PLEDGE AND SECURITY
AGREEMENT
(Quest Transmission Company,
LLC)
THIS PLEDGE AND
SECURITY AGREEMENT (herein referred to as this “
Security Agreement ”) is executed as of
February 21, 2008, by QUEST TRANSMISSION COMPANY, LLC, a
Delaware limited liability company (“ Debtor
”), whose address is 210 Park Avenue, Suite 2750,
Oklahoma City, Oklahoma 73102, for the benefit of ROYAL BANK OF
CANADA (in its capacity as “ Administrative Agent
” and “ Collateral Agent ” for the Lenders
(hereafter defined)), as “ Secured Party
,” whose address is Royal Bank Plaza, P.O. Box 50, 200 Bay
Street, 12th Floor, South Tower, Toronto, Ontario M5J
2W7.
WHEREAS, pursuant
to that certain Amended and Restated Credit Agreement, dated as of
November 1, 2007 (as the same may hereafter be amended,
supplemented and restated, the “ Credit
Agreement ”), among Bluestem Pipeline, LLC, a
Delaware limited liability company (“ Bluestem
”), Quest Midstream Partners, L.P., a Delaware limited
partnership (“ MLP; ” Bluestem and MLP,
each and collectively, the Borrowers ”), the
various financial institutions that are, or may from time to time
become, parties thereto (individually a “
Lender ” and collectively the “
Lenders ”) and Royal Bank of Canada, as
administrative agent (in such capacity, the “
Administrative Agent ”) and as collateral agent
(in such capacity, the “ Collateral Agent
”), the Lenders have agreed to make Loans for the account of
the Borrowers; and
WHEREAS, Debtor
has agreed to guarantee the obligations of the Borrower under the
Credit Agreement and to secure its guaranteed obligations by the
pledge of its assets hereunder;
WHEREAS, the
Debtor has duly authorized the execution, delivery and performance
of this Security Agreement;
WHEREAS, it is in
the best interests of the Debtor to execute a Guaranty of the
Obligations as herein defined and this Security Agreement inasmuch
as the Debtor will derive substantial direct and indirect benefits
from the Credit Extensions made from time to time to the Borrowers
by the Lenders pursuant to the Credit Agreement;
WHEREAS, this
Security Agreement is integral to the transactions contemplated by
the Loan Documents, and the execution and delivery of this Security
Agreement is a condition precedent to the Lenders’
obligations to extend credit under the Loan Documents;
ACCORDINGLY, for
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Debtor and Secured Party hereby agree as
follows:
1.
REFERENCE TO CREDIT AGREEMENT . The terms, conditions, and
provisions of the Credit Agreement are incorporated herein by
reference, the same as if set forth herein verbatim, which terms,
conditions, and provisions shall continue to be in full force and
effect hereunder so long as the
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Lenders are
obligated to lend under the Credit Agreement and thereafter until
the Obligations are paid and performed in full (except as provided
in Sections 10.01(d) and 10.01(e)
of the Credit Agreement).
2.
CERTAIN DEFINITIONS . Unless otherwise defined herein, or
the context hereof otherwise requires, each term defined in the
Credit Agreement or in the UCC is used in this Security Agreement
with the same meaning; provided that , if the definition
given to such term in the Credit Agreement conflicts with the
definition given to such term in the UCC, the definition in the
Credit Agreement shall control to the extent legally allowable; and
if any definition given to such term in Chapter 9 of
the UCC conflicts with the definition given to such term in any
other chapter of the UCC, the Chapter 9 definition
shall prevail. As used herein, the following terms have the
meanings indicated:
Borrower or Borrowers has the meaning
set forth in the first recital.
Collateral has the meaning set forth in
Paragraph 4 hereof.
Collateral
Note Security has the meaning set forth in
Paragraph 4 hereof.
Collateral
Notes has the meaning set forth in
Paragraph 4 hereof.
Control
Agreement means, with respect to any Collateral consisting
of investment property, Deposit Accounts, electronic chattel paper,
and letter-of-credit rights, an agreement evidencing that Secured
Party has “ control ” (as defined in the UCC) of
such Collateral.
Copyrights has the meaning set forth in
Paragraph 4 hereof.
Credit
Agreement has the meaning set forth in the first
recital.
Deposit
Accounts has the meaning set forth in
Paragraph 4 hereof.
Intellectual Property has the meaning set forth in
Paragraph 4 hereof.
Lender means, individually, or Lenders
means, collectively, on any date of determination, the
Administrative Agent and Lenders, and their permitted successors
and assigns.
Material
Agreements has the meaning set forth in
Paragraph 4 hereof.
Obligations means, collectively, (a) the
Obligations as such term is defined in the Credit Agreement, and
(b) all indebtedness, liabilities, and obligations of Debtor
arising under this Security Agreement or any Guaranty assuring
payment of all or any part of the Obligations; it being the
intention and contemplation of Debtor and Secured Party that future
advances will be made by one or more Lenders to the Debtor for a
variety of purposes.
Obligor means any Person obligated with respect to
any of the Collateral, whether as an account debtor, obligor on an
instrument, issuer of securities, or otherwise.
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Partnerships/Limited Liability Companies shall mean:
(a) those partnerships and limited liability companies listed
on Annex B-1 attached hereto and incorporated herein
by reference, as such partnerships or limited liability companies
exist or may hereinafter be restated, amended, or restructured;
(b) any partnership, joint venture, or limited liability
company in which Debtor shall, at any time, become a limited or
general partner, venturer, or member; or (c) any partnership,
joint venture, or corporation formed as a result of the
restructure, reorganization, or amendment of the
Partnerships/Limited Liability Companies.
Partnership/Limited Liability Company Agreements
shall mean: (a) those agreements listed on Annex
B-1 attached hereto and incorporated herein by reference
(together with any modifications, amendments, or restatements
thereof); and (b) partnership agreements, joint venture
agreements, or organizational agreements for any of the
partnerships, joint ventures, or limited liability companies
described in clause (b) of the definition of “
Partnerships/Limited Liability Companies ” above
(together with any modifications, amendments or restatements
thereof), and “ Partnership/Limited Liability Company
Agreement ” means any one of the Partnership/Limited
Liability Company Agreements.
Partnership/Limited Liability Company Interests shall
mean all of Debtor’s Rights, title and interest now or
hereafter accruing under the Partnership/Limited Liability Company
Agreements with respect to all distributions, allocations,
proceeds, fees, preferences, payments, or other benefits, which
Debtor now is or may hereafter become entitled to receive with
respect to such interests in the Partnerships/Limited Liability
Companies and with respect to the repayment of all loans now or
hereafter made by Debtor to the Partnerships/Limited Liability
Companies.
Patents has the meaning set forth in
Paragraph 4 hereof.
Pledged
Securities means, collectively, the Pledged Shares and any
other Collateral constituting securities.
Pledged
Shares has the meaning set forth in
Paragraph 4 hereof.
Rights means rights, remedies, powers, privileges and
benefits.
Security
Interest means the security interest granted and the pledge
and assignment made under Paragraph 3
hereof.
Trademarks has the meaning set forth in
Paragraph 4 hereof.
UCC
means the Uniform Commercial Code, including each such provision as
it may subsequently be renumbered, as enacted in the State of New
York or other applicable jurisdiction, as amended at the time in
question.
3.
SECURITY INTEREST . In order to secure the full and complete
payment and performance of the Obligations when due, Debtor hereby
grants to Secured Party a Security Interest in all of
Debtor’s Rights, titles, and interests in and to the
Collateral and pledges, collaterally transfers, and
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assigns the
Collateral to Secured Party, all upon and subject to the terms and
conditions of this Security Agreement. Such Security Interest is
granted and pledge and assignment are made as security only and
shall not subject Secured Party to, or transfer or in any way
affect or modify, any obligation of Debtor with respect to any of
the Collateral or any transaction involving or giving rise thereto.
If the grant, pledge, or collateral transfer or assignment of any
specific item of the Collateral is expressly prohibited by any
contract, license, law or regulation, then the Security Interest
created hereby nonetheless remains effective to the extent allowed
by the UCC or other applicable Law, but is otherwise limited by
that prohibition.
4.
COLLATERAL . As used herein, the term “
Collateral ” means the following items and
types of property, wherever located, now owned or in the future
existing or acquired by Debtor, and all proceeds and products
thereof, and any substitutes or replacements therefor:
(a) all personal
property and fixture property of every kind and nature including,
without limitation, all accounts, chattel paper (whether tangible
or electronic), goods (including inventory, equipment, and any
accessions thereto), software, instruments, investment property,
documents, deposit accounts, money, commercial tort claims, letters
of credit and letter-of-credit rights, supporting obligations, Tax
refunds, and general intangibles (including payment
intangibles);
(b) all Rights,
titles, and interests of Debtor in and to all outstanding stock,
equity, or other investment securities owned by Debtor, including,
without limitation, all capital stock of each Subsidiary of the
Debtor set forth on Annex B-1 (“ Pledged
Shares ”);
(c) all Rights,
titles, and interests of Debtor in and to all promissory notes and
other instruments payable to Debtor, including, without limitation,
all inter-company notes from Subsidiaries and those set forth on
Annex B-1 (“ Collateral Notes
”) and all Rights, titles, interests, and Liens Debtor may
have, be, or become entitled to under all present and future loan
agreements, security agreements, pledge agreements, deeds of trust,
mortgages, guarantees, or other documents assuring or securing
payment of or otherwise evidencing the Collateral Notes, including,
without limitation, those set forth on Annex B-1
(“ Collateral Note Security
”);
(d) the
Partnership/Limited Liability Company Interests and all Rights of
Debtor with respect thereto, including, without limitation, all
Partnership/Limited Liability Company Interests set forth on
Annex B-1 and all of Debtor’s distribution
rights, income rights, liquidation interest, accounts, contract
rights, general intangibles, notes, instruments, drafts, and
documents relating to the Partnership/Limited Liability Company
Interests;
(e) (i) all
copyrights (whether statutory or common law, registered or
unregistered), works protectable by copyright, copyright
registrations, copyright licenses, and copyright applications of
Debtor, including, without limitation, all of Debtor’s Right,
title, and interest in and to all copyrights registered in the
United States Copyright Office or anywhere else in the world and
also including, without limitation, the copyrights set forth on
Annex B-2 ; (ii) all renewals, extensions, and
modifications thereof, (iii) all income, licenses, royalties,
damages, profits, and payments relating to or payable under any of
the foregoing; (iv) the Right to sue for
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past, present,
or future infringements of any of the foregoing; and (v) all
other rights and benefits relating to any of the foregoing
throughout the world; in each case, whether now owned or hereafter
acquired by Debtor (“ Copyrights
”);
(f) (i) all
patents, patent applications, patent licenses, and patentable
inventions of Debtor, including, without limitation, registrations,
recordings, and applications thereof in the United States Patent
and Trademark Office or in any similar office or agency of the
United States of America, any state thereof or any other country or
any political subdivision thereof including, without limitation,
those set forth on Annex B-2 , and all of the
inventions and improvements described and claimed therein;
(ii) all continuations, divisions, renewals, extensions,
modifications, substitutions, reexaminations,
continuations-in-part, or reissues of any of the foregoing;
(iii) all income, royalties, profits, damages, awards, and
payments relating to or payable under any of the foregoing;
(iv) the right to sue for past, present, and future
infringements of any of the foregoing; and (v) all other
rights and benefits relating to any of the foregoing throughout the
world; in each case, whether now owned or hereafter acquired by
Debtor (“ Patents ”);
(g) (i) all
trademarks, trademark licenses, trade names, corporate names,
company names, business names, fictitious business names, trade
styles, service marks, certification marks, collective marks,
logos, other business identifiers, all registrations, recordings,
and applications thereof including, without limitation,
registrations, recordings, and applications 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 including, without limitation, those
set forth on Annex B-2 ; (ii) all reissues,
extensions, and renewals thereof; (iii) all income, royalties,
damages, and payments now or hereafter relating to or payable under
any of the foregoing including, without limitation, damages or
payments for past or future infringements of any of the foregoing;
(iv) the right to sue for past, present, and future
infringements of any of the foregoing; (v) all rights
corresponding to any of the foregoing throughout the world; and
(vi) all goodwill associated with and symbolized by any of the
foregoing, in each case, whether now owned or hereafter acquired by
Debtor (“ Trademarks ”, and collectively
with the Copyrights and the Patents, the “ Intellectual
Property ”);
(h) (i) all
of Debtor’s Rights, titles, and interests in, to, and under
those contracts pursuant to which a default in or breach of the
performance or observance of any provision could reasonably be
expected to result in the opinion of the Secured Party in a
Material Adverse Effect (the “ Material
Agreements ”) including, without limitation, all
Rights of Debtor to receive moneys due and to become due under or
pursuant to the Material Agreements; (ii) all rights of Debtor
to receive proceeds of any insurance, indemnity, warranty, or
guaranty with respect to the Material Agreements; (iii) all
claims of Debtor for damages arising out of or for breach of or
default under the Material Agreements; and (iv) all rights of
Debtor to compel performance and otherwise exercise all rights and
remedies under the Material Agreements;
(i) all present
and future automobiles, trucks, truck tractors, trailers,
semi-trailers, or other motor vehicles or rolling stock, now owned
or hereafter acquired by such Debtor (collectively, the “
Vehicles ”);
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(j) any and all
material deposit accounts, bank accounts, investment accounts, or
securities accounts, now owned or hereafter acquired or opened by
Debtor including, without limitation, any such accounts set forth
on Annex B-1 , and any account which is a replacement
or substitute for any of such accounts, together with all monies,
instruments, certificates, checks, drafts, wire transfer receipts,
and other property deposited therein and all balances therein (the
“ Deposit Accounts ”);
(k) all permits,
licenses and other authorizations (“
Authorizations ”) issued by any governmental
authority, to the extent and only to the extent that the grant of a
security interest in any such Authorization does not result in the
forfeiture of, or default under, any such Authorization;
(l) all present
and future distributions, income, increases, profits, combinations,
reclassifications, improvements, and products of, accessions,
attachments, and other additions to, tools, parts, and equipment
used in connection with, and substitutes and replacements for, all
or part of the Collateral described above;
(m) all present
and future accounts, contract rights, general intangibles, chattel
paper, documents, instruments, cash and noncash proceeds, and other
Rights arising from or by virtue of, or from the voluntary or
involuntary sale or other disposition of, or collections with
respect to, or insurance proceeds payable with respect to, or
proceeds payable by virtue of warranty or other claims against the
manufacturer of, or claims against any other Person with respect
to, all or any part of the Collateral heretofore described in this
clause or otherwise; and
(n) all present
and future security for the payment to Debtor or any Subsidiary of
any of the Collateral described above and goods which gave or will
give rise to any such Collateral or are evidenced, identified, or
represented therein or thereby.
The description
of the Collateral contained in this Paragraph 4
shall not be deemed to permit any action prohibited by this
Security Agreement or by the terms incorporated in this Security
Agreement.
5.
REPRESENTATIONS AND WARRANTIES . Debtor represents and
warrants to Secured Party that:
(a) Credit
Agreement . Certain representations and warranties in the
Credit Agreement are applicable to the Debtor or its assets or
operations, and each such representation is true and correct, in
all material respects.
(b) Binding
Obligation/Perfection . This Security Agreement creates a
legal, valid, and binding Lien in and to the Collateral in favor of
Secured Party and enforceable against Debtor. For Collateral in
which the Security Interest may be perfected by the filing of
Financing Statements pursuant to Article 9 of the UCC, once
those Financing Statements have been properly filed in the
jurisdictions described on Annex A hereto, the
Security Interest in that Collateral will be fully perfected and
the Security Interest will constitute a first-priority Lien on such
Collateral, subject only to Permitted Liens. With respect to
Collateral consisting of
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investment
property (other than Pledged Securities covered by
Paragraph 5(j) ), Deposit Accounts, electronic
chattel paper, letter-of-credit rights, and instruments, upon the
delivery of such Collateral to Secured Party or delivery of an
executed Control Agreement with respect to such Collateral, the
Security Interest in that Collateral will be fully perfected and
the Security Interest will constitute a first-priority Lien on such
Collateral, subject only to Permitted Liens. None of the Collateral
has been delivered nor control with respect thereto given to any
Person other than the Administrative Agent. Other than the
Financing Statements and Control Agreements with respect to this
Security Agreement, there are no other financing statements or
control agreements covering any Collateral, other than those
evidencing Permitted Liens. The creation of the Security Interest
does not require the consent of any Person that has not been
obtained.
(c) Debtor
Information . Debtor’s exact legal name, mailing address,
jurisdiction of organization, type of entity, and state issued
organizational identification number are as set forth on
Annex A hereto.
(d)
Location/Fixtures . (i) Debtor’s place of
business and chief executive office is where Debtor is entitled to
receive notices hereunder; the present and foreseeable location of
debtor’s books and records concerning any of the Collateral
that is accounts is as set forth on Annex A hereto,
and the location of all other Collateral, including, without
limitation, Debtor’s inventory and equipment (but excluding
fixtures) is as set forth on Annex A hereto; and,
except as noted on Annex A hereto, all such books,
records, and Collateral are in Debtor’s possession, and
(ii) substantially all the Collateral that is or may be
fixtures is located on or affixed to the real property described in
deeds of trust or mortgages executed by Debtor in favor of Secured
Party pursuant to the Credit Agreement or on Annex A
hereto.
(e)
Governmental Authority . Other than the filing of Financing
Statements contemplated hereby, appropriate filings to perfect the
Security Interest in the Intellectual Property and the notation of
a Lien in favor of the Secured Party on any motor vehicle
certificate of title, no Authorization, approval, or other action
by, and no notice to or filing with, any Governmental Authority is
required either (i) for the pledge by Debtor of the Collateral
pursuant to this Security Agreement or for the execution, delivery,
or performance of this Security Agreement by Debtor, or
(ii) for the exercise by Secured Party of the voting or other
Rights provided for in this Security Agreement or the remedies in
respect of the Collateral pursuant to this Security Agreement
(except as may be required in connection with the disposition of
the Pledged Securities by Laws affecting the offering and sale of
securities generally).
(f) Maintenance
of Collateral . All tangible Collateral which is useful in and
necessary to Debtor’s business is in good repair and
condition, ordinary wear and tear excepted.
(g) Liens .
Debtor owns, leases or has valid rights to use all presently
existing Collateral, and will acquire or lease all
hereafter-acquired Collateral, free and clear of all Liens,
except Permitted Liens.
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(h)
Collateral . Annex B-1 accurately lists all
Collateral Notes, Collateral Note Security, Pledged Shares,
Partnership/Limited Liability Company Interests, commercial tort
claims, and Deposit Accounts.
(i)
Instruments, Chattel Paper, Collateral Notes, and Collateral
Note Security . All material instruments and chattel paper
including, without limitation, the Collateral Notes, have been
delivered to Secured Party, together with corresponding
endorsements duly executed by Debtor in favor of Secured Party, and
such endorsements have been duly and validly executed and are
binding and enforceable against Debtor in accordance with their
terms. Each material Collateral Note and the documents evidencing
the Collateral Note Security are in full force and effect; there
have been no renewals or extensions of, or amendments,
modifications, or supplements which would materially adversely
affect such Collateral Notes or Collateral Note Security; and no
“default” or “event of default” has
occurred and is continuing under any such Collateral Note or
documents evidencing the Collateral Note Security. Debtor has good
title to the Collateral Notes and Collateral Note Security, and
such Collateral Notes and Collateral Note Security are free from
any claim for credit, deduction, or allowance of an Obligor and
free from any defense, condition, dispute, setoff, or counterclaim
which could materially adversely affect the value thereof, and
there is no extension or indulgence with respect
thereto.
(j) Pledged
Securities, Pledged Shares . All Collateral that is Pledged
Shares is duly authorized, validly issued, fully paid, and
non-assessable (except to the extent required by applicable Law),
and the transfer thereof is not subject to any restrictions, other
than restrictions imposed hereunder and by applicable securities
and corporate Laws or Permitted Liens. The Pledged Securities
securing the Obligations as defined in the Credit Agreement include
100% of the issued and outstanding common stock or other equity
interests owned by the Debtor of each Subsidiary of the Debtor.
Debtor has good title to the Pledged Securities, free and clear of
all Liens and encumbrances thereon (except for the Security
Interest created hereby or Permitted Liens), and has delivered to
Secured Party (i) all stock certificates, or other instruments
or documents representing or evidencing the Pledged Securities,
together with corresponding assignment or transfer powers duly
executed in blank by Debtor, and such powers have been duly and
validly executed and are binding and enforceable against Debtor in
accordance with their terms or (ii) to the extent such Pledged
Securities are uncertificated, an executed Acknowledgment of Pledge
in the form of Annex D with respect to such Pledged
Securities. The pledge of the Pledged Securities in accordance with
the terms hereof creates a valid and perfected first priority
security interest in the Pledged Securities securing payment of the
Obligations, subject to Permitted Liens.
(k)
Partnership/Limited Liability Company Interests . Each
Partnership/Limited Liability Company issuing a Partnership/Limited
Liability Company Interest, is duly organized, currently existing,
and in good standing in the jurisdiction of its formation; there
have been no material amendments, modifications, or supplements to
any agreement or certificate creating any Partnership/Limited
Liability Company or any material contract relating to the
Partnerships/Limited Liability Companies, of which Secured Party
has not been advised in writing; no event of default, default,
breach, or potential default has occurred and is continuing under
any Partnership/Limited Liability Company Agreement, except for
such defaults or
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breaches that
would not reasonably be expected to result in a Material Adverse
Effect; and no approval or consent of the partners of any
Partnership/Limited Liability Company is required as a condition to
the validity and enforceability of the Security Interest created
hereby or the consummation of the transactions contemplated hereby
which has not been duly obtained by Debtor. Debtor has good title
to the Partnership/Limited Liability Company Interests free and
clear of all Liens and encumbrances (except for the Security
Interest granted hereby or Permitted Liens). The
Partnership/Limited Liability Company Interests are validly issued,
fully paid, and nonassessable (except to the extent required by
applicable Law) and are not subject to statutory, contractual, or
other restrictions governing their transfer, ownership, or control,
except as set forth in the applicable Partnership/Limited Liability
Company Agreements or applicable securities Laws or Permitted
Liens. All capital contributions required to be made by the terms
of the Partnership/Limited Liability Company Agreements for each
Partnership/Limited Liability Company have been made. No
Partnership/Limited Liability Company interests owned by Debtor are
evidenced by certificates.
(1)
Accounts . All Collateral that is accounts, contract rights,
chattel paper, instruments, payment intangibles, or general
intangibles is free from any claim for credit, deduction, or
allowance of an Obligor, from any defense, condition, dispute,
setoff, or counterclaim (collectively “
Deductions ”), and there is no extension or
indulgence with respect thereto, except to the extent such
Deductions, extensions and indulgences could not reasonably be
expected to have a Material Adverse Effect.
(m) Deposit
Accounts . With respect to the Deposit Accounts,
(i) Debtor maintains each Deposit Account with the banks
listed on Annex B-1 hereto, (ii) upon request by
the Administrative Agent, Debtor shall use its reasonable efforts
to, within thirty (30) days of such request, cause each such bank
to acknowledge to Secured Party that each such Deposit Account is
subject to the Security Interest and Liens herein created, that the
pledge of such Deposit Account has been recorded in the books and
records of such bank, and that Secured Party shall have “
control ” (as defined in the UCC) over such Deposit
Account, and (iii) Debtor has the legal Right to pledge and
assign to Secured Party the funds deposited and to be deposited in
each such Deposit Account.
(n)
Intellectual Property .
(i) All of the
Intellectual Property is subsisting, valid, and enforceable (except
where any failure to be subsisting, valid and enforceable would not
reasonably be expected to have a Material Adverse Effect). The
information contained on Annex B-2 hereto is true,
correct and complete. All issued Patents, Patent applications,
registered Trademarks, Trademark applications, registered
Copyrights, and Copyright applications of Debtor are identified on
Annex B-2 hereto.
(ii) Except for
off-the-shelf software and other Intellectual Property of which
Debtor is a licensee (as to which this representation is
inapplicable), the Debtor is the sole and exclusive owner of, the
entire and unencumbered Right, title, and interest in and to the
Intellectual Property owned by Debtor free and clear of any Liens
including, without
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limitation, any
pledges, assignments, licenses, user agreements, and covenants by
Debtor not to sue third Persons, other than Permitted Liens or
licenses permitted by Paragraph 8(c)
.
(iii) As of the
date hereof, to Debtor’s knowledge, no third party is
infringing any of Debtor’s Rights under the Intellectual
Property.
(iv) Debtor has
performed and will continue to perform all acts and has paid and
will continue to pay all required fees and Taxes to maintain each
material item of the Intellectual Property in full force and effect
throughout the world, as applicable.
(v) Each of the
Patents and Trademarks identified on Annex B-2
hereto, to the extent required in Debtor’s reasonable
business judgment, has been properly registered with the United
States Patent and Trademark Office and in corresponding offices
throughout the world (where appropriate) and each of the Copyrights
identified on Annex B-2 hereto has been properly
registered with the United States Copyright Office and in
corresponding offices throughout the world (where
appropriate).
(vi) As of the
date hereof, to Debtor’s knowledge, no claims with respect to
the Intellectual Property have been asserted and are pending
(i) to the effect that the sale, licensing, pledge, or use of
any of the products of Debtor’s business infringes any other
party’s valid copyright, trademark, service mark, trade
secret, or other intellectual property Right, (ii) against the
use by Debtor of any Intellectual Property used in the
Debtor’s business as currently conducted, or (iii)
challenging the ownership or use by Debtor of any of the
Intellectual Property that Debtor purports to own or
use.
The foregoing
representations and warranties will be true and correct in all
material respects with respect to any additional Collateral or
additional specific descriptions of certain Collateral delivered to
Secured Party in the future by Debtor. The failure of any of these
representations or warranties or any description of Collateral
therein to be accurate or complete shall not impair the Security
Interest in any such Collateral.
6.
COVENANTS . So long as any Lenders are committed to make
Credit Extensions under the Credit Agreement, and until the
Obligations are paid and performed in full (except as provided in
Sections 10.01(d) and 10.01(e) of the
Credit Agreement), Debtor covenants and agrees with Secured Party
that Debtor will:
(a) Credit
Agreement . (i) Comply with, perform, and be bound by all
applicable covenants and agreements in the Credit Agreement, each
of which is hereby ratified and confirmed.
(b) Books and
Records Concerning Collateral; Inspection Rights . Debtor shall
comply with the provisions of Section 6.09 and
6.10 regarding records concerning and inspection
rights relating to the Collateral. In addition, from time to time
at the request of Secured Party
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deliver to
Secured Party such information regarding Debtor that is in the
possession of Debtor as Secured Party may reasonably
request.
(c) Annexes
. Together with the delivery of compliance certificates pursuant to
Section 6.02(a) of the Credit Agreement, update
all annexes hereto if any information therein shall become
inaccurate or incomplete and such updated Annexes shall replace the
existing Annexes for all purposes of this Agreement.
Notwithstanding any other provision herein, Debtor’s failure
to describe any Collateral required to be listed on any annex
hereto shall not impair Secured Party’s Security Interest in
the Collateral.
(d) Perform
Obligations . Perform all of Debtor’s duties under and in
connection with each transaction to which the Collateral, or any
material part thereof, relates, in the ordinary course of business
except when in Debtor’s business judgment non-performance is
justified. Notwithstanding anything to the contrary contained
herein, (i) Debtor shall remain liable under the contracts,
agreements, documents, and instruments included in the Collateral
to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Security
Agreement had not been executed, (ii) the exercise by Secured
Party of any of its Rights or remedies hereunder shall not release
Debtor from any of its duties or obligations under the contracts,
agreements, documents, and instruments included in the Collateral,
and (iii) Secured Party shall not have any indebtedness,
liability, or obligation under any of the contracts, agreements,
documents, and instruments included in the Collateral by reason of
this Security Agreement, and Secured Party shall not be obligated
to perform any of the obligations or duties of Debtor thereunder or
to take any action to collect or enforce any claim for payment
assigned hereunder.
(e)
Intentionally Deleted .
(f) Collateral
in Trust . Hold in trust (and not commingle with other assets
of Debtor) for Secured Party all Collateral that is chattel paper,
instruments, Collateral Notes, Pledged Securities, or documents at
any time received by Debtor, and promptly deliver same to Secured
Party, unless Secured Party at its option (which may be evidenced
only by a writing signed by Secured Party stating that Secured
Party elects to permit Debtor to so retain) permits Debtor to
retain the same, but any chattel paper, instruments, Collateral
Notes, Pledged Securities, or documents so retained shall be marked
to state that they are assigned to Secured Party; each such
instrument shall be endorsed to the order of Secured Party (but the
failure of same to be so marked or endorsed shall not impair the
Security Interest thereon).
(g) Control
. Execute all documents and take any action required by Secured
Party in order for Secured Party to obtain “control”
(as defined in the UCC) with respect to Collateral consisting of
Deposit Accounts, investment property, uncertificated Pledged
Securities, and letter-of-credit rights. If Debtor at any time
holds or acquires an interest in any electronic chattel paper or
any “transferable record,” as that term is defined in
the federal Electronic Signatures in Global and National Commerce
Act, or in the Uniform Electronic Transactions Act as in effect in
any relevant jurisdiction, promptly notify Secured Party thereof
and, at the request of Secured Party, take such action as Secured
Party may reasonably request to vest in Secured Party
control
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under the UCC
of such electronic chattel paper or control under the federal
Electronic Signatures in Global and National Commerce Act or, as
the case may be, the Uniform Electronic Transactions Act, as so in
effect in such jurisdiction, of such transferable
record.
(h) Further
Assurances . At Debtor’s expense and Secured
Party’s request, before or after a Default or Event of
Default: (i) file or cause to be filed such applications and
take such other actions as Secured Party may request to obtain the
consent or approval of any Governmental Authority to Secured
Party’s Rights hereunder including, without limitation, the
Right to sell all the Collateral upon an Event of Default without
additional consent or approval from such Governmental Authority
(and, because Debtor agrees that Secured Party’s remedies at
Law for failure of Debtor to comply with this provision would be
inadequate and that such failure would not be adequately
compensable in damages, Debtor agrees that its covenants in this
provision may be specifically enforced); (ii) from time to
time promptly execute and deliver to Secured Party all such other
assignments, certificates, supplemental documents, and financing
statements, and do all other acts or things as Secured Party may
reasonably request in order to more fully create, evidence,
perfect, continue, and preserve the priority of the Security
Interest and to carry out the provisions of this Security
Agreement; and (iii) pay all filing fees in connection with
any financing, continuation, or termination statement or other
instrument with respect to the Security Interests.
(i)
Encumbrances . Not create, permit, or suffer to exist, and
shall defend the Collateral against, any Lien or other encumbrance
on the Collateral, other than Permitted Liens, and shall defend
Debtor’s Rights in the Collateral and Secured Party’s
Security Interest in the Collateral against the claims and demands
of all Persons except those holding or claiming Permitted Liens.
Debtor shall do nothing to impair the Rights of Secured Party in
the Collateral.
(j) Estoppel
and Other Agreements and Matters . Upon the reasonable request
of Secured Party, either (i) use commercially reasonable
efforts to cause the landlord or lessor for each location where any
of its inventory or equipment is maintained to execute and deliver
to Secured Party an estoppel and subordination agreement in such
form as may be reasonably acceptable to Secured Party and its
counsel, or (ii) deliver to Secured Party a legal opinion or
other evidence (in each case that is reasonably satisfactory to
Secured Party and it counsel) that neither the applicable lease nor
the Laws of the jurisdiction in which that location is situated
provide for contractual, common Law, or statutory landlord’s
Liens that is senior to or pari passu with the Security
Interest.
(k)
Fixtures . For any Collateral that is a fixture or an
accession which has been attached to real estate or other goods
prior to the perfection of the Security Interest, use commercially
reasonable efforts to furnish to Secured Party, upon reasonable
demand, a disclaimer of interest in each such fixture or accession
and a consent in writing to the Security Interest of Secured Party
therein, signed by all Persons having any interest in such fixture
or accession by virtue of any interest in the real estate or other
goods to which such fixture or accession has been
attached.
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(l)
Certificates of Title . Upon the request of Secured Party,
if a certificate of title is issued or outstanding with respect to
any Vehicle or other Collateral with a fair market value of at
least $50,000, cause the Security Interest to be properly noted
thereon.
(m) Warehouse
Receipts Non-Negotiable . If any warehouse receipt or receipt
in the nature of a warehouse receipt is issued in respect of any of
the Collateral, agree that such warehouse receipt or receipt in the
nature thereof shall not be “negotiable” (as such term
is used in Section 7-104 of the UCC) unless such warehouse
receipt or receipt in the nature thereof is delivered to Secured
Party.
(n) Impairment
of Collateral . Not use any material portion of the Collateral,
or permit the same to be used, for any unlawful purpose, in any
manner that is reasonably likely to materially adversely impair the
value or usefulness of the Collateral, or in any manner
inconsistent with the provisions or requirements of any policy of
insurance thereon nor affix or install any accessories, equipment,
or device on the Collateral or on any component thereof if such
addition will materially impair the original intended function or
use of the Collateral or such component.
(o) Collateral
Notes and Collateral Note Security . Without the prior written
consent of Secured Party not (i) materially modify or
substitute, or permit material modification or substitution of, any
Collateral Note or any document evidencing the Collateral Note
Security, if the effect thereof would be to materially adversely
affect the value of the Collateral Notes and Collateral Note
Security taken as a whole, or (ii) release any material
portion of any Collateral Note Security unless paid in full or
otherwise specifically required by the terms thereof, except in the
exercise of the Debtor’s reasonable business
judgment.
(p)
Securities . Except as permitted by the Credit Agreement,
not sell, exchange, or otherwise dispose of, or grant any option,
warrant, or other Right with respect to, any of the Pledged
Securities; and take any action requested by Secured Party to allow
Secured Party to fully enforce its Security Interest in the Pledged
Securities including, without limitation, the filing of any claims
with any court, liquidator, trustee, custodian, receiver, or other
like person or party.
(q) Depository
Bank . With respect to any Deposit Accounts, (i) maintain
the Deposit Accounts at the banks (a “ Depository Bank
”) described on Annex B-1 or such additional
depository banks
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