Exhibit 10.2
EXECUTION COPY
AMENDED AND RESTATED GUARANTEE AND COLLATERAL
AGREEMENT
made by
NBTY, INC.
and the other Grantors party hereto
in favor of
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
Dated as of July 25, 2008
TABLE OF CONTENTS
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Page
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SECTION 1. DEFINED
TERMS
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2
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1.1
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Definitions
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2
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1.2
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Other Definitional
Provisions
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6
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SECTION 2.
GUARANTEE
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6
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2.1
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Guarantee
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6
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2.2
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Right of Contribution
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7
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2.3
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No Subrogation
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7
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2.4
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Amendments, etc. with respect to the
Borrower Obligations
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7
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2.5
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Guarantee Absolute, Irrevocable and
Unconditional
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8
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2.6
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Reinstatement
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8
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2.7
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Payment
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9
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SECTION 3. GRANT OF SECURITY
INTEREST
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9
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SECTION 4. REPRESENTATIONS AND
WARRANTIES
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10
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4.1
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Representations in Credit
Agreement
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10
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4.2
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Title; No Other Liens
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10
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4.3
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Perfected First Priority
Lien
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10
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4.4
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Chief Executive Office
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11
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4.5
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Inventory and Equipment
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11
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4.6
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Farm Products
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11
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4.7
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Pledged Securities
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11
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4.8
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Receivables
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11
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4.9
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Intellectual Property
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11
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4.10
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Deposit Accounts; Security Accounts;
Commodity Accounts
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12
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4.11
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Commercial Tort Claims
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12
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SECTION 5. COVENANTS
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12
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5.1
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Covenants in Credit
Agreement
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12
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5.2
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Delivery of Instruments and Chattel
Paper
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12
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5.3
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Maintenance of Insurance
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13
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5.4
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Payment of Obligations
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13
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5.5
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Maintenance of Perfected Security
Interest; Further Documentation
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13
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5.6
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Changes in Jurisdiction of
Organization, Locations, Name, etc
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14
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5.7
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Notices
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14
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5.8
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Pledged Securities
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14
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5.9
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Receivables
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15
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5.10
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Intellectual Property
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16
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5.11
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Jurisdiction of
Organization
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17
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5.12
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Commercial Tort Claims
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17
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5.13
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Additional Accounts
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17
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SECTION 6. REMEDIAL
PROVISIONS
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18
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6.1
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Certain Matters Relating to
Receivables
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18
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6.2
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Communications with Obligors;
Grantors Remain Liable
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18
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6.3
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Pledged Stock
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19
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6.4
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Proceeds To Be Turned Over to
Administrative Agent
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19
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6.5
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Application of Proceeds
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20
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6.6
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Code and Other Remedies
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20
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6.7
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Private Sales
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21
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6.8
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Deficiency
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21
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SECTION 7. THE ADMINISTRATIVE
AGENT
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22
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7.1
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Administrative Agent’s
Appointment as Attorney-in-Fact, etc
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22
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7.2
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Duty of Administrative
Agent
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23
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7.3
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Execution of Financing
Statement
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23
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7.4
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Authority of Administrative
Agent
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24
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SECTION 8.
MISCELLANEOUS
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24
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8.1
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Amendments in Writing
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24
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8.2
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Notices
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24
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8.3
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No Waiver by Course of Conduct;
Cumulative Remedies
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24
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8.4
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Enforcement Expenses;
Indemnification
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25
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8.5
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Successors and Assigns
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25
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8.6
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Set-Off
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25
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8.7
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Counterparts
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26
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8.8
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Severability
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26
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8.9
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Section Headings
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26
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8.10
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Integration
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26
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8.11
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GOVERNING LAW
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26
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8.12
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Submission to Jurisdiction;
Waivers
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26
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8.13
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Acknowledgements
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27
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8.14
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WAIVER OF JURY TRIAL
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27
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8.15
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Additional Grantors
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27
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8.16
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Releases
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27
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SECTION 9.
REAFFIRMATION
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28
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9.1
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Reaffirmation
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28
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ii
SCHEDULES
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Schedule 1
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Notice Addresses of
Guarantors
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Schedule 2
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Description of Pledged Securities
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Schedule 3
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Filings and Other Actions Required to Perfect
Security Interests
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Schedule 4
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Jurisdictions of Organization; Identification
Numbers and Locations of Chief Executive Offices
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Schedule 5
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Locations of Inventory and Equipment
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Schedule 6
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Copyrights and Copyright Licenses;
Patents and Patent Licenses; Trademark and Trademark
Licenses
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Schedule 7
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Existing Prior Liens
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Schedule 8
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Commercial Tort Claims
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Schedule 9
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Deposit Accounts; Securities Accounts;
Commodities Accounts
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ANNEXES
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Annex 1
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Form of Assumption Agreement
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Annex 2
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Issuer’s Acknowledgement
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iii
AMENDED AND RESTATED GUARANTEE AND
COLLATERAL AGREEMENT, dated as of July 25, 2008, made by each
of the signatories hereto other than the Administrative Agent
(together with any other entity that may become a party hereto as a
Grantor as provided herein, the “ Grantors ”),
in favor of JPMORGAN CHASE BANK, N.A. as Administrative Agent (in
such capacity, the “ Administrative Agent ”) for
the banks and other financial institutions (the “
Lenders ”) from time to time party to the Amended and
Restated Credit Agreement, dated as of July 25, 2008 (as
amended, supplemented or otherwise modified from time to time, the
“ Credit Agreement ”), among NBTY, INC., a
Delaware corporation (the “ Borrower ”), BANK OF
AMERICA, N.A., CITIBANK, N.A., HSBC BANK USA, NATIONAL ASSOCIATION,
and WACHOVIA BANK, NATIONAL ASSOCIATION, as Co-Syndication Agents
(in such capacity, collectively the “ Co-Syndication
Agents ”), the Lenders and JPMORGAN CHASE BANK, N.A. as
Collateral Agent and as the Administrative Agent.
W I T N E S S E T H
:
WHEREAS, the Borrower is party to
that certain Credit Agreement dated as of November 3, 2006, as
amended from time to time to the date hereof, among the Borrower,
the several lenders party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent and Bank of America,
N.A., BNP Paribas, Citibank, N.A. and HSBC Bank USA, National
Association, as co-syndication agents (the “ Existing
Credit Agreement ”);
WHEREAS, pursuant to the Existing
Credit Agreement, the Borrower and certain other Grantors entered
into a Guarantee and Collateral Agreement dated as of
November 3, 2006 (the “ Existing Guarantee and
Collateral Agreement ”), in favor of the Administrative
Agent for the benefit of the lenders party to the Existing Credit
Agreement in order to guarantee and secure the extensions of credit
made to the Borrower thereunder;
WHEREAS, the Borrower entered into
an Amended and Restated Asset Purchase Agreement, dated as of
June 9, 2008 (the “ Leiner Acquisition Agreement
”), pursuant to which NBTY Acquisition, LLC, a wholly-owned
subsidiary of the Borrower, has acquired substantially all of the
assets (the “ Transaction ”) of Leiner Health
Products, Inc., Leiner Health Services Corp. and Leiner Health
Products, LLC for approximately $371,000,000 (subject to adjustment
based on working capital and cure costs as set forth in the Leiner
Acquisition Agreement) plus the assumption of certain
liabilities;
WHEREAS, the Borrower has initially
financed the Transaction and the related fees and expenses with a
combination of cash on hand and borrowings under the Existing
Credit Agreement;
WHEREAS, pursuant to the Credit
Agreement, the Borrower and the Lenders have agreed to amend and
restate the Existing Credit Agreement in its entirety to, among
other things, provide for a $300,000,000 term loan facility and to
amend certain other provisions of the Existing Credit Agreement for
the purpose of (x) repaying borrowings outstanding under the
Existing Credit Agreement on the Effective Date and paying any
fees, commissions and expenses in connection therewith,
(y) for working capital and other general corporate purposes
of the Borrower and its Subsidiaries and (z) any Acquisitions
consummated after the Effective Date;
WHEREAS, pursuant to the Credit
Agreement, the Lenders have severally agreed to make extensions of
credit to the Borrower upon the terms and subject to the conditions
set forth therein;
WHEREAS, the Borrower is a member of
an affiliated group of companies that includes each other
Grantor,
WHEREAS, 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 the other Grantors in connection with the operation of
their respective businesses;
WHEREAS, the Borrower and the other
Grantors are 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 Grantors shall have executed and delivered this Agreement
to the Administrative Agent for the ratable benefit of the
Lenders;
NOW, THEREFORE, in consideration of
the premises and to induce the Agents and the Lenders to enter into
the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrower under the Credit
Agreement, each Grantor agrees that the Existing Guarantee and
Collateral Agreement is hereby amended and restated as of the
Effective Date to read in its entirety as follows:
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, and the
following terms which are defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof are used herein
as so defined: Account, Certificated Security, Chattel Paper,
Commercial Tort Claim, Commodity Account, Document, Equipment, Farm
Product, General Intangibles, Instrument, Inventory, Letter of
Credit Right, Proceeds, Securities Account and Supporting
Obligations.
(b)
The following terms shall have the following meanings:
“ Agreement
”: this Amended and Restated Guarantee and Collateral
Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
“ Borrower Obligations
”: the collective reference to the unpaid principal of
and interest on the Loans, the Reimbursement Obligations and all
other obligations and liabilities of the Borrower (including,
without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of such Loans
and Reimbursement Obligations and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing
of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to any Agent or any Lender
(or, in the case of any Hedge Agreement or Cash Management
Obligations referred to below, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit, any
Hedge Agreement (including any guar antees of the Borrower of any
Hedge Agreements made by any Grantor) or Cash Management
Obligation
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entered into by the Borrower with any Lender (or
any Affiliate of any Lender) or any other document made, delivered
or given in connection therewith, in each case whether on account
of principal, interest, 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 Borrower pursuant to the terms of any of the foregoing
agreements).
“ Cash Management
Obligation ”: any obligation of the Borrower or any
of its Subsidiaries in respect of overdrafts and related
liabilities owed to any Lender (or any Affiliate of a Lender) that
arise from treasury, depositary or cash management services
including in connection with any automated clearing house transfers
of funds or any similar transactions.
“ Collateral
”: as defined in Section 3.
“ Collateral Account
”: any collateral account established by the
Administrative Agent as provided in Section 6.1 or
6.4.
“ Control Agreement
”: shall mean an agreement in form and substance reasonably
acceptable to the Administrative Agent sufficient to establish the
Administrative Agent’s control (within the meaning of the
applicable Uniform Commercial Code as in effect in the applicable
jurisdiction) over any applicable Investment Property (including,
without limitation, any Securities Account or Commodities Account)
or Deposit Account, for the benefit of the Administrative Agent and
the benefit of the Secured Parties.
“ Copyrights
”: (i) all copyrights arising under the laws of
the United States, any other country or any political subdivision
thereof, whether registered or unregistered and whether published
or unpublished (including, without limitation, those listed in
Schedule 6 ), all registrations and recordings thereof, and
all applications in connection therewith, including, without
limitation, all registrations, recordings and applications in the
United States Copyright Office, and (ii) the right to obtain
all renewals thereof.
“ Copyright Licenses
”: any written agreement naming any Grantor as licensor
or licensee (including, without limitation, those listed in
Schedule 6 ), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright,
to the extent (after giving effect to the provisions of
9-408(a) of the New York UCC and similar provisions of a
Uniform Commercial Code of any other applicable jurisdiction) the
grant by such Grantor of a security interest pursuant to this
Agreement in its right, title and interest in such Copyright
License is not prohibited by such Copyright License without the
consent of any other party thereto, would not give any other party
to such Copyright License the right to terminate its obligations
thereunder, or is permitted with consent if all necessary consents
to such grant of a security interest have been obtained from the
other parties thereto (it being understood that the foregoing shall
not be deemed to obligate such Grantor to obtain such consents);
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 money or other amounts
due or to become due under any such Copyright License.
“ Deposit Account
”: the “deposit accounts” as such term is
defined in Section 9-102(a)(29) of the New York UCC listed on
Schedule 9 hereto under the heading “Deposit
Accounts” or required to be disclosed to the Administrative
Agent pursuant to Section 5.13 hereof.
3
“ Guarantor Obligation
”: with respect to any Guarantor, the collective
reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under
or in connection with this Agreement or any other Loan Document to
which such Guarantor is a party, in each case whether on account of
guarantee 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
”: the collective reference to each Grantor other than
the Borrower.
“ Intellectual Property
”: the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to sue at law or in equity for
any infringement or other impairment thereof, including the right
to receive all proceeds and damages therefrom.
“ Intercompany Note
”: any promissory note evidencing loans made by any
Grantor to the Borrower or any of its Subsidiaries (other than the
promissory note dated May 12, 2003, evidencing the loan
made by the Borrower to Holland & Barrett Europe Limited
in the amount of £200,000,000 and any Refinancing Indebtedness
in respect thereof permitted by the Credit Agreement).
“ Investment Property
”: the collective reference to all “investment
property” as such term is defined in
Section 9-102(a)(49) of the New York UCC (other than Capital
Stock of a Foreign Subsidiary which is not required to be pledged
to the Administrative Agent pursuant to the terms of this Agreement
and the Credit Agreement).
“ Issuers
”: the collective reference to each issuer of any
Pledged Security.
“ material ”: as
the context may reasonably permit or require, material in relation
to the Borrower and its Subsidiaries, taken as a whole.
“ New York UCC
”: the Uniform Commercial Code as from time to time in
effect in the State of New York.
“ Obligation
”: (i) in the case of the Borrower, its Borrower
Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.
“ Patent ”:
(i) all letters patent of the United States, any other country
or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in Schedule 6 ,
(ii) all applications for letters patent of the United States
or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any
of the foregoing referred to in Schedule 6 , and
(iii) all rights to obtain any reissues or extensions of the
foregoing.
“ Patent License
”: all agreements, 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,
4
including, without limitation, any of the
foregoing referred to in Schedule 6 , to the extent (after
giving effect to the provisions of 9-408(a) of the New York
UCC and similar provisions of a Uniform Commercial Code of any
other applicable jurisdiction) the grant by such Grantor of a
security interest pursuant to this Agreement in its right, title
and interest in such Patent License is not prohibited by such
Patent License without the consent of any other party thereto,
would not give any other party to such Patent License the right to
terminate its obligations thereunder, or is permitted with consent
if all necessary consents to such grant of a security interest have
been obtained from the other parties thereto (it being understood
that the foregoing shall not be deemed to obligate such Grantor to
obtain such consents); 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 money or other amounts due or to become due under any such
Patent License.
“ Pledged Note
”: 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 and other than the promissory note dated May 12,
2003, evidencing the loan made by the Borrower to
Holland & Barrett Europe Limited in the amount of
£200,000,000 and any Refinancing Indebtedness in respect
thereof permitted by the Credit Agreement.).
“ Pledged Securities
”: the collective reference to the Pledged Notes and
the Pledged Stock.
“ Pledged Stock
”: the shares of Capital Stock listed on Schedule
2 together with any other shares, stock certificates, options
or rights of any nature whatsoever pledged pursuant to subsection
7.9 of the Credit Agreement.
“ Receivable
”: any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned
by performance (including, without limitation, any
Account).
“ Secured Parties
”: as defined in Section 2.1
“ Securities Act
”: the Securities Act of 1933, as amended.
“ Trademarks
”: (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names,
trade styles, service marks, logos and other source or business
identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, or otherwise,
and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6 ,
and (ii) the right to obtain all renewals thereof.
“ Trademark License
”: any agreement, 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 6 , to the extent (after giving
effect to the provisions of 9-408(a) of the New York UCC and
similar provisions of a Uniform Commercial Code of any other
applicable jurisdiction) the
5
grant by such Grantor of a security interest
pursuant to this Agreement in its right, title and interest in such
Trademark License is not prohibited by such Trademark License
without the consent of any other party thereto, would not give any
other party to such Trademark License the right to terminate its
obligations thereunder, or is permitted with consent if all
necessary consents to such grant of a security interest have been
obtained from the other parties thereto (it being understood that
the foregoing shall not be deemed to obligate such Grantor to
obtain such consents); 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 money or other amounts due or to become due under any such
Trademark License.
“ Vehicles
”: all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of
title law of any state.
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.
GUARANTEE
2.1
Guarantee . (a) Each of the Guarantors hereby,
jointly and severally, absolutely, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the benefit of the
Lenders and, in the case of any Hedge Agreement or Cash Management
Obligations, between the Borrower and any Affiliate of a Lender,
such Affiliate of a Lender and any person that was a lender or an
Affiliate of a lender at the time it entered into a Hedge Agreement
or a Cash Management Obligation (any such person, lender or
Affiliate of a lender, together with the Agents and the Lenders,
the “ Secured Parties ”) and their respective
successors, indorsees, transferees and assigns, the prompt and
complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower
Obligations.
(b)
Anything herein
or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other
Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state
laws relating to the insolvency of debtors (after giving effect to
the right of contribution established in
Section 2.2).
(c)
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 guarantee contained in this
Section 2 or affecting the rights and remedies of the
Administrative Agent or any other Secured Party
hereunder.
(d)
Subject to
reinstatement as provided in Section 2.6, the guarantee
contained in this Section 2 shall remain in full force and
effect until all the Borrower Obligations and the obligations
of
6
each Guarantor under the
guarantee contained in this Section 2 shall have been
satisfied by payment 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 the Borrower
Obligations.
(e)
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 other Secured Party 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 (subject to reinstatement as provided in
Section 2.6) all Borrower Obligations are paid in full, no
Letter of Credit shall be outstanding and the Commitments are
terminated.
2.2
Right of Contribution
. Each Guarantor hereby agrees
that to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Guarantor
shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate
share of such payment. Each Guarantor’s right of
contribution shall be subject to the terms and conditions of
Section 2.3. The provisions of this Section 2.2
shall in no respect limit the obligations and liabilities of any
Guarantor to the Secured Parties, and each Guarantor shall remain
liable to the Secured Parties for the full amount guaranteed by
such Guarantor hereunder.
2.3
No Subrogation
. Notwithstanding any payment
made by any Guarantor hereunder or any set-off or application of
funds of any Guarantor by any Secured Party, no Guarantor shall be
entitled to be subrogated to any of the rights of any Secured Party
against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative
Agent or any other Secured Party 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 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 Secured Parties,
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, as provided by Section 6.5
hereof.
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 any Secured Party may be rescinded by the
Administrative Agent or such Secured Party 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 guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended,
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modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any other
Secured Party, 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 Majority 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 other Secured Party for the payment of the Borrower Obligations
may be sold, exchanged, waived, surrendered or released.
Neither the Administrative Agent nor any other Secured Party 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 guarantee contained in this Section 2 or any property
subject thereto.
2.5
Guarantee Absolute, Irrevocable
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 any Secured Party upon the guarantee
contained in this Section 2 or acceptance of the guarantee
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 guarantee contained in this Section 2; and
all dealings between the Borrower and any of the Guarantors, on the
one hand, and the Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2.
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
guarantee contained in this Section 2 shall be construed as a
continuing, absolute, irrevocable and unconditional guarantee 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
guarantee or right of offset with respect thereto at any time or
from time to time held by any Secured Party, (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 any Secured Party, 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 guarantee contained in this
Section 2, in bankruptcy or in any other instance (other than
payment or performance in full). When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Administrative Agent or any other
Secured Party 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 guarantee for the
Borrower Obligations or any right of offset with respect thereto,
and any failure by the Administrative Agent or any other Secured
Party 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 guarantee 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, guarantee 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 other Secured Party against any
Guarantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal
proceedings.
2.6
Reinstatement
. The guarantee 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
8
or any Secured Party 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 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
Payment . Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without
set-off or counterclaim in Dollars pursuant to the Credit Agreement
at the relevant payment office specified in the Credit
Agreement.
SECTION 3. GRANT
OF SECURITY INTEREST
Each Grantor hereby assigns and
transfers to the Administrative Agent, for the benefit of the
Secured Parties, and hereby grants to the Administrative Agent, for
the benefit of the Secured Parties, 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 Commercial Tort Claims, in which
any Grantor has rights, in excess of $1,000,000, including all
Commercial Tort Claims listed on Schedule 8 hereto (as such
Schedule may be amended and/or supplemented from time to
time);
(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 Letter of Credit
Rights;
(m)
all Pledged Securities;
9
(n)
all books and records pertaining to
the Collateral;
(o)
to the extent not otherwise
included, all Proceeds, Supporting Obligations 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.
SECTION 4.
REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders
to enter into the Credit Agreement and to induce the Lenders and
the other Secured Parties 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
Representations in Credit
Agreement . In the
case of each Guarantor, the representations and warranties set
forth in Section 5 of the Credit Agreement as they relate to
such Guarantor or to the Loan Documents to which such Guarantor is
a party, each of which is hereby incorporated herein by reference,
are true and correct, and each Agent and each Lender shall be
entitled to rely on each of them as if they were fully set forth
herein; provided that each reference in each such
representation and warranty to the Borrower’s knowledge
shall, for the purposes of this Section 4.1, be deemed to be a
reference to such Guarantor’s knowledge.
4.2
Title; No Other Liens
. Except for the security
interest granted to the Administrative Agent for the benefit of the
Secured Parties 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 or
other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except
(a) such as have been filed in favor of the Administrative
Agent, for the benefit of the Secured Parties, pursuant to this
Agreement, (b) as are permitted by the Credit Agreement,
(c) as filed in favor of the Administrative Agent pursuant to
the Existing Credit Agreement for the ratable benefit of the
lenders (and certain of their affiliates) thereunder (and
arrangements for the release of which have been made to the
satisfaction of the Administrative Agent), or (d) as
previously identified in writing to the Administrative Agent,
arrangements for the release of which satisfactory to the
Administrative Agent have been made.
4.3
Perfected First Priority
Lien . The security
interests granted pursuant to this Agreement (a) upon
completion of the filings and other actions specified on
Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and (to the extent required) duly
executed form) will constitute or will continue to constitute valid
perfected security interests in all of the Collateral in favor of
the Administrative Agent, for its benefit and the benefit of the
Secured Parties, 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 (i) unrecorded Liens permitted by the Credit
Agreement which have priority over the Liens on the Collateral by
operation of law, (ii) Liens described on Schedule 7 ,
and (ii) Liens previously identified in writing to the
Administrative Agent, arrangements for the release of which
satisfactory to the Administrative Agent have been made, and except
to the extent that filings outside the United States might be
required to perfect such security interest in non-U.S. intellectual
property.
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4.4
Chief Executive Office
. On the date hereof, such
Grantor’s jurisdiction of organization, identification number
from such jurisdiction of organization (if any) and the location of
such Grantor’s chief executive office or principal place of
business are specified on Schedule 4.
4.5
Inventory and
Equipment . On the
date hereof, the Inventory and the Equipment (other than mobile
goods) are kept at the locations listed on Schedule 5
.
4.6
Farm Products
. None of the Collateral
constitutes, or is the Proceeds of, Farm Products.
4.7
Pledged Securities
. (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, except that the shares of
Pledged Stock of any Issuer which is a Foreign Subsidiary
constitute no more than 65% of all the issued and outstanding
Capital Stock of such Issuer and no shares of any Issuer that are
owned by a Foreign Subsidiary shall constitute Pledged
Stock.
(b)
All the shares of
the Pledged Stock have been duly and validly issued and, to the
extent the same are shares of Capital Stock of a corporation, are
fully paid and nonassessable.
(c)
Each of the
Pledged Notes that is an Intercompany Note constitutes the legal,
valid and binding obligation of the obligor with respect thereto,
enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing. No obligor
with respect to any such Pledged Note has any defense or
counterclaim with respect to such Pledged Note or any payment
thereunder. All Pledged Notes with a principal amount in
excess of $100,000 are listed on Schedule 2 .
(d)
Such Grantor is
the record and beneficial owner of, and has good and marketable
title to, the Pledged Securities 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.
4.8
Receivables
. (a) No amount payable
to such Grantor under or in connection with any material Receivable
is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Administrative Agent.
(b)
Receivables in
respect of which a Governmental Authority is the obligor do not
constitute more than 5%, in face amount, of all
Receivables.
(c)
The amounts
represented by such Grantor to the Lenders from time to time as
owing to such Grantor in respect of the Receivables will at such
times be accurate in all material respects.
4.9
Intellectual Property
. (a) Schedule 6
lists all material Intellectual Property owned by such Grantor in
its own name on the date hereof and all applications to register
any such Intellectual Property.
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(b)
On the date
hereof, all material Intellectual Property, and to the best of
Grantor’s knowledge, all other Intellectual Property, is
valid, subsisting, unexpired and enforceable, has not been
abandoned and does not infringe the intellectual property rights of
any other Person.
(c)
Except as set
forth in Schedule 6 , on the date hereof, none of the
material Intellectual Property, and to the best of Grantor’s
knowledge, none of the other 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 material Intellectual Property or such
Grantor’s ownership therein, or to the best of
Grantor’s knowledge, any other Intellectual Property or such
Grantor’s ownership interest therein, or (ii) which, if
adversely determined, could reasonably be expected to have a
Material Adverse Effect.
4.10
Deposit Accounts; Security
Accounts; Commodity Accounts . Schedule 9 lists all
(i) deposit accounts that are owned by such Grantor in its own
name on the date hereof (as such term is defined in
Section 9-102(a)(29) of the New York UCC) (a) that have
had an average daily balance in excess of $500,000, or such other
amount to be agreed by the Borrower and the Administrative Agent,
for twelve months prior to the date hereof and (b) in which
the amounts held therein are not transferred to another Deposit
Account listed on Schedule 9 at the end of each Business Day and
(ii) all Securities Accounts or Commodities Accounts
maintained by such Grantor.
4.11
Commercial Tort Claims
. Schedule 8 lists all
Commercial Tort Claims in which any Grantor has any rights in
excess of $1,000,000.
SECTION 5.
COVENANTS
Each Grantor covenants and agrees
with the Administrative Agent and the other Secured Parties 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
Covenants in Credit
Agreement . In the
case of each Guarantor, such Guarantor shall comply with and
perform each covenant set forth in the Credit Agreement applicable
thereto as if such Guarantor were a party to the Credit
Agreement.
5.2
Delivery of Instruments and
Chattel Paper . If
any amount payable under or in connection with any of the
Collateral in excess of $1,000,000 shall be or become evidenced by
any Instrument, Certificated Security o
