Exhibit 10.3
Execution Copy
FIRST LIEN PLEDGE AND SECURITY AGREEMENT
by and between
DAY INTERNATIONAL, INC.
DAY INTERNATIONAL GROUP, INC.
VARN INTERNATIONAL, INC.
DAY INTERNATIONAL FINANCE, INC.
NETWORK DISTRIBUTION INTERNATIONAL
NETWORK DISTRIBUTION INTERNATIONAL, INC.
as Grantors
and
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Collateral Agent
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS; GRANT OF SECURITY
1
1.1 General Definitions
1
1.2 Definitions; Interpretation
9
SECTION 2. GRANT OF SECURITY
9
2.1 Grant of Security
9
2.2 Certain Limited Exclusions
10
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE
10
3.1 Security for Obligations
10
3.2 Continuing Liability Under Collateral
11
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS
11
4.1 Generally
11
4.2 Equipment and Inventory
14
4.3 Receivables
15
4.4 Investment Related Property
17
4.5 Material Contracts
23
4.6 Letter of Credit Rights
24
4.7 Intellectual Property
25
4.8 Commercial Tort Claims
28
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL
GRANTORS
28
5.1 Access; Right of Inspection
29
5.2 Further Assurances
29
5.3 Additional Grantors
30
SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT
30
6.1 Power of Attorney
30
6.2 No Duty on the Part of Collateral Agent or Secured Parties
31
SECTION 7. REMEDIES
31
7.1 Generally
31
7.2 Application of Proceeds
33
7.3 Sales on Credit
33
7.4 Deposit Accounts
33
7.5 Investment Related Property
33
7.6 Intellectual Property
34
7.7 Cash Proceeds
36
SECTION 8. COLLATERAL AGENT
36
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS
37
SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM
37
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PAGE
SECTION 11. MISCELLANEOUS
38
SCHEDULE 4.1 - GENERAL INFORMATION
SCHEDULE 4.2 - LOCATION OF EQUIPMENT AND INVENTORY
SCHEDULE 4.4 - INVESTMENT RELATED PROPERTY
SCHEDULE 4.6 - DESCRIPTION OF LETTERS OF CREDIT
SCHEDULE 4.7 - INTELLECTUAL PROPERTY - EXCEPTIONS
SCHEDULE 4.8 - COMMERCIAL TORT CLAIMS
EXHIBIT A - PLEDGE SUPPLEMENT
EXHIBIT B - UNCERTIFICATED SECURITIES CONTROL AGREEMENT
EXHIBIT C - SECURITIES ACCOUNT CONTROL AGREEMENT
EXHIBIT D - DEPOSIT ACCOUNT CONTROL AGREEMENT
EXHIBIT E - TRADEMARK SECURITY AGREEMENT
EXHIBIT F - COPYRIGHT SECURITY AGREEMENT
EXHIBIT G - PATENT SECURITY AGREEMENT
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This FIRST LIEN PLEDGE AND SECURITY AGREEMENT (as amended, restated,
supplemented or otherwise modified from time to time, this "Agreement"), dated
as of December 5, 2005, is made by and between DAY INTERNATIONAL, INC., a
Delaware corporation (the "Company"), DAY INTERNATIONAL GROUP, INC., a Delaware
corporation ("Holdings") and CERTAIN SUBSIDIARIES OF THE COMPANY, as Guarantors
(described below) (each of the Guarantors, the Company and Holdings are referred
to hereinafter individually as a "Grantor", and collectively as the "Grantors"),
and GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as collateral agent for the
Secured Parties described below (together with its successors, designees and
permitted assigns in such capacity, the "Collateral Agent").
RECITALS:
WHEREAS, reference is made to that certain Credit and Guaranty Agreement,
dated as of the date hereof (as it may be amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among the
COMPANY, HOLDINGS AND CERTAIN AFFILIATES OF THE