GUARANTEE
AND COLLATERAL AGREEMENT
dated
as of May 30, 2008,
among
RENTECH
ENERGY MIDWEST CORPORATION,
as
the Borrower,
RENTECH,
INC.,
as
Holdings,
the
Subsidiaries of Holdings from time to time party
hereto
and
CREDIT
SUISSE, CAYMAN ISLANDS BRANCH
as
Collateral Agent
[CS&M
Ref. No. ________]
TABLE
OF CONTENTS
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Page
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ARTICLE
I
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Definitions
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SECTION
1.01. Credit Agreement
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2
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SECTION
1.02. Other Defined Terms
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2
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ARTICLE
II
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Guarantee
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SECTION
2.01. Guarantee
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2
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SECTION
2.02. Guarantee of Payment; Continuing
Guarantee
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2
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SECTION
2.03. No Limitations, Etc
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2
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SECTION
2.04. Reinstatement
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2
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SECTION
2.05. Agreement To Pay;
Subrogation
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2
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SECTION
2.06. Information
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2
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SECTION
2.07. Taxes
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2
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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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2
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SECTION
3.02. Delivery of the Pledged
Collateral
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2
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SECTION
3.03. Representations, Warranties and
Covenants
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2
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SECTION
3.04. Certification of Limited Liability
Company Interests and Limited Partnership
Interests
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2
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SECTION
3.05. Registration in Nominee Name;
Denominations
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2
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SECTION
3.06. Voting Rights; Dividends and Interest,
Etc
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2
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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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2
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SECTION
4.02. Representations and
Warranties
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2
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SECTION
4.03. Covenants
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2
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SECTION
4.04. Other Actions
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2
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SECTION
4.05. Covenants Regarding Patent, Trademark
and Copyright Collateral
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2
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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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2
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SECTION
5.02. Application of Proceeds
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2
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SECTION
5.03. Grant of License to Use Intellectual
Property
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2
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SECTION
5.04. Securities Act, Etc
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2
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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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2
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SECTION
6.02. Contribution and
Subrogation
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2
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SECTION
6.03. Subordination
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2
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ARTICLE
VII
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Miscellaneous
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SECTION
7.01. Notices
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2
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SECTION
7.02. Security Interest Absolute
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2
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SECTION
7.03. Survival of Agreement
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2
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SECTION
7.04. Binding Effect; Several
Agreement
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2
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SECTION
7.05. Successors and Assigns
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2
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SECTION
7.06. Agent’s Fees and Expenses;
Indemnification
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2
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SECTION
7.07. Agent Appointed
Attorney-in-Fact
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2
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SECTION
7.08. Applicable Law
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2
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SECTION
7.09. Waivers; Amendment
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2
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SECTION
7.10. WAIVER OF JURY TRIAL
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2
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SECTION
7.11. Severability
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2
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SECTION
7.12. Counterparts
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2
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SECTION
7.13. Headings
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2
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SECTION
7.14. Jurisdiction; Consent to Service of
Process
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2
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SECTION
7.15. Termination or Release
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2
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SECTION
7.16. Additional Subsidiaries
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2
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SECTION
7.17. Right of Setoff
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2
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Schedules
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Schedule
I
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Subsidiary
Guarantors
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Schedule
II
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Pledged
Equity Interests; Pledged Debt Securities
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Schedule
III
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Intellectual
Property
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Exhibits
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Exhibit
A
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Form
of Supplement
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Exhibit
B
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Form
of Perfection Certificate
|
GUARANTEE
AND COLLATERAL AGREEMENT dated as of May 30, 2008 (this
“ Agreement
”), among RENTECH ENERGY MIDWEST CORPORATION, a
corporation organized under the laws of the State of Delaware
(the “ Borrower
”), RENTECH, INC., a corporation organized under the
laws of the State of Colorado (“ Holdings
”), the Subsidiaries of Holdings from time to time party
hereto and CREDIT SUISSE, Cayman Islands Branch, as collateral
agent for the Secured Parties (in such capacity, the “
Collateral
Agent ”).
PRELIMINARY STATEMENT
Reference
is made to the Credit Agreement dated as of May 30, 2008
(as amended, supplemented or otherwise modified from time to
time, the “Credit
Agreement” ), among the Borrower, Holdings, the
lenders from time to time party thereto (the “
Lenders
”) and Credit Suisse, Cayman Islands Branch, as
administrative agent for the Lenders and collateral agent for
the Secured Parties (such term and each other capitalized term
used but not defined in this preliminary statement being
defined as provided in Article I).
The
Lenders 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 Guarantor. Each 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) Each capitalized term
used but not defined herein shall have the meaning assigned to it
in the Credit Agreement. Each capitalized term defined
in the New York UCC (as such term is defined herein) and not
defined in this Agreement shall have the meaning assigned to it in
the New York UCC. 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.
“
Agent
” shall mean Credit Suisse, in its capacity as
collateral agent for the Secured
Parties. References to “ Agent
” shall also include Credit Suisse, acting in its
capacity as administrative agent for the Lenders under the
Credit Agreement.
“
Agreement
” shall have the meaning assigned to such term in the
introductory paragraph.
“
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
introductory paragraph to this Agreement.
“
Claiming
Party ” has the meaning assigned to such term in
Section 6.02.
“
Collateral
” shall mean the Article 9 Collateral and the
Pledged Collateral.
“
Collateral
Agent ” shall have the meaning assigned to such
term in the introductory paragraph to this
Agreement.
“
Contributing
Party ” has the meaning assigned to such term in
Section 6.02.
“Controlled Foreign Corporation” shall mean
“controlled foreign corporation” as defined in the Tax
Code.
“
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
.
“
Credit
Agreement ” shall have the meaning assigned to
such term in the preliminary statement to this
Agreement.
“
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
every kind and nature (other than Accounts) and other general
intangibles 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 other leases, Hedging Agreements, the Management
Agreement 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 Holdings, the Borrower and the Subsidiary
Guarantors.
“
Guarantors
” shall mean Holdings and the Subsidiary
Guarantors.
“
Holdings
” shall have the meaning assigned to such term in the
introductory paragraph to this Agreement.
“
Intellectual
Property ” shall mean all intellectual and
similar property of every kind and nature now owned or
hereafter acquired by any Grantor, including inventions,
designs, Patents, Copyrights, Licenses, Trademarks, trade
secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information,
software and databases and all embodiments or fixations
thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with,
any of the foregoing.
“
Lenders
” shall have the meaning assigned to such term in the
preliminary statements to this Agreement.
“
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.
“Obligations” shall mean (a) the due and
punctual payment by the Borrower of (i) the principal of, premium
(if any) and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in
such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for
prepayment or otherwise and (ii) 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 fees, expense reimbursement obligations and
indemnification obligations, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), (b) the due and punctual
performance of all other obligations of the Borrower under or
pursuant to this Agreement and each of the other Loan Documents to
which it is a party and (c) the due and punctual payment and
performance of all the obligations of each other Loan Party under
or pursuant to the Security Documents and each of the other Loan
Documents to which they are a party.
“
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
, completed and supplemented with the schedules and
attachments contemplated thereby.
“
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
Equity Interests ” shall have the meaning
assigned to such term in Section 3.01.
“
Pledged
Securities ” shall mean any promissory notes,
unit certificates, stock certificates or other securities (as
defined in Article 8 of the New York UCC) now or hereafter
included in the Pledged Collateral, including all
certificates, instruments or other documents representing or
evidencing any Pledged Collateral.
“Secured Parties” shall mean the
Lenders.
“
Security
Interest ” shall have the meaning assigned to
such term in Section 4.01.
“
Subsidiary
Guarantors ” 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 Guarantors after the Closing Date.
“Tax Code” shall mean the United States Internal
Revenue Code of 1986, as amended from time to time.
“
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 Guarantor irrevocably and unconditionally
guarantees, jointly with the other Guarantors and severally, as a
primary obligor and not merely as a surety, the due and punctual
payment and performance of the Obligations. Each
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 hereunder
notwithstanding any such extension or renewal of any
Obligation. Each 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; Continuing Guarantee. Each Guarantor
further agrees that its guarantee hereunder constitutes a guarantee
of payment when due (whether or not any bankruptcy or similar
proceeding shall have stayed the accrual or collection of any of
the Obligations or operated as a discharge thereof) and not of
collection, and waives any right to require that any resort be had
by the 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 Agent or any other Secured
Party in favor of the Borrower, any other Loan Party or any other
person. Each Guarantor agrees that its guarantee
hereunder is continuing in nature and applies to all Obligations,
whether currently existing or hereafter incurred.
SECTION 2.03. No
Limitations, Etc. (b) Except for
termination of a Guarantor’s obligations hereunder as
expressly provided in Section 7.15, the obligations of each
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, any
impossibility in the performance of the Obligations or
otherwise.
Without
limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged, impaired or
otherwise affected by (i) the failure of the Agent or any
other Secured Party to assert any claim or demand or to
enforce or exercise any right or remedy under the provisions
of any Loan Document or otherwise, (ii) any extension or
renewal of any of the Obligations, (iii) 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 Guarantor under
this Agreement, (iv) the release of, or any impairment of
or failure to perfect any Lien on or security interest in, any
security held by the Agent or any other Secured Party for the
Obligations or any of them, (v) any default, failure or
delay, willful or otherwise, in the performance of the
Obligations or (vi) any other act, omission or delay to
do any other act that may or might in any manner or to any
extent vary the risk of any Guarantor or otherwise operate as
a discharge of any Guarantor as a matter of law or equity
(other than the indefeasible payment in full in cash of all
the Obligations (other than contingent indemnification
obligations)) or which would impair or eliminate the right of
any Guarantor to subrogation. Each Guarantor
expressly authorizes the Agent and the other Secured Parties
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 their 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 Guarantor hereunder. Each
Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements
contemplated by the Loan Documents.
(b)
Each
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 (other than contingent indemnification
obligations). The 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 Guarantor hereunder except to the extent the
Obligations (other than contingent indemnification obligations)
have been fully and indefeasibly paid in full in
cash. Each Guarantor 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
Guarantor against the Borrower or any other Loan Party, as the case
may be, or any security.
SECTION 2.04. Reinstatement.
Each 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 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 Agent
or any other Secured Party has at law or in equity against any
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 Guarantor, upon notice from Agent,
hereby promises to and will forthwith pay, or cause to be paid, to
the Agent for distribution to the applicable Secured Parties in
cash the amount of such unpaid Obligation. Upon payment
by any Guarantor of any sums to the Agent as provided above, all
rights of such Guarantor 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. If any amount
shall erroneously be paid to any Guarantor on account of any such
Indebtedness of the Borrower or any other Loan Party, such amount
shall be held in trust for the benefit of the Secured Parties and
shall forthwith be paid to the Agent to be credited against the
payment of the Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement and any other
Loan Document.
SECTION 2.06. Information.
Each 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
Guarantor assumes and incurs hereunder, and agrees that neither the
Agent nor any other Secured Party will have any duty to advise such
Guarantor of information known to it or any of them regarding such
circumstances or risks.
SECTION 2.07. Taxes
. Each Guarantor agrees that the provisions of Section
2.15 of the Credit Agreement shall apply equally to such Guarantor
with respect to payments made by it hereunder.
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 Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Agent, 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 in
any Subsidiary owned by such Grantor on the date hereof (including
all such Equity Interests listed on Schedule II
), (ii) any other Equity Interests in any Subsidiary obtained
in the future by such Grantor and (iii) all certificates, if any,
representing any such Equity Interests (all the foregoing
collectively referred to herein as the “ Pledged
Equity Interests ”), (b)(i) the debt securities
owing by any Subsidiary 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 owing by any Subsidiary obtained
in the future by such Grantor and (iii) all promissory notes
and other instruments evidencing any 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 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 ”).
Notwithstanding
anything herein to the contrary, in no event shall the
Security Interest attach to the outstanding capital stock of a
Controlled Foreign Corporation in excess of 65% of the voting
power of all classes of capital stock of such Controlled
Foreign Corporation entitled to vote, to the extent, and for
so long as, such pledge would result in adverse tax
consequences to the Secured Parties as a result of such
pledge; provided
, that immediately upon the amendment of the Tax Code to allow
the pledge of a greater percentage of the voting power of
capital stock in a Controlled Foreign Corporation without
adverse tax consequences, the Collateral shall include, and
the security interest granted by such Grantor shall attach to,
such greater percentage of capital stock of each Controlled
Foreign Corporation.
TO
HAVE AND TO HOLD the Pledged Collateral, together with all
right, title, interest, powers, privileges and preferences
pertaining or incidental thereto, unto the 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. (c) To the
extent required for the validity and first priority of the security
interests created or intended to be created by the Security
Documents, each Grantor agrees promptly to deliver or cause to be
delivered to the Agent any and all certificates, instruments or
other documents representing or evidencing Pledged
Securities.
(b)
Upon
delivery to the Agent, (i) any certificate, instrument or document
representing or evidencing Pledged Securities constituting a
“security” shall be accompanied by undated stock or
unit powers duly executed in blank or other undated instruments of
transfer satisfactory to the Agent and duly executed in blank and
by such other instruments and documents as the Agent may request
and (ii) all other property composing part of the Pledged
Collateral shall be accompanied by proper instruments of assignment
duly executed by the applicable Grantor and such other instruments
or documents as the Agent may 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.
SECTION 3.03. Representations,
Warranties and Covenants. Each Grantor, jointly
with the other Grantors and severally, represents and warrants, as
of the Effective Date, that, and covenants to and with the 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 such Pledged Equity Interests and
includes all Equity Interests, debt securities and promissory notes
required to be pledged hereunder to the extent required for the
validity and first priority of the security interests created or
intended to be created by the Security Documents;
(b)
the
Pledged Equity Interests and Pledged Debt Securities have been duly
and validly authorized and issued by the issuers thereof and
(i) in the case of Pledged Equity Interests, are fully paid
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 and (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;
(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 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 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 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 Agent
in accordance with this Agreement, the 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 Agent, for the
ratable benefit of the Secured Parties, the rights of the 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. As of the Closing Date, except as may
be set forth on Schedule II
, no interest in any limited liability company or limited
partnership which is a Subsidiary is represented by a certificate
or is a “security” within the meaning of Article 8 of
the New York UCC or governed by Article 8 of the New York
UCC. If after the Closing Date any interest in any
limited liability company or limited partnership which is a
Subsidiary becomes represented by a certificate or becomes a
“security” within the meaning of Article 8 of the
New York UCC, the applicable Grantor agrees to deliver such
certificate to the extent required for the validity and first
priority of the security interests created or intended to be
created by the Security Documents.
SECTION 3.05. Registration
in Nominee Name; Denominations. The Agent, on
behalf of the Secured Parties, shall have the right (in its sole
and absolute discretion), if an Event of Default shall have
occurred and be continuing, 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 Grantor, endorsed or
assigned in blank or in favor of the Agent. Each Grantor
will promptly give to the 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 Agent
shall at all times 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, Etc.
(d) Unless and until an Event of Default
shall have occurred and be continuing and, subject to applicable
law, the 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 could materially and adversely affect the rights inuring to a
holder of any Pledged Securities or the rights and remedies of the
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
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 subparagraph (i) above.
(iii)
Each
Grantor shall be entitled to receive and retain, free and clear of
the Lien of this Agreement, 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 Equity Interests or
Pledged Debt Securities, whether resulting from a subdivision,
combination or reclassification of the outstanding Equity Interests
in 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
Agent in the same form as so received (with any necessary
endorsement or instrument of assignment).
(b)
Upon
the occurrence and during the continuance of an Event of Default,
after the 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 Agent, for the ratable benefit of the Secured
Parties. The Agent 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 Agent, for the ratable benefit of
the Secured Parties, and shall be segregated from other property or
funds of such Grantor and shall be forthwith delivered to the Agent
upon demand in the same form as so received (with any necessary
endorsement or instrument of assignment). Any and all
money and other property paid over to or received by the Agent
pursuant to the provisions of this paragraph (b) shall be
retained by the Agent in an account to be established by the Agent
upon receipt of such money or other property and shall be applied
in accordance with the provisions of
Section 5.02. After all Obligations (other than
contingent indemnification obligations) are indefeasibly paid in
full in cash, the 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 remain in such account.
(c)
Upon
the occurrence and during the continuance of an Event of Default,
after the 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 Agent under paragraph (a)(ii) of this
Section 3.06, shall cease, and all such rights shall thereupon
become vested in the Agent, for the ratable benefit of the Secured
Parties. The Agent 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 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 Agent to the Grantors exercising its 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 Grantors at the same or different times and
(iii) 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 Agent in its sole and absolute discretion) and
without waiving or otherwise affecting the 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. (e) As security for the
payment or performance, as the case may be, in full of the
Obligations, each Grantor hereby grants to the 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;
(ii)
all
As-Extracted Collateral;
(iii)
all
Chattel Paper;
(iv)
all
cash and Deposit Accounts;
(v)
all
Documents;
(vi)
all
Equipment;
(vii)
all
Fixtures;
(viii)
all
General Intangibles;
(ix)
all
Instruments;
(x)
all
Inventory;
(xi)
all
Investment Property;
(xii)
all
Letter-of-Credit Rights;
(xiii)
all
Commercial Tort Claims;
(xiv)
all Securities Accounts;
(xv)
all
books and records pertaining to the Article 9 Collateral;
and
(xvi)
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
Grantor hereby irrevocably authorizes the 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 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 whether such
Grantor is an organization, the type of organization and any
organizational identification number issued to such
Grantor. Each Grantor agrees to provide such information
to the Agent promptly upon request.
Each
Grantor also ratifies its authorization for the Agent to file
in any relevant jurisdiction any initial financing statements
or amendments thereto if filed prior to the Closing
Date.
The
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 such Grantor, and naming such Grantor
or the Grantors as debtors and the Agent as secured
party.
(c)
The
Security Interest is granted as security only and shall not subject
the 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.
(d)
Notwithstanding
anything herein to the contrary, (i) in no event shall the Security
Interest attach to (A) any contract or agreement to which any
Grantor is a party or any of its rights or interests thereunder to
the extent and for so long as the grant of the Security Interest
shall constitute or result in (I) the unenforceability of any right
of such Grantor therein or (II) a breach or termination pursuant to
the terms of, or a default under, any such contract or agreement
(other than 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 New York UCC or any other applicable law or principles of
equity), (B) any fixtures, improvements or equipment acquired
by any Grantor after the Closing Date if (I) at least 80% of the
purchase price of such fixtures, improvements or equipment was
financed through the incurrence of Indebtedness, (II) such
Indebtedness is secured by a Lien on such fixtures, improvements or
equipment and (III) the terms of the instrument or instruments
governing such Indebtedness (but not of any refinancings or
replacements thereof) would be violated by the attachment of the
Security Interest to such fixtures, improvements or equipment, (C)
the Equity Interests in any person that is not the Bor
