EXHIBIT 10.2
NON-SHARED COLLATERAL SECURITY AGREEMENT
dated as of July 30, 1999, among ALLIED WASTE NORTH
AMERICA, INC., a Delaware corporation (the
"Borrower"), ALLIED WASTE INDUSTRIES, INC., a
Delaware corporation ("Allied Waste"), each
subsidiary listed on Schedule I hereto (each such
Subsidiary individually a "Subsidiary Guarantor" and
collectively, the "Subsidiary Guarantors"; the
Subsidiary Guarantors, Allied Waste and the Borrower
are referred to collectively herein as the
"Grantors") and THE CHASE MANHATTAN BANK, a New York
banking corporation ("Chase"), as collateral agent
(in such capacity, the "Collateral Agent") for the
Secured Parties (as defined herein).
Reference is made to (a) the Credit Agreement dated as of July 21, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, Allied Waste, the lenders from time to time
party thereto (the "Lenders"), and Chase, as administrative and collateral agent
for the Lenders, (b) the Parent Guarantee Agreement dated as of July 30, 1999
(as amended, supplemented or otherwise modified from time to time, the "Parent
Guarantee Agreement"), between Allied Waste and the Collateral Agent and (c) the
Subsidiary Guarantee Agreement dated as of July 30, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiary Guarantee
Agreement"), among the Subsidiary Guarantors, certain other Subsidiaries of
Allied Waste and the Collateral Agent.
The Senior Lenders have agreed to make Senior Loans to the Borrower,
and the Issuing Banks have agreed to issue Letters of Credit for the account of
the Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of Allied Waste and the Subsidiary
Guarantors has agreed to guarantee, among other things, all the obligations of
the Borrower to the Senior Lenders under the Credit Agreement. The obligations
of the Senior Lenders to make Senior Loans and of the Issuing Banks to issue
Letters of Credit are conditioned upon, among other things, the execution and
delivery by the Grantors of an agreement in the form hereof to secure (a) the
due and punctual payment by the Borrower of (i) the principal of and premium, if
any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Senior Loans, when and
as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (ii) each payment required to be made by the Borrower
under the Credit Agreement in respect of any Letter of Credit, when and as due,
including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrower to the Secured Parties under the
Credit Agreement and the other Loan Documents, (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Borrower to the Senior Lenders or relating to the Senior Loans under or pursuant
to the Credit Agreement and the other Loan Documents, (c) the due and punctual
payment and performance of all the covenants, agreements, obligations and
liabilities of each Loan Party under or pursuant to this Agreement and the other
Loan Documents and (d) the due and punctual payment and performance of all
obligations of any Loan Party under each Interest Rate Protection Agreement
entered into with any counterparty that was a Senior Lender or an Affiliate of a
Senior Lender at the time such Interest Rate Protection Agreement was entered
into (all the monetary and other obligations described in the preceding clauses
(a) through (d) being collectively called the "Obligations").
Accordingly, the Grantors and the Collateral Agent, on behalf of itself
and each Secured Party (and each of their respective successors or assigns),
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the context otherwise
requires, all capitalized terms used but not defined herein shall have the
meanings set forth in the Credit Agreement and all references to the Uniform
Commercial Code shall mean the Uniform Commercial Code in effect in the State of
New York as of the date hereof.
SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"Accounts" shall mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or not
it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including accounts receivable from Affiliates of the
Grantors.
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"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents, (c)
Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash accounts,
(g) Investment Property and (h) Proceeds.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an option
on a commodity futures contract, a commodity option or any other contract that,
in each case, is (a) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to the
federal commodities laws or (b) traded on a foreign commodity board of trade,
exchange or market, and is carried on the books of a Commodity Intermediary for
a Commodity Customer.
"Commodity Customer" shall mean a person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a person who is registered as a
futures commission merchant under the federal commodities laws or (b) a person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Copyright License" shall mean any written agreement, now or hereafter
in effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
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"Documents" shall mean all instruments, files, records, ledger sheets
and documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such person is the
Entitlement Holder.
"Equipment" shall mean all equipment, furniture and furnishings, and
all tangible personal property similar to any of the foregoing, including tools,
parts and supplies of every kind and description, and all improvements,
accessions or appurtenances thereto, that are now or hereafter owned by any
Grantor. The term Equipment shall include Fixtures.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a
person or a share, participation or other interest in a person or in property or
an enterprise of a person that is, or is of a type, dealt with in or traded on
financial markets, or that is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another person in a Securities Account if the
Securities Intermediary has expressly agreed with the other person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
"Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles" shall mean all choses in action and causes of
action and all other assignable intangible personal property of any Grantor of
every kind and nature (other than Accounts Receivable) now owned or hereafter
acquired by any Grantor, including all rights and interests in partnerships,
limited partnerships, limited liability companies and other unincorporated
entities, corporate or other business records, indemnification claims, contract
rights (including rights under leases, whether entered into as lessor or lessee,
Interest Rate Protection Agreements and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the
Accounts Receivable.
"Intellectual Property" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter acquired
by any Grantor, including inventions, designs, Patents, Copyrights, Licenses,
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Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"Inventory" shall mean all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service, or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing supplies
and spare parts, and all such goods that have been returned to or repossessed by
or on behalf of any Grantor.
"Investment Property" shall mean Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule III (other than those license agreements in
existence on the date hereof and listed on Schedule Ill and those license
agreements entered into after the date hereof, which by their terms prohibit
assignment or a grant of a security interest by such Grantor as licensee
thereunder).
"Obligations" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean of the following now owned or hereafter acquired
by any Grantor: (a) all letters patent of the United States or any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or any other country, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country, including
those listed on Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
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"Perfection Certificate" shall mean a certificate substantially in the
form of Annex 2 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by a Financial Officer and
the chief legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession of
any Collateral and any payment received from any insurer or other person or
entity as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property that constitutes
Collateral, and shall include (a) all cash and negotiable instruments received
by or held on behalf of the Collateral Agent, (b) any claim of any Grantor
against any third party for (and the right to xxx and recover for and the rights
to damages or profits due or accrued arising out of or in connection with) (i)
past, present or future infringement of any Patent now or hereafter owned by any
Grantor, or licensed under a Patent License, (ii) past, present or future
infringement or dilution of any Trademark now or hereafter owned by any Grantor
or licensed under a Trademark License or injury to the goodwill associated with
or symbolized by any Trademark now or hereafter owned by any Grantor, (iii)
past, present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or licensed
under a Copyright License and (c) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Secured Parties" shall mean (a) the Senior Lenders, (b) the
Administrative Agent, (c) the Collateral Agent, (d) the Issuing Banks, (e) each
counterparty to an Interest Rate Protection Agreement entered into with the
Borrower if such counterparty was a Senior Lender or an Affiliate of a Senior
Lender at the time the Interest Rate Protection Agreement was entered into, (f)
the beneficiaries of each indemnification obligation undertaken by any Grantor
under any Loan Document in respect of any of the foregoing Persons or their
Related Parties, in their capacities as such, and (g) the successors and assigns
of each of the foregoing.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer that (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a Financial Asset
is or may be credited in accordance with an agreement under which the person
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maintaining the account undertakes to treat the person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property interests of
an Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Securities Intermediary" shall mean (a) a clearing corporation or (b)
a person, including a bank or broker, that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Trademark License" shall mean any written agreement, now or hereafter
in effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office,
any State of the United States or any similar offices in any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule V, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
SECTION 1.03. Rules of Interpretation. The rules of interpretation specified in
Section 1.03 of the Credit Agreement shall be applicable to this Agreement.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment or performance, as
the case may be, in full of the Obligations, each Grantor hereby bargains,
sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and
transfers to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a
security interest in, all of such Grantor's right, title and interest in, to and
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under the Collateral (the "Security Interest"). Without limiting the foregoing,
the Collateral Agent is hereby authorized to file one or more financing
statements (including fixture filings), continuation statements, filings with
the United States Patent and Trademark Office or United States Copyright Office
(or any successor office or any similar office in any other country) or other
documents for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the signature
of any Grantor, and naming any Grantor or the Grantors as debtors and the
Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security Interest is granted as
security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid rights in and
title to the Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval that has been obtained.
Anything in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign, and the term "Collateral"
shall not include, any interest in Roosevelt Associates General Partnership,
Landfill Power LLC, Kent-Meridian Disposal Company Joint Venture, Foothills
Sanitary Landfill, Inc. and BFGSI Series 1997-A Trust if (i) such assignment,
without the consent of a third party, would constitute a breach or default
under, or cause or permit the acceleration of the obligations under, any
applicable agreement or contract and (ii) AWNA has been unable, after using
commercially reasonable efforts, to obtain such consent within 60 days after the
Effective Date.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly prepared
completed and executed and the information set forth therein is correct and
complete. Fully executed Uniform Commercial Code financing statements (including
fixture filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Collateral have been delivered to
the Collateral Agent for filing in each governmental, municipal or other office
specified in Schedule 6 to the Perfection Certificate, which are all the
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filings, recordings and registrations (other than filings required to be made in
the United States Patent and Trademark Office and the United States Copyright
Office in order to perfect the Security Interest in Collateral consisting of
United States Patents, Trademarks and Copyrights) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the ratable
benefit of the Secured Parties) in respect of all Collateral in which the
Security Interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, ~efilling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
(b) Each Grantor represents and warrants that fully executed security
agreements in the form hereof and containing a description of all Collateral, if
any, consisting of Intellectual Property with respect to United States Patents
and United States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights
have been delivered to the Collateral Agent for recording by the United States
Patent and Trademark Office and the United States Copyright Office pursuant to
35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and the regulations
thereunder, as applicable, and otherwise as may be required pursuant to the laws
of any other necessary jurisdiction, to protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral,
if any, consisting of Patents, Trademarks and Copyrights in which a security
interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof) and its territories and
possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Collateral consisting of Patents,
Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest constitutes
(a) a legal and valid security interest in all the Collateral securing the
payment and performance of the Obligations, (b) subject to the filings described
in Section 3.02 above, a perfected security interest in all Collateral in which
a security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (c) a security
interest that shall be perfected in all Collateral, if any, in which a security
interest may be perfected upon the receipt and recording of this Agreement with
the United States Patent and Trademark Office and the United States Copyright
Office, as applicable. The Security Interest is and shall be prior to any other
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Lien on any of the Collateral, other than Liens expressly permitted to be prior
to the Security Interest pursuant to Section 6.02A of the Credit Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the Grantors
free and clear of any Lien, except for Liens expressly permitted pursuant to
Section 6.02A of the Credit Agreement. The Grantor has not filed or consented to
the filing of (a) any financing statement or analogous document under the
Uniform Commercial Code or any other applicable laws covering any Collateral,
(b) any assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering any Collateral with the United States
Patent and Trademark Office or the United States Copyright Office or (c) any
assignment in which any Grantor assigns any Collateral or any security agreement
or similar instrument covering any Collateral with any foreign governmental,
municipal or other office, which financing statement or analogous document,
assignment, security agreement or similar instrument is still in effect, except,
in each case, for Liens expressly permitted pursuant to Section 6.02A of the
Credit Agreement.
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records; Place of
Business. (a) Each Grantor agrees promptly to notify the Collateral Agent in
writing, or to ensure that such notice is given in the first report thereafter
pursuant to Section 5.15A of the Credit Agreement, of any change (i) in its
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of its
chief executive office, its principal place of business, any office in which it
maintains books or records relating to Collateral owned by it or any office or
facility at which Collateral owned by it is located (including the establishment
of any such new office or facility), (iii) in its identity or corporate
structure or (iv) in its Federal Taxpayer Identification Number. Each Grantor
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected first priority
security interest in all the Collateral. Each Grantor agrees promptly to notify
the Collateral Agent if any material portion of the Collateral owned or held by
such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense, such complete
and accurate records with respect to the Collateral owned by it as is consistent
with its current practices and in accordance with such prudent and standard
practices used in industries that are the same as or similar to those in which
such Grantor is engaged, but in any event to include complete accounting records
indicating all payments and proceeds received with respect to any part of the
Collateral, and, at such time or times as the Collateral Agent may reasonably
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request, promptly to prepare and deliver to the Collateral Agent a duly
certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all
Collateral.
SECTION 4.02. Periodic Certification. Each year, at the time of delivery of
annual financial statements with respect to the preceding fiscal year pursuant
to clause (a) of Section 5.04A of the Credit Agreement, Allied Waste and the
Borrower shall deliver to the Collateral Agent a certificate executed by a
Financial Officer of the Borrower and Allied Waste setting forth the information
required pursuant to Sections 1, 2, 8, 9, 10 and 11 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of such certificate or the date of the most recent certificate
delivered pursuant to this Section 4.02 or the date of the most recent report
delivered pursuant to Section 5.15A of the Credit Agreement. Each certificate
delivered pursuant to this Section 4.02 shall identify in the format of Schedule
II, III, IV or V, as applicable, all Intellectual Property of any Grantor in
existence on the date thereof and not then listed on such Schedules or
previously so identified to the Collateral Agent.
SECTION 4.03. Protection of Security. Each Grantor shall, at its own cost and
expense, take any and all actions necessary to defend title to the Collateral
against all persons and to defend the Security Interest of the Collateral Agent
in the Collateral and the priority thereof against any Lien not expressly
permitted pursuant to Section 6.02A of the Credit Agreement.
SECTION 4.04. Further Assurances. Each Grantor agrees, at its own expense, to
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent may
from time to time request to better assure, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the filing
of any financing statements (including fixture filings) or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note
or other instrument, such note or instrument shall be immediately pledged and
delivered to the Collateral Agent, duly endorsed in a manner satisfactory to the
Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to
supplement this Agreement by supplementing Schedule II, III, IV or V hereto or
adding additional schedules hereto to specifically identify any asset or item
that may constitute Copyrights, Licenses, Patents or Trademarks; provided,
however, that any Grantor shall have the right, exercisable within 10 days after
it has been notified by the Collateral Agent of the specific identification of
such Collateral, to advise the Collateral Agent in writing of any inaccuracy of
the representations and warranties made by such Grantor hereunder with respect
to such Collateral. Each Grantor agrees that it will use its best efforts to
take such action as shall be necessary in order that all representations and
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warranties hereunder shall be true and correct with respect to such Collateral
within 30 days after the date it has been notified by the Collateral Agent of
the specific identification of such Collateral.
SECTION 4.05. Inspection and Verification. The Collateral Agent and such persons
as the Collateral Agent may reasonably designate shall have the right, at the
Grantors' own cost and expense, to inspect the Collateral, all records related
thereto (and to make extracts and copies from such records) and the premises
upon which any of the Collateral is located, to discuss the Grantors' affairs
with the officers of the Grantors and their independent accountants and to
verify under reasonable procedures, in accordance with Section 5.07A of the
Credit Agreement, the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to, the Collateral, including, in the
case of Accounts or Collateral in the possession of any third person, by
contacting Account Debtors or the third person possessing such Collateral for
the purpose of making such a verification; provided, that so long as no Default
has occurred and is continuing, such inspections and discussions shall be at
reasonable times and with reasonable notice and shall occur no more than three
times per year. The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured Party
(it being understood that any such information shall be deemed to be
"Information" subject to the provisions of Section 9.12 of the Credit
Agreement).
SECTION 4.06. Taxes; Encumbrances. At its option, the Collateral Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Collateral and not
permitted pursuant to Section 6.02A of the Credit Agreement, and may pay for the
maintenance and preservation of the Collateral to the extent any Grantor fails
to do so as required by the Credit Agreement or this Agreement, and each Grantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
payment made or any expense incurred by the Collateral Agent pursuant to the
foregoing authorization; provided, however, that nothing in this Section 4.06
shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.
SECTION 4.07. Assignment of Security Interest. If at any time any Grantor shall
take a security interest in any property of an Account Debtor or any other
person to secure payment and performance of an Account, such Grantor shall
promptly assign such security interest to the Collateral Agent. Such assignment
need not be filed of public record unless necessary to continue the perfected
status of the security interest against creditors of and transferees from the
Account Debtor or other person granting the security interest.
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SECTION 4.08. Continuing Obligations of the Grantors. Each Grantor shall remain
liable to observe and perform all the conditions and obligations to be observed
and performed by it under each contract, agreement or instrument relating to the
Collateral, all in accordance with the terms and conditions thereof, and each
Grantor jointly and severally agrees to indemnify and hold harmless the
Collateral Agent and the Secured Parties from and against any and all liability
for such performance.
SECTION 4.09. Use and Disposition of Collateral. None of the Grantors shall make
or permit to be made an assignment, pledge or hypothecation of the Collateral or
shall grant any other Lien in respect of the Collateral, except as expressly
permitted by Section 6.02A of the Credit Agreement. None of the Grantors shall
make or permit to be made any transfer of the Collateral and each Grantor shall
remain at all times in possession of the Collateral owned by it, except that (a)
Inventory may be sold in the ordinary course of business and (b) unless and
until the Collateral Agent shall notify the Grantors that a Senior Event of
Default shall have occurred and be continuing and that during the continuance
thereof the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Collateral (which notice may be given by telephone if
promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document. Without limiting the
generality of the foregoing, each Grantor agrees that it shall not permit any
Inventory to be in the possession or control of any warehouseman, bailee, agent
or processor at any time unless such warehouseman, bailee, agent or processor
shall have been notified of the Security Interest and shall have agreed in
writing to hold the Inventory subject to the Security Interest and the
instructions of the Collateral Agent and to waive and release any Lien held by
it with respect to such Inventory, whether arising by operation of law or
otherwise.
SECTION 4.10. Limitation on Modification of Accounts. None of the Grantors will,
without the Collateral Agent's prior written consent, grant any extension of the
time of payment of any of the Accounts Receivable, compromise, compound or
settle the same for less than the full amount thereof, release, wholly or
partly, any person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar to
those in which such Grantor is engaged.
SECTION 4.11. Insurance. The Grantors, at their own expense, shall maintain or
cause to be maintained insurance covering physical loss or damage to the
Inventory and Equipment in accordance with Section 5.02A of the Credit
Agreement. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact)
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for the purpose, during the continuance of a Senior Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto (or shall fail to be self-insured as permitted by the Credit
Agreement), the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Senior Event of
Default, in its sole discretion, obtain and maintain such policies of insurance
and pay such premium and take any other actions with respect thereto as the
Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in
connection with this Section 4.11, including reasonable attorneys' fees, court
costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Grantors to the Collateral Agent and shall be additional
Obligations secured hereby.
SECTION 4.12. Legend. Each Grantor shall legend, in form and manner satisfactory
to the Collateral Agent, its Accounts Receivable and its books, records and
documents evidencing or pertaining thereto with an appropriate reference to the
fact that such Accounts Receivable have been assigned to the Collateral Agent
for the benefit of the Secured Parties and that the Collateral Agent has a
security interest therein.
SECTION 4.13. Covenants Regarding Patent, Trademark and Copyright Collateral.
(a) Each Grantor agrees that it will not, nor will it permit any of its
licensees to, do any act, or omit to do any act, whereby any Patent that is
material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue to xxxx any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its sublicensees)
will, for each Trademark material to the conduct of such Grantor's business, (i)
maintain such Trademark in full force free from any claim of abandonment or
invalidity for non-use, (ii) maintain the quality of products and services
offered under such Trademark, (iii) display such Trademark with notice of
Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
(c) Each Grantor (either itself or through licensees) will, for each work
covered by a material Copyright, continue to publish, reproduce, display, adopt
and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws.
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(d) Each Grantor shall notify the Collateral Agent immediately if it knows or
has reason to know that any Patent, Trademark or Copyright material to the
conduct of its business may become abandoned, lost or dedicated to the public,
or of any adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United States
Patent and Trademark Office, United States Copyright Office or any court or
similar office of any country) regarding such Grantor's ownership of any Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain
the same.
(e) In no event shall any Grantor, either itself or through any agent, employee,
licensee or designee, file an application for any Patent, Trademark or Copyright
(or for the registration of any Trademark or Copyright) with the United States
Patent and Trademark Office, United States Copyright Office or any office or
agency in any political subdivision of the United States or in any other country
or any political subdivision thereof, unless it promptly informs the Collateral
Agent, and, upon request of the Collateral Agent, executes and delivers any and
all agreements, instruments, documents and papers as the Collateral Agent may
request to evidence the Collateral Agent's security interest in such Patent,
Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent as
its attorney-in-fact to execute and file such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power, being coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, to maintain and pursue each material application relating
to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant
or registration) and to maintain each issued Patent and each registration of the
Trademarks and Copyrights that is material to the conduct of any Grantor's
business, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any Collateral
consisting of a Patent, Trademark or Copyright material to the conduct of any
Grantor's business has been or is about to be infringed, misappropriated or
diluted by a third party, such Grantor promptly shall notify the Collateral
Agent and shall, if consistent with good business judgment, promptly xxx for
infringement, misappropriation or dilution and to recover any and all damages
for such infringement, misappropriation or dilution, and take such other actions
as are appropriate under the circumstances to protect such Collateral.
(h) Upon and during the continuance of a Senior Event of Default, each Grantor
shall use its best efforts to obtain all requisite consents or approvals by the
licensor of each Copyright License, Patent License or Trademark License to
effect the assignment of all of such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.
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ARTICLE V
Remedies
SECTION 5.01. Remedies upon Default. Upon the occurrence and during the
continuance of a Senior Event of Default, each Grantor agrees to deliver each
item of Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any such Collateral throughout the world on such terms
and conditions and in such manner as the Collateral Agent shall determine (other
than in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained), and (b) with or without legal process and with or
without prior notice or demand for performance, to take possession of the
Collateral and without liability for trespass to enter any premises where the
Collateral may be located for the purpose of taking possession of or removing
the Collateral and, generally, to exercise any and all rights afforded to a
secured party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal
that such Grantor now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.
The Collateral Agent shall give the Grantors 10 days' written notice
(which each Grantor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code as in effect in the State of New York or
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its equivalent in other jurisdictions) of the Collateral Agent's intention to
make any xxxx of Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker's
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Collateral Agent may fix and state in the notice (if any)
of such sale. At any such sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as the Collateral
Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to any Grantor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Senior Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver.
SECTION 5.02. Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of the Collateral, as well as any Collateral
consisting of cash, as follows:
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FIRST, to the payment of all costs and expenses incurred by
the Administrative Agent or the Collateral Agent (in its capacity as
such hereunder or under any other Loan Document) in connection with
such collection or sale or otherwise in connection with this Agreement
or any of the Obligations, including all court costs and the fees and
expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any other Loan Document
on behalf of any Grantor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under
any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 5.03. Grant of License to Use Intellectual Property. For the purpose of
enabling the Collateral Agent to exercise rights and remedies under this Article
at such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to the Collateral Agent an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to the Grantors) to use, license or sub-license any of the
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent, upon the occurrence
and during the continuation of a Senior Event of Default; provided that any
license, sub-license or other transaction entered into by the Collateral Agent
in accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of a Senior Event of Default.
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ARTICLE VI
Miscellaneous
SECTION 6.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Guarantor shall be given to it at its address or telecopy
number set forth on Schedule I, with a copy to the Borrower. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 6.02. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest and all obligations of the Grantors hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement
SECTION 6.03. Survival of Agreement. All covenants, agreements, representations
and warranties made by any Grantor herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the Secured Parties
and shall survive the making by the Senior Lenders of the Senior Loans, and the
execution and delivery to the Senior Lenders of any notes evidencing such Senior
Loans, regardless of any investigation made by the Senior Lenders or on their
behalf, and shall continue in full force and effect until this Agreement shall
terminate.
SECTION 6.04. Binding Effect; Several Agreement. This Agreement shall become
effective as to any Grantor when a counterpart hereof executed on behalf of such
Grantor shall have been delivered to the Collateral Agent and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Grantor and the Collateral Agent and their
respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
19
expressly contemplated by this Agreement or the Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each Grantor and may
be amended, modified, supplemented, waived or released with respect to any
Grantor without the approval of any other Grantor and without affecting the
obligations of any other Grantor hereunder.
SECTION 6.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 6.06. Collateral Agent's Fees and Expenses; Indemnification. (a) Each
Grantor jointly and severally agrees to pay upon demand to the Collateral Agent
the amount of any and all reasonable expenses, including the reasonable fees,
disbursements and other charges of its counsel and of any experts or agents,
which the Collateral Agent may incur in connection with (i) the administration
of this Agreement (including the customary fees and charges of the Collateral
Agent for any audits conducted by it or on its behalf with respect to the
Accounts Receivable or Inventory), (ii) the custody or preservation of, or the
sale of, collection from or other realization upon any of the Collateral, (iii)
the exercise, enforcement or protection of any of the rights of the Collateral
Agent hereunder or (iv) the failure of any Grantor to perform or observe any of
the provisions hereof.
(b) Without limitation of its indemnification obligations under the other Loan
Documents, each Grantor jointly and severally agrees to indemnify the Collateral
Agent and the other Indemnitees that are Senior Lenders or Related Parties
thereof against, and hold each of them harmless from, any and all losses,
claims, damages, liabilities and related expenses, including reasonable fees,
disbursements and other charges of counsel, incurred by or asserted against any
of them arising out of, in any way connected with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating hereto or to the Collateral, whether or not
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 6.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Senior Loans, the invalidity or unenforceability of any term or provision of
20
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any Lender. All amounts due under this Section
6.06 shall be payable on written demand therefor.
SECTION 6.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.08. Waivers; Amendment. (a) No failure or delay of the Collateral
Agent in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent hereunder and of
the Collateral Agent, the Issuing Banks, the Administrative Agent and the Senior
Lenders under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or any other Loan Document or consent to any
departure by any Grantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Grantor in any case shall entitle such
Grantor or any other Grantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Grantor or Grantors with respect to which such
waiver, amendment or modification is to apply, subject to any consent required
in accordance with Section 9.02 of the Credit Agreement.
SECTION 6.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.09.
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SECTION 6.10. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 6.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract (subject to Section 6.04), and
shall become effective as provided in Section 6.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 6.12. Headings. Article and Section headings used herein are for the
purpose of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this
Agreement.
SECTION 6.13. Jurisdiction; Consent to Service of Process. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other mariner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent, the
Administrative Agent, the Issuing Banks or any Senior Lender may otherwise have
to bring any action or proceeding relating to this Agreement or the other Loan
Documents against any Grantor or its properties in the courts of any
jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New York
State or Federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
22
(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 6.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 6.14. Termination and Release. This Agreement and the Security Interest
shall terminate when all the Obligations have been indefeasibly paid in full,
the Senior Lenders have no further commitment to lend, the LC Exposure has been
reduced to zero and the Issuing Banks have no further commitment to issue
Letters of Credit under the Credit Agreement, at which time the Collateral Agent
shall execute and deliver to the Grantors, at the Grantors' expense, all Uniform
Commercial Code termination statements and similar documents which the Grantors
shall reasonably request to evidence such termination. Any execution and
delivery of termination statements or documents pursuant to this Section 6.14
shall be without recourse to or warranty by the Collateral Agent. A Subsidiary
Guarantor shall automatically be released from its obligations hereunder and the
Security Interest in the Collateral of such Subsidiary Guarantor shall be
automatically released in the event that all the capital stock of such
Subsidiary Guarantor shall be sold, transferred or otherwise disposed of to a
person that is not an Affiliate of the Borrower in accordance with the terms of
the Credit Agreement and the other Loan Documents; provided that, if required by
the terms of the Credit Agreement, the Required Senior Lenders, the Senior
Lenders or all the Lenders, as the case may be, shall have consented to such
sale, transfer or other disposition and the terms of such consent did not
provide otherwise. The Security Interest shall automatically terminate with
respect to Collateral sold, transferred or disposed of in accordance with this
Agreement and the Credit Agreement, and the Collateral Agent shall execute and
deliver to the Grantors, at the Grantors' expense, all Uniform Commercial Code
partial termination statements and similar documents which the Grantors shall
reasonably request to evidence such termination. Such termination statements
shall, upon the reasonable prior request of the Grantors, be delivered prior to,
and held in escrow pending, such sale, transfer or disposition.
SECTION 6.15. Additional Grantors. Upon execution and delivery by the Collateral
Agent and a Subsidiary of Allied Waste (other than any Subsidiary of BFI) of an
instrument in the form of Annex 3 hereto, such Subsidiary shall become a Grantor
hereunder with the same force and effect as if originally named as a Grantor
herein. The execution and delivery of any such instrument shall not require the
consent of any Grantor hereunder. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor as a party to this Agreement.
23
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ALLIED WASTE NORTH AMERICA, INC.,
by
-----------------------------------------
Name:
Title:
ALLIED WASTE INDUSTRIES, INC.,
by
-----------------------------------------
Name:
Title:
EACH OF THE SUBSIDIARY GUARANTORS
LISTED ON SCHEDULE I HERETO,
by
-----------------------------------------
Name:
Title: Authorized Officer
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
-----------------------------------------
Name:
Title: Authorized Officer
24
SCHEDULE I
SUBSIDIARY GUARANTORS
SCHEDULE II
COPYRIGHTS
None.
SCHEDULE III
LICENSES
None.
SCHEDULE IV
PATENTS
None.
SCHEDULE V
TRADEMARKS
None.
Annex 1 to the
Non-Shared Collateral Security Agreement
[Form Of]
PERFECTION CERTIFICATE
Reference is made to (a) the Credit Agreement dated as of July 21, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Allied Waste Industries, Inc. ("Allied Waste"), Allied Waste
North America, Inc. (the "Borrower"), the lenders from time to time party
thereto (the "Lenders"), and The Chase Manhattan Bank, as administrative agent
and collateral agent for the Lenders, (b) the Parent Guarantee Agreement dated
as of July 30, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Parent Guarantee Agreement"), between Allied Waste and the Collateral
Agent, (c) the Subsidiary Guarantee Agreement dated as of July 30, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Subsidiary
Guarantee Agreement"), among the Subsidiary Guarantors, certain other
Subsidiaries of Allied Waste and the Collateral Agent and (d) the Non-Shared
Collateral Security Agreement dated as of July 30, 1999 (the "Non-Shared
Collateral Security Agreement"), among the Borrower, Allied Waste, the
Subsidiaries of Allied Waste listed on Schedule I thereto (together with Allied
Waste and the Borrower, the "Grantors") and the Collateral Agent. Capitalized
terms used but not defined herein have the meanings assigned thereto in the
Non-Shared Collateral Security Agreement or the Credit Agreement, as applicable.
The undersigned, a Financial Officer and a Legal Officer, respectively,
of Allied Waste, hereby certify to the Collateral Agent and each other Secured
Party as follows:
1. Names. (a) The exact corporate name of each Grantor, as such name
appears in its respective certificate of incorporation, is as follows:
(b) Set forth below is each other corporate name each Grantor has had
in the past five years, together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor has changed
its identity or corporate structure in any way within the past five years.
Changes in identity or corporate structure would include mergers, consolidations
and acquisitions, as well as any change in the form, nature or jurisdiction of
corporate organization. If any such change has occurred, include in Schedule 1
the information required by Sections 1 and 2 of this certificate as to each
acquiree or constituent party to a merger or consolidation.
(d) The following is a list of all other names (including trade names
or similar appellations) used by each Grantor or any of its divisions or other
business units in connection with the conduct of its business or the ownership
of its properties at any time during the past five years:
(e) Set forth below is the Federal Taxpayer Identification Number of
each Grantor:
2. Current Locations. (a) The chief executive office of each Grantor
is located at the address set forth opposite its name below:
Grantor Mailing Address Country State
------- --------------- ------- -----
(b) Set forth below opposite the name of each Grantor are all
locations where such Grantor maintains any books or records relating to any
Accounts Receivable (with each location at which chattel paper, if any, is kept
being indicated by an "*"):
Grantor Mailing Address Country State
------- --------------- ------- -----
(c) Set forth below opposite the name of each Grantor are all the
locations where such Grantor maintains any Collateral not identified above:
Grantor Mailing Address Country State
------- --------------- ------- -----
(d) Set forth below opposite the name of each Grantor are all the
places of business of such Grantor not identified in paragraphs (a), (b) and (c)
above:
Grantor Mailing Address Country State
------- --------------- ------- -----
(e) Set forth below opposite the name of each Grantor are the names
and addresses of all Persons other than such Grantor that have possession of any
of the Collateral of such Grantor:
Grantor Mailing Address Country State
------- --------------- ------- -----
A1-2
3. Unusual Transactions. All Accounts Receivable have been originated
by the Grantors and all Inventory has been acquired by the Grantors in the
ordinary course of business.
4. File Search Reports. Attached hereto as Schedule 4(A) are true
copies of file search reports from the Uniform Commercial Code filing offices
where filings described in Section 3.23 of the Credit Agreement are to be made.
Attached hereto as Schedule 4(B) is a true copy of each financing statement or
other filing identified in such file search reports.
5. UCC Filings. Duly signed financing statements on Form UCC-l in
substantially the form of Schedule 5 hereto have been prepared for filing in the
Uniform Commercial Code filing office in each jurisdiction where a Grantor has
Collateral as identified in Section 2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule
setting forth, with respect to the filings described in Section 5 above, each
filing and the filing office in which such filing is to be made.
7. Filing Fees. All filing fees and taxes payable in connection with
the filings described in Section 5 above have been paid.
8. Stock Ownership. Attached hereto as Schedule 8 is a true and
correct list of all the duly authorized, issued and outstanding stock,
partnership interests, limited liability company interests or other equity
interests of the Borrower and each Subsidiary (other than a Subsidiary of BFI)
and the record and beneficial owners of such equity interests. Also set forth on
Schedule 8 is each equity Investment of Allied Waste and each Subsidiary (other
than BFI or a Subsidiary of BFI) that represents 50% or less of the equity of
the entity in which such investment was made.
9. Debt Instruments. Attached hereto as Schedule 9 is a true and
correct list of all promissory notes and other evidences of indebtedness held by
Allied Waste, the Borrower and each Grantor that are required to be pledged
under the Non-Shared Collateral Pledge Agreement, including all intercompany
notes between Allied Waste and each Grantor or between Grantors.
10. Advances. Attached hereto as Schedule 10 is (a) a true and correct
list of all advances made by Allied Waste to any Grantor or made by any Grantor
to Allied Waste or any other Grantor (other than those identified in Schedule
8), which advances will be on and after the date hereof evidenced by one or more
intercompany notes pledged to the Collateral Agent under the Non-Shared
Collateral Pledge Agreement, and (b) a true and correct list of all unpaid
intercompany transfers of goods sold and delivered by or to Allied Waste, the
Borrower or any Grantor.
A1-3
11. Intellectual Property. (a) Attached hereto in proper form for
filing with the United States Patent and Trademark Office is a schedule setting
forth all of each Grantor's Patents, Patent Licenses, Trademarks and Trademark
Licenses, including the name of the registered owner, the registration number
and the expiration date of each such Patent, Patent License, Trademark and
Trademark License.
(b) Attached hereto in proper form for filing with the United States
Copyright Office is a schedule setting forth all of each Grantor's Copyrights
and Copyright Licenses, including the name of the registered owner, the
registration number and the expiration date of each Copyright or Copyright
License owned by any Grantor.
IN WITNESS WHEREOF, the undersigned have duly executed this
certificate on this [ ] day of July, 1999.
ALLIED WASTE INDUSTRIES, INC.,
by
---------------------------------------
Name:
Title: [Financial Officer]
by
---------------------------------------
Name:
Title: [Legal Officer]
A1-4
Annex 2 to the
Non-Shared Collateral Security Agreement
SUPPLEMENT NO. __ dated as of , to the
Non-Shared Collateral Security Agreement dated as of
July 30, 1999, among Allied Waste North America,
Inc., a Delaware corporation (the "Borrower"), Allied
Waste Industries, Inc., a Delaware corporation
("Allied Waste"), each Subsidiary listed on Schedule
I thereto (each such Subsidiary individually a
"Subsidiary Guarantor" and collectively, the
"Subsidiary Guarantors"; the Subsidiary Guarantors,
Allied Waste and the Borrower are referred to
collectively herein as the "Grantors") and The Chase
Manhattan Bank ("Chase"), as collateral agent (in
such capacity, the "Collateral Agent") for the
Secured Parties (as defined therein).
A. Reference is made to (a) the Credit Agreement dated as of July 21,
1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, Allied Waste, the lenders from time to
time party thereto (the "Lenders"), and Chase, as administrative and collateral
agent for the Lenders, (b) the Parent Guarantee Agreement dated as of July 30,
1999 (as amended, supplemented or otherwise modified from time to time, the
"Parent Guarantee Agreement"), between Allied Waste and the Collateral Agent and
(c) the Subsidiary Guarantee Agreement dated as of July 30, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiary Guarantee
Agreement"), among the Subsidiary Guarantors, certain other Subsidiaries of
Allied Waste, and the Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Non-Shared Collateral
Security Agreement and the Credit Agreement.
C. The Grantors have entered into the Non-Shared Collateral Security
Agreement in order to induce the Senior Lenders to make Senior Loans and the
Issuing Banks to issue Letters of Credit Section 6.15 of Non-Shared Collateral
Security Agreement provides that additional Subsidiaries of the Borrower (other
than BFI and Subsidiaries of BFI) may become Grantors under the Non-Shared
Collateral Security Agreement by execution and delivery of an instrument in the
form of this Supplement. The undersigned Subsidiary (the "New Grantor") is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Grantor under the Non-Shared Collateral Security Agreement
in order to induce the Senior Lenders to make additional Senior Loans and the
Issuing Banks to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 6.15 of the Non-Shared Collateral
Security Agreement, the New Grantor by its signature below becomes a Grantor
under the Non-Shared Collateral Security Agreement with the same force and
effect as if originally named therein as a Grantor and the New Grantor hereby
(a) agrees to all the terms and provisions of the Non-Shared Collateral Security
Agreement applicable to it as a Grantor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof. In furtherance of
the foregoing, the New Grantor, as security for the payment and performance in
full of the Obligations (as defined in the Non-Shared Collateral Security
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, their successors and
assigns, a security interest in and lien on all of the New Grantor's right,
title and interest in and to the Collateral (as defined in the Non-Shared
Collateral Security Agreement) of the New Grantor. Each reference to a "Grantor"
in the Non-Shared Collateral Security Agreement shall be deemed to include the
New Grantor. The Non-Shared Collateral Security Agreement is hereby incorporated
herein by reference.
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Non-Shared
Collateral Security Agreement shall remain in full force and effect.
A2-2
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Non-Shared Collateral Security Agreement shall not in any way
be affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 6.01 of the Non-Shared Collateral Security
Agreement. All communications and notices hereunder to the New Grantor shall be
given to it at the address set forth under its signature below.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Non-Shared Collateral Security Agreement as of
the day and year first above written.
[Name Of New Grantor],
by
-----------------------------------------------
Name:
Title:
Address:
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
-----------------------------------------------
Name:
Title:
A2-3
SCHEDULE I
to Supplement No.___ to the
Non-Shared Collateral Security Agreement
LOCATION OF COLLATERAL
----------------------
Description Location
----------- --------
