EXECUTION VERSION
GUARANTEE AND COLLATERAL
AGREEMENT
dated as of
March 30, 2007,
among
SPECTRUM BRANDS, INC.,
THE SUBSIDIARIES OF SPECTRUM BRANDS,
INC.
IDENTIFIED HEREIN
and
GOLDMAN SACHS CREDIT PARTNERS
L.P.,
as the Collateral Agent
TABLE OF CONTENTS
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ARTICLE I
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Definitions
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SECTION 1.01.
Credit Agreement
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1
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SECTION 1.02.
Other Defined Terms
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1
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ARTICLE II
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Guarantee
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SECTION 2.01.
Guarantee
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5
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SECTION 2.02.
Guarantee of Payment
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5
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SECTION 2.03.
No Limitations
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6
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SECTION 2.04.
Reinstatement
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6
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SECTION 2.05.
Agreement To Pay; Subrogation
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7
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SECTION 2.06.
Information
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7
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ARTICLE III
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Pledge of Securities
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SECTION 3.01.
Pledge
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7
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SECTION 3.02.
Delivery of the Pledged Collateral
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8
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SECTION 3.03.
Representations, Warranties and Covenants
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8
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SECTION 3.04.
Certification of Limited Liability Company and Limited Partnership
Interests
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10
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SECTION 3.05.
Registration in Nominee Name; Denominations
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10
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SECTION 3.06.
Voting Rights; Dividends and Interest
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10
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ARTICLE IV
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Security Interests in Personal
Property
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SECTION 4.01.
Security Interest
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12
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SECTION 4.02.
Representations and Warranties
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14
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SECTION 4.03.
Covenants
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16
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SECTION 4.04.
Other Actions
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19
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SECTION 4.05.
Covenants Regarding Patent, Trademark and Copyright
Collateral
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21
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ARTICLE V
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Remedies
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SECTION 5.01.
Remedies Upon Default
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23
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SECTION 5.02.
Application of Proceeds
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25
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SECTION 5.03.
Grant of License to Use Intellectual Property
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25
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SECTION 5.04.
Securities Act
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26
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SECTION 5.05.
Registration
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26
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ARTICLE VI
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Indemnity, Subrogation and
Subordination
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SECTION 6.01.
Indemnity and Subrogation
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27
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SECTION 6.02.
Contribution and Subrogation
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27
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SECTION 6.03.
Subordination
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28
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ARTICLE VII
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Miscellaneous
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SECTION 7.01.
Notices
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28
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SECTION 7.02.
Waivers; Amendment
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28
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SECTION 7.03.
Collateral Agent’s Fees and Expenses;
Indemnification
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29
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SECTION 7.04.
Successors and Assigns
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29
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SECTION 7.05.
Survival of Agreement
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30
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SECTION 7.06.
Counterparts; Effectiveness; Several Agreement
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30
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SECTION 7.07.
Severability
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30
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SECTION 7.08.
Right of Set-Off
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31
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SECTION 7.09.
Governing Law; Jurisdiction; Consent to Service of
Process
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31
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SECTION 7.10.
WAIVER OF JURY TRIAL
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32
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SECTION 7.11.
Headings
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32
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SECTION 7.12.
Security Interest Absolute
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32
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SECTION 7.13.
Termination or Release
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32
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SECTION 7.14.
Additional Subsidiaries
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33
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SECTION 7.15.
Collateral Agent Appointed Attorney-in-Fact
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33
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Schedules
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Schedule
I
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Subsidiary Loan
Parties
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Schedule
II
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Pledged Equity
Interests; Debt Securities
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Schedule
III
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Intellectual
Property
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Schedule
IV
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Commercial Tort
Claims
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Exhibits
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Exhibit
I
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Form of
Supplement
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Exhibit
II
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Form of
Perfection Certificate
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Exhibit
III
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Form of
Trademark Security Agreement
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Exhibit IV
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Form of Patent
Security Agreement
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Exhibit
V
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Form of
Copyright Security Agreement
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GUARANTEE AND COLLATERAL AGREEMENT dated as of
March 30, 2007, among SPECTRUM BRANDS, INC., a Wisconsin
corporation (the “ Borrower ”), the
Subsidiaries of the Borrower identified herein and GOLDMAN SACHS
CREDIT PARTNERS L.P., as the Collateral Agent.
Reference is made to the Credit Agreement dated
as of March 30, 2007 (as amended, supplemented or otherwise
modified from time to time, the “ Credit Agreement
”), among the Borrower, the Lenders party thereto, Goldman
Sachs Credit Partners L.P., as the Administrative Agent, the
Collateral Agent and the Syndication Agent, Wachovia Bank, National
Association, as the Deposit Agent, and Bank of America, N.A., as an
LC Issuer. The Lenders and the LC Issuers have agreed to extend
credit to the Borrower subject to the terms and conditions set
forth in the Credit Agreement. The obligations of the Lenders and
the LC Issuers to extend such credit are conditioned upon, among
other things, the execution and delivery of this Agreement. The
Subsidiary Loan Parties are Affiliates of the Borrower, will derive
substantial benefits from the extension of credit to the Borrower
pursuant to the Credit Agreement and are willing to execute and
deliver this Agreement in order to induce the Lenders and the LC
Issuers to extend such credit. Accordingly, the parties hereto
agree as follows:
ARTICLE I
Definitions
SECTION 1.01.
Credit Agreement.
(a) Capitalized terms used in this
Agreement (including the preamble hereto) and not otherwise defined
herein have the meanings specified in the Credit Agreement. All
terms defined in the New York UCC (as defined herein) and not
defined in this Agreement or in the Credit Agreement have the
meanings specified therein; the term “instrument” shall
have the meaning specified in Article 9 of the New York
UCC.
(b) The rules of construction specified in
Section 1.02 of the Credit Agreement also apply to this
Agreement.
SECTION 1.02.
Other Defined Terms
. As used in this Agreement, the
following terms have the meanings specified below:
“ Account Debtor ” means
any Person who is or who may become obligated to any Loan Party
under, with respect to or on account of an Account.
“ Article 9 Collateral
” has the meaning assigned to such term in Section 4.01
hereof.
“ Borrower ” has the
meaning assigned to such term in the preliminary statement to this
Agreement.
“ Collateral ” means
Article 9 Collateral and Pledged Collateral.
“ Copyright License ” means
any written agreement, now or hereafter in effect, granting any
right to any third party under any copyright now or hereafter owned
by any Loan Party or that such Loan Party otherwise has the right
to license, or granting any right to any Loan Party under any
copyright now or hereafter owned by any third party, and all rights
of such Loan Party under any such agreement.
“ Copyrights ” means all of
the following now owned or hereafter acquired by any Loan Party:
(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 III.
“ Credit Agreement ” has
the meaning assigned to such term in the preliminary statement to
this Agreement.
“ Federal Securities Laws ”
has the meaning assigned to such term in
Section 5.04.
“ General Intangibles ”
means all choses in action and causes of action and all other
intangible personal property of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Loan Party and all
other “general intangibles” as defined in the
New York UCC (other than Accounts), including corporate or
other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or
lessee, Swap Contracts and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims
and any letter of credit, guarantee, claim, security interest or
other security held by or granted to any Loan Party to secure
payment by an Account Debtor of any of the Accounts.
“ Intellectual Property ”
means all intellectual and similar property of every kind and
nature now owned or hereafter acquired by any Loan Party, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks,
trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other proprietary data or
information, rights in software and databases and rights in all
embodiments or fixations thereof and rights in related
documentation, registrations and franchises, and all additions,
improvements and accessions to any of the foregoing.
“ IP Security Agreements ”
has the meaning assigned to such term in Section 4.02(b)
hereof.
“ Lender Party ” means each
Lender, each Agent, each Arranger, each LC Issuer and each of their
respective Affiliates (including any Person that is a Lender, an
Agent or an LC Issuer (or that is such an Affiliate) as of the
Closing Date but subsequently ceases to be a Lender, an Agent or an
LC Issuer (or such an Affiliate), as the case may be, if such
Person is a counterparty to any Swap Contract with any Loan Party
or provides any cash management services to any Loan
Party).
“ License ” means any
Patent License, Trademark License, Copyright License or other
license or sublicense agreement to which any Loan Party is a party,
including those listed on Schedule III.
“ Loan Parties ” means,
collectively, the Borrower and the Subsidiary Loan
Parties.
“ New York UCC ” means
the Uniform Commercial Code as from time to time in effect in the
State of New York.
“ Obligations ” means
(a) the due and punctual payment by the Borrower of
(i) the principal of 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 any Loan Document in respect of any
Letter of Credit, when and as due, including payments in respect of
reimbursement of LC Disbursements, interest thereon (including
interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) and obligations to
provide cash collateral, and (iii) all other monetary obligations
of the Borrower to any of the Secured Parties under the Credit
Agreement and each of the other Loan Documents, including
obligations to pay LC Lender Fees, expense reimbursement
obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred, and any interest thereon accruing,
during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual
payment of all the monetary obligations of each other Loan Party
under or pursuant to the Credit Agreement and each of the other
Loan Documents, (c) the due and punctual payment and
performance of all monetary obligations of each Loan Party under
each Swap Contract with a counterparty that is a Lender Party,
whether such Swap Contract is in effect on the Closing Date or
entered into after the Closing Date, (d) the due and punctual
payment and performance of all monetary obligations of each Loan
Party to any Lender Party in respect of cash management services
(including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements)
(other than cash management services provided after (i) the
principal of each Loan and all LC Disbursements, interest and fees
payable under the Credit Agreement have been paid in full, (ii) all
Commitments under the Credit Agreement have been reduced to zero
and (iii) no LC Issuer shall have any obligation to issue Letters
of Credit under the Credit Agreement and no Letter of Credit is
outstanding (other than any Letter of Credit the obligations under
which have been cash collateralized in full or supported in full by
letters of credit of other banks naming the applicable LC Issuer as
the beneficiary, in each case, in a manner satisfactory to the
applicable LC Issuer)) and (e) the due and punctual payment of all
the monetary obligations of each Loan Party under or pursuant to
the Qualified Foreign Credit Facility.
“ Patent License ” means
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
patent, now or hereafter owned by any Loan Party or that any Loan
Party otherwise has the right to license, is in existence, or
granting to any Loan Party 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 Loan Party under any
such agreement.
“ Patents ” means all of
the following now owned or hereafter acquired by any Loan Party:
(a) all letters patent of the United States or the
equivalent thereof in 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 any similar
offices in any other country, including those listed on
Schedule III, 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.
“ Perfection Certificate ”
means a certificate substantially in the form of Exhibit II,
completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Responsible Officer of
the Borrower.
“ Pledged Collateral ” has
the meaning assigned to such term in Section 3.01.
“ Pledged Debt Securities ”
has the meaning assigned to such term
in Section 3.01.
“ Pledged Equity Interests
” has the meaning assigned to such term in
Section 3.01.
“ Pledged Securities ”
means any promissory notes, stock certificates or other securities
now or hereafter included in the Pledged Collateral, including all
certificates, instruments or other documents representing or
evidencing any Pledged Collateral.
“ Proceeds ” has the
meaning specified in Section 9-102 of the New York
UCC.
“ Secured Parties ” means
(a) the Lenders, (b) the Administrative Agent, (c) the
Collateral Agent, (d) the Deposit Agent, (e) the Syndication Agent,
(f) the Arrangers, (g) the LC Issuers, (h) the Lender
Parties to whom any of the Obligations is owed, (i) each other
Person to whom any of the Obligations referred to in clause (e) of
the definition of such term is owed and (j) the permitted
successors and assigns of each of the foregoing.
“ Security Interest ” has
the meaning assigned to such term in Section 4.01.
“ Subsidiary Loan Parties ”
means (a) the Subsidiaries identified on Schedule I and
(b) each other Subsidiary that becomes a party to this
Agreement as a Subsidiary Loan Party after the Closing
Date.
“ Trademark License ” means
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 Loan Party or that any Loan Party otherwise has the right to
license, or granting to any Loan Party any right to use any
trademark now or hereafter owned by any third party, and all rights
of any Loan Party under any such agreement.
“ Trademarks ” means all of
the following now owned or hereafter acquired by any Loan Party:
(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 and other 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 or any similar offices in any State of the
United States or any other country or any political
subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III and (b) all goodwill
associated therewith or symbolized thereby.
ARTICLE II
Guarantee
SECTION 2.01.
Guarantee
. Each Loan Party (including the
Borrower) unconditionally guarantees, jointly with the other Loan
Parties and severally, as a primary obligor and not merely as a
surety, the due and punctual payment of the Obligations. Each Loan
Party further agrees that the Obligations may be extended or
renewed, in whole or in part, or amended or modified, without
notice to or further assent from it, and that it will remain bound
upon its guarantee notwithstanding any extension or renewal, or
amendment or modification, of any Obligation. Each Loan Party
waives presentment to, demand of payment from and protest to the
Borrower or any other Loan Party of any of the Obligations, and
also waives notice of acceptance of its guarantee and notice of
protest for nonpayment.
SECTION 2.02.
Guarantee of Payment
. Each Loan Party further agrees
that its guarantee hereunder constitutes a guarantee of payment
when due and not of collection, and waives any right to require
that any resort be had by the Collateral Agent or any other Secured
Party to any security held for the payment of the Obligations or to
any balance of any deposit account or credit on the books of the
Collateral Agent or any other Secured Party in favor of the
Borrower or any other Person.
SECTION 2.03.
No Limitations.
(a) Except for termination of a
Loan Party’s obligations hereunder as expressly provided in
Section 7.13, the obligations of each Loan Party hereunder
shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release,
surrender, alteration or compromise of any Obligations, and shall
not be subject to any defense or set-off, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality
or unenforceability of the Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each
Loan Party hereunder shall not be discharged or impaired or
otherwise affected by (i) the failure of the Collateral Agent
or any other Secured Party to assert any claim or demand or to
enforce any right or remedy under the provisions of any Loan
Document or otherwise; (ii) any rescission, waiver, amendment
or modification of, or any release from any of the terms or
provisions of, any Loan Document or any other agreement, including
with respect to any other Loan Party under this Agreement;
(iii) the release of, or any impairment of or failure to
perfect any Lien on or security interest in, any security held by
the Collateral Agent or any other Secured Party for the Obligations
or any of them; (iv) any default, failure or delay, wilful or
otherwise, in the performance of the Obligations; or (v) any
other act or omission that may or might in any manner or to any
extent vary the risk of any Loan Party or otherwise operate as a
discharge of any Loan Party as a matter of law or equity (other
than the indefeasible payment in full in cash of all the
Obligations). Each Loan Party expressly authorizes the Secured
Parties to take and hold security in accordance with the terms of
this Agreement and the other Loan Documents for the payment and
performance of the Obligations, to exchange, waive or release any
or all such security (with or without consideration), to enforce or
apply such security and direct the order and manner of any sale
thereof in their sole discretion or to release or substitute any
one or more other Loan Parties or obligors upon or in respect of
the Obligations, all without affecting the obligations of any Loan
Party hereunder.
(b) To the fullest extent permitted by applicable
Law, each Loan Party waives any defense based on or arising out of
any defense of the Borrower or any other Loan Party or the
unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any
Borrower or any other Loan Party, other than the indefeasible
payment in full in cash of all the Obligations. The Collateral
Agent and the other Secured Parties may, at their election,
foreclose on any security held by one or more of them in accordance
with the terms of this Agreement and the other Loan Documents by
one or more judicial or nonjudicial sales, accept an assignment of
any such security in lieu of foreclosure, compromise or adjust any
part of the Obligations, make any other accommodation with the
Borrower or any other Loan Party or exercise any other right or
remedy available to them against the Borrower or any other Loan
Party, without affecting or impairing in any way the liability of
any Loan Party hereunder except to the extent the Obligations have
been fully and indefeasibly paid in full in cash. To the fullest
extent permitted by applicable Law, each Loan Party waives any
defense arising out of any such election even though such election
operates, pursuant to applicable Law, to impair or to extinguish
any right of reimbursement or subrogation or other right or remedy
of such Loan Party against the Borrower or any other Loan Party, as
the case may be, or any security.
SECTION 2.04.
Reinstatement
. Each Loan Party agrees that its
guarantee hereunder shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part
thereof, of any Obligation is rescinded or must otherwise be
restored by the Collateral Agent or any other Secured Party upon
the bankruptcy or reorganization of the Borrower, any other Loan
Party or otherwise.
SECTION 2.05.
Agreement To Pay;
Subrogation. In
furtherance of the foregoing and not in limitation of any other
right that the Collateral Agent or any other Secured Party has at
law or in equity against any Loan Party by virtue hereof, upon the
failure of the Borrower or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise,
each Loan Party hereby promises to and will forthwith pay, or cause
to be paid, to the Collateral Agent for distribution to the
applicable Secured Parties in cash the amount of such unpaid
Obligation. Upon payment by any Loan Party of any sums to the
Collateral Agent as provided above, all rights of such Loan Party
against the Borrower or any other Loan Party arising as a result
thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.
SECTION 2.06.
Information
. Each Loan Party assumes all
responsibility for being and keeping itself informed of the
Borrower’s and each other Loan Party’s financial
condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the Obligations and the nature, scope and
extent of the risks that such Loan Party assumes and incurs
hereunder, and agrees that neither the Collateral Agent nor any of
the other Secured Parties will have any duty to advise such Loan
Party of information known to it or any of them regarding such
circumstances or risks.
ARTICLE III
Pledge of
Securities
SECTION 3.01.
Pledge . As security for the payment in full of the
Obligations, each Loan Party (including the Borrower) hereby
pledges to the Collateral Agent, its successors and assigns, for
the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, a security interest in, all of such Loan
Party’s right, title and interest in, to and under
(a) (i) the shares of capital stock and other Equity Interests
of each Subsidiary owned by it on the date hereof (including all
such shares and other Equity Interests listed on Schedule II),
(ii) any Equity Interests of a Subsidiary obtained by such Loan
Party in the future and (iii) the certificates representing
all such Equity Interests (all the foregoing being called the
“ Pledged Equity Interests ”);
provided that the Pledged Equity Interests shall not
include (i) more than 65% of the issued and outstanding voting
Equity Interests of any Foreign Subsidiary and (ii) any Equity
Interests of any Dormant Subsidiary; (b)(i) all instruments
and promissory notes owned by such Loan Party on the date hereof
(including all such instruments and the promissory notes listed on
Schedule II), and (ii) all instruments and promissory
notes issued to or otherwise obtained by such Loan Party in the
future (all the foregoing being called the “ Pledged Debt
Securities ”); (c) subject to Section 3.06,
all payments of principal or interest, dividends, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the
conversion of, and all other Proceeds received in respect of, the
securities referred to in clauses (a) and (b) above;
(d) subject to Section 3.06, all rights and privileges of
such Loan Party with respect to the securities and other property
referred to in clauses (a), (b) and (c) above; and
(e) all Proceeds of any of the foregoing (the items referred
to in clauses (a) through (e) above being collectively referred to
as the “ Pledged Collateral ”).
TO HAVE AND TO HOLD the Pledged Collateral,
together with all right, title, interest, powers, privileges and
preferences pertaining or incidental thereto, unto the Collateral
Agent, its successors and assigns, for the benefit of the Secured
Parties, during the term of this Agreement; subject ,
however , to the terms, covenants and conditions
hereinafter set forth.
SECTION 3.02.
Delivery of the Pledged
Collateral . (a) Each
Loan Party agrees promptly to deliver or cause to be delivered to
the Collateral Agent any and all Pledged Securities.
(b) Each Loan Party will cause any Indebtedness for
borrowed money owed to such Loan Party by the Borrower or any
Subsidiary to be evidenced by a duly executed promissory note that
is pledged and delivered to the Collateral Agent pursuant to the
terms hereof.
(c) Upon delivery to the Collateral Agent, (i) all
Pledged Securities shall be accompanied by undated stock powers
duly executed in blank or other undated instruments of transfer
reasonably satisfactory to the Collateral Agent and duly executed
in blank and (ii) all other property comprising part of the
Pledged Collateral shall be accompanied by proper instruments of
assignment duly executed by the applicable Loan Party and such
other instruments or documents as the Collateral Agent may
reasonably request. Each delivery of Pledged Securities shall be
accompanied by a schedule describing such Pledged Securities, which
schedule shall be attached hereto as a supplement to
Schedule II and made a part hereof; provided that
failure to attach any such schedule hereto shall not affect the
validity of such pledge of such Pledged Securities.
SECTION 3.03.
Representations, Warranties and
Covenants . The Loan
Parties jointly and severally represent, warrant and covenant to
and with the Collateral Agent, for the benefit of the Secured
Parties, that:
(a) Schedule II correctly sets forth the percentage
of the issued and outstanding units of each class of the Equity
Interests of the issuer thereof represented by the Pledged Equity
Interests and includes all Equity Interests, debt securities and
promissory notes required to be pledged hereunder in order to
satisfy the Guarantee and Collateral Requirement;
(b) the Pledged Equity Interests and Pledged Debt
Securities have been duly and validly authorized and issued by the
issuers thereof (this representation and warranty being made, in
the case of Pledged Debt Securities of a Person that is not the
Borrower or a Subsidiary, to the knowledge of the applicable Loan
Party) and (i) in the case of Pledged Equity Interests (other
than interests in any limited liability company), are fully paid
and nonassessable and (ii) in the case of Pledged Debt
Securities (this representation and warranty being made, in the
case of Pledged Debt Securities of a Person that is not the
Borrower or a Subsidiary, to the knowledge of the applicable Loan
Party), are legal, valid and binding obligations of the issuers
thereof, and there exists no defense, offset or counterclaim to any
obligation of the maker or issuer of any Pledged Debt Securities
(this representation and warranty being made, in the case of
Pledged Debt Securities of a Person that is not the Borrower or a
Subsidiary, to the knowledge of the applicable Loan
Party);
(c) except for the security interests granted
hereunder, each Loan Party (i) is and, subject to any
transfers made in compliance with the Credit Agreement, will
continue to be the direct owner, beneficially and of record, of the
Pledged Securities indicated on Schedule II as owned by such Loan
Party, (ii) holds the same free and clear of all Liens, other
than Liens created by the Loan Documents and Permitted Liens,
(iii) will make no further assignment, pledge, hypothecation
or transfer of, or create or permit to exist any security interest
in or other Lien on, the Pledged Collateral, other than Permitted
Liens and as otherwise permitted by the Credit Agreement, and
(iv) will defend its title or interest thereto or therein
against any and all Liens (other than Permitted Liens), however
arising, of all Persons whomsoever;
(d) except for restrictions and limitations imposed
or permitted by the Loan Documents or securities laws generally,
the Pledged Collateral is freely transferable and
assignable;
(e) each Loan Party has the power and authority to
pledge the Pledged Collateral pledged by it hereunder in the manner
hereby done or contemplated;
(f) no consent or approval of any Governmental
Authority, any securities exchange or any other Person was or is
necessary to the validity of the pledge effected hereby (other than
such as have been obtained and are in full force and effect and
other than consents or approvals that, individually or in the
aggregate, could not reasonably be expected to be material to the
interests of the Secured Parties hereunder);
(g) by virtue of the execution and delivery by the
Loan Parties of this Agreement, when any Pledged Securities are
delivered to the Collateral Agent in accordance with this
Agreement, the Collateral Agent will obtain, for the benefit of the
Secured Parties, a legal, valid and perfected first priority lien
upon and security interest in such Pledged Securities as security
for the payment of the Obligations; and
(h) each pledge effected hereby is effective to vest
in the Collateral Agent, for the benefit of the Secured Parties,
the rights of the Collateral Agent in the Pledged Collateral as set
forth herein.
SECTION 3.04.
Certification of Limited
Liability Company and Limited Partnership Interests
. With respect to any Equity
Interests in a limited liability company or a limited partnership
controlled by a Loan Party and pledged hereunder that are not
represented by a certificate, such Loan Party represents that such
interests are not “securities” within the meaning of
Article 8 of the New York UCC and covenants and agrees that it
shall at no time elect to treat any such Equity Interests as a
“security” within the meaning of Article 8 of the New
York UCC or request or permit the issuance of any certificate
representing such Equity Interests, unless it provides prior
written notice to the Collateral Agent of such election and
immediately pledges and delivers any such certificate to the
Collateral Agent pursuant to the terms hereof.
SECTION 3.05.
Registration in Nominee Name;
Denominations . The
Collateral Agent, on behalf of the Secured Parties, shall have the
right (in its sole and absolute discretion) to hold the Pledged
Securities in its own name as pledgee, the name of its nominee (as
pledgee or as sub-agent) or the name of the applicable Loan Party,
endorsed or assigned in blank or in favor of the Collateral Agent.
Each Loan Party will promptly give to the Collateral Agent copies
of any notices or other communications received by it with respect
to Pledged Securities registered in the name of such Loan Party.
Upon the occurrence and during the continuance of an Event of
Default, the Collateral Agent shall have the right to exchange the
certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with
this Agreement.
SECTION 3.06.
Voting Rights; Dividends and
Interest. (a) Unless and
until an Event of Default shall have occurred and is continuing and
the Collateral Agent shall have notified the Loan Parties that
their rights under this Section 3.06 are being
suspended:
(i) Each Loan Party shall be entitled to exercise
any and all voting and/or other consensual rights and powers
inuring to an owner of Pledged Securities or any part thereof for
any purpose consistent with the terms of this Agreement, the Credit
Agreement and the other Loan Documents; provided
that such rights and powers shall not be exercised in any
manner that could materially and adversely affect the rights and
remedies of any of the Collateral Agent or the other Secured
Parties under this Agreement or the Credit Agreement or any other
Loan Document or the ability of the Secured Parties to exercise the
same.
(ii) The Collateral Agent shall promptly execute and
deliver to each Loan Party, or cause to promptly be executed and
delivered to such Loan Party, all such proxies, powers of attorney
and other instruments as such Loan Party may reasonably request for
the purpose of enabling such Loan Party to exercise the voting
and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) Each Loan Party shall be entitled to receive and
retain any and all dividends, interest, principal and other
distributions paid on or distributed in respect of the Pledged
Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are
permitted by, and otherwise paid or distributed in accordance with,
the terms and conditions of the Credit Agreement, the other Loan
Documents and applicable Laws; provided that any noncash
dividends, interest, principal or other distributions that would
constitute Pledged Equity Interests or Pledged Debt Securities,
whether resulting from a subdivision, combination or
reclassification of the outstanding Equity Interests of the issuer
of any Pledged Securities or received in exchange for Pledged
Securities or any part thereof, or in redemption thereof, or as a
result of any merger, consolidation, acquisition or other exchange
of assets to which such issuer may be a party or otherwise, shall
be and become part of the Pledged Collateral, and, if received by
any Loan Party, shall not be commingled by such Loan Party with any
of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Collateral
Agent and the other Secured Parties and shall be forthwith
delivered to the Collateral Agent in the same form as so received
(with any necessary endorsement, stock powers and other instruments
of transfer).
(b) Upon the occurrence and during the continuance
of an Event of Default, after the Collateral Agent shall have
notified the Loan Parties of the suspension of their rights under
paragraph (a)(iii) of this Section 3.06, all rights of any
Loan Party to dividends, interest, principal or other distributions
that such Loan Party is authorized to receive pursuant to such
paragraph shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole
and exclusive right and authority to receive and retain such
dividends, interest, principal or other distributions. All
dividends, interest, principal or other distributions received by
any Loan Party contrary to the provisions of this Section 3.06
shall be held in trust for the benefit of the Collateral Agent and
the other Secured Parties, shall be segregated from other property
or funds of such Loan Party and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with
any necessary endorsement). Any and all money and other property
paid over to or received by the Collateral Agent pursuant to the
provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral
Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02.
After all Events of Default have been cured or waived and the
Borrower has delivered to the Collateral Agent a certificate to
that effect, the Collateral Agent shall promptly repay to each Loan
Party (without interest) all dividends, interest, principal or
other distributions that such Loan Party would otherwise be
permitted to retain pursuant to the terms of paragraph (a)(iii) of
this Section 3.06 and that remain in such account.
(c) Upon the occurrence and during the continuance
of an Event of Default, after the Collateral Agent shall have
notified the Loan Parties of the suspension of their rights under
paragraph (a)(i) of this Section 3.06, all rights of any Loan
Party to exercise the voting and consensual rights and powers it is
entitled to exercise pursuant to paragraph (a)(i) of this
Section 3.06, and the obligations of the Collateral Agent
under paragraph (a)(ii) of this Section 3.06, shall
cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers;
provided that, unless otherwise directed by the Required
Lenders, the Collateral Agent shall have the right from time to
time following and during the continuance of an Event of Default to
permit the Loan Parties to exercise such rights. After all Events
of Default have been cured or waived, as the case may be, all
rights vested in the Collateral Agent pursuant to this paragraph
shall cease, and the Loan Parties shall have the voting and
consensual rights and powers they would otherwise be entitled to
exercise pursuant to paragraph (a)(i) of this
Section 3.06.
(d) Any notice given by the Collateral Agent to the
Loan Parties suspending their rights under paragraph (a) of
this Section 3.06 (i) may be given by telephone if promptly
confirmed in writing, (ii) may be given to one or more of the Loan
Parties at the same or different times and (iii) may suspend the
rights of the Loan Parties under paragraph (a)(i) or paragraph
(a)(iii) in part without suspending all such rights (as specified
by the Collateral Agent in its sole and absolute discretion) and
without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending
other rights so long as an Event of Default has occurred and is
continuing.
ARTICLE IV
Security Interests in Personal
Property
SECTION 4.01.
Security Interest
. (a) As security for the payment
in full of the Obligations, each Loan Party (including the
Borrower) hereby pledges to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, and hereby
grants to the Collateral Agent, its successors and assigns, for the
benefit of the Secured Parties, a security interest (the “
Security Interest ”) in, all right, title or
interest in or to any and all of the following assets and
properties now owned or at any time hereafter acquired by such Loan
Party or in which such Loan Party now has or at any time in the
future may acquire any right, title or interest (collectively, the
“ Article 9 Collateral
”):
(iii)
all cash and Deposit
Accounts;
(vi)
all General Intangibles;
(ix)
all Investment Property;
(x)
all letter-of-credit
rights;
(xi)
all commercial tort claims specified
on Schedule IV;
(xii)
all books and records pertaining to
the Article 9 Collateral; and
(xiii) to the extent not otherwise included, 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.
(b) Each Loan Party 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) with respect to the Article 9
Collateral or any part thereof and amendments thereto and
continuations thereof 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 (a) whether such Loan Party is an
organization, the type of organization and any organizational
identification number issued to such Loan Party and (b) in the case
of a financing statement filed as a fixture filing, a sufficient
description of the real property to which such Article 9
Collateral relates. Each Loan Party agrees to provide such
information to the Collateral Agent promptly upon request. Without
limiting the foregoing, each Loan Party hereby irrevocably
authorizes the Collateral Agent at any time and from time to time
to file in any relevant jurisdiction financing statements that
describe the Collateral as “all assets, whether now owned or
hereafter acquired” of such Loan Party, or words of similar
effects as being of an equal or lesser scope or with greater
detail.
Each Loan Party also ratifies its authorization
for the Collateral Agent to file in any relevant jurisdiction any
initial financing statements or amendments thereto if filed prior
to the date hereof.
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 documents as may be
necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted
by each Loan Party, without the signature of any Loan Party, and
naming any Loan Party or the Loan Parties 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 Loan Party with respect to or arising out of the
Article 9 Collateral (other than the duties expressly created
hereunder).
(d) Notwithstanding anything herein to the contrary,
in no event shall the security interest granted hereunder attach to
any license, contract or agreement to which a Loan Party is a party
or any of its rights or interests thereunder if and for so long as
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 Loan Party therein or (ii) in a breach or
termination pursuant to the terms of, or a default under, any such
license, contract or agreement (other than to the extent that any
such term would be rendered ineffective pursuant to
Section 9-406, 9-407, 9-408 or 9-409 of the New York UCC
or any other applicable law or principles of equity),
provided , however , that such security interest
shall attach immediately at such time as the condition causing such
abandonment, invalidation or unenforceability shall be remedied
and, to the extent severable, shall attach immediately to any
portion of such license, contract or agreement that does not result
in any of the consequences specified in (i) or (ii) including,
without limitation, any proceeds of such contract or agreement,
provided further that in no event shall
the Security Interest granted hereunder attach to (i) more
than 65% of the issued and outstanding voting Equity Interests of
any Foreign Subsidiary, (ii) any Equity Interests of any
Dormant Subsidiary or (iii) any trademark or service mark
applications filed in the United States Patent and Trademark Office
on the basis of any Loan Party’s “intent to use”
such mark unless and until the earlier of the filing of an
amendment to allege use (or statement of use) or the issuance of a
registration.
SECTION 4.02.
Representations and
Warranties . The Loan
Parties jointly and severally represent and warrant to the
Collateral Agent and the other Secured Parties that:
(a) Each Loan Party has good and valid rights in and
title to the Article 9 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, for the benefit of
the Secured Parties, the Security Interest in such Article 9
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, except to the extent that the
failure to have such rights, title, power or authority could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(b) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth
therein, including the exact legal name and place of organization
of each Loan Party, is correct and complete as of the Closing Date.
The Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations prepared by the Collateral Agent based upon the
information provided to the Collateral Agent in the Perfection
Certificate for filing in each governmental, municipal or other
office specified in Schedules 2A and 2B to the Perfection
Certificate (or specified by notice from the Borrower to the
Collateral Agent after the Closing Date in the case of filings,
recordings or registrations required by Section 6.13(b) or
6.15 of the Credit Agreement), 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 Article 9 Collateral consisting of
U
