SECOND AMENDED AND RESTATED SECURITY AGREEMENT

EXHIBIT 10.3

 

SECOND AMENDED AND RESTATED

SECURITY AGREEMENT

 

THIS SECOND AMENDED AND RESTATED SECURITY AGREEMENT (this “ Security Agreement ”), is entered into as of December 29, 2005, among THE PANTRY, INC., a Delaware corporation (the “ Borrower ”), the Domestic Subsidiaries of the Borrower from time to time a party hereto (individually a “ Guarantor ” and collectively the “ Guarantors ”; the Guarantors, together with the Borrower, individually an “ Obligor ” and collectively the “ Obligors ”) and WACHOVIA BANK, NATIONAL ASSOCIATION , in its capacity as Administrative Agent under the Credit Agreement referred to below (in such capacity, the “ Administrative Agent ”) for the several banks and other financial institutions as may from time to time become parties to such Credit Agreement (individually a “ Secured Party ” and collectively the “ Secured Parties ”).

 

RECITALS

 

WHEREAS , pursuant to that certain Amended and Restated Credit Agreement dated as of March 12, 2004 (as amended, modified, extended, renewed or replaced, the “ Existing Credit Agreement ”), among the Borrower, the guarantors party thereto, the lenders party thereto, and the Administrative Agent, the lenders agreed to make loans and issue letters of credit upon the terms and subject to the conditions set forth therein;

 

WHEREAS , pursuant to that certain Second Amended and Restated Credit Agreement dated as of the date hereof (as amended, modified, extended, renewed or replaced from time to time, the “ Credit Agreement ”), among the Borrower, the Guarantors, the Secured Parties party thereto, and the Administrative Agent, the Secured Parties have agreed to refinance the Existing Credit Agreement and make Loans and issue Letters of Credit upon the terms and subject to the conditions set forth therein;

 

WHEREAS , in connection with the Existing Credit Agreement, the Borrower and the Guarantors entered into that certain Amended and Restated Security Agreement dated as of March 12, 2004 (as amended, modified, extended, renewed or replaced, the “ Existing Security Agreement ”); and

 

WHEREAS , it is a condition precedent to the effectiveness of the Credit Agreement and the obligations of the Secured Parties to make their respective Loans and to issue Letters of Credit under the Credit Agreement that the Obligors shall have executed and delivered this Security Agreement (which amends and restates the Existing Security Agreement) to the Administrative Agent for the ratable benefit of the Secured Parties.

NOW, THEREFORE , in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1. Definitions .

 

(a) Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Credit Agreement, and the following terms which are defined in the Uniform Commercial Code from time to time in effect in the State of North Carolina (the “ UCC ”) are used herein as so defined: Accessions, Accounts, As-Extracted Collateral, Chattel Paper, Commercial Tort Claims, Consumer Goods, Control, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Manufactured Homes, Proceeds, Securities Account, Securities Intermediary, Security, Security Entitlement, Software, Supporting Obligations and Tangible Chattel Paper. For purposes of this Security Agreement, the term “Secured Party” shall include any Hedging Agreement Provider.

 

(b) In addition, the following term shall have the following meaning:

 

“ Secured Obligations ”: (a) all of the Credit Party Obligations, howsoever evidenced, created, incurred or acquired, whether primary, secondary, direct, contingent, or joint and several and (b) all expenses and charges, legal and otherwise, incurred by the Administrative Agent and/or the Secured Parties in collecting or enforcing any Credit Party Obligations or in realizing on or protecting any security therefor, including without limitation the security granted hereunder.

 

2. Grant of Security Interest in the Collateral .

 

(a) To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, each Obligor hereby grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a continuing security interest in, and right to set off against, any and all right, title and interest of such Obligor in and to the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “ Collateral ”):

 

(i)

all Accounts;

 

(ii)

all cash and Cash Equivalents;

 

(iii)

all Chattel Paper;

 

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(iv)

those certain Commercial Tort Claims set forth on Schedule 2(a) attached hereto (as such Schedule may be updated from time to time by the Obligors);

 

(v)

all Copyright Licenses;

 

(vi)

all Copyrights;

 

(vii)

all Deposit Accounts;

 

(viii)

all Documents;

 

(ix)

all Equipment;

 

(x)

all Fixtures;

 

(xi)

all General Intangibles;

 

(xii)

all Goods;

 

(xiii)

all Instruments;

 

(xiv)

all Inventory;

 

(xv)

all Investment Property;

 

(xvi)

all Letter-of-Credit Rights;

 

(xvii)

all Material Contracts and all such other agreements, contracts, leases, licenses, tax sharing agreements or hedging arrangements now or hereafter entered into by an Obligor, as such agreements may be amended or otherwise modified from time to time (collectively, the “ Assigned Agreements ”), including without limitation, (A) all rights of an Obligor to receive moneys due and to become due under or pursuant to the Assigned Agreements, (B) all rights of an Obligor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to the Assigned Agreements, (C) claims of an Obligor for damages arising out of or for breach of or default under the Assigned Agreements and (D) the right of an Obligor to terminate the Assigned Agreements, to perform thereunder and to compel performance and otherwise exercise all remedies thereunder;

 

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(xviii)

all Patent Licenses;

 

(xix)

all Patents;

 

(xx)

all Payment Intangibles;

 

(xxi)

all Trademark Licenses;

 

(xxii)

all Trademarks;

 

(xxiii)

all Software;

 

(xxiv)

all Supporting Obligations;

 

(xxv)

all books, records, ledger cards, files, correspondence, computer programs, tapes, disks, and related data processing software (owned by such Obligor or in which it has an interest) that at any time evidence or contain information relating to any Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon;

 

(xxvi)

all other personal property of any kind or type whatsoever owned by such Obligor; and

 

(xxvii)

to the extent not otherwise included, all Accessions, Proceeds and products of any and all of the foregoing.

 

Notwithstanding the foregoing, nothing in this Section 2 or otherwise in this Security Agreement shall constitute a grant by any Obligor of a security interest in any contract, document, instrument, general intangible, lease, license or other right of any kind to the extent such agreement was entered into prior to the date of this Security Agreement and to the extent such a grant of a security interest would, after giving effect to the provisions of subsections 9-406, 9-407 and 9-408 of the UCC, constitute a breach or violation of any term thereof.

 

(b) The Obligors and the Administrative Agent, on behalf of the Secured Parties, hereby acknowledge and agree that the security interest created hereby in the Collateral (i) constitutes continuing collateral security for all of the Secured Obligations, whether now existing or hereafter arising and (ii) is not to be construed as an assignment of any Intellectual Property.

 

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3. Provisions Relating to Accounts, Contracts and Agreements .

 

(a) Anything herein to the contrary notwithstanding, each of the Obligors shall remain liable under each of its Accounts, contracts and agreements to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account or the terms of such contract or agreement. Neither the Administrative Agent nor any Secured Party shall have any obligation or liability under any Account (or any agreement giving rise thereto), contract or agreement by reason of or arising out of this Security Agreement or the receipt by the Administrative Agent or any Secured Party of any payment relating to such Account, contract or agreement pursuant hereto, nor shall the Administrative Agent or any Secured Party be obligated in any manner to perform any of the obligations of an Obligor under or pursuant to any Account (or any agreement giving rise thereto), contract or agreement, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

 

(b) Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent shall have the right, but not the obligation, to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and the Obligors shall furnish all such assistance and information as the Administrative Agent may reasonably require in connection with such test verifications. Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent’s request and at the expense of the Obligors, the Obligors shall cause independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts. Subject to Section 2(a), the Administrative Agent in its own name or in the name of others may communicate with account debtors on the Accounts to verify with them to the Administrative Agent’s satisfaction the existence, amount and terms of any Accounts.

 

4. Representations and Warranties . Each Obligor hereby represents and warrants to the Administrative Agent, for the benefit of the Secured Parties, that so long as any of the Secured Obligations remain outstanding (other than contingent indemnity or reimbursement obligations) or any Credit Document or Secured Hedging Agreement is in effect, and until all of the Commitments shall have been terminated:

 

(a) Chief Executive Office; Books & Records; Legal Name; State of Formation . As of the Closing Date, each Obligor’s chief executive office and chief place of business are (and for the prior four months has been) located at the locations set forth on Schedule 3.5(c) to the Credit Agreement and as of the Closing Date each Obligor

 

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keeps its books and records at such locations. As of the Closing Date, each Obligor’s exact legal name is as shown in this Security Agreement and its state of incorporation or organization is (and for the prior four months has been) the location set forth on Schedule 3.1-1 to the Credit Agreement. No Obligor has in the four months preceding the Closing Date changed its name, been party to a merger, consolidation or other change in structure or used any tradename not disclosed on Schedule 4(a) attached hereto.

 

(b) Location of Tangible Collateral . The location of all tangible Collateral owned by each Obligor is set forth in the Perfection Certificate delivered in accordance with the Credit Agreement.

 

(c) Ownership . Each Obligor is the legal and beneficial owner of its Collateral and has the right to pledge, sell, assign or transfer the same.

 

(d) Security Interest/Priority . This Security Agreement creates a valid security interest in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, in the Collateral of such Obligor and, when properly perfected by filing, the granting of Control to the Administrative Agent or otherwise, shall constitute a valid first priority, perfected security interest in such Collateral, to the extent such security interest can be perfected by filing, the granting of Control or otherwise under the UCC or by filing an appropriate notice with the United States Patent and Trademark Office or the United States Copyright Office, free and clear of all Liens except for Permitted Liens.

 

(e) Consents . Except for (i) the filing or recording of UCC financing statements, (ii) the filing of appropriate notices with the United States Patent and Trademark Office and the United States Copyright Office or (iii) obtaining Control to perfect the Liens created by this Security Agreement, no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority and no consent of any other Person (including, without limitation, any stockholder, member or creditor of such Obligor), is required (A) for the grant by such Obligor of the security interest in the Collateral granted hereby or for the execution, delivery or performance of this Security Agreement by such Obligor or (B) for the perfection of such security interest or the exercise by the Administrative Agent of the rights and remedies provided for in this Security Agreement.

 

(f) Types of Collateral . None of the Collateral consists of, or is the Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes or standing timber (as used in the UCC).

 

(g) Accounts . With respect to the Accounts of the Obligors: (i) to the extent an Account arises out of goods sold and/or services furnished, (A) the goods sold and/or services furnished giving rise to each Account, are not subject to any security interest or Lien except the first priority, perfected security interest granted to the Administrative Agent herein and Permitted Liens and (B) such Account arises out of a bona fide transaction for

 

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goods sold and delivered (or in the process of being delivered) by an Obligor or for services actually rendered by an Obligor, which transaction was conducted in the ordinary course of the Obligor’s business or otherwise permitted by the Credit Agreement; (ii) no Account of an Obligor is evidenced by any Instrument or Chattel Paper unless (x) such Instrument or Chattel Paper represents an obligation of less than $50,000, or (y) as to any Instrument or Chattel Paper which represents an obligation of $50,000 or more, notice has been given to the Administrative Agent, and at the request of the Administrative Agent, the same has been endorsed over and delivered to, or submitted to the Control of, the Administrative Agent; (iii) each Account and the papers and documents of the applicable Obligor relating thereto are genuine and in all material respects what they purport to be; (iv) the amount of each Account as shown on the applicable Obligor’s books and records, and on all invoices and statements which may be delivered to the Administrative Agent with respect thereto, is due and payable to the applicable Obligor and is not in any way contingent; (v) no Account is evidenced by judgment, there are no set-offs, counterclaims or disputes existing or asserted with respect to any Account that in the aggregate could reasonably be expected to have a Material Adverse Effect, and no Obligor has made any agreement with any account debtor for any deduction from any Account except for deductions made in the ordinary course of its business; (vi) there has been no development or event which individually or in the aggregate has had or could be reasonably expected to have an adverse effect on the validity or enforcement of any Account or tend to reduce the amount payable thereunder as shown on the applicable Obligor’s books and records and all invoices and statements delivered to the Administrative Agent with respect thereto, which development or event could reasonably be expected to have a Material Adverse Effect; and (vii) the right to receive payment under each Account is assignable except where the account debtor with respect to such Account is the United States government or any State government or any agency, department or instrumentality thereof, or any other Governmental Authority, to the extent the assignment of any such right to payment is prohibited or limited by applicable law, regulations, administrative guidelines or contract.

 

(h) Inventory . Except as set forth on Schedule 4(a) attached hereto, no Inventory of an Obligor is held by a third party pursuant to consignment, sale or return, sale on approval or similar arrangement.

 

(i) Intellectual Property .

 

(i) Schedule 3.21 to the Credit Agreement includes all Intellectual Property owned by the Obligors as of the date hereof.

 

(ii) All Intellectual Property owned by each Obligor is valid, subsisting, unexpired, and enforceable and has not been abandoned, and each Obligor is legally entitled to use each of its tradenames.

 

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(iii) Except as set forth in Schedule 3.21 to the Credit Agreement, none of the Intellectual Property owned by the Obligors is the subject of any licensing or franchise agreement.

 

(iv) No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of any Intellectual Property of the Obligors.

 

(v) To the knowledge by each Obligor no action or proceeding is pending seeking to limit, cancel or question the validity of any Intellectual Property of the Obligors, or which, if adversely determined, would have a material adverse effect on the value of any such Intellectual Property.

 

(vi) All filed applications pertaining to the Intellectual Property of each Obligor have been duly and properly filed, and all registrations or letters pertaining to such Intellectual Property have been duly and properly filed and issued, and all of such Intellectual Property is valid and enforceable.

 

(vii) No Obligor has made any assignment or agreement in conflict with the security interest of the Administrative Agent in the Intellectual Property of each Obligor hereunder.

 

(j) Documents, Instruments and Chattel Paper . All Documents, Instruments and Chattel Paper describing, evidencing or constituting Collateral are, to the Obligors’ knowledge, complete, valid, and genuine.

 

(k) Equipment . With respect to each Obligor’s Equipment: (i) such Obligor has good and marketable title thereto; and (ii) all such Equipment is in normal operating condition and repair, ordinary wear and tear alone excepted, and is suitable for the uses to which it is customarily put in the conduct of such Obligor’s business.

 

5. Covenants . Each Obligor covenants that, so long as any of the Secured Obligations remain outstanding (other than contingent indemnity or reimbursement obligations) or any Credit Document or Secured Hedging Agreement is in effect, and until all of the Commitments shall have been terminated, such Obligor shall:

 

(a) Other Liens . Defend the Collateral against the claims and demands of all other parties claiming an interest therein and keep the Collateral free from all Liens, except for Permitted Liens. If an Obligor proposes to obtain financing permitted under Section 6.1(c) of the Credit Agreement with respect to any asset acquired after the Closing Date (a “ Purchase Money Financing ”), the Administrative Agent will either (i) with respect to such asset, subordinate the Lien and security interest created hereunder to the Lien securing the Purchase Money Financing by a subordination agreement reasonably acceptable to the Administrative Agent and the provider thereof or (ii) if the

 

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Obligor has not been able, after reasonable effort, to get the provider of such Purchase Money Financing to agree to subordination, the Administrative Agent will release the Lien and security interest granted hereunder in such asset.

 

(b) Sales and Sale and Lease-Backs of Collateral . Neither the Administrative Agent nor any Secured Party authorizes any Obligor to, and no Obligor shall, sell, exchange, transfer, assign, lease or otherwise dispose of the Collateral or any interest therein, except as permitted under the Credit Agreement; provided that in the event the Obligor makes an asset sale or sale and lease-back transaction permitted by the Credit Agreement and the assets subject to such asset sale or sale and lease-back transaction constitute Collateral, the Administrative Agent shall release the Collateral that is the subject of such asset sale to the Obligor free and clear of any Lien and security interest under this Security Agreement or any other Credit Document concurrently with the consummation of such asset sale or sale and lease-back transaction.

 

(c) Preservation of Collateral . Keep the Collateral in good order, condition and repair in all material respects, ordinary wear and tear excepted; not use the Collateral in violation of the provisions of this Security Agreement or any other agreement relating to the Collateral or any policy insuring the Collateral or any applicable Requirement of Law; not permit any Collateral to be or become a fixture to real property or an accession to other personal property unless the Administrative Agent has a valid, perfected and first priority security interest for the benefit of the Secured Parties in such real or personal property; and not, without the prior written consent of the Administrative Agent, alter or remove any identifying symbol or number on its Equipment.

 

(d) Possession or Control of Certain Collateral . If (i) any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Tangible Chattel Paper or Supporting Obligation or (ii) if any Collateral shall be stored or shipped subject to a Document or (iii) if any Collateral shall consist of Investment Property in the form of certificated securities, in the case of either clause (i) or (ii), in an amount of $50,000 or more, immediately notify the Administrative Agent of the existence of such Collateral and, upon the request of the Administrative Agent, deliver such Instrument, Chattel Paper, Supporting Obligation, Document or Investment Property to the Administrative Agent, duly endorsed in a manner satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Security Agreement. If any Collateral shall consist of Deposit Accounts, Electronic Chattel Paper, Letter-of-Credit Rights or uncertificated Investment Property, execute and deliver (and, with respect to any Collateral consisting of uncertificated Security Entitlements or Investment Property, cause the Securities Intermediary or the issuer, as applicable, with respect to such Investment Property to execute and deliver) to the Administrative Agent all control agreements, assignments, instruments or other documents as reasonably requested by the Administrative Agent for the purposes of obtaining and maintaining Control of such Collateral.

 

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(e) Changes in Corporate Structure or Location . Not, without providing ten (10) days prior written notice to the Administrative Agent and without filing (or confirming that the Administrative Agent has filed) such financing statements and amendments to any previously filed financing statements as the Administrative Agent may require, (i) alter its corporate existence or, in one transaction or a series of transactions, merge into or consolidate with any other entity, (ii) change its state of incorporation or organization or the location where it maintains its books and records or (iii) change its registered corporate name.

 

(f) Inspection . Allow the Administrative Agent or its representatives to visit and inspect the Collateral as set forth in Section 5.5 of the Credit Agreement.

 

(g) Perfection of Security Interest . Mark its books and records to reflect the security interest of the Administrative Agent in the Collateral. Each Obligor hereby authorizes the Administrative Agent to prepare and file such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as the Administrative Agent may from time to time deem necessary or appropriate in order to perfect and maintain the security interests granted hereunder in accordance with the UCC, including, without limitation, any financing statement that describes the Collateral as “all personal property” or “all assets” of such Obligor or that describes the Collateral in some other manner as the Administrative Agent deems necessary or advisable. To the extent permitted by applicable law, each Obligor hereby agrees that a carbon, photographic or other reproduction of this Security Agreement or any such financing statement is sufficient for filing as a financing statement by the Administrative Agent without notice thereof to such Obligor wherever the Administrative Agent may reasonably determine is appropriate. Each Obligor shall also execute and deliver to the Administrative Agent such agreements, assignments or instruments (including affidavits, notices, reaffirmations and amendments and restatements of existing documents, as the Administrative Agent may reasonably request) and do all such other things as the Administrative Agent may reasonably deem necessary or appropriate (i) to assure to the Administrative Agent its security interests hereunder are perfected, including (A) such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as the Administrative Agent may from time to time reasonably request in order to perfect and maintain the security interests granted hereunder in accordance with the UCC and any other personal property security legislation in the appropriate state(s) or province(s), (B) with regard to Investment Property, execute and cause any Securities Intermediary with respect to such Investment Property to execute a securities control agreement in form and substance satisfactory to the Administrative Agent, (C) with regard to Copyrights, a Notice of Grant of Security Interest in Copyrights for filing with the United States Copyright Office in the form of Schedule 5(f)(i) attached hereto, (D) with regard to Patents, a Notice of Grant of Security Interest in Patents for filing with the United States Patent and Trademark Office in the form of Schedule 5(f)(ii) attached hereto and (E) with regard to Trademarks, a Notice of Grant of Security Interest in Trademarks for filing with the United States Patent and

 

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Trademark Office in the form of Schedule 5(f)(iii) attached hereto, (ii) to consummate the transactions contemplated hereby and (iii) to otherwise protect and assure the Administrative Agent of its rights and interests hereunder. To that end, each Obligor hereby irrevocably makes, constitutes and appoints the Administrative Agent, its nominee or any other person whom the Administrative Agent may designate, as such Obligor’s attorney-in-fact with full power and for the limited purpose to sign in the name of such Obligor any notices or any similar documents which in the Administrative Agent’s reasonable discretion would be necessary or appropriate in order to perfect and maintain perfection of the security interests granted hereunder, such power, being coupled with an interest, being and remaining irrevocable so long as any of the Secured Obligations remain outstanding (other than any such obligations which by the terms thereof are stated to survive termination of the Credit Documents) or any Credit Document or Secured Hedging Agreement is in effect, and until all of the Commitments shall have terminated. In the event for any reason the law of any jurisdiction other than North Carolina becomes or is applicable to the Collateral of any Obligor or any part thereof, or to any of the Secured Obligations, such Obligor agrees to execute and deliver all such instruments and to do all such other things as the Administrative Agent in its reasonable discretion reasonably deems necessary or appropriate to preserve, protect and enforce the security interests of the Administrative Agent under the law of such other jurisdiction (and, if an Obligor shall fail to do so promptly upon the request of the Administrative Agent, then the Administrative Agent may execute any and all such requested documents on behalf of such Obligor pursuant to the power of attorney granted hereinabove).

 

(h) Collateral Held by Warehouseman, Bailee, etc. If any Collateral with a book value of $1,000,000 or more is at any time in the possession or control of a warehouseman, bailee or any agent or processor of such Obligor, (i) notify the Administrative Agent of such possession, (ii) notify such Person of the Administrative Agent’s security interest for the benefit of the Secured Parties in such Collateral, (iii) instruct such Person to hold all such Collateral for the Administrative Agent’s account subject to the Administrative Agent’s instructions and (iv) obtain an acknowledgment from such Person that it is holding such Collateral for the benefit of the Administrative Agent.

 

(i) Treatment of Accounts . (i) Not grant or extend the time for payment of any Account, or compromise or settle any Account for less than the full amount thereof, or release any person or property, in whole or in part, from payment thereof, or allow any credit or discount thereon, other than as normal and customary in the ordinary course of an Obligor’s business and (ii) maintain at its principal place of business a record of Accounts consistent with customary business practices.

 

(j) Covenants Relating to Inventory .

 

(i) Maintain, keep and preserve its Inventory in good salable condition at its own cost and expense, subject to policies and procedures relating to obsolete, defective, damaged, or slow-moving items and items held for return that are normal and customary in the ordinary course of any Obligor’s business.

 

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(ii) Comply with all reporting requirements set forth in the Credit Agreement with respect to Inventory.

 

(iii) If any of the Inventory with a book value in excess of $100,000 is at any time evidenced by a document of title, immediately upon request by the Administrative Agent, deliver such document of title to the Administrative Agent.

 

(k) Covenants Relating to Copyrights .

 

(i) Employ the Copyright for each material Work with such notice of copyright as may be required by law to secure copyright protection.

 

(ii) Not do any act or knowingly omit to do any act whereby any Copyright may become invalidated and (A) not do any act, or knowingly omit to do any act, whereby any Copyright material to the conduct of its business may become injected into the public domain; (B) notify the Administrative Agent immediately if it knows, or has reason to know, that any Copyright material to the conduct of its business may become injected into the public domain or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in any court or tribunal in the United States or any other country) regarding an Obligor’s ownership of any such Copyright or its validity; (C) take all necessary steps as it shall deem appropriate under the circumstances, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of each Copyright owned by an Obligor, which any Obligor reasonably determines are material to the conduct of its business, including, without limitation, filing of applications for renewal where necessary; and (D) promptly notify the Administrative Agent of any material infringement of any Copyright of an Obligor of which it becomes aware (with respect to Copyrights that an Obligor reasonably determines is material to the conduct of its business) and take such actions as it shall reasonably deem appropriate under the circumstances to protect such Copyright, including, where appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking to recover any and all damages for such infringement.

 

(iii) Not make any assignment or agreement in conflict with the security interest in