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EXHIBIT 10.7
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CERIDIAN CORPORATION
(DBA THE ARBITRON COMPANY)
$50,000,000 Senior Secured Notes due January 31, 2008
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NOTE PURCHASE AGREEMENT
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January 31, 2001
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS....................................1
1.01 Defined Terms...................................................1
1.02 Other Interpretive Provisions..................................20
1.03 Accounting Terms...............................................21
1.04 Rounding.......................................................21
1.05 References to Agreements and Laws..............................21
ARTICLE II AUTHORIZATION, SALE AND PURCHASE OF NOTES.........................22
2.01 Authorization of Notes.........................................22
2.02 Sale and Purchase of Notes.....................................22
2.03 Closing........................................................22
2.04 Optional Prepayments...........................................22
2.05 Mandatory Offers to Make Prepayments...........................22
2.06 General Provisions Concerning Prepayments......................24
2.07 Repayment of Notes.............................................25
2.08 Interest.......................................................25
2.09 Reserved.......................................................25
2.10 Computation of Interest........................................25
2.11 Reserved.......................................................25
2.12 Payments Generally.............................................25
2.13 Reserved.......................................................26
2.14 Security and Guaranties........................................26
ARTICLE III TAXES............................................................26
3.01 Taxes..........................................................26
3.02 Reserved.......................................................27
3.03 Reserved.......................................................27
3.04 Reserved.......................................................27
3.05 Reserved.......................................................27
3.06 Matters Applicable to all Requests for Compensation............27
3.07 Survival.......................................................28
ARTICLE IV CONDITIONS PRECEDENT..............................................28
4.01 Conditions to Effectiveness....................................28
4.02 Conditions to Purchase of Notes................................31
4.03 Reserved.......................................................33
ARTICLE V REPRESENTATIONS AND WARRANTIES.....................................33
5.01 Corporate Existence and Power..................................33
5.02 Corporate Authorization; No Contravention......................34
5.03 Governmental Authorization.....................................34
5.04 Binding Effect.................................................35
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5.05 Litigation.....................................................35
5.06 No Default.....................................................36
5.07 ERISA Compliance...............................................36
5.08 Title to Properties............................................37
5.09 Taxes..........................................................37
5.10 Financial Condition............................................37
5.11 Environmental Matters..........................................38
5.12 Regulated Entities.............................................39
5.13 Collateral Documents...........................................39
5.14 No Burdensome Restrictions.....................................39
5.15 Solvency.......................................................39
5.16 Labor Relations................................................39
5.17 Intellectual Property; Proprietary Information.................40
5.18 Insurance......................................................40
5.19 Employment Agreements..........................................41
5.20 Spin-Off Documents; Note Documents.............................41
5.21 Capitalization; Subsidiaries...................................41
5.22 Margin Regulations.............................................42
5.23 Brokers; Certain Expenses......................................42
5.24 Year End.......................................................42
5.25 Third Party Consents...........................................42
5.26 Existing Indebtedness..........................................42
5.27 New Ceridian Obligations.......................................43
5.28 Swap Contracts.................................................43
5.29 Full Disclosure................................................43
5.30 Offer of Notes; Investment Bankers.............................43
ARTICLE VI AFFIRMATIVE COVENANTS.............................................43
6.01 Financial Statements...........................................43
6.02 Certificates; Other Information................................44
6.03 Notices........................................................45
6.04 Preservation of Corporate Existence, Etc.......................47
6.05 Maintenance of Property........................................47
6.06 Insurance......................................................48
6.07 Payment of Obligations.........................................48
6.08 Compliance with Laws...........................................49
6.09 ERISA Compliance...............................................49
6.10 Interest Rate Protection.......................................49
6.11 Inspection of Property and Books and Records...................49
6.12 Environmental Laws.............................................49
6.13 Use of Proceeds................................................49
6.14 Additional Guarantors..........................................50
6.15 Additional Subsidiaries........................................50
6.16 Additional Intellectual Property...............................51
6.17 Licenses.......................................................51
6.18 Further Assurances.............................................52
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ARTICLE VII NEGATIVE COVENANTS...............................................52
7.01 Limitation on Liens............................................52
7.02 Mergers and Consolidations.....................................54
7.03 Indebtedness...................................................55
7.04 Disposition of Assets..........................................56
7.05 Contingent Obligations.........................................57
7.06 Notes and Investments..........................................58
7.07 Dividends and Payments.........................................59
7.08 Use of Proceeds................................................60
7.09 Hostile Acquisition............................................60
7.10 Leverage Ratio.................................................60
7.11 Fixed Charge Coverage Ratio....................................61
7.12 Foreign Subsidiaries...........................................61
7.13 Change in Business.............................................61
7.14 Accounting Changes.............................................62
7.15 Certain Contracts..............................................62
7.16 Transactions with Affiliates...................................62
7.17 Capital Expenditures...........................................63
7.18 Sales and Leasebacks...........................................63
7.19 Certain Tax Matters............................................63
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES..................................64
8.01 Events of Default..............................................64
8.02 Remedies Upon Event of Default.................................66
8.03 Rescission of Acceleration.....................................67
ARTICLE IX REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF NOTES.........68
9.01 Registration, Transfer and Exchange of Notes...................68
9.02 Replacement of Notes...........................................68
9.03 Transfer of Notes..............................................68
9.04 ERISA..........................................................69
ARTICLE X MISCELLANEOUS......................................................70
10.01 Amendments, Etc...............................................70
10.02 Notices and Other Communications; Facsimile Copies............71
10.03 No Waiver; Cumulative Remedies................................72
10.04 Attorney Costs, Expenses and Taxes............................72
10.05 Indemnification by the Company................................72
10.06 Payments Set Aside............................................73
10.07 Transferees, Successors and Assigns...........................73
10.08 Confidentiality...............................................73
10.09 Set-off.......................................................74
10.10 Interest Rate Limitation......................................74
10.11 Counterparts..................................................75
10.12 Integration...................................................75
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10.13 Survival of Representations and Warranties....................75
10.14 Severability..................................................75
10.15 Note Holders..................................................75
10.16 Reserved......................................................76
10.17 Governing Law.................................................76
10.18 Waiver of Right to Trial by Jury..............................77
10.19 Purchase for Investment.......................................77
SCHEDULES
I Schedule of Note Holders
1.01(i) Initial Permitted Indebtedness
1.01(s) Spin-Off Documents
2.03 Wire Instructions
5.05 Litigation Affecting Note Parties
5.07 ERISA Compliance
5.10 Contingent Obligations
5.11 Environmental Matters
5.17 Intellectual Property; Proprietary Information
5.19 Employment Agreements
5.21 Capitalization; Subsidiaries
5.23 Brokers' Fees and Related Expenses
5.25 Third Party Consents
7.01 Permitted Liens
7.02(b) Permitted Mergers, Etc.
7.06(b) Permitted Investments
10.02 Addresses for Notices
EXHIBITS
A Form of Note
B Compliance Certificate
C Reserved
D New Ceridian Guaranty
E Subsidiary Guaranty
F Company Security Agreement
G Subsidiary Security Agreement
H Supplemental IP Security Agreement
I Company Pledge Agreement
J Subsidiary Pledge Agreement
K Effectiveness Date Opinion of Counsel (Content Summary)
L Closing Date Opinion of Counsel (Content Summary)
M Additional Guarantor Assumption Agreement
N Additional Guarantor Opinion of Counsel
O Form of Accession Agreement
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NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT ("Agreement") is entered into as of
January __, 2001, among CERIDIAN CORPORATION, a Delaware corporation that will
change its name to Arbitron Inc. on or about the Closing Date (the "Company"),
and each of the Note Holders named on Schedule I attached hereto.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Account Control Agreement" means any account control agreement,
deposit account control agreement, lockbox or other agreement with any
securities intermediary or depository granting control with respect to any
investment property or deposit account for purposes of Article 9 of the UCC or
other applicable law.
"Acquisition" means, as to the Company and each of its Subsidiaries,
any transaction or series of related transactions for the purpose of or
resulting directly or indirectly in (a) the acquisition of all or substantially
all of the assets of a Person, or of any business or division of a Person, (b)
the acquisition of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary).
"Additional Guarantor Assumption Agreement" has the meaning specified
in Section 6.14(a).
"Administrative Agent" means the administrative agent or agents under
any of the Note Documents, or any successor agent or agents.
"Affiliate" means, as to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 15% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or (b)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Aggregate Distributable Income" means an amount equal to 50% of
Consolidated Net Income (positive or negative) calculated on a cumulative basis,
based on the year-end financial statements delivered to the Note Holders
pursuant to Section 6.01(a); provided that any and all amounts paid pursuant to
Section 7.07(a)(iv) or pursuant to any equivalent provision in the Note
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Documents shall reduce the amount of Aggregate Distributable Income on a dollar
for dollar basis.
"Agreement" means this Note Purchase Agreement.
"Arbitron Business" means collectively the businesses of: (a) providing
media and marketing research services to broadcasters, advertising agencies,
advertisers, on-line webcasters and cable television; (b) providing media
audience and consumer retail behavior research services to cable systems,
broadcasters, magazines, advertising agencies and newspapers; and (c) providing
application software used to access and analyze media audience information and
software applications to access and analyze consumer retail behavior and media
usage.
"Arbitron Subsidiaries" means, at all times prior to the Spin-Off
Consummation Date, those Subsidiaries designated as Arbitron Subsidiaries on
Schedule 5.21 and, at all times after the Spin-Off Consummation Date, all
Subsidiaries of the Company.
"Attorney Costs" means and includes all fees and disbursements of any
law firm or other external counsel and the non-duplicative allocated cost of
internal legal services and all disbursements of internal counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
Capital Lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a Capital Lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Company and its Subsidiaries for the fiscal years ended December
31, 1998 and December 31, 1999 (in each case, giving effect to the Spin-Off
Transaction) and the related consolidated statements of income and cash flows
for the fiscal years of the Company ended December 31, 1997, December 31, 1998
and December 31, 1999, each in the final form attached to the Form 10.
"Bank of America" means Bank of America, N.A.
"Business Day" means any day other than a Saturday, Sunday, or other
day which shall be in Boston, Massachusetts or New York, New York, a legal
holiday or a day on which banking institutions therein are authorized by law to
close.
"Capital Lease" means, as applied to any Person, any lease of property
by such Person as lessee that is classified as a capital lease under GAAP.
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or insured by the
United States Government or any agency thereof, having maturities of
not more than six months from the date of acquisition;
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(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or
bankers' acceptances, having in each case a tenor of not more than six
months, issued by any Lender under the New Credit Facility, or by any
U.S. commercial or investment bank or broker having combined capital
and surplus of not less than $100,000,000 whose short term securities
are rated at least A-1 by S&P and P-1 by Moody's;
(c) commercial paper or promissory notes of an issuer rated
at least A-1 by S&P or P-1 by Moody's and in either case having a tenor
of not more than three months; and
(d) money market funds that comply with all material
provisions of Rule 2a-7 issued by the SEC under the Investment Company
Act of 1940.
"Change of Control" means, with respect to the Company, an event or
series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of the Company or its Subsidiaries,
or any Person acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan), becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right
to acquire (such rights, "option rights"), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 30% or more of the equity interests of the Company on a
partially diluted basis taking into account equity interests realizable
upon the exercise of such person's or group's option rights; or
(b) during any period of 12 consecutive months, a majority
of the members of the board of directors or other equivalent governing
body of the Company ceases to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of
such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in
clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body, or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body.
"Closing" has the meaning specified in Section 2.03.
"Closing Date" means the first date all the conditions precedent in
Section 4.02 are satisfied or waived in accordance with Section 4.02.
"Code" means the Internal Revenue Code of 1986.
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"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Company or any Guarantor and
their respective Subsidiaries in or upon which a Lien now or hereafter exists in
favor of the Note Holders, or any agent on behalf of or as bailee for the Note
Holders, whether under this Agreement or under any of the Collateral Documents.
"Collateral Agent" has the meaning specified in the Intercreditor
Agreement.
"Collateral Documents" means, collectively, (i) the Security
Agreements, (ii) the Pledge Agreements, (iii) the Account Control Agreements,
(iv) all documents executed by the Company to accomplish Cash Collateralization
(as defined in the New Credit Facility) or pledges of deposit accounts and (v)
all licenses, UCC financing statements, notices and other documents executed
from time to time under or in connection with the foregoing.
"Company" has the meaning set forth in the introductory paragraph
hereto.
"Company Pledge Agreement" means a Pledge Agreement executed by the
Company, in substantially the form of Exhibit I.
"Company Security Agreement" means a Security Agreement executed by the
Company, in substantially the form of Exhibit F.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit B.
"Consolidated EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, plus (b) Consolidated Interest Expense, plus (c) the
amount of taxes, based on or measured by income, used or included in the
determination of such Consolidated Net Income, plus (d) the amount of all
depreciation expense and amortization expense for such period, less (e) interest
income for such period; provided, however, that Consolidated Net Income shall be
computed for these purposes without giving effect to (i) extraordinary non-cash
losses or non-cash gains, or (ii) non-cash losses or non-cash gains from
discontinued operations, except that cash payments made in any current period in
respect of non-cash charges incurred under clause (i) or (ii) in any previous
period shall be deducted from Consolidated Net Income in such current period.
"Consolidated Funded Indebtedness" means, as of any date of
determination, for Company and its Subsidiaries on a consolidated basis, all (i)
obligations for borrowed money, (ii) obligations evidenced by bonds, debentures,
notes and Note agreements, (iii) obligations in respect of letters of credit,
surety bonds, bankers' acceptances or similar instruments, (iv) obligations to
pay the deferred purchase price of property or services (other than trade
payables entered into in the Ordinary Course of Business pursuant to ordinary
terms and paid within the specified time), and (v) Attributable Indebtedness
incurred by the Company or any of its Subsidiaries in connection with Synthetic
Lease Obligations and Capital Leases; and (vi) Guaranty obligations of the
Company and its Subsidiaries in respect of obligations of any Person in the
nature of (i) through (v) above.
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"Consolidated Interest Expense" means, for any period, for the Company
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, fees, charges and related expenses of the Company and its
Subsidiaries in connection with borrowed money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, but excluding any fees,
charges and expenses of the Company and its Subsidiaries arising from the
negotiation, execution, closing and consummation of the Spin-Off Documents and
the "Facility Documents" (as such term is defined in the Intercreditor
Agreement); and (b) the portion of rent expense of the Company and its
Subsidiaries with respect to such period under Capital Leases that is treated as
interest in accordance with GAAP.
"Consolidated Net Income" means, for any period, for the Company and
its Subsidiaries on a consolidated basis, the net income of the Company and its
Subsidiaries, as determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date of determination, with
respect to the Company and its Subsidiaries on a consolidated basis,
shareholders' equity on the date of determination as determined in accordance
with GAAP.
"Consolidated Total Assets" means, as of any date of determination, the
total consolidated assets of the Company and its Subsidiaries as determined in
accordance with GAAP.
"Contingent Obligation" means, as to the Company or any of its
Subsidiaries, (a) any Guaranty Obligation of that Person; (b) any reimbursement
obligation of that Person with respect to a standby letter of credit, surety
bond, banker's acceptance, bank guaranty or similar instrument; (c) any
obligation of that Person to purchase any materials, supplies or other property
from, or to obtain the services of, another Person (other than the Company or
one of its Subsidiaries) if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other property,
or for such services, shall be made regardless of whether delivery of such
materials, supplies or other property is ever made or tendered, or such services
are ever performed or tendered; and (d) all Indebtedness (other than that of the
Company or any of its Subsidiaries) secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including accounts and contract rights) owned by the
Company or any such Subsidiary.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Current Portion of Long Term Debt" means, as of any date of
determination, in respect of the Company and its Subsidiaries on a consolidated
basis, (a) current portion of long term debt as determined on such date in
accordance with GAAP (provided that, for purposes of Section 7.11 only, during
the 365-day period immediately preceding the Maturity Date, the current portion
of the Notes shall be deemed to be $10,000,000), plus (b) an amount equal to the
amount, if any, by which the Outstanding Amount (as defined in the New Credit
Facility) on such date exceeds (i) the Aggregate Commitments (as defined in the
New Credit Facility) on such date less
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(ii) the amount of any mandatory reduction in Aggregate Commitments scheduled to
occur within the four fiscal quarter period commencing on such date pursuant to
Section 2.06(b)(i) of the New Credit Facility; provided, however, during the 365
days prior to the scheduled Maturity Date of the New Credit Facility (under
clause (a) of the definition of Maturity Date in the New Credit Facility),
"Current Portion of Long Term Debt" shall be calculated excluding the
then-outstanding principal amount of the New Credit Facility.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.
"Default" means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.
"Default Rate" means an interest rate equal to 11.96% per annum.
"Disposition" or "Dispose" means the direct or indirect sale,
assignment, conveyance, lease, transfer, license or other disposition (including
any sale and leaseback transaction) of any property (other than cash or Cash
Equivalents) by any Person, including any sale, assignment, transfer or other
disposition, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith.
"Distribution" means the distribution by dividend of all stock of New
Ceridian held by the Company to the Company's shareholders, pursuant to a
tax-free transaction under Section 355 of the Code and undertaken pursuant to
the Spin-Off Documents.
"Dollar" and "$" means lawful money of the United States of America.
"EBITDA" means, in respect of any Person, for any period as determined
in accordance with GAAP, an amount equal to the sum of (a) net income, plus (b)
interest expense, plus (c) the amount of taxes, based on or measured by income,
used or included in the determination of such net income, plus (d) the amount of
all depreciation expense and amortization expense for such period, less (e)
interest income for such period; provided, however, that net income shall be
computed for these purposes without giving effect to (i) extraordinary non-cash
losses or non-cash gains, or (ii) non-cash losses or non-cash gains from
discontinued operations, except that cash payments made in any current period in
respect of non-cash charges incurred under clause (i) or (ii) in any previous
period shall be deducted from consolidated net income in such current period.
"Effectiveness Date" means the first day all the conditions precedent
in Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in
the case of Section 4.01(c), waived by the Person entitled to receive the
applicable payment).
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any
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Environmental Law or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup, removal, remedial
or response costs, restitution, civil or criminal penalties, injunctive relief,
or other type of relief, resulting from or based upon (a) the alleged or actual
presence, placement, migration, spillage, leakage, disposal, discharge, emission
or release of any Hazardous Material at, in, or from property, whether or not
owned by the Company, or (b) any other circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations,
registration requirements and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental and land use matters or
health and safety matters involving Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations issued pursuant thereto.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is currently or at any relevant time in the past was under
common control with the Company within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which would reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Company or any ERISA Affiliate.
"Event of Default" means any of the events or circumstances specified
in Article VIII.
"Event of Loss" means with respect to any asset of any Person, any of
the following: (i) any loss, destruction or damage of such asset; (ii) any sale
or transfer of such asset in connection with any pending or threatened
institution of any proceedings for the condemnation of or seizure of such asset
or of any right of any eminent domain; or (iii) any actual condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such asset, or confiscation of such asset or requisition of the use of such
asset.
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"Exchange Act" means the Securities Exchange Act of 1934.
"Existing Credit Facility" means that certain Amended and Restated
Credit Agreement dated as of July 31, 1997 among the Company, Bank of America,
as agent, and a syndicate of lenders, and after giving effect to that certain
"Waiver to Credit Agreement" dated as of December 20, 2000.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Foreign Subsidiary" means any Subsidiary of the Company incorporated
or organized, and existing, under the laws of any jurisdiction other than the
United States or any state thereof.
"Form 10" means until the Closing Date, that certain Form 10 filing
prepared by New Ceridian and delivered to the SEC on or about December 6, 2000
in connection with the Spin-Off Transaction, as amended by that amendment filed
with the SEC on or about December 22, 2000, and by that amendment filed with the
SEC on or about January 22, 2001. From and after the Closing Date, the term
"Form 10" also includes: (a) any amendments to the Form 10 filed with the SEC
between the Effectiveness Date and the Closing Date to the extent permitted by
Section 4.02(a)(i)(H), and (b) any amendments filed with the SEC after the
Closing Date to the extent necessary to accommodate changes to the Spin-Off
Documents permitted by Section 7.15(c).
"Form 10 Financial Statements" means the Audited Financial Statements
plus all related unaudited financial statements of the Company filed with the
Form 10.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.
"Guarantor" means each Arbitron Subsidiary party to a Guaranty and, at
all times prior to the Spin-Off Consummation Date, New Ceridian.
"Guaranties" means the Subsidiary Guaranties and the New Ceridian
Guaranty.
"Guaranty Obligation" means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guarantying or having the economic
effect of guarantying any
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Indebtedness or other obligation payable or performable by another Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation, or (iv)
entered into for the purpose of assuring in any other manner the obligees in
respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligees against loss in respect thereof (in whole or
in part), or (b) any Lien on any assets of such Person securing any Indebtedness
or other obligation of any other Person, whether or not such Indebtedness or
other obligation is assumed by such Person; provided, however, that the term
"Guaranty Obligation" shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guaranty Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guarantying Person in good faith.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, hazardous chemicals,
special waste, hazardous substance, hazardous material, regulated substance, or
toxic substance, or petroleum or petroleum derived substance or waste.
"Indebtedness" means, as to any Person at a particular time, all of the
following:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes,
Note agreements or other similar instruments;
(b) any fixed (non-contingent) obligations of such Person
arising under letters of credit (including standby and commercial),
banker's acceptances, bank guaranties, surety bonds and similar
instruments;
(c) net obligations under any Swap Contract in an amount
equal to (i) if such Swap Contract has been closed out, the Swap
Termination Value, or (ii) if such Swap Contract has not been closed
out, the xxxx-to-market value thereof determined on the basis of
readily available quotations provided by any recognized dealer in such
Swap Contract;
(d) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services (other than trade payables entered into
in the Ordinary Course of Business pursuant to ordinary terms and paid
within the specified time), and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being
purchased by such Person
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15
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; and
(e) Capital Leases and Synthetic Lease Obligations.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (that is not itself a
corporation, limited liability company or limited liability partnership) in
which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person except for customary
exceptions acceptable to the Required Note Holders. The amount of any Capital
Lease or Synthetic Lease Obligation as of any date shall be deemed to be the
amount of Attributable Indebtedness in respect thereof as of such date. Without
limiting the generality of the foregoing, any indebtedness of the Company to any
of the Company's Wholly Owned Subsidiaries, or of any of the Company's Wholly
Owned Subsidiaries to other of the Company's Wholly Owned Subsidiaries, shall
not constitute Indebtedness hereunder.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
"Indemnitees" has the meaning set forth in Section 10.05.
"Initial Permitted Indebtedness" means that Indebtedness set forth on
Schedule 1.01(i).
"Intellectual Property" means all trademarks, trademark rights, trade
names, trade name rights, service marks, patents, pending patent applications,
copyrights, franchises, authorizations, inventions, Proprietary Information and
goodwill now existing or hereafter arising, and all other intellectual property
rights held or used by the Company and its Subsidiaries.
"Intercreditor Agreement" means that Intercreditor Agreement, dated as
of the Closing Date, entered into among the Collateral Agent, the Administrative
Agent, the Note Holders, and the "Swap Provider" (as defined therein) as
counterparty to the Specified Swap Contracts, in form and substance satisfactory
to the Required Note Holders, as amended or modified from time to time in
accordance with the terms thereof.
"Interest Payment Date" means the last day of each January, April, July
and October, commencing April 30, 2001.
"Investment" of a Person means (i) the outstanding principal amount of
any Note, advance, extension of credit (other than Notes, advances or extensions
of credit arising in the Ordinary Course of Business), or (ii) the amount
(measured by the amount of cash expended or the then-current fair market value
of other assets, including stock of such Person, utilized as consideration) of
any contribution of capital by such Person to any other Person or any investment
in, or purchase or other acquisition of, the stock, partnership or membership
interests, notes, debentures or other securities of any other Person made by
such Person, reduced by the amount of any distribution by such other Person
constituting a return of capital, any payment of principal on such notes,
debentures or other debt securities, or any proceeds from the sale of any equity
or debt securities of such other Person.
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"IRS" means the United States Internal Revenue Service.
"IRS Ruling Letter" means an affirmative private letter ruling by the
IRS regarding the tax-free nature of the Spin-Off Transaction.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"Lender" means each lender from time to time party to the New Credit
Facility.
"Leverage Ratio" means, as of any date of determination, for Company
and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated
Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of
the four fiscal quarters ending on such date.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable Laws of any jurisdiction), including the
interest of a purchaser of accounts receivable, but excluding the interest of a
lessor under an Operating Lease.
"Note Documents" means the New Credit Facility, the Intercreditor
Agreement and each note, security agreement, pledge agreement, control
agreement, borrowing request, fee letter, certificate or other agreement,
document or instrument executed or delivered in connection therewith.
"Make Whole Amount" means, at any date, with respect to any prepayment
or payment (whether on account of acceleration or otherwise) of any Notes, if
the Treasury Rate plus 75 basis points at such date is lower than 9.96%, the
excess of (x) the present value of the principal and interest payments on and in
respect of the Notes being prepaid or paid, as the case may be, that would
otherwise become due and payable (without giving effect to such prepayment or
payment) (including the final payment on the maturity date of the Notes),
discounted at a rate which is equal to the Treasury Rate plus 75 basis points
over (y) the principal amount of the Notes being prepaid or paid, as the case
may be, at par. If the Treasury Rate plus 75 basis points at the date of such
prepayment or payment is equal to or higher than 9.96% per annum, the Make Whole
Amount for purposes of such prepayment or payment is zero.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole and includes, at any time
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17
prior to the Spin-Off Consummation Date, New Ceridian and its Subsidiaries taken
as a whole; (b) a material impairment of the ability of any Note Party to
perform its obligations under any Note Document to which it is a party or, at
any time prior to the Spin-Off Consummation Date, the ability of New Ceridian to
perform its obligations under any Spin-Off Document to which it is party; or (c)
a material adverse effect upon (i) the legality, validity, binding effect or
enforceability against any Note Party or Subsidiary of any Note Document to
which it is a party or, at any time prior to the Spin-Off Consummation Date,
against New Ceridian of any Spin-Off Document to which it is a party, or (ii)
the perfection or priority of any Lien granted under any of the Collateral
Documents.
"Material Software" means, at any time, any software program (including
all releases, versions and modifications thereof) developed, acquired or used in
connection with the Arbitron Business and as to which the Company or its
Subsidiaries have received gross royalty or license payments from any and all
third parties in an aggregate amount in excess of $1,000,000 during any of the
five fiscal years preceding such time.
"Material Subsidiary" means, at any time, any Arbitron Subsidiary: (a)
the assets of which are either 5% or more of Consolidated Total Assets (or the
equivalent thereof in another currency) or the gross revenues of which are 5% or
more of consolidated gross revenue of the Company and its Subsidiaries, based on
the most recent financial statements delivered to the Note Holders under Section
4.01(a), 4.02(a) or 6.01; or (b) designated by the Company as a Material
Subsidiary pursuant to Section 6.15(b) and not de-designated pursuant to Section
6.15(c).
"Maturity Date" means (a) January 31, 2008, or (b) such earlier date
upon which the Notes and other Obligations may be accelerated in accordance with
the terms hereof.
"Maximum Rate" has the meaning specified in Section 10.10.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Company or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
three calendar years, has made or been obligated to make contributions.
"Net Cash Proceeds" has the meaning specified in Section 2.05(a).
"New Ceridian" means New Ceridian Corporation, a Delaware corporation.
"New Ceridian Assets" means, at all times prior to the Spin-Off
Consummation Date, all assets of the Company and its Subsidiaries intended
(consistent with the Form 10) to be transferred to New Ceridian pursuant to the
Separation and not including any assets necessary to conduct the Arbitron
Business.
"New Ceridian Credit Agreement" means that certain Credit Agreement
dated as of January 31, 2001, among New Ceridian, the lenders from time to time
party thereto and Bank of
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America, as the administrative agent, as amended or modified from time to time,
and any agreement or agreements relating to extensions of credit which are a
refinancing or replacement of such Credit Agreement.
"New Ceridian Guaranty" means a Guaranty executed by New Ceridian, in
substantially the form of Exhibit D.
"New Credit Facility" means the Credit Agreement dated as of January 3,
2001 among the Company, Bank of America, as the Administrative Agent and Letter
of Credit Issuer, and a syndicate of lenders, as amended or modified from time
to time (subject to the Intercreditor Agreement), and any agreement or
agreements relating to the refinancing or replacement of such Credit Agreement.
"Nielsen" means Xxxxxxx Media Research, Inc., a Delaware corporation.
"Xxxxxxx XX" means a joint venture that may be created upon the
exercise of an option granted to Nielsen pursuant to the Xxxxxxx XX Option
Agreement.
"Xxxxxxx XX Option Agreement" means that Option Agreement between the
Company and Nielsen dated as of May 31, 2000 and as in effect as of the
Effectiveness Date.
"Note Documents" means this Agreement, the Notes, the Intercreditor
Agreement, the Collateral Documents, the Guaranties, each Additional Guarantor
Assumption Agreement, each Compliance Certificate and other certificates
delivered under any of the foregoing.
"Note Holder-Related Persons" means each of the Note Holders and the
Note Holder Representative (including any successor Note Holder Representative),
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Note Holder Representative" means Xxxx Xxxxxxx Life Insurance Company,
and its successors and assigns.
"Note Holders" means each of the Persons named on Schedule I attached
hereto and their respective transferees, successors and assigns.
"Note Parties" means, collectively, the Company and all other Persons
from time to time party to a Note Document, other than any Note Holder, or the
Administrative Agent or any Lender pursuant to the New Credit Facility who may
be a party from time to time to the Intercreditor Agreement or any of the
Collateral Documents.
"Notes" has the meaning specified in Section 2.01.
"Notice of Lien" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder" office,
central filing office, or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a lien securing
obligations owing to a Governmental Authority.
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19
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Note Party arising under any Note
Document, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest that accrues after the commencement by or against any
Note Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding.
"Operating Lease" means, as applied to any Person, any lease of
property which is not a Capital Lease.
"Ordinary Course of Business" means, in respect of any transaction
involving the Company or any Subsidiary, the ordinary course of such Person's
business, as conducted by any such Person (or its predecessor) in accordance
with past practice and undertaken by such Person in good faith and not for
purposes of evading any covenant or restriction in any Note Document.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws; (b) with respect to
any limited liability company, the articles of formation and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation with the
secretary of state or other department in the state of its formation, in each
case as amended from time to time.
"Other Taxes" has the meaning specified in Section 3.01(b).
"Outstanding Amount" means with respect to the Notes on any date, the
aggregate outstanding principal amount thereof after giving effect to
prepayments or repayments of the Notes occurring on such date.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company or
any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.
"Permitted Acquisition" means any Acquisition as to which all of the
following conditions are satisfied: (a) total cash and non cash consideration
(including any deferred payment) paid or required to be paid by the Company and
its Subsidiaries in connection with such Acquisition does not exceed
$30,000,000; (b) after giving effect to such Acquisition, total cash and non
cash consideration (including any deferred payment) paid or required to be paid
by the Company and its Subsidiaries in connection with all such Acquisitions in
any fiscal year does not exceed $50,000,000; (c) after giving effect to such
Acquisition, the Person, or business or division of such Person, so acquired
shall be a Wholly Owned Subsidiary of the Company or one
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of its Subsidiaries; and (d) immediately after giving effect to such
Acquisition, there shall exist no Default or Event of Default.
"Permitted Indebtedness" has the meaning specified in Section 7.03(a).
"Permitted Liens" has the meaning specified in Section 7.01.
"Permitted Xxxxxxx XX" means any Person that is a Xxxxxxx XX, provided
the following conditions are at all times satisfied: (i) such Person is an
entity duly formed and existing under the Laws of its jurisdiction of
incorporation or organization; (ii) no less than 50% of the beneficial ownership
of such person is owned by the Company and such Person is not a Subsidiary of
Nielsen or of any Affiliate of Nielsen; (iii) the assets and property of such
Person consisting of Intellectual Property or Proprietary Information
contributed by the Company or any Subsidiary of the Company are subject to no
Liens in favor of any other Person other than Permitted Liens; (iv) such Person
is authorized to use and license the Company's PPM Technology to the extent, but
only to the extent, consistent with the Xxxxxxx XX Option Agreement; and (v) the
Organization Documents and all material contracts and licenses of such Person
entered into, directly or indirectly, with the Company or any Subsidiary, and
other material contracts to be entered into by such Person substantially
contemporaneously with its formation are in form and substance reasonably
satisfactory to the Required Note Holders.
"Permitted Swap Contract" means any Swap Contract entered into by the
Company or any Subsidiary for which each of the following conditions is
satisfied: (a) such contract is (or was) entered into by such Person in the
Ordinary Course of Business for the purpose of directly mitigating risks
associated with liabilities, commitments or assets held or reasonably
anticipated by such Person (including any Swap Contract entered into by the
Company or any Subsidiary for the purpose of hedging interest rate risk arising
in connection with the Obligations (a "Specified Swap Contract")), or with
changes in the value of securities issued by such Person in conjunction with a
securities repurchase program not otherwise prohibited hereunder, and not for
purposes of speculation or taking a "market view"; and (b) such Swap Contract
does not contain: (i) any provision (a "walk-away" provision) exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party, or (ii) with respect to any Swap Contract
that it is not a Specified Swap Contract, any provision creating or permitting
the declaration of an event of default, termination event, or similar event upon
the occurrence of an Event of Default hereunder (other than an Event of Default
under Section 8.01(a)).
"Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture or Governmental Authority.
"Pledge Agreements" means the Company Pledge Agreement and the
Subsidiary Pledge Agreements.
"Pledged Collateral" has the meaning specified in the Pledge
Agreements.
"PPM Expenditures" means (a) at any time prior to the initial exercise
of the option under the Xxxxxxx XX Option Agreement to establish a Xxxxxxx XX,
all capital expenditures and
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21
capitalized expenditures (including in respect of software development and
acquisition), made or incurred by the Company or its Subsidiaries in
anticipation of a Xxxxxxx XX or in furtherance of the development or Disposition
of PPM Technology, and (b) at any time thereafter, the sum of the items
specified in clause (a) plus all Investments made by the Company and its
Subsidiaries, in any and all Nielsen JV's.
"PPM Technology" means (a) all patent, copyright and other intellectual
property rights and technology of the Company and its Subsidiaries in the
Company's "Portable People Meter" and "Critical Band Encoding Technique," as
such terms are defined in the Xxxxxxx XX Option Agreement, together with all
improvements and additions thereto, and (b) all other audio encoding patents
held by the Company and subject to the Xxxxxxx XX Option Agreement.
"Preliminary Opening Balance Sheet" has the meaning specified in
Section 4.01(a)(viii).
"premium" when used in conjunction with references to principal of and
interest on the Notes, shall mean any amount due upon any payment or prepayment
of any of the Notes, other than principal and interest, and shall include the
Make Whole Amount.
"Proprietary Information" means, as to the Company and each of its
Subsidiaries, such Person's trade secrets, including know-how, computer
programs, and technical data, used in the development, production and sale of
products and services.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Required Note Holders" means, as of any date of determination, the
holder or holders of more than 50% in interest of the Notes at the time
outstanding (excluding all Notes at the time owned by the Company, any of its
Subsidiaries or any of their respective Affiliates).
"Responsible Officer" means the president, chief executive officer,
chief financial officer, treasurer or controller of a Note Party, and also
includes, in respect of the Company, the Executive Vice President of Finance and
Planning of Arbitron. Any document delivered hereunder that is signed by a
Responsible Officer of a Note Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Note Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Note Party.
"Revocable" means, in relation to any license of Intellectual Property,
that such license may be revoked or terminated by the licensor at any time or
upon default or breach of condition by the licensee.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Scarborough Partnership" means that New York general partnership
created pursuant to the Scarborough Partnership Agreement.
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22
"Scarborough Partnership Agreement" means that Partnership Agreement
between VNU Advertising Expenditure Corp. and the Company, dated as of December
31, 1994, as amended and in effect as of the Effectiveness Date.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the SEC promulgated
thereunder, all as the same shall be in effect from time to time.
"Security Agreements" means the Company Security Agreement, the
Subsidiary Security Agreements and the Supplemental IP Security Agreements.
"Senior Credit Ratable Amount" means, at any time, with reference to
any mandatory prepayment hereunder pursuant to Section 2.05, an amount equal to
the quotient of: (a) the Outstanding Amount divided by (b) the sum of (i) the
Outstanding Amount, plus (ii) the Aggregate Commitments of the Lenders (but in
no event greater than $225,000,000) under and as defined in the New Credit
Facility at such time; provided, however, that if there exists at such time no
mandatory prepayment requirement pursuant to the Note Documents in respect of
such prepayment or if any such mandatory prepayment has been waived, the "Senior
Credit Ratable Amount" shall equal 1.0.
"Senior Note Indenture" means that Indenture dated as of June 10, 1999
between Ceridian Corporation, as Issuer, and the Bank of New York, as Trustee,
relating to 7.25% Senior Notes due 2004.
"Separation" means the consummation of (a) the transfer by way of
absolute assignment and contribution by the Company to New Ceridian of all
assets and businesses of the Company, other than the Arbitron Business, and (b)
the corresponding allocation of liabilities of the Company as between the
Company and New Ceridian, through means of novation or cross-indemnities,
pursuant to the Spin-Off Documents.
"Separation Date" means the date upon which all material aspects of the
Separation have been completed.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the fair value of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Conveyances Act (as enacted in the State of New York); (b)
the present fair saleable value of the property of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such
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23
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital.
"Specified Swap Contract" has the meaning specified in the definition
of "Permitted Swap Contract".
"Spin-Off Consummation Date" means the date upon which all material
aspects of the Spin-Off Transaction have been consummated.
"Spin-Off Deadline" means the earlier of (a) March 30, 2001 or (b) the
date occurring three Business Days after the Closing Date.
"Spin-Off Documents" means the documents set forth in Schedule 1.01(s),
each substantially in the form attached to the Form 10 or delivered to the Note
Holders pursuant to Article IV.
"Spin-Off Transaction" means, collectively, (i) the Separation and (ii)
the Distribution.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Company.
"Subsidiary Guaranty" means a Guaranty executed by any Arbitron
Subsidiary, in substantially the form of Exhibit E.
"Subsidiary Pledge Agreement" means a Pledge Agreement executed by any
Arbitron Subsidiary, in substantially the form of Exhibit J.
"Subsidiary Security Agreement" means a Security Agreement executed by
any Arbitron Subsidiary, in substantially the form of Exhibit G.
"Supplemental Financial Statements" means the unaudited pro forma
consolidated balance sheet of the Company and Arbitron Subsidiaries on a
stand-alone basis for the fiscal quarter ended March 31, 2000 (giving effect to
the Spin-Off Transaction) and the related pro forma consolidated income
statement for such fiscal quarter.
"Supplemental IP Security Agreement" means any Supplemental
Intellectual Property Security Agreement, in substantially the form of Exhibit
H, executed pursuant to Section 6.16.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index
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24
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
"Master Agreement"), including any such obligations or liabilities under any
Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender under the New Credit
Facility).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Taxes" has the meaning specified in Section 3.01(a).
"Test Period" means a period of four consecutive fiscal quarters.
"Threshold Amount" means $5,000,000, except that in respect of
Indebtedness under the Note Documents or any Swap Termination Value in respect
of Specified Swap Contracts, "Threshold Amount" means $0.
"Transaction Liens" means, collectively, all Liens from time to time
existing in favor of the Collateral Agent, for the benefit of the Administrative
Agent, the Note Holders and any Lender counterparty to a Specified Swap
Contract, to the extent subject to the Intercreditor Agreement.
"Treasury Rate" at any time with respect to any Notes being prepaid or
paid (whether on account of acceleration or otherwise), as the case may be,
shall mean and shall be determined by reference to the applicable display on
Bloomberg Financial Markets Service as of 10:00 A.M., Boston time, on the second
Business Day prior to the date fixed for such prepayment or payment (or, if such
display is no longer available, any publicly available source of similar market
data), and shall be the yield on actively traded United States Treasury
securities adjusted to a maturity equal to the then remaining Weighted Average
Life to Maturity of the Notes then being prepaid
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or paid (whether on account of acceleration or otherwise) (the "Remaining
Life"). If the Remaining Life is not equal to the maturity of a United States
Treasury security for which a yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of the two closest United States Treasury
securities for which such yields are given, except that if the Remaining Life is
less than one year, the average yield on actively traded United States Treasury
securities adjusted to a constant maturity of one year shall be used. The
Treasury Rate shall be computed to the fifth decimal place (one-thousandth of a
percentage point) and then rounded to the fourth decimal place (one-hundredth of
a percentage point).
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided that in the event that by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for the purposes of definitions related
to such provisions.
"Weighted Average Life to Maturity" of any Indebtedness or obligation
shall mean, at any date, the number of years obtained by dividing the then
Remaining Dollar-years of such Indebtedness or obligation by the then
outstanding principal amount of such Indebtedness or obligation. For purposes of
this definition, the "Remaining Dollar-years" of any Indebtedness or obligation
shall mean, at any date, the total of the products obtained by multiplying (a)
the amount of each then remaining installment, sinking fund, serial maturity or
other required payment, including payment at final maturity, in respect thereof,
by (b) the number of years (calculated to the nearest one-twelfth) which will
elapse between such date and the making of such payment.
"Wholly Owned Subsidiary" means any Subsidiary in which (other than
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Company, or by one or more of the
other Wholly Owned Subsidiaries of the Company, or both.
1.02 OTHER INTERPRETIVE PROVISIONS.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "herein" and "hereunder" and words of similar import
when used in any Note Document shall refer to such Note Document as a whole and
not to any particular provision thereof.
(i) Unless otherwise specified herein, Article, Section,
Exhibit and Schedule references are to this Agreement.
(ii) The term "including" is by way of example and not
limitation.
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(iii) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced.
(c) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including;" the words
"to" and "until" each mean "to but excluding;" and the word "through" means "to
and including."
(d) Section headings herein and the other Note Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Note Document.
1.03 ACCOUNTING TERMS.
(a) All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data required to
be submitted pursuant to this Agreement shall be prepared in conformity with,
GAAP applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Note Document, and either
the Company or the Required Note Holders shall so request, the Note Holders and
the Company shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Note Holders); provided that, until so amended, (a)
such ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (b) the Company shall provide to the Note
Holders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
1.04 ROUNDING. Any financial ratios required to be maintained by
the Company pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Note Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Note Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.
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ARTICLE II
AUTHORIZATION, SALE AND PURCHASE OF NOTES
2.01 AUTHORIZATION OF NOTES. The Company has authorized the issue
and sale of its Senior Secured Notes due January 31, 2008 (herein, together with
any notes issued in exchange therefor or replacement thereof, called the
"Notes") in the aggregate principal amount of $50,000,000. The Notes are to be
substantially in the form of Exhibit A attached hereto.
2.02 SALE AND PURCHASE OF NOTES. The Company will issue and sell to
each of the Note Holders listed on Schedule I and, subject to the terms and
conditions hereof and in reliance upon the representations and warranties of the
Company contained herein and in the other Note Documents, each of the Note
Holders shall purchase from the Company, at the Closing, as specified in Section
2.03, such Notes as are specified on that portion of Schedule I attached hereto
as is applicable to such Note Holder. The aggregate purchase price of the Notes
shall be $50,000,000.
2.03 CLOSING. The closing of the sale and purchase of the Notes
hereunder (the "Closing") shall take place at the office of Xxxxxx, Hall &
Xxxxxxx or such other place as the Company and the Note Holder Representative
may agree, on the Business Day on or before the Spin-Off Deadline specified by
the Company to the Note Holder Representative on five (5) Business Days prior
written notice (the "Closing Date"), not later than 11:00 A.M. Boston,
Massachusetts time (the Note Holders' reinvestment deadline). At the Closing,
the Company will deliver to the Note Holders the Notes to be issued to them at
the Closing against payment of the purchase price thereof to (or for the benefit
of) the Company in immediately available funds in accordance with the wire
instructions set forth on Schedule 2.03. Delivery of the Notes to be issued to
the Note Holders at the Closing shall be made in the form of one or more Notes,
in such denominations and registered in such names as are specified on Schedule
I and in each case dated and bearing interest from the Closing Date. If at the
Closing the Company shall fail to tender the Notes to be delivered to the Note
Holders thereat as provided herein, or if at the Closing any of the conditions
specified in Article IV shall not have been fulfilled to the Note Holders'
satisfaction, the Note Holders shall, at their election, be relieved of all
further obligations under this Agreement and the other Note Documents, without
thereby waiving any other rights the Note Holders may have by reason of such
failure or non-fulfillment.
2.04 OPTIONAL PREPAYMENTS. At any time or from time to time, the
Company may, at its option, upon notice as set forth in Section 2.06(b), prepay
all or any part (in an integral multiple of $100,000 and a minimum of $5,000,000
or such lesser principal amount thereof as shall then be outstanding) of the
Notes, together with all accrued and unpaid interest thereon, upon the
concurrent payment of a premium equal to the Make-Whole Amount.
2.05 MANDATORY OFFERS TO MAKE PREPAYMENTS.
(a) Asset Dispositions. If the Company or any Arbitron Subsidiary
shall at any time or from time to time make or agree to make a Disposition,
other than a Disposition specified in Section 7.04(b) (but subject to clause (D)
of Section 7.04(b)(ii)) or shall suffer an Event of Loss (except to the extent
the insurance or other third party recovery proceeds received in connection
therewith are within 25 days of receipt applied to the purchase price of
replacement assets
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substantially similar to those experiencing the Event of Loss), other than any
Disposition or Event of Loss occurring prior to the Separation Date to the
extent relating to New Ceridian Assets, then (i) the Company shall promptly
notify the Note Holders of such proposed Disposition or such Event of Loss
(including the amount of the estimated net cash or Cash Equivalents proceeds,
calculated exclusive of (x) reasonable out-of-pocket expenses, (y) taxes
actually paid and (z) the amount of Indebtedness secured solely or principally
by such assets and actually repaid ("Net Cash Proceeds") to be received by the
Company or such Subsidiary in respect thereof), which notice shall contain and
constitute an offer to prepay without premium the Notes of each Note Holder, as
further provided in Section 2.05(d), and (ii) promptly upon, and in no event
later than 30 days after, receipt by the Company or the Subsidiary of the Net
Cash Proceeds of such Disposition or Event of Loss, the Company shall, subject
to the provisions of Section 2.05(d), prepay the Notes of each Note Holder that
shall have timely elected to accept such offer, provided that the aggregate
amount to be paid to the Note Holders pursuant to this Section 2.05(a) shall not
exceed an amount equal to the Senior Credit Ratable Amount times the amount of
such Net Cash Proceeds (with each Note Holder being entitled to its pro rata
share thereof in proportion to the outstanding principal amount of Notes then
held by it); provided, however, that no prepayment shall be required under this
subsection in connection with any Disposition that, alone or together with all
related Dispositions to the same Person or Affiliate of such Person, involves
Net Cash Proceeds of less than $1,000,000.
(b) Equity or Debt Issuance. (i) If the Company shall issue new
common or preferred equity, or, subject to Section 7.03, any debt securities,
the Company shall promptly notify the Note Holders of the estimated proceeds of
such issuance net of reasonable out-of-pocket expenses incurred by the Company
("Net Issuance Proceeds") to be received by the Company in respect thereof,
which notice shall contain and constitute an offer to prepay without premium the
Notes, as further provided in Section 2.05(d). Promptly upon, and in no event
later than 30 days after, receipt by the Company of such Net Issuance Proceeds
of such issuance, the Company shall, subject to the provisions of Section
2.05(d), prepay the Notes of each Note Holder that shall have timely elected to
accept such offer, provided that the aggregate amount to be paid to the Note
Holders pursuant to this Section 2.05(b) shall not exceed an amount equal to the
Senior Credit Ratable Amount times the amount of such Net Issuance Proceeds
(with each Note Holder being entitled to its pro rata share thereof in
proportion to the outstanding principal amount of Notes then held by it). (ii)
No prepayment shall be required under this subsection (b) in connection with (A)
the issuance of equity securities pursuant to Section 7.07(a)(i), or (B) the
Acquisition by the Company or any Subsidiary of cash or Cash Equivalents in any
Permitted Acquisition, provided that the cash or Cash Equivalents so acquired is
merely incidental to such Permitted Acquisition, or (C) the issuance of any debt
instrument or incurrence of debt pursuant to the New Credit Facility.
(c) Reserved.
(d) Offers to Prepay; Acceptance, etc.
(i) Each offer to prepay Notes pursuant to Sections 2.05(a)
and (b) shall be an offer to prepay the Notes of each holder on the
date required pursuant to such Section which date shall be specified in
such offer (the "Proposed Prepayment Date").
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(ii) A holder of Notes may accept an offer to prepay made
pursuant to Section 2.05(a) or (b) by causing a notice of such
acceptance to be given to the Company not later than 10 Business Days
following the date upon which such offer shall have been given to such
Note Holder. A failure by a Note Holder to respond to an offer to
prepay made pursuant to Section 2.05(a) or (b) shall be deemed to
constitute a rejection of the offer by such Note Holder.
(iii) Prepayment of the Notes to be prepaid pursuant to this
Section 2.05 shall be at 100% of the principal amount of such Notes,
together with interest on such Notes accrued to the date of prepayment.
(iv) Each offer to prepay the Notes pursuant to this Section
2.05 shall be accompanied by a certificate, executed by a senior
financial officer of the Company and dated the date of such offer,
specifying: (A) the Proposed Prepayment Date; (B) that such offer is
made pursuant to this Section 2.05; (C) the principal amount of each
Note offered to be prepaid; (D) the interest that would be due on each
Note offered to be prepaid, accrued to the Proposed Prepayment Date;
and (E) that the conditions of this Section 2.05 have been fulfilled.
(e) Prepayments Under New Credit Facility. In no event shall the
Company prepay any Notes under the New Credit Facility on account of any events
of the kind referred to in Sections 2.05(a) or (b) without concurrently offering
to prepay all Notes then and to the extent required pursuant to this Section
2.05.
2.06 GENERAL PROVISIONS CONCERNING PREPAYMENTS.
(a) Allocation of Partial Prepayments of Notes. In the case of
each partial prepayment of the Notes under Section 2.04 or 2.05, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding and then required to be prepaid (excluding any Notes at the
time owned by the Company or any Affiliate of the Company) in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof, with
adjustments, to the extent practicable, to compensate for any prior prepayments
not made exactly in such proportion.
(b) Notice of Prepayments of Notes. In the case of each prepayment
under Section 2.04 or 2.05, the Company shall give written notice thereof to
each holder of Notes not less than 30 (5 days in the case of any prepayment
pursuant to Section 2.05) nor more than 60 days prior to the date fixed for such
prepayment. Each such notice shall set forth: (i) the date fixed for prepayment;
(ii) the aggregate principal amount of Notes to be prepaid on such date; and
(iii) the aggregate principal amount of Notes held by such holder to be prepaid
on such date and the amount of accrued interest and an estimation of the
Make-Whole Amount, if any, to be paid to such holder on such date (together with
the calculation of such Make-Whole Amount, which calculation shall be
satisfactory to each holder of the Notes).
(c) Maturity; Accrued Interest; Surrender, etc. of Notes. In the
case of each prepayment of all or any part of any Note, the principal amount to
be prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such
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principal amount accrued to such date and the premium, if any, due thereon. Any
Note prepaid in full shall be surrendered to the Company at its principal place
of business promptly following prepayment and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of
any Note.
(d) Purchase of Notes. The Company will not, and will not permit
any of its Affiliates to, directly or indirectly, purchase or otherwise acquire,
or offer to purchase or otherwise acquire, any outstanding Notes except by way
of payment or prepayment in accordance with the provisions of the Notes and this
Agreement.
2.07 REPAYMENT OF NOTES. The Company shall repay to the Note
Holders on the Maturity Date the aggregate principal amount of the Notes
outstanding on such date, together with all accrued and unpaid interest thereon.
2.08 INTEREST.
(a) Subject to the provisions of subsection (b) below, the Notes
shall bear interest at a per annum rate equal to 9.96%.
(b) While any Event of Default exists or after acceleration, the
Company shall pay interest on the Outstanding Amount of all Obligations at an
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Law. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.
(c) Interest on each Note shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at maturity and at such other
times as may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.
2.09 RESERVED.
2.10 COMPUTATION OF INTEREST. Computation of interest on the Notes
shall be calculated on the basis of a 360-day year of twelve-30 day months.
2.11 RESERVED.
2.12 PAYMENTS GENERALLY.
(a) All payments to be made by the Company shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Company
hereunder shall be made to the Note Holders by the method and at the address for
such purpose specified in Schedule I attached hereto or by such other method or
at such other address as a Note Holder may designate in writing, without
requiring any presentation or surrender of such Note, except that if any Note
shall be paid, prepaid and/or repurchased in full, such Note, at the Company's
request, shall be surrendered to the Company promptly following such payment,
prepayment or repurchase and cancelled.
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(b) If any payment to be made by the Company shall come due on a
day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest.
2.13 RESERVED.
2.14 SECURITY AND GUARANTIES.
(a) Subject to and in accordance with the Intercreditor Agreement
and the Collateral Documents, the Obligations shall be secured at all times in
accordance with the terms hereof and the Collateral Documents by a first
priority perfected security interest in all of the properties and assets of the
Company and its Subsidiaries (other than real property), whether now existing or
hereafter acquired or created, except as expressly otherwise provided herein and
in the Collateral Documents.
(b) The Obligations of the Company under this Agreement, each of
the Notes and all other Note Documents shall be unconditionally guaranteed by
the Guarantors pursuant to the Guaranties.
ARTICLE III
TAXES
3.01 TAXES.
(a) Any and all payments by the Company to or for the account of
any of the Note Holders under any Note Document shall be made free and clear of
and without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of each Note Holder,
taxes imposed on or measured by its net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which such Note Holder is organized or
maintains an office (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and liabilities
being hereinafter referred to as "Taxes"). If the Company shall be required by
any Laws to deduct any Taxes from or in respect of any sum payable under any
Note Document to any Note Holder, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), such Note Holder
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions, (iii) the
Company shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Company shall furnish to such Note Holder
the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Company agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Note
Document or from the execution, delivery,
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performance, enforcement or registration of, or otherwise with respect to, any
Note Document (hereinafter referred to as "Other Taxes").
(c) If the Company shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Note Document to any
Note Holder, the Company shall also pay to such Note Holder, at the time
interest is paid, such additional amount that such Note Holder specifies as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Note Holder would
have received if such Taxes or Other Taxes had not been imposed.
(d) The Company agrees to indemnify each Note Holder for (i) the
full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section) paid by
such Note Holder, (ii) amounts payable under Section 3.01(c) and (iii) any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this subsection (d) shall be made within 30 days after the date
any Note Holder makes a demand therefor.
(e) The Company shall not be required to pay any additional amount
in respect of United States federal income tax pursuant to Section 3.01(a) to
any Note Holder:
(i) if the obligation to pay such additional amounts would
not have arisen but for a failure by such Note Holder to comply with
its obligations under Section 10.15; or
(ii) if any Note Holder shall have delivered to the Company
the forms referred to in Section 10.15, and such Note Holder shall not
at any time be entitled to exemption from deduction or withholding of
United States federal income tax in respect of payments by the Company
hereunder for the account of such Note Holder for any reason other than
a change in United States law or regulations or in the official
interpretation of such law or regulations by any Governmental Authority
charged with the interpretation or administration thereof (whether or
not having the force of law) after the date of delivery of such forms.
3.02 RESERVED.
3.03 RESERVED.
3.04 RESERVED.
3.05 RESERVED.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of any Note Holder claiming compensation under
this Article III and setting forth the calculation of the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Note Holder may use any
reasonable averaging and attribution methods.
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(b) Reserved
(c) The Company shall not be obligated to pay any amounts under
Sections 3.01(d) which arose prior to the date that is 180 days preceding the
date of the demand required by each such Section or that is attributable to
periods prior to the date that is 180 days preceding the date of such demand.
3.07 SURVIVAL. All of the Company's obligations under this Article
III shall survive termination of the Note Documents and payment in full of the
Notes and all the other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Agreement is subject to satisfaction of the following conditions precedent;
provided that at the election of the Required Note Holders any of the items
required to be delivered pursuant to subsection (a)(iv), (a)(vi), (e) or (f) may
be waived for purposes of this Section 4.01, provided that they shall be deemed
added to Section 4.02 and delivered or accomplished by no later than the Closing
Date.
(a) Unless waived by all the Note Holders, the Note Holders'
receipt of the following, each of which shall be originals or facsimiles
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Note Party that is a party
thereto, each dated the Effectiveness Date (or, in the case of certificates of
governmental officials, a recent date before the Effectiveness Date) and each in
form and substance satisfactory to the Required Note Holders:
(i) executed counterparts of this Agreement and the
Guaranties, sufficient in number for distribution to each Note Holder
and the Company;
(ii) the Notes issued to the Note Holders in accordance with
Section 2.03;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Note Party as the Note Parties may require to
establish the identities of and verify the authority and capacity of
each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Note Documents
to which such Note Party is a party;
(iv) such evidence as the Note Holders may reasonably
require to verify that each Note Party is duly organized or formed,
validly existing, in good standing and qualified to engage in business
in each jurisdiction (a) in which it is incorporated, or has any
headquarter function, or (b) in which it is required to be qualified to
engage in business if the absence of such qualification could have a
Material Adverse Effect; including certified copies of each Note
Party's Organization Documents, certificates of good standing and/or
qualification to engage in business and tax good standing certificates
in such jurisdictions;
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(v) a certificate signed by a Responsible Officer of the
Company certifying (A) that all representations and warranties
contained in Article V are true and correct on and as of the
Effectiveness Date and no Default or Event of Default exists on and as
of such date; (B) that there has been no event or circumstance since
the date of the most recent of the Audited Financial Statements which
has or could be reasonably expected to have a Material Adverse Effect;
and (C) that the Company's and New Ceridian's senior management are
highly confident that the Spin-Off Consummation Date will occur by no
later than the Spin-Off Deadline under the terms specified in the
Spin-Off Documents delivered under subsection (a)(vii) below.
(vi) one or more opinions of counsel to each Note Party with
respect to those matters set forth listed at Exhibit K;
(vii) a certificate signed by a Responsible Officer of the
Company certifying the attachment of (A) true and complete draft or
final copies of all material Spin-Off Documents, which shall be in form
and substance reasonably satisfactory to the Note Holders; (B) true and
complete copy of the Form 10 as submitted by the Company to and
approved by the SEC in connection with the Spin-Off Transaction
(together with and including all exhibits and attachments thereto),
which shall be in form and substance satisfactory to the Required Note
Holders; (C) true and complete copy of each of the Note Documents,
which shall satisfy the following conditions: (I) a maturity date
occurring five (5) years after the Closing Date of the New Credit
Facility (subject to termination in accordance with the terms thereof),
(II) representations and warranties, covenants and events of default
not more restrictive than those contained in the Note Documents; (III)
aggregate commitments of no less than $225,000,000 with scheduled
reductions in such commitments or other amortization in form and
substance satisfactory to the Required Note Holders; (IV) no collateral
other than the Collateral, and (V) no guarantor other than the
Guarantors; (D) a true and complete copy of the Scarborough Partnership
Agreement; (E) a true and complete copy of the Xxxxxxx X.X. Option
Agreement; and (F) a solvency opinion provided by the Xxxxxxxx Xxxxx
firm in respect of the Company and New Ceridian, respectively,
addressed to the Note Holder Representative, dated as of the
Effectiveness Date, and any and all certificates and other documents
provided by the Company to the Xxxxxxxx Xxxxx firm in respect of such
opinion.
(viii) such other financial information and documentation as
any Note Holder may reasonably request, in form and substance
reasonably satisfactory to the Required Note Holders, including (A)
five-year financial projections for the Company and its Arbitron
Subsidiaries on a stand-alone basis, (B) a preliminary pro forma
opening balance sheet of the Company and its Subsidiaries as of the
Separation Date ("Preliminary Opening Balance Sheet"), prepared by the
Company, and (C) a consolidated balance sheet of the Company and it
Arbitron Subsidiaries on a stand-alone basis, as of December 31, 2000,
as prepared by the Company consistent with GAAP, reflecting the
consummation of the Spin-Off Transaction as of such date, but without
giving effect to the refinancing of the Company's Existing Credit
Facility and other Indebtedness pursuant to this Agreement, the New
Ceridian Credit Agreement and the
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New Credit Facility, and in substantially similar form as the column
captioned "Historical-Arbitron" in the balance sheet labeled as
"Arbitron Unaudited Pro Forma Condensed Combined Balance Sheet Date"
set forth in the Form 10;
(ix) evidence of the Company's receipt of the IRS Ruling
Letter;
(x) evidence of a waiver or consent with respect to
defaults otherwise arising under the Existing Credit Facility from the
consummation of the Spin-Off Transaction and the financings
contemplated thereby by the "Agent" and "Lenders" as defined in and
party to the Existing Credit Facility; and
(xi) such other assurances, certificates, documents,
consents or opinions as the Required Note Holders or the Note Holder
Representative reasonably may require.
(b) The corporate, legal, capital, tax, contractual, and
management structure and attributes of the Company and its Subsidiaries and of
the Spin-Off Transaction shall be satisfactory to the Required Note Holders.
(c) Any fees required to be paid on or before the Effectiveness
Date shall have been paid, and unless waived by the Required Note Holders or the
Note Holder Representative, as applicable, the Company shall have paid all
Attorney Costs of the Note Holders and the Note Holder Representative to the
extent invoiced prior to or on the Effectiveness Date, plus such additional
amounts of Attorney Costs as shall constitute their reasonable estimate of
Attorney Costs incurred or to be incurred by them through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between the Company and the Note Holders or the Note Holder
Representative).
(d) The Effectiveness Date shall occur no later than February 5,
2001.
(e) The Collateral Documents shall be executed by each Note Party
other than New Ceridian, in appropriate form for recording, where necessary,
together with:
(i) acknowledgment copies of all UCC-l financing statements
filed, registered or recorded to perfect the security interests of the
Collateral Agent for the benefit of the Note Holders, or other evidence
reasonably satisfactory to the Required Note Holders that there has
been filed, registered or recorded all financing statements and other
filings, registrations and recordings (including filings at the U.S.
Copyright Office, the U.S. Patent and Trademark Office or other
applicable Governmental Authority in respect of Intellectual Property
and Proprietary Information) necessary and advisable to perfect or
protect the Liens of the Collateral Agent for the benefit of the Note
Holders in accordance with applicable law, with such exceptions as the
Required Note Holders may permit in their discretion;
(ii) true and complete copies of copyright filings of the
Company and its Subsidiaries at the U.S. Copyright Office in respect of
computer databases registered during the years 1999 and 2000 and of the
Material Software, as more fully required pursuant to the Security
Agreements;
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(iii) written advice relating to such Lien and judgment
searches as the Note Holders shall have requested, and such termination
statements or other documents as may be necessary to confirm that the
Collateral is subject to no other Liens in favor of any Persons (other
than Permitted Liens);
(iv) all certificates and instruments representing the
Pledged Collateral, stock transfer powers executed in blank with
signatures guaranteed as the Collateral Agent or any Note Holder or the
Note Holder Representative may specify; provided that in no event shall
more than 65% of the capital stock of any Foreign Subsidiary be
required to be so pledged;
(v) Account Control Agreements, executed by all parties
thereto, relating to (a) any deposit accounts maintained by the Company
in relation to the Arbitron Business with Bank of America or any of its
Affiliates, and (b) any securities accounts maintained by the Company
in relation to the Arbitron Business;
(vi) such consents, estoppels, subordination agreements and
other documents and instruments executed by landlords, tenants and
other Persons party to material contracts relating to any Collateral as
to which the Collateral Agent, for the benefit of the Note Holders,
shall be granted a Lien, as requested by the any Note Holder; and
(vii) evidence that all other actions necessary or, in the
reasonable opinion of the Required Note Holders or the Note Holder
Representative, desirable to perfect and protect the first priority
Lien created by the Collateral Documents and to enhance the ability of
the Note Holders or the Note Holder Representative to preserve and
protect their interests in and access to the Collateral, have been
taken.
(f) Insurance Policies. The Company shall provide evidence in form
and substance satisfactory to the Required Note Holders that the Note Holders
(or the Note Holder Representative on their behalf) have (or has) been named as
loss payees/mortgagees and as additional insured(s), as their interests may
appear, as required in accordance with Section 6.06 and the Collateral
Documents, together with a certificate of insurance as to all insurance coverage
on the properties of the Company and its Subsidiaries.
4.02 CONDITIONS TO PURCHASE OF NOTES. The obligation of each Note
Holder to purchase and pay for the Notes to be issued hereunder is subject to
satisfaction of the following conditions precedent:
(a) Unless waived by the Required Note Holders, the Note Holders'
receipt of the following, each of which shall be originals or facsimiles
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Note Party, each dated the
Closing Date and each in form and substance satisfactory to the Required Note
Holders:
(i) a certificate signed by a Responsible Officer of the
Company certifying (A) that all representations and warranties of the
Company contained in Article V are true and correct on and as of the
Closing Date, (B) that there exists as of such date no Default
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or Event of Default, (C) that there has been no event or circumstance
since the date of the most recent Audited Financial Statements which
has or could reasonably be expected to have a Material Adverse Effect,
(D) that the Separation Date has occurred pursuant to the Spin-Off
Documents, which are in full force and effect and in substantially the
form delivered in connection with the Effectiveness Date (or otherwise
in form and substance satisfactory to the Note Holders), (E) that the
Company's and New Ceridian's senior management are highly confident
that the Spin-Off Consummation Date will occur by no later than the
Spin-Off Deadline; (F) that the Company has obtained stockholder
approval to effect a reverse stock split of the Company's shares of
common stock at a ratio not to exceed 1-for-5, which shall occur
promptly but in any event not more than 60 days after the Spin-Off
Consummation Date; (G) that the Board of Directors of the Company has
authorized and approved the final terms of the Spin-Off Transaction
(including declaration of a dividend of shares of New Ceridian's common
stock to Company's shareholders); (H) that the SEC has approved the
form of the Form 10, as it may have been amended since the
Effectiveness Date to reflect (I) revisions made to conform the
Spin-Off Documents filed with the Form 10 to those delivered to the
Note Holders pursuant to Section 4.01(a)(vii), (II) the inclusion of
the opinions described in Section 4.02(a)(iv), (III) any required date
revisions not inconsistent with the terms hereof, (IV) ministerial
revisions necessary to address administrative issues or facial
ambiguities, and (V) other amendments satisfactory to the Required Note
Holders, (I) that all conditions precedent pursuant to the New Credit
Facility have been satisfied and that the New Credit Facility has been,
or is contemporaneously with the initial funding hereunder being, fully
funded; and (J) such other matters relating to the Spin-Off Transaction
as the Required Note Holders may request;
(ii) a pro forma Compliance Certificate of the Company and
its Subsidiaries, signed by a Responsible Officer of the Company;
(iii) a certificate signed by a Responsible Officer of the
Company certifying the attachment of (A) a true and complete copy of
the final pro forma opening balance sheet of the Company and its
Subsidiaries as of the Separation Date, by the Company, which shall
contain in the opinion of the Note Holders no material adverse
discrepancies from the Preliminary Opening Balance Sheet, (B) a true
and complete copy of the Supplemental Financial Statements, and (C) an
audited balance sheet of the Company and its Arbitron Subsidiaries as
of December 31, 2000, which balance sheet shall contain in the opinion
of the Required Note Holders no material adverse discrepancies from the
balance sheet delivered by the Company under Section 4.01(a)(viii)(C),
accompanied by the opinion of KPMG Peat Marwick LLP or another
nationally-recognized independent public accounting firm, which report
shall state that such balance sheet presents fairly in all material
respects the financial position of the Company and the Arbitron
Subsidiaries on a stand-alone basis as of such date and such opinion
shall not be qualified or limited for any reason;
(iv) a certificate signed by a Responsible Officer of the
Company certifying the Company's receipt, and attaching a true and
complete copy, of (A) a solvency opinion provided by the Xxxxxxxx Xxxxx
firm in respect of the Company and New Ceridian,
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respectively, addressed to the Note Holder Representative, dated as of
the Closing Date, and including any and all certificates and other
documents provided by the Company to the Xxxxxxxx Xxxxx firm in respect
of such opinion; (B) a fairness, financial viability, and "fair value"
opinion addressed to the Company (or its Board of Directors) and
relating to the Spin-Off Transaction, provided by the Company's
financial advisors, Bear Xxxxxxx & Co., and including any and all
certificates and other documents provided by the Company to Bear
Xxxxxxx & Co. in respect of such opinion;
(v) evidence: (A) of payment (prior to or upon the initial
funding) of all funded Indebtedness of the Company existing immediately
prior to the Closing Date and termination of all credit commitments,
including the Existing Credit Facility together with evidence of the
release of all Liens securing obligations in connection therewith, but
excluding the Initial Permitted Indebtedness, and (B) of the
allocation, which shall be satisfactory to the Note Holders, of all
contingent and other liabilities of the Company as between the Company
and New Ceridian, with such third party acknowledgments or consents
relating thereto as the Note Holders may request;
(vi) one or more opinions of counsel to the Company
regarding the matters specified in Exhibit L; and
(vii) such other assurances, certificates, documents,
consents or opinions as the Required Note Holders or the Note Holder
Representative reasonably may require.
(b) The Closing Date shall occur no later than March 30, 2001.
(c) The corporate, legal, capital, tax, contractual, and
management structure and attributes of the Company and its Subsidiaries and of
the Spin-Off Transaction shall conform to those deemed satisfactory by the
Required Note Holders as a condition to the Effectiveness Date, or shall
otherwise be satisfactory to the Required Note Holders.
4.03 RESERVED.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each Note Holder as follows:
5.01 CORPORATE EXISTENCE AND POWER.
(a) Each of the Company and each Material Subsidiary:
(i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation;
(ii) has the power and authority and all material
governmental licenses, authorizations, consents and approvals to own
its assets and carry on its business and to execute, deliver, and
perform its obligations under the Note Documents;
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(iii) is duly qualified as a foreign corporation, licensed
and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its
business requires such qualification or license, except where the
failure to be so qualified, licensed or in good standing would not
adversely affect the business or operations of the Company or such
Subsidiary in any significant manner; and
(iv) is in compliance with all material Laws applicable to
it.
(b) Each Subsidiary of the Company which is not a Material
Subsidiary:
(i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation;
(ii) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its assets and
carry on its business;
(iii) is duly qualified as a foreign corporation, licensed
and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its
business requires such qualification; and
(iv) is in compliance with all material Laws applicable to
it;
except where any failure to comply with the requirements of this subsection (b)
would not, individually or in the aggregate, result in a Material Adverse
Effect.
(c) As of the Closing Date, the Company does not have any material
place of business other than in the State of New York and the State of Maryland.
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by each Note Party of this Agreement and each other
Note Document and each Spin-Off Document, and the consummation of the Spin-Off
Transaction, have been duly authorized by all necessary corporate action by or
on behalf of such Note Party, and do not and will not:
(a) contravene the terms of such Note Party's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any Contractual
Obligation (other than the Senior Note Indenture, provided that any such
conflict with or breach or contravention of the Senior Note Indenture shall be
of no further effect after giving effect to the transactions that will occur on
the Closing Date) to which such Note Party is a party or any order, injunction,
writ or decree of any Governmental Authority to which such Note Party or its
property is subject; or
(c) violate any Law applicable to such Note Party.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings or filings in connection with the
Liens granted under the Collateral Documents) is
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necessary or required in connection (a) with the execution, delivery or
performance by, or enforcement against, the Company or any other Note Party of
this Agreement or any other Note Document or (b) the execution, delivery or
performance by or enforcement against the Company or any other Person party
thereto of the Spin-Off Documents, or (c) the consummation of the Spin-Off
Transaction, except in each case as have been obtained on or before the Closing
Date.
5.04 BINDING EFFECT.
(a) This Agreement and each other Note Document to which the
Company or any of its Subsidiaries is a party, when executed and delivered, will
constitute the legal, valid and binding obligations of the Company and any of
its Subsidiaries to the extent it is a party thereto, enforceable against such
Person in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.
(b) From and after the Closing Date, each Spin-Off Document
constitutes the legal, valid and binding obligation of each Person party
thereto, enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability. As of the Closing Date, all conditions
precedent to the effectiveness of the Spin-Off Documents have been satisfied.
5.05 LITIGATION. Attached hereto as Schedule 5.05 is a list of all
material litigation in which the Company or any Subsidiary of the Company is a
plaintiff or a defendant as of the Effectiveness Date. There are no actions,
suits, proceedings, claims or disputes pending, or to the best knowledge of the
Company, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against the Company or its Subsidiaries or their
respective properties which:
(a) purport to affect or pertain to this Agreement, or any other
Note Document, or any of the transactions contemplated hereby or thereby; or
(b) challenge in any respect the legality or validity of any
material aspect of the Spin-Off Transaction; or
(c) except as provided in Schedule 5.05, would reasonably be
expected to have a Material Adverse Effect (and assuming for this purpose the
reasonable likelihood of an adverse decision). No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement or any other Note Document, or the
consummation of any material aspect of the Spin-Off Transaction, or directing
that the transactions provided for herein or therein not be consummated as
herein or therein provided. Since the Effectiveness Date, there has been no
change in the status of any of the matters set forth in Schedule 5.05 that would
reasonably be expected to result in a Material Adverse Effect. All amounts
potentially payable by the Company or any Arbitron Subsidiary (including upon
judgment or settlement) in connection with any matter set forth in Schedule 5.05
not relating to
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the Arbitron Business are subject from and after the Separation Date to a
binding indemnification obligation by New Ceridian in favor of the Company or
such Arbitron Subsidiary.
5.06 NO DEFAULT. No Default or Event of Default exists or would
result from the incurring of any Obligations by the Company or any other Note
Party or from the grant or perfection of the Transaction Liens on the
Collateral. As of the Effectiveness Date and the Closing Date, neither the
Company nor any of its Subsidiaries, (a) is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or (b) is in default under or with respect to any Spin-Off Document. As
of the Effectiveness Date, there exists no "Default" or "Event of Default," and
as of the Closing Date, there exists no "Event of Default," under and as defined
in (i) the Existing Credit Facility (ii) the Senior Note Indenture or (iii) the
Note Documents.
5.07 ERISA COMPLIANCE. Except as referenced or provided for in
either Schedule 5.05 or Schedule 5.07 attached hereto:
(a) To the best knowledge of the Company, no facts or
circumstances exist which would reasonably be expected to have a Material
Adverse Effect in connection with the failure of any Plan, or the failure of the
Company, an ERISA Affiliate or any Person with regard to the Plan, to comply
with the applicable provisions of ERISA, the Code and other Federal or state
law. The Company and each ERISA Affiliate have made all required contributions
to any Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or would, if determined adversely to
the Company or any Plan, reasonably be expected to result in a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or would
reasonably be expected to result in a Material Adverse Effect.
(c) To the best knowledge of the Company (i) no ERISA Event has
occurred or is reasonably expected to occur; (ii) neither the Company nor any
ERISA Affiliate has incurred, nor reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iii) neither the Company
nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither the Company
nor any ERISA Affiliate has engaged in a transaction that would reasonably be
expected to be subject to Section 4069 or 4212(c) of ERISA.
(d) The consummation of the transactions contemplated by the Note
Documents will not involve any transaction that is subject to the prohibitions
of Section 406 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975(c)(1)(A)-(D) of the
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Code. The Company's representation in the immediately preceding sentence is made
in reliance upon and subject to the accuracy of the representation of the Note
Holders in Section 9.04 as to the source of funds used to pay the purchase price
of the Notes to be purchased by the Note Holders.
5.08 TITLE TO PROPERTIES. As of the Effectiveness Date and the
Closing Date, the property of the Company and its Subsidiaries is subject to no
Liens, other than Permitted Liens. As of the Closing Date, the Company has
retained and has title to, or a valid and enforceable leasehold or licensee's
interest in, all assets necessary to and appropriate for conducting the Arbitron
Business, and such assets are subject to no Liens, claims or interest of third
parties other than Permitted Liens, and the interests of lessors and licensors
not otherwise prohibited under any Note Document or Note Document.
5.09 TAXES.
(a) The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded. There is
no proposed tax assessment against the Company or any of its Subsidiaries which
would, if the assessment were made, have a Material Adverse Effect.
(b) None of the representations and warranties made by the
Company, New Ceridian or any of their Subsidiaries to the IRS in connection with
the Spin-Off Transaction (including with respect to the tax-free nature of the
Spin-Off Transaction and in connection with the Company's request for the IRS
Ruling Letter) as of the date such representations and warranties are made or
deemed made, and none of the statements contained in any report, exhibit,
statement or certificate furnished by or on behalf of the Company, New Ceridian
or any of their Subsidiaries to the IRS in connection with the Spin-Off
Transaction as of the date such statements are made or deemed made, contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they are made, not misleading.
(c) As of the Effectiveness Date, the Closing Date and Spin-Off
Consummation Date, there is no "plan or series of related transactions" of the
type described in Section 355(e) of the Code.
5.10 FINANCIAL CONDITION.
(a) The Form 10 Financial Statements and the Supplemental
Financial Statements:
(i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise
expressly noted therein, subject to ordinary, good faith year-end audit
adjustments and the absence of footnotes in the case of quarterly
financial statements,
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(ii) are complete, accurate and fairly present the financial
condition of the Company and its Subsidiaries as of the date thereof,
and results of operation for the period covered thereby, in each case
based upon the assumed consummation of the Spin-Off Transaction on such
date, and
(iii) comply with all applicable Laws relating to spin-off
transactions.
(b) Except as disclosed in filings by the Company with the
Securities and Exchange Commission on Form 10-Q for the quarter ended June 30,
2000, or the Form 10, since December 31, 1999 there has been no Material Adverse
Effect.
(c) As of the Effectiveness Date and the Closing Date, the Company
and its consolidated Subsidiaries have not incurred any material Contingent
Obligations except for those specified in Schedule 5.10, which Schedule also
specifies which Contingent Obligations pertain to the Arbitron Business, and
those specified in Section 7.05(a), Section 7.05(d)(i) or Section 7.05(f).
Except as expressly otherwise stated in Schedule 5.10, New Ceridian is subject,
from and after the Separation Date, to a binding obligation to fully indemnify
the Company in respect of all Contingent Obligations specified in such Schedule
5.10 not relating to the Arbitron Business. The projections delivered pursuant
to Section 4.01(a)(viii) have been reasonably prepared, in good faith, based
upon reasonable assumptions, and are consistent with the prepayment requirements
set forth in this Agreement and the New Credit Facility.
(d) The Preliminary Opening Balance Sheet delivered by the Company
to the Note Holders pursuant to Section 4.01(a)(viii) and the pro forma
operating balance sheet delivered by the Company to the Note Holders pursuant to
Section 4.02(a)(iii): (i) were prepared on a basis consistent with GAAP as
applied to the Company's financial statements, (ii) have been reasonably
prepared on bases reflecting the currently available estimates and judgments of
the senior management of the Company and New Ceridian as to the future expected
performance of the Company, (iii) accurately reflect all material adjustments
required to be made to give effect to the Spin-Off Transaction, and (iv) present
fairly on a pro forma basis the estimated consolidated financial position of the
Company and its Arbitron Subsidiaries as of the date thereof, assuming
consummation of the Spin-Off Transaction.
5.11 ENVIRONMENTAL MATTERS.
(a) The ongoing operations of the Company and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability that would reasonably be expected to have a Material Adverse
Effect.
(b) As of the Effectiveness Date and the Closing Date, except as
specifically disclosed on Schedule 5.11, neither the Company nor any of its
Subsidiaries, nor any of their respective present property or operations, is
subject to any outstanding written order from or agreement with any Governmental
Authority, nor subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Material.
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(c) Except as specifically disclosed on Schedule 5.11, there are
no Hazardous Materials or other conditions or circumstances existing with
respect to any property, or arising from operations of the Company or any of its
Subsidiaries that would reasonably be expected to give rise to Environmental
Claims with a potential liability of the Company and its Subsidiaries that in
the aggregate for any such condition, circumstance or property would reasonably
be expected to have a Material Adverse Effect.
(d) Except as expressly otherwise stated in Schedule 5.11, New
Ceridian is subject from and after the Separation Date to a binding obligation
to fully indemnify the Company in respect of all matters referenced in such
Schedule 5.11 not relating to the Arbitron Business.
5.12 REGULATED ENTITIES. None of the Company, any Person
controlling the Company, or any Subsidiary of the Company, is (a) an "investment
company" within the meaning of the Investment Company Act of 1940; or (b)
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code,
or any other Federal or state statute or regulation limiting its ability to
incur Indebtedness, except that certain Persons who may be deemed to control the
Company are registered investment companies within the meaning of the Investment
Company Act of 1940.
5.13 COLLATERAL DOCUMENTS. The Collateral Documents are effective
to create in favor of the Administrative Agent for the benefit of the Note
Holders, a legal, valid and enforceable first priority security interest,
subject to the term of the Intercreditor Agreement, in all right, title and
interest of the Note Parties in the Collateral described therein; and UCC-1
financing statements have been filed in the offices in all of the jurisdictions
listed in the schedules to the Security Agreements.
5.14 NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject to
any charter or corporate restriction, or any Law, which could reasonably be
expected to have a Material Adverse Effect. As of the Effectiveness Date and the
Closing Date, no Subsidiary (other than New Ceridian and Subsidiaries that are
not Arbitron Subsidiaries) is party to or bound by any Contractual Obligation
restricting the ability of such Subsidiary to pay dividends or make Notes to the
Company.
5.15 SOLVENCY. The Company and each of its Material Subsidiaries
are Solvent. Both immediately before and after the Separation Date and the
Spin-Off Consummation Date, New Ceridian is Solvent. All statements contained in
any certificate delivered to the Note Holders pursuant to Section 4.01(a)(viii)
and Section 4.02(a)(iv) are true and accurate in all materials respects and not
materially misleading and do not contain any material omissions of fact.
5.16 LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority which,
in any case, could reasonably be expected to have a Material Adverse Effect.
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5.17 INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION. Except as
specifically set forth on Schedule 5.17:
(a) The Company owns (directly or through the Arbitron
Subsidiaries) all of the Intellectual Property and Proprietary Information that
is material to the Arbitron Business (including that in relation to the
"Portable People Meter" and "Critical Band Encoding Technique"), free of any
right, claim or interest of any Person, except for Permitted Liens.
(b) To the best knowledge of the Company, no Intellectual Property
or Proprietary Information now employed by the Company or its Subsidiaries and
relating to the Arbitron Business infringes upon any rights held by any other
Person.
(c) As of the Closing Date and Spin-Off Consummation Date, except
as specifically disclosed on Schedule 5.05 attached hereto, no claim or
litigation regarding any Intellectual Property or Proprietary Information
relating to the Arbitron Business is pending against the Company or any of its
Subsidiaries or, to the Company's knowledge, threatened, against any of such
Persons.
(d) As of the Closing Date and Spin-Off Consummation Date, neither
the Company nor any of its Subsidiaries uses pursuant to a license agreement
with any third party (except for ordinary shrinkwrap licenses for software
products that the Company and its Subsidiaries use in the Ordinary Course of
Business and licenses specified on Schedule 5.17) any patents, trademarks,
service marks, trade names, copyrights, trade secrets or franchises material to
the conduct of the Arbitron Business.
(e) As of the Closing Date and Spin-Off Consummation Date, in
relation to the Arbitron Business, each of the Company's and its Subsidiaries'
respective employees who, either alone or in concert with others, developed,
invented, discovered, derived, programmed or designed Intellectual Property or
Proprietary Information, or who has knowledge of or access to information about
Intellectual Property or Proprietary Information, has entered into one or more
effective assignment of rights agreements in favor of the Company or its
Subsidiaries, as applicable, no material exceptions have been taken by any such
employee to the terms of any such agreements, and neither the Company nor any of
its Subsidiaries is aware that any of its respective employees is in violation
thereof.
(f) As of the Closing Date and Spin-Off Consummation Date, neither
the Company nor its Subsidiaries believes it is or will be necessary in relation
to the Arbitron Business to utilize any inventions of any of their respective
employees (or people they currently intend to hire or retain) that were invented
prior to such employment, except those inventions formally assigned or
transferred to the Company or the Arbitron Subsidiaries, as applicable, by such
employees.
(g) As of the Effectiveness Date, neither the Company nor any
Arbitron Subsidiary owns, licenses or sub-licenses any Material Software in
connection with the Arbitron Business.
5.18 INSURANCE. As of the Closing Date and Spin-Off Consummation
Date, the properties of the Company and its Subsidiaries are insured with
financially sound and reputable
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insurance companies, in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where the Company or such Subsidiary
operates.
5.19 EMPLOYMENT AGREEMENTS. Except as set forth on Schedule 5.19,
as of the Effectiveness Date, Closing Date and Spin-Off Consummation Date in
relation to the Arbitron Business, neither the Company nor any of its
Subsidiaries is (a) party to or bound by any employment contract or agreement,
agency, independent contractor or sales representative agreement involving
annual compensation at a base rate equal to or exceeding $200,000, golden
parachute agreement, or change of control agreement; or (b) obligated to make
any payments on account of any severance, golden-parachute, or change of control
agreement.
5.20 SPIN-OFF DOCUMENTS; NOTE DOCUMENTS.
(a) The representations and warranties of the Company contained in
the Spin-Off Documents and in any other document filed or delivered to the SEC
in connection with the Spin-Off Transaction are true and correct in all material
respects as of the Effectiveness Date and the Closing Date and as of any other
date specified in such documents. There are no material documents or agreements
to be entered into by the Company or the Arbitron Subsidiaries in connection
with the Spin-Off Transaction, other than the Spin-Off Documents.
(b) The representations and warranties of the Company contained in
the Note Documents, and in any other documents delivered to the Administrative
Agent in connection therewith, are true and correct in all material respects as
of the Effectiveness Date and the Closing Date and as of any other date
specified in such documents.
5.21 CAPITALIZATION; SUBSIDIARIES.
(a) As of the Effectiveness Date, the Closing Date, and the
Spin-Off Consummation Date, Schedule 5.21 sets forth: (i) a true, correct and
reasonably detailed description of all Subsidiaries, and specifying which
Subsidiaries are (A) Arbitron Subsidiaries and (B) Material Subsidiaries; and
(ii) all authorized shares of capital stock of the Company and all the Arbitron
Subsidiaries, and the number of shares of each class of capital stock of such
Subsidiaries that are issued and outstanding. All of the issued and outstanding
shares of capital stock of the Company and the Subsidiaries have been duly
authorized and are validly issued, fully paid and non-assessable, and are free
and clear of any Liens and other restrictions (including any restrictions on the
right to vote, sell or otherwise dispose of such capital stock) and of any
preemptive or other similar rights to subscribe for or to purchase any such
capital stock.
(b) Except as set forth on Schedule 5.21 (which Schedule sets
forth a true, correct and complete description of, with respect to each
security, title, name of the holder or Person, as applicable, the number of
shares of capital stock underlying such security, exercise price, expiration
date and percentage of shares of such capital stock on a fully diluted basis),
as of the Effectiveness Date and Closing Date, there are: (i) no outstanding
rights to acquire equity in any Subsidiary; (ii) no voting trusts of other
agreements or undertakings with respect to the voting of the capital stock of
any Subsidiary; (iii) no obligations or rights (whether fixed or contingent) on
the part of any Subsidiary, any of its directors or officers, or any other
Person to purchase,
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repurchase, redeem or "put" any outstanding shares of the capital stock of such
Persons; and (iv) no agreements to which any Subsidiary, any of its directors or
officers, or any other Person is a party granting any other Person any rights of
first offer or first refusal, registration rights or "drag-along" "tag-along" or
similar rights with respect to any transfer of any capital stock or equity
rights of any Subsidiary.
(c) As of the Effectiveness Date, the Closing Date and the
Spin-Off Consummation Date, all shares of capital stock and equity rights of the
Company or any Subsidiary that have been issued have been issued and offered in
compliance with all applicable federal and state securities laws. Except as set
forth on Schedule 5.21 no additional shares of capital stock of any Arbitron
Subsidiary will become issuable to any Person pursuant to any "anti-dilution"
provisions of any such issued and outstanding securities of any Subsidiary on
account of the issuance of any securities.
5.22 MARGIN REGULATIONS. Neither the Company, New Ceridian, nor any
Subsidiary is engaged in the business of extending credit for the purpose of
purchasing or carrying "margin stock" (within the meaning of Regulation U of the
Federal Reserve Board). No part of the proceeds of the sale of the Notes is
being or will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.
5.23 BROKERS; CERTAIN EXPENSES. No Note Party or Affiliate has paid
or is obligated to pay any fee or commission to any broker, finder, investment
bank or other intermediary, in connection with this Agreement, the Note
Documents or any of the Spin-Off Documents or the transactions contemplated
hereby or thereby, other than as set forth on Schedule 5.23. No Note Party or
Affiliate is bound by any agreement or commitment for the provision of
investment banking or financial advisory services with respect to any
recapitalization, issuance of debt or equity securities or other capital or
financing transactions involving the Note Parties that would operate to restrict
or prevent the occurrence of the Closing Date or the Spin-Off Consummation Date.
5.24 YEAR END. As of the Effectiveness Date, the Company's and New
Ceridian's fiscal year ends on December 31 of each year.
5.25 THIRD PARTY CONSENTS. Other than as set forth in Schedule
5.25, and except as have been obtained before the Closing Date, no approval,
consent, exemption, authorization, amendment or waiver, or other action by, or
notice to, or filing with, any Person is necessary or required in connection
with (a) the execution, delivery or performance by or enforcement against the
Company or New Ceridian of the Spin-Off Documents, (b) the consummation of the
Spin-Off Transaction or (c) the conduct of the Arbitron Business from and after
the Closing Date and the Spin-Off Consummation Date.
5.26 EXISTING INDEBTEDNESS. As of the Closing Date, neither the
Company nor any of the Arbitron Subsidiaries is indebted on account of any
Indebtedness, except Initial Permitted Indebtedness. The allocation of
Indebtedness and other obligations existing as of the Closing Date, as between
the Company and New Ceridian, has been undertaken in a fair and reasonable
fashion.
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5.27 NEW CERIDIAN OBLIGATIONS. From and after the Closing Date, New
Ceridian is legally obligated, under the Spin-Off Documents, to indemnify the
Company and hold the Company harmless from all material obligations of the
Company and its Arbitron Subsidiaries other than those incurred pursuant to or
in furtherance of the Arbitron Business, and New Ceridian has neither repudiated
nor breached in any material respect such obligation.
5.28 SWAP CONTRACTS. As of the Closing Date, neither the Company
nor any Subsidiary is party to any Swap Contracts other than Permitted Swap
Contracts.
5.29 FULL DISCLOSURE. None of the representations or warranties
made by the Company, New Ceridian or any of their respective Subsidiaries in the
Note Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in each exhibit, report,
statement or certificate furnished by or on behalf of the Company or any
Subsidiary in connection with the Note Documents as of the date such statements
are made or deemed made, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading. The Form 10 (including all Exhibits thereto) does not
contain any untrue statement of a material fact or omit any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were or are made, not misleading.
5.30 OFFER OF NOTES; INVESTMENT BANKERS. Neither the Company nor
any Person acting on its behalf (a) has directly or indirectly offered the Notes
or any part thereof or any similar securities for issue or sale to, or solicited
any offer to buy any of the same from, anyone other than the Note Holders, (b)
has taken or will take any action which would bring the issuance, exchange or
sale of the Notes within the provisions of Section 5 of the Securities Act or
the registration or qualification provisions of any applicable blue sky or other
securities laws, (c) has dealt with any broker, finder, commission agent or
other similar Person in connection with the sale of the Notes and the other
transactions contemplated by the Note Documents, other than Banc of America
Securities, LLC (the "Placement Agent"), or (d) is under any obligation to pay
any broker's fee, finder's fee or commission in connection with such
transactions, other than a fee to the Placement Agent which fee is the
obligation solely of the Company.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any of the Notes
shall remain outstanding or any other Obligation shall remain unpaid or
unsatisfied, unless the Required Note Holders waive compliance in writing:
6.01 FINANCIAL STATEMENTS. The Company shall deliver to the each
Note Holder in form and detail satisfactory to the Required Note Holders:
(a) as soon as available, but not later than 90 days after the end
of each fiscal year commencing with the fiscal year ending December 31, 2000, a
copy of the audited consolidated financial statements of the Company as of the
end of such fiscal year, setting forth in each case
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in comparative form the figures for the previous year (based on the Audited
Financial Statements, if applicable), and accompanied by the opinion of KPMG
Peat Marwick LLP or another nationally-recognized independent public accounting
firm, which report shall state that such consolidated financial statements
present fairly in all material respects the financial position of the Company
and its Subsidiaries as of the dates indicated (on a stand-alone basis
reflecting the consummation of the Spin-Off Transaction, in the case of the
December 31, 2000 statements) and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP; such opinion shall not
be qualified or limited for any reason, including because of a restricted or
limited examination by such accountant of any material portion of the Company's
or any Subsidiary's records;
(b) (i) as soon as available, but not later than 45 days after the
end of the first three fiscal quarters of each fiscal year of the Company, (A) a
copy of the Company 's quarterly report on Form 10-Q filed with the SEC with
respect to such fiscal quarter, and (B) an operating report summarizing the
Company's consolidated year-to-date profit and loss, revenue, operating profit,
invested capital, and cash flow information, and (ii) if the Company at such
time is not required to file such Form 10-Q with the SEC under the Exchange Act,
as soon as available, but in any event within 60 days after the end of each
fiscal quarter, a consolidated balance sheet of the Company and its Subsidiaries
as at the end of such fiscal quarter, and the related consolidated statements of
income and cash flows for such fiscal quarter and for the portion of the
Company's fiscal year then ended, setting forth in each case in comparative form
the figures for the corresponding fiscal quarter of the previous fiscal year,
and the corresponding portion of the previous fiscal year (based on the Audited
Financial Statements or the Supplemental Financial Statements, if applicable),
together with the items described in clause (i)(B) of this subsection; all in
reasonable detail and certified by a Responsible Officer of the Company as
fairly presenting the financial condition, results of operations, and cash flows
of the Company and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes.
(c) promptly upon receipt thereof, copies of all reports submitted
to the Company or any of its Subsidiaries by its independent certified public
accountants in connection with each annual, interim or special audit examination
of the Company or any of its Subsidiaries made by such accountants, including
the "management letter" submitted by such accountants to the Company or any of
its Subsidiaries in connection with their annual audit; and
(d) as soon as available and in any event not less than 30 days
prior to the start of each fiscal year, a consolidated financial forecast for
the Company and its Subsidiaries for the following fiscal year, including
forecasted consolidated balance sheets, consolidated statements of income,
shareholders' equity and cash flows of the Company and its Subsidiaries, which
forecast shall (A) state the assumptions used in the preparation thereof, (B)
contain such other information as reasonably requested by any Note Holder and
(C) be in form reasonably satisfactory to the Required Note Holders.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to
each Note Holder:
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(a) as soon as available, but in any event not later than 15 days
after the delivery of the financial statements referred to in Section 6.01(a)
and (b) above, a Compliance Certificate, signed by a Responsible Officer;
(b) copies of each registration statement (or prospectus contained
therein) of the Company other than with respect to employee benefit plans, each
periodic report regarding the Company required pursuant to Section 13 of the
Exchange Act, each annual report, each proxy statement and any amendments to any
of the above filed or reported by the Company with or to any securities exchange
or the SEC, copies of each communication from the Company or any Subsidiary to
the Company's shareholders generally, promptly upon the filing or making thereof
and copies of such other filings, reports and communications with the Company's
shareholders as the Note Holders may from time to time request;
(c) upon release, copies of all financially material press
releases by the Company or any Material Subsidiary;
(d) promptly after the creation or Acquisition of any Material
Subsidiary, the name of such Subsidiary, a description of its business, the
price paid for the stock or assets of such Subsidiary, its net worth and the
value of its assets;
(e) promptly after the execution and filing thereof, copies of all
patent, trademark and copyright filing certificates of the Company and any
Subsidiary as required more fully under the Security Agreements; and
(f) promptly, such additional business, financial, corporate
affairs and other information as any Note Holder, may from time to time
reasonably request.
Reports required to be delivered pursuant to Sections 6.01 or 6.02(b)
shall be deemed to have been delivered on the date on which Company posts such
reports on the Company's website on the Internet at the website address listed
on Schedule 10.02 hereof or when such report is posted on the Securities and
Exchange Commission's website at xxx.xxx.xxx.; provided that (x) Company shall
deliver paper copies of such reports to any Note Holder who requests the Company
to deliver such paper copies until written request to cease delivering paper
copies is given by such Note Holder, (y) the Company shall notify by facsimile
each Note Holder of the posting of any such reports, and (z) in every instance
the Company shall provide paper copies of the Compliance Certificates required
by Section 6.02(a) to each of the Note Holders.
6.03 NOTICES. The Company shall promptly notify the Note Holders
upon a Responsible Officer of the Company obtaining knowledge:
(a) of the occurrence of any Default or Event of Default and,
until the Spin-Off Consummation Date, the occurrence of any "Default" or "Event
of Default" under and as defined in the New Ceridian Credit Agreement;
(b) of (i) any breach or non-performance of, or any default under,
any Contractual Obligation of the Company or any of its Subsidiaries which would
reasonably be expected to result in a Material Adverse Effect; and (ii) any
dispute, litigation, investigation, proceeding or
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suspension by an Governmental Authority that may exist or come to exist at any
time in which the Company or any of its Subsidiaries is a party which would
reasonably be expected to result in a Material Adverse Effect (and assuming for
this purpose the reasonable likelihood of an adverse decision);
(c) of the commencement of, or any material development in, any
litigation or proceeding affecting the Company or any Subsidiary which would
reasonably be expected to: (i) have a Material Adverse Effect (and taking into
account the reasonable likelihood of an adverse decision), (ii) if adversely
resolved against such Person, result in the imposition of an injunction or other
stay of the performance of this Agreement or any Note Document or the
consummation of the Spin-Off Transaction, or (iii) involve an aggregate
liability of $1,000,000 (or its equivalent in another currency) or more;
(d) of (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions affecting the Company or any of its
Subsidiaries or any of their respective properties pursuant to any applicable
Environmental Laws, (ii) all other Environmental Claims, and (iii) any
environmental or similar condition on any real property adjoining or in the
vicinity of the property of the Company or any Subsidiary that could reasonably
be anticipated to cause the property of the Company or any of its Subsidiaries
or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any Environmental Laws,
if, individually or in the aggregate, the events or conditions described or the
amount claimed in clauses (i), (ii) and (iii) would reasonably be expected to
result in a Material Adverse Effect;
(e) of the occurrence of any ERISA Event affecting the Company or
any ERISA Affiliate, and deliver to each Note Holder a copy of any notice with
respect to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event;
(f) of any Material Adverse Effect subsequent to the date of the
most recent audited financial statements of the Company delivered to the Note
Holders pursuant to Section 6.01(a);
(g) of any labor controversy resulting in or threatening to result
in any strike, work stoppage, boycott, shutdown or other labor disruption
against or involving the Company or any of its Subsidiaries;
(h) of the creation, purchase, or acquisition of any Subsidiary
(including its jurisdiction of incorporation);
(i) of: (i) any Subsidiary being or becoming a Material
Subsidiary, and (ii) of any Material Subsidiary ceasing to be a Material
Subsidiary;
(j) of the occurrence of the Separation Date and the Spin-Off
Consummation Date;
(k) of (i) the exercise or termination of any option under the
Xxxxxxx XX Option Agreement, (ii) the formation of the Xxxxxxx XX, (iii) any
decision by the Company not to commercially deploy the PPM Technology, and (iv)
the occurrence of any material breach or
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default under the terms of the Xxxxxxx XX Option Agreement or the Scarborough
Partnership Agreement;
(l) of any material breach or default under, or any material
waiver or consent granted pursuant to, any Spin-Off Document;
(m) of the occurrence of any Event of Loss or Disposition with
respect to any assets of the Company or any Material Subsidiary (other than New
Ceridian), where the fair value of the assets exceed on an aggregate basis, for
each such occurrence, $250,000; and
(n) of the occurrence of any "Default" or "Event of Default" (or
comparable term) under, and as defined in, the Note Documents.
Each notice pursuant to this Section 6.03 shall be accompanied by a
certificate by a Responsible Officer of the Company setting forth details of the
occurrence referred to therein, and stating what action, if any, the Company
proposes to take with respect thereto and at what time. Each notice under this
Section 6.03 shall describe with particularity any and all clauses or provisions
of this Agreement or other Note Document that have been breached or violated.
6.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall,
and shall cause each of its Subsidiaries to:
(a) except as permitted in Section 7.02, preserve and maintain in
full force and effect its corporate existence and good standing under the laws
of its state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all material
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by Sections 7.02 and 7.04;
(c) use its reasonable efforts, in the Ordinary Course of
Business, to preserve its business organization and preserve the goodwill and
business of the customers, suppliers and others having material business
relations with it; and
(d) preserve or renew all of its registered trademarks, trade
names and service marks, the non-preservation of which would reasonably be
expected to have a Material Adverse Effect, provided, however, that the Company
shall not be deemed to be in default under this Section 6.04 if a Subsidiary
(other than a Material Subsidiary) fails to comply herewith so long as such
failure is not material.
On or before the Spin-Off Consummation Date, the Company shall file
with appropriate Governmental Authorities all necessary filings in order to
change its name to "Arbitron Inc."
6.05 MAINTENANCE OF PROPERTY. The Company shall, and shall cause
each of its Subsidiaries, to maintain and preserve all its property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted, make all necessary repairs thereto and renewals and
replacements thereof, except as permitted by Section 7.04, and to keep
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such property free of any Hazardous Materials. The Company shall use at least
the standard of care typical in the industry in the operation of its facilities.
6.06 INSURANCE. The Company shall, and shall cause each of its
Material Subsidiaries to, maintain with financially sound and reputable
independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons;
including workers' compensation insurance, public liability and property and
casualty insurance. All such policies, to the extent consisting of comprehensive
general liability or property or casualty policies, shall name the
Administrative Agent as loss payee/mortgagee and as additional insured, for the
benefit of the Note Holders, as their interests may appear. Upon request of or
any Note Holder, the Company shall furnish each Note Holder, at reasonable
intervals (but not more than once per calendar year) a certificate of a
Responsible Officer of the Company (and, if requested by any Note Holder, any
insurance broker of the Company) setting forth the nature and extent of all
insurance maintained by the Company and its Material Subsidiaries in accordance
with this Section 6.06 (and which, in the case of a certificate of a broker,
were placed through such broker).
6.07 PAYMENT OF OBLIGATIONS.
(a) The Company shall, and shall cause its Subsidiaries to, pay
and discharge as the same shall become due and payable, all their respective
obligations and liabilities, including:
(i) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same
are being contested in good faith by appropriate proceedings and
adequate reserves in accordance with GAAP are being maintained by the
Company or such Subsidiary;
(ii) all lawful claims which, if unpaid, would by law become
a Lien upon its property; and
(iii) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness;
provided, however, that the Company and its Subsidiaries shall not be deemed to
be in default under this Section 6.07 if failure to comply herewith would not
result in a Material Adverse Effect.
(b) The Company shall use commercially reasonable efforts to
cause, on or prior to the Spin-Off Consummation Date or as soon as practicable
thereafter, the Company and all Arbitron Subsidiaries to be released as
guarantors of or obligors for any liability described in Schedule 5.10 and
allocated to New Ceridian pursuant to the Distribution Agreement between the
Company and New Ceridian dated on or before the Separation Date.
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6.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall
cause each of its Subsidiaries to comply, in all material respects with all
material Laws applicable to it or its business (including the Federal Fair Labor
Standards Act), except such as may be contested in good faith or as to which a
bona fide dispute may exist.
6.09 ERISA COMPLIANCE. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Pension Plan in compliance with
ERISA, the Code and other applicable Laws; (b) cause each Pension Plan that is
qualified under Section 401(a) of the Code to maintain such qualification; and
(c) make all required contributions to any Pension Plan subject to Section 412
of the Code.
6.10 INTEREST RATE PROTECTION. Within 90 days of the Closing Date,
the Company shall enter into and maintain in effect one or more Specified Swap
Contracts providing protection against fluctuations in interest rates with
respect to at least 50% of the difference between the Outstanding Amount under
the New Credit Facility from time to time, and the aggregate outstanding amount
of the Notes from time to time; on such terms and with such financial
institutions as shall be satisfactory to the Required Note Holders.
6.11 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company
shall maintain and shall cause each of its Material Subsidiaries to maintain
proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Company and
such Subsidiaries. The Company shall permit, and shall cause each of its
Material Subsidiaries to permit, representatives and independent contractors of
any Note Holder to visit and inspect any of their respective properties, to
examine their respective corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public
accountants at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to the Company;
provided, however, when a Default exists, (i) any Note Holder may do any of the
foregoing with respect to the Company or any Subsidiary at any time during
normal business hours and without advance notice and (ii) such inspection,
examination and meetings shall be at the Company's expense.
6.12 ENVIRONMENTAL LAWS.
(a) The Company shall, and shall cause each of its Subsidiaries
to, conduct its operations and keep and maintain its property in compliance in
all material respects with all Environmental Laws.
(b) Upon the written request of any Note Holder, the Company shall
submit to the Note Holder, at the Company's sole cost and expense, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to Section 6.03(d).
6.13 USE OF PROCEEDS. The Company may use the proceeds of the sale
of the Notes (a) to provide all or a portion of the funds necessary to repay in
full all of the Indebtedness of the Company that is outstanding as of the
Closing Date, to the extent otherwise permitted or required
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hereunder, and to replace any letters of credit outstanding under the Existing
Credit Facility, (b) to the extent otherwise permitted or required hereunder, to
repurchase or redeem securities of the Company, and (c) for working capital and
other general corporate purposes (including Permitted Acquisitions).
6.14 ADDITIONAL GUARANTORS. If any Arbitron Subsidiary, other than
a Foreign Subsidiary, shall at any time become a Material Subsidiary, or if the
Company or any Subsidiary otherwise shall incorporate, create or acquire any
Material Subsidiary, other than a Foreign Subsidiary, the Company shall cause
such Material Subsidiary to furnish promptly, but in no event more than 30 days
thereafter, each of the following to the Administrative Agent, in sufficient
quantities for each Note Holder:
(a) if such Subsidiary is the first such Subsidiary, a duly
executed Subsidiary Guaranty and for each such succeeding Subsidiary, a duly
executed notice and agreement in substantially the form of Exhibit M (an
"Additional Guarantor Assumption Agreement");
(b) a duly executed Subsidiary Security Agreement, in
substantially the form of Exhibit G, together with such other Collateral
Documents as the Administrative Agent or any Note Holder may request; and
(c) (i) copies of the resolutions of the board of directors (or
equivalent governing body) of such Subsidiary approving and authorizing the
execution, delivery and performance by such Subsidiary of its Subsidiary
Guaranty or Additional Guarantor Assumption Agreement, its Subsidiary Security
Agreement, this Agreement, and the other Note Documents, including all
Collateral Documents to which it is a party), certified as of the effective date
of such Additional Guarantor Assumption Agreement and Subsidiary Security
Agreement by the Secretary or an Assistant Secretary (or other appropriate
officer) of such Subsidiary; (ii) a certificate of the Secretary or Assistant
Secretary (or other appropriate officer) of such Subsidiary certifying the names
and true signatures of the officers of such Subsidiary authorized to execute and
deliver and perform, as applicable, its Additional Guarantor Assumption
Agreement, its Subsidiary Security Agreement, this Agreement and all other Note
Documents and Collateral Documents to be delivered hereunder; (iii) copies of
the articles or certificate of incorporation and bylaws (or other applicable
Organization Documents) of such Subsidiary as in effect on the effective date of
such Additional Guarantor Assumption Agreement and Subsidiary Security
Agreement, certified by the Secretary or Assistant Secretary (or other
appropriate officer) of such Subsidiary as of such date; and (iv) an opinion of
counsel to such Subsidiary and addressed to the Administrative Agent and the
Note Holders, satisfactory to the Required Note Holders and addressing the
matters set forth in Exhibit N
6.15 ADDITIONAL SUBSIDIARIES.
(a) If the Company directly or indirectly incorporates, creates or
acquires any additional Subsidiary, then within 10 days thereafter, the Company
(for the benefit of the Note Holders) shall (i) (A) pledge the capital stock of
such additional Subsidiary to the Note Holders (or the Collateral Agent on their
behalf) pursuant to the Company Pledge Agreement, if such stock is directly
owned by the Company, or (B) if such stock is owned by a Subsidiary, cause such
Subsidiary to pledge the capital stock of such additional Subsidiary to the Note
Holders (or
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the Collateral Agent on their behalf) pursuant to a Subsidiary Pledge Agreement,
(ii) execute and deliver, or cause such Subsidiary to have executed and
delivered, to the Note Holders (or their bailee) (or the Collateral Agent on
their behalf) stock transfer powers executed in blank with signatures guaranteed
as any Note Holder shall request, such Subsidiary Security Agreements and UCC-1
financing statements (as furnished by the Note Holders) for filing in each
jurisdiction in which such filing is necessary to establish and perfect the
first priority security interest of the Collateral Agent for the benefit of the
Note Holders (subject to the terms of the Intercreditor Agreement) in the
Collateral with respect to the Company or such Subsidiary, and (iii) deliver
such other items as reasonably requested by the Required Note Holders in
connection with the foregoing, including resolutions, incumbency and officers'
certificates, opinions of counsel, search reports and other certificates and
documents; provided, however, that if any additional Subsidiary so incorporated,
created or acquired is a Foreign Subsidiary, in no event shall more than 65% of
the capital stock of any such Foreign Subsidiary be required to be so pledged.
(b) If the combined EBITDA of all Arbitron Subsidiaries that are
not Material Subsidiaries is greater than or equal to 10% of Consolidated
EBITDA, based on the Company's quarterly financial statements for the most
recent calendar quarter delivered to the Note Holders pursuant to Section 6.01,
the Company shall designate one or more such Subsidiaries as a Material
Subsidiary, such that after giving effect to all such designations the combined
EBITDA of all remaining Arbitron Subsidiaries that are not Material Subsidiaries
is less than 10% of Consolidated EBITDA. Within 10 days of the date of any such
designation, the Company and any Subsidiary designated as a Material Subsidiary
shall take all actions required under Section 6.14.
(c) Following the delivery of Company's quarterly financial
statements pursuant to Section 6.01, the Company may de-designate any Subsidiary
previously designated as a Material Subsidiary under subsection (b) of this
Section 6.15 so that such Subsidiary shall no longer be treated as a Material
Subsidiary, effective as of the date on which such de-designation is made,
provided that: (i) such Subsidiary is not independently a Material Subsidiary
under subsection (a) of the definition thereof and (ii) after giving effect to
such de-designation the combined EBITDA of all Subsidiaries that are not
Material Subsidiaries (including the EBITDA of the Subsidiary that has been
de-designated) shall be less than 10% of Consolidated EBITDA. Notwithstanding
any such de-designation, all Collateral Documents and Subsidiary Guaranties
executed by each such Subsidiary pursuant to Section 6.14 shall continue in full
force and effect according to their respective terms, and subject to the terms
of the Intercreditor Agreement.
6.16 ADDITIONAL INTELLECTUAL PROPERTY. The Company and each
Arbitron Subsidiary shall execute such Supplemental IP Security Agreements and
shall undertake such other filings, recordations, registrations and actions from
time to time with respect to Intellectual Property created, purchased or
otherwise acquired by the Company or such Subsidiary after the Effectiveness
Date, as more fully set forth in the Company Security Agreement and Subsidiary
Security Agreement or as reasonably requested by the Required Note Holders.
6.17 LICENSES. The Company shall, and shall cause each of its
Subsidiaries to, obtain and maintain all material licenses, authorizations,
consents, filings, exemptions, registrations and other governmental approvals
necessary in connection with the execution, delivery and
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performance of the Note Documents, the consummation of the transactions therein
contemplated or the operation and conduct of its business and ownership of their
properties.
6.18 FURTHER ASSURANCES.
(a) The Company shall ensure that all written information,
exhibits and reports furnished to the Note Holders do not and will not contain
any untrue statement of a material fact and do not and will not omit to state
any material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Note Holders and correct any defect or error that may be
discovered therein or in any Note Document or in the execution, acknowledgment
or recordation thereof.
(b) Promptly upon request by the Required Note Holders, the
Company shall (and shall cause any of its Subsidiaries to) do, execute,
acknowledge and deliver any and all such further acts, certificates, security
agreements, assignments, estoppel certificates, financing statements, and
continuations or amendments thereof, termination statements, notices of
assignment, transfers, assurances and other instruments as the Required Note
Holders, as the case may be, may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement or any other
Note Document, (ii) to subject to the Liens created by any of the Collateral
Documents any of the properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Note Holders the rights granted or now or
hereafter intended to be granted to the Note Holders under any Note Document or
under any other document executed in connection therewith.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any of the
Notes shall remain outstanding, or any other Obligation shall remain unpaid or
unsatisfied, unless the Required Note Holders waive compliance in writing:
7.01 LIMITATION ON LIENS. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property (including Intellectual Property, Proprietary Information
and accounts and notes receivable, with or without recourse), whether now owned
or hereafter acquired, other than the following ("Permitted Liens"):
(a) any Lien created under any Note Document;
(b) (i) Liens existing on the Closing Date and listed on Schedule
7.01 and any renewals or extensions thereof, provided that the property covered
thereby is not increased and any renewal or extension of the obligations secured
or benefited thereby is permitted by Section 7.03(a)(iii); and (ii) at any time
prior to the Spin-Off Consummation Date, Liens on New
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Ceridian Assets that would, if such assets were at such time owned or held by
New Ceridian, constitute "Permitted Liens" under and as defined in the New
Ceridian Credit Agreement.
(c) Liens for taxes, fees, assessments or other governmental
charges or statutory obligations which are not delinquent or remain payable
without penalty, or to the extent that non-payment thereof is permitted by
Section 6.07, provided that no Notice of Lien has been filed or recorded under
the Code;
(d) Liens arising in the Ordinary Course of Business in connection
with obligations (other than obligations for borrowed money) that are not
overdue or which are being contested in good faith and by appropriate
proceedings, including, but not limited to Liens under bid, performance and
other surety bonds, supersedeas and appeal bonds, Liens on advance or progress
payments received from customers under contracts for the sale, lease or license
of goods, software, services or real estate and upon the products being sold or
licensed, in each case securing performance of the underlying contract or the
repayment of such advances in the event final acceptance of performance under
such contracts does not occur; and Liens upon funds collected temporarily from
others pending payment or remittance on their behalf; provided that the
aggregate value of all collateral pledged by the Company together with its
Subsidiaries to secure Liens arising under this subsection and subsection (e) of
this Section do not exceed on an aggregate, consolidated basis at any time
outstanding the amount of $2,500,000;
(e) Liens (other than any Lien imposed by ERISA) required in the
Ordinary Course of Business in connection with workers' compensation,
unemployment insurance and other social security legislation; provided that the
aggregate value of all collateral pledged by the Company together with its
Subsidiaries to secure Liens arising under this subsection and subsection (d) of
this Section do not exceed on an aggregate, consolidated basis at any time
outstanding the amount of $2,500,000;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the Ordinary Course of Business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(g) purchase money security interests on any property acquired or
held by the Company or its Subsidiaries in the Ordinary Course of Business
securing Indebtedness incurred or assumed for the purpose of financing all or
any part of the cost of acquiring such property to the extent permitted under
Section 7.03; provided, however, that (i) any such Lien attaches to such
property concurrently with or within 20 days after the acquisition thereof, (ii)
such Lien attaches solely to the property so acquired in such transaction, and
(iii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such property;
(h) Liens securing the property of any Person that is acquired by
the Company or any of its Subsidiaries after the Effectiveness Date; provided
that (a) such Liens existed prior to the date of such acquisition and were not
created in contemplation thereof or for purposes of circumventing this
Agreement;
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(i) Liens consisting of pledges of cash collateral or government
securities to secure on a xxxx-to-market basis Permitted Swap Contracts,
provided that the aggregate value of such collateral so pledged by the Company
and all Subsidiaries in favor of all counterparties thereunder does not at any
time exceed $1,000,000;
(j) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided, however, that (i) such deposit account is not
a dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (ii) such deposit account is not intended by the
Company or any of its Subsidiaries to provide collateral to the depository
institution; and
(k) Liens existing pursuant to the Note Documents or pursuant to
collateral documents securing any Specified Swap Contract, and in each case,
subject to the Intercreditor Agreement.
7.02 MERGERS AND CONSOLIDATIONS.
(a) The Company shall not, and shall not permit any of its
Arbitron Subsidiaries to, merge, consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one or a series of transactions) all
or substantially all of its assets (whether now owned or hereafter acquired) to
or in favor of any Person, except as provided in subsection (b) of this Section.
(b) Section 7.02(a) shall not prohibit:
(i) Permitted Acquisitions;
(ii) the merger or consolidation of any Subsidiary (except
New Ceridian) into the Company, or with or into any other Subsidiary,
provided that if any such transaction is between a Subsidiary and a
Wholly Owned Subsidiary, the Wholly Owned Subsidiary is the continuing
or surviving corporation; and
(iii) dispositions of assets pursuant to a dissolution or
liquidation otherwise permitted under this Agreement of a Subsidiary;
(iv) the sale or other disposition of all or substantially
all of the assets of a Subsidiary of the Company to the Company or to a
Wholly-Owned Subsidiary of the Company; or
(v) the mergers, consolidations or transfers of assets
listed on Schedule 7.02(b) attached hereto.
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7.03 INDEBTEDNESS.
(a) Company and Subsidiaries. The Company shall not, and shall not
permit any Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than the following (collectively referred to herein as
"Permitted Indebtedness"):
(i) the Obligations;
(ii) Indebtedness arising from taxes, fees, assessments or
other governmental charges or statutory obligations which are not
delinquent or remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 6.07;
(iii) (A) Initial Permitted Indebtedness of the Company or
any Subsidiary of the Company existing on the Closing Date or
extensions, renewals and refinancings of such Indebtedness, provided
that the principal amount of such Indebtedness being extended, renewed
or refinanced does not increase; and (B) at all times prior to the
Spin-Off Consummation Date, Indebtedness constituting "Initial
Permitted Indebtedness" under and as defined in the New Ceridian Credit
Agreement;
(iv) accounts payable of the Company or its Subsidiaries to
trade creditors for goods and services and current operating
liabilities (not the result of the borrowing of money) incurred in the
Ordinary Course of Business in accordance with customary terms and paid
within the specified time, unless contested in good faith by
appropriate proceedings and reserved for in accordance with GAAP;
(v) obligations in respect of Permitted Swap Contracts;
(vi) Indebtedness of the Company or any Subsidiary of the
Company secured by Permitted Liens of the type referred to in Section
7.01(g), in a principal amount (including imputed principal for Capital
Leases) not to exceed $5,000,000, in the aggregate for the Company and
all Subsidiaries of the Company, at any time outstanding;
(vii) Indebtedness not secured by any Lien, in an outstanding
principal amount not to exceed, together with the principal amount of
Indebtedness outstanding at such time under clause (vi), $10,000,000 at
any time in the aggregate for the Company and all Subsidiaries;
(viii) unsecured Indebtedness not to exceed $14,000,000
incurred prior to December 31, 2001 in favor of the seller of certain
assets relating to a Person known as "Coventry", as partial
consideration for the Company's acquisition of such assets; provided
the sum of all payments (including principal, interest, fees and other
amounts) required to be made thereunder over the scheduled term thereof
does not exceed $16,000,000;
(ix) Indebtedness arising in connection with the Note
Documents (or any extensions, renewals, refinancings or replacements
thereof), provided that the aggregate outstanding principal amount of
such Indebtedness does not exceed at any time
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$225,000,000 (plus the amount of any Protective Advances (as defined in
the Intercreditor Agreement) made in accordance with the terms of the
Intercreditor Agreement);
(x) prior to the Closing Date, Indebtedness required to be
repaid on or before the Closing Date pursuant to Section 4.02(a)(v);
and
(xi) Indebtedness of Wholly-Owned Subsidiaries incurred
pursuant to transactions permitted under Section 7.06(f).
(b) Subsidiaries. The Company shall not permit any of its
Subsidiaries to incur, assume or suffer to exist any Indebtedness if the
aggregate principal amount of all Indebtedness of such Subsidiaries at any time
would exceed 10% of such Subsidiary's net worth.
7.04 DISPOSITION OF ASSETS.
(a) The Company shall not, and shall not permit any of its
Subsidiaries, to Dispose of any assets (including Intellectual Property,
Proprietary Information, accounts and rights to payment), whether now owned or
hereafter acquired, or enter into any agreement to make any Disposition of such
assets, except as permitted under subsection (b).
(b) Section 7.04(a) shall not apply to or restrict:
(i) (A) the Spin-Off Transaction; or (B) at any time prior
to the Spin-Off Consummation Date, Dispositions of New Ceridian Assets
that would be permitted under the New Ceridian Credit Agreement if such
assets were at such time assets of New Ceridian;
(ii) the sale of equipment to the extent that such equipment
is exchanged for credit against the purchase price of similar
replacement equipment, or the proceeds of such sale are reasonably
promptly, but in no event more than 30 days, applied to the purchase
price of such replacement equipment; provided, however, that: (A) the
replacement equipment has comparable value and is of the same type, and
used for the same purpose, as the equipment sold; (B) the Person
selling equipment under this subsection is the same Person that
purchases any replacement equipment; (C) any such sale is conducted at
arm's length and under commercially reasonable terms; and (D) to the
extent there exists more than $1,000,000 of Net Cash Proceeds from all
such equipment sold which have not yet been invested in replacement
equipment, such amount shall be promptly applied under Section 2.05(a);
(iii) the transfer of assets by the Company (A) to any of its
Material Subsidiaries if such transfer is a sale for fair market value
and the consideration received by the Company is cash; or (B) to any
Wholly-Owned Subsidiary;
(iv) Revocable Licenses in the Ordinary Course of Business
of Intellectual Property of the Company or its Subsidiaries to third
parties (other than Xxxxxxx XX) upon
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commercially reasonable terms and that do not, singly or in the
aggregate result in a Material Adverse Effect;
(v) (A) assignments and sales to a Permitted Xxxxxxx XX of
software used or usable for the compilation of data solely derived from
PPM Technology, and to the extent, but only to the extent, consistent
with the Xxxxxxx XX Option Agreement; and (B) Revocable, non-exclusive
licenses of software and other Intellectual Property to a Permitted
Xxxxxxx XX in the Ordinary Course of Business upon commercially
reasonable terms that do not, singly or in the aggregate, result in a
Material Adverse Effect;
(vi) the license by the Company of its PPM Technology,
solely for the purpose of audience measurement, to a Permitted Xxxxxxx
XX to the extent, but only to the extent, consistent with the Xxxxxxx
XX Option Agreement, and otherwise in form and substance satisfactory
to the Required Note Holders;
(vii) the non-transferable, exclusive U.S.-license by the
Company of its "Critical Band Encoding Technology" to Nielsen and the
license to a Permitted Xxxxxxx XX of encoding patents, to the extent,
but only to the extent, consistent with the Xxxxxxx XX Option
Agreement, and otherwise in form and substance reasonably satisfactory
to the Required Note Holders;
(viii) the Disposition of assets or stock of Ceridian Info
Tech (India) Private Limited and CSW Research Limited; provided that no
Intellectual Property or Proprietary Information is Disposed of as part
of any such Disposition, other than Intellectual Property and
Proprietary Information that is not materially related to the Arbitron
Business; and further provided that the total aggregate value of all
assets and stock transferred pursuant to this clause does not exceed
$3,500,000;
(ix) the transfer by any Subsidiary of the Company of assets
(upon voluntary liquidation or otherwise) to the Company or a Wholly
Owned Subsidiary of the Company that is a Material Subsidiary; and
(x) transfers by the Company or its Subsidiaries totaling
on a consolidated, aggregate basis for all such transfers in any fiscal
year an amount not in excess of $1,000,000; provided that (A) each such
transfer is otherwise permitted pursuant to the Note Documents, (B) the
consideration paid to the Company or its Subsidiaries in connection
with each such transfer is exclusively in the form of cash or Cash
Equivalents, (C) unused transfers permitted by this subsection (b)(x)
shall not accrue to the following year, and (D) after giving effect to
each such transfer there shall exist no Default or Event of Default.
7.05 CONTINGENT OBLIGATIONS. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Contingent Obligations, except:
(a) Contingent Obligations set forth in Schedule 5.10, or incurred
pursuant to any Note Document or any Specified Swap Contract;
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(b) Contingent Obligations arising in connection with supersedeas
or appeal bonds in respect of litigation to which the Company or any of its
Subsidiaries is a party or a real party in interest, in an amount for all such
obligations on an aggregate consolidated basis not to exceed $1,000,000 at any
time outstanding; provided that after giving effect to each such obligation
there shall exist no Default or Event of Default;
(c) endorsements for collection or deposit in the Ordinary Course
of Business;
(d) until the Spin-Off Consummation Date, (i) Contingent
Obligations incurred in connection with the guaranty, of near or even date
herewith, made by the Company in favor of the administrative agent under (and as
defined in) the New Ceridian Credit Agreement to guarantee the obligations of
New Ceridian under the New Ceridian Credit Agreement; and (ii) Contingent
Obligations not incurred pursuant to or in furtherance of the Arbitron Business;
(e) Contingent Obligations incurred pursuant to the Note
Documents;
(f) Contingent Obligations consisting of Guaranty Obligations of
(i) the Company in respect of Indebtedness of any Wholly-Owned Subsidiary or
(ii) any Subsidiary in respect of Indebtedness of the Company or any
Wholly-Owned Subsidiary; and
(g) other Contingent Obligations of the Company and its
Subsidiaries in an aggregate amount not in excess of $1,000,000 at any time
outstanding.
7.06 NOTES AND INVESTMENTS. The Company shall not, nor shall it
permit any of its Subsidiaries to, purchase, acquire, hold or maintain the
capital stock, assets (constituting a business unit), obligations or other
securities of or any interest in any Person, or otherwise extend any credit to,
make any Guaranty Obligation with respect to or make any additional investments
in any Person, other than:
(a) Investments listed on Schedule 7.06(b) and held by the Company
or any Subsidiary as of the Closing Date;
(b) Investments in the form of Cash Equivalents or investment
grade marketable securities;
(c) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sales of goods or services or franchising
activities in the Ordinary Course of Business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;
(d) Investments resulting in Permitted Acquisitions;
(e) advances to officers, directors and employees of the Company
and its Subsidiaries in an aggregate amount for all such advances by the Company
and its Subsidiaries not to exceed in the aggregate $1,000,000 at any time
outstanding, for travel, entertainment, relocation and analogous purposes
arising in the Ordinary Course of Business;
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(f) extensions of credit by the Company to any of its Wholly Owned
Subsidiaries or by any of its Wholly Owned Subsidiaries to another of its Wholly
Owned Subsidiaries or the Company, in each case in the Ordinary Course of
Business;
(g) Contingent Obligations permitted by Section 7.05;
(h) Investments permitted by Section 7.02;
(i) Investments resulting from Dispositions permitted under
Section 7.04(b) (iii), (vi), (vii) or (ix);
(j) Investments consisting of PPM Expenditures in an amount not to
exceed: (i) $5,000,000 for all such Investments in respect of all Nielsen JV's
on an aggregate basis in any fiscal year ending on or before December 31, 2005;
or (ii) $10,000,000 for all such Investments in respect of all Nielsen JV's in
any fiscal year ending after December 31, 2005.
(k) Investments existing or entered into prior to the Separation
Date to the extent constituting New Ceridian Assets; or
(l) additional Investments otherwise permitted hereunder in
Persons that are not, and will not be after giving effect to each such
Investment, a Subsidiary, in an amount not to exceed $3,500,000 in the aggregate
for all such Investments in any fiscal year; provided that this subsection shall
not permit Investments in either the Scarborough Partnership or any Xxxxxxx XX .
7.07 DIVIDENDS AND PAYMENTS.
(a) The Company shall not, and shall not suffer or permit any of
its Subsidiaries to, declare or make any dividend payment or other distribution
of assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock, or purchase, redeem, or otherwise
acquire for value any shares of its capital stock or any warrants, rights or
options to acquire such shares, now or hereafter outstanding, except that the
Company may:
(i) declare and make (A) the Distribution, or (B) dividend
payments or other distributions payable solely in shares of its common
stock (and, solely in respect of fractional shares, cash of a de
minimis amount);
(ii) purchase, redeem or otherwise acquire shares of its
common stock or warrants or options to acquire any such shares out of
proceeds received from the substantially concurrent issue of new shares
of its common stock, after taking into account (a) any prepayment made
under Section 2.05 of the Credit Agreement as a result of any reduction
in the Aggregate Commitments under Section 2.06(b)(iii) of the Credit
Agreement in relation to such issuance and (b) any prepayment made or
required to be made under the Note Documents in relation to such
issuance;
(iii) make payments in the Ordinary Course of Business in
connection with its Pension Plan or in connection with the employment,
termination or compensation of its employees, officers or directors;
and
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(iv) from and after that date on which the Company's 2002
year end financial statements are received by the Note Holders pursuant
to Section 6.01, declare or pay cash dividends to its stockholders out
of (and in an aggregate amount not exceeding) Aggregate Distributable
Income; provided, however, that immediately after giving effect to any
such proposed declaration or payment there exists no Default or Event
of Default.
(b) The Company shall not suffer or permit any Subsidiary of the
Company (other than New Ceridian) to grant or otherwise agree to or suffer to
exist any consensual restrictions on the ability of such Subsidiary to pay
dividends and make other distributions to the Company, or to pay any
Indebtedness owed to the Company or transfer properties and assets to the
Company.
(c) After the Spin-Off Consummation Date, the Subsidiaries may
declare and make dividend payments in the Ordinary Course of Business to the
Company and to Wholly Owned Subsidiaries (and, in the case of a dividend payment
by a non-Wholly Owned Subsidiary, to the Company and any Subsidiary and to each
other owner of capital stock of such Subsidiary on a pro rata basis based on
their relative ownership interests).
7.08 USE OF PROCEEDS. The Company shall not and shall not suffer or
permit any of its Subsidiaries to use any portion of the proceeds of the sale of
the Notes, directly or indirectly, in violation of Regulation T, U or X of the
Federal Reserve Board.
7.09 HOSTILE ACQUISITION. The Company shall not, and shall not
permit any of its Subsidiaries to, make any Acquisition unless: (a) the
Acquisition complies with applicable Laws, (b) the board of directors or
equivalent governing body of the Person to be so acquired provides written
consent or approval of such Acquisition prior to its commencement; and (c) such
Acquisition is otherwise permitted hereunder.
7.10 LEVERAGE RATIO. The Company shall not permit its Leverage
Ratio for any fiscal quarter, beginning with the fiscal quarter ended December
31, 2000, calculated as of the last date of such quarter, to exceed, for the
Test Period ending on such date (including Test Period fiscal quarters ending
prior to the Effectiveness Date, and using for this purpose the Form 10
Financial Statements and the Supplemental Financial Statements), the following
amounts:
------------------------------------------ ------------------------------------
FISCAL QUARTER ENDING: MAXIMUM LEVERAGE RATIO
------------------------------------------ ------------------------------------
December 31, 2000 through 3.75 to 1.00
September 30, 2001
------------------------------------------ ------------------------------------
December 31, 2001 through 3.25 to 1.00
September 30, 2002
------------------------------------------ ------------------------------------
December 31, 2002 through 3.00 to 1.00
September 30, 2003
------------------------------------------ ------------------------------------
December 31, 2003 and 2.75 to 1.00
thereafter
------------------------------------------ ------------------------------------
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7.11 FIXED CHARGE COVERAGE RATIO. The Company shall not permit as
of the last day of any fiscal quarter, beginning with the fiscal quarter ended
December 31, 2000: (a) the sum of (i) the Company's Consolidated EBITDA for the
Test Period ending on such day, less (ii) taxes actually paid in cash or Cash
Equivalents for the Test Period ending on such day, less (iii) capital
expenditures plus (without duplication) PPM Expenditures for the Test Period
ending on such day, (b) divided by the sum of (i) Consolidated Interest Expense
for the Test Period ending on such day plus (ii) the Current Portion of
Long-Term Debt as of such day; for the Company and its Subsidiaries on a
consolidated basis (including in respect of Test Period fiscal quarters ending
prior to the Effectiveness Date, and using for this purpose the Form 10
Financial Statements and the Supplemental Financial Statements), to be less than
the following amounts:
------------------------------------------ ------------------------------------
FISCAL QUARTER ENDING MINIMUM RATIO
------------------------------------------ ------------------------------------
December 31, 2000 through 2.00 to 1.00
September 30, 2001
------------------------------------------ ------------------------------------
December 31, 2001 through 2.25 to 1.00
September 30, 2002
------------------------------------------ ------------------------------------
December 31, 2002 through 2.50 to 1.00
September 30, 2003
------------------------------------------ ------------------------------------
December 31, 2003 and 2.75 to 1.00
thereafter
------------------------------------------ ------------------------------------
7.12 FOREIGN SUBSIDIARIES. The Company shall not, and shall not
suffer or permit any Subsidiary to, (a) make any Disposition of, or make any
Investment of, any of its property, business or assets (including Intellectual
Property, Proprietary Information, accounts and rights to payment), whether now
owned or hereafter acquired, to or in any Foreign Subsidiary, except
Dispositions or Investments that, individually or in the aggregate, (i) are
otherwise permitted hereunder and (ii) would not reasonably be expected to have
a Material Adverse Effect on the business, results of operation or financial
condition of the Company together with those of its Subsidiaries that are not
Foreign Subsidiaries, taken as a whole, or (b) make any Investment in, or any
Disposition to, Ceridian Info Tech (India) Private Limited in an aggregate
amount, for all such Investments and Dispositions in respect of the Company and
all Subsidiaries of the Company together from and after the Effectiveness Date,
in excess of $200,000.
7.13 CHANGE IN BUSINESS. The Company shall not, and shall not
permit any of its Subsidiaries to, (i) engage in any material line of business
substantially different from those lines of business carried on by the Company
and its Subsidiaries on the Closing Date; (ii) extend any material amount of
Indebtedness to or make any material equity Investment in any Person which
engages in one or more lines of business all of which are substantially
different from those lines of business carried on by the Company and its
Subsidiaries on the Effectiveness Date; or (iii) enter into any joint venture
which engages in a material line of business substantially different from those
lines of business carried on by the Company and its Subsidiaries on the
Effectiveness Date.
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7.14 ACCOUNTING CHANGES. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required or permitted by
GAAP, or change the fiscal year of the Company or of any of its consolidated
Subsidiaries.
7.15 CERTAIN CONTRACTS.
(a) The Company shall not permit any of its Arbitron Subsidiaries
(other than New Ceridian) to enter into any Contractual Obligation restricting
the ability of such Subsidiary to pay dividends or make Notes to the Company or
Arbitron Subsidiaries of the Company.
(b) The Company shall not, and shall not suffer or permit any of
its Subsidiaries to, enter into any amendment, restatement, extension,
supplement or other modification of the Note Documents if the effect of any such
action would be to render any of the conditions set forth in Section
4.01(a)(vii)(C) inaccurate or unsatisfied in any respect.
(c) Unless consented to by the Required Note Holders, the Company
shall not, and shall not suffer or permit any of its Subsidiaries to, enter into
any amendment, revision, supplement or modification to any of the Spin-Off
Documents after the Closing Date, other than (i) ministerial changes necessary
to address administrative issues, or (ii) changes necessary to address facial
ambiguities.
7.16 TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not suffer or permit any of
its Subsidiaries to, enter into any material transaction of any kind with any
Affiliate of the Company (other than a Subsidiary), or with the New Ceridian and
any of its Subsidiaries, other than arm's-length transactions with such Persons
that are otherwise permitted hereunder.
(b) The Company shall not suffer or permit any Xxxxxxx XX or the
Scarborough Partnership to Dispose of, or grant any Lien upon, Intellectual
Property or Proprietary Information licensed to either such Person by the
Company, provided, however, that the Scarborough Partnership may grant licenses
of such Intellectual Property (i) to the Company, and (ii) to third Persons in
the Ordinary Course of Business upon commercially reasonable terms, and provided
further that a Permitted Xxxxxxx XX may xxxxx licenses in such Intellectual
Property (A) to the Company, (B) to Nielsen to the extent, but only to the
extent, consistent with the Xxxxxxx XX Option Agreement, and otherwise in form
and substance satisfactory to the Required Note Holders and (C) which are
non-exclusive, non-transferable and Revocable to other Persons on commercially
reasonable terms in the Ordinary Course of Business and consistent with the
Xxxxxxx XX Option Agreement.
(c) Except as consented to in writing by the Required Note
Holders, the Company shall not make or permit any amendment, modification,
extension, renewal, restatement or assignment of the Xxxxxxx XX Option Agreement
or the Scarborough Partnership Agreement that would, directly or indirectly, (i)
increase the amount of cash contributions or payments required to be made by the
Company or any of its Subsidiaries to Nielsen, any Xxxxxxx XX, or he Scarborough
Partnership (ii) require the license or other Disposition of Intellectual
Property of
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the Company or its Subsidiaries other than the property previously contemplated
or alter the license or other transfer arrangements such that they involve
longer terms, or less consideration than previously contemplated or (iii)
include products, applications or markets other than as previously contemplated,
(iv) cause any such Xxxxxxx XX to no longer satisfy the requirements of a
Permitted Xxxxxxx XX, or (v) forseeably be detrimental to the Company or its
Subsidiaries or to the interests of the Note Holders.
7.17 CAPITAL EXPENDITURES. The Company shall not, nor shall it
permit any of its Subsidiaries to, make any expenditures for fixed or capital
assets of the Company or its Subsidiaries, including obligations under Capital
Leases, in excess of: (i) $5,000,000 in the aggregate for all such Persons, on a
consolidated basis, in any fiscal year ending on or before December 31, 2005, or
(ii) $10,000,000 in the aggregate for all such Persons, on a consolidated basis,
in any fiscal year ending after December 31, 2005 (not including, in any case,
equipment and real estate subject to a sale-leaseback transaction that is
consented to by the Required Note Holders and that is completed no later than 90
days after the date on which such property is sold by the Company or Subsidiary
pursuant to such sale-leaseback transaction); provided, however, that this
Section shall not restrict the incurrence of capital expenditures in respect of
New Ceridian Assets prior to the Spin-Off Consummation Date, provided that any
lease or other obligation (other than obligations in respect of trade payables
entered into in the Ordinary Course of Business on customary payment terms) of
the Company or any Arbitron Subsidiary related to such New Ceridian Assets shall
be released or terminated on or before the Spin-Off Consummation Date.
7.18 SALES AND LEASEBACKS. The Company shall not, nor shall it
permit any of its Subsidiaries to, become liable, directly or indirectly, with
respect to any lease, whether an operating lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which the Company or such Subsidiary has sold or transferred or is
to sell or transfer to any other Person, or (b) which the Company or such
Subsidiary intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by the Company or such
Subsidiary to any other Person in connection with such lease.
7.19 CERTAIN TAX MATTERS. The Company shall not, (a) during the two
year period following the Closing Date, cease to be engaged in the active trade
or business relied upon for purposes of satisfying the requirements of Section
355(b) of the Code and obtaining, and staying in conformity with, the IRS Ruling
Letter; or (b) during the applicable period provided by Section 355(e)(2)(B) of
the Code with respect to the Distribution, enter into any transaction or make
any change to its equity structure (including stock issuance, pursuant to the
exercise of options, option grants or otherwise, capital contributions or
acquisitions, but not including the Distribution) that may cause the
Distribution to be treated as part of a plan pursuant to which one or more
Persons acquire directly or indirectly capital stock of the Company representing
a "50 percent or greater interest" within the meaning of Section 355(e) of the
Code; provided that, in each case, the Company may take such actions if (i) the
Company obtains an private letter ruling from the IRS to the effect that such
actions should not result in the Distribution being taxable to New Ceridian or
its shareholders, or (ii) the Company delivers to the Note Holders an opinion of
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independent counsel addressed to the Note Holders to the same effect, provided,
that such opinion is reasonably acceptable in form and substance to the Required
Note Holders.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. The Company fails to pay (i) when and as required
to be paid herein, any amount of principal of, or the Make-Whole Amount in
respect of, any Note or (ii) within three days after the same becomes due, any
interest on any Note or (iii) within five days after the same becomes due, any
other amount payable hereunder or under any other Note Document; or
(b) Specific Covenants. The Company fails to perform or observe
any term, covenant, or agreement contained in Section 6.03(a), (b), (c), (d), or
(f), Section 6.09, Section 6.13 or in Article VII; or the Company fails to
perform or observe any term, covenant or agreement contained in Section 6.01 or
Section 6.02 or in Section 6.03 (other than subsections (a), (b), (c), (d) or
(f) thereof) and such failure continues unremedied for a period of 10 days; or
(c) Other Defaults. The Company fails to perform or observe any
other term or covenant contained in this Agreement or any other Note Document,
and such default continues unremedied for a period of 20 days; or
(d) Representations and Warranties. Any representation or warranty
made or deemed made by the Company or any other Note Party herein, in any other
Note Document, or in any document delivered in connection herewith or therewith
proves to have been incorrect in any material respect when made or deemed made;
or
(e) Cross-Default. (i) The Company or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guaranty
Obligation (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness or Guaranty Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guaranty Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be repurchased
or redeemed (automatically or otherwise) prior to its stated maturity, or such
Guaranty Obligation to become payable or cash collateral in respect thereof to
be demanded; or (ii) there occurs (A) under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (I) any event
of default under such Swap Contract as to which the Company or any Subsidiary is
the Defaulting
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Party (as defined in such Swap Contract) or (II) any Termination Event (as so
defined) under such Swap Contract as to which the Company or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Company or such Subsidiary as a result thereof is greater than
the Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Note Party, any of its
Subsidiaries, the Scarborough Partnership or the Xxxxxxx XX institutes or
consents to the institution of any proceeding under any Debtor Relief Law, or
makes an assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any part of its property is instituted without the
consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding; provided,
however, that it shall not be an Event of Default under this subsection (f) if
any Subsidiary of the Company to which this subsection applies does not have
annual revenues in excess of 1% of the consolidated revenues of the Company or
net worth which constitutes more than 5% of the Consolidated Net Worth of the
Company in the fiscal year immediately preceding the date this subsection first
becomes applicable to such Subsidiary; or
(g) Inability to Pay Debts; Attachment. (i) The Company or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; provided, however, that it shall
not be an Event of Default under this subsection (g) if any Subsidiary of the
Company to which this subsection applies does not have annual revenues in excess
of 1% of the consolidated revenues of the Company or net worth which constitutes
more than 5% of the Consolidated Net Worth of the Company in the fiscal year
immediately preceding the date this subsection first becomes applicable to such
Subsidiary; or
(h) Judgments. There is entered against the Company or any
Subsidiary (i) a final judgment, order or decree for the payment of money in an
aggregate amount exceeding $5,000,000 (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any non-monetary final judgment, order or decree that has, or would
reasonably be expected to have, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment,
order or decree, or (B) there shall be any period of 10 consecutive days during
which such judgment, order or decree continues unsatisfied and during which a
stay of enforcement of such judgment, order or decree, by reason of a pending
appeal or otherwise, shall not be in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or would reasonably be expected to
result in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount that would reasonably be
expected to result in a Material Adverse Effect, or (ii) the Company or any
ERISA Affiliate fails to pay when due, after the expiration of any
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applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount that would reasonably be expected to result in a Material Adverse Effect;
or
(j) Invalidity of Note Documents. Any Note Document, at any time
after its execution and delivery and for any reason other than the agreement of
all the Note Holders or satisfaction in full of all the Obligations, ceases to
be in full force and effect, or is declared by a court of competent jurisdiction
to be null and void, invalid or unenforceable in any material respect; or any
Note Party denies that it has any or further liability or obligation under any
Note Document, or purports to revoke, terminate or rescind any Note Document; or
(k) Invalidity of Spin-Off Documents. Any Spin-Off Document, at
any time after its execution and delivery and for any reason other than the
satisfaction in full of all the obligations therein, ceases to be in full force
and effect, or is declared by a court of competent jurisdiction to be null and
void, invalid or unenforceable in any respect; or any party thereto denies that
it has any or further liability or obligation under any Spin-Off Document, or
purports to revoke, terminate or rescind any Spin-Off Document; or
(l) Change of Control. There occurs any Change of Control; or
(m) Collateral.
(i) Any provision of any Collateral Document shall for any
reason cease to be valid and binding on or enforceable against the
Company or any Subsidiary party thereto, or the Company or any
Subsidiary shall so state in writing or bring an action to limit its
obligations or liabilities thereunder, or
(ii) any Collateral Document shall for any reason (other
than pursuant to the terms thereof) cease to create a valid security
interest in the Collateral purported to be covered thereby, or such
security interest shall for any reason cease to be a perfected and
first priority security interest subject only to Permitted Liens; or
(n) Guarantor Defaults. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in its Guaranty;
or any Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or any Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at subsections (f) or
(g) of this Section occurs with respect to any Guarantor; or
(o) Spin-Off Consummation. The Spin-Off Consummation Date does not
occur on or before the Spin-Off Deadline.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
occurs, the Required Note Holders may (or may direct the Note Holder
Representative to):
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(a) declare the unpaid principal amount of all outstanding Notes,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or thereunder or under any other Note Document to be immediately due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Company; and
(b) exercise all rights and remedies available to them or the Note
Holder Representative under the Note Documents or applicable law;
provided, however, that (x) upon the occurrence of any event specified in
subsection (a) of Section 8.01, any Note Holder may declare the unpaid principal
amount of all outstanding Notes held by such Note Holder, all interest accrued
and unpaid thereon, and all other amounts owing or payable to such Note Holder
hereunder or thereunder or under any other Note Document to be immediately due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Company and (y) upon the
occurrence of any event specified in subsection (f) of Section 8.01, the unpaid
principal amount of all outstanding Notes and all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or thereunder or under
any other Note Document shall automatically become due and payable without
further act of any Note Holder.
Upon any acceleration of the Notes or any Note pursuant to this Section
8.02 or otherwise, in addition to the unpaid principal amount of and accrued and
unpaid interest on such Notes or Note, to the extent permitted by law, as
liquidated damages and not as a penalty, the Make-Whole Amount, calculated as of
the date of such acceleration, shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Company.
8.03 RESCISSION OF ACCELERATION. Notwithstanding the provisions of
Section 8.02, at any time after the occurrence of any Event of Default and of
notice thereof, if any, by any Note Holder or Note Holders and before any
judgment, decree or order for payment of the money due has been obtained by or
on behalf of any Note Holder or Note Holders, the Required Note Holders by
written notice to the Company, may rescind and annul such Event of Default
and/or notice of such Event of Default and the consequences thereof with respect
to all of the Notes (excluding any Notes which were accelerated pursuant to
clause (x) of the proviso in Section 8.02 by any holder or holders on account of
an Event of Default of the character described in subsection (a) of Section
8.01) if:
(1) the Company has paid a sum sufficient to pay
(A) all overdue interest on all Notes at the rate
specified in the Notes;
(B) the principal of (and premium, if any, on) any
Notes which have become due otherwise than by such Event of
Default or notice thereof and interest thereon; and
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(C) interest on such overdue principal (and
premium, if any) and, to the extent that payment of such
interest is lawful, interest upon overdue interest; and
(2) all Defaults and Events of Default, other than the
non-payment of the principal of Notes which have become due solely by
such acceleration, have been cured or waived as provided in Section
10.01.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
ARTICLE IX
REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF NOTES
9.01 REGISTRATION, TRANSFER AND EXCHANGE OF NOTES. The Notes issued
hereunder shall be issued in registered form. The Company shall keep at its
principal executive office (which at Closing shall be located at the address set
forth in Schedule 10.02) a register in which the Company shall provide for the
registration and transfer of the Notes. The name and address of each Note Holder
shall be registered in such register. The Company shall give to any Note Holder
promptly (but in any event within 10 days) following request therefor, a
complete and correct copy of the names and addresses of all registered Note
Holders and the amount of Notes held by each. Subject to Section 9.03, whenever
any Note or Notes shall be surrendered for transfer or exchange, the Company, at
its expense, will execute and deliver in exchange therefor a new Note or Notes
(in such denominations and registered in such name or names as may be requested
by the holder of the surrendered Note or Notes), in the same aggregate unpaid
principal amount as that of the Note or Notes so surrendered and dated so as not
to result in any loss of interest. The Company may treat the Person in whose
name any Note is registered as the owner of such Note for all purposes.
9.02 REPLACEMENT OF NOTES. Upon receipt by the Company of
reasonably satisfactory evidence of the loss, theft, destruction or mutilation
of any Note and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnity, and (in the case of mutilation) upon surrender of such
Note, the Company, at its expense, will execute and deliver in lieu of such Note
a new Note of like tenor and dated so as not to result in any loss of interest.
An agreement to indemnify and/or affidavit from any institutional Note Holder
shall constitute satisfactory indemnity and/or satisfactory evidence of loss,
theft or destruction for the purpose of this Section 9.02.
9.03 TRANSFER OF NOTES.
(a) Upon the transfer of any Notes by any Note Holder or the
registration of any transferee, successor or assign of any Note Holder, such
transferee, successor or assign shall, by its acceptance of such Notes, be
deemed to have become a party to the Intercreditor Agreement and to have agreed
with each other party to the Intercreditor Agreement to be bound by the
applicable provisions thereof, and promptly following a request thereof by any
party to the
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Intercreditor Agreement, such transferee, successor or assign shall further
evidence the same by executing an Accession Agreement in a form substantially
identical to Exhibit O.
(b) In no event may any Notes be transferred by any Note Holder to
any Person other than a: (i) bank, (ii) financial institution, (iii) insurance
company, (iv) other institutional investor or (v) any entity for which any of
the foregoing acts as investment advisor or investment manager that, in each of
cases (i) through (v), has assets of greater than $75,000,000 (each, a
"Permitted Transferee") including any agent or trustee for, and any Person
formed by or on behalf of Permitted Transferee provided that if any agent or
trustee or any such Person so formed having assets of less than $75,000,000 is
the transferee, the Permitted Transferee shall guarantee the indemnification
obligations of the transferee under the Intercreditor Agreement.
(c) The Company shall not issue to any Person any Note (i) in a
denomination of less than $500,000, unless such Person is acquiring all of the
Notes held by any other Person, or (ii) if such issuance would result in there
being more than fifteen (15) Note Holders.
9.04 ERISA. Each of the Note Holders represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by such Note Holder to pay the purchase price of
the Notes to be purchased hereunder:
(a) the Source is an "insurance company general account" as
defined in Section V(e) of Prohibited Transaction Exemption ("PTE") 95-60
(issued July 12, 1995) and, except as disclosed to the Company in writing the
amount of reserves and liabilities for the general account contract(s) held by
or on behalf of any employee benefit plan or group of plans maintained by the
same employer (or an "affiliate" thereof as defined in Section V(a)(1) of PTE
95-60) or employee organization do not exceed 10% of the total reserves and
liabilities of the general account (exclusive of separate account liabilities)
plus surplus as set forth in the NAIC Annual Statement filed with the state of
domicile of the insurer; or
(b) the Source is a separate account of an insurance company
maintained by such Note Holder in which an employee benefit plan (or its related
trust) has an interest, which separate account is maintained solely in
connection with fixed contractual obligations under which the amounts payable,
or credited, to such plan and to any participant or beneficiary of such plan
(including any annuitant) are not affected in any manner by the investment
performance of the separate account; or
(c) the Source is either (A) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990) with respect
to which the insurance company satisfies the record maintenance requirements in
Section III(b) of PTE 90-1, or (B) a bank collective investment fund, within the
meaning of the PTE 91-38 (issued July 12, 1991) with respect to which the bank
satisfies the record maintenance requirements in Section III(b) of PTE 91-38
and, except as disclosed to the Company in writing, no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or
(d) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM"
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(within the meaning of Part V of the QPAM Exemption), no employee benefit plan's
assets that are included in such investment fund, when combined with the assets
of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and managed by
such QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest
in the Company and (A) the identity of such QPAM and (B) the names of all
employee benefit plans whose assets are included in such investment fund have
been disclosed to the Company in writing; or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing; or
(g) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 9.04, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA, and the term "QPAM
Exemption" means PTE 84-14 (issued March 13, 1984).
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Note Document, and no consent to any departure by
the Company or any other Note Party therefrom, shall be effective unless in
writing signed by the Required Note Holders and the Company or the applicable
Note Party, as the case may be, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such amendment, waiver or consent shall,
unless in writing and signed by each of the Note Holders directly affected
thereby and by the Company, do any of the following:
(a) amend Section 2.04 or 2.05;
(b) postpone any date fixed by this Agreement or any other Note
Document for any payment of principal, interest, fees or other amounts due to
the Note Holders (or any of them) hereunder or under any other Note Document;
(c) reduce the principal of, or the rate of interest specified
herein on, any Note or any other amounts payable hereunder or under any other
Note Document; provided, however, that only the consent of the Required Note
Holders shall be necessary to amend the definition of "Default Rate" or to waive
any obligation of the Company to pay interest at the Default Rate;
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(d) change the percentage of the aggregate unpaid principal amount
of Notes which is required for the Note Holders or any of them to take any
action hereunder;
(e) Reserved
(f) amend this Section, or any provision herein providing for
consent or other action by all the Note Holders;
(g) amend Section 4.01 or 4.02 or waive any condition precedent
specified therein (subject to the first proviso in the introductory clause to
Section 4.01); or
(h) discharge any Guarantor, or release all or substantially all
of the Collateral except as otherwise may be provided herein or in the
Collateral Documents.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission) and mailed, faxed or delivered, to the
address, facsimile number or (subject to subsection (c) below) electronic mail
address specified for notices on Schedule 10.02; or, to such other address as
shall be designated in a notice to the other parties. All such notices and other
communications shall be deemed to be given or made upon the earlier to occur of
(i) actual receipt by the intended recipient and (ii) (A) if delivered by hand
or by courier, when signed for by the intended recipient; (B) if delivered by
first class mail, four Business Days after deposit in the mails, postage
prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed
by telephone; and (D) if delivered by electronic mail (which form of delivery is
subject to the provisions of subsection (c) below), when delivered.
(b) Effectiveness of Facsimile Documents and Signatures. Note
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Note Parties and Note Holders. The Note Holders may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
provided, however, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and internet
and intranet websites may be used only to distribute routine communications,
such as financial statements and other information, and to distribute Note
Documents for execution by the parties thereto, and may not be used for any
other purpose.
(d) Reliance by Note Holders. The Note Holders shall be entitled
to rely and act upon any notices even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Company shall
indemnify each Note Holder - Related Person from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on
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behalf of the Company. All telephonic notices to and other communications with
any Note Holder may be recorded by such Note Holder and each of the parties
hereto hereby consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Note Holder
or the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein or therein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Company agrees (a) to
pay or reimburse the Note Holders and the Note Holder Representative for all
costs and expenses incurred in connection with the development, preparation,
negotiation and execution of this Agreement and the other Note Documents and any
amendment, waiver, consent or other modification of the provisions hereof and
thereof (whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse the Note Holders and the Note Holder Representative for all costs and
expenses incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Note
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses shall include all search, filing,
recording, title insurance and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Note Holders and the
Note Holder Representative and the cost of independent public accountants and
other outside experts retained by the Note Holders and the Note Holder
Representative. The agreements in this Section shall survive the repayment of
the Notes and all other Obligations. At the election of any Indemnitee, the
Company shall defend such Indemnitee using legal counsel satisfactory to such
Indemnitee in such Person's sole discretion, at the sole cost and expense of the
Company; provided, however, that the Company shall only be obligated to hire one
counsel to represent all of the Note Holders unless any Note Holder advises the
Company that its legal counsel has advised it that its interest is materially
different from that of the other Note Holders and it would not be adequately
represented without its own separate counsel, in which case the Company shall
hire separate counsel for such Note Holder, satisfactory to such Note Holder.
All amounts owing under this Section 10.04 shall be paid within 30 days after
demand.
10.05 INDEMNIFICATION BY THE COMPANY. Whether or not the
transactions contemplated hereby are consummated, the Company agrees to
indemnify, save and hold harmless each Note Holder - Related Person and their
respective Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against: (a) any and
all claims, demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than the Note Holders) relating directly or
indirectly to a claim, demand, action or cause of action that such Person
asserts or may assert against any Note Party,
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any Affiliate of any Note Party or any of their respective officers or
directors; (b) any and all claims, demands, actions or causes of action that may
at any time (including at any time following repayment of the Obligations) be
asserted or imposed against any Indemnitee, arising out of or relating to, the
Note Documents, any predecessor Note documents, the use or contemplated use of
the proceeds of the sale of the Notes, or the relationship of any Note Party,
and the Note Holders under this Agreement or any other Note Document; (c) any
administrative or investigative proceeding by any Governmental Authority arising
out of or related to a claim, demand, action or cause of action described in
subsection (a) or (b) above; and (d) any and all liabilities (including
liabilities under indemnities), losses, costs or expenses (including Attorney
Costs) that any Indemnitee suffers or incurs as a result of the assertion of any
foregoing claim, demand, action, cause of action or proceeding, or as a result
of the preparation of any defense in connection with any foregoing claim,
demand, action, cause of action or proceeding, in all cases, and whether or not
an Indemnitee is a party to such claim, demand, action, cause of action or
proceeding (all the foregoing, collectively, the "Indemnified Liabilities");
provided that no Indemnitee shall be entitled to indemnification for any claim
caused by its own gross negligence or willful misconduct or for any loss
asserted against it by another Indemnitee. The agreements in this Section shall
survive the repayment of the Notes and of all the other Obligations.
10.06 PAYMENTS SET ASIDE. To the extent that the Company makes a
payment to any Note Holder, or any Note Holder exercises its right of set-off,
and such payment or the proceeds of such set-off or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by such Note
Holder in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such set-off had not
occurred.
10.07 TRANSFEREES, SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective transferees, successors and assigns permitted hereby,
except that the Company may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Note Holder
(and any attempted assignment or transfer by the Company without such consent
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective transferees, successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
10.08 CONFIDENTIALITY. Each of the Note Holders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder;
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(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any transferee or prospective transferee of any Notes;
(g) with the consent of the Company; (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to any Note Holder on a nonconfidential basis from a
source other than the Company; (i) to the National Association of Insurance
Commissioners or any other similar organization or any nationally recognized
rating agency that requires access to information about a Note Holder's or its
Affiliates' investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates; or (j) to any Person from time to time party
(directly or through any agent or trustee) to the Intercreditor Agreement. For
the purposes of this Section, "Information" means all information received from
the Company relating to the Company or its business, other than any such
information that is available to any Note Holder on a nonconfidential basis
prior to disclosure by the Company; provided that, in the case of information
received from the Company after the date hereof, such information is clearly
identified in writing at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
10.09 SET-OFF. In addition to any rights and remedies of the Note
Holders provided by law, upon the occurrence and during the continuance of any
Event of Default, each Note Holder is authorized at any time and from time to
time, without prior notice to the Company or any other Note Party, any such
notice being waived by the Company (on its own behalf and on behalf of each Note
Party) to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Note Holder to or for
the credit or the account of the respective Note Parties against any and all
Obligations owing to such Note Holder, now or hereafter existing, irrespective
of whether or not such Note Holder shall have made demand under this Agreement
or any other Note Document and although such Obligations may be contingent or
unmatured. Each Note Holder agrees promptly to notify the Company after any such
set-off and application made by such Note Holder; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Note Document, the interest paid or agreed to be paid
under the Note Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If any Note Holder
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Notes or, if it exceeds such
unpaid principal, refunded to the Company. In determining whether the interest
contracted for, charged, or received by a Note Holder exceeds the Maximum Rate,
such Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations.
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10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 INTEGRATION. This Agreement, together with the other Note
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Note Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Note Holders in any other Note
Document shall not be deemed a conflict with this Agreement. Each Note Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Note Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Note
Holder, regardless of any investigation made by any Note Holder or on their
behalf and notwithstanding that any Note Holder may have had notice or knowledge
of any Default or Event of Default, and shall continue in full force and effect
as long as any Note shall remain unpaid or unsatisfied.
10.14 SEVERABILITY. Any provision of this Agreement and the other
Note Documents to which the Company is a party that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
10.15 NOTE HOLDERS.
(a) Each Note Holder that is a citizen or resident of the United
States or a United States corporation, partnership or trust ("a U.S. Note
Holder") shall deliver, upon request, to the Company, prior to receipt of any
payment made to such Person by the Company pursuant to this Agreement (or after
accepting an assignment of an interest herein), two duly signed completed copies
of IRS Form W-9 or any successor (providing such Person's taxpayer
identification number and certifying that such Person is not subject to backup
withholding) or such other evidence satisfactory to the Company that such Person
is entitled to an exemption from U.S. backup withholding tax.
(b) Each Note Holder that is a "non-resident alien individual" or
a "foreign corporation, partnership or trust" within the meaning of the Code (a
"Foreign Note Holder") shall deliver, upon request, to the Company, prior to
receipt of any payment made to such Person by the Company pursuant to this
Agreement (or after accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(establishing that such Person is a foreign person and, if applicable, entitling
it to an exemption
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from, or reduction of, withholding tax on all payments to be made to such Person
by the Company pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Company
pursuant to this Agreement and representing that the income with which that Form
is associated is not subject to withholding because it is effectively connected
with the conduct of a United States trade or business) or such other evidence
satisfactory to the Company that such Person is entitled to an exemption from,
or reduction of, U.S. withholding tax.
(c) Following the delivery of the form described in subsections
(a) and (b) of this Section 10.15 and from time to time, each such Person shall
(a) promptly submit to the Company such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Company of any available exemption from
or reduction of, United States withholding taxes in respect of all payments to
be made to such Person by the Company pursuant to this Agreement, (b) promptly
notify the Company of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (c) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Note
Holder, and as may be reasonably necessary to avoid any requirement of
applicable Laws that the Company make any deduction or withholding for taxes
from amounts payable to such Person. If such Person fails to deliver the above
forms or other documentation, then the Company may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by Section 3406 or Sections 1441 and 1442 of the Code, without
reduction. If any Governmental Authority asserts that the Company did not
properly withhold any tax or other amount from payments made in respect to such
Person, such Person shall indemnify the Company therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Company under this Section, and costs and expenses (including
Attorney Costs) of the Company. The obligation of the Note Holders under this
Section shall survive the payment of all Obligations.
10.16 RESERVED.
10.17 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT EACH NOTEHOLDER
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER NOTE DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE COMPANY AND EACH NOTE HOLDER CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE NON-EXCLUSIVE
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JURISDICTION OF THOSE COURTS. THE COMPANY AND EACH NOTE HOLDER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN THE JURISDICTION OF SUCH COURTS IN
RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE COMPANY AND
EACH NOTE HOLDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.
10.18 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY NOTE DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.19 PURCHASE FOR INVESTMENT. Each Note Holder represents and
warrants that (i) it will acquire the Notes to be issued to it pursuant hereto
for its own account for investment and not for distribution in any manner that
would violate applicable securities laws, but without prejudice to its rights to
dispose of such Notes or a portion thereof to a transferee or transferees, in
accordance with such laws if at some future time a Note Holder deems it
advisable to do so and (ii) it is an "accredited investor", as defined in
Regulation D of the SEC under the Securities Act. The acquisition of such Notes
at the Closing shall constitute the confirmation of the foregoing
representations and warranties. Each Note Holder understands that the Notes are
being sold to the Note Holders in a transaction which is exempt from the
registration requirements of the Securities Act, and that, in making the
representations and warranties contained in Section 5.30, the Company is
relying, to the extent applicable, upon the representations and warranties
contained herein.
[The remainder of this page is left blank intentionally.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CERIDIAN CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President of Finance
and Planning of Arbitron and Vice
President of Ceridian
XXXX XXXXXXX LIFE INSURANCE
COMPANY
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Managing Director
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
COMMONWEALTH OF
PENNSYLVANIA STATE EMPLOYES'
RETIREMENT SYSTEM
BY XXXX XXXXXXX LIFE INSURANCE
COMPANY, AS INVESTMENT ADVISOR
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Managing Director
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SIGNATURE 4 LIMITED
BY XXXX XXXXXXX LIFE INSURANCE
COMPANY, AS PORTFOLIO ADVISOR
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Managing Director
SIGNATURE 5 LIMITED
BY XXXX XXXXXXX LIFE INSURANCE
COMPANY, AS PORTFOLIO ADVISOR
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Managing Director
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SCHEDULE I
XXXX XXXXXXX LIFE INSURANCE COMPANY
1. All payments on account of the Notes or other obligations in accordance
with the provisions thereof shall be made by bank wire transfer of
immediately available funds for credit, not later than 12 noon, Boston time,
to:
BankBoston
ABA No. 000000000
Xxxxxx, Xxxxxxxxxxxxx 00000
Account of: Xxxx Xxxxxxx Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
January 31, 2008 (PPN 156779 A* 1)
2. Contemporaneous with the above wire transfer, advice setting forth:
(1) the full name, interest rate and maturity date of the Notes or
other obligations;
(2) allocation of payment between principal and interest and any special
payment; and
(3) name and address of Bank (or Trustee) from which wire transfer was sent
shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
3. All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or
faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company and: Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attention: Manager, Investment Attention: Investment Law Division, T-50
Accounting Division, B-3 Fax: (000) 000-0000
Fax: (000) 000-0000
4. All other communications which shall include, but not be limited to,
financial statements and certificates of compliance with financial
covenants, shall be delivered or faxed AND mailed to:
86
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Bond and Corporate Finance Group, T-57
Fax: (000) 000-0000
5. A copy of any notices relating to change in issuer's name, address or
principal place of business or location of collateral and a copy of any
legal opinions shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Investment Law Division, T-50
Fax: (000) 000-0000
6. All securities shall be registered in the name of: XXXX XXXXXXX LIFE
INSURANCE COMPANY
7. Tax I.D. No. 00-0000000
8. Securities to be Purchased: (a) $31,500,000 9.96% Senior Secured Note (No. R-1)
(b) $ 4,500,000 9.96% Senior Secured Note (No. R-2)
87
XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
1. All payments on account of the Notes or other obligations in
accordance with the provisions thereof shall be made by bank wire transfer
of immediately available funds for credit, not later than 12 noon, Boston
time, to:
BankBoston
ABA No. 000000000
Xxxxxx, Xxxxxxxxxxxxx 00000
Account of: Xxxx Xxxxxxx Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
January 31, 2008 (PPN 156779 A* 1)
2. Contemporaneous with the above wire transfer, advice setting forth:
(1) the full name, interest rate and maturity date of the Notes or other
obligations;
(2) allocation of payment between principal and interest and any special
payment; and
(3) name and address of Bank (or Trustee) from which wire transfer was
sent shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Variable Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Manager, Investment Accounting Division, B-3
Fax: (000) 000-0000
3. All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity shall
be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Variable Life Insurance Company and: Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attention: Manager, Investment Attention: Investment Law Division, T-50
Accounting Division, B-3 Fax: (000) 000-0000
Fax: (000) 000-0000
88
4. All other communications which shall include, but not be limited to,
financial statements and certificates of compliance with financial
covenants, shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Bond and Corporate Finance Group, T-57
Fax: (000) 000-0000
5. A copy of any notices relating to change in issuer's name, address
or principal place of business or location of collateral and a copy of
any legal opinions shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Investment Law Division, T-50
Fax: (000) 000-0000
6. All securities shall be registered in the name of: XXXX XXXXXXX
VARIABLE LIFE INSURANCE COMPANY
7. Tax I.D. No. 00-0000000
8. Securities to be Purchased: $2,000,000 9.96% Senior Secured
Note (No. R-3)
89
COMMONWEALTH OF PENNSYLVANIA
STATE EMPLOYES' RETIREMENT SYSTEM
1. All payments on account of the Notes or other obligations in accordance
with the provisions thereof shall be made by bank wire transfer of
immediately available funds for credit, not later than 11:30 a.m., Boston
time, to:
Federal Reserve Bank of Boston
A/C Boston Safe Deposit & Trust Company
ABA No. 000000000
DDA: 125261
Ref: CPZFFD01302
On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
January 31, 2008
(PPN 156779 A* 1)
2. Contemporaneous with the above wire transfer, advice setting forth
(1) the full name, interest rate and maturity date of the Notes or other
obligations;
(2) allocation of payment between principal and interest and any special
payment; and
(3) name and address of Bank (or Trustee) from which wire transfer was
sent, shall be delivered or faxed AND mailed to:
Mellon Bank, N.A.
Three Mellon Bank Center, Room 153-3610
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Principal & Interest Unit
Fax: 000-000-0000
3. All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or
faxed AND mailed to:
Mellon Bank, N.A.
Three Mellon Bank Center, Room 153-3610
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Principal & Interest Unit
Fax: 000-000-0000
4. All other communications shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
90
Attention: Xxxxx Xxxxx, Bond and Corporate Finance Group, T-57
Fax: 000-000-0000
5. A copy of any notices relating to change in issuer's name, address or
principal place of business or location of collateral and a copy of any
legal opinions shall be delivered or faxed AND mailed to
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Investment Law Division, T-50
Fax: 000-000-0000
6. Execution documents shall be executed as follows:
COMMONWEALTH OF PENNSYLVANIA
STATE EMPLOYES' RETIREMENT SYSTEM
By: Xxxx Xxxxxxx Life Insurance Company,
as Investment Advisor
By: Xxxxxx X. Xxxxx
Managing Director
7. All securities shall be registered in the name of SERS & CO.
8. Tax I.D. No. 00-0000000
9. Securities to be Purchased: $3,000,000 9.96% Senior Secured Note (No.
R-4)
91
SIGNATURE 4 LIMITED
1. All payments on account of the Notes or other obligations in accordance
with the provisions thereof shall be made by bank wire transfer of
immediately available funds for credit, not later than 12 noon, Boston
time, to:
HARE & CO.
c/o The Bank of New York
ABA No. 000-000-000
BNF: IOC566
On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
January 31, 2008
(PPN 156779 A* 1)
2. Contemporaneous with the above wire transfer, advice setting forth:
(1) the full name, interest rate and maturity date of the Notes or
other obligations;
(2) allocation of payment between principal and interest and any
special payment; and
(3) name and address of Bank (or Trustee) from which wire transfer was
sent shall be delivered or faxed AND mailed to:
Investors Bank & Trust Company and: HARE & CO.
000 Xxxxxxxxx Xxxxxx x/x Xxx Xxxx xx Xxx Xxxx
Xxxxxx, XX 00000 X.X. Xxx 00000
Xxxx: Xxxx XxXxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
3. All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or
faxed AND mailed to:
Investors Bank & Trust Company and: HARE & CO.
000 Xxxxxxxxx Xxxxxx x/x Xxx Xxxx xx Xxx Xxxx
Xxxxxx, XX 00000 X.X. Xxx 00000
Xxxx.: Xxxxxxx XxXxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
and:
Xxxx Xxxxxxx Life Insurance Company Xxxx Xxxxxxx Life Insurance
000 Xxxxxxxxx Xxxxxx Xxxxxxx
00
Xxxxxx, XX 00000 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx: Investment Law Division, T-50 Xxxxxx, XX 00000
Attention: Bond and Corporate
Fax: (000) 000-0000 Finance Group, T-57
Fax: (000) 000-0000
4. All other communications which shall include, but not be limited to,
financial statements and certificates of compliance with financial
covenants, shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Bond and Corporate Finance Group, T-57
Fax: (000)-000-0000
5. A copy of any notices relating to change in issuer's name, address or
principal place of business or location of collateral and a copy of any
legal opinions shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Investment Law Division, T-50
Fax: (000)-000-0000
6. Execution documents shall be executed as follows:
Signature 4 Limited
By: Xxxx Xxxxxxx Life Insurance Company,
as Portfolio Advisor
By: Xxxxxx X. Xxxxx
Managing Director
7. All securities shall be registered in the name of: HARE & CO.
8. Securities to be Purchased: $2,000,000 9.96% Senior Secured Note (No.
R-5)
93
SIGNATURE 5 L.P.
1. All payments on account of the Notes or other obligations in accordance
with the provisions thereof shall be made by bank wire transfer of
immediately available funds for credit, not later than 12 noon, Boston
time, to:
HARE & CO.
c/o The Bank of New York
ABA No. 000-000-000
BNF: IOC566
On Order of: Arbitron Corporation, 9.96% Senior Secured Notes due
January 31, 2008
(PPN 156779 A* 1)
2. Contemporaneous with the above wire transfer, advice setting forth:
(1) the full name, interest rate and maturity date of the Notes or
other obligations;
(2) allocation of payment between principal and interest and any
special payment; and
(3) name and address of Bank (or Trustee) from which wire transfer was
sent shall be delivered or faxed AND mailed to:
Investors Bank & Trust Company and: HARE & CO.
000 Xxxxxxxxx Xxxxxx x/x Xxx Xxxx xx Xxx Xxxx
Xxxxxx, XX 00000 X.X. Xxx 00000
Xxxx: Xxxx XxXxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
3. All notices with respect to prepayments, both scheduled and unscheduled,
whether partial or in full, and notice of maturity shall be delivered or
faxed AND mailed to:
Investors Bank & Trust Company and: HARE & CO.
000 Xxxxxxxxx Xxxxxx x/x Xxx Xxxx xx Xxx Xxxx
Xxxxxx, XX 00000 X.X. Xxx 00000
Xxxx.: Xxxxxxx XxXxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
and:
Xxxx Xxxxxxx Life Insurance Company and: Xxxx Xxxxxxx Life Insurance
000 Xxxxxxxxx Xxxxxx Xxxxxxx
00
Xxxxxx, XX 00000 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx: Investment Law Division, T-50 Xxxxxx, XX 00000
Attention: Bond and Corporate
Fax: (000) 000-0000 Finance Group, T-57
Fax: (000) 000-0000
4. All other communications which shall include, but not be limited to,
financial statements and certificates of compliance with financial
covenants, shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Bond and Corporate Finance Group, T-57
Fax: (000)-000-0000
5. A copy of any notices relating to change in issuer's name, address or
principal place of business or location of collateral and a copy of any
legal opinions shall be delivered or faxed AND mailed to:
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Investment Law Division, T-50
Fax: (000)-000-0000
6. Execution documents shall be executed as follows:
Signature 5 L.P.
By: Xxxx Xxxxxxx Life Insurance Company,
as Portfolio Advisor
By: Xxxxxx X. Xxxxx
Managing Director
7. All securities shall be registered in the name of: HARE & CO.
8. Securities to be Purchased: $7,000,000 9.96% Senior Secured Note (No.
R-6)
95
SCHEDULE 1.01(i)
INITIAL PERMITTED INDEBTEDNESS
1. Repayment obligations pursuant to the Letters of Credit described in
Schedule 1.01(e) under the New Credit Facility.
2. There are no existing capital leases.
3. Final payment in the amount of three million dollars ($3,000,000) to
Tapscan Inc. due on May 4, 2001 under the Asset Purchase Agreement dated
May 4, 1998.
96
SCHEDULE 1.01(s)
SPIN-OFF DOCUMENTS
1. The Form 10
2. Amended and Restated Certificate of Incorporation of the Company
3. Amended and Restated Bylaws of the Company
4. Distribution Agreement dated on or before the Separation Date between
the Company and New Ceridian (see Schedules below)
Schedule Description of Schedule
-------- ------------------------
1.1(o) Conveyancing and Assumption Instruments
1.1(g) Debt Realignment Plan
1.1(ff) List of Divested Business Entities Relating to Arbitron Business
1.1(gg) December 31, 1999 Media Information Balance Sheet
1.1 (ii)(iii) Government Contracts Exclusively Relating to Media Information Business
1.1 (ii)(iv) Lease Agreements Relating to Media Information Business
1.1(ll) List of Certain Liabilities to remain with the Corporation after Spin-Off
1.1(ll) A List of Certain Liabilities to be Assumed by New Ceridian
2.8(a) Guarantees where Corporation (Arbitron Inc.) is to be removed as a
Guarantor
2.8(b) Guarantees where New Ceridian is to be removed as a guarantor of a Media
Information Liability
7.3(b) Allocation of deductibles with respect to Shared Insurance Policies
7.3(e) Allocation of deductible for Workers' Compensation, General Liability and
Automotive Liability Claims
8.5 Allocation of Expenses
5. Personnel Agreement dated on or before the Separation Date between
Arbitron and New Ceridian
97
6. Tax Matters Agreement dated on or before the Separation Date between
Arbitron and New Ceridian
7. Transition Services Agreement dated on or before the Separation Date
between Arbitron and New Ceridian
8. Information Statement dated December 6, 2000 attached as Annex A to the
Form 10
9. Xxxx of Sale and Assumption Agreement, dated on or before the Separation
Date, between the Company and the Parent.
10. Real Estate Sublease Agreement, dated on or before the Separation Date,
between the Company, as sub-lessor, and the Parent, as sub-lessee,
related to the facilities located at 000 X. 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx.
98
SCHEDULE 5.05
LITIGATION AFFECTING NOTE PARTIES
The following information is provided regarding various matters in
litigation involving the Company and the Subsidiaries of the Company. The
information provided includes matters where the plaintiff has alleged damages in
an amount that exceeds $5,000,000 or where such damages are currently unknown,
but could potentially exceed $5,000,000, and excludes threatened litigation
where the threatening party or parties specified no Dollar threshold. Inclusion
of any matter on the lists provided below shall not be deemed a conclusion on
the part of the Company or its Subsidiaries that an adverse determination in
connection with such matter is likely or expected, or that such a determination
would necessarily result in a Material Adverse Effect. Terms not otherwise
defined in this Schedule are used herein as defined in the Agreement.
1. Flying J, Inc. v. Comdata Network, Inc. and Trendar Corporation, et. al.
In July 1996, Comdata was sued in the U.S. District Court for the Northern
District of Utah by Flying J, an operator of a large chain of truck stops and
formerly a significant Comdata customer. The complaint alleges violations of
various antitrust laws, tortious interference with contract and unfair
competition. Specifically, Flying J alleges that Comdata's market position in
the transportation industry caused Flying J's agreement(s) with another truck
stop chain to deploy point-of-sale authorization devices and truck driver
service kiosks to unravel. Comdata filed a motion to dismiss, stay or transfer
this case to the U.S. District Court for the Eastern District of Tennessee where
Comdata had previously filed suit against Flying J in April 1996, seeking a
temporary restraining order and, later, a permanent injunction to prevent Flying
J from misappropriating certain confidential and proprietary information of
Comdata, including misuse of Comdata's Comchek card numbers. Although the
temporary restraining order was granted by the Tennessee court and remained in
place through mid-December 1996, the Tennessee court declined to issue a
permanent injunction and the Tennessee case, accordingly, was dismissed. The
plaintiff filed an amended complaint in the Utah case in mid-January 1997. In
January 1999, plaintiffs filed a second and third amended complaint seeking to
add claims for interference with contractual relations with NCR and NTS, Inc.
Plaintiffs' expert report has been filed under seal. A motion is pending to have
the court reconsider its denial of plaintiffs' motion the Company as a party.
Similar motions have been denied twice previously. Meanwhile, plaintiffs have
sued the Company separately, repeating the same allegations made against
Comdata. The complaint was accompanied with a motion to stay following the
Company's answer. Ceridian has answered and is pursuing dispositive motions to
dismiss. Ceridian believes that the separate suit filed against it is subject to
various affirmative defenses, including, without limitation, lack of standing,
laches, unclean hands, no damages as a result of conduct of the Company and
statute of limitation defenses, and in addition the Company does not believe
that suit reaches the damages thresholds specified above. The suit is disclosed
only to provide a complete description of the current circumstances. The lawsuit
against Comdata is currently scheduled for a four-week trial beginning in June
2001.
2. Fortune Funding LLC, et al. v. Ceridian Corporation. On July 28, 2000
the owner of the Company's former headquarters building sued the Company in the
United States District Court for the District of Minnesota. The complaint
alleges breach of contract, violation of Minn. Stat.
99
561.17, common law waste, intentional and negligent misrepresentation, and
violation of the consumer fraud act.
3. The Huntington National Bank v. ABR Benefits Services, Inc. The
Huntington National Bank sued ABR Benefits Services in Circuit Court, Pinellas
County, Florida. Plaintiff terminated their contract with ABR and claims breach
of contract and wrongful retention of hardware and software. ABR's professional
liability carrier is paying costs. The matter is currently in the discovery
phase.
100
SCHEDULE 5.07
ERISA COMPLIANCE
Not Applicable.
101
SCHEDULE 5.10
CONTINGENT OBLIGATIONS
1. Reimbursement obligations relating to letters of credit set forth in
Schedule 1.01(e) of the New Credit Facility.
2. Contingent Obligations arising in connection with the Company's
guarantee of the obligations of New Ceridian under the New Ceridian Credit
Agreement.
3. The Company's obligations to pay certain obligations as expressly set
forth in the Spin-Off Documents.
4. Existing Contingent Obligations relating to a $1,200,000 letter of
credit required by Liberty Sites, Ltd., the landlord of the Montreal, Canada
facilities, and Contingent Obligations related to a guaranty of the account
party's obligations in respect thereto, given to the issuing bank (CIBC) by the
Company as of the Effectiveness Date, and by New Ceridian on the Closing Date.
5. Existing Contingent Obligations of $100,000 relating to the obligations
of Resumix (a divested subsidiary) under a switchboard lease/purchase.
6. Existing Contingent Obligations of $18,900,000 under surety bonds
primarily relating to various licensing or permitting requirements of Comdata
(and its subsidiaries) for fuel tax, ATM, check cashing and related matters.
7. Existing Contingent Obligations of $900,000 under performance guarantees
of Empros (a divested business operation) in Mexico, as to which the Company has
a "back-up" indemnity from Siemens, the acquiror of Empros.
8. Existing Guarantees by the Company as of the Effectiveness Date, as
described in Schedule 1.01(i) of the New Credit Facility, by New Ceridian as of
the Closing Date, in substantially the form of Exhibit E, and by the Company's
domestic Material Subsidiaries, in substantially the form of Exhibit F.
9. Contingent Obligations relating to a $2,000,000 Letter of Credit (the
amount subject to rescission) issued under the Existing Credit Facility and to
be reissued under the New Ceridian Credit Agreement.
10. Contingent Obligations arising in connection with the Company's
guarantee to landlords in respect of 5 sales office locations leased by CCL (no
sum certain), which guarantees were executed on March 10, 1998.
11. Contingent Obligations arising in connection with the Company's
guarantee in the amount of $1,103,170 to IBM Canada, LTd of obligations of CCL,
which guarantee was executed on December 7, 1998 and expires on January 1, 2003.
102
12. Contingent Obligations arising in connection with the Company's
guarantee in the amount of $3,000,000 to CIBC of obligations of Pernicom, which
guarantee was executed on August 27, 1999.
13. Contingent Obligations arising in connection with the Company's customer
guarantee for no sum certain to Asda of obligations of Centre-File, which
guarantee was executed on September 5, 1997.
14. Contingent Obligations arising in connection with the Company's
overdraft guarantee for no sum certain to National Westminster of obligations of
Centre-File, which guarantee was executed on August 18, 1997.
15. Contingent Obligations arising in connection with the Company's landlord
guarantee in the amount of $34,000 to Kingsway Group PLC of obligations of CCP,
which guarantee was executed on July 1, 2000 and expires on December 24, 2002.
16. Contingent Obligations arising in connection with the Company's customer
guarantee for no sum certain to Exxon Card Services of obligations of
LAES/Comdata, which guarantee was executed on September 24, 1997 and expires on
September 24, 2002.
17. Contingent Obligations arising in connection with the Company's customer
guarantee for no sum certain to Exxon Card Services of obligations of
SVS/Comdata, which guarantee was executed on March 1, 1999 and expires on March
1, 2004.
18. Contingent Obligations arising in connection with the Company's
guarantee for no sum certain to IBM of obligations of Comdata, which guarantee
was executed on June 30, 1998.
19. Contingent Obligations arising in connection with the Company's landlord
guarantee for no sum certain to Norwestern Mutual Insurance of obligations of
Comdata.
20. Contingent Obligations arising in connection with the Company's
guarantee in the amount of $0 to AmSouth (1st American) of obligations of
Comdata, which guarantee was executed on September 4, 1998.
21. Contingent Obligations arising in connection with the Company's
guarantee in the amount of $0 to Chase Manhattan Bank of obligations of
XxxxxXxx.xxx, which guarantee was executed on October 1, 1999.
22. Contingent Obligations arising in connection with the Company's
guarantee in the amount of $575,000 to Amplicon of obligations of Usertech,
which guarantee was executed on November 3, 2000 and expires on November 1,
2003.
103
SCHEDULE 5.11
ENVIRONMENTAL MATTERS
The following information is provided regarding various matters relating
to Environmental Laws, Environmental Claims and Hazardous Materials involving
the Company and its Subsidiaries. Inclusion of any matter on the lists provided
below shall not be deemed a conclusion on the part of the Company that such
matter would or could reasonably be expected to result in a Material Adverse
Effect. Terms not otherwise defined in this Schedule are used herein as defined
in the Agreement.
1. Printed Circuits Operations, St. Louis Park, Minnesota. Groundwater
contamination was discovered at the printed circuits facility formerly operated
by the Company's Computer Products division in St. Louis Park. Despite the sale
of the printed circuits business and the transfer of the St. Louis Park real
estate to CD Systems in connection with the spin-off of CD Systems, the Company
remains responsible for environmental matters related to this site. A consent
order was signed with the Minnesota Pollution Control Agency ("MPCA") which
obligates the Company to perform MPCA-approved remedial actions. The MPCA has
accepted the Company's proposed remedial alternative involving the treatment and
discharge of contaminated groundwater, and has issued a record of decision
setting the recommended cleanup levels for the groundwater. A response action
plan was submitted and approved and remediation facilities have been in
operation since July 1990. Groundwater clean up has progressed to the point
where the site is expected to start the closure and delisting process within the
next 1-2 years. CD Systems is pursuing a sale of this property. The remaining
cost of implementing remedial actions was most recently estimated by management
to be under $500,000.
2. Imprimis/Seagate Environmental Matters. The Company has agreed to
indemnify Seagate against a portion of environmental liabilities relating the
Imprimis facilities and sites where Imprimis may have disposed of hazardous
materials, to the extent such liabilities relate to occurrences that predate the
sale of Imprimis to Seagate, and to the extent such liabilities exceed the
amount of applicable reserves on the closing balance sheet of Imprimis. Because
those reserves have been exhausted, the Company is responsible for up to $8.2
million of the next $9.2 million of such liabilities, and for 50 percent of such
liabilities beyond that amount, with a maximum indemnification obligation of
$15.7 million. The Company has paid approximately $8.2 million to Seagate
pursuant to this indemnity through mid-2000. The Company has established
reserves for the full amount of its remaining liability with respect to this
indemnification undertaking.
3. Chemical Marketing Corporation of America. In April and May 1999, MPCA
has requested information, under the Minnesota Environmental Response and
Liability Act regarding the possible release of hazardous substances or
pollutants of contaminants at the Chemical Marketing Company of America Site,
previously located at 000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxxxx.
The Company's initial review of its documents shows that it had shipped
hazardous waste from its former VTC subsidiary's location at 0000 X. Xxx
Xxxxxxxx Xxxx, Xxxxxxxxxxx, XX back in the early 1980's. The Company has
responded to the requests and is in discussion with MPCA and other PRPs
regarding site clean up. Total clean up
104
costs are estimated by management to be between $660,000 to $1,400,000. The
Company has adequate reserves available to cover anticipated clean up costs.
4. Spring Grove, Minnesota. After detecting low levels of contamination in
two municipal xxxxx in Spring Grove, the MPCA requested information from the
Company and Northern Engraving Corporation ("NEC") regarding a facility in
Spring Grove operated by the Company from 1965 to 1971 and since that time by
NEC. The Company and NEC subsequently entered into a consent order with the MPCA
pursuant to which the Company and NEC are implementing certain remedial actions
and have reimbursed the MPCA for 75% of its past costs in connection with this
matter. Estimated future costs for the Company under the consent order may be as
much as $500,000 over a period of as much as thirty years.
5. Freeway Sanitary Landfill, Burnsville, Minnesota. In April 1994, the
Company received a request for information from the MPCA regarding the Company's
connection with this landfill. Apparently groundwater contamination has been
discovered in connection with this facility. The Company's investigation to date
suggests that some waste materials generated by the Company were disposed of at
this landfill during the relevant time period (1969-1990) in accordance with
applicable law. In 1996, the State of Minnesota, under the Minnesota Landfill
Cleanup Law, assumed responsibility for all further response actions at the
site. The Landfill Cleanup Law requires the Company to preserve its rights to
insurance coverage for cleanup costs at the site.
6. Oak Grove Landfill, Anoka County, Minnesota. This landfill in Anoka
County, Minnesota, closed in 1984, was the subject of an investigation by the
EPA and MPCA for several years. The Company's involvement with the site,
allegedly as a result of utilizing a transporter who disposed of waste at the
landfill, was relatively small. Nevertheless, the Company joined an Oak Grove
PRP group, which has negotiated a consent decree with the EPA. The Company
contributed approximately $250,000 to the PRP group and does not expect to make
any significant future payments with respect to this site. In 1996, the State of
Minnesota, under the Minnesota Landfill Cleanup Law, assumed responsibility for
all further response actions at the site. The Landfill Cleanup Law requires the
Company to preserve its rights to insurance coverage for cleanup costs at the
site. The State of Minnesota has recently brought a lawsuit against the
insurance companies and has subpoenaed all applicable records from PRP.
7. Isanti County, Minnesota. In the 1991 settlement of a civil action filed
in the U.S. District Court for Minnesota, the Company and nine other parties
agreed to reimburse the EPA and the MPCA for costs incurred in the surface
cleanup of five waste disposal sites in Isanti County, and to create a
remediation fund to conduct remedial activities at the sites for a period of 12
years, at which time the State of Minnesota would take over the sites. The
Company has paid its share of these amounts. The settlement agreement also
provides that unless new information is discovered during the 12 year period
that indicates the seven settling PRPs have in the past been responsible for any
additional contamination at these sites, the settling PRPs would obtain a full
release from the State at the conclusion of the 12 year period.
8. Ecolotech, Minneapolis and St. Xxxx, Minnesota. Prior to 1987, the
Company shipped wastes to Ecolotech, which operated facilities in Minneapolis
and St. Xxxx. Soil and groundwater contamination where discovered at the sites
and a consent order was entered into by the generators (including the Company)
with the MPCA in 1987. Remedial efforts specified for the
105
sites have been completed. The Company is awaiting termination of the consent
order by the MPCA.
9. Hopkins Landfill, Hopkins, Minnesota. In March 1994, the Company
received a letter from the City of Xxxxxxx identifying the Company as having
used the Hopkins Landfill for disposal of waste and seeking reimbursement of
methane remediation costs. The City then placed a "hold" on its reimbursement
request until the state legislature passed the Landfill Cleanup Law. In July
1996, the Company received a request from MPCA for information regarding the
Company's connection with this landfill. The records search to date has not
uncovered any disposal records for the Hopkins Landfill. The State of Minnesota,
under the Minnesota Landfill Cleanup Law, has assumed responsibility for all
further response actions at the site. The Landfill Cleanup Law requires the
Company to preserve its rights to insurance coverage for cleanup costs at the
site.
10. Other. The Company has identified certain of its facilities that contain
asbestos containing materials ("ACM"). As to such facilities, it is the
Company's policy and practice, in accordance with applicable Environmental Laws,
to manage ACM in place or remove it when necessary. The Company is also aware of
underground storage tanks located in its Comdata subsidiary facilities in
Brentwood, Tennessee and Newberry, South Carolina which are being utilized in
accordance with applicable Environmental Laws.
106
SCHEDULE 5.17
INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION
(a)
(i) TVScan software and trademark license dated May 1, 1998
from Tapscan Inc. to Arbitron for its exclusive use in the radio, agency
and advertising industries worldwide and the television and cable
industries outside the U.S. TVScan processes and provides custom
analysis reports of television viewing data.
(ii) Software used for internal business: See 4(d) below.
(iii) License agreement between Arbitron and Claritas Inc. for
PRIZM/Clusters (population) data.
(iv) License agreement between Arbitron and Market Statistics
for demographic and economic data.
(v) Software license agreement dated July 17, 2000 between
Ceridian and Lariat Software, Inc. for software to be used in Company's
services or processes.
(vi) Software license agreement between CSW Research Ltd.,
and outside third parties. The licensed software is used in connection
with survey research, including questionnaire design, automated
telephone dialing, and data analysis. All agreements listed are for a
one year term and are auto renewing for a like term.
(b) None.
(c) See Schedule 5.05, Item 3.
(d) See the list below.
ACT
Add Strip
Adobe Acrobat 4
ADOBE ACROBAT FULL
Adobe After Effects 4
Adobe Illustrator 6
Adobe Illustrator 7
Adobe PageMaker 6.5
Adobe Photoshop 5.5, 6 and 5LE
Adobe Type Manager Deluxe and Lite 4.6
Alladin StuffIt Deluxe 5.5
Xxxxxxx Cold Fusion 4
Apple OS 8.6 and 9.0.4
ARCSERVE
107
ASPChart Charting Component
ATAMAN TELNET
ATLAS GIS
AUDIX VOICEPOWER
BackupEXEC
BARSPOOL
C++/DEC
CAS FOR WINDOWS
CDR
CLIENTS & PROFITS
Clients & Profits 4.0
CODE1+
COLD FUSION
COMPARERITE
Corel Draw 6
CRYSTAL INFO
CUTEFTP
DATAJET
DB BRZ
DBASE IV
DEFINITY G1
Deltagraph 4.5
DESIGNER
DEVELOPER
DOC1/DEC
DOC1/NT
DTC MANAGER
EDIFY
EXCEED6
Extensis Portfolio 5
Extensis Suitcase 8 and 9
EZCASE
EZFLOW
Fetch 3.03
FileMaker Pro 3, 4 and 5
FOREHELP
FREELANCE GRAPHICS
GEMBASE
GEOCODER
GHOST
GOLDMINE
HELPDESK
HP UNIX
HYPERION
IMAGE PRO
108
IMAGEBASIC
IMAGEKEY
JAVA/DEC
Kai's Power Tools 3
KAWA
LAN WORKGROUP
LAN WORKPLACE
XXXXXX INSIGHT
LEAD TOOLS
LEXMARK TOOLKIT
LISTCONV LOTUS 1-2-3 V4.0
LOTUS 1-2-3 V5.0
LWP PRO 95/NT
MacLink Plus 9.7.1 through 11
Macromedia Dreamweaver 3 and 4
Macromedia Fireworks 3
Macromedia Flash 4 and 5
Macromedia Fontographer 4.1.5
Macromedia Freehand 8.01 and 9
MAILSTREAM
MCAFEE VIRUS SCAN
MEDIAMAX
MICRO FOCUS COBOL
MICRO FOCUS COBOL\DEC
MICROSOFT ACCESS
MICROSOFT EXCEL
MICROSOFT FOXPRO
MICROSOFT FRONTPAGE
Microsoft Internet Explorer 5
MICROSOFT OFFICE 2000
Microsoft Office 98 for Mac
MICROSOFT OFFICE PRO
MICROSOFT OFFICE97
MICROSOFT OFFICE97
Microsoft Outlook Exchange 8.2.1
Microsoft Outlook Express 5
MICROSOFT PROJECT
MICROSOFT PUBLISHER
MICROSOFT VB
MICROSOFT VFOXPRO
MICROSOFT VISSTUDIO
MICROSOFT WIN 2000
Microsoft Windows Media Player
MICROSOFT WORD
MICRPSOFT POWERPNT
109
MITEK ICR/OCR
MS IIS
MS INTERNET EXPLORER
Netscape Communicator 4.7 and 6
NETWARE
NFS Maestro
Norton AntiVirus 5 and 6
Norton Utilities 4 and 5
ODBC FOR OS/2
ODBC FOR WINDOWS
ORACLE/NT
ORACLE/DEC
OS/2 LAN REQUESTER
OS/2 LAN SERVER
PAGEMAKER
PARADOX
PcAnywhere
PHOTOSHOP
PIXTOOLS/EZ
PIXTOOLS/IMAGE PROC
PKZIP/PKUNZIP
Pocket Ethernet AdapterIII
PowerBuilder Desktop
PowerBuilder Professional
PowerPoint
PPI Modem Utilities
Project
PROMIX
ProtoView
PROXY
PVCS DEC
PVCS TRAKKER
PVCS Version Manager
PVCS\PC Columbia
PVCS\PC New York
QA Plus
QA Plus
QBAL
Quark Express 3.32
Quick Xpense
Quicken ExpensAble
QuickLink II Fax
QuickLink II Windows and DOS
Quancept CATI
Quanquest
Quantum
110
Quanvert
Quanvert DBA
Quicktime
Quinput
Quinput DOS
REELBACKUP
REELIBRARIAN
REFLECTIONS FOR HP
ReFox
Removable Cartridge Disk Utilities
Roadmap to Developer Products and Services
ROBO HELP
ROBOT
ROLM CBXII
ROLM PHONEMAIL
RTPatch for InstallShield Professional
SALES TAX
Sanyo Boot Floppy
SAS
SAVEU2
SCO Unix Driver for AHA
SCSI Interface Kit
SCSI Network Manager
SCSI Pro!
SDK's, DDK's, and Operating Systems
SEAGATE CRYSTAL REPT
Serv-U FTP Server
Sheridan Developer's Toolkit
SideBar Try-n-Buy
Sidekick
SMARTGATE
SmartSuite 97
SmartSuite ATM Program Disk
SMAX
Solutions Development Kit
Sound Blaster 16 Software
Special Enhancements R410
Spread
SPSS
SQLNET
SQLNET FOR OS/2
SQLPLUS
SQZ!
Stacker
Stacker
Stacker
111
Stacker
Stealth 64
Stealth 64 DRAM
Stealth 64 Video
Stealth II S220
Stealth II S220 Game Sampler CD
Stealth VRAM
Stonefield Database Toolkit
Superdisk for EtherCard
SYLVAN MAPS
SYNCSORT
SYSTEM COMMANDER
T4900 Reference Manual
Tab Pro
TCP/IP
TCP/IP DOS
TCP/IP OS2
Tech Net
TELEMATE
TELETHENA
Test
TEXTPAD
ThinkPad Bundle
Tools and Systems
TOTAL ACCESS STATS
Track for Windows
TrackMate
TRU64 UNIX DEC
TRUE DB GRID PRO 5.0
True DBGrid Pro
True DBGrid Pro VC++
UNIFACE
VBAssist
Vibra 16
Video for Windows Runtime
View for Windows
Viper V330
Viper VLB
VISIO
VISIO NETWORK EQ 2000
Visio Professional
Visio2000 Professional
Vistacom
VISUAL BASIC
Visual Basic Professional
Visual C++
112
Visual C++ Power Tools
Visual C++ Subscription
Visual Components
Visual FoxPro
Visual FoxPro Professional Edition
Visual FoxPro Professional Training Series
Visual FoxPro Windows Professional
Visual FoxPro Windows Standard
Visual J++ Technology Preview 2
Visual Studio 97 Service Pack 3
Visual Studio Enterprise Edition
Visual Studio MSDN Library
Visual Studio Professional Edition
Visual Studio Professional Edition Licenses
Visual Test
VSFlexGrid Pro
VS-OCX
WEBBASE
Windows
WINDOWS 3.51
WINDOWS 95
Windows 95
Windows 95, Win32 SDK
Windows 95, Win32 SDK and Windows NT
Windows 95, Win32 SDK, Backoffice 1.5 SDK
Windows 98
Windows for Workgroups/DOS
WINDOWS NT 4.0 Clients
WINDOWS NT 4.0 Servers
WINDOWS NT 4.0 W/S
Windows NT Server
Windows NT Server
Windows NT Workstation
Windows NT Workstation, Win32 SDK, Windows
NT
DDK
Windows Sound System
Winfax Lite
Winfax Pro
Winfax Pro Patch
WinLib Wizard
WinList for Windows
Winstone 94
Winzip
Wordperfect
Workgroup Add-On for Windows
113
XTree Gold
XTree Gold
zip Install
zip tools 100
(e) None.
(f) None.
(g) Material Software owned and used by Arbitron:
(i) Maximi$er/MediaProfessional (owned by Arbitron); performs
research and sales analysis using respondent-level radio audience
estimate data.
(ii) Tapscan (owned by Arbitron); processes respondent-level
and summary-level radio audience estimate data.
(iii) Qualitap (owned by Arbitron); processes qualitative data.
(iv) TV Qualitap (owned by Arbitron and licensed to Tapscan
Inc. for its exclusive use in the television and cable industries in the
U.S.); processes qualitative data.
(v) TVScan software (owned by Tapscan Inc. and licensed to
Arbitron for its exclusive use in the radio, agency and advertising
industries worldwide and the television and cable industries outside the
U.S.)
NOTE: COPYRIGHT REGISTRATION APPLICATIONS WERE FILED ON FORM TX IN THE U.S.
COPYRIGHT OFFICE FOR MAXIMI$ER (A/K/A MEDIAPROFESSIONAL), TAPSCAN,
TVSCAN AND QUALITAP ON DECEMBER 18, 2000. COPYRIGHT REGISTRATION APPLICATIONS
WERE FILED ON DECEMBER 28, 2000 FOR COMPANY'S INTERNAL SOFTWARE USED TO
PRODUCE ITS RATINGS DATA.
114
SCHEDULE 5.19
EMPLOYMENT AGREEMENTS
There is currently an employment agreement with Xxxxxxx X. Xxxxxx.
Company's policy for its Arbitron division prior to the Spin-Off Consummation
Date is that members of the Arbitron Executive Staff are generally eligible to
receive up to one year's salary as severance in the event of termination of
employment for reasons other than for cause. It is expected that change of
control agreements will be entered into with members of the Executive Staff of
Arbitron Inc. after the Spin-Off Consummation Date.
115
SCHEDULE 5.21
CAPITALIZATION; SUBSIDIARIES
Information as of the Effectiveness Date
1. Company's capitalization as of the Effectiveness Date:
No. shares authorized: 500,000,000
No. shares issued: 161,685,596
No. shares outstanding: 145,681,462
Please note that the shares listed above are subject to a reverse
stock split at a ratio of one-for-five. The reverse stock split will be
effective immediately after the Spin-Off Consummation Date.
2. Following is a list of Company's Subsidiaries as of the
Effectiveness Date:
--------------------------------------------------------------------------------------------------
NO. OF
PERCENTAGE OF SHARES
STATE OR OTHER VOTING SECURITIES AUTHORIZED/
JURISDICTION OF OWNED BY IMMEDIATE ISSUED &
SUBSIDIARY ORGANIZATION PARENT OUTSTANDING
---------- ------------ ------ -----------
--------------------------------------------------------------------------------------------------
Arbitron Holdings Inc. (First Tier Delaware 100% 1000/1000
Arbitron subsidiary) formed in
October 2000
--------------------------------------------------------------------------------------------------
CSW Research Ltd. (Second Tier United Kingdom 100% 410,000/
Subsidiary of Arbitron Holdings,
Inc.) 405,000
--------------------------------------------------------------------------------------------------
Euro-Fieldswork Ltd. (First Tier United Kingdom 100% No shares
Arbitron Subsidiary) yet
authorized
nor issued
--------------------------------------------------------------------------------------------------
Ceridian Infotech (India) Private 8,400,000/
Limited (First Tier Arbitron
Subsidiary) India 100% 1,712,374
--------------------------------------------------------------------------------------------------
ABR Information Services, Inc. Florida 100% N/A
--------------------------------------------------------------------------------------------------
ABR Employer Services, Inc. Florida 100% N/A
--------------------------------------------------------------------------------------------------
ABR Properties, Inc. Florida 100% N/A
--------------------------------------------------------------------------------------------------
BMC Consultants, Inc. Colorado 100% N/A
--------------------------------------------------------------------------------------------------
116
--------------------------------------------------------------------------------------------------
NO. OF
PERCENTAGE OF SHARES
STATE OR OTHER VOTING SECURITIES AUTHORIZED/
JURISDICTION OF OWNED BY IMMEDIATE ISSUED &
SUBSIDIARY ORGANIZATION PARENT OUTSTANDING
---------- ------------ ------ -----------
--------------------------------------------------------------------------------------------------
Ceridian Benefits Services, Inc. Florida 100% N/A
(f/k/a ABR Benefits Services,
Inc.)
--------------------------------------------------------------------------------------------------
Ceridian Retirement Plan Florida 100% N/A
Services, Inc.
(f/k/a ABR Retirement Plan
Services, Inc.)
--------------------------------------------------------------------------------------------------
Charing Company, Inc. Wisconsin 100% N/A
--------------------------------------------------------------------------------------------------
Xxxxxxxx, Ltd. Wisconsin 100% N/A
--------------------------------------------------------------------------------------------------
The Barrington Group Wisconsin 100% N/A
--------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxx & Associates, Arizona 100% N/A
Ltd.
--------------------------------------------------------------------------------------------------
MidAtlantic 401(k) Services, Inc. Virginia 100% N/A
--------------------------------------------------------------------------------------------------
Western Pension Service California 100% N/A
Corporation
--------------------------------------------------------------------------------------------------
Ceridian Investors Advisors, Florida 100% N/A
Inc.
(f/k/a ABR Investment
Advisors, Inc.)
--------------------------------------------------------------------------------------------------
Arbat Middle East E.C. (held in Bahrain 100% N/A
trust) (inactive)
--------------------------------------------------------------------------------------------------
Ceridian Canada Holdings, Inc. Delaware 100% N/A
--------------------------------------------------------------------------------------------------
Ceridian Canada Ltd. Canada 100% N/A
--------------------------------------------------------------------------------------------------
33444651 Canada Ltd. Canada 100% N/A
--------------------------------------------------------------------------------------------------
Ceridian Performance Partners Canada 100% N/A
Ltd.
--------------------------------------------------------------------------------------------------
Ceridian Holdings U.K. Limited United Kingdom 100% N/A
--------------------------------------------------------------------------------------------------
Centrefile Limited United Kingdom 100% N/A
--------------------------------------------------------------------------------------------------
Centrefile APS Limited United Kingdom 100% N/A
--------------------------------------------------------------------------------------------------
Centrefile (Mauritius) Ltd. Mauritius 100% N/A
--------------------------------------------------------------------------------------------------
Ceridian Performance Partners United Kingdom 100% N/A
Limited
--------------------------------------------------------------------------------------------------
Usertech UK Limited United Kingdom 100% N/A
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
NO. OF
PERCENTAGE OF SHARES
STATE OR OTHER VOTING SECURITIES AUTHORIZED/
JURISDICTION OF OWNED BY IMMEDIATE ISSUED &
SUBSIDIARY ORGANIZATION PARENT OUTSTANDING
---------- ------------ ------ -----------
--------------------------------------------------------------------------------------------------
Ceridian Tax Services, Inc. California 100% N/A
--------------------------------------------------------------------------------------------------
Comdata Network, Inc. Maryland 100% N/A
--------------------------------------------------------------------------------------------------
Comdata Network Inc. of California 100% N/A
California
--------------------------------------------------------------------------------------------------
Comdata Telecommunications Delaware 100% N/A
Services, Inc.
--------------------------------------------------------------------------------------------------
International Automated Energy Florida 100% N/A
Systems, Inc.
--------------------------------------------------------------------------------------------------
Permicom Permits Services, Inc. Canada 100% N/A
--------------------------------------------------------------------------------------------------
Stored Value Systems, Inc. Delaware 100% N/A
--------------------------------------------------------------------------------------------------
Computing Devices International Delaware 100% N/A
Satellite Services, Inc.
--------------------------------------------------------------------------------------------------
Partnership Group, Inc., The Pennsylvania 100% N/A
--------------------------------------------------------------------------------------------------
Plan Xxxx Inc. (inactive) Pennsylvania 100% N/A
--------------------------------------------------------------------------------------------------
XXXXXXXX.XXX INC. New Jersey 100% N/A
(f/k/a Ceridian Small Business
Solutions, Inc.)
--------------------------------------------------------------------------------------------------
User Technology Services, Inc. New York 100% N/A
--------------------------------------------------------------------------------------------------
117
3. Following is a list of Company's Arbitron Subsidiaries as of the
Effectiveness Date:
--------------------------------------------------------------------------------------------------
SUBSIDIARY STATE OR OTHER JURISDICTION OF ORGANIZATION
----------- ----------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Arbitron Holdings Inc. Delaware
--------------------------------------------------------------------------------------------------
CSW Research Limited United Kingdom
--------------------------------------------------------------------------------------------------
Euro-Fieldwork Limited United Kingdom
--------------------------------------------------------------------------------------------------
Ceridian Infotech (India) Private Limited India
--------------------------------------------------------------------------------------------------
4. Following is a list of Company's Material Subsidiaries as of the
Effectiveness Date:
--------------------------------------------------------------------------------------------------
MATERIAL SUBSIDIARIES STATE OR OTHER JURISDICTION OF ORGANIZATION
---------------------- --------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
ABR Information Services, Inc. Florida
--------------------------------------------------------------------------------------------------
Comdata Network, Inc. Maryland
--------------------------------------------------------------------------------------------------
Information as of the Spin-Off Consummation Date
1. Following is a list of Company's Arbitron Subsidiaries after the Spin-
Off Consummation Date:
--------------------------------------------------------------------------------------------------
PERCENTAGE OF NO. OF SHARES
STATE OR OTHER VOTING SECURITIES AUTHORIZED/
JURISDICTION OF OWNED BY IMMEDIATE ISSUED &
SUBSIDIARY ORGANIZATION PARENT OUTSTANDING
---------- ------------ ------ -----------
--------------------------------------------------------------------------------------------------
Arbitron Holdings Inc. Delaware 100% 0000/0000
--------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx Xxxxxx Xxxxxxx 100% 410,000/
405,000
--------------------------------------------------------------------------------------------------
Euro-Fieldwork Limited United Kingdom 100% No shares yet
authorized
nor issued
--------------------------------------------------------------------------------------------------
Ceridian Infotech (India) India 100 8,400,000/
Private Limited 1,712,374
--------------------------------------------------------------------------------------------------
2. THERE WILL NOT BE ANY MATERIAL SUBSIDIARIES OF THE COMPANY AS OF
THE SPIN-OFF CONSUMMATION DATE.
118
SCHEDULE 5.23
BROKERS' FEES AND RELATED EXPENSES
None.
119
SCHEDULE 5.25
THIRD PARTY CONSENTS
None.
120
SCHEDULE 7.01
PERMITTED LIENS
None.
121
SCHEDULE 7.02(b)
TRANSFERABLE ASSETS
1. Sale of assets of Ceridian Infotech (India) Private, Limited
2. Sale of assets of CSW Research Limited
3. Dissolution of Euro-Fieldword Limited
3. Separation ("Spin-off") of Ceridian Corporation into two publicly traded
companies to be known as Ceridian Corporation and Arbitron Inc., respectively,
pursuant to Spin-off documents.
122
SCHEDULE 7.06(b)
PERMITTED INVESTMENTS
1. The following is a list of the Investments of the Company and its
Subsidiaries (other than Investments in Subsidiaries) as of the Effectiveness
Date:
----------------------------------------------------------------------------------------------------
STATE OR OTHER
JURISDICTION OF PERCENTAGE OF VOTING
COMPANY INCORPORATION SECURITIES OWNED ARBITRON INVESTMENT
------- ------------- ---------------- -------------------
----------------------------------------------------------------------------------------------------
Xxxxxxx Technology, Inc. Texas 9.9% 0
----------------------------------------------------------------------------------------------------
Buyers' Health Care Action Minnesota 9.3% 0
Group, Inc.
----------------------------------------------------------------------------------------------------
XxxXxxx.xxx, Ltd. Delaware 1.4% 0
----------------------------------------------------------------------------------------------------
Revelation Technologies, Inc. Delaware 7.4% 0
----------------------------------------------------------------------------------------------------
TruckersB2B, Inc. Delaware 800,000 shares 0
----------------------------------------------------------------------------------------------------
ADcom Information Services, Delaware 13.75% 1994:
Inc. $2,000,000
1995:
$1,000,000
1996:
-----
$1,585,000
----------
Total:
$4,585,000
---------------------------------------------------------------------------------------------------
The Center for Online Florida 2.8% 2000: $2,000
Learning, Inc.
---------------------------------------------------------------------------------------------------
Symmetrical Holdings, Inc. Florida 7.5% 1997: $900,000
(f/k/a Symmetrical Resources 1998: $500,000
Corporation) ------------------
Total: $1,400,000
---------------------------------------------------------------------------------------------------
2. The following is a list of the Investments of the Company and its
Subsidiaries (other than Investments in Subsidiaries) as of the Spin-Off
Consummation Date:
----------------------------------------------------------------------------------------------
COMPANY STATE OR OTHER JURISDICTION OF INCORPORATION
---------- --------------------------------------------
-------------------------------------------------------------------------------------------------
ADcom Information Services, Inc. Delaware
-------------------------------------------------------------------------------------------------
The Center for Online Learning, Inc. Florida
-------------------------------------------------------------------------------------------------
123
-------------------------------------------------------------------------------------------------
Symmetrical Holdings, Inc. Florida
f/k/a Symmetrical Resources Corporation)
-------------------------------------------------------------------------------------------------
124
SCHEDULE 10.02
ADDRESSES FOR NOTICES
CERIDIAN CORPORATION
Arbitron Corporation
0000 Xxxxxxxx Xxxxx Xx.
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx, Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxx.xxxx@xxxxxxxx.xxx
Website: xxx.xxxxxxxx.xxx
cc: Xxxxxxxxxxx X. Xxxxxx
Xxxxxxxxxxx Xxxxx & Xxxxxxxx XXX
Xxxxx XXX
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 612-607-7100
Electronic Mail: xxxxxxx@xxxxxxxxxxx.xxx
NOTE HOLDERS
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: XXxxxx@XXxxxxxx.xxx
Website: xxx.xxxxxxxx.xxx
cc: Xxxxxxxx W. Xxx
Xxxxxx, Xxxx & Xxxxxxx
Exchange Place, 00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: Xxxx@Xxxxxx.xxx
125
EXHIBIT A
FORM OF NOTE
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN
INTERCREDITOR AGREEMENT (AS AMENDED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT") DATED
AS OF JANUARY 31, 2001 BETWEEN AND AMONG CERIDIAN CORPORATION,
__________________, THE ORIGINAL HOLDER OF THIS NOTE, AND THE
COLLATERAL AGENT NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY
ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT.
CERIDIAN CORPORATION
9.96% Senior Secured Note due January 31, 2008
No. R-___
$___________ January 31, 2001
CERIDIAN CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to _________________________________, or
registered assigns, the principal amount of ___________________________________
DOLLARS ($_______________) on January 31, 2008, with interest (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid balance of such
principal amount at a rate per annum equal to 9.96%, from the date hereof,
payable quarterly on the last day of each January, April, July and October after
the date hereof, commencing on April 30, 2001, until the principal hereof shall
have become due and payable (whether at maturity or at a date fixed for
prepayment or by declaration or otherwise), and with interest on any overdue
principal (including any overdue prepayment of principal) and (to the extent
permitted by applicable law) premium, if any, and (to the extent permitted by
applicable law) on any overdue installment of interest, at a rate per annum
equal to 11.96% until paid, payable quarterly as aforesaid or, at the option of
the holder hereof, on demand, and, upon acceleration of this Note, together with
the Make-Whole Amount specified in the Note Purchase Agreement hereinafter
referred to, as liquidated damages and not as a penalty; provided that in no
event shall the amount payable by the Company as interest on this Note exceed
the highest lawful rate permissible under any law applicable hereto. Payments of
principal, premium, if any, and interest hereon shall be made in lawful money of
the United States of America by the method and at the address for such purpose
specified in the Note Purchase Agreement hereinafter referred to, and such
payments shall be overdue for purposes
126
hereof if not made on the originally scheduled date of payment therefor, without
giving effect to any applicable grace period.
This Note is one of the Company's 9.96% Senior Secured Notes due January
31, 2008, limited to $50,000,000 aggregate principal amount, issued pursuant to
that certain Note Purchase Agreement dated January 31, 2001 (such agreement, as
amended, modified and supplemented from time to time, the "Note Purchase
Agreement") among the Company and the institutional investors named therein, and
the holder hereof is entitled to the benefits of the Note Purchase Agreement and
the other Note Documents referred to in the Note Purchase Agreement, including,
without limitation, the Collateral Documents, and may enforce the agreements
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof, all in accordance with the terms thereof.
This Note is subject to prepayment only as specified in the Note
Purchase Agreement.
Capitalized terms used herein without definition have the meanings
ascribed to them in the Note Purchase Agreement.
This Note is in registered form and is transferable only by surrender
hereof at the principal executive office of the Company as provided in the Note
Purchase Agreement. The Company may treat the person in whose name this Note is
registered on the Note register maintained at such office pursuant to the Note
Purchase Agreement as the owner hereof for all purposes, and the Company shall
not be affected by any notice to the contrary.
In case an Event of Default, as defined in the Note Purchase Agreement,
shall occur and be continuing, the unpaid balance of the principal of this Note
may be declared and become due and payable in the manner and with the effect
provided in the Note Purchase Agreement.
The parties hereto, including the makers and all guarantors and
endorsers of this Note, hereby waive presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance or enforcement of this Note.
This Note shall be construed in accordance with and governed by the
domestic substantive laws of The State of New York without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.
[The remainder of this page is intentionally left blank.]
127
IN WITNESS WHEREOF, the Company has executed this Note as an instrument
under seal as of the date first above written.
CERIDIAN CORPORATION
By
--------------------------
(Title)
128
FORM OF ASSIGNMENT
[To be signed only upon transfer of Note]
For value received, the undersigned hereby
sells, assigns and transfers unto the within Note, and appoints
Attorney to transfer such Note on the books of CERIDIAN CORPORATION with full
power of substitution in the premises.
Date: , .
................................................
(Signature must conform in all respects to name of
Holder as specified on the face of the Note)
Signed in the presence of
.........................
129
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ,
----------
To: Xxxx Xxxxxxx Life Insurance Company as Note Holder Representative
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of January
31, 2001 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Note Agreement;" the terms defined therein being
used herein as therein defined), among CERIDIAN CORPORATION, a Delaware
corporation (the "Company"), the Note Holders from time to time party thereto,
and Xxxx Xxxxxxx Life Insurance Company as the Note Holder Representative for
such Note Holders (in such capacity, the "Note Holder Representative").
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the _______________________________________________ of the
Company, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Company, and that:
[Use following for fiscal year-end financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Credit Agreement for the fiscal
year of the Company ended as of the above date, together with the report and
opinion of an independent certified public accountant required by such section.
[Use following for fiscal quarter-end financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial statements
required by Section 6.01(b) of the Agreement for the fiscal quarter of the
Company ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and cash flows of the Company and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.
2. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and condition (financial or
otherwise) of the Company during the accounting period covered by the attached
financial statements.
130
3. A review of the activities of the Company during such fiscal period
has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Company performed and observed
all its Obligations under the Note Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, the
Company performed and observed each covenant and condition of the Note Documents
applicable to it.]
--or--
[the following covenants or conditions have not been performed or
observed and the following is a list of each such Default or Event of Default
and its nature and status:]
4. The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
-------------, ---------.
CERIDIAN CORPORATION
By:
------------------------
Name:
----------------------
Title:
---------------------
131
For the Quarter/Year ended ___________________("Statement Date")
SCHEDULE 2
to the Compliance Certificate
($ in 000's)
ARTICLE XISECTION 7.10 - LEVERAGE RATIO
---------------------------------------
11.01 Consolidated Funded Indebtedness of the Company and its
Subsidiaries as of the Statement Date:
(a)
All obligations for borrowed money of the Company and its Subsidiaries on a
consolidated basis at the Statement Date: $
(b)
All obligations of the Company and its Subsidiaries as evidenced by bonds,
debentures, notes and Note agreements on a consolidated basis at the Statement
Date: $
(c)
All obligations of the Company and its Subsidiaries in respect of letters of
credit, surety bonds, bankers' acceptances or similar instruments on a
consolidated basis at the Statement Date: $
(d)
___________________________________________________All obligations of the
Company and its Subsidiaries to pay the deferred purchase price of property or
services (other than trade payables entered into in the Ordinary Course of
Business pursuant to ordinary terms and paid within the specified time) on a
consolidated basis at the Statement
(e)
The capitalized amount of all Capital Leases of the Company and its Subsidiaries
that would appear on a balance sheet of such Persons prepared as of the
Statement Date in accordance with GAAP and the capitalized amount of the
remaining lease payments under any Synthetic Lease Obligations incurred by the
Company or any of its Subsidiaries which would appear on a balance sheet of such
Persons prepared as of the Statement Date in accordance with GAAP if such lease
were accounted for as a Capital Lease:
(f)
All guaranty obligations of the Company and its Subsidiaries in respect of
obligations of any Person in the nature of the obligations referenced in Lines
I.A.1 through I.A.4 above:
(g)
Consolidated Funded Indebtedness as of the Statement Date
[Line I.A.1 + I.A.2 + I.A.3 + I.A.4 + I.A.5 + I.A.6]:
Statement Date:
132
11.02 Consolidated EBITDA of the Company and its Subsidiaries for the
period of the four fiscal quarters ending on the Statement Date ("Test Period"):
133
(a)
Net income of the Company and its Subsidiaries on a consolidated basis for the
Test Period, as determined in accordance with GAAP:
(b)
All extraordinary non-cash losses and non-cash gains, and non-cash losses and
non-cash gains from discontinued operations of the Company and its Subsidiaries
on a consolidated basis for the Test Period: $_____________
_______________________________________
(c) All cash payments
made by the Company and its Subsidiaries during the Test Period in respect of
non-cash charges listed on Line I.B.2 of Schedule 2 attached to any Compliance
Certificate delivered to the Administrative Agent prior to the Statement Date
hereof:_________________________________$
(d)
All interest, premium payments, fees, charges and related expenses of the
Company and its Subsidiaries in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP
for the Test Period, but excluding any fees, charges and expenses of the Company
and its Subsidiaries arising from the negotiation, execution, closing and
consummation of the Spin-Off Documents, the Note Documents, the Private
Placement Documents and any Specified Swap Contracts: $
(e)
The portion of all rent expense of the Company and its Subsidiaries for the Test
Period under Capital Leases that is treated as interest in accordance with GAAP
on a consolidated basis:
(f)
The amount of taxes of the Company and its Subsidiaries on a consolidated basis
for the Test Period, based on or measured by income used or included in the
determination of Line I.B.1:
(g)
All depreciation expense and amortization expense of the Company and its
Subsidiaries on a consolidated basis for the Test Period:
(h)
All interest income of the Company and its Subsidiaries on a consolidated basis
for the Test Period:
(i)
Consolidated EBITDA for the Test Period [Line I.B.1 +/- I.B.2 (if the amount in
Line I.B.2 constitutes a loss, it should be added; if it constitutes a gain, it
should be subtracted) - I.B.3 + I.B.4 + I.B.5 + I.B.6 + I.B.7 - I.B.8]: $
134
11.03 Leverage Ratio
[Line I.A.7 / I.B.9]: _________ to 1
11.04 Maximum permitted Leverage Ratio at the Statement Date (See
Section 7.10 of the Agreement for ratio applicable to the Statement Date):
_________ to 1
COMPLIANCE WITH COVENANT (YES / NO)
ARTICLE XIISECTION 7.11 - FIXED CHARGE COVERAGE
-----------------------------------------------------
RATIO
-----
12.01 Consolidated EBITDA for the Test Period [Line I.B.9]: $_________
12.02 Taxes actually paid by the Company and its Subsidiaries on a
consolidated basis in cash or Cash Equivalents for the Test Period: $___________
12.03 Capital expenditures plus (without duplication) PPM Expenditures
of the Company and its Subsidiaries on a consolidated basis for the Test Period:
$_______________________
12.04 Consolidated Interest Expense of the Company and its
Subsidiaries on a consolidated basis for the Test Period [Line I.B.4 + I.B.5]:
$__________________
12.05 Current Portion of Long-Term Debt for the Test Period of the
Company and its Subsidiaries on a consolidated basis: $_______________
12.06 Fixed Charge Coverage Ratio
[(Line II.A - II.B - II.C) /(Line II.D + II.E)]: __________ to 1
12.07 Minimum permitted Fixed Charge Ratio (See Section 7.11 of the
Agreement for ratio applicable to the Statement Date): ___________to 1
COMPLIANCE WITH COVENANT (YES / NO)
135
EXHIBIT D
FORM OF NEW CERIDIAN GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made
by NEW CERIDIAN CORPORATION, a Delaware corporation (the "Guarantor"), in favor
of (a) the financial institutions (the "Lenders" and, individually, a "Lender")
from time to time party to that certain Credit Agreement dated as of January 31,
2001 (as renewed, extended, modified, amended or restated from time to time, the
"Credit Agreement"), among CERIDIAN CORPORATION, a Delaware corporation (the
"Company"), the Lenders and BANK OF AMERICA, N.A., as the administrative agent
for such Lenders (in such capacity, the "Administrative Agent"), (b) the "Swap
Provider" (as defined herein), and (c) the Lenders party from time to time to
the Note Purchase Agreement (collectively, the "Guaranteed Parties" and each,
individually, a "Guaranteed Party").
RECITALS
WHEREAS, it is a requirement under the Credit Agreement and the Note
Purchase Agreement that Guarantor shall be bound by the terms and conditions of
this Guaranty pending the Spin-Off Consummation Date; and
WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the credit extensions to the Company pursuant to the Credit
Agreement and the Note Purchase Agreement together with the amendments,
restatements, extensions and continuations contemplated therein, and from the
Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor;
WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the Company being party to the Specified Swap Contracts, which
benefits are hereby acknowledged;
NOW, THEREFORE, in consideration of the Administrative Agent and Lenders
entering into the Credit Agreement, the Guarantor hereby agrees as follows:
SECTION 1 Definitions; Interpretation.
(a) Terms Defined in Credit Agreement. All capitalized terms used in
this Guaranty and not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.
(b) Certain Defined Terms. As used in this Guaranty, the following
terms shall have the following meanings:
"Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" under, and as defined in, the Intercreditor Agreement (or
such replacement Collateral Agent as may be appointed from time to time pursuant
thereto) on behalf and for the benefit of, (a) Bank of America, N.A., in its
capacity as Administrative Agent for the benefit of itself and the other Lenders
from time to time party to the Credit Agreement, and the L/C Issuer; (b) the
Lenders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.
136
"Credit Documents" means, collectively, the Note Documents, the Swap
Documents, and the Note Purchase Documents.
"Guaranteed Obligations" has the meaning set forth in Section 2(a).
"Guaranteed Parties" and "Guaranteed Party" have the meanings assigned
to them in the first paragraph hereof.
"Guarantor Documents" means this Guaranty, and all other certificates,
documents, agreements and instruments delivered to the Guaranteed Parties under
or in connection with this Guaranty.
"Indemnified Liabilities" has the meaning set forth in Section 15(b).
"Indemnified Person" has the meaning set forth in Section 15(b).
"Intercreditor Agreement" means that Intercreditor Agreement dated as of
January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider, and the Lenders.
"Note Holder Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in
the Credit Agreement, but to the extent entered into by the parties thereto
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Lenders), (b) all Account Control Agreements executed by any Note
Party under any Note Holder Document, (c) all documents executed by any Note
Party to accomplish cash collateralization pursuant to any Note Holder
Document, and (d) all licenses, UCC financing statements, notices and other
documents executed from time to time or in connection with any of the
foregoing.
"Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder
Guaranties.
"Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or
otherwise changed in respect of, the Lenders.
"Note Holder" means a "Note Holder" under, and as defined in, the
Note Purchase Agreement.
"Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company and the Lenders party thereto.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of the
New York Uniform Fraudulent Conveyance Act; (b) the present fair saleable
value of the property of such Person is not less than the amount that will be
required to pay the probable liability of such
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Person on its debts as they become absolute and matured; (c) such Person is
able to realize upon its property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature
in the normal course of business; (d) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature; and (e) such Person is
not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would constitute
unreasonably small capital.
"Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the Company
and the Swap Provider as swap counterparties.
"Specified Swap Contract" means any interest rate swap entered into
between the Company and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.
"Subordinated Debt" has the meaning set forth in Section 7(a).
"Subordinated Debt Payments" has the meaning set forth in Section 7(b).
"Swap Collateral Documents" means, collectively, (i) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Swap
Provider), (ii) all Account Control Agreements executed by any Note Party under
any Swap Document, (iii) all documents executed by any Note Party to accomplish
cash collateralization pursuant to any Swap Document, and (iv) all licenses, UCC
financing statements, notices and other documents executed from time to time or
in connection with any of the foregoing.
"Swap Documents" means, collectively, (a) any Specified Swap Agreement,
(b) the Swap Collateral Documents, and (c) the Swap Guaranties.
"Swap Guaranties" means the Guaranties under and as defined in the
Credit Agreement, but to the extent entered into by the Guarantors thereunder
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider.
"Swap Provider" has the meaning specified in the Intercreditor
Agreement.
(c) Interpretation. The rules of interpretation set forth in Section
1.02 of the Credit Agreement shall be applicable to this Guaranty and are
incorporated herein by this reference.
SECTION 2 Guaranty.
(a) Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees to each of the Guaranteed Parties, and their respective successors,
endorsees, transferees and assigns, the full and prompt payment when due
(whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise) and performance of the indebtedness, liabilities and other
obligations of the Company to each such Guaranteed Party,
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whether created under, arising out of or in connection with any of the Credit
Documents, including all Obligations (as independently defined in each of the
Credit Agreement and the Note Purchase Agreement); and any obligations under
any Specified Swap Agreement to the extent arising out of any one or more
Specified Swap Contracts. The terms "indebtedness," "liabilities" and
"obligations" are used herein in their most comprehensive sense and include
any and all advances, debts, obligations and liabilities, now existing or
hereafter arising, whether voluntary or involuntary and whether due or not
due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether recovery upon such indebtedness, liabilities and
obligations may be or hereafter becomes unenforceable or shall be an allowed
or disallowed claim under the Bankruptcy Code or other applicable law. The
foregoing indebtedness, liabilities and other obligations of the Company, and
all other indebtedness, liabilities and obligations to be paid or performed by
the Guarantor in connection with this Guaranty (including any and all amounts
due under Section 15), shall hereinafter be collectively referred to as the
"Guaranteed Obligations."
(b) Limitation of Guaranty. To the extent that any court of
competent jurisdiction shall impose by final judgment under applicable law
(including the New York Fraudulent Conveyance Act and Sections 544 and 548 of
the Bankruptcy Code) any limitations on the amount of the Guarantor's
liability with respect to any of the Guaranteed Obligations which any of the
Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by
their acceptance hereof accept such limitation on the amount of the
Guarantor's liability hereunder to the extent needed to make this Guaranty and
the Guarantor Documents fully enforceable and nonavoidable.
SECTION 3 Liability of Guarantor. The liability of the Guarantor under
this Guaranty shall be irrevocable, absolute, independent and unconditional,
and shall not be affected by any circumstance which might constitute a
discharge of a surety or guarantor other than the indefeasible payment and
performance in full of all Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, the Guarantor agrees as
follows:
(i) the Guarantor's liability hereunder shall be the immediate,
direct, and primary obligation of the Guarantor and shall not be contingent
upon the Guaranteed Parties' exercise or enforcement of any remedy it may have
against the Company or any other Person, or against any collateral now or
hereafter securing any of the Guaranteed Obligations;
(ii) this Guaranty is a guaranty of payment when due and not merely
of collectibility;
(iii) the Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and
(iv) the Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall
not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:
(A) any proceeding under any Debtor Relief Laws with respect
to the Company, any other guarantor or any other Person;
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(B) any limitation, discharge, or cessation of the liability
of the Company, any other guarantor or any other Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any invalidity
or unenforceability in whole or in part of any of the Guaranteed Obligations
or the Note Documents;
(C) subject to Section 24 hereof, any merger, acquisition,
consolidation or change in structure of the Company, the Guarantor or any
other guarantor or Person, or any sale, lease, transfer or other disposition
of any or all of the assets or shares of the Company, the Guarantor, any other
guarantor or other Person;
(D) any assignment or other transfer, in whole or in part,
of any of the Guaranteed Parties' interests in and rights under this Guaranty
or the other Credit Documents, including the Guaranteed Parties' right to
receive payment of the Guaranteed Obligations;
(E) any claim, defense, counterclaim or setoff, other than
that of prior performance, that the Company, the Guarantor, any other
guarantor or other Person may have or assert, including any defense of
incapacity or lack of corporate or other authority to execute any of the
Credit Documents;
(F) the Guaranteed Parties' or any Lender's amendment,
modification, renewal, extension, cancellation or surrender of any Credit
Document;
(G) the Guaranteed Parties' vote, claim, distribution,
election, acceptance, action or inaction in any proceeding under any Debtor
Relief Laws related to the Guaranteed Obligations;
(H) any impairment or invalidity of any collateral securing
any of the Guaranteed Obligations or any failure to perfect any of the Liens
of the Guaranteed Parties thereon or therein; and
(I) any other guaranty, whether by the Guarantor or any
other Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of the Company to the Guaranteed
Parties.
SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally
consents and agrees that, without notice to or further assent from the
Guarantor:
(i) the principal or other amount of the Guaranteed Obligations in
respect of any of the Guaranteed Parties may be increased or decreased as to
such Guaranteed Parties and additional indebtedness or obligations of the
Company under the Credit Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any such Credit Documents;
(ii) the time, manner, place or terms of any payment under any of
the Credit Documents may be extended or changed, including by an increase or
decrease in the interest rate on any Guaranteed Obligation or any fee or other
amount payable under such Credit Documents, by an amendment, modification or
renewal of any Credit Documents or otherwise;
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(iii) the time for the Company's (or any other Person's) performance
of or compliance with any term, covenant or agreement on its part to be
performed or observed under any Credit Documents may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any of the Guaranteed Parties may deem proper;
(iv) any of the Guaranteed Parties may discharge or release, in
whole or in part, any other guarantor or any other Person liable for the
payment and performance of all or any part of the Guaranteed Obligations owing
to such Guaranteed Parties, and may permit or consent to any such action or
any result of such action, and shall not be obligated to demand or enforce
payment upon any collateral, nor shall the Guaranteed Parties be liable to the
Guarantor for any failure to collect or enforce payment or performance of the
Guaranteed Obligations from any Person or to realize on any collateral
therefor;
(v) the Guaranteed Parties may take and hold other security (legal
or equitable) of any kind, at any time, as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of
any such action, and may apply such security and direct the order or manner of
sale thereof;
(vi) the Guaranteed Parties may request and accept other guaranties
of the Guaranteed Obligations and any other indebtedness, obligations or
liabilities of the Company to the Guaranteed Parties and may, from time to
time, in whole or in part, surrender, release, subordinate, modify, waive,
rescind, compromise or extend any such guaranty and may permit or consent to
any such action or the result of any such action; and
(vii) the Guaranteed Parties may exercise, or waive or otherwise
refrain from exercising, any other right, remedy, power or privilege
(including the right to accelerate the maturity of any Note and any power of
sale) granted by any Credit Document or other security document or agreement,
or otherwise available to the Guaranteed Parties, with respect to the
Guaranteed Obligations or any collateral, even if the exercise of such right,
remedy, power or privilege affects or eliminates any right of subrogation or
any other right of the Guarantor against the Company;
all as the Guaranteed Parties (or the Collateral Agent on their
behalf) may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty.
SECTION 5 Guarantor's Waivers.
(a) Certain Waivers. The Guarantor waives and agrees not to
assert:
(i) any right to require any of the Guaranteed
Parties to marshal assets in favor of the Company, the Guarantor, any other
guarantor or any other Person, to proceed against the Company, any other
guarantor or any other Person, to proceed against or exhaust any of the
Collateral, to give notice of the terms, time and place of any public or
private sale of personal property security constituting the Collateral or
other collateral for the Guaranteed Obligations or comply with any other
provisions of Section 9-504 of the New York UCC (or any
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equivalent provision of any other applicable law) or to pursue any other
right, remedy, power or privilege of the Guaranteed Parties whatsoever;
(ii) the defense of the statute of limitations in any
action hereunder or for the collection or performance of the Guaranteed
Obligations;
(iii) any defense arising by reason of any lack of
corporate or other authority or any other defense of the Company, the
Guarantor or any other Person;
(iv) any defense based upon the Guaranteed Parties'
errors or omissions in the administration of the Guaranteed Obligations;
(v) any rights to set-offs and counterclaims;
(vi) any defense based upon an election of remedies
(including, if available, an election to proceed by nonjudicial foreclosure)
which destroys or impairs the subrogation rights of the Guarantor or the right
of the Guarantor to proceed against the Company or any other obligor of the
Guaranteed Obligations for reimbursement; and
(vii) without limiting the generality of the foregoing,
to the fullest extent permitted by law, any defenses or benefits that may be
derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties, or which may conflict with the terms of
this Guaranty, including any and all benefits that otherwise might be
available to the Guarantor under New York Laws. This means, among other
things: (A) the Guaranteed Parties may collect from the Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Company; and (B) if the Guaranteed Parties forecloses on any real property
collateral pledged by the Company: (1) the amount of the debt may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price, and (2) the
Guaranteed Parties may collect from the Guarantor even if the Administrative
Agent, by foreclosing on the real property collateral, has destroyed any right
the Guarantor may have to collect from the Company. This is an unconditional
and irrevocable waiver of any rights and defenses the Guarantor may have
because the Company's debt is secured by real property.
(b) Additional Waivers. The Guarantor waives any and all notice of the
acceptance of this Guaranty, and any and all notice of the creation, renewal,
modification, extension or accrual of the Guaranteed Obligations, or the
reliance by the Guaranteed Parties upon this Guaranty, or the exercise of any
right, power or privilege hereunder. The Guaranteed Obligations shall
conclusively be deemed to have been created, contracted, incurred and
permitted to exist in reliance upon this Guaranty. The Guarantor waives
promptness, diligence, presentment, protest, demand for payment, notice of
default, dishonor or nonpayment and all other notices to or upon the Company,
the Guarantor or any other Person with respect to the Guaranteed Obligations.
(c) Independent Obligations. The obligations of the Guarantor
hereunder are independent of and separate from the obligations of the Company
and any other guarantor. Upon the occurrence and during the continuance of any
Event of Default, a separate action or actions may be brought against the
Guarantor, whether or not the Company or any such other guarantor
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is joined therein or a separate action or actions are brought against the
Company or any such other guarantor.
(d) Financial Condition of Company. The Guarantor shall not have
any right to require the Guaranteed Parties to obtain or disclose any
information with respect to: (i) the financial condition or character of the
Company or the ability of the Company to pay and perform the Guaranteed
Obligations; (ii) the Guaranteed Obligations; (iii) the existence or
nonexistence of any other guarantees of all or any part of the Guaranteed
Obligations; (iv) any action or inaction on the part of the Guaranteed Parties
or any other Person; or (v) any other matter, fact or occurrence whatsoever.
SECTION 6 Subrogation. Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, the Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that
it may acquire by way of subrogation under this Guaranty, by any payment
hereunder or otherwise, (ii) any rights of contribution, indemnification,
reimbursement or similar suretyship claims arising out of this Guaranty or
(iii) any other right which it might otherwise have or acquire (in any way
whatsoever) which could entitle it at any time to share or participate in any
right, remedy or security of the Guaranteed Parties as against the Company or
other guarantors, whether in connection with this Guaranty, any of the other
Credit Documents or otherwise. If any amount shall be paid to the Guarantor on
account of the foregoing rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in
trust for the benefit of the Guaranteed Parties and shall forthwith be paid to
the Guaranteed Parties (or the Collateral Agent on their behalf) to be
credited and applied to the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Documents and subject to
the Intercreditor Agreement.
SECTION 7 Subordination.
(a) Subordination to Payment of Guaranteed Obligations. All
payments on account of all indebtedness, liabilities and other obligations of
the Company to the Guarantor, whether created under, arising out of or in
connection with any documents or instruments evidencing any credit extensions
to the Company or otherwise, including all principal on any such credit
extensions, all interest accrued thereon, all fees and all other amounts
payable by the Company to the Guarantor in connection therewith, whether now
existing or hereafter arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined (the
"Subordinated Debt") shall be subject, subordinate and junior in right of
payment and exercise of remedies, to the extent and in the manner set forth
herein, to the prior payment in full in cash or cash equivalents of the
Guaranteed Obligations.
(b) No Payments. Other than arising out of the consummation of the
Spin-Off Transaction, as long as any of the Guaranteed Obligations shall
remain outstanding and unpaid, the Guarantor shall not accept or receive any
payment or distribution by or on behalf of the Company, directly or
indirectly, of assets of the Company of any kind or character, whether in
cash, property or securities, including on account of the purchase, redemption
or other acquisition of Subordinated Debt, as a result of any collection, sale
or other disposition of collateral, or by setoff, exchange or in any other
manner, for or on account of the Subordinated Debt ("Subordinated Debt
Payments"), except that if no Event of Default exists and no notice
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described below has been received by the Guarantor, the Guarantor shall be
entitled to accept and receive any and all payments. During the existence of
an Event of Default (or if any Event of Default would exist immediately after
the making of a Subordinated Debt Payment), and upon receipt by the Company of
notice from the Guaranteed Parties (or the Collateral Agent on their behalf)
of such Default, and until such Event of Default is cured or waived, pursuant
to the terms of the applicable Credit Documents, the Company shall not make,
accept or receive any Subordinated Debt Payment. In the event that,
notwithstanding the provisions of this Section 7, any Subordinated Debt
Payments shall be received in contravention of this Section 7 by the Guarantor
before all Guaranteed Obligations are paid in full in cash or cash
equivalents, such Subordinated Debt Payments shall be held in trust for the
benefit of the Guaranteed Parties and shall be paid over or delivered to the
Guaranteed Parties (or the Collateral Agent on their behalf) for application
to the payment in full in cash or cash equivalents of all Guaranteed
Obligations remaining unpaid to the extent necessary to give effect to this
Section 7, after giving effect to any concurrent payments or distributions to
the Guaranteed Parties in respect of the Guaranteed Obligations.
(c) Subordination of Remedies. As long as any Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not,
without the prior written consent of the Guaranteed Parties (or the Collateral
Agent on their behalf):
(i) accelerate or bring suit or institute any other
actions or proceedings to enforce its rights or interests under or in respect
of the Subordinated Debt;
(ii) exercise any rights under or with respect to (A)
any guaranties of the Subordinated Debt, or (B) any collateral held by it,
including causing or compelling the pledge or delivery of any collateral, any
attachment of, levy upon, execution against, foreclosure upon or the taking of
other action against or institution of other proceedings with respect to any
collateral held by it, notifying any account debtors of the Company or
asserting any claim or interest in any insurance with respect to any
collateral, or attempt to do any of the foregoing;
(iii) exercise any rights to set-offs and counterclaims
in respect of any indebtedness, liabilities or obligations of the Guarantor to
the Company against any of the Subordinated Debt; or
(iv) commence, or cause to be commenced, or join with
any creditor other than the Guaranteed Parties in commencing, any proceeding
under any Debtor Relief Laws as against Company.
(d) Subordination Upon Any Distribution of Assets of the Company.
In the event of any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, upon any
proceeding under any Debtor Relief Laws with respect to or involving the
Company, (i) all amounts owing on account of the Guaranteed Obligations,
including all interest accrued thereon at the contract rate both before and
after the initiation of any such proceeding, whether or not an allowed claim
in any such proceeding, shall first be paid in full in cash, or payment
provided for in cash or in cash equivalents, before any Subordinated Debt
Payment is made; and (ii) to the extent permitted by applicable law, any
Subordinated Debt Payment to which the Guarantor would be entitled except for
the provisions hereof, shall be paid
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or delivered by the trustee in bankruptcy, receiver, assignee for the benefit
of creditors or other liquidating agent making such payment or distribution
directly to the Guaranteed Parties (or the Collateral Agent acting on their
behalf) for application to the payment of the Guaranteed Obligations in
accordance with clause (i), after giving effect to any concurrent payment or
distribution or provision therefor to the Guaranteed Parties in respect of
such Guaranteed Obligations.
(e) Authorization to Guaranteed Parties. If, while any
Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws
is commenced by or against the Company or its property:
(i) the Guaranteed Parties are hereby irrevocably
authorized and empowered (in the name of the Guaranteed Parties, in the name
of the Guarantor or otherwise), but shall have no obligation, to demand, xxx
for, collect and receive every payment or distribution in respect of the
Subordinated Debt and give acquittance therefor and to file claims and proofs
of claim and take such other action (including voting the Subordinated Debt)
as they may deem necessary or advisable for the exercise or enforcement of any
of the rights or interests of the Guaranteed Parties; and
(ii) the Guarantor shall promptly take such action as
any of the Guaranteed Parties may reasonably request (A) to collect the
Subordinated Debt for the account of the Guaranteed Parties and to file
appropriate claims or proofs of claim in respect of the Subordinated Debt, (B)
to execute and deliver to the Guaranteed Parties (or the Collateral Agent
acting on their behalf), such powers of attorney, assignments and other
instruments as they may request to enable them to enforce any and all claims
with respect to the Subordinated Debt, and (C) to collect and receive any and
all Subordinated Debt Payments.
SECTION 8 Continuing Guaranty; Reinstatement.
(a) Continuing Guaranty. This Guaranty is a continuing guaranty
and agreement of subordination and shall continue in effect and be binding
upon the Guarantor until the payment and performance in full of all Guaranteed
Obligations.
(b) Reinstatement. This Guaranty shall continue to be effective or
shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of the Company (or
receipt of any proceeds of collateral) shall be rescinded, invalidated,
declared to be fraudulent or preferential, set aside, voided or otherwise
required to be repaid to the Company, its estate, trustee, receiver or any
other Person (including under any Debtor Relief Laws or other state or federal
law), or must otherwise be restored by the Guaranteed Parties, whether as a
result of proceedings under any Debtor Relief Laws or otherwise. To the extent
any payment is so rescinded, set aside, voided or otherwise repaid or
restored, the Guaranteed Obligations shall be revived in full force and effect
without reduction or discharge for such payment. All losses, damages, costs
and expenses that the Guaranteed Parties may suffer or incur as a result of
any voided or otherwise set aside payments shall be specifically covered by
the indemnity in favor of the Guaranteed Parties contained in Section 15.
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SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the
foregoing provisions of this Guaranty and not in limitation of any other right
which the Guaranteed Parties or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Company to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor
shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties
(or the Collateral Agent on their behalf) an amount equal to the amount of the
Guaranteed Obligations then due as aforesaid (including interest which, but
for the filing of a petition in any proceeding under any Debtor Relief Laws
with respect to the Company, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against the Company for such
interest in any such proceeding under any Debtor Relief Laws). The Guarantor
shall make each payment hereunder, unconditionally in full without set-off,
counterclaim or other defense, or deduction for any Taxes, on the day when due
in Dollars and in same day or immediately available funds, to the Collateral
Agent at such office or account of any Guaranteed Party as any of the
Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All
such payments shall be promptly applied from time to time by the Guaranteed
Parties as provided in the Credit Documents.
SECTION 10 Representations and Warranties. The Guarantor represents
and warrants to the Guaranteed Parties that:
(a) Organization and Powers. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business
and is in good standing in each jurisdiction in which the failure so to
qualify or be in good standing would have a Material Adverse Effect and has
all requisite power and authority: (i) to own its assets and carry on its
business, and (ii) to execute, deliver and perform its obligations under the
Guarantor Documents and Spin-Off Documents.
(b) Authorization; No Conflict. The execution, delivery and
performance by the Guarantor of this Guaranty and all other Guarantor
Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly
authorized by all necessary corporate action of the Guarantor, and do not and
will not: (i) contravene the terms of the Guarantor's organization documents
or (ii) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any material Contractual
Obligation to which the Guarantor is a party or any order, injunction, writ or
decree of any Governmental Authority to which the Guarantor or its property is
subject, or (iii) violate any Laws.
(c) Binding Obligation. This Guaranty and the other Guarantor
Documents constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
(d) Governmental Consents. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, except as have been
obtained on or before the Closing Date, is required for (i) the
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due execution, delivery or performance by, or enforcement against, the
Guarantor of the Guarantor Documents, (ii) the execution, delivery or
performance by or enforcement against the Guarantor of the Spin-Off Documents
or (iii) the consummation of the Spin-Off Transaction.
(e) No Prior Assignment. The Guarantor has not previously assigned
any interest in the Subordinated Debt or any collateral relating thereto, no
Person other than the Guarantor owns an interest in the Subordinated Debt or
any such collateral (whether as joint holders of the Subordinated Debt,
participants or otherwise), and the entire Subordinated Debt is owing only to
the Guarantor.
(f) Solvency. Immediately prior to and after and giving effect to
(i) the incurrence of the Guarantor's obligations under this Guaranty, and
(ii) the Spin-Off Transaction, the Guarantor will be Solvent.
(g) Consideration. The Guarantor has received at least "reasonably
equivalent value" (as such phrase is used in Section 548 of the Bankruptcy
Code) and "fair consideration" (as such phrase is used in Section 272 of the
New York Debtor & Creditor Laws and in comparable provisions of other
applicable law) and more than sufficient consideration to support its
obligations hereunder in respect of the Guaranteed Obligations to which it is
a party.
(h) Independent Investigation. The Guarantor hereby acknowledges
that it has undertaken its own independent investigation of the financial
condition of the Company and all other matters pertaining to this Guaranty and
further acknowledges that it is not relying in any manner upon any
representation or statement of the Guaranteed Parties with respect thereto.
The Guarantor represents and warrants that it has received and reviewed copies
of the Credit Documents and that it is in a position to obtain, and it hereby
assumes full responsibility for obtaining, any additional information
concerning the financial condition of the Company and any other matters
pertinent hereto that the Guarantor may desire. The Guarantor is not relying
upon or expecting the Guaranteed Parties to furnish to the Guarantor any
information now or hereafter in the Guaranteed Parties' possession concerning
the financial condition of the Company or any other matter.
SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations
shall remain unsatisfied or any Lender shall have any Commitment, the
Guarantor agrees that it shall furnish to the Guaranteed Parties such
information respecting the operations, properties, business or condition
(financial or otherwise) of the Guarantor or its Subsidiaries as any of the
Guaranteed Parties may from time to time reasonably request.
SECTION 12 Additional Covenants. So long as any Guaranteed Obligations
shall remain unsatisfied or any Lender shall have any Commitment, the
Guarantor agrees that:
(a) Preservation of Existence, Etc. The Guarantor shall, and shall
cause each of its Subsidiaries to, maintain and preserve (i) its legal
existence and (ii) its rights to transact business and all other rights,
franchises and privileges necessary or desirable in the normal course of its
business and operations and the ownership of its properties, except in the
case of this clause (ii) where the non-preservation could not reasonably be
expected to have a Material Adverse Effect.
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(b) Further Assurances and Additional Acts. The Guarantor shall
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements, instruments, certificates, documents and
assurances and perform such acts as any of the Guaranteed Parties shall deem
reasonably necessary or appropriate to effectuate the purposes of this
Guaranty and the other Guarantor Documents, and promptly provide the
Guaranteed Parties with evidence of the foregoing satisfactory in form and
substance to the Guaranteed Parties.
SECTION 13 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; except that (a) any notices to the Swap Provider shall be
delivered to Fleet National Bank (or to such replacement Swap Provider may be
appointed from time to time consistent with the Intercreditor Agreement),
according to the information listed in Schedule 10.02 of the Credit Agreement
for such party as a Lender and (b) any notice to the Lenders shall be
delivered to the address specified for such Persons in the Note Purchase
Agreement (or to such replacement Lenders as may be appointed from time to
time consistent with the Intercreditor Agreement). Notices to the Guarantor
shall be sent or delivered to the address set forth in the Credit Agreement
for the Company. All such notices, requested and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.
SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of
any Guaranteed Party to exercise, and no delay in exercising on the part of
any Guaranteed Party, any right, remedy, power or privilege hereunder or under
any other Guarantor Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.
SECTION 15 Costs and Expenses; Indemnification.
(a) Costs and Expenses. The Guarantor shall:
(i) whether or not the transactions contemplated
hereby are consummated, pay or reimburse each of the Guaranteed Parties for
all costs and expenses incurred by them in connection with the development,
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Guaranty, any other Guarantor Document and any other
documents prepared in connection herewith or therewith and the consummation of
the transactions contemplated hereby and thereby; and
(ii) pay or reimburse the Guaranteed Parties for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Guaranty or any other Guarantor Document during the
existence of an Event of Default or after acceleration of the Notes (including
in connection with any "workout" or restructuring regarding the Notes, and
including in any proceeding under any Debtor Relief Laws or appellate
proceeding).
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(b) Indemnification. The Company shall indemnify, defend and hold
each of the Guaranteed Parties and each Lender and Note Holder and each of its
respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suites, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Person in favor of any
third-party in any way relating to or arising out of this Guaranty or any
document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under
or in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any proceeding under any
Debtor Relief Laws or appellate proceeding) related to or arising out of this
Guaranty or relating to the Collateral, whether or not any Indemnified Person
is a party thereto (the "Indemnified Liabilities"); provided that the
Guarantor shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting from the gross negligence or
willful misconduct of such Indemnified Person.
(c) Defense. At the election of any Indemnified Person, the
Guarantor shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole discretion, at
the sole cost and expense of the Guarantor.
(d) Interest. Any amounts payable to the Guaranteed Parties under
this Section 15 if not paid upon demand shall bear interest from the date of
such demand until paid in full, at the Default Rate.
SECTION 16 Right of Set-Off. In addition to any rights and remedies of
the Guaranteed Parties and the Lenders provided by law, if an Event of Default
exists or any reimbursement or payment obligation under any of the Credit
Documents has been accelerated, each of the Guaranteed Parties and Lenders is
hereby authorized at any time and from time to time, upon notice to the other
Guaranteed Parties as prescribed in the Intercreditor Agreement, but without
notice to the Guarantor (any such notice being expressly waived by the
Guarantor), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Person to or for the credit or the account of the
Guarantor against any and all of the obligations of the Guarantor then due and
owing, irrespective of whether or not such Person shall have made any demand
upon the Company or the Guarantor under any of the Credit Documents. Each
Lender and the Guaranteed Parties shall promptly notify the Guarantor (through
the Collateral Agent) after any such set-off and application made by it;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Lenders and
Guaranteed Parties under this Section 16 are in addition to other rights and
remedies (including other rights of set-off) which such Persons may have.
SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the
Lenders, or the Guaranteed Parties shall be under any obligation to marshal
any assets in favor of the Guarantor or any other Person or against or in
payment of any or all of the Guaranteed Obligations. To the extent that the
Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set
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aside or required (including pursuant to any settlement entered into by the
Guaranteed Parties in their discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief
Laws or otherwise, then (a) to the extent of such recovery the obligation or
part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Collateral Agent upon demand its pro rata share of any amount so recovered
from or repaid by the Collateral Agent.
SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the
sole protection and benefit of the Lenders, the Lenders, the Guaranteed
Parties, and their respective successors and assigns, and no other Person
(other than any Indemnified Person specified herein) shall be a direct or
indirect beneficiary of, or shall have any direct or indirect cause of action
or claim in connection with, this Guaranty. The Guaranteed Parties, by their
acceptance of this Guaranty, shall not have any obligations under this
Guaranty to any Person other than the Guarantor, and such obligations shall be
limited to those expressly stated herein.
SECTION 19 Binding Effect; Assignment.
(a) Successors and Assigns. The provisions of this Guaranty shall
be binding upon and insure to the benefit of the parties hereto and their
respective successors and assigns.
(b) Assignment. The Guarantor shall not have the right to assign or
transfer its rights and obligations hereunder or under any other Guarantor
Documents without the prior written consent of the Required Lenders. Each of
the Guaranteed Parties, the Lenders and the Lenders may, without notice to or
consent by the Guarantor, sell, assign, transfer or grant participations in
all or any portion of such Person's rights and obligations hereunder and under
the other Guarantor Documents in connection with any sale, assignment,
transfer or grant of a participation by such Person in accordance with Section
10.07 of the Credit Agreement or in its rights and obligations thereunder and
under any of the other Credit Documents. The Guarantor agrees that in
connection with any such sale, assignment, transfer or grant by any Lender,
such Lender may deliver to the prospective participant or assignee financial
statements and other relevant information relating to the Guarantor and its
Subsidiaries.
SECTION 20 Governing Law and Jurisdiction.
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX
XXX XXXX SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES
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CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL
COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR
OTHER DOCUMENT RELATED THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 22 Entire Agreement; Amendments. This Guaranty, together with
the other Guarantor Documents, embodies the entire agreement of the Guarantor
with respect to the matters set forth herein for the benefit of each
Guaranteed Party, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 23, this Guaranty shall be
amended only by written agreement between the Guarantor and the Guaranteed
Party to whom such amendment relates. Any such amendment shall not effect any
guaranty of the Guarantor granted hereunder to any other Guaranteed Party.
SECTION 23 Independence. This Guaranty sets forth independent and
separate guaranties of the Guarantor in favor of each Guaranteed Party in
respect of the Guaranteed Obligations owing to each such Guaranteed Party. The
illegality or unenforceability of any provision of this Guaranty or any
instrument or agreement required hereunder with respect to any Guaranteed
Party shall not in any way affect or impair the legality or enforceability of
that or any other provision of this Guaranty or any instrument or agreement
required hereunder in respect of any other Guaranteed Party. The parties
acknowledge that this Guaranty has, solely for reasons of convenience, been
prepared and executed as a single document, but that the legal effect shall be
in all respects as thought the Guarantor had executed separate guaranties, in
favor of each Guaranteed Party. Any provision of this Agreement and the other
Credit Documents to which the Grantor is a party that is prohibited or
unenforceable in any jurisdiction shall, as to such
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jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 24 Termination. This Guaranty shall terminate in all respects
on the Spin-Off Consummation Date, provided, that (i) as of the Spin-Off
Consummation Date, there exists no Default or Event of Default, and (ii) all
of the representations and warranties of the Company contained in Article V of
the Credit Agreement, or which were contained in any Note Document or Spin-Off
Documents furnished prior to the Spin-Off Consummation Date are true and
correct on and as of the Spin-Off Consummation Date, except to the extent that
such representations and warranties specifically refer to any earlier date, in
which case they shall be true and correct as of such earlier date, and (iii)
the Administrative Agent shall have received a certificate of a Responsible
Officer of the Company, dated as of the Spin-Off Consummation Date, certifying
that (A) the Spin-Off Consummation Date has occurred, (B) as of the Spin-Off
Consummation Date there exists no Default or Event of Default, and (C) all of
the representations and warranties of the Company contained in Article V of
the Credit Agreement, or which were contained in any Note Documents or
Spin-Off Documents furnished prior to the Spin-Off Consummation Date, are true
and correct on and as of the Spin-Off Consummation Date, except to the extent
that such representations and warranties specifically refer to an earlier
date, in which case they shall be certified as being true and correct as of
such earlier date.
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IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of
the date first above written.
NEW CERIDIAN CORPORATION
By:
-------------------------
Title:
----------------------
Address:
New Ceridian Corporation
0000 Xxxx Xxx Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
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EXHIBIT E
FORM OF SUBSIDIARY GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of January 31, 2001, is made
by each of the Subsidiaries listed on Schedule 1 hereto (collectively, the
"Guarantor"), in favor (a) of the financial institutions (each a "Lender" and,
collectively, the "Lenders") from time to time party to that certain Credit
Agreement dated as of January 31, 2001 (as renewed, extended, modified,
amended or restated from time to time, the "Credit Agreement"), among CERIDIAN
CORPORATION, a Delaware corporation (the "Company"), the Lenders and BANK OF
AMERICA, N.A., as administrative agent for such Lenders (in such capacity, the
"Administrative Agent"), (b) the "Swap Provider" (as defined herein); and (c)
the Lenders (as defined herein) (collectively, the "Guaranteed Parties" and
each, individually, a "Guaranteed Party").
RECITALS
WHEREAS, it is a requirement under of the Credit Agreement and the
Note Purchase Agreement that Guarantor shall be bound by the terms and
conditions of this Guaranty pending the Spin-Off Consummation Date; and
WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the credit extensions to the Company pursuant to the Credit
Agreement and the Note Purchase Agreement together with the amendments,
restatements, extensions and continuations contemplated therein, and from the
Spin-Off Transaction, which benefits are hereby acknowledged by the Guarantor;
WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the Company being party to the Specified Swap Contracts, which
benefits are hereby acknowledged;
NOW, THEREFORE, in consideration of the Administrative Agent and
Lenders entering into the Credit Agreement, the Guarantor hereby agrees as
follows:
SECTION 1 Definitions; Interpretation.
(a) Terms Defined in Credit Agreement. All capitalized terms used
in this Guaranty and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.
(b) Certain Defined Terms. As used in this Guaranty, the following
terms shall have the following meanings:
"Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" under, and as defined in, the Intercreditor Agreement (or
such replacement Collateral Agent as may be appointed from time to time
pursuant thereto) on behalf and for the benefit of, (a) Bank of America, N.A.,
in its capacity as Administrative Agent for the benefit of itself and the
other Lenders from time to time party to the Credit Agreement, and the L/C
Issuer; (b) the Lenders for
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the benefit of itself and the other Lenders from time to time party to the
Note Purchase Agreement; and (c) the Swap Provider.
"Credit Documents" means, collectively, the Note Documents, the Swap
Documents, and the Note Purchase Documents.
"Guaranteed Obligations" has the meaning set forth in Section 2(a).
"Guaranteed Parties" and "Guaranteed Party" have the meanings assigned
to them in the first paragraph hereof.
"Guarantor Documents" means this Guaranty, and all other certificates,
documents, agreements and instruments delivered to the Guaranteed Parties
under or in connection with this Guaranty.
"Indemnified Liabilities" has the meaning set forth in Section 15(b).
"Indemnified Person" has the meaning set forth in Section 15(b).
"Intercreditor Agreement" means that Intercreditor Agreement dated as
of January ___, 2001 among the Collateral Agent, the Administrative Agent, the
Swap Provider, and the Lenders Agent.
"Note Holder Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in
the Credit Agreement, but to the extent entered into by the parties thereto
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Lenders), (b) all Account Control Agreements executed by any Note
Party under any Note Holder Document, (c) all documents executed by any Note
Party to accomplish cash collateralization pursuant to any Note Holder
Document, and (d) all licenses, UCC financing statements, notices and other
documents executed from time to time or in connection with any of the
foregoing.
"Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder
Guaranties.
"Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or
otherwise changed in respect of, the Lenders.
"Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.
"Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company, the Lenders and the other
Lenders party thereto.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of
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Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes
of the New York Uniform Fraudulent Conveyance Act; (b) the present fair
saleable value of the property of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal course
of business; (d) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature; and (e) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital.
"Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into
between the Company and the Swap Provider as swap counterparties.
"Specified Swap Contract" means any interest rate swap entered into
between the Company and the Swap Provider as swap counterparties constituting
a "Specified Swap Contract" as defined in the Credit Agreement.
"Subordinated Debt" has the meaning set forth in Section 7(a).
"Subordinated Debt Payments" has the meaning set forth in Section
7(b).
"Swap Collateral Documents" means, collectively, (i) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider), (ii) all Account Control Agreements executed by any Note Party
under any Swap Document, (iii) all documents executed by any Note Party to
accomplish cash collateralization pursuant to any Swap Document, and (iv) all
licenses, UCC financing statements, notices and other documents executed from
time to time or in connection with any of the foregoing.
"Swap Documents" means, collectively, (a) any Specified Swap
Agreement, (b) the Swap Collateral Documents, and (c) the Swap Guaranties.
"Swap Guaranties" means the Guaranties under and as defined in the
Credit Agreement, but to the extent entered into by the Guarantors thereunder
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider.
"Swap Provider" has the meaning specified in the Intercreditor
Agreement.
(c) Interpretation. The rules of interpretation set forth in
Section 1.02 of the Credit Agreement shall be applicable to this Guaranty and
are incorporated herein by this reference.
SECTION 2 Guaranty.
(a) Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees to the Guaranteed Parties, and their respective successors,
endorsees, transferees and assigns, the
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full and prompt payment when due (whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise) and performance of
the indebtedness, liabilities and other obligations of the Company to each
such Guaranteed Party, whether created under, arising out of or in connection
with any of the Credit Documents, including all Obligations (as independently
defined in each of the Credit Agreement and the Note Purchase Agreement); and
any obligations under any Specified Swap Agreement to the extent arising out
of any one or more Specified Swap Contracts. The terms "indebtedness,"
"liabilities" and "obligations" are used herein in their most comprehensive
sense and include any and all advances, debts, obligations and liabilities,
now existing or hereafter arising, whether voluntary or involuntary and
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, and whether recovery upon such indebtedness,
liabilities and obligations may be or hereafter becomes unenforceable or shall
be an allowed or disallowed claim under the Bankruptcy Code or other
applicable law. The foregoing indebtedness, liabilities and other obligations
of the Company, and all other indebtedness, liabilities and obligations to be
paid or performed by the Guarantor in connection with this Guaranty (including
any and all amounts due under Section 15), shall hereinafter be collectively
referred to as the "Guaranteed Obligations."
(b) Limitation of Guaranty. To the extent that any court of
competent jurisdiction shall impose by final judgment under applicable law
(including the New York Fraudulent Conveyance Act and Sections 544 and 548 of
the Bankruptcy Code) any limitations on the amount of the Guarantor's
liability with respect to any of the Guaranteed Obligations which any of the
Guaranteed Parties can enforce under this Guaranty, such Guaranteed Parties by
their acceptance hereof accept such limitation on the amount of the
Guarantor's liability hereunder to the extent needed to make this Guaranty and
the Guarantor Documents fully enforceable and nonavoidable.
SECTION 3 Liability of Guarantor. The liability of the Guarantor under
this Guaranty shall be irrevocable, absolute, independent and unconditional,
and shall not be affected by any circumstance which might constitute a
discharge of a surety or guarantor other than the indefeasible payment and
performance in full of all Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, the Guarantor agrees as
follows:
(i) the Guarantor's liability hereunder shall be the immediate,
direct, and primary obligation of the Guarantor and shall not be contingent
upon the Guaranteed Parties' exercise or enforcement of any remedy it may have
against the Company or any other Person, or against any collateral now or
hereafter securing any of the Guaranteed Obligations;
(ii) this Guaranty is a guaranty of payment when due and not merely
of collectibility;
(iii) the Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and
(iv) the Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall
not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:
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(A) any proceeding under any Debtor Relief Laws with respect
to the Company, any other guarantor or any other Person;
(B) any limitation, discharge, or cessation of the liability
of the Company, any other guarantor or any other Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any invalidity
or unenforceability in whole or in part of any of the Guaranteed Obligations
or the Note Documents;
(C) any merger, acquisition, consolidation or change in
structure of the Company, the Guarantor or any other guarantor or Person, or
any sale, lease, transfer or other disposition of any or all of the assets or
shares of the Company, the Guarantor, any other guarantor or other Person;
(D) any assignment or other transfer, in whole or in part,
of any of the Guaranteed Parties' interests in and rights under this Guaranty
or the other Credit Documents, including the Guaranteed Parties' right to
receive payment of the Guaranteed Obligations;
(E) any claim, defense, counterclaim or setoff, other than
that of prior performance, that the Company, the Guarantor, any other
guarantor or other Person may have or assert, including any defense of
incapacity or lack of corporate or other authority to execute any of the
Credit Documents;
(F) the Guaranteed Parties' amendment, modification,
renewal, extension, cancellation or surrender of any Credit Document;
(G) the Guaranteed Parties' vote, claim, distribution,
election, acceptance, action or inaction in any proceeding under any Debtor
Relief Laws related to the Guaranteed Obligations;
(H) any impairment or invalidity of any collateral securing
any of the Guaranteed Obligations or any failure to perfect any of the Liens
of the Guaranteed Parties thereon or therein; and
(I) any other guaranty, whether by the Guarantor or any
other Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of the Company to the Guaranteed
Parties.
SECTION 4 Consents of Guarantor. The Guarantor hereby unconditionally
consents and agrees that, without notice to or further assent from the
Guarantor:
(i) the principal amount of the Guaranteed Obligations in respect
of any of the Guaranteed Parties may be increased or decreased as to such
Guaranteed Party and additional indebtedness or obligations of the Company
under the Credit Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any such Credit Document;
(ii) the time, manner, place or terms of any payment under any
Credit Documents may be extended or changed, including by an increase or
decrease in the interest rate on any
158
Guaranteed Obligation or any fee or other amount payable under such Credit
Documents, by an amendment, modification or renewal of any Credit Documents or
otherwise;
(iii) the time for the Company's (or any other Person's) performance
of or compliance with any term, covenant or agreement on its part to be
performed or observed under any Credit Documents may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any of the Guaranteed Parties may deem proper;
(iv) any of the Guaranteed Parties may discharge or release, in
whole or in part, any other guarantor or any other Person liable for the
payment and performance of all or any part of the Guaranteed Obligations owing
to such Guaranteed Parties, and may permit or consent to any such action or
any result of such action, and shall not be obligated to demand or enforce
payment upon any collateral, nor shall the Guaranteed Parties be liable to the
Guarantor for any failure to collect or enforce payment or performance of the
Guaranteed Obligations from any Person or to realize on any collateral
therefor;
(v) the Guaranteed Parties may take and hold other security (legal
or equitable) of any kind, at any time, as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of
any such action, and may apply such security and direct the order or manner of
sale thereof;
(vi) the Guaranteed Parties may request and accept other guaranties
of the Guaranteed Obligations and any other indebtedness, obligations or
liabilities of the Company to the Guaranteed Parties and may, from time to
time, in whole or in part, surrender, release, subordinate, modify, waive,
rescind, compromise or extend any such guaranty and may permit or consent to
any such action or the result of any such action; and
(vii) the Guaranteed Parties may exercise, or waive or otherwise
refrain from exercising, any other right, remedy, power or privilege
(including the right to accelerate the maturity of any Note and any power of
sale) granted by any Credit Document or other security document or agreement,
or otherwise available to the Guaranteed Parties, with respect to the
Guaranteed Obligations or any collateral, even if the exercise of such right,
remedy, power or privilege affects or eliminates any right of subrogation or
any other right of the Guarantor against the Company;
all as the Guaranteed Parties (or the Collateral Agent on their
behalf) may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty.
SECTION 5 Guarantor's Waivers.
(a) Certain Waivers. The Guarantor waives and agrees not to assert:
(i) any right to require any of the Guaranteed
Parties to marshal assets in favor of the Company, the Guarantor, any other
guarantor or any other Person, to proceed against the Company, any other
guarantor or any other Person, to proceed against or exhaust any of the
Collateral, to give notice of the terms, time and place of any public or
private sale of
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personal property security constituting the Collateral or other collateral for
the Guaranteed Obligations or comply with any other provisions of Section
9-504 of the New York UCC (or any equivalent provision of any other applicable
law) or to pursue any other right, remedy, power or privilege of the
Guaranteed Parties whatsoever;
(ii) the defense of the statute of limitations in any
action hereunder or for the collection or performance of the Guaranteed
Obligations;
(iii) any defense arising by reason of any lack of
corporate or other authority or any other defense of the Company, the
Guarantor or any other Person;
(iv) any defense based upon the Guaranteed Parties' or
any Lender's errors or omissions in the administration of the Guaranteed
Obligations;
(v) any rights to set-offs and counterclaims;
(vi) any defense based upon an election of remedies
(including, if available, an election to proceed by nonjudicial foreclosure)
which destroys or impairs the subrogation rights of the Guarantor or the right
of the Guarantor to proceed against the Company or any other obligor of the
Guaranteed Obligations for reimbursement; and
(vii) without limiting the generality of the foregoing,
to the fullest extent permitted by law, any defenses or benefits that may be
derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties, or which may conflict with the terms of
this Guaranty, including any and all benefits that otherwise might be
available to the Guarantor under New York Laws. This means, among other
things: (A) the Guaranteed Parties may collect from the Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Company; and (B) if the Guaranteed Parties forecloses on any real property
collateral pledged by the Company: (1) the amount of the debt may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price, and (2) the
Guaranteed Parties may collect from the Guarantor even if the Administrative
Agent, by foreclosing on the real property collateral, has destroyed any right
the Guarantor may have to collect from the Company. This is an unconditional
and irrevocable waiver of any rights and defenses the Guarantor may have
because the Company's debt is secured by real property.
(b) Additional Waivers. The Guarantor waives any and all notice of
the acceptance of this Guaranty, and any and all notice of the creation,
renewal, modification, extension or accrual of the Guaranteed Obligations, or
the reliance by the Guaranteed Parties upon this Guaranty, or the exercise of
any right, power or privilege hereunder. The Guaranteed Obligations shall
conclusively be deemed to have been created, contracted, incurred and
permitted to exist in reliance upon this Guaranty. The Guarantor waives
promptness, diligence, presentment, protest, demand for payment, notice of
default, dishonor or nonpayment and all other notices to or upon the Company,
the Guarantor or any other Person with respect to the Guaranteed Obligations.
(c) Independent Obligations. The obligations of the Guarantor
hereunder are independent of and separate from the obligations of the Company
and any other guarantor. Upon
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the occurrence and during the continuance of any Event of Default, a separate
action or actions may be brought against the Guarantor, whether or not the
Company or any such other guarantor is joined therein or a separate action or
actions are brought against the Company or any such other guarantor.
(d) Financial Condition of Company. The Guarantor shall not have
any right to require the Guaranteed Parties to obtain or disclose any
information with respect to: (i) the financial condition or character of the
Company or the ability of the Company to pay and perform the Guaranteed
Obligations; (ii) the Guaranteed Obligations; (iii) the existence or
nonexistence of any other guarantees of all or any part of the Guaranteed
Obligations; (iv) any action or inaction on the part of the Guaranteed Parties
or any other Person; or (v) any other matter, fact or occurrence whatsoever.
SECTION 6 Subrogation. Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, the Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that
it may acquire by way of subrogation under this Guaranty, by any payment
hereunder or otherwise, (ii) any rights of contribution, indemnification,
reimbursement or similar suretyship claims arising out of this Guaranty or
(iii) any other right which it might otherwise have or acquire (in any way
whatsoever) which could entitle it at any time to share or participate in any
right, remedy or security of the Guaranteed Parties as against the Company or
other guarantors, whether in connection with this Guaranty, any of the other
Credit Documents or otherwise. If any amount shall be paid to the Guarantor on
account of the foregoing rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in
trust for the benefit of the Guaranteed Parties and shall forthwith be paid to
the Guaranteed Parties (or the Collateral Agent on their behalf) to be
credited and applied to the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Documents (and subject
to the Intercreditor Agreement).
SECTION 7 Subordination.
(a) Subordination to Payment of Guaranteed Obligations. All
payments on account of all indebtedness, liabilities and other obligations of
the Company to the Guarantor, whether created under, arising out of or in
connection with any documents or instruments evidencing any credit extensions
to the Company or otherwise, including all principal on any such credit
extensions, all interest accrued thereon, all fees and all other amounts
payable by the Company to the Guarantor in connection therewith, whether now
existing or hereafter arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined (the
"Subordinated Debt") shall be subject, subordinate and junior in right of
payment and exercise of remedies, to the extent and in the manner set forth
herein, to the prior payment in full in cash or cash equivalents of the
Guaranteed Obligations.
(b) No Payments. As long as any of the Guaranteed Obligations shall
remain outstanding and unpaid, the Guarantor shall not accept or receive any
payment or distribution by or on behalf of the Company, directly or
indirectly, of assets of the Company of any kind or character, whether in
cash, property or securities, including on account of the purchase, redemption
or other acquisition of Subordinated Debt, as a result of any collection, sale
or other disposition of collateral, or by setoff, exchange or in any other
manner, for or on account of the
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Subordinated Debt ("Subordinated Debt Payments"), except that if no Event of
Default exists and no notice described below has been received by the
Guarantor, the Guarantor shall be entitled to accept and receive any and all
payments. During the existence of an Event of Default (or if any Event of
Default would exist immediately after the making of a Subordinated Debt
Payment), and upon receipt by the Company of notice from the Guaranteed
Parties (or the Collateral Agent on their behalf) of such Default, and until
such Event of Default is cured or waived, pursuant to the terms of the
applicable Credit Documents, the Company shall not make, accept or receive any
Subordinated Debt Payment. In the event that, notwithstanding the provisions
of this Section 7, any Subordinated Debt Payments shall be received in
contravention of this Section 7 by the Guarantor before all Guaranteed
Obligations are paid in full in cash or cash equivalents, such Subordinated
Debt Payments shall be held in trust for the benefit of the Guaranteed Parties
and shall be paid over or delivered to the Guaranteed Parties (or the
Collateral Agent on their behalf) for application to the payment in full in
cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the
extent necessary to give effect to this Section 7, after giving effect to any
concurrent payments or distributions to the Guaranteed Parties in respect of
the Guaranteed Obligations.
(c) Subordination of Remedies. As long as any Guaranteed
Obligations shall remain outstanding and unpaid, the Guarantor shall not,
without the prior written consent of the Guaranteed Parties (or the Collateral
Agent on their behalf):
(i) accelerate or bring suit or institute any other
actions or proceedings to enforce its rights or interests under or in respect
of the Subordinated Debt;
(ii) exercise any rights under or with respect to (A)
any guaranties of the Subordinated Debt, or (B) any collateral held by it,
including causing or compelling the pledge or delivery of any collateral, any
attachment of, levy upon, execution against, foreclosure upon or the taking of
other action against or institution of other proceedings with respect to any
collateral held by it, notifying any account debtors of the Company or
asserting any claim or interest in any insurance with respect to any
collateral, or attempt to do any of the foregoing;
(iii) exercise any rights to set-offs and counterclaims
in respect of any indebtedness, liabilities or obligations of the Guarantor to
the Company against any of the Subordinated Debt; or
(iv) commence, or cause to be commenced, or join with
any creditor other than the Guaranteed Parties in commencing, any proceeding
under any Debtor Relief Laws as against Company.
(d) Subordination Upon Any Distribution of Assets of the Company.
In the event of any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, upon any
proceeding under any Debtor Relief Laws with respect to or involving the
Company, (i) all amounts owing on account of the Guaranteed Obligations,
including all interest accrued thereon at the contract rate both before and
after the initiation of any such proceeding, whether or not an allowed claim
in any such proceeding, shall first be paid in full in cash, or payment
provided for in cash or in cash equivalents, before any Subordinated Debt
Payment is made; and (ii) to the extent permitted by applicable law, any
Subordinated Debt
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Payment to which the Guarantor would be entitled except for the provisions
hereof, shall be paid or delivered by the trustee in bankruptcy, receiver,
assignee for the benefit of creditors or other liquidating agent making such
payment or distribution directly to the Guaranteed Parties (or the Collateral
Agent acting on their behalf) for application to the payment of the Guaranteed
Obligations in accordance with clause (i), after giving effect to any
concurrent payment or distribution or provision therefor to the Guaranteed
Parties in respect of such Guaranteed Obligations.
(e) Authorization to Guaranteed Parties. If, while any
Subordinated Debt is outstanding, any proceeding under any Debtor Relief Laws
is commenced by or against the Company or its property:
(i) the Guaranteed Parties are hereby irrevocably
authorized and empowered (in the name of the Guaranteed Parties, in the name
of the Guarantor or otherwise), but shall have no obligation, to demand, xxx
for, collect and receive every payment or distribution in respect of the
Subordinated Debt and give acquittance therefor and to file claims and proofs
of claim and take such other action (including voting the Subordinated Debt)
as they may deem necessary or advisable for the exercise or enforcement of any
of the rights or interests of the Guaranteed Parties; and
(ii) the Guarantor shall promptly take such action as
any of the Guaranteed Parties may reasonably request (A) to collect the
Subordinated Debt for the account of the Guaranteed Parties and to file
appropriate claims or proofs of claim in respect of the Subordinated Debt, (B)
to execute and deliver to the Guaranteed Parties (or the Collateral Agent
acting on their behalf), such powers of attorney, assignments and other
instruments as they may request to enable them to enforce any and all claims
with respect to the Subordinated Debt, and (C) to collect and receive any and
all Subordinated Debt Payments.
SECTION 8 Continuing Guaranty; Reinstatement.
(a) Continuing Guaranty. This Guaranty is a continuing guaranty
and agreement of subordination and shall continue in effect and be binding
upon the Guarantor until the payment and performance in full of all Guaranteed
Obligations.
(b) Reinstatement. This Guaranty shall continue to be effective or
shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of the Company (or
receipt of any proceeds of collateral) shall be rescinded, invalidated,
declared to be fraudulent or preferential, set aside, voided or otherwise
required to be repaid to the Company, its estate, trustee, receiver or any
other Person (including under any Debtor Relief Laws or other state or federal
law), or must otherwise be restored by the Guaranteed Parties, whether as a
result of proceedings under any Debtor Relief Laws or otherwise. To the extent
any payment is so rescinded, set aside, voided or otherwise repaid or
restored, the Guaranteed Obligations shall be revived in full force and effect
without reduction or discharge for such payment. All losses, damages, costs
and expenses that the Guaranteed Parties may suffer or incur as a result of
any voided or otherwise set aside payments shall be specifically covered by
the indemnity in favor of the Guaranteed Parties contained in Section 15.
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SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of the
foregoing provisions of this Guaranty and not in limitation of any other right
which the Guaranteed Parties or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Company to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code), the Guarantor
shall forthwith pay, or cause to be paid, in cash, to the Guaranteed Parties
(or the Collateral Agent on their behalf) an amount equal to the amount of the
Guaranteed Obligations then due as aforesaid (including interest which, but
for the filing of a petition in any proceeding under any Debtor Relief Laws
with respect to the Company, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against the Company for such
interest in any such proceeding under any Debtor Relief Laws). The Guarantor
shall make each payment hereunder, unconditionally in full without set-off,
counterclaim or other defense, or deduction for any Taxes, on the day when due
in Dollars and in same day or immediately available funds, to the Collateral
Agent at such office or account of any Guaranteed Party as any of the
Guaranteed Parties (or the Collateral Agent on their behalf) may direct. All
such payments shall be promptly applied from time to time by the Guaranteed
Parties as provided in the Intercreditor Documents.
SECTION 10 Representations and Warranties. The Guarantor represents
and warrants to the Guaranteed Parties that:
(a) Organization and Powers. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business
and is in good standing in each jurisdiction in which the failure so to
qualify or be in good standing would have a Material Adverse Effect and has
all requisite power and authority: (i) to own its assets and carry on its
business, and (ii) to execute, deliver and perform its obligations under the
Guarantor Documents and Spin-Off Documents.
(b) Authorization; No Conflict. The execution, delivery and
performance by the Guarantor of this Guaranty and all other Guarantor
Documents and Spin-Off Documents, and the Spin-Off Transaction, have been duly
authorized by all necessary corporate action of the Guarantor, and do not and
will not: (i) contravene the terms of the Guarantor's organization documents
or (ii) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any material Contractual
Obligation to which the Guarantor is a party or any order, injunction, writ or
decree of any Governmental Authority to which the Guarantor or its property is
subject, or (iii) violate any Laws.
(c) Binding Obligation. This Guaranty and the other Guarantor
Documents constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
(d) Governmental Consents. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, except as have been
obtained on or before the Closing Date, is required for (i) the
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due execution, delivery or performance by, or enforcement against, the
Guarantor of the Guarantor Documents, (ii) the execution, delivery or
performance by or enforcement against the Guarantor of the Spin-Off Documents
or (iii) the consummation of the Spin-Off Transaction.
(e) The Guarantor has not previously assigned any interest in the
Subordinated Debt or any collateral relating thereto, no Person other than the
Guarantor owns an interest in the Subordinated Debt or any such collateral
(whether as joint holders of the Subordinated Debt, participants or
otherwise), and the entire Subordinated Debt is owing only to the Guarantor.
(f) Solvency. Immediately prior to and after and giving effect to
(i) the incurrence of the Guarantor's obligations under this Guaranty, and
(ii) the Spin-Off Transaction, the Guarantor will be Solvent.
(g) Consideration. The Guarantor has received at least "reasonably
equivalent value" (as such phrase is used in Section 548 of the Bankruptcy
Code) and "fair consideration" (as such phrase is used in Section 272 of the
New York Debtor & Creditor Laws and in comparable provisions of other
applicable law) and more than sufficient consideration to support its
obligations hereunder in respect of the Guaranteed Obligations to which it is
a party.
(h) Independent Investigation. The Guarantor hereby acknowledges
that it has undertaken its own independent investigation of the financial
condition of the Company and all other matters pertaining to this Guaranty and
further acknowledges that it is not relying in any manner upon any
representation or statement of the Guaranteed Parties with respect thereto.
The Guarantor represents and warrants that it has received and reviewed copies
of the Credit Documents and that it is in a position to obtain, and it hereby
assumes full responsibility for obtaining, any additional information
concerning the financial condition of the Company and any other matters
pertinent hereto that the Guarantor may desire. The Guarantor is not relying
upon or expecting the Guaranteed Parties to furnish to the Guarantor any
information now or hereafter in the Guaranteed Parties' possession concerning
the financial condition of the Company or any other matter.
SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations
shall remain unsatisfied or any Lender shall have any Commitment, the
Guarantor agrees that it shall furnish to the Guaranteed Parties such
information respecting the operations, properties, business or condition
(financial or otherwise) of the Guarantor or its Subsidiaries as any of the
Guaranteed Parties may from time to time reasonably request.
SECTION 12 Additional Covenants. So long as any Guaranteed Obligations
shall remain unsatisfied or any Lender shall have any Commitment, the
Guarantor agrees that:
(a) Preservation of Existence, Etc. The Guarantor shall, and shall
cause each of its Subsidiaries to, maintain and preserve (i) its legal
existence and (ii) its rights to transact business and all other rights,
franchises and privileges necessary or desirable in the normal course of its
business and operations and the ownership of its properties, except in the
case of this clause (ii) where the non-preservation could not reasonably be
expected to have a Material Adverse Effect.
(b) Further Assurances and Additional Acts. The Guarantor shall
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements,
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instruments, certificates, documents and assurances and perform such acts as
any of the Guaranteed Parties shall deem reasonably necessary or appropriate
to effectuate the purposes of this Guaranty and the other Guarantor Documents,
and promptly provide the Guaranteed Parties with evidence of the foregoing
satisfactory in form and substance to the Guaranteed Parties.
SECTION 13 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; except that (a) any notices to the Swap Provider shall be
delivered to Fleet National Bank (or such replacement Swap Provider as the
Swap Provider may direct in writing), according to the information listed in
Schedule 10.02 of the Credit Agreement for such party as a Lender and (b) any
notice to the Lenders be delivered to the address specified for such Persons
in the Note Purchase Agreement (or to such replacement Lenders as may be
appointed from time to time consistent with the Intercreditor Agreement).
Notices to the Guarantor shall be sent or delivered to the address set forth
in the Credit Agreement for the Company. All such notices, requested and
communications shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery, or transmitted in
legible form by facsimile machine, respectively, or if mailed, upon receipt by
the addressee, or if delivered, upon delivery.
SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of
any Guaranteed Parties to exercise, and no delay in exercising on the part of
any Guaranteed Parties, any right, remedy, power or privilege hereunder or
under any other Guarantor Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege.
SECTION 15 Costs and Expenses; Indemnification.
(a) Costs and Expenses. The Guarantor shall:
(i) whether or not the transactions contemplated
hereby are consummated, pay or reimburse each of the Guaranteed Parties for
all costs and expenses incurred by them in connection with the development,
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Guaranty, any other Guarantor Document and any other
documents prepared in connection herewith or therewith and the consummation of
the transactions contemplated hereby and thereby; and
(ii) pay or reimburse the Guaranteed Parties for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Guaranty or any other Guarantor Document during the
existence of an Event of Default or after acceleration of the Notes (including
in connection with any "workout" or restructuring regarding the Notes, and
including in any proceeding under any Debtor Relief Laws or appellate
proceeding).
(b) Indemnification. The Company shall indemnify, defend and hold
each of the Guaranteed Parties, and each Lender and Note Holder and each of
its respective officers,
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directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suites, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Person in favor of any third-party in any way relating to or
arising out of this Guaranty or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or
omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding
(including any proceeding under any Debtor Relief Laws or appellate
proceeding) related to or arising out of this Guaranty or relating to the
Collateral, whether or not any Indemnified Person is a party thereto (the
"Indemnified Liabilities"); provided that the Guarantor shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting from the gross negligence or willful misconduct of such
Indemnified Person.
(c) Defense. At the election of any Indemnified Person, the
Guarantor shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole discretion, at
the sole cost and expense of the Guarantor.
(d) Interest. Any amounts payable to the Guaranteed Parties under
this Section 15 if not paid upon demand shall bear interest from the date of
such demand until paid in full, at the Default Rate.
(e) Survival. The agreements in this Section shall survive payment
of all other Guaranteed Obligations.
SECTION 16 Right of Set-Off. In addition to any rights and remedies of
the Guaranteed Parties and the Lenders provided by law, if an Event of Default
exists or any reimbursement or payment obligation under any of the Credit
Documents has been accelerated, each Guaranteed Parties and Lenders is hereby
authorized at any time and from time to time, upon notice to the other
Guaranteed Parties as prescribed in the Intercreditor Agreement, but without
notice to the Guarantor (any such notice being expressly waived by the
Guarantor), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Person to or for the credit or the account of the
Guarantor against any and all of the obligations of the Guarantor then due and
owing, irrespective of whether or not such Person shall have made any demand
upon the Company or the Guarantor under any of the Credit Documents. Each
Lender and the Guaranteed Parties shall promptly notify the Guarantor (through
the Collateral Agent) after any such set-off and application made by it;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Lenders and
Guaranteed Parties under this Section 16 are in addition to other rights and
remedies (including other rights of set-off) which the such parties may have.
SECTION 17 Marshalling; Payments Set Aside. None of the Lenders, the
Lenders, or the Guaranteed Parties shall be under any obligation to marshal
any assets in favor of the Guarantor or any other Person or against or in
payment of any or all of the Guaranteed Obligations. To the extent that the
Guarantor makes a payment to the Guaranteed Parties, or the Guaranteed Parties
exercise their right of set-off, and such payment or the proceeds of such
set-
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off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Guaranteed Parties in their discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each
Lender severally agrees to pay to the Collateral Agent upon demand its pro
rata share of any amount so recovered from or repaid by the Collateral Agent.
SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the
sole protection and benefit of the Lenders, the Lenders, the Guaranteed
Parties, and their respective successors and assigns, and no other Person
(other than the Collateral Agent and any Indemnified Person specified herein)
shall be a direct or indirect beneficiary of, or shall have any direct or
indirect cause of action or claim in connection with, this Guaranty. The
Guaranteed Parties, by their acceptance of this Guaranty, shall not have any
obligations under this Guaranty to any Person other than the Guarantor, and
such obligations shall be limited to those expressly stated herein.
SECTION 19 Binding Effect; Assignment.
(a) Successors and Assigns. The provisions of this Guaranty shall
be binding upon and insure to the benefit of the parties hereto and their
respective successors and assigns.
(b) Assignment. The Guarantor shall not have the right to assign or
transfer its rights and obligations hereunder or under any other Guarantor
Documents without the prior written consent of the Required Lenders. Each of
the Guaranteed Parties, the Lenders, and the Lenders may, without notice to or
consent by the Guarantor, sell, assign, transfer or grant participations in
all or any portion of such Person's rights and obligations hereunder and under
the other Guarantor Documents in connection with any sale, assignment,
transfer or grant of a participation by such Person in accordance with Section
10.07 of the Credit Agreement in its rights and obligations thereunder and
under any of the Credit Documents. The Guarantor agrees that in connection
with any such sale, assignment, transfer or grant by any Lender, such Lender
may deliver to the prospective participant or assignee financial statements
and other relevant information relating to the Guarantor and its Subsidiaries.
SECTION 20 Governing Law and Jurisdiction.
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE GUARANTEED PARTIES
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX
XXX XXXX SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF
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THIS AGREEMENT, EACH OF THE GUARANTOR AND THE GUARANTEED PARTIES CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE GUARANTOR AND THE GUARANTEED PARTIES IRREVOCABLY WAIVE ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE COURT
SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT RELATED
THERETO. THE GUARANTOR AND THE GUARANTEED PARTIES WAIVE PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.
SECTION 21 Waiver of Right to Jury Trial. EACH PARTY TO THIS GUARANTY
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS GUARANTY, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 22 Entire Agreement; Amendments. This Guaranty, together with
the other Guarantor Documents, embodies the entire agreement of the Guarantor
with respect to the matters set forth herein for the benefit of each
Guaranteed Party, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 23, this Guaranty shall be
amended only by written agreement between the Guarantor and the Guaranteed
Party to whom such amendment relates. Any such amendment shall not effect any
guaranty of the Guarantor granted hereunder to any other Guaranteed Party.
SECTION 23 Independence. This Guaranty sets forth independent and
separate guaranties of the Guarantor in favor of each Guaranteed Party in
respect of the Guaranteed Obligations owing to each such Guaranteed Party. The
illegality or unenforceability of any provision of this Guaranty or any
instrument or agreement required hereunder with respect to any Guaranteed
Party shall not in any way affect or impair the legality or enforceability of
that or any other provision of this Guaranty or any instrument or agreement
required hereunder in respect of any other Guaranteed Party. The parties
acknowledge that this Guaranty has, solely for reasons of convenience, been
prepared and executed as a single document, but that the legal effect shall be
in all respects as thought the Guarantor had executed separate guaranties, in
favor of each Guaranteed Party. Any provision of this Agreement and the other
Credit Documents to which
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the Grantor is a party that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
thereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 24 Multiple Guarantors; Joint and Several Liability. When this
Guaranty is executed by more than one Guarantor, the word "Guarantor" shall
mean all and any one or more of them, and the obligations of all Persons
signing this Guaranty shall be joint and several.
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IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of
the date first above written.
[NAME OF SUBSIDIARY]
By:
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SCHEDULE 1
to the Subsidiary Guaranty
SUBSIDIARIES
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EXHIBIT F
[COMPANY] SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __,
2001, is made by and among CERIDIAN CORPORATION, a Delaware corporation (the
"Grantor") in favor of the "Collateral Agent" (as defined herein) for the
benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent (in such
capacity, the "Administrative Agent") for itself and the financial
institutions (the "Lenders" and, individually, a "Lender") from time to time
party to that certain Credit Agreement dated as of January 31, 2001 (as
renewed, extended, modified, amended or restated from time to time, the
"Credit Agreement"), (b) the "Swap Provider" (as defined herein); and (c) the
Lenders party from time to time to the Note Purchase Agreement.
RECITALS
WHEREAS, it is a condition precedent to the borrowings under the
Credit Agreement and the Note Purchase Agreement that the Grantor enter into
this Agreement and grant to the Collateral Agent, for the ratable benefit of
the Credit Agents, the security interests hereinafter provided to secure the
obligations of the Grantor described below.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
(a) Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement.
(b) Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Account Control Agreement" means any account control agreement,
deposit account control agreement, lockbox or other agreement with any
securities intermediary or depository granting control with respect to any
investment property or deposit account for purposes of Article 9 of the UCC or
applicable law.
"Accounts" means any and all accounts of Grantor, whether now existing
or hereafter acquired or arising, and in any event includes all accounts
receivable, contract rights, royalties, Rights to Payment and other
obligations of any kind owed to Grantor arising out of or in connection with
the sale, lease, license or other transfer of Intellectual Property,
merchandise, goods or commodities or the rendering of services or arising from
any other transaction, however evidenced, and whether or not earned by
performance, all guaranties, indemnities and security with respect to the
foregoing, and all letters of credit relating thereto, in each case whether
now existing or hereafter acquired or arising.
"Arbitron Databases" means any and all of Grantor's collections or
compilations of data, stored in such a way as to permit selective search and
retrieval using electronic, electromagnetic,
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manual or mechanical methods, which relate to Grantor's business, and wherever
maintained, collected or accessed.
"Books" means all books, records and other written, electronic or
other documentation in whatever form maintained now or hereafter by or for
Grantor in connection with the ownership of its assets or the conduct of its
business or evidencing or containing information relating to the Collateral,
including: (i) ledgers; (ii) records indicating, summarizing, or evidencing
Grantor's assets (including Inventory and Rights to Payment), business
operations or financial condition; (iii) computer programs and software; (iv)
computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts
and output of whatever kind; (vi) any other computer prepared or
electronically stored, collected or reported information and equipment of any
kind; and (vii) any and all other rights now or hereafter arising out of any
contract or agreement between Grantor and any service bureau, computer or data
processing company or other Person charged with preparing or maintaining any
of Grantor's books or records or with credit reporting, including with regard
to Grantor's Accounts.
"Chattel Paper" means all writings of whatever sort which evidence a
monetary obligation and a security interest in or lease of specific goods,
whether now existing or hereafter arising.
"Collateral" has the meaning set forth in Section 2.
"Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the
Lenders from time to time party to the Note Purchase Agreement; and (c) the
Swap Provider.
"Copyright Office" means the United States Copyright Office.
"Credit Agents" and each, individually, a "Credit Agent" means
(a) the Administrative Agent (for the benefit of itself and the other Lenders,
and the L/C Issuer), (b) the Lenders and (c) the Swap Provider.
"Credit Documents" means, collectively, the Note Documents, the
Note Holder Documents and the Swap Documents.
"Credit Parties" and each, individually, a "Credit Party" means
the Credit Agents and the Debt Participants.
"Database Copyright Filing" has the meaning specified in Section
5(q)(v)(A).
"Debt Participant" means a "Debt Participant" under, and as defined
in, the Intercreditor Agreement.
"Deposit Account" means any demand, time, savings, passbook or like
account now or hereafter maintained by or for the benefit of Grantor with a
bank, savings and Note association,
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credit union or like organization (including Bank of America) and all funds
and amounts therein, whether or not restricted or designated for a particular
purpose.
"Documents" means any and all documents of title, bills of lading,
dock warrants, dock receipts, warehouse receipts and other documents of
Grantor, whether or not negotiable, and includes all other documents which
purport to be issued by a bailee or agent and purport to cover goods in any
bailee's or agent's possession which are either identified or are fungible
portions of an identified mass, including such documents of title made
available to Grantor for the purpose of ultimate sale or exchange of goods or
for the purpose of loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing with goods in a manner
preliminary to their sale or exchange, in each case whether now existing or
hereafter acquired or arising.
"Equipment" means all now existing or hereafter acquired equipment of
Grantor in all of its forms, wherever located, and in any event includes any
and all machinery, furniture, equipment, furnishings and fixtures in which
Grantor now or hereafter acquires any right, and all other goods and tangible
personal property (other than Inventory), including tools, parts and supplies,
automobiles, trucks, tractors and other vehicles, computer and other
electronic data processing equipment and other office equipment, computer
programs and related data processing software, and all additions,
substitutions, replacements, parts, accessories, and accessions to and for the
foregoing, now owned or hereafter acquired, and including any of the foregoing
which are or are to become fixtures on real property.
"Filing Offices" has the meaning set forth in Section 3(a).
"General Intangibles" means all general intangibles of Grantor, now
existing or hereafter acquired or arising, and in any event includes: (i) all
tax and other refunds, rebates or credits of every kind and nature to which
Grantor is now or hereafter may become entitled; (ii) all good will, choses in
action and causes of action, whether legal or equitable, whether in contract
or tort and however arising; (iii) all Intellectual Property; (iv) all rights
of stoppage in transit, replevin and reclamation; (v) all licenses, permits,
consents, indulgences and rights of whatever kind issued in favor of or
otherwise recognized as belonging to Grantor by any Governmental Authority;
(vi) all indemnity agreements, guaranties, insurance policies and other
contractual, equitable and legal rights of whatever kind or nature; and (vii)
all rights to receive payment and other rights arising under any Swap
Contracts; in each case whether now existing or hereafter acquired or arising.
"Grantor" has the meaning set forth in the first paragraph hereof.
"Instructing Group" means "Instructing Group" under, and as
defined in, the Intercreditor Agreement.
"Instruments" means any and all negotiable instruments and every other
writing which evidences a right to the payment of money, wherever located and
whether now existing or hereafter acquired.
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"Intellectual Property" means the following properties and assets
owned or held by Grantor or in which Grantor otherwise has any interest, now
existing or hereafter acquired or arising:
(i) all patents and patent applications, domestic or foreign, all
licenses relating to any of the foregoing and all income and royalties with
respect to any licenses (including such patents, patent applications and
patent licenses as described in Schedule 2), all rights to xxx for past,
present or future infringement thereof, all rights arising in connection with
any of the foregoing and pertaining thereto and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof; all
copyrights and applications for copyright (including with respect to the
Arbitron Databases and the Material Arbitron Software), domestic or foreign,
together with the underlying works of authorship (including titles), whether
or not the underlying works of authorship have been published and whether said
copyrights are statutory or arise under the common law, and all other rights
and works of authorship (including the copyrights and copyright applications
described in Schedule 2), all rights, claims and demands in any way relating
to any such copyrights or works, including royalties and rights to xxx for
past, present or future infringement, and all rights of renewal and extension
of copyright;
(ii) all state (including common law), federal and foreign trademarks,
service marks and trade names, and applications for registration of such
trademarks, service marks and trade names, all licenses relating to any of the
foregoing and all income and royalties with respect to any licenses (including
such marks, names, applications and licenses as described in Schedule 2),
whether registered or unregistered and wherever registered, all rights to xxx
for past, present or future infringement or unconsented use thereof, all
rights arising therefrom and pertaining thereto and all reissues, extensions
and renewals thereof;
(iii) all trade secrets, trade dress, trade styles, logos, other
source of business identifiers, mask-works, mask-work registrations, mask-work
applications, software (including all Material Arbitron Software and Material
Software Additions), confidential information, customer lists, license rights,
advertising materials, operating manuals, methods, processes, know-how,
algorithms, formulae, databases (including all Arbitron Databases), quality
control procedures, product, service and technical specifications, operating,
production and quality control manuals, sales literature, drawings,
specifications, blue prints, descriptions, inventions, name plates and
catalogs;
(iv) the entire goodwill of or associated with the businesses now or
hereafter conducted by Grantor connected with and symbolized by any of the
aforementioned properties and assets; and
(v) all intellectual property rights and property of the Grantor now
existing or hereafter arising, covered by any Supplemental IP Security
Agreement executed by Grantor from time to time in accordance with Section
3(c).
"Intercreditor Agreement" means that Intercreditor Agreement dated as
of January _____, 2001 among the Collateral Agent, the Administrative Agent,
the Swap Provider, and the "Lenders" (as defined therein).
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"Inventory" means any and all of Grantor's inventory in all of its
forms, wherever located, whether now owned or hereafter acquired, and in any
event includes all goods (including goods in transit) which are held for sale,
lease or other disposition, including those held for display or demonstration
or out on lease or consignment or to be furnished under a contract of service,
or which are raw materials, work in process, finished goods or materials used
or consumed in Grantor's business, and the resulting product or mass, and all
repossessed, returned, rejected, reclaimed and replevied goods, together with
all parts, components, supplies packing, and other materials used or usable in
connection with the manufacture, production, packing, shipping, advertising,
selling or furnishing of such goods; and all other items hereafter acquired by
Grantor by way of substitution, replacement, return, repossession or
otherwise, and all additions and accessions thereto, and any Document
representing or relating to any of the foregoing at any time.
"Investment Property" means any and all investment property of
Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts and commodity
accounts, and all financial assets held in any securities account or
otherwise, wherever located, and whether now existing or hereafter acquired or
arising.
"Letter of Credit Proceeds" means any and all proceeds of written
letters of credit.
"Material Arbitron Software" means all computer operation and
application programs of Grantor listed on Schedule 2.
"Material Software Addition" means any update, release, version,
patch, debugging program, compilation, or beta in respect of Material Arbitron
Software, and any and all computer operation and application programs,
including all object and source code and all copies and encodings thereof,
purchased, created or otherwise acquired by Grantor after the Closing Date.
"Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in
the Credit Agreement, but to the extent entered into by the parties thereto
for the benefit of, and as modified, extended or other wise changed in respect
of, the Lenders), (ii) all Account Control Agreements executed by any Note
Party under any Note Holder Document, (iii) all documents executed by any Note
Party to accomplish cash collateralization pursuant to any Note Holder
Document, and (iv) all licenses, UCC financing statements, notices and other
documents executed from time to time or in connection with any of the
foregoing.
"Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder
Guaranties.
"Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or
otherwise changed in respect of, the Lenders.
"Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.
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"Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company, the Lenders party thereto.
"Partnership Collateral" means any and all limited and general
partnership interests and limited liability company interests of any type or
nature, whether now existing or hereafter acquired or arising.
"Patent and Trademark Office" means the United States Patent and
Trademark Office.
"Proceeds" means whatever is receivable or received from or upon the
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Collateral or other assets of Grantor,
including "proceeds" as defined at UCC Section 9306, any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to or for the account
of Grantor from time to time with respect to any of the Collateral, any and
all payments (in any form whatsoever) made or due and payable to Grantor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any Governmental
Authority (or any Person acting under color of Governmental Authority), any
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral or for or on account of any damage or injury to or
conversion of any Collateral by any Person, any and all other tangible or
intangible property received upon the sale or disposition of Collateral, and
all proceeds of proceeds.
"Rights to Payment" means all Accounts and any and all rights and
claims to the payment or receipt of money or other forms of consideration of
any kind in, to and under all Chattel Paper, Documents, General Intangibles,
Instruments, Investment Property and Proceeds.
"Secured Obligations" means all indebtedness, liabilities and other
obligations of the Grantor to the Collateral Agent, any of the Credit Agents
and any Debt Participant, whether now existing or hereafter arising, and
whether due or to become due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, now or hereafter created under,
arising out of, or in connection with any of the Credit Documents, including
all Obligations (as independently defined in each of the Credit Agreement and
the Note Purchase agreement), and any obligations under any of the Swap
Documents.
"Software Copyright Filing" has the meaning specified in Section
5(q)(v)(B).
"Specified Swap Agreement" means any ISDA(R) Master Agreement
(including any schedule and confirmation relating thereto) entered into
between the Grantor and the Swap Provider as swap counterparties.
"Specified Swap Contract" means any interest rate swap entered into
between the Grantor and the Swap Provider as swap counterparties constituting
a "Specified Swap Contract" as defined in the Credit Agreement.
"Supplemental IP Security Agreement" means a Supplemental IP Security
Agreement substantially in the form of Exhibit I of the Credit Agreement,
executed pursuant to Section 3(c) hereof and Section 6.16 of the Credit
Agreement, and the terms and conditions of which may derive from, and be
incorporated by reference to, this Agreement.
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"Swap Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in
the Credit Agreement, but to the extent entered into by the parties thereto
for the benefit of, and as modified, extended or otherwise changed in respect
of, the Swap Provider, (b) all Account Control Agreements executed by any Note
Party under any Swap Document, (c) any documents executed by any Note Party to
accomplish cash collateralization pursuant to any Swap Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time in connection with any of the foregoing.
"Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.
"Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed
in respect of, the Swap Provider.
"Swap Provider" has the meaning specified in the Intercreditor
Agreement.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
"UCC Financing Statements" has the meaning specified in Section 4(f).
(c) Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned
to them in the UCC.
(d) Interpretation. The rules of interpretation set forth in
Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable
to this Agreement and are incorporated herein by this reference.
SECTION 2 Security Interest.
(a) Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent (for the benefit
of the Credit Agents, and each of them), and hereby grants to the Collateral
Agent (for the benefit of the Credit Agents, and each of them), a security
interest in all of Grantor's right, title and interest in, to and under the
following property, wherever located and whether now existing or owned or
hereafter acquired or arising (collectively, the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
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(iii) all Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Inventory;
(viii) all Books;
(ix) all products and Proceeds of any and all of the foregoing; and
(x) all Letter of Credit Proceeds.
Notwithstanding the foregoing provisions of this Section 2(a), such grant of
security interest shall not extend to, and the term "Collateral" shall not
include, any Intellectual Property which is now held or hereafter held by
Grantor as licensee, lessee or otherwise, to the extent such Intellectual
Property consists of: (i) ordinary shrinkwrap licenses governing software
products that Grantor purchased for use in the Ordinary Course of Business; or
(ii) licenses listed on Schedule 5.17 of the Credit Agreement.
(b) Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (i) Grantor shall remain liable under any contracts,
agreements and other documents included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by
the Collateral Agent of any of the rights hereunder shall not release Grantor
from any of its duties or obligations under such contracts, agreements and
other documents included in the Collateral, and (iii) none of the Collateral
Agent or any Credit Party shall have any obligation or liability under any
contracts, agreements and other documents included in the Collateral by reason
of this Agreement, nor shall any such Person be obligated to perform any of
the obligations or duties of Grantor thereunder or to take any action to
collect or enforce any such contract, agreement or other document included in
the Collateral hereunder.
(c) Continuing Security Interest. Grantor agrees that this
Agreement shall create continuing security interests in the Collateral which
shall remain in effect until terminated in accordance with Section 23.
SECTION 3 Perfection Procedures. Grantor shall duly complete, execute
and deliver to the Collateral Agent and each of the Credit Agents concurrently
with the execution of this Agreement, and at any time and from time to time,
all Supplemental IP Security Agreements, financing statements, continuation
statements, termination statements, security agreements, chattel mortgages,
assignments, patent, copyright and trademark collateral assignments, fixture
filings, warehouse receipts, Account Control Agreements, documents of title,
affidavits, reports, notices, schedules of account, letters of authority and
all other documents and instruments, in form satisfactory to the
Administrative Agent, and take all other action, as the Collateral Agent (upon
instruction of the Instructing Group) may request, to perfect and continue
perfected,
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maintain the priority of or provide notice of the Collateral Agent's security
interests in the Collateral for the benefit of each of the Credit Agents and
to accomplish the purposes of this Agreement. Without limiting the generality
of the foregoing, Grantor shall from time to time take the following actions:
(a) Filing of Security Agreements; Financing Statements. On or
prior to the Closing Date Grantor shall execute, notarize and deliver (i) an
original of this Agreement, (ii) such original UCC Financing Statements and
(iii) such original Supplemental IP Security Agreements as the Collateral
Agent at the instruction of the Instructing Group may reasonably request; all
duly completed and in final form for recordation at the offices described in
Schedule 3 (the "Filing Offices"), and after the Closing Date the Grantor
shall execute, notarize and deliver original completed UCC Financing
Statements for filing or recording in the appropriate filing office or offices
in any state identified by a Grantor in a notice delivered pursuant to Section
5(e).
(b) Deposit Accounts. On or prior to the Closing Date Grantor shall
execute such Account Control Agreements, notices, and shall take such other
action, as the Collateral Agent at the instruction of the Instructing Group
may reasonably request, to perfect and continue perfected, maintain the
priority of or provide notice of the Collateral Agent's security interests in
Collateral for the benefit of each of the Credit Agents consisting of Deposit
Accounts and to accomplish the purposes of this Agreement.
(c) Intellectual Property Collateral.
(i) Patents; etc. Promptly following any submission, filing
or recordation required pursuant to subsection (iv) of Section 5(q) (except as
provided in subsection (c)(ii) with respect to certain copyrights), record
such duly completed, signed and notarized Supplemental IP Security Agreement
with the Patent and Trademark Office or Copyright Office, as applicable, and
take such other action as may be necessary, or as the Collateral Agent at the
instruction of the Instructing Group may reasonably request, to perfect or
protect the Collateral Agent's security interests in such Intellectual
Property for the benefit of each of the Credit Agents. Grantor shall promptly,
but in any event not later than ten days after any such recordation, deliver
to the Collateral Agent and each Credit Agent true and complete copies of all
file-stamped applications, disclosure documents and amendments, and all
file-stamped Supplemental IP Security Agreements recorded at the Patent and
Trademark Office.
(ii) Copyrights. Grantor shall:
(A) Promptly following any submission, filing or recordation
required pursuant to subsection (v) of Section 5(q), duly complete, execute,
notarize and record a Supplemental IP Security Agreement at the Copyright
Office and take such other actions as may be necessary or appropriate in the
discretion of the Collateral Agent at the instruction of the Instructing Group
to perfect or protect the Collateral Agent's security interests in (I) all
Database Copyright Filings for such quarter, and (II) all Software Copyright
Filings made since the most recently filed Supplemental IP Security Agreement;
and
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(B) take such other action as may be necessary, or the Collateral
Agent may reasonably request, to perfect or protect the Collateral Agent's
security interests in the Intellectual Property.
(iii) The Grantor hereby authorizes the Collateral Agent to modify,
amend or supplement the Schedules hereto and to reexecute this Agreement and
any Supplemental IP Security Agreement from time to time on the Grantor's
behalf and as its attorney-in-fact to include any such future Collateral and
to cause to such reexecuted Agreement, Supplemental IP Security Agreement or
such modified, amended or supplemented Schedules to be filed with the
Copyright Office or the Patent and Trademark Office.
(d) Documents, Etc. Within five calendar days after receipt,
Grantor shall deliver to the Collateral Agent, or an agent designated by it,
for the benefit of the Credit Agents, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Chattel
Paper, and all other Rights to Payment at any time evidenced by promissory
notes, trade acceptances or other instruments, not already delivered hereunder
pursuant to this Section 3; provided, however, that unless an Event of Default
shall have occurred and be continuing, Grantor shall not be required to
deliver any Document, Chattel Paper, promissory note, trade acceptance or
other instrument having a face amount not in excess of $100,000. Upon the
request of the Collateral Agent, Grantor shall xxxx all Documents and Chattel
Paper with such legends as the Collateral Agent shall reasonably specify.
SECTION 4 Representations and Warranties. In addition to the
representations and warranties of the Grantor set forth in the Credit
Agreement, which are incorporated and restated herein by this reference, and
which are true and correct as of the date hereof, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, Grantor further
represents and warrants to each Credit Party that:
(a) Location of Chief Executive Office and Collateral. Grantor's
chief executive office and principal place of business is located at the
address set forth in Schedule 1, and all other locations where Grantor
conducts business or Collateral is kept are set forth in Schedule 1.
(b) Locations of Books. All locations where Books pertaining to the
Rights to Payment are kept, including all equipment necessary for accessing
such Books and the names and addresses of all service bureaus, computer or
data processing companies and other Persons keeping any Books or collecting
Rights to Payment for Grantor, are set forth in Schedule 1.
(c) Trade Names and Trade Styles. All trade names and trade styles
under which Grantor presently conducts the Arbitron Business operations are
set forth in Schedule 1, and, except as set forth in Schedule 1 and in
connection with the Transaction, Grantor has not, at any time in the past
year: (i) been known as or used any other corporate, trade or fictitious name;
(ii) changed its name; (iii) been the surviving or resulting corporation in a
merger or consolidation; or (iv) acquired through asset purchase or otherwise
any business of any Person.
(d) Ownership of Collateral. Grantor is, and, subject to Section
5(i), will continue to be, the sole and complete owner of the Collateral, or
has a valid and enforceable leasehold or licensee's interest in such
Collateral as set forth in Schedule 2 and in accordance with subsection
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(i) of this Section 4 (or, in the case of after-acquired Collateral, at the
time Grantor acquires rights in such Collateral, will be the sole and complete
owner thereof, or will have a valid and enforceable leasehold or licensee's
interest in such Collateral, to the extent permitted hereunder or under the
Credit Agreement), free from any Lien other than Permitted Liens.
(e) Enforceability; Priority of Security Interest. (i) This
Agreement together with such Supplemental IP Security Agreements as have been
executed by Grantor and filed at the Copyright Office or Patent and Trademark
Office in respect of the Intellectual Property create security interests which
are enforceable against the Collateral in which Grantor now has rights and
will create security interests which are enforceable against any Collateral in
which Grantor hereafter acquires rights at the time Grantor acquires any such
rights.
(ii) The Collateral Agent has a perfected and first priority
security interest in the Collateral in which Grantor now has rights, and will
have a perfected and first priority security interest in the Collateral in
which Grantor hereafter acquires rights at the time Grantor acquires any such
rights, in each case for the Credit Agent's benefit and, subject only to
Permitted Liens, securing the payment and performance of the Secured
Obligations.
(f) Other Financing Statements. Other than (i) financing statements
or other filings naming the owner of the asset to which such Lien relates as
debtor, under the UCC, copyright, patent, or trademark or any comparable law
("UCC Financing Statements") disclosed to the Administrative Agent prior to
the Effective Date and listed on Schedule 5.17 of the Credit Agreement, and
(ii) UCC Financing Statements in favor of the Collateral Agent for itself and
the Credit Agents pursuant to the Credit Documents, no effective UCC Financing
Statement naming Grantor as debtor, assignor, grantor, mortgagor, pledgor or
the like or covering all or any part of the Collateral is on file in any
filing or recording office in any jurisdiction, except in connection with
Permitted Liens.
(g) Rights to Payment.
(i) The Rights to Payment represent valid, binding and enforceable
obligations of the account debtors or other Persons obligated thereon,
representing undisputed, bona fide transactions completed in accordance with
the terms and provisions contained in any documents related thereto, and are
and will be genuine, free from Liens, and not subject to any adverse claims,
counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages,
holdbacks or conditions precedent of any kind of character, except to the
extent reflected by the Grantor's reserves for uncollectible Rights to Payment
or to the extent, if any, that such account debtors or other Persons may be
entitled to normal and ordinary course trade discounts, returns, adjustments
and allowances in accordance with Section 5(m), or as otherwise disclosed to
the Credit Agents in writing or occurring in the ordinary course of business;
(ii) to the best of Grantor's knowledge, all account debtors and
other obligors on Rights to Payment are solvent and generally paying their
debts as they come due, except to the extent that Grantor has established
adequate reserves therefor in accordance with GAAP;
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(iii) all Rights to Payment comply in all material respects with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable any federal or state consumer credit
laws;
(iv) Grantor has not assigned any of its rights under the Rights to
Payment except as provided in this Agreement or as set forth in the other
Credit Documents;
(v) all statements made, all unpaid balances and all other
information in the Books and other documentation relating to the Rights to
Payment in all material respects are true and correct and what they purport to
be; and
(vi) Grantor has no knowledge of any fact or circumstance which
would materially impair the validity or collectibility of any of such Rights
to Payment, except to the extent that Grantor has established adequate
reserves therefor in accordance with GAAP;
(h) Inventory. No Inventory is stored with any bailee, warehouseman
or similar Person or on any premises leased to Grantor, nor has any Inventory
been consigned to Grantor or consigned by Grantor to any Person or is held by
Grantor for any Person under any "xxxx and hold" or other arrangement, except
at locations listed in Schedule 1.
(i) Intellectual Property.
(i) As of the Closing Date, except as set forth in Schedule 2, (A)
Grantor (directly or through any Subsidiary) does not own, possess or use
under any licensing arrangement (other than ordinary shrinkwrap licenses
governing software products that Grantor purchased for use in the Ordinary
Course of Business) Intellectual Property materially related to the Arbitron
Business, and (B) Grantor (directly or through any Subsidiary) has no
registrations or applications therefor pending before any Governmental
Authority, that are or may be materially related to the Arbitron Business, for
any (I) patents or trademarks, (II) copyrights in respect of Material Arbitron
Software, Material Software Additions or Arbitron Databases for which any such
application was submitted after December 31, 1998, (III) copyrights in respect
of "Radio Market Reports" of Grantor for which any such application was
submitted after December 1, 2000, or (IV) any other copyrights for which such
application was submitted after December 31, 1999.
(ii) All Grantor's Intellectual Property is subsisting and has not
been adjudged invalid or unenforceable in whole or in part.
(iii) All maintenance fees required to be paid by Grantor on account
of any of its patents have been timely paid for maintaining such patents in
force, and, to the best of Grantor's knowledge, each of such patents is valid
and enforceable.
(iv) To the best of Grantor's knowledge, no infringement or
unauthorized use presently is being made of any Intellectual Property by any
Person that could reasonably be expected to have a Material Adverse Effect.
(v) Grantor is the owner or licensee of its Intellectual Property
and the past, present and contemplated future use of such Intellectual
Property by Grantor has not, does not and will
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not infringe or violate any right, privilege or license agreement of or with
any other Person in any material respect.
(vi) Grantor owns, has material rights under, is a party to, or an
assignee of a party to all Intellectual Property necessary and appropriate to
continue to conduct the Arbitron Business.
(vii) The Arbitron Databases purchased developed or otherwise
acquired by Grantor since December 31, 1998 are protected under current, valid
and enforceable copyright registrations (or applications therefor) at the
Copyright Office and under the U.S. copyright laws.
(viii) The Material Arbitron Software is protected under current,
valid and enforceable copyright registrations (or applications therefor) at
the Copyright Office and under the U.S. copyright laws.
(ix) Grantor's Intellectual Property consisting of patents are
protected under current, valid and enforceable patents or applications
therefor issued by the Patent and Trademark Office and under the U.S. patent
laws (except with respect to such patents that have expired of their own
terms, and not as the result of any abandonment, dispute or settlement).
(j) Equipment. As of the Closing Date, none of the Equipment is
leased from any Person, except as set forth in UCC record searches delivered
to the Collateral Agent or as otherwise disclosed to the Administrative Agent
and the other Credit Agents.
(k) Deposit Accounts. The names and addresses of all financial
institutions at which Grantor maintains its Deposit Accounts, and the account
numbers and account names of such Deposit Accounts, are set forth in Schedule
1. No Deposit Account Control Agreements exist with respect to any Investment
Property other than any Deposit Account Control Agreements in favor of the
Collateral Agent for the benefit of the Credit Agents.
(l) Instruments. (i) Grantor has not previously assigned any
interest in any Instruments (other than such interests as will be released on
or before the date hereof), (ii) no Person other than Grantor owns an interest
in the Instruments (whether as joint holders, participants or otherwise),
(iii) all Instruments are owing only to Grantor, and (iv) no material default
exists under or in respect of the Instruments.
(m) Other Investment Property. All securities accounts of the
Grantor and other Investment Property of the Grantor are set forth in Schedule
1. No Account Control Agreements exist with respect to any Investment Property
other than any Account Control Agreements in favor of the Collateral Agent for
the benefit of the Credit Agents.
SECTION 5 Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this
reference, so long as any of the Secured Obligations remain unsatisfied,
Grantor agrees that:
(a) Defense of Collateral. Grantor shall appear in and defend any
action, suit or proceeding which may affect to a material extent its title to,
or right or interest in, or the Collateral Agent's rights or interest in, the
Collateral.
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(b) Preservation of Collateral. Grantor shall do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve
and protect the Collateral.
(c) Compliance with Laws, Etc. Grantor shall comply in all material
respects with all laws, regulations and ordinances (including with respect to
the Fair Labor Standards Act), and with all policies of insurance, relating in
a material way to the possession, operation, maintenance and control of the
Collateral.
(d) Location of Books and Chief Executive Office. Grantor shall:
(i) keep all Books pertaining to the Rights to Payment at the locations set
forth in Schedule 1; and (ii) give at least 30 days' prior written notice to
the Collateral Agent and each Credit Agent of (A) any changes in any such
location where Books pertaining to the Rights to Payment are kept, including
any change of name or address of any service bureau, computer or data
processing company or other Person preparing or maintaining any Books or
collecting Rights to Payment for Grantor or (B) any changes in the location of
Grantor's chief executive office or principal place of business.
(e) Location of Collateral. If any Collateral of Grantor shall be
physically relocated to, or otherwise be physically located in, a state of the
United States in which a financing statement has not already been filed with
respect to such Collateral, Grantor shall give the Collateral Agent and each
Credit Agent prompt notice thereof (and in any event not later than one
Business Day after becoming aware thereof).
(f) Change in Name, Identity or Structure. Grantor shall give at
least 30 days' prior written notice to the Collateral Agent and each Credit
Agent of (i) any change in its name, (ii) any change of its jurisdiction of
incorporation or the location of its chief executive offices, (iii) any
changes in, additions to or other modifications of its trade names used as the
name of Grantor set forth in Schedule 1, and (iv) any changes in its identity
or structure in any manner which might make any financing statement filed
hereunder incorrect or misleading.
(g) Maintenance of Records. Grantor shall keep accurate and
complete Books with respect to the Collateral, disclosing the Collateral
Agent's security interests hereunder for the benefit of the Credit Agents.
(h) Invoicing of Sales. The Grantor will invoice all of its sales
upon forms customary in the industry and to maintain proof of delivery and
customer acceptance of goods.
(i) Disposition of Collateral. Grantor shall not surrender or lose
possession of (other than to a Credit Agent), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein,
except to the extent expressly permitted by the Credit Agreement.
(j) Liens. (i) Grantor shall keep the Collateral free of all
Liens except Permitted Liens.
(ii) Notwithstanding any other provision contained herein or in the
Credit Agreement, no Disposition of any assets of the Grantor shall be deemed
a transfer of goods free of the Collateral Agent's security interests under
Section 9307 UCC, except that Dispositions expressly permitted by Sections
7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and
7.06(j)
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thereof shall be free of such security interests. Accordingly, all
non-excluded Dispositions shall be subject at all times to the Liens of the
Collateral Agent.
(k) Expenses. The Grantor will pay all expenses of protecting,
storing, warehousing, insuring, handling and shipping the Collateral.
(l) Leased Premises. At the Collateral Agent's request, Grantor
shall obtain from each Person from whom Grantor leases any premises at which
any Collateral is at any time present such subordination, waiver, consent and
estoppel agreements as the Administrative Agent may reasonably require, in
form and substance satisfactory to the Administrative Agent.
(m) Rights to Payment. Grantor shall:
(i) with such frequency as the Collateral Agent may reasonably
require, furnish to the Collateral Agent (A) master customer listings,
including all names and addresses, together with copies or originals (as
requested by the Administrative Agent) of documents, customer statements,
repayment histories and present status reports relating to the Accounts; (B)
accurate records and summaries of Accounts, including detailed agings
specifying the name, face value and date of each invoice, and listings of
Accounts that are disputed or have been cancelled; and (C) such other
information relating to the Accounts as the Collateral Agent shall from time
to time reasonably request;
(ii) give only normal discounts, allowances and credits as to
Accounts and other Rights to Payment, in the Ordinary Course of Business,
according to normal trade practices, and enforce all Accounts and other Rights
to Payment strictly in accordance with their terms or pursuant to Grantor's
Ordinary Course of Business, and during the existence of an Event of Default,
take all such action to such end as may from time to time be reasonably
requested by the Collateral Agent, except that Grantor may at any time grant
any extension of the time for payment or enter into any agreement to make a
rebate or otherwise to reduce the amount owing on or with respect to, or
compromise or settle for less than the full amount thereof, any Account or
other Right to Payment, in the Ordinary Course of Business, according to
normal trade practices;
(iii) if any discount, allowance, credit, extension of time for
payment, agreement to make a rebate or otherwise to reduce the amount owing
on, or compromise or settle, an Account or other Right to Payment exists or
occurs, or if, to the knowledge of Grantor, any dispute, setoff, claim,
counterclaim or defense exists or has been asserted or threatened with respect
to an Account or other Right to Payment, disclose such fact to the Collateral
Agent in the Books relating to such Account or other Right to Payment when
such Books are requested for inspection by the Collateral Agent, and in
connection with any invoice or report furnished by Grantor to the Collateral
Agent relating to such Account or other Right to Payment;
(iv) if Accounts in an amount in excess of $500,000 for any and all
such Accounts arise from contracts with the United States or any department,
agency or instrumentality thereof, promptly notify the Collateral Agent
thereof and execute any documents and instruments and take any other steps
reasonably requested by the Collateral Agent in order that all monies due and
to become due thereunder shall be assigned to the Collateral Agent and notice
thereof given
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to the federal authorities under the Federal Assignment of Claims Act
(provided that such assignment and notice shall not be required if the
applicable contract prohibits assignment);
(v) in accordance with its sound business judgment perform and
comply in all material respects with its obligations in respect of the
Accounts and other Rights to Payment;
(vi) subject to Section 7, upon the request of the Collateral Agent
(A) at any time, notify all or any designated portion of the account debtors
and other obligors on the Rights to Payment of the security interests
hereunder, and (B) if there exists any Default or Event of Default, notify the
account debtors and other obligors on the Rights to Payment or any designated
portion thereof that payment shall be made directly to the Collateral Agent or
to such other Person or location as the Collateral Agent shall specify; and
(vii) if there exists any Default or Event of Default, establish such
lockbox or similar arrangements for the payment of the Accounts and other
Rights to Payment as the Administrative Agent shall require.
(n) Deposit Accounts and Securities Accounts. Grantor shall give
the Collateral Agent immediate notice of the establishment of any new Deposit
Account and any new securities account with respect to any Investment
Property.
(o) Inventory. Grantor shall:
(i) at such times as the Collateral Agent shall reasonably request,
prepare and deliver to the Collateral Agent a report of all Inventory, in form
and substance reasonably satisfactory to the Collateral Agent ;
(ii) upon the request of the Collateral Agent, take a physical
listing of the Inventory and promptly deliver a copy of such physical listing
to the Collateral Agent; and
(iii) not store any Inventory with a bailee, warehouseman or similar
Person or on premises leased to Grantor, nor dispose of any Inventory on a
xxxx-and-hold, guaranteed sale, sale and return, sale on approval, consignment
or similar basis, nor acquire any Inventory from any Person on any such basis,
except in the ordinary course of business and in accordance with its normal
practices.
(p) Equipment. Grantor shall, upon the Collateral Agent's request,
deliver to the Collateral Agent a report of each item of Equipment, in form
and substance reasonably satisfactory to the Collateral Agent.
(q) Intellectual Property Collateral. Grantor shall:
(i) not allow or suffer any Intellectual Property to become
abandoned, nor any registration thereof to be terminated, forfeited, expired
or dedicated to the public, except for Intellectual Property having negligible
commercial value;
(ii) not enter into any agreements or transactions (including any
license, sublicense or royalty agreement) pertaining to any Intellectual
Property outside of the ordinary course of
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business, or enter into any exclusive license or sublicense of any
Intellectual Property, except in a transaction permitted under the Credit
Documents;
(iii) promptly give the Collateral Agent notice of any rights Grantor
may obtain to any new patentable inventions, copyrightable works or other new
Intellectual Property, prior to the registration or recordation thereof
(including pursuant to this Section 5(q)) as to which Grantor (a) has received
gross royalty or license payments from any and all third parties in an
aggregate amount excess of $1,000,000 during any of the five fiscal years
preceding such time or (b) reasonably projects that it will receive gross
royalty or license payments from any and all third parties in an aggregate
amount excess of $1,000,000 during the any of the subsequent five fiscal
years; provided that Grantor shall have no obligation to provide notice under
this subsection (iii) to the extent that Grantor has satisfied, or within the
immediately following three calendar months will satisfy, subsection (iv) or
(v), as applicable, of this Section 5(q);
(iv) not less frequently than once every three calendar months and,
additionally, upon the purchase, creation or other acquisition of any Material
Software Addition, diligently record, register or prosecute, as applicable,
all applications for patents, copyrights and trademarks, and diligently
record, register and prosecute, as applicable, any and all continuations,
continuations-in-part, applications for reissue, applications for certificate
of correction and like matters in respect of Grantor's Intellectual Property
as shall be reasonable and appropriate in accordance with prudent business
practice, and promptly and timely pay any and all maintenance, license,
registration and other fees, taxes and expenses incurred in connection with
any Intellectual Property; and, without limiting the generality of the
foregoing,
(v) (A) not less frequently than once every three calendar months,
submit such duly completed, signed and notarized copyright registration forms
to the Copyright Office and take such other actions as necessary to register
under the U.S. copyright laws any and all additions, modifications or other
changes to the Arbitron Databases (each, a "Database Copyright Filing") since
the Closing Date; and (B) not less frequently than once every three calendar
months and, additionally, promptly after any purchase, creation or other
acquisition of any Material Software Addition, submit such duly completed,
signed and notarized copyright registration forms to the Copyright Office and
take such other actions as necessary to register under the U.S. copyright laws
each Material Software Addition (each, a "Software Copyright Filing"); and
(vi) not less frequently than once ever three calendar months, and
promptly but in any event not later than ten days after any and all
recordations described in subsections (iv) and (v) of this Section 5(q), and
after any and all recordations described in Section 3(c), deliver to the
Collateral Agent and each Credit Agent all such duly completed, file-stamped
(or otherwise certificated or acknowledged) and recorded documents together
with such other documents and information as the Collateral Agent or any
Credit Agent may reasonably request.
(r) Notices, Reports and Information. Subject to Section 3(c),
Grantor shall (i) notify the Collateral Agent and each Credit Agent of any
material claim made or asserted against the Collateral by any Person and of
any change in the composition of the Collateral or other event which could
materially adversely affect the value of the Collateral or the Lien thereon in
favor of the Collateral Agent (for the benefit of the Credit Agents); (ii)
furnish to the Collateral Agent and each Credit Agent such statements and
schedules further identifying and describing the
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Collateral and such other reports and other information in connection with the
Collateral as the Collateral Agent at the instruction of the Instructing Group
may reasonably request, all in reasonable detail; and (iii) upon reasonable
request of the Collateral Agent or any Credit Agent make such demands and
requests for information and reports as Grantor is entitled to make in respect
of the Collateral.
(s) Insurance. (i) Grantor shall carry and maintain in full force
and effect, at the expense of the Grantor and with financially sound and
reputable insurance companies, insurance for itself and the Collateral Agent
for the benefit of the Credit Agents, with respect to the Collateral in such
amounts, with such deductibles and covering such risks as shall be specified
in the Credit Agreement. Upon the request of the Collateral Agent, at the
instruction of the Instructing Group, and in any event not less often than
annually, Grantor shall furnish the Collateral Agent and each Credit Agent
with full information as to the insurance carried by it and, if so requested,
copies of all such insurance policies. All insurance policies required under
this subsection (s) shall provide that they shall not be terminated or
cancelled nor shall any such policy be materially changed without at least 30
days' prior written notice to the Grantor and the Collateral Agent (or 10
days' prior written notice if the Collateral Agent consents to such shorter
notice). Receipt of notice of termination or cancellation of any such
insurance policies or reduction of coverages or amounts thereunder shall
entitle the Collateral Agent to renew any such policies, cause the coverages
and amounts thereof to be maintained at levels required pursuant to the first
sentence of this subsection (s) or otherwise to obtain similar insurance in
place of such policies, in each case at the expense of the Grantor.
(ii) If Collateral of Grantor with a value exceeding $1,000,000 (the
"Settlement Consent Threshold") shall be materially damaged or destroyed, in
whole or in part, by fire or other casualty, Grantor shall give prompt notice
thereof to the Collateral Agent and each Credit Agent. No settlement on
account of any loss on any Collateral covered by insurance shall be made for
less than insured value without the consent of the Collateral Agent (with the
consent of the Instructing Group), unless, so long as there exists no Default
or Event of Default, the total value of each such loss or series of related
losses so compromised does not exceed the Settlement Consent Threshold. Unless
there exists any Default or Event of Default, the Collateral Agent (upon
instruction of the Instructing Group) shall promptly execute such necessary
consents, waivers and endorsements to permit Grantor to settle losses the
total aggregate value of which is in an amount less than the Settlement
Consent Threshold, and to receive payment therefor, as reasonably requested by
Grantor. After the occurrence and during the continuance of an Event of
Default, or as otherwise required under any of the Credit Documents, all sums
payable to Grantor by any insurer with respect to a casualty relating to all
or any part of the Collateral shall be paid to the Collateral Agent (upon
instruction of the Instructing Group). If Grantor shall receive any insurance
proceeds which are to be paid to the Collateral Agent pursuant to the previous
sentence, Grantor shall hold such proceeds in trust for the Collateral Agent
and shall segregate such proceeds from other funds of Grantor, and shall
immediately forward such proceeds in the form received to the Collateral Agent
(appropriately indorsed by Grantor to the order of the Collateral Agent or in
such other manner as shall be satisfactory to the Collateral Agent, upon
instruction of the Instructing Group). All such insurance proceeds may be
retained by the Collateral Agent as part of Collateral hereunder and held in
the Proceeds Account, applied by the Collateral Agent toward payment of all or
part of the Secured Obligations in such order as
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is provided herein, or released to Grantor upon its request with the consent
of the Instructing Group.
(t) Other Swap Obligations. Grantor shall not enter into any swap
contract under or subject to a Specified Swap Agreement, other than a
Specified Swap Contract.
SECTION 6 Administration of the Rights to Payment.
(a) Collection of Rights to Payment. Until the Collateral Agent
exercises its rights hereunder to collect Rights to Payment, Grantor shall
endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the Rights to Payment. At the request of the
Collateral Agent, upon instruction of the Instructing Group, if there exists
at such time any Event of Default, all remittances received by Grantor shall
be held in trust for the Collateral Agent and, in accordance with the
Collateral Agent's instructions, remitted to the Collateral Agent or deposited
to an account with the Collateral Agent in the form received (with any
necessary endorsements or instruments of assignment or transfer).
(b) Investment Property and Instruments. At the request of the
Collateral Agent, upon instruction of the Instructing Group, if there exists
at such time any Event of Default, the Collateral Agent shall be entitled,
subject to the Intercreditor Agreement, to receive all distributions and
payments of any nature with respect to any Investment Property or Instruments,
and all such distributions or payments received by Grantor shall be held in
trust for the Collateral Agent and, in accordance with any of the its
instructions (with the consent of the Instructing Group), remitted to the
Collateral Agent or deposited to an account with the Administrative Agent in
the form received (with any necessary endorsements or instruments of
assignment or transfer). If there exists any Default or Event of Default any
such distributions and payments with respect to any Investment Property held
in any securities account shall be held and retained in such securities
account, in each case as part of the Collateral hereunder. Additionally, the
Collateral Agent shall have the right, if there exists any Default or Event of
Default, following prior written notice to Grantor, to vote and to give
consents, ratifications and waivers with respect to any Investment Property
and Instruments, and to exercise all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining thereto, as
if the Collateral Agent was the absolute owner thereof; provided that the
Collateral Agent shall have no duty to exercise any of the foregoing rights
afforded to it and shall not be responsible to Grantor or any other Person for
any failure to do so or delay in doing so.
(e) Distributions to Be Held for Administrative Agent.
Distributions and other payments which are received by the Grantor but which
it is not entitled to retain as a result of the operation of this Section 6
shall be held in trust for the benefit of the Collateral Agent and be
segregated from the other property or funds of Grantor, and be forthwith paid
over or delivered to the Collateral Agent in the same form as so received.
SECTION 7 Authorization; Appointment as Attorney-in-Fact. The
Collateral Agent shall have the right to, in the name of Grantor, or in the
name of any of the Credit Parties or otherwise, without notice to or assent by
Grantor, and Grantor hereby constitutes and appoints the Collateral Agent (and
any officers or employees or agents designated by the Collateral Agent) as
Grantor's true and lawful attorney-in-fact, with full power and authority to:
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(i) sign any of the financing statements and Supplemental IP
Security Agreements which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the security
interests in the Collateral of the Collateral Agent (for the benefit of the
Credit Agents) and file any such financing statements and Supplemental IP
Security Agreements by electronic means with or without a signature as
authorized or required by applicable law or filing procedures;
(ii) take possession of and endorse any notes, acceptances, checks,
drafts, money orders or other forms of payment or security and collect any
Proceeds of any Collateral;
(iii) sign and endorse any invoice or xxxx of lading relating to any
of the Collateral, warehouse or storage receipts, drafts against customers or
other obligors, assignments, notices of assignment, verifications and notices
to customers or other obligors;
(iv) notify the U.S. Postal Service and other postal authorities to
change the address for delivery of mail addressed to Grantor to such address
as Collateral Agent may designate (provided that the Collateral Agent agrees
it will promptly deliver over to Grantor any mail that does not relate to the
Collateral); and, without limiting the generality of the foregoing, establish
with any Person lockbox or similar arrangements for the payment of the Rights
to Payment;
(v) receive, open and dispose of all mail addressed to Grantor
(provided that the Collateral Agent agrees it will promptly deliver over to
Grantor any mail that does not relate to the Collateral);
(vi) send requests for verification of Rights to Payment to the
customers or other obligors of Grantor;
(vii) contact, or direct Grantor to contact, all account debtors and
other obligors on the Rights to Payment and instruct such account debtors and
other obligors to make all payments directly to the Collateral Agent;
(viii) assert, adjust, xxx for, compromise or release any claims under
any policies of insurance;
(ix) exercise dominion and control over, and refuse to permit
further withdrawals from, Deposit Accounts maintained with Bank of America or
any other bank, financial institution or other Person;
(x) notify each Person maintaining lockbox or similar arrangements
for the payment of the Rights to Payment to remit all amounts representing
collections on the Rights to Payment directly to the Collateral Agent;
(xi) ask, demand, collect, receive and give acquittances and
receipts for any and all Rights to Payment, enforce payment or any other
rights in respect of the Rights to Payment and other Collateral, grant
consents, agree to any amendments, modifications or waivers of the agreements
and documents governing the Rights to Payment and other Collateral, and
otherwise file any claims, take any action or institute, defend, settle or
adjust any actions, suits or proceedings with respect to the Collateral, as
the Collateral Agent (upon instruction of the
192
Instructing Group) may deem necessary or desirable to maintain, preserve and
protect the Collateral, to collect the Collateral or to enforce the rights of
the Collateral Agent with respect to the Collateral;
(xii) execute any and all applications, documents, papers and
instruments necessary for the Collateral Agent to use the Intellectual
Property and grant or issue any exclusive or non-exclusive license or
sublicense with respect to any Intellectual Property;
(xiii) execute any and all endorsements, assignments or other
documents and instruments necessary to sell, lease, assign, convey or
otherwise transfer title in or dispose of the Collateral;
(xiv) execute and deliver to any securities intermediary or other
Person any entitlement order, Account Control Agreement or other notice,
document or instrument which the Collateral Agent (upon instruction of the
Instructing Group) may deem necessary or advisable (A) to realize upon the
Collateral, and (B) to maintain, protect and preserve the Investment Property
and the security interest of the Collateral therein; and
(xv) execute any and all such other documents and instruments, and
do any and all acts and things for and on behalf of Grantor, which the
Collateral Agent (upon instruction of the Instructing Group) may deem
necessary or advisable (A) to realize upon the Collateral, and (B) to
maintain, protect and preserve the Collateral and security interests of the
Collateral Agent therein and to accomplish the purposes of this Agreement.
The Collateral Agent agrees that, unless there exists any Default or Event of
Default, it shall not exercise the power of attorney, or any rights granted to
the Collateral Agent pursuant to clauses (ii) through (xiii), (xiv)(A) and
(xv)(A). The foregoing power of attorney is coupled with an interest and
irrevocable so long as any of the Secured Obligations has not been paid and
performed in full. Grantor hereby ratifies, to the extent permitted by law,
any and all acts that the Collateral Agent shall lawfully and in good faith do
or cause to be done by virtue of and in compliance with this Section 7.
SECTION 8 Performance of Grantor Obligations. The Collateral Agent may
perform or pay any obligation which Grantor has agreed to perform or pay under
or in connection with this Agreement, and which Grantor has failed to perform
or pay as and when due, and Grantor shall reimburse the Collateral Agent on
demand for any amounts paid by the Collateral Agent pursuant to this Section
8.
SECTION 9 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to
exercise any of the rights, privileges or powers afforded to such party and
shall not be responsible to Grantor or any other Person for any failure to do
so or delay in doing so. Beyond the exercise of reasonable care to assure the
safe custody of Collateral in the Collateral Agent's possession, and the
accounting for moneys actually received by the Collateral Agent hereunder, the
Collateral Agent shall have no duty or liability to exercise or preserve any
rights, privileges or powers pertaining to the Collateral.
SECTION 10. Remedies.
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(a) Remedies. If there exists any Default or Event of Default, the
Collateral Agent shall have, in addition to all other rights and remedies
granted to in this Agreement, the Credit Agreement or any other Credit
Document, all rights and remedies of a secured party under the UCC and other
applicable laws. Without limiting the generality of the foregoing, Grantor
agrees that:
(i) The Collateral Agent may peaceably and without notice enter any
premises of Grantor; take possession of any Collateral; remove, prohibit
access to or use of, or dispose of all or part of the Collateral on any
premises of Grantor or elsewhere; or, in the case of Equipment, render it
nonfunctional, and otherwise collect, receive, appropriate and realize upon
all or any part of the Collateral, and demand, give receipt for, settle,
renew, extend, exchange, compromise, adjust, or xxx for all or any part of the
Collateral, as the Collateral Agent (upon instruction of the Instructing
Group) may determine.
(ii) The Collateral Agent may require Grantor to assemble all or any
part of the Collateral and make it available to the Collateral Agent, at any
place and time designated by the Collateral Agent.
(iii) The Collateral Agent may use or transfer any of Grantor's
rights and interests in any Intellectual Property, by license, by sublicense
(to the extent permitted by an applicable license) or otherwise, on such
conditions and in such manner as the Collateral Agent (upon instruction of the
Instructing Group) may determine.
(iv) The Collateral Agent may secure the appointment of a receiver
of the Collateral or any part thereof (to the extent and in the manner
provided by applicable law).
(v) The Collateral Agent may withdraw (or cause to be withdrawn)
any and all funds from any Deposit Accounts or securities accounts.
(vi) The Collateral Agent may sell, resell, lease, use, assign,
transfer or otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or processing
(utilizing in connection therewith any of Grantor's assets, without charge or
liability to the Collateral agent or any of the Credit Parties therefor) at
public or private sale, by one or more contracts, in one or more parcels, at
the same or different times, for cash or credit or for future delivery without
assumption of any credit risk, all as the Collateral Agent (upon instruction
of the Instructing Group) deem advisable; provided, however, that Grantor
shall be credited with the net proceeds of sale only when such proceeds are
finally collected by the Collateral Agent. The Collateral Agent shall have the
right upon any such public sale, and, to the extent permitted by law, upon any
such private sale, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption, which right or equity of
redemption Grantor hereby releases, to the extent permitted by law. Grantor
hereby agrees that the sending of notice by ordinary mail, postage prepaid, to
the address of Grantor set forth in the Credit Agreement, of the place and
time of any public sale or of the time after which any private sale or other
intended disposition is to be made, shall be deemed reasonable notice thereof
if such notice is sent ten days prior to the date of such sale or other
disposition or the date on or after which such sale or other disposition may
occur, provided that the Collateral Agent
194
may provide Grantor shorter notice or no notice, to the extent permitted by the
UCC or other applicable law.
(b) License. For the purpose of enabling the Collateral Agent to
exercise its rights and remedies under this Section 10 or otherwise in
connection with this Agreement, Grantor hereby grants to Collateral Agent for
the benefit of the Credit Agents an irrevocable, non-exclusive and assignable
license (exercisable without payment or royalty or other compensation to
Grantor) to use, license or sublicense any Intellectual Property.
(c) Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated at such time as there
may exist an Event of Default (including with respect to undrawn amounts under
any Letter of Credit or contingent amounts due under any Specified Swap
Agreement arising from any Specified Swap Contract), the Collateral Agent, at
its election, (i) retain the proceeds of any sale, collection, disposition or
other realization upon the Collateral (or any portion thereof) in a special
purpose non-interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for the benefit of
the Credit Agents for such purpose (which shall constitute a Deposit Account
included within the Collateral hereunder) until such time as the Collateral
Agent may elect to apply such proceeds to the Secured Obligations, and Grantor
agrees that such retention of such proceeds by the Collateral Agent shall not
be deemed strict foreclosure with respect thereto; (ii) in any manner elected
by the Collateral Agent (upon instruction of the Instructing Group), estimate
the liquidated amount of any such contingent, unmatured or unliquidated claims
and apply the proceeds of the Collateral against such amount; or (iii)
otherwise proceed in any manner permitted by applicable law. Grantor agrees
that the Proceeds Account shall be a blocked account and that upon the
irrevocable deposit of funds into the Proceeds Account, Grantor shall not have
any right of withdrawal with respect to such funds. Accordingly, Grantor
irrevocably waives until the termination of the security interests granted
under this Agreement in accordance with Section 23 the right to make any
withdrawal from the Proceeds Account and the right to instruct the Collateral
Agent or any of the Credit Parties to honor drafts against the Proceeds
Account.
(d) Application of Proceeds. Subject to subsection (c), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by
the applicable Credit Parties or the Collateral Agent against all or any part
of the Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.
SECTION 11 Certain Waivers. Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshalling
of the Collateral or other collateral or security for the Secured Obligations;
(ii) any right to require the Collateral Agent, or any of the Credit Parties
(A) to proceed against any Person, (B) to exhaust any other collateral or
security for any of the Secured Obligations, (C) to pursue any remedy, or (D)
to make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Collateral; and (iii) all claims, damages, and
demands
195
against the Collateral Agent, or any of the Credit Parties arising out of the
repossession, retention, sale or application of the proceeds of any sale of
the Collateral.
SECTION 12 Notices. All notices or other communications hereunder
shall be given in the manner and to the addresses specified in, and shall be
effective as provided in, the Credit Agreement; provided, however, that
notices hereunder to (a) the Swap Provider shall be delivered to Fleet
National Bank using the information listed in Schedule 10.02 of the Credit
Agreement for such party as a Lender or such replacement Swap Provider as may
be appointed from time to time pursuant to the terms of the Intercreditor
Agreement, and (b) the Lenders shall be delivered to such Persons at the
address specified in the Note Purchase Agreement, or to such replacement
Lenders as may be appointed from time to time consistent with the terms of the
Intercreditor Agreement.
SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of
the Collateral Agent, or any of the Credit Parties to exercise, and no delay
in exercising, any right, remedy, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right, remedy, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights and remedies under this Agreement are cumulative and not exclusive of
any rights, remedies, powers and privileges that may otherwise be available to
the Collateral Agent, or any of the Credit Parties.
SECTION 14 Indemnification; Other Charges.
(a) Indemnification. The Grantor hereby agrees to indemnify the
Collateral Agent and the Credit Parties, and the other Lenders, and their
respective directors, officers, employees, agents, counsel and other advisors
(each an "Indemnified Person") against, and hold each of them harmless from,
any and all liabilities, obligations, losses, claims, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever, including the reasonable fees and disbursements of counsel
to an Indemnified Person (including allocated costs of internal counsel),
which may be imposed on, incurred by, or asserted against any Indemnified
Person, in any way relating to or arising out of this Agreement or the
transactions contemplated hereby or any action taken or omitted to be taken by
it hereunder (the "Indemnified Liabilities"); provided that Grantor shall not
be liable to any Indemnified Person with respect to Indemnified Liabilities
resulting from such Indemnified Person's gross negligence or willful
misconduct. If and to the extent that the foregoing indemnification is for any
reason held unenforceable, Grantor agrees to make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
(b) Other Charges. The Grantor agrees to indemnify the Collateral
Agent and the Credit Parties against and hold each of them harmless from any
and all present and future stamp, transfer, documentary and other such taxes,
levies, fees, assessments and other charges made by any jurisdiction by reason
of the execution, delivery, performance and enforcement of this Agreement.
(c) Interest. Any amounts payable to the any Indemnified Person
under this Section 14 or otherwise under this Agreement if not paid upon
demand shall bear interest from
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the date of such demand until paid in full, at the applicable rate, (a) for
the Administrative Agent and any Lender, as set forth in Section 2.08(b) of
the Credit Agreement, (b) for the Swap Provider, as set forth in the Specified
Swap Agreement, and (c) for the Lenders as set forth in Section 2.08(b) of the
Note Purchase Agreement.
SECTION 15 Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by Grantor, each Indemnified Person
referred to in Section 14 and their respective successors and assigns.
SECTION 16 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE
COLLATERAL AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX
XXXX SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF
THE CREDIT PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
ANY FEDERAL COURT OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT
AND EACH OF THE CREDIT PARTIES WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN
197
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
SECTION 18 Entire Agreement; Amendment. This Agreement, together with
the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent (for the benefit of the Credit
Agents), and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 19, this Agreement shall be
amended only by written agreement with the written consent of the Instructing
Group; provided, however, that any amendment having the effect of causing a
release of all or substantially all of the Collateral must be consented to in
writing by the Collateral Agent and each of the Credit Agents.
SECTION 19 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the
benefit of each Credit Agent. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
with respect to any Credit Agent shall not in any way affect or impair the
legality or enforceability of that or any other provision of this Agreement or
any instrument or agreement required hereunder in respect to any other Credit
Agent. The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the
legal effect shall be in all respects as though the Grantor had executed
separate security interests, for the benefit of each of the Credit Agents. Any
provision of this Agreement and the other Credit Documents to which the
Grantor is a party that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
thereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 20 Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement may be delivered by any party
hereto or thereto either in the form of an executed original or an executed
original sent by facsimile transmission to be followed promptly by mailing of
a hard copy original, and that receipt by the Collateral Agent or any Credit
Agent of a facsimile transmitted document purportedly bearing the signature of
a Grantor shall bind Grantor with the same force and effect as the delivery of
a hard copy original. Any failure by the Collateral Agent or any Credit Agent
to receive the hard copy executed original of such document shall not diminish
the binding effect of receipt of the facsimile transmitted executed original
of such document of the party whose hard copy page was not received by the
Collateral Agent or such Credit Party.
SECTION 21 Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to
the Credit Documents, including any such provisions contained in Article X
thereof, such provisions are incorporated herein by this reference.
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SECTION 22 No Inconsistent Requirements. Grantor acknowledges that
this Agreement and the other Credit Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters,
and agrees that all such covenants, terms and provisions are cumulative and
all shall be performed and satisfied in accordance with their respective
terms.
SECTION 23 Termination; Releases. (i) Upon the termination of the
Commitments of the Lenders, the surrender of any Letters of Credit issued for
the account of Grantor under the Credit Agreement and payment and performance
in full of all Secured Obligations, the security interests granted under this
Agreement shall terminate and the Collateral Agent and all Credit Agents shall
promptly execute and deliver to Grantor such documents and instruments
reasonably requested by Grantor as shall be necessary to evidence termination
of all security interests given by Grantor to the Collateral Agent hereunder;
provided, however, that the obligations of Grantor under Section 14 shall
survive such termination.
(ii) Concurrently with any permitted disposition of Collateral under
the Credit Documents, the security interests hereunder shall automatically be
released from the Collateral so disposed of, subject to Section 5(j);
provided, however, that the security interests shall continue in the Proceeds
thereof. Upon satisfaction to all conditions precedent to any permitted
disposition set forth herein or in the other Credit Documents, the Collateral
Agent and all Credit Agents shall execute and deliver any releases or other
documents reasonably requested by the relevant Grantor to accomplish or
confirm the release of Collateral provided by this Section. Any such release
shall specifically describe the portion of the Collateral to be released,
shall be expressed to be unconditional and shall be without recourse or
warranty (other than a warranty that the Collateral Agent and the Credit
Agents have not assigned their rights and interests to any other Person).
SECTION 24 Assumption. Upon execution and delivery to the
Administrative Agent of an Subsidiary Security Agreement by a Subsidiary of
the Grantor as provided in Section 6.14 of the Credit Agreement, effective as
of the effective date of such Subsidiary Security Agreement, such Subsidiary
shall be deemed a Grantor party hereto, and this Agreement shall be deemed
amended to include any amendments to the Schedules provided by such Subsidiary
in connection therewith.
SECTION 25 Intercreditor Agreement. Notwithstanding anything set forth
in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.
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199
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in San Francisco, California by their proper
and duly authorized officers as of the day and year first above written.
CERIDIAN CORPORATION
Grantor
By:
--------------------------------
Name:
Title:
BANK OF AMERICA, N.A.,
as Collateral
By:
--------------------------------
Name:
Title:
200
SCHEDULE 1
to the Security Agreement
1. LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF
COLLATERAL
a. Chief Executive Office and Principal Place of Business:
Other locations where Grantor conducts business or Collateral is kept:
2. LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT
3. TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS
NAMES; ETC.
4. DEPOSIT ACCOUNTS
201
5. INVESTMENT PROPERTY
6. INSTRUMENTS
7. LEASED EQUIPMENT
8. MATERIAL SOFTWARE
202
SCHEDULE 2
to the Security Agreement
(a) ISSUED PATENTS OF GRANTOR
Grantor Patent No. Issue Date Inventors Title Agent
------- ---------- ---------- --------- ----- -----
(b) PENDING PATENT APPLICATIONS OF GRANTOR
Grantor Application No. Filing Date Inventors Title
------- --------------- ----------- --------- -----
(c) TRADEMARKS OF GRANTOR
Registration Registration Registered
Grantor No. Date Filing Date Owner Xxxx
------- --- ---- ----------- ----- ----
(d) PENDING TRADEMARK APPLICATIONS OF GRANTOR
Application
Grantor No. Filing Date Applicant Xxxx
------- --- ----------- --------- ----
(e) COPYRIGHTS OF GRANTOR
Grantor Copyright Title Reg. No. Date of Issue
------- --------------- -------- -------------
203
(f) COPYRIGHT APPLICATIONS OF GRANTOR
Grantor Title Date of Application
------- ----- -------------------
(g) COPYRIGHT LICENSES OF GRANTOR
Grantor Title Copyright Owner Reg. No. Date of Issue
------- ----- --------------- -------- -------------
204
SCHEDULE 3
to the Security Agreement
FILING OFFICES
205
EXHIBIT G
[SUBSIDIARY] SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), dated as of February __,
2001, is made by and among _____________ (the "Grantor") in favor of the
"Collateral Agent" (as defined herein) for the benefit of: (a) BANK OF AMERICA,
N.A., as the administrative agent (in such capacity, the "Administrative Agent")
for itself and the financial institutions (the "Lenders" and, individually, a
"Lender") from time to time party to that certain Credit Agreement dated as of
January 31, 2001 (as renewed, extended, modified, amended or restated from time
to time, the "Credit Agreement"), (b) the "Swap Provider" (as defined in
herein); and (c) the Lenders party from time to time to the Note Purchase
Agreement.
RECITALS
WHEREAS, it is a condition precedent to the borrowings under the Credit
Agreement and the Note Purchase Agreement that the Grantor enter into this
Agreement and grant to the Collateral Agent, for the ratable benefit of the
Credit Agents, the security interests hereinafter provided to secure the
obligations of the Grantor described below.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
(a) Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement.
(b) Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Account Control Agreement" means any account control agreement, deposit
account control agreement, lockbox or other agreement with any securities
intermediary or depository granting control with respect to any investment
property or deposit accounts for purposes of Article 9 of the UCC or applicable
law.
"Accounts" means any and all accounts of Grantor, whether now existing
or hereafter acquired or arising, and in any event includes all accounts
receivable, contract rights, royalties, Rights to Payment and other obligations
of any kind owed to Grantor arising out of or in connection with the sale,
lease, license or other transfer of Intellectual Property, merchandise, goods or
commodities or the rendering of services or arising from any other transaction,
however evidenced, and whether or not earned by performance, all guaranties,
indemnities and security with respect to the foregoing, and all letters of
credit relating thereto, in each case whether now existing or hereafter acquired
or arising.
"Arbitron Databases" means any and all of Grantor's collections or
compilations of data, stored in such way as to permit selective search and
retrieval using electronic, electromagnetic,
206
manual or mechanical methods, which relate to Grantor's business, and wherever
maintained, collected or accessed.
"Books" means all books, records and other written, electronic or other
documentation in whatever form maintained now or hereafter by or for Grantor in
connection with the ownership of its assets or the conduct of its business or
evidencing or containing information relating to the Collateral, including: (i)
ledgers; (ii) records indicating, summarizing, or evidencing Grantor's assets
(including Inventory and Rights to Payment), business operations or financial
condition; (iii) computer programs and software; (iv) computer discs, tapes,
files, manuals, spreadsheets; (v) computer printouts and output of whatever
kind; (vi) any other computer prepared or electronically stored, collected or
reported information and equipment of any kind; and (vii) any and all other
rights now or hereafter arising out of any contract or agreement between Grantor
and any service bureau, computer or data processing company or other Person
charged with preparing or maintaining any of Grantor's books or records or with
credit reporting, including with regard to Grantor's Accounts.
"Company" has the meaning specified in the Credit Agreement.
"Chattel Paper" means all writings of whatever sort which evidence a
monetary obligation and a security interest in or lease of specific goods,
whether now existing or hereafter arising.
"Collateral" has the meaning set forth in Section 2.
"Collateral Agent" means Bank of America, N.A. in its capacity
as "Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the Lenders
from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.
"Credit Agents" and each, individually, a "Credit Agent" means
(a) the Administrative Agent (for the benefit of itself and the other Lenders,
and the L/C Issuer), (b) the Lenders and (c) the Swap Provider.
"Credit Documents" means, collectively, the Note Documents, the
Note Holder Documents and the Swap Documents.
"Credit Parties" and each, individually, a "Credit Party" means
the Credit Agents and the Debt Participants.
"Database Copyright Filing" has the meaning set forth in Section
5(q)(v)(A).
"Debt Participant" means a "Debt Participant" under, and as defined in,
the Intercreditor Agreement.
"Deposit Account" means any demand, time, savings, passbook or like
account now or hereafter maintained by or for the benefit of Grantor with a
bank, savings and Note association,
207
credit union or like organization (including Bank of America) and all funds and
amounts therein, whether or not restricted or designated for a particular
purpose.
"Documents" means any and all documents of title, bills of lading, dock
warrants, dock receipts, warehouse receipts and other documents of Grantor,
whether or not negotiable, and includes all other documents which purport to be
issued by a bailee or agent and purport to cover goods in any bailee's or
agent's possession which are either identified or are fungible portions of an
identified mass, including such documents of title made available to Grantor for
the purpose of ultimate sale or exchange of goods or for the purpose of loading,
unloading, storing, shipping, transshipping, manufacturing, processing or
otherwise dealing with goods in a manner preliminary to their sale or exchange,
in each case whether now existing or hereafter acquired or arising.
"Equipment" means all now existing or hereafter acquired equipment of
Grantor in all of its forms, wherever located, and in any event includes any and
all machinery, furniture, equipment, furnishings and fixtures in which Grantor
now or hereafter acquires any right, and all other goods and tangible personal
property (other than Inventory), including tools, parts and supplies,
automobiles, trucks, tractors and other vehicles, computer and other electronic
data processing equipment and other office equipment, computer programs and
related data processing software, and all additions, substitutions,
replacements, parts, accessories, and accessions to and for the foregoing, now
owned or hereafter acquired, and including any of the foregoing which are or are
to become fixtures on real property.
"Filing Offices" has the meaning set forth in Section 3(a).
"General Intangibles" means all general intangibles of Grantor, now
existing or hereafter acquired or arising, and in any event includes: (i) all
tax and other refunds, rebates or credits of every kind and nature to which
Grantor is now or hereafter may become entitled; (ii) all good will, choses in
action and causes of action, whether legal or equitable, whether in contract or
tort and however arising; (iii) all Intellectual Property; (iv) all rights of
stoppage in transit, replevin and reclamation; (v) all licenses, permits,
consents, indulgences and rights of whatever kind issued in favor of or
otherwise recognized as belonging to Grantor by any Governmental Authority; (vi)
all indemnity agreements, guaranties, insurance policies and other contractual,
equitable and legal rights of whatever kind or nature; and (vii) all rights to
receive payment and other rights under any Swap Contracts; in each case whether
now existing or hereafter acquired or arising.
"Grantor" has the meaning set forth in the first paragraph hereof.
"Instructing Group" means "Instructing Group" under, and as
defined in, the Intercreditor Agreement.
"Instruments" means any and all negotiable instruments and every other
writing which evidences a right to the payment of money, wherever located and
whether now existing or hereafter acquired.
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"Intellectual Property" means the following properties and assets owned
or held by Grantor or in which Grantor otherwise has any interest, now existing
or hereafter acquired or arising:
(i) all patents and patent applications, domestic or foreign, all
licenses relating to any of the foregoing and all income and royalties with
respect to any licenses (including such patents, patent applications and patent
licenses as described in Schedule 2), all rights to xxx for past, present or
future infringement thereof, all rights arising in connection with any of the
foregoing and pertaining thereto and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof; all copyrights and
applications for copyright (including with respect to the Arbitron Databases and
the Material Arbitron Software), domestic or foreign, together with the
underlying works of authorship (including titles), whether or not the underlying
works of authorship have been published and whether said copyrights are
statutory or arise under the common law, and all other rights and works of
authorship (including the copyrights and copyright applications described in
Schedule 2), all rights, claims and demands in any way relating to any such
copyrights or works, including royalties and rights to xxx for past, present or
future infringement, and all rights of renewal and extension of copyright;
(ii) all state (including common law), federal and foreign trademarks,
service marks and trade names, and applications for registration of such
trademarks, service marks and trade names, all licenses relating to any of the
foregoing and all income and royalties with respect to any licenses (including
such marks, names, applications and licenses as described in Schedule 2),
whether registered or unregistered and wherever registered, all rights to xxx
for past, present or future infringement or unconsented use thereof, all rights
arising therefrom and pertaining thereto and all reissues, extensions and
renewals thereof;
(iii) all trade secrets, trade dress, trade styles, logos, other source
of business identifiers, mask-works, mask-work registrations, mask-work
applications, software (including all Material Arbitron Software and all
Material Software Additions), confidential information, customer lists, license
rights, advertising materials, operating manuals, methods, processes, know-how,
algorithms, formulae, databases (including all Arbitron Databases), quality
control procedures, product, service and technical specifications, operating,
production and quality control manuals, sales literature, drawings,
specifications, blue prints, descriptions, inventions, name plates and catalogs;
and
(iv) the entire goodwill of or associated with the businesses now or
hereafter conducted by Grantor connected with and symbolized by any of the
aforementioned properties and assets; and
(v) all intellectual property rights and property of the Grantor now
existing or hereafter arising, covered by any Supplemental IP Security Agreement
executed by Grantor from time to time in accordance with Section 3(c).
"Intercreditor Agreement" means that Intercreditor Agreement dated as of
January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider, and the "Lenders" (as defined therein).
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"Inventory" means any and all of Grantor's inventory in all of its
forms, wherever located, whether now owned or hereafter acquired, and in any
event includes all goods (including goods in transit) which are held for sale,
lease or other disposition, including those held for display or demonstration or
out on lease or consignment or to be furnished under a contract of service, or
which are raw materials, work in process, finished goods or materials used or
consumed in Grantor's business, and the resulting product or mass, and all
repossessed, returned, rejected, reclaimed and replevied goods, together with
all parts, components, supplies packing, and other materials used or usable in
connection with the manufacture, production, packing, shipping, advertising,
selling or furnishing of such goods; and all other items hereafter acquired by
Grantor by way of substitution, replacement, return, repossession or otherwise,
and all additions and accessions thereto, and any Document representing or
relating to any of the foregoing at any time.
"Investment Property" means any and all investment property of Grantor,
including all securities, whether certificated or uncertificated, security
entitlements, securities accounts, commodity contracts and commodity accounts,
and all financial assets held in any securities account or otherwise, wherever
located, and whether now existing or hereafter acquired or arising.
"Letter of Credit Proceeds" means any and all proceeds of written
letters of credit.
"Material Arbitron Software" means all computer operation and
application programs of Grantor listed on Schedule 2.
"Material Software Addition" means any update, release, version, patch,
debugging program, compilation, or beta in respect of Material Arbitron
Software, and any and all computer operation and application programs, including
all object and source code and all copies and encodings thereof, purchased,
created or otherwise acquired by Grantor after the Closing Date.
"Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Note Party
under any Note Holder Document, (iii) all documents executed by any Note Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.
"Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.
"Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.
"Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.
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"Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company, the Note Holders party thereto.
"Partnership Collateral" means any and all limited and general
partnership interests and limited liability company interests of any type or
nature, whether now existing or hereafter acquired or arising.
"Patent and Trademark Office" means the United States Patent and
Trademark Office.
"Proceeds" means whatever is receivable or received from or upon the
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Collateral or other assets of Grantor,
including "proceeds" as defined at UCC Section 9306, any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to or for the account of
Grantor from time to time with respect to any of the Collateral, any and all
payments (in any form whatsoever) made or due and payable to Grantor from time
to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of Governmental Authority), any and all other
amounts from time to time paid or payable under or in connection with any of the
Collateral or for or on account of any damage or injury to or conversion of any
Collateral by any Person, any and all other tangible or intangible property
received upon the sale or disposition of Collateral, and all proceeds of
proceeds.
"Rights to Payment" means all Accounts and any and all rights and claims
to the payment or receipt of money or other forms of consideration of any kind
in, to and under all Chattel Paper, Documents, General Intangibles, Instruments,
Investment Property and Proceeds.
"Secured Obligations" means all indebtedness, liabilities and other
obligations of the Grantor to the Collateral Agent, any of the Credit Agents and
any Debt Participant whether now existing or hereafter arising, and whether due
or to become due, absolute or contingent, liquidated or unliquidated, determined
or undetermined, now or hereafter created under, arising out of or in connection
with any of the Credit Documents, including all Obligations (as independently
defined in each of the Credit Agreement and the Note Purchase Agreement), and
any obligations under any of the Swap Documents.
"Software Copyright Filing" has the meaning set forth in Section
5(q)(v)(B).
"Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the Company
and the Swap Provider as swap counterparties.
"Specified Swap Contract" means any interest rate swap entered into
between the Company and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.
"Supplemental IP Security Agreement" means a Supplemental IP Security
Agreement substantially in the form of Exhibit I of the Credit Agreement,
executed pursuant to Section 3(c) hereof and Section 6.16 of the Credit
Agreement, and the terms and conditions of which may derive from, and be
incorporated by reference to, this Agreement.
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"Swap Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider, (b) all Account Control Agreements executed by any Note Party
under any Swap Document, (c) any documents executed by any Note Party to
accomplish cash collateralization pursuant to any Swap Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time in connection with any of the foregoing.
"Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.
"Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.
"Swap Provider" has the meaning specified in the Intercreditor
Agreement.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions related
to such provisions.
"UCC Financing Statements" has the meaning specified in Section 4(f).
(c) Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.
(d) Interpretation. The rules of interpretation set forth in
Sections 1.02, 1.03, 1.04 and 1.05 of the Credit Agreement shall be applicable
to this Agreement and are incorporated herein by this reference.
SECTION 2 Security Interest.
(a) Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent (for the benefit
of the Credit Agents, and each of them), and hereby grants to the Collateral
Agent (for the benefit of the Credit Agents, and each of them), a security
interest in all of Grantor's right, title and interest in, to and under the
following property, wherever located and whether now existing or owned or
hereafter acquired or arising (collectively, the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
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(iii) all Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Inventory;
(viii) all Books;
(ix) all products and Proceeds of any and all of the foregoing; and
(x) all Letter of Credit Proceeds.
Notwithstanding the foregoing provisions of this Section 2(a), such grant of
security interest shall not extend to, and the term "Collateral" shall not
include, Intellectual Property which is now or hereafter held by Grantor as
licensee, lessee or otherwise, to the extent such Intellectual Property consists
of: (i) ordinary shrinkwrap licenses governing software products that Grantor
purchased for use in the Ordinary Course of Business; or (ii) licenses listed on
Schedule 5.17 of the Credit Agreement.
(b) Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (i) Grantor shall remain liable under any contracts, agreements
and other documents included in the Collateral, to the extent set forth therein,
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Collateral Agent
of any of the rights hereunder shall not release Grantor from any of its duties
or obligations under such contracts, agreements and other documents included in
the Collateral, and (iii) none of the Collateral Agent or any Credit Party shall
have any obligation or liability under any contracts, agreements and other
documents included in the Collateral by reason of this Agreement, nor shall any
such Person be obligated to perform any of the obligations or duties of Grantor
thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Collateral hereunder.
(c) Continuing Security Interest. Grantor agrees that this Agreement
shall create continuing security interests in the Collateral which shall remain
in effect until terminated in accordance with Section 23.
SECTION 3 Perfection Procedures. Grantor shall duly complete, execute
and deliver to the Collateral Agent and each of the Credit Agents concurrently
with the execution of this Agreement, and at any time and from time to time, all
Supplemental IP Security Agreements, financing statements, continuation
statements, termination statements, security agreements, chattel mortgages,
assignments, patent, copyright and trademark collateral assignments, fixture
filings, warehouse receipts, Account Control Agreements, documents of title,
affidavits, reports, notices, schedules of account, letters of authority and all
other documents and instruments, in form satisfactory to the Administrative
Agent, and take all other action, as the Collateral Agent may request, to
perfect and continue perfected, maintain the priority of or provide notice of
the
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Collateral Agent's security interest in the Collateral for the benefit of each
of the Credit Agents and to accomplish the purposes of this Agreement. Without
limiting the generality of the foregoing, Grantor shall from time to time take
the following actions:
(a) Filing of Security Agreements; Financing Statements. On or prior
to the Closing Date Grantor shall execute, notarize and deliver (i) an original
of this Agreement; (ii) such original UCC Financing Statements and (iii) such
original Supplemental IP Security Agreements as the Collateral Agent at the
instruction of the Instructing Group may reasonably request; all duly completed
and in final form for recordation at the offices described in Schedule 3 (the
"Filing Offices"), and after the Closing Date the Grantor shall execute,
notarize and deliver completed UCC Financing Statements for filing or recording
in the appropriate filing or recording office or offices in any state identified
by a Grantor in a notice delivered to the Administrative Agent pursuant Section
5(e).
(b) Deposit Accounts. On or prior to the Closing Date, Grantor shall
execute such Account Control Agreements, notices, and shall take such other
action, as the Collateral Agent at the instruction of the Instructing Group may
reasonably request, to perfect and continue perfected, maintain the priority of
or provide notice of the Collateral Agent's security interests in Collateral for
the benefit of each of the Credit Agents consisting of Deposit Accounts and to
accomplish the purposes of this Agreement.
(c) Intellectual Property Collateral.
(i) Patents, Etc. Promptly following any submission, filing or
recordation required pursuant to subsection (iv) of Section 5(q) (except as
provided in subsection (c)(ii) with respect to certain copyrights), record such
duly completed, signed and notarized Supplemental IP Security Agreement with the
Patent and Trademark Office or Copyright Office, as applicable, and take such
other action as may be necessary, or as the Collateral Agent at the instruction
of the Instructing Group may reasonably request, to perfect or protect the
Collateral Agent's security interests in such Intellectual Property for the
benefit of each of the Credit Agents. Grantor shall promptly, but in any event
not later than ten days after any such recordation, deliver to the Collateral
Agent and each Credit Agent true and complete copies of all file-stamped
applications, disclosure documents and amendments, and all file-stamped
Supplemental IP Security Agreements recorded at the Patent and Trademark Office.
(ii) Copyrights. Grantor shall:
(A) Promptly following any submission, filing or recordation
required pursuant to subsection (v) of Section 5(q), duly complete, execute,
notarize and record a Supplemental IP Security Agreement at the Copyright Office
and take such other actions as may be necessary or appropriate in the discretion
of the Collateral Agent at the instruction of the Instructing Group to perfect
or protect the Collateral Agent's security interests in (I) all Database
Copyright Filings for such quarter, and (II) all Software Copyright Filings made
since the most recently filed Supplemental IP Security Agreement; and
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(B) take such other action as may be necessary, or as the Collateral
Agent may reasonably request, to perfect or protect the Collateral Agent's
security interests in the Intellectual Property for the benefit of the Credit
Agents.
(iii) The Grantor hereby authorizes the Collateral Agent to modify,
amend or supplement the Schedules hereto and to reexecute this Agreement and any
Supplemental IP Security Agreement from time to time on the Grantor's behalf and
as its attorney-in-fact to include any such future Collateral and to cause to
such reexecuted Agreement, Supplemental IP Security Agreement or such modified,
amended or supplemented Schedules to be filed with the Copyright Office or the
Patent and Trademark Office.
(d) Documents, Etc. Within five calendar days after receipt, Grant
shall deliver to the Collateral Agent, or an agent designated by it, for the
benefit of the Credit Agents, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Chattel
Paper, and all other Rights to Payment at any time evidenced by promissory
notes, trade acceptances or other instruments, not already delivered hereunder
pursuant to this Section 3; provided, however, that unless an Event of Default
shall have occurred and be continuing, Grantor shall not be required to deliver
any Document, Chattel Paper, promissory note, trade acceptance or other
instrument having a face amount not in excess of $100,000. Upon the request of
the Collateral Agent, Grantor shall xxxx all Documents and Chattel Paper with
such legends as the Collateral Agent shall reasonably specify.
SECTION 4 Representations and Warranties. In addition to the
representations and warranties of the Grantor set forth in the Credit Agreement,
which are incorporated and restated herein by this reference, and which are true
and correct as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, Grantor further
represents and warrants to each Credit Party that:
(a) Location of Chief Executive Office and Collateral. Grantor's
chief executive office and principal place of business is located at the address
set forth in Schedule 1, and all other locations where Grantor conducts business
or Collateral is kept are set forth in Schedule 1.
(b) Locations of Books. All locations where Books pertaining to the
Rights to Payment are kept, including all equipment necessary for accessing such
Books and the names and addresses of all service bureaus, computer or data
processing companies and other Persons keeping any Books or collecting Rights to
Payment for Grantor, are set forth in Schedule 1.
(c) Trade Names and Trade Styles. All trade names and trade styles
under which Grantor presently conducts the Arbitron Business operations are set
forth in Schedule 1, and, except as set forth in Schedule 1 and in connection
with the Transaction, Grantor has not, at any time in the past year: (i) been
known as or used any other corporate, trade or fictitious name; (ii) changed its
name; (iii) been the surviving or resulting corporation in a merger or
consolidation; or (iv) acquired through asset purchase or otherwise any business
of any Person.
(d) Ownership of Collateral. Grantor is, and, subject to Section
5(i), will continue to be, the sole and complete owner of the Collateral, or has
a valid and enforceable leasehold or
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licensee's interest in such Collateral as set forth in Schedule 2 and in
accordance with subsection (i) of this Section 4 (or, in the case of
after-acquired Collateral, at the time Grantor acquires rights in such
Collateral, will be the sole and complete owner thereof, or will have a valid
and enforceable leasehold or licensee's interest in such Collateral, to the
extent permitted hereunder or under the Credit Agreement), free from any Lien
other than Permitted Liens.
(e) Enforceability; Priority of Security Interest.
(i) This Agreement together with such Supplemental IP Security
Agreements as have been executed by Grantor and filed at the Copyright Office or
the Patent and Trademark Office in respect of the Intellectual Property create
security interests which are enforceable against the Collateral in which Grantor
now has rights and will create security interests which are enforceable against
the Collateral in which Grantor hereafter acquires rights at the time Grantor
acquires any such rights.
(ii) The Collateral Agent has a perfected and first priority security
interest in the Collateral in which Grantor now has rights, and will have a
perfected and first priority security interest in the Collateral in which
Grantor now has rights and will create a security interest in any Collateral in
which Grantor hereafter acquires rights at the time Grantor acquires any such
rights, in each case for the Credit Agents' benefit and, subject only to
Permitted Liens, securing the payment and performance of the Secured
Obligations.
(f) Other Financing Statements. Other than (i) financing statements
or similar filings naming the owner of the asset to which such Lien relates as
debtor, under the UCC, copyright, patent, trademark or any comparable law ("UCC
Financing Statements") disclosed to the Administrative Agent prior to the
Effective Date and (i) UCC Financing Statements in favor of the Collateral Agent
for itself and the Credit Agents pursuant to the Credit Documents, no effective
UCC Financing Statement naming Grantor as debtor, assignor, grantor, mortgagor,
pledgor or the like or covering all or any part of the Collateral is on file in
any filing or recording office in any jurisdiction, except in connection with
Permitted Liens.
(g) Rights to Payment.
(i) The Rights to Payment represent valid, binding and enforceable
obligations of the account debtors or other Persons obligated thereon,
representing undisputed, bona fide transactions completed in accordance with the
terms and provisions contained in any documents related thereto, and are and
will be genuine, free from Liens, and not subject to any adverse claims,
counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages,
holdbacks or conditions precedent of any kind of character, except to the extent
reflected by the Grantor's reserves for uncollectible Rights to Payment or to
the extent, if any, that such account debtors or other Persons may be entitled
to normal and ordinary course trade discounts, returns, adjustments and
allowances in accordance with Section 5(m), or as otherwise disclosed to the
Credit Agents in writing or occurring in the ordinary course of business;
(ii) to the best of Grantor's knowledge, all account debtors and
other obligors on Rights to Payment are solvent and generally paying their debts
as they come due, except to the extent that Grantor has established adequate
reserves therefor in accordance with GAAP;
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(iii) all Rights to Payment comply in all material respects with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable any federal or state consumer credit laws;
(iv) Grantor has not assigned any of its rights under the Rights to
Payment except as provided in this Agreement or as set forth in the other Credit
Documents;
(v) all statements made, all unpaid balances and all other
information in the Books and other documentation relating to the Rights to
Payment in all material respects are true and correct and what they purport to
be; and
(vi) Grantor has not any knowledge of any fact or circumstance which
would materially impair the validity or collectibility of any of such Rights to
Payment, except to the extent that Grantor has established adequate reserves
therefor in accordance with GAAP;
(h) Inventory. No Inventory is stored with any bailee, warehouseman
or similar Person or on any premises leased to Grantor, nor has any Inventory
been consigned to Grantor or consigned by Grantor to any Person or is held by
Grantor for any Person under any "xxxx and hold" or other arrangement, except at
locations listed in Schedule 1.
(i) Intellectual Property.
(i) As of the Closing Date, except as set forth in Schedule 2, (A)
Grantor (directly or through any Subsidiary) does not own, possess or use under
any licensing arrangement (other than ordinary shrinkwrap licenses governing
software products that Grantor purchased for use in the Ordinary Course of
Business) Intellectual Property materially related to the Arbitron Business, and
(B) Grantor (directly or through any Subsidiary) has no registrations or
applications therefor pending before any Governmental Authority, that are or may
be materially related to the Arbitron Business, for any (I) patents or
trademarks, (II) copyrights in respect of Material Arbitron Software, Material
Software Additions or Arbitron Databases for which any such application was
submitted after December 31, 1998, (III) copyrights in respect of "Radio Market
Reports" of Grantor for which any such application was submitted after December
1, 2000, or (IV) any other copyrights for which such application was submitted
after December 31, 1999.
(ii) All Grantor's Intellectual Property is subsisting and has not
been adjudged invalid or unenforceable in whole or in part.
(iii) All maintenance fees required to be paid by Grantor on account
of any of its patents have been timely paid for maintaining such patents in
force, and, to the best of Grantor's knowledge, each of such patents is valid
and enforceable.
(iv) To the best of Grantor's knowledge, no infringement or
unauthorized use presently is being made of any Intellectual Property by any
Person that could reasonably be expected to have a Material Adverse Effect.
(v) Grantor is the owner or licensee of its Intellectual Property
and the past, present and contemplated future use of such Intellectual Property
by Grantor has not, does not and will
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not infringe or violate any right, privilege or license agreement of or with any
other Person in any material respect.
(vi) Grantor owns, licenses, has material rights under, is a party
to, or an assignee of a party to all other Intellectual Property necessary and
appropriate to continue to conduct the Arbitron Business.
(vii) The Arbitron Databases are protected under current, valid and
enforceable copyright registrations (or applications therefor) at the Copyright
Office and under the U.S. copyright laws.
(viii) The Material Arbitron Software is protected under current, valid
and enforceable copyright registrations (or applications therefor) at the
Copyright Office and under the U.S. copyright laws.
(ix) Grantor's Intellectual Property consisting of patents are
protected under current, valid and enforceable patents or applications therefor
issued by the Patent and Trademark Office and under the U.S. patent laws (except
with respect to such patents that have expired of their own terms, and not as
the result of any abandonment, dispute or settlement).
(j) Equipment. As of the Closing Date, none of the Equipment is
leased from any Person, except as set forth in UCC record searches delivered to
the Collateral Agent or as otherwise disclosed to the Administrative Agent and
the other Credit Agents.
(k) Deposit Accounts. The names and addresses of all financial
institutions at which Grantor maintains its Deposit Accounts, and the account
numbers and account names of such Deposit Accounts, are set forth in Schedule 1.
No Deposit Account Control Agreements exist with respect to any Investment
Property other than any Deposit Account Control Agreements in favor of the
Collateral Agent for the benefit of the Collateral Agent for the benefit of the
Credit Agents.
(l) Instruments. (i) Grantor has not previously assigned any
interest in any Instruments (other than such interests as will be released on or
before the date hereof), (ii) no Person other than Grantor owns an interest in
the Instruments (whether as joint holders, participants or otherwise), (iii) all
Instruments are owing only to Grantor, and (iv) no material default exists under
or in respect of the Instruments.
(m) Other Investment Property. All securities accounts of the
Grantor and other Investment Property of the Grantor are set forth in Schedule
1. No Account Control Agreements exist with respect to any Investment Property
other than any Account Control Agreements in favor of the Collateral Agent for
the benefit of the Credit Agents.
SECTION 5 Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this reference,
so long as any of the Secured Obligations remain unsatisfied, Grantor agrees
that:
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(a) Defense of Collateral. Grantor shall appear in and defend any
action, suit or proceeding which may affect to a material extent its title to,
or right or interest in, or the Collateral Agent's right or interest in, the
Collateral.
(b) Preservation of Collateral. Grantor shall do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Collateral.
(c) Compliance with Laws, Etc. Grantor shall comply in all material
respects with all laws, regulations and ordinances (including with respect to
the Fair Labor Standards Act), and with all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral.
(d) Location of Books and Chief Executive Office. Grantor shall: (i)
keep all Books pertaining to the Rights to Payment at the locations set forth in
Schedule 1; and (ii) give at least 30 days' prior written notice to the
Collateral Agent and each Credit Agent of (A) any changes in any such location
where Books pertaining to the Rights to Payment are kept, including any change
of name or address of any service bureau, computer or data processing company or
other Person preparing or maintaining any Books or collecting Rights to Payment
for Grantor or (B) any changes in the location of Grantor's chief executive
office or principal place of business.
(e) Location of Collateral. If any Collateral of Grantor shall be
physically relocated to, or otherwise be physically located in, a state of the
United States in which a financing statement has not already been filed with
respect to such Collateral, Grantor shall give the Collateral Agent and each
Credit Agent prompt notice thereof (and in any event not later than one Business
Day after becoming aware thereof).
(f) Change in Name, Identity or Structure. Grantor shall give at
least 30 days' prior written notice to the Collateral Agent and each Credit
Agent of (i) any change in its name, (ii) any change of its jurisdiction of
incorporation or the location of its chief executive offices, (iii) any changes
in, additions to or other modifications of its trade names used as the name of
Grantor set forth in Schedule 1, and (iv) any changes in its identity or
structure in any manner which might make any financing statement filed hereunder
incorrect or misleading.
(g) Maintenance of Records. Grantor shall keep accurate and complete
Books with respect to the Collateral, disclosing the Collateral Agent's security
interests hereunder for the benefit of the Credit Agents.
(h) Invoicing of Sales. The Grantor will invoice all of its sales
upon forms customary in the industry and to maintain proof of delivery and
customer acceptance of goods.
(i) Disposition of Collateral. Grantor shall not surrender or lose
possession of (other than to a Credit Agent), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein,
except to the extent expressly permitted by the Credit Documents.
(j) Liens.
(i) Grantor shall keep the Collateral free of all Liens except
Permitted Liens.
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(ii) Notwithstanding any other provision contained herein or in the
Credit Agreement, no Disposition of any assets of the Grantor shall be deemed a
transfer of goods free of the Collateral Agent's security interests under
Section 9307 UCC, except that Dispositions expressly permitted by Sections
7.04(b)(i), 7.04(b)(ii), 7.04(b)(viii), 7.04(b)(x), 7.06(e), 7.06(i) and 7.06(j)
thereof shall be free of such security interests. Accordingly, all non-excluded
Dispositions shall be subject at all times to the Liens of the Collateral Agent
for the benefit of the Credit Agents.
(k) Expenses. The Grantor will pay all expenses of protecting,
storing, warehousing, insuring, handling and shipping the Collateral.
(l) Leased Premises. At the Collateral Agent's request, Grantor
shall obtain from each Person from whom Grantor leases any premises at which any
Collateral is at any time present such subordination, waiver, consent and
estoppel agreements as the Collateral Agent may reasonably require, in form and
substance satisfactory to the Collateral Agent.
(m) Rights to Payment. Grantor shall:
(i) with such frequency as the Collateral Agent for the benefit of
the Credit Agents may reasonably require, furnish to the Collateral Agent and
each Credit Agent (A) master customer listings, including all names and
addresses, together with copies or originals (as requested by the Collateral
Agent or any Credit Agent) of documents, customer statements, repayment
histories and present status reports relating to the Accounts; (B) accurate
records and summaries of Accounts, including detailed agings specifying the
name, face value and date of each invoice, and listings of Accounts that are
disputed or have been cancelled; and (C) such other information relating to the
Accounts as any of the Credit Agents shall from time to time reasonably request;
(ii) give only normal discounts, allowances and credits as to
Accounts and other Rights to Payment, in the Ordinary Course of Business,
according to normal trade practices, and enforce all Accounts and other Rights
to Payment strictly in accordance with their terms or pursuant to Grantor's
Ordinary Course of Business, and during the existence of an Event of Default,
take all such action to such end as may from time to time be reasonably
requested by Collateral Agent, except that Grantor may at any time grant any
extension of the time for payment or enter into any agreement to make a rebate
or otherwise to reduce the amount owing on or with respect to, or compromise or
settle for less than the full amount thereof, any Account or other Right to
Payment, in the Ordinary Course of Business, according to normal trade
practices;
(iii) if any discount, allowance, credit, extension of time for
payment, agreement to make a rebate or otherwise to reduce the amount owing on,
or compromise or settle, an Account or other Right to Payment exists or occurs,
or if, to the knowledge of Grantor, any dispute, setoff, claim, counterclaim or
defense exists or has been asserted or threatened with respect to an Account or
other Right to Payment, disclose such fact to the Collateral Agent and the
Credit Parties in the Books relating to such Account or other Right to Payment
when such Books are requested for inspection by the Collateral Agent, and in
connection with any invoice or report furnished by Grantor to the Collateral
Agent relating to such Account or other Right to Payment;
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(iv) if Accounts in an amount in excess of $500,000 for any and all
such Accounts arise from contracts with the United States or any department,
agency or instrumentality thereof, promptly notify the Collateral Agent and the
Credit Parties thereof and execute any documents and instruments and take any
other steps reasonably requested by the Collateral Agent in order that all
monies due and to become due thereunder shall be assigned to the Collateral
Agent and notice thereof given to the federal authorities under the Federal
Assignment of Claims Act (provided that such assignment and notice shall not be
required if the applicable contract prohibits assignment);
(v) in accordance with its sound business judgment perform and
comply in all material respects with its obligations in respect of the Accounts
and other Rights to Payment;
(vi) subject to Section 7, upon the request of the Collateral Agent
(A) at any time, notify all or any designated portion of the account debtors and
other obligors on the Rights to Payment of the security interests hereunder, and
(B) if there exists any Default or Event of Default, notify the account debtors
and other obligors on the Rights to Payment or any designated portion thereof
that payment shall be made directly to the Collateral Agent or to such other
Person or location as the Collateral Agent shall specify; and
(vii) if there exists any Default or Event of Default, establish such
lockbox or similar arrangements for the payment of the Accounts and other Rights
to Payment as the Collateral Agent (upon instruction of the Instructing Group)
shall require.
(n) Deposit Accounts and Securities Accounts. Grantor shall give the
Collateral Agent and the Credit Parties immediate notice of the establishment of
any new Deposit Account and any new securities account with respect to any
Investment Property.
(o) Inventory. Grantor shall:
(i) at such times as the Collateral Agent or any Credit Agent shall
reasonably request, prepare and deliver to the Collateral Agent and each Credit
Agent a report of all Inventory, in form and substance reasonably satisfactory
to the Collateral Agent and each Credit Agent;
(ii) upon the request of the Collateral Agent or any Credit Agent,
take a physical listing of the Inventory and promptly deliver a copy of such
physical listing to the Collateral Agent and each Credit Agent; and
(iii) not store any Inventory with a bailee, warehouseman or similar
Person or on premises leased to Grantor, nor dispose of any Inventory on a
xxxx-and-hold, guaranteed sale, sale and return, sale on approval, consignment
or similar basis, nor acquire any Inventory from any Person on any such basis,
except in the ordinary course of business and in accordance with its normal
practices.
(p) Equipment. Grantor shall, upon the Collateral Agent or any
Credit Agent request, deliver to the Collateral Agent and each Credit Agent a
report of each item of Equipment, in form and substance reasonably satisfactory
to the Collateral Agent and each Credit Agent.
(q) Intellectual Property Collateral. Grantor shall:
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(i) not allow or suffer any Intellectual Property to become
abandoned, nor any registration thereof to be terminated, forfeited, expired or
dedicated to the public, except for Intellectual Property having negligible
commercial value;
(ii) not enter into any agreements or transactions (including any
license, sublicense or royalty agreement) pertaining to any Intellectual
Property outside of the ordinary course of business, or enter into any exclusive
license or sublicense of any Intellectual Property, except in a transaction
permitted under the Credit Documents;
(iii) promptly give the Collateral Agent and each Credit Agent notice
of any rights Grantor may obtain to any new patentable inventions, copyrightable
works or other new Intellectual Property, prior to the registration or
recordation thereof (including pursuant to this Section 5(q)) as to which
Grantor (a) has received gross royalty or license payments from any and all
third parties in an aggregate amount excess of $1,000,000 during any of the five
fiscal years preceding such time or (b) reasonably projects that it will receive
gross royalty or license payments from any and all third parties in an aggregate
amount excess of $1,000,000 during the any of the subsequent five fiscal years;
provided that Grantor shall have no obligation to provide notice under this
subsection (iii) to the extent that Grantor has satisfied, or within the
immediately following three calendar months will satisfy, subsection (iv) or
(v), as applicable, of this Section 5(q);
(iv) not less frequently than once every three calendar months and,
additionally, upon the purchase, creation or other acquisition of any Material
Software Addition, diligently record, register or prosecute, as applicable, all
applications for patents, copyrights and trademarks, and diligently record,
register and prosecute, as applicable, any and all continuations,
continuations-in-part, applications for reissue, applications for certificate of
correction and like matters in respect of Grantor's Intellectual Property as
shall be reasonable and appropriate in accordance with prudent business
practice, and promptly and timely pay any and all maintenance, license,
registration and other fees, taxes and expenses incurred in connection with any
Intellectual Property; and, without limiting the generality of the foregoing,
(v) (A) not less frequently than once every three calendar months,
submit such duly completed, signed and notarized copyright registration forms to
the Copyright Office and take such other actions as necessary to register under
the U.S. copyright laws any and all additions, modifications or other changes to
the Arbitron Databases (each, a "Database Copyright Filing") since the Closing
Date; and (B) not less frequently than once every three calendar months and,
additionally, promptly after any purchase, creation or other acquisition of any
Material Software Addition, submit such duly completed, signed and notarized
copyright registration forms to the Copyright Office and take such other actions
as necessary to register under the U.S. copyright laws each Material Software
Addition (each, a "Software Copyright Filing");
(vi) not less frequently than once every three calendar months, and
promptly but in any event not later than ten days after any and all recordations
described in subsections (iv) and (v) of this Section 5(q), and after any and
all recordations described in Section 3(c), deliver to the Collateral Agent and
each Credit Agent all such duly completed, file-stamped (other otherwise
certificated or acknowledged) and recorded documents together with such other
documents and information as the Collateral Agent or any Credit Agent may
reasonably request.
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(r) Notices, Reports and Information. Subject to Section 3(c),
Grantor shall (i) notify the Collateral Agent and each Credit Agent of any
material claim made or asserted against the Collateral by any Person and of any
change in the composition of the Collateral or other event which could
materially adversely affect the value of the Collateral or the Lien thereon in
favor of the Collateral Agent (for the benefit of the Credit Agents); (ii)
furnish to the Collateral Agent and each Credit Agent such statements and
schedules further identifying and describing the Collateral and such other
reports and other information in connection with the Collateral as the
Collateral Agent at the instruction of the Instructing Group may reasonably
request, all in reasonable detail; and (iii) upon reasonable request of the
Collateral Agent of any Credit Agent make such demands and requests for
information and reports as Grantor is entitled to make in respect of the
Collateral.
(s) Insurance. (i) Grantor shall carry and maintain in full force
and effect, at the expense of the Grantor and with financially sound and
reputable insurance companies, insurance for itself and the Collateral Agent for
the benefit of the Credit Agents, with respect to the Collateral in such
amounts, with such deductibles and covering such risks as shall be specified in
the Credit Agreement. Upon the request of any of the Credit Agents, and in any
event not less often than annually, Grantor shall furnish the Collateral Agent
and each Credit Agent with full information as to the insurance carried by it
and, if so requested, copies of all such insurance policies. All insurance
policies required under this subsection (s) shall provide that they shall not be
terminated or cancelled nor shall any such policy be materially changed without
at least 30 days' prior written notice to the Grantor and the Collateral Agent
(or 10 days' prior written notice if the Collateral Agent consents to such
shorter notice). Receipt of notice of termination or cancellation of any such
insurance policies or reduction of coverages or amounts thereunder shall entitle
the Collateral Agent to renew any such policies, cause the coverages and amounts
thereof to be maintained at levels required pursuant to the first sentence of
this subsection (s) or otherwise to obtain similar insurance in place of such
policies, in each case at the expense of the Grantor.
(ii) If Collateral of Grantor with a value exceeding $1,000,000 (the
"Settlement Consent Threshold") shall be materially damaged or destroyed, in
whole or in part, by fire or other casualty, Grantor shall give prompt notice
thereof to the Collateral Agent and each Credit Agent. No settlement on account
of any loss on any Collateral covered by insurance shall be made for less than
insured value without the consent of the Collateral Agent (with the consent of
the Instructing Group), unless, so long as there exists no Default or Event of
Default, the total value of each such loss or series of related losses so
compromised does not exceed the Settlement Consent Threshold. Unless there
exists any Default or Event of Default, the Collateral Agent (upon instruction
of the Instructing Group) shall promptly execute such necessary consents,
waivers and endorsements to permit Grantor to settle losses the total aggregate
value of which is in an amount less than the Settlement Consent Threshold, and
to receive payment therefor, as reasonably requested by Grantor. After the
occurrence and during the continuance of an Event of Default, or as otherwise
required under any of the Credit Documents, all sums payable to Grantor by any
insurer with respect to a casualty relating to all or any part of the Collateral
shall be paid to the Collateral Agent (upon instruction of the Instructing
Group). If Grantor shall receive any insurance proceeds which are to be paid to
the Collateral Agent pursuant to the previous sentence, Grantor shall hold such
proceeds in trust for the Collateral Agent and shall segregate such proceeds
from other funds of Grantor, and shall immediately forward such
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proceeds in the form received to the Collateral Agent (appropriately indorsed by
Grantor to the order of the Collateral Agent or in such other manner as shall be
satisfactory to the Collateral Agent, upon instruction of the Instructing
Group). All such insurance proceeds may be retained by the Collateral Agent as
part of Collateral hereunder and held in the Proceeds Account, applied by the
Collateral Agent toward payment of all or part of the Secured Obligations in
such order as is provided herein, or released to Grantor upon its request with
the consent of the Instructing Group.
SECTION 6 Administration of the Rights to Payment.
(a) Collection of Rights to Payment. Until the Collateral Agent
exercises its rights hereunder to collect Rights to Payment, Grantor shall
endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the Rights to Payment. At the request of the
Collateral Agent, if there exists at such time any Event of Default, all
remittances received by Grantor shall be held in trust for the Collateral Agent
and, in accordance with the Collateral Agent's instructions (upon instruction
from the Instructing Group), remitted to the Collateral Agent or deposited in an
account with the Collateral Agent in the form received (with any necessary
endorsements or instruments of assignment or transfer).
(b) Investment Property and Instruments. At the request of the
Collateral Agent (at the request of the Instructing Group), if there exists at
such time any Event of Default, the Collateral Agent shall be entitled, subject
to the Intercreditor Agreement, to receive all distributions and payments of any
nature with respect to any Investment Property or Instruments, and all such
distributions or payments received by Grantor shall be held in trust for the
Collateral Agent and, in accordance with its instructions (with the consent of
the Instructing Group), remitted to the Collateral Agent or deposited to an
account with the Collateral Agent in the form received (with any necessary
endorsements or instruments of assignment or transfer). If there exists any
Default or Event of Default any such distributions and payments with respect to
any Investment Property held in any securities account shall be held and
retained in such securities account, in each case as part of the Collateral
hereunder. Additionally, the Collateral Agent shall have the right, if there
exists any Default or Event of Default, following prior written notice to
Grantor, to vote and to give consents, ratifications and waivers with respect to
any Investment Property and Instruments, and to exercise all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining thereto, as if the Collateral Agent were the absolute owner thereof;
provided that the Collateral Agent shall have no duty to exercise any of the
foregoing rights afforded to it and shall not be responsible to Grantor or any
other Person for any failure to do so or delay in doing so.
(e) Distributions to Be Held for Administrative Agent. Distributions
and other payments which are received by the Grantor but which it is not
entitled to retain as a result of the operation of this Section 6 shall be held
in trust for the benefit of the Collateral Agent, be segregated from the other
property or funds of Grantor, and be forthwith paid over or delivered to the
Collateral Agent in the same form as so received.
SECTION 7 Authorization; Appointed Attorney-in-Fact. The Collateral
Agent shall have the right to, in the name of Grantor, or in the name of the any
of the Credit Parties or otherwise, without notice to or assent by Grantor, and
Grantor hereby constitutes and appoints
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the Collateral Agent (and any of the officers or employees or agents designated
by the Collateral Agent) as Grantor's true and lawful attorney-in-fact, with
full power and authority to:
(i) sign any of the financing statements and Supplemental IP
Security Agreements which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the security interests
and in the Collateral of the Collateral Agent (for the benefit of the Credit
Agents) and file any such financing statements and Supplemental IP Security
Agreements by electronic means with or without a signature as authorized or
required by applicable law or filing procedures;
(ii) take possession of and endorse any notes, acceptances, checks,
drafts, money orders or other forms of payment or security and collect any
Proceeds of any Collateral;
(iii) sign and endorse any invoice or xxxx of lading relating to any
of the Collateral, warehouse or storage receipts, drafts against customers or
other obligors, assignments, notices of assignment, verifications and notices to
customers or other obligors;
(iv) notify the U.S. Postal Service and other postal authorities to
change the address for delivery of mail addressed to Grantor to such address the
Collateral Agent may designate (provided that the Collateral Agent agrees it
will promptly deliver over to Grantor any mail that does not relate to the
Collateral); and, without limiting the generality of the foregoing, establish
with any Person lockbox or similar arrangements for the payment of the Rights to
Payment;
(v) receive, open and dispose of all mail addressed to Grantor
(provided that the Collateral Agent agrees it will promptly deliver over to
Grantor any mail that does not relate to the Collateral);
(vi) send requests for verification of Rights to Payment to the
customers or other obligors of Grantor;
(vii) contact, or direct Grantor to contact, all account debtors and
other obligors on the Rights to Payment and instruct such account debtors and
other obligors to make all payments directly to the Collateral Agent;
(viii) assert, adjust, xxx for, compromise or release any claims under
any policies of insurance;
(ix) exercise dominion and control over, and refuse to permit further
withdrawals from, Deposit Accounts maintained with Bank of America or any other
bank, financial institution or other Person;
(x) notify each Person maintaining lockbox or similar arrangements
for the payment of the Rights to Payment to remit all amounts representing
collections on the Rights to Payment directly to the Collateral Agent;
(xi) ask, demand, collect, receive and give acquittances and receipts
for any and all Rights to Payment, enforce payment or any other rights in
respect of the Rights to Payment and other Collateral, grant consents, agree to
any amendments, modifications or waivers of the
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agreements and documents governing the Rights to Payment and other Collateral,
and otherwise file any claims, take any action or institute, defend, settle or
adjust any actions, suits or proceedings with respect to the Collateral, as the
Collateral Agent (upon instruction of the Instructing Group) may deem necessary
or desirable to maintain, preserve and protect the Collateral, to collect the
Collateral or to enforce the rights of the Collateral Agent with respect to the
Collateral;
(xii) execute any and all applications, documents, papers and
instruments necessary for the Collateral Agent to use the Intellectual Property
and grant or issue any exclusive or non-exclusive license or sublicense with
respect to any Intellectual Property;
(xiii) execute any and all endorsements, assignments or other documents
and instruments necessary to sell, lease, assign, convey or otherwise transfer
title in or dispose of the Collateral;
(xiv) execute and deliver to any securities intermediary or other
Person any entitlement order, Account Control Agreement or other notice,
document or instrument which the Collateral Agent (upon instruction of the
Instructing Group) may deem necessary or advisable (A) to realize upon the
Collateral, and (B) to maintain, protect and preserve the Investment Property
and the security interests of the Collateral Agent therein; and
(xv) execute any and all such other documents and instruments, and do
any and all acts and things for and on behalf of Grantor, which the Collateral
Agent (upon instruction from the Instructing Group) may deem necessary or
advisable (A) to realize upon the Collateral, and (B) to maintain, protect and
preserve the Collateral and the security interests of the Collateral Agent
therein and to accomplish the purposes of this Agreement.
The Collateral Agent agrees that, unless there exists any Default or Event of
Default, it shall not exercise the power of attorney, or any rights granted to
the Collateral Agent, pursuant to clauses (ii) through (xiii), (xiv)(A) and
(xv)(A). The foregoing power of attorney is coupled with an interest and
irrevocable so long as any of the Secured Obligations has not been paid and
performed in full. Grantor hereby ratifies, to the extent permitted by law, any
and all acts that the Collateral Agent shall lawfully and in good faith do or
cause to be done by virtue of and in compliance with this Section 7.
SECTION 8 Performance of Grantor Obligations. The Collateral Agent
may perform or pay any obligation which Grantor has agreed to perform or pay
under or in connection with this Agreement, and which Grantor has failed to
perform or pay as and when due, and Grantor shall reimburse the Collateral Agent
on demand for any amounts paid by the Collateral Agent pursuant to this Section
8.
SECTION 9 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to such party and shall not be
responsible to Grantor or any other Person for any failure to do so or delay in
doing so. Beyond the exercise of reasonable care to assure the safe custody of
Collateral in the Collateral Agent's possession, and the accounting for moneys
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actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Collateral.
SECTION 10 Remedies.
(a) Remedies. If there exists any Default or Event of Default, the
Collateral Agent shall have, in addition to all other rights and remedies
granted to it in this Agreement, the Credit Agreement or any other Credit
Document, all rights and remedies of a secured party under the UCC and other
applicable laws. Without limiting the generality of the foregoing, Grantor
agrees that:
(i) The Collateral Agent may peaceably and without notice enter any
premises of Grantor, take possession of any Collateral, remove, prohibit access
to or use of, or dispose of all or part of the Collateral on any premises of
Grantor or elsewhere; or, in the case of Equipment, render it nonfunctional, and
otherwise collect, receive, appropriate and realize upon all or any part of the
Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or xxx for all or any part of the Collateral, as the
Collateral Agent (upon instruction of the Instructing Group) may determine.
(ii) The Collateral Agent may require Grantor to assemble all or any
part of the Collateral and make it available to the Collateral Agent, at any
place and time designated by the Collateral Agent.
(iii) The Collateral Agent may use or transfer any of Grantor's rights
and interests in any Intellectual Property, by license, by sublicense (to the
extent permitted by an applicable license) or otherwise, on such conditions and
in such manner as the Collateral Agent (upon instruction of the Instructing
Group) may determine.
(iv) The Collateral Agent may secure the appointment of a receiver of
the Collateral or any part thereof (to the extent and in the manner provided by
applicable law).
(v) The Collateral Agent may withdraw (or cause to be withdrawn) any
and all funds from any Deposit Accounts or securities accounts.
(vi) The Collateral Agent may sell, resell, lease, use, assign,
transfer or otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or processing
(utilizing in connection therewith any of Grantor's assets, without charge or
liability to the Collateral Agent or any of the Credit Parties therefor) at
public or private sale, by one or more contracts, in one or more parcels, at the
same or different times, for cash or credit or for future delivery without
assumption of any credit risk, all as the Collateral Agent (upon instruction of
the Instructing Group) deem advisable; provided, however, that Grantor shall be
credited with the net proceeds of sale only when such proceeds are finally
collected by the Collateral Agent. The Collateral Agent shall have the right
upon any such public sale, and, to the extent permitted by law, upon any such
private sale, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption, which right or equity of redemption
Grantor hereby releases, to the extent permitted by law. Grantor hereby agrees
that the sending of notice by ordinary mail, postage prepaid, to the address of
Grantor set forth in the Credit Agreement, of the place and time of any public
sale or of the time after which any private sale or other intended disposition
is to be made, shall be deemed reasonable notice thereof if such notice is sent
ten days prior to the date of such sale or other disposition or the date on or
after which
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such sale or other disposition may occur, provided that the Collateral Agent may
provide Grantor shorter notice or no notice, to the extent permitted by the UCC
or other applicable law.
(b) License. For the purpose of enabling the Collateral Agent to
exercise its rights and remedies under this Section 10 or otherwise in
connection with this Agreement, Grantor hereby grants to the Collateral Agent
for the benefit of the Credit Agents an irrevocable, non-exclusive and
assignable license (exercisable without payment or royalty or other compensation
to Grantor) to use, license or sublicense any Intellectual Property.
(c) Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated at such time as there
may exist an Event of Default (including with respect to undrawn amounts under
any Letter of Credit or contingent amounts due under any Specified Swap
Agreement arising from any Specified Swap Contract), the Collateral Agent for
the benefit of the Credit Agents may, at their election, (i) retain the proceeds
of any sale, collection, disposition or other realization upon the Collateral
(or any portion thereof) in a special purpose non-interest-bearing restricted
deposit account (the "Proceeds Account") created and maintained by the
Collateral Agent for the benefit of the Credit Agents for such purpose (which
shall constitute a Deposit Account included within the Collateral hereunder)
until such time as the Collateral Agent may elect to apply such proceeds to the
Secured Obligations, and Grantor agrees that such retention of such proceeds by
the Collateral Agent shall not be deemed strict foreclosure with respect
thereto; (ii) in any manner elected by the Collateral Agent (upon instruction of
the Instructing Group), estimate the liquidated amount of any such contingent,
unmatured or unliquidated claims and apply the proceeds of the Collateral
against such amount; or (iii) otherwise proceed in any manner permitted by
applicable law. Grantor agrees that the Proceeds Account shall be a blocked
account and that upon the irrevocable deposit of funds into the Proceeds
Account, Grantor shall not have any right of withdrawal with respect to such
funds. Accordingly, Grantor irrevocably waives until the termination of the
security interests granted under this Agreement in accordance with Section 23
the right to make any withdrawal from the Proceeds Account and the right to
instruct the Collateral Agent, or any of the Credit Parties to honor drafts
against the Proceeds Account.
(d) Application of Proceeds. Subject to subsection (c), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 8 or Section 14) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.
SECTION 11 Certain Waivers. Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshalling
of the Collateral or other collateral or security for the Secured Obligations;
(ii) any right to require the Collateral Agent, or any of the Credit Parties (A)
to proceed against any Person, (B) to exhaust any other collateral or security
for any of the
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Secured Obligations, (C) to pursue any remedy, or (D) to make or give any
presentments, demands for performance, notices of nonperformance, protests,
notices of protests or notices of dishonor in connection with any of the
Collateral; and (iii) all claims, damages, and demands against the Collateral
Agent, or any of the Credit Parties arising out of the repossession, retention,
sale or application of the proceeds of any sale of the Collateral.
SECTION 12 Notices. All notices or other communications hereunder shall
be given in the manner and to the addresses specified in, and shall be effective
as provided in, the Credit Agreement; provided, however, that notices hereunder
to (a) the Swap Provider shall be delivered to Fleet National Bank using the
information listed in Schedule 10.02 of the Credit Agreement for such party as a
Lender or such replacement Swap Provider as may be appointed from time to time
pursuant to the terms of the Intercreditor Agreement, and (b) the Note Holders
shall be delivered to such persons at the address specified in the Note Purchase
Agreement, or to such replacement Note Holders as may be appointed from time to
time consistent with the terms of the Intercreditor Agreement.
SECTION 13 No Waiver; Cumulative Remedies. No failure on the part of the
Collateral Agent, or any of the Credit Parties to exercise, and no delay in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent,
or any of the Credit Parties.
SECTION 14 Indemnification; Other Charges.
(a) Indemnification. The Grantor hereby agrees to indemnify the
Collateral Agent and the Credit Parties, and their respective directors,
officers, employees, agents, counsel and other advisors (each an "Indemnified
Person") against, and hold each of them harmless from, any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel to an Indemnified Person (including
allocated costs of internal counsel), which may be imposed on, incurred by, or
asserted against any Indemnified Person, in any way relating to or arising out
of this Agreement or the transactions contemplated hereby or any action taken or
omitted to be taken by it hereunder (the "Indemnified Liabilities"); provided
that Grantor shall not be liable to any Indemnified Person with respect to
Indemnified Liabilities resulting from such Indemnified Person's gross
negligence or willful misconduct. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, Grantor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
(b) Other Charges. The Grantor agrees to indemnify the Collateral
Agent and the Credit Parties against and hold each of them harmless from any and
all present and future stamp, transfer, documentary and other such taxes,
levies, fees, assessments and other charges made by any jurisdiction by reason
of the execution, delivery, performance and enforcement of this Agreement.
229
(c) Interest. Any amounts payable to any Indemnified Person under
this Section 14 or otherwise under this Agreement if not paid upon demand shall
bear interest from the date of such demand until paid in full, at the applicable
rate, (a) for the Administrative Agent and any Lender, as set forth in Section
2.08(b) of the Credit Agreement, (b) for the Swap Provider, as set forth in the
Specified Swap Agreement, and (c) for the Note Holders as set forth in Section
2.08(b) of the Note Purchase Agreement.
SECTION 15 Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by Grantor, each of the Credit Parties, the
Collateral Agent, each Indemnified Person referred to in Section 14 and their
respective successors and assigns.
SECTION 16 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE COLLATERAL AGENT AND
EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT PARTIES
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT OR STATE
COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER DOCUMENT
RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH OF THE CREDIT
PARTIES WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
SECTION 17 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED
HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A
230
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 18 Entire Agreement; Amendment. This Agreement, together with
the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent (for the benefit of the Credit
Agents), and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof. Subject to Section 19, this Agreement shall be
amended only by written agreement with the written consent of the Instructing
Group; provided, however, that any amendment having the effect of causing a
release of all or substantially all of the Collateral must be consented to in
writing by the Collateral Agent and each of the Credit Agents.
SECTION 19 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the benefit
of each Credit Agent. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder with respect to
any Credit Agent shall not in any way affect or impair the legality or
enforceability of that or any other provision of this Agreement or any
instrument or agreement required hereunder in respect to any other Credit Agent.
The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision
of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 20 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement may be delivered by any party hereto
or thereto either in the form of an executed original or an executed original
sent by facsimile transmission to be followed promptly by mailing of a hard copy
original, and that receipt by the Collateral Agent or any Credit Agent of a
facsimile transmitted document purportedly bearing the signature of a Grantor
shall bind Grantor with the same force and effect as the delivery of a hard copy
original. Any failure by the Collateral Agent or any Credit Agent to receive the
hard copy executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original of such
document of the party whose hard copy page was not received by the Collateral
Agent or such Credit Party.
SECTION 21 Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to the
Credit Documents, including any such provisions contained in Article X thereof,
such provisions are incorporated herein by this reference.
231
SECTION 22 No Inconsistent Requirements. Grantor acknowledges that this
Agreement and the other Credit Documents may contain covenants and other terms
and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.
SECTION 23 Termination; Releases. (i) Upon the termination of the
Commitments of the Lenders, the surrender of any Letters of Credit issued for
the account of Company under the Credit Agreement and payment and performance in
full of all Secured Obligations, the security interests granted under this
Agreement shall terminate and the Collateral Agent and all Credit Agents shall
promptly execute and deliver to Grantor such documents and instruments
reasonably requested by Grantor as shall be necessary to evidence termination of
all security interests given by Grantor to the Collateral Agent hereunder;
provided, however, that the obligations of Grantor under Section 14 shall
survive such termination.
(ii) Concurrently with any permitted disposition of Collateral under
the Credit Documents, the security interests hereunder shall automatically be
released from the Collateral so disposed of, subject to Section 5(j); provided,
however, that the security interests shall continue in the Proceeds thereof.
Upon satisfaction to all conditions precedent to any permitted disposition set
forth herein or in the other Credit Documents, the Collateral Agent and all
Credit Agents shall execute and deliver any releases or other documents
reasonably requested by the relevant Grantor to accomplish or confirm the
release of Collateral provided by this Section. Any such release shall
specifically describe the portion of the Collateral to be released, shall be
expressed to be unconditional and shall be without recourse or warranty (other
than a warranty that the Collateral Agent and the Credit Agents have not
assigned their rights and interests to any other Person).
SECTION 24 Assumption. Upon execution and delivery to the Administrative
Agent of an Subsidiary Security Agreement by a Subsidiary of the Grantor as
provided in Section 6.14 of the Credit Agreement, effective as of the effective
date of such Subsidiary Security Agreement, such Guarantor shall be deemed a
Grantor party hereto, and this Agreement shall be deemed amended to include any
amendments to the Schedules provided by such Subsidiary in connection therewith.
SECTION 25 Intercreditor Agreement. Notwithstanding anything set forth
in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.
[remainder of page intentionally left blank]
232
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
[_________________] CORPORATION
Grantor
By:
--------------------------------
Name:
Title:
BANK OF AMERICA, N.A.,
as Collateral Agent
` By:
--------------------------------
Name:
Title:
233
SCHEDULE 1
to the Security Agreement
1. LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF
COLLATERAL
a. Chief Executive Office and Principal Place of Business:
Other locations where Grantor conducts business or Collateral is kept:
2. LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT
3. TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS
NAMES; ETC.
4. DEPOSIT ACCOUNTS
234
5. INVESTMENT PROPERTY
6. INSTRUMENTS
7. LEASED EQUIPMENT
235
SCHEDULE 2
to the Security Agreement
(A) ISSUED PATENTS OF GRANTOR
Grantor Patent No. Issue Date Inventors Title Agent
------- ---------- ---------- --------- ----- -----
(B) PENDING PATENT APPLICATIONS OF GRANTOR
Grantor Application No. Filing Date Inventors Title
------- --------------- ----------- --------- -----
(C) TRADEMARKS OF GRANTOR
Registration Registration Registered
Grantor No. Date Filing Date Owner Xxxx
------- --- ---- ----------- ----- ----
(D) PENDING TRADEMARK APPLICATIONS OF GRANTOR
Application
Grantor No. Filing Date Applicant Xxxx
------- --- ----------- --------- ----
(E) COPYRIGHTS OF GRANTOR
Grantor Copyright Title Reg. No. Date of Issue
------- --------------- -------- -------------
236
(F) COPYRIGHT APPLICATIONS OF GRANTOR
Grantor Title Date of Application
------- ----- -------------------
(G) COPYRIGHT LICENSES OF GRANTOR
Grantor Title Copyright Owner Reg. No. Date of Issue
------- ----- --------------- -------- -------------
237
SCHEDULE 3
to the Security Agreement
FILING OFFICES
238
EXHIBIT H
SUPPLEMENTAL IP SECURITY AGREEMENT
THIS SUPPLEMENTAL IP SECURITY AGREEMENT (this "Agreement"), dated as of
_________ __, 2001, is made by and among [____________________], a [________]
corporation (the "Grantor") in favor of BANK OF AMERICA, N.A., as the Collateral
Agent for the benefit of: (a) BANK OF AMERICA, N.A., as the administrative agent
(in such capacity, the "Administrative Agent") for itself and the financial
institutions (the "Lenders" and, individually, a "Lender") from time to time
party to that certain Credit Agreement dated as of January 31, 2001 (as renewed,
extended, modified, amended or restated from time to time, the "Credit
Agreement"); (b) the "Swap Provider" (as defined in the Security Agreement); and
(c) the Note Holders party from time to time to the Note Purchase Agreement.
RECITALS
WHEREAS, it is a covenant the satisfaction of which permits borrowings
under the Credit Agreement and the Note Purchase Agreement that the Grantor
enter into this Agreement and grant to the Collateral Agent for the benefit of
the Credit Parties the security interests hereinafter provided to secure the
obligations of the Grantor described below.
WHEREAS, the Grantor is party to that Security Agreement dated as of
February __, 2001 by and among Grantor[, other Subsidiaries of the Company party
thereto] and the Collateral Agent for the benefit of the Credit Parties (the
"Security Agreement").
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them,
respectively, in subsections (a), (b) and (c) of Section 1 of the Security
Agreement. The rules of interpretation set forth in subsection (d) of Section 1
of the Security Agreement shall be applicable to this Agreement and are
incorporated herein by this reference.
SECTION 2 Grant of Security Interest.
(a) As a continuing security for the payment and performance of the
Secured Obligations, the Grantor hereby pledges, assigns, transfers,
hypothecates and sets over to the Collateral Agent (for the benefit of the
Credit Parties, and each of them), and hereby grants to the Collateral Agent
(for the benefit of the Credit Parties, and each of them), a security interest
in all of Grantor's right, title and interest in, to and under the Intellectual
Property, wherever located and whether now existing or owned or hereafter
acquired or arising, including without limitation such Intellectual Property
described and set forth on Schedule 1 hereto.
(b) Notwithstanding the foregoing provisions of this Section 2, the
grant of a security interest as provided herein shall not extend to, and the
term "Intellectual Property" shall not include, Intellectual Property which is
now or hereafter held by Grantor as licensee, lessee or otherwise to the extent
such Intellectual Property consists of: (i) ordinary shrinkwrap licenses
239
governing software products that Grantor purchased in the Ordinary Course of
Business; or (ii) licenses listed on Schedule 5.17 of the Credit Agreement.
SECTION 3 Further Assurances; Appointment of Collateral Agent as
Attorney-in-Fact. The Grantor at its expense shall execute and deliver, or cause
to be executed and delivered, to the Collateral Agent any and all documents and
instruments, in form and substance satisfactory to the Collateral Agent (upon
instruction of the Instructing Group), and take any and all action, which the
Collateral Agent (upon instruction of the Instructing Group) may request from
time to time, to perfect and continue perfected, maintain the priority of or
provide notice of the security interest of the Collateral Agent in the
Intellectual Property Collateral and to accomplish the purposes of this
Agreement. The Collateral Agent shall have the right, in the name of the
Grantor, or in the name of the Collateral Agent or any of the Credit Parties or
otherwise, upon notice to but without the requirement of assent by the Grantor,
and the Grantor hereby constitutes and appoints the Collateral Agent (and any of
the Collateral Agent's officers or employees or agents designated by the
Collateral Agent) as the Grantor's true and lawful attorney-in-fact with full
power and authority, to: (i) sign any financing statements and any other
documents and instruments which the Collateral Agent (upon instruction of the
Instructing Group) deems necessary or advisable to perfect or continue
perfected, maintain the priority of or provide notice of the Collateral Agent's
security interest in the Intellectual Property; (ii) assert, adjust, xxx for,
compromise or release any claims under any policies of insurance; and (iii)
execute any and all such other documents and instruments, and do any and all
acts and things for and on behalf of the Grantor, which the Collateral Agent
(upon instruction of the Instructing Group) may deem necessary or advisable to
maintain, protect, realize upon and preserve the Intellectual Property and the
Collateral Agent's security interest therein and to accomplish the purposes of
this Agreement, including (A) to defend, settle, adjust or institute any action,
suit or proceeding with respect to the Intellectual Property, (B) to assert or
retain any rights under any license agreement for any of the Intellectual
Property, including without limitation any rights of the Grantor arising under
Section 365(n) of the Bankruptcy Code, and (C) to execute any and all
applications, documents, papers and instruments for the Collateral Agent to use
the Intellectual Property, to grant or issue any exclusive or non-exclusive
license or sub-license with respect to any Intellectual Property and to assign,
convey or otherwise transfer title in or dispose of the Intellectual Property;
provided, however, that the Collateral Agent agrees that, except upon and during
the continuance of an Event of Default, it shall not exercise the power of
attorney pursuant to clauses (ii) and (iii). The power of attorney set forth in
this Section 3, being coupled with an interest, is irrevocable so long as this
Agreement shall not have terminated.
SECTION 4 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to such party and shall not be
responsible to Grantor or any other Person for any failure to do so or delay in
doing so. Beyond the exercise of reasonable care to assure the safe custody of
Collateral in the Collateral Agent's possession, and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Collateral.
SECTION 5 Credit Parties' Rights and Remedies.
240
(a) Upon and during the continuation of a Default, the Collateral
Agent shall have all rights and remedies available to it under this Agreement,
the Security Agreement and applicable law with respect to the security interests
in any of the Intellectual Property. Grantor agrees that such rights and
remedies include, but are not limited to, the right of the Collateral Agent as a
secured party to sell or otherwise dispose of the Intellectual Property pursuant
to the UCC.
(b) The cash proceeds actually received from the sale or other
disposition or collection of Intellectual Property, and any other amounts
received in respect of the Intellectual Property Collateral the application of
which is not otherwise provided for herein, shall be applied as provided in the
Security Agreement.
SECTION 6 Security Agreement. This Agreement is supplementary to and
entered into in support of the Security Agreement. The terms and provisions of
the Security Agreement are incorporated herein by reference and shall be applied
as if fully set forth herein. The Grantor acknowledges that the rights and
remedies of the Collateral Agent with respect to the security interests in the
Intellectual Property granted hereby are more fully set forth in the Security
Agreement and that all such rights and remedies are cumulative.
SECTION 7 Independence. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable Laws (including the UCC, patent law, trademark law and copyright
law) and regulations. If, however, any provision of this Agreement shall be
prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum
requirements of such law or regulation, or, if for any reason it is not deemed
so modified, it shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions of this
Agreement, or the validity or effectiveness of such provision in any other
jurisdiction.
SECTION 8 Representations and Warranties. The representations and
warranties of the Grantor set forth in the Section 4 of the Security Agreement
and incorporated herein by Section 6 hereof are true and correct as of the date
hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case such representations and
warranties are true and correct as of such earlier date.
SECTION 9 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
241
CERIDIAN CORPORATION
Grantor
By:
-----------------------------------
Name:
Title:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
-----------------------------------
Name:
Title:
242
SCHEDULE 1
to the Supplemental IP Security Agreement
(A) NEW ISSUED PATENTS OF GRANTOR
Grantor Patent No. Issue Date Inventors Title Agent
------- ---------- ---------- --------- ----- -----
(B) PENDING PATENT APPLICATIONS OF GRANTOR
Grantor Application No. Filing Date Inventors Title
------- -------------- ----------- ---------- -----
(C) NEW U.S. TRADEMARKS OF GRANTOR
Registration Registration Registered
Grantor No. Date Filing Date Owner Xxxx
------- --- ---- ----------- ----- ----
(D) PENDING TRADEMARK APPLICATIONS OF GRANTOR
Grantor Application No. Filing Date Applicant Xxxx
------- --------------- ----------- --------- ----
(E) NEW COPYRIGHTS OF GRANTOR
Grantor Copyright Title Reg. No. Date of Issue
------- --------------- -------- -------------
243
(F) NEW COPYRIGHT APPLICATIONS OF GRANTOR
Grantor Title Application No. Date of Application
------- ----- --------------- -------------------
(G) NEW COPYRIGHT LICENSES OF GRANTOR
Grantor Title Copyright Owner Reg. No. Date of Issue
------- ----- --------------- -------- -------------
244
EXHIBIT I
FORM OF COMPANY PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February __,
2001, is made among CERIDIAN CORPORATION, a Delaware corporation (the
"Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent for the benefit of:
(a) BANK OF AMERICA, N.A., in its capacity as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders from time to time party to
the Credit Agreement, dated as of January 31, 2001 (the "Credit Agreement"), (b)
the "Swap Provider" (as defined herein), and (c) the Note Holders party from
time to time to the Note Purchase Agreement.
It is a condition precedent to the borrowings under each of the Credit
Agreement and the Note Purchase Agreement that the Grantor enter into this
Agreement and pledge to the Collateral Agent the shares of the capital stock of
each of the Subsidiaries set forth in Schedule 1 (collectively, the
"Subsidiaries"), owned by the Grantor, to secure the obligations of the Grantor
described below.
Accordingly, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
(a) Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement. The rules of interpretation set forth in
the Credit Agreement shall be applicable to this Agreement and are incorporated
herein by this reference.
(b) Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Additional Collateral" means any and all (i) additional capital stock
or other equity securities of the Subsidiaries, whether certificated or
uncertificated, (ii) warrants, options or other rights entitling the Grantor to
acquire any interest in the capital stock or other equity securities of the
Subsidiaries, (iii) securities, property, interest, dividends and other payments
and distributions issued as an addition to, in redemption of, in renewal or
exchange for, in substitution or upon conversion of, or otherwise on account of,
the Pledged Shares or such additional capital stock or other equity securities,
and (iv) cash and non-cash proceeds of the Pledged Shares and any of the
foregoing, in each case from time to time received or receivable by, or
otherwise paid or distributed to or acquired by, the Grantor.
"Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be appointed from time to time thereunder)
on behalf and for the benefit of, (a) Bank of America, N.A. in its capacity as
the Administrative Agent for the benefit of itself and the other Lenders from
time to time party to the Credit Agreement, and the L/C Issuer; (b) the Note
Holders from time to time party to the Note Purchase Agreement; and (c) the Swap
Provider.
245
"Credit Agents" and each, individually, a "Credit Agent" means (a) the
Administrative Agent (for the benefit of itself and the other Lenders, and the
L/C Issuer), (b) the Note Holders and (c) the Swap Provider.
"Credit Documents" means, collectively, the Note Documents, the Note
Holder Documents and the Swap Documents.
"Credit Parties" and each, individually, a "Credit Party" means the
Credit Agents and the Debt Participants.
"Debt Participant" means a "Debt Participant" under, and as defined in,
the Intercreditor Agreement.
"Exchange Act" means the Securities Exchange Act of 1934.
"Instructing Group" means "Instructing Group" under, and as defined in,
the Intercreditor Agreement.
"Intercreditor Agreement" means that Intercreditor Agreement dated as of
January ___, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider, and the Note Holders.
"Investment Property" means any and all investment property of the
Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts, commodity
accounts and all financial assets held in any securities account or otherwise,
wherever located and whether now existing or hereafter arising.
"Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Note Party
under any Note Holder Document, (iii) all documents executed by any Note Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.
"Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.
"Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.
"Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.
"Note Purchase Agreement" means that Note Purchase Agreement
dated as of January 31, 2001 among the Company, the Note Holders party thereto.
246
"Pledged Collateral" has the meaning set forth in Section 2(a).
"Pledged Shares" means (a) all of the issued and outstanding shares of
capital stock, whether certificated or uncertificated, of the Subsidiaries now
owned by the Grantor (other than Ceridian Infotech (India) Private Limited), as
more specifically described in Schedule 2, provided, however, that 65% (but no
more than 65%) of the issued and outstanding capital stock of any Subsidiary
which is a Foreign Subsidiary, measured on a non-diluted basis) shall constitute
Pledged Shares hereunder, and (b) all Investment Property.
"Secured Obligations" means all indebtedness, liabilities and other
obligations of the Grantor to the Collateral Agent (for the benefit of the
Credit Agents), whether now existing or hereafter arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, now or created under, arising out of or in connection with any of
the Credit Documents, including all Obligations (as independently defined in
each of the Credit Agreement and the Note Purchase Agreement), and any
obligations under any Specified Swap Agreement to the extent arising out of any
Specified Swap Contracts.
"Securities Act" means the Securities Act of 1933.
"Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the Grantor
and the Swap Provider as swap counterparties.
"Specific Swap Contract" means any interest rate swap entered into
between Grantor and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.
"Swap Collateral Documents" means, collectively, (a) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or otherwise changed in respect of, the
Swap Provider, (b) all Account Control Agreements executed by any Note Party
under any Swap Document, (c) any documents executed by any Note Party to
accomplish cash collateralization pursuant to any Swap Document, and (d) all
licenses, UCC financing statements, notices and other documents executed from
time to time in connection with any of the foregoing.
"Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.
"Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.
"Swap Provider" has the meaning specified in the Intercreditor
Agreement.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in
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any Pledged Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of New York, the term "UCC" shall mean
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
(c) Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.
(d) Interpretation. The rules of interpretation set forth in
Sections 1.02 and 1.05 of the Credit Agreement shall be applicable to this
Agreement and are incorporated herein by this reference.
SECTION 2 Security Interest.
(a) Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, the Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent, and hereby grants
to the Collateral Agent, a security interest in, all of the Grantor's right,
title and interest in, to and under (i) the Pledged Shares and the Additional
Collateral and any certificates and instruments now or hereafter representing
the Pledged Shares and the Additional Collateral, (ii) all rights, interests and
claims with respect to the Pledged Shares and Additional Collateral, including
under any and all related agreements, instruments and other documents, and (iii)
all books, records and other documentation of the Grantor related to the Pledged
Shares and Additional Collateral, in each case whether presently existing or
owned or hereafter arising or acquired and wherever located (collectively, the
"Pledged Collateral") provided, however, that Pledged Collateral shall not
include any of the shares of capital stock of Ceridian Infotech (India) Private
Limited, a Subsidiary of the Grantor organized and existing under the laws of
India.
(b) Delivery of Pledged Shares. The Grantor hereby agrees to deliver
to or for the account of the Collateral Agent, at the address and to the Person
to be designated by theAdministrative Agent, the certificates representing the
Pledged Shares, which shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Collateral Agent (with the
consent of the Instructing Group).
(c) Delivery of Additional Collateral. If the Grantor shall become
entitled to receive or shall receive any Additional Collateral, the Grantor
shall accept any such Additional Collateral as the agent for the Collateral
Agent, shall hold it in trust for the Collateral Agent, shall segregate it from
other property or funds of the Grantor, and shall deliver all Additional
Collateral and all certificates, instruments and other writings representing
such Additional Collateral forthwith to or for the account of the Collateral
Agent, at the address and to the Person to be designated by the Collateral Agent
upon instruction from the Instructing Group, which shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Collateral Agent (with consent of the Instructing Group), as the Collateral
Agent shall request, to be held by the Collateral Agent subject to the terms
hereof, as part of the Pledged Collateral.
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Upon accepting any such Additional Collateral hereunder, the Collateral Agent
shall promptly send a notification to the Grantor describing the Additional
Collateral accepted and held as part of the Pledged Collateral hereunder, which
notification shall be deemed to be a Schedule to this Agreement and may be
attached hereto.
(d) Transfer of Security Interest Other Than by Delivery. If for any
reason Pledged Collateral cannot be delivered to or for the account of the
Collateral Agent as provided in subsections (b) and (c), the Grantor shall
promptly take such other steps as shall be requested from time to time by the
Collateral Agent (upon instruction of the Instructing Group) to effect a
transfer of a perfected first priority security interest in and pledge of the
Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent
practicable, the Grantor shall thereafter deliver the Pledged Collateral to or
for the account of the Collateral Agent as provided in subsections (b) and (c).
(e) Continuing Security Interest. The Grantor agrees that this
Agreement shall create continuing security interests in and pledge of the
Pledged Collateral which shall remain in effect until terminated in accordance
with Section 22.
SECTION 3 Representations and Warranties. In addition to the
representations and warranties of the Grantor made in the Credit Agreement,
which are incorporated, remade and reaffirmed herein by this reference, and
which are true, complete and accurate as of the date hereof except to the extent
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, the Grantor
represents and warrants to the Collateral Agent and each of the Credit Parties
that:
(a) Valid Issuance of Pledged Collateral. All the Pledged Shares
have been, and upon issuance any Additional Collateral will be, duly and validly
issued, and are and will be fully paid and non-assessable.
(b) Ownership of Pledged Collateral. With respect to the Pledged
Shares the Grantor is, and with respect to any Additional Collateral the Grantor
will be, the legal record and beneficial owner thereof, and has and will have
good and marketable title thereto, subject to no Lien except for the pledge and
security interests created by this Agreement.
(c) Capitalization of the Subsidiary. The Pledged Shares constitute
100% of the issued and outstanding shares of capital stock of the Subsidiary,
provided, however, that if the Company is a Foreign Subsidiary of the Grantor,
the Pledged Shares constitute no less than 65% of the issued and outstanding
capital stock of the Subsidiary, measured on a non-diluted basis.
(d) Options, Warrants, Etc. Other than as set forth in Schedule 2,
no securities convertible into or exchangeable for any shares of capital stock
of the Subsidiary, or any options, warrants or other commitments entitling any
Person to purchase or otherwise acquire any shares of capital stock of the
Subsidiary, are issued and outstanding.
(e) Transfer Restrictions. There are no restrictions on the
transferability of the Pledged Collateral to the Collateral Agent or with
respect to the foreclosure, transfer or disposition thereof by the Collateral
Agent .
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(f) Shareholders Agreements. There are no shareholders agreements,
voting trusts, proxy agreements or other agreements or understandings which
affect or relate to the voting or giving of written consents with respect to any
of the Pledged Collateral.
(g) No Violation of Securities Laws. None of the Pledged Shares has
been transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such transfer may be
subject.
(h) Location of Chief Executive Office. The Grantor's chief
executive office and principal place of business, and all books and records
concerning the Pledged Collateral, are located at __________________, or such
other address as to which the Grantor has notified the Collateral Agent in
accordance with Section 4(e).
(i) Other Financing Statements. Other than (i) financing statements
disclosed to the Collateral Agent and (ii) financing statements in favor of the
Collateral Agent, no effective financing statement naming the Grantor as debtor,
assignor, grantor, mortgagor, pledgor or the like and covering all or any part
of the Pledged Collateral is on file in any filing or recording office in any
jurisdiction.
(j) Enforceability; Priority of Security Interest. This Agreement
(i) creates an enforceable perfected and first priority security interest in and
pledge of the Pledged Collateral upon delivery thereof pursuant to Section 2(b),
and (ii) will create an enforceable perfected and first priority security
interest in and pledge of the Additional Collateral upon delivery thereof
pursuant to Section 2(c) (or upon the taking of such other action with respect
thereto as may be requested by the Collateral Agent pursuant to Section 2(d)),
in each case securing the payment and performance of the Secured Obligations.
The Grantor agrees that the foregoing representations and warranties
shall be deemed to have been made by it on the date of each delivery of Pledged
Collateral hereunder.
SECTION 4 Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this reference,
so long as any of the Secured Obligations remain unsatisfied or unpaid, the
Grantor agrees that:
(a) Defense of Pledged Collateral. The Grantor will, at its own
expense, appear in and defend any action, suit or proceeding which purports to
affect its title to, or right or interest in, the Pledged Collateral or the
security interests of the Collateral Agent therein and the pledge to the
Collateral Agent thereof.
(b) Preservation of Collateral. The Grantor will do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Pledged Collateral.
(c) Compliance with Laws, Etc. The Grantor will comply with all
laws, regulations and ordinances relating in a material way to the possession,
maintenance and control of the Pledged Collateral.
(d) Location of Books and Chief Executive Office. The Grantor will:
(i) keep all books and records pertaining to the Pledged Collateral at the
location set forth in Section 3(h);
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and (ii) give at least 30 days' prior written notice to the Collateral Agent of
(A) any changes in any such location where books and records pertaining to the
Pledged Collateral are kept, or (B) any change in the location of the Grantor's
chief executive office or principal place of business.
(e) Change in Name, Identity or Structure. The Grantor will give at
least 30 days' prior written notice to the Collateral Agent of (i) any change in
its name, (ii) any changes in, additions to or other modifications of its trade
names used as the name of Grantor, and (iii) any changes in its identity or
structure in any manner which might make any financing statement filed hereunder
incorrect or misleading.
(f) Disposition of Pledged Collateral. Except as permitted by the
Credit Agreement, the Grantor will not surrender or lose possession of (other
than to the Collateral Agent or, with the prior consent of the Collateral Agent,
to a depositary or financial intermediary), exchange, sell, convey, assign or
otherwise dispose of or transfer the Pledged Collateral or any right, title or
interest therein.
(g) Liens. Except for Permitted Liens, the Grantor will not create,
incur or permit to exist any Liens upon or with respect to the Pledged
Collateral, other than the security interests of and pledge to the Collateral
Agent created by this Agreement for the benefit of the Credit Agents.
(h) Shareholders Agreements. The Grantor will not enter into any
shareholders agreement, voting trust, proxy agreement or other agreement or
understanding which affects or relates to the voting or giving of written
consents with respect to any of the Pledged Collateral.
(i) Issuance of Additional Shares. The Grantor will not consent to
or approve, or allow the Subsidiary to consent to or approve, the issuance to
any Person of any additional shares of any class of capital stock of the
Subsidiary, or of any securities convertible into or exchangeable for any such
shares, or any warrants, options or other rights to purchase or otherwise
acquire any such shares, except as permitted under the Credit Agreement.
(j) Notices. The Grantor will deliver promptly to the Collateral
Agent all reports and notices received by the Grantor from the Subsidiary in
respect of any of the Pledged Collateral.
(k) Further Assurances. The Grantor will promptly, upon the written
request from time to time of the Collateral Agent, execute, acknowledge and
deliver, and file and record, all such financing statements and other documents
and instruments, and take all such action, as shall be reasonably necessary to
carry out the purposes of this Agreement.
SECTION 5 Administration of the Pledged Collateral.
(a) Distributions and Voting Prior to an Event of Default. Unless
there exists any Default or Event of Default: (i) the Grantor shall be entitled
to receive and retain for its own account any cash dividend on or other cash
distribution, if any, in respect of the Pledged Collateral; and (ii) the Grantor
shall have the right to vote the Pledged Collateral and to retain the power to
control the direction, management and policies of the Subsidiary to the same
extent as the Grantor would if the Pledged Collateral were not pledged to the
Collateral Agent pursuant to
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this Agreement; provided, however, that the Grantor shall not be entitled to
receive (A) cash paid, payable or otherwise distributed in redemption of, or in
exchange for or in substitution of, any Pledged Collateral, or (B) dividends and
other distributions paid or payable in cash in respect of any Pledged Collateral
in connection with a partial or total liquidation or dissolution of the
Subsidiary or in connection with a reduction of capital, capital surplus or
paid-in-surplus or any other type of recapitalization involving the Subsidiary;
and provided further, however, that no vote shall be cast or consent, waiver or
ratification given or action taken which would have the effect of impairing the
position or interest of the Collateral Agent in respect of the Pledged
Collateral or which would alter the voting rights with respect to the stock of
the Subsidiary or be inconsistent with or violate any provision of this
Agreement and other Credit Documents. If applicable, the Grantor shall be deemed
the beneficial owner of all Pledged Collateral for purposes of Sections 13 and
16 of the Exchange Act and agrees to file all reports required to be filed by
beneficial owners of securities thereunder. The Collateral Agent shall execute
and deliver (or cause to be executed and delivered) to the Grantor all such
proxies and other instruments as the Grantor may reasonably request for the
purpose of enabling the Grantor to exercise the voting and other rights which it
is entitled to exercise pursuant to this subsection (a) and to receive the
distributions which it is authorized to receive and retain pursuant to this
subsection (a).
(b) General Authority upon an Event of Default. If there exists any
Default or Event of Default:
(i) the Collateral Agent shall be entitled to receive all
distributions and payments of any nature with respect to the Pledged Collateral,
to be held by the Collateral Agent as part of the Pledged Collateral;
(ii) the Collateral Agent shall have the right following
prior written notice to the Grantor to vote or consent to take any action with
respect to the Pledged Shares and exercise all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to the
Pledged Collateral as if the Collateral Agent were the absolute owner thereof;
and
(iii) the Collateral Agent shall have the right, for and in
the name, place and stead of the Grantor, to execute endorsements, assignments
or other instruments of conveyance or transfer with respect to all or any of the
Pledged Collateral, to endorse any checks, drafts, money orders and other
instruments relating thereto, to xxx for, collect, receive and give acquittance
for all moneys due or to become due in connection with the Pledged Collateral
and otherwise to file any claims, take any action or institute, defend, settle
or adjust any actions, suits or proceedings with respect to the Pledged
Collateral, execute any and all such other documents and instruments, and do any
and all such acts and things, as the Collateral Agent may deem necessary or
desirable to protect, collect, realize upon and preserve the Pledged Collateral,
to enforce the Collateral Agent's rights with respect to the Pledged Collateral
and to accomplish the purposes of this Agreement.
(c) Distributions to Be Held for Administrative Agent. Distributions
and other payments which are received by the Grantor but which it is not
entitled to retain as a result of the operation of subsection (a) or (b) shall
be held in trust for the benefit of the Collateral Agent, be
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segregated from the other property or funds of the Grantor, and be forthwith
paid over or delivered to the Collateral Agent in the same form as so received.
(d) Certain Other Administrative Matters. At any time and from time
to time, the Collateral Agent may cause any of the Pledged Collateral to be
transferred into its name or into the name of its nominee or nominees (subject
to the revocable rights specified in subsection (a)). The Collateral Agent shall
at all times have the right to exchange uncertificated Pledged Collateral for
certificated Pledged Collateral, and to exchange certificated Pledged Collateral
for certificates of larger or smaller denominations, for any purpose consistent
with this Agreement.
(e) Appointment of Collateral Agent as Attorney-in-Fact. For the
purpose of enabling the Collateral Agent to exercise its rights under this
Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i)
constitutes and appoints Collateral Agent (and any of the Collateral Agent's
officers, employees or agents designated by the Collateral Agent ) Grantor's
true and lawful attorney-in-fact, with full power and authority to execute any
notice, assignment, endorsement or other instrument or document, and to do any
and all acts and things for and on behalf of the Grantor, which the Collateral
Agent may deem necessary or desirable (with the consent of the Instructing
Group) to protect, collect, realize upon and preserve the Pledged Collateral, to
enforce the Collateral Agent's rights with respect to the Pledged Collateral and
to accomplish the purposes hereof, and (ii) revokes all previous proxies with
regard to the Pledged Collateral and appoints the Collateral Agent as its proxy
holder with respect to the Pledged Collateral to attend and vote at any and all
meetings of the shareholders of the Subsidiary held on or after the date of this
proxy and prior to the termination hereof, with full power of substitution to do
so and agrees, if so requested, to execute or cause to be executed appropriate
proxies therefor. Each such appointment is coupled with an interest and
irrevocable so long as any of the Secured Obligations have not been paid and
performed in full. The Grantor hereby ratifies, to the extent permitted by law,
all that the Collateral Agent shall lawfully and in good faith do or cause to be
done by virtue of and in compliance with this Section 5. The Collateral Agent
agrees that, unless there exists any Default or Event of Default, it shall not
exercise the power of attorney, or any rights granted to the Collateral Agent,
pursuant to this subsection (e). The foregoing power of attorney is coupled with
an interest and irrevocable so long as the Secured Obligations have not been
paid and performed in full. Grantor hereby ratifies, to the extent permitted by
law, all that the Collateral Agent shall lawfully and in good faith do or cause
to be done by virtue of and in compliance with this Section 5.
SECTION 6 Performance of Grantor Obligations. The Collateral Agent
may perform or pay any obligation which the Grantor has agreed to perform or pay
under or in connection with this Agreement, and the Grantor shall reimburse the
Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant
to this Section 6.
SECTION 7 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to it and shall not be
responsible to the Grantor or any other Person for any failure to do so or delay
in doing so. Beyond the exercise of reasonable care to assure the safe custody
of the Pledged Collateral while held hereunder and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Pledged Collateral.
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SECTION 8 Remedies.
(a) Remedies. If there exists any Default or Event of Default, the
Collateral Agent shall have, in addition to all other rights and remedies
granted to it in this or any Credit Document, all rights and remedies of a
secured party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, the Grantor agrees that any item of the Pledged
Collateral may be sold for cash or on credit or for future delivery without
assumption of any credit risk, in any number of lots at the same or different
times, at any exchange, brokers' board or elsewhere, by public or private sale,
and at such times and on such terms, as the Collateral Agent shall determine;
provided, however, that the Grantor shall be credited with the net proceeds of
sale only when such proceeds are finally collected by the Collateral Agent. The
Grantor hereby agrees that the sending of notice by ordinary mail, postage
prepaid, to the address of the Grantor set forth in the Credit Agreement, of the
place and time of any public sale or of the time after which any private sale or
other intended disposition is to be made, shall be deemed reasonable notice
thereof if such notice is sent ten days prior to the date of such sale or other
disposition or the date on or after which such sale or other disposition may
occur, provided that the Collateral Agent may provide the Grantor shorter notice
or no notice, to the extent permitted by the UCC or other applicable law. The
Grantor recognizes that the Collateral Agent may be unable to make a public sale
of any or all of the Pledged Collateral, by reason of prohibitions contained in
applicable securities laws or otherwise, and expressly agrees that a private
sale to a restricted group of purchasers for investment and not with a view to
any distribution thereof shall be considered a commercially reasonable sale. The
Collateral Agent and each Credit Party shall have the right upon any such public
sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Pledged Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption the Grantor
hereby releases to the extent permitted by law.
(b) Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated (including with respect
to undrawn amounts under the Letters of Credit) at such time as there may exist
an Event of Default, the Collateral Agent may, upon instruction by the
Instructing Group, (i) retain the proceeds of any sale, collection, disposition
or other realization upon the Pledged Collateral (or any portion thereof) in a
special purpose non-interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for such purpose (as to
which the Grantor hereby grants a security interest and which shall constitute
part of the Pledged Collateral hereunder) until such time as the Collateral
Agent may elect (with the consent of the Instructing Group) to apply such
proceeds to the Secured Obligations, and the Grantor agrees that such retention
of such proceeds by the Collateral Agent shall not be deemed strict foreclosure
with respect thereto; (ii) in any manner elected by the Collateral Agent (with
the consent of the Instructing Group), estimate the liquidated amount of any
such contingent, unmatured or unliquidated claims and apply the proceeds of the
Pledged Collateral against such amount; or (iii) otherwise proceed in any manner
permitted by applicable law. The Grantor agrees that the Proceeds Account shall
be a blocked account and that upon the irrevocable deposit of funds into the
Proceeds Account, the Grantor shall not have any right of withdrawal with
respect to such funds. Accordingly, the Grantor irrevocably waives until the
termination of this Agreement in accordance with Section 22 the right to make
any withdrawal from the Proceeds Account and the right to instruct the
Collateral Agent to honor drafts against the Proceeds Account.
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(c) Application of Proceeds. Subject to subsection (b), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.
SECTION 9 Registration Rights.
(a) Registration of Pledged Collateral. If the Collateral Agent at
the request of the Instructing Group shall determine to exercise its right to
sell any or all of the Pledged Collateral pursuant to Section 8, and if the
Collateral Agent shall determine (with the consent of the Instructing Group)
that it is necessary or advisable to have the Pledged Collateral, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the Grantor shall execute and deliver, and shall cause the Subsidiary and
the Grantor's and the Subsidiary's respective directors and officers to execute
and deliver, all such instruments and documents, and to do or cause to be done
all such other acts and things as may, in the view of the Collateral Agent, be
advisable to register such Pledged Collateral under the provisions of 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 view of the Collateral Agent
(with the consent of the Instructing Group), are necessary or be necessary or
advisable, all in conformity with the requirements of the Securities and
Exchange Commission applicable thereto. The Grantor agrees to comply, and to
cause the Subsidiary to comply, with the provisions of the securities or "Blue
Sky" laws of any jurisdiction which the Collateral Agent shall designate, and to
cause the Subsidiary to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which shall
satisfy the provisions of Section 11(a) of the Securities Act. The Grantor shall
cause to be furnished to the Collateral Agent and each of the Credit Agents such
number of copies of each preliminary prospectus and prospectus, shall promptly
notify the Collateral Agent of the happening of any event (upon becoming aware
thereof) as a result of which any then effective prospectus includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of then existing circumstances and shall cause the Collateral Agent and
each Credit Agent to be furnished with such number of copies as any such Person
may reasonably request of such supplement to or amendment of such prospectus as
is necessary to eliminate such untrue statement or correct such omission.
(b) No Obligation to Delay Private Sale. Neither the Collateral
Agent nor the Credit Parties shall be under any obligation to delay a private
sale of any of the Pledged Collateral (as contemplated by subsection (a)) for
the period of time necessary to permit the issuer thereof to register such
Pledged Collateral for public sale under the Securities Act, or under applicable
state securities laws, even if such issuer would agree to do so.
(c) Further Acts. The Grantor further agrees to do or to use its
best efforts to cause to be done all such other acts and things as may be
necessary to make any sales of all or any portion
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of the Pledged Collateral pursuant to subsections (a) and (b) valid and binding
and in compliance with any and all applicable laws (including the Exchange Act),
regulations, orders, writs, injunctions, decrees or awards of any and all
Governmental Authorities having jurisdiction over any such sale or sales.
(d) Equitable Relief. The Grantor acknowledges that a breach of any
of the covenants contained in this Section 9 will cause irreparable injury to
the Collateral Agent and the Credit Parties, that the Collateral Agent and
Credit Parties have no adequate remedy at law in respect of such breach and, as
a consequence, agrees that each and every covenant contained in this Section 9
shall be specifically enforceable against the Grantor, and the Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the provisions of the Credit Agreement.
(e) Costs and Expenses. The Grantor shall bear all costs and
expenses of carrying out its obligations under this Section 9.
SECTION 10 Certain Waivers. The Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Pledged
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Pledged Collateral or other collateral or security for the
Secured Obligations; (ii) any right to require the Collateral Agent (A) to
proceed against any Person, (B) to exhaust any other collateral or security for
any of the Secured Obligations, (C) to pursue any remedy in the Collateral
Agent's power, or (D) to make or give any presentments, demands for performance,
notices of nonperformance, protests, notices of protests or notices of dishonor
in connection with any of the Pledged Collateral; and (iii) all claims, damages,
and demands against the Collateral Agent arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Pledged
Collateral.
SECTION 11 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; provided, however, that notices hereunder (a) to the Swap
Provider shall be delivered to Fleet National Bank using the information listed
in Schedule 10.02 of the Credit Agreement for such party as a Lender (or such
replacement Swap Provider as may be appointed from time to time consistent with
the terms of the Intercreditor Agreement), and (b) to the Note Holders as set
forth in the Note Purchase Agreement (or such replacement Note Holders as may be
appointed from time to time consistent with the terms of the Intercreditor
Agreement). All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.
SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the
Collateral Agent or any Credit Party to exercise, and no delay in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, remedy,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent or
any Credit Party.
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SECTION 13 Costs and Expenses; Indemnification; Other Charges.
(a) Costs and Expenses. The Grantor agrees to pay on demand:
(i) the out-of-pocket costs and expenses of the Collateral
Agent and any of the Credit Parties' attorney costs, in connection with the
negotiation, preparation, execution, delivery and administration of this
Agreement, and any amendments, modifications or waivers of the terms thereof,
and the custody of the Pledged Collateral;
(ii) all title, appraisal (including the allocated cost of
internal appraisal services), survey, audit, consulting, search, recording,
filing and similar costs, fees and expenses incurred or sustained by the
Collateral Agent or any Credit Party in connection with this Agreement or the
Pledged Collateral; and
(iii) all costs and expenses of the Collateral Agent or any
Credit Party, including Attorney Costs, in connection with the enforcement or
attempted enforcement of, and preservation of any rights or interest under, this
Agreement, any out-of-court workout or other refinancing or restructuring or in
any bankruptcy case, and the protection, sale or collection of, or other
realization upon, any of the Pledged Collateral, including any and all losses,
costs and expenses sustained by the Collateral Agent and any Credit Party as a
result of any failure by the Grantor to perform or observe its obligations
contained herein.
(b) Indemnification. The Grantor shall indemnify, defend and hold
the Collateral Agent, Agent-Related Persons and each Credit Party and each of
its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Person in favor of any third-party in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including caused by, arising out of or by reason of any
alleged untrue statement of a material fact contained in any registration
statement (or any amendment thereto) or in any preliminary prospectus or
prospectus (or any amendment or supplement thereto) contemplated by Section
9(a), or any alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except to
the extent that any such liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements are
caused by, arise solely out of or by reason of any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on
the written direction of any of the Collateral Agent or any Credit Party
(including information supplied by the Collateral Agent or any Credit Party),
and including with respect to any investigation, litigation or proceeding
(including any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement or relating to the Collateral, whether or not any
Indemnified Person is a party thereto (all of the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Grantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent they are found by a final decision of a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
257
misconduct of such Indemnified Person. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, the Grantor agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
(c) Other Charges. The Grantor agrees to indemnify the Indemnified
Persons against and hold each of them harmless from any and all present and
future stamp, transfer, documentary and other such taxes, levies, fees,
assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Agreement.
(d) Interest. Any amounts payable to the Collateral Agent or any
Credit Party under this Section 13 or otherwise under this Agreement if not paid
upon demand shall bear interest from the date of such demand until paid in full,
at the applicable rate of interest (a) for the Administrative Agent or any
Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the
Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any
Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement.
SECTION 14 Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the Grantor, the Collateral Agent and
each Credit Party and their respective successors and assigns.
SECTION 15 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS
OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS
HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED
BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE COLLATERAL
AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX
XXXX SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT PARTY
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT
OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE GRANTOR, THE
258
COLLATERAL AGENT AND EACH CREDIT PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
SECTION 17 Entire Agreement; Amendment. This Agreement, together with
the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof. Subject to Section
18, this Agreement shall be amended only by written agreement with the written
consent of the Instructing Group; provided, however, that any amendment having
the effect of causing a release of all or substantially all of the Collateral
must be consented to in writing by the Collateral Agent and each of the Credit
Agents.
SECTION 18 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the benefit
of each Credit Agent. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder with respect to
any Credit Agent shall not in any way affect or impair the legality or
enforceability of that or any other provision of this Agreement or any
instrument or agreement required hereunder in respect to any other Credit Agent.
The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision
of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 19 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so
259
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
SECTION 20 Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to the
Note Documents, including any such provisions contained in Article X thereof,
such provisions are incorporated herein by this reference.
SECTION 21 No Inconsistent Requirements. The Grantor acknowledges that
this Agreement, and the other Credit Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.
SECTION 22 Termination. Upon termination of the Commitments of the
Lenders, surrender of all Letters of Credit and payment and performance in full
of all Secured Obligations, this Agreement shall terminate and the Collateral
Agent shall (with the consent of the Instructing Group) promptly redeliver to
the Grantor any of the Pledged Collateral in its possession and shall execute
and deliver to the Grantor such documents and instruments reasonably requested
by the Grantor as shall be necessary to evidence termination of all security
interests given by the Grantor to the Collateral Agent hereunder; provided,
however, that the obligations of the Grantor under Sections 9(e) and 13 shall
survive such termination. Upon satisfaction to all conditions precedent to any
permitted disposition set forth herein or in the other Credit Documents, the
Collateral Agent shall execute and deliver any releases or other documents
reasonably requested by the relevant Grantor to accomplish or confirm the
release of Pledged Shares provided by this Section.
SECTION 23 Intercreditor Agreement. Notwithstanding anything set forth
in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
CERIDIAN CORPORATION
THE GRANTOR
By:
------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
THE COLLATERAL AGENT
By:
------------------------------
Name:
Title:
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SCHEDULE 1
to the Stock Pledge Agreement
SUBSIDIARIES
262
SCHEDULE 2
to the Stock Pledge Agreement
PLEDGED SHARES
_______ stock of _________________ being represented by stock certificates as
follows:
Certificate No. Certificate Date No. of Shares
--------------- ---------------- -------------
263
SCHEDULE 3
to the Stock Pledge Agreement
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
OF CAPITAL STOCK OF THE SUBSIDIARIES
264
EXHIBIT J
FORM OF SUBSIDIARY PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of February __,
2001, is made among ___________________, a _______________ corporation (the
"Grantor"), and BANK OF AMERICA, N.A., as Collateral Agent on behalf of, and for
the benefit of, (a) BANK OF AMERICA, N.A. in its capacity as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders from time
to time party to the Credit Agreement dated as of January 31, 2001 (as amended,
modified, renewed or extended from time to time, the "Credit Agreement"), (b)
the "Swap Provider" (as defined herein), and (c) the "Note Holders" (as defined
herein) party to the Note Purchase Agreement.
It is a condition precedent to the borrowings under each of the Credit
Agreement and the Note Purchase Agreement that the Grantor enter into this
Agreement and pledge to the Collateral Agent the shares of the capital stock of
___________________________, a ____________ corporation (the "Subsidiary"),
owned by the Grantor, to secure the obligations of the Company described below.
Accordingly, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
(a) Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them,
respectively, in the Credit Agreement. The rules of interpretation set forth in
the Credit Agreement shall be applicable to this Agreement and are incorporated
herein by this reference.
(b) Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Additional Collateral" means any and all (i) additional capital stock
or other equity securities of the Subsidiary, whether certificated or
uncertificated, (ii) warrants, options or other rights entitling the Grantor to
acquire any interest in capital stock or other equity securities of the
Subsidiary, (iii) securities, property, interest, dividends and other payments
and distributions issued as an addition to, in redemption of, in renewal or
exchange for, in substitution or upon conversion of, or otherwise on account of,
the Pledged Shares or such additional capital stock or other equity securities,
and (iv) cash and non-cash proceeds of the Pledged Shares and any of the
foregoing, in each case from time to time received or receivable by, or
otherwise paid or distributed to or acquired by, the Grantor.
"Company" means CERIDIAN CORPORATION, a Delaware corporation.
"Credit Documents" means the Note Documents together with the Swap
Documents.
"Collateral Agent" means Bank of America, N.A. in its capacity as
"Collateral Agent" (as defined in the Intercreditor Agreement; or such
replacement Collateral Agent as may be
265
appointed from time to time thereunder) on behalf and for the benefit of, (a)
Bank of America, N.A. in its capacity as the Administrative Agent for the
benefit of itself and the other Lenders from time to time party to the Credit
Agreement, and the L/C Issuer; (b) the Note Holders from time to time party to
the Note Purchase Agreement; and (c) the Swap Provider.
"Credit Agents" and each, individually, a "Credit Agent" means (a) the
Administrative Agent (for the benefit of itself and the other Lenders, and the
L/C Issuer), (b) the Note Holders and (c) the Swap Provider.
"Credit Parties" and each, individually, a "Credit Party" means the
Credit Agents and the Debt Participants.
"Credit Documents" means, collectively, the Note Documents, the Note
Holder Documents and the Swap Documents.
"Debt Participant" means a "Debt Participant" under, and as defined in,
the Intercreditor Agreement.
"Exchange Act" means the Securities and Exchange Act of 1934.
"Instructing Group" means "Instructing Group" under, and as defined in,
the Intercreditor Agreement.
"Intercreditor Agreement" means that Intercreditor Agreement dated as of
January 31, 2001 among the Collateral Agent, the Administrative Agent, the Swap
Provider and the Note Holders.
"Note Holder Collateral Documents" means, collectively, (i) the
Security Agreements and the Pledge Agreements (as such terms are defined in the
Credit Agreement, but to the extent entered into by the parties thereto for the
benefit of, and as modified, extended or other wise changed in respect of, the
Note Holders), (ii) all Account Control Agreements executed by any Note Party
under any Note Holder Document, (iii) all documents executed by any Note Party
to accomplish cash collateralization pursuant to any Note Holder Document, and
(iv) all licenses, UCC financing statements, notices and other documents
executed from time to time or in connection with any of the foregoing.
"Note Holder Documents" means, collectively, the Note Purchase
Agreement, the Note Holder Collateral Documents and the Note Holder Guaranties.
"Note Holder Guaranties" means the Guaranties under and as
defined in the Credit Agreement, but to the extent entered into by the
Guarantors thereunder for the benefit of, and as modified, extended or otherwise
changed in respect of, the Note Holders.
"Note Holder" means a "Note Holder" under, and as defined in,
the Note Purchase Agreement.
"Note Purchase Agreement" means that Note Purchase Agreement dated as of
January 31, 2001 among the Company and the Note Holders party thereto.
266
"Intercreditor Agreement" means that Intercreditor Agreement dated as of
__________ _____, 2001 among the Collateral Agent, the Administrative Agent, the
Swap Provider, and the Note Holders.
"Investment Property" means any and all investment property of the
Grantor, including all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts, commodity
accounts and all financial assets held in any securities account or otherwise,
wherever located and whether now existing or hereafter arising.
"Pledged Collateral" has the meaning set forth in Section 2(a).
"Pledged Shares" mean (a) all of the issued and outstanding shares of
capital stock, whether certificated or uncertificated, of the Subsidiary now
owned by the Grantor (other than Ceridian Infotech (India) Private Limited), as
more specifically described in Schedule 1, provided, however, that if the
Subsidiary is a Foreign Subsidiary of the Grantor, 65% (but no more than 65%) of
the issued and outstanding capital stock of the Subsidiary, measured on a
non-diluted basis, shall constitute Pledged Shares, and (b) all Investment
Property.
"Secured Obligations" means all indebtedness, liabilities and other
obligations of the Company to the Collateral Agent, whether now existing or
hereafter arising, and whether due to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, nor or created under,
arising out of or in connection with any of the Credit Documents, including all
Obligations (as independently defined in each of the Credit Agreement and the
Note Purchase Agreement), and any of the obligations under any Swap Documents.
"Securities Act" means the Securities Act of 1933.
"Specified Swap Agreement" means any ISDA(R) Master Agreement (including
any schedule and confirmation relating thereto) entered into between the Company
and the Swap Provider as swap counterparties.
"Specific Swap Contract" means any interest rate swap entered into
between the Company and the Swap Provider as swap counterparties constituting a
"Specified Swap Contract" as defined in the Credit Agreement.
"Swap Collateral Documents" means, collectively, (a) the Security
Agreements and the Pledge Agreements (as such terms are defined in the Credit
Agreement, but to the extent entered into by the parties thereto for the benefit
of, and as modified, extended or otherwise changed in respect of, the Swap
Provider, (b) all Account Control Agreements executed by any Note Party under
any Swap Document, (c) any documents executed by any Note Party to accomplish
cash collateralization pursuant to any Swap Document, and (d) all licenses, UCC
financing statements, notices and other documents executed from time to time in
connection with any of the foregoing.
"Swap Documents" means, collectively, any Specified Swap
Agreement, the Swap Collateral Documents and the Swap Guaranties.
267
"Swap Guaranties" means the Guaranties under and as defined in
the Credit Agreement, but to the extent entered into by the Guarantors
thereunder for the benefit of, and as modified, extended or otherwise changed in
respect of, the Swap Provider.
"Swap Provider" has the meaning specified in the Intercreditor
Agreement.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York: provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Pledged Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
(c) Terms Defined in UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.
(d) Interpretation. The rules of interpretation set forth in Section
1.02 and 1.05 of the Credit Agreement shall be applicable to this Agreement and
are incorporated herein by this reference.
SECTION 2 Security Interest.
(a) Grant of Security Interest. As security for the payment and
performance of the Secured Obligations, the Grantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Collateral Agent, and hereby grants
to the Collateral Agent, a security interest in, all of the Grantor's right,
title and interest in, to and under (i) the Pledged Shares and the Additional
Collateral and any certificates and instruments now or hereafter representing
the Pledged Shares and the Additional Collateral, (ii) all rights, interests and
claims with respect to the Pledged Shares and Additional Collateral, including
under any and all related agreements, instruments and other documents, and (iii)
all books, records and other documentation of the Grantor related to the Pledged
Shares and Additional Collateral, in each case whether presently existing or
owned or hereafter arising or acquired and wherever located (collectively, the
"Pledged Collateral") provided, however, that Pledged Collateral shall not
include any of the shares of capital stock of Ceridian Infotech (India) Private
Limited, a Subsidiary of the Grantor organized and existing under the laws of
India.
(b) Delivery of Pledged Shares. The Grantor hereby agrees to deliver
to or for the account of the Collateral Agent, at the address and to the Person
to be designated by theAdministrative Agent, the certificates representing the
Pledged Shares, which shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Collateral Agent (with the
consent of the Instructing Group).
(c) Delivery of Additional Collateral. If the Grantor shall become
entitled to receive or shall receive any Additional Collateral, the Grantor
shall accept any such Additional Collateral as the agent for the Collateral
Agent, shall hold it in trust for the Collateral Agent,
268
shall segregate it from other property or funds of the Grantor, and shall
deliver all Additional Collateral and all certificates, instruments and other
writings representing such Additional Collateral forthwith to or for the account
of the Collateral Agent, at the address and to the Person to be designated by
the Collateral Agent upon instruction from the Instructing Group, which shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent (with consent of the Instructing
Group), as the Collateral Agent shall request, to be held by the Collateral
Agent subject to the terms hereof, as part of the Pledged Collateral. Upon
accepting any such Additional Collateral hereunder, the Collateral Agent shall
promptly send a notification to the Grantor describing the Additional Collateral
accepted and held as part of the Pledged Collateral hereunder, which
notification shall be deemed to be a Schedule to this Agreement and may be
attached hereto.
(d) Transfer of Security Interest Other Than by Delivery. If for any
reason Pledged Collateral cannot be delivered to or for the account of the
Collateral Agent as provided in subsections (b) and (c), the Grantor shall
promptly take such other steps as shall be requested from time to time by the
Collateral Agent (upon instruction of the Instructing Group) to effect a
transfer of a perfected first priority security interest in and pledge of the
Pledged Collateral to the Collateral Agent pursuant to the UCC. To the extent
practicable, the Grantor shall thereafter deliver the Pledged Collateral to or
for the account of the Collateral Agent as provided in subsections (b) and (c).
(e) Continuing Security Interest. The Grantor agrees that this
Agreement shall create continuing security interests in and pledge of the
Pledged Collateral which shall remain in effect until terminated in accordance
with Section 22.
SECTION 3 Representations and Warranties. In addition to the
representations and warranties of the Grantor made in the Credit Agreement,
which are incorporated, remade and reaffirmed herein by this reference, and
which are true, complete and accurate as of the date hereof except to the extent
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, the Grantor
represents and warrants to the Collateral Agent and each of the Credit Parties
that:
(a) Valid Issuance of Pledged Collateral. All the Pledged Shares
have been, and upon issuance any Additional Collateral will be, duly and validly
issued, and are and will be fully paid and non-assessable.
(b) Ownership of Pledged Collateral. With respect to the Pledged
Shares the Grantor is, and with respect to any Additional Collateral the Grantor
will be, the legal record and beneficial owner thereof, and has and will have
good and marketable title thereto, subject to no Lien except for the pledge and
security interests created by this Agreement.
(c) Capitalization of the Subsidiary. The Pledged Shares constitute
100% of the issued and outstanding shares of capital stock of the Subsidiary,
provided, however, that if the Company is a Foreign Subsidiary of the Grantor,
the Pledged Shares constitute no less than 65% of the issued and outstanding
capital stock of the Subsidiary, measured on a non-diluted basis.
269
(d) Options, Warrants, Etc. Other than as set forth in Schedule 2,
no securities convertible into or exchangeable for any shares of capital stock
of the Subsidiary, or any options, warrants or other commitments entitling any
Person to purchase or otherwise acquire any shares of capital stock of the
Subsidiary, are issued and outstanding.
(e) Transfer Restrictions. There are no restrictions on the
transferability of the Pledged Collateral to the Collateral Agent or with
respect to the foreclosure, transfer or disposition thereof by the Collateral
Agent .
(f) Shareholders Agreements. There are no shareholders agreements,
voting trusts, proxy agreements or other agreements or understandings which
affect or relate to the voting or giving of written consents with respect to any
of the Pledged Collateral.
(g) No Violation of Securities Laws. None of the Pledged Shares has
been transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such transfer may be
subject.
(h) Location of Chief Executive Office. The Grantor's chief
executive office and principal place of business, and all books and records
concerning the Pledged Collateral, are located at __________________, or such
other address as to which the Grantor has notified the Collateral Agent in
accordance with Section 4(e).
(i) Other Financing Statements. Other than (i) financing statements
disclosed to the Collateral Agent and (ii) financing statements in favor of the
Collateral Agent, no effective financing statement naming the Grantor as debtor,
assignor, grantor, mortgagor, pledgor or the like and covering all or any part
of the Pledged Collateral is on file in any filing or recording office in any
jurisdiction.
(j) Enforceability; Priority of Security Interest. This Agreement
(i) creates an enforceable perfected and first priority security interest in and
pledge of the Pledged Collateral upon delivery thereof pursuant to Section 2(b),
and (ii) will create an enforceable perfected and first priority security
interest in and pledge of the Additional Collateral upon delivery thereof
pursuant to Section 2(c) (or upon the taking of such other action with respect
thereto as may be requested by the Collateral Agent pursuant to Section 2(d)),
in each case securing the payment and performance of the Secured Obligations.
The Grantor agrees that the foregoing representations and warranties
shall be deemed to have been made by it on the date of each delivery of Pledged
Collateral hereunder.
SECTION 4 Covenants. In addition to the covenants of the Grantor set
forth in the Credit Agreement, which are incorporated herein by this reference,
so long as any of the Secured Obligations remain unsatisfied or unpaid, the
Grantor agrees that:
(a) Defense of Pledged Collateral. The Grantor will, at its own
expense, appear in and defend any action, suit or proceeding which purports to
affect its title to, or right or interest in, the Pledged Collateral or the
security interests of the Collateral Agent therein and the pledge to the
Collateral Agent thereof.
270
(b) Preservation of Collateral. The Grantor will do and perform all
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Pledged Collateral.
(c) Compliance with Laws, Etc. The Grantor will comply with all
laws, regulations and ordinances relating in a material way to the possession,
maintenance and control of the Pledged Collateral.
(d) Location of Books and Chief Executive Office. The Grantor will:
(i) keep all books and records pertaining to the Pledged Collateral at the
location set forth in Section 3(h); and (ii) give at least 30 days' prior
written notice to the Collateral Agent of (A) any changes in any such location
where books and records pertaining to the Pledged Collateral are kept, or (B)
any change in the location of the Grantor's chief executive office or principal
place of business.
(e) Change in Name, Identity or Structure. The Grantor will give at
least 30 days' prior written notice to the Collateral Agent of (i) any change in
its name, (ii) any changes in, additions to or other modifications of its trade
names used as the name of Grantor, and (iii) any changes in its identity or
structure in any manner which might make any financing statement filed hereunder
incorrect or misleading.
(f) Disposition of Pledged Collateral. Except as permitted by the
Credit Agreement, the Grantor will not surrender or lose possession of (other
than to the Collateral Agent or, with the prior consent of the Collateral Agent,
to a depositary or financial intermediary), exchange, sell, convey, assign or
otherwise dispose of or transfer the Pledged Collateral or any right, title or
interest therein.
(g) Liens. Except for Permitted Liens, the Grantor will not create,
incur or permit to exist any Liens upon or with respect to the Pledged
Collateral, other than the security interests of and pledge to the Collateral
Agent created by this Agreement for the benefit of the Credit Agents.
(h) Shareholders Agreements. The Grantor will not enter into any
shareholders agreement, voting trust, proxy agreement or other agreement or
understanding which affects or relates to the voting or giving of written
consents with respect to any of the Pledged Collateral.
(i) Issuance of Additional Shares. The Grantor will not consent to
or approve, or allow the Subsidiary to consent to or approve, the issuance to
any Person of any additional shares of any class of capital stock of the
Subsidiary, or of any securities convertible into or exchangeable for any such
shares, or any warrants, options or other rights to purchase or otherwise
acquire any such shares, except as permitted under the Credit Agreement.
(j) Notices. The Grantor will deliver promptly to the Collateral
Agent all reports and notices received by the Grantor from the Subsidiary in
respect of any of the Pledged Collateral.
(k) Further Assurances. The Grantor will promptly, upon the written
request from time to time of the Collateral Agent, execute, acknowledge and
deliver, and file and record, all such financing statements and other documents
and instruments, and take all such action, as shall be reasonably necessary to
carry out the purposes of this Agreement.
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SECTION 5 Administration of the Pledged Collateral.
(a) Distributions and Voting Prior to an Event of Default. Unless
there exists any Default or Event of Default: (i) the Grantor shall be entitled
to receive and retain for its own account any cash dividend on or other cash
distribution, if any, in respect of the Pledged Collateral; and (ii) the Grantor
shall have the right to vote the Pledged Collateral and to retain the power to
control the direction, management and policies of the Subsidiary to the same
extent as the Grantor would if the Pledged Collateral were not pledged to the
Collateral Agent pursuant to this Agreement; provided, however, that the Grantor
shall not be entitled to receive (A) cash paid, payable or otherwise distributed
in redemption of, or in exchange for or in substitution of, any Pledged
Collateral, or (B) dividends and other distributions paid or payable in cash in
respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution of the Subsidiary or in connection with a reduction
of capital, capital surplus or paid-in-surplus or any other type of
recapitalization involving the Subsidiary; and provided further, however, that
no vote shall be cast or consent, waiver or ratification given or action taken
which would have the effect of impairing the position or interest of the
Collateral Agent in respect of the Pledged Collateral or which would alter the
voting rights with respect to the stock of the Subsidiary or be inconsistent
with or violate any provision of this Agreement and other Credit Documents. If
applicable, the Grantor shall be deemed the beneficial owner of all Pledged
Collateral for purposes of Sections 13 and 16 of the Exchange Act and agrees to
file all reports required to be filed by beneficial owners of securities
thereunder. The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Grantor all such proxies and other instruments as
the Grantor may reasonably request for the purpose of enabling the Grantor to
exercise the voting and other rights which it is entitled to exercise pursuant
to this subsection (a) and to receive the distributions which it is authorized
to receive and retain pursuant to this subsection (a).
(b) General Authority upon an Event of Default. If there exists any
Default or Event of Default:
(i) the Collateral Agent shall be entitled to receive all
distributions and payments of any nature with respect to the Pledged Collateral,
to be held by the Collateral Agent as part of the Pledged Collateral;
(ii) the Collateral Agent shall have the right following
prior written notice to the Grantor to vote or consent to take any action with
respect to the Pledged Shares and exercise all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to the
Pledged Collateral as if the Collateral Agent were the absolute owner thereof;
and
(iii) the Collateral Agent shall have the right, for and in
the name, place and stead of the Grantor, to execute endorsements, assignments
or other instruments of conveyance or transfer with respect to all or any of the
Pledged Collateral, to endorse any checks, drafts, money orders and other
instruments relating thereto, to xxx for, collect, receive and give acquittance
for all moneys due or to become due in connection with the Pledged Collateral
and otherwise to file any claims, take any action or institute, defend, settle
or adjust any actions, suits or proceedings with respect to the Pledged
Collateral, execute any and all such
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other documents and instruments, and do any and all such acts and things, as the
Collateral Agent may deem necessary or desirable to protect, collect, realize
upon and preserve the Pledged Collateral, to enforce the Collateral Agent's
rights with respect to the Pledged Collateral and to accomplish the purposes of
this Agreement.
(c) Distributions to Be Held for Administrative Agent. Distributions
and other payments which are received by the Grantor but which it is not
entitled to retain as a result of the operation of subsection (a) or (b) shall
be held in trust for the benefit of the Collateral Agent, be segregated from the
other property or funds of the Grantor, and be forthwith paid over or delivered
to the Collateral Agent in the same form as so received.
(d) Certain Other Administrative Matters. At any time and from time
to time, the Collateral Agent may cause any of the Pledged Collateral to be
transferred into its name or into the name of its nominee or nominees (subject
to the revocable rights specified in subsection (a)). The Collateral Agent shall
at all times have the right to exchange uncertificated Pledged Collateral for
certificated Pledged Collateral, and to exchange certificated Pledged Collateral
for certificates of larger or smaller denominations, for any purpose consistent
with this Agreement.
(e) Appointment of Collateral Agent as Attorney-in-Fact. For the
purpose of enabling the Collateral Agent to exercise its rights under this
Section 5 or otherwise in connection with this Agreement, the Grantor hereby (i)
constitutes and appoints Collateral Agent (and any of the Collateral Agent's
officers, employees or agents designated by the Collateral Agent ) Grantor's
true and lawful attorney-in-fact, with full power and authority to execute any
notice, assignment, endorsement or other instrument or document, and to do any
and all acts and things for and on behalf of the Grantor, which the Collateral
Agent may deem necessary or desirable (with the consent of the Instructing
Group) to protect, collect, realize upon and preserve the Pledged Collateral, to
enforce the Collateral Agent's rights with respect to the Pledged Collateral and
to accomplish the purposes hereof, and (ii) revokes all previous proxies with
regard to the Pledged Collateral and appoints the Collateral Agent as its proxy
holder with respect to the Pledged Collateral to attend and vote at any and all
meetings of the shareholders of the Subsidiary held on or after the date of this
proxy and prior to the termination hereof, with full power of substitution to do
so and agrees, if so requested, to execute or cause to be executed appropriate
proxies therefor. Each such appointment is coupled with an interest and
irrevocable so long as any of the Secured Obligations have not been paid and
performed in full. The Grantor hereby ratifies, to the extent permitted by law,
all that the Collateral Agent shall lawfully and in good faith do or cause to be
done by virtue of and in compliance with this Section 5. The Collateral Agent
agrees that, unless there exists any Default or Event of Default, it shall not
exercise the power of attorney, or any rights granted to the Collateral Agent,
pursuant to this subsection (e). The foregoing power of attorney is coupled with
an interest and irrevocable so long as the Secured Obligations have not been
paid and performed in full. Grantor hereby ratifies, to the extent permitted by
law, all that the Collateral Agent shall lawfully and in good faith do or cause
to be done by virtue of and in compliance with this Section 5.
SECTION 6 Performance of Grantor Obligations. The Collateral Agent
may perform or pay any obligation which the Grantor has agreed to perform or pay
under or in connection with this Agreement, and the Grantor shall reimburse the
Collateral Agent on demand for any amounts paid by the Collateral Agent pursuant
to this Section 6.
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SECTION 7 Collateral Agent's Duties. Notwithstanding any provision
contained in this Agreement, the Collateral Agent shall have no duty to exercise
any of the rights, privileges or powers afforded to it and shall not be
responsible to the Grantor or any other Person for any failure to do so or delay
in doing so. Beyond the exercise of reasonable care to assure the safe custody
of the Pledged Collateral while held hereunder and the accounting for moneys
actually received by the Collateral Agent hereunder, the Collateral Agent shall
have no duty or liability to exercise or preserve any rights, privileges or
powers pertaining to the Pledged Collateral.
SECTION 8 Remedies.
(a) Remedies. If there exists any Default or Event of
Default, the Collateral Agent shall have, in addition to all other rights and
remedies granted to it in this or any Credit Document, all rights and remedies
of a secured party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, the Grantor agrees that any item of the Pledged
Collateral may be sold for cash or on credit or for future delivery without
assumption of any credit risk, in any number of lots at the same or different
times, at any exchange, brokers' board or elsewhere, by public or private sale,
and at such times and on such terms, as the Collateral Agent shall determine;
provided, however, that the Grantor shall be credited with the net proceeds of
sale only when such proceeds are finally collected by the Collateral Agent. The
Grantor hereby agrees that the sending of notice by ordinary mail, postage
prepaid, to the address of the Grantor set forth in the Credit Agreement, of the
place and time of any public sale or of the time after which any private sale or
other intended disposition is to be made, shall be deemed reasonable notice
thereof if such notice is sent ten days prior to the date of such sale or other
disposition or the date on or after which such sale or other disposition may
occur, provided that the Collateral Agent may provide the Grantor shorter notice
or no notice, to the extent permitted by the UCC or other applicable law. The
Grantor recognizes that the Collateral Agent may be unable to make a public sale
of any or all of the Pledged Collateral, by reason of prohibitions contained in
applicable securities laws or otherwise, and expressly agrees that a private
sale to a restricted group of purchasers for investment and not with a view to
any distribution thereof shall be considered a commercially reasonable sale. The
Collateral Agent and each Credit Party shall have the right upon any such public
sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Pledged Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption the Grantor
hereby releases to the extent permitted by law.
(b) Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated (including with respect
to undrawn amounts under the Letters of Credit) at such time as there may exist
an Event of Default, the Collateral Agent may, upon instruction by the
Instructing Group, (i) retain the proceeds of any sale, collection, disposition
or other realization upon the Pledged Collateral (or any portion thereof) in a
special purpose non-interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for such purpose (as to
which the Grantor hereby grants a security interest and which shall constitute
part of the Pledged Collateral hereunder) until such time as the Collateral
Agent may elect (with the consent of the Instructing Group) to apply such
proceeds to the Secured Obligations, and the Grantor agrees that such retention
of such proceeds by the Collateral Agent shall not be deemed strict foreclosure
with respect thereto; (ii) in any manner elected by the Collateral Agent (with
the consent of the Instructing Group), estimate the
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liquidated amount of any such contingent, unmatured or unliquidated claims and
apply the proceeds of the Pledged Collateral against such amount; or (iii)
otherwise proceed in any manner permitted by applicable law. The Grantor agrees
that the Proceeds Account shall be a blocked account and that upon the
irrevocable deposit of funds into the Proceeds Account, the Grantor shall not
have any right of withdrawal with respect to such funds. Accordingly, the
Grantor irrevocably waives until the termination of this Agreement in accordance
with Section 22 the right to make any withdrawal from the Proceeds Account and
the right to instruct the Collateral Agent to honor drafts against the Proceeds
Account.
(c) Application of Proceeds. Subject to subsection (b), cash
proceeds actually received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the Collateral the
application of which is not otherwise provided for herein, shall be applied
(after payment of any amounts payable to the applicable Credit Parties or the
Collateral Agent pursuant to Section 6 or Section 13) in whole or in part by the
applicable Credit Parties or the Collateral Agent against all or any part of the
Secured Obligations in the manner and to the extent set forth in the
Intercreditor Agreement.
SECTION 9 Registration Rights.
(a) Registration of Pledged Collateral. If the Collateral Agent at
the request of the Instructing Group shall determine to exercise its right to
sell any or all of the Pledged Collateral pursuant to Section 8, and if the
Collateral Agent shall determine (with the consent of the Instructing Group)
that it is necessary or advisable to have the Pledged Collateral, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the Grantor shall execute and deliver, and shall cause the Subsidiary and
the Grantor's and the Subsidiary's respective directors and officers to execute
and deliver, all such instruments and documents, and to do or cause to be done
all such other acts and things as may, in the view of the Collateral Agent, be
advisable to register such Pledged Collateral under the provisions of 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 view of the Collateral Agent
(with the consent of the Instructing Group), are necessary or be necessary or
advisable, all in conformity with the requirements of the Securities and
Exchange Commission applicable thereto. The Grantor agrees to comply, and to
cause the Subsidiary to comply, with the provisions of the securities or "Blue
Sky" laws of any jurisdiction which the Collateral Agent shall designate, and to
cause the Subsidiary to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which shall
satisfy the provisions of Section 11(a) of the Securities Act. The Grantor shall
cause to be furnished to the Collateral Agent and each of the Credit Agents such
number of copies of each preliminary prospectus and prospectus, shall promptly
notify the Collateral Agent of the happening of any event (upon becoming aware
thereof) as a result of which any then effective prospectus includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of then existing circumstances and shall cause the Collateral Agent and
each Credit Agent to be furnished with such number of copies as any such Person
may reasonably request of such supplement to or amendment of such prospectus as
is necessary to eliminate such untrue statement or correct such omission.
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(b) No Obligation to Delay Private Sale. Neither the Collateral
Agent nor the Credit Parties shall be under any obligation to delay a private
sale of any of the Pledged Collateral (as contemplated by subsection (a)) for
the period of time necessary to permit the issuer thereof to register such
Pledged Collateral for public sale under the Securities Act, or under applicable
state securities laws, even if such issuer would agree to do so.
(c) Further Acts. The Grantor further agrees to do or to use its
best efforts to cause to be done all such other acts and things as may be
necessary to make any sales of all or any portion of the Pledged Collateral
pursuant to subsections (a) and (b) valid and binding and in compliance with any
and all applicable laws (including the Exchange Act), regulations, orders,
writs, injunctions, decrees or awards of any and all Governmental Authorities
having jurisdiction over any such sale or sales.
(d) Equitable Relief. The Grantor acknowledges that a breach of any
of the covenants contained in this Section 9 will cause irreparable injury to
the Collateral Agent and the Credit Parties, that the Collateral Agent and
Credit Parties have no adequate remedy at law in respect of such breach and, as
a consequence, agrees that each and every covenant contained in this Section 9
shall be specifically enforceable against the Grantor, and the Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the provisions of the Credit Agreement.
(e) Costs and Expenses. The Grantor shall bear all costs and
expenses of carrying out its obligations under this Section 9.
SECTION 10 Certain Waivers. The Grantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Pledged
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Pledged Collateral or other collateral or security for the
Secured Obligations; (ii) any right to require the Collateral Agent (A) to
proceed against any Person, (B) to exhaust any other collateral or security for
any of the Secured Obligations, (C) to pursue any remedy in Collateral Agent's
power, or (D) to make or give any presentments, demands for performance, notices
of nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Pledged Collateral; and (iii) all claims, damages,
and demands against the Collateral Agent arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Pledged
Collateral.
SECTION 11 Notices. All notices, requests or other communications
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement; provided, however, that notices hereunder (a) to the Swap
Provider shall be delivered to Fleet National Bank using the information listed
in Schedule 10.02 of the Credit Agreement for such party as a Lender (or such
replacement Swap Provider as may be appointed from time to time consistent with
the terms of the Intercreditor Agreement), and (b) to the Note Holders as set
forth in the Note Purchase Agreement (or such replacement Note Holders as may be
appointed from time to time consistent with the terms of the Intercreditor
Agreement). All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.
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SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of the
Collateral Agent or any Credit Party to exercise, and no delay in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, remedy,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under this Agreement are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the Collateral Agent or
any Credit Party.
SECTION 13 Costs and Expenses; Indemnification; Other Charges.
(a) Costs and Expenses. The Grantor agrees to pay on demand:
(i) the out-of-pocket costs and expenses of the Collateral
Agent and any of the Credit Parties' attorney costs, in connection with the
negotiation, preparation, execution, delivery and administration of this
Agreement, and any amendments, modifications or waivers of the terms thereof,
and the custody of the Pledged Collateral;
(ii) all title, appraisal (including the allocated cost of
internal appraisal services), survey, audit, consulting, search, recording,
filing and similar costs, fees and expenses incurred or sustained by the
Collateral Agent or any Credit Party in connection with this Agreement or the
Pledged Collateral; and
(iii) all costs and expenses of the Collateral Agent or any
Credit Party, including Attorney Costs, in connection with the enforcement or
attempted enforcement of, and preservation of any rights or interest under, this
Agreement, any out-of-court workout or other refinancing or restructuring or in
any bankruptcy case, and the protection, sale or collection of, or other
realization upon, any of the Pledged Collateral, including any and all losses,
costs and expenses sustained by the Collateral Agent and any Credit Party as a
result of any failure by the Grantor to perform or observe its obligations
contained herein.
(b) Indemnification. The Grantor shall indemnify, defend and hold
the Collateral Agent, Agent-Related Persons and each Credit Party and each of
its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Person in favor of any third-party in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including caused by, arising out of or by reason of any
alleged untrue statement of a material fact contained in any registration
statement (or any amendment thereto) or in any preliminary prospectus or
prospectus (or any amendment or supplement thereto) contemplated by Section
9(a), or any alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except to
the extent that any such liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements are
caused by, arise solely out of or by reason of any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on
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the written direction of any of the Collateral Agent or any Credit Party
(including information supplied by the Collateral Agent or any Credit Party),
and including with respect to any investigation, litigation or proceeding
(including any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement or relating to the Collateral, whether or not any
Indemnified Person is a party thereto (all of the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Grantor shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent they are found by a final decision of a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Person. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, the Grantor agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
(c) Other Charges. The Grantor agrees to indemnify the Indemnified
Persons against and hold each of them harmless from any and all present and
future stamp, transfer, documentary and other such taxes, levies, fees,
assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Agreement.
(d) Interest. Any amounts payable to the Collateral Agent or any
Credit Party under this Section 13 or otherwise under this Agreement if not paid
upon demand shall bear interest from the date of such demand until paid in full,
at the applicable rate of interest (a) for the Administrative Agent or any
Lender, as set forth in Section 2.08(b) of the Credit Agreement, (b) for the
Swap Provider, as set forth in the Specified Swap Agreement, and (c) for any
Note Holder, as set forth in Section 2.08(b) of the Note Purchase Agreement.
SECTION 14 Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the Grantor, the Collateral Agent and
each Credit Party and their respective successors and assigns.
SECTION 15 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS
OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS
HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED
BY THE LAW OF A JURISDICTION OTHER THAN NEW YORK, PROVIDED THAT THE COLLATERAL
AGENT AND EACH CREDIT PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER COLLATERAL DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX
XXXX SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
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PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN ANY FEDERAL COURT
OR STATE COURT SITTING IN NEW YORK IN RESPECT OF ANY NOTE DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE GRANTOR, THE COLLATERAL AGENT AND EACH CREDIT
PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
SECTION 16 Waiver of Right to Jury Trial. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, ANY NOTE DOCUMENT, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
SECTION 17 Entire Agreement; Amendment. This Agreement, together with
the other Credit Documents, embodies the entire agreement and understanding
among the Grantor and the Collateral, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof. Subject to Section
18, this Agreement shall be amended only by written agreement with the written
consent of the Instructing Group; provided, however, that any amendment having
the effect of causing a release of all or substantially all of the Collateral
must be consented to in writing by the Collateral Agent and each of the Credit
Agents.
SECTION 18 Independence. This Agreement sets forth independent and
separate security interests of the Grantor in favor of the Collateral Agent in
respect of the Secured Obligations owing to the Collateral Agent for the benefit
of each Credit Agent. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder with respect to
any Credit Agent shall not in any way affect or impair the legality or
enforceability of that or any other provision of this Agreement or any
instrument or agreement required hereunder in respect to any other Credit Agent.
The parties acknowledge that this Agreement has, solely for reasons of
convenience, been prepared and executed as a single document, but that the legal
effect shall be in all respects as though the Grantor had executed separate
security interests, for the benefit of each of the Credit Agents. Any provision
of this Agreement and the other Credit Documents to which the Grantor is a party
that is prohibited or
279
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
SECTION 19 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
SECTION 20 Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to the
Note Documents, including any such provisions contained in Article X thereof,
such provisions are incorporated herein by this reference.
SECTION 21 No Inconsistent Requirements. The Grantor acknowledges that
this Agreement, and the other Credit Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.
SECTION 22 Termination. Upon termination of the Commitments of the
Lenders, surrender of all Letters of Credit and payment and performance in full
of all Secured Obligations, this Agreement shall terminate and the Collateral
Agent shall (with the consent of the Instructing Group) promptly redeliver to
the Grantor any of the Pledged Collateral in its possession and shall execute
and deliver to the Grantor such documents and instruments reasonably requested
by the Grantor as shall be necessary to evidence termination of all security
interests given by the Grantor to the Collateral Agent hereunder; provided,
however, that the obligations of the Grantor under Sections 9(e) and 13 shall
survive such termination. Upon satisfaction to all conditions precedent to any
permitted disposition set forth herein or in the other Credit Documents, the
Collateral Agent shall execute and deliver any releases or other documents
reasonably requested by the relevant Grantor to accomplish or confirm the
release of Pledged Shares provided by this Section.
SECTION 23 Intercreditor Agreement. Notwithstanding anything set forth
in this Agreement, any inconsistency between this Agreement and the
Intercreditor Agreement in respect of the rights and obligations of the
Collateral Agent and the Credit Agents owing to and among each other (but not
including in respect of the obligations of the Grantor to the Collateral Agent
or Credit Agents hereunder) shall be resolved in favor of the Intercreditor
Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
[ ]
-----------------------------------
THE GRANTOR
By:
---------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
THE COLLATERAL AGENT
By:
---------------------------------
Name:
Title:
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SCHEDULE 1
to the Stock Pledge Agreement
PLEDGED SHARES
_______ stock of _________________ being represented by stock certificates as
follows:
Certificate No. Certificate Date No. of Shares
-------------- ---------------- -------------
282
SCHEDULE 2
to the Stock Pledge Agreement
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
OF CAPITAL STOCK OF THE SUBSIDIARIES
283
SCHEDULE 3
to the Stock Pledge Agreement
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES
OF CAPITAL STOCK OF THE SUBSIDIARY
284
EXHIBIT K
FORM OF EFFECTIVENESS DATE OPINIONS OF COUNSEL
(CONTENT SUMMARY)
1. Each Note Party is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with the corporate power
and authority and all material governmental licenses, authorizations, consents
and approvals to own and operate (or lease, as the case may be) its properties
and to carry on its business as it is now conducted. Each Note Party is
qualified as a foreign corporation, licensed and in good standing in each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification or license, except where the failure
to be so qualified, licensed or in good standing would not adversely affect the
business or operations of such Note Party in any significant manner.
2. Each Note Party has the corporate power and authority to enter into and
perform the Note Documents to which it is a party, and has taken all necessary
corporate action to authorize the execution, delivery and performance of such
Note Documents.
3. No authorization, consent, approval, license, exemption of, or filing or
registration with, any Governmental Authority, or approval or consent of any
other Person, is required for the due execution, delivery or performance by, or
enforcement against, any Note Party of the Note Documents to which it is a
party.
4. The Note Documents to which each Note Party is a party have been duly
executed and delivered by such Note Party and constitute the legal, valid and
binding obligations of such Note Party, enforceable against such Note Party in
accordance with their respective terms.
5. The execution, delivery and performance by each Note Party of the Note
Documents to which it is a party will not (i) violate or be in conflict with any
provision of the certificate or articles of incorporation, as the case may be,
or by-laws of such Note Party, (ii) violate or be in conflict with any law or
regulation having applicability to such Note Party, (iii) violate or contravene
any judgment, decree, injunction, writ or order of any court, or any arbitrator
or other Governmental Authority, having jurisdiction over such Note Party or
such Note Party's properties or by which such Note Party may be bound, or (iv)
violate or conflict with, or constitute a default under or result in the
termination of, or accelerate the performance required by, any indenture, any
Note or credit agreement (including the Existing Credit Facility), or any other
agreement for borrowed money or any other material agreement, lease or
instrument to which such Note Party is a party or by which it or such Note
Party's properties may be bound, or result in the creation of any Lien upon any
of the assets or properties of such Note Party.
6. The provisions of the Company Security Agreement and the Subsidiary
Security Agreement (collectively, the "Security Agreements") are in form
sufficient to create, in favor of the Administrative Agent, as secured party, a
valid security interest in and lien on the Collateral described in such Security
Agreements and the financing statements related thereto. The financing
statements filed with the ____________ (the "Filing Offices") are in appropriate
form for filing in the Filing Offices, (ii) the Filing Offices are the
appropriate filing offices in order to
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perfect a security interest in such Collateral, subject only to the provisions
of the Intercreditor Agreement, (iii) the Administrative Agent has a perfected
security interest in such Collateral, and (iv) no other action is necessary
under the Uniform Commercial Code or other laws (including without limitation
the U.S. copyright laws, the U.S. patent laws and the U.S. trademark laws) as in
effect in ______________ to perfect a security interest in such Collateral.
7. The provisions of the Company Stock Pledge Agreement and the Subsidiary
Stock Pledge Agreement (collectively, the "Stock Pledge Agreements") are in form
sufficient to create, in favor of the Administrative Agent, as secured party, a
valid security interest in and lien on the Pledged Collateral described therein.
The security interest in the Pledged Collateral created under the Stock Pledge
Agreements will become perfected upon delivery to and possession by the
Administrative Agent of the certificates representing the Pledged Collateral,
indorsed to the Administrative Agent or in blank by an effective indorsement.
8. Based solely on our review of the minute books and stock records of the
Note Parties, to our knowledge, the authorized, issued and outstanding capital
stock of each Note Party (other than Ceridian) as set forth on Schedule __
hereto constitutes all of the authorized, issued and outstanding capital stock
of such Note Party, and all of such issued and outstanding capital stock is
owned of record by the Persons indicated on such Schedule __.
9. No filings, registrations, recordings, or other actions are necessary
under the laws of _______________ to create, preserve, perfect, and protect the
Administrative Agent's Lien in the Pledged Securities under the Stock Pledge
Agreements, and no consent, approval, or authorization of any Person is required
under the laws of _______________ in order for the Administrative Agent's Lien
to be created, preserved, perfected, and protected.
10. The extension of credit under the Credit Agreement does not violate the
provisions of Regulations T, U or X of the Federal Reserve Board.
11. No Note Party is an "investment company," or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940.
12. No Note Party is a "holding company" or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of Public Utility Holding
Company Act of 1935.
13. The offer, issue, sale and delivery of the Notes under the circumstances
contemplated by the Note Purchase Agreement constitute exempted transactions
under the Securities Act of 1933 (the "1933 Act"), as amended, and neither the
registration thereunder nor the qualification of an indenture in respect of the
Notes under the Trust Indenture Act of 1939, as amended, is required in
connection with such offer, issue, sale or delivery.
286
EXHIBIT L
FORM OF CLOSING DATE OPINIONS OF COUNSEL
(CONTENT SUMMARY)
1. Each Note Party has the corporate power and authority to enter into and
perform the Spin-Off Transaction and each of the Spin-Off Documents to which it
is a party, and has taken all necessary corporate action to authorize the
execution, delivery and performance of each Spin-Off Document and to consummate
the Spin-Off Transaction.
2. No authorization, consent, approval, license, exemption of, or filing or
registration with, any Governmental Authority, or approval or consent of any
other Person, is required for the due execution, delivery or performance by, or
enforcement against, any Note Party of any Spin-Off Document to which it is a
party, or to consummate the Spin-Off Transaction, except as have been obtained
prior to the Closing Date.
3. The Spin-Off Documents to which each Note Party is a party have been
duly executed and delivered by such Note Party and constitute the legal, valid
and binding obligations of such Note Party, enforceable against such Note Party
in accordance with their respective terms.
4. The execution, delivery and performance by each Note Party of each
Spin-Off Document to which it is a party, and the consummation of the Spin-Off
Transaction, will not (i) violate or be in conflict with any provision of the
certificate or articles of incorporation, as the case may be, or by-laws of such
Note Party, (ii) violate or be in conflict with any law or regulation having
applicability to such Note Party, (iii) violate or contravene any judgment,
decree, injunction, writ or order of any court, or any arbitrator or other
Governmental Authority, having jurisdiction over such Note Party or such Note
Party's properties or by which such Note Party may be bound, or (iv) violate or
conflict with, or constitute a default under or result in the termination of, or
accelerate the performance required by, any indenture, any Note or credit
agreement, or any other agreement for borrowed money or any other material
agreement, lease or instrument to which such Note Party is a party or by which
it or such Note Party's properties may be bound, or result in the creation of
any Lien upon any of the assets or properties of such Note Party.
5. The Distribution is legal under the Delaware General Corporation Law.
287
EXHIBIT M
FORM OF ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT
Date: ______________
To each of the Lenders party to the Credit Agreement referred to below, and to
Bank of America, N.A., as the Administrative Agent
Ladies and Gentlemen:
This agreement ("Additional Guarantor Assumption Agreement") is made and
delivered pursuant to Section 6.14 of that certain Credit Agreement dated as of
January 31, 2001 (as renewed, extended, amended or restated, the "Credit
Agreement"), among CERIDIAN CORPORATION (the "Company"), the several financial
institutions from time to time party thereto (each a "Lender" and together with
the Assignor, the "Lenders") and BANK OF AMERICA, N.A., as administrative agent
(in such capacity, the "Administrative Agent"). All capitalized terms used in
this Additional Guarantor Assumption Agreement and not otherwise defined herein
shall have the meanings assigned to them in the Credit Agreement.
_____________, a _____________ corporation (the "Subsidiary") hereby
confirms, represents and warrants to the Administrative Agent and the Lenders
that the Subsidiary is a Subsidiary of the Company effective as of
________________. [The Subsidiary further represents that it is a Foreign
Subsidiary.]
The documents, resolutions, incumbency and officer's certificates,
opinions of counsel, UCC-1 financing statements, Supplemental IP Security
Agreements and other documents and certificates required to be delivered to the
Administrative Agent under subsections (b) and (c) of Section 6.14 and Section
6.16 of the Credit Agreement will be furnished to the Administrative Agent in
accordance with the requirements of the Credit Agreement.
The Subsidiary hereby confirms that with effect from the date hereof,
the Subsidiary shall (i) be a party to the Guaranty, dated as of January 31,
2001 (the "Subsidiary Guaranty"), given by certain Subsidiaries of the Company,
as Guarantor, in favor of the Administrative Agent, to the Security Agreement,
dated as of January 31, 2001, (the "Subsidiary Security Agreement"), among
certain Subsidiaries of the Company, as Grantors, and the Administrative Agent
and to the Supplemental IP Security Agreements dated as of ______, ____, and
______; and (ii) shall have the same obligations, duties and liabilities towards
the Administrative Agent and Lenders as those which the Subsidiary would have
had if the Subsidiary had been an original party to the Subsidiary Guaranty, as
a Guarantor, and the Subsidiary Security Agreement, as a Grantor (and pursuant
to Section 2(a) of the Subsidiary Security Agreement, the Subsidiary hereby
grants to the Administrative Agent a security interest in all its "Collateral"
(as defined therein) as security
288
for the payment and performance of the Secured Obligations (as defined
therein)). The Subsidiary hereby confirms its acceptance of, and consents to,
all representations and warranties, covenants, and other terms and provisions of
the Subsidiary Guaranty applicable to Guarantors, and the Subsidiary Security
Agreement applicable to Grantors, and to any other Note Documents to which the
Guarantors are parties.
Without limiting the generality of the foregoing, the Subsidiary
confirms that effective as of the date hereof it shall be liable as a Guarantor
pursuant to Section 8.01(n) of the Credit Agreement.
This Additional Guarantor Assumption Agreement shall constitute a Note
Document under the Credit Agreement.
THIS ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Subsidiary has caused this Additional Guarantor
Assumption Agreement to be duly executed and delivered in _____________,
______________, by its proper and duly authorized officer as of the day and year
first above written.
[SUBSIDIARY]
By:
----------------------------------
Name:
-------------------------------
Title:
------------------------------
289
EXHIBIT N
FORM OF ADDITIONAL GUARANTOR OPINION OF COUNSEL
(CONTENT SUMMARY)
1. The Additional Guarantor is a ___________ duly organized,
validly existing and in good standing under the laws of [the State of
__________] [the country of _________] with the power and authority to own and
operate (or lease, as the case may be) its properties and to carry on its
business as it is now conducted. The Additional Guarantor is qualified and in
good standing in ___________________.
2. The Additional Guarantor has the power and authority to enter
into and perform the Additional Guarantor Documents, and has taken all necessary
action to authorize the execution, delivery and performance of the Additional
Guarantor Documents.
3. No authorization, consent, approval, license, exemption of, or
filing or registration with, any Governmental Authority, or approval or consent
of any other Person, is required for the due execution, delivery or performance
by the Additional Guarantor of the Additional Guarantor Documents[, except for
recordings or filings in connection with the perfection of the Liens on the
Collateral in favor of the Administrative Agent on behalf of the Lenders].
4. The Additional Guarantor Documents have been duly executed and
delivered by the Additional Guarantor and constitute the legal, valid and
binding obligations of the Additional Guarantor enforceable against the
Additional Guarantor in accordance with their respective terms.
5. The execution, delivery and performance by the Additional
Guarantor of the Additional Guarantor Documents will not (i) violate or be in
conflict with any provision of the _______________ [specify applicable
Organization Documents reviewed] of the Additional Guarantor or any, (ii)
violate or be in conflict with any law or regulation having applicability to the
Additional Guarantor, (iii) violate or contravene any judgment, decree,
injunction, writ or order of any court, or any arbitrator or other Governmental
Authority, having jurisdiction over the Additional Guarantor or the Additional
Guarantor's properties or by which the Additional Guarantor may be bound, or
(iv) violate or conflict with, or constitute a default under or result in the
termination of, or accelerate the performance required by, any indenture, any
Note or credit agreement, or any other agreement for borrowed money or any other
material Contractual Obligation to which the Additional Guarantor is a party or
by which it or the Additional Guarantor's properties may be bound, or result in
the creation of any Lien upon any of the assets or properties of the Additional
Guarantor.
6. The provisions of the Security Agreement [and Supplemental IP
Security Agreement] are in form sufficient to create, in favor of the
Administrative Agent on behalf of the Lenders, as secured party, a valid
security interest in and lien on the Collateral of the Additional Guarantor
described in the Security Agreement and the financing statements. Upon the
filing of the financing statements with the filing offices and the delivery of
the Pledged Collateral, the
290
Administrative Agent will have a valid and perfected security interest in and
lien on all of such Collateral described in the Security Agreement and the
financing statements.
7. Except as specifically disclosed in __________________________,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best of our knowledge, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Additional
Guarantor or any of its properties which (i) purport to affect or pertain to the
Additional Guarantor Documents, or any of the transactions contemplated thereby;
or (ii) if determined adversely to the Additional Guarantor, would be likely to
have a Material Adverse Effect.
8. Our opinion set forth in paragraph 4 above is subject to the
qualification that the enforceability of the Additional Guarantor Documents may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by general
equity principles.