PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "Pledge and Security
Agreement"), dated as of June 19, 2001, is made by NEW WORLD COFFEE-MANHATTAN
BAGEL, INC., a Delaware corporation (the "Issuer"), each Subsidiary (as defined
below) of the Issuer a signatory hereto, and each other Subsidiary of the Issuer
which may from time to time hereafter become a party hereto pursuant to Section
7.5 (each, individually, an "Additional Grantor", and collectively, the
"Additional Grantors", and together with the Issuer, each such Subsidiary, each,
individually, a "Grantor", and collectively, the "Grantors"), in favor of UNITED
STATES TRUST COMPANY OF NEW YORK, as collateral agent (together with its
successor(s) thereto, in such capacity the "Collateral Agent") for each of the
Secured Parties.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Issuer, the other Grantors and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of June 19, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Indenture"), and in connection therewith, the Issuer has issued (the "Notes
Issuance") its Senior Secured Increasing Rate Notes due 2003 (and, if
applicable, its Senior Secured Increasing Rate Notes due 2003, Series B issued
in exchange therefor) (collectively, the "Notes");
WHEREAS, as a condition precedent to the Notes Issuance, each Grantor is
required to execute and deliver this Pledge and Security Agreement;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Pledge and Security Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this Pledge
and Security Agreement inasmuch as such Grantor will derive substantial direct
and indirect benefits from proceeds of the Notes issued by the Issuer;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Holders
to acquire the Notes and maintain the Indebtedness evidenced thereby, each
Grantor agrees, for the benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge and Security Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Additional Grantor" and "Additional Grantors" are defined in the preamble.
"AFC Lien" means the Lien granted in favor of AFC Enterprises, Inc.
pursuant to that certain Asset Purchase Agreement dated as of July 26, 1999 as
amended August 27,1999 by and between AFC Enterprises, Inc. and CBB Acquisition
Corp. (n/k/a Chesapeake Bagel Franchise Corp.) and New World Coffee- Manhattan
Bagel, Inc. and in connection with the sale of certain AFC Enterprises Inc.
properties, assets, rights and the business of franchising and operating of
certain Chesapeake Bagel Bakery stores to CBB Acquisition Corp.
"Collateral" is defined in Section 2.1.
"Commodity Account" means an account maintained by a Commodity Intermediary
in which a Commodity Contract is carried out for a Commodity Customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" means a Person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a Person who is registered as a futures
commission merchant under the federal commodities laws or (b) a Person who in
the ordinary course of business provides clearance or settlement services for a
board of trade that has been designated as a contract market pursuant to federal
commodities laws.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing hardware, integrated
computer systems, central processing units, memory units, display terminals,
printers, features, computer elements, card readers, tape drives, hard and soft
disk drives, cables, electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer hardware;
(b) all software programs (including both source code, object code and all
related applications and data files), whether now owned, licensed or leased or
hereafter acquired by any Grantor, designed for use on the computers and
electronic data processing hardware described in clause (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams, manuals,
guides and specifications) with respect to such hardware, software and firmware
described in the preceding clauses (a) through (c); and
(e) all rights with respect to all of the foregoing, including any and all
copyrights, licenses, options, warranties, service contracts, program services,
test rights, maintenance rights, support rights, improvement rights, renewal
rights and indemnifications and any substitutions, replacements, additions or
model conversions of any of the foregoing.
"Control Agreement" means an agreement in form and substance satisfactory
to the Collateral Agent which provides for the Collateral Agent to have
"control" (as defined in Section 8-106 of the U.C.C., as such term relates to
Investment Property (other than certificated Securities or Commodity Contracts),
or as used in Section 9-115(e) of the U.C.C., as such term relates to Commodity
Contracts).
"Copyright Collateral" means all copyrights (including all copyrights for
semiconductor chip product mask works) of each Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of such Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Schedule V
attached hereto, and all applications for registration thereof, whether pending
or in preparation, all copyright licenses, including each copyright license
referred to in Item B of Schedule V attached hereto, the right to xxx for past,
present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"Deposit Account" means a demand, time, savings, passbook or other account
maintained with a bank, savings and loan association, credit union or other
financial institution.
"Distributions" means all stock dividends, liquidating dividends, shares of
stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non- cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Securities constituting Collateral, but
shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to any
Securities constituting Collateral made in the ordinary course of business and
not a liquidating dividend.
"Entitlement Holder" means a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the U.C.C., such Person is the Entitlement
Holder.
"Equipment" is defined in clause (d) of Section 2.1.
"Financial Asset" means (a) a Security, (b) an obligation of a Person or a
share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the U.C.C. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a Person's claims to it is evidenced, including a
certificated or an uncertificated Security, a certificate representing a
Security or a Security Entitlement.
"Grantor" and "Grantors" are defined in the preamble.
"Indenture" is defined in the first recital.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Intercompany Note" means, with respect to any Grantor, as the payee
thereunder, a subordinated promissory note, which subordinated promissory note
evidences all intercompany loans (to the extent such loans are evidenced by a
note) which may be made from time to time by such Grantor to the Issuer or any
of its Subsidiaries as the maker of such subordinated promissory note, as such
subordinated promissory note, in accordance with Section 4.2.4, is amended,
modified or supplemented from time to time, together with any subordinated
promissory note of such maker taken in extension or renewal thereof or
substitution therefor.
"Investment Property" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor.
"Inventory" is defined in clause (e) of Section 2.1
"Issuer" is defined in the preamble.
"Master Deposit Account" means the Deposit Account of the Issuer to be
established and maintained with the Collateral Agent upon the occurrence of an
Event of Default.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operating results or condition (financial or otherwise)
of the Issuer and its Subsidiaries, taken as a whole;
(b) the ability of any Grantor to perform its obligations under any of the
Related Documents, including the payment of any principal, interest, fees,
expenses or other amounts under or in respect of any of the Related Documents;
or
(c) the validity or enforceability of any of the Related Documents or any
of the rights or remedies of the Collateral Agent or any other Secured Party
under any of the Related Documents.
"Motor Vehicles" shall mean motor vehicles, tractors, trailers and other
like property, whether or not the title thereto is governed by a certificate of
title or ownership.
"Notes" is defined in the first recital.
"Notes Issuance" is defined in the first recital.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent throughout the
world, including all patent applications in preparation for filing anywhere in
the world and including each patent and patent application referred to in Item A
of Schedule III attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in clause
(a);
(c) all patent licenses, including each patent license referred to in Item
B of Schedule III attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing (including
license royalties and proceeds of infringement suits), the right to xxx third
parties for past, present or future infringements of any patent or patent
application, including any patent or patent application referred to in Item A of
Schedule III attached hereto, and for breach or enforcement of any patent
license, including any patent license referred to in Item B of Schedule III
attached hereto, and all rights corresponding thereto throughout the world.
"Pledge and Security Agreement" is defined in the preamble.
"Receivables" is defined in clause (f) of Section 2.1.
"Related Contracts" is defined in clause (f) of Section 2.1.
"Related Documents" means the Indenture, the Notes, this Pledge and
Security Agreement, the Trademark Security Agreement, the Patent Security
Agreement, if any, the Copyright Security Agreement, if any, and the Mortgages.
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means the Collateral Agent, the Trustee and the Holders.
"Securities" means any obligations of an issuer or any shares,
participations, or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of such issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c) (i) are, or are of a type,
dealt with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the U.C.C.
"Securities Account" means an account to which a Financial Asset is or may
be credited in accordance with an agreement under which the Person maintaining
the account undertakes to treat the Person for whom the account is maintained as
entitled to exercise rights that comprise the Financial Asset.
"Securities Act" is defined in Section 6.2.
"Security Entitlements" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"Security Intermediary" means (a) a clearing corporation or (b) a Person,
including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, certification
marks, collective marks, logos, other source of business identifiers, prints and
labels on which any of the foregoing have appeared or appear, designs and
general intangibles of a like nature (all of the foregoing items in this clause
(a) being collectively called a "Trademark"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any office or agency of the United States of America or
any State thereof or any foreign country, including those referred to in Item A
of Schedule IV attached hereto;
(b) all Trademark licenses, including each Trademark license referred to in
Item B of Schedule IV attached hereto;
(c) all reissues, extensions or renewals of any of the items described in
clause (a) and (b);
(d) all of the goodwill of the business connected with the use of, and
symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing, including
any claim by any Grantor against third parties for past, present or future
infringement or dilution of any Trademark, Trademark registration or Trademark
license, including any Trademark, Trademark registration or Trademark license
referred to in Item A and Item B of Schedule IV attached hereto, or for any
injury to the goodwill associated with the use of any such Trademark or for
breach or enforcement of any Trademark license.
"Trade Secrets Collateral" means all common law and statutory trade secrets
and all other confidential or proprietary or useful information and all know-how
obtained by or used in or contemplated at any time for use in the business of
any Grantor (all of the foregoing being collectively called a "Trade Secret"),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in Schedule VI attached hereto, and including the
right to xxx for and to enjoin and to collect damages for the actual or
threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
"Collateral Agent" is defined in the preamble.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
SECTION 1.2. Indenture Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge and Security Agreement,
including its preamble and recitals, have the meanings provided in the
Indenture.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or in the
Indenture or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Pledge and Security Agreement, including
its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. Each Grantor hereby assigns (which
assignment in the case of any Trademark Collateral shall be an assignment of a
security interest), pledges, hypothecates, charges, mortgages, delivers, and
transfers to the Collateral Agent for its benefit and the ratable benefit of
each of the Secured Parties, and hereby grants to the Collateral Agent for its
benefit and the ratable benefit of each of the Secured Parties, a security
interest in all of the following, whether now or hereafter existing or acquired
by such Grantor (the "Collateral"):
(a) all Intercompany Notes in which such Grantor has an interest (including
each Intercompany Note described in Item A of Schedule I hereto);
(b) all interest and other payments and rights with respect to each
Intercompany Note in which such Grantor has an interest;
(c) all Investment Property in which such Grantor has an interest
(including the Securities of each issuer described in Item B of Schedule I
hereto but excluding the Securities of New World EnbcDeb Corp.);
(d) all equipment in all of its forms (including all Motor Vehicles) of
such Grantor, wherever located, including all parts thereof and all accessions,
additions, attachments, improvements, substitutions and replacements thereto and
therefor and all accessories related thereto (any and all of the foregoing being
the "Equipment");
(e) all inventory in all of its forms of such Grantor, wherever located,
including
(i) all raw materials and work in process therefor, finished goods
thereof, and materials used or consumed in the manufacture or production
thereof,
(ii) all goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods in which such
Grantor has an interest or right as consignee), and
(iii) all goods which are returned to or repossessed by such Grantor,
and all accessions thereto, products thereof and documents therefor (any and all
such inventory, materials, goods, accessions, products and documents being the
"Inventory");
(f) all accounts, contracts (including franchise agreements), contract
rights, chattel paper, documents, instruments, and general intangibles
(including tax refunds and limited liability company or member interests in
Subsidiaries of such Grantor that are limited liability companies that have not
elected to have such interests treated as Securities for purposes of Article 8
of the U.C.C.) of such Grantor, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services, and all rights of
such Grantor now or hereafter existing in and to all security agreements,
guaranties, leases and other contracts securing or otherwise relating to any
such accounts, contracts (including franchise agreements), contract rights,
chattel paper, documents, instruments, and general intangibles (any and all such
accounts, contracts, contract rights, chattel paper, documents, instruments, and
general intangibles being the "Receivables", and any and all such security
agreements, guaranties, leases and other contracts being the "Related
Contracts");
(g) all Deposit Accounts of such Grantor (including the Master Deposit
Account in the case where such Grantor is the Issuer) and all cash, checks,
drafts, notes, bills of exchange, money orders and other like instruments, if
any, now owned or hereafter acquired, held therein (or in sub-accounts thereof)
and all certificates and instruments, if any, from time to time representing or
evidencing such investments, and all interest, earnings and proceeds in respect
thereof;
(h) all Intellectual Property Collateral of such Grantor;
(i) all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing, embodying,
incorporating or referring to, any of the foregoing in this Section 2.1;
(j) all of such Grantor's other property and rights of every kind and
description and interests therein; and
(k) all products, offspring, rents, issues, profits, returns, income and
proceeds of and from any and all of the foregoing Collateral (including proceeds
which constitute property of the types described in clauses (a) through (j),
proceeds deposited from time to time in any lock box or Deposit Account of such
Grantor (including the Master Deposit Account in the case where such Grantor is
the Issuer), and, to the extent not otherwise included, all payments under
insurance (whether or not the Collateral Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights described in clause (f) above arising under any
contracts, instruments, licenses or other documents described in such clause as
to which the grant of a security interest would constitute a violation of a
valid and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained. Each Grantor
agrees to use its best efforts to obtain any such required consent.
SECTION 2.2. Security for Obligations. This Pledge and Security Agreement
secures the payment of all Obligations of the Issuer now or hereafter existing
under the Indenture, the Notes and each other Related Document to which the
Issuer is or may become a party, whether for principal, interest, costs, fees,
expenses or otherwise, and all Obligations of each Grantor now or hereafter
existing under its Subsidiary Guarantee, this Pledge and Security Agreement and
each other Related Document to which such Grantor is or may become a party (all
such obligations of the Issuer, such Grantor being the "Secured Obligations").
SECTION 2.3. Delivery of Certificated Securities and Intercompany Notes.
All Collateral comprised of Intercompany Notes and certificated Securities shall
be delivered to and held by or on behalf of (and, in the case of the
Intercompany Notes, endorsed to the order of) the Collateral Agent pursuant
hereto, shall be in suitable form for transfer by delivery, and shall be
accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION 2.4. Dividends on Securities and Payments on Intercompany Notes. In
the event that any Dividend is to be paid on any Security that constitutes
Collateral or any payment of principal or interest is to be made on any
Intercompany Note at a time when no Default of the nature referred to in clause
(f) of Section 6.01 of the Indenture or Event of Default has occurred and is
continuing or would result therefrom, such Dividend or payment may be paid
directly to the applicable Grantor. If any such Default or Event of Default has
occurred and is continuing, then any such Dividend or payment shall be paid
directly to the Collateral Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Notes. This Pledge
and Security Agreement shall create a continuing security interest in the
Collateral and shall
(a) remain in full force and effect until payment in full in cash of
all Secured Obligations,
(b) be binding upon each Grantor, its successors, transferees and
assigns, and
(c) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and each other
Secured Party.
Without limiting the generality of the foregoing clause (c), any Holder may
assign or otherwise transfer (in whole or in part) any Note held by it to any
other Person, and such other Person shall thereupon become vested with all the
rights and benefits in respect thereof granted to such Holder under any Related
Document (including this Pledge and Security Agreement) or otherwise, subject,
however, to any contrary provisions in such assignment or transfer, and to the
provisions of Sections 2.14 and 2.15 of the Indenture. Upon the payment in full
in cash of all Secured Obligations, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to such Grantor. Upon
any such termination, the Collateral Agent will, at such Grantor's sole expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination. Upon (i) the sale, transfer or
other disposition of Collateral in accordance with Section 4.15 of the Indenture
or (ii) the payment in full in cash of all Secured Obligations, the security
interests granted herein shall automatically terminate with respect to (x) such
Collateral (in the case of clause (i)) or (y) all Collateral (in the case of
clause (ii)). Upon any such sale, transfer, disposition or termination, the
Collateral Agent will, at such Grantor's sole expense, deliver to such Grantor,
without any representations, warranties or recourse of any kind whatsoever, all
applicable certificated Securities and all applicable Intercompany Notes,
together with all other applicable Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination (including such
documents as such Grantor shall reasonably request to remove the notation of the
Collateral Agent as lienholder on any certificate of title for any applicable
Motor Vehicle).
SECTION 2.6. Grantor Remains Liable. Anything herein to the contrary
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and
shall perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Pledge and Security Agreement had
not been executed,
(b) the exercise by the Collateral Agent of any of its rights
hereunder shall not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral, and
(c) neither the Collateral Agent nor any other Secured Party shall
have any obligation or liability under any such contracts or agreements
included in the Collateral by reason of this Pledge and Security Agreement,
nor shall the Collateral Agent or any other Secured Party be obligated to
perform any of the obligations or duties of any Grantor thereunder or to
take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 2.7. Security Interest Absolute. All rights of the Collateral Agent
and the security interests granted to the Collateral Agent hereunder, and all
obligations of each Grantor hereunder, shall be absolute and unconditional,
irrespective of
(a) any lack of validity or enforceability of the Indenture, any Note
or any other Related Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any right or
remedy against the Issuer, any other Grantor or any other Person under
the provisions of the Indenture, any Note, any other Related Document
or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any Secured Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligations;
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and each
Grantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Secured Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Indenture, any Note
or any other Related Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty, for
any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Issuer, any other
Grantor, any surety or any guarantor.
SECTION 2.8. Postponement of Subrogation, etc. Each Grantor hereby agrees
that it will not exercise any rights which it may acquire by reason of any
payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the prior payment in full in cash of all Secured Obligations.
Any amount paid to any Grantor on account of any payment made hereunder prior to
the payment in full in cash of all Secured Obligations shall be held in trust
for the benefit of the Secured Parties and shall immediately be paid to the
Secured Parties and credited and applied against the Secured Obligations,
whether matured or unmatured, in accordance with the terms of the Indenture;
provided, however, that if
(a) such Grantor has made payment to the Secured Parties of all or any
part of the Secured Obligations, and
(b) all Secured Obligations have been paid in full in cash,
each Secured Party agrees that, at the requesting Grantor's request, the Secured
Parties will execute and deliver to such Grantor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to such Grantor of an interest in the Secured
Obligations resulting from such payment by such Grantor. In furtherance of the
foregoing, for so long as any Secured Obligations remain outstanding, each
Grantor shall refrain from taking any action or commencing any proceeding
against the Issuer or any other Grantor (or its successors or assigns, whether
in connection with a bankruptcy proceeding or otherwise) to recover any amounts
in respect of payments made under this Pledge and Security Agreement to any
Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Each Grantor represents and
warrants to each Secured Party insofar as the representations and warranties
contained herein are applicable to such Grantor and its properties, as set forth
in this Article III.
SECTION 3.2. As to Securities. All Securities issued by a Subsidiary of
such Grantor are duly authorized and validly issued, fully paid, and
non-assessable, and constitute all of the issued and outstanding Securities of
such Subsidiary of such Grantor. All of the Securities issued by each Subsidiary
of such Grantor are in certificated form and, except for the Securities of each
Subsidiary of such Grantor set forth in Item C of Schedule I, have been pledged
to the Collateral Agent by such Grantor.
SECTION 3.3. As to Intercompany Notes. In the case of each Intercompany
Note, all of such Intercompany Notes have been duly authorized, executed,
endorsed, issued and delivered, and are the legal, valid and binding obligation
of the issuers thereof, and are not in default.
SECTION 3.4. Location of Collateral, etc. All of the Equipment, Inventory
and lock boxes of such Grantor are respectively located at the places specified
in Items 3(e), (f) and (c), respectively, of Schedule II hereto. None of the
Equipment and Inventory has, within the four months preceding the date of this
Pledge and Security Agreement (if then owned by such Grantor), been located at
any place other than the places specified in Items 3(e) and (f), respectively,
of Schedule II hereto. The place(s) of business and chief executive office of
such Grantor and the office(s) where such Grantor keeps its records concerning
the Receivables, and all originals of all chattel paper which evidence
Receivables, are respectively located at the addresses set forth in Items 3(b),
(a) and (c) of Schedule II hereto. Such Grantor has no trade names other than
those set forth in Item 1(b) of Schedule II hereto. During the four months
preceding the date hereof, such Grantor has not been known by any legal name nor
has it had a federal taxpayer identification number different from the ones set
forth in Schedule II hereto 1(a) and 2, respectively, of Schedule II hereto, nor
has such Grantor been the subject of any merger or other corporate
reorganization, except as disclosed pursuant to Schedule II hereto 1(c) of
Schedule II hereto. If the Collateral includes any Inventory located in the
State of California, such Grantor is not a "retail merchant" within the meaning
of Section 9102 of the Uniform Commercial Code - Secured Transactions of the
State of California. All Receivables evidenced by a promissory note or other
instrument, negotiable document or chattel paper have been duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Agent and delivered and pledged to
the Collateral Agent pursuant to Section 4.10. Such Grantor is not a party to
any Federal, state or local government contract except as set forth in Item 4 of
Schedule II hereto.
SECTION 3.5. Ownership, No Liens, etc. Such Grantor owns its Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Pledge and Security Agreement and except
in the case of Collateral not consisting of Securities and Intercompany Notes as
permitted by the Indenture; provided, however, that the Securities issued by
Chesapeake Bagel Franchise Corp. may be encumbered by the AFC Lien. No effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any recording office, except such as may
have been filed in favor of the Collateral Agent relating to this Pledge and
Security Agreement or as have been filed in connection with Liens permitted
pursuant to Section 4.17 of the Indenture or as to which a duly executed
termination statement relating to such financing statement or other instrument
has been delivered to the Collateral Agent on the Closing Date.
SECTION 3.6. Possession and Control. Such Grantor has exclusive possession
and control of its Equipment and Inventory.
SECTION 3.7. Negotiable Documents, Instruments and Chattel Paper. Such
Grantor has, contemporaneously herewith, delivered to the Collateral Agent
possession of all originals of all negotiable documents, instruments and chattel
paper currently owned or held by such Grantor (duly endorsed in blank, if
requested by the Collateral Agent).
SECTION 3.8. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and enforceable;
(c) such Grantor has made all necessary filings and recordations to
protect its interest in such Intellectual Property Collateral (except with
respect to Intellectual Property Collateral that it is acquiring on the
date hereof, in which case, such Grantor agrees to promptly (and in any
event within 15 Business Days of the date hereof) deliver to the United
States Patent and Trademark Office for filing on proper forms, together
with the necessary filing fees, all necessary filings and recordations to
protect its interest in such newly-acquired Intellectual Property
Collateral), including recordations of all of its interests in the Patent
Collateral, if any, and Trademark Collateral in the United States Patent
and Trademark Office and in corresponding offices in countries in which the
failure to so file and/or record could reasonably have a Material Adverse
Effect and its claims to the Copyright Collateral, if any, in the United
States Copyright Office and in corresponding offices in countries in which
the failure to so file and/or record could reasonably have a Material
Adverse Effect;
(d) such Grantor is the exclusive owner of the entire and unencumbered
right, title and interest in and to such Intellectual Property Collateral
and no claim has been made that the use of such Intellectual Property
Collateral does or may violate the asserted rights of any third party; and
(e) such Grantor has performed and will continue to perform all acts
and has paid and will continue to pay all required fees and taxes to
maintain each and every such item of Intellectual Property Collateral in
full force and effect throughout the world, as applicable.
Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor's
business.
SECTION 3.9. Validity, etc. This Pledge and Security Agreement creates a
valid continuing security interest in the Collateral securing the payment of the
Secured Obligations, and
(a) in the case of Collateral comprised of certificated Securities or
instruments, upon the delivery of such Collateral to the Collateral Agent,
such security interest will be a valid first priority perfected security
interest;
(b) in the case of Collateral comprised of uncertificated Securities
and other Investment Property (other than certificated Securities), upon
the Collateral Agent obtaining "control" (as defined in Section 8-106 of
the U.C.C., as such term relates to Investment Property (other than
certificated Securities or Commodity Contracts), or as used in Section
9-115(e) of the U.C.C., as such term relates to Commodity Contracts) of
such Collateral and the filing of the Uniform Commercial Code financing
statements delivered by the Grantor having an interest in such Collateral
to the Collateral Agent with respect to such Collateral, such security
interest will be a valid first priority perfected security interest;
(c) in the case of Collateral comprised of Motor Vehicles, upon the
recordation or notation of the Collateral Agent's Lien on the certificates
of title or ownership in respect of such Motor Vehicles and the filing of
the Uniform Commercial Code financing statements delivered by the Grantor
having an interest in such Motor Vehicles to the Collateral Agent with
respect to such Collateral, such security interest will be a valid first
priority perfected security interest;
(d) in the case of all other Collateral, upon the filing in the
appropriate jurisdictions of the Uniform Commercial Code financing
statements delivered by the Grantor to the Collateral Agent with respect to
such Collateral, such security interest will be a valid first priority
perfected security interest (except to the extent a Uniform Commercial Code
financing statement was previously filed in connection with Liens permitted
pursuant to Section 4.17 of the Indenture and such financing statement
remains effective in respect of such Collateral).
Each Grantor has executed and provided the Collateral Agent with all of the
Uniform Commercial Code financing statements referred to above for filing by CT
Corporation Systems with the appropriate offices therefor and has taken all of
the other actions referred to above necessary to create perfected,
first-priority security interests in the applicable Collateral.
SECTION 3.10. Authorization, Approval, etc. Except as have been obtained or
made and are in full force and effect (or otherwise provided for to the
satisfaction of the Agents), no authorization, approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required either
(a) for the grant by such Grantor of the security interest granted
hereby, the pledge by such Grantor of any Collateral pursuant hereto or for
the execution, delivery and performance of this Pledge and Security
Agreement by such Grantor,
(b) for the perfection of or the exercise by the Collateral Agent of
its rights and remedies hereunder, or
(c) for the exercise by the Collateral Agent of the voting or other
rights provided for in this Pledge and Security Agreement, or, except with
respect to any Securities issued by a Subsidiary of such Grantor, as may be
required in connection with a disposition of such Securities by laws
affecting the offering and sale of securities generally, the remedies in
respect of the Collateral pursuant to this Pledge and Security Agreement.
SECTION 3.11. Compliance with Laws. Such Grantor is in compliance with the
requirements of all applicable laws (including the provisions of the Fair Labor
Standards Act), rules, regulations and orders of every governmental authority,
the non-compliance with which could reasonably be expected to have a Material
Adverse Effect or which could reasonably be expected to materially adversely
affect the value of the Collateral or the worth of the Collateral as collateral
security.
ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. Each Grantor covenants and agrees that, so
long as any portion of the Secured Obligations shall remain unpaid, such Grantor
will, unless the Holder or Holders of at least a majority in aggregate principal
amount of the outstanding Notes shall otherwise consent in writing, perform,
comply with and be bound by the obligations set forth in this Article IV.
SECTION 4.2. As to Investment Property and Intercompany Notes; Etc.
SECTION 4.2.1. Certificated Securities. Such Grantor shall not permit any
of its Subsidiaries that is not a corporation to provide in its Organic
Documents that all equity interests in such Subsidiaries shall be Securities
governed by Article 8 of the U.C.C. unless all such interests are evidenced by
certificated Securities which are delivered contemporaneously upon the issuance
thereof to the Collateral Agent, together with all necessary instruments of
transfer or assignment, duly executed in blank.
SECTION 4.2.2. Investment Property (other than Certificated Securities).
With respect to any Investment Property (other than certificated Securities) of
such Grantor, such Grantor shall (a) cause a Control Agreement relating to such
Investment Property to be executed and delivered in favor of the Collateral
Agent and (b) deliver Uniform Commercial Code financing statements which when
filed will result in the Collateral Agent having a first priority perfected
security interest in such Investment Property.
SECTION 4.2.3. Stock Powers, etc. Such Grantor agrees that all certificated
Securities constituting Collateral delivered by such Grantor pursuant to this
Pledge and Security Agreement will be accompanied by duly executed undated blank
stock powers, or other equivalent instruments of transfer acceptable to the
Collateral Agent. Such Grantor will, from time to time upon the request of the
Collateral Agent, promptly deliver to the Collateral Agent such stock powers,
instruments, and similar documents, satisfactory in form and substance to the
Collateral Agent, with respect to such Collateral as the Collateral Agent may
reasonably request and will, from time to time upon the request of the
Collateral Agent after the occurrence of any Event of Default, promptly transfer
any Securities constituting Collateral into the name of any nominee designated
by the Collateral Agent.
SECTION 4.2.4. Continuous Pledge. Such Grantor will, at all times, keep
pledged to the Collateral Agent pursuant hereto on a first priority perfected
basis all Investment Property constituting Collateral, all Dividends and
Distributions with respect thereto, all Intercompany Notes, all interest,
principal and other proceeds received by the Collateral Agent with respect to
the Intercompany Notes, and all other Collateral and other securities,
instruments, proceeds, and rights from time to time received by or distributable
to such Grantor in respect of any of the foregoing Collateral and will not
permit any Subsidiary of such Grantor to issue any Securities which shall not
have been immediately duly pledged hereunder on a first priority perfected
basis.
SECTION 4.2.5. Voting Rights; Dividends, etc. Such Grantor agrees:
(a) after any Default of the nature referred to in clause (f) of
Section 6.01 of the Indenture or any Event of Default shall have occurred
and be continuing, promptly upon receipt of notice thereof by such Grantor
and without any request therefor by the Collateral Agent, to deliver
(properly endorsed where required hereby or requested by the Collateral
Agent) to the Collateral Agent all Dividends, Distributions, all interest,
all principal, all other cash payments, and all proceeds of the Collateral,
all of which shall be held by the Collateral Agent as additional Collateral
for use in accordance with clause (b) of Section 6.1; and
(b) after any Event of Default shall have occurred and be continuing
and the Collateral Agent has notified such Grantor of the Collateral
Agent's intention to exercise its voting power under this Section 4.2.5(b)
(i) the Collateral Agent may exercise (to the exclusion of such
Grantor) the voting power and all other incidental rights of ownership
with respect to any Securities or other Investment Property
constituting Collateral and such Grantor hereby grants the Collateral
Agent an irrevocable proxy, exercisable under such circumstances, to
vote such Securities and such other Collateral; and
(ii) promptly to deliver to the Collateral Agent such additional
proxies and other documents as may be necessary to allow the
Collateral Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by such Grantor but which
such Grantor is then obligated to deliver to the Collateral Agent, shall, until
delivery to the Collateral Agent, be held by such Grantor separate and apart
from its other property in trust for the Collateral Agent. The Collateral Agent
agrees that unless an Event of Default shall have occurred and be continuing and
the Collateral Agent shall have given the notice referred to in Section
4.2.5(b), such Grantor shall have the exclusive voting power with respect to any
Securities constituting Collateral and the Collateral Agent shall, upon the
written request of such Grantor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by such Grantor which are
necessary to allow such Grantor to exercise voting power with respect to any
such Securities; provided, however, that no vote shall be cast, or consent,
waiver, or ratification given, or action taken by such Grantor that would impair
any such Collateral or be inconsistent with or violate any provision of the
Indenture or any other Related Document (including this Pledge and Security
Agreement).
SECTION 4.2.6. Amendment of Organic Documents. Such Grantor will not amend,
supplement or otherwise modify, or permit, consent or suffer to occur any
amendment, supplement or modification of any terms or provisions contained in,
or applicable to, any Organic Document of any issuer of any Security comprising
the Collateral in which it has an equity interest if the effect thereof is to
impair, or is in any manner adverse to, the rights or interests of the
Collateral Agent or any other Secured Party hereunder or under the Indenture or
any other Related Document, without the prior written consent of the Collateral
Agent and the Holder or Holders of at least a majority in aggregate principal
amount of the outstanding Notes.
SECTION 4.3. As to Equipment and Inventory. Such Grantor hereby agrees that
it shall
(a) keep all the Equipment and Inventory (other than Inventory sold in
the ordinary course of business) at the places therefor specified in
Section 3.4 or, upon 30 days' prior written notice to the Collateral Agent,
at such other places in a jurisdiction where all representations and
warranties set forth in Article III (including Section 3.9) shall be true
and correct, and all action required pursuant to the first sentence of
Section 4.10 shall have been taken with respect to the Equipment and
Inventory;
(b) cause the Equipment to be maintained and preserved as required by
Section 4.05 of the Indenture; and promptly furnish to the Collateral Agent
a statement respecting any loss or damage to any of such material
Equipment; and
(c) pay promptly when due all property and other material taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Equipment
and Inventory, except to the extent the validity thereof is being contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside.
SECTION 4.4. As to Receivables. (a) Such Grantor shall keep its place(s) of
business and chief executive office and the office(s) where it keeps its records
concerning the Receivables, and all originals of all chattel paper which
evidences Receivables, located at the address(es) set forth in Item 3(b) of
Schedule II attached hereto, or, upon 30 days' prior written notice to the
Collateral Agent, at such other locations in a jurisdiction where all actions
required by the first sentence of Section 4.10 shall have been taken with
respect to the Receivables; not change its name or federal taxpayer
identification number except upon 30 days' prior written notice to the
Collateral Agent; hold and preserve such records and chattel paper; and permit
representatives of the Collateral Agent at any time during normal business hours
to inspect and make abstracts from such records and chattel paper. In addition,
each Grantor shall give the Collateral Agent a supplement to the Schedules
hereto on the last Business Day of each March, June, September and December
(commencing with the last Business Day of September, 2001) to the extent
necessary to set forth any changes to the information set forth in Section 3.4.
(b) Such Grantor shall have the right to collect all Receivables so long as
no Default of the nature set forth in clause (f) of Section 6.01 of the
Indenture nor any Event of Default shall have occurred and be continuing;
provided, however, that such Grantor agrees to promptly deposit all payments
received by such Grantor on account of the Receivables, whether in the form of
cash, checks, drafts, notes, bills of exchange, money orders or other like
instruments or otherwise, in a Deposit Account in precisely the form in which
received (but with any endorsements of such Grantor necessary for deposit or
collection).
(c) All proceeds of Collateral received by such Grantor shall be deposited
into a Deposit Account of such Grantor, unless, during the occurrence and
continuance of an Event of Default, such Grantor is otherwise notified in
writing by the Collateral Agent. Following any such notice by the Collateral
Agent to such Grantor pursuant to this Section 4.4(c), all proceeds of
Collateral received by such Grantor shall be delivered in kind to the Master
Deposit Account (which shall be established by the Issuer with the Collateral
Agent if such Deposit Account is not then existing) or any other account or
accounts specified by the Collateral Agent. Proceeds of Collateral received by
such Grantor shall, prior to deposit in the Master Deposit Account or such other
account or accounts specified by the Collateral Agent, be held separate and
apart from, and not commingled with, all other property and in express trust for
the benefit of the Collateral Agent until delivery thereof is made to the Master
Deposit Account or such other account or accounts.
(d) Following and during the continuance of an Event of Default, such
Grantor shall transfer all funds out of each of its Deposit Accounts that is not
the Master Deposit Account (other than, in the aggregate, cash or Cash
Equivalent Investments in all Deposit Accounts (other than the Master Deposit
Account) that do not exceed at any time $10,000) for deposit into the Master
Deposit Account at the close of business each day or, if not commercially
reasonable to do so, no less frequently than once every five Business Days.
(e) The Collateral Agent shall have the right to apply any amount in each
Deposit Account (including the Master Deposit Account) to the payment of any
Secured Obligations which are due and payable or payable upon demand or to the
payment of any Secured Obligations at any time that an Event of Default shall
have occurred and be continuing.
(f) With respect to each Deposit Account maintained with the Collateral
Agent (including the Master Deposit Account), it is hereby agreed that (i)
deposits in each such Deposit Account are subject to a security interest as
contemplated hereby, (ii) each such Deposit Account shall be under the sole
dominion and control of the Collateral Agent and (iii) the Collateral Agent
shall have the sole right of withdrawal over each such Deposit Account;
provided, however, that, unless and until the Collateral Agent shall notify the
applicable Grantors that an Event of Default shall have occurred and be
continuing and that during the continuance thereof no such Grantor shall
withdraw any of the funds contained in any such Deposit Account (which notice
may be given by telephone if promptly confirmed in writing or by facsimile), any
such Grantor may at any time withdraw any of the funds contained in its Deposit
Account for use in any lawful manner not inconsistent with the provisions of
this Pledge and Security Agreement, the Indenture or any other Related Document.
SECTION 4.5. Motor Vehicles. (a) Such Grantor shall deliver to the
Collateral Agent the original of the certificate of title or ownership listing
the Collateral Agent as lienholder for (i) any Motor Vehicle owned by such
Grantor that has a fair market value of at least $50,000 or (ii) at the request
of the Collateral Agent, any other Motor Vehicle owned by such Grantor.
(b) Upon the acquisition after the date hereof by such Grantor of (i) any
Motor Vehicle having a fair market value of at least $50,000 or (ii) any other
Motor Vehicle for which the Collateral Agent has requested the original of the
certificate of title or ownership thereof, such Grantor shall deliver to the
Collateral Agent originals of the certificates of title or ownership for such
Motor Vehicles, together with the manufacturer's statement of origin with the
Collateral Agent listed as lienholder.
(c) Without limiting Section 5.1, such Grantor hereby appoints the
Collateral Agent as its attorney-in-fact, effective the date hereof and
terminating upon the termination of this Pledge and Security Agreement, for the
purpose of (i) executing on behalf of such Grantor title or ownership
applications for filing with appropriate state agencies to enable Motor Vehicles
now owned or hereafter acquired by such Grantor to be retitled and the
Collateral Agent listed as lienholder thereon, (ii) filing such applications
with such state agencies and (iii) executing such other documents and
instruments on behalf of, and taking such other action in the name of, such
Grantor as the Collateral Agent may deem necessary or advisable to accomplish
the purposes hereof (including, without limitation, the purpose of creating in
favor of the Collateral Agent a perfected lien on the Motor Vehicles and
exercising the rights and remedies of the Collateral Agent under Section 6.1
hereof). This appointment as attorney-in-fact is irrevocable and coupled with an
interest.
(d) Any certificates of title or ownership delivered pursuant to the terms
hereof shall be accompanied by odometer statements for each Motor Vehicle
covered thereby.
SECTION 4.6. As to Collateral. (a) Until the occurrence and continuance of
a Default of the nature set forth in clause (f) of Section 6.01 of the Indenture
or an Event of Default, and such time as the Collateral Agent shall notify such
Grantor of the revocation of such power and authority such Grantor (i) may in
the ordinary course of its business (except as otherwise permitted under the
Indenture), at its own expense, sell, lease or furnish under the contracts of
service any of the Inventory normally held by such Grantor for such purpose, and
use and consume, in the ordinary course of its business (except as otherwise
permitted under the Indenture), any raw materials, work in process or materials
normally held by such Grantor for such purpose, (ii) will, at its own expense,
endeavor to collect, as and when due, all amounts due with respect to any of the
Collateral, including the taking of such action with respect to such collection
as the Collateral Agent may reasonably request following the occurrence of a
Default of the nature set forth in clause (f) of Section 6.01 of the Indenture
or an Event of Default or, in the absence of such request, as such Grantor may
deem advisable, and (iii) may grant, in the ordinary course of business (except
as otherwise permitted under the Indenture), to any party obligated on any of
the Collateral, any rebate, refund or allowance to which such party may be
lawfully entitled, and may accept, in connection therewith, the return of goods,
the sale or lease of which shall have given rise to such Collateral. The
Collateral Agent, however, may, at any time following a Default of the nature
set forth in clause (f) of Section 6.01 of the Indenture or an Event of Default,
whether before or after any revocation of such power and authority or the
maturity of any of the Secured Obligations, notify any parties obligated on any
of the Collateral to make payment to the Collateral Agent of any amounts due or
to become due thereunder and enforce collection of any of the Collateral by suit
or otherwise and surrender, release, or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder or evidenced thereby. Upon request
of the Collateral Agent following a Default of the nature set forth in clause
(f) of Section 6.01 of the Indenture or an Event of Default, such Grantor will,
at its own expense, notify any parties obligated on any of the Collateral to
make payment to the Collateral Agent of any amounts due or to become due
thereunder.
(b) Following a Default of the nature set forth in clause (f) of Section
6.01 of the Indenture or an Event of Default, the Collateral Agent is authorized
to endorse, in the name of such Grantor, any item, howsoever received by the
Collateral Agent, representing any payment on or other proceeds of any of the
Collateral.
SECTION 4.7. As to Intellectual Property Collateral. Each Grantor covenants
and agrees to comply with the following provisions as such provisions relate to
any Intellectual Property Collateral of such Grantor:
(a) such Grantor shall not, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Collateral Agent) that any of the Patent
Collateral is of negligible economic value to such Grantor, or (ii) have a
valid business purpose to do otherwise, do any act, or omit to do any act,
whereby any of the Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable;
(b) such Grantor shall not, and such Grantor shall not permit any of
its licensees to, unless such Grantor shall either (i) reasonably and in
good faith determine (and notice of such determination shall have been
delivered to the Collateral Agent) that any of the Trademark Collateral is
of negligible economic value to such Grantor, or (ii) have a valid business
purpose to do otherwise,
(i) fail to continue to use any of the Trademark Collateral in
order to maintain all of the Trademark Collateral in full force free
from any claim of abandonment for non-use,
(ii) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral in a manner
which might reasonably be expected to cause material impairment of any
such Trademark Collateral,
(iii) fail to employ all of the Trademark Collateral registered
with any Federal or state or foreign authority with an appropriate
notice of such registration,
(iv) adopt or use any other Trademark which is confusingly
similar or a colorable imitation of any of the Trademark Collateral,
(v) use any of the Trademark Collateral registered with any
Federal or state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark
Collateral has been made, and
(vi) do or permit any act or knowingly omit to do any act whereby
any of the Trademark Collateral may lapse or become invalid or
unenforceable;
(c) such Grantor shall not, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Collateral Agent) that any of the
Copyright Collateral or any of the Trade Secrets Collateral is of
negligible economic value to such Grantor, or (ii) have a valid business
purpose to do otherwise, do or permit any act or knowingly omit to do any
act whereby any of the Copyright Collateral or any of the Trade Secrets
Collateral may lapse or become invalid or unenforceable or placed in the
public domain except upon expiration of the end of an unrenewable term of a
registration thereof;
(d) such Grantor shall notify the Collateral Agent immediately if it
knows, or has reason to know, that any application or registration relating
to any material item of the Intellectual Property Collateral may become
abandoned or dedicated to the public or placed in the public domain or
invalid or unenforceable, or of any adverse determination or development
(including the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any foreign counterpart thereof or any court)
regarding such Grantor's ownership of any of the Intellectual Property
Collateral, its right to register the same or to keep and maintain and
enforce the same;
(e) in no event shall such Grantor or any of its agents, employees,
designees or licensees file an application for the registration of any
Intellectual Property Collateral 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, unless
it promptly informs the Collateral Agent, and upon request of the
Collateral Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Collateral Agent may reasonably
request to evidence the Collateral Agent's security interest in such
Intellectual Property Collateral and the goodwill and general intangibles
of such Grantor relating thereto or represented thereby;
(f) such Grantor shall take all necessary steps, including 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 any
application (and to obtain the relevant registration) filed with respect
to, and to maintain any registration of, the Intellectual Property
Collateral, including the filing of applications for renewal, affidavits of
use, affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to the
extent that dedication, abandonment or invalidation is permitted under the
foregoing clauses (a), (b) and (c)); and
(g) such Grantor shall, contemporaneously herewith, execute and
deliver to the Collateral Agent a Patent Security Agreement and a Trademark
Security Agreement in the forms of Exhibits A and B hereto, respectively,
and shall execute and deliver to the Collateral Agent any other document
required to acknowledge or register or perfect the Collateral Agent's
interest in any part of the Intellectual Property Collateral.
SECTION 4.8. Insurance. Such Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Indenture and will, upon the request of the Collateral
Agent, furnish a certificate of a reputable insurance broker setting forth the
nature and extent of all insurance maintained by such Grantor in accordance with
this Section.
SECTION 4.9. Transfers and Other Liens. Such Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except Inventory in the ordinary course
of business or as permitted by the Indenture; or
(b) create or suffer to exist any Lien or other charge or encumbrance
upon or with respect to any of the Collateral to secure Indebtedness of any
Person or entity, except for the security interest created by this Pledge
and Security Agreement and except as permitted by the Indenture.
SECTION 4.10. Further Assurances, etc. Such Grantor agrees that, from time
to time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Collateral Agent may request, in order to perfect,
preserve and protect any security interest granted or purported to be granted
hereby or to enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, such Grantor will
(a) xxxx conspicuously each document included in the Inventory, each
chattel paper included in the Receivables and each Related Contract and, at the
request of the Collateral Agent, each of its records pertaining to the
Collateral with a legend, in form and substance satisfactory to the Collateral
Agent, indicating that such document, chattel paper, Related Contract or
Collateral is subject to the security interest granted hereby;
(b) if any Receivable shall be evidenced by a promissory note or other
instrument, negotiable document or chattel paper, deliver and pledge to the
Collateral Agent hereunder such promissory note, instrument, negotiable document
or chattel paper duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Collateral
Agent;
(c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices (including any
assignment of claim form under or pursuant to the federal assignment of claims
statute, 31 U.S.C. ss. 3726, any successor or amended version thereof or any
regulation promulgated under or pursuant to any version thereof), as may be
necessary or desirable, or as the Collateral Agent may request, in order to
perfect and preserve the security interests and other rights granted or
purported to be granted to the Collateral Agent hereby;
(d) not enter into any agreement amending, supplementing, or waiving any
provision of any Intercompany Note (including any underlying instrument pursuant
to which such Intercompany Note is issued) or compromising or releasing or
extending the time for payment of any obligation of the maker thereof;
(e) promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that the Collateral Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral;
(f) cause the Collateral Agent to be listed as the lienholder on the
certificate of title or ownership relating to (i) any Motor Vehicle owned by
such Grantor that has a fair market value of at least $50,000 or (ii) at the
request of the Collateral Agent, any other Motor Vehicle owned by such Grantor;
(g) not take or omit to take any action the taking or the omission of which
would result in any impairment or alteration of any obligation of the maker of
any Intercompany Note or other instrument constituting Collateral; and
(h) furnish to the Collateral Agent, from time to time at the Collateral
Agent's request, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A carbon, photographic or other reproduction of this Pledge and Security
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the Collateral
Agent's discretion, following the occurrence and continuation of a Default of
the nature set forth in clause (f) of Section 6.01 of the Indenture or an Event
of Default, to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Pledge and Security Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above;
(c) to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Collateral Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of such Grantor hereunder
(including all obligations of such Grantor pursuant to Section 4.10).
Such Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Agent May Perform. If any Grantor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor pursuant to
Section 6.4.
SECTION 5.3. Collateral Agent Has No Duty. In addition to, and not in
limitation of, Section 2.6, the powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Investment
Property, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as any Grantor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Collateral Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under the
U.C.C. (whether or not the U.C.C. applies to the affected Collateral) and also
may
(i) require each Grantor to, and such Grantor hereby agrees that it
will, at its expense and upon request of the Collateral Agent forthwith,
assemble all or part of the Collateral as directed by the Collateral Agent
and make it available to the Collateral Agent at a place to be designated
by the Collateral Agent which is reasonably convenient to both parties, and
(ii) without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any
of the Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' prior notice to such
Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.
The Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Collateral Agent may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Collateral Agent in respect of any
sale of, collection from, or other realization upon, all or any part of the
Collateral shall be applied by the Collateral Agent against, all or any part of
the Secured Obligations as follows:
(i) first, to the payment of any amounts payable to the Collateral
Agent pursuant to Sections 6.08 and 7.07 of the Indenture and Section 6.4;
(ii) second, to the equal and ratable payment of Secured Obligations,
in accordance with each Secured Party's Secured Obligations owing to it
under or pursuant to the Indenture or any other Related Document, applied
(A) first to fees and expense reimbursements then due to such
Secured Party,
(B) then to interest due to such Secured Party, and
(D) then to pay the remaining outstanding Secured Obligations;
and
(iii) fourth, to be held as additional collateral security until the
payment in full in cash of all of the Secured Obligations, after which such
remaining cash proceeds shall be paid over to the applicable Grantor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Collateral Agent may
(i) transfer all or any part of the Collateral into the name of the
Collateral Agent or its nominee, with or without disclosing that such
Collateral is subject to the lien and security interest hereunder,
(ii) notify the parties obligated on any of the Collateral to make
payment to the Collateral Agent of any amount due or to become due
thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than
the original period) any obligations of any nature of any party with
respect thereto,
(iv) endorse any checks, drafts, or other writings in such Grantor's
name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of such Grantor)
endorsements, assignments, stock powers and other instruments of conveyance
or transfer with respect to all or any of the Collateral.
SECTION 6.2. Securities Laws. If the Collateral Agent shall determine to
exercise its right to sell all or any of the Collateral pursuant to Section 6.1,
each Grantor agrees that, upon request of the Collateral Agent, such Grantor
will, at its own expense:
(a) execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver, all such instruments and documents, and do or cause to be done
all such other acts and things, as may be necessary or, in the opinion of
the Collateral Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and to cause the registration statement relating thereto
to become effective and to remain effective for such period as prospectuses
are required by law to be furnished, and to make all amendments and
supplements thereto and to the related prospectus which, in the opinion of
the Collateral Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Collateral
Agent;
(c) cause each such issuer to make available to its security holders,
as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
Each Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Collateral Agent or the Secured Parties
by reason of the failure by any Grantor to perform any of the covenants
contained in this Section and, consequently, agrees that, if such Grantor shall
fail to perform any of such covenants, it shall pay, as liquidated damages and
not as a penalty, an amount equal to the value (as determined by the Collateral
Agent) of the Collateral on the date the Collateral Agent shall demand
compliance with this Section.
SECTION 6.3. Compliance with Restrictions. Each Grantor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and such Grantor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Collateral Agent be liable nor accountable to
such Grantor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.
SECTION 6.4. Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to indemnify the
Collateral Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Pledge and Security
Agreement (including enforcement of this Pledge and Security Agreement),
except claims, losses or liabilities resulting from the Collateral Agent's
gross negligence or wilful misconduct.
(b) Each Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the
Collateral Agent may incur in connection with
(i) the administration of this Pledge and Security Agreement,
(ii) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the Secured Parties hereunder, and
(iv) the failure by any Grantor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Related Document. This Pledge and Security Agreement is a
Related Document executed pursuant to the Indenture and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the provisions Section 1.04 thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any provision of
this Pledge and Security Agreement nor consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Collateral Agent (on behalf of (x) the Holders or (y) the
Holder or Holders of at least a majority in aggregate principal amount of the
outstanding Notes, as the case may be), and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 7.3. Protection of Collateral. The Collateral Agent may from time
to time, at its option, perform any act which each Grantor agrees hereunder to
perform and which such Grantor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Collateral Agent may from time to time take any other action which the
Collateral Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and, if to any Grantor, mailed or telecopied or delivered to it, addressed to it
in care of the Issuer at the address of the Issuer specified in the Indenture,
if to the Collateral Agent, mailed or telecopied or delivered to it, addressed
to it at the address of the Collateral Agent specified in the Indenture. All
such notices and other communications, when mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any such notice or communication, if
transmitted by telecopier, shall be deemed given when transmitted and
electronically confirmed.
SECTION 7.5. Additional Grantors. Upon the execution and delivery by any
other Person of an instrument in the form of Annex I hereto, such Person shall
become a "Grantor" hereunder with the same force and effect as if originally
named as a Grantor herein. The execution and delivery of any such instrument
shall not require the consent of any other Grantor hereunder. The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Pledge and
Security Agreement.
SECTION 7.6. Section Captions. Section captions used in this Pledge and
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Pledge and Security Agreement.
SECTION 7.7. Severability. Wherever possible each provision of this Pledge
and Security Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Pledge and Security
Agreement shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Pledge and Security Agreement.
SECTION 7.8. Counterparts. This Pledge and Security Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed an original and all of which shall constitute together but one and the
same agreement.
SECTION 7.9. Governing Law, Entire Agreement, etc. THIS PLEDGE AND SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION
OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. THIS PLEDGE AND SECURITY AGREEMENT AND THE OTHER RELATED
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.10. Intercreditor Agreement. In case of any conflict or
inconsistency between this Pledge and Security Agreement and the Intercreditor
Agreement (to the extent such agreement is executed and delivered by the
Collateral Agent and a Lender in accordance with the terms of the Indenture) or
with respect to the rights and obligations of the parties prior to enforcement
and the conditions and terms on which security interests may be enforced, the
Intercreditor Agreement shall control; provided, however, that the terms of the
Intercreditor Agreement shall not increase the obligations of, or adversely
affect any rights, of any Grantor, in each case under this Pledge and Security
Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
IN WITNESS WHEREOF, each Grantor has caused this Pledge and Security
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
NEW WORLD COFFEE--MANHATTAN
BAGEL, INC., a Delaware corporation
By: /s/__________________
Name: R. Xxxxx Xxxxxx
Title: Chairman and Chief Executive
Officer
CHESAPEAKE BAGEL FRANCHISE
CORP. (F/K/A CBB ACQUISITION
CORP.), a New Jersey corporation
By: /s/__________________
Name:
Title:
XXXXXXXXXX'X INCORPORATED, a
Connecticut corporation
By:/s/__________________
Name:
Title:
PARAGON BAKERIES, INC., a New
Jersey corporation
By:/s/__________________
Name:
Title:
MANHATTAN BAGEL COMPANY, INC.,
a New Jersey corporation
By:/s/__________________
Name:
Title:
I AND J BAGEL, INC., a California
corporation
By:/s/__________________
Name:
Title:
MANHATTAN BAGEL CONSTRUCTION
CORP., a New Jersey corporation
By: /s/__________________
Name:
Title:
BAY AREA BAGEL, INC., a California
corporation
By: /s/__________________
Name:
Title:
DAB INDUSTRIES, INC., a California
corporation
By:/s/__________________
Name:
Title:
CR BAGEL LEASES, INC., a New Jersey
corporation
By:/s/__________________
Name:
Title:
MBC East Aurora, LLC, a New York
limited liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Amherst, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC North Buffalo, LLC, a New York
limited liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Orchard Park, LLC, a New York
limited liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By:/s/__________________
Name:
Title:
MBC Cheektowaga, LLC, a New York
limited liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Transit, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Xxxxxx, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Northtown, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Maple, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Main Place, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Elmwood, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Tonawanda, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By: /s/__________________
Name:
Title:
MBC Genessee, LLC, a New York limited
liability company
By: New World Coffee--Manhattan Bagel,
Inc., a Delaware corporation, its
managing member
By:/s/__________________
Name:
Title:
XXXXXXXX XXXX BAGEL PARTNERS,
INC., a California corporation
By: /s/__________________
Name:
Title:
EINSTEIN ACQUISITION CORP., a
Delaware corporation
By:/s/__________________
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Collateral Agent
By: /s/__________________
Name:
Title:
EXHIBIT A
to Pledge and Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of __________
__, ____, is made between ___________________, a ____________ (the "Grantor"),
and UNITED STATES TRUST COMPANY OF NEW YORK, as collateral agent (together with
its successor(s) thereto in such capacity, the "Collateral Agent") for each of
the Secured Parties;
W I T N E S S E T H :
-------------------
WHEREAS, New World Coffee-Manhattan Bagel, Inc., a Delaware corporation
(the "Issuer"), the Subsidiaries of the Issuer and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of June 19, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Indenture"), and in connection therewith, the Issuer has issued (the "Notes
Issuance") its Senior Secured Increasing Rate Notes due 2003 (and its Senior
Secured Increasing Rate Notes due 2003, Series B to be issued in exchange
therefor) (collectively, the "Notes");
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Pledge and Security Agreement, dated as of June 19, 2001 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Pledge and Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Patent Collateral (as defined
below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Issuer;
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in order to induce the Holders to acquire the Notes
and maintain the Indebtedness evidenced thereby, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Pledge and Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, to secure all of
the Secured Obligations, the Grantor does hereby mortgage, pledge and
hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Patent Collateral"), whether now owned or
hereafter acquired or existing by it:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and including each patent and patent application
referred to in Item A of Schedule III attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
clause (a);
(c) all patent licenses, including each patent license referred to in
Item B of Schedule III attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right
to xxx third parties for past, present or future infringements of any
patent or patent application, including any patent or patent application
referred to in Item A of Schedule III attached hereto, and for breach or
enforcement of any patent license, including any patent license referred to
in Item B of Schedule III attached hereto, and all rights corresponding
thereto throughout the world.
SECTION 3. Pledge and Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Collateral Agent in the Patent Collateral with the United States
Patent and Trademark Office and corresponding offices in other countries of the
world. The security interest granted hereby has been granted as a supplement to,
and not in limitation of, the security interest granted to the Collateral Agent
for its benefit and the benefit of each Secured Party under the Pledge and
Security Agreement. The Pledge and Security Agreement (and all rights and
remedies of the Collateral Agent and each Secured Party thereunder) shall remain
in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash of
all Secured Obligations, the Collateral Agent shall, at the Grantor's expense,
execute and deliver to the Grantor all instruments and other documents as may be
necessary or proper to release the lien on and security interest in the Patent
Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Patent Collateral granted hereby are more fully set
forth in the Pledge and Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a ____________
By:
------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Collateral Agent
By:
------------------------------
Name:
Title:
SCHEDULE III
to Patent Security Agreement
Item A. Patents
Issued Patents
**Country Patent No. Issue Date Inventor(s) Title
------- ---------- ---------- ----------- -----
Pending Patent Applications
*Country Serial No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
Patent Applications in Preparation
Expected
*Country Docket No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
Item B. Patent Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- --------- ---------- -------
--------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
EXHIBIT B
to Pledge and Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
__________ __, ____, is made between _____________________, a ___________
__________ (the "Grantor"), and UNITED STATES TRUST COMPANY OF NEW YORK, as
collateral agent (together with its successor(s) thereto in such capacity, the
"Collateral Agent") for each of the Secured Parties;
W I T N E S S E T H :
-------------------
WHEREAS, New World Coffee-Manhattan Bagel, Inc., a Delaware corporation
(the "Issuer"), the Subsidiaries of the Issuer and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of June 19, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Indenture"), and in connection therewith, the Issuer has issued (the "Notes
Issuance") its Senior Secured Increasing Rate Notes due 2003 (and its Senior
Secured Increasing Rate Notes due 2003, Series B to be issued in exchange
therefor) (collectively, the "Notes");
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Pledge and Security Agreement, dated as of June 19, 2001 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Pledge and Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Trademark Collateral (as
defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Issuer;
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in order to induce the Holders to acquire the Notes
and maintain the Indebtedness evidenced thereby, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Pledge and Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, to secure all of
the Secured Obligations, the Grantor does hereby mortgage, pledge and
hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Trademark Collateral"), whether now owned or
hereafter acquired or existing by it:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this clause (a) being collectively called a
"Trademark"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State thereof or
any foreign country, including those referred to in Item A of Schedule IV
attached hereto;
(b) all Trademark licenses, including each Trademark license referred
to in Item B of Schedule IV attached hereto;
(c) all reissues, extensions or renewals of any of the items described
in clause (a) and (b);
(d) all of the goodwill of the business connected with the use of, and
symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark registration
or Trademark license, including any Trademark, Trademark registration or
Trademark license referred to in Item A and Item B of Schedule IV attached
hereto, or for any injury to the goodwill associated with the use of any
such Trademark or for breach or enforcement of any Trademark license.
SECTION 3. Pledge and Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Collateral Agent in the Trademark Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Collateral Agent for its benefit and the benefit of each Secured Party under the
Pledge and Security Agreement. The Pledge and Security Agreement (and all rights
and remedies of the Collateral Agent and each Secured Party thereunder) shall
remain in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash of
all Secured Obligations, the Collateral Agent shall, at the Grantor's expense,
execute and deliver to the Grantor all instruments and other documents as may be
necessary or proper to release the lien on and security interest in the
Trademark Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Trademark Collateral granted hereby are more fully set
forth in the Pledge and Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a ____________
By:
------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Collateral Agent
By:
------------------------------
Name:
Title:
SCHEDULE IV
to Trademark Security Agreement
Item A. Trademarks
------- ----------
Registered Trademarks
---------------------
*Country Trademark Registration No. Registration Date
-------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
------- --------- ---------- ----------- ---------
--------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
Item B. Trademark Licenses
------- ------------------
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
---------- --------- -------- -------- --------- ----------
EXHIBIT C
to Pledge and Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
__________ __, ____, is made between _____________________, a __________ (the
"Grantor"), and UNITED STATES TRUST COMPANY OF NEW YORK, as collateral agent
(together with its successor(s) thereto in such capacity, the "Collateral
Agent") for each of the Secured Parties;
W I T N E S S E T H :
-------------------
WHEREAS, New World Coffee-Manhattan Bagel, Inc., a Delaware corporation
(the "Issuer"), the Subsidiaries of the Issuer and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of June 19, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Indenture"), and in connection therewith, the Issuer has issued (the "Notes
Issuance") its Senior Secured Increasing Rate Notes due 2003 (and its Senior
Secured Increasing Rate Notes due 2003, Series B to be issued in exchange
therefor) (collectively, the "Notes");
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Pledge and Security Agreement, dated as of June 19, 2001 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Pledge and Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Copyright Collateral (as
defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Issuer;
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in order to induce the Holders to acquire the Notes
and maintain the Indebtedness evidenced thereby, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Pledge and Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, to secure all of
the Secured Obligations, the Grantor does hereby mortgage, pledge and
hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Copyright Collateral"), whether now owned or
hereafter acquired or existing by it, being all copyrights (including all
copyrights for semi-conductor chip product mask works) of the Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
throughout the world including all of the Grantor's right, title and interest in
and to all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including the copyrights referred to in Item
A of Schedule V attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses, including each
copyright license referred to in Item B of Schedule V attached hereto, the right
to xxx for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
SECTION 3. Pledge and Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Collateral Agent in the Copyright Collateral with the United
States Copyright Office and corresponding offices in other countries of the
world. The security interest granted hereby has been granted as a supplement to,
and not in limitation of, the security interest granted to the Collateral Agent
for its benefit and the benefit of each Secured Party under the Pledge and
Security Agreement. The Pledge and Security Agreement (and all rights and
remedies of the Collateral Agent and each Secured Party thereunder) shall remain
in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash of
all Secured Obligations, the Collateral Agent shall, at the Grantor's expense,
execute and deliver to the Grantor all instruments and other documents as may be
necessary or proper to release the lien on and security interest in the
Copyright Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Copyright Collateral granted hereby are more fully set
forth in the Pledge and Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a ____________
By:
-----------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Collateral Agent
By:
-----------------------------
Name:
Title:
SCHEDULE V
to Copyright
Security Agreement
Item A. Copyrights/Mask Works
------- ---------------------
Registered Copyrights/Mask Works
--------------------------------
*Country Registration No. Registration Date Author(s) Title
------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
--------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
Item B. Copyright/Mask Work Licenses
-------------------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
---------- -------- -------- --------- ---------- -------
ANNEX I
to Pledge and Security Agreement
SUPPLEMENT TO PLEDGE AND SECURITY AGREEMENT
This SUPPLEMENT NO. ___, dated as of ________ __, ____ (this "Supplement"),
to the Pledge and Security Agreement, dated as of ________ __, ____ (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Pledge and Security Agreement"), among the initial signatories thereto and each
other Person which from time to time thereafter became a party thereto pursuant
to Section 7.5 thereof (each, individually, a "Grantor", and, collectively, the
"Grantors"), in favor of UNITED STATES TRUST COMPANY OF NEW YORK, as collateral
agent (together with any successor(s) thereto in such capacity, the "Collateral
Agent") for each of the Secured Parties (such and other capitalized terms being
used herein with the meanings provided, or incorporated by reference, in the
Pledge and Security Agreement), is made by the undersigned.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, New World Coffee-Manhattan Bagel, Inc., a Delaware corporation
(the "Issuer"), the Subsidiaries of the Issuer and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of June 19, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Indenture"), and in connection therewith, the Issuer has issued (the "Notes
Issuance") its Senior Secured Increasing Rate Notes due 2003 (and its Senior
Secured Increasing Rate Notes due 2003, Series B to be issued in exchange
therefor) (collectively, the "Notes");
WHEREAS, as a condition to the Notes Issuance, the undersigned is required
to execute and deliver this Supplement;
WHEREAS, the undersigned has duly authorized the execution, delivery and
performance of this Supplement and the Pledge and Security Agreement;
WHEREAS, the Pledge and Security Agreement provides that additional parties
may become Grantors under the Pledge and Security Agreement by execution and
delivery of an instrument in the form of this Supplement;
WHEREAS, pursuant to the provisions of Section 7.5 of the Pledge and
Security Agreement, the undersigned is becoming an Additional Grantor under the
Pledge and Security Agreement; and
WHEREAS, the undersigned desires to become a Grantor under the Pledge and
Security Agreement in order to induce the Holders to acquire the Notes and
maintain the Indebtedness evidenced thereby as consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with the Pledge and Security Agreement, the
undersigned by its signature below becomes a Grantor under the Pledge and
Security Agreement with the same force and effect as if it were an original
signatory thereto as a Grantor and the undersigned hereby
(a) agrees to all the terms and provisions of the Pledge and Security
Agreement applicable to it as a Grantor thereunder;
(b) assigns and pledges to the Collateral Agent for its benefit and
the ratable benefit of each of the Secured Parties, and grants to the
Collateral Agent for its benefit and the ratable benefit of each of the
Secured Parties, a security interest in all of the following, whether now
or hereafter existing or acquired by the undersigned (its "Collateral"):
(i) all Intercompany Notes in which the undersigned has an
interest (including each Intercompany Note described in Item A of
Schedule I hereto);
(ii) all interest and other payments and rights with respect to
each Intercompany Note in which the undersigned has an interest;
(iii) all Investment Property in which the undersigned has an
interest (including the Securities of each issuer described in Item B
of Schedule I hereto);
(iv) all equipment in all of its forms (including all Motor
Vehicles) of the undersigned, wherever located, including all parts
thereof and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor and all
accessories related thereto (any and all of the foregoing being the
"Equipment");
(v) all inventory in all of its forms of the undersigned,
wherever located, including
(A) all raw materials and work in process therefor, finished
goods thereof, and materials used or consumed in the manufacture
or production thereof,
(B) all goods in which the undersigned has an interest in
mass or a joint or other interest or right of any kind (including
goods in which the undersigned has an interest or right as
consignee), and
(C) all goods which are returned to or repossessed by the
undersigned,
and all accessions thereto, products thereof and documents
therefor (any and all such inventory, materials, goods,
accessions, products and documents being the "Inventory");
(vi) all accounts, contracts (including franchise agreements),
contract rights, chattel paper, documents, instruments, and general
intangibles (including tax refunds and limited liability company or
member interests in Subsidiaries of the undersigned that are limited
liability companies that have not elected to have such interests
treated as Securities for purposes of Article 8 of the U.C.C.) of the
undersigned, whether or not arising out of or in connection with the
sale or lease of goods or the rendering of services, and all rights of
the undersigned now or hereafter existing in and to all security
agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts (including
franchise agreements), contract rights, chattel paper, documents,
instruments, and general intangibles (any and all such accounts,
contracts, contract rights, chattel paper, documents, instruments, and
general intangibles being the "Receivables", and any and all such
security agreements, guaranties, leases and other contracts being the
"Related Contracts");
(vii) all Deposit Accounts of the undersigned and all cash,
checks, drafts, notes, bills of exchange, money orders and other like
instruments, if any, now owned or hereafter acquired, held therein (or
in sub-accounts thereof) and all certificates and instruments, if any,
from time to time representing or evidencing such investments, and all
interest, earnings and proceeds in respect thereof;
(viii) all Intellectual Property Collateral of the undersigned;
(ix) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1;
(x) all of the undersigned's other property and rights of every
kind and description and interests therein; and
(xi) all products, offspring, rents, issues, profits, returns,
income and proceeds of and from any and all of the foregoing
Collateral (including proceeds which constitute property of the types
described in subclauses (b)(i) through (b)(x), proceeds deposited from
time to time in any lock box or Deposit Account of the undersigned,
and, to the extent not otherwise included, all payments under
insurance (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral);
provided, however, that "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments,
licenses or other documents as to which the grant of a security
interest would constitute a violation of a valid and enforceable
restriction in favor of a third party on such grant, unless and until
any required consents shall have been obtained and the undersigned
agrees to use its best efforts to obtain any such required consent;
(c) agrees that each of the Schedules attached hereto shall be deemed
to be a Schedule thereto; and
(d) represents and warrants that the representations and warranties
made by it as a Grantor thereunder are true and correct on and as of the
date hereof.
In furtherance of the foregoing, each reference to a "Grantor" or "Additional
Grantor" in the Pledge and Security Agreement shall be deemed to include the
undersigned.
SECTION 2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Pledge and Security
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge and Security Agreement shall not in any way be affected
or impaired.
SECTION 5. Without limiting the provisions of the Indenture (or any other
Related Document, including the Pledge and Security Agreement), the undersigned
agrees to reimburse the Collateral Agent for its reasonable out-of-pocket
expenses in connection with this Supplement, including reasonable attorneys'
fees and expenses of the Collateral Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THIS SUPPLEMENT, THE PLEDGE AND
SECURITY AGREEMENT AND THE OTHER RELATED DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
SECTION 7. This Supplement hereby incorporates by reference the provisions
of the Pledge and Security Agreement, which provisions are deemed to be a part
hereof, and this Supplement shall be deemed to be a part of the Pledge and
Security Agreement. Unless otherwise defined herein or the context otherwise
requires, terms used in this Supplement, including its preamble and recitals,
have the meanings provided (or incorporated by reference) in the Pledge and
Security Agreement.
SECTION 8. This Supplement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and all of which
shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
[NAME OF ADDITIONAL GRANTOR], a
By:
--------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Collateral Agent
By:
-----------------------------------------
Name:
Title:
SCHEDULE I
to Supplement No. --
to Pledge and Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Intercompany Notes
------- ------------------
Maximum Amount of
Intercompany Loans
Maker Evidenced Thereby Date
----- ----------------- ----
Item B. Securities
------- ----------
Common Stock
------------
Authorized Outstanding % of Shares
Issuer (corporate) Shares Shares Pledged
----------------- ------ ------ --------
Limited Liability Company Interests
-----------------------------------
% of Limited Liability Type of Limited Liability
Issuer (limited liability company) Company Interests Pledged Company Interests Pledged
---------------------------------- ------------------------- -------------------------
Partnership Interests
---------------------
% of Partnership Type of Partnership
Issuer (partnership) Interests Pledged Interests Pledged
------------------- ----------------- -----------------
Item C. Additional Subsidiaries
--------------------------------
SCHEDULE II
to Supplement No. --
to Pledge and Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Government Contracts
--------------------
SCHEDULE III
to Supplement No. --
to Pledge and Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Patents
----------------
Issued Patents
--------------
*Country Patent No. Issue Date Inventor(s) Title
------- ---------- ---------- ----------- -----
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
Patent Applications in Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
Item B. Patent Licenses
------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
---------- -------- -------- --------- ---------- -------
--------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
SCHEDULE IV
to Supplement No. --
to Pledge and Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Trademarks
-------------------
Registered Trademarks
---------------------
*Country Trademark Registration No. Registration Date
------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
------- --------- ---------- ----------- ---------
--------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
Item B. Trademark Licenses
---------------------------
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
---------- --------- -------- -------- --------- ----------
SCHEDULE V
to Supplement No. --
to Pledge and Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Copyrights/Mask Works
------------------------------
Registered Copyrights/Mask Works
---------------------------------
*Country Registration No. Registration Date Author(s) Title
------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
--------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
Item B. Copyright/Mask Work Licenses
-------------------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
---------- -------- -------- --------- ---------- -------
SCHEDULE VI
to Supplement No. --
to Pledge and Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Trade Secret or Know-How Licenses
---------------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
---------- -------- -------- --------- ---------- -------
--------
* List items related to the United States first for ease of
recordation. List items related to other countries next, grouped by
country and in alphabetical order by country name.