GUARANTY AND COLLATERAL AGREEMENT dated as of September 28, 2007 made by REX ENERGY CORPORATION and EACH OF THE OTHER GRANTORS (AS DEFINED HEREIN) in favor of KEYBANK NATIONAL ASSOCIATION, as Administrative Agent
Exhibit
10.2
Execution
Version
dated
as of September 28, 2007
made
by
XXX
ENERGY CORPORATION
and
EACH
OF THE OTHER GRANTORS (AS DEFINED HEREIN)
in
favor of
KEYBANK
NATIONAL ASSOCIATION,
as
Administrative Agent
TABLE
OF CONTENTS
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Page
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Article
I
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Definitions
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Section
1.01 Definitions
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1
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Section
1.02 Other
Definitional Provisions
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7
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Section
1.03 Rules
of Interpretation
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7
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Article
II
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Guarantee
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Section
2.01 Guarantee
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7
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Section
2.02 Right
of Contribution
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8
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Section
2.03 No
Subrogation
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8
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Section
2.04 Guaranty
Amendments, Etc. with respect to the Borrower
Obligations
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8
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Section
2.05 Waivers
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9
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Section
2.06 Guaranty
Absolute and Unconditional
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9
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Section
2.07 Reinstatement
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11
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Section
2.08 Payments
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11
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Article
III
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Grant
of Security Interest
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Section
3.01 Grant
of Security Interest
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11
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Section
3.02 Transfer
of Pledged Securities
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12
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Article
IV
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Representations
and Warranties
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Section
4.01 Representations
in Credit Agreement
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13
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Section
4.02 Title;
No Other Liens
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13
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Section
4.03 Perfected
First Priority Liens
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13
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Section
4.04 Grantor
Information
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13
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Section
4.05 Inventory
and Equipment
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14
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Section
4.06 Farm
Products
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14
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Section
4.07 Investment
Property
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14
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Section
4.08 Receivables
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15
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Section
4.09 Intellectual
Property
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15
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Section
4.10 Commercial
Tort Claims
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15
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Section
4.11 Benefit
to the Guarantors
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16
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Article
V
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Covenants
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Section
5.01 Covenants
and Events of Default in Credit Agreement
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16
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Section
5.02 Delivery
of Instruments, Certificated Securities and Chattel Paper
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16
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Section
5.03 Maintenance
of Insurance
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16
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Section
5.04 Payment
of Obligations
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16
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Section
5.05 Maintenance
of Perfected Security Interest; Further Documentation
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16
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Section
5.06 Notices
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17
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Section
5.07 Investment
Property
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17
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Section
5.08 Receivables
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19
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Section
5.09 Intellectual
Property
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19
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Section
5.10 Commercial
Tort Claims
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21
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Article
VI
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Remedial
Provisions
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Section
6.01 Certain
Matters Relating to Receivables
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21
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Section
6.02 Communications
with Obligors; Grantors Remain Liable
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22
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Section
6.03 Pledged
Securities
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22
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Section
6.04 Proceeds
to be Turned Over to Administrative Agent
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23
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Section
6.05 Application
of Proceeds
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24
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Section
6.06 Code
and Other Remedies
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24
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Section
6.07 Registration
Rights
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25
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Section
6.08 Waiver;
Deficiency
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26
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Section
6.09 Non-Judicial
Enforcement
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26
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Article
VII
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The
Administrative Agent
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Section
7.01 Administrative
Agent’s Appointment as Attorney-in-Fact, Etc.
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26
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Section
7.02 Duty
of Administrative Agent
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28
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Section
7.03 Execution
of Financing Statements
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29
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Section
7.04 Authority
of Administrative Agent
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29
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Article
VIII
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Subordination
of Indebtedness
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Section
8.01 Subordination
of All Grantor Claims
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29
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Section
8.02 Claims
in Bankruptcy
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30
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Section
8.03 Payments
Held in Trust
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30
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Section
8.04 Liens
Subordinate
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30
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Section
8.05 Notation
of Records
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30
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Article
IX
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Miscellaneous
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Section
9.01 No
Waiver by Course of Conduct; Cumulative Remedies
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31
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Section
9.02 Notices
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31
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Section
9.03 Enforcement
Expenses; Indemnities
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31
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Section
9.04 Amendments
in Writing
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32
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Section
9.05 Successors
and Assigns
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32
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Section
9.06 Survival;
Revival; Reinstatement
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32
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Section
9.07 Counterparts;
Integration; Effectiveness
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33
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Section
9.08 Severability
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33
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Section
9.09 Set-Off
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33
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Section
9.10 Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial
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34
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Section
9.11 Headings
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35
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Section
9.12 Acknowledgments
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35
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Section
9.13 Additional
Grantors and Additional Pledged Securities
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36
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Section
9.14 Releases
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36
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Section
9.15 Acceptance
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37
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SCHEDULES:
1 Notice
Addresses
2 Investment
Property
3 Perfection
Matters
4 Location
of Jurisdiction of Organization and Chief Executive Office
5 Inventory
and Equipment Locations
6 Intellectual
Property
7 Receivables
from Government Authorities
ANNEXES:
I
Form of Acknowledgment and Consent
II
Form of Assumption Agreement
III
Form of Supplement
This
GUARANTY AND COLLATERAL AGREEMENT, dated as of September
28, 2007, is
made by Xxx Energy Corporation, a corporation duly
formed and
existing under the laws of the State of Delaware (the “Borrower”),
Xxx Energy I, LLC, a limited liability
company
duly formed and existing under the laws of the State of Delaware (“Xxx
Energy I”), Xxx Energy Operating Corp., a corporation duly
formed and
existing under the laws of the State of Delaware (“Xxx Energy
Operating”),
Penn Tex Energy, Inc., a corporation
duly formed and
existing under the laws of the State of Delaware (“Penn Tex
Energy”),
PennTex Resources Illinois, Inc., a corporation
duly formed and
existing under the laws of the State of Delaware (“PennTex Resources
Illinois”), Xxx
Energy IV, LLC, a limited liability
company
duly formed and existing under the laws of the State of Delaware (“Xxx Energy
IV”)
and
PennTex Resources, L.P., a limited partnership duly formed and
existing under the laws of the State of Texas (“Penn Tex Resources”) (the
Borrower, Xxx Energy I, Xxx Energy Operating, Penn Tex Energy, Penn Tex
Resources Illinois, Xxx Energy IV, Penn Tex Resources and any other Person
that
becomes a party hereto from time to time after the date hereof, the
“Grantors”), in favor of KeyBank National
Association, as administrative agent (in such capacity, together with its
successors in such capacity, the “Administrative Agent”) for the banks
and other financial institutions (the “Lenders”) from time to time
parties to the Credit Agreement dated as of September 28, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the Administrative Agent and the
Lenders.
R
E C I T A L S
A. It
is a condition precedent to the obligation of the Lenders to make their
respective loans to and extensions of credit on behalf of the Borrower under
the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the
Lenders.
B. Now,
therefore, in consideration of the premises herein and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and
to
induce the Lenders to make their respective loans to and extensions of credit
on
behalf of the Borrower thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Lenders, as
follows:
ARTICLE
I
Definitions
Section
1.01 Definitions.
(a) Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
have the meanings given to them in the Credit Agreement, and all uncapitalized
terms which are defined in the UCC (as defined herein) on the date hereof are
used herein as so defined.
(b) The
following terms are used herein as defined in the UCC on the date
hereof: Accounts, Certificated Security, Chattel Paper, Commercial
Tort Claims, Documents, Electronic Chattel Paper, Equipment, Farm Products,
Fixtures, General Intangibles, Instruments,
-1-
Inventory,
Letter-of-Credit Rights, Payment Intangibles, Proceeds, Supporting Obligations,
and Tangible Chattel Paper.
(c) The
following terms have the following meanings:
“Acknowledgment
and Consent” means an Acknowledgement and Consent substantially in the form
attached hereto as Annex I.
“Agreement”
means this Guaranty and Collateral Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
“Assumption
Agreement” means an Assumption Agreement substantially in the form attached
hereto as Annex II.
“Bankruptcy
Code” means Xxxxx 00, Xxxxxx Xxxxxx Code, as amended from time to
time.
“Borrower
Obligations” means the collective reference to the unpaid principal of and
interest on the Loans and reimbursement obligations in respect of Letters of
Credit, the Indebtedness, and all other obligations and liabilities of the
Borrower and the other Grantors (including, without limitation, interest
accruing at the then applicable rate provided in the Credit Agreement after
the
maturity of the Loans and LC Exposure and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to the
Secured Parties, whether direct or indirect, absolute or contingent, due or
to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Secured Documents, in each case, whether on
account of principal, interest, reimbursement obligations, payments in respect
of an early termination date, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Secured Parties that are required to be paid by the Borrower pursuant to the
terms of any of the Secured Documents).
“Collateral”
has the meaning assigned such term in Section 3.01.
“Collateral
Account” means any collateral account established by the Administrative
Agent as provided in Section 6.01 or Section 6.04.
“Copyright
Licenses” means any written agreement naming any Grantor as licensor or
licensee, granting any right under any Copyright, including the grant of rights
to manufacture, distribute, exploit and sell materials derived from any
Copyright.
“Copyrights”
means the collective reference to (a) all copyrights arising under the laws
of
the United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished
(including those listed in Schedule 6), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
and (b) the right to obtain all renewals thereof.
-2-
“Deposit
Account” has the meaning given such term in the Uniform Commercial Code of
any applicable jurisdiction and, in any event, including any demand, time,
savings, passbook or like account maintained with a depositary
institution.
“Excluded
Property” means any of the following property or assets of any
Grantor:
(a) only
to the extent such prohibition is permitted pursuant to the Credit Agreement,
any property or assets to the extent that such Grantor is prohibited from
granting a security interest in, pledge of, or charge, mortgage or other Lien
upon any such property or assets by reason of (i) an existing negative
pledge provision or (ii) applicable law or regulation to which such Grantor
is subject;
(b) General
Intangibles, Investment Property and all other Collateral of a contractual
nature which by their respective express terms (i) prohibit the grant of any
Lien, (ii) provides that any such grant shall constitute or result in the
unenforceability of any right, interest or benefit of such Grantor therein,
or
in a breach or termination thereof, or a default thereunder, or (iii) requires
the consent of a third party thereto for a grant of a Lien therein;
(c) permits
and licenses to the extent the grant of a Lien therein is prohibited under
applicable law or regulation or by their express terms, except to the extent
such prohibition is ineffective under the UCC;
(d) any
deposit accounts (i) exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of such Grantor’s
employees or (ii) exclusively holding deposits made by any purchasers of
Hydrocarbons in contemplation of the sale of such Hydrocarbons;
(e)
any Vehicles; and
(f) 34%
of the Equity Interests in each direct Foreign Subsidiary of such Grantor that
is a “controlled foreign corporation” under the Code.
“Foreign
Subsidiary” means any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
“Foreign
Subsidiary Voting Stock” means the voting Equity Interests of any Foreign
Subsidiary.
“Grantor
Claims” has the meaning assigned to such term in Section 8.01.
“Guarantor
Obligations” means with respect to any Guarantor, the collective reference
to (a) the Borrower Obligations and (b) all obligations and liabilities of
such
Guarantor which may arise under or in connection with any Secured Document
to
which such Guarantor is a party (including, without limitation, Article II
of
this Agreement), in each case, whether on account of principal, interest,
guarantee obligations, reimbursement obligations, payments in respect of an
early termination date, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to any
Secured Party under any Secured Document).
-3-
“Guarantors”
means the collective reference to all Grantors other than the
Borrower.
“Intellectual
Property” means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and
the
Trademark Licenses, and all rights to xxx at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
“Intercompany
Note” means any promissory note evidencing loans made by any Grantor to the
Borrower or any of its Subsidiaries.
“Investment
Property” means the collective reference to (a) all “investment property” as
such term is defined in Section 9.102(a)(49) of the UCC (other than any Foreign
Subsidiary Voting Stock excluded from the definition of “Pledged Securities”)
and (b) whether or not constituting “investment property” as so defined, all
Pledged Notes and all Pledged Securities.
“Issuers”
means the collective reference to each issuer of any Investment
Property.
“LLC”
means, with respect to any Grantor, each limited liability company described
or
referred to in Schedule 2 in which such Grantor has an interest.
“LLC
Agreement” means each operating agreement relating to an LLC, as each
agreement has heretofore been, and may hereafter be, amended, restated,
supplemented or otherwise modified from time to time.
“Obligations”
means: (a) in the case of the Borrower, the Borrower Obligations and
(b) in the case of each Guarantor, its Guarantor Obligations.
“Partnership”
means, with respect to any Grantor, each partnership described or referred
to in
Schedule 2 in which such Grantor has an interest.
“Partnership
Agreement” means each partnership agreement governing a Partnership, as each
such agreement has heretofore been, and may hereafter be, amended, restated,
supplemented or otherwise modified.
“Patent
License” means all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any thereof referred to in Schedule 6.
“Patents”
means the collective reference to (a) all letters patent of the United States,
any other country or any political subdivision thereof, all reissues and
extensions thereof and all goodwill associated therewith, including any of
the
foregoing referred to in Schedule 6, (b) all applications for letters patent
of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including any of the foregoing referred to in
Schedule 6 and (c) all rights to obtain any reissues or extensions of the
foregoing.
-4-
“Pledged
LLC Interests” means, with respect to any Grantor, all right, title and
interest of such Grantor as a member of all LLCs and all right, title and
interest of such Grantor in, to and under the LLC Agreements.
“Pledged
Notes” all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued
in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).
“Pledged
Partnership Interests” means, with respect to any Grantor, all right, title
and interest of such Grantor as a limited or general partner in all Partnerships
and all right, title and interest of such Grantor in, to and under the
Partnership Agreements.
“Pledged
Securities” means: (a) the Equity Interests described or referred to in
Schedule 2 (as the same may be supplemented from time to time pursuant to a
Supplement), together with any other Equity Interests of any Person that may
be
issued or granted to, or held by, any Grantor while this Agreement is in effect;
provided that in no event shall more than 66% of the total outstanding Foreign
Subsidiary Voting Stock of any Foreign Subsidiary be required to be pledged
hereunder; including, but not limited to, all Pledged LLC Interests and Pledged
Partnership Interests related thereto; and (b) the certificates or instruments,
if any, representing (i) such Equity Interests, (ii) all dividends (cash, Equity
Interests or otherwise), cash, instruments, rights to subscribe, purchase or
sell and all other rights and Property from time to time received, receivable
or
otherwise distributed in respect of or in exchange for any or all of such
securities, (iii) all replacements, additions to and substitutions for any
of
the Property referred to in this definition, including, without limitation,
claims against third parties, (iv) the proceeds, interest, profits and other
income of or on any of the Property referred to in this definition, (v) all
security entitlements in respect of any of the foregoing, if any, and (vi)
all
books and records relating to any of the Property referred to in this
definition.
“Proceeds”
means all “proceeds” as such term is defined in the UCC on the date hereof and,
in any event, shall include, without limitation, all dividends or other income
from the Pledged Securities, collections thereon or distributions or payments
with respect thereto.
“Receivable”
means any right to payment for goods sold or leased or for services rendered,
whether or not such right is evidenced by an Instrument or Chattel Paper and
whether or not it has been earned by performance (including any
Account).
“Secured
Documents” means the collective reference to the Credit Agreement, the other
Loan Documents, each Secured Swap Agreement and any other document made,
delivered or given in connection with any of the foregoing.
“Secured
Parties” means the collective reference to the Administrative Agent, the
Lenders, and the Lenders and Affiliates of Lenders that are parties to Secured
Swap Agreements. For the avoidance of doubt, (a) a Lender or an
Affiliate of a Lender that is a party to a Swap Agreement between it and the
Borrower or any or any Subsidiary ceases immediately and automatically to be
a
Secured Party when such Swap Agreement ceases to be a Secured Swap Agreement,
and (b) a Person that is an Affiliate of a Lender when it became a party to
a Swap
-5-
Agreement
between it and the Borrower or any Subsidiary immediately and automatically
ceases to be a Secured Party when it no longer is an Affiliate of a Lender,
and
in each case, it shall have no benefits, rights or other interests under this
Agreement, including the Liens and guarantees provided herein, or then or
thereafter be deemed a Secured Party hereunder for any purpose or
reference.
“Secured
Swap Agreement” means any Swap Agreement between the Borrower or any of its
Subsidiaries and any Lender or any Affiliate of any Lender (as long
as and solely for the period during which such Person is an Affiliate of a
Lender) while such Person (or, in the case of an Affiliate of a Lender, the
Person so affiliated therewith) is a Lender regardless of when such Swap
Agreement was entered into. For the avoidance of doubt, a Swap
Agreement immediately and automatically ceases to be a Secured Swap Agreement
if
(a) the Person that is the counterparty to the Borrower or one of its
Subsidiaries under a Swap Agreement ceases to be a Lender under the Credit
Agreement (or, in the case of an Affiliate of a Lender, the Person affiliated
therewith ceases to be a Lender under the Credit Agreement) or (b) all
amounts owed under the Loan Documents are paid, no Letters of Credit are
outstanding and all Commitments are terminated.
“Securities
Act” means the Securities Act of 1933, as amended.
“Trademark
License” means any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark.
“Trademarks”
means (a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, and all goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
including any of the foregoing referred to in Schedule 6 and (b) the right
to
obtain all renewals thereof.
“Supplement”
means a Supplement substantially in the form attached hereto as
Annex III.
“UCC”
means the Uniform Commercial Code as from time to time in effect in the State
of
Texas; provided, however, that, in the event that, by reason of mandatory
provisions of law, any of the attachment, perfection or priority of the
Administrative Agent’s security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State
of
Texas, the term “UCC” shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection, the effect thereof or priority and for purposes of
definitions related to such provisions.
“Vehicles”
means all cars, trucks, trailers, construction and earth moving equipment and
other vehicles covered by a certificate of title law of any state and, in any
event including, without limitation, the vehicles listed on Schedule 7 and
all
tires and other appurtenances to any of the foregoing.
-6-
Section
1.02 Other
Definitional Provisions. Where the context requires, terms
relating to the Collateral or any part thereof, when used in relation to a
Grantor, refer to such Grantor’s Collateral or the relevant part
thereof.
Section
1.03 Rules
of Interpretation. Section 1.04 and Section 1.05 of the
Credit Agreement are hereby incorporated herein by reference and shall apply
to
this Agreement, mutatismutandis.
ARTICLE
II
Guarantee
Section
2.01 Guarantee.
(a) Each
of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Secured Parties and each of their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
in cash when due (whether at the stated maturity, by acceleration or otherwise)
of the Borrower Obligations. This is a guarantee of payment and not
collection and the liability of each Guarantor is primary and not
secondary.
(b) Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Loan Documents
shall in no event exceed the amount which can be guaranteed by such Guarantor
under applicable federal and state laws relating to the insolvency of debtors
(after giving effect to the right of contribution established in Section
2.02).
(c) Each
Guarantor agrees that the Borrower Obligations may at any time and from time
to
time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee contained in this Article II or affecting the
rights and remedies of any Secured Party hereunder.
(d) Each
Guarantor agrees that if the maturity of the Borrower Obligations is accelerated
by bankruptcy or otherwise, such maturity shall also be deemed accelerated
for
the purpose of this guarantee without demand or notice to such
Guarantor. Unless released pursuant to Section 9.14, the guarantee of
each Guarantor contained in this Article II shall remain in full force and
effect until all the Borrower Obligations shall have been satisfied by payment
in full in cash, no Letter of Credit shall be outstanding and all of the
Commitments are terminated, notwithstanding that from time to time during the
term of the Credit Agreement, no Borrower Obligations may be
outstanding.
(e) No
payment made by any Grantor, any other guarantor or any other Person or received
or collected by any Secured Party from the Borrower, any of the Guarantors,
any
other guarantor or any other Person by virtue of any action or proceeding or
any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the
-7-
Borrower
Obligations are paid in full in cash, no Letter of Credit shall be outstanding
and all of the Commitments are terminated.
Section
2.02 Right
of Contribution. Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s right of
contribution shall be subject to the terms and conditions of Section
2.03. The provisions of this Section 2.02 shall in no respect limit
the obligations and liabilities of any Guarantor to the Secured Parties, and
each Guarantor shall remain liable to the Secured Parties for the full amount
guaranteed by such Guarantor hereunder.
Section
2.03 No
Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by any Secured
Party, no Guarantor shall be entitled to exercise its rights to be subrogated
to
any of the rights of any Secured Party against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by
any
Secured Party for the payment of the Borrower Obligations, nor shall any
Guarantor seek any indemnity, exoneration, participation, contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Secured Parties
on account of the Borrower Obligations are irrevocably and indefeasibly paid
in
full in cash, no Letter of Credit shall be outstanding and all of the
Commitments are terminated. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Borrower Obligations shall not have been irrevocably and indefeasibly paid
in
full in cash, any Letter of Credit shall be outstanding or any of the
Commitments are in effect, such amount shall be held by such Guarantor in trust
for the Secured Parties, and shall, forthwith upon receipt by such Guarantor,
be
turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Borrower Obligations in accordance with
Section 10.02(c) of the Credit Agreement.
Section
2.04 Guaranty
Amendments, Etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder, and such Guarantor’s obligations
hereunder shall not be released, discharged or otherwise affected,
notwithstanding that, without any reservation of rights against any Guarantor
and without notice to, demand upon or further assent by any Guarantor (which
notice, demand and assent requirements are hereby expressly waived by such
Guarantor): (i) any demand for payment of any of the Borrower
Obligations made by any Secured Party may be rescinded by such Secured Party
or
otherwise and any of the Borrower Obligations continued; (ii) the Borrower
Obligations, the liability of any other Person upon or for any part thereof
or
any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released
by,
or any indulgence or forbearance in respect thereof granted by, any Secured
Party; (iii) any Secured Document may be amended, modified, supplemented
or terminated, in whole or in part, as the Secured Parties may deem advisable
from time to time; (iv) any collateral security, guarantee or right of offset
at
any time held by any Secured Party for the payment of the Borrower Obligations
may be sold, exchanged, waived, surrendered or released; (v) any additional
guarantors, makers or endorsers of the
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Borrower
Obligations may from time to time be obligated on the Borrower Obligations
or
any additional security or collateral for the payment and performance of the
Borrower Obligations may from time to time secure the Borrower Obligations;
or
vi) any other event shall occur which constitutes a defense or release
of
sureties generally. No Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Borrower Obligations or for the guarantee contained in this
Article II or any Property subject thereto.
Section
2.05 Waivers. Each
Guarantor hereby waives any and all notice of the creation, renewal, extension
or accrual of any of the Borrower Obligations and notice of or proof of reliance
by any Secured Party upon the guarantee contained in this Article II or
acceptance of the guarantee contained in this Article II; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Article II and no notice of creation
of the Borrower Obligations or any extension of credit already or hereafter
contracted by or extended to the Borrower need be given to any Guarantor; and
all dealings between the Borrower and any of the Guarantors, on the one hand,
and the Secured Parties, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Article II. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment
to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations.
Section
2.06 Guaranty
Absolute and Unconditional.
(a) Each
Guarantor understands and agrees that the guarantee contained in this
Article II is, and shall be construed as, a continuing, completed, absolute
and unconditional guarantee of payment, and each Guarantor hereby waives any
defense of a surety or guarantor or any other obligor on any obligations arising
in connection with or in respect of any of the following and hereby agrees
that
its obligations hereunder shall not be discharged or otherwise affected as
a
result of any of the following:
(i) the
invalidity or unenforceability of any Secured Document, any of the Borrower
Obligations or any other collateral security therefor or guarantee or right
of
offset with respect thereto at any time or from time to time held by any Secured
Party;
(ii) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against any Secured Party;
(iii) the
insolvency, bankruptcy arrangement, reorganization, adjustment, composition,
liquidation, disability, dissolution or lack of power of the Borrower or any
other Guarantor or any other Person at any time liable for the payment of all
or
part of the Obligations, including any discharge of, or bar or stay against
collecting, any Obligation (or any part of them or interest therein) in or
as a
result of such proceeding;
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(iv) any
sale, lease or transfer of any or all of the assets of the Borrower or any
other
Guarantor, or any changes in the shareholders of the Borrower or any other
Guarantor;
(v) any
change in the corporate existence (including its constitution, laws, rules,
regulations or power), structure or ownership of any Grantor or in the
relationship between the Borrower and any Grantor;
(vi) the
fact that any Collateral or Lien contemplated or intended to be given, created
or granted as security for the repayment of the Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or subordinate
to any other Lien, it being recognized and agreed by each of the Guarantors
that
it is not entering into this Agreement in reliance on, or in contemplation
of
the benefits of, the validity, enforceability, collectability or value of any
of
the Collateral for the Obligations;
(vii) the
absence of any attempt to collect the Obligations or any part of them from
any
Grantor;
(viii) (1)
any Secured Party’s election, in any proceeding instituted under chapter 11 of
the Bankruptcy Code, of the application of Section 1111(b)(2) of the
Bankruptcy Code; (a) any borrowing or grant of a Lien by the Borrower, as
debtor-in-possession, or extension of credit, under Section 364 of the
Bankruptcy Code; (b) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of any Secured Party’s claim (or claims) for
repayment of the Obligations; (c) any use of cash collateral under
Section 363 of the Bankruptcy Code; (d) any agreement or stipulation as to
the provision of adequate protection in any bankruptcy proceeding; (e) the
avoidance of any Lien in favor of the Secured Parties or any of them for any
reason; or (f) failure by any Secured Party to file or enforce a claim against
the Borrower or its estate in any bankruptcy or insolvency case or proceeding;
or
(ix) any
other circumstance or act whatsoever, including any action or omission of the
type described in Section 2.04 (with or without notice to or knowledge of the
Borrower or such Guarantor), which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this
Article II, in bankruptcy or in any other instance.
(b) When
making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, any Secured Party may, but shall be under
no
obligation to, join or make a similar demand on or otherwise pursue or exhaust
such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by any Secured Party to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security
or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of
any
obligation or liability hereunder, and shall not impair or affect the rights
and
remedies, whether express, implied or available as a matter of law, of any
Secured Party against any Guarantor. For
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the
purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.
Section
2.07 Reinstatement. The
guarantee contained in this Article II shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Borrower Obligations is rescinded or must otherwise be restored
or
returned by any Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or
as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its Property, or otherwise, all as though such payments had not been
made.
Section
2.08 Payments. Subject
to Section 5.03 of the Credit Agreement, each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent, for the ratable
benefit of the Secured Parties, without set-off, deduction or counterclaim,
in
dollars, in immediately available funds, at the offices of the Administrative
Agent specified in Section 12.01 of the Credit Agreement (or from time to
time designated in accordance with the terms thereof).
ARTICLE
III
Grant
of Security Interest
Section
3.01 Grant
of Security Interest. Each Grantor hereby pledges, and
collaterally assigns and transfers to the Administrative Agent, and hereby
grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, a continuing security interest in, lien on and right of setoff against,
all of the following Property now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future
may
acquire any right, title or interest and whether now existing or hereafter
coming into existence (collectively, the “Collateral”), as security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor’s
Obligations:
|
(a)
|
all
Accounts;
|
|
(b)
|
all Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel
Paper);
|
|
(c)
|
all Commercial Tort Claims (including, without limitation, with respect
to
the matters set forth on Schedule
3);
|
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(d)
|
all Deposit Accounts;
|
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(e)
|
all Documents;
|
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(f)
|
all Equipment;
|
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(g)
|
all Fixtures;
|
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(h)
|
all General Intangibles (including, without limitation, all rights
in and
under Swap Agreements);
|
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(i)
|
all Instruments;
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(j)
|
all Intellectual Property;
|
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(k)
|
all Inventory;
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(l)
|
all Investment Property;
|
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(m)
|
all Letter-of-Credit Rights;
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(n)
|
all other Property not otherwise described above (except for the
Excluded
Property and any Property specifically excluded from any defined
term used
in any clause of this Section);
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(o)
|
all books and records pertaining to the Collateral;
and
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(p)
|
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;
|
provided,
however, notwithstanding anything to the contrary contained herein or in an
other Secured Document, this Agreement shall not grant, effect or constitute
or
evidence a grant of a security interest, collateral assignment or transfer
or
any other type of Lien in Excluded Property.
Section
3.02 Transfer
of Pledged Securities. All certificates or instruments
representing or evidencing the Pledged Securities shall be delivered to and
held
pursuant hereto by the Administrative Agent or a Person designated by the
Administrative Agent and shall be in suitable form for transfer by delivery,
or
shall be accompanied by duly executed instruments of transfer or assignment
in
blank, and accompanied by any required transfer tax stamps to effect the pledge
of the Pledged Securities to the Administrative
Agent. Notwithstanding the preceding sentence, at the Administrative
Agent’s discretion, all Pledged Securities must be delivered or transferred in
such manner as to permit the Administrative Agent to be a “protected purchaser”
to the extent of its security interest as provided in Section 8.303 of the
UCC (if the Administrative Agent otherwise qualifies as a protected
purchaser). During the continuance of an Event of Default, the
Administrative Agent shall have the right, at any time in its discretion and
without notice, to transfer to or to register in the name of the Administrative
Agent or any of its nominees any or all of the Pledged Securities, subject
only
to the revocable rights of the relevant Grantor specified in Section
6.03. In addition, during the continuance of an Event of Default, the
Administrative Agent shall have the right at any time to exchange certificates
or instruments representing or evidencing Pledged Securities for certificates
or
instruments of smaller or larger denominations.
ARTICLE
IV
Representations
and Warranties
To
induce
the Administrative Agent and the Lenders to enter into the Credit Agreement
and
to induce the Lenders to make their respective loans to and extensions of credit
to the Borrower thereunder and to induce the Lenders (and their Affiliates)
to
enter into Swap
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Agreements
with the Borrower and its Subsidiaries, the Borrower and, solely with respect
to
itself and as applicable, each other Grantor hereby represents and warrants
to
the Administrative Agent and each Lender that:
Section
4.01 Representations
in Credit Agreement. In the case of each Grantor other than the
Borrower, the representations and warranties set forth in Article VII of
the Credit Agreement as they relate to such Grantor or to the Loan Documents
to
which such Grantor is a party, each of which is hereby incorporated be
reference, are true and correct, and the Administrative Agent and the Lenders
shall be entitled to rely on each of them, provided that each reference in
each
such representation and warranty to the Borrower’s knowledge shall, for the
purposes of this Section 4.01, be deemed to be a reference to such Grantor’s
knowledge.
Section
4.02 Title;
No Other Liens. Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Secured Parties pursuant
to
this Agreement and the other Liens permitted to exist on the Collateral by
the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or
other public notice with respect to all or any part of the Collateral is on
file
or of record in any public office, except such as have been filed in favor
of
the Administrative Agent, for the ratable benefit of the Secured Parties,
pursuant to this Agreement or as are permitted by the Credit Agreement, and
such
as shall be terminated substantially contemporaneous with the consummation
of
the Transactions. For the avoidance of doubt, it is understood and
agreed that any Grantor may, as part of its business, grant licenses to third
parties to use Intellectual Property owned or developed by a
Grantor. For purposes of this Agreement and the other Loan Documents,
such licensing activity shall not constitute a “Lien” on such Intellectual
Property. Each of the Administrative Agent and each Lender
understands that any such licenses may be exclusive to the applicable licensees,
and such exclusivity provisions may limit the ability of the Administrative
Agent to utilize, sell, lease or transfer the related Intellectual Property
or
otherwise realize value from such Intellectual Property pursuant
hereto.
Section
4.03 Perfected
First Priority Liens. The security interests granted pursuant to
this Agreement b) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent
in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for
the
ratable benefit of the Secured Parties, as collateral security for such
Grantor’s Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor and c) are prior to all other Liens on the
Collateral in existence on the date hereof except for unrecorded Liens permitted
by the Credit Agreement which have priority over the Liens on the Collateral
by
operation of law.
Section
4.04 Grantor
Information. On the date hereof, the correct legal name of such
Grantor, all names and trade names that such Grantor has used in the last five
years, such Grantor’s jurisdiction of organization and each jurisdiction of
organization of such Grantor over the last five years, such Grantor’s
organizational number (if any), taxpayer identification number, and the
location(s) of such Grantor’s chief executive office or sole place of business
or principal residence, as the case may be, over the last five years are
specified on Schedule 4. Such Grantor has furnished to the
Administrative Agent a certified charter, certificate of
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incorporation
or other organization document and long-form good standing certificate as of
a
date which is recent to the date hereof.
Section
4.05 Inventory
and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
5, other than Inventory or Equipment of an inconsequential value or nature
or
that is in transit to a purchaser or to one or more of the locations listed
in
Schedule 5.
Section
4.06 Farm
Products. None of the Collateral constitutes, or is the Proceeds
of, Farm Products.
Section
4.07 Investment
Property.
(a) The
Pledged Securities required to be pledged hereunder and under the Credit
Agreement by such Grantor are listed in Schedule 2. The shares of
Pledged Securities pledged by such Grantor hereunder constitute all the issued
and outstanding shares of all classes of the Equity Interests of each Issuer
owned by such Grantor which is a Domestic Subsidiary of such Grantor and 66%
of
the issued and outstanding shares of all classes of the Equity Interests of
each
Issuer owned by such Grantor which is a Foreign Subsidiary. All the
shares of the Pledged Securities have been duly and validly issued and are
fully
paid and nonassessable; and such Grantor is the record and beneficial owner
of,
and has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of,
any
other Person, except the security interest created by this Agreement, and has
rights in or the power to transfer the Investment Property in which a Lien
is
granted by it hereunder, free and clear of any Lien.
(b) There
are no restrictions on transfer (that have not been waived or otherwise
consented to) in the LLC Agreement governing any Pledged LLC Interest or the
Partnership Agreement governing any Pledged Partnership Interest or any other
agreement relating thereto which would limit or restrict: (1) the
grant of a security interest in the Pledged LLC Interests or the Pledged
Partnership Interests, (2) the perfection of such security interest or (3)
the
exercise of remedies in respect of such perfected security interest in the
Pledged LLC Interests or the Pledged Partnership Interests, in each case, as
contemplated by this Agreement. Upon the exercise of remedies in
respect of the Pledged LLC Interests or the Pledged Partnership Interests as
provided for herein and otherwise as required by then applicable law, a
transferee or assignee of a membership interest or a partnership interest,
as
the case may be, of such LLC or Partnership, as the case may be, shall become
a
member or partner, as the case may be, of such LLC or Partnership, as the case
may be, entitled to participate in the management thereof to the extent
immediately theretofore held by the assignor or transferor, as the case may
be,
and, upon the transfer of the entire interest of such Grantor, such Grantor
shall cease to be a member or partner, as the case may be.
(c) Each
of the Pledged Notes constitutes the legal, valid and binding obligation of
the
obligor with respect thereto, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles
-14-
(whether
considered in a proceeding in equity or at law) and an implied covenant of
good
faith and fair dealing.
Section
4.08 Receivables.
(a) No
amount payable to such Grantor under or in connection with any Receivable is
evidenced by any Instrument or Chattel Paper which has not been delivered to
the
Administrative Agent.
(b) None
of the obligors on any Receivables is a Governmental Authority, except as
disclosed on Schedule 7.
(c) The
amounts represented by such Grantor to the Lenders from time to time as owing
to
such Grantor in respect of the Receivables will at such times be
accurate.
Section
4.09 Intellectual
Property.
(a) Schedule
6 lists all Intellectual Property owned by such Grantor in its own name on
the
date hereof which consists of Patents, patent applications and registered
copyrights.
(b) On
the date hereof, all material Intellectual Property is valid, subsisting,
unexpired and enforceable, has not been abandoned and does not infringe the
intellectual property rights of any other Person.
(c) Except
as set forth in Schedule 6 (and any implied warranties, resulting from product
sales or services or implied licenses arising in the ordinary course of such
Grantor’s business), on the date hereof, none of the Intellectual Property is
the subject of any licensing or franchise agreement pursuant to which such
Grantor is the licensor or franchisor.
(d) No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or such Grantor’s rights
in, any Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect.
(e) No
action or proceeding is pending, or, to the knowledge of such Grantor,
threatened, on the date hereof ii) seeking to limit, cancel or question the
validity of any Intellectual Property or such Grantor’s ownership interest
therein, or iii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
Section
4.10 Commercial
Tort Claims.
(a) On
the date hereof, except to the extent listed in Schedule 3, no Grantor has
rights in any Commercial Tort Claim with an asserted value in excess of
$1,000,000.
(b) Upon
the filing of a financing statement covering any Commercial Tort Claim referred
to in Section 5.10 against such Grantor in the jurisdiction specified in
Schedule 3, the security interest granted in such Commercial Tort Claim will
constitute a valid perfected security interest in favor of the Administrative
Agent, for the ratable benefit of the Secured
-15-
Parties,
as collateral security for such Grantor’s Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase such Collateral from such Grantor, which security
interest shall be prior to all other Liens on such Collateral except for
unrecorded liens permitted by the Credit Agreement which have priority over
the
Liens on such Collateral by operation of law.
Section
4.11 Benefit
to the Guarantors. The Borrower is a member of an affiliated
group of companies that includes such Grantor, and the Borrower and the other
Grantors are engaged in related businesses. Such Grantor may
reasonably be expected to benefit, directly or indirectly, from the
Transactions; and such Grantor has determined that this Agreement is necessary
and convenient to the conduct, promotion and attainment of the business of
such
Grantor.
ARTICLE
V
Covenants
Each
Grantor covenants and agrees with the Administrative Agent and the Lenders
that,
from and after the date of this Agreement until the Borrower Obligations shall
have been indefeasibly paid in full in cash, no Letter of Credit shall be
outstanding and all of the Commitments shall have terminated:
Section
5.01 Covenants
and Events of Default in Credit Agreement. Such Grantor shall
take, or shall refrain from taking, as the case may be, each action that is
necessary to be taken or not taken, as the case may be, by it so that no Default
or Event of Default is caused by the failure to take such action or to refrain
from taking such action by such Grantor.
Section
5.02 Delivery
of Instruments, Certificated Securities and Chattel Paper. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument, Certificated Security or Chattel Paper,
such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly indorsed in a manner satisfactory
to
the Administrative Agent, to be held as Collateral pursuant to this
Agreement. Notwithstanding the foregoing, the Borrower shall not be
required to deliver such Instrument, Certificated Security or Chattel Paper
to
the Administrative Agent as set forth in the immediately preceding sentence
if
the value of an Instrument, Certificated Security or Chattel Paper is less
than
$50,000 or if the aggregate value of all such Instruments, Certificated
Securities and Chattel Paper is less than $200,000.
Section
5.03 Maintenance
of Insurance. Each Grantor agrees to maintain insurance on the
Collateral as set forth in Section 8.07 of the Credit Agreement.
Section
5.04 Payment
of Obligations. Each Grantor agrees to comply with the provisions
of Section 8.04 of the Credit Agreement with respect to its payment obligations
in the same manner as the Borrower is required thereunder.
Section
5.05 Maintenance
of Perfected Security Interest; Further Documentation.
(a) Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section
4.03
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and
shall
defend such security interest against the claims and demands of all Persons
whomsoever, subject to the rights of such Grantor under the Loan Documents
to
dispose of the Collateral.
(b) Such
Grantor or the Borrower will furnish to the Administrative Agent and the Lenders
from time to time statements and schedules further identifying and describing
the assets and property of such Grantor and such other reports in connection
therewith, in each case as the Administrative Agent may reasonably request,
all
in reasonable detail.
(c) At
any time and from time to time, upon the written request of the Administrative
Agent, and at the sole expense of such Grantor, such Grantor will promptly
and
duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, (i) delivering certificated securities, (ii) filing any
financing or continuation statements under the UCC (or other similar laws)
in
effect in any jurisdiction with respect to the security interests created hereby
and (iii) in the case of Investment Property, Deposit Accounts, Letter-of-Credit
Rights and any other relevant Collateral, taking any actions necessary to enable
the Administrative Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.
Section
5.06 Notices. Such
Grantor or the Borrower will advise the Administrative Agent, in reasonable
detail, of:
(a) any
Lien (other than security interests created hereby or Liens permitted under
the
Credit Agreement) on any of the Collateral of such Grantor which would
reasonably be expected to have an adverse affect on the ability of the
Administrative Agent to exercise any of its remedies hereunder; and
(b) of
the occurrence of any other event which could reasonably be expected to have
a
material adverse effect on the aggregate value of the Collateral or on the
security interests created hereby.
Section
5.07 Investment
Property.
(a) If
such Grantor shall become entitled to receive or shall receive any certificate
(including, without limitation, any certificate representing a dividend or
a
distribution in connection with any reclassification, increase or reduction
of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Equity Interests of any Issuer, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any shares
of
the Pledged Securities, or otherwise in respect thereof, such Grantor shall
accept the same as the agent of the Secured Parties, hold the same in trust
for
the Secured Parties, segregated from other Property of such Grantor, and deliver
the same forthwith to the Administrative Agent in the exact form received,
duly
indorsed by such Grantor to the Administrative Agent, if required, together
with
an undated stock power covering such certificate duly executed in blank by
such
Grantor and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof,
as
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additional
collateral security for the Obligations. Any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it hereunder
as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Investment
Property or any property shall be distributed upon or with respect to the
Investment Property pursuant to the recapitalization or reclassification of
the
capital of any Issuer or pursuant to the reorganization thereof, the property
so
distributed shall, unless otherwise subject to a perfected security interest
in
favor of the Administrative Agent, be delivered to the Administrative Agent
to
be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed
in respect of the Investment Property shall be received by such Grantor, such
Grantor shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, as additional collateral security for the Obligations.
(b) Without
the prior written consent of the Administrative Agent, such Grantor will not
(i)
unless otherwise expressly permitted hereby or under the other Loan Documents,
vote to enable, or take any other action to permit, any Issuer to issue any
Equity Interests of any nature or to issue any other securities convertible
into
or granting the right to purchase or exchange for any Equity Interests of any
nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Investment Property or
Proceeds thereof (except pursuant to a transaction expressly permitted by the
Credit Agreement), (iii) create, incur or permit to exist any Lien or option
in
favor of, or any claim of any Person with respect to, any of the Investment
Property or Proceeds thereof, or any interest therein, except for the security
interests created by this Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof except as expressly permitted pursuant to Section 9.16
of
the Credit Agreement.
(c) In
the case of each Grantor that is an Issuer, such Issuer agrees that (i) it
will
be bound by the terms of this Agreement relating to the Investment Property
issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.07(a)
with
respect to the Investment Property issued by it and (iii) the terms of Section
6.03(c) and Section 6.07 shall apply to it, mutatismutandis, with
respect to all actions that may be required of it pursuant to Section 6.03(c)
or
Section 6.07 with respect to the Investment Property issued by it. In
the case of any Issuer that is not a Grantor hereunder, such Grantor shall
promptly cause such Issuer to execute and deliver to the Administrative Agent
an
Acknowledgment and Consent.
(d) In
the case of each Grantor that is a partner in a Partnership, such Grantor hereby
consents to the extent required by the applicable Partnership Agreement to
the
pledge by each other Grantor, pursuant to the terms hereof, of the Pledged
Partnership Interests in such Partnership and to the transfer of such Pledged
Partnership Interests to the Administrative Agent or its nominee and to the
substitution of the Administrative Agent or its nominee as a substituted partner
in such Partnership with all the rights, powers and duties of a general partner
or a limited partner, as the case may be. In the case of each Grantor
that is a member of an LLC, such
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Grantor
hereby consents to the extent required by the applicable LLC Agreement to the
pledge by each other Grantor, pursuant to the terms hereof, of the Pledged
LLC
Interests in such LLC and to the transfer of such Pledged LLC Interests to
the
Administrative Agent or its nominee and to the substitution of the
Administrative Agent or its nominee as a substituted member of the LLC with
all
the rights, powers and duties of a member of such LLC.
(e) Such
Grantor shall not agree to any amendment of a Partnership Agreement or an LLC
Agreement that (i) in any way adversely affects the perfection of the security
interest of the Administrative Agent in the Pledged Partnership Interests or
Pledged LLC Interests pledged by such Grantor hereunder or (ii) causes any
Partnership Agreement or LLC Agreement to include an election to treat the
membership interests or partnership interests of such Grantor as a security
under Section 8-103 of the UCC.
(f) With
respect to Equity Interests in certificated form, such Grantor shall furnish
to
the Administrative Agent such stock or equity powers and other instruments
as
may be required by the Administrative Agent to assure the transferability of
the
Investment Property when and as often as may be reasonably requested by the
Administrative Agent.
(g) The
Pledged Securities set forth on Schedule 2 will at all times constitute not
less
than 100% of the Equity Interests of each Issuer which is a Domestic Subsidiary
and not less than 66% of the Equity Interests of each Issuer which is a Foreign
Subsidiary thereof owned by such Grantor. Such Grantor will not
permit any Issuer of any of the Pledged Securities set forth on Schedule 2
to
issue any new shares of any class of Equity Interests of such Issuer without
the
prior written consent of the Administrative Agent.
Section
5.08 Receivables.
(a) Other
than in the ordinary course of business consistent with its past practice,
such
Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise or settle any Receivable for less than the full
amount thereof, (iii) release, wholly or partially, any Person liable for the
payment of any Receivable, (iv) allow any credit or discount whatsoever on
any
Receivable or (v) amend, supplement or modify any Receivable in any manner
that
could adversely affect the value thereof.
(b) Such
Grantor will deliver to the Administrative Agent a copy of each material demand,
notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.
Section
5.09 Intellectual
Property.
(a) Such
Grantor (either itself or through licensees) will (i) continue to use each
material Trademark on each and every trademark class of goods applicable to
its
current line as reflected in its current catalogs, brochures and price lists
in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, in each case if such Grantor deems that such use is
appropriate under the circumstances, (ii) maintain as in the past the quality
of
products and services offered under such Trademark, (iii) use such Trademark
with the appropriate notice of registration and all other notices and legends
required of such Grantor by applicable Governmental Requirements, (iv) not
knowingly adopt or use any xxxx
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which
is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such xxxx pursuant to this Agreement
and
(v) not (and not permit any licensee or sublicensee thereof to) knowingly do
any
act or omit to do any act whereby such Trademark may become invalidated or
impaired in any way.
(b) Such
Grantor (either itself or through licensees) will not knowingly do any act,
or
omit to do any act, whereby any material Patent may, after giving immediately
effect to such act or omission, become forfeited, abandoned or dedicated to
the
public.
(c) Such
Grantor (either itself or through licensees) (i) will employ each material
Copyright, if such Grantor deems that such employment is appropriate under
the
circumstances, and (ii) will not (and will not permit any licensee or
sublicensee thereof to) knowingly do any act or omit to do any act whereby
any
material portion of the Copyrights may, after giving immediate effect to such
act or omission, become invalidated or otherwise impaired. Such
Grantor will not (either itself or through licensees) knowingly, do any act
whereby any material portion of the Copyrights may fall into the public
domain.
(d) Such
Grantor (either itself or through licensees) will not knowingly use any material
Intellectual Property to infringe the intellectual property rights of any other
Person.
(e) Such
Grantor or the Borrower will notify the Administrative Agent and the Lenders
as
soon as reasonably practicable after it knows, or a Responsible Officer has
reason to know, that any application or registration relating to any material
Intellectual Property may become forfeited, abandoned or dedicated to the
public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in,
any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor’s ownership of, or the validity of, any material Intellectual Property
or such Grantor’s right to register the same or to own and maintain the
same.
(f) Whenever
such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual
Property with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, such Grantor shall report such filing to the
Administrative Agent in the certificate it delivers pursuant to
Section 8.01(c) of the Credit Agreement which covers the quarterly period
in which such filing occurred. Upon request of the Administrative
Agent, such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Administrative Agent
may
reasonably request to evidence the Administrative Agent’s and the Lenders’
security interest in any Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby.
(g) Such
Grantor will take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency
in
any other country or any political subdivision thereof, to maintain and pursue
each application (and to obtain the relevant
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registration)
and to maintain each registration of the material Intellectual Property,
including, without limitation, filing of applications for renewal, affidavits
of
use and affidavits of incontestability.
(h) In
the event that any material Intellectual Property is infringed, misappropriated
or diluted by a third party, such Grantor shall (i) take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such Intellectual Property and (ii) if such Intellectual Property is of material
economic value, promptly notify the Administrative Agent after it learns thereof
and xxx for infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.
Section
5.10 Commercial
Tort Claims. If such Grantor shall obtain an interest in any
Commercial Tort Claim with an asserted value in excess of $1,000,000, such
Grantor shall within 30 days of obtaining such interest sign and deliver
documentation acceptable to the Administrative Agent that grants a security
interest under the terms and provisions of this Agreement in and to such
Commercial Tort Claim.
ARTICLE
VI
Remedial
Provisions
Section
6.01 Certain
Matters Relating to Receivables. At any time after the occurrence
and the continuation of an Event of Default:
(a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information
as
the Administrative Agent may require in connection with such test
verifications. At any time and from time to time, upon the
Administrative Agent’s request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to
the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.
(b) The
Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, subject to the Administrative Agent’s direction and control, and
the Administrative Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of
Default. If required by the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, any payments
of Receivables, when collected by any Grantor, (i) shall be forthwith (and,
in
any event, within two Business Days) deposited by such Grantor in the exact
form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for
the
account of the Lenders only as provided in Section 6.05, and (ii) until so
turned over, shall be held by such Grantor in trust for the Administrative
Agent
and the Lenders, segregated from other funds of such Grantor. Each
such deposit of Proceeds of
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Receivables
shall be accompanied by a report identifying in reasonable detail the nature
and
source of the payments included in the deposit.
(c) At
the Administrative Agent’s request, each Grantor shall deliver to the
Administrative Agent all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
Section
6.02 Communications
with Obligors; Grantors Remain Liable.
(a)
The Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default in its own name or in the name of others
may
at any time communicate with obligors under the Receivables to verify with
them
to the Administrative Agent’s satisfaction the existence, amount and terms of
any Receivables.
(b) Upon
the request of the Administrative Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall notify
obligors on the Receivables that the Receivables have been assigned to the
Administrative Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Administrative
Agent.
(c) Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Receivables to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the
Administrative Agent nor any Lender shall have any obligation or liability
under
any Receivable (or any agreement giving rise thereto) or Contract by reason
of
or arising out of this Agreement or the receipt by the Administrative Agent
or
any Lender of any payment relating thereto, nor shall the Administrative Agent
or any Lender be obligated in any manner to perform any of the obligations
of
any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of
any
performance by any party thereunder, to present or file any claim, to take
any
action to enforce any performance or to collect the payment of any amounts
which
may have been assigned to it or to which it may be entitled at any time or
times.
Section
6.03 Pledged
Securities.
(a) Unless
an Event of Default shall have occurred and be continuing and the Administrative
Agent shall have given notice to the relevant Grantor of the Administrative
Agent’s intent to exercise its corresponding rights pursuant to Section 6.03(b),
each Grantor shall be permitted to receive all cash dividends paid in respect
of
the Pledged Securities and all payments made in respect of the Pledged Notes,
in
each case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Credit Agreement,
and to exercise all voting and corporate or other organizational rights with
respect to the Investment Property; provided, however, that no vote shall be
cast or corporate or other organizational right exercised or other action taken
which, in the Administrative Agent’s reasonable judgment, would impair the
Collateral or which would be inconsistent with or result
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in
any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If
an Event of Default shall occur and be continuing and the Administrative Agent
shall give notice of its intent to exercise such rights to the relevant Grantor
or Grantors, during the pendancy of such Event of Default, (i) the
Administrative Agent shall have the right to receive any and all cash dividends,
payments or other Proceeds paid in respect of the Investment Property and make
application thereof to the Obligations in such order as the Administrative
Agent
may determine, and (ii) any or all of the Investment Property shall be
registered in the name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter and during the pendancy
of
such Default exercise (a) all voting, corporate and other rights pertaining
to
such Investment Property at any meeting of shareholders of the relevant Issuer
or Issuers or otherwise and (b) any and all rights of conversion, exchange
and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Grantor
or
the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege
or
option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each
Grantor hereby authorizes and instructs each Issuer of any Investment Property
pledged by such Grantor hereunder to (i) comply with any instruction received
by
it from the Administrative Agent in writing that (a) states that an Event of
Default has occurred and is continuing and (b) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from
such
Grantor, and each Grantor agrees that each Issuer shall be fully protected
in so
complying, and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Investment Property directly
to
the Administrative Agent.
Section
6.04 Proceeds
to be Turned Over to Administrative Agent. In addition to the
rights of the Administrative Agent and the Lenders specified in Section 6.01
with respect to payments of Receivables, if an Event of Default shall occur
and
be continuing, all Proceeds received by any Grantor consisting of cash, checks
and other near-cash items shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to
the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if
required). All such Proceeds received by the Administrative Agent
hereunder shall be held by the Administrative Agent in a Collateral Account
maintained under its sole dominion and control. All such Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the
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Lenders)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section
6.05.
Section
6.05 Application
of Proceeds. At such intervals as may be agreed upon by the
Borrower and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent’s election,
the Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds
of
the guarantee set forth in Article II, in payment of the Obligations in
accordance with Section 10.02(c) of the Credit Agreement.
Section
6.06 Code
and Other Remedies.
(a) If
an Event of Default shall occur and be continuing, the Administrative Agent,
on
behalf of the Secured Parties, may exercise, in addition to all other rights
and
remedies granted to them in this Agreement, the other Loan Documents and in
any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC or any
other applicable law or otherwise available at law or equity. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement
or
notice of any kind (except any notice required by law referred to below) to
or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or
any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of
any Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or
for
future delivery without assumption of any credit risk. Any Secured
Party shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and
released. Each Grantor further agrees, at the Administrative Agent’s
request, to assemble the Collateral and make it available to the Administrative
Agent at places which the Administrative Agent shall reasonably select, whether
at such Grantor’s premises or elsewhere. Any such sale or transfer by
the Administrative Agent either to itself or to any other Person shall be
absolutely free from any claim of right by any Grantor, including any equity
or
right of redemption, stay or appraisal which any Grantor has or may have under
any rule of law, regulation or statute now existing or hereafter adopted (and
each Grantor hereby waives any rights it may have in respect
thereof). Upon any such sale or transfer, the Administrative Agent
shall have the right to deliver, assign and transfer to the purchaser or
transferee thereof the Collateral so sold or transferred. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.06, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral
or
the rights of the Administrative Agent and the Secured Parties hereunder,
including, without limitation, reasonable attorneys’ fees and disbursements, to
the payment in whole or in part of the Obligations, in accordance with
Section 10.02(c) of the Credit Agreement, and only after such application
and after the payment by the Administrative Agent of any other amount required
by
-24-
any
provision of law, including, without limitation, Section 9-615(a)(3) of the
UCC,
need the Administrative Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor
waives all claims, damages and demands it may acquire against the Administrative
Agent or any Secured Party arising out of the exercise by them of any rights
hereunder except to the extent caused by the gross negligence or willful
misconduct of the Administrative Agent or such Secured Party or their respective
agents. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable
and
proper if given at least 10 days before such sale or other
disposition.
(b) In
the event that the Administrative Agent elects not to sell the Collateral,
the
Administrative Agent retains its rights to dispose of or utilize the Collateral
or any part or parts thereof in any manner authorized or permitted by law or
in
equity, and to apply the proceeds of the same towards payment of the
Obligations. Each and every method of disposition of the Collateral
described in this Agreement shall constitute disposition in a commercially
reasonable manner. Without limitation of the foregoing, any
disposition involving three (3) or more bidders that are “accredited investors”
(within the meaning of the Securities Act) shall constitute disposition in
a
commercially reasonable manner.
(c) The
Administrative Agent may appoint any Person as agent to perform any act or
acts
necessary or incident to any sale or transfer of the Collateral.
Section
6.07 Registration
Rights.
(a) If
the Administrative Agent shall determine to exercise its right to sell any
or
all of the Pledged Securities pursuant to Section 6.06, and if in the opinion
of
the Administrative Agent it is necessary or advisable to have the Pledged
Securities, or that portion thereof to be sold, registered under the provisions
of the Securities Act, the relevant Grantor will use commercially reasonable
efforts to cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as
may
be, in the reasonable opinion of the Administrative Agent, necessary or
advisable to register the Pledged Securities, or that portion thereof to be
sold, under the provisions of the Securities Act, (ii) use its commercially
reasonable efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the
date
of the first public offering of the Pledged Securities, or that portion thereof
to be sold and (iii) use its commercially reasonable efforts to cause the Issuer
to make all amendments thereto and/or to the related prospectus which, in the
opinion of the Administrative Agent, are necessary or advisable to enable it
to
realize upon such Collateral, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to use its
commercially reasonable efforts to cause such Issuer to comply with the
provisions of the securities or “Blue Sky” laws of any and all jurisdictions
which the Administrative Agent shall designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need
not
be audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
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(b) Each
Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, or may determine that a public sale is
impracticable or not commercially reasonable, and, accordingly, may resort
to
one or more private sales thereof to a restricted group of purchasers which
will
be obliged to agree, among other things, to acquire such securities for their
own account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private
sale may result in prices and other terms less favorable than if such sale
were
a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to
delay a sale of any of the Pledged Securities for the period of time necessary
to permit the Issuer thereof to register such securities for public sale under
the Securities Act, or under applicable state securities laws, even if such
Issuer would agree to do so.
(c) Each
Grantor agrees to use its commercially reasonable efforts to do or cause to
be
done all such other acts as may be necessary to make such sale or sales of
all
or any portion of the Pledged Securities pursuant to this Section 6.07 valid
and
binding and in compliance with any and all other applicable Governmental
Requirements. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.07 will cause irreparable injury to the
Secured Parties, that the Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.07 shall be specifically enforceable against such
Grantor, and, to the maximum extent permitted by applicable law, such Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
Section
6.08 Waiver;
Deficiency. To the maximum extent permitted by applicable law,
each Grantor waives and agrees not to assert any rights or privileges which
it
may acquire under the UCC. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency.
Section
6.09 Non-Judicial
Enforcement. The Administrative Agent may enforce its rights
hereunder without prior judicial process or judicial hearing, and to the extent
permitted by law, each Grantor expressly waives any and all legal rights which
might otherwise require the Administrative Agent to enforce its rights by
judicial process.
ARTICLE
VII
The
Administrative Agent
Section
7.01 Administrative
Agent’s Appointment as Attorney-in-Fact, Etc.
(a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent
and
any officer or agent thereof, with full power of substitution, as its true
and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of
-26-
such
Grantor and in the name of such Grantor or in its own name, for the purpose
of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary
or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Administrative
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:
(i) in
the name of such Grantor or its own name, or otherwise, take possession of
and
indorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any Receivable or Contract or with respect
to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by
the
Administrative Agent for the purpose of collecting any and all such moneys
due
under any Receivable or Contract or with respect to any other Collateral
whenever payable;
(ii) in
the case of any Intellectual Property, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as the Administrative
Agent may request to evidence the Administrative Agent’s and the Secured
Parties’ security interest in such Intellectual Property and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay
or discharge Taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of
this
Agreement or any other Loan Document and pay all or any part of the premiums
therefor and the costs thereof;
(iv) execute,
in connection with any sale provided for in Section 6.06 or Section 6.07, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and
(v) (A)
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (B) ask or
demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; (D) in the name of such Grantor, or in its own
name,
or otherwise, commence and prosecute any suits, actions or proceedings at law
or
in equity in any court of competent jurisdiction to collect the Collateral
or
any portion thereof and to enforce any other right in respect of any Collateral;
(E) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (F) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; (G) assign any
Copyright, Patent or Trademark (along with the goodwill of the business to
which
any such Copyright, Patent or Trademark pertains), throughout the world for
such
term on terms, on such conditions, and in such manner, as the Administrative
Agent shall in its sole discretion determine; and (H) generally, sell, transfer,
pledge and make any
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agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner thereof
for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the Secured Parties’ security
interests therein and to effect the intent of this Agreement, all as fully
and
effectively as such Grantor might do.
Anything
in this Section 7.01(a) to the contrary notwithstanding, the Administrative
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.01(a) unless an Event of Default shall have
occurred and be continuing.
(b) If
any Grantor fails to perform or comply with any of its agreements contained
herein, the Administrative Agent, at its option, but without any obligation
so
to do, may perform or comply, or otherwise cause performance or compliance,
with
such agreement.
(c) The
expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.01, together with interest thereon
at
the post-default rate specified in Section 3.02(c) of the Credit Agreement,
but
in no event to exceed the Highest Lawful Rate, from the date of payment by
the
Administrative Agent to the date reimbursed by the relevant Grantor, shall
be
payable by such Grantor to the Administrative Agent on demand.
(d) Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be
done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby
are
released.
Section
7.02 Duty
of Administrative Agent. The Administrative Agent’s sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the UCC or otherwise,
shall
be to deal with it in the same manner as the Administrative Agent deals with
similar Property for its own account, and the Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which comparable secured parties accord comparable
collateral. Neither the Administrative Agent, any Secured Party nor
any of their Related Parties shall be liable for failure to demand, collect
or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Administrative Agent and the Secured Parties hereunder
are solely to protect the Administrative Agent’s and the Secured Parties’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such
powers. The Administrative Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their Related Parties
shall
be responsible to any Grantor for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct. To the fullest
extent permitted by applicable law, the Administrative Agent shall be under
no
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duty
whatsoever to make or give any presentment, notice of dishonor, protest, demand
for performance, notice of non-performance, notice of intent to accelerate,
notice of acceleration, or other notice or demand in connection with any
Collateral or the Obligations, or to take any steps necessary to preserve any
rights against any Grantor or other Person or ascertaining or taking action
with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not it has or is deemed to have knowledge
of such matters. Each Grantor, to the extent permitted by applicable
law, waives any right of marshaling in respect of any and all Collateral, and
waives any right to require the Administrative Agent or any Secured Party to
proceed against any Grantor or other Person, exhaust any Collateral or enforce
any other remedy which the Administrative Agent or any Secured Party now has
or
may hereafter have against any Grantor or other Person.
Section
7.03 Execution
of Financing Statements. Pursuant to the UCC and any other
applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. A photographic or other reproduction of this
Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any
jurisdiction. Each Grantor authorizes the Administrative Agent to use
the collateral description “all personal property” or “all assets” in any such
financing statements. Each Grantor hereby ratifies and authorizes the
filing by the Administrative Agent of any financing statement with respect
to
the Collateral made prior to the date hereof.
Section
7.04 Authority
of Administrative Agent. Each Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise
or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between
the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall
be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
ARTICLE
VIII
Subordination
of Indebtedness
Section
8.01 Subordination
of All Grantor Claims. As used herein, the term “Grantor
Claims” shall mean all debts and obligations of the Borrower or any other
Grantor to any other Grantor, whether such debts and obligations now exist
or
are hereafter incurred or arise, or whether the obligation of the debtor thereon
be direct, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such debts or obligations be evidenced
by
note, contract, open account, or otherwise, and irrespective of the Person
or
Persons in whose favor such debts or obligations may, at their inception, have
been, or may hereafter be created, or the manner in which they have been or
may
hereafter be acquired by.
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After
and
during the continuation of an Event of Default, no Grantor shall receive or
collect, directly or indirectly, from any obligor in respect thereof any amount
upon the Grantor Claims.
Section
8.02 Claims
in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving any Grantor, the Administrative Agent on behalf of the Administrative
Agent and the Secured Parties shall have the right to prove their claim in
any
such proceeding, so as to establish their rights hereunder and receive directly
from the receiver, trustee or other court custodian, dividends and payments
which would otherwise be payable upon Grantor Claims. Each Grantor
hereby assigns such dividends and payments to the Administrative Agent for
the
benefit of the Administrative Agent and the Secured Parties for application
against the Borrower Obligations as provided under Section 10.02(c) of the
Credit Agreement. Should any Agent or Secured Party receive, for
application upon the Obligations, any such dividend or payment which is
otherwise payable to any Grantor, and which, as between such Grantors, shall
constitute a credit upon the Grantor Claims, then upon payment in full in cash
of the Borrower Obligations, the expiration of all Letters of Credit outstanding
under the Credit Agreement and the termination of all of the Commitments, the
intended recipient shall become subrogated to the rights of the Administrative
Agent and the Secured Parties to the extent that such payments to the
Administrative Agent and the Secured Parties on the Grantor Claims have
contributed toward the liquidation of the Obligations, and such subrogation
shall be with respect to that proportion of the Obligations which would have
been unpaid if the Administrative Agent and the Secured Parties had not received
dividends or payments upon the Grantor Claims.
Section
8.03 Payments
Held in Trust. In the event that, notwithstanding Section 8.01
and Section 8.02, any Grantor should receive any funds, payments, claims or
distributions which is prohibited by such Sections, then it agrees: (a) to
hold
in trust for the Administrative Agent and the Secured Parties an amount equal
to
the amount of all funds, payments, claims or distributions so received and
(b)
that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions except to pay them promptly to the
Administrative Agent, for the benefit of the Secured Parties; and each Grantor
covenants promptly to pay the same to the Administrative Agent.
Section
8.04 Liens
Subordinate. Each Grantor agrees that, until the Borrower
Obligations are paid in full in cash, no Letter of Credit shall be outstanding
and the termination of all of the Commitments, any Liens securing payment of
the
Grantor Claims shall be and remain inferior and subordinate to any Liens
securing payment of the Obligations, regardless of whether such encumbrances
in
favor of such Grantor, the Administrative Agent or any Secured Party presently
exist or are hereafter created or attach. Without the prior written
consent of the Administrative Agent, no Grantor, during the period in which
any
of the Borrower Obligations are outstanding or the Commitments are in effect,
shall (a) exercise or enforce any creditor’s right it may have against any
debtor in respect of the Grantor Claims or (b) foreclose, repossess, sequester
or otherwise take steps or institute any action or proceeding (judicial or
otherwise, including without limitation the commencement of or joinder in any
liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency
proceeding) to enforce any Lien held by it.
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Section
8.05 Notation
of Records. Upon the request of the Administrative Agent, all
promissory notes and all accounts receivable ledgers or other evidence of the
Grantor Claims accepted by or held by any Grantor shall contain a specific
written notice thereon that the indebtedness evidenced thereby is subordinated
under the terms of this Agreement.
ARTICLE
IX
Miscellaneous
Section
9.01 No
Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 9.04), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced
in
any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, and no course of dealing with respect to, any right, power or privilege
hereunder, or any abandonment or discontinuance of steps to enforce such right,
power or privilege, shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude
any
other or further exercise thereof or the exercise of any other right, power
or
privilege. A waiver by the Administrative Agent or any Secured Party
of any right or remedy hereunder on any one occasion shall not be construed
as a
bar to any right or remedy which the Administrative Agent or such Secured Party
would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and
are
not exclusive of any other rights or remedies provided by law or
equity.
Section
9.02 Notices. All
notices and other communications provided for herein shall be given in the
manner and subject to the terms of Section 12.01 of the Credit Agreement;
provided that any such notice, request or demand to or upon any Guarantor shall
be addressed to such Guarantor at its notice address set forth on Schedule
1.
Section
9.03 Enforcement
Expenses; Indemnities.
(a) Each
Guarantor agrees to pay or reimburse each Secured Party and the Administrative
Agent for all its reasonable costs and expenses incurred in collecting against
such Guarantor under the guarantee contained in Article II or otherwise
enforcing or preserving any rights under this Agreement and the other Loan
Documents to which such Guarantor is a party, including, without limitation,
the
reasonable fees and disbursements of counsel to each Secured Party and of
counsel to the Administrative Agent.
(b) Each
Guarantor agrees to pay, and to save the Administrative Agent and the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all Other Taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
(c) Each
Guarantor agrees to pay, and to save the Administrative Agent and the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this
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Agreement
to the extent the Borrower would be required to do so pursuant to Section 12.03
of the Credit Agreement.
(d) The
agreements in this Section 9.03 shall survive repayment of the Obligations
and
all other amounts payable under the Credit Agreement and the other Loan
Documents.
Section
9.04 Amendments
in Writing. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except in accordance
with
Section 12.02 of the Credit Agreement.
Section
9.05 Successors
and Assigns. The provisions of this Agreement shall be binding
upon the Grantors and their successors and assigns and shall inure to the
benefit of the Administrative Agent and the Secured Parties and their respective
successors and permitted assigns; provided that no Grantor may assign, transfer
or delegate any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent and the Majority Lenders,
and
any such purported assignment, transfer or delegation shall be null and
void.
Section
9.06 Survival;
Revival; Reinstatement.
(a) All
covenants, agreements, representations and warranties made by any Grantor herein
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document to which it is a party
shall be considered to have been relied upon by the Administrative Agent, the
other Agents, the Issuing Bank and the Lenders and shall survive the execution
and delivery of this Agreement and the making of any Loans and issuance of
any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the other
Agents, the Issuing Bank or any Lender may have had notice or knowledge of
any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as
the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under the Credit Agreement is outstanding and unpaid or any Letter
of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Section 9.03 shall survive and remain
in full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement, any other Loan Document or any provision hereof or
thereof.
(b) To
the extent that any payments on the Obligations or proceeds of any Collateral
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, debtor in possession, receiver
or
other Person under any bankruptcy law, common law or equitable cause, then
to
such extent, the Obligations so satisfied shall be revived and continue as
if
such payment or proceeds had not been received and the Administrative Agent’s
and the Secured Parties’ Liens, security interests, rights, powers and remedies
under this Agreement and each other Loan Document shall continue in full force
and effect. In such event, each Loan Document shall be automatically
reinstated and the Borrower
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shall
take such action as may be reasonably requested by the Administrative Agent
and
the Secured Parties to effect such reinstatement.
Section
9.07 Counterparts;
Integration; Effectiveness.
(a) This
Agreement may be executed in counterparts (and by different parties hereto
on
different counterparts), each of which shall constitute an original, but all
of
which when taken together shall constitute a single contract.
(b) This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof
and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof. THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THE LETTERS OF CREDIT AND
THE
LETTER OF CREDIT AGREEMENTS) REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
(c) This
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each
of
the other parties hereto, and thereafter shall be binding upon and inure to
the
benefit of the parties hereto, the Lenders and their respective successors
and
assigns. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy or other electronic transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.
Section
9.08 Severability. Any
provision of this Agreement or any other Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or thereof; and the invalidity of a particular provision
in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section
9.09 Set-Off. If
an Event of Default shall have occurred and be continuing, each Lender and
each
of its Affiliates is hereby authorized at any time and from time to time,
without notice to such Person or any other Grantor, any such notice being
expressly waived by each Grantor, to the fullest extent permitted by law, to
set
off and appropriate and apply any and all deposits (general or special, time
or
demand, provisional or final), in any currency, and any other credits,
indebtedness, claims or obligations (of whatsoever kind, including, without
limitations obligations under Swap Agreements), in any currency, whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held
or
owing by such Lender or Affiliate to or for the credit or the account of any
Grantor against any of and all the obligations and liabilities of the Grantor
owed to such Lender now or hereafter existing under this Agreement or any other
Loan Document, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Loan Document and although
such
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obligations
may be unmatured. The rights of each Lender under this Section 9.09
are in addition to other rights and remedies (including other rights of setoff)
which such Lender or its Affiliates may have.
Section
9.10 Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial.
(a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL LAW PERMITS
ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE INTEREST AT THE
RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
LOCATED. CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL
NOT APPLY TO THIS AGREEMENT.
(b) ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN THE COURTS OF XXXXXX COUNTY IN THE STATE OF TEXAS
OR
OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF
AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY
AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS
SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM
OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING
JURISDICTION.
(c) EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 12.01 OF THE CREDIT AGREEMENT OR SUCH OTHER ADDRESS AS
IS
SPECIFIED PURSUANT TO SECTION 12.01 OF THE CREDIT AGREEMENT (OR ITS ASSIGNMENT
AND ASSUMPTION) OR SCHEDULE 1 HERETO, AS APPLICABLE, SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.
(d) EACH
PARTY HEREBY (1) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO
THIS
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AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (2) IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE
TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES;
(3) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE, OR AGENT OF COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (4) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION 9.10.
Section
9.11 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 shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.
Section
9.12 Acknowledgments. Each
Grantor hereby acknowledges that:
(a) it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;
(b) neither
the Administrative Agent nor any Secured Party has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Grantors,
on the one hand, and the Administrative Agent and Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and
(c) no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Secured
Parties or among the Grantors and the Secured Parties.
(d) Each
of the parties hereto specifically agrees that it has a duty to read this
Agreement, the Security Instruments and the other Loan Documents and agrees
that
it is charged with notice and knowledge of the terms of this Agreement, the
Security Instruments and the other Loan Documents; that it has in fact read
this
Agreement, the Security Instruments and the other Loan Documents and is fully
informed and has full notice and knowledge of the terms, conditions and effects
thereof; that it has been represented by independent legal counsel of its choice
throughout the negotiations preceding its execution of this Agreement and the
Security Instruments; and has received the advice of its attorney in entering
into this Agreement and the Security Instruments; and that it recognizes that
certain of the terms of this Agreement and the Security Instruments result
in
one party assuming the liability inherent in some aspects of the transaction
and
relieving the other party of its responsibility for such
liability. EACH PARTY
HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY
OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE SECURITY INSTRUMENTS ON
THE
BASIS THAT THE
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PARTY
HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
“CONSPICUOUS.”
Section
9.13 Additional
Grantors and Additional Pledged Securities. Each
Subsidiary of the Borrower that is required to become a party to this Agreement
pursuant to Section 8.14 of the Credit Agreement shall become a party
hereto as a
Grantor for all purposes of this Agreement upon execution and delivery by
such Subsidiary of an Assumption Agreement and shall thereafter have the same
rights, benefits and obligations as a Grantor party hereto on the date
hereof. Each Grantor that is required to pledge additional Equity
Interests pursuant to the Credit Agreement shall execute and deliver a
Supplement.
Section
9.14 Releases.
(a) Release
Upon Payment in Full. The grant of the security interest
hereunder, all other grants of interests, set off and other Liens hereunder,
and
all guarantees provided for herein, the security interest granted hereunder,
all
other interest, set offs and other Liens granted hereunder, and all guarantees
provided for herein, and all Lien rights, powers and interests and guarantee
benefits with respect thereto shall automatically terminate and be null and
void
immediately upon the date that the Borrower Obligations (other than Borrower
Obligations in respect of Secured Swap Agreements and Indebtedness consisting
of
payment obligations that are provided under each Loan Document as surviving
the
termination of any Loan Document or other transactions contemplated thereby,
or
words of similar import) shall have been indefeasibly paid in full in cash,
no
Letter of Credit shall be outstanding, and all of the Commitments shall have
terminated, and the Administrative Agent, at the written request and expense
of
the Borrower, will promptly take all steps and actions requested by the Borrower
to evidence and more fully effect the foregoing termination, including the
release, reassignment and transfer, without recourse or warranty, of the
property theretofore constituting the Collateral to the Grantors and the
declaration of all such guarantees and this Agreement to be of no further force
or effect.
(b) Partial
Releases. If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then immediately upon the occurrence of any such disposition, all
Liens and other rights with respect thereto, shall automatically terminate
and
be null and void, and the Administrative Agent, at the request and sole expense
of such Grantor, shall promptly execute and deliver to such Grantor all releases
or other documents deemed reasonably necessary or desirable by the Borrower
to
evidence the release of the Liens created hereby on such
Collateral. If all the Equity Interests of a Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement, then immediately upon the occurrence of such disposition, such
Guarantor automatically shall be released from its obligations hereunder, and
the Liens and other rights created hereunder in all property of such Guarantor
shall automatically terminate and be null and void; and at the request and
sole
expense of the Borrower, the Administrative Agent shall promptly execute and
deliver to or at the request of the Borrower all releases and other documents
reasonable necessary or desirable to release such obligations, Liens and other
rights; provided that the Borrower shall have delivered to the Administrative
Agent, at least fifteen Business Days prior to the date of the requested
releases and documents, a written request of a Responsible Officer for release
identifying the relevant Guarantor and the terms of the sale or
-36-
other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Borrower stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.
(c) Retention
in Satisfaction. Except as may be expressly applicable pursuant
to Section 9.620 of the UCC, no action taken or omission to act by the
Administrative Agent or the Secured Parties hereunder, including, without
limitation, any exercise of voting or consensual rights or any other action
taken or inaction, shall be deemed to constitute a retention of the Collateral
in satisfaction of the Obligations or otherwise to be in full satisfaction
of
the Obligations, and the Obligations shall remain in full force and effect,
until the Administrative Agent and the Secured Parties shall have applied
payments (including, without limitation, collections from Collateral) towards
the Obligations in the full amount then outstanding or until such subsequent
time as is provided in Section 9.14(a).
Section
9.15 Acceptance. Each
Grantor hereby expressly waives notice of acceptance of this Agreement,
acceptance on the part of the Administrative Agent and the Secured Parties
being
conclusively presumed by their request for this Agreement and delivery of the
same to the Administrative Agent.
[Remainder
of page intentionally left blank; signature page follows]
IN
WITNESS WHEREOF, each of the undersigned has caused this Guaranty and Collateral
Agreement to be duly executed and delivered as of the date first above
written.
| BORROWER: | XXX ENERGY CORPORATION | ||
|
By:
|
/s/
Xxxxxxxx X. Xxxxxxx
|
||
|
Xxxxxxxx
X. Xxxxxxx, Chief Executive Officer
|
|||
| GRANTORS: | XXX ENERGY I, LLC | ||
| XXX ENERGY OPERATING CORP. | |||
| PENN TEX ENERGY, INC. | |||
| PENNTEX RESOURCES ILLINOIS, INC. | |||
| XXX ENERGY IV, LLC | |||
|
By:
|
/s/
Xxxxxxxx X. Xxxxxxx
|
||
|
Xxxxxxxx
X. Xxxxxxx, Chief Executive Officer
|
|||
| PENNTEX RESOURCES, L.P. | |||
| By: Penn Tex Energy, Inc., its general partner | |||
|
By:
|
/s/
Xxxxxxxx X. Xxxxxxx
|
||
|
Xxxxxxxx
X. Xxxxxxx, Chief Executive Officer
|
|||
Acknowledged
and Agreed to as
of
the
date hereof by:
| ADMINISTRATIVE AGENT: | KEYBANK NATIONAL ASSOCIATION, | ||
| as Administrative Agent | |||
|
By:
|
/s/
Xxxxxx Xxxxx
|
||
|
Xxxxxx
Xxxxx
|
|||
| Director | |||
SCHEDULE
1
NOTICE
ADDRESSES OF GRANTORS
|
Grantor
|
Notice
Address
|
|
Xxx
Energy I, LLC
|
Xxx
Energy I, LLC
c/o
Xxx Energy Corporation
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx Xxxxxxx, Chief Financial Officer
Fax
No. 000.000.0000
|
|
Xxx
Energy Operating Corp.
|
Xxx
Energy Operating Corp.
c/o
Xxx Energy Corporation
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx Xxxxxxx, Chief Financial Officer
Fax
No. 000.000.0000
|
|
Xxx
Energy IV, LLC
|
Xxx
Energy IV, LLC
c/o
Xxx Energy Corporation
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx Xxxxxxx, Chief Financial Officer
Fax
No. 000.000.0000
|
|
PennTex
Resources Illinois, Inc.
|
PennTex
Resources Illinois, Inc.
c/o
Xxx Energy Corporation
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx Xxxxxxx, Chief Financial Officer
Fax
No. 000.000.0000
|
|
Penn
Tex Energy, Inc.
|
Penn
Tex Energy, Inc.
c/o
Xxx Energy Corporation
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx Xxxxxxx, Chief Financial Officer
Fax
No. 000.000.0000
|
|
PennTex
Resources, L.P.
|
PennTex
Resources, L.P.
c/o
Xxx Energy Corporation
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx Xxxxxxx, Chief Financial Officer
Fax
No. 000.000.0000
|
SCHEDULE
2
INVESTMENT
PROPERTY
Description
of Pledged Securities
|
Owner/Grantor
|
Issuer
|
Percentage
Owned
|
Percentage
Pledged
|
Class
of
Stock
or other Equity Interest
|
No.
of
Shares
|
Certificate
No.
|
|
Xxx
Energy Corporation
|
Xxx
Energy I, LLC
|
100%
|
100%
|
Membership
Interest
|
Not
Applicable
|
Not
Applicable
|
|
Xxx
Energy Corporation
|
Xxx
Energy Operating Corp.
|
100%
|
100%
|
Common
Stock
|
100
|
3
|
|
Xxx
Energy Corporation
|
Penn
Tex Energy, Inc.
|
100%
|
100%
|
Common
Stock
|
100
|
2
|
|
Xxx
Energy Corporation
|
PennTex
Resources, L.P.
|
99%
|
100%
|
Limited
Partnership Interest
|
Not
Applicable
|
Not
Applicable
|
|
Xxx
Energy Corporation
|
PennTex
Resources Illinois, Inc.
|
100%
|
100%
|
Common
Stock
|
1,000
|
7
|
|
Xxx
Energy Corporation
|
Xxx
Energy IV, LLC
|
100%
|
100%
|
Membership
Interest
|
Not
Applicable
|
Not
Applicable
|
|
Xxx
Energy I, LLC
|
Xxx
Energy Marketing, LLC
|
100%
|
100%
|
Membership
Interest
|
Not
Applicable
|
Not
Applicable
|
|
Penn
Tex Energy, Inc.
|
PennTex
Resources, L.P.
|
1%
|
100%
|
General
Partner Interest
|
Not
Applicable
|
Not
Applicable
|
Description
of Pledged Notes
None.
SCHEDULE
3
FILINGS
AND OTHER ACTIONS
REQUIRED
TO PERFECT SECURITY INTERESTS
Uniform
Commercial Code Filings
|
1.
|
Filing
of UCC-1 Financing Statements with respect to the Collateral with
the
Secretary of State of the State of
Delaware.
|
2. Filing
of UCC-1 Financing Statements with respect to the Collateral with the Secretary
ofState of the State of Texas.
Patent
and Trademark Filings
|
1.
|
Filing
of UCC-1 Financing Statements with respect to the trademarks of Xxx
Energy
Operating Corp. with the Secretary of State of the State of
Delaware.
|
Actions
with respect to Pledged Securities
|
1.
|
Delivery
to the Administrative Agent of all Pledged Securities consisting
of
certificated securities, in each case properly endorsed for transfer
or in
blank.
|
Description
of Commercial Tort Claims With An Asserted Value in Excess of
$1,000,000
None.
SCHEDULE
4
JURISDICTION
OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Borrower:
|
Legal
Name/Address
|
Trade
Names Used in Past 5 Years
|
Current
Jurisdiction of Organization
|
Jurisdiction
of Organizations in Past 5 Years
|
Organizational
No.
|
Taxpayer
Identification No.
|
Chief
Executive Office or Sole Place of Business over the last 5
years
|
|
Xxx
Energy Corporation
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
None
|
Delaware
|
Not
Applicable
|
4313846
|
00-0000000
|
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
Grantors:
|
Legal
Name/Address
|
Trade
Names Used in Past 5 Years
|
Current
Jurisdiction of Organization
|
Jurisdiction
of Organizations in Past 5 Years
|
Organizational
No.
|
Taxpayer
Identification No.
|
Chief
Executive Office or Sole Place of Business over the last 5
years
|
|
Xxx
Energy I, LLC
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
None
|
Delaware
|
Not
Applicable
|
4335969
|
00-0000000
|
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
|
Xxx
Energy Operating Corp.
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
None
|
Delaware
|
Not
Applicable
|
3865470
|
00-0000000
|
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX
00000
|
|
Xxx
Energy IV, LLC
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
None
|
Delaware
|
Not
Applicable
|
4219136
|
00-0000000
|
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
Xxxxx
0, Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx
000, X.X. Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
|
|
PennTex
Resources Illinois, Inc.
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
ERG
Illinois, Inc.
|
Delaware
|
Not
Applicable
|
3757111
|
00-0000000
|
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX
00000
0000
Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000
|
|
Penn
Tex Energy, Inc.
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
None
|
Delaware
|
Not
Applicable
|
2822522
|
00-0000000
|
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX
00000
|
|
PennTex
Resources, L.P.
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
|
None
|
Not
Applicable
|
10295910
|
00-0000000
|
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX 00000
0000
Xxxxxx Xxxx
Xxxxx
Xxxxxxx, XX
00000
|
SCHEDULE
5
LOCATIONS
OF INVENTORY AND EQUIPMENT
|
Grantor
|
Locations
|
|
Xxx
Energy I, LLC
|
1. 0000
Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
2. 000
Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxxx 00000
3. 000
Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
4. Xxxxx
0, Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
5. 0000
Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxx 00000
|
|
Xxx
Energy Operating Corp.
|
1. 0000
Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
2. 000
Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxxx 00000
3. 000
Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
4. Xxxxx
0, Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
5. 0000
Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxx 00000
|
|
Xxx
Energy IV, LLC
|
1. 0000
Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
2. Xxxxx
0, Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
|
|
PennTex
Resources Illinois, Inc.
|
1. 0000
Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
2. Xxxxx
0, Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
|
|
Penn
Tex Energy, Inc.
|
1. 0000
Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
|
|
PennTex
Resources, L.P.
|
1. 0000
Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
2. Xxxxx
0, Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
|
Schedule
6
INTELLECTUAL
PROPERTY
Copyrights
and Copyright Licenses
None.
Patents
and Patent Licenses
None.
Trademarks
and Trademark Licenses
|
Grantor
|
Trademark
Name
|
Reg.
No.
|
Date
Registered
|
|
Xxx
Energy Operating Corp.
|
Xxx
Energy Trademark
|
3,132,973
|
August
22, 2006
|
|
Xxx
Energy Operating Corp.
|
Xxx
Energy and Lion Design Trademark
|
3,132,974
|
August
22, 2006
|
Schedule
7
RECEIVABLES
WITH GOVERNMENTAL AUTHORITY AS OBLIGOR
None.
Annex
I
ACKNOWLEDGMENT
AND CONSENT
The
undersigned hereby acknowledges
receipt of a copy of the Guaranty and Collateral Agreement dated as of September
28, 2007 (the “Guaranty and Collateral Agreement”), made by the Grantors
parties thereto for the benefit of KeyBank National Association, as
Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Secured Parties as follows:
1. The
undersigned will be bound by the terms of the Guaranty and Collateral Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The
undersigned will notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5.07(a) of the Guaranty
and
Collateral Agreement.
3. The
terms of Section 6.03(c) and Section 6.07 of the Guaranty and Collateral
Agreement shall apply to it, mutatismutandis, with respect to all
actions that may be required of it pursuant to Section 6.03(c) and Section
6.07
of the Guaranty and Collateral Agreement.
[NAME
OF
ISSUER]
By:
______________________________________
Title:
Address
for Notices:
Fax:
|
*
|
This
consent is necessary only with respect to any Issuer which is not
also a
Grantor. This consent may be modified or eliminated with
respect to any Issuer that is not controlled by a
Grantor.
|
Annex
II
Assumption
Agreement
ASSUMPTION
AGREEMENT, dated as of
[ ],
200[ ], made by
[ ],
a
[ ]
(the “Additional Grantor”), in favor of KeyBank National Association, as
administrative agent (in such capacity, the “Administrative Agent”) for
the Lenders party to the Credit Agreement referred to below. All
capitalized terms not defined herein shall have the meaning ascribed to them
in
the Guaranty and Collateral Agreement referred to below.
W
I T N E
S S E T H:
WHEREAS,
Xxx
Energy
Corporation, a corporation
duly formed and
existing under the laws of the State of [Delaware] (the
“Borrower”), the Administrative Agent, and certain financial institutions
(the “Lenders”) have entered into that certain Credit Agreement, dated as
of September 28, 2007 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”);
WHEREAS,
in connection with the Credit
Agreement, the Borrower and certain of its affiliates (other than the Additional
Grantor) have entered into that certain Guaranty and Collateral Agreement,
dated
as of September 28, 2007 (as amended, restated, supplemented or otherwise
modified from time to time, the “Guaranty and Collateral Agreement”) in
favor of the Administrative Agent for the ratable benefit of the Secured
Parties;
WHEREAS,
the Credit Agreement requires
the Additional Grantor to become a party to the Guaranty and Collateral
Agreement; and
WHEREAS,
the Additional Grantor has
agreed to execute and deliver this Assumption Agreement in order to become
a
party to the Guaranty and Collateral Agreement;
NOW,
THEREFORE, IT IS
AGREED:
1. Guaranty
and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 9.13 of
the
Guaranty and Collateral Agreement, hereby becomes a party to the Guaranty and
Collateral Agreement as a Grantor thereunder with the same force and effect
as
if originally named therein as a Grantor and, without limiting the generality
of
the foregoing, hereby expressly assumes all obligations and liabilities of
a
Grantor and a Guarantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guaranty and Collateral Agreement. The Additional Grantor hereby
represents and warrants that, with respect to itself and as applicable, each
of
the representations and warranties contained in Article IV of the Guaranty
and Collateral Agreement is true and correct on and as the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such
date.
2. Governing
Law. This Assumption Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas.
3. Miscellaneous. This
Assumption Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single
contract. Any provision of this Assumption Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability
of
the remaining provisions hereof; and the invalidity of a particular provision
in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement
to be duly executed and delivered as of the date first above
written.
[ADDITIONAL
GRANTOR]
By:
_____________________________________
Name:
Title:
Annex
III
Supplement
SUPPLEMENT,
dated as of
[ ],
200[ ], made by
[ ],
a
[ ]
(the “Grantor”), in favor of KeyBank National Association, as
administrative agent (in such capacity, the “Administrative Agent”) for
the Lenders party to the Credit Agreement referred to below. All
capitalized terms not defined herein shall have the meaning ascribed to them
in
the Guaranty and Collateral Agreement referred to below.
W
I T N E
S S E T H:
WHEREAS,
Xxx
Energy
Corporation, a corporation
duly formed and
existing under the laws of the State of [Delaware] (the
“Borrower”), the Administrative Agent, and certain financial institutions
(the “Lenders”) have entered into that certain Credit Agreement, dated as
of September 28, 2007 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”);
WHEREAS,
in connection with the Credit
Agreement, the Borrower and certain of its Affiliates (including the Grantor)
have entered into that certain Guaranty and Collateral Agreement, dated as
of
September 28, 2007 (as amended, restated, supplemented or otherwise modified
from time to time, the “Guaranty and Collateral Agreement”)
in favor of the Administrative Agent for the ratable benefit of the Secured
Parties;
WHEREAS,
the Credit Agreement requires
the Grantor to pledge the Equity Interests described in Schedule 2-S hereto;
and
WHEREAS,
the Grantor has agreed to
execute and deliver this Supplement in order to pledge such Equity
Interests;
NOW,
THEREFORE, IT IS
AGREED:
1. Guaranty
and Collateral Agreement. By executing and
delivering this Supplement, the information set forth in Schedule 2-S hereto
is
hereby added to the information set forth in Schedule 2 to the Guaranty and
Collateral Agreement. The Grantor hereby represents and warrants
that, with respect to itself and as applicable, each of the representations
and
warranties contained in Article IV of the Guaranty and Collateral Agreement
is true and correct on and as the date hereof (after giving effect to this
Supplement) as if made on and as of such date.
2. Governing
Law. This Supplement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
3. Miscellaneous. This
Supplement may be executed in counterparts (and by different parties hereto
on
different counterparts), each of which shall constitute an original, but all
of
which when taken together shall constitute a single contract. Any
provision of this
Supplement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as
to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
IN
WITNESS WHEREOF, the undersigned has
caused this Supplement to be duly executed and delivered as of the date first
above written.
[GRANTOR]
By:
_____________________________________
Name:
Title:
