EXHIBIT 10_2
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GUARANTEE AND COLLATERAL AGREEMENT
made by
P&L COAL HOLDINGS CORPORATION,
and certain of its Subsidiaries
in favor of
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of May 14, 1998
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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............................... 6
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.......................................................... 9
4.1 Representations in Credit Agreement..................................................... 9
4.2 Title; No Other Liens................................................................... 9
4.3 Perfected First Priority Liens.......................................................... 9
4.4 Chief Executive Office.................................................................. 10
4.5 Inventory and Equipment................................................................. 10
4.6 Farm Products........................................................................... 10
4.7 Pledged Securities...................................................................... 10
4.8 Receivables............................................................................. 11
4.9 Contracts............................................................................... 11
4.10 Intellectual Property................................................................... 11
4.11 Peabody Minerals Pty. Limited........................................................... 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.................................................................. 12
5.5 Maintenance of Perfected Security Interest; Further Documentation....................... 12
5.6 Changes in Locations, Name, etc......................................................... 13
5.7 Notices................................................................................. 13
5.8 Pledged Securities...................................................................... 13
5.9 Receivables............................................................................. 14
5.10 Contracts............................................................................... 14
5.11 Peabody Minerals Pty. Limited........................................................... 15
SECTION 6. REMEDIAL PROVISIONS..................................................................... 15
6.1 Certain Matters Relating to Receivables................................................. 15
6.2 Communications with Obligors; Grantors Remain Liable.................................... 16
6.3 Pledged Shares.......................................................................... 16
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6.4 Proceeds to be Turned Over To Administrative Agent......................................... 17
6.5 Application of Proceeds.................................................................... 17
6.6 Code and Other Remedies.................................................................... 17
6.7 Registration Rights........................................................................ 18
6.8 Waiver; Deficiency......................................................................... 19
SECTION 7. THE ADMINISTRATIVE AGENT................................................................... 19
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc................................ 19
7.2 Duty of Administrative Agent............................................................... 20
7.3 Execution of Financing Statements.......................................................... 21
7.4 Authority of Administrative Agent.......................................................... 21
SECTION 8. MISCELLANEOUS.............................................................................. 21
8.1 Amendments in Writing...................................................................... 21
8.2 Notices.................................................................................... 21
8.3 No Waiver by Course of Conduct; Cumulative Remedies........................................ 21
8.4 Enforcement Expenses; Indemnification...................................................... 22
8.5 Successors and Assigns..................................................................... 22
8.6 Set-Off.................................................................................... 22
8.7 Counterparts............................................................................... 23
8.8 Severability............................................................................... 23
8.9 Section Headings........................................................................... 23
8.10 Integration................................................................................ 23
8.11 Governing Law.............................................................................. 23
8.12 Submission To Jurisdiction; Waivers........................................................ 23
8.13 Acknowledgements........................................................................... 24
8.14 WAIVER OF JURY TRIAL....................................................................... 24
8.15 Additional Grantors........................................................................ 24
8.16 Releases................................................................................... 24
8.17 Conflict................................................................................... 25
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 14, 1998, 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 ▇▇▇▇▇▇ Commercial
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Paper Inc. ("LCPI"), as administrative agent (in such capacity, the
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"Administrative Agent") for the banks and other financial institutions (the
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"Lenders") from time to time parties to the Credit Agreement, dated as of the
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date hereof (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among P&L Coal Holdings Corporation, a Delaware
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corporation (the "Borrower"), the Lenders, LCPI, as documentation agent (in such
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capacity, the "Documentation Agent"), LCPI, as syndication agent (in such
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capacity, the "Syndication Agent"), ▇▇▇▇▇▇ Brothers Inc., as arranger (in such
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capacity, the "Arranger", together with the Documentation Agent, the Syndication
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Agent and the Administrative Agent, the "Agents") and the Administrative Agent.
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Borrower upon the terms and subject
to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses and to finance the costs of the Acquisition;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each 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 Borrower under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Agents and the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Agents and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
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in the Credit Agreement and used herein shall have the meanings given to them in
the Credit 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, Fixtures, Instruments and Inventory.
(b) The following terms shall have the following meanings:
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"Agreement": this Guarantee and Collateral Agreement, as the same may
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be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
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principal of and interest on the Loans and Reimbursement Obligations and
all other obligations and liabilities of the Borrower (including, without
limitation, (i) interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the 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 Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding and (ii) any exposure of any Lender
under any lockbox arrangement, controlled disbursement arrangement,
checking accounts or other similar arrangements (collectively, "Cash
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Management Agreements") with or on behalf of the Borrower and/or its
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Subsidiaries) to the Agents or any Lender (or, in the case of any Interest
Rate 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 Credit
Documents, any Letter of Credit or any Interest Rate Agreement entered into
by the Borrower with any Lender (or any Affiliate of any Lender) or any
Cash Management Agreement entered into by the Borrower or any Subsidiary of
the Borrower with 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 and counsel to the Lenders that are
required to be paid by the Borrower pursuant to the terms of any of the
foregoing agreements).
"Collateral": as defined in Section 3.
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"Collateral Account": any collateral account established by the
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Administrative Agent as provided in Section 6.1 or 6.4.
"Contracts": the contracts and agreements listed on Schedule 7, as
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the same may be amended, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of any Grantor to damages arising thereunder and
(iii) all rights of any Grantor to perform and to exercise all remedies
thereunder.
"Copyrights": (i) all copyrights arising under the laws of the United
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States or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished (including, without
limitation, those listed on Schedule 6), all registrations and recordings
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thereof, and all applications in connection therewith, including, without
limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
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licensor or licensee 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
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defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in
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any event, including, without limitation, with respect to any Grantor, (A)
all partnership interests, member interests and other ownership interests
(other than Pledged Shares) in any Subsidiary of the Borrower (other than
any Citizens Entity and any Subsidiary of a Foreign Subsidiary), including,
without limitation, the partnership interests held by any Grantor in Colony
Bay Coal Company, Patriot Coal Company, L.P. and Peabody Natural Resources
Company and the member interests held by any Grantor in Thoroughbred, LLC
and (B) 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 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, in each case to the extent
the grant by such Grantor of a security interest pursuant to this Agreement
in its right, title and interest in such contract, agreement, instrument or
indenture is not prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, would not give
any other party to such contract, agreement, instrument or indenture the
right to "reopen" certain provisions thereof or to terminate its
obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from the
other parties thereto (it being understood that the foregoing shall not be
deemed to obligate the Borrower to obtain such consents); provided that the
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foregoing limitation shall not affect, limit, restrict or impair the grant
by such Grantor of a security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become due under any
such agreement, contract, instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the
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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 Credit 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 and counsel to the Lenders that are
required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Credit Document).
"Guarantors": the collective reference to each Grantor other than the
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Borrower.
"Intellectual Property": the collective reference to all rights,
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priorities and privileges relating to intellectual property arising under
United States laws, including, without limitation, Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses, and
all rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"Intercompany Note": any promissory note evidencing loans made by any
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Grantor to the Borrower or any of its Subsidiaries.
"Interest Rate Agreement": any interest rate swap agreement, interest
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rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement.
"Investment Property": means all "certificated securities",
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"uncertificated securities", "security entitlements", "securities
accounts", "commodity contracts" or "commodity accounts" (as each is
defined in the New York UCC).
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"Issuers": the collective reference to each issuer of a Pledged
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Security (which shall include, without limitation, each presently existing
or hereinafter acquired or created Subsidiary of the Borrower (other than
any Citizens Entity and any Subsidiary of a Foreign Subsidiary).
"New York UCC": the Uniform Commercial Code as from time to time in
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effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
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Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States or any
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political subdivision thereof, all reissues and extensions thereof and all
goodwill associated therewith, including, without limitation, any of the
foregoing referred to on Schedule 6, (ii) all applications for letters
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patent and design letters patent of the United States and all divisions,
continuations and continuations-in-part thereof, including, without
limitation, any of the foregoing referred to on Schedule 6, and (iii) all
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rights to obtain any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral, providing
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for the grant by or to any Grantor of any right to manufacture, use or sell
any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to on Schedule 6.
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"Pledged Notes": all promissory notes listed on Schedule 2, all
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Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory
notes issued in connection with extensions of trade credit by any Grantor
in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged Notes
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and the Pledged Shares.
"Pledged Shares": the shares of Capital Stock listed on Schedule 2,
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whether certificated or uncertificated, all certificates representing such
Capital Stock, and all cash dividends, stock dividends, distributions of
any nature, cash, warrants, options and other rights, property or proceeds
(whether tangible or intangible) and products from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such Capital Stock, together with any other shares, stock
certificates, options or rights of any nature whatsoever in respect of the
Capital Stock of any Person that may be issued or granted to, or held by, a
Grantor while this Agreement is in effect (subject to the provisions of
subsection 6.10(b) of the Credit Agreement).
"Proceeds": all "proceeds" as such term is defined in Section 9-
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306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof and, in any event, without limitation, all dividends or
other income from the Pledged Securities, collections thereon or
distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
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services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
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"Trademarks": (i) all trademarks, trade names, corporate names,
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company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States or any State
thereof, or otherwise, and all common-law rights related thereto,
including, without limitation, any of the foregoing referred to on Schedule
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6, and (ii) the right to obtain all renewals thereof.
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"Trademark License": any agreement, whether written or oral,
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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
on Schedule 6.
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1.2 Other Definitional Provisions. (a) The words "hereof,"
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"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(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
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severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Agents and the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Credit Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Credit 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, any other Agent
or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no 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 Borrower may be free from any Borrower
Obligations.
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(e) No indefeasible payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Lender from the 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
release the liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor in respect of
the Borrower Obligations or any payment received or collected from such
Guarantor in respect of the Borrower Obligations), remain liable for the
Borrower Obligations up to the maximum liability of such Guarantor hereunder
until the Borrower Obligations are paid in full, no Letter of Credit shall be
outstanding and the Commitments are terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
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extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent, the other Agents and the Lenders, and
each Guarantor shall remain jointly and severally liable to the Administrative
Agent, the other Agents and the Lenders for the full amount guaranteed by such
Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
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Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent, any other Agent or any Lender, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent, any
other Agent or any Lender against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent, any other Agent or any Lender for the payment of the Borrower
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Administrative Agent, the other Agents and the Lenders by the Borrower 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, the other Agents
and the Lenders, 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
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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, any other Agent or any Lender may
be rescinded by the Administrative Agent, such other Agent or such Lender 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, any other Agent or any Lender, and the Credit Agreement and the other
Credit 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
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Administrative Agent (or the Required Lenders or all 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, any other Agent
or any Lender for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. None of the Administrative Agent,
any other Agent or any Lender 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
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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, any other Agent or any Lender 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 the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent, the other Agents and the Lenders, 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 Borrower or any of the Guarantors with respect to the
Borrower Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Credit 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, any other Agent or any Lender, (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 the Borrower or any other Person
against the Administrative Agent, any other Agent or any Lender, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the 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, any other Agent or any Lender 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 the 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, any other Agent or any Lender to make any such demand, to
pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the 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, any other Agent or any Lender
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
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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, any other
Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or
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conservator of, or trustee or similar officer for, the 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
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hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at 3
World Financial Center, New York, New York 10285, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
fax: (▇▇▇) ▇▇▇-▇▇▇▇.
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
Agents and the Lenders, 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
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complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all Fixtures;
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory (including, without limitation, coal);
(k) all Investment Property;
(l) all Pledged Securities;
(m) all Receivables;
(n) all books and records pertaining to the Collateral; and
(o) 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.
9
Notwithstanding the foregoing, except as permitted by Section 9-318(4) of the
New York UCC, this Agreement shall not constitute an assignment of any Contract,
Pledged Security, General Intangible, Copyright License, Patent License or
Trademark License, or the instruments giving the same, to the extent that, and
only so long as, such Contract, Pledged Security, General Intangible, Copyright
License, Patent License or Trademark License, or the instruments or agreements
giving or governing the same, would prohibit such assignment or would, upon such
assignment or attempted assignment, give any other party to such Contract,
Pledged Security, General Intangible, Copyright License, Patent License or
Trademark License, or the instruments or agreements giving the same, the right
to "reopen" any provision thereof or terminate its obligations thereunder
(unless, in either case, all necessary consents to such assignment have been
obtained from the other parties thereto).
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 Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
-----------------------------------
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the other Credit
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, each other Agent and each Lender shall be entitled to rely on each of
them as if they were fully set forth herein, provided that each reference in
--------
each such representation and warranty to the Borrower's knowledge shall, for the
purposes of this Section 4.1, 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 Agents and the
Lenders 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
Agents and the Lenders, pursuant to this Agreement or as are permitted by the
Credit Agreement.
4.3 Perfected First Priority Liens. The security interests granted
------------------------------
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
----------
referred to on said Schedule, have been delivered to the 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 Lenders, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for unrecorded Liens and other Liens
permitted by the Credit Agreement which have priority over the Liens on the
Collateral by operation of law. Without limiting the foregoing, to the extent
the Collateral pledged by the Borrower and the Grantor to the Administrative
Agent on behalf of the Lenders constitutes partnership interests, member
interests and other ownership interests which are uncertificated, the recording
of the security interests on the relevant partnership agreement, member
agreement or other governing document pursuant to subsection 5.5(d) and the
filing of appropriate financing statements and continuation statements will
perfect and establish the first priority Lien and security interest in such
Collateral hereunder in favor of the Administrative Agent on behalf of the
Agents and the Lenders.
10
4.4 Chief Executive Office. On the date such Grantor became a party
----------------------
to this Agreement, 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 such Grantor became a party
-----------------------
to this Agreement, the Inventory and the Equipment of such Grantor (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.
4.7 Pledged Securities. (a) The Pledged Shares pledged by such
------------------
Grantor hereunder constitute all (or in the case of an Issuer that is a Foreign
Subsidiary, 65%) of the issued and outstanding shares of all classes of the
Capital Stock of each Issuer owned by such Grantor.
(b) All the shares of the Pledged Shares 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. The Pledged Notes pledged by
such Grantor hereunder constitute the only promissory notes of any Issuer in
favor of such Grantor.
(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 and other Liens expressly
permitted by subsection 7.3(a) of the Credit Agreement.
(e) Such Grantor has delivered to the Administrative Agent all
certificates evidencing Pledged Shares, duly indorsed by such Grantor to the
Administrative Agent, if required, together with undated stock powers covering
each such certificate duly executed in blank by such Grantor. No shares, units
and other securities constituting the Pledged Shares were issued in violation of
the preemptive rights of any Person or of any agreement by which Grantor or the
Issuer thereof is bound. All documentary, stamp or other taxes or fees owing in
connection with the issuance, transfer or pledge of Pledged Shares (or rights in
respect thereof) have been paid. No restrictions or conditions exist with
respect to the transfer or voting of any Pledged Shares.
(f) Such Grantor has delivered to the Administrative Agent originals
of all Pledged Notes, duly indorsed by such Grantor to the Administrative Agent,
if required, together with undated note powers or instruments of assignment
covering each such Pledged Note executed in blank by such Grantor and with, if
the Administrative Agent has so requested, signature guaranteed.
4.8 Receivables. (a) Except for (i) the Tennessee Valley Authority,
-----------
(ii) federal tax refunds and (iii) Receivables which are not in the aggregate
material to the Borrower and its Restricted Subsidiaries taken as a whole, none
of the obligors on any Receivables is a Governmental Authority.
(b) The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
11
4.9 Contracts. (a) Each Contract (and each other contract,
---------
agreement, instrument and indenture included in the Collateral (the "Additional
----------
Contracts")) is in full force and effect and constitutes a valid and legally
---------
enforceable obligation of the parties thereto, 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.
(b) No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts or Additional Contracts by any party thereto other than those which
have been duly obtained, made or performed, are in full force and effect and do
not subject the scope of any such Contract to any material adverse limitation,
either specific or general in nature.
(c) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts or Additional Contracts is
in default in the performance or observance of any of the terms thereof in any
manner that, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(d) The right, title and interest of such Grantor in, to and under
the Contracts and the Additional Contracts are not subject to any defenses,
offsets, counterclaims or claims that, in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(e) Such Grantor has delivered to the Administrative Agent a complete
and correct copy of each Contract and Additional Contract, including all
amendments, supplements and other modifications thereto.
(f) No amount payable to such Grantor under or in connection with any
Contract or Additional Contract is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent.
4.10 Intellectual Property. Neither the Borrower nor any Grantor
---------------------
owns any Intellectual Property which is, in the aggregate, material to the
Borrower and its Restricted Subsidiaries, taken as a whole.
4.11 Peabody Minerals Pty. Limited. Peabody Minerals Pty. Limited has
-----------------------------
no material assets or liabilities and conducts no business.
12
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders 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
immediately 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. Such Grantor will maintain insurance
------------------------
in accordance with subsection 6.5 of the Credit Agreement.
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 material 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
Lenders 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, and have recorded, 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.
(d) With respect to any partnership, member or other ownership
interests included in the Collateral pledged hereunder, the applicable Grantor
will cause the Issuer thereof to ▇▇▇▇ the relevant
13
partnership agreement, member agreement or other governing document with a
legend indicating the Administrative Agent's security interest in such
Collateral and prohibiting the transfer thereof except in a manner not in
violation of the provisions of this Agreement and the Credit Agreement.
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;
----------
(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 and
-------
the Lenders promptly, in reasonable detail, of:
(a) any Lien (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 realize on the
Collateral or otherwise 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 (subject to the provisions of
subsection 6.10(b) of the Credit Agreement), whether in addition to, in
substitution of, as a conversion of, or in exchange for, any of the Pledged
Shares, or otherwise in respect thereof, such Grantor shall accept the same as
the agent of the Administrative Agent, the other Agents and the Lenders, hold
the same in trust for the Administrative Agent, the other Agents and the Lenders
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. Any
sums paid upon or in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer 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 Securities or any property shall be distributed upon or with respect to
the Pledged Securities 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
14
Agent to be held by it hereunder as additional collateral security for the
Obligations. Except as provided in the Credit Agreement, 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, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Agents and the Lenders, segregated from other funds of such
Grantor, as additional collateral security for the Obligations.
(b) Except as provided in the Credit Agreement, 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 Securities 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 Securities 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 Securities issued by it.
5.9 Receivables. (a) Other than in the ordinary course of business
-----------
consistent with its past practices, such Grantor shall not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable 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 5% of the aggregate
amount of the then outstanding Receivables.
5.10 Contracts. (a) Such Grantor will maintain its Coal Supply
---------
Agreements in compliance with the requirements of subsection 6.19 of the Credit
Agreement. With respect to Contracts or Additional Contracts that are not Coal
Supply Agreements, such Grantor will perform and comply in all material respects
with all its obligations under such Contracts and Additional Contracts.
(b) With respect to Contracts or Additional Contracts that are not
Coal Supply Agreements, such Grantor will not amend, modify, terminate or waive
any provision of any such material Contract or Additional Contract in any manner
which could reasonably be expected to materially adversely affect the value of
such material Contract or Additional Contract as Collateral.
(c) With respect to Contracts or Additional Contracts that are not
Coal Supply Agreements, such Grantor will exercise promptly and diligently each
and every material right which it may have under each such Contract or
Additional Contract (other than any right of termination).
15
(d) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it relating in any way to
any Contract or Additional Contract that questions the validity or
enforceability of such Contract or Additional Contract. Such Grantor will
notify the Administrative Agent immediately upon learning of any default by any
party (including, without limitation, the Grantor) under any Contract or
Additional Contract.
5.11 Peabody Minerals Pty. Limited. The Borrower will ensure that
-----------------------------
the representation and warranty set forth in subsection 4.11 hereof remains true
and correct at all times after the Closing Date, unless and until Peabody
Minerals Pty. Limited is no longer a Subsidiary of the Borrower.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) Following the
---------------------------------------
occurrence and during the continuance of an Event of Default, the Administrative
Agent shall have the right to make test verifications of the Receivables 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 following the occurrence and during the continuance of an
Event of Default, upon the Administrative Agent's reasonable request and at the
expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others reasonably satisfactory to the Administrative Agent to
furnish to the Administrative Agent reports showing reconciliations, aging and
test verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, provided that the Administrative Agent may
--------
curtail or terminate said authority or require that such authority be subject to
the Administrative Agent's direct control, 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 Receivables, when collected by any
Grantor, (i) shall be forthwith (and, in any event, within two Business Days)
deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the Administrative Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Administrative Agent,
subject to withdrawal by the Administrative Agent for the account of the Agents
and the Lenders only as provided in Section 65, and (ii) until so turned over,
shall be held by such Grantor in trust for the Administrative Agent, the other
Agents and the Lenders, segregated from other funds of such Grantor. Each such
deposit of Proceeds of Receivables shall be accompanied by a report identifying
in reasonable detail the nature and source of the payments included in the
deposit.
(c) At the Administrative Agent's reasonable request at any time
after the occurrence and during the continuance of an Event of Default, 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 Receivables, 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
after the occurrence and during the continuance of an Event of Default and after
giving notice to the relevant Grantor, communicate with obligors under the
Receivables and parties to the Contracts and Additional Contracts to verify with
them to the Administrative Agent's satisfaction the existence, amount and terms
of any Receivables or Contracts.
16
(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 Receivables and parties to the Contracts and
Additional Contracts that the Receivables and the Contracts and Additional
Contracts have been assigned to the Administrative Agent for the ratable benefit
of the Lenders 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 Receivables, Contracts and Additional
Contracts 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 Receivable (or any agreement
giving rise thereto), Contract or Additional Contract by reason of or arising
out of this Agreement or the receipt by the Administrative Agent or any Lender
of any payment relating thereto, nor shall the Administrative Agent or any
Lender be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), Contract or Additional Contract to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
6.3 Pledged Shares. (a) Unless an Event of Default shall have
--------------
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant 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 Shares and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Securities; provided, however, that
-------- -------
no vote shall be cast or corporate right exercised or other action taken which,
in the Administrative Agent's reasonable judgment, would materially impair the
Collateral or which would result in any violation of any provision of the Credit
Agreement, this Agreement or any other Credit 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 Securities and make application thereof to the
Obligations in such order as the Administrative Agent may determine, and (ii)
any or all of the Pledged Securities may 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 Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities 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 Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities 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.
17
(c) Each Grantor hereby authorizes and instructs each Issuer 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
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, the other Agents and the Lenders
specified in Section 6.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash and checks shall be held by such Grantor in trust for the
Administrative Agent, the Agents and the Lenders, 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 Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 65.
6.5 Application of Proceeds. At such intervals as may be agreed upon
-----------------------
by the Borrower 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 required
by the Credit Agreement, and any part of such funds which are not required as
collateral security for the Obligations shall be paid over from time to time by
the Administrative Agent to the Borrower or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrower 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 Lenders, 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 New York UCC
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 Lender 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 Lender shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
18
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, the other Agents and
the Lenders 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 New York UCC, 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, the other Agents or any Lender arising out of the exercise
by them of any rights hereunder. 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 15 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 Shares
pursuant to Section 6.6, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Shares, 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 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 Shares, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its commercially reasonable 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 Shares, 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 Shares, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Shares 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 commercially reasonable 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 Shares pursuant to this Section
6.7 valid and binding and in compliance with any and all other
19
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 Waiver; Deficiency. Each Grantor waives and agrees not to assert
------------------
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. 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 Lender 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 assent by such Grantor, to do any or all of the following:
(i) upon the occurrence and during the continuance of an Event of
Default and after notice to the applicable Grantor, in the name of such
Grantor or its own name, or otherwise, take possession of and indorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Receivable or any Contract or Additional
Contract included in the Collateral 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
Receivable or any Contract or Additional Contract or with respect to any
other Collateral whenever payable;
(ii) in the case of any Intellectual Property included in the
Collateral, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent's and the Lenders'
security interest in such Intellectual Property and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section
6.6 or 6.7, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
20
(v) upon the occurrence and during the continuance of an Event of
Default and after notice to the applicable Grantor (1) direct any party
liable for any payment under any of the Collateral to make payment of any
and all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (2) ask
or demand for, collect, and receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (3) sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (5)
defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may reasonably deem appropriate; (7)
assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains),
throughout the world for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole discretion
determine; and (8) generally, sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent's option and
such Grantor's 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
Lenders' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
(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 Base Rate 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 New York UCC 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 Agent, any Lender 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, the other Agents and the Lenders
hereunder are solely to protect the Administrative Agent's, the other Agents',
and the Lenders' interests in the Collateral and shall
21
not impose any duty upon the Administrative Agent or any Lender to exercise any
such powers. The Administrative Agent, the other Agents and the Lenders shall
be accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
---------------------------------
the New York UCC and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements (including, without
limitation, fixture filings) and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
(but with subsequent notice to 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 shall, as between the Administrative
Agent and the Lenders, 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 Lenders 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 in
accordance with subsection 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the Agents
-------
or any Grantor hereunder shall be effected in the manner provided for in
subsection 10.2 of the Credit Agreement; provided that any such notice, request
--------
or demand to or upon any Guarantor shall be addressed to such Grantor at its
notice address set forth on Schedule 1.
----------
8.3 No Waiver by Course of Conduct; Cumulative Remedies. None of the
---------------------------------------------------
Administrative Agent, any other Agent or any Lender 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, any other Agent or
any Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
any other Agent or any Lender 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, such other Agent or such Lender 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.
22
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
-------------------------------------
agrees to pay or reimburse each Lender and each Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Credit Documents to which such Guarantor is a
party, including, without limitation, the fees and disbursements of counsel to
each Lender and of counsel to the Administrative Agent and the other Agents.
(b) Each Guarantor agrees to pay, and to save the Administrative
Agent, the other Agents and the Lenders 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, the other Agents and the Lenders 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 to the extent the Borrower would be required to do so pursuant to
subsection 10.5 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 Credit 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, the other Agents and the Lenders 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 and the Syndication Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
-------
Administrative Agent, each other Agent and each Lender at any time and from time
to time pursuant to subsection 10.7(a) of the Credit Agreement, without notice
to such Grantor or any other Grantor, any such notice being expressly waived by
each Grantor, to set-off and appropriate and apply any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Administrative Agent or such Lender to or for the credit or
the account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
Obligations and liabilities of such Grantor to the Administrative Agent, such
other Agent or such Lender hereunder then due and owing and claims of every
nature and description of the Administrative Agent, such other Agent or such
Lender against such Grantor then due and owing, in any currency, whether arising
hereunder, under the Credit Agreement, any other Credit Document or otherwise,
as the Administrative Agent, such other Agent or such Lender may elect, whether
or not the Administrative Agent, any other Agent or any Lender has made any
demand for payment and although such Obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent, each other Agent and each
Lender shall notify such Grantor promptly of any such set-off and the
application made by the Administrative Agent, such other Agent or such Lender 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, each other Agent and each Lender 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, such other Agent or
such Lender may have.
23
8.7 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction with respect to any of the
Grantors shall, as to such jurisdiction and such Grantor, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof with respect to such Grantor or any of the other
Grantors, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction
or with respect to any of the other Grantors in any 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 Credit Documents
-----------
represent the agreement of the Grantors, the Administrative Agent, the other
Agents and the Lenders with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent, the other Agents or any Lender relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the other
Credit 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 Grantor hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of 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
Grantor 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 special, exemplary, punitive or consequential damages.
24
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents to which it is a
party;
(b) None of the Administrative Agent, any other Agent or any Lender
has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Credit Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent, the other Agents and the Lenders, 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 Credit
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Grantors and the Lenders.
8.14 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE
--------------------
BENEFITS HEREOF, EACH OF THE LENDERS AND THE AGENTS, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 Additional Grantors. Each Subsidiary of the Borrower that is
-------------------
required to become a party to this Agreement pursuant to subsection 6.10 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 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 and 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) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement
(including, without limitation, the designation of a Credit Party as an
Unrestricted Subsidiary as permitted thereunder), then the Administrative Agent,
at the request and sole expense of such Grantor, shall execute and deliver to
such Grantor all releases or other documents reasonably necessary for the
release of the Liens created hereby on such Collateral. At the request and sole
expense of the Borrower, a Guarantor shall be released from its obligations
hereunder in the event that all the Capital Stock of such Guarantor shall be
sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement (including, without limitation, the designation of such
Guarantor as an Unrestricted Subsidiary as permitted thereunder).
(c) If at any time the Capital Stock of any Unrestricted Subsidiary
pledged hereunder is to be pledged instead as security for the obligations of
any such Unrestricted Subsidiary under any Non-Recourse Debt, the Administrative
Agent, at the request and sole expense of the applicable Grantor, shall execute
and deliver to such Grantor all releases and other documents reasonably
necessary for the release
25
of the Liens created hereby on such Collateral and shall deliver the
certificates (if any) representing such Capital Stock to the applicable Grantor.
8.17 Conflict. In the event there is a conflict between the terms of
--------
this Agreement and the Credit Agreement, the Credit Agreement shall control.
[SIGNATURE PAGES FOLLOW]
26
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.
P&L COAL HOLDINGS CORPORATION,
a Delaware corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
By:___________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Accepted on behalf of the Agents
and the Lenders as of the date first
above written
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: _______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Schedule 1
----------
NOTICE ADDRESSES OF GRANTORS
Schedule 2
----------
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED CAPITAL STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares
--------- ------------------ ------------------------- ------------------
PLEDGED NOTES:
Issuer Payee Principal Amount
----------------------- --------------- ------------------------------
MEMBER INTERESTS:
Issuer Certificate No. No. of Interests
----------------------- ----------------- ------------------------------
Schedule 3
----------
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings (including fixture filings)
-----------------------------------------------------------
[List each office where a financing statement is to be filed]
Patent and Trademark Filings
----------------------------
[List all filings]
Actions with respect to Pledged Shares
--------------------------------------
Other Actions
-------------
[Describe other actions to be taken]
Schedule 4
----------
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
Schedule 5
----------
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
Schedule 6
----------
COPYRIGHTS AND COPYRIGHT LICENSES
None.
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
Schedule 7
----------
CONTRACTS
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement dated as of ______________ ___, 1998 (the "Agreement"),
---------
made by the Grantors parties thereto for the benefit of ▇▇▇▇▇▇ Brothers
Commercial Paper Inc., as Administrative Agent. The undersigned agrees for the
benefit of the Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and
will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a) of
the Agreement.
3. The terms of Sections 5.5(d), 6.3 and 6.7 of the Agreement shall
apply to it, mutatis mutandis, with respect to all actions that may be required
------- --------
of it pursuant to Section 5.5(d), 6.3 or 6.7 of the Agreement.
[NAME OF ISSUER]
By________________________________________________
Title_____________________________________________
Address for Notices:
__________________________________________________
__________________________________________________
Fax:______________________________________________
Annex 1 to
Guarantee and Collateral Agreement
----------------------------------
ASSUMPTION AGREEMENT, dated as of ________________, 199_, made by
_______________________, a ______________ corporation (the "Additional
----------
Grantor"), in favor of ▇▇▇▇▇▇ Commercial Paper Inc., as administrative agent (in
-------
such capacity, the "Administrative Agent") for the other Agents and the banks
--------------------
and other financial institutions (the "Lenders") parties to the Credit Agreement
-------
referred to 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, P&L Coal Holdings Corporation, a Delaware corporation (the
"Borrower"), the Lenders, ▇▇▇▇▇▇ Commercial Paper Inc. ("LCPI"), as
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Documentation Agent, LCPI, as Syndication Agent, ▇▇▇▇▇▇ Brothers Inc., as
Arranger, and the Administrative Agent have entered into a Credit Agreement,
dated as of _____________ __, 1998, (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement");
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WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of its Subsidiaries (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of _______ __, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
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and Collateral Agreement") in favor of the Administrative Agent for the benefit
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of the Lenders;
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
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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 Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.
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* Refer to each Schedule which needs to be supplemented.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
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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:________________________________
Name:
Title: