, and to Grantor's knowledge (after due inquiry), such
Intellectual Property Collateral has not been adjudged invalid or unenforceable,
in whole or in part.
b. To Grantor's knowledge (after due inquiry), no claim has
been made that the use of any Intellectual Property Collateral does or may
violate the asserted rights of any third party.
c. Grantor has performed all acts and has paid all required
fees and taxes to maintain each and every item of its Intellectual Property
Collateral which has been registered with the appropriate Official Body in full
force and effect throughout the world, as applicable, except where such fees and
taxes are being contested in good faith with diligent prosecution.
d. Grantor owns directly, or is entitled to use by license or
otherwise, all Patents, Trademarks, Trade Secrets, Copyrights, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in or necessary for the conduct of Grantor's business. To the extent any
such Intellectual Property Collateral was developed or created for or on behalf
of Grantor as a "work for hire," then Grantor has obtained a waiver of any
rights herein by the author or creator hereof.
2.7. As to Pledged Shares. With respect to any Pledged Equity
constituting Collateral, all of such Pledged Equity is duly authorized and
validly issued, fully paid, and non-assessable. The Pledged Equity constitutes
all of the issued and outstanding shares (and other rights) of equity ownership
of each domestic Pledged Equity Issuer owned by Grantor and 65% of each foreign
Pledged Equity Issuer.
2.8. Valid and Perfected Security Interest. This Security Agreement
creates a valid security interest in and collateral assignment and pledge of the
Collateral and proceeds thereof securing the payment of the Secured Obligations.
All filings and other actions necessary or desirable to perfect and protect such
security interest, collateral assignment and pledge have been duly taken or will
be duly taken as of the effective date hereof, unless otherwise consented to by
the Administrative Agent. Schedule 2.8 (a) lists each filing (including filing
locations and "debtor" names) that is necessary or appropriate to perfect the
security interests, collateral assignments and pledges created hereby (including
with respect to Intellectual Property Collateral), and (b) identifies the items
of Collateral that must be delivered to or possessed by Administrative Agent to
perfect Administrative Agent's interest hereunder. Upon perfection (as described
in this Section), such security interest, collateral assignment and pledge will
be of a first priority ranking except as and to the extent noted in Section 2.3
(or on the corresponding schedule thereto).
2.9. Authorization and Approval. Except as noted in Section 2.8 (or on
the corresponding schedule thereto), no authorization, approval or other action
by (and no notice to or filing with) any Official Body or other Person is
required either (a) for the grant by Grantor of the security interest,
collateral assignment and pledge granted hereby, or (b) for the execution,
delivery and performance of this Security Agreement by Grantor, or (c) for the
perfection by Administrative Agent of its rights and interests hereunder, or (d)
for the exercise by Administrative Agent of its rights and remedies hereunder.
2.10. Compliance with Laws and Contracts. Grantor is (and after
execution and delivery of the Loan Documents to which Grantor is a party,
Grantor will be) in compliance in all material respects with the requirements of
all applicable laws, rules, regulations, policies, orders and decrees of every
Official Body and with all contractual restrictions, in either instance the
non-compliance with which individually or in the aggregate could reasonably be
expected to have or cause a Material Adverse Effect.
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2.11. Validity of Obligations. This Security Agreement constitutes the
legal, valid and binding obligation of Grantor and is enforceable against
Grantor in accordance with the terms hereof.
2.12. Solvency; Fraudulent Transfers. Grantor is not "insolvent," as
such term is defined in Section 101(32) of the Bankruptcy Code (11 U.S.C. ss.
101(32)). Grantor, by virtue of its obligations and actions in connection with
the Loan Documents, has neither engaged in nor is engaging in any transaction
that constitutes a fraudulent transfer or fraudulent conveyance under applicable
federal or state law (including under Section 548 of the Bankruptcy Code or
under the Uniform Fraudulent Transfer Act or the Uniform Fraudulent Conveyance
Act).
ARTICLE 3: COVENANTS
Grantor covenants and agrees that, so long as this Security Agreement
remains effective, Grantor will comply with the covenants set forth in this
Article, unless Administrative Agent otherwise consents in writing.
3.1. As to Equipment and Inventory.
a. Except as permitted by Section 5.14 of the Credit
Agreement, Grantor will keep all the Equipment and Inventory (other than
Inventory and Equipment sold in the ordinary course of business or as otherwise
permitted by the Credit Agreement) at the places therefor specified in Section
2.1 or (upon prior written notice to Administrative Agent of at least 30
calendar days) at such other places in a jurisdiction where all of the
representations and warranties in Article 2 at that time will be true and
correct. Grantor will take all actions reasonably necessary to ensure the
continued perfection of Administrative Agent's interest in such Equipment and
Inventory.
b. Grantor will maintain and preserve the Equipment in proper
repair and working order (ordinary wear and tear excepted). Grantor will
forthwith (or, in the case of any loss or damage to any Equipment, as quickly as
practicable after the occurrence thereof) make or cause to be made all repairs,
replacements and other improvements in connection with the Equipment that are
reasonably necessary to maintain the Equipment in accordance with the standard
set forth in this Section. Grantor will promptly furnish to Administrative Agent
a statement respecting any material loss or damage to any of the Equipment.
c. Grantor will pay promptly before delinquent all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (whether for labor, materials or supplies) against, the Equipment
and Inventory, except to the extent the validity thereof is being contested in
good faith by appropriate proceedings diligently prosecuted and for which
adequate reserves in accordance with GAAP have been set aside.
3.2. As to Contracts and Related Rights.
a. Grantor will keep its principal place of business and chief
executive office and the office where it keeps its records concerning the
Contract Rights and Related Contracts, and all originals of all chattel paper
which evidence Contract Rights, located at the places therefor specified in
Section 2.1 or (upon prior written notice to Administrative Agent of at least 30
calendar days) at such other places in a jurisdiction where all of the
representations and warranties in Article 2 at that time will be true and
correct. Grantor will take all actions necessary to ensure the continued
perfection of Administrative Agent's interest in the Contract Rights and Related
Contracts. Grantor will not change its name except upon prior written notice to
Administrative Agent of at least 30 calendar days. Grantor will hold and
preserve such records and chattel paper concerning the Contract Rights and
Related Contracts and will permit representatives of Administrative Agent or any
Lender at any time during normal business hours to inspect and make abstracts
from such records
9
and chattel paper. Upon the occurrence and during the continuation of a Default
or an Event of Default, Administrative Agent shall have the right at any time,
and from time to time, to verify the validity and amount of any Contract Right
by communication in writing or orally directly with the parties thereto.
b. Grantor will remain liable under the contracts, licenses,
leases and other agreements included in the Collateral to the extent set forth
therein. Without limiting the foregoing, unless Grantor otherwise receives
Administrative Agent's prior written consent (which consent will not be
unreasonably withheld while no Default is occurring), then Grantor (a) will
faithfully abide by, perform and discharge each and every material obligation,
covenant and agreement under each Material Contract (as such term is defined in
the Credit Agreement) to be performed by Grantor, and (b) will not materially
adversely amend, modify or otherwise alter the terms of any Material Contract
(including the term or duration thereof or the amount of or methodology for
calculating the compensation due thereunder), and (c) will not assign its rights
under any Material Contract, and (d) will not accept (and will not take any
action to cause) a surrender, termination, revocation or cancellation of any
Material Contract unless replaced by a substantially similar contractual
relationship reasonably acceptable to Administrative Agent, and (e) will enforce
the performance of each and every material obligation, covenant and condition of
each Material Contract to be performed by the other parties thereto, and (f)
will appear in and defend any action or proceeding arising under or in any
manner connected with any Material Contract.
c. Grantor will give prompt written notice to Administrative
Agent of the occurrence of any default, breach or other material event,
condition or circumstance relating to any of Grantor's Material Contracts
(together, if applicable, with a true and complete copy of any related written
notice that Grantor may have given to or received from any other party thereto).
3.3. As to Pledged Equity Collateral.
▇. ▇▇▇▇▇▇ and Appointments. Grantor agrees that all Pledged
Equity (and all other equity ownership interests constituting Pledged Equity
Collateral) delivered by Grantor pursuant to this Security Agreement will be
accompanied by duly executed undated blank powers, appointments or other
equivalent instruments of transfer acceptable to Administrative Agent. From time
to time at Administrative Agent's request, Grantor will promptly deliver to
Administrative Agent such powers, appointments, instruments and similar
documents (satisfactory in form and substance to Administrative Agent) with
respect to the Collateral. From time to time at Administrative Agent's request
after acceleration of all or any portion of the Secured Obligations, Grantor
will promptly transfer any Pledged Equity or other shares of capital stock or
ownership interests constituting Collateral into the name of any nominee
designated by Administrative Agent.
b. Continuous Pledge; Protect Pledged Equity Collateral. At
all times, Grantor will keep pledged to Administrative Agent pursuant hereto all
Pledged Equity, all other Pledged Collateral, all Dividends and Distributions
with respect thereto (subject, however, to Section 1.4.c), and all other
securities, instruments, proceeds, capital accounts, and rights from time to
time received by or distributable to Grantor in respect of any Pledged Equity
Collateral. Grantor will warrant and defend the right and title herein granted
to Administrative Agent in and to the Pledged Equity Collateral (and all right,
title, and interest represented by the Pledged Equity Collateral) against the
claims and demands of all persons whomsoever.
c. Delivery of Dividends, Distributions and Other Collateral.
Promptly upon receipt and without any request by Administrative Agent, Grantor
agrees to deliver to Administrative Agent (properly endorsed if required hereby
or requested by Administrative Agent) all Distributions, all Dividends (subject,
however, in each case to Section 1.4.c), all other non-Dividend cash payments,
and all proceeds thereof, all of which will be held by Administrative Agent as
additional Pledged Equity Collateral. All Dividends, Distributions, cash
payments, and proceeds that at any time and from time to time may be delivered
to Grantor but which Grantor is then obligated to deliver to Administrative
Agent, until delivery to Administrative Agent,
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must be held by Grantor (a) in trust for Administrative Agent and (b) separate,
segregated and apart from its other property.
d. Voting Rights.
1. Unless and until an Event of Default has occurred and
is continuing, Grantor will have the exclusive right to exercise all voting
rights with respect to its Pledged Equity. Upon written request from Grantor
(and at Grantor's sole expense), Administrative Agent will promptly execute and
deliver such proxies and other documents, if any, as reasonably requested in
writing by Grantor (together with a reasonably acceptable form thereof) that are
necessary to allow Grantor to exercise voting power with respect to any such
Pledged Equity owned by Grantor constituting Pledged Equity Collateral;
provided, however, that no vote may be cast or other action taken by Grantor
(including, the giving of any consent, waiver, or ratification) that could
impair any Pledged Equity Collateral or would otherwise be inconsistent with or
violate any provision of any Loan Document (including this Security Agreement).
2. After any Event of Default has occurred and is
continuing and Administrative Agent has notified Grantor of Administrative
Agent's intention to exercise its voting power, unless otherwise then expressly
impermissible under applicable law, Administrative Agent may exercise (to the
exclusion of Grantor) the voting power and all other incidental rights of
ownership with respect to any Pledged Equity or other ownership interests
constituting Pledged Equity Collateral. Grantor hereby grants Administrative
Agent an irrevocable proxy, exercisable under such circumstances, to vote the
Pledged Equity and such other Pledged Equity Collateral. Grantor hereby
covenants to promptly deliver to Administrative Agent such additional proxies,
appointments and other documents as may be necessary to allow Administrative
Agent to exercise such voting power and other incidental ownership rights.
3.4. As to Intellectual Property Collateral.
a. Grantor (1) will maintain (in a manner consistent with its
historical practices) the quality of products and services offered under all of
the material Trademark Collateral, or (2) will employ with all of the material
Trademark Collateral (whether or not registered with any Official Body) an
appropriate notice of such trademark, or (3) will employ with all of the
material Copyright Collateral an appropriate notice of such copyright, or (4)
will employ with any issued Patent within the Patent Collateral an appropriate
notice of such registration.
b. Grantor will not permit any act to be done (or knowingly
omit to do any act) whereby any of the material Intellectual Property Collateral
may lapse or become abandoned, forfeited, invalid, dedicated to the public or
unenforceable (except upon expiration of the end of an unrenewable term of a
registration thereof) without the prior written consent of Administrative Agent
(which consent will not be unreasonably withheld while no Default is occurring).
c. Grantor will promptly notify Administrative Agent if
Grantor believes (or has reason to believe) that (1) any application or
registration relating to any material item of the Intellectual Property
Collateral may become abandoned, dedicated to the public, placed in the public
domain, invalid or unenforceable, or (2) there has been or will be an adverse
determination or development (including the institution of, or any determination
or development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any other Official Body) regarding
Grantor's ownership of any material item of the Intellectual Property
Collateral, its right to register the same, or its right to keep, maintain and
enforce the same.
d. If Grantor files an application for the registration of any
Intellectual Property Collateral with the United States Patent and Trademark
Office, the United States Copyright Office or any other Official Body, then
Grantor must notify Administrative Agent thereof within 90 calendar days
thereafter, and
11
upon request of Administrative Agent, must promptly execute and deliver any and
all agreements, instruments, documents and papers that Administrative Agent may
request to evidence Administrative Agent's security interest in such
Intellectual Property Collateral.
e. Grantor will perform all acts and will pay all required
fees and taxes (including in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any other Official Body)
to maintain each and every item of material Intellectual Property Collateral in
full force and effect in the United States, and to pursue any application filed
with respect to the Intellectual Property Collateral, including the filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition, and interference and cancellation proceedings.
f. Grantor will notify the Administrative Agent at such times
and in such manner as is required under Section 4.2.2 of the Credit Agreement
upon Grantor's acquiring any Intellectual Property Collateral and, upon
Administrative Agent's request, Grantor will promptly thereafter record
Administrative Agent's interest therein.
g. Grantor (1) will protect, defend and maintain the validity
and enforceability of the material Intellectual Property Collateral, and (2)
will use its best efforts to detect infringements of the material Intellectual
Property Collateral and promptly notify Administrative Agent in writing of
material infringements detected.
h. Grantor, on a continuing basis, will register Grantor's
material Trademarks, pursue patent protection for Grantor's material inventions,
and register the most recent versions of any of Grantor's material Copyrights.
i. Grantor will not enter into any agreement that would
materially impair or conflict with Grantor's obligations hereunder with respect
to its Intellectual Property Collateral. Grantor will not permit the inclusion
in any material contract to which it becomes a party any provisions that could
in any way prevent the creation of a security interest in Grantor's rights and
interest in any property included within the definition of the Intellectual
Property Collateral acquired or licensed under such contracts. Grantor will not
arrange for the creation or development of any Intellectual Property Collateral
as a "work for hire" without concurrently obtaining an assignment and/or waiver
of all rights therein by the author or creator thereof.
j. Grantor will promptly notify Administrative Agent in
writing upon obtaining knowledge of any event that materially adversely affects
(1) the value of any material Intellectual Property Collateral, or (2) the
ability of Grantor to dispose of any material Intellectual Property Collateral,
or (3) the rights and remedies of Administrative Agent in relation thereto,
including the levy of any legal process against any of the Intellectual Property
Collateral.
k. Grantor, on a continuing basis, will make, execute,
acknowledge and deliver, and will file and record in the proper filing and
recording places in the United States, all such instruments, collateral
agreements and filings (including all appropriate financing and continuation
statements) with the United States Patent and Trademarks Office and the Register
of Copyrights, and any other appropriate official body located in the United
States, as are necessary or advisable to perfect or protect Administrative
Agent's security interest in all material Intellectual Property Collateral
located or deemed located in the United States and otherwise to carry out the
intent and purpose of this Security Agreement, or for assuring and confirming to
Administrative Agent the grant or perfection of a security interest in all
Intellectual Property Collateral.
1. Grantor will continue to use each material Trademark within
the Trademark Collateral on or in connection with the goods and/or services in
each and every Trademark class of goods and services applicable to its current
line as reflected in its current catalogs, brochures and price lists in order to
maintain such material Trademark in full force and effect, free from any claim
of abandonment for non-use.
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3.5. As to Customer and Material Business Records and Computer
Software.
a. Upon Administrative Agent's request, Grantor (at its cost
and expense) will maintain at a separate location a duplicate current copy of
(1) all lists, files and records of active and prospective customers and
subscribers, and (2) all material computer software and data bases (including
all material application and operating system software and all material data
files and operating manuals), and (3) all other material business files, records
and software that Administrative Agent may reasonably request in writing from
time to time. Unless Administrative Agent otherwise consents, such records,
materials and information must be kept (at Grantor's election) either with
Administrative Agent or with an unrelated business that is engaged in the
business of storing such items and that is reasonably acceptable to
Administrative Agent. For purposes of this Clause, such records, materials and
information will be considered "current" if they were accurate and complete
within the immediately preceding 30 calendar days.
b. If Grantor elects to keep such records, materials and
information with an unrelated business, then (upon Administrative Agent's
request) Grantor will notify such business at which such records, materials and
information are maintained (1) that Administrative Agent, each Lender and their
representatives are authorized from time to time to inspect, examine, audit and
make copies and abstracts of such records, materials and information during
normal business hours, and (2) that, upon receipt of written notice from
Administrative Agent that an Event of Default has occurred under the Loan
Documents, such business is to release and deliver such records, materials and
information to Administrative Agent in such manner and at such place as
Administrative Agent may direct (in its sole and absolute discretion), and (3)
that such business is not to release or return such records, materials or
information to Grantor without Administrative Agent's prior written consent
unless (a) Grantor has delivered a more current version thereof to such business
or (b) this Security Agreement has been terminated in accordance with Section
1.3.
c. Grantor will also otherwise utilize standard industry
precautions to safeguard the utility, value and confidentiality of all such
records, materials and information covered by this Section.
3.6. As to Certain Investment Property (including Margin Stock).
Without obtaining Administrative Agent's prior written consent, Grantor will not
establish or maintain any "securities account" or "financial asset" with any
"securities intermediary" (as such terms are defined in Article 8 of the UCC),
unless a control agreement acceptable in form and substance to Administrative
Agent is first executed by such "securities intermediary" securing
Administrative Agent's first priority interest and rights in and to all
"financial assets" and "security entitlements" associated with such "securities
account". Without obtaining Administrative Agent's prior written consent (which
consent will not be unreasonably withheld while no Default is occurring), and
except as otherwise permitted under Section 5.16 of the Credit Agreement,
Grantor will not purchase or carry any "Margin Stock" within the meaning of
Regulations T, U or X of the Board of Governors of the Federal Reserve System.
3.7. Insurance. Grantor will maintain insurance coverages to the same
extent and subject to the same requirements and conditions as required for
Borrower under the Credit Agreement. At any time during the occurrence of an
Event of Default payments and proceeds in respect of insurance coverage
("Insurance Proceeds") are to be delivered to Administrative Agent and may be
held by Administrative Agent (at its discretion) as additional Collateral for
and may be applied by Administrative Agent in whole or in part against, all or
any part of the Secured Obligations in such order as Administrative Agent
elects. All other Insurance Proceeds received by Grantor will be used to repair
or replace the lost, stolen, damaged or destroyed property which formed the
basis of Grantor's receipt of such Insurance Proceeds.
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3.8. Transfers and Other Liens.
a. Grantor will not sell, transfer, assign, lease, license or
otherwise dispose of any of the Collateral, except (1) Inventory sold, leased or
licensed in the ordinary course of business to unrelated third parties for value
received, and (2) Equipment that has become obsolete or worn out, and (3)
Equipment leased or licensed in the ordinary course of business to unrelated
third parties for value received, and (4) Intellectual Property Collateral
licensed to unrelated third parties for value received and subject to at least
commercially reasonable terms and conditions from the perspective of Grantor,
and (5) as otherwise permitted by the Credit Agreement.
b. Grantor will maintain the security interest, collateral
assignment and pledge created hereby as a first priority interest (except as
otherwise permitted by the Credit Agreement), and Grantor will not create or
suffer to exist any Lien upon or with respect to any of the Collateral to secure
any indebtedness or obligations of any Person, (except as otherwise permitted by
the Credit Agreement).
3.9. Further Assurances. Grantor (from time to time at its own expense)
will promptly execute and deliver all further instruments and documents, and
will take all further action, that may be necessary or desirable (or that
Administrative Agent may reasonably request) in order to perfect, preserve and
protect any security interest, collateral assignment or pledge granted or
purported to be granted hereby or to enable Administrative Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Grantor:
a. Will ▇▇▇▇ conspicuously each chattel paper included in the
Contract Rights and, at the request of Administrative Agent, each of its records
pertaining to the Collateral with a legend (in form and substance reasonably
satisfactory to Administrative Agent) indicating that such chattel paper is
subject to the security interest, collateral assignment and pledge granted
hereby; and
b. If any Contract Rights shall be evidenced by a promissory
note or other instrument, negotiable document or chattel paper, then will
deliver and pledge to Administrative Agent hereunder such promissory note,
instrument, negotiable document or chattel paper duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance reasonably satisfactory to Administrative Agent; and
c. Will execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices as may
be necessary (or as Administrative Agent may reasonably request) in order to
perfect and preserve the security interests, collateral assignments, pledges and
other rights granted or purported to be granted to Administrative Agent hereby;
and
d. Will furnish to Administrative Agent (from time to time at
Administrative Agent's request) statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Administrative Agent may reasonably request, all in reasonable
detail.
With respect to the foregoing and the grant of the security interest, collateral
assignment and pledge hereunder, Grantor hereby authorizes Administrative Agent
to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the signature of
Grantor where permitted by law. A carbon, photographic or other reproduction of
this Security Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.
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ARTICLE 4: LENDER
4.1. Administrative Agent Appointed Attorney-in-Fact. Grantor hereby
irrevocably appoints Administrative Agent as Grantor's attorney-in-fact, with
full authority in the name, place and stead of Grantor or otherwise, from time
to time in Administrative Agent's reasonable discretion, after an Event of
Default, to take any action and to execute any instrument which Administrative
Agent may deem reasonably necessary or advisable to accomplish the purposes of
this Security Agreement. This authority includes the following:
a. To ask, demand, collect, ▇▇▇ for, recover,
compromise, restructure, receive and give acquittance
and receipts for moneys due and to become due under
or in respect of any of the Collateral; and/or
b. To notify the parties obligated on any of the
Collateral to make payment to Administrative Agent of
any amount due or to become due in connection
therewith; and/or
c. To receive, endorse, and collect any drafts, checks
or other instruments, documents and chattel paper in
connection with Clause "a" of this Section; and/or
d. To file any claims or take any action or institute
any proceedings which Administrative Agent may deem
reasonably necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the
rights of Administrative Agent, any Lender or Grantor
with respect to any of the Collateral; and/or
e. To execute (in the name, place and stead of Grantor)
endorsements, assignments, powers and other
instruments of conveyance or transfer with respect to
all or any of the Collateral; and/or
f. To execute (in the name, place and stead of Grantor)
UCC financing statements, amendments and
continuations; and/or
g. To perform any and all of the affirmative obligations
and covenants of Grantor hereunder (with notice
thereof to be provided to Grantor by Administrative
Agent within a reasonable time thereafter).
Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest,
but that it will terminate upon the termination of this Security Agreement
pursuant to Section 1.3.
4.2. Administrative Agent May Perform. From time to time,
Administrative Agent (at its option) may perform (or may cause the performance
of) any act which Grantor agrees hereunder to perform and which Grantor fails to
perform after being requested in writing so to perform (it being understood that
no such request need be given during the continuance of an Event of Default),
and Administrative Agent from time to time may also take any other action which
Administrative Agent reasonably deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein or collateral assignments or pledges thereof. The costs and expenses of
Administrative Agent incurred in connection with any such performance will be
payable by Grantor pursuant to Section 5.3 hereof.
4.3. Administrative Agent Has No Duty. The rights and powers conferred
upon Administrative Agent hereunder are solely to protect Administrative Agent's
and each Lender's interest in the Collateral and do not impose any duty on
Administrative Agent to exercise any such rights or powers. Except for
reasonable
15
care of any Collateral in Administrative Agent's possession and the accounting
for moneys actually received by it hereunder, Administrative Agent has no duty
as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral.
4.4. Reasonable Care. Administrative Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, Administrative Agent will be deemed to have
exercised such reasonable care in the custody and preservation of any of the
Collateral if Administrative Agent takes such action for that purpose as Grantor
reasonably requests in writing at times other than after the occurrence or
during the continuance of a Default. Notwithstanding the foregoing, any failure
or refusal by Administrative Agent at any time to comply with any such request
by Grantor will not in itself be deemed a failure to exercise reasonable care.
ARTICLE 5: DEFAULTS AND REMEDIES
5.1. Events of Default. The occurrence of any "Event of Default" under
and as defined in the Credit Agreement will constitute an independent Event of
Default ("Event of Default") hereunder.
5.2. Certain Remedies. If any Event of Default occurs and is
continuing:
a. In addition to other rights and remedies provided for
herein (including under Article 4) or otherwise available to Administrative
Agent or any Lender (including under the other Loan Documents and/or applicable
law), Administrative Agent may also exercise in respect of the Collateral all
the rights and remedies of a secured party upon default under the UCC (whether
or not the UCC applies to the affected Collateral). Upon the occurrence of any
Event of Default, Administrative Agent will have the immediate right to enforce
and realize upon any and all collateral security granted under the Loan
Documents (including the Collateral hereunder) in any manner or order that
Administrative Agent deems expedient without regard to any equitable principles
of marshalling or otherwise. All rights and remedies available to Administrative
Agent or any Lender are to be considered cumulative in nature.
b. Without notice except as expressly specified herein or
required by applicable law, Administrative Agent may also sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any of
Administrative Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as Administrative Agent may deem
commercially reasonable. To the extent notice of sale is required by law,
Grantor agrees that prior notice to Grantor of at least ten (10) calendar days
indicating the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Administrative Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale (without further notice) may be made at the
time and place to which it was so adjourned.
c. Administrative Agent may require Grantor to, and Grantor
hereby agrees (at its expense) that it will, forthwith assemble all or part of
the Collateral as directed by Administrative Agent and make it available to
Administrative Agent at a place designated by Administrative Agent that is
reasonably convenient to both Administrative Agent and Grantor.
d. Unless Administrative Agent otherwise consents, and except
as otherwise provided for in Sections 1.1.5.3 and 1.2.8.5 of the Credit
Agreement, Grantor will remit to Administrative Agent all cash proceeds received
in respect of any sale of, or collection from, or other realization upon all or
any part of the Collateral. All cash proceeds received by Administrative Agent
from Grantor or otherwise in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral (in the discretion of
Administrative Agent) may be held by Administrative Agent as additional
Collateral for the Secured
16
Obligations, and/or then or at any time thereafter may be applied in whole or in
part by Administrative Agent against all or any part of the Secured Obligations
in an order consistent with the designated application of payments provided for
in Section 1.5 of the Credit Agreement. Any surplus of such cash or cash
proceeds held by Administrative Agent and remaining after payment in full of all
the Secured Obligations will be paid over to Grantor or to whomsoever
Administrative Agent reasonably believes may be lawfully entitled to receive
such surplus.
e. To the extent any of the Collateral represents an interest
in a partnership, a limited liability company or other unincorporated
enterprise, in addition to any other rights and remedies available to
Administrative Agent or any Lender under the Loan Documents or applicable law,
Administrative Agent (at its option but with notice to the relevant Grantor) may
also exercise all rights and privileges of the holder of such interest under the
agreements governing such Collateral and the Organic Documents for the related
organization or may instruct Grantor how to exercise such rights and privileges
(with which instructions Grantor hereby agrees to comply). Grantor, in addition,
covenants and agrees (at Administrative Agent's request) to amend (and to use
its best efforts to cause others to amend) any of the Organic Documents for such
organization in order to authorize Administrative Agent to so exercise any such
rights and privileges associated with such Collateral (including voting rights
and the rights to participate in management decisions). The rights of
Administrative Agent under this Subsection may be transferred to and exercised
by any subsequent acquiror or transferee of the Collateral pursuant to any sale
of or foreclosure on such Collateral. Grantor hereby agrees that the rights of
Administrative Agent and each Lender (or any subsequent acquiror or transferee
of the Collateral) under this Subsection may be enforced by specific performance
or otherwise.
5.3. Special Securities-Related Remedies.
a. Additional Rights. If, during the continuance of an Event
of Default, Administrative Agent determines to exercise its right to sell all or
any portion of the Pledged Equity Collateral pursuant to Section 5.2, upon
Administrative Agent's request, then Grantor (at its own expense):
1. Will execute and deliver, and will use best
efforts to cause each issuer of the Pledged
Equity Collateral contemplated to be sold
(and the directors and officers thereof) to
execute and deliver, all such instruments
and documents, and will do or use best
efforts to cause to be done all such other
acts and things as may be necessary or, in
Administrative Agent's opinion, advisable
(1) to register such Pledged Equity
Collateral under the provisions of the
Securities Act, and (2) to cause the
registration statement relating thereto to
become effective and to remain effective for
such period as prospectuses are required by
law to be furnished, and (3) to make all
amendments and supplements thereto and to
the related prospectus which, in
Administrative Agent's opinion, are
necessary or advisable, all in conformity
with the requirements of the Securities Act
and the rules and regulations of the
Securities and Exchange Commission
applicable thereto; and
2. Will use its best efforts to qualify the
Pledged Equity Collateral under the state
securities or "Blue Sky" laws and to obtain
all necessary governmental approvals for the
sale of the Pledged Equity Collateral, as
requested by Administrative Agent; and
3. Will use best efforts to cause each such
issuer to make available to its security
holders, as soon as practicable, an earnings
statement that will satisfy the provisions
of Section 11(a) of the Securities Act; and
17
4. Will do or use best efforts to cause to be
done all such other acts and things as may
be reasonably necessary, or in
Administrative Agent's opinion, advisable to
make such sale of the Pledged Equity
Collateral or any part thereof valid and
binding and in compliance with applicable
law.
In furtherance of the foregoing (and not in limitation of any other obligations
under the Loan Documents), Grantor covenants that it will fully cooperate with
the Administrative Agent, and will comply with all requests of Administrative
Agent, in order to permit Administrative Agent to fully and timely exercise the
remedies under this Section.
b. Compliance with Restrictions. Grantor agrees that, in any
sale of any of the Pledged Equity Collateral, Administrative Agent is authorized
to comply with any limitation or restriction in connection with the type of such
sale pursued as Administrative Agent may be advised by counsel is necessary or
desirable in order to avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Official Body. Grantor further agrees that such
compliance will not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor will Administrative Agent or
any Lender be liable or accountable to Grantor for any discount allowed by
reason of the fact that such Collateral is sold at foreclosure or otherwise in
compliance with any such limitation or restriction or by reason of the fact that
such Pledge Equity Collateral may represent a minority interest in Grantor.
5.4. Special IP-Related Remedies (License of Intellectual Property
Collateral). Grantor hereby grants Administrative Agent a royalty-free,
non-exclusive, worldwide, irrevocable license (the "Remedies License") to make,
use and sell from time to time after the occurrence of any Event of Default that
is not waived by Administrative Agent and delivery of notice thereof by
Administrative Agent (unless such Event of Default is under Section 7.1.10 of
the Credit Agreement, in which case no such notification shall be required) all
present and future Intellectual Property Collateral of Grantor (including the
right to sub-license such Intellectual Property Collateral) in connection with
the maintenance, preservation, preparation, sale, disposition, collection,
foreclosure, or other realization of, upon, or with respect to the Collateral or
payment of the Secured Obligations in accordance with the Loan Documents. Any
such license for any Trademark shall include appropriate quality control
measures designed to protect the goodwill of such Trademarks. The Remedies
License shall remain in full force and effect until this Security Agreement is
terminated in accordance with Section 1.3 (but any sub-license or transfer of
the Remedies License prior to the termination of the Remedies License shall
survive such termination of the Remedies Licenses unless otherwise provided on
such sub-license or transfer document). The rights of Administrative Agent under
the Remedies License are assignable by Administrative Agent (without the consent
of Grantor) in connection with (a) any sale or other disposition of Collateral
in accordance with the Loan Documents to the extent necessary or appropriate to
permit the purchaser of such Collateral to have continuing and royalty-free,
worldwide rights with respect to such Collateral or (b) any assignment or other
transfer by Administrative Agent of all or any part of its rights under and in
accordance with the Loan Documents. Upon or at any time after the occurrence of
any Event of Default, Grantor will deliver to Administrative Agent (at
Administrative Agent's request but at Grantor's expense) a copy of all such
Intellectual Property Collateral and all related other Collateral in a form
requested by Administrative Agent. Administrative Agent's rights as a licensee
under this Section constitute a separately enforceable contract from the balance
of this Security Agreement.
5.5. Indemnity and Expenses.
a. Grantor agrees to indemnify and hold Administrative Agent
and each Lender harmless from and against any and all claims, losses and
liabilities arising out of or in any manner resulting from any or
18
all of the following: (1) Grantor's failure to perform or otherwise observe any
of its obligations hereunder, or (2) Administrative Agent's enforcement of any
of the provisions hereof, or (3) Grantor's gross negligence, misrepresentation,
willful misconduct or fraud.
b. Upon demand, Grantor will pay Administrative Agent the
amount of any and all costs and expenses that Administrative Agent or any Lender
may incur in connection with any of the matters described under clause "a" of
this Section. Without limitation, Grantor's obligation to reimburse
Administrative Agent for such fees, costs and expenses includes all reasonable
fees and disbursements of Administrative Agent's or any Lender's counsel and any
other experts and agents that Administrative Agent or any Lender may retain in
connection herewith (whether or not litigation is commenced).
5.6. Administrative Agent's Rights Upon Occurrence of Liquidation
Events.
a. Right to Certain Payments and Distributions. Upon the
occurrence of any Liquidation Event, any payment or distribution of any kind or
character (whether in cash, securities or other property) that but for this
Security Agreement would be payable or deliverable to Grantor must instead be
paid or delivered directly to Administrative Agent for application on the
Secured Obligations, whether or not then due or mature.
b. Non-Cash Payments and Distributions. Notwithstanding the
provisions of Clause "a" of this Section, if Administrative Agent receives
delivery of any such payment or distribution in connection with a Liquidation
Event in a form other than cash, then Administrative Agent may hold such
property as additional Collateral for the Secured Obligations, and neither
Grantor nor any other Obligor of the Secured Obligations will be entitled to a
credit with respect to the Secured Obligations, nor will the Secured Obligations
otherwise be adjusted in any respect, until such time as Administrative Agent
(in its sole and absolute discretion) has sold, discounted or otherwise
liquidated such distribution (at a price considered by Administrative Agent to
be in its sole best interest) and then (subject to the terms of Section 7.8),
such credit or adjustment to the Secured Obligations will be limited only to the
net cash proceeds realized therefrom after the payment of all costs and expenses
associated with such sale or liquidation.
c. Collection of Payments and Distributions. In addition to
any rights otherwise permitted under the Loan Documents or applicable law,
Grantor hereby irrevocably authorizes and empowers Administrative Agent, upon
the occurrence of a Liquidation Event, to file and/or vote claims and take such
other proceedings, in each instance in Administrative Agent's own name or in the
name of Grantor, or otherwise, all as Administrative Agent may deem reasonably
necessary or advisable for the enforcement of this Security Agreement. Grantor
further agrees duly and promptly (i) to take such action as may be requested by
Administrative Agent to assist in the collection and/or compromise of any
amounts owed to Grantor, and (ii) to file appropriate proofs of claim in respect
of such amounts, and (iii) to execute and deliver to Administrative Agent on
demand such powers of attorney, proofs of claim, assignments of claim or other
instruments as may be requested by Administrative Agent to enable Administrative
Agent to enforce any and all claims upon or with respect to such amounts, and
(iv) to collect, compromise and receive any and all payments or distributions
which may be payable or deliverable at any time upon or with respect to such
amounts.
5.7. Delivery of Payments and Distributions. If Grantor receives any
payment, distribution or any other funds or property in contravention of the
provisions hereof or any other Loan Document, then Grantor must immediately
forthwith deliver such payment, distribution or other funds or property (or
proceeds thereof) to Administrative Agent in precisely the form received (except
for the endorsement or assignment without recourse of Grantor where necessary)
for application on the Secured Obligations (or, at Administrative Agent's
option, held as additional Collateral therefor), whether or not then due or
mature. Until such funds or property are delivered to Administrative Agent,
Grantor must hold such payment, distribution or other funds or property (or
proceeds thereof) (a) in trust for the benefit of and as property of
Administrative Agent and (b) separate from (i.e., not commingled with) its other
assets. If Grantor fails or refuses to make any such endorsement or
19
assignment, then Administrative Agent (or any of its officers or employees) are
hereby irrevocably authorized by Grantor to make the endorsement and/or
assignment.
5.8. Cooperation and Assistance. Grantor agrees (during the existence
of a Default) to take any actions that Administrative Agent may reasonably
request in order to enable Administrative Agent and each Lender to receive the
full rights and benefits granted to Administrative Agent and each Lender by the
Loan Documents. Grantor further agrees that, during the existence of a Default
or an Event of Default, Grantor will assist and cooperate with Administrative
Agent (and will use its best efforts to cause others to assist and cooperate
with Administrative Agent) to ensure that Grantor continues (a) to operate in
the normal course of business, and (b) to fulfill all of its legal, regulatory
and contractual obligations and (c) to otherwise be properly and professionally
managed. At Administrative Agent's request and the expense of Grantor, at any
time during the existence of an Event of Default, such assistance and
cooperation may include the employment of (and, to the maximum extent not
prohibited by the rules, regulations and orders of any Official Body with
jurisdiction, the delegation of appropriate management authority to) one or more
qualified and independent consultants and professional managers acceptable to
Administrative Agent to assist in the interim operations of Grantor; all of
which Grantor hereby agrees not to challenge.
ARTICLE 6: DEFINITIONS
6.1. Credit Agreement Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Security Agreement (including
the preamble and recitals hereof) have the meanings provided in the Credit
Agreement.
6.2. Rules of Construction. The rules of interpretation and
construction set forth in Section 9.2 of the Credit Agreement apply to the
interpretation and construction of this Security Agreement.
6.3. Certain Terms. The following terms (whether or not underscored)
when used in this Security Agreement (including the preamble and recitals
hereof) have the following meanings:
a. "Administrative Agent" means LaSalle Bank National
Association and any successor, assignee, transferee, pledgee or participant
thereof as administrative agent for itself and the Lenders.
b. "Borrower" means Borrower under and as defined in the
Credit Agreement, including any successor or assignee thereof.
c. "Collateral" is defined in Section 1.1.
d. "Computer Software Collateral" is defined in Section
1.1.
e. "Contract Rights" is defined in Section 1.1.
f. "Copyright Collateral" is defined in Section 1.1.
g. "Credit Agreement" is defined in the Recitals.
h. "Distribution" means all equity dividends, liquidating
dividends, shares or interests of equity resulting from (or in connection with
the exercise of) equity splits, reclassifications, warrants, options, non-cash
dividends, mergers, consolidations, distributions of capital accounts, and all
other distributions (whether similar or dissimilar to the foregoing) on or with
respect to any Pledged Equity or other shares or interests of equity
constituting Pledged Equity Collateral, but such term does not include
Dividends.
20
i. "Dividend" means cash dividends and cash distributions with
respect to any Pledged Equity or other Pledged Equity Property made in the
ordinary course of business, but such term shall not include a liquidating
dividend.
j. "Domestic Subsidiary" means a Subsidiary organized under
the laws of the United States or any political subdivision or any agency,
department or instrumentality thereof.
j. "Equipment" is defined in Section 1.1.
k. "Fixture" is defined in Section 1.1.
l. "Grantor" means the Person that from time to time executes
this Security Agreement (or a counterpart hereof or supplemental addendum
hereto) as a grantor hereunder, and any successor or permitted assignee thereof.
m. "Intellectual Property Collateral" means, collectively, the
Computer Software Collateral, the Copyright Collateral, the Patent Collateral,
the Trademark Collateral and the Trade Secrets Collateral, as defined in Section
1.1.
n. "Inventory" is defined in Section 1.1.
o. "License" means any authorization, permit, call sign,
frequency designation, consent, franchise, ordinance, registration, certificate,
license, agreement or other right filed with, granted by, or entered into by a
federal, state or local Official Body.
p. "Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, option, claim, encumbrance, lien
(statutory or otherwise), charge against or interest in property to secure
payment of a debt or performance of an obligation or other priority or
preferential arrangement of any kind or nature whatsoever.
q. "Liquidation Event" means any foreclosure on or any sale of
all or any material part of the assets of Grantor, or any liquidation,
dissolution or other winding up (partial or complete) of Grantor's business, or
any sale, receivership, insolvency or bankruptcy proceeding, any assignment for
the benefit of creditors, or any other proceeding by or against Grantor or its
assets for any relief under any bankruptcy or insolvency law relating to the
relief of debtors, readjustment of indebtedness, arrangements, reorganizations,
compositions or extensions.
r. "Official Body" means any federal, state, local, or other
government (or any political subdivision, agency, authority, bureau, commission,
department or instrumentality thereof) and any court, tribunal, grand jury or
arbitrator, in each instance whether foreign or domestic.
s. "Operating Agreements" means any consulting agreement,
management agreement, employment agreement, cost allocation agreement or other
similar agreement relating to the operation of Grantor's business.
t. "Patent Collateral" is defined in Section 1.1.
u. "Person" means any natural person, corporation,
partnership, limited liability company, firm, association, trust, government,
governmental agency or any other entity, whether acting in an individual,
fiduciary or other capacity.
21
v. "Pledged Equity" means all shares of capital stock and all
other forms of equity or ownership rights and interests (whether in the form of
partnership interests, membership interests or otherwise) of or in any
corporation, partnership, limited liability company business trust or other
business entity; provided, however, that Grantor's interest in Celebration shall
not be deemed "Pledged Equity" of Grantor unless it is required to pledge such
equity pursuant to Section 4.14.1 of the Credit Agreement.
w. "Pledged Equity Collateral" is defined in Section 1.4.
x. "Pledged Equity Issuer" means each Person who is an issuer
of Pledged Equity Collateral.
y. "Pledged Equity Property" means all Pledged Equity and all
other forms of equity interests and rights, all other securities (including,
without limitation, all options, warrants and puts for Pledged Equity), all
assignments of any amounts due or to become due, all other instruments which are
now being delivered by any Pledgor to Administrative Agent or may from time to
time hereafter be delivered by any Pledgor to Administrative Agent for the
purpose of pledge under the Security Agreement, and all proceeds of any of the
foregoing.
z. "Pledgor" means each Person (a) who is a Grantor hereunder
and (b) who pledges Pledged Equity Collateral.
aa. "Related Contracts" is defined in Section 1.1.
bb. "Secured Obligations" is defined in Section 1.2.
cc. "Security Agreement" means this Security and Pledge
Agreement, and all exhibits, schedules and supplemental addenda hereto, all as
may be amended and otherwise modified from time to time hereafter.
dd. "Securities Act" means the Securities Act of 1933, as
amended from time to time, and as implemented by the Securities Exchange
Commission.
ee. "Trademark Collateral" is defined in Section 1.1.
ff. "Trade Secrets Collateral" is defined in Section 1.1.
gg. "UCC" means the Uniform Commercial Code, as amended from
time to time, in effect in the State of Illinois or, if the laws of some other
jurisdiction otherwise dictates, then the Uniform Commercial Code as in effect
in the jurisdiction whose laws govern the interpretation of the relevant
provisions of this Security Agreement.
6.4. UCC Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the UCC are used in
this Security Agreement (including in the preamble and recitals hereof) with
such meanings.
ARTICLE 7: MISCELLANEOUS PROVISIONS
7.1. Loan Document. This Security Agreement and each separate
assignment executed in connection herewith are Loan Documents executed pursuant
to the Credit Agreement and (unless otherwise expressly indicated herein) are to
be construed, administered and applied in accordance with the terms and
provisions thereof.
22
7.2. Amendments. No amendment to or waiver of any provision of this
Security Agreement, nor consent to any departure by Grantor herefrom, shall in
any event be effective unless such amendment, waiver or consent is in writing
and signed by Administrative Agent. Any such waiver or consent will be effective
only in the specific instance and for the specific purpose for which given.
7.3. Addresses for Notices. Any notice, request, consent, waiver or
other communication required or permitted under or in connection with this
Security Agreement will be deemed satisfactorily given if it is in writing and
is delivered either personally to the addressee thereof, or by prepaid
registered or certified U.S. mail (return receipt requested), or by a nationally
recognized commercial courier service with next-day delivery charges prepaid, or
by telegraph, or by facsimile (voice confirmed), or by any other reasonable
means of personal delivery to the party entitled thereto at its respective
address set forth below its signature to this Security Agreement (or, if blank,
then to such party at its address or facsimile number set forth in the Credit
Agreement). If Grantor fails to insert an address below (and in the Credit
Agreement), then such failure shall constitute a designation of its last known
address as the address for all notices, including notices of default and sale.
Any party to this Security Agreement may change its address or facsimile number
for notice purposes by giving notice thereof to the other parties hereto in
accordance with this Section, provided that such change shall not be effective
until two (2) calendar days after notice of such change. All such notices and
other communications will be deemed given and effective (a) if by mail, then
upon actual receipt or five (5) calendar days after mailing as provided above
(whichever is earlier), or (b) if by facsimile, then upon successful transmittal
to such party's designated number, or (c) if by telegraph, then upon actual
receipt or two (2) Business Days after delivery to the telegraph company
(whichever is earlier), or (d) if by nationally recognized commercial courier
service, then upon actual receipt or two (2) Business Days after delivery to the
courier service (whichever is earlier), or (e) if otherwise delivered, then upon
actual receipt.
7.4. Severability. Wherever possible, each provision of this Security
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Security Agreement shall be prohibited
by or invalid under such law, then such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Security Agreement.
7.5. Governing Law; Entire Agreement. This Security Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Illinois, except to the extent that the validity or perfection of the security
interest, collateral assignment or pledge hereunder (or remedies hereunder) in
respect of any particular Collateral are required to be governed by the laws of
a jurisdiction other than the State of Illinois. This Security Agreement and the
other loan documents constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and supersede any prior
agreements (written or oral) with respect thereto.
7.6. Reinstatement. To the maximum extent not prohibited by applicable
law, this Security Agreement shall continue to be effective or be reinstated if
at any time any amount received by Administrative Agent or any Lender in respect
of the Credit Agreement or any other Loan Document is rescinded or must
otherwise be restored or returned by Administrative Agent or such Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of
Grantor or upon the appointment of any receiver, intervenor, conservator,
trustee or similar official for Grantor or any substantial part of Grantor's
assets, or otherwise, all as though such payments had not been made.
7.7. Conflict Provision. In the event of any irreconcilable conflict
between the terms and conditions of this Security Agreement and the terms and
conditions of the Credit Agreement, the terms and conditions of the Credit
Agreement shall govern.
23
7.8. Incorporation of Separate IP Security Agreements and Collateral
Assignments of Material Contracts. Each representation, warranty, covenant and
further assurance by Grantor contained in any separate assignment or security
agreement relating to any Intellectual Property Collateral or any material
contract executed in connection the Credit Agreement is hereby incorporated
herein by reference.
7.9. Incorporation of Financing Statements and Exhibits Thereto. Each
UCC financing statement (including each exhibit thereto) executed by Grantor in
connection with this Security Agreement is hereby incorporated herein by
reference.
7.10. Administrative Agent. References in this Security Agreement to
Administrative Agent shall mean either to Administrative Agent in such capacity
or (where appropriate) to Administrative Agent for the benefit of itself and
other Lenders. Unless otherwise indicated in this Security Agreement or the
other Loan Documents, all Collateral held and all payments received by
Administrative Agent are deemed to be held and received, respectively, for the
benefit of Lenders.
7.11. Waiver of Suretyship Defenses. Grantor hereby waives any and all
defenses and rights of discharge based on suretyship or impairment of collateral
(including any lack of attachment or perfection with respect thereto) that it
may now have or may hereafter acquire with respect to Administrative Agent or
any Lender or any of Grantor's obligations hereunder or under any other
agreement that it may have or hereafter enter into with Administrative Agent or
any Lender.
7.12. Waiver of Subrogation. Until this Security Agreement is
terminated in accordance with Section 1.3, Grantor hereby irrevocably waives any
claim or other rights which it may now have or may hereafter acquire against any
other Obligor that arise from the existence, payment, performance or enforcement
of Grantor's obligations under this Security Agreement or any other Loan
Document, including any right of subrogation, reimbursement, contribution,
exoneration, or indemnification, any right to participate in any claim or remedy
of Administrative Agent or any Lender against any other Obligor or any
collateral which Administrative Agent or any Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law.
7.13. WAIVER OF NOTICE; WAIVER OF BOND. GRANTOR WAIVES ALL RIGHTS OF
NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY ADMINISTRATIVE AGENT OR
ANY LENDER OF ITS RIGHTS DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT TO
REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY
UPON THE COLLATERAL. GRANTOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED
OF ADMINISTRATIVE AGENT OR ANY LENDER IN CONNECTION WITH ANY JUDICIAL PROCESS OR
PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR
OTHER SECURITY FOR THE SECURED OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER
COURT ORDER ENTERED IN FAVOR OF ADMINISTRATIVE AGENT OR ANY LENDER, OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR
PERMANENT INJUNCTION THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT.
7.14. WAIVER OF LIABILITY. GRANTOR (A) AGREES THAT NEITHER
ADMINISTRATIVE AGENT NOR ANY LENDER (NOR ANY DIRECTOR, OFFICER, EMPLOYEE OR
AGENT OF ADMINISTRATIVE AGENT OR ANY LENDER) SHALL HAVE ANY LIABILITY TO GRANTOR
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES OR COSTS SUFFERED
OR INCURRED BY GRANTOR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED OR
THE RELATIONSHIP ESTABLISHED BY ANY LOAN DOCUMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION
24
THEREWITH, EXCEPT FOR FORESEEABLE ACTUAL LOSSES RESULTING DIRECTLY AND
EXCLUSIVELY FROM ADMINISTRATIVE AGENT OR SUCH LENDER'S OWN GROSS NEGLIGENCE,
WILLFUL MISCONDUCT OR FRAUD, AND (B) WAIVES, RELEASES AND AGREES NOT TO ▇▇▇ UPON
ANY CLAIM AGAINST ADMINISTRATIVE AGENT OR ANY LENDER (OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES OR AGENTS) WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE,
EXCEPT FOR CLAIMS FOR FORESEEABLE ACTUAL LOSSES RESULTING DIRECTLY AND
EXCLUSIVELY FROM ADMINISTRATIVE AGENT'S OR SUCH LENDER'S OWN GROSS NEGLIGENCE,
WILLFUL MISCONDUCT OR FRAUD. MOREOVER, WHETHER OR NOT SUCH DAMAGES ARE RELATED
TO A CLAIM THAT IS SUBJECT TO THE WAIVER EFFECTED ABOVE AND WHETHER OR NOT SUCH
WAIVER IS EFFECTIVE, NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER (NOR ANY
DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF ADMINISTRATIVE AGENT OR ANY LENDER)
SHALL HAVE ANY LIABILITY WITH RESPECT TO (AND GRANTOR HEREBY WAIVES, RELEASES
AND AGREES NOT TO ▇▇▇ UPON ANY CLAIM FOR) ANY SPECIAL, INDIRECT, CONSEQUENTIAL,
PUNITIVE OR NON-FORESEEABLE DAMAGES SUFFERED BY GRANTOR IN ANY WAY RELATED TO
THE TRANSACTIONS CONTEMPLATED OR THE RELATIONSHIP ESTABLISHED BY ANY LOAN
DOCUMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH.
7.15. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION IN
ANY WAY RELATED TO ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OR INACTIONS OF
ADMINISTRATIVE AGENT OR ANY LENDER OR GRANTOR WILL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF ▇▇▇▇ COUNTY IN THE STATE OF ILLINOIS OR IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST GRANTOR OR ANY COLLATERAL MAY
ALSO BE BROUGHT (AT ADMINISTRATIVE AGENT'S OR SUCH LENDER'S OPTION) IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL MAY BE FOUND OR WHERE
ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE OBTAIN PERSONAL JURISDICTION
OVER GRANTOR. GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL
AND NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR OUTSIDE THE
STATE OF ILLINOIS. GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES (TO THE
FULLEST EXTENT PERMITTED BY LAW) ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THEN GRANTOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
SECURITY AGREEMENT.
25
7.16. WAIVER OF JURY TRIAL. ADMINISTRATIVE AGENT, EACH LENDER AND THE
GRANTOR EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION (WHETHER AS CLAIM,
COUNTER-CLAIM, AFFIRMATIVE DEFENSE OR OTHERWISE) IN ANY WAY RELATED TO ANY LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), ACTIONS OR INACTIONS OF ADMINISTRATIVE AGENT, ANY LENDER OR
THE GRANTOR. GRANTOR ACKNOWLEDGES AND AGREES (A) THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY), AND (B) THAT IT HAS BEEN ADVISED BY
LEGAL COUNSEL IN CONNECTION HEREWITH, AND (C) THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR ADMINISTRATIVE AGENT AND EACH LENDER ENTERING INTO THE LOAN
DOCUMENTS AND FUNDING ADVANCES THEREUNDER.
7.17. Counterparts. This Security Agreement may be executed in any
number of counterparts with the same effect as if all the signatures on such
counterparts appeared on one document. Each counterpart will be deemed to be an
original, but all counterparts together will constitute one and the same
instrument.
[BALANCE OF PAGE INTENTIONALLY BLANK]
26
IN WITNESS WHEREOF, the parties hereto have executed this
Security Agreement, through their duly authorized officers, as of the date first
written above.
ATTEST: INTEGRITY PUBLISHERS, INC.
(as Grantor)
By: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------- ----------------------------------
Name: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Chief Executive Officer Title: Secretary and Treasurer
-------------------------------
Address:
------------------------------
------------------------------
Facsimile: (___) ___-____
LASALLE BANK NATIONAL ASSOCIATION
(as Administrative Agent)
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Commercial Banking Officer
Address: One Metropolitan Square
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