Exhibit 10.2
GUARANTEE AND COLLATERAL AGREEMENT
dated and effective as of
July 30, 2004,
among
FC 2 CORP.,
FOUNDATION COAL CORPORATION,
S2 ACQUISITION CORP. (WHICH, ON THE
CLOSING DATE, SHALL BE MERGED WITH
AND INTO, FOUNDATION PA COAL COMPANY),
each Domestic Subsidiary of Holdings
identified herein,
and
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
TABLE OF CONTENTS
Page
ARTICLE I.
Definitions
SECTION 1.01. Credit Agreement........................................... 1
SECTION 1.02. Other Defined Terms........................................ 1
ARTICLE II.
Guarantee
SECTION 2.01. Guarantee.................................................. 5
SECTION 2.02. Guarantee of Payment....................................... 5
SECTION 2.03. No Limitations, etc........................................ 5
SECTION 2.04. Reinstatement.............................................. 6
SECTION 2.05. Agreement To Pay; Subrogation.............................. 7
SECTION 2.06. Information................................................ 7
SECTION 2.07. Maximum Liability.......................................... 7
ARTICLE III.
Pledge of Securities
SECTION 3.01. Pledge..................................................... 7
SECTION 3.02. Delivery of the Pledged Collateral......................... 8
SECTION 3.03. Representations, Warranties and Covenants.................. 9
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests.................................... 10
SECTION 3.05. Registration in Nominee Name; Denominations................ 10
SECTION 3.06. Voting Rights; Dividends and Interest, etc................. 11
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ARTICLE IV.
Security Interests in Personal Property
SECTION 4.01. Security Interest.......................................... 12
SECTION 4.02. Representations and Warranties............................. 14
SECTION 4.03. Covenants.................................................. 16
SECTION 4.04. Other Actions.............................................. 18
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright
Collateral............................................... 20
ARTICLE V.
Remedies
SECTION 5.01. Remedies Upon Default...................................... 21
SECTION 5.02. Application of Proceeds.................................... 23
SECTION 5.03. Grant of License To Use Intellectual Property.............. 23
SECTION 5.04. Securities Act, etc........................................ 24
SECTION 5.05. Registration, etc.......................................... 24
ARTICLE VI.
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and Subrogation.................................. 25
SECTION 6.02. Contribution and Subrogation............................... 25
SECTION 6.03. Subordination.............................................. 26
ARTICLE VII.
Miscellaneous
SECTION 7.01. Notices.................................................... 26
SECTION 7.02. Security Interest Absolute................................. 26
SECTION 7.03. Binding Effect; Several Agreement.......................... 27
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SECTION 7.04. Successors and Assigns..................................... 27
SECTION 7.05. Collateral Agent's Fees and Expenses; Indemnification...... 27
SECTION 7.06. Collateral Agent Appointed Attorney-in-Fact................ 28
SECTION 7.07. GOVERNING LAW.............................................. 28
SECTION 7.08. Waivers; Amendment......................................... 28
SECTION 7.09. WAIVER OF JURY TRIAL....................................... 29
SECTION 7.10. Severability............................................... 29
SECTION 7.11. Counterparts............................................... 29
SECTION 7.12. Headings................................................... 30
SECTION 7.13. Jurisdiction; Consent to Service of Process................ 30
SECTION 7.14. Termination or Release..................................... 30
SECTION 7.15. Additional Subsidiaries.................................... 31
SECTION 7.16. Right of Set-off........................................... 31
Schedules
---------
Schedule I Subsidiary Parties
Schedule II Capital Stock; Debt Securities
Schedule III Intellectual Property
Schedule IV Limited Liability Company Interests
Schedule V Commercial Tort Claims
Exhibits
--------
Exhibit I Form of Supplement to the Guarantee and Collateral Agreement
Exhibit II Form of Perfection Certificate
Exhibit III Form of Intercompany Note
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GUARANTEE AND COLLATERAL AGREEMENT dated and effective as of July 30, 2004
(this "Agreement"), among FC 2 CORP., a Delaware corporation ("Holdings"),
FOUNDATION COAL CORPORATION, a Delaware Corporation ("Acquisition Corp."), S2
ACQUISITION CORP., a Delaware Corporation (which, on the Closing Date, shall be
merged with and into, Foundation PA Coal Company, the "Borrower"), each Domestic
Subsidiary of Borrower identified herein (each, a "Subsidiary Party") and
CITICORP NORTH AMERICA, INC. ("CNAI"), as collateral agent (in such capacity,
the "Collateral Agent") for the Secured Parties (as defined below).
Reference is made to the Credit Agreement dated as of July 30, 2004 (as
amended, supplemented, waived or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, Acquisition Corp., the Borrower, the
lenders party thereto from time to time (the "Lenders"), CNAI as Administrative
Agent and as Collateral Agent for the Lenders, UBS AG, STAMFORD BRANCH, BEAR
XXXXXXX CORPORATE LENDING INC. and NATEXIS BANQUES POPULAIRES, each a
Co-Documentation Agent, CITIGROUP GLOBAL MARKETS, INC. ("CGMI") and CREDIT
SUISSE FIRST BOSTON ("CSFB") as Co-Syndication Agents and CGMI and CSFB, as
Joint Lead Arrangers and Joint Book Managers.
The Lenders have agreed to extend credit to the Borrower subject to the
terms and conditions set forth in the Credit Agreement. The obligations of the
Lenders to extend such credit are conditioned upon, among other things, the
execution and delivery of this Agreement. Holdings and the Subsidiary Parties
are affiliates of the Borrower, will derive substantial benefits from the
extension of credit to the Borrower pursuant to the Credit Agreement and are
willing to execute and deliver this Agreement in order to induce the Lenders to
extend such credit. Accordingly, the parties hereto agree as follows:
ARTICLE I.
Definitions
SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this
Agreement and not otherwise defined herein have the respective meanings assigned
thereto in the Credit Agreement. All terms defined in the New York UCC (as
defined herein) and not defined in this Agreement have the meanings specified
therein. The term "instrument" shall have the meaning specified in Article 9 of
the New York UCC.
(b) The rules of construction specified in Section 1.02 of the Credit
Agreement also apply to this Agreement.
SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"Account Debtor" means any person who is or who may become obligated to any
Guarantor under, with respect to or on account of an Account.
"Article 9 Collateral" has the meaning assigned to such term in Section
4.01.
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"Collateral" means Article 9 Collateral and Pledged Collateral.
"Control Agreement" means a securities account control agreement or
commodity account control agreement, as applicable, in form and substance
reasonably satisfactory to the Collateral Agent.
"Copyright License" means any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Guarantor or that any Guarantor otherwise has the right
to license, or granting any right to any Guarantor under any Copyright now or
hereafter owned by any third party, and all rights of any Guarantor under any
such agreement.
"Copyrights" means all of the following now owned or hereafter acquired by
any Guarantor: (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, supplemental registrations and pending applications for
registration in the United States Copyright Office, including those listed on
Schedule III.
"Credit Agreement" has the meaning assigned to such term in the preliminary
statement of this Agreement.
"Federal Securities Laws" has the meaning assigned to such term in Section
5.04.
"General Intangibles" means all "General Intangibles" as defined in the New
York UCC, including all choses in action and causes of action and all other
intangible personal property of any Guarantor of every kind and nature (other
than Accounts) now owned or hereafter acquired by any Guarantor, including
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap
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
Guarantor to secure payment by an Account Debtor of any of the Accounts.
"Guarantors" means Holdings, Acquisition Corp., the Borrower, and the
Subsidiary Parties.
"Intellectual Property" means all intellectual and similar property of
every kind and nature now owned or hereafter acquired by any Guarantor,
including inventions, designs, Patents, Copyrights, Trademarks, Patent Licenses,
Copyright Licenses, Trademark Licenses, trade secrets, domain names,
confidential or proprietary technical and business information, know-how,
show-how or other data or information and all related documentation.
"Intercompany Note" shall mean a promissory note substantially in the form
of Exhibit III.
"Loan Document Obligations" means (a) the due and punctual payment by the
Borrower of (i) the unpaid principal of and interest (including interest
accruing during the pendency
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of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans made
to the Borrower, 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 (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) and obligations
to provide cash collateral and (iii) all other monetary obligations of the
Borrower to any of the Secured Parties under the Credit Agreement and each of
the other Loan Documents, including obligations to pay fees, expense and
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including interest incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), (b)
the due and punctual performance of all other obligations of the Borrower under
or pursuant to the Credit Agreement and each of the other Loan Documents (other
than the Obligations referred to in clause (b) of the definition of
"Obligations") (including interest incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) and (c) the due and punctual
payment and performance of all the obligations of each other Loan Party under or
pursuant to this Agreement and each of the other Loan Documents.
"New York UCC" means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations" means (a) the Loan Document Obligations and (b) the due and
punctual payment and performance of all obligations of each Loan Party under
each Swap Agreement (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) that (i) is in effect on the
Closing Date with a counterparty that is a Lender or an Affiliate of a Lender as
of the Closing Date or (ii) is entered into after the Closing Date with any
counterparty that is a Lender or an Affiliate of a Lender at the time such Swap
Agreement is entered into and (c) the due and punctual payment and performance
of all obligations of Borrower and any of its subsidiaries in respect of
overdrafts and related liabilities owed to a Lender or any of its Affiliates and
arising from cash management services (including treasury, depository,
overdraft, credit or debit card, electronic funds transfer and other cash
management arrangements) (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding).
"Patent License" means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention covered
by a Patent, now or hereafter owned by any Guarantor or that any Guarantor
otherwise has the right to license or granting to any Guarantor any right to
make, use or sell any invention covered by a Patent, now or hereafter owned by
any third party.
"Patents" means all of the following now owned or hereafter acquired by any
Guarantor: (a) all letters patent of the United States or the equivalent thereof
in any other country, and all applications for letters patent of the United
States or the equivalent thereof in any
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other country, including those listed on Schedule III, and (b) all reissues,
continuations, divisions, continuations-in-part 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.
"Perfection Certificate" means a certificate substantially in the form of
Exhibit II, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Financial Officer of the Borrower
and the General Counsel of the Borrower.
"Pledged Collateral" has the meaning assigned to such term in Section 3.01.
"Pledged Debt Securities" has the meaning assigned to such term in Section
3.01.
"Pledged Securities" means any promissory notes, stock certificates or
other certificated securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.
"Pledged Stock" has the meaning assigned to such term in Section 3.01.
"Pledgor" shall mean each Guarantor.
"Secured Parties" means (a) the Lenders (and any Affiliate of a Lender to
which any obligation referred to in clause (c) of the definition of the term
"Obligations" is owed), (b) the Administrative Agent, (c) the Collateral Agent
(d) each Issuing Bank, (e) each counterparty to any Swap Agreement entered into
with a Loan Party the obligations under which constitute Obligations, (f) the
beneficiaries of each indemnification obligation undertaken by any Loan Party
under any Loan Document and (g) the successors and permitted assigns of each of
the foregoing.
"Security Interest" has the meaning assigned to such term in Section 4.01.
"Subsidiary Party" has the meaning assigned to such term in the preliminary
statement of this Agreement.
"Trademark License" means 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 Guarantor or that any Guarantor otherwise has the right
to license, or granting to any Guarantor any right to use any Trademark now or
hereafter owned by any third party.
"Trademarks" means all of the following now owned or hereafter acquired by
any Guarantor: (a) all trademarks, service marks, corporate names, company
names, business names, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations thereof (if any), and all registration
and recording applications filed in connection therewith in the United States
Patent and Trademark Office or any similar offices in any State of the United
States or any other country or any political subdivision thereof, and all
renewals thereof, including those listed on Schedule III and (b) all goodwill
associated therewith or symbolized thereby.
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ARTICLE II.
Guarantee
SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Obligations. Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligation. Each Guarantor waives presentment to, demand of payment from and
protest to the Borrower or any other Loan Party of any of the Obligations, and
also waives notice of acceptance of its guarantee and notice of protest for
nonpayment.
SECTION 2.02. Guarantee of Payment. Each Guarantor further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the payment
of the Obligations or to any balance of any deposit account or credit on the
books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other person.
SECTION 2.03. No Limitations, etc. (a) Except for termination of a
Guarantor's obligations hereunder as expressly provided for in Section 7.14, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by:
(i) the failure of the Administrative Agent, the Collateral Agent or
any other Secured Party to assert any claim or demand or to exercise or
enforce any right or remedy under the provisions of any Loan Document or
otherwise;
(ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document or any
other agreement, including with respect to any other Guarantor under this
Agreement;
(iii) the failure to perfect any security interest in, or the
exchange, substitution, release or any impairment of, any security held by
the Collateral Agent or any other Secured Party for the Obligations;
(iv) any default, failure or delay, willful or otherwise, in the
performance of the Obligations;
(v) any other act or omission that may or might in any manner or to
any extent vary the risk of any Guarantor or otherwise operate as a
discharge of any Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations),
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(vi) any illegality, lack of validity or enforceability of any
Obligation,
(vii) any change in the corporate existence, structure or ownership of
the Borrower, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Borrower or its assets or any resulting
release or discharge of any Obligation,
(viii) the existence of any claim, set-off or other rights that the
Guarantor may have at any time against the Borrower, the Collateral Agent,
or any other corporation or person, whether in connection herewith or any
unrelated transactions, provided that nothing herein will prevent the
assertion of any such claim by separate suit or compulsory counterclaim,
(ix) and any other circumstance (including without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Collateral Agent that might otherwise constitute a
defense to, or a legal or equitable discharge of, the Borrower or the
Guarantor or any other guarantor or surety.
Each Guarantor expressly authorizes the Secured Parties to take and hold
security for the payment and performance of the Obligations, to exchange, waive
or release any or all such security (with or without consideration), to enforce
or apply such security and direct the order and manner of any sale thereof in
their sole discretion or to release or substitute any one or more other
guarantors or obligors upon or in respect of the Obligations, all without
affecting the obligations of any Guarantor hereunder.
(b) To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of the Borrower
or any other Loan Party or the unenforceability of the Obligations or any
part thereof from any cause, or the cessation from any cause of the
liability of the Borrower or any other Loan Party, other than the
indefeasible payment in full in cash of all the Obligations. The Collateral
Agent and the other Secured Parties may, at their election, foreclose on
any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any
other accommodation with the Borrower or any other Loan Party or exercise
any other right or remedy available to them against the Borrower or any
other Loan Party, without affecting or impairing in any way the liability
of any Guarantor hereunder except to the extent the Obligations have been
fully and indefeasibly paid in full in cash. To the fullest extent
permitted by applicable law, each Guarantor waives any defense arising out
of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against the Borrower
or any other Loan Party, as the case may be, or any security.
SECTION 2.04. Reinstatement. Each Guarantor agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by the Administrative Agent or any other Secured
Party upon the bankruptcy or reorganization of the Borrower, any other Loan
Party or otherwise.
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SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
for distribution to the applicable Secured Parties in cash the amount of such
unpaid Obligation. Upon payment by any Guarantor of any sums to the Collateral
Agent as provided above, all rights of such Guarantor against the Borrower, or
other Loan Party or any other Guarantor arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subject to Article VI.
SECTION 2.06. Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition and assets of the
Borrower and each other Loan Party, and of all other circumstances bearing upon
the risk of nonpayment of the Obligations and the nature, scope and extent of
the risks that such Guarantor assumes and incurs hereunder, and agrees that none
of the Collateral Agent or the other Secured Parties will have any duty to
advise such Guarantor of information known to it or any of them regarding such
circumstances or risks.
SECTION 2.07. Maximum Liability. Anything herein or in any other Loan
Document to the contrary notwithstanding, the maximum liability of each
Guarantor (other than Holdings and the Borrower) hereunder and under the other
Loan Documents shall in no event exceed the amount which can be guaranteed by
such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 6.02).
ARTICLE III.
Pledge of Securities
SECTION 3.01. Pledge. As security for the payment or performance, as the
case may be, in full of the Obligations, each Pledgor hereby assigns and pledges
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 Pledgor's right, title and interest in, to and under (a) the
Equity Interests owned by it as of the Closing Date (which shall be listed on
Schedule II) and any other Equity Interests obtained in the future by such
Pledgor and any certificates representing all such Equity Interests (the
"Pledged Stock"); provided that the Pledged Stock shall not include (i) more
than 65% of the issued and outstanding voting Equity Interests of any Foreign
Subsidiary, (ii) to the extent applicable law requires that a Subsidiary of such
Pledgor issue directors' qualifying shares, such shares or nominee or other
similar shares, (iii) any Equity Interests with respect to which the Collateral
and Guarantee Requirement or the other paragraphs of Section 5.10 of the Credit
Agreement need not be satisfied by reason of Section 5.10(f) of the Credit
Agreement, (iv) any Equity Interests of a Subsidiary to the extent that, as of
the Closing Date, and for so long as, such a pledge of such Equity Interests
would violate a contractual obligation binding on such Equity Interests, (v) any
Equity Interests of a Subsidiary of a Guarantor acquired after
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the Closing Date if, and to the extent that, and for so long as, (A) a pledge of
such Equity Interests would violate applicable law or any contractual obligation
binding upon such Subsidiary and (B) such law or obligation existed at the time
of the acquisition thereof and was not created or made binding upon such
Subsidiary in contemplation of or in connection with the acquisition of such
Subsidiary (provided that the foregoing clause (B) shall not apply in the case
of a joint venture, including a joint venture that is a Subsidiary) or (vi) any
Equity Interests of a person that is not directly or indirectly a Subsidiary;
(b)(i) the debt securities held by such Pledgor as of the Closing Date (which
shall be listed opposite the name of such Pledgor on Schedule II), (ii) any debt
securities in the future issued to such Pledgor and (iii) the promissory notes
and any other instruments, if any, evidencing such debt securities (the "Pledged
Debt Securities"); (c) subject to Section 3.06, all payments of principal or
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of, and all other proceeds received in respect of, the
securities referred to in clauses (a) and (b) above; (d) subject to Section
3.06, all rights and privileges of such Pledgor with respect to the securities
and other property referred to in clauses (a), (b) and (c) above; and (e) all
proceeds of any of the foregoing (the items referred to in clauses (a) through
(e) above being collectively referred to as the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Pledgor agrees
promptly to deliver or cause to be delivered to the Collateral Agent, for the
ratable benefit of the Secured Parties, any and all Pledged Stock and any and
all Pledged Debt Securities to the extent such Pledged Securities, in the case
of promissory notes or other instruments evidencing Indebtedness, are required
to be delivered pursuant to paragraph (b) of this Section 3.02.
(b) Each Pledgor will cause any Indebtedness for borrowed money having
an aggregate principal amount in excess of $10,000,000 (other than
intercompany current liabilities incurred in the ordinary course of
business in connection with the cash management operations of Holdings, the
Borrower and the Subsidiaries) owed to such Pledgor by any person to be
evidenced by a duly executed promissory note that is pledged and delivered
to the Collateral Agent, including the Intercompany Note, for the ratable
benefit of the Secured Parties, pursuant to the terms hereof. To the extent
any such promissory note is a demand note, each Pledgor party thereto
agrees, if requested by the Collateral Agent, to immediately demand payment
thereunder upon an Event of Default specified under Sections 7.01(b), (c),
(f), (h) or (i) of the Credit Agreement.
(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities
required to be delivered pursuant to the foregoing paragraphs (a) and (b)
of this Section 3.02 shall be accompanied by stock powers or note powers,
as applicable, duly executed in blank or other instruments of transfer
reasonably satisfactory to the Collateral Agent and by such other
instruments and documents as the Collateral Agent may reasonably request
and (ii) all other property composing part of the Pledged Collateral
delivered pursuant to the terms of this Agreement shall be accompanied to
the extent
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necessary to perfect the security interest in or allow realization on the
Pledged Collateral by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents (including
issuer acknowledgments in respect of uncertificated securities) as the
Collateral Agent may reasonably request. Each delivery of Pledged
Securities shall be accompanied by a schedule describing the securities,
which schedule shall be attached hereto as Schedule II and made a part
hereof; provided that failure to attach any such schedule hereto shall not
affect the validity of such pledge of such Pledged Securities. Each
schedule so delivered shall supplement any prior schedules so delivered.
SECTION 3.03. Representations, Warranties and Covenants. The Pledgors,
jointly and severally, represent, warrant and covenant to and with the
Collateral Agent, for the ratable benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the issued and
outstanding shares of each class of the Equity Interests of the issuer
thereof represented by such Pledged Stock and includes all Equity
Interests, debt securities and promissory notes or instruments evidencing
Indebtedness required to be pledged hereunder in order to satisfy the
Collateral and Guarantee Requirement;
(b) the Pledged Stock and Pledged Debt Securities (solely with respect
to Pledged Debt Securities issued by a person that is not a Subsidiary of
Holdings or an Affiliate of any such subsidiary, to each Pledgor's
knowledge) have been duly and validly authorized and issued by the issuers
thereof and (i) in the case of Pledged Stock, are fully paid and
nonassessable and (ii) in the case of Pledged Debt Securities (solely with
respect to Pledged Debt Securities issued by a person that is not a
Subsidiary of Holdings or an Affiliate of any such subsidiary, to each
Pledgor's knowledge) are legal, valid and binding obligations of the
issuers thereof;
(c) except for the security interests granted hereunder, each Pledgor
(i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of
record, of the Pledged Securities indicated on Schedule II as owned by such
Pledgor, (ii) holds the same free and ----------- clear of all Liens, other
than Liens permitted under Section 6.02 of the Credit Agreement, (iii) will
make no assignment, pledge, hypothecation or transfer of, or create or
permit to exist any security interest in or other Lien on, the Pledged
Collateral, other than pursuant to a transaction permitted by the Credit
Agreement and other than Liens permitted under Section 6.02 of the Credit
Agreement and (iv) subject to the rights of such Pledgor under the Loan
Documents to dispose of Pledged Collateral, will defend its title or
interest hereto or therein against any and all Liens (other than Liens
permitted under Section 6.02 of the Credit Agreement), however arising, of
all persons;
(d) except for restrictions and limitations imposed by the Loan
Documents or securities laws generally or otherwise permitted to exist
pursuant to the terms of the Credit Agreement, the Pledged Collateral is
and will continue to be freely transferable and assignable, and none of the
Pledged Collateral is or will be subject to any option, right of first
refusal, shareholders agreement, charter or by-law provisions or
contractual
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restriction of any nature that might prohibit, impair, delay or otherwise
affect the pledge of such Pledged Collateral hereunder, the sale or
disposition thereof pursuant hereto or the exercise by the Collateral Agent
of rights and remedies hereunder;
(e) each Pledgor has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or
contemplated;
(f) no consent or approval of any Governmental Authority, any
securities exchange or any other person was or is necessary to the validity
of the pledge effected hereby (other than such as have been obtained and
are in full force and effect);
(g) by virtue of the execution and delivery by the Pledgors of this
Agreement, when any Pledged Securities are delivered to the Collateral
Agent, for the ratable benefit of the Secured Parties, in accordance with
this Agreement, the Collateral Agent will obtain, for the ratable benefit
of the Secured Parties, a legal, valid and perfected first priority lien
upon and security interest in such Pledged Securities as security for the
payment and performance of the Obligations; and
(h) the pledge effected hereby is effective to vest in the Collateral
Agent, for the ratable benefit of the Secured Parties, the rights of the
Collateral Agent in the Pledged Collateral as set forth herein.
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests. Each interest in any limited liability company or limited
partnership controlled by any Guarantor and pledged hereunder shall be
represented by a certificate, shall to the extent permitted by applicable laws
be a "security" within the meaning of Article 8 of the New York UCC and shall be
governed by Article 8 of the New York UCC; provided, however, in the case of (a)
the limited liability company interests set forth on Schedule IV, the Borrower
shall cause such interests to be represented by a certificate, to be a
"security" within the meaning of Article 8 of the New York UCC and to be
governed by Article 8 of the New York UCC, in each case not later than 20
Business Days after the Closing Date and (b) that any limited liability company
or limited partnership that, in either case, is a Wholly Owned Subsidiary formed
or acquired after the Closing Date, the Borrower shall cause such interests to
be represented by a certificate, to be a "security" within the meaning of
Article 8 of the New York UCC and to be governed by Article 8 of the New York
UCC, in each case not later than 20 Business Days after the date of formation or
acquisition thereof, as applicable.
SECTION 3.05. Registration in Nominee Name; Denominations. The Collateral
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in the name of the
applicable Pledgor, endorsed or assigned in blank or in favor of the Collateral
Agent or, if an Event of Default shall have occurred and be continuing, in its
own name as pledgee or the name of its nominee (as pledgee or as sub-agent).
Each Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. If an Event of Default shall have
occurred and be continuing, the Collateral Agent shall have the right to
exchange the certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.
Each Pledgor
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shall use its commercially reasonable efforts to cause any Loan Party that is
not a party to this Agreement to comply with a request by the Collateral Agent,
pursuant to this Section 3.05, to exchange certificates representing Pledged
Securities of such Loan Party for certificates of smaller or larger
denominations.
SECTION 3.06. Voting Rights; Dividends and Interest, etc. (a) Unless and
until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms of
this Agreement, the Credit Agreement and the other Loan Documents; provided
that such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any
Pledged Securities, the rights and remedies of any of the Collateral Agent
or the other Secured Parties under this Agreement, the Credit Agreement or
any other Loan Document or the ability of the Secured Parties to exercise
the same.
(ii) The Collateral Agent shall promptly execute and deliver to each
Pledgor, or cause to be executed and delivered to such Pledgor, all such
proxies, powers of attorney and other instruments as such Pledgor may
reasonably request for the purpose of enabling such Pledgor to exercise the
voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) Each Pledgor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Securities to the extent and only to
the extent that such dividends, interest, principal and other distributions
are permitted by, and otherwise paid or distributed in accordance with, the
terms and conditions of the Credit Agreement, the other Loan Documents and
applicable laws; provided that any noncash dividends, interest, principal
or other distributions that would constitute Pledged Securities, whether
resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Securities or
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party
or otherwise, shall be and become part of the Pledged Collateral, and, if
received by any Pledgor, shall not be commingled by such Pledgor with any
of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Collateral Agent,
for the ratable benefit of the Secured Parties, and shall be forthwith
delivered to the Collateral Agent, for the ratable benefit of the Secured
Parties, in the same form as so received (endorsed in a manner reasonably
satisfactory to the Collateral Agent).
(b) Upon the occurrence and during the continuance of an Event of
Default and after notice by the Collateral Agent to the relevant Pledgors
of the Collateral Agent's intention to exercise its rights hereunder, all
rights of any Pledgor to dividends, interest, principal or other
distributions that such Pledgor is authorized to receive pursuant to
paragraph (a)(iii) of this Section 3.06 shall cease, and all such rights
shall thereupon become vested, for the ratable benefit of the Secured
Parties, in the Collateral
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Agent which shall have the sole and exclusive right and authority to
receive and retain such dividends, interest, principal or other
distributions. All dividends, interest, principal or other distributions
received by any Pledgor contrary to the provisions of this Section 3.06
shall not be commingled by such Pledgor with any of its other funds or
property but shall be held separate and apart therefrom, shall be held in
trust for the benefit of the Collateral Agent, for the ratable benefit of
the Secured Parties, and shall be forthwith delivered to the Collateral
Agent, for the ratable benefit of the Secured Parties, in the same form as
so received (endorsed in a manner reasonably satisfactory to the Collateral
Agent). Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of this paragraph (b) shall
be retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02. After all Events
of Default have been cured or waived and the Borrower has delivered to the
Collateral Agent a certificate to that effect, the Collateral Agent shall
promptly repay to each Pledgor (without interest) all dividends, interest,
principal or other distributions that such Pledgor would otherwise be
permitted to retain pursuant to the terms of paragraph (a)(iii) of this
Section 3.06 and that remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default and after notice by the Collateral Agent to the relevant Pledgors
of the Collateral Agent's intention to exercise its rights hereunder, all
rights of any Pledgor to exercise the voting and/or consensual rights and
powers it is entitled to exercise pursuant to paragraph (a)(i) of this
Section 3.06, and the obligations of the Collateral Agent under paragraph
(a)(ii) of this Section 3.06, shall cease, and all such rights shall
thereupon become vested in the Collateral Agent, for the ratable benefit of
the Secured Parties, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers;
provided that, unless otherwise directed by the Required Lenders, the
Collateral Agent shall have the right from time to time following and
during the continuance of an Event of Default to permit the Pledgors to
exercise such rights. After all Events of Default have been cured or waived
and the Borrower has delivered to the Collateral Agent a certificate to
that effect, each Pledgor shall have the right to exercise the voting
and/or consensual rights and powers that such Pledgor would otherwise be
entitled to exercise pursuant to the terms of paragraph (a)(i) above.
ARTICLE IV.
Security Interests in Personal Property
SECTION 4.01. Security Interest. (a) As security for the payment or
performance, as the case may be, in full of the Obligations, each Guarantor
hereby assigns and pledges 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 (the "Security Interest") in all right,
title and interest in or to any and all of the following assets and properties
now owned or at any time hereafter acquired by such Guarantor or in which such
Guarantor now has or at any time in the future may acquire any right, title or
interest (collectively, the "Article 9 Collateral"):
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(i) all Accounts;
(ii) all As-Extracted Collateral;
(iii) all Chattel Paper;
(iv) all cash and Deposit Accounts;
(v) all Documents;
(vi) all Equipment;
(vii) all Fixtures;
(viii) all General Intangibles;
(ix) all Instruments;
(x) all Inventory;
(xi) all Investment Property;
(xii) all Letter-of-Credit Rights;
(xiii) all Commercial Tort Claims;
(xiv) all books and records pertaining to the Article 9 Collateral;
and
(xv) to the extent not otherwise included, all proceeds, Supporting
Obligations 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.
Notwithstanding anything to the contrary in this Agreement, this Agreement shall
not constitute a grant of a security interest in, and "Article 9 Collateral"
shall not include, (a) any assets (including Equity Interests) with respect to
which the Collateral and Guarantee Requirement or the other paragraphs of
Section 5.10 of the Credit Agreement need not be satisfied by reason of Sections
5.10(f) and 5.17 of the Credit Agreement or (b) any Letter of Credit Rights to
the extent any Guarantor is required by applicable law to apply the proceeds of
a drawing of such Letter of Credit for a specified purpose.
(b) Each Guarantor hereby irrevocably authorizes the Collateral Agent
at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings), continuation
statements, or other filings and recordings, with respect to the Article 9
Collateral and any other collateral pledged hereunder or any part thereof
and amendments thereto that contain the information required by Article 9
of the Uniform Commercial Code of each applicable jurisdiction for the
filing of any financing statement or amendment, or such other information
as may be required under applicable law including (i) whether such
Guarantor is an organization, the type of organization and any
organizational identification number issued to such
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Guarantor, (ii) in the case of Fixtures and As-Extracted Collateral a
sufficient description of the real property to which such Article 9
Collateral relates and (iii) a description of collateral that describes
such property in any other manner as the Collateral Agent may reasonably
determine is necessary or advisable to ensure the perfection of the
security interest in the Article 9 Collateral or other collateral granted
under this Agreement, including describing such property as "all assets" or
"all property". Each Guarantor agrees to provide such information to the
Collateral Agent promptly upon request.
The Collateral Agent is further authorized to file 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) such documents as may be
necessary or advisable for the purpose of perfecting, confirming, continuing,
enforcing or protecting the Security Interest granted by each Guarantor, without
the signature of any Guarantor, and naming any Guarantor or the Guarantors as
debtors and the Collateral Agent as secured party.
(c) 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 Guarantor with respect
to or arising out of the Article 9 Collateral.
SECTION 4.02. Representations and Warranties. The Guarantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties
that:
(a) Each Guarantor has good and valid rights in and title to the
Article 9 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 Article 9 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 and is in full force and effect.
(b) The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal
name of each Guarantor, is correct and complete, in all material respects,
as of the Closing Date. Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations containing a description of the Article 9
Collateral have been prepared by the Collateral Agent based upon the
information provided to the Collateral Agent in the Perfection Certificate
for filing in each governmental, municipal or other office specified in
Schedule 7 to the Perfection Certificate (or ---------- specified by notice
from the Borrower to the Collateral Agent after the Closing Date in the
case of filings, recordings or registrations required by Section 5.10 of
the Credit Agreement), and constitute all the 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 Article 9 Collateral consisting of
United States Patents, United States registered Trademarks and United
States registered 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
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Collateral Agent (for the ratable benefit of the Secured Parties) in
respect of all Article 9 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, refiling, 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 or amendments. Each Guarantor represents and
warrants that a fully executed agreement in the form hereof (or a short
form hereof which form shall be reasonably acceptable to the Collateral
Agent) containing a description of all Article 9 Collateral consisting of
Intellectual Property with respect to United States Patents (and Patents
for which United States registration applications are pending), United
States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered
Copyrights (and Copyrights for which United States registration
applications are pending) has been delivered to the Collateral Agent for
recording with the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 X.X.X.xx. 261, 15 X.X.X.xx. 1060 or
17 X.X.X.xx. 205 and the regulations thereunder, as applicable, and
reasonably requested by the Collateral Agent, 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 Article 9 Collateral consisting of such Intellectual
Property in which a security interest may be perfected by recording with
the United States Patent and Trademark Office and the United States
Copyright Office, 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 Article 9 Collateral consisting of Patents, Trademarks and Copyrights
(or registration or application for registration thereof) acquired or
developed after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid security
interest in all the Article 9 Collateral securing the payment and
performance of the Obligations, (ii) subject to the filings described in
Section 4.02(b), a perfected security interest in all Article 9 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 (iii) a security interest that shall be perfected
in all Article 9 Collateral 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 Lien
on any of the Article 9 Collateral, other than Liens expressly permitted
pursuant to Section 6.02 of the Credit Agreement or arising by operation of
law.
(d) The Article 9 Collateral is owned by the Guarantors free and clear
of any Lien, other than Liens expressly permitted pursuant to Section 6.02
of the Credit Agreement or arising by operation of law. None of the
Guarantors has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any
other applicable laws covering any Article 9 Collateral, (ii) any
assignment in which any Guarantor assigns any Article 9 Collateral or any
security
-15-
agreement or similar instrument covering any Article 9 Collateral with the
United States Patent and Trademark Office or the United States Copyright
Office or (iii) any assignment in which any Guarantor assigns any Article 9
Collateral or any security agreement or similar instrument covering any
Article 9 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 6.02 of the
Credit Agreement.
(e) None of the Guarantors holds any Commercial Tort Claim
individually in excess of $1,000,000 as of the Closing Date except as
indicated on Schedule III hereto, as such schedule may be updated or
supplemented from time to time.
(f) All Accounts have been originated by the Guarantors and all
Inventory has been acquired by the Guarantors in the ordinary course of
business.
SECTION 4.03. Covenants. (a) Each Guarantor agrees promptly to notify the
Collateral Agent in writing of any change (i) in its corporate name, (ii) in its
identity or type of organization or corporate structure, (iii) in its Federal
Taxpayer Identification Number or organizational identification number or (iv)
in its jurisdiction of organization. Each Guarantor agrees promptly to provide
the Collateral Agent with certified organizational documents reflecting any of
the changes described in the immediately preceding sentence. Each Guarantor
agrees not to effect or permit any change referred to in the first sentence of
this paragraph (a) 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 Article 9 Collateral, for
the ratable benefit of the Secured Parties. Each Guarantor agrees promptly to
notify the Collateral Agent if any material portion of the Article 9 Collateral
owned or held by such Guarantor is damaged or destroyed.
(b) Subject to the rights of such Guarantor under the Loan Documents
to dispose of Collateral, each Guarantor shall, at its own expense, take
any and all actions necessary to defend title to the Article 9 Collateral
against all persons and to defend the Security Interest of the Collateral
Agent, for the ratable benefit of the Secured Parties, in the Article 9
Collateral and the priority thereof against any Lien not expressly
permitted pursuant to Section 6.02 of the Credit Agreement.
(c) Each Guarantor 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 reasonably 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
Article 9 Collateral that is in excess of $10,000,000 shall be or become
evidenced by any promissory note or other instrument, such note or
instrument
-16-
shall be promptly pledged and delivered to the Collateral Agent, for the
ratable benefit of the Secured Parties, duly endorsed in a manner
reasonably satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Guarantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Guarantors,
to supplement this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically identify any asset or item that may constitute
Copyrights, Patents, Trademarks, Copyright Licenses, Patent Licenses or
Trademark Licenses; provided that any Guarantor shall have the right,
exercisable within 30 days after it has been notified by the Collateral Agent of
the specific identification of such Article 9 Collateral, to advise the
Collateral Agent in writing of any inaccuracy of the representations and
warranties made by such Guarantor hereunder with respect to such Article 9
Collateral. Each Guarantor agrees that it will use its commercially reasonable
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Article 9 Collateral within 30 days after the date it has been notified
by the Collateral Agent of the specific identification of such Article 9
Collateral.
(d) After the occurrence of an Event of Default and during the
continuance thereof, the Collateral Agent shall have the right to verify
under reasonable procedures the validity, amount, quality, quantity, value,
condition and status of, or any other matter relating to, the Article 9
Collateral, including, in the case of Accounts or Article 9 Collateral in
the possession of any third person, by contacting Account Debtors or the
third person possessing such Article 9 Collateral for the purpose of making
such a verification. The Collateral Agent shall have the right to share any
information it gains from such inspection or verification with any Secured
Party.
(e) 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 Article 9 Collateral and not permitted
pursuant to Section 6.02 of the Credit Agreement, and may pay for the
maintenance and preservation of the Article 9 Collateral to the extent any
Guarantor fails to do so as required by the Credit Agreement or this
Agreement, and each Guarantor jointly and severally agrees to reimburse the
Collateral Agent on demand for any reasonable payment made or any
reasonable expense incurred by the Collateral Agent pursuant to the
foregoing authorization; provided, however, that nothing in this Section
4.03(e) shall be interpreted as excusing any Guarantor 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 Guarantor 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.
(f) Each Guarantor (rather than the Collateral Agent or any Secured
Party) shall remain liable for the observance and performance of all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral and
each Guarantor 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.
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(g) None of the Guarantors shall make or permit to be made an
assignment, pledge or hypothecation of the Article 9 Collateral or
shall grant any other Lien in respect of the Article 9 Collateral,
except as expressly permitted by the Credit Agreement. None of the
Guarantors shall make or permit to be made any transfer of the Article
9 Collateral and each Guarantor shall remain at all times in
possession of the Article 9 Collateral owned by it, except as
permitted by the Credit Agreement.
(h) None of the Guarantors will, without the Collateral Agent's
prior written consent, grant any extension of the time of payment of
any Accounts included in the Article 9 Collateral, 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 prudent
business practices or as otherwise permitted by the Credit Agreement.
(i) Each Guarantor irrevocably makes, constitutes and appoints
the Collateral Agent (and all officers, employees or agents designated
by the Collateral Agent) as such Guarantor's true and lawful agent
(and attorney-in-fact) for the purpose, during the continuance of an
Event of Default, of making, settling and adjusting claims in respect
of Article 9 Collateral under policies of insurance, endorsing the
name of such Guarantor 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 Guarantor 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, the Collateral Agent
may, without waiving or releasing any obligation or liability of the
Guarantors hereunder or any 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 reasonably deems advisable. All sums disbursed by the Collateral
Agent in connection with this Section 4.03(i), including reasonable
attorneys' fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Guarantors to the
Collateral Agent and shall be additional Obligations secured hereby.
SECTION 4.04. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
for the ratable benefit of the Secured Parties, the Collateral Agent's security
interest in the Article 9 Collateral, each Guarantor agrees, in each case at
such Guarantor's own expense, to take the following actions with, respect to the
following Article 9 Collateral:
(a) Instruments and Tangible Chattel Paper. If any Guarantor
shall at any time hold or acquire any Instruments or Tangible Chattel
Paper evidencing an amount in excess of $5,000,000, such Guarantor
shall forthwith endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as the Collateral Agent may from time to time
reasonably request.
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(b) Cash Accounts. No Guarantor shall grant control of any
deposit account to any Person other than the Collateral Agent and the
bank with which the deposit account is maintained.
(c) Investment Property. Except to the extent otherwise provided
in Article III, if any Guarantor shall at any time hold or acquire any
Certificated Security, such Guarantor shall forthwith endorse, assign
and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time reasonably specify. If any
security now or hereafter acquired by any Guarantor is uncertificated
and is issued to such Guarantor or its nominee directly by the issuer
thereof, upon the Collateral Agent's reasonable request and following
the occurrence of an Event of Default, such Guarantor shall promptly
notify the Collateral Agent of such uncertificated securities and
pursuant to an agreement in form and substance reasonably satisfactory
to the Collateral Agent, either (i) cause the issuer to agree to
comply with instructions from the Collateral Agent as to such
security, without further consent of any Guarantor or such nominee, or
(ii) cause the issuer to register the Collateral Agent as the
registered owner of such security. If any security or other Investment
Property, whether certificated or uncertificated, representing an
Equity Interest in a third party and having a fair market value in
excess of $10,000,000 now or hereafter acquired by any Guarantor is
held by such Guarantor or its nominee through a securities
intermediary or commodity intermediary, such Guarantor shall promptly
notify the Collateral Agent thereof and, at the Collateral Agent's
request and option, pursuant to a Control Agreement in form and
substance reasonably satisfactory to the Collateral Agent, either (A)
cause such securities intermediary or commodity intermediary, as
applicable, to agree, in the case of a securities intermediary, to
comply with entitlement orders or other instructions from the
Collateral Agent to such securities intermediary as to such securities
or other Investment Property or, in the case of a commodity
intermediary, to apply any value distributed on account of any
commodity contract as directed by the Collateral Agent to such
commodity intermediary, in each case without further consent of any
Guarantor or such nominee, or (B) in the case of Financial Assets or
other Investment Property held through a securities intermediary,
arrange for the Collateral Agent to become the entitlement holder with
respect to such Investment Property, for the ratable benefit of the
Secured Parties, with such Guarantor being permitted, only with the
consent of the Collateral Agent, to exercise rights to withdraw or
otherwise deal with such Investment Property. The Collateral Agent
agrees with each of the Guarantors that the Collateral Agent shall not
give any such entitlement orders or instructions or directions to any
such issuer, securities intermediary or commodity intermediary, and
shall not withhold its consent to the exercise of any withdrawal or
dealing rights by any Guarantor, unless an Event of Default has
occurred and is continuing or, after giving effect to any such
withdrawal or dealing rights, would occur. The provisions of this
paragraph (c) shall not apply to any Financial Assets credited to a
securities account for which the Collateral Agent is the securities
intermediary.
(d) Commercial Tort Claims. If any Guarantor shall at any time
hold or acquire a Commercial Tort Claim in an amount reasonably
estimated to exceed $10,000,000, such Guarantor shall promptly notify
the Collateral Agent thereof in a
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writing signed by such Guarantor, including a summary description of such
claim, and grant to the Collateral Agent in writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement,
with such writing to be in form and substance reasonably satisfactory to
the Collateral Agent.
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Guarantor agrees that it will not knowingly do any act or
omit to do any act (and will exercise commercially reasonable efforts to prevent
its licensees from doing any act or omitting to do any act) whereby any Patent
that is material to the normal conduct of such Guarantor's business may become
prematurely invalidated or dedicated to the public, and agrees that it shall
take commercially reasonable steps with respect to any material products covered
by any such Patent as necessary and sufficient to establish and preserve its
rights under applicable patent laws.
(b) Each Guarantor will, and will use its commercially reasonable
efforts to cause its licensees or its sublicensees to, for each
material Trademark necessary to the normal conduct of such Guarantor's
business, (i) maintain such Trademark in full force free from any
adjudication of abandonment or invalidity for non-use, (ii) maintain
the quality of products and services offered under such Trademark
consistent with the quality of such products and services as of the
date hereof, (iii) display such Trademark with notice of federal or
foreign registration or claim of trademark or service xxxx as required
under applicable law and (iv) not knowingly use or knowingly permit
its licensees' use of such Trademark in violation of any third-party
rights.
(c) Each Guarantor will, and will use its commercially reasonable
efforts to cause its licensees or its sublicensees to, for each work
covered by a material Copyright necessary to the normal conduct of
such Guarantor's business that it publishes, displays and distributes,
use copyright notice as required under applicable copyright laws.
(d) Each Guarantor shall notify the Collateral Agent promptly if
it knows that any Patent, Trademark or Copyright material to the
normal conduct of such Guarantor's business may imminently become
abandoned, lost or dedicated to the public other than by expiration,
or of any materially adverse determination or development, excluding
office actions and similar determinations in the United States Patent
and Trademark Office, United States Copyright Office, any court or any
similar office of any country, regarding such Guarantor's ownership of
any such material Patent, Trademark or Copyright or its right to
register or to maintain the same.
(e) Each Guarantor, either itself or through any agent, employee,
licensee or designee, shall (i) inform the Collateral Agent on a
semi-annual basis of each application by itself, or through any agent,
employee, licensee or designee, for any Patent with the United States
Patent and Trademark Office and each registration of any Trademark or
Copyright with the United States Patent and Trademark Office, the
United States Copyright Office or any comparable office or agency in
any other country filed during the preceding six-month period, and
(ii) upon the reasonable request of the Collateral Agent, execute and
deliver any and all agreements, instruments, documents
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and papers as the Collateral Agent may reasonably request to evidence
the Collateral Agent's security interest in such Patent, Trademark or
Copyright.
(f) Each Guarantor shall exercise its reasonable business
judgment consistent with the practice in any proceeding before the
United States Patent and Trademark Office, the United States Copyright
Office or any comparable office or agency in any other country with
respect to maintaining and pursuing each material application relating
to any Patent, Trademark and/or Copyright (and obtaining the relevant
grant or registration) material to the normal conduct of such
Guarantor's business and to maintain (i) each issued Patent and (ii)
the registrations of each Trademark and each Copyright in each case
that is material to the normal conduct of such Guarantor's business,
including, when applicable and necessary in such Guarantor's
reasonable business judgment, timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment
of maintenance fees, and, if any Guarantor believes necessary in its
reasonable business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.
(g) In the event that any Guarantor knows or has reason to know
that any Article 9 Collateral consisting of a Patent, Trademark or
Copyright material to the normal conduct of its business has been or
is about to be materially infringed, misappropriated or diluted by a
third party, such Guarantor shall promptly notify the Collateral Agent
and shall, if such Guarantor deems it necessary in its reasonable
business judgment, promptly contact such third party, and if necessary
in its reasonable business judgment, xxx and recover damages, and take
such other actions as are reasonably appropriate under the
circumstances.
(h) Upon and during the continuance of an Event of Default, each
Guarantor shall use commercially reasonable efforts to obtain all
requisite consents or approvals from the licensor under each Copyright
License, Patent License or Trademark License to effect the assignment
of all such Guarantor's right, title and interest thereunder to (in
the Collateral Agent's sole discretion) the designee of the Collateral
Agent or the Collateral Agent.
ARTICLE V.
Remedies
SECTION 5.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Pledgor 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 Article 9
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
Article 9 Collateral by the applicable Guarantors to the Collateral Agent or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or a nonexclusive basis, any such Article 9 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 thereunder cannot be obtained) and (b)
with or without
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legal process and with or without prior notice or demand for performance, to
take possession of the Article 9 Collateral and without liability for trespass
to enter any premises where the Article 9 Collateral may be located for the
purpose of taking possession of or removing the Article 9 Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
applicable Uniform Commercial Code or other applicable law. Without limiting the
generality of the foregoing, each Pledgor 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 a 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 in connection with any sale of a
security (if it deems it advisable to do so) pursuant to the foregoing to
restrict the prospective bidders or purchasers to persons who represent and
agree that they are purchasing such security for their own account, for
investment, and not with a view to the distribution or sale thereof. Upon
consummation of any such sale of Collateral pursuant to this Section 5.01 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 Pledgor, and each Pledgor hereby waives and releases
(to the extent permitted by law) all rights of redemption, stay, valuation and
appraisal that such Pledgor 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 applicable Pledgors 10 Business Days'
written notice (which each Pledgor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale 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 the 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 the case of any sale of all or any part of the Collateral 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 the event
that any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in the case of any such failure, such Collateral may be
sold again upon notice given in accordance with provisions above. At any public
(or, to the extent permitted by law, private) sale made pursuant to this Section
5.01, any Secured Party may bid for or purchase for cash, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Pledgor (all such rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and such Secured Party may, upon
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compliance with the terms of sale, hold, retain and dispose of such property in
accordance with Section 5.02 hereof without further accountability to any
Pledgor 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 Pledgor 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 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. Any sale pursuant to the provisions of this Section
5.01 shall be deemed to conform to the commercially reasonable standards as
provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.
SECTION 5.02. Application of Proceeds. The Collateral Agent shall promptly
apply the proceeds, moneys or balances of any collection or sale of Collateral,
as well as any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Applicable Agent and the Collateral Agent in connection with such
collection or sale or otherwise in connection with this Agreement, any
other Loan Document 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 Applicable Agent and the
Collateral Agent hereunder or under any other Loan Document on behalf
of any Pledgor 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 respective amounts of the Obligations owed to them
on the date of any such distribution); and
THIRD, to the Pledgors, 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 Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by 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 Agreement at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, each Guarantor hereby grants to (in the
Collateral Agent's sole discretion) a designee of the Collateral
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Agent or the Collateral Agent, for the ratable benefit of the Secured Parties,
an irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to any Guarantor) to use, license or sublicense any of the
Article 9 Collateral consisting of Intellectual Property (excluding Trademarks)
now owned or hereafter acquired by such Guarantor, wherever the same may be
located, and including, without limitation, 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 right to prosecute and maintain all intellectual property and the right to
xxx for past infringement of the intellectual property. The use of such license
by the Collateral Agent may be exercised, at the option of the Collateral Agent,
upon the occurrence and during the continuation of an Event of Default; provided
that any license, sublicense or other transaction entered into by the Collateral
Agent in accordance herewith shall be binding upon the Guarantors
notwithstanding any subsequent cure of an Event of Default.
SECTION 5.04. Securities Act, etc. In view of the position of the Pledgors
in relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar federal statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Pledgor acknowledges and agrees that in light of such restrictions
and limitations, the Collateral Agent, in its sole and absolute discretion, (a)
may proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws or, to the extent applicable, Blue Sky
or other state securities laws and (b) may approach and negotiate with a single
potential purchaser to effect such sale. Each Pledgor acknowledges and agrees
that any such sale might result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions. In the
event of any such sale, the Collateral Agent shall incur no responsibility or
liability for selling all or any part of the Pledged Collateral at a price that
the Collateral Agent, in its sole and absolute discretion, may in good xxxxx
xxxx reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 5.04 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.
SECTION 5.05. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Collateral Agent desires to sell any of the Pledged Collateral at a public
sale, it will, at any time and from time to time, upon the written request of
the Collateral Agent, use its commercially reasonable efforts to take or to
cause the issuer of such Pledged Collateral to take such action and prepare,
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distribute and/or file such documents, as are required or advisable in the
reasonable opinion of counsel for the Collateral Agent to permit the public sale
of such Pledged Collateral. Each Pledgor further agrees to indemnify, defend and
hold harmless the Administrative Agent, each other Secured Party, any
underwriter and their respective officers, directors, affiliates and controlling
persons from and against all loss, liability, expenses, costs of counsel
(including reasonable fees and expenses to the Collateral Agent of legal
counsel), and claims (including the costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Pledgor or the issuer of such Pledged Collateral by the Collateral Agent
or any other Secured Party expressly for use therein. Each Pledgor further
agrees, upon such written request referred to above, to use its commercially
reasonable efforts to qualify, file or register, or cause the issuer of such
Pledged Collateral to qualify, file or register, any of the Pledged Collateral
under the Blue Sky or other securities laws of such states as may be reasonably
requested by the Collateral Agent and keep effective, or cause to be kept
effective, all such qualifications, filings or registrations. Each Pledgor will
bear all costs and expenses of carrying out its obligations under this Section
5.05. Each Pledgor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 5.05 only and that
such failure would not be adequately compensable in damages and, therefore,
agrees that its agreements contained in this Section 5.05 may be specifically
enforced.
ARTICLE VI.
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 6.03), the Borrower agrees that (a) in the event a payment
shall be made by any Guarantor under this Agreement in respect of any Obligation
of the Borrower, the Borrower shall indemnify such Guarantor for the full amount
of such payment and such Guarantor shall be subrogated to the rights of the
person to whom such payment shall have been made to the extent of such payment
and (b) in the event any assets of any Guarantor shall be sold pursuant to this
Agreement or any other Security Document to satisfy in whole or in part an
Obligation of the Borrower, the Borrower shall indemnify such Guarantor in an
amount equal to the greater of the book value or the fair market value of the
assets so sold.
SECTION 6.02. Contribution and Subrogation. Each Guarantor (other than
Holdings and the Borrower) (a "Contributing Guarantor") agrees (subject to
Section 6.03) that, in the event a payment shall be made by any other Guarantor
(other than Holdings and the Borrower) hereunder in respect of any Obligation or
assets of any other Guarantor (other than Holdings and the Borrower) shall be
sold pursuant to any Security Document to satisfy any Obligation owed to any
Secured Party and such other Guarantor (the "Claiming Guarantor") shall not have
been fully indemnified by the Borrower as provided in Section 6.01, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal
to the amount of such
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payment or the greater of the book value or the fair market value of such
assets, as applicable, in each case multiplied by a fraction of which the
numerator shall be the net worth of such Contributing Guarantor on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 7.15, the date of the supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the
rights of such Claiming Guarantor under Section 6.01 to the extent of such
payment.
SECTION 6.03. Subordination. (a) Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 6.01 and
6.02 and all other rights of indemnity, contribution or subrogation of the
Pledgor under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the part
of the Borrower or any Guarantor to make the payments required by Sections 6.01
and 6.02 (or any other payments required under applicable law or otherwise)
shall in any respect limit the obligations and liabilities of any Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor hereunder.
(b) Each Guarantor hereby agrees that all Indebtedness and other
monetary obligations owed by it to any other Guarantor or any
Subsidiary shall be fully subordinated to the indefeasible payment in
full in cash of the Obligations.
ARTICLE VII.
Miscellaneous
SECTION 7.01. 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 Party shall be given to it in care of the Borrower,
with such notice to be given as provided in Section 9.01 of the Credit
Agreement.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest, the security interest in the Pledged
Collateral and all obligations of each Pledgor 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
Pledgor in respect of the Obligations or this Agreement.
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SECTION 7.03. Binding Effect; Several Agreement. This Agreement shall
become effective as to any party to this Agreement when a counterpart hereof
executed on behalf of such party shall have been delivered to the Administrative
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such party and the
Collateral Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such party, the Collateral Agent and the other
Secured Parties and their respective permitted successors and assigns, except
that no party 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 expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each party and may be amended, modified,
supplemented, waived or released with respect to any party without the approval
of any other party and without affecting the obligations of any other party
hereunder.
SECTION 7.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Pledgor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective permitted successors and assigns.
SECTION 7.05. Collateral Agent's Fees and Expenses; Indemnification. (a)
The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.05 of
the Credit Agreement.
(b) Without limitation of its indemnification obligations under
the other Loan Documents, each Pledgor jointly and severally agrees to
indemnify the Collateral Agent and the other Indemnitees (as defined
in Section 9.05 of the Credit Agreement) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees,
charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of, (i)
the execution, delivery or performance of this Agreement or any other
Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto and thereto of their
respective obligations thereunder or the consummation of the
Transactions and other transactions contemplated hereby, (ii) the use
of proceeds of the Loans or the use of any Letter of Credit or (iii)
any claim, litigation, investigation or proceeding relating to any of
the foregoing, 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 7.05 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
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Obligations, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any
other Secured Party. All amounts due under this Section 7.05 shall be
payable on written demand therefor.
SECTION 7.06. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Pledgor, (a) to receive,
endorse, assign or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part
thereof; (b) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (c) to ask for, demand,
xxx for, collect, receive and give acquittance for any and all moneys due or to
become due under and by virtue of any Collateral; (d) to sign the name of any
Pledgor on any invoice or xxxx of lading relating to any of the Collateral; (e)
to send verifications of Accounts to any Account Debtor; (f) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (g) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (h) to notify, or to require any
Guarantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, that nothing herein contained shall
be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby.
The Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Pledgor for any act or failure to act hereunder,
except for their own gross negligence or wilful misconduct.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay by the Applicable
Agent, the Collateral Agent, any Issuing Bank or any Lender in exercising any
right, power or remedy hereunder or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy, or any abandonment
-28-
or discontinuance of steps to enforce such a right, power or remedy, preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. The rights, powers and remedies of the Administrative Agent, the
Collateral Agent, any Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights, powers or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section 7.08, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or the issuance of a Letter of
Credit shall not be construed as a waiver of any Default or Event of Default,
regardless of whether the Administrative Agent, the Collateral Agent, any Lender
or any Issuing Bank may have had notice or knowledge of such Default or Event of
Default at the time. No notice or demand on any Loan Party in any case shall
entitle any Loan Party 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
Loan Party or Loan Parties with respect to which such waiver,
amendment or modification is to apply, subject to any consent required
in accordance with Section 9.08 of the Credit Agreement.
SECTION 7.09. 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 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. 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 7.11. 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, and shall become effective as
provided in Section 7.03.
-29-
Delivery of an executed counterpart to this Agreement by facsimile transmission
shall be as effective as delivery of a manually signed original.
SECTION 7.12. Headings. Article and Section headings and the Table of
Contents used herein are for convenience 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 7.13. Jurisdiction; Consent to Service of Process. (a) Each party
to this Agreement hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any 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 manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Pledgor, or its properties, in the courts of
any jurisdiction.
(b) Each party to this Agreement 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 any other Loan Document 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.
SECTION 7.14. Termination or Release. (a) This Agreement, the guarantees
made herein, the Security Interest and all other security interests granted
hereby shall terminate when all the Loan Document Obligations have been
indefeasibly paid in full in cash and the Lenders have no further commitment to
lend under the Credit Agreement, the Revolving L/C Exposure has been reduced to
zero and each Issuing Bank has no further obligations to issue Letters of Credit
under the Credit Agreement.
(b) A Subsidiary Party shall automatically be released from its
obligations hereunder and the security interests in the Collateral of
such Subsidiary Party shall be automatically released upon the
consummation of any transaction permitted by the Credit Agreement as a
result of which such Subsidiary Party ceases to be a Subsidiary of
Holdings; provided that the Required Lenders shall -------- have
consented to such transaction (to the extent such consent is required
by the Credit Agreement).
(c) Upon any sale or other transfer by any Pledgor of any
Collateral that is permitted under the Credit Agreement to any person
that is not a Pledgor, or upon
-30-
the effectiveness of any written consent to the release of the
security interest granted hereby in any Collateral pursuant to Section
9.08 of the Credit Agreement, the security interest in such Collateral
shall be automatically released.
(d) In connection with any termination or release pursuant to
paragraph (a), (b) or (c) of this Section 7.14, the Collateral Agent
shall execute and deliver to any Pledgor, at such Pledgor's, expense
all documents that such Pledgor shall reasonably request to evidence
such termination or release. Any execution and delivery of documents
pursuant to this Section 7.14 shall be without recourse to or warranty
by the Collateral Agent.
SECTION 7.15. Additional Subsidiaries. Upon execution and delivery by the
Collateral Agent and any Subsidiary that is required to become a party hereto by
Section 5.10 of the Credit Agreement of an instrument in the form of Exhibit I
hereto, such subsidiary shall become a Subsidiary Party hereunder with the same
force and effect as if originally named as a Subsidiary Party herein. The
execution and delivery of any such instrument shall not require the consent of
any other party to this Agreement. The rights and obligations of each party to
this Agreement shall remain in full force and effect notwithstanding the
addition of any new party to this Agreement.
SECTION 7.16. Right of Set-off. If an Event of Default shall have occurred
and be continuing, each Lender and each Issuing Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set-off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or such Issuing Bank to or for the credit or the account of any party to
this Agreement against any of and all the obligations of such party now or
hereafter existing under this Agreement owed to such Lender or such Issuing
Bank, irrespective of whether or not such Lender or such Issuing Bank shall have
made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section 7.16 are in addition to
other rights and remedies (including other rights of set-off) that such Lender
or such Issuing Bank may have.
[Signature Page Follows]
-31-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
FC 2 CORP.
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X.Xxxx
Title: Senior Vice President and
Chief Financial Officer
FOUNDATION COAL CORPORATION (f/k/a
AMERICAN COAL ACQUISITION CORP.)
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and
Chief Financial Officer
S2 ACQUISITION CORP. (WHICH, ON THE
CLOSING DATE, SHALL BE MERGED WITH AND
INTO, FOUNDATION PA COAL COMPANY (f/k/a
RAG PENNSYLVANIA COAL HOLDING COMPANY)),
as Borrower
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
ALLIANCE POWER MARKETING, INC.
XXXXXXX HOLDINGS INC.
CASTLE GATE HOLDING COMPANY
DELTA MINE HOLDING COMPANY
FOUNDATION AMERICAN COAL COMPANY, LLC
(f/k/a RAG AMERICAN COAL COMPANY, LLC)
FOUNDATION COAL DEVELOPMENT CORPORATION
(f/k/a RAG COAL DEVELOPMENT CORPORATION)
FOUNDATION COAL HOLDING, INC.
(f/k/a RAG AMERICAN COAL HOLDING, INC.)
FOUNDATION COAL RESOURCES CORPORATION
(f/k/a RAG CONSOLIDATED LAND CORPORATION)
FOUNDATION COAL WEST, INC.
(f/k/a RAG COAL WEST, INC.)
FOUNDATION ENERGY SALES, INC.
(f/k/a RAG ENERGY SALES, INC.)
FOUNDATION EQUIPMENT COMPANY
(f/k/a RAG EQUIPMENT COMPANY)
FOUNDATION MIDWEST HOLDING COMPANY
(f/k/a RAG midwest holding company
FOUNDATION ROYALTY COMPANY
(f/k/a RAG ROYALTY COMPANY)
FOUNDATION WYOMING LAND COMPANY
(f/k/a RAG WYOMING LAND COMPANY)
FREEPORT RESOURCES CORPORATION
(f/k/a RAG FREEPORT RESOURCES CORPORATION)
KINGSTON MINING, INC.
KINGSTON PROCESSING, INC.
KINGSTON RESOURCES, INC.
LAUREL CREEK CO., INC.
MAPLE MEADOW MINING COMPANY
NEWEAGLE COAL SALES CORP.
NEWEAGLE DEVELOPMENT CORP.
NEWEAGLE INDUSTRIES, INC.
NEWEAGLE MINING CORP.
XXXXX PROCESSING INC.
XXXXXXX BRANCH MINING, INC.
PENNSYLVANIA LAND HOLDINGS CORPORATION
PENNSYLVANIA SERVICES CORPORATION
PIONEER FUEL CORPORATION
PIONEER MINING, INC.
PLATEAU MINING CORPORATION
RED ASH SALES COMPANY, INC.
RIVEREAGLE CORP.
RIVER PROCESSING CORPORATION
(f/k/a RAG RIVER PROCESSING CORPORATION)
RIVERTON CAPITAL VENTURES I, LIMITED
LIABILITY COMPANY
RIVERTON CAPITAL VENTURES II, LIMITED
LIABILITY COMPANY
RIVERTON COAL PRODUCTION, INC.
RIVERTON COAL SALES, INC.
ROCKSPRING DEVELOPMENT, INC.
RUHRKOHLE TRADING CORPORATION
XXXXXXX FORK MINING, INC.
WABASH MINE HOLDING COMPANY
XXXXXXX HOLDING COMPANY
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
ENERGY DEVELOPMENT CORPORATION
SOUTHERN RESOURCES, INC.
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
COAL GAS RECOVERY, LP
(f/k/a RAG LIBERTY MINING, LP)
By: Pennsylvania Services Corporation,
as General Partner
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
CUMBERLAND COAL RESOURCES, LP
(f/k/a RAG CUMBERLAND RESOURCES, LP)
By: Pennsylvania Services Corporation,
as General Partner
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
EMERALD COAL RESOURCES, LP
(f/k/a RAG EMERALD RESOURCES, LP)
By: Pennsylvania Services Corporation,
as General Partner
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
FREEPORT MINING, LP
(f/k/a RAG FREEPORT MINING, L.P.)
By: Pennsylvania Services Corporation,
as General Partner
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Schedule I
SUBSIDIARY PARTIES(1)
Alliance Power Marketing, Inc.
Xxxxxxx Holdings Inc.
Castle Gate Holding Company
Coal Gas Recovery, LP
Cumberland Coal Resources, LP*
Delta Mine Holding Company
Emerald Coal Resources, LP*
Energy Development Corporation
Foundation American Coal Company, LLC*
Foundation Coal Development Corporation*
Foundation Coal Holding, Inc.*
Foundation Coal Resources Corporation*
Foundation Coal West, Inc.*
Foundation Energy Sales, Inc.*
Foundation Equipment Company*
Foundation Midwest Holding Company*
Foundation PA Coal Company
Foundation Royalty Company*
Foundation Wyoming Land Company*
Freeport Mining, LP*
Freeport Resources Corporation*
Kingston Mining, Inc.
Kingston Processing, Inc.
Kingston Resources, Inc.
Laurel Creek Co., Inc.
Maple Meadow Mining Company
Neweagle Coal Sales Corp.
----------
(1) Subsidiaries marked with an asterisk will have undergone a name change as
of the Closing Date. Names listed here represent the name as of the Closing
Date.
Neweagle Development Corp.
Neweagle Industries, Inc.
Neweagle Mining Corp.
Xxxxx Processing Inc.
Xxxxxxx Branch Mining, Inc.
Pennsylvania Land Holdings Corporation
Pennsylvania Services Corporation
Pioneer Fuel Corporation
Pioneer Mining, Inc.
Plateau Mining Corporation
Red Ash Sales Company, Inc.
Rivereagle Corp.
River Processing Corporation*
Riverton Capital Ventures I, Limited Liability Company
Riverton Capital Ventures II, Limited Liability Company
Riverton Coal Production, Inc.
Riverton Coal Sales, Inc.
Rockspring Development, Inc.
Ruhrkohle Trading Corporation
Xxxxxxx Fork Mining, Inc.
Southern Resources, Inc.
Wabash Mine Holding Company
Xxxxxxx Holding Company
Schedule II
CAPITAL STOCK; DEBT SECURITIES
Equity Interests
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
ISSUER PLEDGOR CERTIFICATE CLASS OF EQUITY NUMBER OF PERCENTAGE
NUMBER INTEREST SHARES PLEDGED BY
PLEDGOR
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Alliance Power Marketing, Inc. Foundation American Coal Company, LLC 10 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Xxxxxxx Holdings Inc. Riverton Coal Production, Inc. 17 Common 18,760 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Castle Gate Holding Company Foundation Midwest Holding Company 3 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Coal Gas Recovery, LP Pennsylvania Services Corporation 1 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Coal Gas Recovery, LP Foundation PA Coal Company 2 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Cumberland Coal Resources, LP Pennsylvania Services Corporation 1 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Cumberland Coal Resources, LP Foundation PA Coal Company 2 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Delta Mine Holding Company Foundation Midwest Holding Company 3 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Emerald Coal Resources, LP Pennsylvania Services Corporation 1 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Emerald Coal Resources, LP Foundation PA Coal Company 2 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Energy Development Corporation Foundation Coal Holding, Inc. 5 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation American Coal Company, LLC Foundation Coal Holding, Inc. 1 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Coal Corporation FC 2 Corp. 3 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Coal Development Corporation Foundation American Coal Company, LLC 6 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Coal Holding, Inc. Foundation Coal Corporation A6 Common 137,143 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Coal Resources Corporation Foundation American Coal Company, LLC 4 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Coal West, Inc. Foundation Coal Corporation 7 Common 10 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Energy Sales, Inc. Foundation Coal Holding, Inc. 10 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Equipment Company Foundation American Coal Company, LLC 6 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
ISSUER PLEDGOR CERTIFICATE CLASS OF EQUITY NUMBER OF PERCENTAGE
NUMBER INTEREST SHARES PLEDGED BY
PLEDGOR
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Midwest Holding Company Foundation American Coal Company, LLC 4 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation PA Coal Company Foundation American Coal Company, LLC 2 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Royalty Company Foundation American Coal Company, LLC 3 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Foundation Wyoming Land Company Foundation Coal Corporation 8 Common 10 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Freeport Mining, LP Pennsylvania Services Corporation 1 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Freeport Mining, LP Foundation PA Coal Company 2 N/A N/A 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Freeport Resources Corporation Foundation American Coal Company, LLC 6 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Kingston Mining, Inc. Kingston Resources, Inc. 1 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Kingston Processing, Inc. Kingston Resources, Inc. 1 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Kingston Resources, Inc. Riverton Coal Production, Inc. 5 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Kingston Resources, Inc. Riverton Coal Production, Inc. 6 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Laurel Creek Co., Inc. Neweagle Mining Corp. 4 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Laurel Creek Co., Inc. Neweagle Mining Corp. 5 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Maple Meadow Mining Company Foundation American Coal Company, LLC C-7 Common 1,000 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Neweagle Coal Sales Corp. Neweagle Industries, Inc. 2 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Neweagle Coal Sales Corp. Neweagle Industries, Inc. 3 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Neweagle Development Corp. Neweagle Industries, Inc. 2 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Neweagle Development Corp. Neweagle Industries, Inc. 3 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Neweagle Industries, Inc. Riverton Coal Production, Inc. 25 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Neweagle Industries, Inc. Riverton Coal Production, Inc. 26 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Neweagle Mining Corp. Neweagle Industries, Inc. 2 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Neweagle Mining Corp. Neweagle Industries, Inc. 3 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Xxxxx Processing Inc. Laurel Creek Co., Inc. 2 Common 1,000 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Xxxxxxx Branch Mining, Inc. Riverton Coal Production, Inc. 2 Common 3 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Xxxxxxx Branch Mining, Inc. Riverton Coal Production, Inc. 3 Common 97 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Pennsylvania Land Holdings Corporation Foundation American Coal Company, LLC 2 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Pennsylvania Services Corporation Foundation American Coal Company, LLC 4 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Pioneer Fuel Corporation Pioneer Mining, Inc. 12 Common 10,000 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Pioneer Mining, Inc. Riverton Coal Production, Inc. 2 Common 3 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Pioneer Mining, Inc. Riverton Coal Production, Inc. 3 Common 97 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
2
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
ISSUER PLEDGOR CERTIFICATE CLASS OF EQUITY NUMBER OF PERCENTAGE
NUMBER INTEREST SHARES PLEDGED BY
PLEDGOR
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Plateau Mining Corporation Foundation American Coal Company, LLC 10 Common 170 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Plateau Mining Corporation Foundation American Coal Company, LLC 13 Common 30 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Plateau Mining Corporation Foundation American Coal Company, LLC P-2A Preferred 1 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Red Ash Sales Company, Inc. Xxxxxxx Holdings Inc. 11 Common 30 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Rivereagle Corp. Neweagle Industries, Inc. 2 Common 1,000 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
River Processing Corporation Foundation American Coal Company, LLC 6 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Riverton Capital Ventures I, Limited Pioneer Mining, Inc. 1 N/A N/A 100%
Liability Company
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Riverton Capital Ventures I, Limited Xxxxxxx Branch Mining, Inc. 2 N/A N/A 100%
Liability Company
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Riverton Capital Ventures II, Limited Pioneer Mining, Inc. 1 N/A N/A 100%
Liability Company
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Riverton Capital Ventures II, Limited Xxxxxxx Branch Mining, Inc. 2 N/A N/A 100%
Liability Company
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Riverton Coal Production, Inc. Foundation Coal Holding, Inc. 2 Common 50 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Riverton Coal Production, Inc. Foundation Coal Holding, Inc. 3 Common 50 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Riverton Coal Sales, Inc. Riverton Coal Production, Inc. 6 Common 3 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Rockspring Development, Inc. Neweagle Development Corp. 4 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Rockspring Development, Inc. Neweagle Development Corp. 5 Common 500 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Ruhrkohle Trading Corporation Riverton Coal Production, Inc. 10 Common 87,000 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Xxxxxxx Fork Mining, Inc. Riverton Coal Production, Inc. 1 Common 1,000 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Southern Resources, Inc. Foundation Coal Holding, Inc. 24 Common 200,000 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Wabash Mine Holding Company Foundation Midwest Holding Company 3 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
Xxxxxxx Holding Company Foundation Midwest Holding Company 3 Common 100 100%
---------------------------------------- -------------------------------------- ------------ --------------- --------- ----------
3
Debt Securities
---------------
1. Intercompany Note, dated July 30, 2004 among Holdings, Acquisition Corp.
the Borrower and the Subsidiary Parties.
Schedule III
INTELLECTUAL PROPERTY(2)
Copyrights
See Attachment 1.
Patents
See Attachment 2.
Trademarks
See Attachment 3.
----------
(2) Only entities that own Intellectual Property are included on this Schedule
III.
Attachment 1
to Schedule III
---------------
COPYRIGHTS OWNED BY FOUNDATION AMERICAN COAL HOLDING, INC.
Copyright Registrations
-----------------------
------------------------------------ -------------------- --------------------------------
TITLE REGISTRATION NUMBER AUTHOR
------------------------------------ -------------------- --------------------------------
Coal Production System Version 3.0 TXu1-150-180 Foundation Coal Holding, Inc.
------------------------------------ -------------------- --------------------------------
Coal Production System Version 3.2 TXu1-150-181 Foundation Coal Holding, Inc.
------------------------------------ -------------------- --------------------------------
Copyright Applications
----------------------
None.
Attachment 2
to Schedule III
---------------
PATENTS OWNED BY FOUNDATION COAL WEST, INC.
Patent Registrations
--------------------
------------------------------------- -------------------------------------
PATENT NUMBER ISSUE DATE
------------------------------------- -------------------------------------
USP 5,343,631 09/06/94
------------------------------------- -------------------------------------
USP 5,486,998 01/23/94
------------------------------------- -------------------------------------
USP 6,086,647 07/11/00
------------------------------------- -------------------------------------
Patent Applications
-------------------
None.
PATENTS OWNED BY FOUNDATION AMERICAN COAL COMPANY, LLC
Patent Registrations
--------------------
----------------------------------------- -----------------------------------
PATENT NUMBER ISSUE DATE
----------------------------------------- -----------------------------------
USP 4,598,652 07/08/86
----------------------------------------- -----------------------------------
USP 4,599,955 07/15/86
----------------------------------------- -----------------------------------
USP 5,567,018 10/22/96
----------------------------------------- -----------------------------------
USP 5,668,325 09/16/97
----------------------------------------- -----------------------------------
USP 6,129,483 10/10/00
----------------------------------------- -----------------------------------
USP 6,132,497 10/17/00
----------------------------------------- -----------------------------------
USP 6,334,738 01/01/02
----------------------------------------- -----------------------------------
AU 695,422 (Australia) 10/31/96
----------------------------------------- -----------------------------------
SA 96/2296 (South Africa) 11/27/96
----------------------------------------- -----------------------------------
Patent Applications
-------------------
None.
PATENTS OWNED BY FOUNDATION COAL DEVELOPMENT CORPORATION
Patent Registrations
--------------------
-------------------------------------------- -----------------------------------
PATENT NUMBER ISSUE DATE
-------------------------------------------- -----------------------------------
USP 5,272,874 12/28/93
-------------------------------------------- -----------------------------------
USP 5,431,706 07/11/95
-------------------------------------------- -----------------------------------
USP 5,488,826 02/06/96
-------------------------------------------- -----------------------------------
USP 5,785,030 07/28/98
-------------------------------------------- -----------------------------------
USP 6,502,392 01/07/03
-------------------------------------------- -----------------------------------
AU 667,319 (Australia) 03/21/96
-------------------------------------------- -----------------------------------
AU 671,750 (Australia) 09/05/96
-------------------------------------------- -----------------------------------
CA 2,120,033 (Canada) 08/12/97
-------------------------------------------- -----------------------------------
DE 97 954069.7 (Germany) 12/04/97
-------------------------------------------- -----------------------------------
SA 92/6986 (South Africa) 04/28/93
-------------------------------------------- -----------------------------------
SA 97/10359 (South Africa) 05/27/98
-------------------------------------------- -----------------------------------
Patent Applications
-------------------
None.
Attachment 3
to Schedule III
---------------
TRADEMARKS OWNED BY FOUNDATION COAL DEVELOPMENT CORPORATION
Trademark Registrations
-----------------------
-------------------------------------------- ------------------------------------ ----------------------------------
XXXX REGISTRATION DATE REGISTRATION NUMBER
-------------------------------------------- ------------------------------------ ----------------------------------
Dry Systems Technologies 11/02/99 2,290,026
-------------------------------------------- ------------------------------------ ----------------------------------
Dry Systems Technologies & Design 04/24/01 2,446,161
-------------------------------------------- ------------------------------------ ----------------------------------
Trademark Applications
----------------------
None.
Schedule IV
-----------
LIMITED LIABILITY COMPANY INTERESTS
None.
Schedule V
----------
COMMERCIAL TORT CLAIMS
None.
Exhibit I
---------
to Guarantee and
Collateral Agreement
SUPPLEMENT NO. __ dated as of (this "Supplement"), to the Guarantee and
Collateral Agreement dated as of July 30, 2004 (the "Guarantee and Collateral
Agreement"), among FC 2 CORP., a Delaware corporation ("Holdings"), FOUNDATION
COAL CORPORATION, a Delaware Corporation ("Acquisition Corp."), S2 ACQUISITION
CORP., a Delaware Corporation (which, on the Closing Date, shall be merged with
and into, Foundation PA Coal Company, the "Borrower"), each Domestic Subsidiary
of Borrower identified herein (each, a "Subsidiary Party") and CITICORP NORTH
AMERICA, INC. ("CNAI"), as collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties.
A. Reference is made to the Credit Agreement dated as of July 30, 2004 (as
amended, supplemented, waived or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, Acquisition Corp., the Borrower, the
lenders party thereto from time to time (the "Lenders"), CNAI as Administrative
Agent and as Collateral Agent for the Lenders, UBS AG, STAMFORD BRANCH, BEAR
XXXXXXX CORPORATE LENDING INC. and NATEXIS BANQUES POPULAIRES, each a
Co-Documentation Agent, CITIGROUP GLOBAL MARKETS, INC. ("CGMI") and CREDIT
SUISSE FIRST BOSTON ("CSFB") as Co-Syndication Agents and CGMI and CSFB, as
Joint Lead Arrangers and Joint Book Managers.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement and the
Guarantee and Collateral Agreement referred to therein.
C. The Guarantors have entered into the Guarantee and Collateral Agreement
in order to induce the Lenders to make Loans and each Issuing Bank to issue
Letters of Credit. Section 7.15 of the Guarantee and Collateral Agreement
provides that additional Subsidiaries may become Subsidiary Parties under the
Guarantee and Collateral Agreement by execution and delivery of an instrument in
the form of this Supplement. The undersigned Subsidiary (the "New Subsidiary")
is executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Party under the Guarantee and Collateral
Agreement in order to induce the Lenders to make additional Loans and each
Issuing Bank 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 Subsidiary agree as follows:
SECTION 1. In accordance with Section 7.15 of the Guarantee and Collateral
Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party
and a Guarantor under the Guarantee and Collateral Agreement with the same force
and effect as if originally named therein as a Subsidiary Party and a Guarantor,
and the New
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Subsidiary hereby (a) agrees to all the terms and provisions of the Guarantee
and Collateral Agreement applicable to it as a Subsidiary Party and Guarantor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Guarantor thereunder are true and correct, in all
material respects, on and as of the date hereof. In furtherance of the
foregoing, the New Subsidiary, as security for the payment and performance in
full of the Obligations (as defined in the Guarantee and Collateral Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, their successors and
assigns, a security interest in and Lien on all the New Subsidiary's right,
title and interest in and to the Collateral (as defined in the Guarantee and
Collateral Agreement) of the New Subsidiary. Each reference to a "Subsidiary
Party" or a "Guarantor" in the Guarantee and Collateral Agreement shall be
deemed to include the New Subsidiary. The Guarantee and Collateral Agreement is
hereby incorporated herein by reference.
SECTION 2. The New Subsidiary 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, subject
to (i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors' rights
generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (iii)
implied covenants of good faith and fair dealing.
SECTION 3. 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. This Supplement shall become effective when (a) the
Collateral Agent shall have received a counterpart of this Supplement that bears
the signature of the New Subsidiary and (b) the Collateral Agent has executed a
counterpart hereof.
SECTION 4. The New Subsidiary 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 Article 9 Collateral of the New Subsidiary, (b) set
forth on Schedule II attached hereto is a true and correct schedule of all the
Pledged Securities of the New Subsidiary and (c) set forth under its signature
hereto, is the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office.
SECTION 5. Except as expressly supplemented hereby, the Guarantee and
Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 7. In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity,
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legality and enforceability of the remaining provisions contained herein and in
the Guarantee and Collateral Agreement shall not in any way be affected or
impaired thereby. 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 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Guarantee and Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, disbursements and other charges of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Guarantee and Collateral Agreement as of the day
and year first above written.
[Name of New Subsidiary]
By:
------------------------------------
Name:
Title:
Legal Name:
Jurisdiction of Formation:
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Location of Chief
Executive Office:
CITICORP NORTH AMERICA, INC., as
Collateral Agent
By:
------------------------------------
Name:
Title:
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