EXHIBIT 10.2
SECURITY AGREEMENT
Dated February 7, 2005
From
The Grantors referred to herein
as Grantors
to
BANK OF AMERICA, N.A.
as Collateral Agent
T A B L E O F C O N T E N T S
Section Page
Section 1. Grant of Security............................................................................2
Section 2. Security for Obligations.....................................................................6
Section 3. Grantors Remain Liable.......................................................................6
Section 4. Delivery and Control of Security Collateral..................................................6
Section 5. Maintaining the Account Collateral...........................................................7
Section 6. Investing of Amounts in the Cash Collateral Accounts.........................................8
Section 7. Release of Amounts...........................................................................8
Section 8. Representations and Warranties...............................................................8
Section 9. Further Assurances..........................................................................10
Section 10. Insurance...................................................................................11
Section 11. Post-Closing Changes; Collections on Assigned Agreements....................................11
Section 12. As to Intellectual Property Collateral......................................................12
Section 13. Voting Rights; Dividends; Etc...............................................................13
Section 14. As to Letter-of-Credit Rights...............................................................14
Section 15. Commercial Tort Claims......................................................................15
Section 16. Transfers and Other Liens; Additional Shares................................................15
Section 17. Collateral Agent Appointed Attorney-in-Fact.................................................15
Section 18. Collateral Agent May Perform................................................................16
Section 19. The Collateral Agent's Duties...............................................................16
Section 20. Remedies....................................................................................16
Section 21. Amendments; Waivers; Additional Grantors; Etc...............................................18
Section 22. Continuing Security Interest; Assignments under the Credit Agreement........................19
Section 23. Release; Termination........................................................................19
Section 24. Execution in Counterparts...................................................................20
Section 25. Governing Law...............................................................................20
Schedules
Schedule I - Investment Property
Schedule II - Intellectual Property
Schedule III - Commercial Tort Claims
Schedule IV - Type Of Organization, Jurisdiction Of Organization
And Organizational Identification Number
Schedule V - Changes in Name, Etc.
Schedule VI - Letters of Credit
Schedule VII - Intellectual Property Matters
Exhibits
Exhibit A - Form of Security Agreement Supplement
Exhibit B - Form of Intellectual Property Security Agreement
Exhibit C - Form of Consent to Assignment of Letter of Credit
Rights
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SECURITY AGREEMENT
SECURITY AGREEMENT dated February 7, 2005 made by RAYOVAC
CORPORATION, a Wisconsin corporation (the "U.S. Borrower") and the other
Persons listed on the signature pages hereof (the U.S. Borrower and the
Persons so listed (together with any Additional Grantors (as hereinafter
defined)) being, collectively, the "Grantors"), to BANK OF AMERICA, N.A., as
collateral agent (in such capacity, together with any successor collateral
agent appointed pursuant to Article IX of the Credit Agreement (as hereinafter
defined), the "Collateral Agent") for the Secured Parties (as defined in the
Credit Agreement).
PRELIMINARY STATEMENTS.
(1) The U.S. Borrower has entered into a Fourth Amended and
Restated Credit Agreement dated as of February 7, 2005 (said Agreement, as it
may hereafter be amended, amended and restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement") with the Lenders and
the Administrative Agent (each as defined therein).
(2) Each Grantor is the owner of the shares of stock or
other Equity Interests set forth opposite such Grantor's name on and as
otherwise described in Part I of Schedule I hereto and issued by the Persons
named therein (the "Initial Pledged Equity") and of the indebtedness set forth
opposite such Grantor's name on and as otherwise described in Part II of
Schedule I hereto and issued by the obligors named therein (the "Initial
Pledged Debt").
(3) Pursuant to the terms of the Credit Agreement, upon the
request of the Collateral Agent, the Grantors shall open one or more cash
collateral deposit accounts (the "Cash Collateral Accounts") in the name of
the Collateral Agent and under the sole control and dominion of the Collateral
Agent and subject to the terms of this Agreement.
(4) It is a condition precedent to the making of Loans by
the Lenders and the issuance of Letters of Credit by the L/C Issuer under the
Credit Agreement, the entry into Secured Hedge Agreements by the Hedge Banks
and the entry into Qualified Foreign Credit Facilities by the Qualified
Foreign Lenders from time to time that the Grantors shall have granted the
security interest contemplated by this Agreement. Each Grantor will derive
substantial direct and indirect benefit from the transactions contemplated by
the Loan Documents.
(5) Terms defined in the Credit Agreement and not otherwise
defined in this Agreement are used in this Agreement as defined in the Credit
Agreement. Further, unless otherwise defined in this Agreement or in the
Credit Agreement, terms defined in Article 8 or 9 of the UCC (as defined
below) are used in this Agreement as such terms are defined in such Article 8
or 9. "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that, if perfection or the effect of
perfection or non-perfection or the priority of the security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, "UCC" means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.
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NOW, THEREFORE, in consideration of the premises and in
order to induce the Lenders to make Loans and the L/C Issuer to issue Letters
of Credit under the Credit Agreement, to induce the Hedge Banks to enter into
Secured Hedge Agreements and to induce the Qualified Foreign Lenders to enter
into Qualified Foreign Credit Facilities from time to time, each Grantor
hereby agrees with the Collateral Agent for the ratable benefit of the Secured
Parties as follows:
Section 1. Grant of Security. Each Grantor hereby grants to
the Collateral Agent, for the ratable benefit of the Secured Parties, a
security interest in such Grantor's right, title and interest in and to the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired by such Grantor, wherever located, and whether
now or hereafter existing or arising; provided, that notwithstanding anything
in this Agreement to the contrary, in no event shall the security interest
granted hereunder attach to any license, contract, or other agreement to which
U.S. Borrower is a party or any of its rights or interests thereunder, or any
property or assets subject to any license, contract, or other agreement, if
and for so long as the grant of such security interest shall constitute or
result in (x) the abandonment, invalidation or unenforceability of any right,
title or interest of U.S. Borrower therein or (y) in a breach or termination
pursuant to the terms of, or a default under, any such license, contract
right, or other agreement, except, in each case, to the extent that any such
term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the UCC (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law or principles of equity, provided,
however that, notwithstanding the foregoing, such security interest shall
attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and, to the extent
severable, shall attached immediately to any portion of such license,
contract, or other agreement, or property subject thereto, that does not
result in any of the consequences specified in clause (x) or (y) above
(collectively, the "Collateral"):
(a) all equipment in all of its forms, including, without
limitation, all machinery, tools, motor vehicles, vessels, aircraft,
furniture and fixtures, and all parts thereof and all accessions
thereto, including, without limitation, computer programs and
supporting information that constitute equipment within the meaning
of the UCC (any and all such property being the "Equipment");
(b) all inventory in all of its forms, including, without
limitation, (i) all raw materials, work in process, finished goods
and materials used or consumed in the manufacture, production,
preparation or shipping thereof, (ii) goods in which such Grantor has
an interest in mass or a joint or other interest or right of any kind
(including, without limitation, goods in which such Grantor has an
interest or right as consignee) and (iii) goods that are returned to
or repossessed or stopped in transit by such Grantor, and all
accessions thereto and products thereof and documents therefor,
including, without limitation, computer programs and supporting
information that constitute inventory within the meaning of the UCC
(any and all such property being the "Inventory");
(c) all accounts (including, without limitation,
health-care-insurance receivables), chattel paper (including, without
limitation, tangible chattel paper and electronic chattel paper),
instruments (including, without
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limitation, promissory notes), deposit accounts, letter-of-credit
rights, general intangibles (including, without limitation, payment
intangibles) and other obligations of any kind, whether or not
arising out of or in connection with the sale or lease of goods or
the rendering of services and whether or not earned by performance,
and all rights now or hereafter existing in and to all supporting
obligations and in and to all security agreements, mortgages, Liens,
leases, letters of credit and other contracts securing or otherwise
relating to the foregoing property (any and all of such accounts,
chattel paper, instruments, deposit accounts, letter-of-credit
rights, general intangibles and other obligations, to the extent not
referred to in clause (d), (e) or (f) below, being the "Receivables,"
and any and all such supporting obligations, security agreements,
mortgages, Liens, leases, letters of credit and other contracts being
the "Related Contracts");
(d) the following (the "Security Collateral"):
(i) the Initial Pledged Equity and the certificates,
if any, representing the Initial Pledged Equity, and all
dividends, distributions, return of capital, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Equity and
all warrants, rights or options issued thereon or with
respect thereto;
(ii) the Initial Pledged Debt and the instruments,
if any, evidencing the Initial Pledged Debt, and all
interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Initial
Pledged Debt;
(iii) all additional shares of stock and other
Equity Interests from time to time acquired by such Grantor
in any manner (such shares and other Equity Interests,
together with the Initial Pledged Equity, being the "Pledged
Equity"), and the certificates, if any, representing such
additional shares or other Equity Interests, and all
dividends, distributions, return of capital, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of such shares or other Equity
Interests and all warrants, rights or options issued thereon
or with respect thereto; provided that, notwithstanding
anything contained herein to the contrary, such Grantor
shall not be required to pledge, and the terms "Pledged
Equity" and "Security Collateral" used in this Agreement
shall not include, any Equity Interests in any foreign
Subsidiary acquired, owned, or otherwise held by such
Grantor, in each case, that, when aggregated with all of the
other shares of stock in such foreign Subsidiary pledged by
such Grantor, would result in more than 66% of the shares of
stock in such foreign Subsidiary being pledged to the
Collateral Agent for the benefit of the Secured Parties
under this Agreement;
(iv) all additional indebtedness from time to time
owed to such Grantor (such indebtedness, together with the
Initial Pledged Debt, being the "Pledged Debt") and the
instruments, if any, evidencing such indebtedness, and all
interest, cash, instruments and other property from time to
time received, receivable or
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otherwise distributed in respect of or in exchange for any
or all of such indebtedness;
(v) the Cash Collateral Accounts, all security
entitlements with respect to all financial assets from time
to time credited to the Cash Collateral Accounts, and all
financial assets, and all dividends, distributions, return
of capital, interest, cash, instruments and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
such security entitlements or financial assets and all
warrants, rights or options issued thereon or with respect
thereto; and
(vi) except for property excluded in clause (iii)
above, all other investment property (including, without
limitation, all (A) securities, whether certificated or
uncertificated, (B) security entitlements, (C) securities
accounts, (D) commodity contracts and (E) commodity
accounts) in which such Grantor has now, or acquires from
time to time hereafter, any right, title or interest in any
manner, and the certificates or instruments, if any,
representing or evidencing such investment property, and all
dividends, distributions, return of capital, interest, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of such investment property and all
warrants, rights or options issued thereon or with respect
thereto;
(e) each Hedge Agreement to which such Grantor is now or may
hereafter become a party, in each case as such agreements may be
amended, amended and restated, supplemented or otherwise modified
from time to time (collectively, the "Assigned Agreements"),
including, without limitation, (i) all rights of such Grantor to
receive moneys due and to become due under or pursuant to the
Assigned Agreements, (ii) all rights of such Grantor to receive
proceeds of any insurance, indemnity, warranty or guaranty with
respect to the Assigned Agreements, (iii) claims of such Grantor for
damages arising out of or for breach of or default under the Assigned
Agreements and (iv) the right of such Grantor to terminate the
Assigned Agreements, to perform thereunder and to compel performance
and otherwise exercise all remedies thereunder (all such Collateral
being the "Agreement Collateral");
(f) the following (collectively, the "Account Collateral"):
(i) the Cash Collateral Accounts, all deposit
accounts and all funds and financial assets from time to
time credited thereto (including, without limitation, all
Cash Equivalents), and all certificates and instruments, if
any, from time to time representing or evidencing the Cash
Collateral Accounts or any other deposit account;
(ii) all promissory notes, certificates of deposit,
checks and other instruments from time to time delivered to
or otherwise possessed by the Collateral Agent for or on
behalf of such Grantor in substitution for or in addition to
any or all of the then existing Account Collateral; and
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(iii) all interest, dividends, distributions, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account
Collateral;
(g) the following (collectively, the "Intellectual Property
Collateral"):
(i) all patents, patent applications, utility models
and statutory invention registrations, all inventions
claimed or disclosed therein and all improvements thereto
("Patents");
(ii) all trademarks, service marks, domain names,
trade dress, logos, designs, slogans, trade names, business
names, corporate names and other source identifiers, whether
registered or unregistered (provided that no security
interest shall be granted in United States intent-to-use
trademark applications), together, in each case, with the
goodwill symbolized thereby ("Trademarks");
(iii) all copyrights, including, without limitation,
copyrights in Computer Software (as hereinafter defined),
internet web sites and the content thereof, whether
registered or unregistered ("Copyrights");
(iv) all computer software, programs and databases
(including, without limitation, source code, object code and
all related applications and data files), firmware and
documentation and materials relating thereto, together with
any and all maintenance rights, service rights, programming
rights, hosting rights, test rights, improvement rights,
renewal rights and indemnification rights and any
substitutions, replacements, improvements, error
corrections, updates and new versions of any of the
foregoing ("Computer Software");
(v) all confidential and proprietary information,
including, without limitation, know-how, trade secrets,
manufacturing and production processes and techniques,
inventions, research and development information, databases
and data, including, without limitation, technical data,
financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and
supplier lists and information (collectively, "Trade
Secrets"), and all other intellectual, industrial and
intangible property of any type, including, without
limitation, industrial designs and mask works;
(vi) all registrations and applications for
registration for any of the foregoing, including, without
limitation, those registrations and applications for
registration set forth in Schedule II hereto, together with
all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and
reexaminations thereof;
(vii) all tangible embodiments of the foregoing, all
rights in the foregoing provided by international treaties
or conventions, all rights corresponding thereto throughout
the world and all other rights of any kind whatsoever of
such Grantor accruing thereunder or pertaining thereto;
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(viii) all agreements, permits, consents, orders and
franchises relating to the license, development, use or
disclosure of any of the foregoing to which such Grantor,
now or hereafter, is a party or a beneficiary; and
(ix) any and all claims for damages and injunctive
relief for past, present and future infringement, dilution,
misappropriation, violation, misuse or breach with respect
to any of the foregoing, with the right, but not the
obligation, to ▇▇▇ for and collect, or otherwise recover,
such damages;
(h) all commercial tort claims, including, without
limitation, the commercial tort claims described in Schedule III
hereto (collectively, the "Commercial Tort Claims Collateral");
(i) all books and records (including, without limitation,
customer lists, credit files, printouts and other computer output
materials and records) of such Grantor pertaining to any of the
Collateral; and
(j) all proceeds of, collateral for, income, royalties and
other payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the Collateral
(including, without limitation, proceeds, collateral and supporting
obligations that constitute property of the types described in
clauses (a) through (i) of this Section 1) and, to the extent not
otherwise included, all (A) payments under insurance (whether or not
the Collateral Agent is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, and (B)
cash.
Section 2. Security for Obligations. This Agreement secures,
in the case of each Grantor, the payment of all Obligations of such Grantor
now or hereafter existing under the Loan Documents (all such Obligations being
the "Secured Obligations").
Section 3. Grantors Remain Liable. Anything herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in such Grantor's Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to
the same extent as if this Agreement had not been executed, (b) the exercise
by the Collateral Agent of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral and (c) no Secured Party shall have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement or any other Loan Document, nor shall
any Secured Party be obligated to perform any of the obligations or duties of
any Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
Section 4. Delivery and Control of Security Collateral. (a)
All certificates or instruments representing or evidencing Security Collateral
shall be delivered to and held by or on behalf of the Collateral Agent
pursuant hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to the Collateral
Agent; provided, that, (i) so long as no Event of Default has occurred and is
continuing and the enforcement by the
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Secured Parties of their rights and remedies under the Loan Documents is not
continuing, no Grantor shall be required to deliver any instrument
representing Pledged Debt if the amount of such Pledged Debt is less than
$5,000,000, and (ii) so long as no Event of Default under Section 8.01(a) or
8.01(f) of the Credit Agreement shall have occurred and be continuing, no
Grantor shall be required to deliver any bills of lading, waybills, airbills
or similar documents of title evidencing the receipt of goods for shipment.
Upon the occurrence and during the continuance of an Event of Default and the
enforcement by the Secured Parties of their rights and remedies under the Loan
Documents, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Security Collateral for
certificates or instruments of smaller or larger denominations.
(b) With respect to (i) any Security Collateral that
constitutes Pledged Equity and (ii) upon the occurrence and during the
continuance of an Event of Default, all other Security Collateral that, in
each case, constitutes an uncertificated security, the relevant Grantor will
cause the issuer thereof upon, in the case of clause (ii), the request of the
Collateral Agent either (A) to register the Collateral Agent as the registered
owner of such security or (B) to agree with such Grantor and the Collateral
Agent that such issuer will comply with instructions with respect to such
security originated by the Collateral Agent without further consent of such
Grantor, such agreement to be in form and substance reasonably satisfactory to
the Collateral Agent (an "Uncertificated Security Control Agreement").
(c) Upon the occurrence and during the continuance of an
Event of Default, with respect to any Security Collateral that constitutes a
security entitlement as to which the financial institution acting as
Collateral Agent hereunder is not the securities intermediary, upon the
request of the Collateral Agent the relevant Grantor will cause the securities
intermediary with respect to such security entitlement either (A) to identify
in its records the Collateral Agent as the entitlement holder thereof or (B)
to agree with such Grantor and the Collateral Agent that such securities
intermediary will comply with entitlement orders originated by the Collateral
Agent without further consent of such Grantor, such agreement to be in form
and substance reasonably satisfactory to the Collateral Agent (a "Securities
Account Control Agreement").
(d) Upon the request of the Collateral Agent following the
occurrence and during the continuance of an Event of Default, each Grantor
will notify each issuer of Securities Collateral granted by it hereunder that
such Securities Collateral is subject to the security interest granted
hereunder.
Section 5. Maintaining the Account Collateral. So long as
the Termination Date (as defined in Section 22) shall not have occurred:
(a) The Collateral Agent shall have sole right to direct the
disposition of funds with respect to the Cash Collateral Accounts, as
permitted by the Credit Agreement; and it shall be a term and
condition of each of the Cash Collateral Accounts, notwithstanding
any term or condition to the contrary in any other agreement relating
to such Cash Collateral Account, that after the occurrence and during
the continuance of an Event of Default no amount (including, without
limitation, interest on Cash Equivalents credited thereto) will be
paid or released to or for the account of, or withdrawn by or for the
account of, the U.S. Borrower or any other Person from any Cash
Collateral Account.
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(b) Each Grantor shall maintain its domestic Cash Collateral
Accounts, if any, only with Bank of America, N.A.
(c) Upon the occurrence and during the continuance of an
Event of Default upon the request of the Collateral Agent and as soon
as practicable, each Grantor shall maintain all other deposit
accounts requested by the Collateral Agent only with Bank of America,
N.A. or with a bank (a "Pledged Account Bank") that has agreed with
such Grantor and the Collateral Agent to (A) comply with instructions
originated by the Collateral Agent directing the disposition of funds
in such other deposit account without the further consent of such
Grantor and (B) waive or subordinate in favor of the Collateral Agent
all claims of such Pledged Account Bank to such other deposit
account, such agreement to be in form and substance reasonably
satisfactory to the Collateral Agent (a "Deposit Account Control
Agreement").
(d) The Collateral Agent may, at any time and without notice
to, or consent from, the applicable Grantor, transfer, or direct the
transfer of, funds from the Cash Collateral Accounts or any other
deposit accounts of such Grantor to satisfy such Grantor's
Obligations under the Loan Documents if an Event of Default shall
have occurred and be continuing.
Section 6. Investing of Amounts in the Cash Collateral
Accounts. The Collateral Agent will, as requested by the applicable Grantor
and subject to the provisions of Sections 5, 7 and 20, from time to time, so
long as no Event of Default has occurred and is continuing invest amounts
received with respect to the Cash Collateral Accounts in such Cash Equivalents
credited to the Cash Collateral Accounts as the applicable Grantor may select
and the Collateral Agent may approve and (b) invest interest paid on the Cash
Equivalents referred to in clause (a) above, and reinvest other proceeds of
any such Cash Equivalents that may mature or be sold, in each case, in such
Cash Equivalents. Interest and proceeds that are not invested or reinvested in
Cash Equivalents as provided above shall be deposited and held in the Cash
Collateral Accounts. In addition, the Collateral Agent shall have the right at
any time to exchange such Cash Equivalents for similar Cash Equivalents of
smaller or larger determinations, or for other Cash Equivalents, credited to
the Cash Collateral Accounts.
Section 7. Release of Amounts. So long as no Default or
Event of Default shall have occurred and be continuing, the Collateral Agent
will, at the U.S. Borrower's request, refund to the U.S. Borrower or at its
order or, at the request of the U.S. Borrower, to the Administrative Agent to
be applied to the Obligations of the Grantors under the Loan Documents, such
amount, if any, as is then on deposit in the Cash Collateral Accounts to the
extent permitted to be released under the terms of the Credit Agreement.
Section 8. Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) As of the Closing Date, such Grantor's exact legal name,
type of organization, jurisdiction of organization and organizational
identification number is set forth in Schedule IV hereto. As of the
Closing Date, such Grantor has no trade names other than as listed on
Schedule V hereto. Within the two years preceding the date
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hereof, except as set forth in Schedule V hereto, such Grantor has not changed
its name, type of organization, jurisdiction of organization or organizational
identification number from those set forth in Schedule IV hereto.
(b) Such Grantor is the legal and beneficial owner of the
Collateral granted or purported to be granted by it free and clear of
any Lien, claim, option or right of others, except for the Permitted
Liens. No effective financing statement or other instrument similar
in effect covering all or any part of such Collateral or listing such
Grantor or any trade name of such Grantor as debtor is on file in any
recording office, except such as may have been filed in favor of the
Collateral Agent relating to the Loan Documents or as otherwise
permitted under the Credit Agreement.
(c) If such Grantor is an issuer of Security Collateral,
such Grantor confirms that it has received notice of the security
interest granted hereunder.
(d) As of the Closing Date, the Initial Pledged Equity
pledged by such Grantor constitutes the percentage of the issued and
outstanding Equity Interests of the issuers thereof indicated on
Schedule I hereto. As of the Closing Date, the Initial Pledged Debt
constitutes all of the outstanding indebtedness owed to such Grantor
by the issuers thereof and is outstanding in the principal amount
indicated on Schedule I hereto.
(e) As of the Closing Date, such Grantor is not a
beneficiary or assignee under any letter of credit, other than the
letters of credit described in Schedule VI hereto and additional
letters of credit as to which such Grantor has complied with the
requirements of Section 14.
(f) This Agreement creates in favor of the Collateral Agent
for the benefit of the Secured Parties a valid security interest in
the Collateral granted by such Grantor, securing the payment of the
Secured Obligations; all filings and other actions necessary to
perfect the security interest in the Collateral granted by such
Grantor have been duly made or taken and are in full force and
effect.
(g) Except as could not reasonably be expected to have a
Material Adverse Effect:
(i) The Intellectual Property Collateral set forth
on Schedule II hereto includes all of the patent
registrations, domain names, trademark registrations and
applications and copyright registrations and applications
owned by such Grantor as of the Closing Date.
(ii) To such Grantor's knowledge, the Intellectual
Property Collateral is valid and enforceable except as
listed on Schedule VII.
(iii) Such Grantor has made or performed all
filings, recordings and other acts and has paid all required
fees and taxes to maintain and protect its interest in its
Intellectual Property Collateral in full force and effect.
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Section 9. Further Assurances. (a) Each Grantor agrees that
from time to time, at the expense of such Grantor, such Grantor will promptly
take all further action that may be necessary, or that the Collateral Agent
may reasonably request, in order to perfect and protect any pledge or security
interest granted by such Grantor hereunder or to enable the Collateral Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral of such Grantor. Without limiting the generality of the foregoing,
each Grantor will promptly with respect to Collateral of such Grantor: (i) if
any such Collateral shall be evidenced by a promissory note or other
instrument (with respect to Pledged Debt, in an amount greater than
$5,000,000), deliver and pledge to the Collateral Agent hereunder such note or
instrument duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance reasonably satisfactory to
the Collateral Agent; (ii) execute or authenticate and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be commercially reasonable, or as the Collateral Agent may
reasonably request, in order to perfect and preserve the security interest
granted or purported to be granted by such Grantor hereunder; (iii) at the
request of the Collateral Agent, take all commercially reasonable action to
ensure that the Collateral Agent's security interest is noted on any
certificate of title related to any Collateral evidenced by a certificate of
title; (iv) upon the occurrence and during the continuance of an Event of
Default, (A) take all commercially reasonable action necessary to ensure that
the Collateral Agent has control of Collateral consisting of deposit accounts,
investment property and letter-of-credit rights as provided in Sections 9-104,
9-106 and 9-107 of the UCC and (B) promptly upon reasonable request of the
Collateral Agent, cause the Collateral Agent to be the beneficiary under all
letters of credit that constitute Collateral, with the exclusive right to make
all draws under such letters of credit, and with all rights of a transferee
under Section 5-114(e) of the UCC; and (v) deliver to the Collateral Agent
evidence that other commercially reasonable actions that the Collateral Agent
may request in order to perfect and protect the security interest granted or
purported to be granted by such Grantor under this Agreement have been taken.
(b) Each Grantor hereby authorizes the Collateral Agent to
file one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more financing statements indicating
that such financing statements cover all assets or all personal property (or
words of similar effect) of such Grantor, in each case without the signature
of such Grantor, and regardless of whether any particular asset described in
such financing statements falls within the scope of the UCC or the granting
clause of this Agreement. A photocopy or other reproduction of this Agreement
shall be sufficient as a financing statement where permitted by law. Each
Grantor ratifies its authorization for the Collateral Agent to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.
(c) Each Grantor will furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Collateral of such Grantor and such other reports in connection with such
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail.
Section 10. Insurance. (a) Each Grantor will, at its own
expense, maintain insurance with respect to its Equipment and Inventory in the
manner required by the Credit Agreement. Each policy of each Grantor for
liability insurance shall provide for all losses to be
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paid on behalf of the Collateral Agent and such Grantor as their interests may
appear. Each such policy shall in addition (i) name such Grantor and the
Collateral Agent as insured parties thereunder (without any representation or
warranty by or obligation upon the Collateral Agent) as their interests may
appear and (iv) provide that at least 10 days' prior written notice of
cancellation or of lapse shall be given to the Collateral Agent by the
insurer.
(b) Reimbursement under any liability insurance maintained
by any Grantor pursuant to this Section 10 may be paid directly to the Person
who shall have incurred liability covered by such insurance.
(c) So long as no Event of Default shall have occurred and
be continuing, all insurance payments received by the Collateral Agent in
connection with any loss, damage or destruction of any Inventory or Equipment
will be released by the Collateral Agent to the applicable Grantor for use in
accordance with the terms of the Credit Agreement. Upon the occurrence and
during the continuance of any Event of Default, all insurance payments in
respect of such Equipment or Inventory shall be paid to the Collateral Agent
and shall, in the Collateral Agent's sole discretion, (i) be released to the
applicable Grantor to be applied as set forth in the first sentence of this
subsection (c) or (ii) be held as additional Collateral hereunder or applied
as specified in Section 20(b).
Section 11. Post-Closing Changes; Collections on Assigned
Agreements. (a) No Grantor will change its name, type of organization,
jurisdiction of organization or organizational identification number from
those set forth in Section 8(a) of this Agreement without first giving at
least 20 days' prior written notice to the Collateral Agent and taking all
action required by the Collateral Agent for the purpose of perfecting or
protecting the security interest granted by this Agreement. If any Grantor
does not have an organizational identification number and later obtains one,
it will forthwith notify the Collateral Agent of such organizational
identification number.
(b) Except as otherwise provided in this subsection (b),
each Grantor will continue to collect, at its own expense, all amounts due or
to become due such Grantor under the Assigned Agreements. In connection with
such collections, such Grantor may take (and, at the Collateral Agent's
direction, will take) such commercially reasonable action as such Grantor or
the Collateral Agent may deem necessary to enforce collection of the Assigned
Agreements; provided, however, that the Collateral Agent shall have the right
at any time, upon the occurrence and during the continuance of an Event of
Default and the enforcement by the Secured Parties of their rights and
remedies under the Loan Documents, and upon written notice to such Grantor of
its intention to do so, to notify the Obligors under any Assigned Agreements
of the assignment of such Assigned Agreements to the Collateral Agent and to
direct such Obligors to make payment of all amounts due or to become due to
such Grantor thereunder directly to the Collateral Agent and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such Assigned Agreements, to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as such Grantor
might have done, and to otherwise exercise all rights with respect to such
Assigned Agreements, including, without limitation, those set forth set forth
in Section 9-607 of the UCC. After receipt by any Grantor of the notice from
the Collateral Agent referred to in the proviso to the preceding sentence, (i)
all amounts and proceeds (including, without limitation, instruments) received
by such Grantor in respect of the
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Assigned Agreements of such Grantor shall be received in trust for the benefit
of the Collateral Agent hereunder, shall be segregated from other funds of
such Grantor and shall be forthwith paid over to the Collateral Agent in the
same form as so received (with any necessary indorsement) and either (A)
released to such Grantor on the terms set forth in the Credit Agreement so
long as no Event of Default shall have occurred and be continuing and
enforcement by the Secured Parties of their rights and remedies under the Loan
Documents is not continuing or (B) if any Event of Default shall have occurred
and be continuing and enforcement by the Secured Parties of their rights and
remedies under the Loan Documents is continuing, applied as provided in
Section 20(b) and (ii) such Grantor will not adjust, settle or compromise the
amount or payment of any amount due on any Assigned Agreement, release wholly
or partly any Obligor thereof, or allow any credit or discount thereon.
Section 12. As to Intellectual Property Collateral. (a) With
respect to each item of its Intellectual Property Collateral, each Grantor
agrees to take, at its expense, all commercially reasonable steps, including,
without limitation, in the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other governmental authority, to maintain the
validity and enforceability of such Intellectual Property Collateral and
maintain such Intellectual Property Collateral in full force and effect,
except to the extent its failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(b) Except in the ordinary course of its business or as
could not be reasonably expected to have a Material Adverse Effect, no Grantor
shall do or permit any act or knowingly omit to do any act whereby any of its
Intellectual Property Collateral may lapse or become invalid or unenforceable
or placed in the public domain.
(c) Except where failure to do so could not reasonably be
expected to cause a Material Adverse Effect, each Grantor shall take all
commercially reasonable steps which it or the Collateral Agent (upon the
occurrence and during the continuance of an Event of Default) deems reasonable
and appropriate under the circumstances to preserve and protect each item of
its Intellectual Property Collateral.
(d) With respect to its Intellectual Property Collateral,
each Grantor agrees to execute or otherwise authenticate an agreement, in
substantially the form set forth in Exhibit B hereto or otherwise in form and
substance reasonably satisfactory to the Collateral Agent (an "Intellectual
Property Security Agreement"), for recording the security interest granted
hereunder to the Collateral Agent in such Intellectual Property Collateral
with the U.S. Patent and Trademark Office, the U.S. Copyright Office and any
other governmental authorities necessary to perfect the security interest
hereunder in such Intellectual Property Collateral.
(e) Each Grantor agrees that should it obtain an ownership
interest in any item of the type set forth in Section 1(g) that is not on the
date hereof a part of the Intellectual Property Collateral ("After-Acquired
Intellectual Property") (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill symbolized thereby,
shall automatically become part of the Intellectual Property Collateral
subject to the terms and conditions of this Agreement with respect thereto.
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Section 13. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing and the enforcement by
the Secured Parties of their rights and remedies under the Loan Documents is
not continuing:
(i) Each Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Security
Collateral of such Grantor or any part thereof for any purpose;
provided however, that such Grantor will not exercise or refrain from
exercising any such right if such action would have a material
adverse effect on the value of the Security Collateral or any part
thereof.
(ii) Each Grantor shall be entitled to receive and retain
any and all dividends, interest and other distributions paid in
respect of the Security Collateral of such Grantor if and to the
extent that the payment thereof is not otherwise prohibited by the
terms of the Loan Documents; provided, however, that upon the
enforcement by the Secured Parties of their rights and remedies under
the Loan Documents, any and all
(A) dividends, interest and other distributions paid
or payable other than in cash in respect of, and instruments
and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Security Collateral in
connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Security Collateral
shall be, and shall be forthwith delivered to the Collateral Agent to
hold as, Security Collateral and shall, if received by such Grantor,
be received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of such Grantor and be
forthwith delivered to the Collateral Agent as Security Collateral in
the same form as so received (with any necessary indorsement).
(iii) The Collateral Agent will execute and deliver (or
cause to be executed and delivered) to each Grantor all such proxies
and other instruments as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i)
above and to receive the dividends or interest payments that it is
authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an
Event of Default and the enforcement by the Secured Parties of their rights
and remedies under the Loan Documents:
(i) All rights of each Grantor (x) to exercise or refrain
from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 13(a)(i) shall,
upon notice to such Grantor by the Collateral Agent, cease and
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(y) to receive the dividends, interest and other distributions that
it would otherwise be authorized to receive and retain pursuant to
Section 13(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise or refrain from exercising
such voting and other consensual rights and to receive and hold as
Security Collateral such dividends, interest and other distributions.
(ii) All dividends, interest and other distributions that
are received by any Grantor contrary to the provisions of paragraph
(i) of this Section 13(b) shall be received in trust for the benefit
of the Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent as
Security Collateral in the same form as so received (with any
necessary indorsement).
Section 14. As to Letter-of-Credit Rights. (a) Each Grantor,
by granting a security interest in its Receivables consisting of
letter-of-credit rights to the Collateral Agent, intends to (and hereby does)
assign to the Collateral Agent its rights (including its contingent rights) to
the proceeds of all Related Contracts consisting of letters of credit of which
it is or hereafter becomes a beneficiary or assignee. Upon the occurrence and
during the continuance of an Event of Default, each Grantor will, upon the
request of the Collateral Agent, promptly use commercially reasonable efforts
to cause the issuer of each letter of credit and each nominated person (if
any) with respect thereto to consent to such assignment of the proceeds
thereof pursuant to a consent in substantially the form of the Consent to
Assignment of Letter of Credit Rights attached hereto as Exhibit C or
otherwise in form and substance reasonably satisfactory to the Collateral
Agent and deliver written evidence of such consent to the Collateral Agent.
(b) Upon the occurrence and during the continuance of an
Event of Default, each Grantor will, promptly upon request by the Collateral
Agent, (i) notify (and such Grantor hereby authorizes the Collateral Agent to
notify) the issuer and each nominated person with respect to each of the
Related Contracts consisting of letters of credit that the proceeds thereof
have been assigned to the Collateral Agent hereunder and any payments due or
to become due in respect thereof are to be made directly to the Collateral
Agent or its designee and (ii) arrange for the Collateral Agent to become the
transferee beneficiary of letter of credit.
Section 15. Commercial Tort Claims. Each Grantor will
promptly give notice to the Collateral Agent of any commercial tort claim that
may arise after the date hereof and will otherwise take all necessary action
to subject such commercial tort claim to the first priority security interest
created under this Agreement.
Section 16. Transfers and Other Liens; Additional Shares.
(a) Each Grantor agrees that it will not (i) sell, assign or otherwise dispose
of, or grant any option with respect to, any of the Collateral, other than
sales, assignments and other dispositions of Collateral, and options relating
to Collateral, permitted under the terms of the Credit Agreement, or (ii)
create or suffer to exist any Lien upon or with respect to any of the
Collateral of such Grantor except for Permitted Liens.
(b) Each Grantor agrees that it will (i) cause each issuer
of the Pledged Equity pledged by such Grantor not to issue any Equity
Interests or other securities or in substitution for
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the Pledged Equity issued by such issuer, except to such Grantor, and (ii)
pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional Equity Interests or other securities.
Section 17. Collateral Agent Appointed Attorney-in-Fact.
Each Grantor hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor
and in the name of such Grantor or otherwise, from time to time, upon the
occurrence and during the continuance of an Event of Default, in the
Collateral Agent's discretion, to take any action and to execute any
instrument that the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to
the Collateral Agent pursuant to Section 10,
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) or (b) above, and
(d) to file any claims or take any action or institute any
proceedings that the Collateral Agent deems reasonably necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce compliance with the terms and conditions of any Assigned
Agreement or the rights of the Collateral Agent with respect to any
of the Collateral.
Section 18. Collateral Agent May Perform. If any Grantor
fails to perform any agreement contained herein, the Collateral Agent may, as
the Collateral Agent deems necessary to protect the security interest granted
hereunder in the Collateral or to protect the value thereof, but without any
obligation to do so and without notice, itself perform, or cause performance
of, such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by such Grantor under Section 10.04 of
the Credit Agreement.
Section 19. The Collateral Agent's Duties. The powers
conferred on the Collateral Agent hereunder are solely to protect the Secured
Parties' interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
the Collateral Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or
not any Secured Party has or is deemed to have knowledge of such matters, or
as to the taking of any necessary steps to preserve rights against any parties
or any other rights pertaining to any Collateral. The Collateral Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which it accords its own property.
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Section 20. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party upon default under the UCC (whether or not the UCC
applies to the affected Collateral) and also may: (i) require each
Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of the Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place and time to be
designated by the Collateral Agent that is reasonably convenient to
both parties; (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms
as the Collateral Agent may deem commercially reasonable; (iii)
occupy any premises owned or, to the fullest extent lawful and
permitted, leased by any of the Grantors where the Collateral or any
part thereof is assembled or located for a reasonable period in order
to effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv)
exercise any and all rights and remedies of any of the Grantors under
or in connection with the Collateral, or otherwise in respect of the
Collateral, including, without limitation, (A) any and all rights of
such Grantor to demand or otherwise require payment of any amount
under, or performance of any provision of, the Assigned Agreements,
the Receivables, the Related Contracts and the other Collateral, (B)
withdraw, or cause or direct the withdrawal, of all funds with
respect to the Account Collateral and (C) exercise all other rights
and remedies with respect to the Receivables, the Related Contracts
and the other Collateral, including, without limitation, those set
forth in Section 9-607 of the UCC. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days'
notice to such Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) Any cash held by or on behalf of the Collateral Agent
and all cash proceeds received by or on behalf of the Collateral
Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the
discretion of the Collateral Agent, be held by the Collateral Agent
as collateral for, and/or then or at any time thereafter applied
(after payment of any amounts payable to the Collateral Agent
pursuant to Section 10 of the Credit Agreement) in whole or in part
by the Collateral Agent for the ratable benefit of the Secured
Parties against, all or any part of the Secured Obligations, in
accordance with the waterfall set forth in Section 8.03 of the Credit
Agreement. Any surplus of such cash or cash proceeds held by or on
the behalf of the Collateral Agent and remaining after payment in
full of all the Secured Obligations shall be paid over to the
applicable Grantor or to whomsoever may be lawfully entitled to
receive such surplus.
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(c) All payments received by any Grantor under or in
connection with any Assigned Agreement or otherwise in respect of the
Collateral shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent in
the same form as so received (with any necessary indorsement).
(d) The Collateral Agent may, without notice to any Grantor
except as required by law and at any time or from time to time,
charge, set-off and otherwise apply all or any part of the Secured
Obligations against any funds held with respect to the Account
Collateral or in any other deposit account.
(e) The Collateral Agent may send to each bank, securities
intermediary or issuer party to any Deposit Account Control
Agreement, Securities Account Control Agreement or Uncertificated
Security Control Agreement a "Notice of Exclusive Control as defined
in and under such Agreement.
(f) If the Collateral Agent shall determine to exercise its
right to sell all or any of the Security Collateral of any Grantor
pursuant to this Section 20, each Grantor agrees that, upon request
of the Collateral Agent, such Grantor will, at its own expense:
(i) execute and deliver, and cause each issuer of
such Security Collateral contemplated to be sold and the
directors and officers thereof to execute and deliver, all
such instruments and documents, and do or cause to be done
all such other acts and things, as may be necessary or, in
the opinion of the Collateral Agent, advisable to register
such Security Collateral under the provisions of the
Securities Act of 1933 (as amended from time to time, the
"Securities Act"), to cause the registration statement
relating thereto to become effective and to remain effective
for such period as prospectuses are required by law to be
furnished and to make all amendments and supplements thereto
and to the related prospectus that, in the opinion of the
Collateral 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;
(ii) use its best efforts to qualify the Security
Collateral under the state securities or "Blue Sky" laws and
to obtain all necessary governmental approvals for the sale
of such Security Collateral, as requested by the Collateral
Agent;
(iii) cause each such issuer of such Security
Collateral to make available to its security holders, as
soon as practicable, an earnings statement that will satisfy
the provisions of Section 11(a) of the Securities Act;
(iv) provide the Collateral Agent with such other
information and projections as may be necessary or, in the
opinion of the Collateral Agent, advisable to enable the
Collateral Agent to effect the sale of such Security
Collateral; and
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(v) do or cause to be done all such other acts and
things as may be necessary to make such sale of such
Security Collateral or any part thereof valid and binding
and in compliance with applicable law.
(g) The Collateral Agent is authorized, in connection with
any sale of the Security Collateral pursuant to this Section 20, to
deliver or otherwise disclose to any prospective purchaser of the
Security Collateral: (i) any registration statement or prospectus,
and all supplements and amendments thereto, prepared pursuant to
subsection (f)(i) above; (ii) any information and projections
provided to it pursuant to subsection (f)(iv) above; and (iii) any
other information in its possession relating to such Security
Collateral.
Section 21. Amendments; Waivers; Additional Grantors; Etc.
(a) No amendment or waiver of any provision of this Agreement, and no consent
to any departure by any Grantor herefrom, shall in any event be effective
unless the same shall be in writing and signed as required by Section 10.01 of
the Credit Agreement, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. No
failure on the part of the Collateral Agent or any other Secured Party to
exercise, and no delay in exercising any right hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.
(b) Upon the execution and delivery by any Person of a
security agreement supplement in substantially the form of Exhibit A hereto
(each a "Security Agreement Supplement"), such Person shall be referred to as
an "Additional Grantor" and shall be and become a Grantor hereunder, and each
reference in this Agreement and the other Loan Documents to "Grantor" shall
also mean and be a reference to such Additional Grantor, and each reference in
this Agreement and the other Loan Documents to the "Collateral" shall also
mean and be a reference to the Collateral granted by such Additional Grantor
and each reference in this Agreement to a Schedule shall also mean and be a
reference to the schedules attached to such Security Agreement Supplement.
Section 22. Continuing Security Interest; Assignments under
the Credit Agreement. This Agreement shall create a continuing security
interest in the Collateral and shall (a) remain in full force and effect
unless and until (i) all of the Secured Obligations shall have been paid in
full in cash (other than L/C Obligations, Obligations in respect of Secured
Hedge Agreements, and Obligations in respect of Qualified Foreign Credit
Facilities), (ii) all Letters of Credit shall have expired or been terminated
or Cash Collateralized, (iii) all Secured Hedge Agreements and all Qualified
Foreign Credit Facilities shall have expired or been terminated or collateral
security provided in respect thereof in form and substance reasonably
satisfactory to the counterparty to such Secured Hedge Agreement or the
Qualified Foreign Lender under such Qualified Foreign Credit Facility, as
applicable, and (iv) the Commitments shall have expired or been terminated
(the first date on which all of the foregoing conditions have been met being
the "Termination Date"; provided, however, that in the case of the termination
or expiration of all Letters of Credit, Secured Hedge Agreements or Qualified
Foreign Credit Facilities as described in clauses (ii) and (iii) above (and
not in the case of a Cash Collateralization or collateral security being
provided as described in clauses (ii) and (iii) above), the Termination Date
shall not occur
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until (x) all L/C Obligations, all Obligations in respect of Secured Hedge
Agreements, and all Obligations in respect of Qualified Foreign Credit
Facilities, as applicable, shall have been paid in full in cash and (y) all of
the other conditions in clauses (i) through (iv) have been met, (b) be binding
upon each Grantor, its successors and assigns and (c) inure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the
Secured Parties and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Lender may
assign or otherwise transfer all or any portion of its rights and obligations
under the Credit Agreement (including, without limitation, all or any portion
of its Commitments, the Loans owing to it and the Note or Notes, if any, held
by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender herein
or otherwise, in each case as provided in Section 10.06 of the Credit
Agreement.
Section 23. Release; Termination. (a) Upon any sale, lease,
transfer or other disposition of any item of Collateral of any Grantor in
accordance with the terms of the Loan Documents (other than sales of Inventory
in the ordinary course of business), the Collateral Agent will, at such
Grantor's expense, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted hereby; provided,
however, that (i) such Grantor shall have delivered to the Collateral Agent,
at least five Business Days prior to the date of the proposed release, a
written request for release describing the item of Collateral and the terms of
the sale, lease, transfer or other disposition in reasonable detail,
including, without limitation, the price thereof and any expenses in
connection therewith, together with a form of release for execution by the
Collateral Agent and a certificate of such Grantor to the effect that the
transaction is in compliance with the Loan Documents and as to such other
matters as the Collateral Agent may reasonably request and (ii) the proceeds
of any such sale, lease, transfer or other disposition required to be applied,
or any payment to be made in connection therewith, in accordance with Section
2.06 of the Credit Agreement shall, to the extent so required, be paid or made
to, or in accordance with the instructions of, the Collateral Agent when and
as required under Section 2.06 of the Credit Agreement.
(b) On the Termination Date, the pledge and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantor. Upon any such termination, the Collateral
Agent will, at the applicable Grantor's expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence
such termination.
Section 24. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier or by e-mail of a scanned copy shall be
effective as delivery of an original executed counterpart of this Agreement.
Section 25. Governing Law(a) This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
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(b) Each Grantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting
in New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other
Loan Documents to which it is or is to be a party, or for recognition or
enforcement of any judgment, and each Grantor hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by Law, in such federal court. Each Grantor agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law. Nothing in this Agreement or any other Loan Document shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document in the courts
of any jurisdiction.
(c) Each Grantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other
Loan Documents to which it is or is to be a party in any New York State or
federal court. Each Grantor hereby irrevocably waives, to the fullest extent
permitted by Law, the defense of an inconvenient forum to the maintenance of
such suit, action or proceeding in any such court.
(d) EACH GRANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE LOANS OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
20
IN WITNESS WHEREOF, each Grantor has caused this Agreement
to be duly executed and delivered by its officer thereunto duly authorized as
of the date first above written.
RAYOVAC CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President, Secretary
and General Counsel
Address for Notices: ROVCAL, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: ROV HOLDING, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary and Treasurer
Address for Notices: UNITED INDUSTRIES CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President, Secretary
and General Counsel
Address for Notices: NU-GRO AMERICA CORP.
c/o United Industries Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
21
Address for Notices: NU-GRO US HOLDCO CORP.
c/o United Industries Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices: ▇▇▇▇▇▇▇ COMPANY
c/o United Industries Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: SYLORR PLANT CORP.
c/o United Industries Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: WPC BRANDS, INC.
c/o United Industries Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: UNITED PET GROUP, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: IB NITROGEN INC.
c/o United Industries Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
22
Address for Notices: NU-GRO TECHNOLOGIES, INC.
c/o United Industries Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: GROUND ZERO, INC.
c/o United Industries Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: DB ONLINE, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇ By: United Pet Goup, Inc., its Managing
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Member
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: PETS `N PEOPLE, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: AQ HOLDINGS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: SOUTHERN CALIFORNIA FOAM, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
23
Address for Notices: AQUARIA, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: PERFECTO HOLDING CORP.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: AQUARIUM SYSTEMS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: PERFECTO MANUFACTURING, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
Address for Notices: JUNGLETALK INTERNATIONAL, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
24
Schedule I to the Security Agreement
INVESTMENT PROPERTY
[Omitted. A supplemental copy of this schedule will be
furnished to the SEC upon request.]
Schedule II to the Security Agreement
INTELLECTUAL PROPERTY
[Omitted. A supplemental copy of this schedule will be
furnished to the SEC upon request.]
Schedule III to the Security Agreement
COMMERCIAL TORT CLAIMS
[Omitted. A supplemental copy of this schedule will be
furnished to the SEC upon request.]
Schedule IV to the Security Agreement
LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION,
JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION
NUMBER
[Omitted. A supplemental copy of this schedule will be
furnished to the SEC upon request.]
Schedule V to the Security Agreement
CHANGES IN NAME, ETC.
[Omitted. A supplemental copy of this schedule will be
furnished to the SEC upon request.]
Schedule VI to the Security Agreement
LETTERS OF CREDIT
[Omitted. A supplemental copy of this schedule will be
furnished to the SEC upon request.]
Schedule VII to the Security Agreement
INTELLECTUAL PROPERTY MATTERS
[Omitted. A supplemental copy of this schedule will be
furnished to the SEC upon request.]
Exhibit A to the Security Agreement
FORM OF SECURITY AGREEMENT SUPPLEMENT
[Omitted. A supplemental copy of this exhibit will be
furnished to the SEC upon request.]
Exhibit B to the Security Agreement
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
[Omitted. A supplemental copy of this exhibit will be
furnished to the SEC upon request.]
Exhibit C to the Security Agreement
FORM OF CONSENT TO ASSIGNMENT OF LETTER OF CREDIT RIGHTS
[Omitted. A supplemental copy of this exhibit will be
furnished to the SEC upon request.]