EXHIBIT 10.27
SECURITY AGREEMENT
among
COINMACH CORPORATION,
EACH OF THE GUARANTORS
PARTY HERETO
and
BANKERS TRUST COMPANY,
as Collateral Agent
Dated as of January 25, 2002
TABLE OF CONTENTS
Page
ARTICLE I
SECURITY INTERESTS
Section 1.1. Grant of Security Interests................................................................2
Section 1.2. Power of Attorney..........................................................................3
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Necessary Filings..........................................................................4
Section 2.2. No Liens...................................................................................4
Section 2.3. Other Financing Statements.................................................................4
Section 2.4. Chief Executive Office; Records; Corporate Name; Jurisdiction of
Incorporation..............................................................................5
Section 2.5. Location of Inventory and Equipment........................................................5
Section 2.6. Recourse...................................................................................5
Section 2.7. Trade Names: Change of Name................................................................5
Section 2.8. Benefit to Guarantors......................................................................6
Section 2.9. Joinder of Affiliates......................................................................6
ARTICLE III
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;
INSTRUMENTS AND CERTAIN OTHER TYPES OF COLLATERAL
Section 3.1. Additional Representations and Warranties..................................................6
Section 3.2. Maintenance of Records.....................................................................7
Section 3.3. Direction to Account Debtors; Contracting Parties; etc.....................................7
Section 3.4. Modification of Terms; etc.................................................................8
Section 3.5. Collection.................................................................................8
Section 3.6. [Intentionally Omitted]....................................................................8
Section 3.7. Further Actions............................................................................8
Section 3.8. Special Provisions Regarding Certain Types of Collateral...................................8
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS
Section 4.1. Additional Representations and Warranties.................................................11
Section 4.2. Licenses and Assignments..................................................................12
Section 4.3. Infringements.............................................................................12
Section 4.4. Preservation of Trademarks................................................................12
-i-
Table of Contents
(continued)
Page
Section 4.5. Maintenance of Registration...............................................................12
Section 4.6. Future Registered Marks...................................................................13
Section 4.7. Remedies..................................................................................13
ARTICLE V
SPECIAL PROVISIONS CONCERNING PATENTS AND COPYRIGHTS
Section 5.1. Additional Representations and Warranties.................................................13
Section 5.2. Licenses and Assignments..................................................................14
Section 5.3. Infringements.............................................................................14
Section 5.4. Maintenance of Patents....................................................................14
Section 5.5. Prosecution of Patent Application.........................................................14
Section 5.6. Other Patents and Copyrights..............................................................14
Section 5.7. Remedies..................................................................................15
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
Section 6.1. Protection of Collateral Agent's Security.................................................15
Section 6.2. Warehouse Receipts Non-negotiable.........................................................15
Section 6.3. Further Actions...........................................................................16
Section 6.4. Financing Statements......................................................................16
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
Section 7.1. Remedies; Obtaining the Collateral Upon Default...........................................16
Section 7.2. Remedies; Disposition of the Collateral...................................................17
Section 7.3. Waiver of Claims..........................................................................18
Section 7.4. Application of Proceeds...................................................................19
Section 7.5. Remedies Cumulative.......................................................................21
Section 7.6. Discontinuance of Proceedings.............................................................22
Section 7.7. Additional Remedies With Respect to Collateral Located in Louisiana.......................22
ARTICLE VIII
INDEMNITY
Section 8.1. Indemnity.................................................................................23
Section 8.2. Indemnity Obligations Secured by Collateral; Survival.....................................25
-ii-
Table of Contents
(continued)
Page
ARTICLE IX
DEFINITIONS
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices...................................................................................32
Section 10.2. Waiver; Amendment.........................................................................33
Section 10.3. Obligations Absolute......................................................................33
Section 10.4. Successors and Assigns....................................................................33
Section 10.5. Headings Descriptive......................................................................34
Section 10.6. Severability..............................................................................34
Section 10.7. GOVERNING LAW.............................................................................34
Section 10.8. Pledgor's Duties..........................................................................34
Section 10.9. Termination; Release......................................................................34
Section 10.10. Counterparts..............................................................................35
Section 10.11. The Collateral Agent......................................................................35
Exhibit 1 Form of Joinder Agreement
-iii-
SECURITY AGREEMENT
SECURITY AGREEMENT (as amended, modified or supplemented from time to
time, this "Agreement"), dated as of January 25, 2002, by COINMACH CORPORATION
(the "Borrower"), a Delaware corporation having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, and EACH OF THE GUARANTORS LISTED ON THE
SIGNATURE PAGES HERETO and EACH OF THE OTHER GUARANTORS FROM TIME TO TIME PARTY
HERETO BY EXECUTION OF A JOINDER AGREEMENT (collectively, the "Guarantors";
together with the Borrower, the "Pledgors") in favor of BANKERS TRUST COMPANY,
as Collateral Agent (in such capacity and together with any successors in such
capacity, the "Collateral Agent") for the benefit of (x) the Banks (as
hereinafter defined), the Administrative Agent (as hereinafter defined), the
Syndication Agents (as hereinafter defined), the Lead Arranger and Book Manager
(as hereinafter defined), the Collateral Agent, the Documentation Agent (as
hereinafter defined) and any other lenders from time to time party to the Credit
Agreement hereinafter referred to (such Banks, the Administrative Agent, the
Syndication Agents, the Lead Arranger and Book Manager, the Documentation Agent
the Collateral Agent and such other lenders, if any, are hereinafter called the
"Bank Creditors") and (y) if one or more Banks (or any Affiliate thereof) enter
into one or more Interest Rate Protection Agreements or Other Hedging Agreements
(each as hereinafter defined) from time to time with, or guaranteed by, any
Pledgor, any such Bank or Banks or any Affiliate or Affiliates of such Bank or
Banks (even if the respective Bank subsequently ceases to be a Bank under the
Credit Agreement for any reason) so long as any such Bank or Affiliate
participates in the extension of such Interest Rate Protection Agreements or
Other Hedging Agreements, and their subsequent assigns, if any (collectively,
the "Other Creditors"; together with the Bank Creditors, the "Secured
Creditors"). Except as otherwise defined herein, all capitalized terms used
herein and defined in the Credit Agreement shall be used herein as so defined.
R E C I T A L S:
- - - - - - - -
1. Coinmach Laundry Corporation, the Borrower, the Guarantors, the
lenders from time to time party thereto (the "Banks"), Bankers Trust Company, as
Administrative Agent (in such capacity and together with any successors in such
capacity, the "Administrative Agent" and Collateral Agent ), Deutsche Banc Alex.
▇▇▇▇▇ Inc., as Lead Arranger and Book Manager (in such capacities and together
with any successors in such capacities, the "Lead Arranger and Book Manager") ,
▇.▇. ▇▇▇▇▇▇ Securities Inc. and First Union Securities, Inc. as Syndication
Agents (in such capacities and together with any successors in such capacities,
the "Syndication Agents"), and Credit Lyonnais New York Branch, as Documentation
Agent (in such capacity and together with any successors in such capacity, the
"Documentation Agent"), have entered into a Credit Agreement, dated as of the
date hereof, providing for the making of Loans and the issuance of, and
participation in, Letters of Credit as contemplated therein (such agreement, as
amended, modified, extended, renewed, replaced, restated or supplemented from
time to time, and including any agreement extending the maturity of, or
restructuring of, all or any portion of the Indebtedness under such agreement or
any successor agreement, the "Credit Agreement").
2. The Pledgors may at any time and from time to time enter into,
or guarantee obligations of one or more other Pledgors under, one or more
Interest Rate Protection Agreements or Other Hedging Agreements with one or more
Other Creditors.
3. Each Guarantor has, pursuant to the provisions of the Credit
Agreement, guaranteed the Obligations of the Borrower under the Credit Agreement
and the other Credit Documents.
4. Each Guarantor has received and will continue to receive
substantial benefit from the execution, delivery and performance of the Credit
Agreement and has agreed to grant to the Collateral Agent Liens on and security
interests in the Collateral owned by it to secure the Obligations.
5. It is a condition to each of the above-described extensions of
credit to the Pledgors that the Pledgors shall have executed and delivered this
Agreement.
6. The Pledgors desire to enter into this Agreement in order to
satisfy the condition described in the preceding paragraph.
A G R E E M E N T:
- - - - - - - - -
NOW, THEREFORE, in consideration of the above-described extensions of
credit to be made to the Pledgors and other benefits accruing to the Pledgors,
the receipt and sufficiency of which are hereby acknowledged, each Pledgor
hereby makes the following representations and warranties to the Collateral
Agent for the benefit of the Secured Creditors and hereby covenants and agrees
with the Collateral Agent for the benefit of the Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
Section 1.1. Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of the Obligations,
each Pledgor does hereby collaterally assign and transfer unto the Collateral
Agent for the benefit of the Secured Creditors, and does hereby grant to the
Collateral Agent for the benefit of the Secured Creditors, a continuing security
interest of first priority (subject to Liens evidenced by Permitted Filings and
other Permitted Liens) in, all of the right, title and interest of such Pledgor
in, to and under all of the following, whether now existing or hereafter from
time to time acquired (collectively, the "Collateral"):
(i) all Equipment;
(ii) all Inventory;
(iii) all Contracts, together with all Contract Rights thereunder;
(iv) all Instruments;
-2-
(v) all General Intangibles;
(vi) all Accounts;
(vii) all Insurance Policies;
(viii) all Intellectual Property;
(ix) all Chattel Paper;
(x) all Investment Property and Financial Assets;
(xi) all Deposit Accounts, including, without limitation,
the Cash Collateral Account established for the
Pledgors and all monies, securities and instruments
deposited or required to be deposited in such Cash
Collateral Account;
(xii) all Letter-of-Credit Rights;
(xiii) all Goods;
(xiv) all Commercial Tort Claims, including, without
limitation, each Specified Commercial Tort Claim;
(xv) all Documents;
(xvi) all Fixtures;
(xvii) all Supporting Obligations relating to any and all
of the foregoing;
(xviii) all books, records, ledgers, printouts, computer
recording media, data files, tapes, file materials
and other papers containing information relating to
any and all items of Collateral; and
(xix) to the extent not covered by clauses (i) through
(xviii) of this sentence, all other personal
property whether tangible or intangible wherever
located; and
(xx) all Proceeds of any and all of the foregoing.
(b) The security interests of the Collateral Agent under this Agreement
extends to all Collateral of the kind which is the subject of this Agreement
which each Pledgor may acquire at any time during the continuation of this
Agreement.
Section 1.2. Power of Attorney. Each Pledgor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Pledgor or as otherwise provided herein), in the
Collateral Agent's reasonable discretion, to take any action and to execute any
instrument which the Collateral Agent may reasonably deem necessary or
-3-
advisable to accomplish the purposes of this Agreement, which appointment as
attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants, as of the date hereof,
which representations, warranties and covenants shall survive execution and
delivery of this Agreement, as follows:
Section 2.1. Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and perfect the
security interest granted by each Pledgor to the Collateral Agent hereby in
respect of the Collateral are set forth in Schedule 8 to the Perfection
Certificate. To the knowledge of each Pledgor, such filings, registrations and
recordings have been filed, registered or recorded or concurrently herewith are
being filed, registered or recorded and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to the Collateral constitutes
or shall constitute, upon such filing, registration or recordings, a perfected
security interest therein prior to the rights of all other Persons therein and
subject to no other Liens (except that the Collateral may be subject to the
security interests evidenced by the financing statements disclosed on Schedule 6
to the Perfection Certificate (the "Permitted Filings") and to any other
Permitted Liens, and is or shall be entitled to all the rights, priorities and
benefits afforded by the Uniform Commercial Code to the extent complied with or
other relevant law as enacted in any relevant jurisdiction to perfected security
interests.
Section 2.2. No Liens. Each Pledgor is, and as to Collateral acquired
by it from time to time after the date hereof such Pledgor will be, the owner of
all of the Collateral pledged by it hereunder free from any Lien, security
interest, encumbrance or other right, title or interest of any Person (other
than Liens created hereby, Permitted Liens or Liens evidenced by the Permitted
Filings), and such Pledgor shall use its good faith efforts to defend the
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to the Collateral Agent.
Section 2.3. Other Financing Statements. As of the date hereof, there
is no financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) on file or of record in any relevant
jurisdiction covering or purporting to cover any interest of any kind in the
Collateral except as disclosed in Schedules 6 and 8 to the Perfection
Certificate and as may be filed in connection with Permitted Liens. So long as
any Commitment has not been terminated or any Letter of Credit or Note remains
outstanding or any of the Obligations remain unpaid or any Interest Rate
Protection Agreement or Other Hedging Agreement remains in effect or any
obligations are owed with respect thereto, no Pledgor shall execute or authorize
to be filed in any public office any financing statement (or similar statement
or instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except financing statements filed or to be filed in
respect of and covering the security interests granted hereby by such Pledgor or
in respect of the Permitted Liens.
-4-
Section 2.4. Chief Executive Office; Records; Corporate Name;
Jurisdiction of Incorporation. (a) As of the date hereof, the chief executive
office of each Pledgor is located at the location indicated on Schedule2(a) to
the Perfection Certificate.
(b) The exact legal name, type of organization and
jurisdiction of organization (together with the organizational
identification number, if any, issued by such jurisdiction to each
Pledgor) of each Pledgor is set forth in Schedule 1(a) to the
Perfection Certificate. No Pledgor shall "reincorporate" or
"reorganize" or otherwise cause the Collateral to be transferred to a
Person incorporated or organized in another state except to the extent
(i) permitted pursuant to the provisions of the Credit Agreement, (ii)
it shall have given to the Collateral Agent not less than 30 days'
prior written notice of its intention so to do, clearly describing such
transaction and providing such other information in connection
therewith as the Collateral Agent may reasonably request, (iii) with
respect to such transaction, such Pledgor shall have taken all action
to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted and perfected hereby at all times
fully perfected and in full force and effect and (iv) the Collateral
Agent shall have received reasonably satisfactory evidence that all
other actions (including, without limitation, the payment of all filing
fees and taxes, if any, payable in connection with such actions) have
been taken, in order to perfect (and maintain the perfection and
priority of) the security interest granted hereby.
Section 2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Pledgor is located at one of the
locations shown on the Schedules to Section 2 of the Perfection Certificate. No
Pledgor shall establish a new location for Equipment and/or Inventory that shall
cause the security interest of the Collateral Agent in such Equipment and/or
Inventory granted hereby (x) to be unperfected or (y) to lose its priority.
Section 2.6. Recourse. This Agreement is made with full recourse to
each Pledgor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Pledgor contained herein, in the
other Credit Documents, in the Interest Rate Protection Agreements or Other
Hedging Agreements and otherwise in writing in connection herewith or therewith.
Section 2.7. Trade Names: Change of Name. No Pledgor has or operates
in any jurisdiction under, or in the preceding 5 years has not had or has not
operated in any jurisdiction under, any trade names, fictitious names or other
names (including, without limitation, any names of divisions or operations)
except its legal name and such other trade, fictitious or other names as are
listed on Schedules 1(b) and 1(c) to the Perfection Certificate. No Pledgor
shall change its legal name or assume or operate in any jurisdiction under any
trade, fictitious or other name in any manner which might make any financing
statement or continuation statement filed in connection therewith seriously
misleading within the meaning of Section 9-507 of the UCC except those names
listed on Schedule 1(b) and 1(c) to the Perfection Certificate and new names
(including, without limitation, any names of divisions or operations)
established in accordance with the last sentence of this Section 2.7. No Pledgor
shall assume or operate in any jurisdiction under any new trade, fictitious or
other name that would make any financing statement or continuation statement
filed in connection therewith, seriously misleading within the meaning of
-5-
Section 9-507 of the UCC until (i) it shall have given to the Collateral Agent
not less than 30 days' prior written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name shall be
used and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (ii) with respect to such new name,
it shall have taken all reasonable action to maintain the security interest of
the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect.
Section 2.8. Benefit to Guarantors. Each Guarantor will receive
substantial benefit as a result of the execution, delivery and performance of
the Credit Documents.
Section 2.9. Joinder of Affiliates. The Pledgors shall cause each
Subsidiary of the Borrower which, from time to time, after the date hereof shall
be required to pledge any assets to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the provisions of the Credit Agreement, to execute
and deliver to the Collateral Agent a joinder agreement substantially in the
form of Exhibit 1 annexed hereto (each, a "Joinder Agreement") and, upon such
execution and delivery, such Subsidiary shall constitute a "Guarantor" and a
"Pledgor" for all purposes hereunder with the same force and effect as if
originally named as a Guarantor and Pledgor herein. The execution and delivery
of such Joinder Agreement shall not require the consent of any Pledgor
hereunder. The rights and obligations of each Pledgor hereunder shall remain in
full force and effect notwithstanding the addition of any new Guarantor and
Pledgor as a party to this Agreement.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS
AND CERTAIN OTHER TYPES OF COLLATERAL
Section 3.1. Additional Representations and Warranties. As of the time
when each of its Accounts arises, each Pledgor shall be deemed to have
represented and warranted that such Account, and all records, papers and
documents relating thereto (if any) are genuine and in all material respects
what they purport to be, and that all papers and documents (if any) relating
thereto to the actual knowledge of such Pledgor (i) will represent the genuine,
legal, valid and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of the
merchandise listed therein, or both, (ii) will be the only original writings
evidencing and embodying such obligation of the account debtor named therein
(other than copies created for general accounting purposes), (iii) will evidence
true and valid obligations, enforceable in accordance with their respective
terms and (iv) will be in compliance and will conform in each case in all
material respects with all applicable federal, state and local laws and
applicable laws of any relevant foreign jurisdiction.
Section 3.2. Maintenance of Records. Each Pledgor will keep and
maintain at its own cost and expense satisfactory and complete records of its
Accounts and Contracts, including, but not limited to, the originals or copies
of all documentation (including each Contract) with respect thereto, records of
all payments received, all credits granted thereon, all
-6-
merchandise returned and all other dealings therewith, and such Pledgor will
make the same available on such Pledgor's premises to the Collateral Agent for
inspection, at such Pledgor's own cost and expense, at any and all reasonable
times; provided, however, if no Event of Default has occurred and is then
continuing, the Collateral Agent shall give such Pledgor reasonable prior
written notice of any such inspection. Upon the occurrence and during the
continuance of an Event of Default and upon the reasonable request of the
Collateral Agent, each Pledgor shall, at its own cost and expense, deliver all
tangible evidence of its Accounts and Contract Rights (including, without
limitation, all documents evidencing the Accounts and all Contracts) and such
books and records to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by such Pledgor). Upon the
occurrence and during the continuance of an Event of Default and the delivery by
the Collateral Agent of notice to the Borrower in accordance with Section 10 of
the Credit Agreement to the extent such notice is required pursuant to Section
10 of the Credit Agreement, if the Collateral Agent so directs, each Pledgor
shall legend, in form and manner reasonably satisfactory to the Collateral
Agent, its Accounts and the Contracts, as well as all books, records and
documents of such Pledgor evidencing or pertaining to such Accounts and
Contracts with an appropriate reference to the fact that such Accounts and
Contracts have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.
Section 3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default and
delivery of notice to the Borrower in accordance with Section 10 of the Credit
Agreement to the extent such notice is required pursuant to Section 10 of the
Credit Agreement, and if the Collateral Agent so directs each Pledgor, to the
extent permitted by applicable law, each Pledgor agrees (x) to cause all
payments on account of the Accounts and Contracts to be made directly the Cash
Collateral Account, (y) that the Collateral Agent may, at its option, directly
notify the obligors with respect to any Accounts and/or under any Contracts to
make payments with respect thereto as provided in preceding clause (x), and (z)
that the Collateral Agent may enforce collection of any such Accounts and
Contracts and may adjust, settle or compromise the amount of payment thereof, in
the same manner and to the same extent as such Pledgor. Without notice to or
assent by any Pledgor, the Collateral Agent may apply any or all amounts then
in, or thereafter deposited in, the Cash Collateral Account which application
shall be effected in the manner provided in Section 7.4 of this Agreement. The
reasonable costs and expenses (including reasonable attorneys' fees) of
collection, whether incurred by any Pledgor or the Collateral Agent, shall be
borne by the Pledgors.
Section 3.4. Modification of Terms; etc. Except as otherwise provided
in the Credit Agreement, no Pledgor shall rescind or cancel any indebtedness
evidenced by any Account or under any Contract, or modify any term relating to
such indebtedness or make any adjustment with respect thereto, or extend or
renew the same, or compromise or settle any material dispute, claim, suit or
legal proceeding relating thereto, or sell any Account or Contract, or interest
therein, without the prior written consent of the Collateral Agent (not to be
unreasonably withheld), except as permitted by Section 3.5. Except as otherwise
provided in the Credit Agreement, each Pledgor will duly fulfill all obligations
on its part to be fulfilled under or in connection with the Accounts and
Contracts and will do nothing to impair in any material respect the rights of
the Collateral Agent in the Accounts or Contracts.
-7-
Section 3.5. Collection. Each Pledgor shall endeavor to cause to be
collected from the account debtor named in each of its Accounts or obligor under
any of its Contracts, as and when due (including, without limitation, amounts
which are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Account or Contract, and apply forthwith upon receipt thereof
all such amounts as are so collected to the outstanding balance of such Account
or under such Contract, except that, unless an Event of Default has occurred and
is continuing and the Collateral Agent has delivered notice to the Borrower in
accordance with Section 10 of the Credit Agreement to the extent such notice is
required pursuant to Section 10 of the Credit Agreement, such Pledgor may allow
in the ordinary course of business as adjustments to amounts owing under its
Accounts and Contracts (i) an extension or renewal of the time or times of
payment, or settlement for less than the total unpaid balance, as such Pledgor
finds appropriate in accordance with sound business judgment and (ii) a refund
or credit due as a result of returned or damaged merchandise or improperly
performed services. The reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees) of collection, whether incurred by any
Pledgor or the Collateral Agent, shall be borne by the Pledgors.
Section 3.6. [Intentionally Omitted]
Section 3.7. Further Actions. Each Pledgor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Accounts, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
Section 3.8. Special Provisions Regarding Certain Types of Collateral.
(a) Deposit Accounts, Securities Accounts and Commodity
Accounts. (i) Each Pledgor hereby represents, warrants and covenants
that (A) it does not maintain any Securities Accounts or Commodity
Accounts with any Securities Intermediary or Commodity Intermediary
other than the Securities Accounts and/or Commodity Accounts listed in
Schedule 15 to the Perfection Certificate and (B) it shall not in the
future maintain any Securities Accounts or Commodity Accounts except
with any Securities Intermediary or Commodity Intermediary in
accordance with the provisions of this Section 3.8. Each Pledgor hereby
represents and warrants that it does not maintain any Deposit Accounts
other than the Deposit Accounts listed in Schedule 15 to the Perfection
Certificate the ("Existing Deposit Accounts"). Each Pledgor agrees
that, consistent with its existing practice, it shall (i) deposit all
amounts collected in the ordinary course of its business into the
Existing Accounts and (ii) sweep all such amounts into the
Concentration Account every day, as necessary and (iii) maintain and
operate the Concentration Account and no other Deposit Account serving
the function of the Concentration Account into which amounts collected
in the ordinary course of business are swept. No Pledgor shall
hereafter establish and maintain any Deposit Account, Securities
Account or Commodity Account with any Depository Bank, Securities
Intermediary or Commodity Intermediary, respectively, unless (1) such
Pledgor shall
-8-
have given the Collateral Agent thirty (30) days' prior written notice
of its intention to establish such new Deposit Account, Securities
Accounts or Commodity Accounts with such Depository Bank, Securities
Intermediary or Commodity Intermediary, (2) such Depository Bank,
Securities Intermediary or Commodity Intermediary shall be reasonably
acceptable to the Collateral Agent and (3) in the case of a new
Concentration Account, the Pledgor shall have used commercially
reasonable efforts to cause such Depository Bank (in the case of any
new Concentration Account unless otherwise agreed to in the sole
discretion of the Collateral Agent), Securities Intermediary or
Commodity Intermediary to enter into a Control Agreement. Each Pledgor
shall accept any cash and Investment Property in trust for the benefit
of the Collateral Agent and within one (1) Business Day of actual
receipt thereof, deposit any cash or Investment Property and any new
securities, instruments, documents or other property by reason of
ownership of the Investment Property received by it into a Designated
Account.
(ii) Each Pledgor hereby acknowledges and agrees that
notwithstanding any provisions hereof or any other circumstance to the
contrary, the Pledgors will use commercial reasonable efforts to cause
the Collateral Agent at all times to (A) have "control" (as defined in
Section 8-106 of the UCC) of all Investment Property, as confirmed in
one or more Control Agreements in respect thereof, and (B) be
authorized to direct the applicable Securities Intermediary or
Commodity Intermediary with respect to such Investment Property to
comply without further consent of such Pledgor or any investment
manager or any other Person acting or purporting to act for any Pledgor
being required, with all Entitlement Orders originated by the
Collateral Agent with respect to the Investment Property. The
Collateral Agent hereby agrees that it shall not issue any Entitlement
Orders to any Securities Intermediary or Commodity Intermediary in
respect of the Investment Property except in connection with the
Collateral Agent's exercise of remedies upon the occurrence of an Event
of Default.
(iii) Each Pledgor hereby acknowledges and agrees that
notwithstanding any provisions hereof or any other circumstance to the
contrary, the Pledgors will use commercially reasonable efforts to
cause the Collateral Agent at all times to (A) have "control" (as
defined in Section 9-104 of the UCC) of the Concentration Account, as
confirmed in the Control Agreement in respect thereof, and (B) be
authorized to direct the institution maintaining the Concentration
Account to comply without further consent of any Pledgor or any person
acting or purporting to act for any Pledgor being required, with all
instructions originated by the Collateral Agent directing disposition
of the funds in the Concentration Account. The Collateral Agent hereby
agrees that it shall not issue any such instructions to the institution
maintaining the Concentration Account except in connection with the
Collateral Agent's exercise of remedies upon the occurrence of an Event
of Default.
(iv) So long as no Event of Default has occurred and is
continuing, each Pledgor may trade, sell, exchange, lend, apply or
transfer funds or Investment Property from any Deposit Account,
Securities Account or Commodities Account, in each case to the extent
not inconsistent with the other provisions hereof or the provisions of
the Credit Agreement; and
-9-
(v) As between the Collateral Agent and each Pledgor, such
Pledgor shall bear the investment risk with respect to the Investment
Property, and the risk of loss of, damage to, or the destruction of any
cash or the Investment Property, whether in the possession of, or
maintained as a security entitlement or deposit by, or subject to the
control of, the Collateral Agent, a Securities Intermediary, a
Commodity Intermediary or a Depository Bank, such Pledgor or any other
Person; provided, however, that nothing contained in this Section
3.8(a)(v) shall release or relieve any Securities Intermediary,
Commodity Intermediary or Depository Bank of its duties and obligations
to such Pledgors or any other Person under the applicable Control
Agreement or under applicable law. Each Pledgor shall promptly pay all
charges and fees of whatever kind or nature with respect to the cash or
Investment Property pledged by it or under this Agreement. In the event
such Pledgor shall fail to make such payment contemplated in the
immediately preceding sentence, the Collateral Agent may do so for the
account of such Pledgor and such Pledgor shall promptly reimburse and
indemnify the Collateral Agent from all costs and expenses incurred by
the Collateral Agent under this Section 3.8(a)(v) in accordance with
Section 8.1 hereof.
(b) Instruments and Tangible Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be
evidenced by any Instrument or Tangible Chattel Paper in an amount in
excess of $250,000, the Pledgor acquiring such Instrument or Tangible
Chattel Paper shall forthwith endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time
to time specify. As of the date hereof, such Instruments and Tangible
Chattel Paper are set forth on Schedule 11 to the Perfection
Certificate.
(c) Electronic Chattel Paper and Transferable Records. If any
amount payable under or in connection with any of the Pledged
Collateral shall be evidenced by any Electronic Chattel Paper or any
"transferable record," as that term is defined in Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act, or
in Section 16 of the Uniform Electronic Transactions Act as in effect
in any relevant jurisdiction, the Pledgor acquiring such Electronic
Chattel Paper or Transferable record shall promptly notify the
Collateral Agent thereof and, at the request of the Collateral Agent,
shall take such action as the Collateral Agent may reasonably request
to vest in the Collateral Agent control under UCC Section 9-105 of such
Electronic Chattel Paper or control under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or, as the
case may be, Section 16 of the Uniform Electronic Transactions Act, as
so in effect in such jurisdiction, of such transferable record. The
Collateral Agent agrees with each Pledgor that the Collateral Agent
will arrange, pursuant to procedures satisfactory to the Collateral
Agent and so long as such procedures will not result in the Collateral
Agent's loss of control, for such Pledgor to make alterations to the
Electronic Chattel Paper or transferable record permitted under UCC
Section 9-105 or, as the case may be, Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to
allow without loss of control, unless an Event of Default has occurred
and is continuing or would occur after taking into account any action
by any Pledgor with respect to such electronic chattel paper or
transferable record.
-10-
(d) Letter-of-Credit Rights. If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor
of such Pledgor, such Pledgor shall promptly notify the Collateral
Agent thereof and, at the request and option of the Collateral Agent,
such Pledgor shall, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent arrange for the issuer
and any confirmer of such Letter of Credit to consent to an assignment
to the Collateral Agent of the proceeds of any drawing under the Letter
of Credit.
(e) Commercial Tort Claims. If any Pledgor shall at any time
hold or acquire a Commercial Tort Claim, such Pledgor shall immediately
notify the Collateral Agent in writing signed by such Pledgor of the
brief details thereof and grant to the Collateral Agent in such writing
a security interest therein and in the Proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
satisfactory to the Collateral Agent.
(f) Motor Vehicles. At any time after the occurrence and
during the continuance of an Event of Default, each Pledgor shall, upon
the request of the Collateral Agent, deliver to the Administrative
Agent originals of the certificates of title or ownership for the motor
vehicles (and any other Equipment covered by Certificates of Title or
ownership owned by it) with the Collateral Agent listed as lienholder
therein.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS
Section 4.1. Additional Representations and Warranties. Each Pledgor
represents and warrants that, as of the date hereof, it is the true and lawful
exclusive owner of its Trademarks listed in Schedule 13(a) to the Perfection
Certificate and that said listed Trademarks include all the United States
federal registrations or applications registered in the United States Patent and
Trademark Office. Each Pledgor represents and warrants that, to the best of its
knowledge, it owns or is licensed to use or is not prohibited from using all
Trademarks that it uses. Each Pledgor further warrants that it is aware of no
third party claim that any aspect of such Pledgor's present or contemplated
business operations infringes or will infringe any Trademark. Each Pledgor
represents and warrants that it is the owner of record of all United States
registrations and applications listed in Schedule 13(a) to the Perfection
Certificate and that said registrations are valid, subsisting, have not been
canceled and that such Pledgor is not aware of any third-party claim that any of
said registrations is invalid or unenforceable. Each Pledgor hereby grants to
the Collateral Agent an absolute power of attorney to sign, upon the occurrence
and during the continuance of an Event of Default and delivery of notice to the
Borrower in accordance with Section 10 of the Credit Agreement to the extent
such notice is required pursuant to Section 10 of the Credit Agreement, any
document which may be required by the United States Patent and Trademark Office
in order to effect an absolute assignment of all right, title and interest in
each Trademark and associated Goodwill, and record the same.
Section 4.2. Licenses and Assignments. Other than the license
agreements listed on Schedule 13(a) to the Perfection Certificate and any
extensions or renewals thereof, each Pledgor hereby agrees not to divest itself
of any right under any Significant Trademark
-11-
absent prior written consent of the Collateral Agent, which consent shall not be
unreasonably withheld.
Section 4.3. Infringements. Each Pledgor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who may be infringing or otherwise violating any of such Pledgor's
rights in and to any Significant Trademark, or with respect to any party
claiming that such Pledgor's use of any Significant Trademark violates any
property right of that party, in each case to the extent that such Pledgor
reasonably believes that such infringement or violation is material to its
business. Each Pledgor further agrees, if consistent with good business practice
and unless otherwise agreed by the Collateral Agent, diligently to prosecute any
Person infringing any Significant Trademark to the extent that such Pledgor
reasonably believes that such infringement is material to its business.
Section 4.4. Preservation of Trademarks. Each Pledgor agrees to use its
Significant Marks in interstate commerce during the time in which this Agreement
is in effect, sufficiently to preserve such Significant Trademarks as trademarks
or service marks registered under the laws of the United States.
Section 4.5. Maintenance of Registration. Each Pledgor shall, at its
own expense, diligently process all documents required by the Trademark Act of
1946, 15 U.S.C. ▇▇.▇▇. 1051 et seq. to maintain trademark registration,
including but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
Significant Trademarks pursuant to 15 U.S.C. ▇▇.▇▇. 1058(a), 1059 and 1065, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all reasonable administrative and judicial remedies
without the prior written consent of the Collateral Agent, which consent shall
not be unreasonably withheld.
Section 4.6. Future Registered Marks. If any Trademark registration
issues hereafter to any Pledgor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within thirty (30)
days of receipt of such certificate such Pledgor shall deliver a copy of such
certificate, and a grant of security interest in such Trademark to the
Collateral Agent, confirming the grant thereof hereunder, the form of such
confirmatory grant to be substantially the same as the form hereof.
Section 4.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, upon delivery to the Borrower of written
notice in accordance with Section 10 of the Credit Agreement to the extent such
notice is required by Section 10 of the Credit Agreement, take any or all of the
following actions: (i) declare the entire right, title and interest of each
Pledgor in and to each of the Trademarks and the Goodwill of the business
associated therewith, together with all trademark rights and rights of
protection to the same, vested, in which event such rights, title and interest
shall immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors, in which case the Collateral Agent shall be entitled to exercise the
power of attorney referred to in Section 4.1 to execute, cause to be
acknowledged and notarized and record said absolute assignment with the
applicable agency; (ii) take and use or sell the Trademarks and the Goodwill of
each Pledgor's business symbolized
-12-
by the Trademarks and the right to carry on the business and use the assets of
each Pledgor in connection with which the Trademarks have been used; and (iii)
direct each Pledgor to refrain, in which event such Pledgor shall refrain, from
using the Trademarks in any manner whatsoever, directly or indirectly, and, if
requested by the Collateral Agent, change such Pledgor's corporate name to
eliminate therefrom any use of any Trademark and execute such other and further
documents that the Collateral Agent may request to further confirm this and to
transfer ownership of the Trademarks and registrations and any pending trademark
application in the United States Patent and Trademark Office or any equivalent
government agency or office in any foreign jurisdiction to the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS
Section 5.1. Additional Representations and Warranties. Each Pledgor
represents and warrants that to the best of its knowledge, as of the date
hereof, it is the true and lawful exclusive owner of all rights in its Patents
listed in Schedule 13(a) to the Perfection Certificate and in the Copyrights
listed in Schedule 13(b) to the Perfection Certificate hereto, that said Patents
include all the United States patents and applications for United States patents
that such Pledgor now owns and that said Copyrights constitute all the United
States Copyrights registered with the United States Copyright Office and
applications for United States copyrights that the Pledgor now owns. Each
Pledgor represents and warrants that to the best of its knowledge, as of the
date hereof, it owns or is licensed to practice under all Patents and Copyrights
that it now uses or practices under. Such Pledgor further warrants that it is
aware of no third party claim that any aspect of such Pledgor's present or
contemplated business operations infringes or will infringe any Patent or any
Copyright. Each Pledgor hereby grants to the Collateral Agent an absolute power
of attorney to sign, upon the occurrence and during the continuance of any Event
of Default and delivery of notice to the Borrower in accordance with Section 10
of the Credit Agreement to the extent such notice is required pursuant to
Section 10 of the Credit Agreement, any document which may be required by the
United States Patent and Trademark Office or the United States Copyright Office
in order to effect an absolute assignment of all right, title and interest in
each Patent and Copyright, and record the same.
Section 5.2. Licenses and Assignments. Other than the license
agreements listed on Schedules 13(a) and 13(b) to the Perfection Certificate and
any extensions or renewals thereof, each Pledgor hereby agrees not to divest
itself of any right under any Significant Patent or Significant Copyright absent
prior written consent of the Collateral Agent, which consent shall not be
unreasonably withheld.
Section 5.3. Infringements. Each Pledgor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Pledgor with respect to any infringement or other
violation of such Pledgor's rights in any Significant Patent or Significant
Copyright, or with respect to any claim that practice of any Significant Patent
or Significant Copyright violates any property right of that party, in each case
to the extent that such Pledgor reasonably believes that such infringement or
violation is material to its business. Each Pledgor further agrees, consistent
with good business practice and absent
-13-
direction of the Collateral Agent to the contrary, diligently to prosecute any
Person infringing any Significant Patent or Significant Copyright to the extent
that such Pledgor reasonably believes that such infringement is material to its
business, which consent shall not be unreasonably withheld.
Section 5.4. Maintenance of Patents. At its own expense, each Pledgor
shall make timely payment of all post-issuance fees required pursuant to 15
▇.▇.▇.▇▇. 41 to maintain in force rights under each Significant Patent.
Section 5.5. Prosecution of Patent Application. At its own expense,
each Pledgor shall diligently prosecute all applications for Significant Patents
listed in Schedule 13(a) to the Perfection Certificate and shall not abandon any
such application prior to exhaustion of all reasonable administrative and
judicial remedies, absent written consent of the Collateral Agent, which consent
shall not be unreasonably withheld.
Section 5.6. Other Patents and Copyrights. Within 30 days of
acquisition of any Patent or Copyright, or of filing of an application for any
Patent or Copyright, each Pledgor shall deliver to the Collateral Agent a copy
of such Patent or Copyright or such application, as the case may be, with a
grant of security as to such Patent or Copyright, as the case may be, confirming
the grant thereof hereunder, the form of such confirmatory grant to be
substantially the same as the form hereof.
Section 5.7. Remedies. If an Event of Default shall occur and be
continuing and Collateral Agent has delivered notice to the Borrower in
accordance with Section 10 of the Credit Agreement to the extent such notice is
required pursuant to Section 10 of the Credit Agreement, the Collateral Agent
may by written notice to the Borrower, take any or all of the following actions:
(i) declare the entire right, title, and interest of each Pledgor in each of its
Patents and Copyrights vested, in which event such right, title, and interest
shall immediately vest in the Collateral Agent for the benefit of the Secured
Creditors, in which case the Collateral Agent shall be entitled to exercise the
power of attorney referred to in Section 5.1 to execute, cause to be
acknowledged and notarized and record said absolute assignment with the
applicable agency; (ii) take and practice or sell the Patents and Copyrights;
and (iii) direct each Pledgor to refrain, in which event such Pledgor shall
refrain, from practicing the Patents and Copyrights directly or indirectly, and
such Pledgor shall execute such other and further documents as the Collateral
Agent may request further to confirm this and to transfer ownership of the
Patents and Copyrights to the Collateral Agent for the benefit of the Secured
Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
Section 6.1. Protection of Collateral Agent's Security. No Pledgor
will do anything to impair in any material respect the rights of the Collateral
Agent in the Collateral. Each Pledgor will at all times keep its Inventory and
Equipment insured in favor of the Collateral Agent, at such Pledgor's own
expense to the extent and in the manner provided in the Credit Agreement. If
such Pledgor shall fail to insure its Inventory and Equipment in accordance with
the preceding sentence, or if such Pledgor shall fail to so endorse and deposit
all policies with
-15-
respect thereto, the Collateral Agent shall have the right (but shall be under
no obligation), upon prior notice to such Pledgor, to procure such insurance and
such Pledgor agrees to promptly reimburse the Collateral Agent for all
reasonable costs and expenses of procuring such insurance. The Collateral Agent
shall, at the time such proceeds of such insurance are distributed to the
Secured Creditors, apply such proceeds in accordance with Section 7.4 or as
otherwise provided in the Credit Agreement. Each Pledgor assumes all liability
and responsibility in connection with the Collateral acquired by it and the
liability of such Pledgor to pay the Obligations shall in no way be affected or
diminished by reason of the fact that such Collateral may be lost, destroyed,
stolen, damaged or for any reason whatsoever unavailable to such Pledgor unless
such loss or damage is finally judicially determined to have been incurred by
reason of the gross negligence or willful misconduct of any Secured Creditor or
any agent of any Secured Creditor or the failure of a Secured Creditor, in
exercising its remedies hereunder, to act in a commercially reasonable manner.
Section 6.2. Warehouse Receipts Non-negotiable. Each Pledgor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued with respect to any of its Inventory, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law).
Section 6.3. Further Actions. Each Pledgor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral in accordance with the terms hereof.
Section 6.4. Financing Statements. Each Pledgor agrees to execute and
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are necessary in the reasonable opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first priority
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby all in accordance with the Uniform
Commercial Code as enacted in any and all applicable jurisdictions or any other
applicable law. Each Pledgor will pay any applicable filing fees, recordation
taxes and related expenses. Each Pledgor authorizes the Collateral Agent to file
any such financing statements without the signature of such Pledgor where
permitted by law including, without limitation, the filing of financing
statements describing the Collateral as "all assets in which the Debtor now owns
or hereafter acquires rights."
-15-
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
Section 7.1. Remedies; Obtaining the Collateral Upon Default. Each
Pledgor agrees that, if any Event of Default shall have occurred and be
continuing and the Collateral Agent shall have delivered to the Borrower notice
in accordance with Section 10 of the Credit Agreement to the extent such notice
is required pursuant to Section 10 of the Credit Agreement, then and in every
such case, subject to any mandatory requirements of applicable law then in
effect, the Collateral Agent, in addition to any rights now or hereafter
existing under applicable law, shall have all rights as a secured creditor under
the Uniform Commercial Code in all applicable jurisdictions and may also
(subject to laws and regulations governing the national security of the United
States):
(a) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from such Pledgor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
such Pledgor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Pledgor;
possession of machinery shall, however, be subject to the terms of the
Location Leases; and
(b) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Accounts and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent and may exercise any and
all remedies of such Pledgor in respect of such Collateral; and
(c) withdraw all monies, securities and instruments in the
Cash Collateral Account for application to the Obligations in
accordance with Section 7.4; and
(d) sell, assign or otherwise liquidate, or direct such
Pledgor to sell, assign or otherwise liquidate, any or all of its
Collateral or any part thereof, and take possession of the proceeds of
any such sale or liquidation; and
(e) take possession of the Collateral or any part thereof, by
directing such Pledgor in writing to deliver the same to the Collateral
Agent at any commercially reasonable place or places designated by the
Collateral Agent, in which event such Pledgor shall at its own expense:
(i) forthwith cause the Collateral pledged by it to
be moved to the place or places so designated by the
Collateral Agent and there delivered to the Collateral
Agent, and
(ii) store and keep any Collateral so delivered to
the Collateral Agent at such place or places pending
further action by the Collateral Agent as provided in
Section 7.2, and
-16-
(iii) while the Collateral shall be so stored and
kept, provide such guards and maintenance services
as shall be necessary to protect the same and to
preserve and maintain them in good condition; and
(f) license or sublicense (to the extent not in violation of
the license), whether on an exclusive or nonexclusive basis, any
Trademarks, Patents or Copyrights included in the Collateral for such
term and on such conditions and in such manner as the Collateral Agent
shall in its commercially reasonable judgment determine;
it being understood that such Pledgor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Pledgor of said obligation.
Section 7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 and any
other Collateral whether or not so repossessed by the Collateral Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine;
provided that such terms shall be commercially reasonable. Any of the Collateral
may be sold, leased or otherwise disposed of, in the condition in which the same
existed when taken by the Collateral Agent or after any commercially reasonable
overhaul or repair made by or at the direction of the Collateral Agent. To the
extent permitted by any requirement of law, the Collateral Agent and the Secured
Creditors or any of their respective Affiliates may be the purchaser, licensee,
assignee or recipient of any or all of the Collateral at any such sale and shall
be entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold, assigned or
licensed at such sale, to use and apply any of the Obligations owed to such
Person as a credit on account of the purchase price of any Collateral payable by
such Person at such sale. Each purchaser, assignee, licensee or recipient at any
such sale shall acquire the property sold, assigned or licensed absolutely free
from any claim or right on the part of any Pledgor, and each Pledgor hereby
waives, to the fullest extent permitted by law, all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Collateral
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Each Pledgor hereby waives, to the fullest
extent permitted by law, any claims against the Collateral Agent arising by
reason of the fact that the price at which any Collateral may have been sold,
assigned or licensed at such a private sale was less than the price which might
have been obtained at a public sale, even if the Administrative Agent accepts
the first offer received and does not offer such Pledged Collateral to more than
one offeree. Each Pledgor acknowledges and agrees that, to the extent notice of
sale shall be required by law, ten days' notice to such Pledgor of the time and
place of any public sale or of the time after which any private sale or other
intended disposition is to take place shall be commercially reasonable
notification of such matters. No notification need be given to any
-17-
Pledgor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or other
intended disposition. Each Pledgor agrees to do or cause to be done all such
other acts and things as may be reasonably necessary to make such sale or sales
of all or any portion of the Collateral valid and binding and in compliance with
any and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at
such Pledgor's reasonable expense.
Section 7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH PLEDGOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Pledgor hereby further waives, to the extent permitted
by law:
(a) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct or failure to act, in exercising its
remedies hereunder, in a commercially reasonable manner;
(b) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Pledgor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws unless such action or threatened action is not commercially
reasonable.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of each Pledgor therein and thereto, and
shall be a perpetual bar both at law and in equity against such Pledgor and
against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
such Pledgor other than any Collateral remaining after payment in full of the
Obligations.
Section 7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent any Pledge Agreement or any Mortgage to
which any Pledgor is a party requires proceeds of Collateral under such
agreement to be applied in accordance with the provisions of this Agreement, the
pledgee or mortgagee under such other agreement) upon
-18-
any sale or other disposition of the Collateral, together with all other moneys
received by the Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all amounts owing the Collateral
Agent of the type described in clauses (iii) and (iv) of the definition
of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(f), with each Secured Creditor
receiving an amount equal to such outstanding Primary Obligations or,
if the proceeds are insufficient to pay in full all such Primary
Obligations, its Pro Rata Share of the amount remaining to be
distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the
Secured Creditors as provided in Section 7.4(f), with each Secured
Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all
such Secondary Obligations, its Pro Rata Share of the amount remaining
to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 10.9(a) hereof, to the applicable Pledgor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Agreement Obligations, all principal of, and interest on, all Loans, all
Unpaid Drawings theretofore made (together with all interest accrued thereon),
and the aggregate Stated Amounts of all Letters of Credit issued (or deemed
issued) under the Credit Agreement, and all Fees and (ii) in the case of the
Other Obligations, all amounts due under the Interest Rate Protection Agreements
or Other Hedging Agreements (other than indemnities, fees (including, without
limitation, reasonable attorneys' fees) and similar obligations and liabilities)
and (z) "Secondary Obligations" shall mean all Obligations other than Primary
Obligations.
(c) When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be applied (for purposes of making determinations under this Section 7.4 only)
(i) first, to their Primary Obligations and (ii) second, to their Secondary
Obligations. If any payment to any Secured Creditor of its Pro Rata Share of any
distribution would result in overpayment to such Secured Creditor, such excess
amount shall instead be immediately distributed in respect of the unpaid Primary
Obligations or Secondary Obligations, as
-19-
the case may be, of the other Secured Creditors, with each Secured Creditor
whose Primary Obligations or Secondary Obligations, as the case may be, have not
been paid in full to receive an amount equal to such excess amount multiplied by
a fraction the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of all Secured Creditors entitled to such distribution.
(d) Each of the Secured Creditors agrees and acknowledges that if the
Bank Creditors are to receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued (or deemed issued) under the Credit
Agreement (which shall only occur after all outstanding Loans and Unpaid
Drawings with respect to such Letters of Credit have been paid in full), such
amounts shall be paid to the Administrative Agent under the Credit Agreement and
held by it, for the equal and ratable benefit of the Bank Creditors, as cash
security for the repayment of Obligations owing to the Bank Creditors as such.
If any amounts are held as cash security pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of Credit, and
after the application of all such cash security to the repayment of all
Obligations owing to the Bank Creditors after giving effect to the termination
of all such Letters of Credit, if there remains any excess cash, such excess
cash shall be distributed by the Collateral Agent in accordance with Section
7.4(a) hereof.
(e) Except as set forth in Section 7.4(d), all payments required to be
made hereunder shall be made (x) if to the Bank Creditors, to the Administrative
Agent under the Credit Agreement for the account of the Bank Creditors, and (y)
if to the Other Creditors, to the trustee, paying agent or other similar
representative (each a "Representative") for the Other Creditors or, in the
absence of such a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance with this
Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative for
the Other Creditors or, in the absence of such a Representative, upon the Other
Creditors for a determination (which the Administrative Agent, each
Representative for any Secured Creditors and the Secured Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Bank Creditors or the
Other Creditors, as the case may be. Unless it has actual knowledge (including
by way of written notice from a Bank Creditor or an Other Creditor) to the
contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
from an Other Creditor) to the contrary, the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection
Agreement or Other Hedging Agreements are in existence.
(g) It is understood and agreed that each Pledgor shall remain liable
to the extent of any deficiency between the amount of the proceeds of the
Collateral hereunder and the aggregate amount of the sums referred to in clauses
(i) through (iii), inclusive, of Section 7.4(a), except to the extent that such
proceeds are not applied by the Collateral Agent in accordance with this
Agreement and the Credit Agreement.
-20-
Section 7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection Agreements or Other Hedging Agreements, the other
Credit Documents or now or hereafter existing at law or in equity, or by statute
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by the Collateral Agent. All
such rights, powers and remedies shall be cumulative and the exercise or the
beginning of exercise of one shall not be deemed a waiver of the right to
exercise of any other or others. No delay or omission of the Collateral Agent in
the exercise of any such right, power or remedy, renewal or extension of any of
the Obligations and no course of dealing between any Pledgor and the Collateral
Agent or any holder of any of the Obligations shall impair any such right, power
or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Pledgor in any
case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover expenses, including reasonable
attorneys' fees, and the amounts thereof shall be included in such judgment.
Section 7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case each Pledgor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
Section 7.7. Additional Remedies With Respect to Collateral Located in
Louisiana. Upon the occurrence and during the continuance of any Event of
Default and provided that the Collateral Agent shall have delivered to the
Borrower notice in accordance with Section 10 of the Credit Agreement to the
extent such notice is required pursuant to Section 10 of the Credit Agreement,
Collateral Agent shall be entitled to exercise any one or more of the following
remedies (all of which are cumulative):
(a) Default Remedies. In addition to the rights of Collateral
Agent with respect to possessory collateral, Collateral Agent shall
have the right, in accordance with the Credit Agreement, to accelerate
payment of all amounts that each Pledgor may then owe to the Secured
Creditors, which will then entitle Collateral Agent to foreclose under
this Agreement under ordinary or executory process procedures, or under
the seizure and disposition remedies set forth in R.S. 6:965 et seq.
(where applicable), and to cause the Collateral to be immediately
seized wherever found, and sold with or without appraisal, in regular
session of court or in vacation, in accordance with applicable
Louisiana law, without the necessity of further demanding payment from
such Pledgor, or of notifying such Pledgor, or placing such Pledgor in
default. For purposes of foreclosure under Louisiana executory process
procedures, such Pledgor confesses judgment and
-21-
acknowledges to be indebted to the Secured Creditors up to the full
amount of the Obligations, in principal, interest, costs, expenses,
attorney's fees and other fees and charges and all other amounts
secured by this Agreement. To the extent permitted under applicable
Louisiana law, each Pledgor additionally: (A) waives any benefit of
appraisal as provided under Articles 2332, 2336, 2723 and 2724 of the
Louisiana Code of Civil Procedure, and all other laws with regard to
appraisal upon judicial sale, recognizing that no appraisal shall be
required prior to sale; (B) waives the demand and three days' delay as
provided under Articles 2639 and 2721 of the Louisiana Code of Civil
Procedure; (C) waives the notice of seizure as provided under Articles
2293 and 2721 of the Louisiana Code of Civil Procedure; (D) waives the
three (3) days' delay provided under Articles 2331 and 2722 of the
Louisiana Code of Civil Procedure; and (E) waives all other benefits
provided under Articles 2331, 2722 and 2723 of the Louisiana Code of
Civil Procedure and all other Articles not specifically mentioned
above. Each Pledgor further agrees that any declaration of fact made by
authentic act before a Notary Public by a person declaring that such
facts are within his or her knowledge shall constitute authentic
evidence of such facts for purposes of foreclosure under applicable
Louisiana law, such Pledgor further agrees that Collateral Agent may
appoint a keeper of the Collateral in the event of foreclosure.
Should the Collateral for any reason be located in another
state at or following any Event of Default, each Pledgor agrees that
Collateral Agent may, in accordance with the terms hereof, take
possession of the Collateral in any manner then permitted under the
laws of the state in which the Collateral is then located or under the
laws of Louisiana as then applicable, including R.S. 6:965 et seq.
Should Collateral Agent for any reason have or acquire possession of
the Collateral at or following default, Collateral Agent may sell the
Collateral at public or private sale as authorized by Louisiana law or
the applicable provisions of the Uniform Commercial Code or similar
laws in effect in the state where the Collateral is then located. If
Collateral Agent is required by law to give any Pledgor notice of the
public or private sale of the Collateral, each Pledgor agrees that the
requirements of reasonable notice shall be met if the Collateral Agent
mails such notice to such Pledgor at the Borrower's address as shown in
this Agreement at least ten (10) days before the time of any public
sale or, if disposition is by private sale, at least ten (10) days
before the time after which private sale may occur. If public sale is
held, there will be sufficient compliance with all requirements of
notice to the public by a single publication in a newspaper in general
circulation in the parish or county where the Collateral is then
located. This notice should include the time and place of sale, and a
brief description of the property to be sold.
(b) Proceeds; Surplus; Deficiencies. Collateral Agent shall
apply any proceeds derived or to be derived from the sale, collection
or other disposition of the Collateral in the manner provided in
Section 7.4 hereof. The Pledgors shall be entitled to any surplus if
one results after application of the proceeds and the Pledgors shall
remain liable for any deficiency.
-22-
ARTICLE VIII
INDEMNITY
Section 8.1. Indemnity. (a) Each Pledgor agrees to indemnify, reimburse
and hold the Collateral Agent, each Secured Creditor and their respective
successors, assigns, employees, agents and servants (hereinafter in this Section
8.1 referred to individually as "Indemnitee" and collectively as "Indemnitees")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys' fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnities arising out of this Agreement, any Interest
Rate Protection Agreement or Other Hedging Agreement, any other Credit Document
or any other document executed in connection herewith and therewith or in any
other way connected with the administration of the transactions contemplated
hereby and thereby or the enforcement of any of the terms of, or the
preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), any contract
claim or, to the maximum extent permitted under applicable law, the violation of
the laws of any country, state or other governmental body or unit, or any tort
(including, without limitation, claims arising or imposed under the doctrine of
strict liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage); provided that no Indemnitee
shall be indemnified pursuant to this Section 8.1(a) for expenses to the extent
finally judicially determined to have been incurred by reason of the gross
negligence or willful misconduct of such Indemnitee. Each Pledgor agrees that
upon written notice by any Indemnitee of the assertion of such a liability,
obligation, damage, injury, penalty, claim, demand, action, suit or judgment,
such Pledgor shall assume full responsibility for the defense thereof. Each
Indemnitee agrees to use its best efforts to promptly notify the Borrower of any
such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a), each Pledgor
agrees to pay, or reimburse the Collateral Agent for any and all reasonable
fees, costs and expenses of whatever kind or nature incurred in connection with
the creation, preservation or protection of the Collateral Agent's Liens on, and
security interest in, the Collateral, including, without limitation, all
reasonable fees and taxes in connection with the recording or filing of
instruments and documents in public offices, payment or discharge of any taxes
or Liens upon or in respect of the Collateral, premiums for insurance with
respect to the Collateral and all other fees, costs and expenses in connection
with protecting, maintaining or preserving the Collateral and the Collateral
Agent's interest therein, whether through judicial proceedings or otherwise, or
in defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Collateral as set forth herein and in the Credit Agreement.
(c) Without limiting the application of Section 8.1(a) or (b), each
Pledgor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, costs, damages and expenses which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any material
misrepresentation by such Pledgor in this Agreement, any Interest
-23-
Rate Protection Agreement or other Hedging Agreement, any other Credit Document
or in any writing contemplated by or made or delivered pursuant to or in
connection with this Agreement, any Interest Rate Protection Agreement or other
Hedging Agreement or any other Credit Document as set forth herein and in the
Credit Agreement.
(d) If and to the extent that the obligations of any Pledgor under this
Section 8.1 are unenforceable for any reason, such Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
Section 8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnification obligations of each Pledgor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and the payment of all other
Obligations and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
(a) The following terms which are capitalized herein shall have the
meanings given to them in the Uniform Commercial Code. Such definitions shall be
equally applicable to the singular and plural forms of the terms defined.
"Account:
"Chattel Paper"
"Commercial Tort Claim"
"Commodity Account"
"Commodity Intermediary"
"Deposit Account"
"Documents"
"Electronic Chattel Paper"
"Entitlement Holder"
"Entitlement Order"
"Equipment"
"Financial Asset"
-24-
"Fixtures"
"General Intangibles"
"Goods"
"Inventory"
"Investment Property"
"Letter-of-Credit Right"
"Letter of Credit"
"Payment Intangible"
"Securities Account"
"Securities Intermediary"
"Security"
"Security Entitlement"
"Supporting Obligations"
"Tangible Chattel Paper"
(b) The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in
Recital 1 of this Agreement.
"Agreement" shall mean this Security Agreement as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.
"Bank Creditors" shall have the meaning provided in the first
paragraph of this Agreement.
"Banks" shall have the meaning provided in Recital 1 of this
Agreement.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement
"Cash Collateral Account" shall mean a non-interest bearing
cash collateral account maintained with the Collateral Agent for the benefit of
the Secured Creditors.
"Class" shall have the meaning provided in Section 10.2 of
this Agreement.
-25-
"Collateral" shall have the meaning provided in Section 1.1(a)
of this Agreement.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Concentration Account" shall mean that certain Deposit
Account established by the Borrower at First Union Bank, Branch #____, North
Carolina, account number ____, in the name of the Borrower or any substitute or
replacement thereof established in accordance with the provisions of Section
3.8(a) of this Agreement.
"Contract Rights" shall mean all rights of each Pledgor
(including, without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between each Pledgor and
one or more additional parties (including, without limitation, (i) each
partnership agreement to which such Pledgor is a party and (ii) any Interest
Rate Protection Agreements or Other Hedging Agreements), but excluding (x)
licenses to the extent that the terms thereof prohibit the assignment of, or
granting of a security interest in, such licenses and (y) location contracts
which have not, with the Collateral Agent's approval, been assigned to the
Collateral Agent but, in each of the cases described in clauses (x) and (y) of
this definition, excluding the right to receive any payment (including, without
limitation, Accounts, General Intangibles and Payment Intangibles) or any other
rights referred to in Sections 9-406(f), 9-407(a) or 9-408(a) of the Uniform
Commercial Code (or any successor provisions of any jurisdiction or any other
applicable law); provided, however, that at such time as such license is no
longer subject to such prohibition, such license shall (without any act or
delivery by any Person) constitute a Contract hereunder.
"Control Agreement" shall mean an agreement in form and
substance reasonably acceptable to the Administrative Agent sufficient to
establish "control" (as defined in Section 8-106 of the Uniform Commercial Code)
over any applicable Investment Property (including, without limitation, any
Securities Account or Commodity Account) or Deposit Account.
"Copyrights" shall mean, collectively, with respect to each
Pledgor, all copyrights (whether statutory or common law and whether established
or registered in the United States or any other country) now owned or hereafter
created or acquired by or assigned to such Pledgor, whether published or
unpublished, and all copyright registrations and applications made by such
Pledgor including, without limitation, the copyrights, registrations and
applications listed in Schedule 13(b) to the Perfection Certificate, together
with any and all (i) rights and privileges arising under applicable law with
respect to such Pledgor's use of any copyrights, (ii) reissues, renewals,
continuations and extensions thereof, (iii) income, fees, royalties, damages,
claims and payments now or hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the world
and (v) rights to ▇▇▇ for past, present or future infringements thereof.
"Credit Agreement" shall have the meaning provided in Recital
1 of this Agreement.
-26-
"Credit Agreement Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Depository Bank" shall have the meaning provided to the term
"bank" in Article 9 of the Uniform Commercial Code.
"Event of Default" shall mean any Event of Default under, and
as defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations, after the expiration of
any applicable grace and cure periods.
"Goodwill" shall mean, collectively, with respect to each
Pledgor, the goodwill connected with such Pledgor's business including, without
limitation, (i) all goodwill connected with the use of and symbolized by any of
the Intellectual Property in which such Pledgor has any interest and (ii) all
know-how, trade secrets, customer and supplier lists, proprietary information,
inventions, methods, procedures, formulae, descriptions, compositions, technical
data, drawings, specifications, name plates, catalogs, confidential information
and the right to limit the use or disclosure thereof by any person or entity,
pricing and cost information, business and marketing plans and proposals,
consulting agreements, engineering contracts and such other assets which relate
to such goodwill.
"Guarantors" shall have the meaning provided in the first
paragraph of this Agreement.
"Indemnitee" shall have the meaning provided in Section 8.1 of
this Agreement.
"Instrument" shall have the meaning provided to such term in
Article 9 of the Uniform Commercial Code as in effect on the date hereof in the
State of New York but shall not include any Location Leases.
"Insurance Policies" shall mean, collectively, with respect to
each Pledgor, all insurance policies held by such Pledgor or naming such Pledgor
as insured, additional insured or loss payee (including, without limitation, the
Required Insurance Policies), all such insurance policies entered into after the
date hereof, other than insurance policies (or certificates of insurance
evidencing such insurance policies) relating to health and welfare insurance and
life insurance policies in which such Pledgor is not named as beneficiary (i.e.,
insurance policies that are not "Key Man" insurance policies) and all rights,
claims and recoveries relating thereto (including, without limitation, all
dividends, returned premiums and other rights to receive money in respect of any
of the foregoing).
"Intellectual Property" shall mean, collectively, the Patents,
Trademarks, Copyrights, Licenses and Goodwill.
"Interest Rate Protection Agreements" shall have the meaning
assigned to such term in the Credit Agreement.
-27-
"Joinder Agreement" shall have the meaning provided in Section
2.9 of this Agreement.
"Lead Arranger and Bank Manager" shall have the meaning
provided in Recital 1 of this Agreement.
"Licenses" shall mean, collectively, with respect to each
Pledgor, all license and distribution agreements and covenants not to ▇▇▇ with
any other party with respect to any Patent, Trademark, or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
including, without limitation, the license and distribution agreements listed in
Schedules 13(a) and 13(b) to the Perfection Certificate, together with any and
all (i) renewals, extensions, supplements and continuations thereof, (ii)
income, fees, royalties, damages, claims and payments now and hereafter due
and/or payable thereunder and with respect thereto including, without
limitation, damages and payments for past, present or future infringements or
violations thereof, (iii) rights to ▇▇▇ for past, present and future
infringements or violations thereof and (iv) any other rights to use, exploit or
practice any or all of the Patents, Trademarks or Copyrights or any other
patents, trademarks or copyrights.
"Obligations" shall mean (i) (x) the principal of and interest
on the Notes issued, and Loans made, under the Credit Agreement, and all
reimbursement obligations and Unpaid Drawings with respect to the Letters of
Credit under the Credit Agreement and (y) all other obligations and indebtedness
(including, without limitation, indemnities, Fees and interest thereon) of each
Pledgor to the Bank Creditors now existing or hereafter incurred under, arising
out of, or in connection with the Credit Agreement and the other Credit
Documents and the due performance and compliance by each Pledgor with all of the
terms, conditions and agreements contained in the Credit Agreement and the other
Credit Documents (all such principal, interest, obligations and liabilities
being herein collectively called the "Credit Agreement Obligations"); (ii) all
obligations and liabilities owing by each Pledgor to the Other Creditors under,
or with respect to, any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereafter arising, and the due performance and
compliance by each Pledgor with all of the terms, conditions and agreements
contained therein (all such obligations and liabilities described in this clause
(ii) being herein collectively called the "Other Obligations"); (iii) any and
all sums reasonably advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral in accordance
with the terms hereof and the other Credit Documents; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of each Pledgor referred to in clauses (i) and (ii), after an
Event of Default shall have occurred and be continuing and the Collateral Agent
has given notice under Section 10 of the Credit Agreement to the extent such
notice is required under Section 10 of the Credit Agreement, the commercially
reasonable expenses of re-taking, holding, preparing for sale or lease, selling
or otherwise disposing of or realizing on the Collateral, or of any exercise by
the Collateral Agent of its rights hereunder, together with reasonable
attorneys' fees and court costs in accordance with the terms hereof and the
other Credit Documents; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement. It is acknowledged and agreed that the "Obligations" shall
-28-
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
"Other Creditors" shall have the meaning provided in the first
paragraph of this Agreement.
"Other Hedging Agreements" shall have the meaning assigned to
such term in the Credit Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean, collectively, with respect to each
Pledgor, all patents issued or assigned to and all patent applications and
registrations made by such Pledgor (whether established or registered or
recorded in the United States or any other country), including, without
limitation, the patents, patent applications, registrations and recordings
listed in Schedule 13(a) to the Perfection Certificate, together with any and
all (i) rights and privileges arising under applicable law with respect to such
Pledgor's use of any patents, (ii) inventions and improvements described and
claimed therein, (iii) reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable thereunder and with respect
thereto including, without limitation, damages and payments for past, present or
future infringements thereof, (v) rights corresponding thereto throughout the
world, and (vi) rights to ▇▇▇ for past, present or future infringements thereof.
"Perfection Certificate" shall mean that certain Perfection
Certificate dated the Closing Date, delivered by the Borrower in favor of the
Collateral Agent (for the benefit of the Secured Creditors), as such Perfection
Certificate may be supplemented pursuant to each Joinder Agreement executed and
delivered in accordance with the provisions of Section 2.9 of this Agreement.
"Permitted Filings" shall have the meaning provided in Section
2.1 of this Agreement.
"Permitted Liens" shall have the meaning provided in the
Credit Agreement.
"Pledgors" shall have the meaning provided in the first
paragraph of this Agreement.
"Primary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Proceeds" shall have the meaning provided to such term in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
or under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Pledgor from time to time with respect to
any of the Collateral, (ii) any and all payments (in any form whatsoever) made
or due and payable to any Pledgor from time to time in connection with any
-29-
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) (iii) instruments representing obligations to
pay amounts in respect of any Collateral, (iv) products of the Collateral and
(v) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.
"Required Secured Creditors" shall mean (i) the Required Banks
(or, to the extent required by Section 13.12 of the Credit Agreement, all of the
Banks) under the Credit Agreement so long as any Credit Agreement Obligations
remain outstanding and (ii) in any situation not covered by the preceding clause
(i), the holders of a majority of the outstanding principal amount of the Other
Obligations.
"Requisite Creditors" shall have the meaning provided in
Section 10.2.
"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the
first paragraph of this Agreement.
"Significant Copyrights" shall mean those Copyrights which
each Pledgor believes in its reasonable judgment to be material to its business.
"Significant Patents" shall mean those Patents which each
Pledgor believes in its reasonable judgment to be material to its business.
"Significant Trademarks" shall mean those Trademarks which
each Pledgor believes in its reasonable judgment to be material to its business.
"Specified Commercial Tort Claims" shall mean each Commercial
Tort Claim with respect to which the applicable Pledgor has complied with the
provisions of Section 3.8(e).
"Syndication Agents" shall have the meaning provided in
Recital 1 of this Agreement.
"Termination Date" shall have the meaning provided in Section
10.9 of this Agreement.
"Trademarks" shall mean, collectively, with respect to each
Pledgor, all trademarks (including service marks), slogans, logos, designs,
certification marks, trade dress, uniform resource locations (URL's), domain
names, corporate names and trade names, whether registered or unregistered,
owned by or assigned to such Pledgor and all registrations and
-30-
applications for the foregoing (whether statutory or common law and whether
established or registered in the United States or any other country) including,
without limitation, the registrations and applications listed in Schedule 13(a)
to the Perfection Certificate, together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor's use of
any trademarks, (ii) reissues, continuations, extensions and renewals thereof,
(iii) income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including, without limitation,
damages, claims and payments for past, present or future infringements thereof,
(iv) rights corresponding thereto throughout the world and (v) rights to ▇▇▇ for
past, present and future infringements thereof.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect on the date hereof in the State of New York; provided,
however, that if by reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the security interest in any item or
portion of the Pledged Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, "Uniform
Commercial Code" shall also mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All such notices and communications hereunder
shall be telecopied or delivered by messenger or overnight courier service and
all such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, be effective when delivered
to the telegraph company, cable company or as overnight courier, the case may
be, or sent by telex or overnight, telecopier and when mailed shall be effective
three Business Days following deposit in the mail with proper postage, except
that notices and communications to the Collateral Agent shall not be effective
until received by the Collateral Agent. All notices, requests, demands or other
communications shall be in writing and addressed as follows:
(a) if to any Pledgor, at:
Coinmach Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
Coinmach Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
-31-
▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(b) if to the Collateral Agent:
Bankers Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Deal Administration
(c) if to any Bank Creditor, either (x) to the Administrative
Agent, at the address of the Administrative Agent specified in the
Credit Agreement or (y) at such address as such Bank Creditor shall
have specified in the Credit Agreement;
(d) if to any Other Creditor, either (x) to the Representative
for the Other Creditors, at such address as such Representative may
have provided to the Borrower and the Collateral Agent from time to
time, or (y) directly to the Other Creditors at such address as the
Other Creditors shall have specified in writing to the Borrower and the
Collateral Agent;
or, at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
Section 10.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied any manner whatsoever
unless in writing duly signed by each Pledgor affected thereby and the
Collateral Agent (with the written consent of the Required Banks, or to the
extent required by Section 13.12 of the Credit Agreement, all the Banks);
provided, however, that any change, waiver, modification or variance affecting
the rights and benefits of a single Class of Secured Creditors (and not all
Secured Creditors in a like or similar manner) shall require the written consent
of the Requisite Creditors of such affected Class. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (y) the Bank Creditors as holders of the Credit Agreement Obligations or
(z) the Other Creditors as the holders of the Other Obligations; and the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Credit Agreement Obligations, the Required Banks and (y) with respect to the
Other Obligations, the holders of 51% of all obligations outstanding from time
to time under the Interest Rate Protection Agreements or other Hedging
Agreements.
Section 10.3. Obligations Absolute. The obligations of each Pledgor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Pledgor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection Agreement or Other Hedging Agreement except as
specifically set forth in a waiver granted pursuant to Section 10.2 hereof; or
(c) any amendment to or modification of
-32-
any Credit Document or any Interest Rate Protection Agreement or Other Hedging
Agreement or any security for any of the Obligations; whether or not such
Pledgor shall have notice or knowledge of any of the foregoing.
Section 10.4. Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of the Collateral Agent, each Secured Creditor and each
Pledgor and their respective successors and assigns, provided that no Pledgor
may transfer or assign any or all of its rights or obligations hereunder without
the written consent of the Required Secured Creditors or otherwise in compliance
with the Credit Agreement and no Secured Creditor shall assign its rights
hereunder except in accordance with the Credit Agreement. All agreements,
statements, representations and warranties made by each Pledgor herein or in any
certificate or other instrument delivered by such Pledgor or on its behalf under
this Agreement shall be considered to have been relied upon by the Secured
Creditors and shall survive the execution and delivery of this Agreement, the
other Credit Documents and the Interest Rate Protection Agreements or Other
Hedging Agreements regardless of any investigation made by the Secured Creditors
or on their behalf.
Section 10.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
Section 10.6. Severability. Any provision of this Agreement which 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
Section 10.8. Pledgor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Pledgor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of such Pledgor under or with
respect to any Collateral except to the extent directly resulting from the
Collateral Agent's gross negligence or willful misconduct or failure to act, in
exercising its remedies hereunder, in a commercially reasonable manner.
Section 10.9. Termination; Release. (a) After the Termination Date,
this Agreement shall terminate and the Collateral Agent, at the request and
expense of the Pledgors, will promptly execute and deliver to the applicable
Pledgor a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to the
applicable Pledgor (without recourse and without any representation or warranty)
such of the
-33-
Collateral of such Pledgor as may be in the possession of the Collateral Agent
and as has not theretofore been sold or otherwise applied or released pursuant
to this Agreement. As used in this Agreement, "Termination Date" shall mean the
date upon which the Commitments and all Interest Rate Protection Agreements or
Other Hedging Agreements have been terminated, no Note under the Credit
Agreement is outstanding (and all Loans have been repaid in full), all Letters
of Credit have been terminated and all Obligations then owing have been paid in
full.
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by Section 9.02 of the Credit Agreement or in connection
with an investment made by any Pledgor in accordance with Section 9.05(j) of the
Credit Agreement or in connection with a Spinoff Guarantor Release Event or is
otherwise released at the direction of the Required Banks (or all Banks if
required by Section 13.12 of the Credit Agreement) and the proceeds of such sale
or sales or from such release are applied in accordance with, and to the extent
required by, the provisions of Section 4.02 of the Credit Agreement, to the
extent required to be so applied, such Collateral will be sold free and clear of
the Liens created by this Agreement and the Collateral Agent, at the request and
expense of the applicable Pledgor, will duly assign, transfer and deliver to
such Pledgor (without recourse and without any representation or warranty) such
of the Collateral as is then being (or has been) so sold or released and as may
be in the possession of the Collateral Agent and has not theretofore been
released pursuant to this Agreement.
(c) At any time that any Pledgor desires that the Collateral Agent take
any action to acknowledge or give effect to any release of Collateral pursuant
to the foregoing Section 10.9(b), it shall deliver to the Collateral Agent a
certificate signed by its chief financial officer stating that the release of
the respective Collateral is permitted pursuant to Section 10.9(a) or (b).
(d) The Collateral Agent shall have no liability whatsoever to any
Secured Creditor as a result of any release of Collateral by it in accordance
with this Section 10.9.
Section 10.10. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Collateral Agent.
Section 10.11. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed by the parties
hereto and each Secured Creditor, by accepting the benefits of this Agreement
acknowledges and agrees that the obligations of the Collateral Agent as holder
of the Collateral and interests therein and with respect to the disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in this Agreement. The Collateral Agent shall act hereunder on the terms and
conditions set forth in Section 12 of the Credit Agreement.
-34-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
COINMACH CORPORATION,
as Pledgor and Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO
SUPER LAUNDRY EQUIPMENT CORP.,
as Pledgor and Guarantor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO
GRAND WASH & DRY LAUNDERETTE, INC.,
as Pledgor and Guarantor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO
BANKERS TRUST COMPANY,
as Collateral Agent
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Title: Managing Director
-35
EXHIBIT 1
[Name of New Pledgor]
[Address of New Pledgor]
[Date]
[Name and Address
of Lender]
Ladies and Gentlemen:
Reference is made to that certain Security Agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Security Agreement"; capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of January 25, 2002, among Coinmach Corporation (the
"Borrower"), each of the Guarantors listed on the signature pages thereto or
from time to time party thereto by execution of a joinder agreement, and Bankers
Trust Company, as collateral agent (in such capacity and together with any
successors in such capacity, the "Collateral Agent").
This letter supplements the Security Agreement and is
delivered by the undersigned, ______________ (the "New Pledgor"), pursuant to
Section 2.9 of the Security Agreement. The New Pledgor hereby agrees to be bound
as a Guarantor and as a Pledgor by all of the terms, covenants and conditions
set forth in the Security Agreement to the same extent that it would have been
bound if it had been a signatory to the Security Agreement on the execution date
of the Security Agreement and without limiting the generality of the foregoing,
hereby grants and pledges to the Collateral Agent, as collateral security for
the full, prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Obligations, a Lien on and
security interest in, all of its right, title and interest in, to and under the
Collateral and expressly assumes all obligations and liabilities of a Guarantor
and Pledgor thereunder. The New Pledgor hereby makes, with respect to itself,
each of the representations and warranties and agrees, with respect to itself,
to each of the covenants applicable to the Pledgors contained in the Security
Agreement.
Attached hereto are supplements to each of the schedules to
the Perfection Certificate with respect to the New Pledgor. Such supplements
shall be deemed to be part of the Perfection Certificate.
This agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Exh. 1-2
IN WITNESS WHEREOF, the New Pledgor has caused this letter
agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
[NEW PLEDGOR]
By:
-------------------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
BANKERS TRUST COMPANY,
as Collateral Agent
By:
-----------------------------------
Name:
Title:
Exh. 1-3
