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Exhibit
10.2
Execution
Version
GUARANTY AND COLLATERAL
AGREEMENT
dated as of May 15,
2007
among
MULTI-COLOR
CORPORATION
and
THE OTHER PARTIES
HERETO,
as
Grantors,
and
LASALLE BANK NATIONAL
ASSOCIATION,
as the Administrative
Agent
GUARANTY AND COLLATERAL
AGREEMENT
THIS GUARANTY AND COLLATERAL
AGREEMENT dated as of May 15, 2007 (this “
Agreement ”) is entered into among MULTI-COLOR
CORPORATION (the “ Company ”) and each other
Person signatory hereto as a Grantor (together with the Company and
any other Person that becomes a party hereto as provided herein,
the “ Grantors ”) in favor of LASALLE BANK
NATIONAL ASSOCIATION, as the Administrative Agent (the “
Administrative Agent ”) for all the Lenders party to
the Credit Agreement (as hereafter defined).
The Lenders have severally
agreed to extend credit to the Company pursuant to the Credit
Agreement. The Company is affiliated with each other Grantor. The
proceeds of credit extended under the Credit Agreement will be used
in part to enable the Company to make valuable transfers to the
Grantors in connection with the operation of their respective
businesses. The Company and the other Grantors are engaged in
interrelated businesses, and each Grantor will derive substantial
direct and indirect benefit from extensions of credit under the
Credit Agreement. It is a condition precedent to each
Lender’s obligation to extend credit under the Credit
Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of
all the Lenders.
In consideration of the
premises and to induce the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to extend
credit thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Lenders, as
follows:
SECTION 1 DEFINITIONS
.
1.1 Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement, and the
following terms are used herein as defined in the UCC: Accounts,
Certificated Security, Commercial Tort Claims, Deposit Accounts,
Documents, Electronic Chattel Paper, Equipment, Farm Products,
Goods, Health Care Insurance Receivables, Instruments, Inventory,
Leases, Letter-of-Credit Rights, Money, Payment Intangibles,
Supporting Obligations and Tangible Chattel Paper.
1.2 When used herein the
following terms shall have the following meanings:
Assigned Agreements
means any agreements relating to a Permitted Acquisition which are
now or hereafter collaterally assigned to the Administrative Agent
for the benefit of the Lenders.
Agreement has the
meaning set forth in the preamble hereto.
Chattel Paper means
all “chattel paper” as such term is defined in
Section 9-102(a)(11) of the UCC and, in any event, including
with respect to any Grantor, all Electronic Chattel Paper and
Tangible Chattel Paper.
Collateral means
(a) all of the personal property now owned or at any time
hereafter acquired by any Grantor or in which any
Grantor now has or at any time in the
future may acquire any right, title or interest, including all of
each Grantor’s Accounts, Chattel Paper, Commercial Tort
Claims, Deposit Accounts, Documents, Equipment, Fixtures, General
Intangibles, Goods, Instruments, Intellectual Property, Inventory,
Investment Property, Leases, Letter-of-Credit Rights, Money,
Supporting Obligations and Identified Claims, (b) all books
and records pertaining to any of the foregoing, (c) all
Proceeds and products of any of the foregoing, and (d) all
collateral security and guaranties given by any Person with respect
to any of the foregoing. Where the context requires, terms relating
to the Collateral or any part thereof, when used in relation to a
Grantor, shall refer to such Grantor’s Collateral or the
relevant part thereof.
Company Obligations
means all Obligations of the Company.
Contract Rights means
all of the Grantors’ rights and remedies with respect to the
Assigned Agreements.
Copyrights means all
copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished, including those
listed on Schedule 5 , all registrations and recordings
thereof, and all applications in connection therewith, including
all registrations, recordings and applications in the United States
Copyright Office, and the right to obtain all renewals of any of
the foregoing.
Copyright Licenses
means all written agreements naming any Grantor as licensor or
licensee, including those listed on Schedule 5 , granting
any right under any Copyright, including the grant of rights to
manufacture, distribute, exploit and sell materials derived from
any Copyright.
Credit Agreement means
the Credit Agreement of even date herewith among the Company, the
Lenders and the Administrative Agent, as amended, supplemented,
restated or otherwise modified from time to time.
Fixtures means all of
the following, whether now owned or hereafter acquired by a
Grantor: plant fixtures; business fixtures; other fixtures and
storage facilities, wherever located; and all additions and
accessories thereto and replacements therefor.
General Intangibles
means all “general intangibles” as such term is defined
in Section 9-102(a)(42) of the UCC and, in any event,
including with respect to any Grantor, all Payment Intangibles, all
contracts and Contract Rights (including all Assigned Agreements
and Seller Undertakings), agreements, instruments and indentures in
any form, and portions thereof, to which such Grantor is a party or
under which such Grantor has any right, title or interest or to
which such Grantor or any property of such Grantor is subject, as
the same from time to time may be amended, supplemented or
otherwise modified, including, without limitation, (a) all
rights of such Grantor to receive moneys due and to become due to
it thereunder or in connection therewith, (b) all rights of
such Grantor to damages arising thereunder and (c) all rights
of such Grantor to perform and to exercise all remedies thereunder;
provided , that the foregoing limitation shall not affect,
limit, restrict or impair the grant by such Grantor of a security
interest pursuant to this Agreement in any Receivable or any money
or other amounts due or to become due under any such Payment
Intangible, contract, agreement, instrument or
indenture.
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Guarantor Obligations
means, collectively, with respect to each Guarantor, all
Obligations of such Guarantor.
Guarantors means the
collective reference to each Grantor other than the Company, if
any.
Identified Claims
means the Commercial Tort Claims described on Schedule 7 as
such schedule shall be supplemented from time to time.
Intellectual Property
means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under
United States, multinational or foreign laws or otherwise,
including the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all
rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and
damages therefrom.
Intercompany Note
means any promissory note evidencing loans made by any Grantor to
any other Grantor.
Investment Property
means the collective reference to (a) all “investment
property” as such term is defined in
Section 9-102(a)(49) of the UCC (other than the equity
interest of any Foreign Subsidiary excluded from the definition of
Pledged Equity), (b) all “financial assets” as
such term is defined in Section 8-102(a)(9) of the UCC, and
(b) whether or not constituting “investment
property” as so defined, all Pledged Notes and all Pledged
Equity.
Issuers means the
collective reference to each issuer of any Investment
Property.
Paid in Full means
(a) the payment in full in cash and performance of all Secured
Obligations, (b) the termination of all Commitments and
(c) either (i) the cancellation and return to the
Administrative Agent of all Letters of Credit or (ii) the cash
collateralization of all Letters of Credit in accordance with the
Credit Agreement.
Patents means
(a) all letters patent of the United States, any other country
or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including any of the
foregoing referred to in Schedule 5, (b) all
applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including any of the foregoing referred to in Schedule
5, and (c) all rights to obtain any reissues or extensions
of the foregoing.
Patent Licenses means
all agreements, whether written or oral, providing for the grant by
or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including any of
the foregoing referred to in Schedule 5 .
Pledged Equity means
the equity interests listed on Schedule 1 , together with
any other equity interests, certificates, options or rights of any
nature whatsoever in respect of the equity interests of any Person
that may be issued or granted to, or held by, any Grantor while
this Agreement is in effect; provided that in no event shall
more than 65% of the total outstanding equity interests of any
Foreign Subsidiary be required to be pledged hereunder.
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Pledged Notes means
all promissory notes listed on Schedule 1 , all Intercompany
Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than
(a) promissory notes issued in connection with extensions of
trade credit by any Grantor in the ordinary course of business and
(b) any individual promissory note which is less than
$1,000,000 in principal amount, up to an aggregate of $1,000,000
for all such promissory notes excluded under this clause
(b)).
Proceeds means all
“proceeds” as such term is defined in
Section 9-102(a)(64) of the UCC and, in any event, shall
include all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect
thereto.
Receivable means any
right to payment for goods sold or leased or for services rendered,
whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance
(including any Accounts).
Secured Obligations
means, collectively, the Company Obligations and Guarantor
Obligations.
Securities Act means
the Securities Act of 1933, as amended.
Seller Undertakings
means, collectively, all representations, warranties, covenants and
agreements in favor of any Grantor, and all indemnifications for
the benefit of any Grantor relating thereto, pursuant to the
Assigned Agreements.
Trademarks means
(a) all trademarks, trade names, corporate names, the Company
names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and
all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and
all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country
or any political subdivision thereof, or otherwise, and all
common-law rights related thereto, including any of the foregoing
referred to in Schedule 5 , and (b) the right to obtain
all renewals thereof.
Trademark Licenses
means, collectively, each agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use
any Trademark, including any of the foregoing referred to in
Schedule 5 .
UCC means the Uniform
Commercial Code as in effect on the date hereof and from
time to time in the State of Ohio, provided that if by
reason of mandatory provisions of law, the perfection or the effect
of perfection or non-perfection of the security interests in any
Collateral or the availability of any remedy hereunder is governed
by the Uniform Commercial Code as in effect on or after the date
hereof in any other jurisdiction, “UCC” means the
Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or
effect of perfection or non-perfection or availability of such
remedy.
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SECTION 2 GUARANTY .
2.1 Guaranty .
(a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, as a primary obligor and not only
a surety, guaranties to the Administrative Agent, for the ratable
benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and
performance by the Company when due (whether at the stated
maturity, by acceleration or otherwise) of the Company
Obligations.
(b) Anything herein or in any
other Loan Document to the contrary notwithstanding, the maximum
liability of each Guarantor hereunder and under the other Loan
Documents shall in no event exceed the amount which can be
guarantied by such Guarantor under applicable federal and state
laws relating to the insolvency of debtors (after giving effect to
the right of contribution established in Section 2.2
).
(c) Each Guarantor agrees
that the Secured Obligations may at any time and from time to time
exceed the amount of the liability of such Guarantor hereunder
without impairing the guaranty contained in this
Section 2 or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.
(d) The guaranty contained in
this Section 2 shall remain in full force and effect
until all of the Secured Obligations shall have been Paid in
Full.
(e) No payment made by the
Company, any of the Guarantors, any other guarantor or any other
Person or received or collected by the Administrative Agent or any
Lender from the Company, any of the Guarantors, any other guarantor
or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to
time in reduction of or in payment of the Secured Obligations shall
be deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor in
respect of the Secured Obligations or any payment received or
collected from such Guarantor in respect of the Secured
Obligations), remain liable for the Secured Obligations up to the
maximum liability of such Guarantor hereunder until the Secured
Obligations are Paid in Full.
2.2 Right of
Contribution . Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to
seek and receive contribution from and against any other Guarantor
hereunder which has not paid its proportionate share of such
payment. Each Guarantor’s right of contribution shall be
subject to the terms and conditions of Section 2.3 .
The provisions of this Section 2.2 shall in no respect
limit the obligations and liabilities of any Guarantor to the
Administrative Agent and the Lenders, and each Guarantor shall
remain liable to the Administrative Agent and the Lenders for the
full amount guarantied by such Guarantor hereunder.
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2.3 No Subrogation .
Notwithstanding any payment made by any Guarantor hereunder or any
set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled
to be subrogated to any of the rights of the Administrative Agent
or any Lender against the Company or any other Guarantor or any
collateral security or guaranty or right of offset held by the
Administrative Agent or any Lender for the payment of the Secured
Obligations, nor shall any Guarantor seek or be entitled to seek
any contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder,
until all of the Secured Obligations are Paid in Full, no Letter of
Credit shall be outstanding and the Commitments are terminated. If
any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Secured Obligations
shall not have been Paid in Full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Secured Obligations, whether
matured or unmatured, in the order set forth in the Credit
Agreement.
2.4 Amendments, etc. with
respect to the Secured Obligations . Each Guarantor shall
remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any
of the Secured Obligations made by the Administrative Agent or any
Lender may be rescinded by the Administrative Agent or such Lender
and any of the Secured Obligations continued, and the Secured
Obligations, or the liability of any other Person upon or for any
part thereof, or any collateral security or guaranty therefor or
right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Lender, and the Credit Agreement and
the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders or all the Lenders,
as the case may be) may deem advisable from time to time. Neither
the Administrative Agent nor any Lender shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by
it as security for the Secured Obligations or for the guaranty
contained in this Section 2 or any property subject
thereto.
The Administrative Agent or
any Lender may, from time to time, at its sole discretion and
without notice to any Guarantor (or any of them), take any or all
of the following actions: (a) retain or obtain a security
interest in any personal property to secure any of the Secured
Obligations or any obligation hereunder, (b) retain or obtain
the primary or secondary obligation of any obligor or obligors, in
addition to the undersigned, with respect to any of the Secured
Obligations, (c) extend or renew any of the Secured
Obligations for one or more periods (whether or not longer than the
original period), alter or exchange any of the Secured Obligations,
or release or compromise any obligation of any of the undersigned
hereunder or any obligation of any nature of any other obligor with
respect to any of the Secured Obligations, (d) release any
guaranty or right of offset or its security interest in, or
surrender, release or permit any substitution or exchange for, all
or any part of any property securing any of the Secured Obligations
or any obligation hereunder, or extend or renew for one or more
periods (whether or not longer than the original period) or
release,
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compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such
property, and (e) resort to the undersigned (or any of them)
for payment of any of the Secured Obligations when due, whether or
not the Administrative Agent or such Lender shall have resorted to
any property securing any of the Secured Obligations or any
obligation hereunder or shall have proceeded against any other of
the undersigned or any other obligor primarily or secondarily
obligated with respect to any of the Secured
Obligations.
2.5 Waivers . Each
Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Secured Obligations and notice
of or proof of reliance by the Administrative Agent or any Lender
upon the guaranty contained in this Section 2 or
acceptance of the guaranty contained in this Section 2
; the Secured Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guaranty
contained in this Section 2 , and all dealings between
the Company and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in
reliance upon the guaranty contained in this Section 2
. Each Guarantor waives (a) diligence, presentment, protest,
demand for payment and notice of default, dishonor or nonpayment
and all other notices whatsoever to or upon the Company or any of
the Guarantors with respect to the Secured Obligations,
(b) notice of the existence or creation or non-payment of all
or any of the Secured Obligations and (c) all diligence in
collection or protection of or realization upon any Secured
Obligations or any security for or guaranty of any Secured
Obligations.
2.6 Payments . Each
Guarantor hereby guaranties that payments hereunder will be paid to
the Administrative Agent without set-off or counterclaim in Dollars
at the office of the Administrative Agent specified in the Credit
Agreement.
SECTION 3 GRANT OF SECURITY
INTEREST .
3.1 Grant . Each
Grantor hereby assigns and transfers to the Administrative Agent,
and hereby grants to the Administrative Agent, for the ratable
benefit of the Lenders and (to the extent provided herein) their
Affiliates, a continuing security interest in all of its
Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Company Obligations or the
Guarantor Obligations, as the case may be.
3.2 Collateral Assignment
of Rights under the Assigned Agreements . Each Grantor hereby
irrevocably authorizes and empowers the Administrative Agent or its
agents, in their sole discretion, to assert, either directly or on
behalf of any Grantor, at any time that an Event of Default is in
existence, any claims any Grantor may from time to time have
against the sellers or any of their affiliates with respect to any
and all of the Contract Rights or with respect to any and all
payments or other obligations due from the sellers or any of their
affiliates to the Company under or pursuant to the Assigned
Agreements (“ Payments ”), and to receive and
collect any damages, awards and other monies resulting therefrom
and to apply the same on account of the Secured
Obligations.
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After the occurrence of any Event of
Default, the Administrative Agent may provide notice to the sellers
or any of their affiliates under any Assigned Agreement that all
Payments shall be made to or at the direction of the Administrative
Agent for so long as such Event of Default shall be continuing.
Following the delivery of any such notice, the Administrative Agent
shall promptly notify the sellers under the Assigned Agreement upon
the termination or waiver of any such Event of Default. Each
Grantor hereby irrevocably makes, constitutes and appoints the
Administrative Agent (and all officers, employees, or agents
designated by the Administrative Agent) as such Grantor’s
true and lawful attorney (and agent-in-fact) for the purpose of
enabling the Administrative Agent or its agents to assert and
collect such claims and to apply such monies in the manner set
forth hereinabove.
SECTION 4 REPRESENTATIONS AND
WARRANTIES .
To induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to
the Company thereunder, each Grantor jointly and severally hereby
represents and warrants to the Administrative Agent and each Lender
that:
4.1 Title; No Other
Liens . Except for Permitted Liens, the Grantors own, lease or
license each item of the Collateral free and clear of any and all
Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file
or of record in any public office, except filings evidencing
Permitted Liens and filings for which termination statements have
been delivered to the Administrative Agent.
4.2 Perfected First
Priority Liens . The security interests granted pursuant to
this Agreement (a) subject to Permitted Liens, as of the date
hereof, upon completion of the filings and other actions specified
on Schedule 2 (which, in the case of all filings and other
documents referred to on Schedule 2 , have been delivered to
the Administrative Agent in completed and duly executed form) will
constitute valid perfected security interests in all of the
Collateral in favor of the Administrative Agent, for the ratable
benefit of the Lenders, as collateral security for each
Grantor’s Obligations, enforceable in accordance with the
terms hereof against all creditors of each Grantor and any Persons
purporting to purchase any Collateral from each Grantor and
(b) are prior to all other Liens on the Collateral in
existence on the date hereof except for Permitted Liens for which
priority is accorded under applicable law. The filings and other
actions specified on Schedule 2 constitute all of the
filings and other actions necessary to perfect all security
interests granted hereunder, as of the date hereof.
4.3 Grantor
Information . On the date hereof, Schedule 3 sets forth
(a) each Grantor’s jurisdiction of organization,
(b) the location of each Grantor’s chief executive
office, (c) each Grantor’s exact legal name as it
appears on its organizational documents and (d) each
Grantor’s organizational identification number (to the extent
a Grantor is organized in a jurisdiction which assigns such
numbers) and federal employer identification number.
4.4 Collateral
Locations . On the date hereof, Schedule 4 sets forth
(a) each place of business of each Grantor (including its
chief executive office), (b) all locations where all Inventory
and the Equipment owned by each Grantor is kept, except with
respect to Inventory and Equipment with a fair market value of less
than $1,000,000 (in the aggregate for all Grantors) which may be
located at
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other locations and (c) whether
each such Collateral location and place of business (including each
Grantor’s chief executive office) is owned or leased (and if
leased, specifies the complete name and notice address of each
lessor). Except as otherwise permitted by the preceding sentence,
no Collateral is located outside the United States or in the
possession of any lessor, bailee, warehouseman or consignee, except
as indicated on Schedule 4 .
4.5 Certain Property .
None of the Collateral constitutes, or is the Proceeds of,
(a) Farm Products, (b) Health Care Insurance Receivables
or (c) vessels, aircraft or any other property subject to any
certificate of title or other registration statute of the United
States, any State or other jurisdiction, except for personal
vehicles owned by the Grantors and used by employees of the
Grantors in the ordinary course of business with an aggregate fair
market value of less than $1,000,000 (in the aggregate for all
Grantors).
4.6 Investment
Property . (a) The Pledged Equity pledged by each Grantor
hereunder constitutes all the issued and outstanding equity
interests of each Issuer owned by such Grantor or, in the case of
any Foreign Subsidiary, 65% of all issued and outstanding equity
interests of such Foreign Subsidiary.
(b) All of the Pledged Equity
has been duly and validly issued and, except for Pledged Equity
constituting membership interests in a limited liability company,
is fully paid and nonassessable.
(c) Each of the Pledged Notes
constitutes the legal, valid and binding obligation of the obligor
with respect thereto, enforceable in accordance with its terms
(subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general
equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair
dealing).
(d) Schedule 1 lists
all Investment Property (other than Investments permitted under
Section 11.11(b) through Section 11.11(k) ,
inclusive, of the Credit Agreement) owned by each Grantor. Each
Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or
claims of, any other Person, except Permitted Liens.
4.7 Receivables .
(a) No material amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or
Chattel Paper which is required to be but has not been delivered to
the Administrative Agent.
(b) Governmental authorities
are not the obligors on a material amount of Receivables in the
aggregate.
(c) The amounts represented
by such Grantor to the Lenders from time to time as owing to such
Grantor in respect of the Receivables (to the extent such
representations are required by any of the Loan Documents) will at
all such times be accurate in all material respects.
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4.8 Intellectual
Property . (a) Schedule 5 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof;
provided , however , that Schedule 5 does not
include Intellectual Property owned by a third party and used by
any Grantor pursuant to a license.
(b) On the date hereof, all
material Intellectual Property owned by any Guarantor is valid,
subsisting, unexpired and enforceable and has not been
abandoned.
(c) Except as set forth in
Schedule 5 , none of the material Intellectual Property is
the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor.
(d) Each Grantor owns and
possesses or has a license or other right to use all Intellectual
Property as is necessary for the conduct of the businesses of such
Grantor, without any infringement upon rights of others which could
reasonably be expected to have a Material Adverse
Effect.
4.9 Depositary and Other
Accounts . All depositary and other accounts maintained by each
Grantor as of the date hereof are described on Schedule 6
hereto, which description includes for each such account the name
of the Grantor maintaining such account, the name and address of
the financial institution at which such account is maintained and
the account number of such account.
SECTION 5 COVENANTS .
Each Grantor covenants and
agrees with the Administrative Agent and the Lenders that, from and
after the date of this Agreement until the Secured Obligations
shall have been Paid in Full:
5.1 Delivery of
Instruments, Certificated Securities and Chattel Paper . If any
amount payable under or in connection with any of the Collateral in
excess of $1,000,000 (in the aggregate for all Grantors) shall be
or become evidenced by any Instrument, Certificated Security or
Chattel Paper, such Instrument, Certificated Security or Chattel
Paper shall be immediately delivered to the Administrative Agent,
duly indorsed in a manner satisfactory to the Administrative Agent,
to be held as Collateral pursuant to this Agreement. In the event
that an Unmatured Event of Default or Event of Default shall have
occurred and be continuing, upon the request of the Administrative
Agent, any Instrument, Certificated Security or Chattel Paper not
theretofore delivered to the Administrative Agent and at such time
being held by any Grantor shall be immediately delivered to the
Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this
Agreement.
5.2 Maintenance of
Perfected Security Interest; Further Documentation .
(a) Such Grantor shall maintain the security interest created
by this Agreement as a perfected security interest having at least
the priority described in Section 4.2 and shall defend
such security interest against the claims and demands of all
Persons whomsoever other than Permitted Liens.
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(b) Such Grantor will furnish
to the Administrative Agent and the Lenders from time to time
statements and schedules further identifying and describing the
assets and property of such Grantor and such other reports in
connection therewith as the Administrative Agent may reasonably
request, all in reasonable detail.
(c) At any time and from time
to time, upon the written request of the Administrative Agent, and
at the sole expense of such Grantor, such Grantor will promptly and
duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including (i) filing any
financing or continuation statements under the UCC (or other
similar laws) in effect in any jurisdiction with respect to the
security interests created hereby and (ii) in the case of
Investment Property and any other relevant Collateral, taking any
actions necessary to enable the Administrative Agent to obtain
“control” (within the meaning of the applicable UCC)
with respect thereto.
5.3 Changes in Locations,
Name, etc . Except with respect to Permitted Acquisitions
completed in accordance with the Credit Agreement, such Grantor
shall not, except upon 30 days’ prior written notice to the
Administrative Agent and delivery to the Administrative Agent of
(a) all additional financing statements and other documents
reasonably requested by the Administrative Agent as to the
validity, perfection and priority of the security interests
provided for herein and (b) if applicable, a written
supplement to Schedule 4 showing any additional location at
which Inventory or Equipment shall be kept:
(i) permit any of the
Inventory or Equipment to be kept at a location other than those
listed on Schedule 4 ; provided , that up to
$1,000,000 (in the aggregate for all Grantors) in fair market value
of any Inventory and Equipment may be kept at other
locations;
(ii) change its jurisdiction
of organization or the location of its chief executive office from
that specified on Schedule 3 or in any subsequent notice
delivered pursuant to this Section 5.3 ; or
(iii) change its name,
identity or corporate structure.
5.4 Notices . Such
Grantor will advise the Administrative Agent and the Lenders
promptly, in reasonable detail, of:
(a) any Lien (other than
Permitted Liens) on any of the Collateral which would adversely
affect the ability of the Administrative Agent to exercise any of
its remedies hereunder; and
(b) the occurrence of any
other event which could reasonably be expected to have a Material
Adverse Effect on the aggregate value of the Collateral or on the
Liens created hereby.
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5.5 Investment
Property . (a) If such Grantor shall become entitled to
receive or shall receive any certificate, option or rights in
respect of the equity interests of any Issuer, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any
of the Pledged Equity, or otherwise in respect thereof, such
Grantor shall accept the same as the agent of the Administrative
Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith
to the Administrative Agent in the exact form received, duly
indorsed by such Grantor to the Administrative Agent, if required,
together with an undated instrument of transfer covering such
certificate duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guarantied, to be held
by the Administrative Agent, subject to the terms hereof, as
additional Collateral for the Secured Obligations. Upon the
occurrence and during the continuance of an Event of Default,
(i) any sums paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer shall be
paid over to the Administrative Agent to be held by it hereunder as
additional Collateral for the Secured Obligations, and (ii) in
case any distribution of capital shall be made on or in respect of
the Investment Property or any property shall be distributed upon
or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer
or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected Lien in
favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional
Collateral for the Secured Obligations. Upon the occurrence and
during the continuance of an Event of Default, if any sums of money
or property so paid or distributed in respect of the Investment
Property shall be received by such Grantor, such Grantor shall,
until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the
Lenders, segregated from other funds of such Grantor, as additional
Collateral for the Secured Obligations.
(b) Without the prior written
consent of the Administrative Agent, such Grantor will not
(i) vote to enable, or take any other action to permit, any
Issuer to issue any equity interests of any nature or to issue any
other securities or interests convertible into or granting the
right to purchase or exchange for any equity interests of any
nature of any Issuer, except, in each case, as permitted by the
Credit Agreement, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the
Investment Property or Proceeds thereof (except pursuant to a
transaction expressly permitted by the Credit Agreement) other
than, with respect to Investment Property not constituting Pledged
Equity or Pledged Notes, any such action which is not prohibited by
the Credit Agreement, (iii) create, incur or permit to exist
any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or
any interest therein, except for Permitted Liens, or
(iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any of the Investment Property or Proceeds
thereof, except, with respect to such Investment Property,
shareholders’ agreements entered into by such Grantor with
respect to Person
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