CONNECTION
WITH THE INTERCOMPANY SETTLEMENTS WITH RESPECT TO COLLECTIONS FROM ACCOUNTS
RECEIVABLE AND INVENTORY OF U.S. LOAN PARTIES DEPOSITED INTO ACCOUNTS OF
CANADIAN LOAN PARTIES AND OTHER INTERCOMPANY RECEIVABLES) (OTHER THAN ANY
INVESTMENT PROPERTY ON DEPOSIT WITH A SECURITIES INTERMEDIARY) TO BE EVIDENCED
BY A DULY EXECUTED PROMISSORY NOTE THAT IS PLEDGED AND DELIVERED TO THE SECURITY
AGENT (OR THE TERM LOAN AGENT OR PERMITTED NOTES AGENT OR A DESIGNATED BAILEE
FOR PURPOSES OF PERFECTION, IN ACCORDANCE WITH THE INTERCREDITOR AGREEMENT)
PURSUANT TO THE TERMS HEREOF.
(C)
UPON DELIVERY TO THE SECURITY AGENT, (I) ANY PLEDGED SECURITIES SHALL BE
ACCOMPANIED BY UNDATED STOCK POWERS DULY EXECUTED IN BLANK OR OTHER INSTRUMENTS
OF TRANSFER REASONABLY SATISFACTORY TO THE SECURITY AGENT AND BY SUCH OTHER
INSTRUMENTS AND DOCUMENTS AS THE SECURITY AGENT MAY REASONABLY REQUEST AND
(II) ALL OTHER PROPERTY COMPRISING PART OF THE PLEDGED COLLATERAL SHALL BE
ACCOMPANIED BY PROPER INSTRUMENTS OF ASSIGNMENT DULY EXECUTED BY THE APPLICABLE
GRANTOR AND SUCH OTHER INSTRUMENTS OR DOCUMENTS AS THE SECURITY AGENT MAY
REASONABLY REQUEST.
EACH DELIVERY OF PLEDGED SECURITIES AFTER THE DATE OF THIS
AGREEMENT SHALL BE ACCOMPANIED BY A SCHEDULE DESCRIBING THE PLEDGED SECURITIES
SO DELIVERED, WHICH SCHEDULE SHALL BE ATTACHED HERETO AS A
10
SUPPLEMENT TO SCHEDULE II AND MADE A PART HEREOF; PROVIDED THAT FAILURE TO
ATTACH ANY SUCH SCHEDULE HERETO SHALL NOT AFFECT THE VALIDITY OF SUCH PLEDGE OF
SUCH PLEDGED SECURITIES.
(D)
THE ASSIGNMENT, PLEDGES AND SECURITY INTERESTS GRANTED IN SECTION 3.01 ARE
GRANTED AS SECURITY ONLY AND SHALL NOT SUBJECT THE SECURITY AGENT OR ANY OTHER
SECURED PARTY TO, OR IN ANY WAY ALTER OR MODIFY, ANY OBLIGATION OR LIABILITY OF
ANY GRANTOR WITH RESPECT TO OR ARISING OUT OF THE PLEDGED COLLATERAL.
SECTION 3.03.
Representations, Warranties and Covenants.
The Grantors jointly
and severally represent, warrant and covenant to and with the Security Agent,
for the benefit of the Secured Parties, that:
(A) SCHEDULE II CORRECTLY SETS FORTH, AS OF THE FUNDING DATE, WITH RESPECT TO
EACH GRANTOR, (I) ALL OF THE EQUITY INTERESTS OWNED BY SUCH GRANTOR AND REQUIRED
TO BE PLEDGED HEREUNDER ON THE FUNDING DATE, THE PERCENTAGE OF THE ISSUED AND
OUTSTANDING UNITS OF EACH CLASS OF THE EQUITY INTERESTS OF THE ISSUER THEREOF SO
REPRESENTED BY THE PLEDGED EQUITY INTERESTS AND THE NUMBER OF EACH CERTIFICATE
REPRESENTING THE SAME AND (II) ALL PROMISSORY NOTES OWNED BY EACH GRANTOR AND
REQUIRED TO BE PLEDGED HEREUNDER ON THE FUNDING DATE;
(B) THE PLEDGED EQUITY INTERESTS AND PLEDGED DEBT SECURITIES, IN EACH CASE
ISSUED BY SUBSIDIARIES, HAVE BEEN DULY AND VALIDLY AUTHORIZED AND ISSUED BY THE
ISSUERS THEREOF AND (I) IN THE CASE OF PLEDGED EQUITY INTERESTS, ARE FULLY PAID
AND NONASSESSABLE AND (II) IN THE CASE OF PLEDGED DEBT SECURITIES, ARE LEGAL,
VALID AND BINDING OBLIGATIONS OF THE ISSUERS THEREOF, SUBJECT TO APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS AFFECTING
CREDITORS' RIGHTS GENERALLY AND SUBJECT TO GENERAL PRINCIPLES OF EQUITY,
REGARDLESS OF WHETHER CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW;
(C)