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Exhibit 10.7
Execution Version
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GUARANTEE AND COLLATERAL AGREEMENT
dated as of
August 1, 2007
among
GOAMERICA, INC.,
the Subsidiaries of the Borrower
from time to time party hereto
and
CLEARLAKE CAPITAL GROUP, LP,
as Collateral Agent
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<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Credit
Agreement.................................................1
SECTION 1.02. Other Defined
Terms..............................................1
ARTICLE II
Guarantee
SECTION 2.01.
Guarantee........................................................4
SECTION 2.02. Guarantee of
Payment.............................................4
SECTION 2.03. No Limitations,
Etc..............................................5
SECTION 2.04.
Reinstatement....................................................6
SECTION 2.05. Agreement To Pay;
Subrogation....................................6
SECTION 2.06.
Information......................................................6
ARTICLE III
Pledge of Securities
SECTION 3.01.
Pledge...........................................................6
SECTION 3.02. Delivery of the Pledged
Collateral...............................7
SECTION 3.03. Representations, Warranties and
Covenants........................8
SECTION 3.04. Certification of Limited Liability Company
Interests
and Limited Partnership
Interests..............................9
SECTION 3.05.
Denominations....................................................9
SECTION 3.06. Voting Rights; Dividends and Interest,
Etc.......................9
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01. Security
Interest...............................................11
SECTION 4.02. Representations and
Warranties..................................13
SECTION 4.03. Covenants 15
SECTION 4.04. Other
Actions...................................................18
SECTION 4.05. Covenants Regarding Patent, Trademark and
Copyright
Collateral..........................................20
<PAGE>
ii
ARTICLE V
Remedies
SECTION 5.01. Remedies Upon
Default...........................................22
SECTION 5.02. Application of
Proceeds.........................................24
SECTION 5.03. Grant of License to Use Intellectual
Property...................24
SECTION 5.04. Securities Act,
Etc.............................................25
ARTICLE VI
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and
Subrogation.......................................26
SECTION 6.02. Contribution and
Subrogation....................................26
SECTION 6.03.
Subordination...................................................26
ARTICLE VII
Miscellaneous
SECTION 7.01.
Notices.........................................................27
SECTION 7.02. Security Interest
Absolute......................................27
SECTION 7.03. Survival of
Agreement...........................................27
SECTION 7.04. Limitation by
Law...............................................27
SECTION 7.05. Binding Effect; Several
Agreement...............................28
SECTION 7.06. Successors and
Assigns..........................................28
SECTION 7.07. Collateral Agent's Fees and Expenses;
Indemnification...........28
SECTION 7.08. Collateral Agent Appointed
Attorney-in-Fact.....................29
SECTION 7.09. Applicable
Law..................................................30
SECTION 7.10. Waivers;
Amendment..............................................30
SECTION 7.11. WAIVER OF JURY
TRIAL............................................30
SECTION 7.12.
Severability....................................................31
SECTION 7.13.
Counterparts....................................................31
SECTION 7.14.
Headings........................................................31
SECTION 7.15. Jurisdiction; Consent to Service of
Process.....................31
SECTION 7.16. Termination or
Release..........................................32
SECTION 7.17. Additional
Subsidiaries.........................................32
SECTION 7.18. Right of
Setoff.................................................32
<PAGE>
iii
Schedules
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Schedule I Subsidiary Guarantors
Schedule II Equity Interests; Pledged Debt Securities
Schedule III Intellectual Property
Exhibits
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Exhibit A Form of Supplement
Exhibit B Form of Perfection Certificate
<PAGE>
GUARANTEE AND COLLATERAL AGREEMENT dated as of August 1, 2007
(this
"Agreement"), among GOAMERICA, INC., a Delaware corporation (the
"Borrower"),
the Subsidiaries of the Borrower from time to time party hereto
and CLEARLAKE
CAPITAL GROUP, LP ("Clearlake"), as collateral agent (in such
capacity, the
"Collateral Agent").
PRELIMINARY STATEMENT
Reference is made to the Credit Agreement dated as of August 1,
2007 (as
amended, supplemented, amended and restated or otherwise
modified from time to
time, the "Credit Agreement"), among the Borrower, the lenders
from time to time
party thereto (each a "Lender" and collectively, the "Lenders")
and Clearlake,
as administrative agent (in such capacity, the "Administrative
Agent") and
Collateral Agent.
The Lenders (such term and each other capitalized term used but
not
defined in this preliminary statement having the meaning given
or ascribed to it
in Article I) have agreed to extend credit to the Borrower
pursuant to, and upon
the terms and conditions specified in, the Credit Agreement. The
obligations of
the Lenders to extend credit to the Borrower are conditioned
upon, among other
things, the execution and delivery of this Agreement by the
Borrower and each
Subsidiary Guarantor. Each Subsidiary Guarantor is an affiliate
of the Borrower,
will derive substantial benefits from the extension of credit to
the Borrower
pursuant to the Credit Agreement and is willing to execute and
deliver this
Agreement in order to induce the Lenders 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 and not otherwise defined herein have the meanings set
forth in the
Credit Agreement. All capitalized terms defined in the New York
UCC (as such
term is defined herein) and not defined in this Agreement have
the meanings
specified therein. Except where the usage dictates otherwise,
all references to
the Uniform Commercial Code shall mean 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:
"Accounts Receivable" shall mean all Accounts and all right,
title and
interest in any returned goods, together with all rights,
titles, securities and
guarantees with respect thereto, including any rights to
stoppage in transit,
replevin, reclamation and resales, and all related security
interests, liens and
pledges, whether voluntary or involuntary, in each case whether
now existing or
owned or hereafter arising or acquired.
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2
"Administrative Agent" shall have the meaning assigned to such
term in the
preliminary statement.
"Article 9 Collateral" shall have the meaning assigned to such
term in
Section 4.01.
"Borrower" shall have the meaning assigned to such term in the
preamble.
"Collateral" shall mean the Article 9 Collateral and the
Pledged
Collateral.
"Collateral Agent" shall have the meaning assigned to such term
in the
preamble.
"Copyright License" shall mean any written agreement, now or
hereafter in
effect, granting any right to any third person under any
copyright now or
hereafter owned by any Grantor or that such Grantor otherwise
has the right to
license, or granting any right to any Grantor under any
copyright now or
hereafter owned by any third person, and all rights of such
Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or
hereafter
acquired by any Grantor: (a) all copyright rights in any work
subject to the
copyright laws of the United States or any other country,
whether as author,
assignee, transferee or otherwise, and (b) all registrations and
applications
for registration of any such copyright in the United States or
any other
country, including registrations, recordings, supplemental
registrations and
pending applications for registration in the United States
Copyright Office (or
any successor office or any similar office in any other
country), including
those listed on Schedule III.
"Federal Securities Laws" shall have the meaning assigned to
such term in
Section 5.04.
"General Intangibles" shall mean all choses in action and causes
of action
and all other intangible personal property of any Grantor of
every kind and
nature (other than Accounts) now owned or hereafter acquired by
any Grantor,
including all rights and interests in partnerships, limited
partnerships,
limited liability companies and other unincorporated entities,
corporate or
other business records, indemnification claims, contract rights
(including
rights under leases, whether entered into as lessor or lessee,
Hedging
Agreements 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
Grantor to secure payment by an Account Debtor of any of the
Accounts.
"Grantors" shall mean the Borrower and the Subsidiary
Guarantors.
"Intellectual Property" shall mean all intellectual and similar
property
of any Grantor of every kind and nature now owned or hereafter
acquired by any
Grantor, including inventions, designs, Patents, Copyrights,
Licenses,
Trademarks, trade secrets,
<PAGE>
3
confidential or proprietary technical and business information,
know-how,
show-how or other data or information, software and databases
and all
embodiments or fixations thereof and related documentation,
registrations and
franchises, and all additions, improvements and accessions to,
and books and
records describing or used in connection with, any of the
foregoing.
"License" shall mean any Patent License, Trademark License,
Copyright
License or other license or sublicense agreement relating to
Intellectual
Property to which any Grantor is a party, including those listed
on Schedule
III.
"New York UCC" shall mean the Uniform Commercial Code as from
time to time
in effect in the State of New York.
"Patent License" shall mean any written agreement, now or
hereafter in
effect, granting to any third person any right to make, use or
sell any
invention on which a patent, now or hereafter owned by any
Grantor or that any
Grantor otherwise has the right to license, is in existence, or
granting to any
Grantor any right to make, use or sell any invention on which a
patent, now or
hereafter owned by any third person, is in existence, and all
rights of any
Grantor under any such agreement.
"Patents" shall mean all of the following now owned or hereafter
acquired
by any Grantor: (a) all letters patent of the United States or
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 successor
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" shall mean a certificate substantially
in the
form of Exhibit B hereto, completed and supplemented with the
schedules and
attachments contemplated thereby, and duly executed by a
Responsible Officer of
the Borrower.
"Pledged Collateral" shall have the meaning assigned to such
term in
Section 3.01.
"Pledged Debt Securities" shall have the meaning assigned to
such term in
Section 3.01.
"Pledged Securities" shall mean 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.
"Pledged Stock" shall have the meaning assigned to such term in
Section
3.01.
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4
"Secured Parties" shall mean (a) the Lenders, (b) the
Administrative
Agent, (c) the Collateral Agent, (d) the beneficiaries of each
indemnification
obligation undertaken by any Loan Party under any Loan Document
and (e) the
successors and assigns of each of the foregoing.
"Security Interest" shall have the meaning assigned to such term
in
Section 4.01.
"Subsidiary Guarantor" shall mean (a) the Subsidiaries
identified on
Schedule I hereto as Subsidiary Guarantors and (b) each other
Subsidiary that
becomes a party to this Agreement as a Subsidiary Guarantor
after the Closing
Date.
"Trademark License" shall mean any written agreement, now or
hereafter in
effect, granting to any third person any right to use any
trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has
the right to
license, or granting to any Grantor any right to use any
trademark now or
hereafter owned by any third person, and all rights of any
Grantor under any
such agreement.
"Trademarks" shall mean all of the following now owned or
hereafter
acquired by any Grantor: (a) all trademarks, service marks,
trade names,
corporate names, company names, business names, fictitious
business names, trade
styles, trade dress, logos, other source or business
identifiers, designs and
general intangibles of like nature, now existing or hereafter
adopted or
acquired, all registrations and recordings thereof, and all
registration and
recording applications filed in connection therewith, including
registrations
and registration applications in the United States Patent and
Trademark Office
(or any successor 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, (b) all
goodwill associated therewith or symbolized thereby and (c) all
other assets,
rights and interests that uniquely reflect or embody such
goodwill.
ARTICLE II
Guarantee
SECTION 2.01. Guarantee. Each Subsidiary Guarantor
unconditionally
guarantees, jointly with the other Subsidiary Guarantors and
severally, as a
primary obligor and not merely as a surety, the due and punctual
payment and
performance of the Obligations. Each Subsidiary Guarantor
further agrees that
the Obligations may be extended or renewed, in whole or in part,
without notice
to or further assent from it, and that it will remain bound upon
its guarantee
notwithstanding any extension or renewal of any Obligation. Each
Subsidiary
Guarantor waives presentment to, demand of payment from and
protest to the
Borrower or any other Loan Party of any Obligation, and also
waives notice of
acceptance of its guarantee and notice of protest for
nonpayment.
SECTION 2.02. Guarantee of Payment. Each Subsidiary Guarantor
further
agrees that its guarantee hereunder constitutes a guarantee of
payment when due
<PAGE>
5
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, Etc. (a) Except for termination of
a
Subsidiary Guarantor's obligations hereunder as expressly
provided in Section
7.16, the obligations of each Subsidiary Guarantor 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, and
shall not be subject to any defense or setoff, 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 Subsidiary
Guarantor
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
Subsidiary Guarantor
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, willful 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 Subsidiary Guarantor or
otherwise operate as
a discharge of any Subsidiary Guarantor as a matter of law or
equity (other than
the indefeasible payment in full in cash of all the
Obligations). Each
Subsidiary Guarantor expressly authorizes the Collateral Agent
to take and hold
security 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
its sole discretion or to release or substitute any one or more
other guarantors
or obligors upon or in respect of the Obligations, all without
affecting the
obligations of any Subsidiary Guarantor hereunder.
(b) To the fullest extent permitted by applicable law, each
Subsidiary
Guarantor 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 the 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 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 Subsidiary Guarantor 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 Subsidiary
Guarantor waives any
defense arising out of any such election even though
<PAGE>
6
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
Subsidiary Guarantor against the Borrower or any other Loan
Party, as the case
may be, or any security.
SECTION 2.04. Reinstatement. Each Subsidiary Guarantor 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
Subsidiary Guarantor
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
Subsidiary
Guarantor 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 Subsidiary
Guarantor of
any sums to the Collateral Agent as provided above, all rights
of such
Subsidiary Guarantor against the Borrower or any other
Subsidiary Guarantor
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 Subsidiary Guarantor 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 Subsidiary Guarantor assumes and
incurs hereunder,
and agrees that neither the Collateral Agent nor any other
Secured Party will
have any duty to advise such Subsidiary Guarantor 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 or
performance, as the
case may be, in full of the Obligations, each Grantor hereby
assigns and pledges
to the Collateral Agent, and its successors and assigns, for the
ratable benefit
of the Secured Parties, and hereby grants to the Collateral
Agent, and its
successors and assigns, for the ratable benefit of the Secured
Parties, a
security interest in, all of such Grantor's right, title and
interest in, to and
under (a)(i) the Equity Interests owned by such Grantor on the
date hereof
(including all such Equity Interests listed on Schedule II),
(ii) any other
Equity Interests obtained in the future by such Grantor and
(iii) the
certificates representing all such Equity Interests (all the
foregoing
collectively referred to herein as the "Pledged Stock");
provided, however, that
the Pledged Stock shall not include more
<PAGE>
7
than 66% of the issued and outstanding voting Equity Interests
of any Foreign
Subsidiary, (b)(i) the debt securities held by such Grantor on
the date hereof
(including all such debt securities listed opposite the name of
such Grantor on
Schedule II), (ii) any debt securities in the future issued to
such Grantor and
(iii) the promissory notes and any other instruments evidencing
such debt
securities (all the foregoing collectively referred to herein as
the "Pledged
Debt Securities"), (c) all other property that may be delivered
to and held by
the Collateral Agent pursuant to the terms of this Section 3.01,
(d) 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, (e) subject to Section 3.06, all
rights and
privileges of such Grantor with respect to the securities and
other property
referred to in clauses (a), (b), (c) and (d) above, and (f) all
Proceeds of any
of the foregoing (the items referred to in clauses (a) through
(f) 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 ratable
benefit of the Secured Parties, forever; subject, however, to
the terms,
covenants and conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) Each
Grantor agrees
promptly to deliver or cause to be delivered to the Collateral
Agent any and all
certificates, instruments or other documents representing or
evidencing Pledged
Securities.
(b) Each Grantor agrees promptly to deliver or cause to be
delivered to
the Collateral Agent any and all Pledged Debt Securities;
provided that, so long
as no Event of Default shall have occurred and be continuing,
Collateral Agent
shall, promptly upon request of such Grantor, make appropriate
arrangements for
making any promissory notes pledged by such Grantor available to
such Grantor
for purposes of prosecution, collection or renewal.
(c) Upon delivery to the Collateral Agent, (i) any certificate,
instrument
or document representing or evidencing Pledged Securities
required to be
delivered pursuant to paragraphs (a) and (b) of this Section
3.02 shall be
accompanied by undated stock powers duly executed in blank or
other undated
instruments of transfer satisfactory to the Collateral Agent and
duly executed
in blank and by such other instruments and documents as the
Collateral Agent may
reasonably request and (ii) all other property comprising part
of the Pledged
Collateral delivered pursuant to the terms of this Agreement
shall be
accompanied by proper instruments of assignment duly executed by
the applicable
Grantor 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 the applicable securities, which schedule
shall be
attached hereto as Schedule II and made a part hereof; provided
that failure to
attach any such schedule hereto shall not affect the validity of
the pledge of
such Pledged Securities. Each schedule so delivered shall
supplement any prior
schedules so delivered.
<PAGE>
8
SECTION 3.03. Representations, Warranties and Covenants. The
Grantors
jointly and severally represent, warrant and covenant to and
with the Collateral
Agent, for the benefit of the Secured Parties, that:
(a) Schedule II (i) correctly sets forth, in respect of each
issuer
that is a Loan Party or a Subsidiary thereof, the percentage of
the issued
and outstanding shares of each class of the Equity Interests of
the issuer
thereof represented by such Pledged Stock and (ii) includes all
Equity
Interests, debt securities and promissory notes required to be
pledged
hereunder;
(b) the Pledged Stock and Pledged Debt Securities issued by a
Loan
Party or a Subsidiary thereof have been duly and validly
authorized and
issued by the issuers thereof and (i) in the case of Pledged
Stock, are
fully paid and nonassessable and (ii) in the case of Pledged
Debt
Securities, are legal, valid and binding obligations of the
issuers
thereof;
(c) except for the security interests granted hereunder (or
otherwise permitted under the Credit Agreement), each Grantor
(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
Grantor, (ii)
holds the same free and clear of all Liens, (iii) will make no
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
transfers made in compliance with the Credit Agreement, and (iv)
subject
to Section 3.06, will cause any and all Pledged Collateral,
whether for
value paid by such Grantor or otherwise, to be forthwith
deposited with
the Collateral Agent and pledged or assigned hereunder;
(d) except for restrictions and limitations imposed by the
Loan
Documents or securities laws generally, the Pledged Collateral
is and will
continue to be freely transferable and assignable, and none of
the Pledged
Collateral constituting Equity Interests of a Loan Party or a
Subsidiary
thereof is or will be subject to any option, right of first
refusal,
shareholders agreement, charter or by-law provisions or
contractual
restriction of any nature that might prohibit, impair, delay or
otherwise
affect the pledge of such Pledged Collateral hereunder, the sale
or
disposition thereof pursuant hereto or the exercise by the
Collateral
Agent of rights and remedies hereunder;
(e) each Grantor (i) has the power and authority to pledge
the
Pledged Collateral pledged by it hereunder in the manner hereby
done or
contemplated and (ii) will defend its title or interest thereto
or therein
against any and all Liens (other than any Lien created or
permitted by the
Loan Documents), however arising, of all persons whomsoever;
(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
<PAGE>
9
pledge effected hereby (other than such as have been obtained
and are in
full force and effect);
(g) by virtue of the execution and delivery by each Grantor of
this
Agreement, when any Pledged Securities are delivered to the
Collateral
Agent in accordance with this Agreement, the Collateral Agent
will obtain
a legal, valid and perfected first priority lien upon and
security
interest in such Pledged Securities as security for the payment
and
performance of the Obligations; and
(h) the pledge effected hereby is effective to vest in the
Collateral Agent, for the ratable benefit of the Secured
Parties, the
rights of the Collateral Agent in the Pledged Collateral as set
forth
herein and all action by any Grantor necessary or desirable to
protect and
perfect the Lien on the Pledged Collateral has been duly
taken.
SECTION 3.04. Certification of Limited Liability Company
Interests and
Limited Partnership Interests. Each interest in any limited
liability company or
limited partnership which is a Subsidiary and pledged hereunder
shall be
represented by a certificate, shall be a "security" within the
meaning of
Article 8 of the New York UCC and shall be governed by Article 8
of the New York
UCC.
SECTION 3.05. Denominations. The Collateral Agent, on behalf of
the
Secured Parties, shall hold the Pledged Securities in the name
of the applicable
Grantor, endorsed or assigned in blank or in favor of the
Collateral Agent. Each
Grantor will promptly give to the Collateral Agent copies of any
notices or
other communications received by it with respect to Pledged
Securities in its
capacity as the registered owner thereof. The Collateral Agent
shall at all
times have the right to require the applicable Grantors 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, Etc. (a)
Unless and
until an Event of Default shall have occurred and be continuing
and the
Collateral Agent shall have given the Grantors notice of its
intent to exercise
its rights under this Agreement (which notice shall be deemed to
have been given
immediately upon the occurrence of an Event of Default under
paragraph (g) or
(h) of Article VII of the Credit Agreement):
(i) Each Grantor 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, however, that such rights and powers shall not be
exercised in
any manner that will materially and adversely affect the rights
inuring to
a holder of any Pledged Securities or 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.
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10
(ii) The Collateral Agent shall execute and deliver to each
Grantor,
or cause to be executed and delivered to each Grantor, all such
proxies,
powers of attorney and other instruments as such Grantor may
reasonably
request for the purpose of enabling such Grantor to exercise the
voting
and/or consensual rights and powers it is entitled to exercise
pursuant to
paragraph (i) above.
(iii) Each Grantor 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 law; provided, however, that
any
noncash dividends, interest, principal or other distributions
that would
constitute Pledged Stock 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
Grantor, shall not be commingled by such Grantor with any of its
other
funds or property but shall be held separate and apart
therefrom, shall be
held in trust for the ratable benefit of the Secured Parties and
shall be
forthwith delivered to the Collateral Agent in the same form as
so
received (with any necessary endorsement or instrument of
assignment).
This paragraph (iii) shall not apply to dividends between or
among the
Borrower, the Subsidiary Guarantors and any Subsidiaries only of
property
subject to a perfected security interest under this Agreement;
provided
that the Borrower notifies the Collateral Agent in writing,
specifically
referring to this Section 3.06 at the time of such non-cash
dividend and
takes any actions the Collateral Agent reasonably specifies to
ensure the
continuance of its perfected security interest in such property
under this
Agreement.
(b) Upon the occurrence and during the continuance of an Event
of Default,
after the Collateral Agent shall have notified (or shall be
deemed to have
notified pursuant to Section 3.06(a)) the Grantors of the
suspension of their
rights under paragraph (a)(iii) of this Section 3.06, then all
rights of any
Grantor to dividends, interest, principal or other distributions
that such
Grantor is authorized to receive pursuant to paragraph (a)(iii)
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
receive and retain such dividends, interest, principal or other
distributions.
All dividends, interest, principal or other distributions
received by any
Grantor contrary to the provisions of this Section 3.06 shall be
held in trust
for the benefit of the Collateral Agent, shall be segregated
from other property
or funds of such Grantor and shall be forthwith delivered to the
Collateral
Agent upon demand in the same form as so received (with any
necessary
<PAGE>
11
endorsement or instrument of assignment). 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 each
applicable Grantor has
delivered to the Administrative Agent certificates to that
effect, the
Collateral Agent shall, promptly after all such Events of
Default have been
cured or waived, repay to each applicable Grantor (without
interest) all
dividends, interest, principal or other distributions that such
Grantor would
otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) of
this Section 3.06 and that have not been applied to payment of
the Obligations.
(c) Upon the occurrence and during the continuance of an Event
of Default,
after the Collateral Agent shall have notified (or shall be
deemed to have
notified pursuant to Section 3.06(a)) the Grantors of the
suspension of their
rights under paragraph (a)(i) of this Section 3.06, then all
rights of any
Grantor 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 Grantors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Grantors
exercising
its rights under paragraph (a) of this Section 3.06 (i) may
suspend the rights
of the Grantors 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
or
performance, as the case may be, in full of the Obligations,
each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and
assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the
Collateral
Agent, its successors and assigns, for the ratable benefit of
the Secured
Parties, a security interest (the "Security Interest"), in all
right, title or
interest in or to any and all of the following assets and
properties now owned
or at any time hereafter acquired by such Grantor or in which
such Grantor now
has or at any time in the future may acquire any right, title or
interest
(collectively, the "Article 9 Collateral"):
(i) all Accounts;
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12
(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all Fixtures;
(vii) all General Intangibles;
(viii) all Instruments;
(ix) all Inventory;
(x) all Investment Property;
(xi) all Letter-of-Credit Rights;
(xii) all Commercial Tort Claims;
(xiii) all books and records pertaining to the Article 9
Collateral;
and
(xiv) 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;
provided, however, that the Article 9 Collateral shall not
include, and in no
event shall the security interest granted under this Section
4.01 attach to (A)
any lease, license, contract, property rights or agreement to
which any Grantor
is a party (or to any of its rights or interests thereunder) if
the grant of
such security interest would constitute or result in either (x)
the abandonment,
invalidation or unenforceability of any right, title or interest
of any Grantor
therein or (y) in a breach or termination pursuant to the terms
of, or a default
under, any such lease, license, contract, property rights or
agreement (other
than, in each case, to the extent that any such term would be
rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of
the UCC, any
provision of the Bankruptcy Code or otherwise), (B) any
Grantor's directors and
officers liability insurance policies, or (C) any application
for registration
of a trademark filed with the United States Patent and Trademark
Office on an
intent-to-use basis until such time (if any) as a statement of
use or amendment
to allege use is filed, at which time such trademark shall
automatically become
part of the Collateral and subject to the security interest
pledged.
(b) Each Grantor hereby irrevocably authorizes the Collateral
Agent at any
time and from time to time to file in any relevant jurisdiction
any initial
financing statements (including fixture filings) with respect to
the Article 9
Collateral or any part thereof and amendments thereto that (i)
indicate the
Article 9 Collateral as "all assets" of
<PAGE>
13
such Grantor or words of similar effect, and (ii) 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 Grantor is an organization, the type of
organization and any
organizational identification number issued to such Grantor 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 Grantor
agrees to provide such information to the Collateral Agent
promptly upon
request.
Each Grantor also ratifies its authorization for the Collateral
Agent to
file in any relevant jurisdiction any initial financing
statements or amendments
thereto 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
Grantor, without
the signature of any Grantor, and naming any Grantor or the
Grantors as debtors
and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall
not
subject the Collateral Agent or any other Secured Party to, or
in any way alter
or modify, any obligation or liability of any Grantor with
respect to or arising
out of the Article 9 Collateral.
SECTION 4.02. Representations and Warranties. The Grantors
jointly and
severally represent and warrant to the Collateral Agent and the
Secured Parties
that:
(a) Each Grantor 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 ratable 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.
(b) The Perfection Certificate has been duly prepared, completed
and
executed and the information set forth therein (including (x)
the exact
legal name of each Grantor and (y) the jurisdiction of
organization of
each Grantor) is correct and complete as of the Closing Date.
Uniform
Commercial Code financing statements (including fixture filings,
as
applicable) or other appropriate filings, recordings or
registrations
containing a description of the Article 9 Collateral have been
prepared by
the Collateral Agent based upon the information provided to
the
Administrative Agent and the Secured Parties in the Perfection
Certificate
for filing in each governmental, municipal or other office
specified in
Section 2 of the Perfection Certificate (or specified by notice
from the
Borrower to the Administrative Agent after the Closing Date in
the case of
filings, recordings or registrations required by Sections 5.06
or 5.12 of
the Credit Agreement), which
<PAGE>
14
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
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