Document:

eh1500199_ex1001.htm

EXHIBIT 10.1

 

EXECUTION VERSION

 

AMENDMENT NO. 4 TO

REVOLVING CREDIT AGREEMENT

 

AMENDMENT NO. 4, dated as of January 20, 2015 (this “Amendment”) to the Revolving Credit Agreement dated as of December 22, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among American Media, Inc. (the “Borrower”), JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and the lenders from time to time party thereto (the “Lenders”).  Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have extended credit to the Borrower on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS, upon Borrower’s request, the Required Lenders have, subject to the terms and conditions set forth herein, consented to amend certain provisions of the Credit Agreement.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

Section 1. Amendment to Credit Agreement.  The definition of “Permitted Refinancing Indebtedness” is hereby amended by replacing it in its entirety with the following: 

 

““Permitted Refinancing Indebtedness” means Indebtedness incurred to refinance any Indebtedness as permitted in Section 6.01; provided that (a) such Indebtedness is issued by the Borrower and is not Guaranteed by any Person that is not a Subsidiary Loan Party, (b) the aggregate principal amount thereof does not exceed the sum of the aggregate principal amount (or accreted value if applicable) of Indebtedness being refinanced thereby, accrued interest thereon at the time and the amount of reasonable expenses, fees and premiums incurred in connection with such refinancing (including upfront fees, original issue discount or initial yield payments) and (c) such modification, refinancing, refunding, renewal, replacement or extension has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended, (d) at the time thereof, no Event of Default shall have occurred and be continuing, (e) to the extent such Indebtedness being modified, refinanced, refunded, renewed, replaced or extended is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal, replacement or extension is subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed, replaced or 

 

  

  

  

 

extended; provided that a certificate of a Responsible Officer delivered to the Administrative Agent stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement and (f) such modification, refinancing, refunding, renewal, replacement or extension is incurred by the Person who is the obligor or guarantor of the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended.”

 

Section 2.Conditions.

 

The amendments contained in Section 1 of this Amendment shall become effective on the date (the “Amendment Effective Date”) on which:

 

(a)           This Amendment has been signed by the Borrower and the Required Lenders.

 

(b)           The Borrower shall have paid all fees required to be paid on the Amendment Effective Date and all expenses for which invoices have been presented on or prior to the Amendment Effective Date, including reasonable legal fees and disbursements of counsel to the Administrative Agent and the Lenders.

 

Section 3.Counterparts.

 

This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Amendment by telecopy or electronic transmission (including in .pdf or similar format) shall be effective as delivery of a manually executed counterpart of this Amendment.

 

Section 4.Applicable Law.

 

THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Section 5.Headings.

 

Section headings herein and in the Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Amendment or any Loan Document.

 

 

  

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Section 6.Effect of Amendment.

 

On and after the Amendment Effective Date, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Credit Agreement, and each reference in each of the Loan Documents to “the Credit Agreement,” “thereunder,” “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended by this Amendment.  The Credit Agreement and each of the other Loan Documents, as supplemented by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect.

 

 

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

 

	
AMERICAN MEDIA, INC., as Borrower

	  
	  	  	  
	
By:

	
/s/ Christopher Polimeni

	  
	
Name:

	
Christopher Polimeni

	  
	
Title:

	
Executive Vice President, Chief Financial Officer and Treasurer

	  

 

 

 

[American Media Credit Agreement Amendment No. 4]

  

  

  

 

	
SIGNATURE PAGE TO AMENDMENT NO. 4 

DATED AS OF JANUARY 20, 2015, AMONG 

AMERICAN MEDIA, INC. AND THE LENDERS PARTY 

HERETO

	  
	  	  	  	  
	
Lender Name:

	  
	  	  	  	  
	
JPMORGAN CHASE BANK, N.A.

	  
	  	  	  	  
	
By:

	
/s/ Charles K. Holmes

	  
	  	
Name:

	
Charles K. Holmes

	  
	  	
Title:

	
Executive Director

	  

 

 

[American Media Credit Agreement Amendment No. 4]

  

  

  

 

 

	
SIGNATURE PAGE TO AMENDMENT NO. 4 

DATED AS OF JANUARY 20, 2015, AMONG 

AMERICAN MEDIA, INC. AND THE LENDERS 

PARTY HERETO

	  
	  	  	  	  
	
Lender Name:

	  
	  	  	  	  
	
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

	  
	  	  	  	  
	
By:

	
/s/ Judith Smith

	  
	  	
Name:

	
Judith Smith

	  
	  	
Title:

	
Authorized Signatory

	  
	  	  	  	  
	
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

	  
	  	  	  
	
By:

	
/s/ Vipul Dhadda

	  
	  	
Name:

	
Vipul Dhadda

	  
	  	
Title:

	
Authorized Signatory

	  

 

 

 

[American Media Credit Agreement Amendment No. 4]eh1500199_ex1002.htm

EXHIBIT 10.2

 

Execution Version

 

 

COLLATERAL AGREEMENT

 

dated as of

 

January 20, 2015

 

among

 

AMERICAN MEDIA, INC.,

 

THE SUBSIDIARIES OF AMERICAN MEDIA, INC.

IDENTIFIED HEREIN

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Collateral Agent

 

 

  

  

  

 

TABLE OF CONTENTS

 

Page

 

	  	
ARTICLE I

	  
	  	  	  
	  	
DEFINITIONS

	  
	  	  	  
	
SECTION 1.01.

	
Indenture

	
1

	
SECTION 1.02.

	
Other Defined Terms

	
1

	  	  	  
	  	
ARTICLE II

	  
	  	  	  
	  	
PLEDGE OF SECURITIES

	  
	  	  	  
	
SECTION 2.01.

	
Pledge

	
5

	
SECTION 2.02.

	
Delivery of the Pledged Collateral

	
5

	
SECTION 2.03.

	
Representations, Warranties and Covenants

	
6

	
SECTION 2.04.

	
Certification of Limited Liability Company and Limited Partnership Interests

	
6

	
SECTION 2.05.

	
Registration in Nominee Name; Denominations

	
7

	
SECTION 2.06.

	
Voting Rights; Dividends and Interest

	
7

	  	  	  
	  	
ARTICLE III

	  
	  	  	  
	  	
SECURITY INTERESTS IN PERSONAL PROPERTY

	  
	  	  	  
	
SECTION 3.01.

	
Security Interest

	
8

	
SECTION 3.02.

	
Representations and Warranties

	
10

	
SECTION 3.03.

	
Covenants

	
11

	
SECTION 3.04.

	
Other Actions

	
14

	
SECTION 3.05.

	
Covenants Regarding Patent, Trademark and Copyright Collateral

	
15

	  	  	  
	  	
ARTICLE IV

	  
	  	  	  
	  	
REMEDIES

	  
	  	  	  
	
SECTION 4.01.

	
Remedies Upon Default

	
16

	
SECTION 4.02.

	
Application of Proceeds

	
17

	
SECTION 4.03.

	
Grant of License to Use Intellectual Property

	
17

	
SECTION 4.04.

	
Securities Act

	
17

	
SECTION 4.05.

	
Registration

	
18

	
SECTION 4.06.

	
Proceeds to be Turned Over to Collateral Agent

	
18

	  	  	  
	  	
ARTICLE V

	  
	  	  	  
	  	
INDEMNITY, SUBROGATION AND SUBORDINATION

	  
	  	  	  
	
SECTION 5.01.

	
Indemnity and Subrogation

	
18

	
SECTION 5.02.

	
Contribution and Subrogation

	
19

	
SECTION 5.03.

	
Subordination

	
19

 

 

  

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ARTICLE VI

	  
	  	  	  
	  	
MISCELLANEOUS

	  
	  	  	  
	
SECTION 6.01.

	
Notices

	
19

	
SECTION 6.02.

	
Waivers; Amendment

	
19

	
SECTION 6.03.

	
Collateral Agent; Fees and Expenses; Indemnification

	
20

	
SECTION 6.04.

	
Successors and Assigns

	
20

	
SECTION 6.05.

	
Survival of Agreement

	
20

	
SECTION 6.06.

	
Counterparts; Effectiveness; Several Agreement

	
20

	
SECTION 6.07.

	
Severability

	
21

	
SECTION 6.08.

	
[Reserved]

	
21

	
SECTION 6.09.

	
Governing Law; Jurisdiction; Consent to Service of Process

	
21

	
SECTION 6.10.

	
WAIVER OF JURY TRIAL

	
21

	
SECTION 6.11.

	
Headings

	
21

	
SECTION 6.12.

	
Security Interest Absolute

	
22

	
SECTION 6.13.

	
Termination or Release

	
22

	
SECTION 6.14.

	
Additional Subsidiaries

	
22

	
SECTION 6.15.

	
Collateral Agent Appointed Attorney-in-Fact

	
22

	
SECTION 6.16.

	
Intercreditor Agreements

	
23

  

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COLLATERAL AGREEMENT (this “Agreement”), dated as of January 20, 2015, among AMERICAN MEDIA, INC., the Subsidiaries of AMERICAN MEDIA, INC. identified herein and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent (together with its successors and assigns, in such capacity, the “Collateral Agent”).

 

Reference is made to the Indenture dated as of January 20, 2015 (as further amended, supplemented or otherwise modified from time to time, the “Indenture”), by and among American Media, Inc. (the “Issuer”), the subsidiaries of the Issuer party thereto as guarantors, Wilmington Trust, National Association, as Trustee (together with its successors and assigns, in such capacity, the “Trustee”) and the Collateral Agent.

 

WHEREAS, pursuant to the Indenture, the Issuer has issued $39,024,390 aggregate principal amount of its 7.00% Second Lien Senior Secured Notes due 2020 (the “Notes”) upon the terms set forth therein;

 

WHEREAS, pursuant to the Indenture, each Grantor has unconditionally and irrevocably guaranteed, as primary obligor and not merely as surety, to the Trustee, for the benefit of the Holders, the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations (as defined below);

 

WHEREAS, each Grantor will receive substantial benefits from the execution, delivery and performance of the obligations under the Indenture and the Notes as well as from the Obligations and each is, therefore, willing to enter into this Agreement;

 

WHEREAS, the Collateral Agent has been appointed to serve as Collateral Agent under the Indenture and, in such capacity, to enter into this Agreement; and

 

WHEREAS, this Agreement is made by the Grantors in favor of the Collateral Agent for the benefit of the Secured Parties to secure the payment and performance in full when due of the Obligations.

 

NOW, THEREFORE, in consideration of the benefits accruing to each Grantor, the receipt and sufficiency of which are hereby acknowledged, and to induce the Collateral Agent to enter into the Indenture and to induce the Holders to purchase the Notes, each Grantor hereby represents and warrants to the Collateral Agent for the benefit of the Secured Parties and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Parties as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.              Indenture.

 

(a)           Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Indenture.  All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein.

 

(b)           The rules of construction specified in Section 1.04 of the Indenture also apply to this Agreement.

 

SECTION 1.02.              Other Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

 

“Account Debtor” means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.

 

“Article 9 Collateral” has the meaning assigned to such term in Section 3.01.

 

 

  

  

  

 

“Collateral” means Article 9 Collateral and Pledged Collateral.

 

“Commodity Account Control Agreement” means an agreement among any Grantor, a commodity intermediary, and the Collateral Agent establishing control of a Commodity Account maintained by any Grantor with such commodity intermediary.

 

“Control” means (i) in the case of each Deposit Account, “control” as such term is defined in Section 9-104 of the New York UCC, (ii) in the case of any Security Entitlement, “control,” as such term is defined in Section 8-106 of the New York UCC, and (iii) in the case of any Commodity Account or Commodity Contract, “control,” as such term is defined in Section 9-106 of the New York UCC.

 

“Copyright License” means any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any right to any Grantor under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement.

 

“Copyrights” means all of the following now owned or hereafter acquired by any Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such Copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule III.

 

“Deposit Account” means, collectively with respect to each Grantor, (i) all “deposit accounts” as such term is defined in the New York UCC and all accounts and sub-accounts relating to any of the foregoing accounts and (ii) all cash, funds, checks, notes and instruments from time to time on deposit in any of the accounts or sub-accounts described in clause (i) of this definition.

 

“Deposit Account Control Agreement” means an agreement among any Grantor, a banking institution holding such Grantor’s funds, and the Collateral Agent establishing control of a Deposit Account maintained by any Grantor with such banking institution.

 

“Excluded Accounts” has the meaning assigned to such term in Section 3.04(d).

 

“Existing Second Lien Indenture” means the Indenture, dated as of December 22, 2010, among the Issuer, the guarantors party thereto from time to time and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as trustee and collateral agent relating to the Company’s 131⁄2% Second Lien Senior Secured Notes due 2018.

 

“Federal Securities Laws” has the meaning assigned to such term in Section 4.04.

 

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Issuer.

 

“First Lien Indenture” means the Indenture, dated as of December 1, 2010, among the Issuer (as successor by merger to AMO Escrow Corporation), the guarantors party thereto from time to time and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as trustee and collateral agent, relating to the Company’s 111⁄2% First Lien Senior Secured Notes due 2017, as amended, supplemented or otherwise modified from time to time.

 

“General Intangibles” means all “general intangibles” (as defined in the New York UCC), including, without limitation, (i) all choses in action and causes of action, (ii) all other intangible personal property of every kind and nature (other than Accounts, chattel paper, Investment Property, Letter of Credit Rights and Deposit Accounts) now owned or hereafter acquired by any Grantor, including corporate or other business records and (iii) indemnification claims, (iv) contract rights (including rights under leases, whether entered into as lessor or 

 

 

  

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lessee, Secured Hedge Agreements and other agreements), (v) Intellectual Property, (vi) goodwill, (vii) registrations, (viii) franchises, (ix) tax refund claims and (x) any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Accounts.

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Grantors” means the Issuer and the Subsidiary Parties.

 

“Indenture” has the meaning assigned to such term in the preliminary statement of this Agreement.

 

“Intellectual Property” means all intellectual and similar property of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.

 

“Intercreditor Agreements” means the First Lien Intercreditor Agreement and the Intercreditor Agreement.

 

“Investment Property” means a security, whether certified or uncertified, Security Entitlement, Securities Account, Commodity Contract or Commodity Account.

 

“License” means any Patent License, Trademark License, Copyright License or other license or sublicense agreement to which any Grantor is a party, including those listed on Schedule III.

 

“New York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.

 

“Notes Documents” means the Indenture, this Agreement and each of the other agreements, documents, and instruments providing for or evidencing any other Obligation and any other document or instrument executed or delivered at any time in connection with any Obligation, to the extent such are effective at the relevant time, as each may be amended, modified, restated, supplemented, replaced or refinanced from time to time.

 

“Obligations” means (a) the due and punctual payment by the Issuer of (i) the principal of and premium, if any, and interest (including any default interest and interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of the Issuer to any of the Secured Parties under the Indenture and each of the other Notes Documents, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Issuer under or pursuant to the Indenture and each of the other Notes Documents, and (c) the due and punctual payment and performance of all the obligations of each other Grantor under or pursuant to this Agreement and each of the other Notes Documents; provided, notwithstanding anything to the contrary herein or any other Notes Document, for purposes of this Agreement and the other Security Documents (except for purposes of Section 5.03(b)), the Obligations related to principal of the Notes shall be limited to the sum of (a) the aggregate principal amount of the Initial Notes issued and 

 

 

  

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outstanding under the Indenture on the Issue Date in an amount equal to $39,024,390 plus (b) such additional principal amount that is equal to the lesser of (i) the aggregate principal amount of Additional Notes issued and outstanding under the Indenture from time to time and (ii) the greater of (1) the maximum principal amount that would not result in a violation of, or breach or default under the First Lien Indenture and Existing Second Lien Indenture, each as in effect on the date hereof, or (2) the maximum principal amount that would not result in a violation of, or breach or default under, the First Lien Indenture and Existing Second Lien Indenture after the date hereof as a result of any amendment, restatement or other modification to, or termination of, such agreements.

 

“Patent License” means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention covered by a Patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to make, use or sell any invention covered by a Patent, now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

 

“Patents” means all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule III, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.

 

“Perfection Certificate” means a certificate substantially in the form of Exhibit II, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by an executive officer or Financial Officer of the Issuer.

 

“Pledged Collateral” has the meaning assigned to such term in Section 2.01.

 

“Pledged Debt Securities” has the meaning assigned to such term in Section 2.01.

 

“Pledged Securities” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

 

“Pledged Stock” has the meaning assigned to such term in Section 2.01.

 

“Proceeds” has the meaning specified in Section 9-102 of the New York UCC.

 

“Secured Parties” means (a) the Holders, (b) the Trustee, (c) the Collateral Agent, (d) the beneficiaries of each indemnification obligation undertaken by any Grantor under any Notes Document and (e) the successors and assigns of each of the foregoing.

 

“Securities Account Control Agreement” means an agreement among any Grantor, a securities intermediary, and the Collateral Agent establishing control of a Securities Account maintained by any Grantor with such securities intermediary.

 

“Security Interest” has the meaning assigned to such term in Section 3.01.

 

“Subsidiary Parties” means (a) the Subsidiaries identified on Schedule I and (b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary Party after the Issue Date.

 

“Trademark License” means any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any Trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

 

 

  

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“Trademarks” means all of the following now owned or hereafter acquired by any Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all renewals thereof, including those listed on Schedule III; provided that applications in the United States Patent and Trademark Office to register trademarks or service marks on the basis of any Grantor’s “intent to use” such trademarks or service marks will not be deemed to be Collateral unless and until a “Statement of Use” or “Amendment to Allege Use” has been filed and accepted in the United States Patent and Trademark Office, whereupon such application shall be automatically subject to the security interest granted herein and deemed to be included in the Collateral, and (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill.

 

ARTICLE II

 

Pledge of Securities

 

SECTION 2.01.              Pledge.  As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in, to and under (a) the shares of capital stock and other equity interests owned by it and listed on Schedule II and any other equity interests obtained in the future by such Grantor and the certificates representing all such Equity Interests (the “Pledged Stock”); (b) (i) the debt securities listed opposite the name of such Grantor on Schedule II, (ii) any debt securities in the future issued to such Grantor represented by a promissory note or other instrument evidencing such debt securities and (iii) the promissory notes and any other instruments evidencing such debt securities, if any (the “Pledged Debt Securities”); (c) all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (a) and (b) above; (d), subject to Section 2.06(d), all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (a), (b) and (c) above; and (e) all Proceeds of any of the foregoing (the items referred to in clauses (a) through (e) above being collectively referred to as the “Pledged Collateral”).

 

SECTION 2.02.              Delivery of the Pledged Collateral.

 

(a)           Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities.

 

(b)           (i) Each Grantor will pledge and deliver to the Collateral Agent pursuant to the terms hereof any Indebtedness for borrowed money owed to such Grantor by any Person that is evidenced by a duly executed promissory note, and, individually, in excess of $250,000 or, in the aggregate, in excess of $1,000,000.

 

(ii)           Each Grantor acknowledges and agrees that, to the extent any debt securities now or hereafter issued to such Grantor are not represented by a promissory note or other instrument evidencing such debt securities on the Issue Date, then such Grantor shall not reduce any such debt securities to a promissory note or other instrument evidencing such debt securities after the Issue Date; unless such Grantor promptly delivers each such promissory note or other instrument evidencing such debt securities, individually, in excess of $250,000 or, in the aggregate, in excess of $1,000,000, to the Collateral Agent.

 

(c)           Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by stock powers, note powers or allonges, as applicable duly executed in blank or other instruments of transfer satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall, at the reasonable request of the Collateral Agent, be accompanied by proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request.  Each 

 

 

  

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delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be attached hereto as 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.  Each schedule so delivered shall supplement any prior schedules so delivered.

 

SECTION 2.03.              Representations, Warranties and Covenants.  The Grantors jointly and severally represent, warrant and covenant to and with the Collateral Agent, for the benefit of the Secured Parties, that:

 

(a)           Schedule II correctly sets forth the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by the Pledged Stock and includes all Equity Interests of Subsidiaries (and with respect to Foreign Subsidiaries 65% of the voting Equity Interest of Foreign Subsidiaries) and all debt securities and promissory notes required to be pledged hereunder;

 

(b)           the Pledged Stock and Pledged Debt Securities have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and nonassessable and (ii) in the case of Pledged Debt Securities, to the best knowledge of the relevant Grantors, are legal, valid and binding obligations of the issuers thereof;

 

(c)           except for the security interests granted hereunder, each of the Grantors (i) is and, subject to any transfers made in compliance with the Indenture, will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by such Grantor, (ii) holds the same free and clear of all Liens, other than Liens created by this Agreement and Liens permitted by Section 4.12 of the Indenture, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than Liens created by this Agreement and Liens permitted by Section 4.12 of the Indenture and assignments and transfers permitted under Section 4.10 of the Indenture, and (iv) will defend its title or interest thereto or therein against any and all Liens (other than the Lien created by this Agreement and Liens permitted by Section 4.12 of the Indenture), however, arising, of all Persons whomsoever;

 

(d)           except for restrictions and limitations imposed by the Notes Documents or securities laws generally or otherwise permitted to exist pursuant to the terms of the Indenture, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

 

(e)           each of the Grantors has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated;

 

(f)           [Reserved];

 

(g)           this Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral; and

 

(h)           the pledge effected hereby is effective to vest in the Collateral Agent, for the benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral as set forth herein.

 

SECTION 2.04.              Certification of Limited Liability Company and Limited Partnership Interests.

 

(a)           Each Grantor acknowledges and agrees that (i) each interest in any limited liability company or limited partnership controlled by the Grantor, pledged hereunder and represented by a certificate shall be a “security” within the meaning of Article 8 of the New York UCC and shall be governed by Article 8 of the New York UCC and (ii) each such interest shall at all times hereafter be represented by a certificate unless such Grantor provides prior written notice of any election to not treat such interests as a “security,” or not to have such interest certificated, and takes all actions necessary or as reasonably required by the Collateral Agent to maintain a valid, perfected lien with respect to such interest.

 

 

  

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(b)           Each Grantor further acknowledges and agrees that (i) each interest in any limited liability company or limited partnership controlled by the Grantor, pledged hereunder and not represented by a certificate shall not be a “security” within the meaning of Article 8 of the New York UCC and shall not be governed by Article 8 of the New York UCC, and (ii) each Grantor shall at no time elect to treat any such interest as a “security” within the meaning of Article 8 of the New York UCC or issue any certificate representing such interest, unless the Grantor provides prior written notification to the Collateral Agent of such election and immediately delivers any such certificate to the Collateral Agent pursuant to the terms hereof.

 

SECTION 2.05.              Registration in Nominee Name; Denominations.  The Collateral Agent, on behalf of the Secured Parties, shall have the right (upon the occurrence and during the continuance of an Event of Default) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent.  Each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Grantor.  After the Pledged Securities are held in its name, the Collateral Agent shall at all times have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.

 

SECTION 2.06.              Voting Rights; Dividends and Interest.

 

(a)           Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent shall have notified the Grantors that their rights under this Section 2.06 are being suspended:

 

(i)            Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Indenture and the other Notes Documents.

 

(ii)           At the sole expense of the Grantors, the Collateral Agent shall execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request, in writing, for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above and to receive the cash dividends it is entitled to receive pursuant to subparagraph (iii) below.

 

(iii)           Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Indenture, the other Notes Documents and applicable laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Stock or Pledged Debt Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent and shall be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement).

 

(b)           Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Grantors of the suspension of their rights under paragraph (a)(iii) of this Section 2.06, then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions.  All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary 

 

 

  

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endorsement).  Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02.  After all Events of Default have been cured or waived and the Issuer has delivered to the Collateral Agent a certificate to that effect, the Collateral Agent shall, within five Business Days after receipt of such certificate, repay to each Grantor (without interest) all dividends, interest, principal (without interest) or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and that remain in such account.

 

(c)           Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Grantors of the suspension of their rights under paragraph (a)(i) of this Section 2.06, then all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.06, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 2.06, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that, the Collateral Agent, if directed by the Trustee or Holders of at least a majority in principal amount of the Notes then outstanding, shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.  After all Events of Default have been cured or waived and the Issuer has delivered to the Collateral Agent a certificate to that effect, each Grantor will have the right to exercise the voting and consensual rights and powers that it would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) of this Section 2.06.

 

(d)           Any notice given by the Collateral Agent to the Grantors suspending their rights under paragraph (a) of this Section 2.06 (i) may be given by telephone if promptly confirmed in writing, (ii) may be given to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.

 

ARTICLE III

 

Security Interests in Personal Property

 

SECTION 3.01.              Security Interest.

 

(a)           As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest (the “Security Interest”) in, all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”):

 

(i)            all Accounts;

 

(ii)           all Chattel Paper;

 

(iii)           all Deposit Accounts;

 

(iv)          all Documents (other than title documents relating to vehicles);

 

(v)           all Equipment;

 

(vi)          all General Intangibles;

 

 

  

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(vii)         all Instruments;

 

(viii)        all Inventory;

 

(ix)           all Investment Property;

 

(x)            Letter-of Credit Rights;

 

(xi)           Commercial Tort Claims described in Schedule IV;

 

(xii)          all other personal property (other than leasehold interests in real property) not otherwise described above (except for any property specifically excluded from any clause in this section above and any property specifically excluded from any defined term used in any clause of this section);

 

(xiii)         all books and records; and

 

(xiv)        all Proceeds and products of any and all Supporting Obligations of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

 

(b)           provided, that notwithstanding anything herein to the contrary, in no event shall the security interest granted hereunder attach to, nor the terms “Article 9 Collateral” or “Pledged Stock” include (A) any contract or agreement to which a Grantor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (i) the unenforceability of any right of the Grantor therein or (ii) a breach or termination pursuant to the terms of, or a default under, any such contract or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or principles of equity), provided, however, that such security interest shall attach immediately at such time as the condition causing such unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such contract or agreement that does not result in any of the consequences specified in (i) or (ii) including, without limitation, any proceeds of such contract or agreement, (B) more than 65% of the issued and outstanding voting Equity Interests of any Foreign Subsidiary or any Equity Interests in any Person that is not a wholly-owned Subsidiary where, pursuant to the organizational documents or any related shareholders or similar agreement of such Person, the grant of such security interest or lien is prohibited or prohibited without the consent of the equity holders of such Person (other than the Borrower or any wholly-owned Subsidiary thereof); and (C) assets owned by any Grantor on the date hereof or hereafter acquired and any proceeds thereof that are subject to a Lien securing Indebtedness permitted to be incurred pursuant to Section 4.09(b)(4) of the Indenture to the extent and for so long as the contract or other agreement in which such Lien is granted (or the documentation providing for such Indebtedness) validly prohibits the creation of any other Lien on such assets and proceeds.

 

(c)           Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Collateral as all assets of such Grantor, whether now owned or hereafter acquired or words of similar effect as being of an equal or lesser scope or with greater detail, and (ii) contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (a) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor and (b) in the case of a financing statement filed as a fixture filing or covering Article 9 Collateral constituting minerals or the like to be extracted or timber to be cut, a sufficient description of the real property to which such Article 9 Collateral relates.  Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.

 

Each Grantor also ratifies its authorization for the Collateral Agent to file in any relevant jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.

 

 

  

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The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party.

 

(d)           The Security Interest is granted as security only and shall not subject the Collateral 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 Article 9 Collateral.

 

SECTION 3.02.              Representations and Warranties.  The Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that:

 

(a)           Each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval that has been obtained.

 

(b)           The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein, including the exact legal name of each Grantor, is correct and complete as of the Issue Date.  The Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations prepared based upon the information provided in the Perfection Certificate for filing in each governmental, municipal or other office specified in Schedule 2 to the Perfection Certificate (or specified by written notice from the Issuer to the Collateral Agent after the Issue Date in the case of filings, recordings or registrations required by Section 4.20 of the Indenture), are all the filings, recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the Security Interest in Article 9 Collateral consisting of United States Patents, Trademarks and Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements.  Each Grantor represents and warrants that a fully executed agreement in the form hereof or a fully executed short-form agreement containing a description of all Article 9 Collateral consisting of Intellectual Property with respect to United States Patents and United States registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered Copyrights have been delivered to the Collateral Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, and otherwise as may be required pursuant to the laws of any other necessary jurisdiction, to protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral consisting of Patents, Trademarks and Copyrights in which a security interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary (other than such actions as are necessary to perfect the Security Interest with respect to any Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or registration or application for registration thereof) acquired or developed after the date hereof).

 

(c)           The Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Obligations, (ii) subject to the filings described in Section 3.02(b), a perfected security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such jurisdictions, (iii) a security interest that shall be perfected in all Article 9 Collateral in which a security interest may be perfected upon the receipt and recording of this Agreement or the short-form agreement 

 

 

  

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referenced in paragraph (b) above with the United States Patent and Trademark Office and the United States Copyright Office, as applicable; and (iv) from and after the date required under the Indenture and Section 3.04(d) hereof, a perfected security interest in each Deposit Account (other than Excluded Accounts), Securities Account and Commodity Account in favor of the Collateral Agent to the extent a security interest therein may be perfected by obtaining “control” pursuant to the New York UCC by entry into control agreements.  The Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral, other than Liens permitted pursuant to Section 4.12 of the Indenture that have priority as a matter of law.  Notwithstanding anything to the contrary contained herein, no representation is made regarding perfection with respect to deposit accounts.

 

(d)           The Article 9 Collateral is owned by the Grantors free and clear of any Lien, except for Liens permitted pursuant to Section 4.12 of the Indenture.  None of the Grantors has filed or consented to the filing of (i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Article 9 Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (iii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens permitted pursuant to Section 4.12 of the Indenture.

 

(e)           No amount payable under or in connection with any of the Article 9 Collateral is evidenced by any promissory note or other instrument that is, individually, in excess of $250,000 or, in the aggregate, in excess of $1,000,000, which has not been promptly pledged and delivered to the Collateral Agent, and duly endorsed.

 

(f)           On the date hereof, except to the extent listed in Schedule IV, no Grantor has knowledge of rights in any Commercial Tort Claim as to which it reasonably expects to recover more than $250,000.

 

(g)           All Deposit Accounts, Securities Accounts and Commodity Accounts of each Grantor as of the date hereof are listed on Schedule V.

 

SECTION 3.03.              Covenants.

 

(a)           Each Grantor agrees promptly (and in any event within 30 days of such change) to notify the Collateral Agent in writing of any change (i) in corporate name, (ii) in the location of its chief executive office, its principal place of business, any office in which it maintains books or records relating to Article 9 Collateral owned by it or any office or facility at which Article 9 owned by it is located (including the establishment of any such new office or facility), (iii) in its identity or type of organization or corporate structure, (iv) in its Federal Taxpayer Identification Number or organizational identification number or (v) in its jurisdiction of organization.  Each Grantor agrees to promptly provide the Collateral Agent with certified organizational documents reflecting any of the changes described in the first sentence of this paragraph.  Each Grantor agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority security interest in all the Article 9 Collateral.  Each Grantor agrees promptly to notify the Collateral Agent, in writing, if any material portion of the Article 9 Collateral owned or held by such Grantor is damaged or destroyed.

 

(b)           Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Article 9 Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged.

 

(c)           Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to Section 4.03 of the Indenture, the Issuer shall deliver to the Collateral Agent a certificate executed by a Financial Officer and the chief legal officer of the Issuer (a) setting forth the information required pursuant to the Perfection Certificate and each of the Schedules or confirming that there has been no 

 

 

  

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change in such information since the date of such certificate or Schedules or the date of the most recent certificate or Schedules delivered pursuant to this Section 3.03(c) and (b) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, recordings and registrations, containing a description of the Collateral have been filed or recorded in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (a) of this Section 3.03 to the extent necessary to protect and perfect the Security Interest as of the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period); provided  that solely with respect to Intellectual Property, the Borrower shall deliver on a quarterly basis the certificate required by this Section 3.03(c) at the time of delivery of any annual or quarterly report pursuant to Section 4.03 of the Indenture for the quarter then ended.  Each certificate delivered pursuant to this Section 3.03(c) shall identify in the format of Schedule III all Intellectual Property of any Grantor in existence on the date thereof and not then listed on such Schedules or previously so identified to the Collateral Agent.

 

(d)           Each Grantor shall, at its own expense, take all reasonable and necessary actions to defend title to the Article 9 Collateral against all Persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien not permitted pursuant to Section 4.12 of the Indenture.

 

(e)           Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as may be necessary or as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith.  If any amount payable under or in connection with any of the Article 9 Collateral shall be or become evidenced by any promissory note or other instrument that is, individually, in excess of $250,000 or, in the aggregate, in excess of $1,000,000, such note or instrument shall be promptly pledged and delivered to the Collateral Agent and duly endorsed.

 

Without limiting the generality of the foregoing, each Grantor hereby authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to supplement this Agreement by supplementing Schedule III or adding additional schedules hereto to specifically identify any asset or item that may constitute Copyrights, Licenses, Patents or Trademarks; provided that any Grantor shall have the right, exercisable within 20 days after it has been notified by the Collateral Agent of the specific identification of such Collateral, to advise the Collateral Agent in writing of any inaccuracy of the representations and warranties made by such Grantor hereunder with respect to such Collateral or provide an explanation as to why such asset or item does not constitute Copyrights, Licenses, Patents or Trademarks.  Each Grantor agrees that it will use its best efforts to take such action as shall be necessary in order that all representations and warranties hereunder shall be true and correct with respect to such Collateral within 30 days after the date it has been notified by the Collateral Agent of the specific identification of such Collateral.

 

(f)           The Collateral Agent and such Persons as the Collateral Agent may reasonably designate, and any counsel which shall be appointed pursuant to Section 10.09 of the Indenture, shall have the right, at the Grantors’ own cost and expense, to inspect the Article 9 Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the Article 9 Collateral is located, to discuss the Grantors’ affairs with the officers of the Grantors and their independent accountants and to verify under reasonable procedures, in accordance with Section 10.09 of the Indenture, the validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of making such a verification.  The Collateral Agent, and any counsel which shall be appointed pursuant to Section 10.09 of the Indenture, shall have the right to share any information it gains from such inspection or verification with any Secured Party.

 

(g)           At its option (but with no obligation), the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to Section 4.12 of the Indenture, and may pay for the maintenance 

 

 

  

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and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Indenture or this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided that nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Notes Documents.

 

(h)           Each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.

 

(i)            None of the Grantors shall make or permit to be made an assignment, pledge or hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9 Collateral, except as permitted by the Indenture.  None of the Grantors shall make or permit to be made any transfer of the Article 9 Collateral and each Grantor shall remain at all times in possession of the Article 9 Collateral owned by it, except in each case as permitted by the Indenture.

 

(j)            None of the Grantors will, without the Collateral Agent’s prior written consent, grant any extension of the time of payment of any Accounts included in the Article 9 Collateral, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any Person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, compromises, settlements, releases, credits or discounts granted or made in the ordinary course of business.

 

(k)           The Grantors, at their own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with Section 4.22 of the Indenture.  All such insurance shall name the Collateral Agent as an additional insured party or loss payee.  Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto.  In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may (but shall not be obligated to), without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as directed by Holders of a majority in aggregate principal amount of the Notes then outstanding.  All sums disbursed by the Collateral Agent in connection with this paragraph, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby.

 

(l)            If any Grantor shall obtain an interest in any Commercial Tort Claim as to which it determines that it reasonably expects to recover more than $250,000, such Grantor shall within 30 days of making such determination (or such other period as agreed by Holders of a majority in aggregate principal amount of the Notes then outstanding) sign and deliver documentation granting a perfected security interest under the terms and provisions of this Agreement in and to such Commercial Tort Claim.

 

(m)           Each Grantor shall take the following actions within the timeframes set forth for the taking of such actions (it being understood and agreed that all representations, warranties and covenants of this Agreement and the other Notes Documents with respect to taking of such actions are qualified by the non-completion of such actions until such time as they are completed or required to be completed in accordance with this Section 3.03(m)): (i) within 45 days from the date hereof, deliver to the Collateral Agent for recording with the United States Patent and Trademark Office and the United States Copyright Office a fully executed agreement in the form hereof or a fully executed short-form agreement containing a description of all Article 9 Collateral consisting 

 

 

  

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of Intellectual Property with respect to United States Patents and United States registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered Copyrights and (ii) within 60 days from the date hereof, cause each bank or financial institution in which any Grantor maintains a Deposit Account, Securities Account or Commodity Account (other than the Excluded Accounts) to enter into a Deposit Account Control Agreement, Securities Account Control Agreement or Commodity Account Control Agreement in substantially the same form as the Deposit Account Control Agreements, Securities Account Control Agreements or Commodity Account Control Agreements existing on the date hereof, with the Collateral Agent.

 

SECTION 3.04.              Other Actions.  In order to further insure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Security Interest, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral:

 

(a)           Instruments.  If any Grantor shall at any time hold or acquire any Instruments, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank.

 

(b)           Investment Property.  Except to the extent otherwise provided in Article II, if any Grantor shall at any time hold or acquire any certificated securities representing Pledged Stock, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank.  If any securities in a Restricted Subsidiary now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall immediately notify the Collateral Agent, in writing, thereof and cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities, without further consent of any Grantor or such nominee.  The Collateral Agent agrees with each of the Grantors that the Collateral Agent shall not give any such instructions or directions to any such issuer and shall not withhold its consent to the exercise of any withdrawal or dealing rights by any Grantor, unless an Event of Default has occurred and is continuing, or, after giving effect to any such investment and withdrawal rights would occur.

 

(c)           Letter-of-Credit Rights.  If any Grantor is at any time a beneficiary under a letter of credit now or hereafter issued in favor of such Grantor, such Grantor shall promptly notify the Collateral Agent, in writing, thereof and, upon the occurrence and during the continuation of an Event of Default, such Grantor shall, pursuant to an agreement, arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under the letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred or is continuing.

 

(d)           Deposit Accounts, Securities Accounts and Commodity Accounts.  From and after the date required under the Indenture, for each Deposit Account (other any Deposit Account exclusively used for payroll, payroll taxes and other employee wage and benefits programs (such accounts, the “Excluded Accounts”)), Securities Account and Commodity Account that any Grantor currently maintains or that any Grantor at any time opens and maintains, such Grantor shall, cause the depository bank, securities intermediary or commodity intermediary, as the case may be, to agree to comply with instructions originated by the Collateral Agent (a) directing the disposition of funds with respect to such Deposit Account or (b) concerning the Securities Account or Commodity Account, as the case may be, without further consent of such Grantor or any other Person, pursuant to a control agreement.  The Collateral Agent agrees with each Grantor that the Collateral Agent shall not give any such instructions or withhold any withdrawal rights from any Grantor unless an Event of Default shall have occurred and be continuing.  Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all actions as may be necessary or as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies of the Collateral Agent with respect to such Deposit Account, Securities Account or Commodity Account.  Without limiting the foregoing, from and after the date required under the Indenture in order to perfect the security interest in Deposit Accounts and Securities Accounts, before opening, closing or replacing any Deposit Account, Securities Account or Commodity Account, each Grantor shall give 5 Business Days’ prior notice to the Collateral Agent and shall cause each bank or financial institution in which it seeks to open a Deposit Account, Securities Account, or Commodity Account to enter into a Deposit Account Control Agreement, Securities Account Control Agreement or Commodity Account Control Agreement, as the case may be, with the Collateral Agent in order to 

 

 

  

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establish control by the Collateral Agent in such Deposit Account, Securities Account or Commodity Account.  Each Grantor further covenants that from and after the date required under the Indenture in order to perfect the security interest in Deposit Accounts and Securities Accounts, any and all cash, checks and proceeds of Collateral shall be placed in an account subject to a control agreement (other than with respect to deposits into an Excluded Account).

 

SECTION 3.05.              Covenants Regarding Patent, Trademark and Copyright Collateral.

 

(a)           Each Grantor agrees that it will not, do any act or omit do to any act (and will exercise commercially reasonable efforts to prevent its licensees from doing any act as omitting to do any act) whereby any Patent that is material to the conduct of such Grantor’s business may become invalidated or dedicated to the public, and agrees that it shall continue to mark any products covered by a Patent with the relevant patent number as necessary and sufficient to establish and preserve its maximum rights under applicable patent laws.

 

(b)           Each Grantor will (and will exercise commercially reasonable efforts to cause its licensees or its sublicensees to), for each Trademark material to the conduct of such Grantor’s business, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark consistent with past practice, (iii) display such Trademark with notice of Federal or foreign registration to the extent necessary and sufficient to establish and preserve its maximum rights under applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights.

 

(c)           Each Grantor will (and will exercise commercially reasonable efforts to cause its licensees or its sublicensees to), for each work covered by a material Copyright, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice as necessary and sufficient to establish and preserve its maximum rights under applicable copyright laws.

 

(d)           Each Grantor shall notify the Collateral Agent, in writing, immediately if it knows or has reason to know that any Patent, Trademark or Copyright material to the conduct of its business may become abandoned, lost or dedicated to the public, or of any materially adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar office of any country) regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or its right to keep and maintain the same.

 

(e)           Each Grantor will take all reasonable and necessary steps that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each material application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of the Trademarks and Copyrights that is material to the conduct of any Grantor’s business, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancellation proceedings against third parties.

 

(f)            In the event that any Grantor has reason to believe that any Article 9 Collateral consisting of a Patent, Trademark or Copyright material to the conduct of any Grantor’s business has been or is about to be materially infringed, misappropriated or diluted by a third party, such Grantor promptly shall notify the Collateral Agent, in writing, and shall, if consistent with good business judgment, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as are reasonably appropriate under the circumstances to protect such Article 9 Collateral.

 

(g)           Upon and during the continuance of an Event of Default, each Grantor shall use its best efforts to obtain all requisite consents or approvals by the licensor of each Copyright License, Patent License or 

 

 

  

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Trademark License to effect the assignment of all such Grantor’s right, title and interest thereunder to the Collateral Agent or its designee, in accordance with Section 4.01.

 

ARTICLE IV

 

Remedies

 

SECTION 4.01.              Remedies Upon Default.  Upon the occurrence and during the continuance of an Event of Default, each Grantor agrees to deliver each item of Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall have the right to take any of or all the following actions at the same or different times: (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Article 9 Collateral (other than Trademarks for which such assignment, transfer or conveyance would jeopardize the validity of such Trademark, for which the parties shall cooperate to find an alternative solution) by the applicable Grantors to the Collateral Agent, or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such Article 9 Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine as directed in accordance with the Indenture (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained), and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Article 9 Collateral and without liability for trespass to enter any premises where the Article 9 Collateral may be located for the purpose of taking possession of or removing the Article 9 Collateral and, generally, to exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law.  Without limiting the generality of the foregoing, each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate.  The Collateral Agent shall be authorized at any such sale of securities to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.

 

The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral.  Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange.  Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale.  At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may determine as directed in accordance with the Indenture.  The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given.  The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned.  In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against 

 

 

  

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the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations paid in full.  As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver.  Any sale pursuant to the provisions of this Section 4.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.

 

SECTION 4.02.              Application of Proceeds.  Upon the occurrence and during the continuation of an Event of Default, subject to the terms of the Intercreditor Agreements, the Collateral Agent shall apply the proceeds of any collection or sale of Collateral, including any Collateral consisting of cash, as follows:

 

(a)           FIRST, to the payment of all costs and expenses incurred by the Collateral Agent or Trustee in connection with such collection or sale or otherwise in connection with this Agreement, any other Notes Document or any of the Obligations, including all court costs and the fees and expenses of its agents and legal counsel (and any expenses of other counsel permitted by Section 10.09 of the Indenture), the repayment of all advances made by the Collateral Agent or Trustee hereunder or under any other Notes Document on behalf of any Grantor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Notes Document; and

 

(b)           SECOND, pursuant to Section 6.13 of the Indenture, without duplication of any amounts already paid under Section 4.02(a) above.

 

The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement.  Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.

 

SECTION 4.03.              Grant of License to Use Intellectual Property.  For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use, license or sublicense (subject to the Grantor’s license) any of the Article 9 Collateral consisting of Intellectual Property, wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.  The use of such license by the Collateral Agent may be exercised, at the option of the Collateral Agent, solely upon the occurrence and during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default.

 

SECTION 4.04.              Securities Act.  In view of the position of the Grantors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Pledged Collateral permitted hereunder.  Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same.  Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or 

 

 

  

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part of the Pledged Collateral under any applicable blue sky or other state securities laws or similar laws analogous in purpose or effect.  Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a single potential purchaser to effect such sale.  Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions.  The provisions of this Section 4.04 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.

 

SECTION 4.05.              Registration.  Each Grantor agrees that, upon the occurrence and during the continuance of an Event of Default, if for any reason the Collateral Agent is directed in accordance with the Indenture to sell any of the Pledged Collateral at a public sale, it will, at any time and from time to time, upon the written request of the Collateral Agent, use its best efforts to take or to cause the issuer of such Pledged Collateral to take such action and prepare, distribute and/or file such documents, as are required to permit the public sale of such Pledged Collateral.  Each Grantor further agrees to indemnify, defend and hold harmless the Collateral Agent, each other Secured Party, any underwriter and their respective officers, directors, affiliates and controlling persons from and against all loss, liability, expenses, costs of counsel (including, without limitation, reasonable fees and expenses to the Collateral Agent of legal counsel or of any other legal counsel approved pursuant to Section 7.07 of the Indenture), and claims (including the costs of investigation) that they may incur insofar as such loss, liability, expense or claim arises out of or is based upon any alleged untrue statement of a material fact contained in any prospectus (or any amendment or supplement thereto) or in any notification or offering circular, or arises out of or is based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements in any thereof not misleading, except insofar as the same may have been caused by any untrue statement or omission based upon information furnished in writing to such Grantor or the issuer of such Pledged Collateral by the Collateral Agent or any other Secured Party expressly for use therein.  Each Grantor further agrees, upon such written request referred to above, to use its best efforts to qualify, file or register, or cause the issuer of such Pledged Collateral to qualify, file or register, any of the Pledged Collateral under the Blue Sky or other securities laws of such states as may be reasonably requested by the Collateral Agent and keep effective, or cause to be kept effective, all such qualifications, filings or registrations.  Each Grantor will bear all costs and expenses of carrying out its obligations under this Section 4.05.  Each Grantor acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section 4.05 and that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section 4.05 may be specifically enforced.

 

SECTION 4.06.              Proceeds to be Turned Over to Collateral Agent.  If an Event of Default occurs and is continuing and the Issuer’s Obligations under the Indenture have been accelerated as a consequence thereof, then the Collateral Agent may request that all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, if required).  All proceeds received by the Collateral Agent shall be held in a collateral account maintained under its sole dominion and control.  All Proceeds while held by the Collateral Agent hereunder shall be held by the Collateral Agent in such a collateral account (or by such Grantor in trust for the Collateral Agent and the other Secured Parties) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 4.02.

 

ARTICLE V

 

Indemnity, Subrogation and Subordination

 

SECTION 5.01.              Indemnity and Subrogation.  In the event any assets of any Grantor shall be sold pursuant to this Agreement or any other Notes Document to satisfy in whole or in part an obligation owed to any 

 

 

  

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Secured Party, the Issuer shall indemnify such Grantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.

 

SECTION 5.02.              Contribution and Subrogation.  Each Grantor (a “Contributing Party”) agrees (subject to Section 5.03) that, in the event assets of any other Grantor shall be sold pursuant to any Notes Document to satisfy any Obligation owed to any Secured Party and such other Grantor (the “Claiming Party”) shall not have been fully indemnified by the Issuer as provided in Section 5.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party on the date hereof and the denominator shall be the aggregate net worth of all the Grantors on the date hereof (or, in the case of any Grantor becoming a party hereto pursuant to Section 6.14, the date of the supplement hereto executed and delivered by such Grantor).  Any Contributing Party making any payment to a Claiming Party pursuant to this Section 5.02 shall be subrogated to the rights of such Claiming Party under Section 5.01 to the extent of such payment.

 

SECTION 5.03.              Subordination.

 

(a)           Notwithstanding any provision of this Agreement to the contrary, all rights of the Grantors under Sections 5.01 and 5.02 and all other rights of indemnity, contribution or subrogation from any other Grantor under applicable law or otherwise shall be fully subordinated (including in any insolvency proceeding) to the indefeasible payment in full in cash of the Obligations.  No failure on the part of the Issuer or any Grantor to make the payments required by Sections 5.01 and 5.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Grantor with respect to its obligations hereunder, and each Grantor shall remain liable for the full amount of the obligations of such Grantor hereunder.

 

(b)           Each Grantor hereby agrees that all Indebtedness and other monetary obligations owed by it to any other Grantor or any other Subsidiary shall be fully subordinated (including in any insolvency proceeding) to the indefeasible payment in full in cash of the Obligations.

 

ARTICLE VI

 

Miscellaneous

 

SECTION 6.01.              Notices.  All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 13.02 of the Indenture.  All communications and notices hereunder to any Subsidiary Party shall be given to it in care of the Issuer as provided in Section 13.02 of the Indenture.

 

SECTION 6.02.              Waivers; Amendment.

 

(a)           No failure or delay by the Collateral Agent, the Trustee or any Holder in exercising any right or power hereunder or under any other Notes Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Collateral Agent, the Trustee and the Holders hereunder and under the Notes Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by any Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 6.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on any Grantor in any case shall entitle any Grantor to any other or further notice or demand in similar or other circumstances.

 

(b)           Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 9.02 of the Indenture.

 

 

  

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SECTION 6.03.              Collateral Agent; Fees and Expenses; Indemnification.

 

(a)           The provisions of Article 10 of the Indenture shall inure to the benefit of the Collateral Agent, and shall be binding upon all Grantors and all Secured Parties, in connection with this Agreement and the other Security Documents.

 

(b)           The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in Section 7.07 of the Indenture.

 

(c)           Without limitation of its indemnification obligations under the Notes Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent against, and hold the Collateral Agent harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for the Collateral Agent, incurred by or asserted against the Collateral Agent arising out of, in connection with, or as a result of, the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating to any of the foregoing agreement or instrument contemplated hereby, or to the Collateral, whether or not the Collateral Agent is a party thereto; provided that such indemnity shall not, as to the Collateral Agent, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of the Collateral Agent.

 

(d)           Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the Notes Documents.  The provisions of this Section 6.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Notes Document, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Notes Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party.  All amounts due under this Section 6.03 shall be payable on written demand therefor.

 

SECTION 6.04.              Successors and Assigns.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

 

SECTION 6.05.              Survival of Agreement.  All covenants, agreements, representations and warranties made by the Grantors in the Notes Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Notes Document shall be considered to have been relied upon by the Holders and shall survive the execution and delivery of the Notes Documents and the purchase of any Notes, regardless of any investigation made by any Holder or on its behalf and shall continue in full force and effect as long as the principal of or any accrued interest on any Note or any other amount payable under any Notes Document is outstanding and unpaid.

 

SECTION 6.06.              Counterparts; Effectiveness; Several Agreement.  This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract.  Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.  This Agreement shall become effective as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the Secured Parties and their respective successors and assigns, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement or the Indenture.  This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.

 

 

  

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SECTION 6.07.              Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.  The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 6.08.              [Reserved].

 

SECTION 6.09.              Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)           This Agreement shall be construed in accordance with and governed by the law of the State of New York.

 

(b)           Each of the Grantors hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Notes Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby 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 or, to the extent permitted by law, in such Federal court.  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 any other Notes Document shall affect any right that the Collateral Agent, the Trustee or any Holder may otherwise have to bring any action or proceeding relating to this Agreement or any other Notes Document against any Grantor or its properties in the courts of any jurisdiction.

 

(c)           Each of the Grantors hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Notes Document in any court referred to in paragraph (b) of this Section 6.09.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 6.01.  Nothing in this Agreement or any other Notes Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

SECTION 6.10.              WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY 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, ANY OTHER NOTES DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.

 

SECTION 6.11.              Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

 

 

  

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SECTION 6.12.              Security Interest Absolute.  All rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Indenture, any other Notes Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Indenture, any other Notes Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations or this Agreement.

 

SECTION 6.13.              Termination or Release.

 

(a)           This Agreement, the Security Interest and all other security interests granted hereby shall terminate when all the Obligations have been indefeasibly paid in full.

 

(b)           A Subsidiary Party shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Subsidiary Party shall be automatically released (i) in the event that such Subsidiary Party is designated as an Unrestricted Subsidiary in accordance with the terms of the Indenture or (ii) upon the consummation of any transaction permitted by the Indenture as a result of which such Subsidiary Party ceases to be a Subsidiary of the Issuer; provided that the Holders of a majority in aggregate principal amount of the Notes then outstanding shall have consented to such transaction (to the extent required by the Indenture) and the terms of such consent did not provide otherwise.

 

(c)           Upon any sale or other transfer by any Grantor of any Collateral (other than any such sale to another Grantor) that is permitted under the Indenture, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Sections 9.02 or 10.03 of the Indenture, the security interest in such Collateral shall be automatically released.

 

(d)           In connection with any termination or release pursuant to paragraph (a), (b), or (c), the Collateral Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release.  Any execution and delivery of documents pursuant to this Section 6.13 shall be without recourse to or warranty by the Collateral Agent.

 

SECTION 6.14.              Additional Subsidiaries.  Each Subsidiary Party that was not in existence or not a Subsidiary on the date of the Indenture and each Unrestricted Subsidiary that is designated as a Restricted Subsidiary shall become a Subsidiary Party and a Grantor to the extent required by the Indenture.  Upon execution and delivery by the Collateral Agent and a Subsidiary of an instrument in the form of Exhibit I hereto, such Subsidiary shall become a Subsidiary Party hereunder with the same force and effect as if originally named as a Subsidiary Party herein.

 

SECTION 6.15.              Collateral Agent Appointed Attorney-in-Fact.

 

(a)           Upon the occurrence and during the continuation of an Event of Default, each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that may be necessary to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest.  Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (i) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (ii) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (iii) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (iv) to send verifications of Accounts Receivable to any Account Debtor; (v) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of 

 

 

  

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the Collateral or to enforce any rights in respect of any Collateral; (vi) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (vii) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent; and (viii) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby.  The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor 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 wilful misconduct.

 

(b)           If any Grantor fails to perform or comply with any of its agreements contained herein, the Collateral Agent may, but without any obligation so to do, perform or comply, or otherwise cause performance or compliance, with such agreement.

 

SECTION 6.16.              Intercreditor Agreements.

 

Notwithstanding anything herein to the contrary, the Liens and security interests granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the terms of the Intercreditor Agreements.  In the event of any conflict between the terms of the Intercreditor Agreements and the terms of this Agreement, the terms of the Intercreditor Agreements shall govern and control.  In the event of any conflict between the terms of the Indenture and the terms of this Agreement, the terms of the Indenture shall govern and control.

 

Notwithstanding anything herein to the contrary, prior to the Discharge of the First Lien Obligations, the requirements of this Agreement to deliver any Collateral to the Collateral Agent, grant the Collateral Agent control over any Collateral (including “control” within the meaning of Sections 8-106, 9-104, 9-105, 9-106 and 9-107 of the UCC) or register the Collateral Agent as the registered owner of any Collateral will be deemed satisfied by delivery of such Collateral to, the granting of control over such Collateral to, or the registration of such Collateral in the name of, the First Lien Collateral Agent on behalf of the Collateral Agent in accordance with the terms and conditions of the Intercreditor Agreements.

 

THIS AGREEMENT IS SUBJECT TO THE PROVISIONS OF THE JUNIOR LIEN INTERCREDITOR AGREEMENT DATED AS OF DECEMBER 22, 2010 (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME), AMONG AMERICAN MEDIA, INC., THE GRANTORS PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS AGENT AND REVOLVING CREDIT COLLATERAL AGENT, WILMINGTON TRUST, NATIONAL ASSOCIATION, AS FIRST LIEN TRUSTEE AND FIRST LIEN COLLATERAL AGENT, WILMINGTON TRUST, NATIONAL ASSOCIATION, AS SECOND LIEN TRUSTEE AND SECOND LIEN COLLATERAL AGENT, AND EACH ADDITIONAL COLLATERAL AGENT FROM TIME TO TIME PARTY THERETO.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

	
AMERICAN MEDIA, INC.

	  
	  	  	  
	
By:

	
/s/ Christopher V. Polimeni

	  
	
Name:

	
Christopher V. Polimeni

	  
	
Title:

	
Executive Vice President, Chief,

	  
	  	
Financial Officer and Treasurer

	  
	  	  	  
	
AMI CELEBRITY  PUBLICATIONS, LLC

	  
	
AMI DIGITAL, INC.

	  
	
AMI PAPER, INC.

	  
	
COUNTRY MUSIC MEDIA GROUP, INC.

	  
	
IN STORE SERVICES INC.

	  
	
ODYSSEY MAGAZINE PUBLISHING GROUP, INC.

	  
	
WEIDER PUBLICATIONS, LLC

	  
	  	  	  
	
By:

	
/s/ Christopher V. Polimeni

	  
	
Name:

	
Christopher V. Polimeni

	  
	
Title:

	
Executive Vice President, Chief,

	  
	  	
Financial Officer and Treasurer

	  

 

 

 

 

SECOND LIEN SENIOR SECURED NOTES DUE 2020

 

COLLATERAL AGREEMENT

  

  

  

 

 

	
WILMINGTON TRUST, NATIONAL

	  
	
ASSOCIATION, AS COLLATERAL AGENT

	  
	  	  	  	  
	
By:

	
/s/ Jane Schweiger

	  
	  	
Name:

	
Jane Schweiger

	  
	  	
Title:

	
Vice President

	  

 

 

 

 

SECOND LIEN SENIOR SECURED NOTES DUE 2020

 

COLLATERAL AGREEMENT

  

  

  

 

Schedule I to

the Collateral Agreement

 

SUBSIDIARY PARTIES

 

 

 

 

 

 

 

  

  

  

 

Schedule II to

the Collateral Agreement

EQUITY INTERESTS

 

 

 

DEBT SECURITIES

 

 

 

  

  

  

Schedule III to

the Collateral Agreement

COPYRIGHTS

PATENTS

TRADEMARKS/TRADE NAMES

LICENSES

 

 

  

  

  

Schedule IV to

the Collateral Agreement

COMMERCIAL TORT CLAIMS

 

 

 

 

 

  

  

  

Schedule V to

the Collateral Agreement

ACCOUNTS

 

 

 

 

 

 

  

  

  

Exhibit I to the

Collateral Agreement

SUPPLEMENT NO.    dated as of [                                                              ] (this “Supplement”), to the Collateral Agreement (as amended, modified or supplemented from time to time, the “Collateral Agreement”) dated as of January [●], 2015, among American Media, Inc., a Delaware corporation (the “Issuer”), each subsidiary of the Issuer listed on Schedule I thereto (each such subsidiary individually a “Subsidiary Party” and collectively, the “Subsidiary Parties”; the Subsidiary Parties and the Issuer are referred to collectively herein as the “Grantors”) and Wilmington Trust, National Association, as Collateral Agent (together with its successors and assigns, in such capacity, the “Collateral Agent”).

 

A.  Reference is made to (x) the Indenture dated as of January [●], 2015 (as further amended, supplemented or otherwise modified from time to time, the “Indenture”), by and among American Media, Inc. (the “Issuer”), the subsidiaries of the Issuer party thereto as guarantors, Wilmington Trust, National Association, as Trustee and the Collateral Agent.

 

B.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture and the Collateral Agreement referred to therein.

 

C.  The Grantors have entered into the Collateral Agreement in order to induce the Holders to purchase the Notes from the Issuer. Section 6.14 of the Collateral Agreement provides that additional Subsidiaries of the Issuer may become Subsidiary Parties under the Collateral Agreement by execution and delivery of an instrument in the form of this Supplement.  The undersigned Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Section 6.14 of the Collateral Agreement.

 

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

SECTION 1.  In accordance with Section 6.14 of the Collateral Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party (and accordingly, becomes a Grantor) and Grantor under the Collateral Agreement with the same force and effect as if originally named therein as a Subsidiary Party and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Collateral Agreement applicable to it as a Subsidiary Party and Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof.  In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Obligations (as defined in the Collateral Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Subsidiary’s right, title and interest in and to the Collateral (as defined in the Collateral Agreement) of the New Subsidiary.  Each reference to a “Grantor” in the Collateral Agreement shall be deemed to include the New Subsidiary.  The Collateral Agreement is hereby incorporated herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

 

SECTION 3.  This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary and the Collateral Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

 

 

Exhibit I to the Collateral Agreement

  

  

  

 

SECTION 4.  The New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of all Deposit Accounts and Securities Accounts of the New Subsidiary, (b) set forth on Schedule II attached hereto is a true and correct schedule of all the Pledged Securities of the New Subsidiary, (c) set forth on Schedule III attached hereto is a true and correct schedule of all Intellectual Property of the New Subsidiary and (d) set forth under its signature hereto, is the true and correct legal name of the New Subsidiary, its jurisdiction of formation and the location of its chief executive office.

SECTION 5. Except as expressly supplemented hereby, the Collateral Agreement shall remain in full force and effect.

 

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Collateral Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).  The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 8.  All communications and notices hereunder shall be in writing and given as provided in Section 6.01 of the Collateral Agreement.

 

SECTION 9.  The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out- of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent.

 

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this

Supplement to the Collateral Agreement as of the day and year first above written.

	
[NAME OF NEW SUBSIDIARY]

	  
	  	  	  	  
	  	  	  	  
	
By:  

	  	  
	  	
Name:

	  	  
	  	
Title:

	  	  
	  	  	  	  
	
Legal Name:

	  
	
Jurisdiction of Formation:

	  
	
Location of Chief Executive Office:

	  
	  	  	  	  
	
WILMINGTON TRUST, NATIONAL ASSOCIATION, AS COLLATERAL AGENT

	  
	  	  	  	  
	  	  	  	  
	
By:  

	
 

	  
	  	
Name:

	  	  
	  	
Title:

	  	  

 

 

Exhibit I to the Collateral Agreement

  

  

  

Schedule I

to the Supplement No __ to the

Collateral Agreement

LOCATION OF COLLATERAL

	
Description

	  	
Location

	  
	  	  	  	  
	  	  	  	  

 

 

 

 

 

 

 

Exhibit I to the Collateral Agreement

  

  

  

 

Schedule II

to the Supplement No __ to the

Collateral Agreement

PLEDGED SECURITIES

Equity Interests

	
Issuer

	
Number of Certificate

	
Registered Owner

	
Number and Class of Equity Interests

	
Percentage of Equity Interests

	  	  	  	  	  
	  	  	  	  	  

Debt Securities

	
Issuer

	
Principal Amount

	
Date of Note

	
Maturity Date

	  	  	  	  
	  	  	  	  

 

 

 

 

Exhibit I to the Collateral Agreement

  

  

  

Schedule III

to the Supplement No __ to the

Collateral Agreement

INTELLECTUAL PROPERTY

 

 

 

 

 

 

Exhibit I to the Collateral Agreement

  

  

  

Exhibit II to the

Collateral Agreement

FORM OF PERFECTION CERTIFICATE

 

 

 

  

Exhibit II to the Collateral Agreement

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