EXHIBIT 10.36
EXECUTION COPY
COLLATERAL AGREEMENT,
dated as of November 10, 2005,
by and among
CROSS COUNTRY HEALTHCARE, INC.,
and certain of its Subsidiaries,
as Grantors,
in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINED TERMS........................................................1
Section 1.1 Terms Defined in the Uniform
Commercial Code..........................1
Section 1.2 Definitions................................2
Section 1.3 Other Definitional Provisions..............5
ARTICLE II SECURITY INTEREST...................................................6
Section 2.1 Grant of Security Interest.................6
Section 2.2 Grantors Remain Liable.....................7
ARTICLE III REPRESENTATIONS AND WARRANTIES.....................................7
Section 3.1 Existence..................................7
Section 3.2 Authorization of Agreement; No Conflict....8
Section 3.3 Consents...................................8
Section 3.4 Perfected First Priority Liens.............8
Section 3.5 Title, No Other Liens......................9
Section 3.6 State of Organization; Location of
Inventory, Equipment and Fixtures;
other Information........................9
Section 3.7 Accounts...................................9
Section 3.8 Chattel Paper.............................10
Section 3.9 Commercial Tort Claims....................10
Section 3.10 Deposit Accounts..........................10
Section 3.11 Intellectual Property.....................10
Section 3.12 Inventory.................................10
Section 3.13 Investment Property;
Partnership/LLC Interests...............10
Section 3.14 Instruments...............................11
Section 3.15 Farm Products.............................11
Section 3.16 Government Contracts......................11
ARTICLE IV COVENANTS..........................................................11
Section 4.1 Maintenance of Perfected Security
Interest; Further Information...........11
Section 4.2 Maintenance of Insurance..................11
Section 4.3 Changes in Locations; Changes in Name
or Structure............................12
Section 4.4 Required Notifications....................13
Section 4.5 Delivery Covenants........................13
Section 4.6 Control Covenants.........................13
Section 4.7 Filing Covenants..........................14
Section 4.8 Accounts..................................14
Section 4.9 Intellectual Property.....................15
Section 4.10 Investment Property; Partnership/
LLC Interests...........................16
Section 4.11 Equipment.................................16
Section 4.12 Vehicles..................................16
Section 4.13 Government Contracts......................17
Section 4.14 Further Assurances........................17
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ARTICLE V REMEDIAL PROVISIONS.................................................17
Section 5.1 General Remedies..........................17
Section 5.2 Specific Remedies.........................18
Section 5.3 Registration Rights.......................20
Section 5.4 Application of Proceeds...................21
Section 5.5 Waiver, Deficiency........................21
ARTICLE VI THE ADMINISTRATIVE AGENT...........................................21
Section 6.1 Administrative Agent's Appointment
as Attorney-In-Fact.....................21
Section 6.2 Duty of Administrative Agent..............23
Section 6.3 Authority of Administrative Agent.........24
ARTICLE VII MISCELLANEOUS.....................................................24
Section 7.1 Amendments in Writing.....................24
Section 7.2 Notices...................................24
Section 7.3 No Waiver by Course of Conduct,
Cumulative Remedies.....................24
Section 7.4 Enforcement Expenses, Indemnification.....24
Section 7.5 Waiver of Jury Trial......................25
Section 7.6 Successors and Assigns....................25
Section 7.7 Set-Off...................................25
Section 7.8 Counterparts..............................26
Section 7.9 Severability..............................26
Section 7.10 Section Heading...........................26
Section 7.11 Integration...............................26
Section 7.12 Governing Law.............................26
Section 7.13 Consent to Jurisdiction...................26
Section 7.14 Acknowledgements..........................27
Section 7.15 Additional Grantors.......................27
Section 7.16 Releases..................................27
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SCHEDULES:
Schedule 3.6 Exact Legal Name; Jurisdiction of Organization;
Taxpayer Identification Number; Registered
Organization Number; Mailing Address; Chief
Executive Office and other Locations
Schedule 3.9 Commercial Tort Claims
Schedule 3.10 Deposit Accounts
Schedule 3.11 Intellectual Property
Schedule 3.13 Investment Property and Partnership/LLC Interests
Schedule 3.14 Instruments
Schedule 3.16 Government Contracts
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COLLATERAL AGREEMENT (this "Agreement"), dated as of November 10, 2005,
by and among CROSS COUNTRY HEALTHCARE, INC., a Delaware corporation (the
"Borrower"), certain of its Subsidiaries as identified on the signature pages
hereto and any Additional Grantor (as defined below) who may become party to
this Agreement (such Subsidiaries and Additional Grantors, collectively, with
the Borrower, the "Grantors"), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent (in such capacity, the "Administrative Agent") for the
ratable benefit of the banks and other financial institutions (the "Lenders")
from time to time parties to the Credit Agreement, dated as of the date hereof
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among the Borrower, the Lenders, and the
Administrative Agent.
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement, the Lenders have agreed to make
Extensions of Credit to the Borrower upon the terms and subject to the
conditions set forth therein.
Pursuant to the terms of the Subsidiary Guaranty Agreement of even
date, certain Subsidiaries of the Borrower who are parties hereto have
guaranteed the payment and performance of the Obligations.
It is a condition precedent to the obligation of the Lenders to make
their respective Extensions of Credit to the Borrower under the Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent, for the ratable benefit of itself and the Lenders.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, and to
induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Extensions of
Credit to the Borrower thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of itself and the Lenders, as
follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 Terms Defined in the Uniform Commercial Code.
(a) The following terms when used in this Agreement shall have the
meanings assigned to them in the UCC (as defined in the Credit Agreement) as in
effect from time to time: "Account", "Account Debtor", "Authenticate",
"Certificated Security", "Chattel Paper", "Commercial Tort Claims", "Deposit
Account", "Documents", "Electronic Chattel Paper", "Equipment", "Farm Products"
"Fixture", "General Intangible", "Instrument", "Inventory", "Investment Company
Security", "Investment Property", "Letter of Credit Rights", "Proceeds",
"Record", "Registered Organization", "Security", "Securities Entitlement",
"Securities Intermediary", "Securities Account", "Supporting Obligation",
"Tangible Chattel Paper", and "Uncertificated Security".
(b) Terms defined in the UCC and not otherwise defined herein or in the
Credit Agreement shall have the meaning assigned in the UCC as in effect from
time to time.
SECTION 1.2 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Additional Grantor" means each Subsidiary of the Borrower which
hereafter becomes a Grantor pursuant to Section 7.15 (as required pursuant to
Section 9.11 of the Credit Agreement).
"Agreement" means this Collateral Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Insolvency Laws" means all Applicable Laws governing
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Sections 547, 548 and 550 and
other "avoidance" provisions of Title 11 of the United States Code).
"Assignment of Claims Act" means the Assignment of Claims Act of 1940
(41 U.S.C. Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727),
including all amendments thereto and regulations promulgated thereunder.
"Collateral" has the meaning assigned thereto in Section 2.1.
"Collateral Account" means any collateral account established by the
Administrative Agent as provided in Section 5.2.
"Control" means the manner in which "control" is achieved under the UCC
with respect to any Collateral for which the UCC specifies a method of achieving
"control".
"Controlled Depository" has the meaning assigned thereto in Section
4.6.
"Controlled Intermediary" has the meaning assigned thereto in Section
4.6.
"Copyrights" means collectively, all of the following of any Grantor:
(a) all copyrights, rights and interests in copyrights, works protectable by
copyright, copyright registrations and copyright applications anywhere in the
world, including, without limitation, those listed on Schedule 3.11 hereto, (b)
all reissues, extensions, continuations (in whole or in part) and renewals of
any of the foregoing, (c) all income, royalties, damages and payments now or
hereafter due and/or payable under any of the foregoing or with respect to any
of the foregoing, including, without limitation, damages or payments for past or
future infringements of any of the foregoing, (d) the right to sue for past,
present and future infringements of any of the foregoing and (e) all rights
corresponding to any of the foregoing throughout the world.
"Copyright Licenses" means any written agreement naming any Grantor as
licensor or licensee, including, without limitation, those listed in Schedule
3.11, granting any right under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell materials derived
from any Copyright.
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"Effective Endorsement and Assignment" means, with respect to any
specific type of Collateral, all such endorsements, assignments and other
instruments of transfer reasonably requested by the Administrative Agent with
respect to the Security Interest granted in such Collateral, and in each case,
in form and substance satisfactory to the Administrative Agent.
"Excluded Deposit Account" means, collectively, (a) Deposit Accounts
established solely for the purpose of funding payroll and other compensation and
benefits to employees and (b) so long as no Default or Event of Default has
occurred and is continuing, Deposit Accounts (other than the Collection Account)
with amounts on deposit that, when aggregated with the amounts on deposit in all
other Deposit Accounts for which a control agreement has not been obtained
(other than those specified in clause (a)), do not exceed $50,000.
"Government Contract" means a contract between any Grantor and an
agency, department or instrumentality of the United States or any state,
municipal or local Governmental Authority located in the United States or all
obligations of any such Governmental Authority arising under any Account now or
hereafter owing by any such Governmental Authority, as account debtor, to any
Grantor.
"Grantors" has the meaning set forth in the Preamble of this Agreement.
"Intellectual Property" means, collectively, all of the following of
any Grantor: (a) all systems software, applications software and internet
rights, including, without limitation, screen displays and formats, internet
domain names, web sites (including web links), program structures, sequence and
organization, all documentation for such software, including, without
limitation, user manuals, flowcharts, programmer's notes, functional
specifications, and operations manuals, all formulas, processes, ideas and
know-how embodied in any of the foregoing, and all program materials,
flowcharts, notes and outlines created in connection with any of the foregoing,
whether or not patentable or copyrightable, (b) concepts, discoveries,
improvements and ideas, (c) any useful information relating to the items
described in clause (a) or (b), including know-how, technology, engineering
drawings, reports, design information, trade secrets, practices, laboratory
notebooks, specifications, test procedures, maintenance manuals, research,
development, manufacturing, marketing, merchandising, selling, purchasing and
accounting, (d) Patents and Patent Licenses, Copyrights and Copyright Licenses,
and Trademarks and Trademark Licenses, and (e) other licenses to use any of the
items described in the foregoing clauses (a), (b), (c) and (d) or any other
similar items of such Grantor necessary for the conduct of its business.
"Issuer" means any issuer of any Investment Property or Partnership/LLC
Interests (including, without limitation, any Issuer as defined in the UCC).
"Obligations" means with respect to the Borrower, the meaning assigned
thereto in the Credit Agreement, and with respect to each Subsidiary Guarantor,
the obligations of such Subsidiary Guarantor under the Subsidiary Guaranty
Agreement executed by such Subsidiary Guarantor and with respect to all
Grantors, all liabilities and obligations of the Grantors hereunder and all
liabilities and obligations of the Grantors with respect to overdrafts, returned
items and related liabilities and all indemnification obligations under the Loan
Documents now or hereafter owing by any Grantor to Wachovia Bank, National
Association, any Affiliate thereof or the Administrative Agent arising from or
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in connection with treasury, depositary or cash management services or in
connection with any automated clearinghouse transfer of funds for the benefit of
such Grantor.
"Partnership/LLC Interests" means, with respect to any Grantor, the
entire partnership, membership interest or limited liability company interest,
as applicable, of such Grantor in each partnership, limited partnership or
limited liability company owned thereby, including, without limitation, such
Grantor's capital account, its interest as a partner or member, as applicable,
in the net cash flow, net profit and net loss, and items of income, gain, loss,
deduction and credit of any such partnership, limited partnership or limited
liability company, as applicable, such Grantor's interest in all distributions
made or to be made by any such partnership, limited partnership or limited
liability company, as applicable, to such Grantor and all of the other economic
rights, titles and interests of such Grantor as a partner or member, as
applicable, of any such partnership, limited partnership or limited liability
company, as applicable, whether set forth in the partnership agreement or
membership agreement, as applicable, of such partnership, limited partnership or
limited liability company, as applicable, by separate agreement or otherwise.
"Patents" means collectively, all of the following of any Grantor: (a)
all patents, rights and interests in patents, patentable inventions and patent
applications anywhere in the world, including, without limitation, those listed
on Schedule 3.11 hereto, (b) all reissues, extensions, continuations (in whole
or in part) and renewals of any of the foregoing, (c) all income, royalties,
damages or payments now or hereafter due and/or payable under any of the
foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of the
foregoing, (d) the right to sue for past, present and future infringements of
any of the foregoing and (e) all rights corresponding to any of the foregoing
throughout the world.
"Patent License" means all agreements now or hereafter in existence,
whether written, implied or oral, providing for the grant by or to any Grantor
of any right to manufacture, use or sell any invention covered in whole or in
part by a Patent, including, without limitation, any of the foregoing referred
to in Schedule 3.11 hereto.
"Restricted Securities Collateral" has the meaning assigned thereto in
Section 5.3.
"Securities Act" means the Securities Act of 1933, including all
amendments thereto and regulations promulgated thereunder.
"Security Interests" means the security interests granted pursuant to
Article II, as well as all other security interests created or assigned as
additional security for the Obligations pursuant to the provisions of the Credit
Agreement.
"Trademarks" means collectively all of the following of any Grantor:
(a) all trademarks, rights and interests in trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on which any
of the foregoing have appeared or appear, whether registered or unregistered,
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all registrations and recordings thereof, and all applications in connection
therewith (other than each application to register any trademark or service mark
prior to the filing under Applicable Law of a verified statement of use for such
mark) anywhere in the world, including, without limitation, those listed on
Schedule 3.11 hereto, (b) all reissues, extensions, continuations (in whole or
in part) and renewals of any of the foregoing, (c) all income, royalties,
damages and payments now or hereafter due and/or payable under any of the
foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of the
foregoing, (d) the right to sue for past, present and future infringements of
any of the foregoing and (e) all rights corresponding to any of the foregoing
(including the goodwill) throughout the world.
"Trademark License" means any agreement now or hereafter in existence,
whether written or oral, providing for the grant by or to any Grantor of any
right to use any Trademark, including, without limitation, any of the foregoing
referred to in Schedule 3.11.
"Vehicles" means all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title under the
laws of any state, all tires and all other appurtenances to any of the
foregoing.
SECTION 1.3 Other Definitional Provisions. Terms defined in the Credit
Agreement and not otherwise defined herein shall have the meaning assigned
thereto in the Credit Agreement. With reference to this Agreement and each other
Loan Document, unless otherwise specified herein or in such other Loan Document:
(a) the definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined, (b) whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms,
(c) the words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation", (d) the word "will" shall be
construed to have the same meaning and effect as the word "shall", (e) any
definition of or reference to any agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(f) any reference herein to any Person shall be construed to include such
Person's permitted successors and assigns, (g) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (h) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (i) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights,
(j) in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including", (k) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document and (l) where the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor's Collateral or the
relevant part thereof.
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ARTICLE II
SECURITY INTEREST
SECTION 2.1 Grant of Security Interest. Each Grantor hereby grants,
pledges and collaterally assigns to the Administrative Agent, for the ratable
benefit of itself and the Lenders, a security interest in, all of such Grantor's
right, title and interest in the following property, now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest, and wherever
located or deemed located (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations:
(a) all Accounts;
(b) all cash and currency;
(c) all Chattel Paper;
(d) all Commercial Tort Claims identified on Schedule 3.9.;
(e) all Deposit Accounts;
(f) all Documents;
(g) all Equipment;
(h) all Fixtures;
(i) all General Intangibles;
(j) all Instruments;
(k) all Intellectual Property;
(l) all Inventory;
(m) all Investment Property;
(n) all Letter of Credit Rights;
(o) all Vehicles;
(p) all other personal property not otherwise described above;
(q) all books and records pertaining to the Collateral; and
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(r) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and Supporting
Obligations (as now or hereafter defined in the UCC) given by any Person with
respect to any of the foregoing;
provided, that (i) any Security Interest on any Capital Stock or other ownership
interests issued by any Foreign Subsidiary shall be limited to 65% of all issued
and outstanding shares of all classes of Capital Stock of such Foreign
Subsidiary, (ii) the Security Interests granted herein shall not extend to, and
the term "Collateral" shall not include, any rights under any lease, contract or
agreement (including, without limitation, any license for Intellectual Property)
to the extent that the granting of a security interest therein is specifically
prohibited in writing by, or would constitute an event of default under or would
grant a party a termination right under any agreement governing such right
unless such prohibition is not enforceable or is otherwise ineffective under
Applicable Law. Notwithstanding any of the foregoing, such proviso shall not
affect, limit, restrict or impair the grant by any Grantor of a Security
Interest in any Account or any money or other amounts due and payable to any
Grantor or to become due and payable to any Grantor under such lease, contract
or agreement.
Notwithstanding the foregoing, the payment and performance of the
Obligations shall not be secured by any Hedging Agreement between any Grantor
and the Administrative Agent or any Lender or any Affiliate of the
Administrative Agent or any Lender.
SECTION 2.2 Grantors Remain Liable. Anything herein to the contrary
notwithstanding: (a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by Administrative Agent of any
of the rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, (c)
neither the Administrative Agent nor any Lender shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Administrative Agent or any Lender be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder, and (d) neither the Administrative Agent nor any Lender shall have
any liability in contract or tort for any Grantor's acts or omissions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective Extensions
of Credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
SECTION 3.1 Existence. Each Grantor is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
formation, has the requisite power and authority to own its properties and to
carry on its business as now being conducted and is duly qualified and
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authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification and
authorization except in jurisdictions where the failure to be so qualified or in
good standing could not reasonably be expected to have a Material Adverse
Effect.
SECTION 3.2 Authorization of Agreement; No Conflict. Each Grantor has
the right, power and authority and has taken all necessary corporate and other
action to authorize the execution, delivery and performance of, this Agreement.
This Agreement has been duly executed and delivered by the duly authorized
officers of each Grantor and this Agreement constitutes the legal, valid and
binding obligation of the Grantors enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors' rights in
general and the availability of equitable remedies. The execution, delivery and
performance by the Grantors of this Agreement will not, by the passage of time,
the giving of notice or otherwise, violate any material provision of any
Applicable Law or Material Contract which could reasonably be expected to have a
Material Adverse Effect, and will not result in the creation or imposition of
any Lien, other than the Security Interests, upon or with respect to any
property or revenues of any Grantor.
SECTION 3.3 Consents. No approval, consent, exemption, authorization or
other action by, or notice to, or filing with, any Governmental Authority or any
other Person is necessary or required in connection with the execution, delivery
or performance by, or enforcement against, any Grantor of this Agreement, except
(a) as may be required by laws affecting the offering and sale of securities
generally, (b) filings with the United States Copyright Office and/or the United
States Patent and Trademark Office, (c) filings under the UCC and/or the
Assignment of Claims Act and (d) as may be required with respect to Vehicles
represented by a certificate of title.
SECTION 3.4 Perfected First Priority Liens. Each financing statement
naming any Grantor as a debtor is in appropriate form for filing in the
appropriate filing offices of the states specified on Schedule 3.6. The Security
Interests granted pursuant to this Agreement (a) constitute valid security
interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of itself and the Lenders, as collateral security for the
Obligations, and (b): (1) when UCC financing statements containing an adequate
description of the Collateral shall have been filed in the offices specified in
Schedule 3.6, the Security Interests will constitute perfected security
interests in all right, title and interest of such Grantor in the Collateral to
the extent that a security interest therein may be perfected by filing pursuant
to the UCC, prior to all other Liens and rights of others therein except for
Permitted Liens; (2) when each Patent and Trademark security agreement has been
filed with the United States Patent and Trademark Office, the Security Interests
will constitute perfected security interests in all right, title and interest of
such Grantor in the Intellectual Property therein described, prior to all other
Liens and rights of others therein except for Permitted Liens; and (3) when each
control agreement has been executed and delivered to the Administrative Agent,
the Security Interests will constitute perfected security interests in all
right, title and interest of the Grantors in the Deposit Accounts and Securities
Accounts, as applicable, subject thereto, prior to all other Liens and rights of
others therein and subject to no adverse claims except for Permitted Liens.
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SECTION 3.5 Title, No Other Liens. Except for the Security Interests,
each Grantor owns each item of the Collateral free and clear of any and all
Liens or claims other than Permitted Liens. No financing statement under the UCC
of any state which names a Grantor as debtor or other public notice with respect
to all or any part of the Collateral is on file or of record in any public
office, except such as have been filed in favor of the Administrative Agent, for
the ratable benefit of itself and the Lenders, pursuant to this Agreement or in
connection with Permitted Liens. No Collateral is in the possession or Control
of any Person asserting any claim thereto or security interest therein, except
that (a) the Administrative Agent or its designee may have possession or Control
of Collateral as contemplated hereby, (b) a depositary bank may have Control of
a Deposit Account owned by a Grantor at such depositary bank and a Securities
Intermediary may have Control over a Securities Account owned by a Grantor at
such Securities Intermediary, in each case subject to the terms of any Deposit
Account control agreement or Securities Account control agreement, as applicable
and to the extent required by Section 4, in favor of the Administrative Agent,
and (c) a bailee, consignee or other Person may have possession of the
Collateral as contemplated by, and so long as, the applicable Grantors have
complied to the satisfaction of the Administrative Agent with the applicable
provisions of Section 4.6(c).
SECTION 3.6 State of Organization; Location of Inventory, Equipment and
Fixtures; other Information.
(a) The exact legal name of each Grantor is set forth on Schedule 3.6.
(b) Each Grantor is a Registered Organization organized under the laws
of the state identified on Schedule 3.6 under such Grantor's name. The taxpayer
identification number and Registered Organization number of each Grantor is set
forth on Schedule 3.6 under such Grantor's name.
(c) All Collateral consisting of Inventory, Equipment and Fixtures
(whether now owned of hereafter acquired) is (or will be) located at the
locations specified on Schedule 3.6, except as otherwise permitted hereunder.
(d) The mailing address, chief place of business, chief executive
office and office where each Grantor keeps its books and records relating to the
Accounts, Documents, General Intangibles, Instruments and Investment Property in
which it has any interest is located at the locations specified on Schedule 3.6
under such Grantor's name. No Grantor has any other places of business except
those separately set forth on Schedule 3.6 under such Grantor's name. No Grantor
does business nor has done business during the past five years under any trade
name or fictitious business name except as disclosed on Schedule 3.6 under such
Grantor's name. Except as disclosed on Schedule 3.6 under such Grantor's name,
no Grantor has acquired assets from any Person, other than assets acquired in
the ordinary course of such Grantor's business, during the past five years.
SECTION 3.7 Accounts. Each existing Account constitutes, and each
hereafter arising Account will constitute, the legally valid and binding
obligation of the applicable Account Debtor. The amount represented by each
Grantor to the Administrative Agent as owing by each Account Debtor is, or will
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be, the correct amount actually and unconditionally owing, except for ordinary
course cash discounts and allowances where applicable. To the knowledge of each
Grantor, no Account Debtor has any defense, set-off, claim or counterclaim
against any Grantor that can be asserted against the Administrative Agent,
whether in any proceeding to enforce Administrative Agent's rights in the
Collateral or otherwise except defenses, setoffs, claims or counterclaims that
are not, in the aggregate, material to the value of the Accounts. None of the
Accounts is, nor will any hereafter arising Account be, evidenced by a
promissory note or other Instrument other than a check that has not been pledged
to the Administrative Agent in accordance with the terms hereof.
SECTION 3.8 Chattel Paper. As of the date hereof, no Grantor holds any
Chattel Paper in the ordinary course of its business.
SECTION 3.9 Commercial Tort Claims. As of the date hereof, all
Commercial Tort Claims owned by any Grantor are listed on Schedule 3.9.
SECTION 3.10 Deposit Accounts. As of the date hereof, all Deposit
Accounts (including, without limitation, cash management accounts that are
Deposit Accounts), securities accounts and lockboxes including the: (a) owner of
the account, (b) name and address of financial institution or securities broker
where such accounts are located, (c) account numbers and (d) purpose or use of
such account owned by any Grantor are listed on Schedule 3.10.
SECTION 3.11 Intellectual Property.
(a) As of the date hereof, all Copyright registrations, Copyright
applications, issued Patents, Patent applications, Trademark registrations and
Trademark applications owned by any Grantor in its own name on the date hereof
is listed on Schedule 3.11.
(b) Except as set forth in Schedule 3.11 on the date hereof, none of
the Intellectual Property owned by any Grantor is the subject of any written
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor, except as could not reasonably be expected to have a Material
Adverse Effect.
SECTION 3.12 Inventory. Collateral consisting of Inventory is of good
and merchantable quality, free from any material defects. To the knowledge of
each Grantor, none of such Inventory is subject to any licensing, Patent,
Trademark, trade name or Copyright with any Person that restricts any Grantor's
ability to manufacture and/or sell such Inventory. The completion of the
manufacturing process of such Inventory by a Person other than the applicable
Grantor would be permitted under any contract to which such Grantor is a party
or to which the Inventory is subject.
SECTION 3.13 Investment Property; Partnership/LLC Interests.
(a) As of the date hereof, all Investment Property (including, without
limitation, Securities Accounts and cash management accounts that are Investment
Property) and all Partnership/LLC Interests owned by any Grantor is listed on
Schedule 3.13.
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(b) All Investment Property and all Partnership/LLC Interests issued by
any Issuer to any Grantor (i) have been duly and validly issued and, if
applicable, are fully paid and nonassessable, (ii) are beneficially owned as of
record by such Grantor and (iii) constitute all the issued and outstanding
shares of all classes of the capital stock of such Issuer issued to such
Grantor.
(c) None of the Partnership/LLC Interests (i) are traded on a
Securities exchange or in Securities markets, (ii) by their terms expressly
provide that they are Securities governed by Article 8 of the UCC, (iii) are
Investment Company Securities or (iv) are held in a Securities Account.
SECTION 3.14 Instruments.
Except as set forth on Schedule 3.14 hereto, as of the date hereof, no
Grantor holds any Instruments or is named a payee of any promissory note or
other evidence of indebtedness.
SECTION 3.15 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
SECTION 3.16 Government Contracts. Except as set forth on Schedule 3.16
hereto, as of the date hereof, no Grantor is party to any contract with a
Governmental Authority under which such Governmental Authority, as account
debtor, owes a monetary obligation to any Grantor under any account.
ARTICLE IV
COVENANTS
Until the Obligations shall have been paid in full and the Commitments
terminated, unless consent has been obtained in the manner provided for in
Section 7.1, each Grantor covenants and agrees that:
SECTION 4.1 Maintenance of Perfected Security Interest; Further
Information.
(a) Each Grantor shall maintain the Security Interest created by this
Agreement as a first priority perfected Security Interest (other than Permitted
Liens) and shall defend such Security Interest against the claims and demands of
all Persons whomsoever (other than Permitted Liens).
(b) Each Grantor will furnish to the Administrative Agent upon the
Administrative Agent's reasonable request and the Lenders from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Administrative Agent may reasonably request, all in reasonable detail.
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SECTION 4.2 Maintenance of Insurance.
(a) Each Grantor will maintain, with financially sound and reputable
companies, insurance policies or provide for self-insurance (i) insuring the
Collateral against loss by fire, explosion, theft, fraud and such other
casualties, including business interruption, as may be reasonably satisfactory
to the Administrative Agent in amounts and with deductibles at least as
favorable as those generally maintained by businesses of similar size engaged in
similar activities and (ii) insuring such Grantor and the Administrative Agent,
for the ratable benefit of the Lenders, against liability for hazards, risks and
liability to persons and property relating to the Collateral, in amounts and
with deductibles at least as favorable as those generally maintained by
businesses of similar size engaged in similar activities, such policies to be in
such form and having such coverage as may be reasonably satisfactory to the
Administrative Agent and the Lenders.
(b) All such insurance shall (i) name the Administrative Agent for the
ratable benefit of itself and the Lenders as loss payee (to the extent covering
risk of loss or damage to tangible property) and as an additional insured as its
interests may appear (to the extent covering any other risk), (ii) provide that
no cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least thirty (30) days after receipt by the
Administrative Agent of written notice thereof and (iii) be reasonably
satisfactory in all other respects to the Administrative Agent.
(c) Upon the request of the Administrative Agent from time to time,
each Grantor shall deliver to the Administrative Agent and the Lenders periodic
information from a reputable insurance broker with respect to the insurance
referred to in this Section 4.2.
SECTION 4.3 Changes in Locations; Changes in Name or Structure. No
Grantor will, except upon thirty (30) days' prior written notice to the
Administrative Agent and delivery to the Administrative Agent of (a) all
additional financing statements (executed if necessary for any particular filing
jurisdiction) and other instruments and documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the
Security Interests and (b) if applicable, a written supplement to the Schedules
of this Agreement:
(i) permit any Deposit Account (other than Excluded Deposit Accounts)
to be held by or at a depositary bank other than the depositary bank that held
such Deposit Account as of the date hereof as set forth on Schedule 3.10;
(ii) permit any Investment Property (other than Certificated Securities
delivered to the Administrative Agent pursuant to Section 4.5) to be held by a
Securities Intermediary other than the Securities Intermediary that held such
Investment Property as of the date hereof as set forth on Schedule 3.13;
(iii) change its jurisdiction of organization or the location of its
chief executive office from that identified on Schedule 3.6; or
(iv) change its name, identity or corporate or organizational structure
to such an extent that any financing statement filed by the Administrative Agent
in connection with this Agreement would become misleading.
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SECTION 4.4 Required Notifications. Each Grantor shall promptly notify
the Administrative Agent, in writing, of: (a) any Lien (other than the Security
Interests or Permitted Liens) on any of the Collateral which would adversely
affect the ability of the Administrative Agent to exercise any of its remedies
hereunder, (b) the occurrence of any other event which could reasonably be
expected to have a Material Adverse Effect on the aggregate value of the
Collateral or on the Security Interests, (c) any Collateral which, to the
knowledge of such Grantor, constitutes a Government Contract, and (d) the
acquisition or ownership by such Grantor of any (i) Commercial Tort Claim, (ii)
Deposit Account (other than Excluded Deposit Accounts), or (iii) Investment
Property after the date hereof.
SECTION 4.5 Delivery Covenants. Each Grantor will deliver and pledge to
the Administrative Agent, for the ratable benefit of itself and the Lenders, all
Certificated Securities, Partnership/LLC Interests evidenced by a certificate,
negotiable Documents, Instruments, and Tangible Chattel Paper owned or held by
such Grantor, in each case, together with an Effective Endorsement and
Assignment and all Supporting Obligations, as applicable, unless such delivery
and pledge has been waived in writing by the Administrative Agent.
SECTION 4.6 Control Covenants.
(a) To the extent requested by the Administrative Agent, each Grantor
shall instruct (and otherwise use its commercially reasonable efforts) to cause
(i) each depositary bank (other than the Administrative Agent) holding a Deposit
Account (other than Excluded Deposit Accounts) owned by such Grantor and (ii)
each Securities Intermediary holding any Investment Property owned by such
Grantor, to execute and deliver a control agreement, sufficient to provide the
Administrative Agent with Control of such Deposit Account and otherwise in form
and substance satisfactory to the Administrative Agent (any such depositary bank
executing and delivering any such control agreement, a "Controlled Depositary",
and any such Securities Intermediary executing and delivering any such control
agreement, a "Controlled Intermediary"). In the event any such depositary bank
or Securities Intermediary refuses to execute and deliver such control
agreement, the Administrative Agent, in its sole discretion, may require the
applicable Deposit Account and Investment Property to be transferred to the
Administrative Agent or a Controlled Depositary or Controlled Intermediary, as
applicable. After the date hereof, all Deposit Accounts and all Investment
Property will be maintained with the Administrative Agent or with a Controlled
Depository or a Controlled Intermediary, as applicable.
(b) Each Grantor will take such actions and deliver all such agreements
as are requested by the Administrative Agent to provide the Administrative Agent
with Control of all Letter of Credit Rights and Electronic Chattel Paper owned
or held by such Grantor, including, without limitation, with respect to any such
Electronic Chattel Paper, by having the Administrative Agent identified as the
assignee of the Record(s) pertaining to the single authoritative copy thereof.
(c) If any Collateral (other than Collateral specifically subject to
the provisions of Section 4.6(a) and Section 4.6(b)) exceeding in value $100,000
in the aggregate (such Collateral exceeding such amount, the "Excess
Collateral") is at any time in the possession or control of any consignee,
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warehouseman, bailee (other than a carrier transporting Inventory to a purchaser
in the ordinary course of business), processor, or any other third party, such
Grantor shall notify in writing such Person of the Security Interests created
hereby, shall use its commercially reasonable efforts to obtain such Person's
written agreement in writing to hold all such Collateral for the Administrative
Agent's account subject to the Administrative Agent's instructions; provided
that if such Grantor is not able to obtain such agreement and cause the delivery
of such items, the Administrative Agent, in its sole discretion, may require
such Excess Collateral to be moved to another location specified thereby.
Further, each Grantor shall perfect and protect such Grantor's ownership
interests in all Inventory stored with a consignee against creditors of the
consignee by filing and maintaining financing statements against the consignee
reflecting the consignment arrangement filed in all appropriate filing offices,
providing any written notices required to notify any prior creditors of the
consignee of the consignment arrangement, and taking such other actions as may
be appropriate to perfect and protect such Grantor's interests in such inventory
under Section 2-326, Section 9-103, Section 9-324 and Section 9-505 of the UCC
or otherwise. All such financing statements filed pursuant to this Section
4.6(c) shall be assigned, on the face thereof, to the Administrative Agent, for
the ratable benefit of itself and the other Lenders.
SECTION 4.7 Filing Covenants. Pursuant to Section 9-509 of the UCC and
any other Applicable Law, each Grantor authorizes the Administrative Agent to
file or record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent determines
appropriate to perfect the Security Interests of the Administrative Agent under
this Agreement. 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
Administrative Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the Security Interest in the
Collateral granted herein, including, without limitation, describing such
property as "all assets" or "all personal property." Further, a photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction. Grantor hereby authorizes, ratifies and confirms
all financing statements and other filing or recording documents or instruments
filed by Administrative Agent prior to the date of this Agreement.
SECTION 4.8 Accounts.
(a) Other than in the ordinary course of business, no Grantor will (i)
grant any extension of the time of payment of any Account, (ii) compromise or
settle any Account for less than the full amount thereof, (iii) release, wholly
or partially, any Account Debtor, (iv) allow any credit or discount whatsoever
on any Account or (v) amend, supplement or modify any Account in any manner that
could reasonably be likely to materially, adversely affect the value thereof,
except in each of cases (i) through (iv) for actions taken in the ordinary
course of business by the Grantor.
(b) At any time and from time to time, upon the Administrative Agent's
reasonable request and at the expense of the relevant Grantor, such Grantor
shall cause independent public accountants or others satisfactory to the
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Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts.
SECTION 4.9 Intellectual Property.
(a) Except as could not reasonably be expected to have a Material
Adverse Effect, each Grantor (either itself or through licensees) (i) will
continue to use each registered Trademark (owned by such Grantor) and Trademark
for which an application (owned by such Grantor) is pending, to the extent
reasonably necessary to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) will maintain products and services
offered under such Trademark at a level substantially consistent with the
quality of such products and services as of the date hereof, (iii) will not (and
will not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark could reasonably be expected to become
invalidated or impaired in any way, (iv) will not do any act, or knowingly omit
to do any act, whereby any issued Patent owned by such Grantor would reasonably
be expected to become forfeited, abandoned or dedicated to the public, (v) will
not (and will not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any registered Copyright owned by such
Grantor or Copyright for which an application is pending (owned by such Grantor)
could reasonably be expected to become invalidated or otherwise impaired and
(vi) will not (either itself or through licensees) do any act whereby any
material portion of the Copyrights may fall into the public domain.
(b) Each Grantor will notify the Administrative Agent and the Lenders
promptly if it knows that any application or registration relating to any
material Intellectual Property owned by such Grantor will become forfeited,
abandoned or dedicated to the public, or of any adverse determination
(including, without limitation, the institution of, or any such determination
in, any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, or the validity of, any material Intellectual Property
owned by such Grantor or such Grantor's right to register the same or to own and
maintain the same.
(c) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within five (5) Business Days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent's and the
Lenders' security interest in any material Copyright, Patent or Trademark and
the goodwill and General Intangibles of such Grantor relating thereto or
represented thereby.
(d) Each Grantor will take all reasonable and necessary steps, at such
Grantor's sole cost and expense, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
15
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
(e) In the event that the Grantor has knowledge that any material
Intellectual Property owned by it has been infringed, misappropriated or diluted
by a third party, the applicable Grantor shall (i) at such Grantor's sole cost
and expense, take such actions as such Grantor shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns of such infringement, misappropriation or
dilution.
SECTION 4.10 Investment Property; Partnership/LLC Interests.
(a) Without the prior written consent of the Administrative Agent, no
Grantor will (i) vote to enable, or take any other action to permit, any
applicable Issuer to issue any Investment Property or Partnership/LLC Interests,
except for such those additional Investment Property or Partnership/LLC
Interests that will be subject to the Security Interest granted herein in favor
of the Administrative Agent, or (ii) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any Investment Property or Partnership/LLC Interests or
Proceeds thereof. The Grantors will defend the right, title and interest of the
Administrative Agent in and to any Investment Property and Partnership/LLC
Interests against the claims and demands of all Persons whomsoever.
(b) If any Grantor shall become entitled to receive or shall receive
(i) any Certificated Securities (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the
ownership interests of any Issuer, whether in addition to, in substitution of,
as a conversion of, or in exchange for, any Investment Property, or otherwise in
respect thereof, or (ii) any sums paid upon or in respect of any Investment
Property upon the liquidation or dissolution of any Issuer, such Grantor shall
accept the same as the agent of the Administrative Agent and the Lenders, hold
the same in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Grantor, and promptly deliver the same to the Administrative
Agent in accordance with the terms hereof.
SECTION 4.11 Equipment. Each Grantor will maintain each item of
Equipment in good working order and condition (reasonable wear and tear and
obsolescence excepted), necessary for such purpose and will promptly furnish to
the Administrative Agent a statement respecting any material loss or damage to
any Equipment material to such Grantor.
SECTION 4.12 Vehicles. Upon the request of the Administrative Agent
upon the occurrence and during the continuance of an Event of Default, all
applications for certificates of title or ownership indicating the
Administrative Agent's first priority Lien on the Vehicle (subject to any
Permitted Liens) covered by such certificate, and any other necessary
documentation, shall be filed in each office in each jurisdiction which the
Administrative Agent shall deem reasonably advisable to perfect its Liens on the
Vehicles; provided that, with respect to Vehicles subject to Permitted Liens, no
such application or other documentation shall be required. Prior thereto, each
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certificate of title or ownership relating to each Vehicle shall be maintained
by the applicable Grantor in accordance with Applicable Law to reflect the
ownership interest of such Grantor.
SECTION 4.13 Government Contracts.
Each Grantor shall promptly notify the Administrative Agent, in
writing, if it enters into any contract with a Governmental Authority under
which such Governmental Authority, as account debtor, owes a material monetary
obligation to the Grantor under any Account.
SECTION 4.14 Further Assurances. Upon the request of the Administrative
Agent and at the sole expense of the Grantors, each Grantor will promptly and
duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, (i) the assignment of any Material Contract, (ii) with
respect to Government Contracts, assignment agreements and notices of
assignment, in form and substance satisfactory to the Administrative Agent, duly
executed by any Grantors party to such Government Contract in compliance with
the Assignment of Claims Act (or analogous state Applicable Law), and (iii) all
applications, certificates, instruments, registration statements, and all other
documents and papers the Administrative Agent may reasonably request and as may
be required by law in connection with the obtaining of any consent, approval,
registration, qualification, or authorization of any Person deemed necessary or
appropriate for the effective exercise of any rights under this Agreement.
ARTICLE V
REMEDIAL PROVISIONS
SECTION 5.1 General Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC or any
other Applicable Law. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
17
assumption of any credit risk. The Administrative Agent may disclaim all
warranties in connection with any sale or other disposition of the Collateral,
including, without limitation, all warranties of title, possession, quiet
enjoyment and the like. The Administrative Agent or any Lender shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released. Each Grantor further
agrees, at the Administrative Agent's request, to assemble the Collateral and
make it available to the Administrative Agent at places which the Administrative
Agent shall reasonably select, whether at such Grantor's premises or elsewhere.
To the extent permitted by Applicable Law, each Grantor waives all claims,
damages and demands it may acquire against the Administrative Agent or any
Lender arising out of the exercise by them of any rights hereunder except to the
extent any such claims, damages, or demands result solely from the gross
negligence or willful misconduct of the Administrative Agent or any Lender, in
each case against whom such claim is asserted. If any notice of a proposed sale
or other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least ten (10) days before such sale
or other disposition.
SECTION 5.2 Specific Remedies.
(a) The Administrative Agent hereby authorizes each Grantor to collect
such Grantor's Accounts, under the Administrative Agent's direction and control;
provided that the Administrative Agent may curtail or terminate such authority
at any time after the occurrence and during the continuance of an Event of
Default.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) the Administrative Agent may communicate with Account Debtors
of any Account subject to a Security Interest and upon the request of
the Administrative Agent, each Grantor shall notify (such notice to be
in form and substance satisfactory to the Administrative Agent) its
Account Debtors and parties to the Material Contracts subject to a
Security Interest that such Accounts and the Material Contracts have
been assigned to the Administrative Agent, for the ratable benefit of
itself and the Lenders;
(ii) each Grantor shall forward to the Administrative Agent, on the
last Business Day of each week, deposit slips related to all cash,
money, checks or any other similar items of payment received by the
Grantor during such week, and, if requested by the Administrative
Agent, copies of such checks or any other similar items of payment,
together with a statement showing the application of all payments on
the Collateral during such week and a collection report with regard
thereto, in form and substance satisfactory to the Administrative
Agent;
(iii) whenever any Grantor shall receive any cash, money, checks or
any other similar items of payment relating to any Collateral
(including any Proceeds of any Collateral), subject to the terms of any
Permitted Liens, such Grantor agrees that it will, within one (1)
Business Day of such receipt, deposit all such items of payment into
the Collateral Account or in a Deposit Account at a Controlled
Depositary, until such Grantor shall deposit such cash, money, checks
or any other similar items of payment in the Collateral Account or in a
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Deposit Account at a Controlled Depositary, such Grantor shall hold
such cash, money, checks or any other similar items of payment in trust
for the Administrative Agent and Lenders and as property of the
Administrative Agent and Lenders, separate from the other funds of such
Grantor, and the Administrative Agent shall have the right in to
transfer or direct the transfer of the balance of each Deposit Account
to the Collateral Account. All such Collateral and Proceeds of
Collateral received by the Administrative Agent hereunder shall be held
by the Administrative Agent in the Collateral Account as collateral
security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 5.4; -----------
(iv) the Administrative Agent shall have the right to receive any
and all cash dividends, payments or distributions made in respect of
any Investment Property, or Partnership/LLC Interests or other Proceeds
paid in respect of any Investment Property, or Partnership/LLC
Interests, and any or all of any Investment Property, or
Partnership/LLC Interests shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or
its nominee may thereafter exercise (A) all voting, corporate and other
rights pertaining to such Investment Property, or Partnership/LLC
Interests at any meeting of shareholders, partners or members of the
relevant Issuers and (B) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to
such Investment Property, or Partnership/LLC Interests as if it were
the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Investment Property, or
Partnership/LLC Interests upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the
corporate, partnership or company structure of any Issuer or upon the
exercise by any Grantor or the Administrative Agent of any right,
privilege or option pertaining to such Investment Property, or
Partnership/LLC Interests, and in connection therewith, the right to
deposit and deliver any and all of the Investment Property, or
Partnership/LLC Interests with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without
liability except to account for property actually received by it; but
the Administrative Agent shall have no duty to any Grantor to exercise
any such right, privilege or option and the Administrative Agent and
the Lenders shall not be responsible for any failure to do so or delay
in so doing. In furtherance thereof, each Grantor hereby authorizes and
instructs each Issuer with respect to any Collateral consisting of
Investment Property and Partnership/LLC Interests to (i) comply with
any instruction received by it from the Administrative Agent in writing
that (A) states that an Event of Default has occurred and is continuing
and (B) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from such Grantor, and each
Grantor agrees that each Issuer shall be fully protected in so
complying following receipt of such notice and prior to notice that
such Event of Default is no longer continuing, and (ii) except as
otherwise expressly permitted hereby, pay any dividends, distributions
or other payments with respect to any Investment Property, or
Partnership/LLC Interests directly to the Administrative Agent; and
(v) the Administrative Agent shall be entitled to (but shall not be
required to): (A) proceed to perform any and all obligations of the
applicable Grantor under any Material Contract and exercise all rights
of such Grantor thereunder as fully as such Grantor itself could, (B)
do all other acts which the Administrative Agent may deem necessary or
19
proper to protect its Security Interest granted hereunder, provided
such acts are not inconsistent with or in violation of the terms of any
of the Credit Agreement, of the other Loan Documents or Applicable Law,
and (C) sell, assign or otherwise transfer any Material Contract in
accordance with the Credit Agreement, the other Loan Documents and
Applicable Law, subject, however, to the prior approval of each other
party to such Material Contract, to the extent required under the
Material Contract.
(c) Unless an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have given notice to the relevant Grantor of
the Administrative Agent's intent to exercise its corresponding rights pursuant
to Section 5.2(b), each Grantor shall be permitted to receive all cash
dividends, payments or other distributions made in respect of any Investment
Property and Partnership/LLC Interests, in each case paid in the normal course
of business of the relevant Issuer and consistent with past practice, to the
extent permitted in the Credit Agreement, and to exercise all voting and other
corporate, company and partnership rights with respect to any Investment
Property and Partnership/LLC Interests; provided that, no vote shall be cast or
other corporate, company and partnership right exercised or other action taken
which, in the Administrative Agent's reasonable judgment, would impair the
Collateral in any material respect or which would result in a Default or Event
of Default under any provision of the Credit Agreement, this Agreement or any
other Loan Document.
SECTION 5.3 Registration Rights.
(a) If the Administrative Agent shall determine that in order to
exercise its right to sell any or all of the Collateral it is necessary or
advisable to have such Collateral registered under the provisions of the
Securities Act (any such Collateral, the "Restricted Securities Collateral"),
the relevant Grantor will use commercially reasonable efforts to cause each
applicable Issuer (and the officers and directors thereof) to (i) execute and
deliver all such instruments and documents, and do or cause to be done all such
other acts as may be, in the opinion of the Administrative Agent, necessary or
advisable to register such Restricted Securities Collateral, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use its
commercially reasonable efforts to cause the registration statement relating
thereto to become effective and to remain effective for a period of one year
from the date of the first public offering of such Restricted Securities
Collateral, or that portion thereof to be sold, and (iii) make all amendments
thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause each applicable Issuer (and the officers and directors thereof) to comply
with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section II (a)
of the Securities Act.
(a) Each Grantor recognizes that the Administrative Agent may be unable
to effect a public sale of any or all the Restricted Securities Collateral, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
20
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Restricted Securities Collateral for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so.
(b) Each Grantor agrees to use its commercially reasonable efforts to
do or cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Restricted Securities Collateral valid and
binding and in compliance with any and all other Applicable Laws. Each Grantor
further agrees that a breach of any of the covenants contained in this Section
5.3 will cause irreparable injury to the Administrative Agent and the Lenders,
that the Administrative Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 5.3 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.
SECTION 5.4 Application of Proceeds. At such intervals as may be agreed
upon by the Borrower and the Administrative Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of the Collateral
or any Proceeds of the Collateral in payment in whole or in part of the
Obligations (after deducting all reasonable costs and expenses of incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements) in accordance with Section 14.3 of
the Credit Agreement. Only after (i) the payment by the Administrative Agent of
any other amount required by any provision of law, including, without
limitation, Section 9-610 and Section 9-615 of the UCC and (ii) the payment in
full of the Obligations and the termination of the Commitments, shall the
Administrative Agent account for the surplus, if any, to any Grantor, or to
whomever may be lawfully entitled to receive the same (if such Person is not a
Grantor).
SECTION 5.5 Waiver, Deficiency. Each Grantor hereby waives, to the
extent permitted by Applicable Law, 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. Each Grantor shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay its Obligations and the
fees and disbursements of any attorneys employed by the Administrative Agent or
any Lender to collect such deficiency.
21
ARTICLE VI
THE ADMINISTRATIVE AGENT
SECTION 6.1 Administrative Agent's Appointment as Attorney-In-Fact.
(a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following upon the occurrence and during the
continuation of an Event of Default:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Account or Material Contract subject to a Security Interest or with
respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Account or Material Contract
subject to a Security Interest or with respect to any other Collateral
whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and General Intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in this
Agreement, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (A) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (B) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (C) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
22
Collateral; (E) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (F) settle, compromise or
adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent
may deem appropriate; (G) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in
its sole discretion determine; and (H) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes,
and do, at the Administrative Agent's option and such Grantor's
expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent's and the
Lenders' Security Interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement in accordance with the provisions
of Section 6.1(a).
(c) The expenses of the Administrative Agent incurred in connection
with actions taken pursuant to the terms of this Agreement, together with
interest thereon at a rate per annum equal to the highest rate per annum at
which interest would then be payable on any category of past due Base Rate Loans
under the Credit Agreement, from the date of payment by the Administrative Agent
to the date reimbursed by the relevant Grantor, shall be payable by such Grantor
to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof in accordance with Section 6.1(a). All
powers, authorizations and agencies contained in this Agreement are coupled with
an interest and are irrevocable until this Agreement is terminated and the
Security Interests created hereby are released.
SECTION 6.2 Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the UCC or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. Neither the Administrative Agent, any
Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent's and
the Lenders' interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
23
SECTION 6.3 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement to make any inquiry respecting such
authority.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with Section 14.2 of the Credit Agreement.
SECTION 7.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 14.1 of the Credit Agreement.
SECTION 7.3 No Waiver by Course of Conduct, Cumulative Remedies.
Neither the Administrative Agent nor any Lender shall by any act (except by a
written instrument pursuant to Section 7.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
SECTION 7.4 Enforcement Expenses, Indemnification.
(a) Each Grantor agrees to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
enforcing or preserving any rights under this Agreement and the other Loan
Documents to which such Grantor is a party, (including, without limitation, in
connection with any workout, restructuring, bankruptcy or other similar
proceeding) including, without limitation, the reasonable fees and disbursements
of counsel to each Lender and of counsel to the Administrative Agent.
24
(b) Each Grantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes (in each case, subject to Section 5.11 of the Credit Agreement) which may
be payable or determined to be payable with respect to any of the Collateral or
in connection with any of the transactions contemplated by this Agreement.
(c) Each Grantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from any and all liabilities, obligations, losses,
damages, penalties, costs and expenses in connection with actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement to the extent any Grantor would be required to do so pursuant
to Section 14.2 of the Credit Agreement.
(d) The agreements in this Section 7.4 shall survive termination of the
Commitments and repayment of the Obligations and all other amounts payable under
the Credit Agreement and the other Loan Documents.
SECTION 7.5 Waiver of Jury Trial.
(a) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 7.6 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of each Grantor (and shall bind all Persons who become bound as a Grantor to
this Collateral Agreement), the Administrative Agent and the Lenders and their
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent (given in accordance with Section
7.1).
SECTION 7.7 Set-Off. If an Event of Default shall have occurred and be
continuing under Section 14.4 of the Credit Agreement, each Lender, the Issuing
Lender, the Swingline Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
Applicable Law, to set-off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
25
other obligations (in whatever currency) at any time owing by such Lender, the
Issuing Lender, the Swingline Lender or any such Affiliate to or for the credit
or the account of each Grantor against any and all of the Obligations now or
hereafter existing under this Agreement or any other Loan Document to such
Lender, the Issuing Lender or the Swingline Lender, irrespective of whether or
not such Lender, the Issuing Lender or the Swingline Lender shall have made any
demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured or are owed to a branch or office of
such Lender, the Issuing Lender or the Swingline Lender different from the
branch or office holding such deposit or other obligation. The rights of each
Lender, the Issuing Lender, the Swingline Lender and their respective Affiliates
under this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the Issuing Lender, the Swingline Lender or
their respective Affiliates may have. Each Lender, the Issuing Lender and the
Swingline Lender agrees to notify such Grantor promptly after any such setoff
and application; provided that the failure to give such notice shall not affect
the validity of such setoff and application.
SECTION 7.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
SECTION 7.9 Severability. Any provision of this Agreement or any other
Loan Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such prohibition
or unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 7.10 Section Heading. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
SECTION 7.11 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.
SECTION 7.12 Governing Law. This Agreement unless otherwise expressly
set forth herein, shall be governed by, construed, interpreted and enforced in
accordance with, the laws of the State of New York without reference to any
other conflicts of law principles thereof.
SECTION 7.13 Consent to Jurisdiction. Each Grantor hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the courts of the State of New York sitting in the Borough of
Manhattan and of the United States District Court of the Borough of Manhattan,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
26
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State court
or, to the fullest extent permitted by Applicable Law, in such Federal court.
Each Grantor hereby irrevocably consents to the service of a summons and
complaint and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement or any
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations, on behalf of itself or its property,
in the manner specified in Section 14.1 of the Credit Agreement. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or in
any other Loan Document shall affect any right that the Administrative Agent,
any Lender or the Issuing Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Grantor or its properties in the courts of any jurisdiction.
SECTION 7.14 Acknowledgements.
(a) Each Grantor hereby acknowledges that: (i) it has been advised by
counsel in the negotiation, execution and delivery of this Agreement and the
other Loan Documents to which it is a party, (ii) neither the Administrative
Agent nor any Lender has any fiduciary relationship with or duty to any Grantor
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand, and the
Administrative Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor, and (iii) no joint venture is
created hereby or by the other Loan Documents or otherwise exists by virtue of
the transactions contemplated hereby or thereby among the Lenders or among the
Grantors and the Lenders.
(b) Each Issuer party to this Agreement acknowledges receipt of a copy
of this Agreement and agrees to be bound thereby and to comply with the terms
thereof insofar as such terms are applicable to it. Each Issuer agrees to
provide such notices to the Administrative Agent as may be necessary to give
full effect to the provisions of this Agreement.
SECTION 7.15 Additional Grantors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to Section 9.11 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of a joinder agreement in form and
substance satisfactory to the Administrative Agent.
SECTION 7.16 Releases.
(a) At such time as the Obligations shall have been paid in full and
the Commitments have been terminated, the Collateral shall be released from the
Liens created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and
each Grantor hereunder shall terminate, all without delivery of any instrument
or performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor following
any such termination, the Administrative Agent shall deliver to such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination
27
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. In the event that all the capital stock of any Grantor shall be
sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement, then, at the request of the Borrower and at the expense of the
Grantors, such Grantor shall be released from its obligations hereunder;
provided that the Borrower shall have delivered to the Administrative Agent, at
least five (5) Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Grantor and the terms of
the sale or other disposition in reasonable detail, including the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
[Signature Pages to Follow]
28
IN WITNESS WHEREOF, the parties hereto have caused this Collateral
Agreement to be executed under seal by their duly authorized officers, all as of
the day and year first written above.
CROSS COUNTRY HEALTHCARE, INC.,
as Grantor
By: /s/ Joseph A. Boshart
--------------------------------------------------
Name: Joseph A. Boshart
-------------------------------------------
Title: President & Chief Executive Officer
------------------------------------------
ASSIGNMENT AMERICA, INC., as Grantor and Issuer
By: /s/ Daniel Lewis
--------------------------------------------------
Name: Daniel Lewis
-------------------------------------------
Title: Assistant Treasurer
------------------------------------------
CROSS COUNTRY TRAVCORPS, INC., as Grantor and Issuer
By: /s/ Joseph A. Boshart
--------------------------------------------------
Name: Joseph A. Boshart
-------------------------------------------
Title: Vice President
------------------------------------------
CROSS COUNTRY LOCAL, INC., as Grantor and Issuer
By: /s/ Daniel Lewis
--------------------------------------------------
Name: Daniel Lewis
-------------------------------------------
Title: Assistant Treasurer
------------------------------------------
[Signature Pages Continue]
NOVAPRO, INC., as Grantor and Issuer
By: /s/ Daniel Lewis
--------------------------------------------------
Name: Daniel Lewis
-------------------------------------------
Title: Assistant Treasurer
------------------------------------------
TVCM, INC., as Grantor and Issuer
By: /s/ Daniel Lewis
--------------------------------------------------
Name: Daniel Lewis
-------------------------------------------
Title: Assistant Treasurer
------------------------------------------
CC STAFFING, INC., as Grantor and Issuer
By: /s/ Emil Hensel
--------------------------------------------------
Name: Emil Hensel
-------------------------------------------
Title: President
------------------------------------------
CROSS COUNTRY CONSULTING, INC., as Grantor and Issuer
By: /s/ Daniel Lewis
--------------------------------------------------
Name: Daniel Lewis
-------------------------------------------
Title: /s/ Assistant Treasurer
------------------------------------------
CEJKA SEARCH, INC., as Grantor and Issuer
By: /s/ Daniel Lewis
--------------------------------------------------
Name: Daniel Lewis
-------------------------------------------
Title: Assistant Treasurer
------------------------------------------
[Signature Pages Continue]
CLINFORCE, INC., as Grantor and Issuer
By: /s/ Emil Hensel
--------------------------------------------------
Name: Emil Hensel
-------------------------------------------
Title: Vice President
------------------------------------------
CROSS COUNTRY EDUCATION, INC., as Grantor and Issuer
By: /s/ Joseph A. Boshart
--------------------------------------------------
Name: Joseph A. Boshart
-------------------------------------------
Title: Vice President
------------------------------------------
MEDSTAFF, INC., as Grantor and Issuer
By: /s/ Joseph A. Boshart
--------------------------------------------------
Name: Joseph A. Boshart
-------------------------------------------
Title: Chief Executive Officer
------------------------------------------
CROSS COUNTRY CAPITAL, INC., as Grantor and Issuer
By: /s/ Emil Hensel
--------------------------------------------------
Name: Emil Hensel
-------------------------------------------
Title: Vice President
------------------------------------------
HEALTHSTAFFERS, INC., as Grantor and Issuer
By: /s/ Joseph A. Boshart
--------------------------------------------------
Name: Joseph A. Boshart
-------------------------------------------
Title: Chief Executive Officer
------------------------------------------
[Signature Pages Continue]
MCVT, INC., as Grantor and Issuer
By: /s/ Emil Hensel
--------------------------------------------------
Name: Emil Hensel
-------------------------------------------
Title: /s/ Vice President &
Chief Financial Officer
------------------------------------------
[Signature Pages Continue]
WACHOVIA BANK, NATIONAL ASSOCIATION
as Administrative Agent
By:/s/ Richard L. Nelson
-----------------------------------------------------
Name: Richard L. Nelson
--------------------------------------------------
Title: Vice President
-------------------------------------------------