AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

 

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

 

among

 

ARBY'S RESTAURANT GROUP, INC.

as a Grantor

 

and

 

ARBY'S RESTAURANT HOLDINGS, LLC

as a Grantor

 

WENDY'S INTERNATIONAL HOLDINGS, LLC

as a Grantor

 

WENDY'S INTERNATIONAL, INC.

as a Grantor

 

and

 

TRIARC RESTAURANT HOLDINGS, LLC

as a Grantor

 

and

 

Each Other Grantor

From Time to Time Party Hereto

 

and

 

CITICORP NORTH AMERICA, INC.

as Collateral Agent

________________________________

 

Dated as of July 25, 2005

 

Amended and Restated as of March 11, 2009

________________________________

 

TABLE OF CONTENTS

Page

ARTICLE I     DEFINED TERMS		2
Section 1.1	Definitions	2
Section 1.2	Certain Other Terms	8
Section 1.3	Perfection Certificate	9
ARTICLE II     GRANT OF SECURITY INTEREST		9
Section 2.1	Collateral	9
Section 2.2	Grant of Security Interest in Collateral	10
ARTICLE III     REPRESENTATIONS AND WARRANTIES		12
Section 3.1	Title; No Other Liens	12
Section 3.2	Perfection and Priority	12
Section 3.3	Jurisdiction of Organization; Chief Executive Office	13
Section 3.4	Inventory and Equipment	13
Section 3.5	Pledged Collateral	13
Section 3.6	Accounts	14
Section 3.7	Intellectual Property	14
Section 3.8	Deposit Accounts, Securities Accounts and Commodity Accounts	15
Section 3.9	Commercial Tort Claims	15
ARTICLE IV      COVENANTS		15
Section 4.1	Generally	15
Section 4.2	Maintenance of Perfected Security Interest; Further Documentation	16
Section 4.3	Changes in Locations, Name, Etc.	16
Section 4.4	Pledged Collateral	17
Section 4.5	Accounts	18
Section 4.6	Delivery of Instruments and Chattel Paper	19
Section 4.7	Intellectual Property	19
Section 4.8	Vehicles	21
Section 4.9	Payment of Obligations	21
Section 4.10	Notice of Commercial Tort Claims	21
Section 4.11	Letter of Credit Rights	21
ARTICLE V     REMEDIAL PROVISIONS		22
Section 5.1	Code and Other Remedies	22
Section 5.2	Accounts and Payments in Respect of General Intangibles	23
Section 5.3	Pledged Collateral	24
Section 5.4	Application of Proceeds of Collateral and Other Payments	25
Section 5.5	Registration Rights	26
Section 5.6	Deficiency	27
ARTICLE VI     THE COLLATERAL AGENT		27
Section 6.1	Collateral Agent’s Appointment as Attorney-in-Fact	27
Section 6.2	Duty of Collateral Agent	29
Section 6.3	Authorization of Financing Statements	29
Section 6.4	Authority of Collateral Agent	29
ARTICLE VII     MISCELLANEOUS		30
Section 7.1	Amendments in Writing	30

 

 

 

 

Section 7.2	Notices	30
Section 7.3	No Waiver by Course of Conduct; Cumulative Remedies	30
Section 7.4	Successors and Assigns	30
Section 7.5	Counterparts	31
Section 7.6	Severability	31
Section 7.7	Section Headings	31
Section 7.8	Entire Agreement	31
Section 7.9	Governing Law	31
Section 7.10	Additional Grantors	31
Section 7.11	Release of Collateral	32
Section 7.12	Reinstatement	32
Section 7.13	Termination	32
Section 7.14	Obligations Absolute	33

 

 

ANNEXES AND SCHEDULES

Annex 1

Form of Deposit Account Control Agreement

 

Annex 2

Form of Securities Account Control Agreement

 

Annex 3

Form of Pledge Amendment

 

Annex 4

Form of Joinder Agreement

 

Annex 5

Form of Short Form Intellectual Property Security Agreement

 

Schedule 3.2

Exclusions to Perfection

 

 

PLEDGE AND SECURITY AGREEMENT, dated as of July 25, 2005 and amended and restated as of March 11, 2009, by ARBY'S RESTAURANT GROUP, INC., a Delaware corporation (“ Borrower ”), ARBY'S RESTAURANT HOLDINGS, LLC, a Delaware limited liability company (“ Holdco Co-Borrower ”), WENDY'S INTERNATIONAL, INC., an Ohio corporation (“ WII Co-Borrower ”), WENDY'S INTERNATIONAL HOLDINGS, LLC, a Delaware limited liability company (“ Ultimate Parent Co-Borrower ” and together with Holdco Co-Borrower, WII Co-Borrower and Borrower, “ Borrowers ”), TRIARC RESTAURANT HOLDINGS, LLC, a Delaware limited liability company (“ Parent ”) and each of the other entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section 7.10 hereof (each a “ Grantor ” and collectively, together with Holdco Co-Borrower, Ultimate Parent Co-Borrower, Parent and Borrower, the “ Grantors ”), in favor of CITICORP NORTH AMERICA, INC. (“ CNAI ”), as collateral agent for the Secured Parties (in such capacity, the “ Collateral Agent ”).

W I T N E S S E T H:

WHEREAS, pursuant to the credit agreement dated as of July 25, 2005 (as amended up to, but not including, the date hereof, the “ Original Credit Agreement ”), among Holdco Co-Borrower, Parent, Borrower, CNAI as administrative agent, the Lenders and Issuer party thereto, the Collateral Agent, Bank of America, N.A. and Credit Suisse, Cayman Islands Branch, as co-syndication agents, and Wachovia Bank, National Association, SunTrust Bank and GE Capital Franchise Finance Corporation, as co-documentation agents, the Lenders and the Issuer severally agreed to make extensions of credit to Holdco Co-Borrower and Borrower upon the terms and subject to the conditions set forth therein;

WHEREAS, the Grantors other than Borrower are party to the Guaranty pursuant to which they guaranteed the Secured Obligations; and

WHEREAS, it was a condition precedent to the obligation of the Lenders and the Issuer to make their respective extensions of credit to Holdco Co-Borrower and Borrower under the Original Credit Agreement that the Grantors shall have executed and delivered that certain pledge and security agreement, dated as of July 25, 2005, among Borrower, Holdco Co-Borrower, Parent, and each of the other entities listed on the signature pages thereof or that became a party thereto in favor of CNAI as collateral agent prior to the Restatement Effective Date (the “ Original Security Agreement ”);

WHEREAS, pursuant to Section 11.1 of the Original Credit Agreement, the Original Credit Agreement is being amended and restated concurrently with the Restatement Effective Date with the consent of the Requisite Lenders under the Original Credit Agreement.

WHEREAS, it is a condition precedent to extensions of credit under the Credit Agreement (defined below) that each Grantor shall have executed and delivered to the Collateral Agent this Agreement;

WHEREAS, pursuant to Section 7.1 of the Original Security Agreement, the Original Security Agreement is being amended and restated concurrently with the Restatement Effective Date with the consent of the Requisite Lenders under the Original Credit Agreement;

 

 

NOW, THEREFORE, in consideration of the foregoing and to induce the Lenders, the Issuer, the Collateral Agent, and the other Agents to enter into the Credit Agreement and to induce certain Lenders and the Issuer to make their respective extensions of credit to Holdco Co-Borrower, Ultimate Parent Co-Borrower, WII Co-Borrower and Borrower thereunder, each Grantor hereby agrees with the Collateral Agent to amend and restate the Original Security Agreement as follows:

ARTICLE I

DEFINED TERMS

 

Section 1.1

Definitions

(a)       Unless otherwise defined herein, terms defined in the Credit Agreement and used herein have the meanings given to them in the Credit Agreement.

(b)       Terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC, including the following terms (which are capitalized herein):

“ Account ”

“ Account Debtor ”

“ Certificated Security ”

“ Chattel Paper ”

“ Commercial Tort Claim ”

“ Commodity Account ”

“ Control Account ”

“ Deposit Account ”

“ Documents ”

“ Entitlement Holder ”

“ Entitlement Order ”

“ Equipment ”

“ Financial Asset ”

“ General Intangible ”

“ Goods ”

“ Instruments ”

“ Inventory ”

“ Investment Property ”

“ Letter-of-Credit Right ”

“ Letters of Credit ”

“ Proceeds ”

“ Securities Account ”

“ Securities Intermediary ”

“ Security ”

“ Security Entitlement ”

“ Supporting Obligations ”

-2-

 

(c)

The following terms shall have the following meanings:

“ 2011/2014 Indenture ” means that certain Indenture, dated as of November 13, 2001, entered into by the Borrower in connection with the issuance of the 2011 Notes and the 2014 Notes, together with all instruments and other agreements entered into by the Borrower in connection therewith.

 

“ 2011 Notes ” means the 6.250% Senior Notes due 2011, issued under the 2011/2014 Indenture.

 

“ 2014 Notes ” means the 6.20% Senior Notes due 2014, issued under the 2011/2014 Indenture.

 

“ 2025 Debentures ” means the 7.00% Debentures due 2025, issued under the 2025 Indenture.

 

“ 2025 Indenture ” means that certain Indenture, dated as of December 14, 1995, entered into by the Borrower in connection with the issuance of the 2025 Debentures, together with all instruments and other agreements entered into by the Borrower in connection therewith.

 

“ Additional Pledged Collateral ” means any Pledged Collateral acquired by any Grantor after the Restatement Effective Date and in which a security interest is granted pursuant to Section 2.2 , including, to the extent a security interest is granted therein pursuant to Section 2.2 , (i) all Stock and Stock Equivalents of any Person that are acquired by any Grantor after the Restatement Effective Date, together with all certificates, instruments or other documents representing any of the foregoing and all Security Entitlements of any Grantor in respect of any of the foregoing, (ii) all additional Indebtedness from time to time owed to any Grantor by any obligor on the Pledged Debt Instruments and the Instruments evidencing such Indebtedness and (iii) all interest, cash, Instruments and other property or Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing. “ Additional Pledged Collateral ” may be General Intangibles, Instruments or Investment Property.

“ Agreement ” means this Amended and Restated Pledge and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Collateral ” has the meaning specified in Section 2.1 .

“ Copyright Licenses ” means any written agreement naming any Grantor as licensor or licensee granting any right under any Copyright, including the grant of any right to reproduce, copy, publicly perform, create derivative works, distribute, display, transmit, sue, receive proceeds and damages thereunder, exploit or sell materials derived from any Copyright, or otherwise exploit rights under any Copyright.

“ Copyrights ” means (a) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof (or any treaty or international organization or body or political subdivision thereof), whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications in connection

                                                                          -3-

 

 

therewith, including all registrations, recordings and applications in the United States Copyright Office or in any foreign counterparts thereof, and (b) the right to obtain all renewals thereof.

“ Credit Agreement ” means the amended and restated credit agreement, dated as of the Restatement Effective Date, among Borrower, Holdco Co-Borrower, WII Co-Borrower, Ultimate Parent Co-Borrower, Parent, the Lenders party thereto, CNAI, as administrative agent for the Lenders and the Issuers and as collateral agent for the Secured Parties, Bank of America, N.A. and Credit Suisse, Cayman Islands Branch, as co-syndication agents for the Lenders and the Issuers, Wachovia Bank, National Association, Suntrust Bank and GE Capital Franchise Finance Corporation, as co-documentation agents for the Lenders and the Issuers, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Deposit Account Control Agreement ” means a letter agreement, substantially in the form of Annex 1 (with such changes as may be agreed to by the Collateral Agent) or such other form as agreed to by the Collateral Agent, executed by the Grantor, the Collateral Agent and the relevant financial institution.

“ Excluded Equity ” means (i) any Voting Stock in excess of 65% of the total outstanding Voting Stock of any Foreign Non-Guarantor that is a direct Subsidiary of a Loan Party and all stock of any Foreign Non-Guarantor that is not a direct Subsidiary of a Loan Party, (ii) the Stock of PVAC, LLC, so long as the Constituent Documents of PVAC, LLC would prohibit the pledge of such Stock hereunder, (iii) the Stock of WNAP, (iv) the Stock of Foreign Non-Guarantors that are Subsidiaries of WII Co-Borrower if and only so long as such Subsidiaries are Immaterial Subsidiaries and (v) the Stock of Pasta Pomodoro, Inc., so long as the pledge of such Stock would constitute a “Qualified Transfer” under the Certificate of Designations of Series C Preferred Stock referred to in the Third Amended and Restated Stockholders’ Agreement, dated as of October 12, 2004, by and among Pasta Pomodoro, Inc. and the stockholders listed on the signature pages thereof. For the purposes of this definition, “ Voting Stock ” means, as to any issuer, the issued and outstanding shares of each class of capital stock or other ownership interests of such issuer entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)).

“ Excluded Property ” means, collectively, (i) Excluded Equity, (ii) any permit, lease, license, contract, instrument or other agreement (including, without limitation, internet domain names) held by any Grantor that prohibits or requires the consent of any Person other than Borrowers and their Affiliates as a condition to the assignment thereof or to the creation by such Grantor of a Lien thereon, or any permit, lease, license, contract or other agreement held by any Grantor to the extent that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon or the assignment thereof, but only, in each case, to the extent, and for so long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC or any other Requirement of Law, (iii) Equipment owned by any Grantor that is subject to a purchase money Lien (including, for the avoidance of doubt, in connection with purchase money financings of Equipment entered into within 180 days after the purchase thereof so long as the Lien in respect thereof is otherwise permitted under the Credit Agreement) or a Capital Lease, in each case, permitted under the Credit Agreement, if the contract or other agreement in which such Lien is granted (or the documentation providing for such Capital Lease) prohibits, 

 

 

or requires the consent of any Person other than Borrowers and their Affiliates as a condition to, the creation of any other Lien on such Equipment, or establishes any other condition for an assignment thereof that cannot be satisfied without involving, or granting benefits to, a party other than the Borrowers and their Affiliates, (iv) any Deposit Account or Securities Account established by one or more Grantors for the sole purpose of depositing funds (or Cash Equivalents) in connection with the discharge of the 2011 Notes as contemplated by the Credit Agreement, (v) each U.S. application to register any Trademark prior to the filing under applicable law of a verified statement of use (or equivalent) for such Trademark, (vi) any Investment Property, Pledged Stock or Pledged Debt Instrument or joint venture or similar agreement to the extent that a grant of a security interest in such Investment Property, Pledged Stock or Pledged Debt Instrument or agreement pursuant to this Agreement would be prohibited by or requires any consent under the Joint Venture Agreement, dated as of April 18, 1990, between Wendy’s International, Inc. and Wyoming Realty, Inc. establishing Wendcreek Venture, provided that such security interest shall attach immediately at such time as the prohibition ceases to be in effect or such consent is obtained and (vii) with respect to the New Entities, any aircraft; provided , however , that “Excluded Property” listed in clauses (i), (ii), (v) and (vi) above shall not include any Proceeds, substitutions or replacements of Excluded Property (unless such Proceeds, substitutions or replacements would constitute Excluded Property).

“ Indenture Threshold Amount ” has the meaning specified in Section 2.2 .

“ Intellectual Property ” means, collectively, all rights, priorities and privileges of any Grantor, whether arising under United States, multinational or foreign laws or otherwise, with respect to Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, trade secrets and Internet domain names, and all rights to sue at law or in equity for any rights thereunder (including, without limitation, infringement, invalidity, dilution or other impairment thereof), including the right to receive all proceeds and damages therefrom.

“ LLC ” means each limited liability company in which a Grantor has an interest, including those set forth on Schedule 10(a) and Schedule 10(b) to the Perfection Certificate.

“ LLC Agreement ” means each operating agreement with respect to a LLC, as each agreement has heretofore been, and may hereafter be, amended, restated, supplemented or otherwise modified from time to time.

“ Limited Entities ” means the collective reference to Scioto Insurance Company, a Vermont corporation, and Oldemark LLC, a Vermont limited liability company, each a “ Limited Entity ,” in each case, so long as and only so long as (i) Scioto Insurance Company is regulated as a captive insurance company pursuant to chapter 141 of the Vermont Statutes Annotated or successor statute, or other similar statute as may apply in the event such entity changes its state of domicile, and (ii) in the case of Oldemark LLC, (in addition to (i)) it is an asset of Scioto Insurance Company.

“ Material Intellectual Property ” means Intellectual Property owned by or licensed to a Grantor and material to the conduct of any Grantor’s business.

“ Original Credit Agreement ” has the meaning specified in the recitals hereto.

 

 

“ Original Security Agreement ” has the meaning specified in the recitals hereto.

“ paid in full ” and “ payment in full ” mean, with respect to any Secured Obligation, the occurrence of all of the following: (a) with respect to such Secured Obligations other than (i) contingent indemnification obligations, Hedging Contract Obligations and Cash Management Obligations not then due and payable and (ii) to the extent covered by clause (b) below, obligations with respect to undrawn Letters of Credit, payment in full thereof in cash (or otherwise to the written satisfaction of the Secured Parties owed such Secured Obligations), (b) with respect to any undrawn Letter of Credit, the obligations under which are included in such Secured Obligations, (i) the cancellation thereof and payment in full of all resulting Secured Obligations pursuant to clause (a) above or (ii) the receipt of cash collateral (or a backstop letter of credit in respect thereof on terms acceptable to the applicable Issuer of the Letters of Credit and the Administrative Agent) in an amount at least equal to 102% of the Letter of Credit Obligations for such Letter of Credit and (c) if such Secured Obligations consist of all the Secured Obligations under one or more Facilities, termination of all Commitments and all other obligations of the Secured Parties in respect of such Facilities under the Loan Documents.

“ Partnership ” means each partnership in which a Grantor has an interest, including those set forth on Schedule 10(a) and Schedule 10(b) to the Perfection Certificate.

“ Partnership Agreement ” means each partnership agreement governing a Partnership, as each such agreement has heretofore been, and may hereafter be, amended, restated, supplemented or otherwise modified from time to time.

“ Patents ” means (a) all patents issued by the United States, any other country or any political subdivision thereof (or any treaty or international organization or body or political subdivision thereof) and all reissues and extensions thereof, (b) all patent applications in the United States or any other country or any political subdivision thereof (or any treaty or international organization or body or political subdivision thereof) and all divisionals, continuations, continuations-in-part, re-issues and extensions thereof and (c) all rights to obtain any reissues or extensions of any of the foregoing.

“ Patent License ” means any written or material oral agreement providing for the grant by or to any Grantor of any right under a Patent, including the right to manufacture, have manufactured, use, import, sell or offer for sale any invention covered in whole or in part by a Patent, including the right to sue and receive all proceeds thereunder.

“ Perfection Certificate ” means the Perfection Certificate, dated as of the Restatement Effective Date, executed by each of the Grantors and delivered to the Collateral Agent.

“ Pledged Certificated Stock ” means all Certificated Securities and any other Stock and Stock Equivalent of a Person evidenced by a certificate, Instrument or other equivalent document, in each case owned by any Grantor, including all Stock listed on Schedule 10(a) or Schedule 10(b) to the Perfection Certificate other than Excluded Equity.

“ Pledged Collateral ” means, collectively, the Pledged Stock, Pledged Debt Instruments, any other Investment Property of any Grantor, all chattel paper, certificates or other

 

 

Instruments representing any of the foregoing and all Security Entitlements of any Grantor in respect of any of the foregoing. Pledged Collateral may, without limitation, be General Intangibles, Instruments or Investment Property.

“ Pledged Debt Instruments ” means all Instruments evidencing any Indebtedness owed to such Grantor, including all Indebtedness described on Schedule 11 to the Perfection Certificate, issued by the obligors named therein.

“ Pledged Stock ” means all Pledged Certificated Stock and all Pledged Uncertificated Stock. For purposes of this Agreement, the term “Pledged Stock” shall not include any Excluded Equity.

“ Pledged Uncertificated Stock ” means any Stock or Stock Equivalent of any Person that is not a Pledged Certificated Stock, including all right, title and interest of any Grantor as a limited or general partner in any Partnership or as a member of any LLC and all right, title and interest of any Grantor in, to and under any Partnership Agreement or LLC Agreement to which it is a party.

“ Restatement Effective Date ” means March 11, 2009.

“ Restricted Property ” has the meaning specified in Section 2.2 .

“ Securities Account Control Agreement ” means a letter agreement, substantially in the form of Annex 2 (with such changes as may be agreed to by the Collateral Agent) or such other form as agreed to by the Collateral Agent, executed by the relevant Grantor, the Collateral Agent and the relevant Approved Securities Intermediary.

“ Securities Act ” means the U.S. Securities Act of 1933, as amended.

“ Senior Note Indentures ” means the 2011/2014 Indenture and the 2025 Indenture.

 

“ Senior Notes ” means the 2011 Notes, the 2014 Notes and the 2025 Debentures.

“ Trademark License ” means any written or material oral agreement providing for the grant by or to any Grantor of any right to use any Trademark, including, without limitation, the right to sue and receive proceeds and damages thereunder.

 

“ Trademarks ” means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, designs, logos and other source or business identifiers, and, in each case, all goodwill associated therewith, whether now existing or hereafter adopted or acquired, all registrations and recordings thereof and all applications in connection therewith, in each case 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 any treaty or international organization or body or political subdivision thereof), and all common-law rights related thereto, and (b) the right to obtain all renewals thereof.

 

 

“ UCC ” means the Uniform Commercial Code as from time to time in effect in the State of New York; provided , however , that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of the Collateral Agent’s and any Secured Party’s security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

“ Vehicles ” means all vehicles covered by a certificate of title law of any state.

“ Vermont Commissioner ” means the Commissioner of the Vermont Department of Banking, Insurance, Securities & Health Care Administration.

“ WNAP ” means Wendy’s National Advertising Program, Inc., an Ohio corporation.

Section 1.2

Certain Other Terms

(a)       In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including.”

(b)       The terms “herein,” “hereof,” “hereto” and “hereunder” and similar terms refer to this Agreement as a whole and not to any particular Article, Section, subsection or clause in this Agreement.

(c)       References herein to an Annex, Schedule, Article, Section, subsection or clause refer to the appropriate Annex or Schedule to, or Article, Section, subsection or clause in this Agreement, unless otherwise specified.

(d)       The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(e)       Where the context requires, provisions relating to any Collateral, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or any relevant part thereof.

(f)        Any reference in this Agreement to a Loan Document shall include all appendices, exhibits and schedules thereto, and, unless specifically stated otherwise all amendments, restatements, supplements or other modifications thereto, and as the same may be in effect at any time such reference becomes operative.

(g)       The term “including” means “including without limitation” except when used in the computation of time periods.

(h)       The terms “Lender,” “Issuer,” “Administrative Agent,” “Collateral Agent,” “Agent” and “Secured Party” include their respective successors.

 

 

(i)        References in this Agreement to any statute shall be to such statute as amended or modified and in effect from time to time.

Section 1.3

Perfection Certificate

The parties hereto agree that the Perfection Certificate and all descriptions of Collateral, schedules, amendments and supplements thereto are incorporated herein and shall at all times remain a part of this Agreement.

ARTICLE II

GRANT OF SECURITY INTEREST

 

Section 2.1

Collateral

For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the “ Collateral ”:

(a)

all Accounts;

 

(b)

all Chattel Paper;

 

(c)

all Deposit Accounts;

 

(d)

all Documents;

 

(e)

all Equipment;

 

(f)

all General Intangibles;

 

(g)

all Instruments;

(h)       all Intellectual Property, other than intent-to-use applications until such applications mature into registered trademarks;

(i)

all Inventory;

 

(j)

all Investment Property;

 

(k)

all Letter-of-Credit Rights;

 

(l)

all Vehicles;

(m)      the Commercial Tort Claims described on Schedule 13 to the Perfection Certificate or of which the Collateral Agent is notified pursuant to Section 4.10 ;

(n)       to the extent determined to be the property of any Grantor, the Escrow Account and all interests in items in the Escrow Account;

(o)

all Supporting Obligations;

 

 

(p)       all books and records pertaining to the other property described in this Section 2.1 ;

(q)       all property of any Grantor held by the Collateral Agent (including in its capacity as Escrow Agent under the Escrow Agreement) or any other Secured Party, including all property of every description, in the possession or custody of or in transit to the Collateral Agent or such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power;

(r)        all other Goods and personal property of such Grantor, whether tangible or intangible and wherever located; and

(s)       to the extent not otherwise included, all Proceeds of any of the foregoing;

 

provided, however, (i) that “Collateral” shall not include any Excluded Property and (ii) that if and when any property shall cease to be Excluded Property, such property shall be deemed at all times from and after the date of the Original Security Agreement to constitute Collateral.

In addition, notwithstanding any of the other provisions set forth in this Article II or anything else contained in this Agreement or any other Loan Document, the amount of all Secured Obligations secured by the Limited Entities’ assets shall not at any time in the aggregate exceed the lesser of (i) $200,000,000 and (ii) 90% of the excess, as reflected on the Limited Entities’ most recent audited financial statements as of the date of determination of the Limited Entities’ liabilities hereunder, of the Limited Entities’ total assets (including any note receivable from an affiliate, but only to the extent that a demand on such note receivable has been made and has been satisfied since the date of the Limited Entities’ most recent audited financial statements) over the Limited Entities’ total liabilities.

Notwithstanding anything herein or in any other Loan Document to the contrary, it is hereby acknowledged and agreed that (a) the perfection and priority of the security interests granted by the Limited Entities, (b) the delivery of any Collateral by the Limited Entities to the Collateral Agent and (c) if it would result in an impairment of surplus of the Limited Entities to the extent that the surplus is less than the amount prescribed by the Vermont Commissioner pursuant to Section 6004(b) of Title 8 of the Vermont Statutes Annotated, the enforcement of rights and remedies of the Secured Parties are, in each case, subject to the prior consent of the Vermont Commissioner.

Section 2.2

Grant of Security Interest in Collateral

Each Grantor that is not a New Entity hereby confirms its mortgage, pledge, hypothecation and grant of a security interest in all of its right title and interest in the Collateral to the Collateral Agent for the benefit of the Secured Parties pursuant to the Original Security Agreement. Each Grantor, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Se-

 

 

cured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral; provided, however , that if and when any property of a Grantor that at any time constituted Excluded Property becomes Collateral, the Collateral Agent shall have, and at all times from and after the date of the Original Security Agreement, be deemed to have had, a lien on and security interest in such property.

This Agreement amends and restates the Original Security Agreement. The obligations of the Grantors under the Original Security Agreement and the grant of security interest in the Collateral by the Grantors under the Original Security Agreement shall continue under this Agreement and shall not in any event be terminated, extinguished or annulled, but shall hereafter be governed by this Agreement. It is understood and agreed that the Original Security Agreement is being amended and restated by entry into this Agreement by the consent of the Requisite Lenders under the Original Credit Agreement in accordance with Section 7.1 of the Original Security Agreement and in connection with their approval of the amendment and restatement of the Original Credit Agreement on the Restatement Effective Date. All references in other Loan Documents to the “Security Agreement” shall refer to this Agreement.

Notwithstanding any of the other provisions set forth in this Article II or anything else contained in this Agreement or any other Loan Document, the aggregate amount of all Secured Obligations secured under the Collateral Documents by Principal Property (as defined in each Senior Note Indenture) or any shares of capital stock or evidences of Indebtedness (as defined in each Senior Note Indenture) issued by any Domestic Subsidiary (as defined in each Senior Note Indenture) and owned by Wendy’s International, Inc. or any Domestic Subsidiary (as defined in each Senior Note Indenture) (collectively, the “ Restricted Property ”) shall not, at any time, exceed the aggregate amount (such amount, the “ Indenture Threshold Amount ”) of Indebtedness (as defined in each Senior Note Indenture) that may be secured by Restricted Property under each Senior Note Indenture, determined in accordance with the terms of each Senior Note Indenture, without requiring holders of the applicable Senior Notes to be equally and ratably secured in accordance with the terms of such Senior Note Indenture. It is understood and acknowledged by the parties hereto (including, by its acceptance of the benefit of this Agreement, each Secured Party) that (v) as of the Restatement Effective Date, the total amount of Secured Obligations is in excess of the Indenture Threshold Amount as of the Restatement Effective Date, (w) from time to time after the Restatement Effective Date, the total amount of the Secured Obligations may be in excess of the Indenture Threshold Amount then in effect, (x) as of the Restatement Effective Date, the Secured Obligations in excess of the Indenture Threshold Amount are not secured by any Restricted Property hereunder or under any other Collateral Document, (y) at any time after the Restatement Effective Date, any Secured Obligations in excess of the Indenture Threshold Amount in effect at such time shall not be secured by any Restricted Property hereunder or under any other Collateral Document and (z) in no event shall any Lien (as defined in each Senior Note Indenture) on any Restricted Property in favor of any Secured Party created hereunder or under any other Collateral Document at any time secure any Secured Obligations in excess of the Indenture Threshold Amount then in effect. For the avoidance of doubt, the calculation of the Indenture Threshold Amount at any date of determination shall take into account all outstanding Attributable Value (as defined in each Senior Note Indenture) of all Sale and Lease-Back Transactions (as defined in each Senior Note Indenture) permitted pursuant to the last paragraph of Section 1009 of each Senior Note Indenture as of such date

 

 

and all Indebtedness (as defined in each Senior Note Indenture) of Wendy’s International, Inc. and its Domestic Subsidiaries (as defined in each Senior Note Indenture) secured by Liens (as defined in each Senior Note Indenture) permitted pursuant to the last paragraph of Section 1008 of each Senior Note Indenture as of such date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the Lenders, the Issuer, the Collateral Agent and the other Agents to enter into the Credit Agreement, each Grantor hereby represents and warrants each of the following to the Collateral Agent, the Lenders, the Issuer and the other Secured Parties:

Section 3.1

Title; No Other Liens

Except for Liens granted to the Collateral Agent pursuant to this Agreement and the other Liens permitted to exist on the Collateral under the Credit Agreement, such Grantor (a) is the record and beneficial owner of the Pledged Collateral pledged by it hereunder constituting Certificated Securities, (b) is the owner of the Pledged Collateral pledged by it hereunder constituting Instruments, (c) is the Entitlement Holder of all such Pledged Collateral constituting Investment Property held in a Securities Account and (d) subject to the last sentence of Section 2.1 , has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien.

Section 3.2

Perfection and Priority

The security interests granted pursuant to this Agreement shall constitute valid and, except as set forth in Schedule 3.2 , continuing perfected security interests in favor of the Collateral Agent in the Collateral for which perfection is governed by the UCC or filing with the United States Patent and Trademark Office or the United States Copyright Office upon (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the timely and proper completion of the filings and other actions specified on Schedules 6 and 12(c) to the Perfection Certificate (which, in the case of all filings and other documents referred to on such schedules, have been delivered to the Collateral Agent in completed and duly executed form), (ii) the delivery to the Collateral Agent of all Collateral consisting of Instruments and Certificated Securities, in each case properly endorsed for transfer to the Collateral Agent or in blank, (iii) the execution of Securities Account Control Agreements with respect to all Securities Accounts, (iv) the execution of Deposit Account Control Agreements with respect to all Deposit Accounts of a Grantor, (v) in the case of Collateral in which a security interest may be perfected by filing with the United States Patent and Trademark Office, filing of a short-form security agreement in the form attached hereto as Annex 5 with the United States Patent and Trademark Office and (vi) in the case of Collateral in which a security interest may be perfected by filing with the United States Copyright Office, filing of a short-form security agreement in the form attached hereto as Annex 5 with the United States Copyright Office. Security interests in collateral that is subject to foreign jurisdiction Requirements of Law may require additional actions in accordance with the Requirements of Law of such jurisdictions. The security interest created hereunder in favor of the Collateral Agent for the benefit of the Secured Parties is prior to all other Liens on the Collateral except for Customary Permitted Liens having

 

priority over the Collateral Agent’s Lien by operation of law or otherwise as permitted under the Credit Agreement.

Section 3.3

Jurisdiction of Organization; Chief Executive Office

Such Grantor’s jurisdiction of organization, legal name, type of entity, Federal Taxpayer Identification Number and organizational identification number, if any, in each case as of the Restatement Effective Date, is specified on Schedule 1(a) to the Perfection Certificate. Any other corporate or organizational name such Grantor has had in the past five years, together with the date of the relevant change, is specified on Schedule 1(b) to the Perfection Certificate. Any other name (including trade names or similar appellations) used by such Grantor, or any other business or organization to which such Grantor became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, during the five years preceding the Restatement Effective Date, together with the date of the relevant change, is specified on Schedule 1(c) to the Perfection Certificate. Also specified on Schedule 1(c) to the Perfection Certificate is any other name used by any other business or organization to which such Grantor become the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, during the five years preceding the Restatement Effective Date, together with the name of the other business or organization, type of entity, jurisdiction of organization and date of the relevant change. The location of such Grantor’s chief executive office, as of the Restatement Effective Date, is specified on Schedule 2(a) to the Perfection Certificate and Schedule 3(a) to the Perfection Certificate lists all other locations of such Grantor’s chief executive office for the four months preceding the Restatement Effective Date.

Section 3.4

Inventory and Equipment

On the Restatement Effective Date, such Grantor’s Inventory and Equipment (other than mobile goods and Inventory or Equipment in transit) are kept at the locations listed on Schedules 2(a) , (b) , (c) , (d) and/or (e) to the Perfection Certificate. Schedule 3(a) to the Perfection Certificate lists the locations of Inventory and Equipment listed on Schedules 2(a) , (b) , (c) , (d) and (e) to the Perfection Certificate for the four months preceding the Restatement Effective Date.

Section 3.5

Pledged Collateral

(a)       The Pledged Stock pledged hereunder by such Grantor on the Restatement Effective Date is listed on Schedules 10(a) and 10(b) to the Perfection Certificate and constitutes that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on Schedule 10(a) or 10(b) to the Perfection Certificate.

(b)       All of the Pledged Stock (other than Pledged Stock in limited liability companies and partnerships) has been duly authorized, validly issued and is fully paid and nonassessable.

(c)       Each of the Pledged Stock constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium

 

 

and other similar laws relating to or affecting creditors’ rights generally, and general equitable principles (whether considered in a proceeding in equity or at law).

(d)       All Pledged Collateral and, if applicable, any Additional Pledged Collateral, consisting of Certificated Securities or Instruments has been delivered to the Collateral Agent in accordance with Section 4.4(a) hereof and Section 7.11 of the Credit Agreement.

(e)       All Pledged Collateral held by a Securities Intermediary in a Securities Account is in a Control Account.

(f)        Other than Pledged Stock constituting General Intangibles, there is no Pledged Collateral other than that represented by Certificated Securities or Instruments in the possession of the Collateral Agent, or that consists of Financial Assets held in a Control Account or that consists of Financial Assets (and, for the avoidance of doubt, money market funds and uncertificated securities) not required to be in a Control Account pursuant to Section 7.12(a) of the Credit Agreement.

(g)       The Constituent Documents of any Person governing any Pledged Stock of any limited liability company, partnership or similar entity do not, upon the occurrence and during the continuance of an Event of Default, (i) prevent the Collateral Agent from exercising all of the rights of the Grantor granting the security interest therein, (ii) prevent a transferee or assignee of Stock of such Person from becoming a member partner or, as the case may be, other holder of such Pledged Stock to the same extent as the Grantor in such Person entitled to participate in the management of such Person or (iii) provide that upon the transfer of the entire interest of such Grantor, the transferee of such interest ceases to be a member, partner or, as the case may be, other holder of such Pledged Stock, in each case, other than requirements that transfers be effected in compliance with applicable securities laws.

Section 3.6

Accounts

No amount payable to such Grantor under or in connection with any Account is evidenced by any Instrument or Chattel Paper that has not been delivered to the Collateral Agent properly endorsed for transfer, to the extent delivery is required by Section 4.4 .

Section 3.7

Intellectual Property

(a)        Schedules 12(a) and 12(b) to the Perfection Certificate list all United States and/or Canada registrations for and issuances of Intellectual Property and applications therefor, and material unregistered trademarks and copyrights owned by such Grantor on the Restatement Effective Date. Schedules 12(a) and 12(b) to the Perfection Certificate also list all material license agreements pursuant to which Material Intellectual Property is licensed to such Grantor on the Restatement Effective Date.

(b)       Except as set forth on Schedules 12(a) and 12(b) to the Perfection Certificate, to the knowledge of the Grantor, all registered Intellectual Property owned by such Grantor is valid, subsisting, unexpired and enforceable, has not been adjudged invalid and has not been abandoned and, to the knowledge of the Grantor, the use thereof in the business of such Grantor

 

 

does not infringe, misappropriate, dilute or otherwise violate the intellectual property rights of any other Person in any material respect.

(c)       Except as set forth in Schedules 12(a) and 12(b) to the Perfection Certificate, none of the Material Intellectual Property owned by such Grantor is the subject of any material license pursuant to which such Grantor is the licensor on the Restatement Effective Date.

(d)       No holding, decision or judgment has been rendered against such Grantor by any Governmental Authority that would reasonably be interpreted to, in whole or in part, limit, impair, cancel or question the validity of, or such Grantor’s rights in, any Material Intellectual Property.

(e)       No action or proceeding seeking to, in whole or in part, limit, impair, cancel or question the validity of any Material Intellectual Property owned by such Grantor or such Grantor’s ownership interest therein is pending against such Grantor or, to the knowledge of such Grantor, threatened. There are no outstanding final claims, judgments or settlements to be paid by such Grantor relating to the Material Intellectual Property.

Section 3.8

Deposit Accounts, Securities Accounts and Commodity Accounts

The only Deposit Accounts, Securities Accounts and Commodity Accounts maintained by any Grantor on the Restatement Effective Date are those listed on Schedule 14 to the Perfection Certificate which sets forth such information separately for each Grantor.

Section 3.9

Commercial Tort Claims

The only Commercial Tort Claims of any Grantor in excess of $2.0 million existing on the Restatement Effective Date are those listed on Schedule 13 to the Perfection Certificate, which sets forth such information separately for each Grantor.

ARTICLE IV

COVENANTS

Each Grantor agrees with the Collateral Agent to the following until all Secured Obligations are paid in full, unless the Requisite Lenders otherwise consent in writing:

Section 4.1

Generally

Such Grantor shall (a) not create or suffer to exist any Lien upon or with respect to any Collateral, except Liens permitted under Section 8.2 of the Credit Agreement, (b) not use any Collateral, and use commercially reasonable efforts not to permit any Collateral to be used, unlawfully or in violation of any provision of this Agreement, any other Loan Document, any Closing Date Related Document, any Requirement of Law or any policy of insurance covering the Collateral, in each case in any material respect, (c) except as permitted under the Credit Agreement, not enter into any agreement or undertaking restricting the right or ability of such Grantor or the Collateral Agent to sell, assign or transfer any Collateral if such restriction would have a Material Adverse Effect and (d) promptly notify the Collateral Agent of its entry into any

 

 

agreement or assumption of undertaking that restricts the ability to sell, assign or transfer any Collateral regardless of whether or not it has a Material Adverse Effect.

Section 4.2

Maintenance of Perfected Security Interest; Further Documentation

(a)       Such Grantor shall maintain the security interests created by this Agreement as security interests having at least the priority described in Section 3.2 and Section 2.2 and shall defend such security interests and such priority against the claims and demands of all Persons to the extent adverse to such Grantor’s ownership rights or otherwise inconsistent with this Agreement or the other Loan Documents; provided, however, that security interests that relate solely to Collateral the aggregate value of which does not exceed $1,000,000 are deemed invalid or unenforceable, such invalidity or unenforceability may remain to the extent not constituting an Event of Default under Section 9.1(j) of the Credit Agreement for the period specified therein.

(b)       Such Grantor shall furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail and in form and substance reasonably satisfactory to the Collateral Agent.

(c)       At any time and from time to time, upon the reasonable written request of the Collateral Agent, and at the sole expense of such Grantor, such Grantor shall promptly and duly execute and deliver, and have recorded or authorize the recording of, such further instruments and documents and take such further action as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the benefits of this Agreement and of the rights and powers herein granted, including the filing of any financing or continuation statement under the UCC (or any other Requirement of Law relating to registration of Liens over Intellectual Property or other personal property) in effect in any jurisdiction with respect to the security interests created hereby and, subject to Section 7.12 of the Credit Agreement, the execution and delivery of Deposit Account Control Agreements and Securities Account Control Agreements.

Section 4.3

Changes in Locations, Name, Etc.

(a)       Except upon ten days’ prior written notice to the Collateral Agent and subsequent prompt delivery to the Collateral Agent of all additional financing statements and other documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests provided for herein:

(i)   change its jurisdiction of organization or its location, in each case from that referred to in Section 3.3 ; or

(ii)  change its legal name or organizational identification number, if any, or corporation, limited liability company or other organizational structure to such an extent that any financing statement filed or other filing or registration made in connection with this Agreement would become misleading or otherwise ineffective.

 

 

(b)       Such Grantor shall keep and maintain at its own cost and expense, and in accordance with its standard operating procedures, satisfactory records of the Collateral.

Section 4.4

Pledged Collateral

(a)       Such Grantor shall deliver to the Collateral Agent all certificates and Instruments representing or evidencing any Pledged Collateral (including Additional Pledged Collateral but excluding (i) Instruments that are not, individually or in the aggregate, in excess of $1.0 million and (ii) checks received in the ordinary course of business and other Instruments received in the ordinary course of business that are deposited into Deposit Accounts or Securities Accounts of such Grantor), whether now existing or hereafter acquired, in suitable form for transfer by delivery or, as applicable, accompanied by such Grantor’s endorsement, where necessary, or duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Collateral Agent, together, in respect of any Additional Pledged Collateral, with a Pledge Amendment, duly executed by the Grantor, in substantially the form of Annex 3 , or such other documentation reasonably acceptable to the Collateral Agent. Such Grantor authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement. The Collateral Agent shall have the right, at any time upon the occurrence and during the continuance of any Event of Default, in its discretion and without notice to the Grantor, to transfer to or to register in its name or in the name of its nominees any Pledged Collateral. The Collateral Agent shall have the right at any time upon the occurrence and during the continuance of any Event of Default, to exchange any certificate or instrument representing or evidencing any Pledged Collateral for certificates or instruments of smaller or larger denominations.

(b)       Except as provided in Article V , such Grantor shall be entitled to receive all dividends paid in respect of the Pledged Collateral with respect to the Pledged Collateral. Any sums paid upon or in respect of any Pledged Collateral upon the liquidation or dissolution of any issuer of any Pledged Collateral, any distribution of capital made on or in respect of any Pledged Collateral or any property distributed upon or with respect to any Pledged Collateral pursuant to the recapitalization or reclassification of the capital of any issuer of Pledged Collateral or pursuant to the reorganization thereof shall, unless otherwise subject to perfected Requisite Liens in favor of the Collateral Agent, be delivered to the Collateral Agent to be held by it hereunder as additional collateral security for the Secured Obligations. If any such sum of money or property so paid or distributed in respect of any Pledged Collateral shall be received by such Grantor and not otherwise be subject to perfected Requisite Liens in favor of the Collateral Agent, such Grantor shall, until such money or property is paid or delivered to the Collateral Agent, hold such money or property in trust for the Collateral Agent, segregated from other funds of such Grantor, as additional security for the Secured Obligations.

(c)       Except as provided in Article V , such Grantor shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral; provided, however, that no vote shall be cast, consent given or right exercised or other action taken by such Grantor that would materially impair the Collateral, be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.

 

 

(d)       Such Grantor shall not grant “control” (within the meaning of such term under Article 9-106 of the UCC) over any Securities Accounts or Deposit Accounts (other than any Excluded Property) of such Grantor to any Person other than the Collateral Agent.

(e)       In the case of each Grantor that is an issuer of Pledged Collateral, such Grantor agrees to be bound by the terms of this Agreement relating to the Pledged Collateral issued by it, to comply with such terms insofar as such terms are applicable to it and to comply with all instructions from the Collateral Agent with respect to any Pledged Collateral after an Event of Default (without the consent of the owner of such Pledged Collateral). In the case of any Grantor that is a holder of any Stock or Stock Equivalent in any Person that is an issuer of Pledged Collateral, such Grantor consents to (i) the exercise of the rights granted to the Collateral Agent hereunder (including those described in Section 5.3 ),and (ii) the pledge by each other Grantor, pursuant to the terms hereof, of the Pledged Stock in such Person and to the transfer of such Pledged Stock after the occurrence and during the continuance Event of Default to the Collateral Agent or its nominee and to the substitution of the Collateral Agent or its nominee as a holder of such Pledged Stock with all the rights, powers and duties of other holders of Pledged Stock of the same class and, if the Grantor having pledged such Pledged Stock hereunder had any right, power or duty at the time of such pledge or at the time of such substitution beyond that of such other holders, with all such additional rights, powers and duties. Such Grantor agrees to execute and deliver to the Collateral Agent such certificates, agreements and other documents as may be reasonably necessary to evidence, formalize or otherwise give effect to the consents given in this clause (e).

(f)        Such Grantor shall not, without the consent of the Collateral Agent (and to the extent required pursuant to Section 8.11 of the Credit Agreement, any Lender or Agent), agree to any amendment of any Constituent Document that in any way materially adversely affects the perfection of the security interests of the Collateral Agent in any Pledged Collateral pledged by any Grantor hereunder, including any amendment electing to treat any membership interest or partnership interest that is part of the Pledged Collateral as a “security” under Section 8-103 of the UCC, or any election to turn any previously uncertificated Stock that is part of the Pledged Collateral into certificated Stock.

Section 4.5

Accounts

(a)       Such Grantor shall not, other than as permitted by the Credit Agreement, (i) grant any extension of the time of payment of any Account, (ii) compromise or settle any Account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Account, (iv) allow any credit or discount on any Account or (v) amend, supplement or modify any Account in any manner that could materially adversely affect the value thereof.

(b)       Subject to the limitations in Section 7.6 of the Credit Agreement, the Collateral Agent shall have the right to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and such Grantor shall use commercially reasonable efforts to furnish all such assistance and information as the Collateral Agen