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Exhibit 10.2
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GUARANTY AND COLLATERAL AGREEMENT
made by
MINDSPRING ENTERPRISES, INC.
and the other Grantors party hereto
in favor of
FIRST UNION NATIONAL BANK,
as Administrative Agent
Dated as of February 17, 1999
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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SECTION 2. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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2.2 Right of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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2.3 No Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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2.4 Amendments, etc. with respect to the Borrower Obligations . . . . . . . . . . . . . . . . . 9
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2.5 Guarantee Absolute and Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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2.6 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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2.7 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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SECTION 3. GRANT OF SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1 Pledge and Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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3.2 Stock Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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3.3 Control Agreement; Acknowledgement by Issuers . . . . . . . . . . . . . . . . . . . . . . 12
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SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.1 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.2 Binding Obligation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.3 Title, No Other Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.4 Perfected First Priority Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.6 Chief Executive Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.7 Inventory and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.8 Farm Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.9 Investment Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.10 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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4.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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4.12 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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4.13 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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4.14 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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SECTION 5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper . . . . . . . . . . . . 17
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5.2 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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5.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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5.4 Maintenance of Perfected Security Interest, Further Documentation . . . . . . . . . . . . 18
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5.5 Changes in Locations, Name, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.7 Investment Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.8 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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5.10 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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5.11 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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5.12 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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5.13 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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SECTION 6. REMEDIAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.1 Certain Matters Relating to Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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6.2 Communications with Obligors, Grantors Remain Liable . . . . . . . . . . . . . . . . . . . 25
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6.3 Pledged Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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6.4 Proceeds to be Turned Over To Administrative Agent . . . . . . . . . . . . . . . . . . . . 27
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6.5 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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6.6 Code and Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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6.7 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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6.8 Waiver, Deficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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SECTION 7. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc . . . . . . . . . . . . . . . 29
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7.2 Duty of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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7.3 Execution of Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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7.4 Authority of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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SECTION 8. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.1 Amendments in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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8.3 No Waiver by Course of Conduct; Cumulative Remedies . . . . . . . . . . . . . . . . . . . 32
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8.4 Enforcement Expenses, Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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8.5 Binding Arbitration; Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . 33
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8.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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8.7 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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8.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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8.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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8.10 Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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8.11 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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8.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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8.13 Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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8.14 Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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8.15 Additional Grantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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8.16 Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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SCHEDULES
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Schedule 1 Notice Addresses of Guarantors
Schedule 2 Investment Property
Schedule 3 Material Contracts
Schedule 4 Intellectual Property
Schedule 5 Deposit Accounts/Financial Institutions
EXHIBITS
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Exhibit A Form of Perfection Certificate
Exhibit B Form of Depository Account Agreement
ANNEXES
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Annex I Form of Acknowledgment and Consent
Annex II Form of Guaranty and Collateral Agreement Supplement
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GUARANTY AND COLLATERAL AGREEMENT
GUARANTY AND COLLATERAL AGREEMENT (this "Agreement"), dated as
of February 17, 1999, made by each of the signatories hereto, including certain
Subsidiaries of the Borrower (as defined below), as guarantors (the
"Guarantors"), and the Borrower (the Borrower and the Guarantors together with
any other entity that may become a party hereto as provided herein, the
"Grantors"), in favor of FIRST UNION NATIONAL BANK, as Administrative Agent (in
such capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") from time to time parties to the Credit Agreement,
dated as of February 17, 1999 (as amended, restated, supplemented or otherwise
modified, the "Credit Agreement"), by and among MINDSPRING ENTERPRISES, INC.,
as borrower (the "Borrower"), the Lenders, FIRST UNION CAPITAL MARKETS CORP.,
as Arranger, and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make Extensions of Credit to the Borrower upon the terms and subject
to the conditions set forth therein;
WHEREAS, on the date hereof, the Borrower is the sole Grantor;
WHEREAS, on such date that additional Grantors are party
hereto, the Borrower will be a member of an affiliated group which group will
include each other Grantor;
WHEREAS, on such date that additional Grantors are party
hereto, the proceeds of the Extensions of Credit under the Credit Agreement
will be used in part to enable the Borrower to make valuable transfers to one
or more of such Grantors in connection with the operation of their respective
businesses;
WHEREAS, on such date that additional Grantors are party
hereto, the Borrower and such other Grantors will be engaged in related
businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the Extensions of Credit under the Credit Agreement;
and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Extensions of Credit to the Borrower under the
Credit Agreement that the Borrower and each of the other Grantors shall have
executed and delivered this Agreement to the Administrative Agent for the
ratable benefit of itself and the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective Extensions of Credit to the
Borrower thereunder, the Borrower and each other Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of itself and the Lenders, as
follows:
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SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement; the following terms are used herein as defined
in the UCC: Certificated Security, and Farm Products.
(b) The following terms when used in this Agreement shall
have the meanings assigned to them below:
"Accounts" means all "accounts" (as defined in the UCC) of any
Grantor, including withoutlimitation all present or future accounts
receivable, all rights to payment for goods sold or leased or to be
sold or leased or for services rendered or to be rendered, whether or
not earned by performance, all rights in any merchandise or goods
which any of the same may represent, all notes receivable, book debts,
notes, bills, drafts, acceptances, choses in action, contract rights,
instruments and documents and all sums of money due or to become due
thereon and all proceeds thereof and all rights, title, security
interests and guarantees with respect to each of the foregoing.
"Agreement" means this Guaranty and Collateral Agreement, as
amended, restated, supplemented or otherwise modified.
"Applicable Insolvency Laws" means all Applicable Laws
governing bankruptcy, reorganization, arrangement, adjustment of
debts, relief of debtors, dissolution, insolvency, fraudulent
transfers or conveyances or other similar laws (including, without
limitation, 11 U.S.C. Section 547, Section 548, Section 550 and other
"avoidance" provisions of Title 11 of the United States Code)
applicable in any such proceeding to any Guarantor and this Agreement.
"Borrower Obligations" means, in each case, whether now in
existence or hereafter arising: (a) the principal of and interest on
(including interest accruing after the filing of any bankruptcy or
similar petition) the Loans, (b) the L/C Obligations, (c) all payment
and other obligations owing by the Borrower to any Lender or the
Administrative Agent under any Hedging Agreement with any Lender
(which Hedging Agreement is permitted or required under the Credit
Agreement), and (d) all other fees and commissions (including
attorney's fees), charges, indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the
Borrower to the Lenders or the Administrative Agent, of every kind,
nature and description, direct or indirect, absolute or contingent,
due or to become due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note, in each case
under or in respect of the Credit Agreement, any Note, any Letter of
Credit or any of the other Loan Documents.
"Chattel Paper" means a writing or writings which evidence
both a monetary obligation of a Grantor and a security interest in or
a lease of specific goods relating thereto.
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"Collateral" shall have the meaning assigned thereto in
Section 3.1.
"Collateral Account" means any cash collateral account
established by the Administrative Agent as provided in Section 6.4.
"Controlled Depository" shall have the meaning assigned thereto in
Section 5.9.
"Copyright Licenses" means any written agreement naming any
Grantor as licensor or licensee (including, without limitation, those
listed in Schedule 4), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.
"Copyrights" means collectively, all of the following of any
Grantor: (a) all copyrights, rights and interests in copyrights,
works protectable by copyright, copyright registrations and copyright
applications anywhere in the world, including, without limitation, any
thereof referred to on Schedule 4 hereto, (b) all reissues,
extensions, continuations (in whole or in part) and renewals of any of
the foregoing, (c) all income, royalties, damages and payments now or
hereafter due and/or payable under any of the foregoing or with
respect to any of the foregoing, including, without limitation,
damages or payments for past or future infringements of any of the
foregoing, (d) the right to ▇▇▇ for past, present and future
infringements of any of the foregoing and (e) all rights corresponding
to any of the foregoing throughout the world.
"Deposit Account" means a deposit account (as defined in the
UCC) of any applicable jurisdiction and, in any event, including,
without limitation, any demand, time, savings, passbook or like
account maintained with a depositary institution.
"Documents" means all "documents" (as defined in the UCC) or
other receipts of any Grantor covering, evidencing or representing
goods.
"Equipment" means all "equipment" (as defined in the UCC) of
any Grantor and all other machinery, furniture, equipment and goods
(other than Inventory) and all other tangible assets of any Grantor
used or bought for use primarily in the business of such Grantor,
including all accessions, additions, attachments, improvements,
alterations, modifications, substitutions, repairs and replacements
thereto and therefor.
"General Intangibles" means all "general intangibles" (as
defined in the UCC) including, without limitation, with respect to any
Grantor, all contracts, agreements, subscriber lists, instruments and
indentures in any form, and portions thereof, to which such Grantor is
a party or under which such Grantor has any right, title or interest
or to which such Grantor or any property of such Grantor is subject, as
the same may be amended, supplemented or otherwise modified, including,
without limitation, (i) all rights of such Grantor to receive monies
due and to become due to it thereunder or in connection therewith, (ii)
all rights of such Grantor to damages arising thereunder and (iii) all
rights of such Grantor to perform and to exercise all remedies
thereunder, in each
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case only to the extent that the grant by such Grantor of a security
interest pursuant to this Agreement in its right, title and interest in
such contract, agreement, instrument or indenture (a) is not prohibited
by such contract, agreement, instrument or indenture without the
consent of any other party thereto, (b) would not give any other party
to such contract, agreement, instrument or indenture the right to
terminate its obligations thereunder, or (c) is permitted with consent
if all necessary consents to such grant of a security interest have
been obtained from the other parties thereto; provided that the
foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this Agreement
in any Account or any money or other amounts due or to become due under
any such contract, agreement, instrument or indenture.
"Guarantor Obligations" means with respect to any Guarantor,
all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement (including, without
limitation, those arising pursuant to Section 2) or any other Loan
Document to which such Guarantor is a party, in each case whether on
account of Guaranty Obligations, Reimbursement Obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by
such Guarantor pursuant to the terms of this Agreement or any other
Loan Document).
"Guarantors" means the collective reference to each Subsidiary
of the Borrower executing this Agreement.
"Instruments" means all "instruments," "chattel paper" or
"letters of credit" (each as defined in the UCC) of any Grantor,
including, without limitation, instruments, chattel paper and letters
of credit evidencing, representing, arising from or existing in
respect of, relating to, securing or otherwise supporting the payment
of, any of the Accounts, including (but not limited to) promissory
notes, drafts, bills of exchange and trade acceptances.
"Intellectual Property" means collectively, all of the
following of any Grantor: (a) all systems software and applications
software, including, without limitation, screen displays and formats,
program structures, sequence and organization, all documentation for
such software, including, without limitation, user manuals,
flowcharts, programmer's notes, functional specifications, and
operations manuals, all formulas, processes, ideas and know-how
embodied in any of the foregoing, and all program materials,
flowcharts, notes and outlines created in connection with any of the
foregoing, whether or not patentable or copyrightable, (b) concepts,
discoveries, improvements and ideas, (c) any useful information
relating to the items described in clause (a) or (b), including
know-how, technology, engineering drawings, reports, design
information, trade secrets, practices, laboratory notebooks,
specifications, test procedures, maintenance manuals, research,
development, manufacturing, marketing, merchandising, selling,
purchasing and accounting, (d) Patents and Patent Licenses, Copyrights
and Copyright Licenses, Trademarks and Trademark Licenses (excluding
any foreign Copyrights, Copyright Licenses, Trademarks, and Trademark
Licenses owned by the Borrower other than in Canada), and (e) other
licenses to
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use any of the items described in the foregoing clauses (a), (b), (c)
and (d) or any other similar items of such Grantor necessary for the
conduct of its business.
"Intercompany Note" means any promissory note evidencing loans
made by any Grantor to another Grantor.
"Inventory" means all "inventory" (as defined in the UCC) of
any Grantor, including without limitation, all raw materials,
inventory and other materials and supplies, work-in-process, finished
goods, all accessions thereto, documents therefor and any products
made or processed therefrom and all substances, if any, commingled
therewith or added thereto.
"Investment Property" means the collective reference to (i)
all "investment property" (as such term is defined in the UCC) and
(ii) all Pledged Notes, all Pledged Stock and all Partnership/LLC
Interests (whether or not constituting "investment property," as so
defined) of any Grantor.
"Issuers" means the collective reference to the issuers of any
Investment Property.
"Lender Hedge Agreements" means all Hedge Agreements entered
into by the Borrower with any Lender (or any Affiliate of any Lender).
"Material Contracts" shall have the meaning assigned thereto
in the Credit Agreement.
"Obligations" means (i) in the case of the Borrower, the
Borrower Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.
"Partnership/LLC" means the collective reference to the
entities listed on Schedule 2 under the heading "Partnerships/LLCs."
"Partnership/LLC Interests" means the entire partnership or
membership interest of each Grantor in each Partnership/LLC listed on
Schedule 2 hereto, including, without limitation, each Grantor's
capital account, its interest as a partner or member in the net cash
flow, net profit and net loss, and items of income, gain, loss,
deduction and credit of the Partnerships/LLCs, its interest in all
distributions made or to be made by the Partnerships/LLCs to such
Grantor and all of the other economic rights, titles and interests of
each Grantor as a partner or member of the Partnerships/LLCs, whether
set forth in the partnership agreement or membership agreement of the
Partnerships/LLCs, by separate agreement or otherwise.
"Patent License" means all agreements now or hereafter in
existence, whether written or oral, providing for the grant by or to
any Grantor of any right to manufacture, use or sell any invention
covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 4.
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"Patents" means collectively, all of the following of any
Grantor: (a) all patents, rights and interests in patents, patentable
inventions and patent applications anywhere in the world, including,
without limitation, any thereof referred to on Schedule 4 hereto, (b)
all reissues, extensions, continuations (in whole or in part) and
renewals of any of the foregoing, (c) all income, royalties, damages
or payments now or hereafter due and/or payable under any of the
foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past or future infringements of
any of the foregoing, (d) the right to ▇▇▇ for past, present and
future infringements of any of the foregoing and (e) all rights
corresponding to any of the foregoing throughout the world.
"Perfection Certificate" means the perfection certificate
dated as of even date herewith, substantially in the form of Exhibit A
attached hereto, in form and substance satisfactory to the
Administrative Agent, and duly certified by a Responsible Officer of
each Grantor.
"Permitted Liens" means all liens and encumbrances respecting
the Collateral permitted pursuant to the terms of the Credit
Agreement.
"Pledged Notes" means all promissory notes listed on Schedule
2, all Intercompany Notes at any time issued to any Grantor and all
other promissory notes issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit
by any Grantor in the ordinary course of business).
"Pledged Stock" means the shares of capital stock listed on
Schedule 2 together with any other shares, stock certificates, options
or rights of any nature whatsoever in respect of the capital stock of
any Person that may be issued or granted to, or held by, any Grantor
while this Agreement is in effect.
"Proceeds" means all "proceeds" (as defined in the UCC) and,
in any event, shall include, without limitation, all dividends or
other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interests" means the security interests granted
pursuant to Section 3, as well as all other security interests created
or assigned as additional security for the Obligations pursuant to the
provisions of this Agreement.
"Trademark License" means any agreement now or hereafter in
existence, whether written or oral, providing for the grant by or to
any Grantor of any right to use any Trademark, including, without
limitation, any of the foregoing referred to in Schedule 4.
"Trademarks" means collectively, all of the following of any
Grantor: (a) all trademarks, rights and interests in trademarks,
trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other
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business identifiers, prints and labels on which any of the foregoing
have appeared or appear, all registrations and recordings thereof, and
all applications in connection therewith anywhere in the world,
including without limitation any thereof referred to on Schedule 4
hereto, (b) all reissues, extensions, continuations (in whole or in
part) and renewals of any of the foregoing, (c) all income, royalties,
damages and payments now or hereafter due and/or payable under any of
the foregoing or with respect to any of the foregoing, including,
without limitation, damages or payments for past or future
infringements of any of the foregoing, (d) the right to ▇▇▇ for past,
present and future infringements of any of the foregoing and (e) all
rights corresponding to any of the foregoing throughout the world.
"UCC" means the Uniform Commercial Code as in effect in the
State of North Carolina; provided that, if by reason of mandatory
provisions of law, the perfection or the effect of perfection or
non-perfection of the Security Interests in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other
than North Carolina, "UCC" means 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.
1.2 Other Definitional Provisions.
(a) The words "hereof," "herein," "hereto" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section and Schedule references are to this Agreement unless otherwise
specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral
or any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2.GUARANTY
2.1 Guaranty. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of itself and the Lenders and their respective
successors, endorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations, provided, that
notwithstanding anything to the contrary contained herein, it is the intention
of each Guarantor and the Lenders that in any proceeding involving the
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution or insolvency or any similar proceeding with respect to any
Guarantor or its assets, the amount of such Guarantor's Guarantor Obligations
shall be in, but not in excess of, the maximum amount thereof not subject to
avoidance or recovery by operation of Applicable Insolvency Laws. To that end,
but only in the event and to the extent that such Guarantor's Guarantor
Obligations or any payment made pursuant to such
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Guarantor Obligations would, but for the operation of the foregoing proviso, be
subject to avoidance or recovery in any such proceeding under Applicable
Insolvency Laws, the amount of such Guarantor's Guarantor Obligations shall be
limited to the largest amount which, after giving effect thereto, would not,
under Applicable Insolvency Laws, render such Guarantor's Guarantor Obligations
unenforceable or avoidable or otherwise subject to recovery under Applicable
Insolvency Laws. To the extent any payment actually made pursuant to the
Guarantor Obligations exceeds the limitation of the foregoing proviso and is
otherwise subject to avoidance and recovery in any such proceeding under
Applicable Insolvency Laws, the amount subject to avoidance shall in all events
be limited to the amount by which such actual payment exceeds such limitation
and the Guarantor Obligations as limited by the foregoing proviso shall in all
events remain in full force and effect and be fully enforceable against such
Guarantor. The foregoing proviso is intended solely to preserve the rights of
the Administrative Agent hereunder against such Guarantor in such proceeding to
the maximum extent permitted by Applicable Insolvency Laws, and the foregoing
proviso does not constitute nor shall it be construed as an acknowledgment that
such Guarantor, the Borrower, or any other guarantor or any other Person has or
shall have any right or claim under Applicable Insolvency Laws in such
proceeding.
(a) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guaranty contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
(b) The guaranty contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and all the Guarantor
Obligations shall have been satisfied by indefeasible payment and performance
in full, no Letter of Credit shall be outstanding and the Commitments shall be
terminated, notwithstanding that from time to time during the term of the
Credit Agreement the Borrower may be free from any Borrower Obligations.
(c) No payment made by the Borrower, any of the Guarantors, any
other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time
in reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid
in full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
2.2 Right of Contribution. To the extent that the value (whether
determined under a standard of "fair value," "reasonably equivalent value" or
any other valuation standard under applicable law) of the benefit received by
any Guarantor by reason of the matters described in the preamble to this
Agreement is determined to be less than the Obligations incurred by such
Guarantor, then each other Guarantor agrees that such Guarantor shall have a
present right of contribution against such other Guarantor which right shall be
no less enforceable than the
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Obligations incurred by each Guarantor under this Agreement. To that end, in
the event any Guarantor is required, by reason of this Agreement, to pay an
amount in excess of the value of the benefit such Guarantor is deemed to have
received by reason of matters described in the preamble of this Agreement, the
remaining Guarantors jointly and severally agree to pay such Guarantor, upon
demand, the amount of such excess. Subject only to the provisions of the
following Section 2.3, such Guarantor shall be subrogated to any and all rights
of the Administrative Agent and the Lenders against the remaining Guarantors and
the Borrower to the extent of such excess payment.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guaranty or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower
on account of the Borrower Obligations are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall
be paid to any Guarantor on account of such subrogation rights at any time when
all of the Borrower Obligations shall not have been paid in full, such amount
shall be held by such Guarantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guaranty therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither
the Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guaranty contained in this Section 2 or any
property subject thereto.
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2.5 Guarantee Absolute and Unconditional. Each Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon the guaranty contained in this Section 2 or acceptance
of the guaranty contained in this Section 2; the Borrower Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guaranty contained in this Section 2; and all dealings between the Borrower and
any of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have
been had or consummated in reliance upon the guaranty contained in this Section
2. To the extent permitted by law, each Guarantor expressly waives all rights
it may now or in the future have under any statute (including, without
limitation, North Carolina General Statutes Section 26-7, et seq. or similar
law). Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or any of
the Guarantors with respect to the Borrower Obligations. Each Guarantor
understands and agrees that the guaranty contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guaranty of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Borrower Obligations or any other
collateral security therefor or guaranty or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or
any Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower or any other Person against the Administrative Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for
the Borrower Obligations, or of such Guarantor under the guaranty contained in
this Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guaranty for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to make any such demand, to pursue such
other rights or remedies or to collect any payments from the Borrower, any
other Guarantor or any other Person or to realize upon any such collateral
security or guaranty or to exercise any such right of offset, or any release of
the Borrower, any other Guarantor or any other Person or any such collateral
security, guaranty or right of offset shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
2.6 Reinstatement. The guaranty contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded
or must otherwise be restored or returned by the Administrative Agent or any
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a
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receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Administrative Agent's Office.
SECTION 3.GRANT OF SECURITY INTEREST
3.1 Pledge and Grant of Security Interest. Each Grantor hereby
assigns and transfers (to the extent allowable by Applicable Law) to the
Administrative Agent and hereby grants to the Administrative Agent, for the
ratable benefit of the Administrative Agent and the Lenders, a security
interest in, all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Material Contracts;
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property;
(l) all other property not otherwise described above;
(m) all books and records pertaining to the Collateral;
and
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(n) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing and all collateral
security and guaranties given by any Person with respect to any of the
foregoing.
Notwithstanding the foregoing and anything contained in any one or
more of the Loan Documents to the contrary, it is agreed that the
Grantors shall not be deemed to have granted a security interest in
the following: (i) any Copyright and Copyright Licenses and Trademark
and Trademark Licenses for any foreign country, except Canada, owned
by any Grantor, (ii) any of Leased Sites listed on Schedule 8.12(c) to
the Credit Agreement until such time as the approvals, authorizations,
or consents therefore have been obtained pursuant to Section 8.12(c)
of the Credit Agreement, (iii) any Leased Sites which do not appear on
Schedule 8.12(c), and (iv) any Material Contracts other than the
NETCOM Network Services Agreement and the WorldCom Network Services
Agreement and the Leased Sites (which shall be treated pursuant to
clause (ii) above). In addition, security interest granted hereby is
granted only to the extent that the grant by such Grantor in its
right, title and interest in any contract, agreement, instrument or
indenture (a) is not prohibited by such contract, agreement,
instrument or indenture without the consent of any other party
thereto, (b) would not give any other party to such contract,
agreement, instrument or indenture the right to terminate its
obligations thereunder, or (c) is permitted with consent if all
necessary consents to such grant of a security interest have been
obtained from the other parties thereto; provided that the foregoing
limitation shall not affect, limit, restrict or impair the grant by
such Grantor of a security interest pursuant to this Agreement in any
Account or any money or other amounts due or to become due under any
such contract, agreement, instrument or indenture.
3.2 Stock Powers. Concurrently with the execution of this
Agreement and the delivery to the Administrative Agent of each certificate
representing one or more shares of Pledged Stock, each Grantor shall deliver an
undated stock power covering such certificate, duly executed in blank by such
Grantor with, if the Administrative Agent so requests, signature guaranteed.
3.3 Control Agreement; Acknowledgement by Issuers.
(a) The Grantors hereby authorize and instruct each Issuer and
Partnership/LLC to comply, and each Issuer and Partnership/LLC hereby agrees to
so comply, with any instruction received thereby from the Administrative Agent
in accordance with the terms of this Agreement with respect to the Collateral,
without any consent or further instructions from such Grantor (or other
registered owner), and such Grantor agrees that such Issuer and Partnership/LLC
shall be fully protected in so complying. Each Issuer and Partnership/LLC
agrees that its agreement set forth in the preceding sentence shall be
sufficient to create in favor of the Administrative Agent, for the benefit of
the Lenders, "control" of the Partnership/LLC Interests within the meaning of
such term under Section 8-106(c) of the UCC. (Notwithstanding the foregoing,
nothing in this Agreement is intended or shall be construed to mean or imply
that the Partnership/LLC Interests constitute "securities" within the meaning
of such term under Section 8-102(a)(15) of the UCC or otherwise to limit or
modify the application of Section 8-103(c) of the UCC. Rather, the
Administrative Agent has requested that this provision be included in this
Agreement solely out of an abundance of
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caution in the event the Partnership/LLC Interests are, nevertheless, deemed to
constitute "securities" under the UCC.)
(b) Each Issuer and Partnership/LLC acknowledges receipt of a copy
of this Agreement and agrees to be bound thereby and to comply with the terms
thereof insofar as such terms are applicable to it. Each Issuer and
Partnership/LLC agrees to notify the Administrative Agent promptly in writing
of the occurrence of any of the events described in Section 5.7(d) of this
Agreement. Each Issuer and Partnership/LLC further agrees that the terms of
Section 6.6 of this Agreement shall apply to it with respect to all actions
that may be required of it under or pursuant to or arising out of Section 6.6
of this Agreement.
SECTION 4.REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective Extensions
of Credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Existence. Each Grantor is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
formation, has the power and authority to own its properties and to carry on
its business as now being and hereafter proposed to be conducted (and as
hereafter conducted at the time of any supplement to Schedule 6.1(a) to the
Credit Agreement required pursuant to Section 8.12 of the Credit Agreement) and
is duly qualified and authorized to do business in each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification and authorization, except where the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.
4.2 Binding Obligation.
(a) Each Grantor has the corporate right, power and authority to
execute, deliver and perform this Agreement and has taken all necessary
corporate action to authorize its execution, delivery and performance of, this
Agreement.
(b) This Agreement constitutes the legal, valid and binding
obligation of the Grantors enforceable in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors' rights in general and the
availability of equitable remedies.
(c) The execution, delivery and performance by the Grantors of
this Agreement will not violate any material provision of any Applicable Law or
Material Contract of any Grantor and will not result in the creation or
imposition of any Lien upon or with respect to any property of any Grantor
other than Liens arising under the Loan Documents.
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4.3 Title, No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of itself and the
Lenders pursuant to this Agreement and the other Liens permitted to exist on
the Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No
financing statement under the UCC of any state which names a Grantor as debtor
and which has not been terminated is on file or of record in any public office,
except such as have been filed in favor of the Administrative Agent, for the
ratable benefit of itself and the Lenders, pursuant to this Agreement or as are
permitted by the Credit Agreement.
4.4 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for
the ratable benefit of itself and the Lenders, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for unrecorded Liens
permitted by the Credit Agreement.
4.5 Perfection Certificate. All the information set forth in the
Perfection Certificate is true and correct as of the date hereof.
4.6 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified in the Perfection Certificate.
4.7 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods) are kept at the locations listed in
the Perfection Certificate.
4.8 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.9 Investment Property.
(a) The shares of Pledged Stock pledged by such Grantor hereunder
constitute all the issued and outstanding shares of all classes of the capital
stock of each Issuer owned by such Grantor; and the Partnership/LLC Interests
pledged by such Grantor hereunder constitute all of the outstanding ownership
interests in which the Grantor has any right, title or interest in each
Partnership/LLC in which it is a partner or member.
(b) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the applicable Grantor, enforceable in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect creditors' rights
generally and the availability of equitable remedies.
(c) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable and all of the Partnership/LLC
Interests have been duly and validly issued;
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(d) Such Grantor is the record and beneficial owner of, and has
good and marketable title to, the Investment Property pledged by it hereunder,
free of any and all Liens or options in favor of, or claims of, any other
Person, except the security interest created by this Agreement and Permitted
Liens.
(e) Except as contemplated by Section 6.7, and provided in
Section 4.13, no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of any
Grantor or any Issuer or any general or limited partner or member of any
Partnership/LLC), is required in connection with the execution, delivery,
performance, validity or enforceability against such Grantor of this Agreement,
except (i) as may be required in connection with the disposition of the Pledged
Stock and the Partnership/LLC Interests by laws affecting the offering and sale
of securities generally, (ii) filings with the United States Copyright Office,
the United States Patent and Trademark Office, the Canadian Trademarks Office,
or the Canadian Copyright Office and (iii) filings under the Uniform Commercial
Code;
(f) The Grantors have delivered to the Administrative Agent true
and complete copies of the partnership agreements and operating agreements, as
applicable, for each of the Partnerships/LLCs, which partnership agreements and
operating agreements are currently in full force and effect and have not been
amended or modified except as disclosed to the Administrative Agent in writing.
4.10 Accounts.
(a) No amount payable to such Grantor in excess of $50,000 under
or in connection with any Account is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent.
(b) The amounts represented by such Grantor to the Lenders from
time to time as owing to such Grantor in respect of the Accounts will at such
times be accurate in all material respects.
4.11 Litigation. Except as set forth on Schedule 6.1(u) to the
Credit Agreement, no actions, suits or proceedings before any arbitrator or
Governmental Authority are pending or, to the knowledge of the Grantors,
threatened by or against any Grantor or against any of their properties with
respect to this Agreement or any of the transactions contemplated hereby.
4.12 Solvency. As of the Closing Date, the Grantors, taken as a
whole, (i) have capital sufficient to carry on their business and transactions
and all business and transactions in which they are about to engage and are
able to pay their debts as they mature, and (ii) own property having a value,
both at fair valuation and at present fair saleable value, greater than the
amount required to pay their probable liabilities (including contingencies).
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4.13 Material Contracts.
(a) No consent of any party (other than such Grantor) to any
Material Contract is required, or purports to be required, in connection with
the execution, delivery and performance of this Agreement, except for those
excluded in Section 3.1.
(b) Each Material Contract is in full force and effect and
constitutes a valid and binding obligation of the applicable Grantor
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors' rights in general and the
availability of equitable remedies.
(c) No consent or authorization of, filing with or other act by or
in respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Material Contracts by any party thereto other than those which have been duly
obtained, made or performed, are in full force and effect and do not subject
the scope of any such Material Contract to any material adverse limitation,
either specific or general in nature.
(d) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Material Contracts is in default in
the performance or observance of any material terms thereof.
(e) The right, title and interest of such Grantor in, to and under
the Material Contracts are not subject to any defenses, offsets, counterclaims
or claims which such defenses, offsets, counterclaims or claims could
reasonably be expected to have a Material Adverse Effect.
(f) Such Grantor has delivered to the Administrative Agent a
complete and correct copy of each Material Contract requested by the
Administrative Agent, including all amendments, supplements and other
modifications thereto.
(g) No amount payable to such Grantor in excess of $50,000 under
or in connection with any Material Contract is evidenced by any Instrument or
Chattel Paper which has not been delivered to the Administrative Agent.
(h) None of the parties to any Material Contract is a Governmental
Authority.
4.14 Intellectual Property.
(a) Schedule 4 lists all material Intellectual Property owned by
such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property is
valid, subsisting, unexpired and enforceable, has not been abandoned and does
not infringe the intellectual property rights of any other Person.
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(c) Except as set forth in Schedule 4 on the date hereof, none of
the Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of,
or such Grantor's rights in, any Intellectual Property in any respect that
could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of
such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any Intellectual Property or such Grantor's ownership
interest therein, or (ii) which, if adversely determined, would have a Material
Adverse Effect on the value of any Intellectual Property.
4.15 Financing Statements. The Financing Statements naming each
Grantor as a debtor are in appropriate form and when filed in the offices
specified in the Perfection Certificate, the Security Interests will constitute
valid and perfected Security Interests in the Collateral of such Grantor, prior
to all other Liens and rights of others therein except for Permitted Liens (to
the extent that a security interest therein may be perfected by filing pursuant
to the UCC) and all filings and other actions necessary or desirable to perfect
and protect such Security Interests have been duly taken.
SECTION 5.COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Delivery of Instruments, Certificated Securities and Chattel
Paper. If any amount in excess of $50,000 payable under or in connection with
any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper, such Instrument, Certificated Security
or Chattel Paper shall be promptly delivered to the Administrative Agent, duly
indorsed in a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement.
5.2 Maintenance of Insurance.
(a) Such Grantor will maintain, with financially sound and
reputable companies, insurance policies (i) insuring the Inventory and
Equipment against loss by fire, explosion, theft, fraud and such other
casualties, including business interruption, as may be reasonably satisfactory
to the Administrative Agent in amounts and with deductibles at least as
favorable as those generally maintained by businesses of similar size engaged
in similar activities and (ii) insuring such Grantor, the Administrative Agent
and the Lenders against liability for hazards, risks and liability to persons
and property relating to such Inventory and Equipment, in amounts
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and with deductibles at least as favorable as those generally maintained by
businesses of similar size engaged in similar activities, such policies to be in
such form and having such coverage as may be reasonably satisfactory to the
Administrative Agent and the Lenders.
(b) All such insurance shall (i) name the Administrative Agent as
loss payee (to the extent covering risk of loss or damage to tangible property)
and as an additional insured as its interests may appear (to the extent
covering any other risk), (ii) provide that no cancellation, material reduction
in amount or material change in coverage thereof shall be effective until at
least 30 days after receipt by the Administrative Agent of written notice
thereof, and (iii) be reasonably satisfactory in all other respects to the
Administrative Agent.
(c) The Borrower shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
substantially concurrently with each delivery of the Borrower's audited annual
financial statements and such supplemental reports with respect thereto as the
Administrative Agent may from time to time reasonably request.
5.3 Payment of Obligations. Such Grantor will pay and discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the Collateral, except
that no such charge need be paid if the amount or validity thereof is currently
being contested in good faith by appropriate proceedings, reserves in conformity
with GAAP with respect thereto have been provided on the books of such Grantor
and such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.4 Maintenance of Perfected Security Interest, Further
Documentation.
(a) Such Grantor shall maintain the Security Interest created by
this Agreement as a perfected Security Interest having at least the priority
described in Section 4.4 and shall defend, in a manner consistent with
customary business practices, such Security Interest against the claims and
demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent and at the sole expense of such Grantor, such Grantor
will promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the UCC (or other
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similar laws) in effect in any jurisdiction with respect to the security
interests created hereby and (ii) in the case of Investment Property, Deposit
Accounts and any other relevant Collateral, taking any actions necessary to
enable the Administrative Agent to obtain "control" (within the meaning of the
applicable UCC ) with respect thereto.
(d) No Grantor shall (1) sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral, except as permitted
by the Credit Agreement, or (2) create or suffer to exist any Lien or other
charge or encumbrance upon or with respect to any of the Collateral to secure
indebtedness of any Person or entity, except as permitted by the Credit
Agreement.
(e) Each Grantor will comply in all material respects with all
Applicable Laws applicable to the Collateral or any part thereof or to the
operation of such Grantor's business.
5.5 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent of (a) all additional executed financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein and (b) if applicable, a written supplement to the
Perfection Certificate showing any additional location at which Inventory or
Equipment shall be kept:
(i) permit any of the material Inventory or Equipment to
be kept at a location other than those listed in the Perfection
Certificate;
(ii) change its jurisdiction of organization or the
location of its chief executive office from that referred to in the
Perfection Certificate or
(iii) change its name, identity or corporate structure to
such an extent that any financing statement filed by the
Administrative Agent in connection with this Agreement would become
misleading.
5.6 Notices. Such Grantor will advise the Administrative Agent a
promptly, in reasonable detail, of
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral which
would adversely affect the ability of the Administrative Agent to exercise any
of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a Material Adverse Effect on the Collateral or on the Security
Interests.
5.7 Investment Property.
(a) On or before the date of execution of this Agreement, the
Grantors shall use its best efforts to cause each of the partners and members
of each of the Partnerships/LLCs to acknowledge
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and consent to the pledge of the Partnership/LLC Interests pursuant to this
Agreement by signing the appropriate signature blocks attached hereto.
(b) The Grantors agree that as a partner or member in the
Partnerships/LLCs such Grantor will abide by, perform and discharge each and
every material obligation, covenant and agreement to be abided by, performed or
discharged by such Grantor under the terms of the partnership agreements and
operating agreements, as applicable, of the Partnerships/LLCs, at no cost or
expense to the Administrative Agent and the Lenders.
(c) Without the prior written consent of the Administrative Agent,
the Grantors will not (i) vote to enable, or take any other action to permit,
any Issuer or Partnership/LLC to issue any stock, partnership interests,
limited liability company interests or other equity securities of any nature or
to issue any other securities convertible into or granting the right to
purchase or exchange for any stock, partnership interests, limited liability
company interests or other equity securities of any nature of such Issuer or
Partnership/LLC, (ii) except as expressly provided to the contrary herein,
consent to any modification, extension or alteration of the terms of any
partnership agreement or operating agreement of the Partnerships/LLCs, (iii)
accept a surrender of any partnership agreement or operating agreement of any
of the Partnerships/LLCs or waive any breach of or default under any
partnership agreement or operating agreement of any of the Partnerships/LLCs by
any other party thereto, (iv) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, or (v) create,
incur or permit to exist any Lien or option in favor of, or any claim of any
Person with respect to, any of the Collateral, or any interest therein, except
for the Lien provided for by this Agreement and by Permitted Liens. The
Grantors will defend the right, title and interest of the Administrative Agent
in and to the Collateral against the claims and demands of all Persons
whomsoever.
(d) If such Grantor shall become entitled to receive or shall
receive any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the capital
stock of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent
of the Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the
Investment Property upon the liquidation or dissolution of any Issuer shall be
paid over to the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of
capital shall be made on or in respect of the Investment Property or any
property shall be distributed upon or with respect to the Investment Property
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of
the Administrative Agent, be delivered to the Administrative Agent to be held
by it hereunder as
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additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Investment Property shall be
received by such Grantor, such Grantor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Lenders, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.
(e) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as
such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.7(d) with respect to the Investment Property issued by it and (iii) the terms
of Section 6.3(c) and Section 6.7 shall apply to it, mutatis mutandis with
respect to all actions that may be required of it pursuant to Section 6.3(c) or
Section 6.7 with respect to the Investment Property issued by it.
5.8 Accounts.
(a) Other than in the ordinary course of business consistent with
its past practice, such Grantor will not (i) grant any extension of the time of
payment of any Account with a face amount in excess of $50,000, (ii) compromise
or settle any Account with a face amount in excess of $50,000 for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable for
the payment of any Account with a face amount in excess of $50,000, (iv) allow
any credit or discount whatsoever on any Account with a face amount in excess of
$50,000 or (v) amend, supplement or modify any Account with a face amount in
excess of $50,000 in any manner that could materially adversely affect the value
thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy
of each material demand, notice or document received by it that questions or
calls into doubt the validity or enforceability of any material Account.
5.9 Deposit Accounts.
(a) Each Grantor shall maintain on and after the Closing Date its
Deposit Accounts with a financial institution listed on Schedule 5 or at such
other financial institution reasonably acceptable to the Administrative Agent
and the Required Lenders, each of which financial institutions (other than
First Union) shall have executed a Depository Account Agreement in
substantially the form of Exhibit B hereto (any such institution a "Controlled
Depository"). Upon the occurrence or during the continuance of a Default or
Event of Default, whenever any Grantor shall receive any monies, checks or any
other items of payment relating to, or proceeds of, Accounts, such Grantor
agrees with the Administrative Agent and Lenders that it will, consistent with
Grantor's business practice, deposit all such items of payment into a Deposit
Account at First Union or at a Controlled Depository. Upon receipt, such
Grantor shall hold such items of payment in trust for the Administrative Agent
and Lenders and as property of the Administrative Agent and Lenders, separate
from the other funds of such Grantor, until such Grantor shall deposit the same
in a Depository Account as provided above.
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(b) Upon the occurrence or during the continuance of a Default or
Event of Default, each Grantor shall forward to the Administrative Agent, on
the last Business Day of each week, deposit slips related to all such items of
payment received by the Grantor during such week, and, if requested by the
Administrative Agent, copies of such checks and other items, together with a
statement showing the application of all payments on the Accounts during such
week and a collection report with regard thereto in form and substance
satisfactory to the Administrative Agent.
(c) The Administrative Agent shall have the right (but not the
obligation) to apply any funds held in any Deposit Account to the repayment of
any Obligations then due and payable in the order set forth in Section 4.5 of
the Credit Agreement.
(d) Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right in accordance with
Section 6 to transfer or direct the transfer of the balance of each Deposit
Account to the Collateral Account.
5.10 Material Contracts.
(a) Such Grantor will perform and comply in all material respects
with all its material obligations under the Material Contracts.
(b) Such Grantor will not amend, modify, terminate or waive any
material provision of any Material Contract in any manner which could
reasonably be expected to materially adversely affect the value of such
Material Contract as Collateral.
(c) Such Grantor will exercise promptly and diligently each and
every material right which it may have under each Material Contract (other than
any right of termination).
(d) Such Grantor will deliver to the Administrative Agent a copy
of each material demand, notice or document received by it relating in any way
to any Material Contract that questions the validity or enforceability of such
Material Contract.
5.11 Intellectual Property.
(a) Such Grantor (either itself or through licensees) will (i)
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force
free from any claim of abandonment for non-use, (ii) maintain as in the past
the quality of products and services offered under such material Trademark,
(iii) use such material Trademark with the appropriate notice of registration
and all other notices and legends required by Applicable Laws, (iv) not adopt
or use any ▇▇▇▇ which is confusingly similar or a colorable imitation of such
material Trademark unless the Administrative Agent, for the ratable benefit of
itself and the Lenders, shall obtain a perfected security interest in such ▇▇▇▇
pursuant to this Agreement; and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
material Trademark may become invalidated or impaired in any way.
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(b) Such Grantor (either itself or through licensees) will not do
any act; or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.
(d) Such Grantor (either itself or through licensees) will not do
any act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office or any
court or tribunal in any country) regarding such Grantor's ownership of, or the
validity of, any material Intellectual Property or such Grantor's right to
register the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, such Grantor shall
report such filing to the Administrative Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon request
of the Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may reasonably request to evidence the Administrative
Agent's and the Lenders' security interest in any Copyright, Patent or
Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby.
(g) With respect to the material Intellectual Property, such
Grantor will take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of the material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
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Administrative Agent after it learns thereof and ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and
to recover any and all damages for such infringement, misappropriation or
dilution.
5.12 Inventory. Each Grantor will maintain each item of Equipment
in good working order and condition (reasonable wear and tear and obsolescence
excepted), and within a reasonable time will make or cause to be made all
maintenance, service and repairs necessary for such purpose and will promptly
furnish to the Administrative Agent a statement respecting any material loss or
damage to any of the Equipment.
5.13 Regulatory Approvals. Each Grantor will, at its expense,
promptly execute and deliver, or cause the execution and delivery of, all
applications, certificates, instruments, registration statements, and all other
documents and papers the Administrative Agent may reasonably request and as may
be required by law in connection with the obtaining of any consent, approval,
registration, qualification, or authorization of any Person deemed necessary or
appropriate for the effective exercise of any rights under this Agreement.
Without limiting the generality of the foregoing, if an Event of Default shall
have occurred and be continuing, each Grantor shall take any action which the
Administrative Agent may reasonably request in order to transfer and assign to
the Administrative Agent, or to such one or more third parties as the
Administrative Agent may designate, or to a combination of the foregoing, each
Communications License or other Governmental Approval. To enforce the
provisions of this Section, upon the occurrence and during the continuance of an
Event of Default, the Administrative Agent is empowered to request the
appointment of a receiver from any court of competent jurisdiction. Such
receiver shall be instructed to seek from the Governmental Authority an
involuntary transfer of control of each such Communications License or other
Governmental Approval for the purpose of seeking a bona fide purchaser to whom
control will ultimately be transferred. Each Grantor hereby agrees to authorize
such an involuntary assignment or transfer of control upon the request of the
receiver so appointed and, if such Grantor shall refuse to authorize the
transfer, its approval may be required by the court. Upon the occurrence and
continuance of an Event of Default, such Grantor shall further use its
commercially reasonable to assist in obtaining approval of any Governmental
Authority, if required, for any action or transactions contemplated by this
Agreement, including, without limitation, the preparation, execution and filing
with any Governmental Authority of the assignor's or transferor's portion of any
application or applications for consent to the assignment of any Communications
License or other Governmental Approval or transfer of control necessary or
appropriate under the rules and regulations of any Governmental Authority for
the approval of the transfer or assignment of any portion of the assets of such
Grantor, together with any Communications Licenses or other Governmental
Approval. Because such Grantor agrees that the Administrative Agent's remedy at
law for failure of such Grantor to comply with the provisions of this Section
would be inadequate and that such failure would not be adequately compensable in
damages, such Grantor agrees that the covenants contained in this Section may be
specifically enforced, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants.
Notwithstanding the foregoing, the Lenders and the Administrative Agent
understand and agree that the assignment or transfer of control of some of the
Communications Licenses requires advance approval by the FCC.
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SECTION 6.REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Accounts.
(a) The Administrative Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Administrative Agent may reasonably require
in connection with such test verifications. At any time and from time to time,
upon the Administrative Agent's request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
reasonably satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Accounts, under the Administrative Agent's direction and
control, and the Administrative Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
(c) At the Administrative Agent's reasonable request, each Grantor
shall deliver to the Administrative Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the material Accounts, including, without limitation, all original orders,
invoices and shipping receipts.
6.2 Communications with Obligors, Grantors Remain Liable.
(a) The Administrative Agent in its own name or in the name of
others may at any time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Accounts and parties to
the Material Contracts to verify with them to the Administrative Agent's
satisfaction the existence, amount and terms of any Accounts or Material
Contracts.
(b) Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on the Accounts and parties to the Material Contracts
that the Accounts and the Material Contracts have been assigned to the
Administrative Agent for the ratable benefit of itself and the Lenders and that
payments in respect thereof shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Accounts and Material Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the Administrative Agent nor any Lender shall
have any obligation or liability under any Account (or any agreement giving
rise thereto) or Material Contract by reason of or arising out of this
Agreement or the receipt by the Administrative Agent or any Lender of any
payment relating thereto, nor shall the Administrative Agent or any Lender be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Account (or any agreement giving rise thereto) or Material
Contract to make any payment, to
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make any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
(d) Anything herein to the contrary notwithstanding, (a) each
Grantor shall remain liable to perform all of its duties and obligations as a
partner or member of the Partnerships/LLCs to the same extent as if this
Agreement had not been executed, (b) the exercise by the Administrative Agent
or any Lender of any of its rights hereunder shall not release such Grantor
from any of its duties or obligations as a partner or member of the
Partnerships/LLCs, and (c) neither the Administrative Agent nor any Lender
shall have any obligation or liability as a partner or member of the
Partnerships/LLCs by reason of this Agreement.
6.3 Pledged Stock.
(a) Unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have given notice to the relevant
Grantor of the Administrative Agent's intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive
all cash dividends paid in respect of the Pledged Stock, Partnership/LLC
Interests and all payments made in respect of the Pledged Notes, in each case
paid in the normal course of business of the relevant Issuer and consistent
with past practice, to the extent permitted in the Credit Agreement, and to
exercise all voting and corporate, company and partnership rights with respect
to the Investment Property; provided, however, that no vote shall be cast or
corporate, company and partnership right exercised or other action taken which,
in the Administrative Agent's reasonable judgment, would impair the Collateral
or which would be inconsistent with or result in any violation of any provision
of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends paid in respect of the Pledged
Stock, partnership and membership distributions in respect of the
Partnership/LLC Interests or other Proceeds paid in respect of the Investment
Property and make application thereof to the Obligations in the order set forth
in Section 4.5 of the Credit Agreement, and (ii) any or all of the Investment
Property shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise
(A) all voting, corporate and other rights pertaining to such Investment
Property at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (B) any and all rights of conversion, exchange and subscription
and any other fights, privileges or options pertaining to such Investment
Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by any Grantor or the Administrative Agent of any
right, privilege or option pertaining to such Investment Property, and in
connection therewith, the right to deposit and deliver any and all of the
Investment Property with any committee, depositary, transfer agent, registrar
or other designated agency upon such terms and conditions as
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the Administrative Agent may determine), all without liability except to account
for property actually received by it; but the Administrative Agent shall have no
duty to any Grantor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of
any Investment Property pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Administrative Agent in writing that
(x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Investment Property directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Lenders specified in
Section 6.1 with respect to payments of Accounts, if an Event of Default shall
occur and be continuing, all Proceeds received by any Grantor consisting of
cash, checks and other near-cash items shall be held by such Grantor in trust
for the Administrative Agent and the Lenders, segregated from other funds of
such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Administrative Agent
and the Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. In accordance with Section 4.5 of
the Credit Agreement, at such intervals as may be agreed upon by the Borrower
and the Administrative Agent, or, if an Event of Default shall have occurred
and be continuing, at any time at the Administrative Agent's election, the
Administrative Agent may apply all or any part of Proceeds held in any
Collateral Account in payment of the Obligations in such order as the
Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time by
the Administrative Agent to the Borrower or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur
and be continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the UCC or any other applicable law. Without limiting the generality of the
foregoing, the
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Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any
part of the Collateral so sold, free of any right or equity of redemption in
any Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Administrative Agent shall apply the net proceeds
of any action taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees
and disbursements, to the payment in whole or in part of the Obligations, in
the order set forth in Section 4.5 of the Credit Agreement, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(l)(c) of the UCC, need the Administrative Agent account for the surplus,
if any, to any Grantor. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
6.7 Registration Rights.
(a) If the Administrative Agent shall determine to exercise its
right to sell any or all of the Pledged Stock pursuant to Section 6.6, and if
in the opinion of the Administrative Agent it is necessary or advisable to have
the Pledged Stock, or that portion thereof to be sold, registered under the
provisions of the Securities Act, the relevant Grantor will use its best
efforts to cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as
may be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering
of the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of
the Administrative Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules
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and regulations of the Securities and Exchange Commission applicable thereto.
Each Grantor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11 (a) of the Securities
Act.
(b) Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other Applicable Laws. Each Grantor
further agrees that a breach of any of the covenants contained in this Section
6.7 will cause irreparable injury to the Administrative Agent and the Lenders,
that the Administrative Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.
6.8 Waiver, Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of the
UCC. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.
(a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement,
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and, without limiting the generality of the foregoing, each Grantor hereby gives
the Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Account or Material Contract or with respect to
any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Account or Material Contract or
with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to
evidence the Administrative Agent's and the Lenders' security interest
in such Intellectual Property and the goodwill and general intangibles
of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof,
(iv) execute, in connection with any sale provided for in
Section 6.6 or Section 6.7, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
and
(v) (1) direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; (4)
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate; (7) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which
any such Copyright, Patent or Trademark pertains), for such term or
terms, on such conditions, and in such manner, as the Administrative
Agent shall in its sole discretion determine; and (8) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute
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owner thereof for all purposes, and do, at the Administrative Agent's
option and such Grantor's expense, at any time, or from time to time,
all acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing and the Administrative
Agent shall give such Grantor not less than ten (10) days notice of such sale
or disposition, except for the sale or disposition of perishable goods.
(b) If any Grantor fails to materially perform or comply with any
of its agreements contained herein, the Administrative Agent, at its option,
but without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the highest rate per annum
at which interest would then be payable on any category of past due Base Rate
Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the UCC or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. Neither the Administrative Agent,
any Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative
Agent and the Lenders hereunder are solely to protect the Administrative
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any Lender to exercise any such powers.
The Administrative Agent and the Lenders shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
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7.3 Execution of Financing Statements. Pursuant to Section 9-402
of the UCC and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the
Administrative Agent determines appropriate to perfect the security interests
of the Administrative Agent under this Agreement. A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement to make any inquiry respecting such
authority.
SECTION 8.MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 13.11 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 13.1 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither
the Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default. No failure to exercise, nor any delay in
exercising on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
8.4 Enforcement Expenses, Indemnification.
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(a) Each Guarantor agrees to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in collecting
against such Guarantor under the guaranty contained in Section 2 or otherwise
enforcing or preserving any rights under this Agreement and the other Loan
Documents to which such Guarantor is a party, including, without limitation,
the reasonable fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or
other taxes which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from any and all liabilities, losses, damages,
penalties, costs and expenses in connection with this Agreement to the extent
the Borrower would be required to do so pursuant to Section 13.2 of the Credit
Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.
8.5 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Agreement
("Disputes"), between or among parties to this Agreement shall be resolved by
binding arbitration as provided herein. Institution of a judicial proceeding
by a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions, claims arising from Loan
Documents executed in the future, or claims concerning any aspect of the past,
present or future relationships arising out of or connected with this
Agreement. Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. The expedited procedures set
forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to
claims of less than $1,000,000. All applicable statutes of limitation shall
apply to any Dispute. A judgment upon the award may be entered in any court
having jurisdiction. Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one-hundred and twenty
(120) days after such demand. These time limitations may not be extended
unless a party hereto shows cause for extension and then such extension shall
not exceed a total of sixty (60) days. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest
court of general jurisdiction, state or federal, of the state where the hearing
will be conducted.
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(b) Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND EACH GRANTOR HEREBY ACKNOWLEDGE THAT BY
AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR
OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
8.6 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each Grantor, the Administrative Agent and the
Lenders, all future holders of the Notes, and their respective successors and
assigns; provided that no Grantor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
each Lender.
8.7 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender at any time and from time to time pursuant
to Section 13.3 of the Credit Agreement, without notice to such Grantor or any
other Grantor, any such notice being expressly waived by each Grantor, to
set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Grantor to the Administrative Agent or such
Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such Grantor
promptly of any such set-off and the application made by the Administrative
Agent or such Lender of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Administrative Agent and each Lender under this Section 8.7 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agent or such Lender may have.
8.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.9 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.
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8.10 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.11 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.
8.12 GOVERNING LAW. THIS AGREEMENT UNLESS OTHERWISE SET FORTH
THEREIN, SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR
CHOICE OF LAW PRINCIPLES THEREOF.
8.13 Consent to Jurisdiction. Each Grantor hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located
in Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, any rights or
obligations hereunder, or the performance of such rights and obligations. Each
Grantor hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement, any
rights or obligations hereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner specified in
Section 8.2. Nothing in this Section 8.13 shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by Applicable Law or affect the right of the Administrative Agent or
any Lender to bring any action or proceeding against each Grantor or its
properties in the courts of any other jurisdictions.
8.14 Acknowledgments. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement;
(b) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement, and the relationship between the
Grantors, on the one hand, and the Administrative Agent and Lenders,
on the other hand, in connection herewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or otherwise
exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
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8.15 Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 8.12 of the
Credit Agreement shall become a Grantor and a Guarantor for all purposes of
this Agreement upon execution and delivery by such Subsidiary of a Guaranty and
Collateral Agreement Supplement in the form of Annex I hereto.
8.16 Releases.
(a) At such time as the Loans, the Reimbursement Obligations and
the other Obligations shall have been paid in full, the Commitments have been
terminated and no Letters of Credit shall be outstanding, the Collateral shall
be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Grantors. At the request and
sole expense of any Grantor following any such termination, the Administrative
Agent shall deliver to such Grantor any Collateral held by the Administrative
Agent hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral. At the request and sole expense of the
Borrower, a Guarantor shall be released from its obligations hereunder in the
event that all the capital stock of such Guarantor shall be sold, transferred
or otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Guarantor and the terms of the
sale or other disposition in reasonable detail, including the price thereof and
any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
GRANTOR:
MINDSPRING ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Title: CFO
----------------------
State of Georgia )
:
County of ▇▇▇▇▇▇ )
This ____ day of February, 1999, personally came before me, K. ▇▇▇▇
▇▇▇▇▇▇▇, Notary Public for said County and State, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, who, being
by me duly sworn, says that he is CFO of MindSpring Enterprises, Inc., a
corporation, and that the seal affixed to the foregoing instrument in writing is
the corporate seal of said company, and that said writing was signed and sealed
by him in behalf of said corporation by its authority duly given, and the said
CFO acknowledged the said writing to be the act and deed of said corporation.
[NOTARIAL SEAL]
/s/ K. ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Notary Public
My commission expires 5/20, 2001
[Guaranty and Collateral Agreement]
42
SECURED PARTY
FIRST UNION NATIONAL BANK,
as Administrative Agent
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
Name: C. ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Title: Vice President
---------------------
State of North Carolina )
:
County of Mecklenburg )
This 16th day of February, 1999, personally came before me, ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Notary Public for said County and State, C. ▇▇▇▇ ▇▇▇▇▇▇▇, who,
being by me duly sworn, says that he is Vice President of First Union National
Bank, a National Banking Association, and that the seal affixed to the foregoing
instrument in writing is the corporate seal of said company, and that said
writing was signed and sealed by him in behalf of said corporation by its
authority duly given, and the said Vice President acknowledged the said writing
to be the act and deed of said corporation.
[NOTARIAL SEAL]
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Notary Public
My commission expires 1/31, 2003
[Guaranty and Collateral Agreement]
43
Schedule 1
to Guaranty and
Collateral Agreement
NOTICE ADDRESSES OF GUARANTORS
44
Schedule 2
to Guaranty and
Collateral Agreement
DESCRIPTION OF INVESTMENT PROPERTY
PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares
PLEDGED NOTES:
Issuer Payee Principal Amount
PARTNERSHIPS/LLC:
Name of Entity Type of Entity Type of Ownership % Ownership
45
Schedule 3
to Guaranty and
Collateral Agreement
MATERIAL CONTRACTS
46
Schedule 4
to Guaranty and
Collateral Agreement
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
47
Schedule 5
to Guaranty and
Collateral Agreement
DEPOSIT ACCOUNTS AND FINANCIAL INSTITUTIONS
Financial Address of Account
Grantor Institution Account No. Financial Institution Purpose
48
Annex I to
the Guaranty and Collateral Agreement
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guaranty
and Collateral Agreement dated as of February 17, 1999 (the "Agreement"), made
by the Grantors party thereto for the benefit of First Union National Bank, as
Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Administrative Agent promptly
in writing of the occurrence of any of the events described in Section 5.7(d)
of the Agreement.
3. The terms of Sections 6.3(c) and Section 6.7 of the Agreement
shall apply to it, mutatis mutandis, with respect to all actions that may be
required of it pursuant to Section 6.3(c) or Section 6.7 of the Agreement.
[NAME OF ISSUER]
By:
----------------------------------
Name:
Title:
Address for Notices:
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Fax:
49
Annex II to the
Guaranty and Collateral Agreement
GUARANTY AND COLLATERAL AGREEMENT SUPPLEMENT (this
"Supplement"), dated as of ____________, ______, made by
________________, a ________________ corporation (the "Additional Grantor"), in
favor of FIRST UNION NATIONAL BANK, as administrative agent (in such capacity,
the "Administrative Agent") for the banks and other financial institutions (the
"Lenders") parties to the Credit Agreement referred to below. All capitalized
terms not defined herein shall have the meaning ascribed to them in such Credit
Agreement.
W I T N E S S E T H:
WHEREAS, MINDSPRING ENTERPRISES, INC. (the "Borrower"), the
Lenders, FIRST UNION CAPITAL MARKETS CORP., as Arranger, and the Administrative
Agent have entered into a Credit Agreement, dated as of February 17, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower
has entered into the Guaranty and Collateral Agreement, dated as of February
17, 1999 (as amended, supplemented or otherwise modified, the "Guaranty and
Collateral Agreement") in favor of the Administrative Agent for the benefit of
the Lenders;
WHEREAS, the Additional Grantor as an indirect or direct
Subsidiary of the Borrower will derive indirect or direct benefit from the
Extension of Credit provided in the Credit Agreement and the Credit Agreement
requires the Additional Grantor to become a party to the Guaranty and
Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Supplement in order to become a party to the Guaranty and
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guaranty and Collateral Agreement. By executing and
delivering this Supplement, the Additional Grantor, as provided in Section 8.15
of the Guaranty and Collateral Agreement, hereby becomes a party to the
Guaranty and Collateral Agreement as a Grantor and Guarantor thereunder with
the same force and effect as if originally named therein as a Grantor and
Guarantor and, without limiting the generality of the foregoing, hereby
expressly assumes all obligations and liabilities of a Grantor and Guarantor
thereunder. The information set forth in Annex 1-A hereto is hereby added to
the information set forth in the Schedules to the Guaranty and Collateral
Agreement. The Additional Grantor hereby represents and warrants that each of
the representations and warranties contained in Section 4 of the Guaranty and
Collateral Agreement is true and correct on and as the date hereof (after
giving effect to this Supplement) as if made on and as of such date.
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2. GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES
THEREOF.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
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Name:
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Title:
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Annex 1-A to
Guaranty and Agreement Supplement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 4
Supplement to Schedule 5
52
EXHIBIT A
to
Guaranty and Collateral Agreement
Form of Perfection Certificate
Reference is made to that certain Guaranty and Collateral Agreement
dated as of _________ ___, 1999, executed by the entities set forth on the
signature pages thereto (collectively, the "Grantors" and each, a "Grantor"),
in favor of FIRST UNION NATIONAL BANK, as Administrative Agent (the "Agent"),
for the ratable benefit of the Administrative Agent and the lenders who are or
may become a party to the Credit Agreement referred to below (collectively, the
"Lenders"). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Credit Agreement dated as of ____________
____, 1999, by and among MINDSPRING ENTERPRISES, INC., as Borrower, the Lenders
and the Administrative Agent (as amended, restated, or otherwise modified, the
"Credit Agreement").
The Grantors hereby certify to the Administrative Agent and each
Lender as follows:
1. Names, etc.
(a) The exact name of each Grantor as it appears in its
Articles or Certificate of Incorporation is as follows:
(b) Except as set forth in the Perfection Certificate, no
Grantor has changed its identity structure in any way within the past five
years.
(c) The following is a list of all other names (including
trade names or similar appellations) used by any Grantor or any of their
respective divisions or other business units at any time during the past five
years:
(d) The taxpayer identification numbers of the Grantors
are as follows:
2. Current Locations.
(a) The chief executive offices of each of the Grantors are
located at the following addresses:
Mailing Address County State
(b) The following are the only locations at which the
Grantors maintain any books or records relating to any Accounts:
Mailing Address County State
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(c) The following are all the locations not identified above
where the Grantors maintain any Inventory or Equipment:
3. Unusual Transactions. Other than as set forth below, all
Accounts have been originated by the Grantors and all Inventory and Equipment
have been acquired by the Grantors in the ordinary course of business.
4. Reliance. The undersigned acknowledges that the
Administrative Agent and the Lenders are entitled to rely and have, in fact,
relied on the information contained herein, and any successor or assign of the
Agent or the Lenders is entitled to rely on the information contained therein.
IN WITNESS WHEREOF, the undersigned have executed this Perfection
Certificate, this ____ day of ________________, 1999.
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EXHIBIT B
to
Guaranty and Collateral Agreement
Form of Depository Account Agreement
[Name and Address of Bank]
_____________, 19__
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: C. ▇▇▇▇ ▇▇▇▇▇▇▇
Re: Credit Agreement dated as of February 17, 1999 (as amended,
restated, supplemented or otherwise modified, the "Credit
Agreement"), by and among MINDSPRING ENTERPRISES, INC., a
corporation organized under the laws of Delaware, as borrower
(the "Borrower"), the Lenders party thereto, FIRST UNION
CAPITAL MARKETS CORP., as Arranger, and FIRST UNION NATIONAL
BANK, as Administrative Agent (the "Administrative Agent") for
such Lenders
Ladies and Gentlemen:
The company or companies set forth on the signature page hereto
(collectively, the "Company") maintains with us (hereinafter referred to as the
"Bank") the accounts and lockboxes set forth on Schedule I hereto
(collectively, the "Deposit Accounts"), which are all the accounts and
lockboxes of the Company maintained with the Bank. By its execution hereof,
the Company has confirmed to the Bank that all amounts and other items in the
Deposit Accounts are and shall be deemed proceeds of the Accounts subject to
the lien of the Administrative Agent granted pursuant to the Guaranty and
Collateral Agreement referred to in the Credit Agreement.
Unless and until an Account Notice (as defined below) is received by
the Bank in accordance with the provisions of this letter, the Company shall
have the right to withdraw and deposit funds, instruments and other items in
the Deposit Accounts by duly authorized signatories in such amounts and with
such frequency as it chooses, and free of any direction by the Administrative
Agent. The Administrative Agent may, at its sole discretion, terminate the
Company's signing authority and rights to withdraw or transfer funds and other
items from the Deposit Accounts by delivery to the Company and the Bank of a
written notice thereof (an "Account Notice"). Such Account Notice shall be
effective upon receipt by the Bank.
From and after the date an Account Notice is received by the Bank and
until such Account Notice is withdrawn by the Administrative Agent or the
termination of this letter (i) withdrawals
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from the Deposit Accounts by the Company shall be prohibited and may be made
only by direction of the Administrative Agent by way of wire transfer or
electronic funds transfer to such account or accounts ("Administrative Agent's
Account") as the Administrative Agent shall notify to the Bank, (ii) the Bank
shall use its reasonable efforts to transfer to Administrative Agent's Account
all collected funds in the Deposit Accounts before noon each business day and
(iii) the Company shall have no right to direct any such transfers.
The Bank agrees that it will not exercise or claim any right of
setoff against, or any security interest or any banker's lien in, the Deposit
Accounts or in monies or items deposited or to be deposited in the Deposit
Accounts. The parties hereto agree that the Deposit Accounts will be subject
to the exercise of such rights by the Administrative Agent. The Bank waives
and releases to the Administrative Agent any right or claim which it may have
in any of the funds or other items at any time deposited or to be deposited in
the Deposit Accounts.
At the end of each statement period, the Bank's regular statement
covering the deposits to and withdrawals from the Deposit Accounts will be sent
to the Company, with a copy to the Administrative Agent. The Administrative
Agent will have no liability to the Bank or the Company for any costs, fees or
charges under the Bank's usual and customary procedures or under this letter.
All fees and other charges incurred in connection with the Deposit Accounts
will be payable by the Company.
The Company may not terminate this letter as long as any of the
Company's Obligations (as defined in the Credit Agreement) to the
Administrative Agent or any Lender under the Credit Agreement are outstanding
and unpaid and any Lender has any obligation to make Loans or has other
obligations to the Company, but the Company may thereafter terminate this
letter by notice to the Bank, provided any such termination notice is also
signed by the Administrative Agent. The Administrative Agent will exercise its
good faith efforts to sign any such termination notice prepared by the Company
within three business days after receipt by the Administrative Agent. Any
attempt to terminate this letter by the Company without the prior written
consent of the Administrative Agent shall be void.
By its execution hereof, the Company agrees to be bound by the
provisions of this letter and represents and warrants that it has no other
accounts or lockboxes with the Bank other than the Deposit Accounts, and
covenants and agrees that any lockboxes or accounts opened by the Company with
the Bank after the date hereof will be added to Schedule 1 of this letter and
be subject upon the establishment thereof to the provisions hereof.
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All notices, demands, requests, and other communications required or
permitted hereunder shall be in writing and shall be effective and deemed to
have been received (i) on the date of delivery if delivered by hand or sent by
telecopy, (ii) on the next business day if sent by recognized overnight courier
service and (iii) on the third business day following the date sent by
certified mail, return receipt requested. Notices to any party shall be sent
to it at the addresses set forth on the first and signature pages hereto, as
applicable, or any other address as any party may from time to time designate
by written notice to the others as herein required.
Very truly yours,
[THE BANK]
By:
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Name:
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Title:
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FIRST UNION NATIONAL BANK,
as Administrative Agent
By:
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Name:
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Title:
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Agreed to and Accepted:
MINDSPRING ENTERPRISES, INC.
By:
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Name:
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Title:
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Attention:
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57
Schedule 1
[Insert Account and Lockboxes Descriptions]
