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Exhibit 99.4
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GUARANTEE AND COLLATERAL AGREEMENT
made by
▇▇▇▇ VISION CORPORATION,
THINGS REMEMBERED, INC.,
▇▇▇▇ GIFT CENTERS, INC.,
PEARLE, INC.,
and
PEARLE SERVICE CORPORATION,
and certain of their Subsidiaries
in favor of
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
Dated as of November 15, 1996
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS.................................................................. 1
1.1 DEFINITIONS.................................................................. 1
1.2 OTHER DEFINITIONAL PROVISIONS................................................ 5
SECTION 2. GUARANTEE...................................................................... 5
2.1 GUARANTEE.................................................................... 5
2.2 RIGHT OF CONTRIBUTION........................................................ 6
2.3 NO SUBROGATION............................................................... 6
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS.................... 7
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL......................................... 7
2.6 REINSTATEMENT................................................................ 8
2.7 PAYMENTS..................................................................... 8
SECTION 3. GRANT OF SECURITY INTEREST..................................................... 8
SECTION 4. REPRESENTATIONS AND WARRANTIES................................................. 10
4.1 REPRESENTATIONS IN CREDIT AGREEMENT.......................................... 10
4.2 TITLE; NO OTHER LIENS........................................................ 10
4.3 PERFECTED FIRST PRIORITY LIENS............................................... 10
4.4 CHIEF EXECUTIVE OFFICE....................................................... 11
4.5 INVENTORY AND EQUIPMENT...................................................... 11
4.6 FARM PRODUCTS................................................................ 11
4.7 PLEDGED SECURITIES........................................................... 11
4.8 ACCOUNTS..................................................................... 11
4.9 INTELLECTUAL PROPERTY........................................................ 11
SECTION 5. COVENANTS...................................................................... 12
5.1 COVENANTS IN CREDIT AGREEMENT................................................ 12
5.2 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER.................................... 12
5.3 MAINTENANCE OF INSURANCE..................................................... 12
5.4 PAYMENT OF OBLIGATIONS....................................................... 13
5.5 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION............ 13
5.7 NOTICES...................................................................... 14
5.8 PLEDGED SECURITIES........................................................... 14
5.9 ACCOUNTS..................................................................... 15
5.10 INTELLECTUAL PROPERTY....................................................... 15
SECTION 6. REMEDIAL PROVISIONS............................................................ 17
6.1 CERTAIN MATTERS RELATING TO ACCOUNTS......................................... 17
6.2 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE......................... 18
6.3 PLEDGED STOCK................................................................ 18
6.4 PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT........................... 19
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6.5 APPLICATION OF PROCEEDS........................................................ 20
6.6 CODE AND OTHER REMEDIES........................................................ 20
6.7 REGISTRATION RIGHTS............................................................ 21
6.8 DEFICIENCY..................................................................... 22
SECTION 7. THE ADMINISTRATIVE AGENT......................................................... 22
7.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC.................... 22
7.2 DUTY OF ADMINISTRATIVE AGENT................................................... 24
7.3 EXECUTION OF FINANCING STATEMENTS.............................................. 24
7.4 AUTHORITY OF ADMINISTRATIVE AGENT.............................................. 24
SECTION 8. MISCELLANEOUS.................................................................... 25
8.1 AMENDMENTS IN WRITING.......................................................... 25
8.2 NOTICES........................................................................ 25
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES............................ 25
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION.......................................... 25
8.5 SUCCESSORS AND ASSIGNS......................................................... 26
8.6 SET-OFF........................................................................ 26
8.7 COUNTERPARTS................................................................... 26
8.8 SEVERABILITY................................................................... 26
8.9 SECTION HEADINGS............................................................... 26
8.10 INTEGRATION................................................................... 27
8.11 GOVERNING LAW................................................................. 27
8.12 SUBMISSION TO JURISDICTION; WAIVERS........................................... 27
8.13 ACKNOWLEDGEMENTS.............................................................. 27
8.14 WAIVER OF JURY TRIAL.......................................................... 28
8.15 ADDITIONAL GRANTORS........................................................... 28
8.16 RELEASES...................................................................... 28
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SCHEDULES
1 Notice Addresses of Guarantors
2 Description of Pledged Securities
3 Filings and Other Actions Required to Perfect Security Interests
4 Location of Jurisdiction of Organization and Chief Executive Office or
Sole Place of Business
5 Location of Inventory and Equipment
6 Copyrights and Copyright Licenses; Patents and Patent Licenses;
Trademarks and Trademark Licenses
ANNEXES
1 Assumption Agreement
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of November 15, 1996, made by
each of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the "GRANTORS"), in favor of Canadian Imperial
Bank of Commerce, as administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") for the banks and other financial institutions (collectively, the
"LENDERS") from time to time parties to the Credit Agreement, dated as of
November 15, 1996 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among ▇▇▇▇ Vision Corporation, Things Remembered,
Inc., ▇▇▇▇ Gift Centers, Inc., Pearle, Inc. and Pearle Service Corporation
(collectively, the "BORROWERS"), the Lenders and the Administrative Agent, and
the other Secured Parties (as defined below) parties hereto.
W I T N E S S E T H:
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WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Borrowers, jointly and severally,
upon the terms and subject to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of companies that
includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit will be used in part to
enable the Borrowers to make valuable transfers to one or more of the other
Grantors in connection with the operation of their respective businesses;
WHEREAS, the Borrowers and the other Grantors are engaged in related
businesses, and each such Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
and
WHEREAS, it is a condition precedent to the obligation of the Lenders to
make their respective extensions of credit to the Borrowers under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit
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Agreement, and the following terms which are defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, Farm Products,
Instruments and Inventory.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Guarantee and Collateral Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"BORROWER OBLIGATIONS": the collective reference to the unpaid
principal of and interest on the Revolving Credit Loans and Reimbursement
Obligations and all other obligations and liabilities of the Borrowers
(including, without limitation, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Revolving
Credit Loans and Reimbursement Obligations and interest accruing at the
then applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrowers, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Administrative Agent or any Lender (or, in the case of
any Hedge Agreement referred to below, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, this Agreement, the other Loan
Documents, any Letter of Credit or any Hedge Agreement entered into by any
Borrower with any Lender (or, in the case of any Hedge Agreement, any
Affiliate of any Lender) or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Lenders that are required to
be paid by any Borrower pursuant to the terms of any of the foregoing
agreements).
"CODE": the Uniform Commercial Code as from time to time in effect in
the State of New York.
"COLLATERAL": as defined in Section 3.
"COLLATERAL ACCOUNT": any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.
"CONTRACTS" with respect to any Grantor, all contracts, agreements,
instruments and indentures in any form, and portions thereof, to which such
Grantor is a party or under which such Grantor has any right, title or
interest or to which such Grantor or any property of such Grantor is
subject, as the same
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may from time to time be amended, supplemented or otherwise modified,
including, without limitation, (i) all rights of such Grantor to receive
moneys due and to become due to it thereunder or in connection therewith,
(ii) all rights of such Grantor to damages arising thereunder and (iii) all
rights of such Grantor to perform and to exercise all remedies thereunder.
"COPYRIGHTS": (i) all United States copyrights, whether published or
unpublished (including, without limitation, those listed in SCHEDULE 6),
all United States registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the United States Copyright
Office, and (ii) all renewals thereof.
"COPYRIGHT LICENSES": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
SCHEDULE 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"GENERAL INTANGIBLES": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof.
"GUARANTOR OBLIGATIONS": with respect to any Guarantor, the collective
reference to (i) the Borrower Obligations and (ii) all obligations and
liabilities of such Guarantor which may arise under or in connection with
this Agreement or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to
the Administrative Agent or to the Lenders that are required to be paid by
such Guarantor pursuant to the terms of this Agreement or any other Loan
Document).
"GUARANTORS": the collective reference to each Grantor other than the
Borrowers.
"HEDGE AGREEMENTS": as to any Person, all interest rate swaps, caps or
collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies, including, without limitation,
all Interest Rate Protection Agreements and Permitted Hedging Arrangements
with respect to currency exchange rates.
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"INTELLECTUAL PROPERTY": the collective reference to the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks
and the Trademark Licenses.
"INTERCOMPANY NOTE": any promissory note evidencing loans made by any
Grantor to any Borrower or any Subsidiary.
"ISSUERS": the collective reference to the Persons identified on
SCHEDULE 2 as the issuers of the Pledged Stock.
"MAKERS": the collective reference to the Persons identified on
SCHEDULE 2 as the makers of the Pledged Notes.
"OBLIGATIONS": (i) in the case of each Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"PATENTS": (i) all letters patent of the United States, all reissues
and extensions thereof, including, without limitation, any of the foregoing
referred to in SCHEDULE 6, and (ii) all applications for letters patent of
the United States and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in SCHEDULE 6.
"PATENT LICENSE": all agreements providing for the grant by or to any
Grantor of any right to manufacture, use or sell any invention covered by a
Patent, including, without limitation, any of the foregoing referred to in
SCHEDULE 6.
"PLEDGED NOTES": all promissory notes listed on SCHEDULE 2, all
Intercompany Notes at any time issued to any Pledgor and all other
promissory notes issued to or held by any Grantor (other than promissory
notes issued in connection with extensions of trade credit by any Grantor
in the ordinary course of business).
"PLEDGED SECURITIES": the collective reference to the Pledged Notes
and the Pledged Stock.
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Issuer that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect (PROVIDED that in no event shall any Grantor be required to
pledge more than 65% of the Capital Stock of any foreign issuer pursuant to
this Agreement).
"PROCEEDS": all "proceeds" as such term is defined in Section 9-306(1)
of the Uniform Commercial Code in effect in the State of New York on the
date
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hereof and, in any event, shall include, without limitation, all dividends
or other income from the Pledged Securities, collections thereon or
distributions or payments with respect thereto.
"SECURED PARTIES": the collective reference to the Administrative
Agent, the Lenders (including, without limitation, the Issuing Lender) and
any Affiliate of any Lender which has entered into a Hedge Agreement with
any Borrower or any Subsidiary.
"SECURITIES ACT": the Securities Act of 1933, as amended from time to
time.
"TRADEMARKS": (i) all United States trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers, and
all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any political subdivision thereof, or otherwise, including,
without limitation, any of the foregoing referred to in SCHEDULE 6, and
(ii) all renewals thereof.
"TRADEMARK LICENSE": any agreement providing for the grant by or to
any Grantor of any right to use any Trademark, including, without
limitation, any of the foregoing referred to in SCHEDULE 6.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, Schedule and Annex references are to this Agreement
unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 GUARANTEE. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrowers when due
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(whether at the stated maturity, by acceleration or otherwise) of the Borrower
Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent or any other Secured Party
hereunder.
(d) The guarantee contained in this Section 2 shall remain in full force
and effect until the earlier to occur of (i) the first date on which all the
Borrower Obligations and the obligations of each Guarantor under the guarantee
contained in this Section 2 shall have been satisfied by payment in full, no
Letter of Credit shall be outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrowers may be free from any Borrower Obligations or (ii) as to any
Guarantor, the sale or other disposition of all of the Capital Stock of such
Guarantor permitted under subsection 8.6 of the Credit Agreement and the release
of such Guarantor from its Guarantee in accordance with subsection 10.11 of the
Credit Agreement.
(e) No payment made by any Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any other Secured Party from any Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the earlier to occur of (i) the
first date on which the Borrower Obligations are paid in full, no Letter of
Credit shall be outstanding and the Commitments are terminated or (ii) the sale
or other disposition of all of the Capital Stock of such Guarantor permitted
under subsection 8.6 of the Credit Agreement and the release of such Guarantor
from its Guarantee in accordance with subsection 10.11 of the Credit Agreement.
2.2 RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
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contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the other Secured Parties, and
each Guarantor shall remain liable to the Administrative Agent and the Lenders
for the full amount guaranteed by such Guarantor hereunder.
2.3 NO SUBROGATION. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any other Secured Party, no Guarantor shall be entitled
to be subrogated to any of the rights of the Administrative Agent or any other
Secured Party against any Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative Agent or any
other Secured Party for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from any
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Administrative Agent and the other
Secured Parties by the Borrowers on account of the Borrower Obligations are paid
in full, no Letter of Credit shall be outstanding and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Administrative Agent and the other Secured Parties, segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any other Secured Party may be
rescinded by the Administrative Agent or such other Secured Party and any of the
Borrower Obligations continued, and the Borrower Obligations, or the liability
of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
other Secured Party, and the Credit Agreement and the other Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Majority Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Administrative Agent or any other Secured Party
for the payment
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of the Borrower Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any other Secured Party shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Borrower Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by the Administrative Agent or
any other Secured Party upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Section 2; and all dealings between any
Borrower and any of the Guarantors, on the one hand, and the Administrative
Agent and the other Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrowers or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment. Each Guarantor hereby waives, to the extent it may legally
do so, any and all defenses that it may have arising out of or in connection
with any and all of the following: (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower Obligations or
any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Administrative
Agent or any other Secured Party, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by any Borrower against the Administrative Agent or
any other Secured Party, (c) any change in the time, place, manner or place of
payment, amendment, or waiver or increase in the Obligations, (d) any exchange,
taking, or release of Collateral, (e) any change in the corporate structure or
existence of any Borrower, (f) any application of Collateral to Obligations or
(g) any other circumstance whatsoever (with or without notice to or knowledge of
such Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of any Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or any other Secured Party may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against any Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any other Secured Party to make any such demand, to
pursue such other rights or remedies or to collect any payments from any
Borrower, any other Guarantor or any other Person or to
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realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of any Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any other Secured
Party against any Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
2.6 REINSTATEMENT. The guarantee contained in this Section 2 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Borrower Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.7 PAYMENTS. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Administrative Agent, and
hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "COLLATERAL"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations of such Grantor:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
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(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Pledged Securities;
(k) all books and records pertaining to any of the foregoing; and
(l) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing;
PROVIDED, HOWEVER that to the extent that the grant by such Grantor of a
security interest pursuant to this Agreement in its right, title and interest in
any Contracts or any General Intangibles or Copyright Licenses, Patent Licenses
or Trademark Licenses arising under such Contracts is prohibited by such
Contracts without the consent of any other party thereto, would give any other
party to such Contracts the right to terminate its obligations thereunder, or is
permitted with consent if all necessary consents to such grant of a security
interest have not been obtained from the other parties thereto (it being
understood that the foregoing shall not be deemed to obligate such Grantor to
obtain such consents), then a security interest in such right, title and
interest shall not be granted pursuant to this Agreement; PROVIDED, FURTHER that
the foregoing limitation shall not affect, limit, restrict or impair the grant
by such Grantor of a security interest pursuant to this Agreement in any Account
or any money or other amounts due or to become due under any such Contracts.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrowers thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each other Secured Party that:
4.1 REPRESENTATIONS IN CREDIT AGREEMENT. (a) In the case of each Guarantor,
the representations and warranties set forth in Section 5 of the Credit
Agreement as they relate to such Guarantor or to the Loan Documents to which
such Guarantor is a party or to the Transaction Documents to which such
Guarantor is a party, each of which is hereby incorporated herein by reference,
are true and correct, and the Administrative Agent and each other Secured Party
shall be entitled to rely on each of them as if they were fully set forth
herein; PROVIDED that each reference in each
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such representation and warranty to any Borrower's knowledge shall, for the
purposes of this Section 4.1(a), be deemed to be a reference to such Guarantor's
knowledge.
4.2 TITLE; NO OTHER LIENS. Except for the security interest granted to the
Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement and the other Liens permitted to exist on the Collateral by
the Credit Agreement, such Grantor owns each item of the Collateral free and
clear of any and all Liens or claims of others. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement or as are permitted by the Credit Agreement or for which
termination statements will be delivered on the Closing Date.
4.3 PERFECTED FIRST PRIORITY LIENS. Except with respect to (x) security
interests in any Intellectual Property, to the extent that such security
interests cannot be perfected by the filing of financing statements under the
Uniform Commercial Code or by the filing and acceptance thereof in the United
States Patent and Trademark Office or the United States Copyright Office or (y)
security interests in any Intellectual Property in respect of which an interest
has been acquired after the date hereof, to the extent that the filings and
other actions specified in SCHEDULE 3 have not been completed (this clause not
being deemed to constitute a waiver of the Grantor's obligations hereunder to
complete such actions), the security interests granted pursuant to this
Agreement (a) upon completion of the filings and other actions specified on
SCHEDULE 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Administrative Agent in completed and
duly executed form) will constitute valid perfected security interests in all of
the Collateral in favor of the Administrative Agent, for the ratable benefit of
the Secured Parties, as collateral security for the Obligations of such Grantor,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
and (b) are prior to all other Liens on the Collateral in existence on the date
hereof except for (i) unrecorded Liens permitted by the Credit Agreement which
have priority over the Liens on the Collateral by operation of law and (ii)
Liens described on SCHEDULE 8.3(h) TO THE CREDIT AGREEMENT.
4.4 CHIEF EXECUTIVE OFFICE. On the date hereof, such Grantor's jurisdiction
of organization and the location of such Grantor's chief executive office or
sole place of business are specified on SCHEDULE 4.
4.5 INVENTORY AND EQUIPMENT. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on SCHEDULE
5.
4.6 FARM PRODUCTS. None of the Collateral constitutes, or is the Proceeds
of, Farm Products.
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4.7 PLEDGED SECURITIES. (a) The shares of Pledged Stock pledged by such
Grantor hereunder constitute (i) in the case of each domestic Issuer, all the
issued and outstanding shares of all classes of the Capital Stock of each such
domestic Issuer owned by such Grantor and (ii) in the case of each foreign
Issuer, such percentage (not more than 65%) as is specified on SCHEDULE 2 of all
the issued and outstanding shares of all classes of the Capital Stock of each
such foreign Issuer.
(b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Pledged Securities pledged by it hereunder, free of any
and all Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement.
4.8 ACCOUNTS. (a) No amount payable to such Grantor under or in connection
with any Account is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Administrative Agent.
(b) None of the obligors on any Accounts is a Governmental Authority.
(c) The amounts represented by such Grantor to the Lenders from time to
time as owing to such Grantor in respect of the Accounts will at such times be
accurate.
4.9 INTELLECTUAL PROPERTY. (a) SCHEDULE 6 lists all material Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) Except as set forth in SCHEDULE 6, to the best of such Grantor's
knowledge, each Copyright, Patent and Trademark is on the date hereof valid,
subsisting, unexpired, enforceable and has not been abandoned.
(c) Except as set forth in SCHEDULE 6, none of the Copyrights, Patents or
Trademarks is on the date hereof the subject of any licensing or franchise
agreement.
(d) To the best of such Grantor's knowledge, no holding, decision or
judgment has been rendered by any Governmental Authority which would limit,
cancel or question the validity of any Copyright, Patent or Trademark in any
respect that could reasonably be expected to have a Material Adverse Effect.
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(e) No action or proceeding is pending on the date hereof (i) seeking to
limit, cancel or question the validity of any Copyright, Patent or Trademark, or
(ii) which, if adversely determined, would have a material adverse effect on the
value of any Copyright, Patent or Trademark, or the Grantor's ownership thereof.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and the
other Secured Parties that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 COVENANTS IN CREDIT AGREEMENT. In the case of each Guarantor, such
Guarantor shall take, or shall refrain from taking, as the case may be, each
action that is necessary to be taken or not taken, as the case may be, so that
no Default or Event of Default is caused by the failure to take such action or
to refrain from taking such action by such Guarantor or any of its Subsidiaries.
5.2 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper, such Instrument or Chattel Paper shall be promptly
delivered to the Administrative Agent, duly indorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this Agreement.
5.3 MAINTENANCE OF INSURANCE. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as are usually insured against in the same general area by companies
engaged in the same or similar business and (ii) insuring such Grantor, the
Administrative Agent and the other Secured Parties against liability for
personal injury and property damage relating to such Inventory and Equipment,
such policies to be in such form and amounts and having such coverage as are
usually insured against in the same general area by companies engaged in the
same or similar business.
(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Administrative Agent of written
notice thereof, (ii) name the Administrative Agent as an additional insured
party or loss payee, (iii) include deductibles consistent with past practice and
(iv) be reasonably satisfactory in all other respects to the Administrative
Agent.
(c) The Borrowers shall deliver to the Administrative Agent reports of one
or more reputable insurance brokers of the individual insurance companies with
respect to such insurance during the month of March in each calendar year and
such
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supplemental reports with respect thereto as the Administrative Agent may from
time to time reasonably request.
5.4 PAYMENT OF OBLIGATIONS. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION. (a)
Such Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section
4.3 and shall defend such security interest against the claims and demands of
all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and the other
Secured Parties from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby.
5.6 CHANGES IN LOCATIONS, NAME, ETC. Such Grantor will not, except upon 30
days' prior written notice to the Administrative Agent and delivery to the
Administrative Agent of (a) all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (b) if applicable, a written supplement to SCHEDULE 5 showing any additional
location at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a location
other than those listed on SCHEDULE 5;
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(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading.
5.7 NOTICES. Such Grantor will advise the Administrative Agent promptly, in
reasonable detail, of:
(a) any Lien of which such Grantor obtains actual knowledge (other than
security interests created hereby or Liens permitted under the Credit Agreement)
on any of the Collateral which would adversely affect the ability of the
Administrative Agent to exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be expected
to have a material adverse effect on the aggregate value of the Collateral or on
the security interests created hereby.
5.8 PLEDGED SECURITIES. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Administrative Agent and the other Secured Parties, hold the same in trust
for the Administrative Agent and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations (PROVIDED that in no event shall such Grantor be
required to pledge more than 65% of the Capital Stock of any foreign issuer
pursuant to this Agreement). Any sums paid upon or in respect of the Pledged
Securities upon the liquidation or dissolution of any Issuer or Maker shall be
paid over to the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of capital
shall be made on or in respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Securities shall be
received by such Grantor, such Grantor shall,
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until such money or property is paid or delivered to the Administrative Agent,
hold such money or property in trust for the Secured Parties, segregated from
other funds of such Grantor, as additional collateral security for the
Obligations.
(b) Without the prior written consent of the Administrative Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Securities or Proceeds thereof (except
pursuant to a transaction expressly permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Pledged Securities or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Pledged
Stock issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a) with
respect to the Pledged Stock issued by it and (iii) the terms of Sections 6.3(c)
and 6.7 shall apply to it, MUTATIS MUTANDIS, with respect to all actions that
may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the
Pledged Stock issued by it.
5.9 ACCOUNTS. (a) Other than in the ordinary course of business, such
Grantor will not (i) grant any extension of the time of payment of any Account,
(ii) compromise or settle any Account for less than the full amount thereof,
(iii) release, wholly or partially, any Person liable for the payment of any
Account, (iv) allow any credit or discount whatsoever on any Account or (v)
amend, supplement or modify any Account in any manner that could adversely
affect the value thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 10% of the aggregate amount of
the then outstanding Accounts.
5.10 INTELLECTUAL PROPERTY. (a) Such Grantor (either itself or through
licensees) will (i) use each material Trademark on each and every trademark
class of goods applicable to its then current line as reflected in its then
current catalogs, brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment for non-use, (ii) maintain as
in the past the quality of products and services offered under such Trademark,
(iii) employ such Trademark with the
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appropriate notice of registration, if applicable, (iv) not adopt or use any
▇▇▇▇ which is confusingly similar or a colorable imitation of any such Trademark
unless the Administrative Agent, for the ratable benefit of the Secured Parties,
shall obtain a perfected security interest in such ▇▇▇▇ pursuant to this
Agreement, and (v) not (and not permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby any such Trademark may become
invalidated where such act or failure to act could reasonably be expected to
have a Material Adverse Effect.
(b) Such Grantor will not do any act, or omit to do any act, whereby any
Patent may become abandoned or dedicated where such abandonment or dedication
could reasonably be expected to have a Material Adverse Effect.
(c) Such Grantor (either itself or through licensees) (i) will employ each
material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the material Copyrights may become invalidated. Such Grantor
will not (either itself or through licensees) do any act whereby any material
portion of the material Copyrights may become injected into the public domain.
(d) Such Grantor will notify the Administrative Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any material Patent or material Trademark may become abandoned or dedicated, or
of any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office or any court or tribunal in the
United States) regarding such Grantor's ownership of any material Patent or
material Trademark or its right to register the same or to keep and maintain the
same.
(e) Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Patent or Trademark with the United States Patent and Trademark Office, such
Grantor shall report such filing to the Administrative Agent within 45 days
after the last day of the fiscal quarter in which such filing occurs. Upon the
request of the Administrative Agent, such Grantor shall execute and deliver any
and all agreements, instruments, documents, and papers as the Administrative
Agent may request to evidence the Administrative Agent's and the Secured
Parties' security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.
(f) Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Copyright with the United States Copyright Office, such Grantor shall report
such filing to the Administrative Agent within 45 days after the last day of the
fiscal quarter in which such filing occurs. Upon the request of the
Administrative Agent, such Grantor shall execute and deliver any and all
agreements, instruments, documents, and papers as
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the Administrative Agent may request to evidence the Administrative Agent's and
the Secured Parties' security interest in any Copyright, Patent or Trademark and
the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
(g) Such Grantor will take all reasonable and necessary steps, including,
without limitation, in any proceeding before the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the material Patents and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability where the failure to do so would result in a Material
Adverse Effect.
(h) In the event that any material Copyright, Patent or Trademark is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Copyright, Patent or Trademark and (ii) if such
Copyright, Patent or Trademark is of material economic value, promptly notify
the Administrative Agent after it learns thereof and ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 CERTAIN MATTERS RELATING TO ACCOUNTS. (a) At any time and from time to
time after the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right to make test verifications of the
Accounts in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
At any time and from time to time after the occurrence and during the
continuance of an Event of Default, upon the Administrative Agent's request and
at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts.
(b) The Administrative Agent hereby authorizes each Grantor to collect such
Grantor's Accounts and the Administrative Agent may curtail or terminate said
authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Accounts, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within three Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained
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under the sole dominion and control of the Administrative Agent, subject to
withdrawal by the Administrative Agent for the account of the Secured Parties
only as provided in Section 6.5, and (ii) until so turned over, shall be held by
such Grantor in trust for the Administrative Agent and the other Secured
Parties, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Accounts shall be accompanied by a report identifying in reasonable
detail the nature and source of the payments included in the deposit.
(c) At any time and from time to time after the occurrence and during the
continuance of an Event of Default, at the Administrative Agent's request, each
Grantor shall deliver to the Administrative Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Accounts, including, without limitation, all original orders,
invoices and shipping receipts.
6.2 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE. (a) The
Administrative Agent in its own name or in the name of others may at any time
and from time to time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Accounts and parties to the
Contracts (in each case, to the extent constituting Collateral) to verify with
them to the Administrative Agent's satisfaction the existence, amount and terms
of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Accounts and parties to the Contracts (in each case, to
the extent constituting Collateral) that such Accounts and the Contracts have
been assigned to the Administrative Agent, for the ratable benefit of the
Secured Parties, and that payments in respect thereof shall be made directly to
the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Accounts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Administrative Agent nor any Lender shall have any obligation or liability under
any Account (or any agreement giving rise thereto) by reason of or arising out
of this Agreement or the receipt by the Administrative Agent or any other
Secured Party of any payment relating thereto, nor shall the Administrative
Agent or any other Secured Party be obligated in any manner to perform any of
the obligations of any Grantor under or pursuant to any Account (or any
agreement giving rise thereto) to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
6.3 PLEDGED STOCK. (a) Unless an Event of Default shall have occurred and
be continuing and the Administrative Agent shall have given notice to the
relevant
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Grantor of the Administrative Agent's intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive
all cash dividends paid in respect of the Pledged Stock and all payments made in
respect of the Pledged Notes, in each case paid in the normal course of business
of the relevant Issuer or Maker and consistent with past practice, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate
rights with respect to the Pledged Stock; PROVIDED, HOWEVER, that no vote shall
be cast or corporate right exercised or other action taken which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Stock and make application thereof to the Obligations in
such order as the Administrative Agent may determine, and (ii) any or all of the
Pledged Stock shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise (x)
all voting, corporate and other rights pertaining to such Pledged Stock at any
meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y)
any and all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to such Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by any Grantor or the
Administrative Agent of any right, privilege or option pertaining to such
Pledged Stock, and in connection therewith, the right to deposit and deliver any
and all of the Pledged Stock with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to account for
property actually received by it, but the Administrative Agent shall have no
duty to any Grantor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer or Maker of
any Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
or Maker shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.
6.4 PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT. In addition to the
rights of the Administrative Agent and the other Secured Parties specified in
Section
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6.1 with respect to payments of Accounts, if an Event of Default shall occur and
be continuing, and the Administrative Agent shall have instructed any Grantor to
do so, all Proceeds received by such Grantor consisting of cash, checks and
other near-cash items shall be held by such Grantor in trust for the
Administrative Agent and the other Secured Parties, segregated from other funds
of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned
over to the Administrative Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Administrative Agent, if required). All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a Collateral
Account (or by such Grantor in trust for the Administrative Agent and the other
Secured Parties) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 APPLICATION OF PROCEEDS. At such intervals as may be agreed upon by the
Borrowers and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's election,
the Administrative Agent may apply all or any part of Proceeds held in any
Collateral Account in payment of the Obligations in such order as the
Administrative Agent may elect. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrowers or to whomsoever may be lawfully entitled to receive the same.
6.6 CODE AND OTHER REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code or any other applicable law. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the Administrative Agent or any other
Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
or any other Secured Party shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in any Grantor, which right or equity is hereby waived
or released.
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Each Grantor further agrees, at the Administrative Agent's request, to assemble
the Collateral and make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
other Secured Parties hereunder, including, without limitation, reasonable
attorneys' fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Administrative Agent may elect, and only after
such application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Administrative Agent account for the surplus,
if any, to any Grantor. To the extent permitted by applicable law, each Grantor
waives all claims, damages and demands it may acquire against the Administrative
Agent or any other Secured Party arising out of the exercise by them of any
rights hereunder, except to the extent arising as a result of the gross
negligence or willful misconduct of the Administrative Agent or such other
Secured Party. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
6.7 REGISTRATION RIGHTS. (a) If the Administrative Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to Section
6.6, and if in the opinion of the Administrative Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and use its best efforts to
cause the directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, 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. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the provisions
of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions
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contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Stock for the period
of time necessary to permit the Issuer thereof to register such securities for
public sale under the Securities Act, or under applicable state securities laws,
even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and
in compliance with any and all other applicable Requirements of Law. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 6.7 will cause irreparable injury to the Administrative Agent and the
Lenders, that the Administrative Agent and the Lenders have no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 6.7 shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred under the Credit Agreement.
6.8 DEFICIENCY. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any other Secured Party to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC. (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:
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(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account or with respect to any other Collateral and file any claim or take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Account or with respect to
any other Collateral whenever payable;
(ii) in the case of any Copyright, Patent or Trademark, execute and
deliver any and all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent's and
the Lenders' security interest in such Copyright, Patent or Trademark and
the goodwill and general intangibles of such Grantor relating thereto or
represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (i) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (ii) ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; (iii) sign
and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (iv) commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (v) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (vi) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, to give such discharges or releases as the Administrative Agent
may deem appropriate; (vii) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), throughout the world for such term or terms,
on such conditions, and in such manner, as the Administrative Agent shall
in its sole discretion determine; and (viii) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of
the Collateral as fully and completely as though the Administrative Agent
were the absolute owner thereof for all purposes, and do, at the
Administrative Agent's option and such Grantor's
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expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent's and the
other Secured Parties' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due ABR Loans under the Credit Agreement, from the date
of payment by the Administrative Agent to the date reimbursed by the relevant
Grantor, shall be payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
7.2 DUTY OF ADMINISTRATIVE AGENT. The Administrative Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as the Administrative Agent deals with similar
property for its own account. Neither the Administrative Agent, any other
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the other Secured Parties hereunder are solely to protect the Administrative
Agent's and the other Secured Parties' interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any other Secured Party to
exercise any such powers. The Administrative Agent and the other Secured Parties
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
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7.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of the
Code and any other applicable law, each Grantor authorizes the Administrative
Agent to file or record financing statements and other filing or recording
documents or instruments with respect to the Collateral without the signature of
such Grantor in such form and in such offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
7.4 AUTHORITY OF ADMINISTRATIVE AGENT. Each Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement or any amendment, supplement or other modification of this
Agreement shall, as between the Administrative Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by each affected Grantor and the Administrative
Agent, PROVIDED that any provision of this Agreement imposing obligations on any
Grantor may be waived by the Administrative Agent in a written instrument
executed by the Administrative Agent.
8.2 NOTICES. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 11.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on SCHEDULE 1.
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES.
Neither the Administrative Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 8.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of the Administrative Agent or any
other Secured Party, any right, power or privilege hereunder
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shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any other Secured Party of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Administrative Agent or such other Secured Party would otherwise have on any
future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. (a) Each Guarantor agrees to pay
or reimburse each Secured Party and the Administrative Agent for all their
respective costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or otherwise enforcing any rights
under this Agreement and the other Loan Documents to which such Guarantor is a
party, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Secured
Party and of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative Agent and
the Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent and
the Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement (collectively, the
"INDEMNIFIED LIABILITIES") to the extent the Borrowers would be required to do
so pursuant to Section 11.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Secured Parties and their successors and assigns;
PROVIDED that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 SET-OFF. Each Guarantor hereby irrevocably authorizes the
Administrative Agent and each other Secured Party at any time and from time to
time without notice to such Guarantor, any other Guarantor or any Borrower, any
such notice
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being expressly waived by each Guarantor and by the Borrowers, upon any amount
remaining unpaid after it becomes due and payable by such Guarantor hereunder to
set-off and appropriate and apply against any such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Administrative Agent or such other Secured Party to or for
the credit or the account of such Guarantor, or any part thereof in such amounts
as the Administrative Agent or such other Secured Party may elect. The
Administrative Agent and each other Secured Party shall notify such Guarantor
promptly of any such set-off and the application made by the Administrative
Agent or such other Secured Party of the proceeds thereof; PROVIDED that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Administrative Agent and each other Secured Party
under this Section 8.6 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Administrative Agent or
such other Secured Party may have.
8.7 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
8.8 SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.9 SECTION HEADINGS. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
8.10 INTEGRATION. This Agreement and the other Loan Documents represent the
agreement of the Grantors, the Administrative Agent and the other Secured
Parties with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
other Secured Party relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 SUBMISSION TO JURISDICTION; WAIVERS. Each Guarantor hereby irrevocably
and unconditionally:
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(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Guarantor at its address referred to in Section 8.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any exemplary, punitive or consequential damages.
8.13 ACKNOWLEDGEMENTS. Each Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Administrative Agent nor any other Secured Party has
any fiduciary relationship with or duty to any Guarantor arising out of or
in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Guarantors, on the one hand, and the
Administrative Agent and the Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Secured Parties or among the Guarantors and the Secured Parties.
8.14 WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
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LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
8.15 ADDITIONAL GRANTORS. Each new domestic Subsidiary of any Borrower that
is required to become a party to this Agreement pursuant to Section 7 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.16 RELEASES. (a) At such time as the Revolving Credit Loans, the
Reimbursement Obligations and the other Obligations shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) In connection with the sale or other disposition of all of the Capital
Stock of any Guarantor or the sale or other disposition of Collateral permitted
under subsection 8.6 of the Credit Agreement and the release of such Guarantor
from its Guarantee or the release of the Collateral subject to such sale or
other disposition, the relevant Borrower shall deliver to the Administrative
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying such Guarantor or the relevant
Collateral and the terms of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a certification by such Borrower stating that such transaction is in
compliance with the Credit Agreement and the other Loan Documents.
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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.
▇▇▇▇ VISION CORPORATION
By: _______________________________
Title:
THINGS REMEMBERED, INC.
By: _______________________________
Title:
▇▇▇▇ GIFT CENTERS, INC.
By: _______________________________
Title:
PEARLE, INC.
By: _______________________________
Title:
PEARLE SERVICE CORPORATION
By: _______________________________
Title:
BAY CITIES OPTICAL COMPANY
By: _______________________________
Title:
WESTERN STATES OPTICAL, INC.
By: ________________________________
Title:
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▇▇▇▇ VISION SERVICES, INC.
By: ________________________________
Title:
▇▇▇▇ MANAGEMENT SERVICES, INC.
By: _______________________________
Title:
▇▇▇▇ LENS SUPPLY, INC.
By: ________________________________
Title:
PEARLE VISIONCARE, INC.
By: ________________________________
Title:
PEARLE VISION MANAGED CARE - HMO
OF TEXAS, INC.
By: ________________________________
Title:
37
Annex 1 to
Guarantee and Collateral Agreement
----------------------------------
ASSUMPTION AGREEMENT, dated as of ________________, 199_, made by
______________________________, a ______________ corporation (the "ADDITIONAL
GRANTOR"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the banks and other
financial institutions (the "LENDERS") from time to time parties to the Credit
Agreement referred to below and the other Secured Parties hereto (as defined
below). All capitalized terms not defined herein shall have the meaning ascribed
to them in such Credit Agreement.
W I T N E S S E T H :
---------------------
WHEREAS, ▇▇▇▇ Vision Corporation, Things Remembered, Inc., ▇▇▇▇ Gift
Centers, Inc., Pearle, Inc. and Pearle Service Corporation (collectively, the
"BORROWERS"), the Lenders and the Administrative Agent, have entered into a
Credit Agreement, dated as of November __, 1996 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT");
WHEREAS, in connection with the Credit Agreement, the Borrowers and certain
of their Affiliates (other than the Additional Grantor) have entered into the
Guarantee and Collateral Agreement, dated as of November __, 1996 (as amended,
supplemented or otherwise modified from time to time, the "GUARANTEE AND
COLLATERAL AGREEMENT") in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties (as defined in the Guarantee and Collateral
Agreement);
WHEREAS, the Credit Agreement requires the Additional Grantor to become a
party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. GUARANTEE AND COLLATERAL AGREEMENT. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.15 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedules ____________ to the Guarantee
and Collateral Agreement. The Additional Grantor hereby represents and warrants
that each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral
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Agreement is true and correct on and as the date hereof (after giving effect to
this Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: ______________________________
Title: