EXHIBIT 10.3
SECURITY AGREEMENT
among
INFOUSA INC.,
CERTAIN OF ITS SUBSIDIARIES
and
BANK OF AMERICA, N.A.,
as COLLATERAL AGENT
----------------------------
Dated as of March 6, 2002 as
Amended and Restated as of
May 27, 2003
------------------------------
ARTICLE I
SECURITY INTERESTS..................................................................................... 2
1.1. Grant of Security Interests................................................................... 2
1.2. Power of Attorney............................................................................. 3
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS...................................................... 3
2.1. Necessary Filings............................................................................. 3
2.2. No Liens...................................................................................... 3
2.3. Other Financing Statements.................................................................... 3
2.4. Chief Executive Office, Record Locations...................................................... 4
2.5. Jurisdiction of Organization.................................................................. 4
2.6. Location of Inventory and Equipment........................................................... 4
2.7. Recourse...................................................................................... 5
2.8. Names, Trade Names; Change of Name............................................................ 5
2.9. Investment Related Property................................................................... 5
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER................. 5
3.1. Additional Representations and Warranties..................................................... 5
3.2. Maintenance of Records........................................................................ 6
3.3. Direction to Account Debtors; Contracting Parties; etc........................................ 6
3.4. Modification of Terms; etc.................................................................... 7
3.5. Collection.................................................................................... 7
3.6. Instruments................................................................................... 7
3.7. Assignors Remain Liable Under Receivables..................................................... 7
3.8. Assignors Remain Liable Under Contracts....................................................... 8
3.9. Changes of Name, Jurisdiction of Organization, etc........................................... 8
3.10. Purchase Money Security Interests............................................................. 8
3.11. Protection of the Collateral Agent's Security................................................. 8
3.12. Further Actions............................................................................... 8
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS............................................................... 9
4.1. Additional Representations and Warranties..................................................... 9
4.2. Licenses and Assignments...................................................................... 9
4.3. Infringements................................................................................. 9
4.4. Preservation of Marks......................................................................... 9
4.5. Maintenance of Registration................................................................... 9
4.6. Future Registered Marks....................................................................... 10
4.7. Remedies...................................................................................... 10
ARTICLE V
SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS.................................... 10
5.1. Additional Representations and Warranties..................................................... 10
5.2. Licenses and Assignments...................................................................... 11
5.3. Infringements................................................................................. 11
5.4. Maintenance of Patents or Copyright........................................................... 11
5.5. Prosecution of Patent Applications............................................................ 11
5.6. Future Patents and Copyrights................................................................. 12
5.7. Remedies...................................................................................... 12
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL................................................................... 12
6.1. Protection of Collateral Agent's Security..................................................... 12
6.2. Warehouse Receipts Non-negotiable............................................................. 12
6.3. Further Actions............................................................................... 13
6.4. Financing Statements.......................................................................... 13
6.5. Authorization to File......................................................................... 13
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT........................................................... 13
7.1. Remedies; Obtaining the Collateral Upon Default............................................... 13
7.2. Remedies; Disposition of the Collateral....................................................... 15
7.3. Waiver of Claims.............................................................................. 16
7.4. Application of Proceeds....................................................................... 16
-ii-
7.5. Remedies Cumulative........................................................................... 18
7.6. Discontinuance of Proceedings................................................................. 19
ARTICLE VIII
INDEMNITY.............................................................................................. 19
8.1. Indemnity..................................................................................... 19
8.2. Indemnity Obligations Secured by Collateral; Survival......................................... 20
ARTICLE IX
DEFINITIONS............................................................................................ 21
ARTICLE X
MISCELLANEOUS.......................................................................................... 27
10.1. Notices....................................................................................... 27
10.2. Waiver; Amendment............................................................................. 28
10.3. Obligations Absolute.......................................................................... 28
10.4. Successors and Assigns........................................................................ 28
10.5. Headings Descriptive.......................................................................... 28
10.6. Governing Law................................................................................. 29
10.7. Assignor's Duties............................................................................. 29
10.8. Termination; Release.......................................................................... 29
10.9. Counterparts.................................................................................. 29
10.10. Severability................................................................................... 30
10.11. The Collateral Agent........................................................................... 30
10.12. Benefit of Agreement........................................................................... 30
10.13. Additional Assignors........................................................................... 30
ANNEX A Schedule of Names and Jurisdictions of Organization
ANNEX B Schedule of Chief Executive Offices/Record Locations
ANNEX C Schedule of Inventory and Equipment Location
ANNEX D Schedule of Trade and Fictitious Names
ANNEX E Schedule of Marks
ANNEX F Schedule of Patent
ANNEX G Schedule of Copyrights
ANNEX H Investment Related Property
ANNEX I Form of Grant of Security Interest in
United States Trademarks and Patents
ANNEX J Form of Grant of Security Interest in United States Copyrights
-iii-
SECURITY AGREEMENT, dated as of March 6, 2002, and amended and
restated as of May 27, 2003, made by each of the undersigned assignors (each an
"Assignor" and, together with any other entity that becomes an assignor
hereunder pursuant to Section 10.13 hereof, the "Assignors") in favor of Bank of
America, N.A., as Collateral Agent together with any successor collateral agent
(the "Collateral Agent"), for the benefit of the Secured Creditors (as defined
below). Except as otherwise defined herein, capitalized terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as so
defined.
W I T N E S S E T H :
WHEREAS, infoUSA Inc. (the "Borrower"), the lenders party from
time to time party thereto (the "Lenders"), and Bank of America, N.A., as
Administrative Agent (together with any successor administrative agent, the
"Administrative Agent"), have entered into a Credit Agreement, dated as of March
6, 2002, as amended and restated as of May 27, 2003, providing for the making of
Loans to, and the issuance of Letters of Credit for the account of, the Borrower
as contemplated therein (as amended, modified or supplemented from time to time,
the "Credit Agreement") (the Lenders, the Administrative Agent, the Issuing
Lender and the Collateral Agent are herein called the "Lender Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lenders or any affiliate thereof (each such Lender
or affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors",
and together with the Lender Creditors, are herein called the "Secured
Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
therein;
WHEREAS, it is a condition precedent to the making of Loans
to, and the issuance of Letters of Credit for the account of, the Borrower under
the Credit Agreement that each Assignor shall have executed and delivered to the
Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the
incurrence of Loans to, and the issuance of Letters of Credit for the account
of, the Borrower under the Credit Agreement and the entering into by the
Borrower of Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, each Assignor desires to enter into this Agreement in order to
satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the
following representations and warranties to the Collateral Agent for the benefit
of the Secured Creditors and hereby covenants and agrees with the Collateral
Agent for the benefit of the Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests.
(a) As security for the prompt and complete payment and
performance when due of all of its Obligations, each Assignor does hereby
pledge, hypothecate and grant to the Collateral Agent for the benefit of the
Secured Creditors, a continuing security interest in, all of the right, title
and interest of such Assignor in, to and under all of the following, whether now
existing or hereafter from time to time acquired (all of the following being
collectively called, the "Collateral"): all Accounts, all Chattel Paper, all
Documents, all General Intangibles, all Goods, all Instruments, all Insurance,
all Intellectual Property, all Investment Related Property, all Letter of Credit
Rights, all Money, all Supporting Obligations (to the extent not otherwise
included above), and all Proceeds, products, accessories, rents and profits of
or in respect of the foregoing, it being understood, that without limitation of
the foregoing, the Collateral shall include (i) all Receivables, (ii) all
Contracts, together with all Contract Rights arising thereunder, (iii) all
Equipment, (iv) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of such Assignor symbolized
by the Marks, (v) all Patents and Copyrights and all reissues, renewals or
extensions thereof, (vi) all computer programs of such Assignor and all
intellectual property rights therein and all other Proprietary Information of
such Assignor, including, but not limited to, Trade Secrets Rights, and (vii)
all Deposit Accounts (including any and all Cash Collateral Accounts) and all
monies, securities, instruments and other investments deposited or required to
be deposited in such Deposit Accounts.
(b) Notwithstanding anything herein to the contrary, in
no event shall the Collateral include and no Assignor shall be deemed to have
granted a security interest in, any of Assignor's right, title or interest in
(i) any Intellectual Property (collectively, the "Non-Assignable Intellectual
Property") to the extent that the grant of such security interest would
constitute or result in the abandonment or invalidation thereof or the
unenforceability of any right, title or interest of any Assignor therein; (ii)
any license, contract or agreement to the extent that the grant of such security
interest is prohibited by or would constitute a default under or a termination
of, such license, contract or agreement (each, a "Non-assignable Contract"), and
the terms restricting such grant are enforceable under applicable law (including
UCC section 9-406), it being understood that each Assignor hereby agrees to use
all reasonable efforts to obtain all requisite consent to enable Assignor to
grant a security interest in such asset and, in any event, immediately upon the
ineffectiveness, lapse or termination of any such restriction, the Collateral
shall include, and Assignor shall be deemed to have granted a security interest
in, all such rights and interests as if such restriction had never been in
effect; or (iii) any of the outstanding capital stock of a Foreign Subsidiary in
excess of 65% of the voting power of all classes of capital stock of such
entitled to vote.
-2-
(c) The security interest of the Collateral Agent under
this Agreement extends to all Collateral of the kind which is the subject of
this Agreement which any Assignor may acquire at any time during the term of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes
and appoints the Collateral Agent its true and lawful attorney, irrevocably,
with full power after the occurrence of and during the continuance of an Event
of Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquittance for any and all moneys and claims for
moneys due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem to be necessary or advisable to protect the
interests of the Secured Creditors, which appointment as attorney is coupled
with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. Upon (i) the filing by the
Collateral Agent of appropriate financing statements in the applicable filing
offices in the jurisdictions set forth in Annex A, and (ii) the filing of the
appropriate Grants of Security Interest in the form of Annex I or J attached
hereto in the United States Patent and Trademark Office or in the United States
Copyright Office, as applicable, all filings, registrations and recordings
necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral will have been accomplished and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to the Collateral will create
a perfected security interest therein prior to the rights of all other Persons
therein and subject to no other Liens (other than Permitted Liens) and will be
entitled to all the rights, priorities and benefits afforded by the Uniform
Commercial Code or other relevant law as enacted in any relevant jurisdiction to
perfected security interests, in each case to the extent that the Collateral
consists of the type of property in which a security interest may be perfected
by filing a financing statement under the Uniform Commercial Code as enacted in
any relevant jurisdiction or in the United States Patent and Trademark Office or
in the United States Copyright Office.
2.2. No Liens. Such Assignor owns the Collateral purported
to be owned by it and otherwise has the rights it purports to have in each item
of Collateral and, as to all Collateral whether now existing or hereafter
acquired, will continue to own or have such rights in each item of the
Collateral, in each case free and clear of any and all Liens, rights or claims
of all other Persons (other than Permitted Liens). Such Assignor shall defend
the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
2.3. Other Financing Statements. As of the date hereof,
there is no financing
-3-
statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Collateral (other than financing statements filed in respect of Permitted
Liens), and so long as the Termination Date has not occurred, such Assignor will
not execute or authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Collateral, except financing
statements filed or to be filed in respect of and covering the security
interests granted hereby by such Assignor or in connection with Permitted Liens.
2.4. Chief Executive Office, Record Locations. The chief
executive office of such Assignor is located at the address indicated on Annex B
hereto for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents evidencing
all Receivables and Contract Rights of such Assignor and the only original books
of account and records of such Assignor relating thereto are, and will continue
to be, kept at such chief executive office, at one or more of the other
locations set forth on Annex B hereto or at such new locations as such Assignor
may establish in accordance with the last sentence of this Section 2.4. All
Receivables and Contract Rights of such Assignor are, and will continue to be,
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, the office locations described above or such
new location established in accordance with the last sentence of this Section
2.4. No Assignor shall establish new locations for such offices until (i) it
shall have given to the Collateral Agent not less than 15 days' prior written
notice of its intention to do so, clearly describing such new location and
providing such other information in connection therewith as the Collateral Agent
may reasonably request, and (ii) with respect to such new location, it shall
have taken all action reasonably satisfactory to the Collateral Agent to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
2.5. Jurisdiction of Organization. The full legal name and
jurisdiction of organization of such Assignor is as set forth on Annex A. If the
chief executive office or sole place of business of any Assignor is located
outside of the United States, then Annex A shall also include the address of the
major executive office in the United States, if any, of Assignor.
2.6. Location of Inventory and Equipment. All Inventory
and Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex C hereto for such Assignor. Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex C
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.6. Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent not less than 15 days' prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Collateral Agent may reasonably request and (ii)
with respect to such new location, it shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect.
-4-
2.7. Recourse. This Agreement is made with full recourse
to each Assignor (including, without limitation, with full recourse to all
assets of such Assignor) and pursuant to and upon all the warranties,
representations, covenants and agreements on the part of such Assignor contained
herein, in the other Secured Debt Agreements and otherwise in writing in
connection herewith or therewith.
2.8. Names, Trade Names; Change of Name. No Assignor has
or operates in any jurisdiction under, or in the preceding one year has had or
has operated in any jurisdiction under, any trade names, fictitious names or
other names except its legal name and such other trade or fictitious names as
are listed on Annex D hereto for such Assignor. No Assignor shall change its
legal name or assume or operate in any jurisdiction under any trade, fictitious
or other name except those names listed on Annex D hereto for such Assignor and
new names established in accordance with the last sentence of this Section 2.8.
No Assignor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) it shall have given to the Collateral Agent
not less than 15 days' prior written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name shall be
used and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (ii) with respect to such new name,
it shall have taken all action reasonably requested by the Collateral Agent to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
2.9. Investment Related Property. Annex H sets forth a
complete list of all Investment Related Property, including all Deposit
Accounts, Securities Accounts and Commodities Accounts. Assignor has taken all
actions necessary or desirable to: (a) establish the Collateral Agent's
"control" (within the meaning of Section 9-106 of the Illinois UCC) over any
portion of the Investment Related Property constituting Certificated Securities,
Uncertificated Securities, Securities Accounts, Securities Entitlements or
Commodities Accounts; (b) establish the Collateral Agent's "control" (within the
meaning of Section 9-104 of the Illinois UCC) over all Deposit Accounts
(including any and all Cash Collateral Accounts); and (c) to deliver all
Instruments to the Collateral Agent. Assignor will not create or permit to exist
any Securities Account or Deposit Account unless such Assignor shall have
executed and delivered to the Collateral Agent a Control Agreement in respect of
such Securities Account or Deposit Account, as the case may be. Such Assignor
will not create or permit to exist any Commodities Account unless the Required
Lenders shall otherwise consent.
2.10. Non-Assignable Collateral. Neither the Non-Assignable
Intellectual Property nor the Non-Assignable Contracts are individually or
collectively material to the Borrower and its Subsidiaries taken as a whole.
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER
3.1. Additional Representations and Warranties. As of the
time when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such
-5-
Receivable, and all records, papers and documents relating thereto (if any) are
genuine and what they purport to be, and that all papers and documents (if any)
relating thereto (i) will, to the knowledge of such Assignor, represent the
genuine legal, valid and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of the
inventory, materials, equipment or merchandise listed therein, or both, and (ii)
will, to the knowledge of such Assignor, be in compliance and will conform in
all material respects with all applicable federal, state and local laws and
applicable laws of any relevant foreign jurisdiction.
3.2. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense accurate records of its Receivables and
Contracts, including, but not limited to, originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times upon prior notice to such
Assignor. Upon the occurrence and during the continuance of an Event of Default
and at the request of the Collateral Agent, such Assignor shall, at its own cost
and expense, deliver all tangible evidence of its Receivables and Contract
Rights (including, without limitation, all documents evidencing the Receivables
and all Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Assignor). Upon the occurrence and during the continuance of an Event of
Default and if the Collateral Agent so directs, such Assignor shall legend, in
form and manner satisfactory to the Collateral Agent, the Receivables and the
Contracts, as well as books, records and documents (if any) of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.
3.3. Direction to Account Debtors; Contracting Parties;
etc. Upon the occurrence and during the continuance of an Event of Default, if
the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause
all payments on account of the Receivables and Contracts to be made directly to
one or more Cash Collateral Accounts (as the Collateral Agent shall so direct),
(y) that the Collateral Agent may, at its option, directly notify the obligors
with respect to any Receivables and/or under any Contracts to make payments with
respect thereto as provided in the preceding clause (x), and (z) that the
Collateral Agent may enforce collection of any such Receivables and Contracts
and may adjust, settle or compromise the amount of payment thereof, in the same
manner and to the same extent as such Assignor. Without notice to or assent by
any Assignor, the Collateral Agent may, upon the occurrence and during the
continuance of an Event of Default, apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Accounts which application shall be
effected in the manner provided in Section 7.4 of this Agreement. The reasonable
costs and expenses (including reasonable attorneys' fees) of collection, whether
incurred by an Assignor or the Collateral Agent, shall be borne by the relevant
Assignor. The Collateral Agent shall deliver a copy of each notice referred to
in the preceding clause (y) to the relevant Assignor, provided, that the failure
by the Collateral Agent to so notify such Assignor shall not affect the
effectiveness of such notice or the other rights of the Collateral Agent created
by this Section 3.3.
-6-
3.4. Modification of Terms; etc. Except in accordance with
such Assignor's ordinary course of business and consistent with reasonable
business judgment, no Assignor shall rescind or cancel any indebtedness
evidenced by any Receivable or under any Contract, or modify any term thereof or
make any adjustment with respect thereto, or extend or renew the same, or
compromise or settle any material dispute, claim, suit or legal proceeding
relating thereto, or sell any Receivable or Contract, or interest therein,
without the prior written consent of the Collateral Agent. No Assignor will do
anything to impair the rights of the Collateral Agent in the Receivables or
Contracts.
3.5. Collection. Each Assignor shall endeavor in
accordance with reasonable business practices to cause to be collected from the
account debtor named in each of its Receivables or obligor under any Contract,
as and when due (including, without limitation, amounts which are delinquent,
such amounts to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts owing under or on account of such
Receivable or Contract, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Receivable or
under such Contract, except as otherwise directed by the Collateral Agent after
the occurrence and during the continuation of an Event of Default, any Assignor
may allow in the ordinary course of business as adjustments to amounts owing
under its Receivables and Contracts (i) an extension or renewal of the time or
times of payment, or settlement for less than the total unpaid balance, which
such Assignor finds appropriate in accordance with reasonable business judgment
and (ii) a refund or credit due as a result of returned or damaged merchandise
or improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, reasonable attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any
Instrument with a value of $50,000 or more constituting Collateral (other than
checks and other payment instruments received and collected in the ordinary
course of business), such Assignor will within 10 Business Days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
3.7. Assignors Remain Liable Under Receivables. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Receivables to observe and perform all of the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to such Receivables. Neither the
Collateral Agent nor any other Secured Creditor 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 the Collateral Agent or
any other Secured Creditor of any payment relating to such Receivable pursuant
hereto, nor shall the Collateral Agent or any other Secured Creditor be
obligated in any manner to perform any of the obligations of any Assignor 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 them or as to the sufficiency of any performance by any
party under any Receivable (or any agreement giving rise
-7-
thereto), 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 them or to which they may be entitled at any time or times.
3.8. Assignors Remain Liable Under Contracts. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Contracts to observe and perform all of the conditions and
obligations to be observed and performed by them thereunder, all in accordance
with and pursuant to the terms and provisions of each Contract. Neither the
Collateral Agent nor any other Secured Creditor shall have any obligation or
liability under any Contract by reason of or arising out of this Agreement or
the receipt by the Collateral Agent or any other Secured Creditor of any payment
relating to such Contract pursuant hereto, nor shall the Collateral Agent or any
other Secured Creditor be obligated in any manner to perform any of the
obligations of any Assignor under or pursuant to any Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any
performance by any party under any Contract, 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 them or to which they may be entitled at
any time or times.
3.9. Changes of Name, Jurisdiction of Organization, etc.
No Assignor shall change its name, form of organization (from that of a
corporation) or jurisdiction of organization, unless it shall have (a) given the
Collateral Agent not less than 30 days' prior written notice thereof, (b)
provided the Collateral Agent with such other information in connection
therewith as the Collateral Agent may reasonably request, and (c) taken all
actions necessary or advisable to maintain the continuous validity, perfection
and the same or better priority of the Collateral Agent's security interest in
the Collateral intended to be granted and agreed to hereby.
3.10. Purchase Money Security Interests. If the Collateral
Agent or any Secured Creditor gives value as defined in Section 9-103 of the UCC
to enable Assignor to acquire rights in or the use of any Collateral, it shall
use such value for such purposes and Assignor further agrees that repayment of
any Obligation shall apply on a "first-in, first-out" basis so that the portion
of the value used to acquire rights in any Collateral shall be paid in the
chronological order Assignor acquired rights therein.
3.11. Protection of the Collateral Agent's Security. Each
Assignor will do nothing to impair the rights of the Secured Creditors in the
Collateral. Each Assignor assumes all liability and responsibility in connection
with the Collateral owned by it and the liability of each Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to it.
3.12. Further Actions. Each Assignor will, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and take
such further steps relating to its Receivables, Contracts, Instruments and other
property or rights covered by the security interest hereby granted, as the
Collateral Agent may reasonably require.
-8-
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each
Assignor represents and warrants that it is the true and lawful owner of or
otherwise has the right to use the registered Marks listed in Annex E hereto for
such Assignor and that said listed Marks include all United States registered
marks and applications for United States registered marks in the United States
Patent and Trademark Office that such Assignor owns or uses in connection with
its business as of the date hereof (or intends to use in the case of an Intent
to Use application for trademark registration). Each Assignor represents and
warrants that it owns, is licensed to use or otherwise has the right to use, all
Marks that it uses. Each Assignor further warrants that it has no knowledge of
any material third party claim received by it that any aspect of such Assignor's
present or contemplated business operations infringes or will infringe any
trademark, service mark or trade name of any other Person. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use all U.S. trademark registrations and applications listed in
Annex E hereto and that said registrations are valid, subsisting, have not been
canceled and that such Assignor is not aware of any material third-party claim
that any of said registrations is invalid or unenforceable, or is not aware that
there is any reason that any of said registrations is invalid or unenforceable,
or is not aware that there is any reason that any of said applications will not
pass to registration. Each Assignor hereby grants to the Collateral Agent an
absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by the
United States Patent and Trademark Office in order to effect an absolute
assignment of all right, title and interest in each Mark, and record the same.
4.2. Licenses and Assignments. Except as otherwise
permitted by the Secured Debt Agreements, each Assignor hereby agrees not to
divest itself of any right under any Mark absent prior written approval of the
Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available with
respect to, any party who may be infringing or diluting or otherwise violating
any of such Assignor's rights in and to any significant Mark, or with respect to
any party claiming that such Assignor's use of any Mark violates in any material
respect any property right of that party. Each Assignor further agrees to
prosecute diligently in accordance with reasonable business practices any Person
infringing any significant Mark.
4.4. Preservation of Marks. Each Assignor agrees to use or
license (along with the associated goodwill) the use of its Marks in interstate
commerce during the time in which this Agreement is in effect and to take all
such other actions as are necessary to preserve such Marks as trademarks or
service marks under the laws of the United States including, without limitation,
maintaining the quality of all associated products or services and assuring the
use of proper statutory notice of such Marks in association with each associated
product or service.
4.5. Maintenance of Registration. Each Assignor shall, at
its own expense, dili-
-9-
gently process all documents required to maintain trademark registrations and/or
to prosecute pending applications for registration, including but not limited to
affidavits of use and applications for renewals of registration in the United
States Patent and Trademark Office for all of its significant registered Marks
or applications for registration, and shall pay all fees and disbursements in
connection therewith and shall not abandon any such application for registration
of a Mark, filing of affidavit of use or any such application of renewal prior
to the exhaustion of all administrative and judicial remedies without prior
written consent of the Collateral Agent (other than with respect to
registrations and applications deemed by such Assignor to be no longer desirable
in the conduct of its business). Each Assignor shall, at its own expense,
vigorously defend the validity and enforceability of any Mark or registration of
a Mark in any proceeding or litigation.
4.6. Future Registered Marks. If any Mark registration is
issued hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral Agent
a copy of such certificate, and a grant of a security interest in such Mark, to
the Collateral Agent and at the expense of such Assignor, confirming the grant
of a security interest in such Mark to the Collateral Agent hereunder, the form
of such security to be substantially in the form of Annex I hereto or in such
other form as may be reasonably satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare and assign the
entire right, title and interest of such Assignor in and to each of the Marks,
together with all trademark rights and rights of protection to the same, vested
in the Collateral Agent for the benefit of the Secured Creditors, in which event
such rights, title and interest shall immediately vest, in the Collateral Agent
for the benefit of the Secured Creditors, and the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 4.1 hereof to
execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency; (ii) take and use or sell the Marks and
the goodwill of such Assignor's business symbolized by the Marks and the right
to carry on the business and use the assets of such Assignor in connection with
which the Marks have been used; and (iii) direct such Assignor to refrain, in
which event such Assignor shall refrain, from using the Marks in any manner
whatsoever, directly or indirectly, and such Assignor shall execute such further
documents that the Collateral Agent may reasonably request to further confirm
this and to transfer ownership of the Marks and registrations and any pending
trademark application in the United States Patent and Trademark Office to the
Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each
Assignor represents and warrants that it is the true and lawful owner of all
rights in or has the right to use (i) all Trade Secret Rights, (ii) the Patents
listed in Annex F hereto for such Assignor and that said Patents
-10-
constitute all the United States or non-United States patents and applications
for United States or non-United States patents that such Assignor owns as of the
date hereof and (iii) the Copyrights listed in Annex G hereto for such Assignor
and that said Copyrights constitute all the United States copyrights registered
with the United States Copyright Office and applications to register United
States copyrights that such Assignor owns as of the date hereof. Each Assignor
further warrants that it has no knowledge of any third party claim that any
aspect of such Assignor's present or contemplated business operations infringes
or will infringe any patent or copyright of any other Person or such Assignor
has misappropriated any trade secret or proprietary information. Each Assignor
hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of any Event of Default, any
document which may be required by the United States Patent and Trademark Office
or the United States Copyright Office in order to effect an absolute assignment
of all right, title and interest in each Patent, including the right to past
damages and to record the same.
5.2. Licenses and Assignments. Except as otherwise
permitted by the Secured Debt Agreements, each Assignor hereby agrees not to
divest itself of any right under any Patent or Copyright acquired after the date
hereof absent prior written approval of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe or other violation of
such Assignor's rights in any significant Patent or significant Copyright or to
any claim that the practice of any Patent or use of any Copyright violates any
property right of a third party, or with respect to any misappropriation of any
Trade Secret Right or any claim that practice of any Trade Secret Right violates
any property right of a third party. Each Assignor further agrees, absent
direction of the Collateral Agent to the contrary, to diligently prosecute any
Person infringing any significant Patent or significant Copyright or any Person
misappropriating any significant Trade Secret Right in accordance with
reasonable business practices.
5.4. Maintenance of Patents or Copyright. At its own
expense, each Assignor shall make timely payment of all post-issuance fees and
take all actions necessary to maintain in force its rights under each Patent or
Copyright, absent prior written consent of the Collateral Agent, except to the
extent that such Assignor has determined in its reasonable business judgment
that the maintenance of such Patent or Copyright is no longer necessary in the
conduct of its business. Assignor shall assure that proper statutory notice is
used in conjunction with all products or services covered by any Patent or
Copyright. Each Assignor shall, at its own expense, vigorously defend the
validity and enforceability of any Patent in any proceeding or litigation.
5.5. Prosecution of Patent Applications. At its own
expense, each Assignor shall diligently prosecute all significant applications
for (i) United States Patents listed in Annex F hereto, (ii) Copyrights listed
on Annex G hereto, and (iii) all after-acquired or filed patent or copyright
applications in each case for such Assignor and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies
absent written consent of the Collateral Agent, except to the extent that such
Assignor has determined in its reasonable business judgment that such
application is no longer necessary in the conduct of its business.
-11-
5.6. Future Patents and Copyrights. Within 30 days of the
acquisition or issuance of a United States Patent, registration of a Copyright,
or acquisition of a registered Copyright, or of filing of an application for a
United States Patent or Copyright, the relevant Assignor shall deliver to the
Collateral Agent a copy of said Copyright or certificate or registration of, or
application therefor, said Patents, as the case may be, with a grant of a
security interest in such Patent or Copyright, as the case may be, to the
Collateral Agent and at the expense of such Assignor, confirming the grant of a
security interest, the form of such grant of a security interest to be
substantially in the form of Annex I or J hereto, as appropriate, or in such
other form as may be reasonably satisfactory to the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may by written notice to the relevant Assignor,
take any or all of the following actions: (i) declare and assign the entire
right, title, and interest of such Assignor in each of the Patents and
Copyrights vested in the Collateral Agent, including the right to sue for past
damages, for the benefit of the Secured Creditors, in which event such right,
title, and interest and right to sue for past damages shall immediately vest in
the Collateral Agent for the benefit of the Secured Creditors, in which case the
Collateral Agent shall be entitled to exercise the power of attorney referred to
in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to
record said absolute assignment with the applicable agency; (ii) take and
practice or sell the Patents and Copyrights; and (iii) direct such Assignor to
refrain, in which event such Assignor shall refrain, from practicing the Patents
and using the Copyrights directly or indirectly, and such Assignor shall execute
such further documents as the Collateral Agent may request further to confirm
this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each
Assignor will do nothing to impair the rights of the Collateral Agent in the
Collateral. Each Assignor will at all times keep its Inventory and Equipment
insured in favor of the Collateral Agent, at such Assignor's own expense to the
extent and in the manner provided in the Credit Agreement. Except to the extent
otherwise permitted to be retained by such Assignor or applied by such Assignor
pursuant to the terms of the Credit Agreement, the Collateral Agent shall, at
the time any proceeds of such insurance are distributed to the Secured
Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each
Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-negotiable. To the extent
practicable, each Assignor agrees that if any warehouse receipt or receipt in
the nature of a warehouse receipt is issued with respect to any of its
Inventory, such Assignor shall request that such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other
-12-
relevant law).
6.3. Further Actions. Each Assignor will, at its own
expense and upon the reasonable request of the Collateral Agent, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to
time such lists, descriptions and designations of its Collateral, warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, certificates, reports
and other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, which the Collateral Agent deems reasonably appropriate or advisable to
perfect, preserve or protect its security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute
and deliver to the Collateral Agent such financing statements, in form
reasonably acceptable to the Collateral Agent, as the Collateral Agent may from
time to time reasonably request or as are reasonably necessary or desirable in
the opinion of the Collateral Agent to establish and maintain a valid,
enforceable, first priority perfected security interest in the Collateral as
provided herein and the other rights and security contemplated hereby all in
accordance with the UCC as enacted in any and all relevant jurisdictions or any
other relevant law. Each Assignor will pay any applicable filing fees,
recordation taxes and related expenses relating to its Collateral. Each Assignor
hereby authorizes the Collateral Agent to file any such financing statements
without the signature of such Assignor where permitted by law.
6.5. Authorization to File. Each Assignor hereby
authorizes the Collateral Agent to file a record or records (as defined in
Article 9 of the UCC), including, without limitation, financing statements, in
all jurisdictions and with all filing offices as the Collateral Agent may
determine, in its sole discretion, are necessary or advisable to perfect the
security interest granted to the Collateral Agent herein. Such financing
statements may describe the Collateral in the same manner as described herein or
may contain an indication or description of collateral that describes such
property in any other manner as the Collateral Agent may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection of the
security interest in the Collateral granted to the Collateral Agent herein,
including, without limitation, describing such property as "all assets" or "all
personal property," and such financing statements may be filed prior to the date
of this Agreement.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law, shall have all rights
as a secured creditor under any UCC, and such additional rights and remedies to
which a secured creditor is entitled under the laws in effect, in all relevant
jurisdictions and may:
-13-
(i) personally, or by agents or attorneys, immediately
take possession of the Collateral or any part thereof, from such
Assignor or any other Person who then has possession of any part
thereof with or without notice or process of law, and for that purpose
may enter upon such Assignor's premises where any of the Collateral is
located and remove the same and use in connection with such removal any
and all services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent and may exercise any and
all remedies of such Assignor in respect of such Collateral;
(iii) withdraw all monies, securities and instruments in
the Cash Collateral Account(s) for application to the Obligations in
accordance with Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof,
or direct the relevant Assignor to sell, assign or otherwise liquidate
any or all of the Collateral or any part thereof, and, in each case,
take possession of the proceeds of any such sale or liquidation;
(v) personally, or by agents or attorneys, immediately
take possession of the Collateral or any part thereof, by directing the
relevant Assignor in writing to deliver the same to the Collateral
Agent at any reasonable place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the
place or places so designated by the Collateral Agent and
there delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered
to the Collateral Agent at such place or places pending
further action by the Collateral Agent as provided in Section
7.2 hereof; and
(z) while the Collateral shall be so stored and
kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition; and
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents, Copyrights or Proprietary
Information included in the Collateral for such term and on such
conditions and in such manner as the Collateral Agent shall in its sole
judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor
-14-
of said obligation. By accepting the benefits of this Agreement, the Secured
Creditors agree that this Agreement may be enforced only by the action of the
Collateral Agent acting upon the instructions of the Required Secured Creditors
and that no other Secured Creditor shall have any right individually to seek to
enforce this Agreement or to realize upon the security to be granted hereby, it
being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent for the benefit of the Secured Creditors upon the terms of
this Agreement and the Credit Agreement.
7.2. Remedies; Disposition of the Collateral. If any Event
of Default shall have occurred and be continuing, then any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' prior written notice to the relevant Assignor specifying the time at which
such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the giving
of such notice, to the right of the relevant Assignor or any nominee of such
Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' prior written notice
to the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after publication
of notice of such auction (where required by applicable law) not less than 10
days prior thereto. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the sale may be so adjourned. To the
extent permitted by any such requirement of law, the Collateral Agent may bid
for and become the purchaser of the Collateral or any item thereof, offered for
sale in accordance with this Section without accountability to the relevant
Assignor. If, under mandatory requirements of applicable law, the Collateral
Agent shall be required to make disposition of the Collateral within a period of
time which does not permit the giving of notice to the relevant Assignor as
hereinabove specified, the Collateral Agent need give such Assignor only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law. Each Assignor agrees to do or cause to
be done all such other acts and things as may be reasonably necessary to make
such sale or sales of all or any portion of the Collateral valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such
-15-
Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in
this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives,
to the extent permitted by law:
(i) all damages occasioned by such taking of
possession except any damages which are the direct result of the
Collateral Agent's gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and
non-appealable decision);
(ii) all other requirements as to the time, place
and terms of sale or other requirements with respect to the enforcement
of the Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force
under any applicable law in order to prevent or delay the enforcement
of this Agreement or the absolute sale of the Collateral or any portion
thereof, and each Assignor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds.
(a) All moneys collected by the Collateral Agent (or, to
the extent the Pledge Agreement, any Mortgage or any Additional Security
Document require proceeds of collateral under such other Security Document to be
applied in accordance with the provisions of this Agreement, the Pledge or
Collateral Agent under such other Security Document) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows.
(i) first, to the payment of all amounts owing
the Collateral Agent of the type described in clauses (iii) and (iv) of
the definition of "Obligations";
(ii) second, to the extent proceeds remain after
the application pursuant to the preceding clause (i), an amount equal
to the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, with each Secured
-16-
Creditor receiving an amount equal to such outstanding Primary
Obligations or, if the proceeds are insufficient to pay in full all
such Primary Obligations, its Pro Rata Share of the amount remaining to
be distributed;
(iii) third, to the extent proceeds remain after
the application pursuant to the preceding clauses (i) and (ii), an
amount equal to the outstanding Secondary Obligations shall be paid to
the Secured Creditors as provided in Section 7.4(e) hereof, with each
Secured Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all
such Secondary Obligations, its Pro Rata Share of the amount remaining
to be distributed; and
(iv) fourth, to the extent proceeds remain after
the application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement, (x) "Pro Rata Share"
shall mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Document Obligations, all principal of, premium, fees and
interest on, all Loans, all Unpaid Drawings theretofore made (together with all
interest accrued thereon), the aggregate Stated Amount of all Letters of Credit
issued or deemed issued under the Credit Agreement and all Fees and (ii) in the
case of the Other Obligations, all amounts due under such Interest Rate
Protection Agreements or Other Hedging Agreements (other than indemnities, fees
(including, without limitation, attorneys' fees) and similar obligations and
liabilities) and (z) "Secondary Obligations" shall mean all Obligations other
than Primary Obligations.
(c) When payments to Secured Creditors are based upon
their respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to such excess amount multiplied by a fraction the numerator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of such Secured Creditor and the denominator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(d) Each of the Secured Creditors, by their acceptance of
the benefits hereof, agrees and acknowledges that if the Lender Creditors are to
receive a distribution on account of undrawn amounts with respect to Letters of
Credit issued under the Credit Agreement (which
-17-
shall only occur after all outstanding Loans and Unpaid Drawings with respect to
such Letters of Credit have been paid in full), such amounts shall be paid to
the Administrative Agent under the Credit Agreement and held by it, for the
equal and ratable benefit of the Lender Creditors, as cash security for the
repayment of Obligations owing to the Lender Creditors as such. If any amounts
are held as cash security pursuant to the immediately preceding sentence, then
upon the termination of all outstanding Letters of Credit, and after the
application of all such cash security to the repayment of all Obligations owing
to the Lender Creditors after giving effect to the termination of all such
Letters of Credit, if there remains any excess cash, such excess cash shall be
returned by the Administrative Agent to the Collateral Agent for distribution in
accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be
made (x) if to the Lender Creditors, to the Administrative Agent under the
Credit Agreement for the account of the Lender Creditors, and (y) if to the
Other Creditors, to the trustee, paying agent or other similar representative
(each a "Representative") for the Other Creditors or, in the absence of such a
Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in
accordance with this Section 7.4, the Collateral Agent shall be entitled to rely
upon (i) the Administrative Agent under the Credit Agreement and (ii) the
Representative for the Other Creditors or, in the absence of such a
Representative, upon the Other Creditors for a determination (which the
Administrative Agent, each Representative for any Other Creditors and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Primary Obligations and Secondary
Obligations owed to the Lender Creditors or the Other Creditors, as the case may
be. Unless it has actual knowledge (including by way of written notice from a
Lender Creditor or an Other Creditor) to the contrary, the Administrative Agent
and each Representative, in furnishing information pursuant to the preceding
sentence, and the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Secondary Obligations are outstanding. Unless it has actual
knowledge (including by way of written notice from an Other Creditor) to the
contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume
that no Interest Rate Protection Agreements or Other Hedging Agreements are in
existence.
(g) It is understood that the Assignors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral and the aggregate amount of the Obligations.
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
other Secured Debt Agreements or now or hereafter existing at law, in equity or
by statute and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by the
Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of the exercise of one shall not be deemed a
waiver of the right to exercise any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy and no
renewal or extension of any obligations shall impair any such right, power
-18-
or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Assignor in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover reasonable expenses, including
reasonable attorneys' fees, and the amounts thereof shall be included in such
judgment.
7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity.
(a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, permitted assigns, employees and agents
(hereinafter in this Section 8.1 referred to individually as "Indemnitee," and
collectively as "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including reasonable
attorneys' fees and expenses) (for the purposes of this Section 8.1 the
foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any other Secured Debt Agreement
or any other document executed in connection herewith or therewith or in any
other way connected with the administration of the transactions contemplated
hereby or thereby or the enforcement of any of the terms of, or the preservation
of any rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any
country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that no Indemnitee
shall be indemnified pursuant to this Section 8.1(a) for losses, damages or
liabilities to the extent caused by the gross negligence or willful misconduct
of such Indemnitee (a) determined by a court of competent jurisdiction in a
final and non-appealable decision). Each Assignor agrees that upon written
notice by any Indemnitee of
-19-
the assertion of such a liability, obligation, damage, injury, penalty, claim,
demand, action, suit or judgment, the relevant Assignor shall assume full
responsibility for the defense thereof. Each Indemnitee agrees to use its best
efforts to promptly notify the relevant Assignor of any such assertion of which
such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a)
hereof, each Assignor agrees, jointly and severally, to pay, or reimburse the
Collateral Agent for any and all reasonable fees, costs and expenses of whatever
kind or nature incurred in connection with the creation, preservation or
protection of the Collateral Agent's Liens on, and security interest in, the
Collateral, including, without limitation, all fees and taxes in connection with
the recording or filing of instruments and documents in public offices, payment
or discharge of any taxes or Liens upon or in respect of the Collateral,
premiums for insurance with respect to the Collateral and all other fees, costs
and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or
(b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and
hold each Indemnitee harmless from and against any loss, costs, damages and
expenses which such Indemnitee may suffer, expend or incur in consequence of or
growing out of any misrepresentation by any Assignor in this Agreement, any
other Secured Debt Agreement or in any writing contemplated by or made or
delivered pursuant to or in connection with this Agreement or any other Secured
Debt Agreement.
(d) If and to the extent that the obligations of any
Assignor under this Section 8.1 are unenforceable for any reason, such Assignor
hereby agrees to make the maximum contribution to the payment and satisfaction
of such obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral;
Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement shall constitute Obligations secured by the Collateral.
The indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of the
other Obligations and notwithstanding the full payment of all the Notes issued,
and Loans made under the Credit Agreement, the termination of all Interest Rate
Protection Agreements, Other Hedging Agreements and Letters of Credit and the
payment of all other Obligations and notwithstanding the discharge thereof.
-20-
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Account" shall mean an "account" as defined in the Illinois
UCC.
"Administrative Agent" shall have the meaning provided in the
recitals of this Agreement.
"Agreement" shall mean this Security Agreement as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrower" shall have the meaning provided in the recitals of
this Agreement.
"Cash Collateral Account" shall mean a Deposit Account which
is (i) maintained with, and in the sole dominion and control of, the Collateral
Agent for the benefit of the Secured Creditors, and (ii) is the subject of a
Control Agreement.
"Certificated Security" shall mean a "certificated security"
as defined in the Illinois UCC.
"Chattel Paper" shall mean "chattel paper" as defined in the
Illinois UCC.
"Class" shall have the meaning provided in Section 10.2 of
this Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a)
of this Agreement.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Commodities Accounts" shall mean a "commodity account" as
defined in the Illinois UCC. The term "Commodities Accounts" shall include,
without limitation, all of the accounts listed on Annex H under the heading
"Commodities Accounts" as such annex may be amended or supplemented from time to
time.
"Contract Rights" shall mean all rights of any Assignor under
each Contract, including, without limitation, (i) any and all rights to receive
and demand payments under any or all Contracts, (ii) any and all rights to
receive and compel performance under any or all Contracts and (iii) any and all
other rights, interests and claims now existing or in the future arising in
connection with any or all Contracts.
-21-
"Contracts" shall mean all contracts between any Assignor and
one or more additional parties (including, without limitation, any Interest Rate
Protection Agreements, Other Hedging Agreements, and any partnership agreements,
joint venture agreements and limited liability company agreements), but
excluding any contract to the extent that (but only as long as) the terms
thereof prohibit the assignment of, or granting a security interest in, such
contract (it being understood and agreed, however, (i) that notwithstanding the
foregoing, all rights to payment for money due or to become due pursuant to any
such excluded contract shall be subject to the security interests created by
this Agreement and (ii) such excluded contract shall otherwise be subject to the
security interests created by this Agreement upon receiving any necessary
approvals or waivers permitting the assignment thereof).
"Control Agreement" shall mean, in the case of a Securities
Account, an agreement substantially in the form of Annex H to the Pledge
Agreement, and in the case of a Deposit Account, an agreement substantially in
the form of Annex I to the Pledge Agreement.
"Copyrights" shall mean any United States or foreign copyright
now or hereafter owned by any Assignor, including any registrations of any
Copyrights, in the United States Copyright Office or any foreign equivalent
office, as well as any application for a copyright registration now or hereafter
made with the United States Copyright Office or any foreign equivalent office by
any Assignor.
"Credit Agreement" shall have the meaning provided in the
recitals of this Agreement.
"Credit Document Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Deposit Account" shall mean a "deposit account" as defined in
the Illinois UCC. The term "Deposit Accounts" shall include, without limitation,
all of the accounts listed on Annex H under the heading "Deposit Accounts" as
such schedule may be amended or supplemented from time to time.
"Document" shall mean a "document" as defined in the Illinois
UCC.
"Equipment" shall mean any "equipment," as such term is
defined in the Illinois UCC, now or hereafter owned by any Assignor and, in any
event, shall include, but shall not be limited to, all machinery, equipment,
furnishings, fixtures and vehicles now or hereafter owned by any Assignor and
any and all additions, substitutions and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and
as defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Other Obligations after the
expiration of any applicable grace period.
-22-
"General Intangible" shall mean a "general intangible" as
defined in the Illinois UCC. The term "General Intangibles" shall include,
without limitation, all interest rate or currency protection or hedging
arrangements, all tax refunds, all licenses, permits, concessions and
authorizations, all Contracts, all Intellectual Property, all Payment
Intangibles, all partnership interests, and all limited liability company and
membership interests (in each case, regardless of whether characterized as
general intangibles under the UCC).
"Goods" shall mean "goods" as defined in the Illinois UCC.
"Illinois UCC" shall mean the UCC as in effect in Illinois on
the date hereof.
"Indemnitee" shall have the meaning provided in Section 8.1 of
this Agreement.
"Instrument" shall mean an "instrument" as defined in the
Illinois UCC.
"Insurance" shall mean (i) all insurance policies covering all
Collateral (regardless of whether the Collateral Agent is the loss payee) and
(ii) all key-man life insurance policies.
"Intellectual Property" shall mean all Patents, Copyrights and
Marks of the Assignors or any of them.
"Inventory" shall mean "inventory" as defined in the Illinois
UCC.
"Investment Property" shall mean "investment property" as
defined in the Illinois UCC.
"Investment Related Property" shall mean Investment Property,
and without limitation, shall include all Deposit Accounts (including the
Collateral Account(s)), all Securities Accounts, and all Commodities Accounts
(in each case regardless of whether classified as Investment Property under the
UCC).
"Lender Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Lenders" shall have the meaning provided in the recitals of
this Agreement.
"Letter of Credit Right" shall mean a "Letter of Credit Right"
as defined in the Illinois UCC.
"Liens" shall mean any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
in a financing lease or analogous instrument, in, of, or on any Assignor's
property.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by an Assignor,
which are registered in the United States Patent and
-23-
Trademark Office or the equivalent thereof in any state of the United States or
any foreign equivalent office; as well as any unregistered marks used by any
Assignor and any trade dress including logos, designs, company names, business
names, fictitious business names and other business identifiers used by any
Assignor, excluding, however, from the term "Marks" any United States
Intent-to-Use trademark application prior to the filing and acceptance of a
Statement of Use or an Amendment to allege use in connection therewith to the
extent that a valid security interest may not be taken in such an Intent-to-Use
trademark application under applicable law.
"Money" shall mean Money as defined in the Illinois UCC.
"Non-Assignable Contract" - see Section 1(b) of this
Agreement..
"Non-Assignable Intellectual Property" - see Section 1(b) of
this Agreement.
"Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, Fees
and interest thereon) of each Assignor to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection with the
Credit Agreement and the other Credit Documents to which such Assignor is a
party (including, in the case of each Assignor which is a Subsidiary Guarantor,
all such obligations and indebtedness of such Assignor under the Subsidiaries
Guaranty) and the due performance and compliance by such Assignor with all of
the terms, conditions and agreements contained in the Credit Agreement and in
such other Credit Documents (all such obligations and liabilities under this
clause (i), except to the extent consisting of obligations or indebtedness with
respect to Interest Rate Protection Agreements or Other Hedging Agreements,
being herein collectively called the "Credit Document Obligations"); (ii) the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations and liabilities owing by such
Assignor to the Other Creditors under, or with respect to (including, in the
case of each Assignor which is a Subsidiary Guarantor, by reason of the
Subsidiaries Guaranty), any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereafter arising, and the due performance and
compliance by such Assignor with all of the terms, conditions and agreements
contained therein (all such obligations and liabilities described in this clause
(ii) being herein collectively called the "Other Obligations"); (iii) any and
all sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of such Assignor referred to in clauses (i) and (ii) above, after
an Event of Default shall have occurred and be continuing, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement; it being acknowledged and agreed that the "Obligations" shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or extended from time to time after the date of this
Agreement.
-24-
"Other Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean all right, title and interest in and to
any United States or non-United States patent to which any Assignor now or
hereafter has title and any divisions continuations, reissues or reexaminations
thereof, as well as any application for a patent now or hereafter made or
acquired by any Assignor.
"Payment Intangible" shall mean a "payment intangible" as
defined in the Illinois UCC.
"Permits" shall mean, to the extent permitted to be assigned
by the terms thereof or by applicable law, all licenses, permits, rights,
orders, variances, franchises or authorizations of or from any governmental
authority or agency.
"Primary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds" shall mean "proceeds" as defined in the Illinois
UCC. Proceeds shall include, but not be limited to, (i) any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to the Collateral Agent
or any Assignor from time to time with respect to any of the Collateral, (ii)
any and all payments (in any form whatsoever) made or due and payable to any
Assignor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any person acting under color of governmental
authority) and (iii) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Proprietary Information" shall mean all information and
know-how worldwide, including, without limitation, data collections; technical
data; manufacturing data; research and development data; data relating to
compositions, processes and formulations, manufacturing and production know-how
and experience; management know-how; training programs; manufacturing,
engineering and other drawings; specifications; performance criteria; operating
instructions; maintenance manuals; technology; technical information; software;
engineering and computer data and databases; design and engineering
specifications; catalogs; financial, business and marketing plans; inventions
and invention disclosures.
"Receivables" shall mean all Accounts, all Chattel Paper, and
all Payment Intangibles, now or hereafter owned by any Assignor and, in any
event, shall include all Supporting Obligations, including without limitation
all of such Assignor's rights to payment for goods sold or leased or services
performed by such Assignor, whether now in existence or arising from time to
time hereafter, including, without limitation, rights evidenced by an account,
note,
-25-
contract, security agreement, chattel paper, or other evidence of indebtedness
or security, together with (a) all security pledged, assigned, hypothecated or
granted to or held by such Assignor to secure the foregoing, (b) all of any
Assignor's right, title and interest in and to any goods, the sale of which gave
rise thereto, (c) all guarantees, endorsements and indemnifications on, or of,
any of the foregoing, (d) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in connection therewith,
(e) all books, records, ledger cards, and invoices relating thereto, (f) all
evidences of the filing of financing statements and other statements and the
registration of other instruments in connection therewith and amendments
thereto, notices to other creditors or secured parties, and certificates from
filing or other registration officers, (g) all credit information, reports and
memoranda relating thereto and (h) all other writings related in any way to the
foregoing.
"Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.
"Required Secured Creditors" shall mean (i) the Required
Lenders (or, to the extent required by Section 13.12 of the Credit Agreement,
each of the Lenders) under the Credit Agreement so long as any Credit Document
Obligations remain outstanding and (ii) in any situation not covered by the
preceding clause (i), the holders of a majority of the outstanding principal
amount of the Other Obligations.
"Requisite Creditors" shall have the meaning provided in
Section 10.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Secured Debt Agreements" shall mean and include this
Agreement, the other Credit Documents and the Interest Rate Protection
Agreements and Other Hedging Agreements.
"Securities Account" shall mean a "securities account" as
defined in the Illinois UCC. The term "Securities Accounts" shall include,
without limitation, all of the accounts listed on Annex H under the heading
"Securities Accounts" (as such schedule may be amended or supplemented from time
to time).
"Securities Entitlement" shall mean a "securities entitlement"
as defined in the Illinois UCC.
"Supporting Obligation" shall mean a "supporting obligation"
as defined in the Illinois UCC.
"Termination Date" shall have the meaning provided in Section
10.8 of this Agreement.
-26-
"Trade Secrets" means any secretly held existing engineering
and other data, information, production procedures and other know-how relating
to the design, manufacture, assembly, installation, use, operation, marketing,
sale and servicing of any products or business of an Assignor worldwide whether
written or not written.
"Trade Secret Rights" shall mean the rights of an Assignor in
any Trade Secret it holds.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction.
"Uncertificated Security" shall mean an "uncertificated
security" as defined in the Illinois UCC.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy,
cable or overnight courier service and all such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier and when mailed shall be effective three Business
Days following deposit in the mail with proper postage, except that notices and
communications to the Collateral Agent or any Assignor shall not be effective
until received by the Collateral Agent or such Assignor, as the case may be. All
notices and other communications shall be in writing and addressed as follows:
(a) if to any Assignor, at:
c/o infoUSA Inc.
5711 South 86th Circle
Omaha, Nebraska 68127
Attention: Chief Financial Officer
Telephone No.: (402) 593-4500
Telecopier No.: (402) 331-1505
(b) if to the Collateral Agent, at:
Bank of America, N.A.
231 South LaSalle Street
Chicago, Illinois 60697
Attention: David Johanson
Tel. No.: (312) 828-7933
Fax. No.: (312) 974-9102;
-27-
(c) if to any Lender Creditor, at such address as such
Lender Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such
Other Creditor shall have specified in writing to each Assignor and the
Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. None of the terms and conditions
of this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly effected
thereby and the Collateral Agent (with the written consent of the Required
Secured Creditors); provided, however, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors of such affected Class.
For the purpose of this Agreement, the term "Class" shall mean each class of
Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the
Credit Document Obligations or (y) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Lenders and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the respective Interest Rate Protection Agreements or
Other Hedging Agreements.
10.3. Obligations Absolute. The obligations of each
Assignor hereunder shall remain in full force and effect without regard to, and
shall not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy,
power or privilege under or in respect of this Agreement or any other Secured
Debt Agreement; or (c) any amendment to or modification of any Secured Debt
Agreement or any security for any of the Obligations; whether or not such
Assignor shall have notice or knowledge of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be
binding upon each Assignor and its successors and assigns (although no Assignor
may assign its rights and obligations hereunder) and shall inure to the benefit
of the Collateral Agent and the Secured Creditors and their respective
successors and assigns. All agreements, statements, representations and
warranties made by each Assignor herein or in any certificate or other
instrument delivered by such Assignor or on its behalf under this Agreement
shall be considered to have been relied upon by the Secured Creditors and shall
survive the execution and delivery of this Agreement and the other Secured Debt
Agreements regardless of any investigation made by the Secured Creditors or on
their behalf.
10.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
-28-
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF ILLINOIS.
10.7. Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any
Assignor under or with respect to any Collateral.
10.8. Termination; Release.
(a) After the Termination Date, this Agreement shall
terminate (provided that all indemnities set forth herein including, without
limitation, in Section 8.1 hereof shall survive such termination) and the
Collateral Agent, at the request and expense of the respective Assignor, will
promptly execute and deliver to such Assignor a proper instrument or instruments
(including Uniform Commercial Code termination statements on form UCC-3)
acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitment and all
Interest Rate Protection Agreements and Other Hedging Agreements have been
terminated, no Note is outstanding (and all Loans have been repaid in full), all
Letters of Credit have been terminated and all Obligations then due and payable
have been paid in full.
(b) In the event that any part of the Collateral is sold
in connection with a sale permitted by Section 10.02 of the Credit Agreement
(other than a sale to any Assignor or a Subsidiary thereof) or otherwise
released at the direction of the Required Secured Creditors and the proceeds of
such sale or sales or from such release are applied in accordance with the
provisions of the Credit Agreement, to the extent required to be so applied,
such Collateral will be sold free and clear of the Liens created by this
Agreement and the Collateral Agent, at the request and expense of the relevant
Assignor, will duly and promptly assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
the possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement.
(c) At any time that an Assignor desires that the
Collateral Agent take any action to acknowledge or give effect to any release of
Collateral pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall
deliver to the Collateral Agent a certificate signed by a senior officer of such
Assignor stating that the release of the respective Collateral is permitted
pursuant to Section 10.8(a) or (b).
10.9. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so
-29-
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with each Assignor and the Collateral Agent.
10.10. 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.
10.11. The Collateral Agent. The Collateral Agent will hold
in accordance with this Agreement all items of the Collateral at any time
received under this Agreement. It is expressly understood and agreed that the
obligations of the Collateral Agent as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement and in Section
12 of the Credit Agreement. The Collateral Agent shall act hereunder and
thereunder on the terms and conditions set forth herein and in Section 12 of the
Credit Agreement.
10.12. Benefit of Agreement. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of and be enforceable by each of the parties hereto and its
successors and assigns.
10.13. Additional Assignors. It is understood and agreed
that any Subsidiary of the Borrower that is required to execute a counterpart of
this Agreement after the date hereof pursuant to the Credit Agreement shall
become an Assignor hereunder by executing a counterpart hereof and delivering
the same to the Collateral Agent (it being understood that in connection
therewith, such Subsidiary shall supplement Annexes A through H with information
pertaining to such Subsidiary).
* * *
-30-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
INFOUSA INC., as an Assignor
By ______________________________________
Title: Chief Financial Officer
AMERICAN CHURCH LISTS, INC.,
BJ HUNTER INFORMATION, INC.,
CD-ROM TECHNOLOGIES, INC.,
CITY DIRECTORIES, INC.,
CLICKACTION INC.,
DONNELLEY MARKETING, INC.,
HILL-DONNELLY CORPORATION
IDEXEC, INC.,
INFOUSA MARKETING, INC.,
LIST BAZAAR.COM, INC.,
STRATEGIC INFORMATION MANAGEMENT, INC.,
TGMVC CORPORATION
WALTER KARL, INC.,
YESMAIL, INC.
each as an Assignor
By ______________________________________
Title: Chief Financial Officer of each
Signature Page
to
Security Agreement
Accepted and Agreed to:
BANK OF AMERICA, N.A.,
as Collateral Agent
By ________________________
Title: Vice President
Signature Page
to
Security Agreement