<PAGE>
Exhibit 10.8
EXECUTION COPY
================================================================================
GUARANTEE, COLLATERAL AND INTERCREDITOR AGREEMENT
dated as of
November 30, 2005,
among
NETWORK COMMUNICATIONS, INC.,
GALLARUS MEDIA HOLDINGS, INC.,
the Subsidiaries of NETWORK COMMUNICATIONS, INC.,
from time to time party hereto,
CREDIT SUISSE,
as Collateral Agent,
CREDIT SUISSE,
as Revolving Loan Administrative Agent
and
CREDIT SUISSE,
as Term
Loan Administrative Agent
================================================================================
[CS&M Ref No. 5865-363]
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TABLE OF CONTENTS
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ARTICLE I
Definitions..............................................................
2
SECTION 1.01.
Credit
Agreements...................................... 2
SECTION 1.02.
Other Defined
Terms.................................... 2
SECTION 1.03.
Extensions.............................................
10
ARTICLE II
Guarantee................................................................
10
SECTION 2.01.
Guarantee..............................................
10
SECTION 2.02.
Guarantee of
Payment................................... 10
SECTION 2.03.
No Limitations,
Etc.................................... 11
SECTION 2.04.
Reinstatement..........................................
12
SECTION 2.05.
Agreement To Pay;
Subrogation.......................... 12
SECTION 2.06.
Information............................................
12
ARTICLE III
Pledge of
Securities.....................................................
12
SECTION 3.01.
Pledge.................................................
12
SECTION 3.02.
Delivery of the
Pledged Collateral..................... 13
SECTION 3.03.
Representations,
Warranties and Covenants.............. 13
SECTION 3.04.
Certification of
Limited Liability Company Interests
and Limited Partnership Interests......................
15
SECTION 3.05.
Registration in
Nominee Name; Denominations............ 15
SECTION 3.06.
Voting Rights;
Dividends and Interest, Etc............. 15
ARTICLE IV
Security Interests in Personal
Property.................................. 17
SECTION 4.01.
Security
Interest...................................... 17
SECTION 4.02.
Representations and
Warranties......................... 19
SECTION 4.03.
Covenants..............................................
21
SECTION 4.04.
Other
Actions.......................................... 25
SECTION 4.05.
Covenants Regarding
Patent, Trademark and Copyright
Collateral.............................................
28
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ii
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ARTICLE V
Remedies.................................................................
29
SECTION 5.01. Remedies Upon
Default.................................. 29
SECTION 5.02.
Application of
Proceeds................................ 31
SECTION 5.03.
Grant of License to
Use Intellectual Property.......... 32
SECTION 5.04.
Securities Act,
Etc.................................... 32
SECTION 5.05.
Provisions Relating to
Cash Collateralization of L/C
Exposure Under Revolving Loan Credit Agreement.........
33
ARTICLE VI
Acts of Secured Parties and Agents; Notices of Default and
Acceleration.. 33
SECTION 6.01.
Acts of Secured
Parties and Agents..................... 33
SECTION 6.02.
Determination of
Existence of Events of Default and
Acceleration; Notices to Agents........................
34
ARTICLE VII
Certain Intercreditor
Provisions......................................... 35
SECTION 7.01.
Actions Under This
Agreement........................... 35
SECTION 7.02.
Restrictions on
Actions................................ 35
SECTION 7.03.
Cooperation;
Accountings............................... 36
SECTION 7.04.
Other
Collateral....................................... 36
SECTION 7.05.
Preferential Payments
and Special Trust Account........ 36
SECTION 7.06.
Restoration of
Obligations............................. 37
SECTION 7.07.
Bankruptcy
Preferences................................. 37
SECTION 7.08.
Bankruptcy
Proceedings................................. 37
ARTICLE VIII
Concerning the Collateral
Agent.......................................... 38
SECTION 8.01.
Appointment of
Collateral Agent........................ 38
SECTION 8.02.
Limitations on
Responsibility of Collateral Agent...... 38
SECTION 8.03.
Reliance by Collateral
Agent; Indemnity Against
Liabilities, etc.......................................
39
SECTION 8.04.
Resignation of the
Collateral Agent.................... 39
SECTION 8.05.
Determination of
Amounts of Obligations................ 40
SECTION 8.06.
Authorized
Investments................................. 40
SECTION 8.07.
Certain Powers
Relating to Collateral.................. 41
ARTICLE IX
Representations and
Warranties........................................... 41
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iii
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ARTICLE X
Indemnity, Subrogation and
Subordination................................. 42
SECTION 10.01.
Indemnity and Subrogation..............................
42
SECTION 10.02.
Contribution and Subrogation...........................
42
SECTION 10.03.
Subordination..........................................
42
ARTICLE XI
Miscellaneous............................................................
43
SECTION 11.01.
Notices................................................
43
SECTION 11.02.
Security Interest Absolute.............................
43
SECTION 11.03.
Survival of Agreement..................................
43
SECTION 11.04.
Binding Effect; Several Agreement......................
43
SECTION 11.05.
Successors and Assigns.................................
44
SECTION 11.06.
Collateral Agent's Fees and Expenses; Indemnification..
44
SECTION 11.07.
Collateral Agent Appointed Attorney-in-Fact............
45
SECTION 11.08.
Applicable Law.........................................
46
SECTION 11.09.
Waivers; Amendment.....................................
46
SECTION 11.10.
WAIVER OF JURY TRIAL...................................
46
SECTION 11.11.
Severability...........................................
47
SECTION 11.12.
Counterparts...........................................
47
SECTION 11.13.
Headings...............................................
47
SECTION 11.14.
Jurisdiction; Consent to Service of Process............
47
SECTION 11.15.
Termination or Release.................................
48
SECTION 11.16.
Additional Subsidiaries................................
48
SECTION 11.17.
Right of Setoff........................................
49
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Schedules
Schedule I
Guarantors
Schedule II Equity
Interests; Pledged Debt Securities
Schedule III Intellectual Property
Exhibits
Exhibit A Form of Supplement
Exhibit B Form of Perfection Certificate
<PAGE>
GUARANTEE, COLLATERAL AND INTERCREDITOR AGREEMENT dated as
of November 30, 2005 (this "AGREEMENT"), among NETWORK
COMMUNICATIONS, INC., a Georgia corporation (the "BORROWER"),
GALLARUS MEDIA HOLDINGS, INC., a Delaware corporation
("HOLDINGS"), the Subsidiaries of the Borrower from time to
time
party hereto, CREDIT SUISSE, as collateral agent for the
Secured
Parties (as defined below) (in such capacity, the "COLLATERAL
AGENT"), CREDIT SUISSE, as administrative agent for the
Revolving
Lenders (as defined below) (in such capacity, the "REVOLVING
LOAN
ADMINISTRATIVE AGENT") and CREDIT SUISSE, as administrative
agent
for the Term Lenders (as defined below) (in such capacity, the
"TERM LOAN ADMINISTRATIVE AGENT" and, together with the
Revolving
Loan Administrative Agent, the "ADMINISTRATIVE AGENTS").
PRELIMINARY STATEMENT
Reference is made to (a) the Revolving Loan Credit Agreement dated
as
of November 30, 2005 (as amended, restated, supplemented or
otherwise modified
from time to time, the "REVOLVING LOAN CREDIT AGREEMENT"), among
the Borrower,
Holdings, the lenders from time to time party thereto (the
"REVOLVING LENDERS"),
the Revolving Loan Administrative Agent and the Collateral Agent,
and (b) the
Term Loan Credit Agreement dated as of November 30, 2005 (as
amended, restated,
supplemented or otherwise modified from time to time, the "TERM
LOAN CREDIT
AGREEMENT" and, together with the Revolving Loan Credit Agreement,
the "CREDIT
AGREEMENTS"), among the Borrower, Holdings, the lenders from time
to time party
thereto (the "TERM LENDERS" and, together with the Revolving
Lenders, the
"LENDERS"), the Term Loan Administrative Agent and the Collateral
Agent.
The Revolving
Lenders and the Issuing Bank have agreed to extend
credit to the Borrower subject to the terms and conditions set
forth in the
Revolving Loan Credit Agreement, and the Term Lenders have agreed
to make term
loans to the Borrower subject to the terms and conditions set forth
in the Term
Loan Credit Agreement. The obligations of the Lenders and the
Issuing Bank to
extend such credit are conditioned upon, among other things, the
execution and
delivery of this Agreement. Each Guarantor is an affiliate of the
Borrower, will
derive substantial benefits from the extension of credit to the
Borrower
pursuant to the Credit Agreements and is willing to execute and
deliver this
Agreement in order to induce the Lenders and the Issuing Bank to
extend such
credit. Accordingly, the parties hereto agree as follows:
<PAGE>
2
ARTICLE I
DEFINITIONS
SECTION 1.01. CREDIT AGREEMENTS. (a) Capitalized terms used in
this
Agreement and not otherwise defined herein have the meanings set
forth in the
applicable Credit Agreement. All capitalized terms defined in the
New York UCC
(as defined herein) and not defined in this Agreement have the
meanings
specified therein. All references to the Uniform Commercial Code
shall mean the
New York UCC.
(b) The rules of construction specified in Section 1.02 of each
Credit
Agreement also apply to this Agreement.
SECTION 1.02. OTHER DEFINED TERMS. As used in this Agreement,
the
following terms have the meanings specified below:
"ACCOUNT DEBTOR" shall mean any person who is or who may become
obligated to any Grantor under, with respect to or on account of an
Account
Receivable.
"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.
"ACT" shall have the meaning assigned to such term in Section
6.01.
"ADMINISTRATIVE AGENTS" shall have the meaning assigned to such
term
in the preamble.
"AGREEMENT" shall have the meaning assigned to such term in the
preamble.
"ARTICLE 9 COLLATERAL" shall have the meaning assigned to such term
in
Section 4.01.
"BANKRUPTCY PROCEEDING" shall mean, with respect to any person,
a
general assignment by such person for the benefit of its creditors,
or the
institution by or against such person of any proceeding seeking
relief as
debtor, or seeking to adjudicate such person as bankrupt or
insolvent, or
seeking reorganization, arrangement, adjustment or composition of
such person or
its debts, under any law relating to bankruptcy, insolvency,
reorganization or
relief of debtors generally, or seeking appointment of a receiver,
trustee,
custodian or other similar official for such person or for any
substantial part
of its property.
"BORROWER" shall have the meaning assigned to such term in the
preamble.
<PAGE>
3
"CASH EQUIVALENT INVESTMENTS" shall mean (a) direct obligations of,
or
obligations the principal of and interest on which are
unconditionally
guaranteed by, the United States of America (or by any agency
thereof to the
extent such obligations are backed by the full faith and credit of
the United
States of America), in each case maturing within 1 year from the
date of
acquisition thereof, (b) investments in tax-exempt obligations of
any State of
the United States of America, or any municipality of any such
State, maturing
within 30 days from the date of acquisition thereof and having, at
such date of
acquisition, one of the two highest credit ratings obtainable from
S&P or from
Moody's, (c) investments in commercial paper maturing within 60
days from the
date of acquisition thereof and having, at such date of
acquisition, one of the
two highest credit ratings obtainable from S&P or from Moody's,
(d) investments
in certificates of deposit, banker's acceptances, demand deposit
accounts and
time deposits maturing within 60 days from the date of acquisition
thereof
issued or guaranteed by or placed with, and money market deposit
accounts issued
or offered by, the Collateral Agent or any domestic office of any
commercial
bank organized under the laws of the United States of America or
any State
thereof that has a combined capital and surplus and undivided
profits of not
less than $500,000,000, (e) fully collateralized repurchase
agreements with a
term of not more than 30 days for securities described in clause
(a) above and
entered into with a financial institution satisfying the criteria
of clause (d)
above, (f) investments in "money market funds" within the meaning
of Rule 2a-7
of the Investment Company Act of 1940, as amended, substantially
all of whose
assets are invested in investments of the type described in clauses
(a) through
(e) above, and (g) investments in so-called "auction rate"
securities rated AAA
or higher by S&P or Aaa or higher by Moody's and which have a
reset date not
more than 90 days from the date of acquisition thereof.
"CLAIMING GUARANTOR" shall have the meaning assigned to such term
in
Section 10.02.
"COLLATERAL" shall mean the Article 9 Collateral, the Pledged
Collateral and all amounts received by any Secured Party pursuant
to Section
11.17.
"COLLATERAL AGENT" shall have the meaning assigned to such term in
the
preamble.
"CONTRIBUTING GUARANTOR" shall have the meaning assigned to such
term
in Section 10.02.
"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
<PAGE>
4
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 AGREEMENTS" shall have the meaning assigned to such term
in
the preliminary statement.
"EQUITY INTERESTS" shall mean shares of capital stock,
partnership
interests, membership interests in a limited liability company,
beneficial
interests in a trust or other equity interests in any person.
"EVENT OF DEFAULT" shall mean a Revolving Loan Event of Default or
a
Term Loan Event of Default.
"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 Guarantors.
"GUARANTORS" shall mean (a) Holdings and (b) each Subsidiary
that
becomes a party to this Agreement as a Guarantor after the Closing
Date.
"HOLDINGS" shall have the meaning assigned to such term in the
preamble.
"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, 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 and
registrations, and all additions, improvements and accessions to,
and books and
records describing or used in connection with, any of the
foregoing.
"ISSUING BANK" shall have the meaning assigned to such term in
the
Revolving Loan Credit Agreement.
<PAGE>
5
"LENDERS" shall have the meaning assigned to such term in the
preliminary statement.
"LICENSE" shall mean any Patent License, Trademark License,
Copyright
License or other license or sublicense agreement to which any
Grantor is a
party, including those material Licenses listed on Schedule
III.
"LOAN DOCUMENTS" shall mean the Revolving Loan Documents and the
Term
Loan Documents.
"LOANS" shall mean the Revolving Loans and the Term Loans.
"LOAN DOCUMENT OBLIGATIONS" shall mean the Revolving Loan
Document
Obligations and the Term Loan Document Obligations.
"MAJORITY SECURED PARTIES" shall mean Lenders, considered as a
single
class, holding more than 50% of the sum of (a) the aggregate amount
of the
Revolving Loan Exposures of all Revolving Lenders and (b) the
aggregate amount
of the Term Loan Exposures of all Term Lenders; provided that for
purposes of
determining the Majority Secured Parties, any Revolving Loan
Exposures and any
Term Loan Exposures then owned by the Borrower or its Affiliates
shall be
disregarded.
"NEW YORK UCC" shall mean the Uniform Commercial Code as from time
to
time in effect in the State of New York.
"NOTICE OF DEFAULT" shall have the meaning assigned to such term
in
Section 6.02.
"OBLIGATIONS" shall mean the Revolving Loan Obligations, the Term
Loan
Obligations and all monetary obligations of the Grantors to the
Collateral Agent
hereunder or under the other Security Documents.
"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
claimed therein, including the right to make, use and/or sell the
inventions
claimed therein.
<PAGE>
6
"PERFECTION CERTIFICATE" shall mean a certificate substantially in
the
form of Exhibit B, 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 EQUITY INTERESTS" 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.
"PREFERENTIAL PAYMENT" shall mean any payment (including any
deposit
of cash collateral) obtained by a Secured Party or its Affiliates
in respect of
Obligations held by it, whether in cash, securities or property,
through the
exercise of any remedy (including the commencement and prosecution
of any
litigation and the exercise of any right of setoff or right to
demand cash
collateral) available to such Secured Party as a result of the
occurrence and
continuance of any Event of Default; provided, that no payment made
to a Secured
Party pursuant to Section 5.02 or received by any Secured Party in
any
Bankruptcy Proceeding pursuant to a plan of reorganization or other
action
approved in writing by the Majority Secured Parties shall
constitute a
Preferential Payment.
"REVOLVING LENDERS" shall have the meaning assigned to such term
in
the preliminary statement.
"REVOLVING LOAN ADMINISTRATIVE AGENT" shall have the meaning
assigned
to such term in the preamble.
"REVOLVING LOAN CREDIT AGREEMENT" shall have the meaning assigned
to
such term in the preliminary statement.
"REVOLVING LOAN DEFAULT" shall mean any "Default" as defined in
the
Revolving Loan Credit Agreement.
"REVOLVING LOAN DOCUMENTS" shall mean the "Loan Documents" as
defined
in the Revolving Loan Credit Agreement.
"REVOLVING LOAN EVENT OF DEFAULT" shall mean any "Event of Default"
as
defined in the Revolving Loan Credit Agreement.
<PAGE>
7
"REVOLVING LOAN EXPOSURE" shall mean, as of any date of
determination,
for any Revolving Lender, (a) if no Revolving Loan Default or
Revolving Loan
Event of Default shall exist, the sum of (i) such Revolving
Lender's Pro Rata
Percentage of the aggregate amount of outstanding Revolving Loans
(excluding
Swingline Loans), (ii) such Lender's Pro Rata Percentage of the L/C
Exposure,
(iii) such Lender's Pro Rata Percentage of the Swingline Exposure
and (iv) such
Lender's Pro Rata Percentage of the aggregate amount of unused
Revolving Credit
Commitments, or (b) if a Revolving Loan Default or Revolving Loan
Event of
Default shall exist, the sum of (i) such Revolving Lender's Pro
Rata Percentage
of the aggregate amount of outstanding Revolving Loans (excluding
Swingline
Loans), (ii) such Lender's Pro Rata Percentage of the L/C Exposure
and (iii)
such Lender's Pro Rata Percentage of the Swingline Exposure.
"REVOLVING LOAN OBLIGATIONS" shall mean (a) the due and
punctual
payment by the Borrower of (i) the principal of and interest
(including interest
accruing during the pendency of any Bankruptcy Proceeding,
regardless of whether
allowed or allowable in such proceeding) on the Revolving Loans,
when and as
due, whether at maturity, by acceleration, upon one or more dates
set for
prepayment or otherwise, (ii) each payment required to be made
under the
Revolving Loan Credit Agreement in respect of any Letter of Credit,
when and as
due, including payments in respect of reimbursement of L/C
Disbursements,
interest thereon (including interest accruing during the pendency
of any
Bankruptcy Proceeding, regardless of whether allowed or allowable
in such
proceeding) and obligations to provide cash collateral, and (iii)
all other
monetary obligations of the Borrower to any of the Revolving Loan
Secured
Parties under the Revolving Loan Credit Agreement and each of the
other
Revolving 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
Proceeding,
regardless of whether allowed or allowable in such proceeding), (b)
the due and
punctual payment of all the monetary obligations of each other
Grantor to any
Revolving Loan Secured Party under or pursuant to the Revolving
Loan Credit
Agreement and each of the other Revolving Loan Documents, (c) the
due and
punctual payment and performance of all monetary obligations of
each Grantor
under each Hedging Agreement that (i) is in effect on the Closing
Date with a
counterparty that is a Revolving Lender or an Affiliate of a
Revolving Lender as
of the Closing Date or (ii) is entered into after the Closing Date
with any
counterparty that is a Revolving Lender or an Affiliate of a
Revolving Lender at
the time such Hedging Agreement is entered into and (d) the due and
punctual
payment and performance of all obligations of the Borrower to a
Revolving Lender
or an Affiliate of a Revolving Lender in respect of cash management
services
(other than cash management services provided after (i) the
principal of and
interest on each Revolving Loan and all fees payable under the
Revolving Loan
Credit Agreement have been paid in full, (ii) the Revolving Lenders
have no
further commitment to lend under the Revolving Loan Credit
Agreement, (iii) the
L/C Exposure has been reduced to zero and (iv) the Issuing Bank
under the
Revolving Loan Credit Agreement has no further obligation to issue
Letters of
Credit under the Revolving Loan Credit Agreement), including
obligations in
respect of overdrafts, temporary advances, interest and fees.
<PAGE>
8
"REVOLVING LOANS" shall mean the "Loans" as defined in the
Revolving
Loan Credit Agreement.
"REVOLVING LOAN SECURED PARTIES" shall mean (a) the Revolving
Lenders,
(b) the Revolving Loan Administrative Agent, (c) the Collateral
Agent, (d) any
Issuing Bank, (e) each counterparty to any Hedging Agreement with a
Grantor that
either (i) is in effect on the Closing Date if such counterparty is
a Revolving
Lender or an Affiliate of a Revolving Lender as of the Closing Date
or (ii) is
entered into after the Closing Date if such counterparty is a
Revolving Lender
or an Affiliate of a Revolving Lender at the time such Hedging
Agreement is
entered into, (f) the beneficiaries of each indemnification
obligation
undertaken by any Grantor under any Revolving Loan Document and (g)
the
successors and assigns of each of the foregoing.
"SECURED PARTIES" shall mean the collective reference to the
Revolving
Loan Secured Parties and the Term Loan Secured Parties.
"SECURITY DOCUMENTS" shall mean this Agreement and each of the
other
security agreements, mortgages or other instruments and documents
pursuant to
which a Lien is granted to secure any Obligations or under which
rights or
remedies with respect to any such Lien are governed.
"SECURITY INTEREST" shall have the meaning assigned to such term
in
Section 4.01.
"SPECIAL TRUST ACCOUNT" shall mean an interest-bearing
restricted
account maintained by the Collateral Agent for the benefit of the
Secured
Parties for the purpose of receiving and holding Preferential
Payments and
payments under Sections 3.06(b) and 7.05.
"TERM LENDERS" shall have the meaning assigned to such term in
the
preliminary statement.
"TERM LOAN ADMINISTRATIVE AGENT" shall have the meaning assigned
to
such term in the preamble.
"TERM LOAN CREDIT AGREEMENT" shall have the meaning assigned to
such
term in the preliminary statement.
"TERM LOAN DOCUMENTS" shall mean the "Loan Documents" as defined
in
the Term Loan Credit Agreement.
"TERM LOAN EVENT OF DEFAULT" shall mean any "Event of Default"
as
defined in the Term Loan Credit Agreement.
"TERM LOAN EXPOSURE" shall mean, as of any date of determination,
for
any Term Lender, such Term Lender's Pro Rata Percentage of the
aggregate amount
of outstanding Term Loans.
<PAGE>
9
"TERM LOAN OBLIGATIONS" shall mean (a) the due and punctual payment
by
the Borrower of (i) the principal of and interest (including
interest accruing
during the pendency of any Bankruptcy Proceeding, regardless of
whether allowed
or allowable in such proceeding) on the Term 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
Term Loan Secured Parties under the Term Loan Credit Agreement and
each of the
other Term 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
Proceeding,
regardless of whether allowed or allowable in such proceeding), (b)
the due and
punctual payment of all the monetary obligations of each other
Grantor to any of
the Term Loan Secured Parties under or pursuant to the Term Loan
Credit
Agreement and each of the other Term Loan Documents and (c) the due
and punctual
payment and performance of all obligations of the Borrower to a
Term Lender or
an Affiliate of a Term Lender in respect of cash management
services (other than
cash management services provided after (i) the principal of and
interest on
each Term Loan and all fees payable under the Term Loan Credit
Agreement have
been paid in full and (ii) the Term Lenders have no further
commitment to lend
under the Term Loan Credit Agreement), including obligations in
respect of
overdrafts, temporary advances, interest and fees.
"TERM LOANS" shall mean the "Loans" as defined in the Term Loan
Credit
Agreement.
"TERM LOAN SECURED PARTIES" shall mean (a) the Term Lenders, (b)
the
Term Loan Administrative Agent, (c) the Collateral Agent, (d) each
counterparty
to any Hedging Agreement with a Grantor that either (i) is in
effect on the
Closing Date if such counterparty is a Term Lender or an Affiliate
of a Term
Lender as of the Closing Date or (ii) is entered into after the
Closing Date if
such counterparty is a Term Lender or an Affiliate of a Term Lender
at the time
such Hedging Agreement is entered into, (e) the beneficiaries of
each
indemnification obligation undertaken by any Grantor under any Term
Loan
Document and (f) the successors and assigns of each of the
foregoing.
"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
<PAGE>
10
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, but
excluding in all
cases any intent-to-use United States trademark application for
which an
amendment to allege use or statement of use has not been filed
under 15 U.S.C
Section 1051(c) or 15 U.S.C Section 1051(d), respectively, or, if
filed, has not
been deemed in conformance with 15 U.S.C Section 1051(a) or
examined and
accepted, respectively, by the United States Patent and Trademark
Office.
"UNFUNDED ADVANCES/PARTICIPATIONS" shall mean (a) with respect to
each
Administrative Agent, the aggregate amount, if any (i) made
available to the
Borrower on the assumption that each Lender has made its portion of
the
applicable Borrowing available to the Administrative Agents (as
contemplated by
Section 2.02(d) of each Credit Agreement) and (ii) with respect to
which a
corresponding amount shall not in fact have been returned to such
Administrative
Agent by the Borrower or made available to such Administrative
Agent by any such
Lender, (b) with respect to the Swingline Lender, the aggregate
amount, if any,
of participations in respect of any outstanding Swingline Loan that
shall not
have been funded by the Revolving Lenders in accordance with
Section 2.21(e) of
the Revolving Loan Credit Agreement and (c) with respect to any
Issuing Bank,
the aggregate amount, if any, of participations in respect of any
outstanding
L/C Disbursement that shall not have been funded by the Revolving
Lenders in
accordance with Sections 2.22(d) and 2.02(f) of the Revolving Loan
Credit
Agreement.
SECTION 1.03. EXTENSIONS. The Collateral Agent may grant extensions
of
time for the perfection of security interests in or the obtaining
of title
insurance with respect to particular assets (including extensions
beyond the
Closing Date for the perfection of security interests in the assets
of the
Grantors on such date) where it determines that perfection cannot
be
accomplished without undue effort or expense by the time or times
at which it
would otherwise be required by the Loan Documents.
ARTICLE II
GUARANTEE
SECTION 2.01. GUARANTEE. Each Guarantor 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 any of 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 Guarantor waives
presentment to,
demand of payment from and protest to the Borrower or any other
Grantor of any
of the Obligations, and also waives notice of acceptance of its
guarantee and
notice of protest for nonpayment.
SECTION 2.02. GUARANTEE OF PAYMENT. Each Guarantor further agrees
that
its guarantee hereunder constitutes a guarantee of payment when due
and not of
collection, and waives any right to require that any resort be had
by the
Collateral Agent
<PAGE>
11
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
Guarantor's obligations hereunder as expressly provided in Section
11.15, 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 or
otherwise. Without limiting the generality of the foregoing, the
obligations of
each 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 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 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).
Each 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 Guarantor hereunder.
(b)
To the fullest extent permitted by applicable law, each
Guarantor
waives any defense based on or arising out of any defense of the
Borrower or any
other Grantor 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 Grantor, 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 Grantor or
exercise any other
right or remedy available to them against the Borrower or any other
Grantor,
without affecting or impairing in any way the liability of any
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
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
<PAGE>
12
remedy of such Guarantor against the Borrower or any other Grantor,
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 Collateral Agent or any other
Secured Party
upon the bankruptcy or reorganization of the Borrower, any other
Grantor 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
Guarantor by virtue
hereof, upon the failure of the Borrower or any other Grantor 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 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 Guarantor of any sums to the
Collateral
Agent as provided above, all rights of such Guarantor against the
Borrower or
any other 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 Guarantor assumes all
responsibility
for being and keeping itself informed of the Borrower's and each
Guarantor'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 Collateral 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.
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, 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 in, all of such Grantor's right, title and
interest in, to and
under (a)(i) the shares of capital stock and other Equity Interests
owned by
such Grantor on the date hereof (including all such shares and
other Equity
Interests set forth 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 EQUITY INTERESTS"); provided that the Pledged Equity
Interests shall
not include more 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 set forth
on
<PAGE>
13
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.
(c) Upon delivery to the Collateral Agent, (i) any certificate,
instrument or document representing or evidencing Pledged
Securities 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
request and (ii) all other property comprising 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
Collateral
Agent may request. Each delivery of Pledged Securities shall be
accompanied by a
schedule describing the 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. 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 correctly sets forth the percentage of the
issued
and outstanding shares of each class of the Equity Interests of
the
issuer thereof represented by such Pledged Equity Interests and
includes all
<PAGE>
14
Equity
Interests, debt securities and promissory notes required to be
pledged hereunder;
(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
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 Agreements), each Grantor (i)
is
and, subject to any transfers made in compliance with the
Credit
Agreements, 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 Agreements, 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 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 the 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 or as to which the
failure
to obtain could not reasonably be expected to result in a
Material
Adverse 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
<PAGE>
15
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. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. The
Collateral Agent, on behalf of the Secured Parties, shall have the
right (in its
sole and absolute discretion) to hold the Pledged Securities in its
own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or
the name of the
applicable 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 following the occurrence and during the
continuance of an
Event of Default 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. (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 either 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, each Credit Agreement and each other
Loan
Document; 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 any of the Collateral Agent or the other Secured
Parties
under this Agreement, any Credit Agreement or any other Loan
Document
or the ability of the Secured Parties to exercise the same.
<PAGE>
16
(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 each Credit
Agreement,
each other Loan Document 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 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 Collateral Agent and shall be
forthwith
delivered to the Collateral Agent in the same form as so
received
(with any necessary endorsement, stock power or instrument of
assignment). This paragraph (iii) shall not apply to dividends
between
or among the Borrower, the 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 dividend and takes any actions the Collateral Agent 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
<PAGE>
17
(with any necessary 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 the Special Trust Account 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 Agents 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 remain in the Special Trust Account.
(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 Majority Secured Parties, 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 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 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"):
<PAGE>
18
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) all Letter-of-Credit Rights;
(xi) all Commercial Tort Claims;
(xii) all books and records pertaining to the Article 9
Collateral; and
(xiii) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral
security
and guarantees given by any person with respect to any of the
foregoing.
Notwithstanding anything herein to the contrary, in no event shall
the security
interest granted hereunder attach to (A) any contract or agreement
to which a
Grantor is a party or any of its rights or interests thereunder if
and for so
long as the grant of such security interest shall constitute or
result in (x)
the unenforceability of any right of the Grantor therein or (y) in
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); provided,
however,
that such security interest shall attach immediately at such time
as the
condition causing such unenforceability shall be remedied and, to
the extent
severable, shall attach immediately to any portion of such contract
or agreement
that does not result in any of the consequences specified in
clauses (x) or (y)
including, without limitation, any proceeds of such contract or
agreement, or
(B) any Intellectual Property to the extent the grant of a security
interest
therein by a Grantor would result in the cancellation or invalidity
thereof.
(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>
19
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 reasonably 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.
(d) Notwithstanding anything contained herein or in any of the
Loan
Documents to the contrary, in no event shall any Grantor have any
obligation to
disclose, schedule or perfect any security interest in any
Copyright or License
existing as of the date hereof that such Grantor, in its reasonable
business
judgment, does not consider to be material to the conduct of the
business of the
Borrower and its Subsidiaries, taken as a whole, or that are
subject to the
copyright laws of any country other than the United States.
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.
<PAGE>
20
(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 Collateral Agent, the
Administrative
Agents and the Secured Parties in the Perfection Certificate
for
filing in each governmental, municipal or other office specified
in
Schedule 2 to the Perfection Certificate (or specified by notice
from
the Borrower to the Collateral Agent after the Closing Date in
the
case of filings, recordings or registrations required by Sections
5.06
or 5.12 of each Credit Agreement), which are all the filings,
recordings and registrations (other than filings required to be
made
in the United States Patent and Trademark Office and the United
States
Copyright Office in order to perfect the Security Interest in
the
Article 9 Collateral consisting of United States Patents,
Trademarks
and Copyrights) that are necessary to publish notice of and
protect
the validity of and to establish a legal, valid and perfected
security
interest in favor of the Collateral Agent (for the ratable benefit
of
the
Secured Parties) in respect of all Article 9 Collateral in
which
the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration
or
reregistration is necessary in any such jurisdiction, except as
provided under applicable law with respect to the filing of
continuation statements. Each Grantor represents and warrants
that
fully executed short-form security agreements (in form and
substance
satisfactory to the Collateral Agent), collectively containing
a
description of all Article 9 Collateral consisting of issued,
registered or pending and otherwise material Intellectual
Property
with respect to United States Patents (and applications
therefor),
United States Trademarks (and applications therefor) and United
States
Copyrights, have been delivered to the Collateral Agent for
recording
in the United States Patent and Trademark Office and/or the
United
States Copyright Office pursuant to 35 U.S.C. Section 261, 15
U.S.C.
Section 1060 or 17 U.S.C. Section 205 and the regulations
thereunder,
as applicable, to protect the validity of and to establish a
legal,
valid and perfected security interest in favor of the Collateral
Agent
(for the
ratable benefit of the Secured Parties) in respect of all
Article 9 Collateral consisting of Patents, Trademarks and
Copyrights
in which a security interest may be perfected by filing, recording
or
registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration
or
reregistration is necessary with respect to such Patents,
Trademarks
and Copyrights (other than such actions as are necessary to
perfect
the Security Interest with
<PAGE>
21
respect to any Article 9 Collateral consisting of Patents,
Trademarks
and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid
security interest in all Article 9 Collateral securing the payment
and
performance of the Obligations, (ii) subject to the filing of
the
financing statements described in Section 4.02(b), a perfected
security interest in all Article 9 Collateral in which a
security
interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or
any
political subdivision thereof) and its territories and
possessions
pursuant to the Uniform Commercial Code or other applicable law
in
such jurisdictions and (iii) a security interest that shall be
perfected in all Article 9 Collateral in which a security interest
may
be perfected upon the receipt and recording of the short-form
security
agreement referred to in paragraph (b) above with the United
States
Patent and Trademark Office and the United States Copyright Office,
as
applicable. The Security Interest is and shall be prior to any
other
Lien on any of the Article 9 Collateral, other than Liens
expressly
permitted pursuant to Section 6.02 of each Credit Agreement that
have
priority as a matter of law.
(d) The Article 9 Collateral is owned by the Grantors free and
clear of any Lien, except for Liens expressly permitted pursuant
to
Section 6.02 of each Credit Agreement. No Grantor has filed or
consented
to the filing of (i) any financing statement or analogous
document under the Uniform Commercial Code or any other
applicable
laws covering any Article 9 Collateral, (ii) any assignment in
which
any Grantor assigns any Collateral or any security agreement or
similar instrument covering any Article 9 Collateral with the
United
States Patent and Trademark Office or the United States
Copyright
Office, (iii) any notice under the Assignment of Claims Act, or
(iv)
any assignment in which any Grantor assigns any Article 9
Collateral
or any security agreement or similar instrument covering any
Article 9
Collateral with any foreign governmental, municipal or other
office,
which financing statement or analogous document, assignment,
security
agreement or similar instrument is still in effect, except, in
each
case, for Liens expressly permitted pursuant to Section 6.02 of
each
Credit Agreement. No Grantor holds any Commercial Tort Claims
except
as indicated on the Perfection Certificate.
SECTION 4.03. COVENANTS. (a) Each Grantor agrees promptly to
notify
the Collateral Agent in writing of any change in (i) its legal
name, (ii) its
identity or type of organization or corporate structure, (iii) its
Federal
Taxpayer Identification Number or organizational identification
number or (iv)
in its jurisdiction of organization. Each Grantor agrees promptly
to provide the
Collateral Agent with certified organizational documents reflecting
any of the
changes described in the first sentence of this paragraph. Each
Grantor agrees
not to effect or permit any change referred to in the preceding
<PAGE>
22
sentence unless all filings have been made under the Uniform
Commercial Code or
otherwise that are required in order for the Collateral Agent to
continue at all
times following such change to have a valid, legal and perfected
first priority
security interest in all the Article 9 Collateral. Each Grantor
agrees promptly
to notify the Collateral Agent if any material portion of the
Article 9
Collateral owned or held by such Grantor is damaged or
destroyed.
(b) Each Grantor agrees to (i) maintain, at its own cost and
expense,
such complete and accurate records with respect to the Article 9
Collateral
owned by it as is consistent with its current practices and in
accordance with
such prudent and standard practices used in industries that are the
same as or
similar to those in which such Grantor is engaged and (ii) at such
time or times
as the Collateral Agent may reasonably request, promptly to prepare
and deliver
to the Collateral Agent a duly certified schedule or schedules in
form and
detail satisfactory to the Collateral Agent showing the identity,
amount and
location of any and all Article 9 Collateral.
(c) Each year, at the time of delivery of annual financial
statements
with respect to the preceding fiscal year pursuant to Section
5.04(a) of each
Credit Agreement, the Borrower shall deliver to the Collateral
Agent a
certificate executed by its chief legal officer and a Responsible
Officer of the
Borrower certifying that all Uniform Commercial Code financing
statements
(including fixture filings, as applicable) or other appropriate
filings
recordings or registrations, including all refilings, recordings
and
registrations, containing a description of the Article 9 Collateral
have been
filed of record in each governmental, municipal or other
appropriate office in
each jurisdiction identified pursuant to clause (a) of this Section
4.03 to the
extent necessary to protect and perfect the Security Interest for a
period of
not less than 18 months after the date of such certificate (except
as noted
therein with respect to any continuation statements to be filed
within such
period). Each certificate delivered pursuant to this Section
4.03(c) shall
identify in the format of Schedule III all registered, issued or
otherwise
material Intellectual Property (or with respect to which
applications for
issuance or registration are pending) of any Grantor in existence
on the date
thereof and not then listed on such Schedules or previously so
identified to the
Collateral Agent.
(d) Each Grantor shall, at its own expense, take any and all
actions
necessary to defend title to the Article 9 Collateral against all
persons and to
defend the Security Interest of the Collateral Agent in the Article
9 Collateral
and the priority thereof against any Lien not expressly permitted
pursuant to
Section 6.02 of each Credit Agreement.
(e) Each Grantor agrees, at its own expense, promptly to
execute,
acknowledge, deliver and cause to be duly filed all such further
instruments and
documents and take all such actions as the Collateral Agent may
from time to
time reasonably request to better assure, obtain, preserve, protect
and perfect
the Security Interest (to the extent the Security Interest may be
assured,
obtained, preserved, protected and/or perfected by such filing or
other action)
and the rights and remedies created hereby, including the payment
of any fees
and Taxes required in connection with the execution and delivery of
this
Agreement, the granting of the Security Interest and the
<PAGE>
23
filing of any financing or continuation statements (including
fixture filings)
or other documents in connection herewith or therewith. If any
amount payable to
any Grantor under or in connection with any of the Article 9
Collateral shall be
or become evidenced by any promissory note or other instrument,
such note or
instrument shall be promptly pledged and delivered to the
Collateral Agent, duly
endorsed in a manner satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor
hereby
authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to
supplement this Agreement by supplementing Schedule III or adding
additional
schedules hereto to identify specifically any asset or item of a
Grantor that
may, in the Collateral Agent's reasonable judgment, constitute
Copyrights,
Licenses, Patents or Trademarks; provided that any Grantor shall
have the right,
exercisable within 15 days after it has been notified by the
Collateral Agent of
the specific identification of such Collateral, to advise the
Collateral Agent
in writing of any inaccuracy of the representations and warranties
made by such
Grantor hereunder with respect to such Collateral. Each Grantor
a
