EXHIBIT 10.10
EXECUTION COPY
NON-SHARED COLLATERAL SECURITY AGREEMENT
dated as of July 30, 1999 and amended and restated as
of April 29, 2003 (as amended, supplemented or
otherwise modified from time to time, this
"Agreement"), among ALLIED WASTE NORTH AMERICA, INC.,
a Delaware corporation (the "Borrower"), ALLIED WASTE
INDUSTRIES, INC., a Delaware corporation ("Allied
Waste"), each Subsidiary listed on Schedule I hereto
(each such Subsidiary individually, a "Subsidiary
Grantor" and collectively, the "Subsidiary Grantors";
the Subsidiary Grantors, Allied Waste and the
Borrower are referred to collectively herein as the
"Grantors") and JPMORGAN CHASE BANK, a New York
banking corporation ("JPMCB"), as collateral agent
(in such capacity, the "Collateral Agent") for the
Secured Parties (as defined herein).
Reference is made to (a) the Credit Agreement dated as of July
21, 1999 and amended and restated as of April 29, 2003 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, Allied Waste, the lenders from time to time party thereto (the
"Lenders"), and JPMCB, as administrative agent and collateral agent for the
Lenders, (b) the Parent Guarantee Agreement dated as of July 30, 1999 and
amended and restated as of April 29, 2003 (as amended, supplemented or otherwise
modified from time to time, the "Parent Guarantee Agreement"), between Allied
Waste and the Collateral Agent and (c) the Subsidiary Guarantee Agreement dated
as of July 30, 1999 and amended and restated as of April 20, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiary Guarantee
Agreement"), among the Subsidiary Grantors, certain other Subsidiaries of Allied
Waste and the Collateral Agent. Reference is also made to the Non-Shared
Collateral Security Agreement dated as of July 30, 1999 (as amended,
supplemented or otherwise modified from time to time prior to the Restatement
Effective Date, the "Original Non-Shared Collateral Security Agreement") among
the Borrower, Allied Waste, the Subsidiaries listed on Schedule I thereto and
the Subsidiaries that became parties thereto as provided in Section 6.16 thereof
(collectively, the "Original Grantors") and the Collateral Agent, pursuant to
which the Original Grantors agreed to secure the Credit Agreement Senior
Obligations (as defined in the Original Non-Shared Collateral Security
Agreement). The Original Grantors and the Collateral Agent now wish to amend and
restate the Original Non-Shared Collateral Security Agreement as set forth
herein to secure the obligations of the Borrower under the Credit Agreement. The
Original Non-Shared Collateral Security Agreement shall be amended and restated
in its entirety in the form hereof as of the Restatement Effective Date.
The Lenders have agreed to make Loans to the Borrower, and the
Issuing Banks have agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of Allied Waste and the Subsidiary
Grantors has agreed to guarantee, among other things, all the obligations of the
Borrower to the Lenders under the Credit Agreement. The obligations of the
Lenders to make Loans and of the Issuing Banks to issue Letters of Credit are
conditioned upon, among other things, the execution and delivery by the
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Grantors of an agreement in the form hereof to secure (a) the due and punctual
payment by the Borrower of (i) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Borrower to the Secured Parties under the Credit Agreement and the other
Loan Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Borrower to the Lenders or
relating to the Loans under or pursuant to the Credit Agreement and the other
Loan Documents, (c) the due and punctual payment and performance of all the
covenants, agreements, obligations and liabilities of each Loan Party under or
pursuant to this Agreement and the other Loan Documents and (d) unless otherwise
agreed upon in writing by the applicable party thereto, all obligations,
monetary or otherwise, of any Loan Party under each Hedging Agreement entered
into with any counterparty that was (i) a Lender or an Affiliate of a Lender at
the time such Hedging Agreement was entered into or (ii) a lender or an
Affiliate of a lender under the Original Credit Agreement at the time such
Hedging Agreement was entered into; provided, however, that the obligations
under this clause (d)(ii) shall include only those obligations under any Hedging
Agreement that was in effect prior to the Restatement Effective Date, and only
in the form as in effect on the Restatement Effective Date, and shall not
include any obligations under such Hedging Agreement to the extent such Hedging
Agreement is extended, amended or renewed on or after the Restatement Effective
Date (all the monetary and other obligations described in the preceding clauses
(a) through (d) being collectively called the "Obligations").
Accordingly, the Grantors and the Collateral Agent, on behalf
of itself and each Secured Party (and each of their successors or assigns),
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the
context otherwise requires, all capitalized terms used herein but not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement, the Parent Guarantee Agreement and the Subsidiary Guarantee
Agreement, as applicable. All capitalized terms used in this Agreement and
defined in the New York UCC (as defined herein) and not otherwise defined in
this Agreement, the Credit Agreement, the Parent Guarantee Agreement or the
Subsidiary Guarantee Agreement shall have the meanings specified therein; the
term "instrument" shall have the meaning specified in Article 9 of
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the New York UCC. The rules of construction and interpretation specified in
Section 1.03 of the Credit Agreement also apply to this Agreement.
SECTION 1.02. Definition of Certain Terms Used Herein. As used
herein, the following terms shall have the following meanings:
"Accounts Receivable" shall mean all Accounts and all right,
title and interest in any returned goods, together with all rights, titles,
securities and guarantees with respect thereto, including any rights to stoppage
in transit, replevin, reclamation and resales, and all related security
interests, liens and pledges, whether voluntary or involuntary, in each case
whether now existing or owned or hereafter arising or acquired.
"Collateral" shall have the meaning assigned to such term in
Section 2.01 of this Agreement.
"Copyright License" shall mean any written agreement, now or
hereafter in effect, granting any right to any third party under any Copyright
now or hereafter owned by any Grantor or that such Grantor otherwise has the
right to license, or granting any right to such Grantor under any Copyright now
or hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all copyright rights in any work subject
to the copyright laws of the United States or any other country, whether as
author, assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office,
including those listed on Schedule II hereto.
"Intellectual Property" shall mean all intellectual and
similar property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights,
Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know-how, show-how or other data or information, software
and databases and all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions, improvements and
accessions to, and books and records describing or used in connection with, any
of the foregoing.
"License" shall mean any Patent License, Trademark License,
Copyright License or other license or sublicense agreement to which any Grantor
is a party, including those listed on Schedule III hereto (except for those that
prohibit assignment or a grant of a security interest by such Grantor as
licensee thereunder).
"New York UCC" shall mean the Uniform Commercial Code as from
time to time in effect in the State of New York.
"Patent License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to make, use or sell
any invention on which a
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Patent, now or hereafter owned by any Grantor or that any Grantor otherwise has
the right to license, is in existence, or granting to any Grantor any right to
make, use or sell any invention on which a Patent, now or hereafter owned by any
third party, is in existence, and all rights of any Grantor under any such
agreement.
"Patents" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all letters patent of the United States
or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or the equivalent
thereof in any similar offices in any other country, including those listed on
Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Proceeds" shall mean all "Proceeds" as defined in Section
9-102 of the New York UCC, and shall include, without limitation, (a) all cash
and negotiable instruments received by or held on behalf of the Collateral Agent
in respect of, or in connection with, the disposition of any Collateral, (b) any
claim of any Grantor against any third party for (and the right to xxx and
recover for and the rights to damages or profits due or accrued arising out of
or in connection with) (i) past, present or future infringement of any Patent
now or hereafter owned by any Grantor, or licensed under a Patent License, (ii)
past, present or future infringement or dilution of any Trademark now or
hereafter owned by any Grantor or licensed under a Trademark License or injury
to the goodwill associated with or symbolized by any Trademark now or hereafter
owned by any Grantor, (iii) past, present or future breach of any License and
(iv) past, present or future infringement of any Copyright now or hereafter
owned by any Grantor or licensed under a Copyright License and (c) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.
"Secured Parties" shall mean (a) the Lenders (including the
Tranche A Lenders), (b) the Administrative Agent, (c) the Collateral Agent, (d)
the Issuing Banks, (e) each counterparty to a Hedging Agreement entered into
with a Loan Party if such counterparty (i) was a Lender or an Affiliate of a
Lender at the time such Hedging Agreement was entered into or (ii) was a lender
under the Original Credit Agreement but not a Lender under the Credit Agreement;
provided that any counterparty described in this clause (e)(ii) shall (A) be a
Secured Party to the extent, and only to the extent, that such Hedging Agreement
was entered into prior to, and in effect on, the Restatement Effective Date, and
(B) remain a Secured Party only until such Hedging Agreement expires, is
extended, renewed or amended or is otherwise terminated, (f) the beneficiaries
of each indemnification obligation undertaken by any Grantor under any Loan
Document in respect of any of the foregoing Persons or their Related Parties, in
their capacities as such, and (g) the successors and permitted assigns of each
of the foregoing.
"Security Interest" shall have the meaning assigned to such
term in Section 2.01 of this Agreement.
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"Trademark License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to use any Trademark
now or hereafter owned by any Grantor or that any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any Trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.
"Trademarks" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule V, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. (a) As security for the
payment or performance, as the case may be, in full of the Obligations, each
Grantor hereby assigns and pledges to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, and hereby grants to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest (the "Security Interest") in, all right,
title and interest in or to any and all of the following assets and properties
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"):
(i) all Accounts Receivable;
(ii) all Chattel Paper;
(iii) all Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
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(ix) all Intellectual Property;
(x) all Investment Property;
(xi) all Letter-of-credit rights;
(xii) commercial tort claims, if any;
(xiii) all books and records pertaining to the Collateral;
and
(xiv) to the extent not otherwise included above, all
Proceeds and products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to any of the
foregoing; provided, however, that notwithstanding anything herein to the
contrary, in no event shall the security interest granted hereunder attach to,
and Collateral shall not include (a) any lease, license, contract, property
rights or agreement to which the Grantor is a party or any of its rights or
interests thereunder if the grant of such security interest shall constitute or
result in (i) the abandonment, invalidation or unenforceability of any right,
title or interest of the Grantor therein or (ii) in a breach or termination,
pursuant to the terms of, or a default under, any such lease, license, contract,
property rights or agreement except, in each case, to the extent that the UCC
invalidates such provisions, or (b) any motor vehicles evidenced by a
certificate of title. Without limiting the generality of the foregoing, the
security interest granted hereunder shall not attach to, and Collateral shall
not include any interest in (a) Roosevelt Associates General Partnership,
Kent-Meridian Disposal Company Joint Venture, Foothills Sanitary Landfill, Inc.
and BFGSI Series 1997-A Trust (or any assets or property of any of them) or (b)
Congress Development Co., Ecosort, L.L.C., Xxxxxx Resources Recovery Facility,
LLC and Evergreen National Indemnity Company if (i) such grant of a security
interest, without the consent of a third party, would constitute a breach or
default under, or cause or permit the acceleration of the obligations under, any
applicable agreement or contract to which any such Person is a party and (ii)
AWNA has been unable, after using commercially reasonable efforts, to obtain
such consent within 60 days after the Restatement Effective Date.
(b) Each Grantor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) and amendments thereto
with respect to the Collateral that contain the information required by Article
9 of the Uniform Commercial Code of each applicable jurisdiction for the filing
of any financing statement or amendment, including whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor. Each Grantor agrees to provide such information
to the Collateral Agent promptly upon request.
Each Grantor also ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto with respect to the Collateral that were filed
prior to the Restatement Effective Date.
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The Collateral Agent is further authorized to file with the
United States Patent and Trademark Office or United States Copyright Office (or
any successor office or any similar office in any other country) such other
documents as may be necessary or advisable for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted by
each Grantor, without the signature of any Grantor, and naming any Grantor or
the Grantors as debtors and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and
shall not subject the Collateral Agent or any other Secured Party to, or in any
way alter or modify, any obligation or liability of any Grantor with respect to
or arising out of the Collateral.
ARTICLE III
Representations and Warranties
Each Grantor represents and warrants to the Collateral Agent
and the Secured Parties that:
SECTION 3.01. Title and Authority. Such Grantor has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other person other than any consent or approval that has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been
duly prepared, completed and executed and the information set forth therein,
including the exact legal name of such Grantor, is correct and complete. Fully
authorized Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Collateral have been delivered to
the Collateral Agent for filing in each governmental, municipal or other office
specified in Schedule D to the Perfection Certificate (or specified by notice
from the Borrower to the Administrative Agent in the case of filings,
recordings, or registrations required by Section 5.10 of the Credit Agreement)
which are all the filings, recordings and registrations (other than filings
required to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the Security Interest in
Collateral consisting of United States Patents, Trademarks and Copyrights) that
are necessary to publish notice of and protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral
(other than motor vehicles) in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements.
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(b) Such Grantor represents and warrants that fully executed
security agreements in the form hereof and containing a description of all
Collateral, if any, consisting of Intellectual Property with respect to United
States Patents and United States registered Trademarks (and Trademarks for which
United States registration applications are pending) and United States
registered Copyrights have been delivered to the Collateral Agent for recording
by the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C.
Section 205 and the regulations thereunder, as applicable, and otherwise as may
be required pursuant to the laws of any other necessary jurisdiction, to protect
the validity of and to establish a legal, valid and perfected security interest
in favor of the Collateral Agent (for the ratable benefit of the Secured
Parties) in respect of all Collateral, if any, consisting of Patents, Trademarks
and Copyrights in which a security interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, or in any other necessary
jurisdiction, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary (other than such
actions as are necessary to perfect the Security Interest with respect to any
Collateral consisting of Patents, Trademarks and Copyrights (or registration or
application for registration thereof) acquired or developed after the date
hereof).
SECTION 3.03. Validity of Security Interest. The Security
Interest constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Obligations, (b) subject
to the filings described in Section 3.02 above, a perfected security interest in
all Collateral (other than motor vehicles) in which a security interest may be
perfected by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other
applicable law in such jurisdictions and (c) a security interest that shall be
perfected in all Collateral, if any, in which a security interest may be
perfected upon the receipt and recording of this Agreement with the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable. The Security Interest is and shall be prior to any other Lien on any
of the Collateral, other than Liens expressly permitted to be prior to the
Security Interest pursuant to Section 6.02 of the Credit Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral of such
Grantor is owned by such Grantor free and clear of any Lien, except for Liens
expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such
Grantor has not filed or consented to the filing of (a) any financing statement
or analogous document under the Uniform Commercial Code or any other applicable
laws covering any Collateral, (b) any assignment in which such Grantor assigns
any Collateral or any security agreement or similar instrument covering any
Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (c) any assignment in which such Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Liens expressly
permitted pursuant to
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Section 6.02 of the Credit Agreement. Such Grantor does not hold any commercial
tort claim except as indicated on the Perfection Certificate.
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records;
Place of Business. (a) Each Grantor agrees promptly to notify the Collateral
Agent in writing, or to ensure that such notice is given in the first report
thereafter pursuant to Section 5.13(a) of the Credit Agreement, of any change
(i) in its corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in its
identity, type of organization, corporate structure or jurisdiction of
incorporation or organization or (iii) in its Federal Taxpayer Identification
Number or other identification number given by its jurisdiction of incorporation
or organization. Each Grantor agrees not to effect or permit any change referred
to in the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral Agent
to continue at all times following such change to have a legal, valid and
perfected first priority security interest in all the Collateral (subject to
Liens permitted by Section 6.02 of the Credit Agreement). Each Grantor agrees
promptly to notify the Collateral Agent if any material portion of the
Collateral owned or held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the Collateral owned
by it as is consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include
complete accounting records indicating all payments and proceeds received with
respect to any part of the Collateral, and, at such time or times as the
Collateral Agent may reasonably request, promptly to prepare and deliver to the
Collateral Agent a duly certified schedule or schedules in form and detail
satisfactory to the Collateral Agent showing the identity, amount and location
of any and all Collateral.
SECTION 4.02. Periodic Certification. Each year, at the time
of delivery of annual financial statements with respect to the preceding fiscal
year pursuant to Section 5.04(a) of the Credit Agreement, Allied Waste and the
Borrower shall deliver to the Collateral Agent a certificate executed by a
Financial Officer of the Borrower and Allied Waste setting forth the information
required pursuant to Sections 1, 2, 8, 9, 10, 11 and 12 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of such certificate or the date of the most recent certificate
delivered pursuant to this Section 4.02 or the date of the most recent report
delivered pursuant to Section 5.13 of the Credit Agreement. Each certificate
delivered pursuant to this Section 4.02 shall identify in the format of Schedule
II, III, IV or V, as applicable, any Patent, any License, any registrations or
applications for registration of any Copyright, or any registrations or
applications for registration of any Trademark of any Grantor in existence on
the date thereof and not then listed on such Schedules or previously so
identified to the Collateral Agent.
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SECTION 4.03. Protection of Security. Each Grantor shall, at
its own cost and expense, take any and all actions necessary to defend title to
the Collateral against all persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien not
expressly permitted pursuant to Section 6.02 of the Credit Agreement.
SECTION 4.04. Further Assurances. Each Grantor agrees, at its
own expense, to execute, acknowledge, deliver and cause to be duly filed all
such further instruments and documents and take all such actions as the
Collateral Agent may from time to time request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Collateral Agent, duly endorsed in a
manner satisfactory to the Collateral Agent. Each Grantor further agrees that it
will not take any action or permit any action to be taken that would cause any
membership interest in a limited liability company or partnership interest
pledged hereunder to become a "security" as defined in Article 8 of the Uniform
Commercial Code of any State or the District of Columbia, unless such membership
interest or partnership interest has been certificated and pledged to the
Collateral Agent pursuant to the Non-Shared Collateral Pledge Agreement.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Schedule II, III, IV or
V hereto or adding additional schedules hereto to specifically identify any
asset or item that may constitute any Patent, any License, any registrations or
applications for registration of any Copyright, or any registrations or
applications for registration of any Trademark; provided, however, that any
Grantor shall have the right, exercisable within 10 days after it has been
notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its best efforts to take
such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such Collateral
within 30 days after the date it has been notified by the Collateral Agent of
the specific identification of such Collateral.
SECTION 4.05. Inspection and Verification. The Collateral
Agent and such Persons as the Collateral Agent may reasonably designate shall
have the right, at the Grantors' own cost and expense, to inspect the
Collateral, all records related thereto (and to make extracts and copies from
such records) and the premises upon which any of the Collateral is located, to
discuss the Grantors' affairs with the officers of the Grantors and their
independent accountants and to verify under reasonable procedures, in accordance
with Section 5.07 of the Credit Agreement, the validity, amount, quality,
quantity, value, condition and status of, or any other matter relating to, the
Collateral, including, in the
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case of Accounts or Collateral in the possession of any third person, by
contacting Account Debtors or the third person possessing such Collateral for
the purpose of making such a verification; provided, that so long as no Default
has occurred and is continuing, such inspections and discussions shall be at
reasonable times and with reasonable notice and shall occur no more than three
times per year. The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured Party
(it being understood that any such information shall be deemed to be
"Information" subject to the provisions of Section 9.12 of the Credit
Agreement).
SECTION 4.06. Taxes; Encumbrances. At its option, the
Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted pursuant to Section 6.02 of the Credit
Agreement, and may pay for the maintenance and preservation of the Collateral to
the extent any Grantor fails to do so as required by the Credit Agreement or
this Agreement, and each Grantor jointly and severally agrees to reimburse the
Collateral Agent on demand for any payment made or any expense incurred by the
Collateral Agent pursuant to the foregoing authorization; provided, however,
that nothing in this Section 4.06 shall be interpreted as excusing any Grantor
from the performance of, or imposing any obligation on the Collateral Agent or
any Secured Party to cure or perform, any covenants or other promises of any
Grantor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.
SECTION 4.07. Continuing Obligations of the Grantors. Each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Collateral, all in accordance with the terms and
conditions thereof, and each Grantor jointly and severally agrees to indemnify
and hold harmless the Collateral Agent and the Secured Parties from and against
any and all liability for such performance.
SECTION 4.08. Use and Disposition of Collateral. None of the
Grantors shall make or permit to be made an assignment, pledge or hypothecation
of the Collateral or shall grant any other Lien in respect of the Collateral,
except as expressly permitted by Section 6.02 of the Credit Agreement. None of
the Grantors shall make or permit to be made any transfer of the Collateral and
each Grantor shall remain at all times in possession of the Collateral owned by
it, except that (a) Inventory may be sold in the ordinary course of business,
(b) Equipment may be in the temporary possession of third parties in connection
with the use of such Equipment in the ordinary course of business and (c) unless
and until the Collateral Agent shall notify (which notice may be given by
telephone if promptly confirmed in writing) the Grantors that an Event of
Default shall have occurred and be continuing, and during the continuance
thereof, the Grantors may use and dispose of the Collateral in any lawful manner
not inconsistent with the provisions of this Agreement, the Credit Agreement or
any other Loan Document. Without limiting the generality of the foregoing, each
Grantor agrees that it shall not permit any Inventory to be in the possession or
control of any warehouseman, bailee, agent or processor at any time unless such
warehouseman, bailee, agent or processor shall have been notified of the
Security Interest and shall have agreed in writing to hold the
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Inventory subject to the Security Interest and the instructions of the
Collateral Agent and to waive and release any Lien held by it with respect to
such Inventory, whether arising by operation of law or otherwise.
SECTION 4.09. Limitation on Modification of Accounts. None of
the Grantors will, without the Collateral Agent's prior written consent, grant
any extension of the time of payment of any of the Accounts Receivable,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises or settlements granted or made in the ordinary course of
business and consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged.
SECTION 4.10. Insurance. The Grantors, at their own expense,
shall maintain or cause to be maintained insurance covering physical loss or
damage to the Inventory and Equipment in accordance with Section 5.02 of the
Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact)
for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or in part
relating thereto (or shall fail to be self-insured as permitted by the Credit
Agreement), the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with
this Section 4.10, including reasonable attorneys' fees, court costs, expenses
and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Collateral Agent and shall be additional Obligations secured
hereby.
SECTION 4.11. Covenants Regarding Patent, Trademark and
Copyright Collateral. (a) Each Grantor agrees that it will not, nor will it
permit any of its licensees to, do any act, or omit to do any act, whereby any
Patent that is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees that it shall continue to
xxxx any products covered by a Patent with the relevant patent number as
necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws.
(b) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii)
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display such Trademark with notice of Federal or foreign registration to the
extent necessary and sufficient to establish and preserve its maximum rights
under applicable law and (iv) not knowingly use or knowingly permit the use of
such Trademark in violation of any third party rights.
(c) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each work covered by a material Copyright, continue
to publish, reproduce, display, adopt and distribute the work with appropriate
copyright notice as necessary and sufficient to establish and preserve its
maximum rights under applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent immediately
if it knows or has reason to know that any Patent, Trademark or Copyright
material to the conduct of its business may become abandoned, lost or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or its
right to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, unless it promptly
informs the Collateral Agent, and, upon request of the Collateral Agent,
executes and delivers any and all agreements, instruments, documents and papers
as the Collateral Agent may request to evidence the Collateral Agent's security
interest in such Patent, Trademark or Copyright, and each Grantor hereby
appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to its Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
such Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that
any Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of such Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party,
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such Grantor promptly shall notify the Collateral Agent and shall, if consistent
with good business judgment, promptly xxx for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and take such other actions as are appropriate
under the circumstances to protect such Collateral.
(h) Upon the occurrence and during the continuance of an Event
of Default, each Grantor shall use its best efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all of such Grantor's right,
title and interest thereunder to the Collateral Agent or its designee.
SECTION 4.12. Other Actions. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in the Collateral, each
Grantor agrees, in each case at such Grantor's own expense, to take the
following actions with respect to the following Collateral:
(a) Instruments. If any Grantor shall at any time hold or
acquire any instruments (other than checks issued by or to such Grantor
in the ordinary course of business and any other instruments issued by
or to such Grantor in an individual amount not in excess of $50,000),
such Grantor shall forthwith deliver the same to the Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed
in blank as the Collateral Agent reasonably may from time to time
specify.
(b) Investment Property. Except to the extent otherwise
provided under the Non-Shared Collateral Pledge Agreement, if any
Grantor shall at any time hold or acquire any Certificated Securities,
such Grantor shall forthwith endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time
to time specify. If any Securities now or hereafter acquired by any
Grantor are uncertificated and are issued to such Grantor or its
nominee directed by the issuer thereof, such Grantor shall immediately
notify the Collateral Agent thereof and, at the Collateral Agent's
request and option, pursuant to an agreement in form and substance
satisfactory to the Collateral Agent, either (a) cause the issuer to
agree to comply with instructions from the Collateral Agent as to such
Securities, without further consent of any Grantor or such nominee, or
(b) arrange for the Collateral Agent to become the registered owner of
the Securities. If any Securities, whether certificated or
uncertificated, or other Investment Property now or hereafter acquired
by any Grantor are held by such Grantor or its nominee through a
Securities Intermediary or Commodity Intermediary, such Grantor shall
immediately notify the Collateral Agent thereof and, at the Collateral
Agent's request and option, pursuant to an agreement in form and
substance satisfactory to the Collateral Agent, either (i) cause such
Securities Intermediary or (as the case may be) Commodity Intermediary
to agree to comply with entitlement orders or other instructions from
the Collateral Agent to such Securities Intermediary as to such
Securities or other Investment Property,
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or (as the case may be) to apply any value distributed on account of
any Commodity Contract as directed by the Collateral Agent to such
Commodity Intermediary, in each case without further consent of any
Grantor or such nominee, or (ii) in the case of Financial Assets or
other Investment Property held through a Securities Intermediary,
arrange for the Collateral Agent to become the entitlement holder with
respect to such Investment Property, with the Grantor being permitted,
only with the consent of the Collateral Agent to exercise rights to
withdraw or otherwise deal with such Investment Property. The
provisions of this paragraph shall not apply to any Financial Assets
credited to a Securities Account for which the Collateral Agent is the
Securities Intermediary.
(c) Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic
chattel paper or any "transferable record," as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions
Act as in effect in any relevant jurisdiction, in each case in excess
of $100,000, such Grantor shall promptly notify the Collateral Agent
thereof and, at the request of the Collateral Agent, shall take such
action as the Collateral Agent may reasonably request to vest in the
Collateral Agent control under New York UCC Section 9-105 of such
electronic chattel paper or control under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or, as the
case may be, Section 16 of the Uniform Electronic Transactions Act, as
so in effect in such jurisdiction, of such transferable record.
(d) Letter-of-credit Rights. If any Grantor is at any time a
beneficiary under a letter of credit in excess of $100,000 now or
hereafter issued in favor of such Grantor, such Grantor shall promptly
notify the Collateral Agent thereof and, at the request and option of
the Collateral Agent, such Grantor shall use its commercially
reasonable efforts, pursuant to an agreement in form and substance
satisfactory to the Collateral Agent, either (i) arrange for the issuer
of such letter of credit to consent to an assignment to the Collateral
Agent of the proceeds of any drawing under the letter of credit or (ii)
arrange for the Collateral Agent to become the transferee beneficiary
of the letter of credit, with the Collateral Agent agreeing, in each
case, that the Proceeds of any drawing under the letter of credit are
to be paid to the applicable pledgor unless an Event of Default has
occurred and is continuing.
(e) Commercial Tort Claims. If any Grantor shall at any time
hold or acquire a commercial tort claim in excess of $100,000, such
Grantor shall promptly notify the Collateral Agent thereof in a writing
signed by such Grantor including a summary description of such claim
and grant to the Collateral Agent in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Agent.
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ARTICLE V
Remedies
SECTION 5.01. Remedies upon Default. Upon the occurrence and
during the continuance of an Event of Default, each Grantor agrees to deliver
each item of Collateral to the Collateral Agent on demand, and it is agreed that
the Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any such Collateral throughout the world on such terms
and conditions and in such manner as the Collateral Agent shall determine (other
than in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained), and (b) with or without legal process and with or
without prior notice or demand for performance, to take possession of the
Collateral and without liability for trespass to enter any premises where the
Collateral may be located for the purpose of taking possession of or removing
the Collateral and, generally, to exercise any and all rights afforded to a
secured party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. With respect to any Collateral
constituting Investment Property, the Collateral Agent shall be authorized at
any such sale (if it deems it advisable to do so) to restrict the prospective
bidders or purchasers to Persons who will represent and agree that they are
purchasing any Collateral constituting securities for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal that such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.
The Collateral Agent shall give the applicable Grantor 10
days' written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-612 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion
17
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to this Section, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Grantor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor. For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Collateral Agent shall be free to carry
out such sale pursuant to such agreement and no Grantor shall be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. To the
extent permitted by applicable law, any sale pursuant to the provisions of this
Section 5.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.
SECTION 5.02. Application of Proceeds. The Collateral Agent
shall apply the proceeds of any collection or sale of the Collateral, as well as
any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Administrative Agent or the Collateral Agent (in its capacity as
such hereunder or under any other Loan Document) in connection with
such collection or sale or otherwise in connection with this Agreement,
any other Loan Document or any of the Obligations, including all court
costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder or
under any other Loan Document on behalf of any Grantor and any
18
other costs or expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 5.03. Grant of License to Use Intellectual Property.
For the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Article at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sub-license any of the Collateral consisting of Intellectual Property now owned
or hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The use of such license
by the Collateral Agent shall be exercised, at the option of the Collateral
Agent, upon the occurrence and during the continuation of an Event of Default;
provided that any license, sub-license or other transaction entered into by the
Collateral Agent with an unaffiliated third party in accordance herewith shall
be binding upon the Grantors notwithstanding any subsequent cure of such Event
of Default.
ARTICLE VI
Miscellaneous
SECTION 6.01. Notices. All communications and notices
hereunder shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to any Subsidiary Grantor shall be given to
it at its address or telecopy number set forth on Schedule I hereto, with a copy
to the Borrower. All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
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SECTION 6.02. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the Security Interest and all obligations of the
Grantors hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor in respect of the
Obligations or this Agreement (other than the indefeasible payment in full of
all the monetary Obligations).
SECTION 6.03. Survival of Agreement. All covenants,
agreements, representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Secured Parties and shall survive the execution and
delivery of the Loan Documents and the making by the Lenders of any Loans, and
the execution and delivery to the Lenders of any notes evidencing such Loans,
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect until this Agreement shall terminate.
SECTION 6.04. Binding Effect; Several Agreement. This
Agreement shall become effective as to any Grantor on the Restatement Effective
Date, and thereafter shall be binding upon such Grantor and the Collateral Agent
and their successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their successors
and assigns, except that no Grantor shall have the right to assign or transfer
its rights or obligations hereunder or any interest herein or in the Collateral
(and any such assignment or transfer shall be void) except as expressly
contemplated by this Agreement or the Credit Agreement. This Agreement shall be
construed as a separate agreement with respect to each Grantor and may be
amended, modified, supplemented, waived or released with respect to any Grantor
without the approval of any other Grantor and without affecting the obligations
of any other Grantor hereunder.
SECTION 6.05. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their successors and assigns.
SECTION 6.06. Collateral Agent's Fees and Expenses;
Indemnification. (a) Each Grantor jointly and severally agrees to pay upon
demand to the Collateral Agent the amount of any and all reasonable expenses,
including the reasonable fees,
20
disbursements and other charges of a single counsel in New York and such other
local and special counsel as may be reasonably necessary in connection therewith
and of any experts or agents, which the Collateral Agent may incur in connection
with (i) the administration of this Agreement (including the customary fees and
charges of the Collateral Agent for any audits conducted by it or on its behalf
with respect to the Accounts Receivable or Inventory), (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to
perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, each Grantor jointly and severally agrees to
indemnify the Collateral Agent and the other Indemnitees (as defined in Section
9.03 of the Credit Agreement) that are Lenders or Related Parties thereof
against, and hold each of them harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable fees,
disbursements and other charges of counsel, incurred by or asserted against any
of them arising out of, in any way connected with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating hereto or to the Collateral, whether or not
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section 6.06 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Collateral Agent or any Lender. All amounts due
under this Section 6.06 shall be payable on written demand therefor.
SECTION 6.07. Collateral Agent Appointed Attorney-in-Fact.
Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest; provided that the Collateral Agent
shall have such right, only upon the occurrence and during the continuance of an
Event of Default, which right shall include the full power of substitution
either in the Collateral Agent's name or in the name of such Grantor to ask for,
demand, xxx for, collect, receive and give acquittance for any and all moneys
due or to become due under and by virtue of any Collateral, to endorse checks,
drafts, orders and other instruments for the payment of money payable to such
Grantor representing any interest or dividend or other distribution payable in
respect of the Collateral or any part thereof or on account thereof and to give
full discharge for the
21
same, to settle, compromise, prosecute or defend any action, claim or proceeding
with respect thereto, and to sell, assign, endorse, pledge, transfer and to make
any agreement respecting, or otherwise deal with, the same; provided, that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor 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
wilful misconduct.
SECTION 6.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.09. Waivers; Amendment. (a) No failure or delay of
the Collateral Agent, any Issuing Bank, the Administrative Agent or any Lender
in exercising any power or right hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Collateral Agent hereunder and of the Collateral Agent, the Issuing Banks, the
Administrative Agent and the Lenders under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by any Grantor therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or an issuance of a Letter of Credit under the Credit
Agreement shall not be construed as a waiver of any Default under the Credit
Agreement. No notice to or demand on any Grantor in any case shall entitle such
Grantor or any other Grantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Grantor or Grantors with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 9.02 of the Credit Agreement.
SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OF THE OTHER
LOAN
22
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6.10.
SECTION 6.11. Severability. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 6.12. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract (subject to Section
6.04), and shall become effective as provided in Section 6.04. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
SECTION 6.13. Headings. Article and Section headings used
herein are for the purpose of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 6.14. Jurisdiction; Consent to Service of Process. (a)
Each Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Collateral Agent, the Administrative Agent, any
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Grantor or
its properties in the courts of any jurisdiction.
23
(b) Each Grantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 6.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 6.15. Termination and Release. This Agreement and the
Security Interest shall terminate when all the monetary Obligations, other than
any contingent indemnity obligations, have been indefeasibly paid in full, the
Commitments have expired or been terminated, the LC Exposure has been reduced to
zero and the Issuing Banks have no further commitment to issue Letters of Credit
under the Credit Agreement, at which time the Collateral Agent shall execute and
deliver to the Grantors, at the Grantors' expense, all Uniform Commercial Code
termination statements and similar documents which the Grantors shall reasonably
request to evidence such termination. Any execution and delivery of termination
statements or documents pursuant to this Section 6.15 shall be without recourse
to or warranty by the Collateral Agent. A Subsidiary Grantor shall automatically
be released from its obligations hereunder and the Security Interest in the
Collateral of such Subsidiary Grantor shall be automatically released in the
event that all the Equity Interests of such Subsidiary Grantor shall be sold,
transferred or otherwise disposed of to a person that is not an Affiliate of the
Borrower in accordance with the terms of the Credit Agreement and the other Loan
Documents; provided that, if required by the terms of the Credit Agreement, the
Required Lenders or all the Lenders, as the case may be, shall have consented to
such sale, transfer or other disposition and the terms of such consent did not
provide otherwise. The Security Interest shall automatically terminate with
respect to Collateral sold, transferred or disposed of in accordance with this
Agreement and the Credit Agreement, and the Collateral Agent shall execute and
deliver to the Grantors, at the Grantors' expense, all Uniform Commercial Code
partial termination statements and similar documents which the Grantors shall
reasonably request to evidence such termination. Such termination statements
shall, upon the reasonable prior request of the Grantors, be delivered prior to,
and held in escrow pending, such sale, transfer or disposition.
SECTION 6.16. Additional Grantors. Upon execution and delivery by the
Collateral Agent and a Subsidiary of Allied Waste (other than any Subsidiary of
BFI) of an instrument in the form of Annex 1 hereto, such Subsidiary shall
become a Grantor hereunder with the same force and effect as if originally named
as a Grantor herein. The execution and delivery of any such instrument shall not
require the consent of any Grantor hereunder. The rights and obligations of each
Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Agreement.
24
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ALLIED WASTE NORTH AMERICA, INC.,
By _______________________________
Name:
Title:
ALLIED WASTE INDUSTRIES, INC.,
By _______________________________
Name:
Title:
EACH OF THE SUBSIDIARY
GRANTORS LISTED ON SCHEDULE I
HERETO,
By _______________________________
Name:
Title:
JPMORGAN CHASE BANK, as Collateral
Agent,
By _______________________________
Name:
Title:
SCHEDULE 1
SUBSIDIARY GRANTORS
SCHEDULE II
COPYRIGHTS
SCHEDULE III
LICENSES
SCHEDULE IV
PATENTS
SCHEDULE V
TRADEMARKS
Annex 1 to the
Non-Shared Collateral Security Agreement
SUPPLEMENT NO. __ dated as of (this
"Supplement"), to the Non-Shared Collateral Security
Agreement dated as of July 30, 1999 and amended and
restated as of April 29, 2003 (as amended,
supplemented or otherwise modified from time to time,
the "Non-Shared Collateral Security Agreement") among
Allied Waste North America, Inc., a Delaware
corporation (the "Borrower"), Allied Waste
Industries, Inc., a Delaware corporation ("Allied
Waste"), each Subsidiary listed on Schedule I thereto
or becoming a party thereto pursuant to Section 6.16
thereof (each such Subsidiary individually, a
"Subsidiary Grantor" and collectively, the
"Subsidiary Grantors"; the Subsidiary Grantors,
Allied Waste and the Borrower are referred to
collectively herein as the "Grantors") and JPMorgan
Chase Bank, a New York banking corporation ("JPMCB"),
as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as
defined therein).
A. Reference is made to (a) the Credit Agreement dated as of
July 21, 1999 and amended and restated as of April 29, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Borrower, Allied Waste, the lenders from time to time party thereto
(the "Lenders"), and JPMCB, as administrative and collateral agent for the
Lenders, (b) the Parent Guarantee Agreement dated as of July 30, 1999 and
amended and restated as of April 29, 2003 (as amended, supplemented or otherwise
modified from time to time, the "Parent Guarantee Agreement"), between Allied
Waste and the Collateral Agent and (c) the Subsidiary Guarantee Agreement dated
as of July 30, 1999 and amended and restated as of April 29, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiary Guarantee
Agreement"), among the Subsidiary Grantors, certain Subsidiaries of Allied Waste
and the Collateral Agent.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Non-Shared
Collateral Security Agreement and the Credit Agreement.
C. The Grantors have entered into the Non-Shared Collateral
Security Agreement in order to induce the Lenders to make Loans and the Issuing
Banks to issue Letters of Credit. Section 6.16 of Non-Shared Collateral Security
Agreement provides that additional Subsidiaries of the Borrower (other than BFI
and Subsidiaries of BFI) may become Grantors under the Non-Shared Collateral
Security Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary (the "New Grantor") is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a Grantor under the Non-Shared Collateral Security Agreement in order to
induce the Lenders to make additional Loans and the Issuing Banks to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.
2
Accordingly, the Collateral Agent and the New Grantor agree as
follows:
SECTION 1. In accordance with Section 6.16 of the Non-Shared
Collateral Security Agreement, the New Grantor by its signature below becomes a
Grantor under the Non-Shared Collateral Security Agreement with the same force
and effect as if originally named therein as a Grantor and the New Grantor
hereby (a) agrees to all the terms and provisions of the Non-Shared Collateral
Security Agreement applicable to it as a Grantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct in all material respects on and as of the date
hereof. In furtherance of the foregoing, the New Grantor, as security for the
payment and performance in full of the Obligations (as defined in the Non-Shared
Collateral Security Agreement), does hereby create and grant to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, their
successors and assigns, a security interest in and lien on all of the New
Grantor's right, title and interest in and to the Collateral (as defined in the
Non-Shared Collateral Security Agreement) of the New Grantor. Each reference to
"Grantor" in the Non-Shared Collateral Security Agreement shall be deemed, if
applicable, to include the New Grantor. The Non-Shared Collateral Security
Agreement is hereby incorporated herein by reference.
SECTION 2. The New Grantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that
(a) set forth on Schedule I attached hereto is a true and correct schedule of
the location of any and all Collateral of the New Grantor and (b) set forth
under its signature hereto, is the true and correct legal name of the New
Grantor, its jurisdiction of formation and, if such New Grantor is not a
"registered organization" under the New York UCC, the location of its chief
executive office.
SECTION 5. Except as expressly supplemented hereby, the
Non-Shared Collateral Security Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
3
SECTION 7. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Non-Shared Collateral Security Agreement shall not
in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties hereto shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 6.01 of the Non-Shared Collateral
Security Agreement. All communications and notices hereunder to the New Grantor
shall be given to it at the address set forth under its signature below.
SECTION 9. The New Grantor agrees to reimburse (or cause to be
reimbursed) the Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees, other charges
and disbursements of counsel for the Collateral Agent.
4
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Non-Shared Collateral Security Agreement as of
the day and year first above written.
[Name Of New Grantor],
By ______________________________
Name:
Title:
Address:
JPMORGAN CHASE BANK, as Collateral
Agent,
By ______________________________
Name:
Title:
SCHEDULE I
to Supplement No.___ to the
Non-Shared Collateral Security Agreement
LOCATION OF COLLATERAL
Description Location
