EXHIBIT 10.2
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GUARANTEE AND COLLATERAL AGREEMENT
made by
GENTIVA HEALTH SERVICES, INC.
and certain of its Subsidiaries
in favor of
LEHMAN COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of February 28, 2006
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINED TERMS...................................................................................1
1.1. Definitions.....................................................................................1
1.2. Other Definitional Provisions...................................................................9
SECTION 2. GUARANTEE......................................................................................10
2.1. Guarantee......................................................................................10
2.2. Rights of Reimbursement, Contribution and Subrogation..........................................11
2.3. Amendments, etc. with respect to the Borrower Obligations......................................12
2.4. Guarantee Absolute and Unconditional...........................................................13
2.5. Reinstatement..................................................................................13
2.6. Payments.......................................................................................14
SECTION 3. GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL.............................14
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................................................15
4.1. Representations in Credit Agreement............................................................15
4.2. Perfected First Priority Liens.................................................................16
4.3. Name; Jurisdiction of Organization, etc........................................................16
4.4. Inventory and Equipment........................................................................16
4.5. Farm Products..................................................................................17
4.6. Investment Property............................................................................17
4.7. Receivables....................................................................................18
4.8. Material Contracts.............................................................................18
4.9. Intellectual Property..........................................................................19
4.10. Letter of Credit Rights........................................................................20
4.11. Commercial Tort Claims.........................................................................20
SECTION 5. COVENANTS......................................................................................20
5.1. Covenants in Credit Agreement..................................................................20
5.2. Delivery and Control of Instruments, Chattel Paper, Negotiable Documents, Investment Property and
Deposit Accounts...............................................................................21
5.3. Maintenance of Insurance.......................................................................22
5.4. Payment of Obligations.........................................................................23
5.5. Maintenance of Perfected Security Interest; Further Documentation..............................23
5.6. Changes in Locations, Name, Jurisdiction of Incorporation, etc.................................23
5.7. Investment Property............................................................................24
5.8. Receivables....................................................................................25
5.9. Material Contracts.............................................................................25
5.10. Intellectual Property..........................................................................25
5.11. Vehicles.......................................................................................28
5.12. Commercial Tort Claims.........................................................................28
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PAGE
SECTION 6. REMEDIAL PROVISIONS............................................................................28
6.1. Certain Matters Relating to Receivables........................................................28
6.2. Communications with Obligors; Grantors Remain Liable...........................................29
6.3. Pledged Securities.............................................................................30
6.4. Proceeds to be Turned Over To Administrative Agent.............................................30
6.5. Application of Proceeds........................................................................31
6.6. Code and Other Remedies........................................................................31
6.7. Waiver; Deficiency.............................................................................33
SECTION 7. THE ADMINISTRATIVE AGENT.......................................................................33
7.1. Administrative Agent's Appointment as Attorney-in-Fact, etc....................................33
7.2. Duty of Administrative Agent...................................................................35
7.3. Execution of Financing Statements..............................................................35
7.4. Authority of Administrative Agent..............................................................35
7.5. Appointment of Co-Collateral Agents............................................................36
SECTION 8. MISCELLANEOUS..................................................................................36
8.1. Amendments in Writing..........................................................................36
8.2. Notices. 36
8.3. No Waiver by Course of Conduct; Cumulative Remedies............................................36
8.4. Enforcement Expenses; Indemnification..........................................................36
8.5. Successors and Assigns.........................................................................37
8.6. Set-Off. 37
8.7. Counterparts...................................................................................38
8.8. Severability...................................................................................38
8.9. Section Headings...............................................................................38
8.10. Integration....................................................................................38
8.11. GOVERNING LAW..................................................................................38
8.12. Submission to Jurisdiction; Waivers............................................................38
8.13. Acknowledgments................................................................................39
8.14. Additional Grantors............................................................................39
8.15. Releases.......................................................................................39
8.16. WAIVER OF JURY TRIAL...........................................................................40
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FORM OF
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of February 28, 2006,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of LEHMAN
COMMERCIAL PAPER INC., as Administrative Agent (in such capacity, the
"Administrative Agent"), for (i) the banks and other financial institutions or
entities (the "Lenders") from time to time parties to the Credit Agreement,
dated as of February 28, 2006 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among GENTIVA HEALTH SERVICES INC.,
a Delaware corporation (the "Borrower"), the Lenders, LEHMAN BROTHERS INC., as
advisor, sole lead arranger and sole bookrunner (in such capacity, the
"Arranger"), and the Administrative Agent, and (ii) the other Secured Parties
(as hereinafter defined).
W I T N E S S E T H:
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WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Borrower upon the terms and subject
to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce the
Arranger, the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1. DEFINED TERMS
1.1. Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are used
herein as so defined: Accounts, Account Debtor, Certificated Security, Chattel
Paper, Commodity Account, Commodity Contract, Commodity Intermediary, Documents,
Electronic Chattel Paper, Entitlement Order, Equipment, Farm Products, Financial
Asset, Goods, Instruments, Inventory, Letter of Credit Rights, Money, Negotiable
Document, Payment Intangibles, Securities Account, Securities Intermediary,
Security, Security Entitlement, Supporting Obligations, Tangible Chattel Paper
and Uncertificated Security.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as
the same may be amended, supplemented, replaced or otherwise modified
from time to time.
"Borrower Obligations": the collective reference to the
Obligations (as defined in the Credit Agreement).
"Certificated Pledged LLC Interests": the collective
reference to the interests in Horizon Health Network LLC, Mid-South
Home Health Agency, LLC, Mid-South Home Care Services, LLC and
Wiregrass Hospice LLC, each an Alabama limited liability company.
"Collateral": as defined in Section 3.
"Collateral Account": (i) any collateral account
established by the Administrative Agent as provided in Section 6.1 or
6.4 or (ii) any cash collateral account established as provided in
Section 8 of the Credit Agreement.
"Copyright Licenses": any written agreement naming any
Grantor as licensor or licensee (including, without limitation, those
listed in Schedule 6), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture,
print, publish, copy, import, export, distribute, exploit and sell
materials derived from any Copyright.
"Copyrights": (i) all domestic and foreign copyrights,
whether or not the underlying works of authorship have been
published, including but not limited to copyrights in software and
databases, all Mask Works (as defined in 17 U.S.C. 901 of the U.S.
Copyright Act) and all works of authorship and other intellectual
property rights therein, all copyrights of works based on,
incorporated in, derived from or relating to works covered by such
copyrights, all right, title and interest to make and exploit all
derivative works based on or adopted from works covered by such
copyrights, and all copyright registrations and copyright
applications, mask works registrations, and mask works applications,
and any renewals or extensions thereof, including, without
limitation, each registration and application identified in Schedule
6, (ii) the rights to print, publish and distribute any of the
foregoing, (iii) the right to sue or otherwise recover for any and
all past, present and future infringements and misappropriations
thereof, (iv) all income, royalties, damages and other payments now
and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all Copyright Licenses entered
into in connection therewith, payments arising out of any other sale,
lease, license or other disposition thereof and damages and payments
for past, present or future infringements thereof), and (v) all other
rights of any kind whatsoever accruing thereunder or pertaining
thereto.
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"Deposit Account": (i) all "deposit accounts" as defined
in Article 9 of the UCC, (ii) all other accounts maintained with any
financial institution (other than Securities Accounts or Commodity
Accounts) and (iii) shall include, without limitation, all of the
accounts listed on Schedule 2 hereto under the heading "Deposit
Accounts" (as such Schedule may be amended from time to time)
together, in each case, with all funds held therein and all
certificates or instruments representing any of the foregoing.
"Excluded Assets": any lease, license, contract, property
right or agreement to which any Grantor is a party or any of its
rights or interests thereunder if and only for so long as the grant
of a security interest hereunder shall constitute or result in a
breach, termination or default under any such lease, license,
contract, property right or agreement (other than to the extent that
any such term would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction
or any other applicable law or principles of equity); provided,
however, that such security interest shall attach immediately to any
portion of such lease, license, contract, property rights or
agreement that does not result in any of the consequences specified
above.
"Excluded Foreign Subsidiary Voting Stock": the voting
Capital Stock of any Excluded Foreign Subsidiary.
"Fiscal Intermediary": any insurance company, financial
institution or other contractor that has entered into an agreement
with any Governmental Authority to process claims and make payments
to payees under Medicare, Medicaid or any other Federal, State or
local public health care or medical assistance program pursuant to
any of the Health Care Laws.
"General Intangibles": all "general intangibles" as such
term is defined in Section 9-102(a)(42) of the Uniform Commercial
Code in effect in the State of New York on the date hereof and, in
any event, including, without limitation, with respect to any
Grantor, all rights of such Grantor to receive any tax refunds, all
Hedge Agreements and all contracts, agreements, instruments and
indentures and all licenses, permits, concessions, franchises and
authorizations issued by Governmental Authorities in any form, and
portions thereof, to which such Grantor is a party or under which
such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same may
from time to time be amended, supplemented, replaced or otherwise
modified, including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due to it thereunder or
in connection therewith, (ii) all rights of such Grantor to receive
proceeds of any insurance, indemnity, warranty or guaranty with
respect thereto, (iii) all rights of such Grantor to damages arising
thereunder, and (iv) all rights of such Grantor to terminate and to
perform, compel performance and to exercise all remedies thereunder.
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"Guarantor Obligations": with respect to any Guarantor,
all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement (including, without
limitation, Section 2) or any other Loan Document to which such
Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to any Secured Party that are required to be
paid by such Guarantor pursuant to the terms of this Agreement or any
other Loan Document).
"Guarantors": the collective reference to each Grantor
other than the Borrower.
"Insurance": shall mean: (i) all insurance policies
covering any or all of the Collateral (regardless of whether the
Administrative Agent is the loss payee thereof) and (ii) any key man
life insurance policies.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks,
the Trademark Licenses, the Trade Secrets and the Trade Secret
Licenses, and all rights to sue at law or in equity for any past,
present and future infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans
made by any Grantor to the Borrower or any of its Subsidiaries,
including, without limitation, the Subordinated Intercompany Note.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49)
of the Uniform Commercial Code in effect in the State of New York on
the date hereof including, without limitation, all Certificated
Securities and Uncertificated Securities, all Security Entitlements,
all Securities Accounts, all Commodity Contracts and all Commodity
Accounts (other than any Excluded Foreign Subsidiary Voting Stock
excluded from the definition of "Pledged Equity Interests"), (ii)
security entitlements, in the case of any United States Treasury
book-entry securities, as defined in 31 C.F.R. section 357.2, or, in
the case of any United States federal agency book-entry securities,
as defined in the corresponding United States federal regulations
governing such book-entry securities, and (iii) whether or not
constituting "investment property" as so defined, all Pledged Notes,
all Pledged Equity Interests, all Pledged Security Entitlements and
all Pledged Commodity Contracts.
"Issuers": the collective reference to each issuer of a
Pledged Security.
"Material Contracts": the collective reference to (i) that
certain Managed Care Alliance Agreement, effective January 1, 2004,
by and between CIGNA Health Corporation, for and on behalf of its
CIGNA Affiliates, and Gentiva CareCentrix, Inc., as amended from time
to time, and (ii) that certain Participating Ancillary Provider
Agreement, dated as of July 1, 2002, by and between Blue Cross and
Blue Shield of Georgia, Inc. and Healthfield, Inc., as amended from
time to time.
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"Medicaid": the health care program jointly financed and
administered by the Federal and State governments under Title XIX of
the Social Security Act.
"Medicaid Account": any Accounts of the Borrower or the
Guarantors arising pursuant to goods sold or services rendered by the
Borrower or the Guarantors to eligible Medicaid beneficiaries to be
paid by a Fiscal Intermediary or by the United States of America
acting under the Medicaid program, any State or the District of
Columbia acting pursuant to a health plan adopted pursuant to Title
XIX of the Social Security Act or any other Governmental Authority
under Medicaid.
"Medicare": the health care program under Title XVIII of
the Social Security Act.
"Medicare Account": any Accounts of the Borrower or the
Guarantors arising pursuant to goods sold or services rendered by the
Borrower or the Guarantors to eligible Medicare beneficiaries to be
paid by a Fiscal Intermediary or by the United States of America
acting under the Medicare program or any other Governmental Authority
under Medicare.
"New York UCC": the Uniform Commercial Code as from time
to time in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the
Borrower Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use, import, export, distribute or sell any invention
covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
"Patents": (i) all domestic and foreign patents, patent
applications and patentable inventions, including, without
limitation, each issued patent and patent application identified in
Schedule 6, all certificates of invention or similar property rights,
(ii) all inventions and improvements described and claimed therein,
(iii) the right to sue or otherwise recover for any and all past,
present and future infringements and misappropriations thereof, (iv)
all income, royalties, damages and other payments now and hereafter
due and/or payable with respect thereto (including, without
limitation, payments under all Patent Licenses entered into in
connection therewith, payments arising out of any other sale, lease,
license or other disposition thereof and damages and payments for
past, present or future infringement thereof), and (v) all reissues,
divisions, continuations, continuations-in-part, substitutes,
renewals, and extensions thereof, all improvements thereon and all
other rights of any kind whatsoever accruing thereunder or pertaining
thereto.
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"Permitted Perfection Exception": (a) personal property
subject to a certificate of title act under which a security interest
may be perfected only by notation on the certificate of title only if
and so long as the aggregate book value of all such property as to
which no such notation has been made does not at any time exceed
$500,000, (b) Deposit Accounts established and maintained as provided
in Section 5.2(g) hereof or otherwise subject to a daily sweep of all
amounts received or deposited in such Deposit Account by federal
funds wire transfer to a Deposit Account subject to the
Administrative Agent's "control" (within the meaning of Section 9.104
of the UCC), (c) Deposit Accounts or Securities Accounts (i)
specifically and exclusively used for disbursement of payroll,
payroll taxes and other employee wage and benefit payments, (ii)
established and maintained solely to meet capitalization requirements
for Approved Captive Insurance Subsidiaries or (iii) established and
maintained solely in support of the Borrower's nonqualified
retirement and savings plan and (d) those items of Property set forth
on Schedule 6.15 to the Credit Agreement, to the extent set forth
therein.
"Pledged Alternative Equity Interests": shall mean all
interests of any Grantor in participation or other interests in any
equity or profits of any business entity and the certificates, if
any, representing such interests and all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such interests and any other warrant, right or option to acquire any
of the foregoing; provided, however, that Pledged Alternative Equity
Interests shall not include any Pledged Stock, Pledged Partnership
Interests, Pledged LLC Interests and Pledged Trust Interests.
"Pledged Commodity Contracts": all commodity contracts
listed on Schedule 2 (as such Schedule may be amended from time to
time) and all other commodity contracts to which any Grantor is party
from time to time.
"Pledged Debt Securities": all debt securities now owned
or hereafter acquired by any Grantor, including, without limitation,
the debt securities listed on Schedule 2 (as such Schedule may be
amended from time to time), together with any other certificates,
options, rights or security entitlements of any nature whatsoever in
respect of the debt securities of any Person that may be issued or
granted to, or held by, any Grantor while this Agreement is in
effect.
"Pledged Equity Interests": shall mean all Pledged Stock,
Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust
Interests and Pledged Alternative Equity Interests.
"Pledged LLC Interests": shall mean all interests of any
Grantor now owned or hereafter acquired in any limited liability
company including, without limitation, all limited liability company
interests listed on Schedule 2 hereto under the heading "Pledged LLC
Interests" (as such Schedule may be amended from time to time) and
the certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records
of such limited liability company and all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such limited liability company interests and any other warrant, right
or option to acquire any of the foregoing.
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"Pledged Notes": all promissory notes now owned or
hereafter acquired by any Grantor including, without limitation,
those listed on Schedule 2 (as such Schedule may be amended from time
to time), all Intercompany Notes at any time issued to any Grantor
(other than promissory notes in a principal amount not to exceed
$100,000 individually and in an aggregate principal amount not to
exceed $500,000 at any time outstanding issued in connection with
extensions of trade credit by any Grantor in the ordinary course of
business).
"Pledged Partnership Interests": shall mean all interests
of any Grantor now owned or hereafter acquired in any general
partnership, limited partnership, limited liability partnership or
other partnership including, without limitation, all partnership
interests listed on Schedule 2 hereto under the heading "Pledged
Partnership Interests" (as such Schedule may be amended from time to
time) and the certificates, if any, representing such partnership
interests and any interest of such Grantor on the books and records
of such partnership and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
partnership interests and any other warrant, right or option to
acquire any of the foregoing.
"Pledged Securities": the collective reference to the
Pledged Debt Securities, the Pledged Notes and the Pledged Equity
Interests.
"Pledged Security Entitlements": all security entitlements
with respect to the Financial Assets listed on Schedule 2 (as such
Schedule may be amended from time to time) and all other security
entitlements of any Grantor.
"Pledged Stock": shall mean all shares of capital stock
now owned or hereafter acquired by such Grantor, including, without
limitation, all shares of capital stock described on Schedule 2
hereto under the heading "Pledged Stock" (as such Schedule may be
amended from time to time), and the certificates, if any,
representing such shares and any interest of such Grantor in the
entries on the books of the issuer of such shares and all dividends,
distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such shares and any other warrant, right or option to
acquire any of the foregoing; provided, however, that in no event
shall more than 65% of the total outstanding Excluded Foreign
Subsidiary Voting Stock be required to be pledged hereunder.
"Pledged Trust Interests": shall mean all interests of any
Grantor now owned or hereafter acquired in a Delaware business trust
or other trust including, without limitation, all trust interests
listed on Schedule 2 hereto under the heading "Pledged Trust
Interests" (as such Schedule may be amended from time to time) and
the certificates, if any, representing such trust interests and any
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interest of such Grantor on the books and records of such trust or on
the books and records of any Securities Intermediary pertaining to
such interest and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust
interests and any other warrant, right or option to acquire any of
the foregoing.
"Proceeds": all "proceeds" as such term is defined in
Section 9-102(a)(64) of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the
Pledged Securities, collections thereon or distributions or payments
with respect thereto.
"Receivable": all Accounts and any other right to payment
for goods or other property sold, leased, licensed or otherwise
disposed of or for services rendered, whether or not such right is
evidenced by an Instrument or Chattel Paper or classified as a
Payment Intangible and whether or not it has been earned by
performance. References herein to Receivables shall include any
Supporting Obligation or collateral securing such Receivable.
"Secured Parties": collectively, the Arranger, the
Administrative Agent, the Lenders and, with respect to any Specified
Hedge Agreement, any Qualified Counterparty that has agreed to be
bound by the provisions of Section 9 of the Credit Agreement as if it
were a Lender party thereto; provided that no Qualified Counterparty
shall have any rights in connection with the management or release of
any Collateral or the obligations of any Guarantor under this
Agreement.
"Securities Act": the Securities Act of 1933, as amended.
"Social Security Act": the Social Security Act (Pub. L.
74-271), 42 U.S.C. ss.ss.301, et seq., as the same now exists or may
from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and
interpretations thereunder or related thereto.
"Third Party Payor": any Person (such as a Fiscal
Intermediary, Blue Cross/Blue Shield or a private health insurance
company) which is obligated to reimburse or otherwise make payments
to health care providers who provide medical care or medical
assistance or other goods or services for eligible patients under
Medicare, Medicaid or any other public or private insurance contract.
"Trademark License": any agreement, whether written or
oral, providing for the grant by or to any Grantor of any right to
use any Trademark, including, without limitation, any of the
foregoing referred to in Schedule 6.
"Trademarks": (i) all domestic and foreign trademarks,
service marks, trade names, corporate names, company names, business
names, trade dress, trade styles, logos, or other indicia of origin
or source identification, Internet domain names, trademark and
service mark registrations, and applications for trademark or service
mark registrations and any renewals thereof, including, without
limitation, each registration and application identified in Schedule
6, (ii) the right to sue or otherwise recover for any and all past,
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present and future infringements and misappropriations thereof, (iii)
all income, royalties, damages and other payments now and hereafter
due and/or payable with respect thereto (including, without
limitation, payments under all Trademark Licenses entered into in
connection therewith, and damages and payments for past, present or
future infringements thereof), and (iv) all other rights of any kind
whatsoever accruing thereunder or pertaining thereto, together in
each case with the goodwill of the business connected with the use
of, and symbolized by, each of the above.
"Trade Secret License": any agreement, whether written or
oral, providing for the grant by or to any Grantor of any right to
use any Trade Secret.
"Trade Secrets": (i) all trade secrets and all
confidential and proprietary information, including know-how,
manufacturing and production processes and techniques, inventions,
research and development information, technical data, financial,
marketing and business data, pricing and cost information, business
and marketing plans, and customer and supplier lists and information,
(ii) the right to sue or otherwise recover for any and all past,
present and future infringements and misappropriations thereof, (iii)
all income, royalties, damages and other payments now and hereafter
due and/or payable with respect thereto (including, without
limitation, payments arising out of the sale, lease, license,
assignment or other disposition thereof, and damages and payments for
past, present or future infringements thereof), and (iv) all other
rights of any kind whatsoever of any Grantor accruing thereunder or
pertaining thereto.
"Vehicles": all cars, trucks, trailers, construction and
earth moving equipment and other Equipment of any nature covered by a
certificate of title law of any jurisdiction and all tires and other
appurtenances to any of the foregoing.
1.2. Other Definitional Provisions. (a) The words "hereof", "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
(d) The expressions "payment in full," "paid in full" and any other
similar terms or phrases when used herein with respect to the Borrower
Obligations or the Guarantor Obligations shall mean the unconditional, final and
irrevocable payment in full, in immediately available funds, of all of the
Borrower Obligations or the Guarantor Obligations, as the case may be.
9
SECTION 2. GUARANTEE
2.1. Guarantee.
(a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) If and to the extent required in order for the Obligations of any
Guarantor to be enforceable under applicable federal, state and other laws
relating to the insolvency of debtors, the maximum liability of such Guarantor
hereunder shall be limited to the greatest amount which can lawfully be
guaranteed by such Guarantor under such laws, after giving effect to any rights
of contribution, reimbursement and subrogation arising under Section 2.2. Each
Guarantor acknowledges and agrees that, to the extent not prohibited by
applicable law, (i) such Guarantor (as opposed to its creditors, representatives
of creditors or bankruptcy trustee, including such Guarantor in its capacity as
debtor in possession exercising any powers of a bankruptcy trustee) has no
personal right under such laws to reduce, or request any judicial relief that
has the effect of reducing, the amount of its liability under this Agreement,
(ii) such Guarantor (as opposed to its creditors, representatives of creditors
or bankruptcy trustee, including such Guarantor in its capacity as debtor in
possession exercising any powers of a bankruptcy trustee) has no personal right
to enforce the limitation set forth in this Section 2.1(b) or to reduce, or
request judicial relief reducing, the amount of its liability under this
Agreement, and (iii) the limitation set forth in this Section 2.1(b) may be
enforced only to the extent required under such laws in order for the
obligations of such Guarantor under this Agreement to be enforceable under such
laws and only by or for the benefit of a creditor, representative of creditors
or bankruptcy trustee of such Guarantor or other Person entitled, under such
laws, to enforce the provisions thereof.
(c) Each Guarantor agrees that Borrower Obligations may at any time
and from time to time be incurred or permitted in an amount exceeding the
maximum liability of such Guarantor under Section 2.1(b) without impairing the
guarantee contained in this Section 2 or affecting the rights and remedies of
any Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until payment in full of the Obligations, notwithstanding that
from time to time during the term of the Credit Agreement the Borrower may be
free from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by any Secured Party from
the Borrower, any of the Guarantors, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in respect of the
Borrower Obligations or any payment received or collected from such Guarantor in
respect of the Borrower Obligations), remain liable for the Borrower Obligations
up to the maximum liability of such Guarantor hereunder until the Borrower
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Obligations (other than Obligations in respect of any Specified Hedge Agreement)
are paid in full, all Letters of Credit shall have been terminated or
arrangements with respect thereto satisfactory to the Administrative Agent shall
have been made and the Commitments are terminated or have expired.
2.2. Rights of Reimbursement, Contribution and Subrogation. In case
any payment is made on account of the Obligations by any Grantor or is received
or collected on account of the Obligations from any Grantor or its property:
(a) If such payment is made by the Borrower or from its property,
then, if and to the extent such payment is made on account of Obligations
arising from or relating to a Loan made to the Borrower or a Letter of Credit
issued for account of the Borrower, the Borrower shall not be entitled (A) to
demand or enforce reimbursement or contribution in respect of such payment from
any other Grantor or (B) to be subrogated to any claim, interest, right or
remedy of any Secured Party against any other Person, including any other
Grantor or its property.
(b) If such payment is made by a Guarantor or from its property, such
Guarantor shall be entitled, subject to and upon payment in full of the
Obligations, (A) to demand and enforce reimbursement for the full amount of such
payment from the Borrower and (B) to demand and enforce contribution in respect
of such payment from each other Guarantor which has not paid its fair share of
such payment, as necessary to ensure that (after giving effect to any
enforcement of reimbursement rights provided hereby) each Guarantor pays its
fair share of the unreimbursed portion of such payment. For this purpose, the
fair share of each Guarantor as to any unreimbursed payment shall be determined
based on an equitable apportionment of such unreimbursed payment among all
Guarantors based on the relative value of their assets and any other equitable
considerations deemed appropriate by the court.
(c) If and whenever (after payment in full of the Obligations) any
right of reimbursement or contribution becomes enforceable by any Grantor
against any other Grantor under Sections 2.2(a) and 2.2(b), such Grantor shall
be entitled, subject to and upon payment in full of the Obligations, to be
subrogated (equally and ratably with all other Grantors entitled to
reimbursement or contribution from any other Grantor as set forth in this
Section 2.2) to any security interest that may then be held by the
Administrative Agent upon any Collateral granted to it in this Agreement. Such
right of subrogation shall be enforceable solely against the Grantors, and not
against the Secured Parties, and neither the Administrative Agent nor any other
Secured Party shall have any duty whatsoever to warrant, ensure or protect any
such right of subrogation or to obtain, perfect, maintain, hold, enforce or
retain any Collateral for any purpose related to any such right of subrogation.
If subrogation is demanded by any Grantor, then (after payment in full of the
Obligations) the Administrative Agent shall deliver to the Grantors making such
demand, or to a representative of such Grantors or of the Grantors generally, an
instrument satisfactory to the Administrative Agent transferring, on a quitclaim
basis without any recourse, representation, warranty or obligation whatsoever,
whatever security interest the Administrative Agent then may hold in whatever
Collateral may then exist that was not previously released or disposed of by the
Administrative Agent.
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(d) All rights and claims arising under this Section 2.2 or based
upon or relating to any other right of reimbursement, indemnification,
contribution or subrogation that may at any time arise or exist in favor of any
Grantor as to any payment on account of the Obligations made by it or received
or collected from its property shall be fully subordinated in all respects to
the prior payment in full of all of the Obligations. Until payment in full of
the Obligations, no Grantor shall demand or receive any collateral security,
payment or distribution whatsoever (whether in cash, property or securities or
otherwise) on account of any such right or claim. If any such payment or
distribution is made or becomes available to any Grantor in any bankruptcy case
or receivership, insolvency or liquidation proceeding, such payment or
distribution shall be delivered by the person making such payment or
distribution directly to the Administrative Agent, for application to the
payment of the Obligations. If any such payment or distribution is received by
any Grantor, it shall be held by such Grantor in trust, as trustee of an express
trust for the benefit of the Secured Parties, and shall forthwith be transferred
and delivered by such Grantor to the Administrative Agent, in the exact form
received and, if necessary, duly endorsed.
(e) The obligations of the Grantors under the Loan Documents,
including their liability for the Obligations and the enforceability of the
security interests granted thereby, are not contingent upon the validity,
legality, enforceability, collectibility or sufficiency of any right of
reimbursement, contribution or subrogation arising under this Section 2.2. The
invalidity, insufficiency, unenforceability or uncollectibility of any such
right shall not in any respect diminish, affect or impair any such obligation or
any other claim, interest, right or remedy at any time held by any Secured Party
against any Guarantor or its property. The Secured Parties make no
representations or warranties in respect of any such right and shall have no
duty to assure, protect, enforce or ensure any such right or otherwise relating
to any such right.
(f) Each Grantor reserves any and all other rights of reimbursement,
contribution or subrogation at any time available to it as against any other
Grantor, but (i) the exercise and enforcement of such rights shall be subject to
Section 2.2(d) and (ii) neither the Administrative Agent nor any other Secured
Party shall ever have any duty or liability whatsoever in respect of any such
right, except as provided in Section 2.2(c).
2.3. Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by any Secured Party may be rescinded by such Secured Party and
any of the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, increased, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
any Secured Party, and the Credit Agreement and the other Loan Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the requisite Lenders under the Credit Agreement or all Lenders, as
the case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by any Secured Party for
the payment of the Borrower Obligations may be sold, exchanged, waived,
surrendered or released. No Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
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2.4. Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by any Secured Party
upon the guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between the Borrower and any of the Guarantors, on
the one hand, and the Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment and performance without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
any Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance hereunder) which may at any time be available
to or be asserted by the Borrower or any other Person against any Secured Party,
or (c) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, any
Secured Party may, but shall be under no obligation to, make a similar demand on
or otherwise pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by any Secured Party to make any such demand,
to pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of any Secured Party against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
2.5. Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
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2.6. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars in immediately available funds at the office of the
Administrative Agent located at the Payment Office specified in the Credit
Agreement.
SECTION 3. GRANT OF SECURITY INTEREST;
CONTINUING LIABILITY UNDER COLLATERAL
(a) Each Grantor hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit of
the Secured Parties, a security interest in, all of the personal property of
such Grantor, including, without limitation, the following property, in each
case, wherever located and now owned or at any time hereafter acquired by such
Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"), as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) Insurance;
(ix) all Intellectual Property;
(x) all Inventory;
(xi) all Investment Property;
(xii) all Letter of Credit Rights;
(xiii) all Money;
(xiv) all Vehicles;
(xv) all Goods not otherwise described above;
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(xvi) any Collateral Account;
(xvii) all books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical
specifications, manuals, computer software, computer
printouts, tapes, disks and other electronic storage
media and related data processing software and similar
items that at any time evidence or contain information
relating to any of the Collateral or are otherwise
necessary or helpful in the collection thereof or
realization thereupon; and
(xviii) to the extent not otherwise included, all other
property of the Grantor and all Proceeds, products,
accessions, rents and profits of any and all of the
foregoing and all collateral security, Supporting
Obligations and guarantees given by any Person with
respect to any of the foregoing.
Notwithstanding anything to the contrary in this Agreement, none of
the Excluded Assets shall constitute Collateral.
(b) Notwithstanding anything herein to the contrary, (i) each Grantor
shall remain liable for all obligations under the Collateral and nothing
contained herein is intended or shall be a delegation of duties to the
Administrative Agent or any Secured Party, (ii) each Grantor shall remain liable
under and each of the agreements included in the Collateral, including, without
limitation, any Receivables and any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests, to perform all of the obligations undertaken
by it thereunder all in accordance with and pursuant to the terms and provisions
thereof and neither the Administrative Agent nor any Secured Party shall have
any obligation or liability under any of such agreements by reason of or arising
out of this Agreement or any other document related thereto nor shall the
Administrative Agent nor any Secured Party have any obligation to make any
inquiry as to the nature or sufficiency of any payment received by it or have
any obligation to take any action to collect or enforce any rights under any
agreement included in the Collateral, including, without limitation, any
agreements relating to any Receivables, Pledged Partnership Interests or Pledged
LLC Interests and (iii) the exercise by the Administrative Agent of any of its
rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Arranger, the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrower thereunder, each Grantor hereby
represents and warrants to the Secured Parties that:
4.1. Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct in all material respects, except for
representations and warranties expressly stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date, and the Secured Parties shall be entitled to
rely on each of them as if they were fully set forth herein, provided that each
reference in each such representation and warranty to the Borrower's knowledge
shall, for the purposes of this Section 4.l, be deemed to be a reference to such
Guarantor's knowledge.
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4.2. Perfected First Priority Liens. (a) The security interests
granted pursuant to this Agreement (i) upon completion of the filings and other
actions specified on Schedule 3 (all of which, in the case of all filings and
other documents referred to on said Schedule, have been delivered to the
Administrative Agent in duly completed and duly executed form, as applicable,
and may be filed by the Administrative Agent at any time) and payment of all
filing fees, except to the extent constituting a Permitted Perfection Exception,
will constitute valid fully perfected security interests in all of the
Collateral in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for such Grantor's Obligations,
enforceable in accordance with the terms hereof and (ii) are prior to all other
Liens on the Collateral except for Permitted Liens. Without limiting the
foregoing, each Grantor has taken all actions necessary or desirable, including
without limitation those specified in Section 5.2 to: (i) establish the
Administrative Agent's "control" (within the meanings of Sections 8-106 and
9-106 of the UCC) over any portion of the Investment Property constituting
Certificated Securities, Uncertificated Securities, Securities Accounts,
Securities Entitlements or Commodity Accounts (each as defined in the UCC), (ii)
establish the Administrative Agent's "control" (within the meaning of Section
9-104 of the UCC) over all Deposit Accounts, (iii) establish the Administrative
Agent's "control" (within the meaning of Section 9-107 of the UCC) over all
Letter of Credit Rights, (iv) establish the Administrative Agent's control
(within the meaning of Section 9-105 of the UCC) over all Electronic Chattel
Paper and (v) establish the Administrative Agent's "control" (within the meaning
of Section 16 of the Uniform Electronic Transaction Act as in effect in the
applicable jurisdiction "UETA") over all "transferable records" (as defined in
UETA).
4.3. Name; Jurisdiction of Organization, etc. On the date hereof,
such Grantor's exact legal name (as indicated on the public record of such
Grantor's jurisdiction of formation or organization), jurisdiction of
organization, organizational i.d. number, if any, and the location of such
Grantor's chief executive office or sole place of business are specified on
Schedule 4. Each Grantor is organized solely under the law of the jurisdiction
so specified and has not filed any certificates of domestication, transfer or
continuance in any other jurisdiction. Except as otherwise indicated on Schedule
4, the jurisdiction of each such Grantor's organization or formation is required
to maintain a public record showing the Grantor to have been organized or
formed. Except as specified on Schedule 4, it has not changed its name,
jurisdiction of organization, chief executive office or sole place of business
or its corporate structure in any way (e.g. by merger, consolidation, change in
corporate form or otherwise) within the past five years and has not within the
last five years become bound (whether as a result of merger or otherwise) as
Grantor under a security agreement entered into by another Person, which has not
heretofore been terminated.
4.4. Inventory and Equipment.(a) (a) On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
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(b) any Inventory now or hereafter produced by any Grantor included
in the Collateral has been and will be produced in compliance with the
requirements of the Fair Labor Standards Act, as amended; and
(c) none of the Inventory or Equipment is in the possession of an
issuer of a negotiable document (as defined in Section 7-104 of the UCC)
therefor or is otherwise in the possession of any bailee or warehouseman.
4.5. Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.6. Investment Property. (a) (a) Schedule 2 hereto (as such Schedule
may be amended from time to time) sets forth under the headings "Pledged Stock,
"Pledged LLC Interests," "Pledged Partnership Interests" and "Pledged Trust
Interests," respectively, all of the Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests and Pledged Trust Interests owned by any Grantor
and such Pledged Equity Interests constitute the percentage of issued and
outstanding shares of stock, percentage of membership interests, percentage of
partnership interests or percentage of beneficial interest of the respective
issuers thereof indicated on such Schedule. Schedule 2 hereto (as such Schedule
may be amended from time to time) sets forth under the heading "Pledged Debt
Securities" or "Pledged Notes" all of the Pledged Debt Securities and Pledged
Notes owned by any Grantor and all of such Pledged Debt Securities and Pledged
Notes has been duly authorized, authenticated or issued, and delivered and is
the legal, valid and binding obligation of the issuers thereof enforceable in
accordance with their terms and is not in default and constitutes all of the
issued and outstanding inter-company indebtedness evidenced by an instrument or
certificated security of the respective issuers thereof owing to such Grantor.
Schedule 2 hereto (as such Schedule may be amended from time to time) sets forth
under the headings "Securities Accounts," "Commodities Accounts," and "Deposit
Accounts" respectively, all of the Securities Accounts, Commodities Accounts and
Deposit Accounts in which each Grantor has an interest. Each Grantor is the sole
entitlement holder or customer of each such account, and such Grantor has not
consented to, and is not otherwise aware of, any Person (other than the
Administrative Agent pursuant hereto) having "control" (within the meanings of
Sections 8-106, 9-106 and 9-104 of the UCC) over, or any other interest in, any
such Securities Account, Commodity Account or Deposit Account or any securities,
commodities or other property credited thereto.
(b) The shares of Pledged Equity Interests pledged by such Grantor
hereunder constitute all of the issued and outstanding shares of all classes of
the Capital Stock of each Issuer owned by such Grantor or, in the case of
Excluded Foreign Subsidiary Voting Stock, if less, 65% of the outstanding
Excluded Foreign Subsidiary Voting Stock of each relevant Issuer.
(c) All the shares of the Pledged Equity Interests have been duly and
validly issued and are fully paid and nonassessable.
(d) The uncertificated Pledged LLC Interests and Pledged Partnership
Interests are not securities governed by Article 8 of the Uniform Commercial
Code in effect from time to time in the "issuer's jurisdiction" of each Issuer
thereof (as such term is defined in the Uniform Commercial Code in effect in
such jurisdiction).
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(e) None of the Pledged LLC Interests nor Pledged Partnership
Interests are or represent interests in issuers that are: (a) registered as
investment companies, (b) are dealt in or traded on securities exchanges or
markets or (c) have opted to be treated as securities under the uniform
commercial code of any jurisdiction, except for the Certificated Pledged LLC
Interests.
(f) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property and Deposit Accounts pledged by
it hereunder, free of any and all Liens or options in favor of, or claims of,
any other Person, except Permitted Liens and there are no outstanding warrants,
options or other rights to purchase, or shareholder, voting trust or similar
agreements outstanding with respect to, or property that is convertible into, or
that requires the issuance or sale of, any Pledged Equity Interests.
(g) Each Issuer that is not a Grantor hereunder has executed and
delivered to the Administrative Agent an Acknowledgment and Consent, in
substantially the form of Exhibit A, to the pledge of the Pledged Securities
pursuant to this Agreement.
4.7. Receivables. (a) No amount payable to such Grantor in excess of
$100,000 individually or $500,000 in the aggregate under or in connection with
any Receivable is evidenced by any Instrument or Tangible Chattel Paper which
has not been delivered to the Administrative Agent or constitutes Electronic
Chattel Paper that has not been subjected to the control (within the meaning of
Section 9-105 of the UCC) of the Administrative Agent.
(b) each Receivable (i) is and will be the legal, valid and binding
obligation of the Account Debtor in respect thereof, representing an unsatisfied
obligation of such Account Debtor, (ii) is and will be enforceable in accordance
with its terms and (iii) is and will be in compliance in all material respects
with all applicable laws and regulations.
4.8. Material Contracts. (a) Each Material Contract is in full force
and effect and constitutes a valid and legally enforceable obligation of the
parties thereto, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(b) No Grantor is in default in the performance or observance of any
of the terms of any Material Contract, except as could not reasonably be
expected to have a Material Adverse Effect.
(c) The right, title and interest of such Grantor in, to and under
the Material Contracts are not subject to any defenses, offsets, counterclaims
or claims that could reasonably be expected to have a Material Adverse Effect.
(d) Such Grantor has delivered to the Administrative Agent a complete
and correct copy of each Material Contract, including all amendments,
supplements and other modifications thereto.
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4.9. Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof. Except as set
forth in Schedule 6, such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual Property and
is otherwise entitled to use all such Intellectual Property, without limitation,
subject only to the license terms of the licensing or franchise agreements
referred to in paragraph (c) below.
(b) On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and neither the
operation of such Grantor's business as currently conducted or as contemplated
to be conducted nor the use if the Intellectual Property in connection therewith
conflict with, infringe, misappropriate, dilute, misuse or otherwise violate the
intellectual property rights of any other Person.
(c) Except as set forth in Schedule 6, on the date hereof (i) none of
the Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor, and (ii) there are
no other agreements, obligations, orders or judgments which affect the use of
any Intellectual Property.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity or
enforceability of, or such Grantor's rights in, any Intellectual Property in any
respect that could reasonably be expected to have a Material Adverse Effect.
Such Grantor is not aware of any uses of any item of material Intellectual
Property that could reasonably be expected to lead to such item becoming invalid
or unenforceable including, without limitation, unauthorized uses by third
parties and uses which were not supported by the goodwill of the business
connected with Trademarks and Trademark Licenses.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any material Intellectual Property or such Grantor's ownership
interest therein, (ii) alleging that any services provided by, processes used
by, or products manufactured or sold by such Grantor infringe any patent,
trademark, copyright, or any other right of any third party, (iii) alleging that
any material Intellectual Property is being licensed, sublicensed or used in
violation of any patent, trademark, copyright or any other right of any third
party, or (iv) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property. To the knowledge of such
Grantor, no Person is engaging in any activity that infringes upon any material
Intellectual Property or upon the rights of such Grantor therein. Except as set
forth in Schedule 6 hereto, such Grantor has not granted any license, release,
covenant not to sue, non-assertion assurance, or other right to any person with
respect to any part of the material Intellectual Property. The consummation of
the transactions contemplated by this Agreement will not result in the
termination or impairment of any of the material Intellectual Property.
(f) With respect to each Copyright License, Trademark License and
Patent License that is material to the conduct of the business of the Grantors:
(i) such license is valid and binding and in full force and effect and
represents the entire agreement between the respective licensor and licensee
with respect to the subject matter of such license; (ii) such license will not
cease to be valid and binding and in full force and effect on terms identical to
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those currently in effect as a result of the rights and interests granted
herein, nor will the grant of such rights and interests constitute a breach or
default under such license or otherwise give the licensor or licensee a right to
terminate such license; (iii) such Grantor has not received any notice of
termination or cancellation under such license; (iv) such Grantor has not
received any notice of a breach or default under such license, which breach or
default has not been cured; and (v) such Grantor is not in breach or default in
any material respect, and no event has occurred that, with notice and/or lapse
of time, would constitute such a breach or default or permit termination,
modification or acceleration under such license.
(g) None of the material Trade Secrets of such Grantor has been used,
divulged, disclosed or appropriated to the detriment of such Grantor for the
benefit of any other Person and no employee, independent contractor or agent of
such Grantor is in default or breach of any term of any employment agreement,
non-disclosure agreement, assignment of inventions agreement or similar
agreement or contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor's material Intellectual Property.
(h) Such Grantor has made all filings and recordations necessary to
adequately protect its interest in its material Intellectual Property including,
without limitation, recordation of its interests in the Patents and Trademarks
with the United States Patent and Trademark Office and in corresponding national
and international patent offices, and recordation of any of its interests in the
Copyrights with the United States Copyright Office and in corresponding national
and international copyright offices.
(i) Such Grantor has taken all steps to use consistent standards of
quality in the manufacture, distribution and sale of all products sold and
provision of all services provided under or in connection with any item of
material Intellectual Property and has taken all steps to ensure that all
licensed users of any kind of material Intellectual Property use such consistent
standards of quality.
(j) No Grantor is subject to any settlement or consents, judgment,
injunction, order, decree, covenants not to sue, non-assertion assurances or
releases that would impair the validity or enforceability of, or such Grantor's
rights in, any material Intellectual Property.
4.10. Letter of Credit Rights. No Grantor is a beneficiary or
assignee under any letter of credit.
4.11. Commercial Tort Claims. On the date hereof, no Grantor has any
commercial tort claims.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Secured Parties that, from
and after the date of this Agreement until the Obligations (other than
Obligations in respect of any Specified Hedge Agreement) shall have been paid in
full, no Letter of Credit shall be outstanding and the Commitments shall have
terminated or expired:
5.1. Covenants in Credit Agreement. Each Guarantor shall take, or
shall refrain from taking, as the case may be, each action that is necessary to
be taken or not taken, as the case may be, so that no Default or Event of
Default is caused by the failure to take such action or to refrain from taking
such action by such Guarantor or any of its Subsidiaries.
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5.2. Delivery and Control of Instruments, Chattel Paper, Negotiable
Documents, Investment Property and Deposit Accounts. (a) If any of the
Collateral with a value in excess of $100,000 individually or $500,000 in the
aggregate is or shall become evidenced or represented by any Instrument,
Certificated Security, Negotiable Document or Tangible Chattel Paper, such
Instrument (other than checks received in the ordinary course of business),
Certificated Security, Negotiable Documents or Tangible Chattel Paper shall be
immediately delivered to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.
(b) If any of the Collateral is or shall become "Electronic Chattel
Paper" such Grantor shall ensure that (i) a single authoritative copy exists
which is unique, identifiable, unalterable (except as provided in clauses (iii),
(iv) and (v) of this paragraph), (ii) that such authoritative copy identifies
the Administrative Agent as the assignee and is communicated to and maintained
by the Administrative Agent or its designee, (iii) that copies or revisions that
add or change the assignee of the authoritative copy can only be made with the
participation of the Administrative Agent, (iv) that each copy of the
authoritative copy and any copy of a copy is readily identifiable as a copy and
not the authoritative copy and (v) any revision of the authoritative copy is
readily identifiable as an authorized or unauthorized revision.
(c) If any of the Collateral is or shall become evidenced or
represented by an Uncertificated Security, such Grantor shall cause the Issuer
thereof either (i) to register the Administrative Agent as the registered owner
of such Uncertificated Security, upon original issue or registration of transfer
or (ii) to agree in writing with such Grantor and the Administrative Agent that
such Issuer will comply with instructions with respect to such Uncertificated
Security originated by the Administrative Agent without further consent of such
Grantor, such agreement to be in a form satisfactory to the Administrative
Agent.
(d) Subject to the Permitted Perfection Exception, each Grantor shall
maintain Securities Entitlements, Securities Accounts and Deposit Accounts only
with financial institutions that have agreed to comply with Entitlement Orders
and instructions issued or originated by the Administrative Agent without
further consent of such Grantor, such agreement to be in a form satisfactory to
the Administrative Agent.
(e) If any of the Collateral is or shall become evidenced or
represented by a Commodity Contract, such Grantor shall cause the Commodity
Intermediary with respect to such Commodity Contract to agree in writing with
such Grantor and the Administrative Agent that such Commodity Intermediary will
apply any value distributed on account of such Commodity Contract as directed by
the Administrative Agent without further consent of such Grantor, such agreement
to be in a form satisfactory to the Administrative Agent.
(f) In addition to and not in lieu of the foregoing, if any Issuer of
any Investment Property is organized under the law of, or has its chief
executive office in, a jurisdiction outside of the United States, each Grantor
shall take such additional actions, including, without limitation, causing the
issuer to register the pledge on its books and records, as may be necessary or
advisable or as may be reasonably requested by the Administrative Agent, under
the laws of such jurisdiction to insure the validity, perfection and priority of
the security interest of the Administrative Agent.
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(g) Subject to the Permitted Perfection Exception, each Grantor shall
establish and maintain one or more deposit accounts into which such Grantor
shall promptly deposit, and shall direct each Fiscal Intermediary or other Third
Party Payor, in accordance with applicable law, including, without limitation,
the Medicare and Medicaid regulations, to directly remit, all payments in
respect of any Medicare Accounts or Medicaid Accounts. Such deposit accounts
shall be under the sole control of the applicable Grantor; provided, that, on
each Business Day the Grantors shall remit, or authorize, direct and instruct
the depository banks at which such separate deposit accounts are maintained to
remit, by federal funds wire transfer all funds received or deposited into such
deposit accounts (to the extent such funds are available funds) to one of the
Deposit Accounts subject to the Administrative Agent's "control" (within the
meaning of Section 9-104 of the UCC).
5.3. Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable insurance companies, insurance on all its
property (including, without limitation, all Inventory, Equipment and Vehicles)
in at least such amounts and against at least such risks as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to the Administrative Agent with copies for each Secured
Party, upon written request, full information as to the insurance carried;
provided that in any event such Grantor will maintain, to the extent obtainable
on commercially reasonable terms, (i) property and casualty insurance on all
real and personal property on an all risks basis (including the perils of flood
and quake and loss by fire, explosion and theft), covering the repair or
replacement cost of all such property, and (ii) general liability insurance. All
such insurance with respect to such Grantor shall be provided by insurers or
reinsurers which (x) in the case of United States insurers and reinsurers, have
an A.M. Best policyholders rating of not less than A- with respect to primary
insurance and B+ with respect to excess insurance and (y) in the case of
non-United States insurers or reinsurers, the providers of at least 80% of such
insurance have either an ISI policyholders rating of not less than A, an A.M.
Best policyholders rating of not less than A- or a surplus of not less than
$500,000,000 with respect to primary insurance, and an ISI policyholders rating
of not less than BBB with respect to excess insurance, or, if the relevant
insurance is not available from such insurers, such other insurers as the
Administrative Agent may approve in writing. All insurance shall (i) provide
that no cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof and (ii) be reasonably
satisfactory in all other respects to the Administrative Agent.
(b) Such Grantor will deliver to the Administrative Agent on behalf
of the Secured Parties, (i) on the Closing Date, a certificate dated such date
showing the amount and types of insurance coverage as of such date, (ii)
promptly following receipt of notice from any insurer, a copy of any notice of
cancellation or material change in coverage from that existing on the Closing
Date, (iii) forthwith, notice of any cancellation or nonrenewal of coverage by
such Grantor, and (iv) promptly after such information is available to such
Grantor, full information as to any material claim with respect to any property
and casualty insurance policy maintained by such Grantor. Each Secured Party
shall be named as additional insured on all such liability insurance policies of
such Grantor and the Administrative Agent shall be named as loss payee on all
property and casualty insurance policies of such Grantor.
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5.4. Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all its material obligations of whatever nature, except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of such Grantor.
5.5. Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Secured Parties from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the assets and property of such
Grantor as the Administrative Agent may reasonably request (provided that unless
a Default or Event of Default has occurred and is continuing, the Administrative
Agent shall limit such requests to once per year), all in reasonable detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such Grantor
will promptly and duly authorize, execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts and
any other relevant Collateral, taking any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto, including without limitation,
executing and delivering and causing the relevant depositary bank or Securities
Intermediary to execute and deliver a control agreement in a form satisfactory
to the Administrative Agent.
5.6. Changes in Locations, Name, Jurisdiction of Incorporation, etc.
Such Grantor will not, except upon 30 days' prior written notice to the
Administrative Agent and delivery to the Administrative Agent of duly authorized
and, where required, executed copies of all additional financing statements and
other documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein:
(i) without limiting the prohibitions on mergers involving the
Grantors contained in the Credit Agreement, change its legal name,
jurisdiction of organization or the location of its chief executive office
or sole place of business from that referred to in Section 4.3; or
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(i) change its legal name, identity or structure to such an extent
that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading.
5.7. Investment Property. (a) If such Grantor shall become entitled
to receive or shall receive any stock or other ownership certificate (including,
without limitation, any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Capital Stock or other Pledged Equity Interest of
any Issuer, whether in addition to, in substitution of, as a conversion of, or
in exchange for, any shares of or other ownership interests in the Pledged
Securities, or otherwise in respect thereof, such Grantor shall accept the same
as the agent of the Secured Parties, hold the same in trust for the Secured
Parties and deliver the same forthwith to the Administrative Agent in the exact
form received, duly endorsed by such Grantor to the Administrative Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the Obligations. Any
sums paid upon or in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Pledged Securities or any property shall be distributed upon or with respect to
the Pledged Securities pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Secured Parties, segregated from other funds of such Grantor, as additional
collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
such Grantor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock, partnership interests, limited liability company
interests or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock, partnership interests, limited liability company interests or other
equity securities of any nature of any Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, any of
the Investment Property or Proceeds thereof or any interest therein (except, in
each case, pursuant to a transaction expressly permitted by the Credit
Agreement), (iii) create, incur or permit to exist any Lien or option in favor
of, or any claim of any Person with respect to, any of the Investment Property
or Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement, (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any of the Investment Property or Proceeds thereof or
any interest therein or (v) without the prior written consent of the
Administrative Agent, cause or permit any Issuer of any Pledged Partnership
Interests or Pledged LLC Interests which are not securities (for purposes of the
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UCC) on the date hereof to elect or otherwise take any action to cause such
Pledged Partnership Interests or Pledged LLC Interests to be treated as
securities for purposes of the UCC; provided, however, notwithstanding the
foregoing, if any issuer of any Pledged Partnership Interests or Pledged LLC
Interests takes any such action in violation of the foregoing in this clause
(v), such Grantor shall promptly notify the Administrative Agent in writing of
any such election or action and, in such event, shall take all steps necessary
or advisable to establish the Administrative Agent's "control" thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.7(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Section 6.3(c) shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.3(c) with respect to
the Pledged Securities issued by it. In addition, each Grantor which is either
an Issuer or an owner of any Pledged Security hereby consents to the grant by
each other Grantor of the security interest hereunder in favor of the
Administrative Agent and to the transfer of any Pledged Security to the
Administrative Agent or its nominee following an Event of Default and to the
substitution of the Administrative Agent or its nominee as a partner, member or
shareholder of the Issuer of the related Pledged Security.
5.8. Receivables. (a) Other than in the ordinary course of business
consistent with its past practice and so long as no Event of Default shall have
occurred and be continuing, such Grantor will not (i) grant any extension of the
time of payment of any Receivable, (ii) compromise or settle any Receivable for
less than the full amount thereof, (iii) release, wholly or partially, any
Person liable for the payment of any Receivable, (iv) allow any credit or
discount whatsoever on any Receivable or (v) amend, supplement or modify any
Receivable in any manner that could adversely affect the value thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables.
(c) Each Grantor shall perform and comply in all material respects
with all of its obligations with respect to the Receivables.
5.9. Material Contracts. (a) Such Grantor will perform and comply in
all material respects with all its obligations under the Material Contracts.
(b) Such Grantor will not amend, modify, terminate, waive or fail to
enforce any provision of any Material Contract in any manner which could
reasonably be expected to have a Material Adverse Effect.
(c) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it relating in any way to
any Material Contract.
5.10. Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark in order to
maintain such Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark and take all necessary steps to ensure that all
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licensed users of such Trademark maintain as in the past such quality, (iii) use
such Trademark with the appropriate notice of registration and all other notices
and legends required by applicable Requirements of Law, (iv) not adopt or use
any mark which is confusingly similar or a colorable imitation of such Trademark
unless the Administrative Agent, for the ratable benefit of the Secured Parties,
shall obtain a perfected security interest in such mark pursuant to this
Agreement and the Intellectual Property Security Agreement, and (v) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any act whereby
any material portion of the Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor (either itself or through licensees) will use proper
statutory notice in connection with the use of each material Patent, Trademark
and Copyright included in the Intellectual Property.
(f) Such Grantor will notify the Secured Parties immediately if it
knows, or has reason to know, that any application or registration relating to
any material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, or the validity of, any material Intellectual Property
or such Grantor's right to register the same or to own and maintain the same.
(g) Promptly upon such Grantor's acquisition or creation of any
copyrightable work, invention, trademark or other similar property that is
material to the business of Grantor, apply for registration thereof with the
United States Copyright Office, the United States Patent and Trademark Office
and other appropriate office. Whenever such Grantor, either by itself or through
any agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, such Grantor
shall report such filing to the Administrative Agent within five Business Days
after the last day of the fiscal quarter in which such filing occurs. Upon
request of the Administrative Agent, such Grantor shall execute and deliver, and
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have recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Secured Parties' security
interest in any Copyright, Patent, Trademark or other Intellectual Property and
the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
(h) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of material Intellectual Property, including, without
limitation, the payment of required fees and taxes, the filing of responses to
office actions issued by the United States Patent and Trademark Office and the
United States Copyright Office, the filing of applications for renewal or
extension, the filing of affidavits of use and affidavits of incontestability,
the filing of divisional, continuation, continuation-in-part, reissue, and
renewal applications or extensions, the payment of maintenance fees, and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings.
(i) Such Grantor (either itself or through licensees) will not,
without the prior written consent of the Administrative Agent, discontinue use
of or otherwise abandon any Intellectual Property, or abandon any application or
any right to file an application for letters patent, trademark, or copyright,
unless such Grantor shall have previously determined that such use or the
pursuit or maintenance of such Intellectual Property is no longer desirable in
the conduct of such Grantor's business and that the loss thereof could not
reasonably be expected to have a Material Adverse Effect and, in which case,
such Grantor shall give prompt notice of any such abandonment to the
Administrative Agent in accordance herewith.
(j) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
(k) Such Grantor agrees that, should it obtain an ownership interest
in any item of intellectual property which is not now a part of the Intellectual
Property Collateral (as defined in Exhibit B-1 hereto) (the "After-Acquired
Intellectual Property"), (i) the provisions of Section 3 shall automatically
apply thereto, (ii) any such After-Acquired Intellectual Property, and in the
case of trademarks, the goodwill of the business connected therewith or
symbolized thereby, shall automatically become part of the Intellectual Property
Collateral, (iii) it shall give prompt (and, in any event within five Business
Days after the last day of the fiscal quarter in which such Grantor acquires
such ownership interest) written notice thereof to the Administrative Agent in
accordance herewith, and (iv) it shall provide the Administrative Agent promptly
(and, in any event within five Business Days after the last day of the fiscal
quarter in which such Grantor acquires such ownership interest) with an amended
Schedule 6 hereto and take the actions specified in 5.10(m).
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(l) Such Grantor agrees to execute an Intellectual Property Security
Agreement with respect to its Intellectual Property in substantially the form of
Exhibit B-1 in order to record the security interest granted herein to the
Administrative Agent for the ratable benefit of the Secured Parties with the
United States Patent and Trademark Office, the United States Copyright Office,
and any other applicable Governmental Authority.
(m) Such Grantor agrees to execute an After-Acquired Intellectual
Property Security Agreement with respect to its After-Acquired Intellectual
Property in substantially the form of Exhibit B-2 in order to record the
security interest granted herein to the Administrative Agent for the ratable
benefit of the Secured Parties with the United States Patent and Trademark
Office, the United States Copyright Office, and any other applicable
Governmental Authority.
(n) Such Grantor shall take all steps reasonably necessary to protect
the secrecy of all material Trade Secrets, including, without limitation,
entering into confidentiality agreements with employees and labeling and
restricting access to secret information and documents.
5.11. Vehicles. (a) No Vehicle with respect to which the
Administrative Agent shall have a perfected first priority lien shall be removed
from the state which has issued the certificate of title or ownership therefor
for a period in excess of four months.
(b) with respect to any Vehicles acquired by such Grantor subsequent
to the date hereof with respect to which such Grantor is required to perfect the
Administrative Agent's lien thereon, within 60 days after the date of
acquisition thereof, all applications for certificates of title or ownership
indicating the Administrative Agent's first priority security interest in the
Vehicle covered by such certificate, and any other necessary documentation,
shall be filed in each office in each jurisdiction which the Administrative
Agent shall deem advisable to perfect its security interests in the Vehicles.
5.12. Commercial Tort Claims. Such Grantor will deliver to the
Administrative Agent notice of any commercial tort claim in excess of $500,000
individually or $1,000,000 in the aggregate hereafter arising, therein
identifying such new commercial tort claim.
SECTION 6. REMEDIAL PROVISIONS
6.1. Certain Matters Relating to Receivables. (a) The Administrative
Agent shall have the right to make test verifications of the Receivables in any
manner and through any medium that it reasonably considers advisable, and each
Grantor shall furnish all such assistance and information as the Administrative
Agent may require in connection with such test verifications. At any time and
from time to time, upon the Administrative Agent's reasonable request and at the
expense of the relevant Grantor, such Grantor 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 Receivables.
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(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the Administrative Agent's
direction and control, and each Grantor hereby agrees to continue to collect all
amounts due or to become due to such Grantor under the Receivables and any
Supporting Obligation and diligently exercise each material right it may have
under any Receivable and any Supporting Obligation, in each case, at its own
expense; provided, however, that the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
any payments of Receivables, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly endorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Secured Parties only as provided
in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Secured Parties, segregated from other funds of such Grantor. Each
such deposit of Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.
(c) At the Administrative Agent's request, each Grantor shall deliver
to the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
6.2. Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables.
(b) The Administrative Agent may at any time notify, or require any
Grantor to so notify, the Account Debtor or counterparty on any Receivable of
the security interest of the Administrative Agent therein. In addition, after
the occurrence and during the continuance of an Event of Default, the
Administrative Agent may upon written notice to the applicable Grantor, notify,
or require any Grantor to notify, the Account Debtor or counterparty to make all
payments under the Receivables directly to the Administrative Agent;
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables 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 thereto. No Secured Party
shall have any obligation or liability under any Receivable (or any agreement
giving rise thereto) by reason of or arising out of this Agreement or the
receipt by any Secured Party of any payment relating thereto, nor shall any
Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), 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 thereunder, 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.
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6.3. Pledged Securities. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Equity Interests
and all payments made in respect of the Pledged Notes to the extent permitted in
the Credit Agreement, and to exercise all voting and corporate rights with
respect to the Pledged Securities; provided, however, that no vote shall be cast
or corporate or other ownership right exercised or other action taken which, in
the Administrative Agent's reasonable judgment, would impair the Collateral or
which would be inconsistent with or result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing: (i) all
rights of each Grantor to exercise or refrain from exercising the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant hereto shall cease and all such rights shall thereupon become vested in
the Administrative Agent who shall thereupon have the sole right, but shall be
under no obligation, to exercise or refrain from exercising such voting and
other consensual rights and (ii) the Administrative Agent shall have the right,
without notice to any Grantor, to transfer all or any portion of the Investment
Property to its name or the name of its nominee or agent. In addition, the
Administrative Agent shall have the right at any time, without notice to any
Grantor, to exchange any certificates or instruments representing any Investment
Property for certificates or instruments of smaller or larger denominations. In
order to permit the Administrative Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder each Grantor shall promptly execute and deliver (or cause to
be executed and delivered) to the Administrative Agent all proxies, dividend
payment orders and other instruments as the Administrative Agent may from time
to time reasonably request and each Grantor acknowledges that the Administrative
Agent may utilize the power of attorney set forth herein.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Administrative Agent.
6.4. Proceeds to be Turned Over To Administrative Agent. In addition
to the rights of the Secured Parties specified in Section 6.1 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing,
all Proceeds received by any Grantor consisting of cash, Cash Equivalents,
checks and other near-cash items shall be held by such Grantor in trust for the
Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly endorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.
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6.5. Application of Proceeds. At such intervals as may be agreed upon
by the Borrower and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may, notwithstanding the provisions of
Section 2.18 of the Credit Agreement, apply all or any part of the net Proceeds
(after deducting fees and expenses as provided in Section 6.6) constituting
Collateral realized through the exercise by the Administrative Agent of its
remedies hereunder, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:
First, to the Administrative Agent, to pay incurred and unpaid fees
and expenses of the Secured Parties under the Loan Documents;
Second, to the Administrative Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect of
the Obligations, pro rata among the Secured Parties according to the
amounts of the Obligations then due and owing and remaining unpaid to the
Secured Parties;
Third, to the Administrative Agent, for application by it towards
prepayment of the Obligations, pro rata among the Lenders according to the
amounts of the Obligations then held by the Lenders; and
Fourth, any balance of such Proceeds remaining after the Obligations
shall have been paid in full, no Letters of Credit shall be outstanding and
the Commitments shall have terminated or expired shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.
6.6. Code and Other Remedies. (a) If an Event of Default shall occur
and be continuing, the Administrative Agent, on behalf of the Secured Parties,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC (whether or not the New York UCC applies to the affected
Collateral) or its rights under any other applicable law or in equity. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
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upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, license, assign, give option or
options to purchase, or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
any Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. Each Secured Party shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Administrative Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. The Administrative Agent may
sell the Collateral without giving any warranties as to the Collateral. The
Administrative Agent may specifically disclaim or modify any warranties of title
or the like. This procedure will not be considered to adversely effect the
commercial reasonableness of any sale of the Collateral. Each Grantor agrees
that it would not be commercially unreasonable for the Administrative Agent to
dispose of the Collateral or any portion thereof by using Internet sites that
provide for the auction of assets of the types included in the Collateral or
that have the reasonable capability of doing so, or that match buyers and
sellers of assets. Each Grantor hereby waives any claims against the
Administrative Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Administrative
Agent accepts the first offer received and does not offer such Collateral to
more than one offeree. Each Grantor further agrees, at the Administrative
Agent's request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Administrative
Agent shall have the right to enter onto the property where any Collateral is
located and take possession thereof with or without judicial process.
(b) The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Secured Parties hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations and only after such application and after
the payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-615(a) of the New
York UCC, need the Administrative Agent account for the surplus, if any, to any
Grantor. If the Administrative Agent sells any of the Collateral upon credit,
the Grantor will be credited only with payments actually made by the purchaser
and received by the Administrative Agent and applied to indebtedness of the
purchaser. In the event the purchaser fails to pay for the Collateral, the
Administrative Agent may resell the Collateral and the Grantor shall be credited
with proceeds of the sale. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against any
Secured Party arising out of the exercise by them of any rights hereunder.
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(c) In the event of any Disposition of any of the Intellectual
Property, the goodwill of the business connected with and symbolized by any
Trademarks subject to such Disposition shall be included, and the applicable
Grantor shall supply the Administrative Agent or its designee with such
Grantor's know-how and expertise, and with documents and things embodying the
same, relating to the manufacture, distribution, advertising and sale of
products or the provision of services relating to any Intellectual Property
subject to such Disposition, and such Grantor's customer lists and other records
and documents relating to such Intellectual Property and to the manufacture,
distribution, advertising and sale of such products and services.
6.7. Waiver; Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by any Secured Party to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1. Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or with respect
to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the Secured
Parties' security interest in such Intellectual Property and the goodwill
and general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
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(iv) execute, in connection with any sale provided for in Section 6.6,
any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3)
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Secured Parties'
security interests therein and to effect the intent of this Agreement, all
as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that, except as provided in Section 7.1(b), it will
not exercise any rights under the power of attorney provided for in this Section
7.1(a) unless an Event of Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement; provided, however, that unless
an Event of Default has occurred and is continuing or time is of the essence,
the Administrative Agent shall not exercise this power without first making
demand on the Grantor and the Grantor failing to immediately comply therewith.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Revolving Credit Loans that are Base Rate Loans
under the Credit Agreement, from the date of payment by the Administrative Agent
to the date reimbursed by the relevant Grantor, shall be payable by such Grantor
to the Administrative Agent on demand.
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(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2. Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, nor any other Secured Party nor any of their respective
officers, directors, partners, employees, agents, attorneys and other advisors,
attorneys-in-fact or affiliates shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Secured Parties hereunder are solely to protect the Secured
Parties' interests in the Collateral and shall not impose any duty upon any
Secured Party to exercise any such powers. The Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be responsible to any Grantor for any act or failure to act
hereunder, except to the extent that any such act or failure to act is found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted solely and proximately from their own gross negligence or willful
misconduct in breach of a duty owed to such Grantor.
7.3. Execution of Financing Statements. Each Grantor acknowledges
that pursuant to Section 9-509(b) of the New York UCC and any other applicable
law, the Administrative Agent is authorized to file or record financing or
continuation statements, and amendments thereto, and other filing or recording
documents or instruments with respect to the Collateral in such form and in such
offices as the Administrative Agent reasonably determines appropriate to perfect
or maintain the perfection of the security interests of the Administrative Agent
under this Agreement. Each Grantor agrees that such financing statements may
describe the collateral in the same manner as described in the Security
documents or as "all assets" or "all personal property" of the undersigned,
whether now owned or hereafter existing or acquired by the undersigned or such
other description as the Administrative Agent, in its sole judgment, determines
is necessary or advisable. A photographic or other reproduction of this
Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.
7.4. Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
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Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.
7.5. Appointment of Co-Collateral Agents. At any time or from time to
time, in order to comply with any Requirement of Law, the Administrative Agent
may appoint another bank or trust company or one of more other persons, either
to act as co-agent or agents on behalf of the Secured Parties with such power
and authority as may be necessary for the effectual operation of the provisions
hereof and which may be specified in the instrument of appointment (which may,
in the discretion of the Administrative Agent, include provisions for
indemnification and similar protections of such co-agent or separate agent).
SECTION 8. MISCELLANEOUS
8.1. Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement.
8.2. Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3. No Waiver by Course of Conduct; Cumulative Remedies. No Secured
Party shall by any act (except by a written instrument pursuant to Section 8.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which such Secured Party would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4. Enforcement Expenses; Indemnification. (a) Each Grantor agrees
to pay or reimburse each Secured Party for all its costs and expenses incurred
in collecting against such Grantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Grantor is a party, including, without limitation,
the fees and disbursements of counsel (including the allocated fees and expenses
of in-house counsel) to each Secured Party and of counsel to the Administrative
Agent.
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(b) Each Grantor agrees to pay, and to save the Secured Parties
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
(c) Each Grantor agrees to pay, and to save the Secured Parties
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 10.5 of the Credit Agreement.
(d) The agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
(e) Each Grantor agrees that the provisions of Section 2.20 of the
Credit Agreement are hereby incorporated herein by reference, mutatis mutandis,
and each Secured Party shall be entitled to rely on each of them as if they were
fully set forth herein.
8.5. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Secured Parties and their successors and assigns; provided that no Grantor may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Administrative Agent.
8.6. Set-Off. Each Grantor hereby irrevocably authorizes each Secured
Party at any time and from time to time while an Event of Default pursuant to
Section 8(a) of the Credit Agreement shall have occurred and be continuing,
without notice to such Grantor or any other Grantor, any such notice being
expressly waived by each Grantor, to set-off and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party to or for the credit
or the account of such Grantor, or any part thereof in such amounts as such
Secured Party may elect, against and on account of the obligations and
liabilities of such Grantor to such Secured Party hereunder and claims of every
nature and description of such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as such Secured Party may elect, whether or not any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Secured Party shall
notify such Grantor promptly of any such set-off and the application made by
such Secured Party of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Secured Party under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which such
Secured Party may have.
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8.7. Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9. Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10. Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the other
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by any Secured
Party relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12. Submission to Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
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(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
8.13. Acknowledgments. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
(b) no Secured Party has any fiduciary relationship with or duty to
any Grantor arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Grantors, on the one
hand, and the Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.
8.14. Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 6.9 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.15. Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations (other than Obligations in respect of any
Specified Hedge Agreement) shall have been paid in full, the Commitments have
been terminated or expired and no Letters of Credit shall be outstanding, the
Collateral shall be released from the Liens created hereby, and this Agreement
and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be Disposed of by any Grantor in a
transaction permitted by the Credit Agreement, then the Administrative Agent, at
the request and sole expense of such Grantor, shall execute and deliver to such
Grantor all releases or other documents reasonably necessary or desirable for
the release of the Liens created hereby on such Collateral. At the request and
sole expense of the Borrower, a Guarantor shall be released from its obligations
hereunder in the event that all the Capital Stock of such Guarantor shall be
Disposed of in a transaction permitted by the Credit Agreement; provided that
the Borrower shall have delivered to the Administrative Agent, at least ten
Business Days prior to the date of the proposed release, a written request for
release identifying the relevant Guarantor, together with a certification by the
Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents and that the Proceeds of such Disposition
will be applied in accordance therewith.
39
(c) Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement originally filed in connection herewith without the prior
written consent of the Administrative Agent subject to such Grantor's rights
under Section 9-509(d)(2) of the New York UCC.
8.16. WAIVER OF JURY TRIAL. EACH GRANTOR AND THE ADMINISTRATIVE AGENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
40
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
GENTIVA HEALTH SERVICES, INC.,
as a Grantor
By: /s/ Ronald A. Malone
-------------------------------
Name: Ronald A. Malone
Title: Chief Executive Officer
41
GRANTORS:
COMMONWEALTH HOME CARE, INC.
GENTIVA CARECENTRIX, INC.
GENTIVA CARECENTRIX (AREA ONE) CORP.
GENTIVA CARECENTRIX (AREA TWO) CORP.
GENTIVA CARECENTRIX (AREA THREE) CORP.
GENTIVA CERTIFIED HEALTHCARE CORP.
GENTIVA HEALTH SERVICES (CERTIFIED), INC.
GENTIVA HEALTH SERVICES HOLDING CORP.
GENTIVA HEALTH SERVICES IPA, INC.
GENTIVA HEALTH SERVICES (USA) INC.
GENTIVA REHAB WITHOUT WALLS, LLC
GENTIVA SERVICES OF NEW YORK, INC.
THE I.V. CLINIC, INC.
THE I.V. CLINIC II, INC.
THE I.V. CLINIC III, INC.
KIMBERLY HOME HEALTH CARE, INC.
NEW YORK HEALTHCARE SERVICES, INC.
OHS SERVICE CORP.
PARTNERSFIRST MANAGEMENT, INC.
QC-MEDI NEW YORK, INC.
QUALITY CARE - USA, INC.
QUALITY MANAGED CARE, INC.
QUANTUM CARE NETWORK, INC.
QUANTUM HEALTH RESOURCES, INC.
THE HEALTHFIELD GROUP, INC.
HEALTHFIELD OPERATING GROUP, INC.
HEALTHFIELD, INC.
CHATTAHOOCHEE VALLEY HOME CARE SERVICES, INC.
CHATTAHOOCHEE VALLEY HOME HEALTH, INC.
CHMG ACQUISITION CORP.
ACCESS HOME HEALTH OF FLORIDA, INC.
CAPITAL CARE RESOURCES, INC.
CAPITAL HEALTH MANAGEMENT GROUP, INC.
ACCESS HOME HEALTH OF FLORIDA, INC.
CAPITAL CARE RESOURCES, INC.
CAPITAL CARERESOURCES OF SOUTH CAROLINA, INC.
Executing this Agreement as Chief Executive Officer of
each of the foregoing persons on behalf of and so as to
bind the persons named above under the caption "Grantors"
By: /s/ Ronald A. Malone
---------------------------------------------------
Name: Ronald A. Malone
Title: Chief Executive Officer
42
GRANTORS:
CHMG OF ATLANTA, INC.
CHMG OF COLUMBUS, INC.
CHMG OF GRIFFIN, INC.
EASTERN CAROLINA HOME HEALTH AGENCY, INC.
ECT, INC.
HOME HEALTH CARE OF CARTERET COUNTY, INC.
TAR HEEL HEALTH CARE SERVICES, INC.
TAR HEEL STAFFING, INC.
HEALTHFIELD CARE AT HOME, INC.
HEALTHFIELD HOME HEALTH, INC.
HEALTHFIELD HOME HEALTH OF NORTH GEORGIA, INC.
HEALTHFIELD HOME HEALTH OF ATHENS, INC.
HEALTHFIELD HOME HEALTH OF AUGUSTA, INC.
HEALTHFIELD HOSPICE SERVICES, INC.
HEALTHFIELD OF SOUTHWEST GEORGIA, INC.
HEALTHFIELD OF STATESBORO, INC.
HEALTHFIELD OF TENNESSEE, INC.
HEALTHFIELD SERVICES OF TENNESSEE, INC.
MID-SOUTH HOME CARE SERVICES, INC.
MID-SOUTH HOME HEALTH AGENCY, INC.
MID-SOUTH HOME HEALTH OF GADSDEN, INC.
TOTAL CARE HOME HEALTH OF LOUISBURG, INC.
TOTAL CARE HOME HEALTH OF NORTH CAROLINA, INC.
TOTAL CARE HOME HEALTH OF SOUTH CAROLINA, INC.
TOTAL CARE SERVICES, INC.
WIREGRASS HOSPICE CARE, INC.
HORIZON HEALTH NETWORK LLC
MID-SOUTH HOME HEALTH AGENCY, LLC
MID-SOUTH HOME CARE SERVICES, LLC
WIREGRASS HOSPICE LLC
WIREGRASS HOSPICE OF SOUTH CAROLINA, LLC
THE HUG CENTER OF ATLANTA, INC.
HEALTHFIELD REHAB, INC.
MID-SOUTH CARE SERVICES, INC.
Executing this Agreement as Chief Executive Officer of
each of the foregoing persons on behalf of and so as to
bind the persons named above under the caption "Grantors"
By: /s/ Ronald A. Malone
---------------------------------------------------
Name: Ronald A. Malone
Title: Chief Executive Officer
43
LEHMAN COMMERCIAL PAPER INC.,
as Administrative Agent
By: /s/ Diane Albanese
---------------------------------
Name: Diane Albanese
Title: Authorized Signatory
44
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
3 Huntington Quadrangle, Suite 200S
Melville, New York 11747
1-1
Schedule 2
DESCRIPTION OF PLEDGED INVESTMENT PROPERTY
PLEDGED STOCK:
Issuer's Jurisdiction
Under New York UCC Stock Certificate
Grantor Issuer Section 9-305(a)(2) Class of Stock No. Percentage of Shares No. of Shares
- ------- ------ ------------------- -------------- --- -------------------- -------------
PLEDGED NOTES:
Grantor Issuer Payee Principal Amount
- ------- ------ ----- ----------------
PLEDGED DEBT SECURITIES:
Issuer's Jurisdiction
Under New York UCC Section
Grantor Issuer 9-305(a)(2) Payee Principal Amount
------- ------ ----------- ----- ----------------
2-1
PLEDGED SECURITY ENTITLEMENTS:
Securities Intermediary's
Issuer of Description of Securities Intermediary Securities Account Jurisdiction Under New York UCC
Grantor Financial Asset Financial Asset (Name and Address) (Number and Location) Section 9-305(a)(3)
- ------- --------------- --------------- ------------------ --------------------- -------------------
PLEDGED COMMODITY CONTRACTS:
Commodity Intermediary's
Description of Commodity Intermediary Commodity Account Jurisdiction Under New York
Grantor Commodity Contract (Name and Address) (Number and Location) UCC Section 9-305(a)(4)
- ------- ------------------ ------------------ --------------------- -----------------------
PLEDGED PARTNERSHIP INTERESTS:
Type of
Partnership Interest Certificated Certificate No. % of Outstanding Partnership
Grantor Issuer (e.g., General or Limited) (Y/N) (if any) Interests of the Partnership
------- ------ -------------------------- ----- -------- ----------------------------
2-2
PLEDGED LLC INTERESTS:
Certificated Certificate No. No. of % of Outstanding LLC Interests
Grantor Issuer (Y/N) (if any) Pledged Units of the Issuer
------- ------ ----- -------- ------------- -------------
PLEDGED TRUST INTERESTS:
Class of Trust Certificated Certificate No. % of Outstanding Trust
Grantor Issuer Interests (Y/N) (if any) Interests of the Issuer
- ------- ------ --------- ----- -------- -----------------------
DEPOSIT ACCOUNTS:
Name of
Grantor Depositary Bank Account Number Account Name
- ------- --------------- -------------- ------------
2-3
Schedule 3
----------
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
-------------------------------
[List each office where a financing statement is to be filed]
Copyright, Patent and Trademark Filings
---------------------------------------
[List all filings]
Actions with respect to Investment Property
-------------------------------------------
[Describe all actions required to obtain "control" of Investment Property]
Other Actions
-------------
[Describe other actions to be taken]
3-1
Schedule 4
----------
EXACT LEGAL NAME, LOCATION OF JURISDICTION OF ORGANIZATION AND
CHIEF EXECUTIVE OFFICE
Exact Legal Name Jurisdiction of Organization Organizational I.D. Location
- ---------------- ---------------------------- ------------------- --------
4-1
Schedule 5
----------
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
5-1
Schedule 6
----------
COPYRIGHTS
PATENTS
TRADEMARKS
INTELLECTUAL PROPERTY LICENSES
OTHER INTELLECTUAL PROPERTY
6-1
Exhibit A to
Guarantee and Collateral Agreement
FORM OF ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the
Guarantee and Collateral Agreement dated as of February 28, 2006 (the
"Agreement"), made by the Grantors parties thereto for the benefit of Lehman
Commercial Paper Inc., as administrative agent; capitalized terms used but not
defined herein have the meanings given such terms therein. The undersigned
agrees for the benefit of the Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and
will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned confirms the statements made in the Agreement with
respect to the undersigned including, without limitation, in Section 4.6 and
Schedule 2.
3. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) of
the Agreement.
4. The terms of Section 6.3(c) of the Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) of the Agreement.
[NAME OF ISSUER]
By ___________________________________
Name:
Title:
Address for Notices:
______________________________________
______________________________________
Fax:__________________________________
A-1
Exhibit B-1 to
Guarantee and Collateral Agreement
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of February
28, 2006 (as amended, supplemented or otherwise modified from time to time, the
"Intellectual Property Security Agreement"), is made by each of the signatories
hereto (collectively, the "Grantors") in favor of Lehman Commercial Paper Inc.,
as administrative agent (in such capacity, the "Administrative Agent") for the
Secured Parties (as defined in the Credit Agreement referred to below).
WHEREAS, Gentiva Health Services, Inc., a Delaware corporation, has
entered into a Credit Agreement, dated as of February 28, 2006 (as amended,
supplemented, replaced or otherwise modified from time to time, the "Credit
Agreement"), with the banks and other financial institutions and entities from
time to time party thereto, Lehman Brothers Inc., as advisor, sole lead arranger
and sole bookrunner, and Lehman Commercial Paper Inc., as administrative agent.
Capitalized terms used and not defined herein have the meanings given such terms
in the Credit Agreement.
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement that the Grantors shall have executed and delivered that certain
Guarantee and Collateral Agreement, dated as of February 28, 2006, in favor of
the Administrative Agent (as amended, supplemented, replaced or otherwise
modified from time to time, the "Guarantee and Collateral Agreement").
WHEREAS, under the terms of the Guarantee and Collateral Agreement,
the Grantors have granted a security interest in certain property, including,
without limitation, certain Intellectual Property of the Grantors to the
Administrative Agent for the ratable benefit of the Secured Parties, and have
agreed as a condition thereof to execute this Intellectual Property Security
Agreement for recording with the United States Patent and Trademark Office, the
United States Copyright Office, and other applicable Governmental Authorities.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantors agree as follows:
SECTION 1. Grant of Security. Each Grantor hereby grants to the
Administrative Agent for the ratable benefit of the Secured Parties a security
interest in and to all of such Grantor's right, title and interest in and to the
following (the "Intellectual Property Collateral"), as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor's Obligations:
(a) (i) all trademarks, service marks, trade names, corporate names,
company names, business names, trade dress, trade styles, logos, or other
indicia of origin or source identification, trademark and service mark
registrations, and applications for trademark or service mark registrations and
any new renewals thereof, including, without limitation, each registration and
application identified in Schedule 1, (ii) the right to sue or otherwise recover
B-1
for any and all past, present and future infringements and misappropriations
thereof, (iii) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past, present or future infringements thereof), and
(iv) all other rights of any kind whatsoever of such Grantor accruing thereunder
or pertaining thereto, together in each case with the goodwill of the business
connected with the use of, and symbolized by, each of the above (collectively,
the "Trademarks");
(b) (i) all patents, patent applications and patentable inventions,
including, without limitation, each issued patent and patent application
identified in Schedule 1, (ii) all inventions and improvements described and
claimed therein, (iii) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof, (iv) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (v) all reissues, divisions,
continuations, continuations-in-part, substitutes, renewals, and extensions
thereof, all improvements thereon and all other rights of any kind whatsoever of
such Grantor accruing thereunder or pertaining thereto (collectively, the
"Patents");
(c) (i) all copyrights, whether or not the underlying works of
authorship have been published, including, but not limited to copyrights in
software and databases all Mask Works (as defined in 17 U.S.C. 901 of the
Copyright Act) and all works of authorship and other intellectual property
rights therein, all copyrights of works based on, incorporated in, derived from
or relating to works covered by such copyrights, all right, title and interest
to make and exploit all derivative works based on or adopted from works covered
by such copyrights, and all copyright registrations and copyright applications,
mask works and mask work applications, and any renewals or extensions thereof,
including, without limitation, each registration and application identified in
Schedule 1, (ii) the rights to print, publish and distribute any of the
foregoing, (iv) the right to sue or otherwise recover for any and all past,
present and future infringements and misappropriations thereof, (iv) all income,
royalties, damages and other payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all licenses
entered into in connection therewith, and damages and payments for past, present
or future infringements thereof), and (v) all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto
("Copyrights");
(d) (i) all trade secrets and all confidential and proprietary
information, including know-how, manufacturing and production processes and
techniques, inventions, research and development information, technical data,
financial, marketing and business data, pricing and cost information, business
and marketing plans, and customer and supplier lists and information, (ii) the
right to sue or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (iii) all income, royalties,
damages and other payments now and hereafter due and/or payable with respect
thereto (including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past, present or future
infringements thereof), and (iv) all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto (collectively, the "Trade
Secrets");
B-2-2
(e) (i) all licenses or agreements, whether written or oral,
providing for the grant by or to any Grantor of: (A) any right to use any
Trademark or Trade Secret, (B) any right to manufacture, use, import, export,
distribute, offer for sale or sell any invention covered in whole or in part by
a Patent, and (C) any right under any Copyright including, without limitation,
the grant of rights to manufacture, distribute, exploit and sell materials
derived from any Copyright including, without limitation, any of the foregoing
identified in Schedule 1, (ii) the right to sue or otherwise recover for any and
all past, present and future infringements and misappropriations of any of the
foregoing, (iii) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past, present or future infringements thereof), and
(iv) all other rights of any kind whatsoever of such Grantor accruing thereunder
or pertaining thereto; and
(f) any and all proceeds of the foregoing.
SECTION 2. Recordation. Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government officer record this Intellectual Property Security
Agreement.
SECTION 3. Execution in Counterparts. This Agreement may be executed
in any number of counterparts (including by telecopy), each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 4. Governing Law. This Intellectual Property Security
Agreement shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.
SECTION 5. Conflict Provision. This Intellectual Property Security
Agreement has been entered into in conjunction with the provisions of the
Guarantee and Collateral Agreement and the Credit Agreement. The rights and
remedies of each party hereto with respect to the security interest granted
herein are without prejudice to, and are in addition to those set forth in the
Guarantee and Collateral Agreement and the Credit Agreement, all terms and
provisions of which are incorporated herein by reference. In the event that any
provisions of this Intellectual Property Security Agreement are in conflict with
the Guarantee and Collateral Agreement or the Credit Agreement, the provisions
of the Guarantee and Collateral Agreement or the Credit Agreement shall govern.
B-2-3
IN WITNESS WHEREOF, each of the undersigned has caused this
Intellectual Property Security Agreement to be duly executed and delivered as of
the date first above written.
[NAME OF GRANTOR]
By:_____________________________________
Name:
Title:
B-2-4
Schedule 1
COPYRIGHTS
PATENTS
TRADEMARKS
INTELLECTUAL PROPERTY LICENSES
Exhibit B-2 to
Guarantee and Collateral Agreement
FORM OF AFTER-ACQUIRED INTELLECTUAL PROPERTY SECURITY AGREEMENT
(FIRST SUPPLEMENTAL FILING)
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (FIRST SUPPLEMENTAL
FILING), dated as of __________ __, 20__ (as amended, supplemented or otherwise
modified from time to time, the "First Supplemental Intellectual Property
Security Agreement"), is made by each of the signatories hereto (collectively,
the "Grantors") in favor of Lehman Commercial Paper Inc., as administrative
agent (in such capacity, the "Administrative Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
WHEREAS, Gentiva Health Services, Inc., a Delaware corporation, has
entered into a Credit Agreement, dated as of February 28, 2006 (as amended,
supplemented, replaced or otherwise modified from time to time, the "Credit
Agreement"), with the banks and other financial institutions and entities from
time to time party thereto, Lehman Brothers Inc., as advisor, sole lead arranger
and sole bookrunner, and Lehman Commercial Paper Inc., as administrative agent.
Capitalized terms used and not defined herein have the meanings given such terms
in the Credit Agreement.
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement that the Grantors shall have executed and delivered that certain
Guarantee and Collateral Agreement, dated as of February 28, 2006, in favor of
the Administrative Agent (as amended, supplemented, replaced or otherwise
modified from time to time, the "Guarantee and Collateral Agreement").
WHEREAS, under the terms of the Guarantee and Collateral Agreement,
the Grantors have granted a security interest in certain property, including,
without limitation, certain Intellectual Property, including but not limited to
After-Acquired Intellectual Property of the Grantors to the Administrative Agent
for the ratable benefit of the Secured Parties, and have agreed as a condition
thereof to execute this First Supplemental Intellectual Property Security
Agreement for recording with the United States Patent and Trademark Office, the
United States Copyright Office, and other applicable Governmental Authorities.
WHEREAS, the Intellectual Property Security Agreement was recorded
against certain United States Intellectual Property at [INSERT REEL/FRAME
NUMBER] [IF SECOND OR LATER SUPPLEMENTAL, ADD PRIOR REEL/FRAME NUMBERS].
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantors agree as follows:
SECTION 1. Grant of Security. Each Grantor hereby grants to the
Administrative Agent for the ratable benefit of the Secured Parties a security
interest in and to all of such Grantor's right, title and interest in and to the
following (the "Intellectual Property Collateral"), as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor's Obligations:
B-2-1
(a) (i) all trademarks, service marks, trade names, corporate names,
company names, business names, trade dress, trade styles, logos, or other
indicia of origin or source identification, trademark and service mark
registrations, and applications for trademark or service mark registrations and
any new renewals thereof, including, without limitation, each registration and
application identified in Schedule 1, (ii) the right to sue or otherwise recover
for any and all past, present and future infringements and misappropriations
thereof, (iii) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past, present or future infringements thereof), and
(iv) all other rights of any kind whatsoever of such Grantor accruing thereunder
or pertaining thereto, together in each case with the goodwill of the business
connected with the use of, and symbolized by, each of the above (collectively,
the "Trademarks");
(b) (i) all patents, patent applications and patentable inventions,
including, without limitation, each issued patent and patent application
identified in Schedule 1, (ii) all inventions and improvements described and
claimed therein, (iii) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof, (iv) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (v) all reissues, divisions,
continuations, continuations-in-part, substitutes, renewals, and extensions
thereof, all improvements thereon and all other rights of any kind whatsoever of
such Grantor accruing thereunder or pertaining thereto (collectively, the
"Patents");
(c) (i) all copyrights, whether or not the underlying works of
authorship have been published, including but not limited to copyrights in
software and databases, all Mask Works (as defined in 17 U.S.C. 901 of the
Copyright Act) and all works of authorship and other intellectual property
rights therein, all copyrights of works based on, incorporated in, derived from
or relating to works covered by such copyrights, all right, title and interest
to make and exploit all derivative works based on or adopted from works covered
by such copyrights, and all copyright registrations and copyright applications,
mask works registrations and mask works applications, and any renewals or
extensions thereof, including, without limitation, each registration and
application identified in Schedule 1, (ii) the rights to print, publish and
distribute any of the foregoing, (iii) the right to sue or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (iv) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past, present or future infringements thereof), and
(v) all other rights of any kind whatsoever of such Grantor accruing thereunder
or pertaining thereto ("Copyrights");
(d) (i) all trade secrets and all confidential and proprietary
information, including know-how, manufacturing and production processes and
techniques, inventions, research and development information, technical data,
financial, marketing and business data, pricing and cost information, business
and marketing plans, and customer and supplier lists and information, (ii) the
right to sue or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (iii) all income, royalties,
damages and other payments now and hereafter due and/or payable with respect
thereto (including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past, present or future
infringements thereof), and (iv) all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto (collectively, the "Trade
Secrets");
B-2-2
(e) (i) all licenses or agreements, whether written or oral,
providing for the grant by or to any Grantor of: (A) any right to use any
Trademark or Trade Secret, (B) any right to manufacture, use, import, export,
distribute, offer for sale or sell any invention covered in whole or in part by
a Patent, and (C) any right under any Copyright including, without limitation,
the grant of rights to manufacture, distribute, print, publish, copy, import,
export, exploit and sell materials derived from any Copyright including, without
limitation, any of the foregoing identified in Schedule 1, (ii) the right to sue
or otherwise recover for any and all past, present and future infringements and
misappropriations of any of the foregoing, (iii) all income, royalties, damages
and other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past, present or future
infringements thereof), and (iv) all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto; and
(f) any and all proceeds of the foregoing.
SECTION 2. Recordation. Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government officer record this First Supplemental Intellectual
Property Security Agreement.
SECTION 3. Execution in Counterparts. This Agreement may be executed
in any number of counterparts (including by telecopy), each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 4. Governing Law. This First Supplemental Intellectual
Property Security Agreement shall be governed by, and construed and interpreted
in accordance with, the law of the State of New York.
SECTION 5. Conflict Provision. This First Supplemental Intellectual
Property Security Agreement has been entered into in conjunction with the
provisions of the Guarantee and Collateral Agreement and the Credit Agreement.
The rights and remedies of each party hereto with respect to the security
interest granted herein are without prejudice to, and are in addition to those
set forth in the Guarantee and Collateral Agreement and the Credit Agreement,
all terms and provisions of which are incorporated herein by reference. In the
event that any provisions of this Intellectual Property Security Agreement are
in conflict with the Guarantee and Collateral Agreement or the Credit Agreement,
the provisions of the Guarantee and Collateral Agreement or the Credit Agreement
shall govern.
B-2-3
IN WITNESS WHEREOF, each of the undersigned has caused this
Intellectual Property Security Agreement to be duly executed and delivered as of
the date first above written.
[NAME OF GRANTOR]
By:_____________________________________
Name:
Title:
B-2-4
Schedule 1
COPYRIGHTS
PATENTS
TRADEMARKS
INTELLECTUAL PROPERTY LICENSES
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ____________, 20__, made by
______________________, a _______________ corporation (the "Additional
Grantor"), in favor of Lehman Commercial Paper Inc., as administrative agent (in
such capacity, the "Administrative Agent"), for (i) the banks and other
financial institutions and entities (the "Lenders") parties to the Credit
Agreement referred to below, and (ii) the other Secured Parties (as defined in
the Guarantee and Collateral Agreement (as hereinafter defined)). All
capitalized terms not defined herein shall have the meaning ascribed to them in
such Credit Agreement.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Gentiva Health Services, Inc., a Delaware corporation (the
"Borrower"), the Lenders, Lehman Brothers Inc., as advisor, sole lead arranger
and sole bookrunner, and the Administrative Agent have entered into a Credit
Agreement, dated as of February 28, 2006 (as amended, supplemented, replaced or
otherwise modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Guarantee and Collateral Agreement, dated as of February 28, 2006 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Administrative Agent for the benefit
of the Secured Parties;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 8.14
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedules 1 through 7 to
the Guarantee and Collateral Agreement. The Additional Grantor hereby represents
and warrants that each of the representations and warranties contained in
Section 4 of the Guarantee and Collateral Agreement is true and correct on and
as the date hereof (after giving effect to this Assumption Agreement) as if made
on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:________________________________
Name:
Title:
2