Document:

Exhibit 10.2

 

	
 

EXECUTION VERSION

Amended and Restated Guarantee and Collateral Agreement

 

Dated as of October 22, 2014,

 

made by

 

SHORETEL, INC.,

 

and the other Grantors referred to herein,

 

in favor of

SILICON VALLEY BANK,

as Administrative Agent

 

	
 

TABLE OF CONTENTS

 

	 	 	
Page

	 		
	
SECTION 1.

	
DEFINED TERMS

	
1

	 	 	 
	
1.1

	
Definitions

	
2

	
1.2

	
Other Definitional Provisions

	
5

	 	 	 
	
SECTION 2.

	
GUARANTEE

	
5

	 	 	 
	
2.1

	
Guarantee

	
5

	
2.2

	
Right of Contribution

	
6

	
2.3

	
No Subrogation

	
6

	
2.4

	
Amendments, etc

	
6

	
2.5

	
Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents

	
7

	
2.6

	
Keepwell Agreement

	
9

	
2.7

	
Reinstatement

	
9

	
2.8

	
Payments

	
9

	 	 	 
	
SECTION 3.

	
GRANT OF SECURITY INTEREST

	
9

	 	 	 
	
3.1

	
Grant of Security Interests

	
9

	
3.2

	
Grantors Remain Liable

	
11

	
3.3

	
Perfection and Priority

	
11

	 	 	 
	
SECTION 4.

	
REPRESENTATIONS AND WARRANTIES

	
13

	 	 	 
	
4.1

	
Title; No Other Liens

	
13

	
4.2

	
Perfected Liens

	
13

	
4.3

	
Jurisdiction of Organization; Chief Executive Office and Locations of Books

	
13

	
4.4

	
Inventory and Equipment

	
14

	
4.5

	
Farm Products

	
14

	
4.6

	
Pledged Collateral

	
14

	
4.7

	
Investment Accounts

	
14

	
4.8

	
Receivables

	
15

	
4.9

	
Intellectual Property

	
15

	
4.10

	
Instruments

	
15

	
4.11

	
Letter of Credit Rights

	
15

	
4.12

	
Commercial Tort Claims

	
15

	 	 	 
	
SECTION 5.

	
COVENANTS

	
15

	 	 	 
	
5.1

	
Delivery of Instruments, Certificated Securities and Chattel Paper

	
15

	
5.2

	
Maintenance of Insurance

	
16

	
5.3

	
Maintenance of Perfected Security Interest; Further Documentation

	
16

	
5.4

	
Changes in Locations, Name, Etc

	
17

	
5.5

	
Notices

	
17

	
5.6

	
Instruments; Investment Property

	
17

	
5.7

	
Securities Accounts; Deposit Accounts

	
18

	
5.8

	
Intellectual Property

	
19

	
5.9

	
Receivables

	
20

	
5.10

	
Defense of Collateral

	
20

	
5.11

	
Preservation of Collateral

	
20

 

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TABLE OF CONTENTS

(continued)

	 		
Page

	 		
	
5.12

	
Compliance with Laws, Etc

	
20

	
5.13

	
Location of Books and Chief Executive Office

	
20

	
5.14

	
Location of Collateral

	
20

	
5.15

	
Maintenance of Records

	
20

	
5.16

	
Disposition of Collateral

	
20

	
5.17

	
Liens

	
21

	
5.18

	
Expenses

	
21

	
5.19

	
Leased Premises; Collateral Held by Warehouseman, Bailee, Etc

	
21

	
5.20

	
Chattel Paper

	
21

	
5.21

	
Commercial Tort Claims

	
21

	
5.22

	
Letter-of-Credit Rights

	
21

	
5.23

	
Shareholder Agreements and Other Agreements

	
21

	 	 	 
	
SECTION 6.

	
REMEDIAL PROVISIONS

	
21

	 	 	 
	
6.1

	
Certain Matters Relating to Receivables

	
22

	
6.2

	
Communications with Obligors; Grantors Remain Liable

	
22

	
6.3

	
Investment Property

	
22

	
6.4

	
Proceeds to be Turned Over To Administrative Agent

	
23

	
6.5

	
Application of Proceeds

	
24

	
6.6

	
Code and Other Remedies

	
24

	
6.7

	
Registration Rights

	
25

	
6.8

	
Intellectual Property License

	
25

	
6.9

	
Deficiency

	
26

	 	 	 
	
SECTION 7.

	
THE ADMINISTRATIVE AGENT

	
26

	 	 	 
	
7.1

	
Administrative Agent’s Appointment as Attorney-in-Fact, etc

	
26

	
7.2

	
Duty of Administrative Agent

	
27

	
7.3

	
Authority of Administrative Agent

	
28

	 	 	 
	
SECTION 8.

	
MISCELLANEOUS

	
28

	 	 	 
	
8.1

	
Amendments in Writing

	
28

	
8.2

	
Notices

	
28

	
8.3

	
No Waiver by Course of Conduct; Cumulative Remedies

	
28

	
8.4

	
Enforcement Expenses; Indemnification

	
28

	
8.5

	
Successors and Assigns

	
29

	
8.6

	
Set Off

	
29

	
8.7

	
Counterparts

	
30

	
8.8

	
Severability

	
30

	
8.9

	
Section Headings

	
30

	
8.10

	
Integration

	
30

	
8.11

	
GOVERNING LAW; Submission to Jurisdiction; Jury Trial Waiver

	
30

	
8.12

	
Acknowledgements

	
30

	
8.13

	
Additional Grantors

	
31

	
8.14

	
Releases

	
31

	
8.15

	
Survival

	
31

 

ii

TABLE OF CONTENTS

(continued)

 

	
SCHEDULES

	 
	 	
	
Schedule 1

	
Notice Addresses

	
Schedule 2

	
Investment Property

	
Schedule 3

	
Perfection Matters

	
Schedule 4

	
Jurisdictions of Organization and Chief Executive Offices, etc.

	
Schedule 5

	
Equipment and Inventory Locations

	
Schedule 6

	
Rights of the Grantors Relating to Intellectual Property

	
Schedule 7

	
Letter of Credit Rights

	
Schedule 8

	
Commercial Tort Claims

	 	 
	
ANNEXES

	 
	 	
	
Annex 1

	
Form of Assumption Agreement

	
Annex 2

	
Form of Pledge Supplement

 

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AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT

 

This AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT (this “Agreement”), dated as of October 22, 2014 is made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, each a “Grantor” and, collectively, the “Grantors”), in favor of SILICON VALLEY BANK, as administrative agent (together with its successors, in such capacity, the “Administrative Agent”) for the banks and other financial institutions or entities (each a “Lender” and, collectively, the “Lenders”) from time to time parties to that certain Amended and Restated Credit Agreement, dated as of the date hereof (as amended, amended and restated, supplemented, restructured or otherwise modified, renewed or replaced from time to time, the “Credit Agreement”), among SHORETEL, INC., a Delaware corporation (the “Borrower”), the Lenders party thereto and the Administrative Agent.

 

INTRODUCTORY STATEMENTS

 

WHEREAS, the Borrower, certain of the other Grantors and SVB, in its capacity as the Existing Agent thereunder, are party to the Existing Guarantee and Collateral Agreement, pursuant to which the Grantors party thereto granted Liens to the Existing Agent (for the ratable benefit of the “Secured Parties” defined in the Existing Guarantee and Collateral Agreement) for the purpose of securing the “Obligations” (as defined in the Existing Credit Agreement) arising under the Existing Loan Documents;

 

WHEREAS, the Borrower and the other Grantors party thereto desire to amend and restate the Existing Guarantee and Collateral Agreement pursuant to this Agreement;

 

WHEREAS, this Agreement amends, restates, supersedes and replaces in its entirety the Existing Guarantee and Collateral Agreement, and is not intended to, and will not, act as a novation of the “Obligations” (as defined in the Existing Credit Agreement) and other indebtedness, liabilities and obligations thereunder;

 

WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Grantor;

 

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective business;

 

WHEREAS, certain of the Qualified Counterparties may enter into Specified Swap Agreements with the Borrower;

 

WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor derives substantial direct and indirect benefit from the extensions of credit under the Credit Agreement and from the Specified Swap Agreements; and

 

WHEREAS, it is a condition precedent to the Closing Date that the Grantors shall have executed and executed and delivered this Agreement in favor of the Administrative Agent for the ratable benefit of the Secured Parties.

 

NOW, THEREFORE, in consideration of the above premises, the parties hereto hereby agree as follows:

 

SECTION 1.      Defined Terms.

 

1

1.1           Definitions.

 

(a)           Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the respective meanings given to such terms in the Credit Agreement, and the following terms are used herein as defined in the UCC:  Account, Certificated Security, Chattel Paper, Commercial Tort Claim, Commodity Account, Document, Equipment, Farm Products, Fixtures, General Intangible, Goods, Instrument, Inventory, Letter-of-Credit Rights, Money, Securities Account and Supporting Obligation.

 

(b)           The following terms shall have the following meanings:

 

“Agreement”:  as defined in the preamble hereto.

 

“Books”: all books, records and other written, electronic or other documentation in whatever form maintained now or hereafter by or for any Grantor in connection with the ownership of its assets or the conduct of its business or evidencing or containing information relating to the Collateral, including:  (a) ledgers; (b) records indicating, summarizing, or evidencing such Grantor’s assets (including Inventory and Rights to Payment), business operations or financial condition; (c) computer programs and software; (d) computer discs, tapes, files, manuals, spreadsheets; (e) computer printouts and output of whatever kind; (f) any other computer prepared or electronically stored, collected or reported information and equipment of any kind; and (g) any and all other rights now or hereafter arising out of any contract or agreement between such Grantor and any service bureau, computer or data processing company or other Person charged with preparing or maintaining any of such Grantor’s books or records or with credit reporting, including with regard to any of such Grantor’s Accounts.

 

“Borrower”:  as defined in the preamble hereto.

 

“Collateral”: as defined in Section 3.1.

 

“Collateral Account”:  any collateral account established by the Administrative Agent as provided in Section 6.1 or 6.4.

 

“Copyright License”:  any written agreement which (a) names a Grantor as licensor or licensee (including those listed on Schedule 6) and (b) grants any right under any Copyright to a Grantor, including any rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

 

“Copyrights”:  (a) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, together with the underlying works of authorship (including titles), whether registered or unregistered and whether published or unpublished, all computer programs, computer databases, computer program flow diagrams, source codes, object codes and all tangible property embodying or incorporating any copyrights, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the U.S. Copyright Office, and (b) the right to obtain any renewals thereof.

 

“Excluded Account”:  any Deposit Account maintained solely for payroll, tax, pension or employee benefits payments, or any zero balance Deposit Account; provided that, in each case, the balance in any such Deposit Account is transferred to a Controlled Account on a daily basis.

 

“Excluded Assets”:  collectively,

 

(a)           Equipment owned by any Grantor on the date hereof or hereafter acquired that is subject to a Lien securing a purchase money obligation or Capital Lease Obligation not prohibited by the terms of the Credit Agreement if the contract or other agreement pursuant to which such Lien is granted (or the documentation providing for such purchase money obligation or Capital Lease Obligation) validly prohibits the creation of any other Lien on such Equipment and proceeds of such Equipment;

 

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(b)           margin stock (within the meaning of Regulation U issued by the Board) to the extent the creation of a security interest therein in favor of the Administrative Agent (for the ratable benefit of the Secured Parties) will result in a violation of Regulation U issued by the Board;

 

(c)           (x) any assets of an Excluded Foreign Subsidiary, and (y) any right, title or interest of any Grantor in any of the outstanding voting Capital Stock or other Equity Interest of any Excluded Foreign Subsidiary (other than Capital Stock or other Equity Interests representing 66% of the total outstanding voting power of all classes of Capital Stock or other Equity Interests of any First Tier Foreign Subsidiary or First Tier Foreign Subsidiary Holding Company); provided that immediately upon the amendment of the Code to allow the pledge of a greater percentage of the voting power of Capital Stock or other Equity Interests in a First Tier Foreign Subsidiary or First Tier Foreign Subsidiary Holding Company without adverse tax consequences, the Collateral shall include, and each Grantor shall be deemed to have granted a security interest in, such greater percentage of Capital Stock or other Equity Interests of each First Tier Foreign Subsidiary or First Tier Foreign Subsidiary Holding Company;

 

(d)           any Excluded Account; and

 

(e)           any interest of the Borrower as a lessee or sublessee under a real property lease;

 

provided, however, that any Proceeds, substitutions or replacements of any Excluded Assets shall not be Excluded Assets (unless such Proceeds, substitutions or replacements are otherwise, in and of themselves, Excluded Assets).

 

“Excluded Swap Obligations”:  as defined in the Credit Agreement.

 

“Grantor”:  as defined in the preamble hereto.

 

“Guarantor”: as defined in Section 2.1(a).

 

“Intellectual Property”:  as defined in the Credit Agreement.

 

“Investment Account”:  any of a Securities Account, a Commodity Account or a Deposit Account.

 

“Investment Property”:  the collective reference to (a) all “investment property” as such term is defined in Section 9-102(a)(49) of the UCC (other than any voting Capital Stock or other ownership interests of a Material First Tier Foreign Subsidiary excluded from the definition of “Pledged Stock”), and (b) whether or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Collateral.

 

“Issuer”:  with respect to any Investment Property, the issuer of such Investment Property.

 

“Patent License”:  any written agreement which (a) names a Grantor as licensor or licensee and (b) grants to such Grantor any right under a Patent, including the right to manufacture, use or sell any invention covered in whole or in part by such Patent, including any such agreements referred to on Schedule 6.

 

3

“Patents”:  (a) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof and all goodwill associated therewith, (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, and (c) all rights to obtain any reissues or extensions of the foregoing.

 

“Pledged Collateral”:  (a) any and all Pledged Stock; (b)  all other Investment Property of any Grantor; (c) all warrants, options or other rights entitling any Grantor to acquire any interest in Capital Stock or other securities of the direct or indirect Subsidiaries of such Grantor or of any other Person; (d) all Instruments; (e) all securities, property, interest, dividends and other payments and distributions issued as an addition to, in redemption of, in renewal or exchange for, in substitution or upon conversion of, or otherwise on account of, any of the foregoing; (f) all certificates and instruments now or hereafter representing or evidencing any of the foregoing; (g) all rights, interests and claims with respect to the foregoing, including under any and all related agreements, instruments and other documents, and (h) all cash and non-cash proceeds of any of the foregoing, in each case whether presently existing or owned or hereafter arising or acquired and wherever located, and as from time to time received or receivable by, or otherwise paid or distributed to or acquired by, any Grantor.  For the avoidance of doubt, in no event shall Pledged Collateral include any Excluded Assets.

 

“Pledged Collateral Agreements”: as defined in Section 5.22.

 

“Pledged Notes”:  all promissory notes listed on Schedule 2 and all other promissory notes issued to or held by any Grantor.

 

“Pledged Stock”:  all of the issued and outstanding shares of Capital Stock, whether certificated or uncertificated, of any Grantor’s direct Subsidiaries now or hereafter owned by any such Grantor and including the Capital Stock listed on Schedule 2 hereof (as amended or supplemented from time to time); provided that in no event shall Pledged Stock include any Excluded Assets.

 

“Proceeds”:  all “proceeds” as such term is defined in Section 9102(a)(64) of the UCC and, in any event, shall include, without limitation, all dividends or other income from any Investment Property constituting Collateral and all collections thereon or distributions or payments with respect thereto.

 

“Receivable”:  any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including any Account).

 

“Rights to Payment”: any and all of any Grantor’s Accounts and any and all of any Grantor’s rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under or with respect to its Chattel Paper, Documents, General Intangibles, Instruments, Investment Property, Letter-of-Credit Rights, Proceeds and Supporting Obligations.

 

“Secured Obligations”:  collectively, the “Obligations”, as such term is defined in the Credit Agreement.

 

“Secured Parties” means the Administrative Agent, each Lender, each Qualified Counterparty with whom the Borrower enters into a Specified Swap Agreement, and each Bank Services Provider.

 

“Trademark License”:  any written agreement which (a) names a Grantor as licensor or licensee and (b) grants to such Grantor any right to use any Trademark, including any such agreement referred to on Schedule 6.

 

4

“Trademarks”:  (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, Internet domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the U.S. Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, and (b) the right to obtain all renewals thereof.

 

“USCRO”:  as defined in the Credit Agreement.

 

“USPTO”:  as defined in the Credit Agreement.

 

1.2          Other Definitional Provisions.  The rules of interpretation set forth in Section 1.2 of the Credit Agreement are by this reference incorporated herein, mutatis mutandis, as if set forth herein in full.

 

SECTION 2.      Guarantee.

 

2.1           Guarantee.

 

(a)           Each Grantor, other than the Borrower, who has executed this Agreement as of the date hereof, together with each Material Domestic Subsidiary of any Grantor that accedes to this Agreement as a Grantor after the date hereof pursuant to Section 6.12 of the Credit Agreement (each a “Guarantor” and, collectively, the “Guarantors”), hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and the other Loan Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations.  In furtherance of the foregoing, and without limiting the generality thereof, each Guarantor agrees as follows:

 

(i)          each Guarantor’s liability hereunder shall be the immediate, direct, and primary obligation of such Guarantor and shall not be contingent upon the Administrative Agent’s or any Secured Party’s exercise or enforcement of any remedy it or they may have against the Borrower, any other Guarantor, any other Person, or all or any portion of the Collateral; and

 

(ii)         the Administrative Agent may enforce this guaranty notwithstanding the existence of any dispute between any of the Secured Parties and the Borrower or any other Guarantor with respect to the existence of any Event of Default.

 

(b)         Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

 

(c)           Each Guarantor agrees that the Secured Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any other Secured Party hereunder.

 

(d)         The guarantee contained in this Section 2 shall remain in full force and effect until the occurrence of the Discharge of Obligations, notwithstanding that from time to time during the term of the Credit Agreement the outstanding amount of the Secured Obligations may be zero.

 

5

(e)           No payment made by the Borrower, any Guarantor, any other guarantor or any other Person or received or collected by the Administrative Agent or any other Secured Party from the Borrower, any Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any setoff or appropriation or application at any time or from time to time in reduction of or in payment of the Secured Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Secured Obligations or any payment received or collected from such Guarantor in respect of the Secured Obligations), remain liable for the Secured Obligations up to the maximum liability of such Guarantor hereunder until the Discharge of Obligations.

 

2.2           Right of Contribution.  If in connection with any payment made by any Guarantor hereunder any rights of contribution arise in favor of such Guarantor against one or more other Guarantors, such rights of contribution shall be subject to the terms and conditions of Section 2.3.  The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the other Secured Parties, and each Guarantor shall remain liable to the Administrative Agent and the other Secured Parties for the full amount guaranteed by such Guarantor hereunder.

 

2.3           No Subrogation.  Notwithstanding any payment made by any Guarantor hereunder or any setoff or application of funds of any Guarantor by the Administrative Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any other Secured Party against the Borrower or any other Guarantor or any Collateral or guarantee or right of offset held by the Administrative Agent or any other Secured Party for the payment of the Secured Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, in each case, until the Discharge of Obligations.  If any amount shall be paid to any Guarantor on account of such subrogation rights at any time prior to the Discharge of Obligations, such amount shall be held by such Guarantor in trust for the Administrative Agent and the other Secured Parties, shall be segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied in such order as set forth in Section 6.5 hereof irrespective of the occurrence or the continuance of any Event of Default.

 

2.4          Amendments, etc. with respect to the Secured Obligations.  Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Secured Obligations made by the Administrative Agent or any other Secured Party may be rescinded by the Administrative Agent or such Secured Party and any of the Secured Obligations continued, and the Secured Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any other Secured Party, and the Credit Agreement, the other Loan Documents, the Specified Swap Agreements and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all of the Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any other Secured Party for the payment of the Secured Obligations may be sold, exchanged, waived, surrendered or released.  Neither the Administrative Agent nor any other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Secured Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

 

6

2.5           Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents.  Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice of or proof of reliance by the Administrative Agent or any other Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Secured Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Administrative Agent and the other Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2.  Each Guarantor further waives:

 

(a)           diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the other Guarantors with respect to the Secured Obligations;

 

(b)           any right to require any Secured Party to marshal assets in favor of the Borrower, such Guarantor, any other Guarantor or any other Person, to proceed against the Borrower, any other Guarantor or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or other collateral for the Secured Obligations or to comply with any other provisions of Section 9611 of the UCC (or any equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of any Secured Party whatsoever;

 

(c)           the defense of the statute of limitations in any action hereunder or for the collection or performance of the Secured Obligations;

 

(d)           any defense arising by reason of any lack of corporate or other authority or any other defense of the Borrower, such Guarantor or any other Person;

 

(e)          any defense based upon the Administrative Agent’s or any Secured Party’s errors or omissions in the administration of the Secured Obligations;

 

(f)            any rights to set-offs and counterclaims;

 

(g)          any defense based upon an election of remedies (including, if available, an election to proceed by non-judicial foreclosure) which destroys or impairs the subrogation rights of such Guarantor or the right of such Guarantor to proceed against the Borrower or any other obligor of the Secured Obligations for reimbursement; and

 

(h)          without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law that limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this Agreement.

 

Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Secured Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any other Secured Party, (ii) any defense, setoff or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Administrative Agent or any other Secured Party, (iii) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower and the Guarantors for the Secured Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance, (iv) any Insolvency Proceeding with respect to the Borrower, any Guarantor or any other Person, (v) any merger, acquisition, consolidation or change in structure of the Borrower, any Guarantor or any other Person, or any sale, lease, transfer or other disposition of any or all of the assets or Voting Stock of the Borrower, any Guarantor or any other Person, (vi) any assignment or other transfer, in whole or in part, of any Secured Party’s interests in and rights under this Guaranty or the other Loan Documents, including any Secured Party’s right to receive payment of the Secured Obligations, or any assignment or other transfer, in whole or in part, of any Secured Party’s interests in and to any of the Collateral, (vi) any Secured Party’s vote, claim, distribution, election, acceptance, action or inaction in any Insolvency Proceeding related to any of the Secured Obligations, and (vii) any other guaranty, whether by such Guarantor or any other Person, of all or any part of the Secured Obligations or any other indebtedness, obligations or liabilities of any Guarantor to any Secured Party.

 

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When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Administrative Agent or any other Secured Party may, but shall be under no obligation to make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Secured Obligations or any right of offset with respect thereto.  Any failure by the Administrative Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any other Secured Party against any Guarantor.  For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

 

Each Guarantor further unconditionally consents and agrees that, without notice to or further assent from any Guarantor: (a) the principal amount of the Secured Obligations may be increased or decreased and additional indebtedness or obligations of the Borrower or any other Persons under the Loan Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any Loan Document or otherwise; (b) the time, manner, place or terms of any payment under any Loan Document may be extended or changed, including by an increase or decrease in the interest rate on any Secured Obligation or any fee or other amount payable under such Loan Document, by an amendment, modification or renewal of any Loan Document or otherwise; (c) the time for the Borrower’s (or any other Loan Party’s) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Loan Document may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as the Administrative Agent may deem proper; (d) in addition to the Collateral, the Secured Parties may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Secured Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (e) any Secured Party may discharge or release, in whole or in part, any other Guarantor or any other Loan Party or other Person liable for the payment and performance of all or any part of the Secured Obligations, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any of the Collateral, nor shall any Secured Party be liable to any Guarantor for any failure to collect or enforce payment or performance of the Secured Obligations from any Person or to realize upon the Collateral, and (f) the Secured Parties may request and accept other guaranties of the Secured Obligations and any other indebtedness, obligations or liabilities of the Borrower or any other Loan Party to any Secured Party and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; in each case (a) through (f), as the Secured Parties may deem advisable, based on their reasonable good faith business judgment, and without impairing, abridging, releasing or affecting this Agreement.

 

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2.6           Keepwell Agreement.  Each Guarantor that is a Qualified ECP Guarantor hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by any other Guarantor to permit such other Guarantor to honor all of its obligations under this Guaranty in respect of Swap Obligations; provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 2.6 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 2.6, or otherwise under this Agreement (including Section 2.1(b) and 2.2), as they relate to such Qualified ECP Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater  amount.  The obligations of each Qualified ECP Guarantor under this Section 2.6 shall remain in force and effect until the Discharge of Obligations.  Each Qualified ECP Guarantor intends that this Section 2.6 constitute, and this Section 2.6 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

2.7           Reinstatement.  The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any such Guarantor or any substantial part of its respective property, or otherwise, all as though such payments had not been made.

 

2.8          Payments.  Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without setoff or counterclaim in Dollars at the Funding Office.

 

SECTION 3.        GRANT OF SECURITY INTEREST

 

3.1           Grant of Security Interests.  Each Grantor hereby grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a security interest in all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest and wherever located (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations:

 

(a)           all Accounts;

 

(b)           all Chattel Paper;

 

(c)           all Commercial Tort Claims;

 

(d)           all Deposit Accounts;

 

(e)           all Documents;

 

(f)            all Equipment;

 

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(g)           all Fixtures;

 

(h)           all General Intangibles;

 

(i)            all Goods;

 

(j)            all Instruments;

 

(k)           all Intellectual Property;

 

(l)            all Inventory;

 

(m)          all Investment Property (including all Pledged Collateral);

 

(n)           all Letter-of-Credit Rights;

 

(o)           all Money;

 

(p)           all Books and records pertaining to the Collateral

 

(q)           all other personal property not otherwise described above; and

 

(r)           to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing; provided, however, that notwithstanding anything to the contrary contained in clauses (a) through (q) above, the security interests created by this Agreement shall not extend to, and the term “Collateral” (including all of the individual items comprising Collateral) shall not include, any Excluded Assets.

 

Notwithstanding any of the other provisions set forth in this Section 3, this Agreement shall not constitute a grant of a security interest in any property to the extent that such grant of a security interest is prohibited by any Requirement of Law of a Governmental Authority or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property, except (i) to the extent that the terms in such contract, license, instrument or other document providing for such prohibition, breach, default or termination, or requiring such consent are not permitted under the terms and conditions of the Credit Agreement or (ii) to the extent that such Requirement of Law or the term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under Section 9406, 9407, 9408 or 9409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity; provided, however, that such security interest shall attach immediately at such time as such Requirement of Law is not effective or applicable, or such prohibition, breach, default or termination is no longer applicable or is waived, and to the extent severable, shall attach immediately to any portion of the Collateral that does not result in such consequences; and provided, further, that no United States intent-to-use Trademark or service mark application shall be included in the Collateral to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use Trademark or service mark application under United States applicable law.  After such period, each Grantor acknowledges that such interest in such Trademark or service mark application shall be subject to a security interest in favor of the Administrative Agent (held for the ratable benefit of the Secured Parties) and shall be included in the Collateral.

 

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Each Grantor acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with one or more Bank Services Providers.  Regardless of the terms of any Bank Services Agreement, each Grantor agrees that any amounts such Grantor owes to any such Bank Services Provider thereunder shall be deemed to be Secured Obligations hereunder and that it is the intent of all such Grantors and all Secured Parties to have all such Secured Obligations secured by the first priority perfected security interest in the Collateral granted herein (subject only to Liens permitted by Section 7.3 of the Credit Agreement that may have superior priority to the Administrative Agent’s Lien (held for the ratable benefit of the Lenders) under this Agreement).

 

Each Grantor acknowledges that the Borrower may have previously entered into and/or may in the future enter into Specified Swap Agreements with one or more Qualified Counterparties and that, notwithstanding anything to the contrary set forth in any such Specified Swap Agreement, each Grantor agrees that any amounts the Borrower owes to any such Qualified Counterparty under any such Specified Swap Agreement shall be deemed to be Secured Obligations hereunder and that it is the intent of all such Grantors and each such Qualified Counterparty to have all such Secured Obligations secured by the first priority perfected security interest and Lien of the Administrative Agent (held for the ratable benefit of the Secured Parties) in the Collateral granted herein (subject only to Liens permitted by Section 7.3 of the Credit Agreement).

 

3.2          Grantors Remain Liable.  Anything herein to the contrary notwithstanding, (a) each Grantor shall remain liable under any contracts, agreements and other documents included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Administrative Agent of any of the rights granted to the Administrative Agent hereunder shall not release any Grantor from any of its duties or obligations under any such contracts, agreements and other documents included in the Collateral, and (c) neither the Administrative Agent nor any other Secured Party shall have any obligation or liability under any such contracts, agreements and other documents included in the Collateral by reason of this Agreement, nor shall the Administrative Agent or any other Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Collateral hereunder.

 

3.3           Perfection and Priority.

 

(a)           Financing Statements.  Pursuant to any applicable law, each Grantor authorizes the Administrative Agent (and its counsel and its agents) to file or record at any time and from time to time any financing statements and other filing or recording documents or instruments with respect to the Collateral and each Grantor shall execute and deliver to the Administrative Agent and each Grantor hereby authorizes the Administrative Agent (and its counsel and its agents) to file (with or without the signature of such Grantor) at any time and from time to time, all amendments to financing statements, continuation financing statements, termination statements, security agreements relating to the Intellectual Property, assignments, fixture filings, affidavits, reports notices and all other documents and instruments, in such form and in such offices as the Administrative Agent or the Required Lenders determine appropriate to perfect and continue perfected, maintain the priority of or provide notice of the Administrative Agent’s security interest in the Collateral under and to accomplish the purposes of this Agreement.  Each Grantor hereby ratifies and authorizes the filing by the Administrative Agent (and its counsel and its agents) of any financing statement with respect to the Collateral made prior to the date hereof.

 

(b)          Filing of Financing Statements.  Each Grantor shall deliver to the Administrative Agent, from time to time, such completed UCC‐1 financing statements for filing or recording in the appropriate filing offices as may be reasonably requested by the Administrative Agent.

 

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(c)          Transfer of Security Interest Other Than by Delivery.  If for any reason Pledged Collateral cannot be delivered to or for the account of the Administrative Agent as provided in Section 5.6(b), each applicable Grantor shall promptly take such other steps as may be necessary or as shall be reasonably requested from time to time by the Administrative Agent to effect a transfer of a perfected first priority security interest in and pledge of the Pledged Collateral to the Administrative Agent for itself and on behalf of and for the ratable benefit of the other Secured Parties pursuant to the UCC.  To the extent practicable, each such Grantor shall thereafter deliver the Pledged Collateral to or for the account of the Administrative Agent as provided in Section 5.6(b).

 

(d)          Intellectual Property.  (i)  Each Grantor shall, in addition to executing and delivering this Agreement, take such other action as may be necessary, or as the Administrative Agent may reasonably request, to perfect the Administrative Agent’s security interest in the Intellectual Property of such Grantor.  (ii) Following the creation or other acquisition of any Intellectual Property by any Grantor after the date hereof which is registered or becomes registered or the subject of an application for registration with the U.S. Copyright Office or the U.S. Patent and Trademark Office, as applicable, such Grantor shall give the Administrative Agent prompt notice thereof by listing such Intellectual Property as an attachment to the next Compliance Certificate that the Borrower is required to deliver to the Administrative Agent pursuant to Section 6.2(b) of the Credit Agreement and, if so requested by the Administrative Agent, (A) modify this Agreement by amending Schedule 6 to include any Intellectual Property of such Grantor which becomes part of the Collateral and which was not included on Schedule 6 as of the date hereof, and (B) record an initial filing or, as applicable, an amendment to this Agreement with the USCRO or the USPTO, as applicable, and take such other action as may be necessary, or as the Administrative Agent or the Required Lenders may reasonably request, to perfect the Administrative Agent’s security interest and Lien in such Intellectual Property (held for the ratable benefit of the Secured Parties).

 

(e)           Bailees.  Any Person (other than the Administrative Agent) at any time and from time to time holding all or any portion of the Collateral shall be deemed to, and shall, hold the Collateral as the agent of, and as pledge holder for, the Administrative Agent.  At any time and from time to time, the Administrative Agent may give notice to any such Person holding all or any portion of the Collateral that such Person is holding the Collateral as the agent and bailee of, and as pledge holder for, the Administrative Agent, and may require any applicable Grantor to use commercially reasonable efforts to obtain such Person’s written acknowledgment thereof, in any such case, in accordance with the terms and provisions of Section 6.12(e) of the Credit Agreement.  Without limiting the generality of the foregoing, each Grantor will join with the Administrative Agent in notifying any Person who has possession of any Collateral of the Administrative Agent’s security interest therein and shall use commercially reasonable efforts to obtain an acknowledgment from such Person that it is holding the Collateral for the benefit of the Administrative Agent.

 

(f)            Control.  Each Grantor will cooperate with the Administrative Agent in obtaining control (as defined in the UCC) of Collateral consisting of any Deposit Accounts (subject to Section 5.7(a)), Electronic Chattel Paper (subject to Section 5.6), Investment Property (subject to Section 5.6) or Letter-of-Credit Rights (subject to Section 5.6), including delivery of Control Agreements, as the Administrative Agent may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the Administrative Agent’s security interest in such Collateral.

 

(g)          Additional Subsidiaries.  In the event that any Grantor acquires rights in any Subsidiary (other than a Foreign Subsidiary which is not a Material First Tier Foreign Subsidiary) after the date hereof, it shall deliver to the Administrative Agent a completed pledge supplement, substantially in the form of Annex 2 (the “Pledge Supplement”), together with all schedules thereto, reflecting the pledge of the Capital Stock of such new Subsidiary (except to the extent such Capital Stock consists of Excluded Assets), together with any other documents and agreements (including, as applicable, any Foreign Pledge Documents reasonably requested by the Administrative Agent) the Administrative Agent requires the Borrower to cause such Grantor to deliver pursuant to Section 6.12 of the Credit Agreement.  Notwithstanding the foregoing, it is understood and agreed that the security interest of the Administrative Agent shall attach to the Pledged Collateral related to such Subsidiary immediately upon any Grantor’s acquisition of rights therein and shall not be affected by the failure of any Grantor to deliver a Pledge Supplement or, as applicable, any such other Foreign Pledge Documents or other documents or agreements.

 

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              SECTION 4.          REPRESENTATIONS AND WARRANTIES

 

In addition to the representations and warranties of the Borrower set forth in the Credit Agreement and relating to the other Loan Parties, which representations and warranties are incorporated herein by this reference, and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby represents and warrants to the Administrative Agent and each other Secured Party that:

 

4.1           Title; No Other Liens.  Except for the Liens permitted to exist on the Collateral by Section 7.3 of the Credit Agreement, such Grantor owns each item of the Collateral in which a Lien is granted by it free and clear of any and all Liens and other claims of others.  Other than precautionary filings in respect of true leases, no financing statement, fixture filing or other public notice with respect to all or any part of the Collateral is on file or of record or will be filed in any public office, except such as have been filed as permitted by the Credit Agreement.  For the avoidance of doubt, it is understood and agreed that each Grantor may, as part of its business, grant licenses to third parties to use Intellectual Property owned or developed by such Grantor.  For purposes of this Agreement and the other Loan Documents, such licensing activity shall not constitute a “Lien” on such Intellectual Property.  The Administrative Agent and each other Secured Party understands that any such licenses may be exclusive to the applicable licensees, and such exclusivity provisions may limit the ability of the Administrative Agent to utilize, sell, lease or transfer the related Intellectual Property or otherwise realize value from such Intellectual Property pursuant hereto.

 

4.2           Perfected Liens.  The security interests granted to the Administrative Agent pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (which, in the case of all filings and other documents referred to on said Schedule but subject to Section 5.3 of the Credit Agreement, have been delivered to the Administrative Agent in completed and duly (if applicable) executed form) will constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, as collateral security for the Secured Obligations, enforceable in accordance with the terms hereof against any creditors of any Grantor and any Persons purporting to purchase any Collateral from any Grantor, and (ii) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreement which have priority over the Liens of the Administrative Agent on the Collateral (for the ratable benefit of the Secured Parties) by operation of law, and in the case of Collateral other than Pledged Collateral, Liens permitted by Section 7.3 of the Credit Agreement.  Unless an Event of Default has occurred and is continuing, each Grantor has the right to remove the Fixtures in which such Grantor has an interest within the meaning of Section 9334(f)(2) of the UCC.

 

4.3         Jurisdiction of Organization; Chief Executive Office and Locations of Books.  On the date hereof, such Grantor’s jurisdiction of organization, identification number from the jurisdiction of organization (if any), and the location of such Grantor’s chief executive office or sole place of business, as the case may be, are specified on Schedule 4.  All locations where Books pertaining to the Rights to Payment of such Grantor are kept, including all equipment necessary for accessing such Books and the names and addresses of all service bureaus, computer or data processing companies and other Persons keeping any Books or collecting Rights to Payment for such Grantor, are set forth in Schedule 4.

 

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4.4           Inventory and Equipment.  On the date hereof (a) the Inventory and (b) the Equipment (other than mobile goods) are kept at the locations listed on Schedule 5.

 

4.5            Farm Products.  None of the Collateral constitutes, or is the Proceeds of, Farm Products.

 

4.6           Pledged Collateral.  (a) All of the Pledged Stock held by such Grantor has been duly and validly issued, and is fully paid and non-assessable, subject in the case of Pledged Stock constituting partnership interests or limited liability company membership interests to future assessments required under applicable law and any applicable partnership or operating agreement, (b) such Grantor is or, in the case of any such additional Pledged Collateral will be, the legal record and beneficial owner thereof, (c) in the case of Pledged Stock of a Subsidiary of such Grantor or Pledged Collateral of such Grantor constituting Instruments issued by a Subsidiary of such Grantor, there are no restrictions on the transferability of such Pledged Collateral or such additional Pledged Collateral to the Administrative Agent or with respect to the foreclosure, transfer or disposition thereof by the Administrative Agent, except as provided under applicable securities or “Blue Sky” laws, (d) the Pledged Stock pledged by such Grantor constitutes all of the issued and outstanding shares of Capital Stock of each Issuer owned by such Grantor (except for Excluded Assets), and such Grantor owns no securities convertible into or exchangeable for any shares of Capital Stock of any such Issuer that do not constitute Pledged Stock hereunder, (e) any and all Pledged Collateral Agreements which affect or relate to the voting or giving of written consents with respect to any of the Pledged Stock pledged by such Grantor have been disclosed to the Administrative Agent, and (f) as to each such Pledged Collateral Agreement relating to the Pledged Stock pledged by such Grantor, (i) to the best knowledge of such Grantor, such Pledged Collateral Agreement contains the entire agreement between the parties thereto with respect to the subject matter thereof and is in full force and effect in accordance with its terms, (ii) to the best knowledge of such Grantor party thereto, there exists no material violation or material default under any such Pledged Collateral Agreement by such Grantor or the other parties thereto, and (iii) such Grantor has not knowingly waived or released any of its material rights under or otherwise consented to a material departure from the terms and provisions of any such Pledged Collateral Agreement.

 

4.7            Investment Accounts.

 

(a)           Schedule 2 sets forth under the headings “Securities Accounts” and “Commodity Accounts”, respectively, all of the Securities Accounts and Commodity Accounts in which such Grantor has an interest.  Except as disclosed to the Administrative Agent, such Grantor is the sole entitlement holder of each such Securities Account and Commodity Account, and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Administrative Agent) having “control” (within the meanings of Sections 8106 and 9106 of the UCC) over, or any other interest in, any such Securities Account or Commodity Account or any securities or other property credited thereto;

 

(b)           Schedule 2 sets forth under the heading “Deposit Accounts” all of the Deposit Accounts in which such Grantor has an interest and, except as otherwise disclosed to the Administrative Agent, such Grantor is the sole account holder of each such Deposit Account and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Administrative Agent) having either sole dominion and control (within the meaning of common law) or “control” (within the meaning of Section 9104 of the UCC) over, or any other interest in, any such Deposit Account or any money or other property deposited therein; and

 

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(c)           In each case to the extent requested by the Administrative Agent or as otherwise required under the terms of this Agreement or any other Loan Document, such Grantor has taken all actions necessary or desirable to: (i) establish the Administrative Agent’s “control” (within the meanings of Sections 8106 and 9106 of the UCC) over any Certificated Securities (as defined in Section 9102 of the UCC); (ii) establish the Administrative Agent’s “control” (within the meanings of Sections 8106 and 9106 of the UCC) over any portion of the Investment Accounts constituting Securities Accounts, Commodity Accounts, Securities Entitlements or Uncertificated Securities (each as defined in Section 9102 of the UCC); (iii) establish the Administrative Agent’s “control” (within the meaning of Section 9104 of the UCC) over all Deposit Accounts; and (iv) deliver all Instruments (as defined in Section 9102 of the UCC) to the Administrative Agent to the extent required hereunder.

 

4.8           Receivables.   No amount payable to such Grantor under or in connection with any Receivable or other Right to Payment is evidenced by any Instrument (other than checks, drafts or other Instruments that will be promptly deposited in an Investment Account) or Chattel Paper which has not been delivered to the Administrative Agent.  None of the account debtors or other obligors in respect of any Receivable in excess of $100,000 in the aggregate is the government of the United States or any agency or instrumentality thereof.

 

4.9           Intellectual Property.  Schedule 6 lists all registrations and applications for Intellectual Property (including registered Copyrights, Patents, Trademarks and all applications therefor) as well as all Copyright Licenses, Patent Licenses and Trademark Licenses, in each case, owned by such Grantor in its own name on the date hereof (except for inbound licenses of commercial off-the-shelf software with annual fees under $10,000 and non-exclusive outbound licenses entered into in the ordinary course of business).  Except as set forth in Schedule 6 (and subject to the immediately preceding sentence), on the date hereof, none of such Intellectual Property of such Grantor is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

 

4.10         Instruments.  (i) Such Grantor has not previously assigned any interest in any Instruments (including but not limited to the Pledged Notes) held by such Grantor (other than such interests as will be released on or before the date hereof), and (ii) no Person other than such Grantor owns an interest in such Instruments (whether as joint holders, participants or otherwise).

 

4.11          Letter of Credit Rights.  Such Grantor does not have any Letter-of-Credit Rights having a potential value in excess of $100,000 except as set forth in Schedule 7 or as have been notified to the Administrative Agent in accordance with Section 5.22.

 

4.12         Commercial Tort Claims.  Such Grantor does not have any Commercial Tort Claims having a potential value in excess of $500,000 except as set forth in Schedule 8 or as have been notified to the Administrative Agent in accordance with Section 5.21.

 

SECTION 5.            COVENANTS

 

In addition to the covenants set forth in the Credit Agreement which by their terms the Borrower is required to cause the other Grantors to observe, which covenants are incorporated herein by this reference, each Grantor covenants and agrees with the Administrative Agent and the other Secured Parties that, from and after the date of this Agreement until the Discharge of Obligations:

 

5.1          Delivery of Instruments, Certificated Securities and Chattel Paper.  If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument (other than checks, drafts or other Instruments that will be promptly deposited in an Investment Account), Certificated Security or Chattel Paper evidencing an amount in excess of $100,000, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to the Administrative Agent, duly indorsed in a manner satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement.

 

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5.2            Maintenance of Insurance.

 

(a)          Such Grantor will maintain, with financially sound and reputable companies, insurance policies (i) insuring all its property in accordance with the requirements set forth at Section 6.6 of the Credit Agreement, (ii) insuring the Inventory and Equipment against loss by fire, explosion, theft and such other casualties as may be reasonably satisfactory to the Administrative Agent and (iii) insuring such Grantor against liability for personal injury and property damage relating to such Inventory and Equipment, such policies to be in such form and amounts and having such coverage as may be reasonably satisfactory to the Administrative Agent and the other Secured Parties.

 

(b)          All such insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until receipt by the Administrative Agent of written notice thereof, (ii) name the Administrative Agent as an additional insured party or loss payee, (iii) to the extent available on commercially reasonable terms, and if reasonably requested by the Administrative Agent, include a breach of warranty clause and (iv) be reasonably satisfactory in all other respects to the Administrative Agent.

 

(c)          The Borrower shall deliver to the Administrative Agent a report of a reputable insurance broker with respect to such insurance substantially concurrently with each delivery of the Borrower’s audited annual financial statements pursuant to Section 6.1(a) of the Credit Agreement and such supplemental reports with respect thereto as the Administrative Agent may from time to time reasonably request.

 

If any Grantor fails to obtain insurance as required under this Section 5.2, to pay any amount or furnish any required proof of payment to third Persons, or if the Administrative Agent receives any notice of termination or cancellation of any such insurance policies or reduction of coverages or amounts thereunder, the Administrative Agent shall be entitled to obtain or renew, as applicable, any such policies, cause the coverages and amounts thereof to be maintained at levels required pursuant to Section 6.6 of the Credit Agreement or otherwise to obtain similar insurance in place of such policies, in each case at the expense of the Grantors.

 

5.3            Maintenance of Perfected Security Interest; Further Documentation.

 

(a)           Such Grantor shall maintain the security interests of the Administrative Agent (for the ratable benefit of the Secured Parties) created by this Agreement as perfected security interests having at least the priority described in Section 4.2 and shall defend such security interests against the claims and demands of all Persons whomsoever, subject to the rights of such Grantor under the Loan Documents to dispose of the Collateral.

 

(b)          Such Grantor will furnish to the Administrative Agent from time to time statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection therewith as the Administrative Agent may reasonably request, all in reasonable detail.

 

(c)          At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (i) filing any financing or continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the security interests created hereby and (ii) in the case of Investment Property, Investment Accounts, Letter-of-Credit Rights and any other relevant Collateral, taking any actions necessary to enable the Administrative Agent to obtain “control” (within the meaning of the UCC) with respect thereto to the extent required hereunder.

 

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5.4          Changes in Locations, Name, Etc.  Such Grantor will not, except upon 15 days’ (or such shorter period as may be agreed to by the Administrative Agent) prior written notice to the Administrative Agent and delivery to the Administrative Agent of (a) all additional executed financing statements and other documents reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein, and (b) if applicable, a written supplement to Schedule 4 showing the relevant new jurisdiction of organization, location of chief executive office or sole place of business, as appropriate:

 

(i)          change its jurisdiction of organization, identification number from the jurisdiction of organization (if any) or the location of its chief executive office or sole place of business, as appropriate, from that referred to in Section 4.3;

 

(ii)          change its name; or

 

(iii)         (A) locate any Collateral having an aggregate book value in excess of $250,000 for more than 30 days at any location other than the locations set forth in Section 5 or at such other locations as may be disclosed in writing to the Administrative Agent at least 15 days prior to the location of such Collateral at such new location or remove any such Collateral from such locations (other than in connection with (w) sales of Inventory in the ordinary course of such Grantor’s business, (x) the movement of Collateral as part of such Grantor’s supply chain and in the ordinary course of such Grantor’s business, (y) other dispositions permitted by the provisions of the Credit Agreement and (z) movements of Collateral from one disclosed location to another disclosed location within the United States).

 

5.5           Notices.  Such Grantor will advise the Administrative Agent promptly, in reasonable detail, of:

 

(a)           any Lien (other than Liens permitted under Section 7.3 of the Credit Agreement) on any of the Collateral; and

 

(b)           the occurrence of any other event which could reasonably be expected to have a material adverse effect on the aggregate value of the Collateral or on the security interests created hereby.

 

5.6           Instruments; Investment Property.

 

(a)           Upon the request of the Administrative Agent, such Grantor will (i) immediately deliver to the Administrative Agent, or an agent designated by it, appropriately endorsed or accompanied by appropriate instruments of transfer or assignment, all Instruments, Documents, Chattel Paper and certificated securities with respect to any Investment Property held by such Grantor, all letters of credit of such Grantor, and all other Rights to Payment held by such Grantor at any time evidenced by promissory notes, trade acceptances or other instruments, and (ii) provide such notice, obtain such acknowledgments and take all such other action, with respect to any Chattel Paper, Documents and Letter-of-Credit Rights held by such Grantor, as the Administrative Agent shall reasonably specify.

 

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(b)           If such Grantor shall become entitled to receive or shall receive any certificate (including any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any Pledged Collateral, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Administrative Agent and the other Secured Parties, hold the same in trust for the Administrative Agent and the other Secured Parties and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Secured Obligations; provided that in no event shall this Section 5.6(b) apply to any Excluded Assets.  Any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of any Issuer shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Secured Obligations, and in case any distribution of capital shall be made on or in respect of the Investment Property or any property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for the Secured Obligations.  If any sums of money or property so paid or distributed in respect of such Investment Property shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, hold such money or property in trust for the Administrative Agent and the other Secured Parties, segregated from other funds of such Grantor, as additional collateral security for the Secured Obligations.

 

(c)           In the case of any Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Capital Stock issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 5.6(a) and (b) with respect to the Pledged Collateral issued by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the Capital Stock issued by it.

 

5.7           Securities Accounts; Deposit Accounts.

 

(a)          With respect to any Securities Account, such Grantor shall cause any applicable securities intermediary maintaining such Securities Account to show on its books that the Administrative Agent is the entitlement holder with respect to such Securities Account, and, if requested by the Administrative Agent, cause such securities intermediary to enter into a Securities Account Control Agreement in form and substance reasonably satisfactory to the Administrative Agent pursuant to which such securities intermediary shall agree to comply with the Administrative Agent’s “entitlement orders” without further consent by such Grantor, as requested by the Administrative Agent; and

 

(b)           with respect to any Deposit Account, such Grantor shall enter into and shall cause the depositary institution maintaining such account to enter into a Deposit Account Control Agreement in form and substance reasonably satisfactory to the Administrative Agent pursuant to which the Administrative Agent shall be granted “control” (within the meaning of Section 9104 of the UCC) over such Deposit Account.

 

(c)          The Administrative Agent agrees that it will only communicate “entitlement orders” with respect to the Deposit Accounts and Securities Accounts of the Grantors after the occurrence and during the continuance of an Event of Default.

 

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(d)           Such Grantor shall give the Administrative Agent immediate notice of the establishment of any new Deposit Account, and of any new Securities Account established by such Grantor with respect to any Investment Property held by such Grantor.

 

5.8            Intellectual Property.

 

(a)           Such Grantor (either itself or through licensees) will, except as permitted by Section 7.5 of the Credit Agreement, (i) continue to use each material Trademark in a manner sufficient to maintain such material Trademark in full force free from any claim of abandonment for non-use and (ii) not (and not knowingly permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any such material Trademark may become invalidated, abandoned or impaired in any way that could reasonably be expected to result in a Material Adverse Effect on such Grantor.

 

(b)           Except as permitted by Section 7.5 of the Credit Agreement, such Grantor will not do any act, or omit to do any act, whereby any material Patent could reasonably be expected to become forfeited, abandoned or dedicated to the public, except for any abandonment or dedication to the public of any such issued Patent that such Grantor has determined in good faith is desirable for the conduct of its business.

 

(c)           Except as permitted by Section 7.5 of the Credit Agreement, such Grantor will not (and will not knowingly permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any such material Copyrights could reasonably be expected to become invalidated or otherwise materially impaired.  Except as permitted by Section 7.5 of the Credit Agreement, such Grantor will not do any act whereby any material portion of such material Copyrights may fall into the public domain.

 

(d)          Such Grantor (either itself or through licensees) will not do any act that knowingly uses any material Intellectual Property to infringe the Intellectual Property rights of any other Person.

 

(e)            Reserved.

 

(f)           Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Patent or Trademark with the U.S. Patent and Trademark Office or any similar office or agency in any other country or political subdivision thereof, such Grantor shall report (i) the initial application to and (ii) the corresponding grant, if any, of the Patent or Trademark from the USPTO to the Administrative Agent in accordance with Section 3.3(d).  Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Copyright with the USCRO, such Grantor shall report the filing of the initial application to the Administrative Agent in accordance with Section 3.3(d).  Upon the reasonable request of the Administrative Agent, other than in respect of intent-to-use trademark or service mark applications, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as the Administrative Agent may reasonably request to evidence the Administrative Agent’s and the other Secured Parties’ security interest in any Copyright, Patent or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby.

 

(g)      Except as permitted by Section 7.5 of the Credit Agreement, such Grantor will take all reasonable and necessary steps, including, without limitation, in any proceeding before the USPTO, the USCRO or any similar office or agency in any other country or any political subdivision thereof, to maintain each registration of such Grantor’s registered Copyrights, Trademarks and issued Patents, including filing of applications for renewal, affidavits of use and affidavits of incontestability.

 

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(h)       In the event that any material Intellectual Property of a Grantor is infringed, misappropriated or diluted by a third party, such Grantor shall take such actions, if any, as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property.

 

5.9           Receivables.  Other than in the ordinary course of business consistent with its past practice, and except as otherwise determined in the good faith business judgment of such Grantor, such Grantor will not (a) grant any extension of the time of payment of any Receivable, (b) compromise or settle any Receivable for less than the full amount thereof, (c) release, wholly or partially, any Person liable for the payment of any Receivable, (d) allow any credit or discount whatsoever on any Receivable or (e) amend, supplement or modify any Receivable in any manner that could adversely affect the value thereof.

 

5.10         Defense of Collateral.  Such Grantor will take such reasonable actions as are necessary to defend any action, suit or proceeding which could reasonably be expected to affect to a material extent its title to, or right or interest in, or the Administrative Agent’s right or interest in, any material portion of the Collateral of such Grantor.

 

5.11         Preservation of Collateral.  Such Grantor will do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Collateral of such Grantor in all material respects.

 

5.12         Compliance with Laws, Etc.  Such Grantor will comply with all laws, regulations and ordinances, and all policies of insurance, relating to the possession, operation, maintenance and control of the Collateral of such Grantor, except in such instances in which the failure to comply therewith, either individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

5.13         Location of Books and Chief Executive Office.  Such Grantor will: (a) keep all Books pertaining to the Rights to Payment of such Grantor at the locations set forth in Schedule 4; and (b) give at least 15 days’ prior written notice to the Administrative Agent of any changes in any location where Books pertaining to the Rights to Payment of such Grantor are kept, including any change of name or address of any service bureau, computer or data processing company or other Person preparing or maintaining any such Books or collecting Rights to Payment for such Grantor.

 

5.14         Location of Collateral.  Except as otherwise permitted under the Credit Agreement, such Grantor will:  (a) keep the Collateral held by such Grantor at the locations set forth in Schedule 5 or at such other locations as may be disclosed in writing to the Administrative Agent pursuant to clause (b) and will not remove any such Collateral from such locations (other than in connection with sales of Inventory in the ordinary course of such Grantor’s business, the movement of Collateral as part of such Grantor’s supply chain and in the ordinary course of such Grantor’s business, other Dispositions permitted by Section 7.5 of the Credit Agreement and movements of Collateral from one disclosed location to another disclosed location within the United States), except upon at least 15 days’ prior written notice of any removal to the Administrative Agent; and (b) give the Administrative Agent at least 15 days’ prior written notice of any change in the locations set forth in Schedule 5.

 

5.15          Maintenance of Records.  Such Grantor will keep separate, accurate and complete Books with respect to Collateral held by such Grantor, disclosing the Administrative Agent’s security interest hereunder.

 

5.16         Disposition of Collateral.  Such Grantor will not surrender or lose possession of (other than to the Administrative Agent), sell, lease, rent, or otherwise dispose of or transfer any of the Collateral held by such Grantor or any right or interest therein, except to the extent permitted by the Loan Documents.

 

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5.17         Liens.  Such Grantor will keep the Collateral held by such Grantor free of all Liens except Liens permitted under Section 7.3 of the Credit Agreement.

 

5.18         Expenses.  Such Grantor will pay all expenses of protecting, storing, warehousing, insuring, handling and shipping the Collateral held by such Grantor, to the extent the failure to pay any such expenses could reasonably be expected to materially and adversely affect the value of the Collateral.

 

5.19         Leased Premises; Collateral Held by Warehouseman, Bailee, Etc.  Such Grantor will use commercially reasonable efforts to satisfy the affirmative covenant of the Borrower set forth in Section 6.12(d) of the Credit Agreement, which covenant by its terms the Borrower is required to cause such Grantor to comply with.

 

5.20        Chattel Paper.  Such Grantor will not create any Chattel Paper without placing a legend on such Chattel Paper acceptable to the Administrative Agent indicating that the Administrative Agent has a security interest in such Chattel Paper.  Such Grantor will give the Administrative Agent immediate notice if such Grantor at any time holds or acquires an interest in any Chattel Paper, including any Electronic Chattel Paper and shall comply, in all respects, with the provisions of Section 5.1 hereof.

 

5.21          Commercial Tort Claims.  Such Grantor will give the Administrative Agent prompt notice if such Grantor shall at any time hold or acquire any Commercial Tort Claim with a potential value in excess of $500,000.

 

5.22         Letter-of-Credit Rights.  Such Grantor will give the Administrative Agent prompt notice if such Grantor shall at any time hold or acquire any Letter-of-Credit Rights with a potential value in excess of $100,000.

 

5.23         Shareholder Agreements and Other Agreements.

 

(a)           Such Grantor shall comply with all of its obligations under any shareholders agreement, operating agreement, partnership agreement, voting trust, proxy agreement or other agreement or understanding (collectively, the “Pledged Collateral Agreements”) to which it is a party and shall enforce all of its rights thereunder, except, with respect to any such Pledged Collateral Agreement relating to any Pledged Collateral issued by a Person other than a Subsidiary of a Grantor, to the extent the failure to enforce any such rights could reasonably be expected to materially and adversely affect the value of the Pledged Collateral to which any such Pledged Collateral Agreement relates.

 

(b)           Such Grantor agrees that no Pledged Stock (i) shall be dealt in or traded on any securities exchange or in any securities market, (ii) shall constitute an investment company security, or (iii) shall be held by such Grantor in a Securities Account.

 

(c)           Subject to the terms and conditions of the Credit Agreement, including Sections 7.3 and 7.5 thereof, such Grantor shall not vote to enable or take any other action to:  (i) amend or terminate, or waive compliance with any of the terms of, any such Pledged Collateral Agreement, certificate or articles of incorporation, bylaws or other organizational documents in any way that materially and adversely affects the validity, perfection or priority of the Administrative Agent’s security interest therein or in the other Collateral or that otherwise materially impairs the interests of the Secured Parties.

 

SECTION 6.             REMEDIAL PROVISIONS

 

Each Grantor covenants and agrees with the Administrative Agent and the other Secured Parties that, from and after the date of this Agreement until the Discharge of Obligations:

 

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6.1            Certain Matters Relating to Receivables.

 

(a)           The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s Receivables, and the Administrative Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default.  If required by the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Administrative Agent if required, in a Collateral Account over which the Administrative Agent has control, subject to withdrawal by the Administrative Agent for the account of the Secured Parties only as provided in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent and the other Secured Parties, segregated from other funds of such Grantor.  At the Administrative Agent’s request after the occurrence and during the continuance of an Event of Default, each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

 

(b)          At the Administrative Agent’s request, after the occurrence and during the continuance of an Event of Default, each Grantor shall deliver to the Administrative Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including, without limitation, all original orders, invoices and shipping receipts.

 

6.2           Communications with Obligors; Grantors Remain Liable.

 

(a)          The Administrative Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default communicate with obligors under the Receivables to verify with them to the Administrative Agent’s satisfaction the existence, amount and terms of any Receivables.

 

(b)           Upon the request of the Administrative Agent, at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on the Receivables that the Receivables have been assigned to the Administrative Agent for the ratable benefit of the Secured Parties and that payments in respect thereof shall be made directly to the Administrative Agent.

 

(c)           Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto.  Neither the Administrative Agent nor any other Secured Party shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any Lender of any payment relating thereto, nor shall the Administrative Agent nor any other Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

 

6.3            Investment Property.

 

(a)           Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given written notice to the relevant Grantor of the Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Collateral and all payments made in respect of the Pledged Notes to the extent not prohibited by the Credit Agreement, and to exercise all voting and corporate or other organizational rights with respect to the Investment Property of such Grantor; provided, however, that no vote shall be cast or corporate or other organizational right exercised or other action taken which, in the Administrative Agent’s reasonable discretion, would materially impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.

 

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(b)           If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right (A) to receive any and all cash dividends, payments or other Proceeds paid in respect of the Investment Property (including the Pledged Collateral) of any or all of the Grantors and make application thereof to the Secured Obligations in the order set forth in Section 6.5, and (B) to exchange uncertificated Pledged Collateral for certificated Pledged Collateral and to exchange certificated Pledged Collateral for certificates of larger or smaller denominations, for any purpose consistent with this Agreement (in each case to the extent such exchanges are permitted under the applicable Pledged Collateral Agreements or otherwise agreed upon by the Issuer of such Pledged Collateral), and (ii) any and all of such Investment Property shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of any such Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other organizational structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of such Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

 

(c)           Each Grantor hereby authorizes and instructs each Issuer of any Pledged Collateral or Pledged Notes pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Collateral or, as applicable, the Pledged Notes directly to the Administrative Agent.

 

(d)          If an Event of Default shall have occurred and be continuing, the Administrative Agent shall have the right to apply the balance from any Deposit Account of any Grantor, or instruct the bank at which any such Deposit Account is maintained to pay the balance of any such Deposit Account to or for the benefit of the Administrative Agent, to be applied to the Obligations in accordance with the terms of the Loan Documents.

 

6.4           Proceeds to be Turned Over To Administrative Agent.  In addition to the rights of the Administrative Agent and the other Secured Parties specified in Section 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash, checks, Cash Equivalents and other near-cash items shall be held by such Grantor in trust for the Administrative Agent and the other Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Administrative Agent, if required).  All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a Collateral Account over which it maintains control, within the meaning of the UCC.  All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the other Secured Parties) shall continue to be held as collateral security for all the Secured Obligations and shall not constitute payment thereof until applied as provided in Section 6.5.

 

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6.5          Application of Proceeds.  If an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent’s election, the Administrative Agent may apply all or any part of Proceeds constituting Collateral, whether or not held in any Collateral Account, in payment of the Secured Obligations in accordance with Section 8.3 of the Credit Agreement.

 

6.6           Code and Other Remedies.  If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the UCC or any other applicable law or in equity.  Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk.  The Administrative Agent or any other Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released.  Each Grantor further agrees, at the Administrative Agent’s request during the existence of an Event of Default, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.6, in accordance with the provisions of Section 6.5, only after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Secured Obligations, in such order as is contemplated by Section 8.3 of the Credit Agreement, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including Section 9615(a)(3) of the UCC, but only to the extent of the surplus, if any, owing to any Grantor.  To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any other Secured Party arising out of the exercise by any of them of any rights hereunder, except to the extent caused by the gross negligence or willful misconduct of the Administrative Agent or such Secured Party or their respective agents.  If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

 

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6.7           Registration Rights.

 

(a)          If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 6.6, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto.  Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

 

(b)          Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner.  Subject to its compliance with state securities laws applicable to private sales. the Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

 

(c)           Each Grantor agrees to use commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance with any applicable Requirement of Law.  Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.7 will cause irreparable injury to the Administrative Agent and the other Secured Parties, that the Administrative Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.7 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement.

 

6.8           Intellectual Property License.  Solely for the purpose of enabling the Administrative Agent to exercise rights and remedies under this Section 6 and at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Administrative Agent, for the benefit of the Secured Parties, an irrevocable, non-exclusive, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation of said Trademarks, to use, operate under, license, or sublicense any Intellectual Property now owned or here­after acquired by the Grantors (subject, in the case of Trademark Licenses, Copyright Licenses and Patent Licenses, to the terms of any applicable license agreement).

 

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6.9           Deficiency.  Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Secured Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any other Secured Party to collect such deficiency, in each case until the Discharge of Obligations.

 

SECTION 7.             THE ADMINISTRATIVE AGENT

 

Each Grantor covenants and agrees with the Administrative Agent and the other Secured Parties that:

 

7.1           Administrative Agent’s Appointment as Attorney-in-Fact, etc.

 

(a)           Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

 

(i)           in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under any Receivable or with respect to any other Collateral whenever payable;

 

(ii)          in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may request to evidence the Administrative Agent’s and the other Secured Parties’ security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

 

(iii)         pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

 

(iv)        execute, in connection with any sale provided for in Section 6.6 or 6.7, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

 

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(v)         (A) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (B) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (C) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (E) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (F) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; (G) assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its sole discretion determine; and (H) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the Administrative Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

 

Anything in this Section 7.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1(a) unless an Event of Default shall have occurred and be continuing.

 

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

 

(c)         The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at a rate per annum equal to the highest rate per annum at which interest would then be payable on any category of past due ABR Loans under the Credit Agreement, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand.

 

(d)         Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

 

7.2          Duty of Administrative Agent.  The Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9207 of the UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account.  Neither the Administrative Agent, any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Administrative Agent and the other Secured Parties hereunder are solely to protect the Administrative Agent’s and the other Secured Parties’ interests in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise any such powers.  The Administrative Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

 

27

7.3           Authority of Administrative Agent.  Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

SECTION 8.            MISCELLANEOUS

 

8.1          Amendments in Writing.  None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 9.1 of the Credit Agreement.

 

8.2           Notices.  All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in Section 10.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Grantor (other than the Borrower) shall be addressed to such Guarantor at its notice address set forth on Schedule 1 (as the same may be updated from time to time in accordance with the terms hereof).

 

8.3           No Waiver by Course of Conduct; Cumulative Remedies.  Neither the Administrative Agent nor any other Secured Party shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default, as applicable.  No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Administrative Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such other Secured Party would otherwise have on any future occasion.  The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

8.4            Enforcement Expenses; Indemnification.

 

(a)         Costs and Expenses.  The Grantors shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent) in connection with the preparation, negotiation, execution, delivery and administration of this Agreement and the other Security Documents, or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated by the Credit Agreement shall be consummated), and (ii) all documented out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the documented fees, charges and disbursements of any counsel for the Administrative Agent or any Lender) in connection with the enforcement or protection of its rights in connection with this Agreement and the other Security Documents, including its rights under this Section.

 

28

(b)          Indemnification by the Grantors.  The Grantors shall indemnify each Indemnitee against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by such Grantor arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Security Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by such Grantor or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by such Grantor or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee's obligations hereunder or under any other Loan Document, if such Grantor or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

 

(c)          Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, no Grantor shall assert, and each Grantor hereby waives, any claim such Grantor may at any time have against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or the transactions contemplated hereby or thereby.  No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement, any other Loan Document or the transactions contemplated hereby or thereby.

 

(d)          Taxes.  The Grantors agree to pay, and to save the Administrative Agent and each other Secured Party harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes (including any withholding taxes) which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.

 

(e)           Reserved.

 

(f)            Payments.  All amounts due under this Section 8.4 shall be payable promptly after demand therefor.

 

(g)          Survival.  The agreements in this Section 8.4 shall survive the Discharge of Obligations.

 

8.5           Successors and Assigns.  This Agreement shall be binding upon the successors and assigns of each party hereto and shall inure to the benefit of each party hereto (including the Administrative Agent on behalf of the Secured Parties) and their respective successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent.

29

8.6           Set Off.  Each Grantor hereby irrevocably authorizes the Administrative Agent and each other Secured Party and any Affiliate thereof at any time and from time to time after the occurrence and during the continuance of an Event of Default, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to setoff and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Administrative Agent or such Secured Party or such Affiliate to or for the credit or the account of such Grantor, or any part thereof in such amounts as the Administrative Agent or such Secured Party may elect, against and on account of the Secured Obligations and liabilities of such Grantor then due to the Administrative Agent or such Secured Party hereunder and under the other Loan Documents and claims of every nature and description of the Administrative Agent or such Secured Party against such Grantor, in any currency, whether arising hereunder, under the Credit Agreement, any other Loan Document or otherwise, as the Administrative Agent or such Secured Party may elect, whether or not the Administrative Agent or any other Secured Party has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured.  The rights of the Administrative Agent and each other Secured Party under this Section 8.6 are in addition to other rights and remedies (including, without limitation, other rights of setoff) which the Administrative Agent or such other Secured Party may have.

 

8.7           Counterparts.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile and/or electronic mail), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

8.8           Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

8.9          Section Headings.  The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

8.10         Integration.  This Agreement and the other Loan Documents represent the agreement of the Grantors, the Administrative Agent and the other Secured Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any other Secured Party relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

 

8.11       GOVERNING LAW; Submission to Jurisdiction; Jury Trial Waiver.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.  THE PROVISIONS OF SECTION 10.14 OF THE CREDIT AGREEMENT REGARDING SUBMISSION TO JURISDICTION AND JURY TRIAL WAIVER SHALL BE APPLICABLE TO THIS AGREEMENT AND ARE HEREBY INCORPORATED HEREIN BY REFERENCE, MUTATIS MUTANDIS, AS IF SUCH PROVISIONS WERE FULLY SET FORTH HEREIN.

 

8.12         Acknowledgements.  Each Grantor hereby acknowledges that:

 

(a)           it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

 

(b)           neither the Administrative Agent nor any other Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

30

(c)       no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among any of the Secured Parties or among the Grantors and any of the Secured Parties.

 

8.13        Additional Grantors.  Each Material Domestic Subsidiary of a Grantor that is required to become a party to this Agreement pursuant to Section 6.12 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto, and such Grantor shall cause such Material Domestic Subsidiary to execute and deliver such Assumption Agreement in accordance with the provisions of this Agreement and the other Loan Documents. .

 

8.14       Releases.

 

(a)       Upon the Discharge of Obligations, the Collateral shall be released from the Liens in favor of the Administrative Agent and the other Secured Parties created hereby, this Agreement shall terminate with respect to the Administrative Agent and the other Secured Parties, and all obligations (other than those expressly stated to survive such termination) of each Grantor to the Administrative Agent or any other Secured Party hereunder shall terminate, all without delivery of any instrument or performance of any act by any party.  At the sole expense of any Grantor following any such termination, the Administrative Agent promptly shall deliver such documents as such Grantor shall reasonably request to evidence such termination.

 

(b)      If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by Section 7 of the Credit Agreement, then the Administrative Agent, at the request and sole expense of such Grantor, shall promptly execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral, as applicable.  At the request and sole expense of the Borrower, a Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Guarantor shall be sold, transferred or otherwise disposed of to a Person other than a Grantor in a transaction permitted by Section 7 of the Credit Agreement; provided that the Borrower shall have delivered to the Administrative Agent, at least ten days, or such shorter period as the Administrative Agent may agree, prior to the date of the proposed release, a written request for release identifying the relevant Guarantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by the Borrower stating that such transaction is in compliance with terms and provisions of the Credit Agreement and the other Loan Documents.

 

8.15       Survival.     All covenants, representations and warranties made in this Agreement shall continue in full force until this Agreement has terminated pursuant to its terms and all Secured Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been paid in full and satisfied.  The grant of the Liens by the Grantors in Section 3.1 shall survive the termination of all Bank Services Agreements.

 

[Remainder of page intentionally left blank]

 

31

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written.

	 	
GRANTORS:

		
	 			
	 	
SHORETEL, INC.

	
	 	 		
	 	
By:

	  	
	 	 		
	 	
Name:

	  	
	 	 		
	 	
Title:

	  	
	 	 		
	 	
M5 NETWORKS, LLC

	
	 	 		
	 	
By:

	  	
	 	 		
	 	
Name:

	  	
	 	 		
	 	
Title:

	  	

 

Signature Page 1 to Amended and Restated Guarantee and Collateral Agreement

 

		
ADMINISTRATIVE AGENT:

	
		 		
		
SILICON VALLEY BANK

	
		 		
		
By:

	  	
		
 

Name:

	  	
		
 

Title:

	  	

 

Signature Page 2 to Amended and Restated Guarantee and Collateral Agreement

 

SCHEDULE 1

 

NOTICE ADDRESSES OF GRANTORS

 

	
 

Grantor

		
Notice Address

	
ShoreTel, Inc.

		
960 Stewart Dr., Sunnyvale, CA 94085

	
M5 Networks, LLC

		
960 Stewart Dr., Sunnyvale, CA 94085

 

 

Schedule 1

SCHEDULE 2

 

DESCRIPTION OF INVESTMENT PROPERTY

 

Pledged Stock:

 

	
Grantor

		
Issuer

		
Class of Capital Stock

	 	
Certificate No.

	 	 	
No. of Shares / Units

	 
	
ShoreTel, Inc.

		
ShoreTel International, Inc.

		
Common

	 	
NA

	 	 	
1,000

	 
	
ShoreTel, Inc.

		
Agito Networks, Inc.

		
NA

	 	
NA

	 	 	
NA

	 
	
ShoreTel, Inc.

		
ShoreTel UK Ltd.

		
NA

	 	
NA

	 	 	
NA

	 
	
ShoreTel, Inc.

		
ShoreTel GmbH

		
NA

	 	
NA

	 	 	
NA

	 
	
ShoreTel, Inc.

		
ShoreTel Singapore PTE Ltd.

		
Ordinary

	 	
1

	 	 	
100

	 
	
ShoreTel, Inc.

		
ShoreTel Australia Pty Ltd

		
Ordinary

	 	
1

	 	 	
100

	 
	
ShoreTel, Inc.

		
ShoreTel Canada Limited

		
Common

	 	
1

	 	 	
100

	 
	
ShoreTel, Inc.

		
M5 Networks, Inc.

		
Common

	 	
1

	 	 	
1

	 
	
ShoreTel, Inc.

		
Maguskaart LLC

		
NA

	 	
NA

	 	 	
NA

	 
	
ShoreTel, Inc.

		
Bukad LLC

		
NA

	 	
NA

	 	 	
NA

	 
	
ShoreTel, Inc.

		
Kammat LLC

		
NA

	 	
NA

	 	 	
NA

	 
	
ShoreTel, Inc.

		
Xatt LLC

		
NA

	 	
NA

	 	 	
NA

	 
	
M5 Networks, LLC

		
M5 Callfinity, Inc.

		
NA

	 	
NA

	 	 	
NA

	 
	
M5 Networks, LLC

		
M5 Telecom-USA, Inc.

		
NA

	 	
NA

	 	 	
NA

	 
	
M5 Networks, LLC

		
M5 Geckotech, Inc.

		
Common

	 	
2

	 	 	
1,000

	 

 Pledged Notes:

 

None.

Schedule 2

Securities Accounts:

 

	
Grantor

		
Securities Intermediary

		
Address

	 	
Account Number(s)

	 
	
ShoreTel, Inc.

		
Silicon Valley Bank

		
555 Mission Street, Ste 900

San Francisco, CA  94105

	 	
19-SV401

	 
	
ShoreTel, Inc.

		
Wells Fargo Bank

		
525 Market Street, 10th Floor

San Francisco, CA  94105

	 	
3903065383

	 

Commodity Accounts:

 

None.

 

Deposit Accounts:

 

	
Grantor

		
Depositary Bank

		
Address

	 	
Account Number(s)

	 
	
ShoreTel, Inc.

		
Wells Fargo Checking

		
PO Box 63020, San Francisco, CA  94163-2798

	 	
4121749972

	 
	
ShoreTel, Inc.

		
Wells Fargo Checking

		
PO Box 63020, San Francisco, CA  94163-2798

	 	
4120960299

	 
	
ShoreTel, Inc.

		
Silicon Valley Bank

		
555 Mission Street, Ste 900

San Francisco, CA  94105

	 	
3300812588

	 

Schedule 2

SCHEDULE 3

 

FILINGS AND OTHER ACTIONS

 

REQUIRED TO PERFECT SECURITY INTERESTS

 

	1.	UCC-3 amendment statement to be filed by the Administrative Agent in the filing office of the Delaware Secretary of State’s Office for the purpose of restating the collateral description contained in the UCC-1 financing statement filed by the Administrative Agent against the Borrower in connection with the Existing Credit Facility.

 

	2.	UCC-3 amendment statement to be filed by the Administrative Agent in the filing office of the Delaware Secretary of State’s Office for the purpose of restating the collateral description contained in the UCC-1 financing statement filed by the Administrative Agent against M5 Networks, LLC in connection with the Existing Credit Facility.

 

	3.	Filing of Borrower Patent and Trademark Security Agreement with the USPTO.

 

	
4.

	
Filing of the M5 Networks, LLC Patent and Trademark Security Agreement with the USPTO.

Schedule 3

SCHEDULE 4

 

LOCATION OF JURISDICTION OF ORGANIZATION,

CHIEF EXECUTIVE OFFICE AND LOCATION OF BOOKS

 

	
Grantor

		

Jurisdiction 

of 

Organization

	 	

Organizational

 Identification 

Number

	 	

Location of Chief

 Executive Office

		
Location of Books

	
ShoreTel, Inc.

		
Delaware

	 	
EIN 77-0443568

	 	
960 Stewart Dr., Sunnyvale, CA 94085

		
960 Stewart Dr., Sunnyvale, CA 94085

	
M5 Networks, LLC

		
Delaware

	 	
5102572

	 	
960 Stewart Dr., Sunnyvale, CA 94085

		
960 Stewart Dr., Sunnyvale, CA 94085

 

Schedule 4

SCHEDULE 5

 

LOCATIONS OF EQUIPMENT AND INVENTORY

 

	
Grantor

		
Address Location

	 		
	
ShoreTel, Inc.

		
960 Stewart Drive, Sunnyvale, CA 94085

6500 Riverplace Blvd., Austin, TX

38897 Cherry Street, Newark, CA 94560

300 N. Elizabeth Street, Suite 510c, Chicago, IL 60607

300 State Street, Suite 100, Rochester, NY 14614

1385 Broadway, Suite 700, New York, NY 10018

1649 W. Frankford Rd., Carrolton, TX 75007

350 East Cermack, 5th Floor, Chicago, IL 60616

17222 Van Karman Ave., Irvine, CA 92614

1250 Broadway, 19th Floor, New York, NY 10018

	 		
	
M5 Networks, LLC

		
960 Stewart Drive, Sunnyvale, CA 94085

 

Schedule 5

SCHEDULE 7

 

LETTER OF CREDIT RIGHTS

 

None.

 

Schedule 7

SCHEDULE 8

 

COMMERCIAL TORT CLAIMS

 

None.

 

 

Schedule 8EX-4.1

 Exhibit 4.1 

EXECUTION COPY 
 NORTHROP GRUMMAN
CORPORATION 
 AND 
 THE BANK OF
NEW YORK MELLON, TRUSTEE 
  
 SIXTH
SUPPLEMENTAL INDENTURE 
 Dated as of February 6, 2015 

to 
 INDENTURE 

Dated as of November 21, 2001 

as amended and supplemented by the 

FIRST SUPPLEMENTAL INDENTURE 

Dated as of July 30, 2009 

THIRD SUPPLEMENTAL INDENTURE 

Dated as of March 30, 2011 

FOURTH SUPPLEMENTAL INDENTURE 

Dated as of March 30, 2011 

 
 3.850% SENIOR
NOTES DUE 2045 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
		
	 Article I. DEFINITIONS
	  	 	2	  
		
	 Article II. ESTABLISHMENT OF 3.850% SENIOR NOTES DUE 2045
	  	 	3	  
			
	 201.
	 	 Establishment and Designation of the Notes
	  	 	3	  
	 202.
	 	 Principal Amount of the Notes; Maturity
	  	 	3	  
	 203.
	 	 Form of Notes; Denominations; Depositary
	  	 	3	  
	 204.
	 	 Payment
	  	 	3	  
	 205.
	 	 Interest Rate
	  	 	4	  
	 206.
	 	 Paying Agent and Security Registrar
	  	 	4	  
	 207.
	 	 No Sinking Fund
	  	 	4	  
	 208.
	 	 Redemption of the Notes
	  	 	4	  
	 209.
	 	 Exchange of the Notes
	  	 	4	  
		
	 Article III. MISCELLANEOUS PROVISIONS
	  	 	5	  
			
	 301.
	 	 Effect of Sixth Supplemental Indenture
	  	 	5	  
	 302.
	 	 Effective Date
	  	 	5	  
	 303.
	 	 Effect of Headings and Table of Contents
	  	 	5	  
	 304.
	 	 Successors and Assigns
	  	 	5	  
	 305.
	 	 Separability Clause
	  	 	5	  
	 306.
	 	 Counterparts
	  	 	6	  
	 307.
	 	 Trustee Not Responsible for Recitals
	  	 	6	  
	 308.
	 	 Governing Law
	  	 	6	  
	 309.
	 	 Applicable Tax Law
	  	 	6	  
			
	EXHIBIT A	 	Form of 3.850% Senior Notes due 2045	  			

  

  
 -i- 

 This SIXTH SUPPLEMENTAL INDENTURE dated as of February 6, 2015 (this “Sixth
Supplemental Indenture”) between NORTHROP GRUMMAN CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), having its principal office at 2980 Fairview Park Drive,
Falls Church, Virginia 22042, and THE BANK OF NEW YORK MELLON, a corporation duly organized and existing under the laws of the State of New York, as successor to JPMorgan Chase Bank, as trustee (herein called the “Trustee”), under the
Indenture (as hereinafter defined), having its Corporate Trust Office at 101 Barclay Street, New York, New York 10286. 
 R E C I T
A L S 
 WHEREAS, the Company and the Trustee have executed and delivered an Indenture, dated as of November 21, 2001 (the
“Original Indenture”), the First Supplemental Indenture, dated as of July 30, 2009 (the “First Supplemental Indenture”), the Third Supplemental Indenture, dated as of March 30, 2011 (the “Third Supplemental
Indenture”), and the Fourth Supplemental Indenture, dated as of March 30, 2011 (the “Fourth Supplemental Indenture”), each of which amends and supplements the Original Indenture; 

WHEREAS, Section 901 of the Original Indenture, as amended, provides, among other things, that the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, without the consent of any Holders, may enter into an indenture supplemental to the Original Indenture to establish the form or terms of Securities of any series as permitted by
Sections 201 and 301 of the Original Indenture, as amended; 
 WHEREAS, pursuant to the terms of the Original Indenture, as amended, the
Company desires to provide for the establishment of a new series of its Securities to be known as its “3.850% Senior Notes due 2045” (the “Notes”), the form and substance thereof and the terms, provisions and conditions thereof
to be set forth as provided in the Original Indenture, as amended by the First Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture and this Sixth Supplemental Indenture (collectively, the
“Indenture”); 
 WHEREAS, the Company has requested that the Trustee execute and deliver this Sixth Supplemental Indenture; and

 WHEREAS, all things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee and issued
upon the terms and subject to the conditions hereinafter and in the Indenture set forth against payment therefor, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Sixth Supplemental
Indenture and make it a valid, binding and legal agreement of the Company, have been done or performed. 
 NOW, THEREFORE, THIS SIXTH
SUPPLEMENTAL INDENTURE WITNESSETH: 
 For and in consideration of the promises and the purchase of the Securities by the Holders thereof, it
is mutually agreed, for the equal and proportionate benefit of all Holders, as follows: 

  
 1 

 Article I. 

DEFINITIONS 
 Unless the context
otherwise requires, capitalized terms used but not defined in this Sixth Supplemental Indenture shall have the respective meaning ascribed to them by the Original Indenture, as heretofore supplemented and amended by the First Supplemental Indenture,
the Third Supplemental Indenture and the Fourth Supplemental Indenture. The following additional terms are hereby established for purposes of this Sixth Supplemental Indenture and shall have the meaning set forth in this Sixth Supplemental Indenture
only for purposes of this Sixth Supplemental Indenture: 
 “Additional Notes” has the meaning set forth in Section 201 of this
Sixth Supplemental Indenture. 
 “Applicable Tax Law” has the meaning set forth in Section 309 of this Sixth Supplemental
Indenture. 
 “First Supplemental Indenture” has the meaning set forth in the recitals of this Sixth Supplemental Indenture. 

“Fourth Supplemental Indenture” has the meaning set forth in the recitals of this Sixth Supplemental Indenture. 

“Global Notes” has the meaning set forth in Section 203 of this Sixth Supplemental Indenture. 

“Indenture” has the meaning set forth in the recitals of this Sixth Supplemental Indenture. 

“Interest Payment Date” has the meaning set forth in Section 205 of this Sixth Supplemental Indenture. 

“Notes” has the meaning set forth in the recitals of this Sixth Supplemental Indenture. 

“Original Indenture” has the meaning set forth in the recitals of this Sixth Supplemental Indenture. 

“Regular Record Date” has the meaning set forth in Section 205 of this Sixth Supplemental Indenture. 

“Third Supplemental Indenture” has the meaning set forth in the recitals of this Sixth Supplemental Indenture. 

  
 2 

 Article II. 

ESTABLISHMENT OF 3.850% SENIOR NOTES DUE 2045 
  

	201.	Establishment and Designation of the Notes 

 Pursuant to the terms hereof and
Section 301 of the Original Indenture, the Company hereby establishes a new series of Securities, designated as the “3.850% Senior Notes due 2045.” Such series may be reopened, from time to time, for issuances of an unlimited
aggregate principal amount of additional Securities of such series (the “Additional Notes”). Any such Additional Notes shall have the same ranking, interest rate, maturity date and other terms as the Notes, except, if applicable, the issue
date, the issue price, the initial Interest Payment Date and corresponding initial Regular Record Date and the initial interest accrual date. Any such Additional Notes, together with the Notes, shall constitute a single series of Securities for all
purposes under the Indenture, including voting, waivers, amendments and redemptions; provided, however, that in the event any such Additional Notes are not fungible with the Notes for U.S. federal income tax purposes, such nonfungible
Additional Notes shall be issued with a separate CUSIP number so that they are distinguishable from the Notes. 
  

	202.	Principal Amount of the Notes; Maturity 

 The maximum aggregate principal amount of the
Notes which may be authenticated and delivered pursuant to the Indenture (except for (i) Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 304, 305, 306,
906 or 1107 of the Original Indenture, (ii) Notes which, pursuant to Section 303 of the Original Indenture, are deemed never to have been authenticated and delivered under the Indenture, and (iii) for avoidance of doubt, Additional
Notes) is $600,000,000. The principal amount of the Notes shall be due and payable on April 15, 2045. 
  

	203.	Form of Notes; Denominations; Depositary 

 The Notes shall be initially issued in the
form of one or more Global Securities (the “Global Notes”) in substantially the form set forth in Exhibit A hereto. The Notes shall be issued in fully registered form without coupons in denominations of $2,000 and integral multiples
of $1,000 in excess thereof. 
 The initial Depositary in respect of the Global Notes shall be The Depository Trust Company. The Global
Notes shall be deposited with, or on behalf of, the Depositary and shall be registered in the name of Cede & Co. Except as otherwise set forth in Section 305 of the Original Indenture, the Global Notes may be transferred, in whole or
in part, only to the Depositary, another nominee of the Depositary or to a successor of the Depositary or its nominee. 
  

	204.	Payment 

 The Company will pay the principal of and premium, if any, and interest on the
Notes in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. The Company will make all payments of interest on any Global Note in

  
 3 

 
accordance with the arrangements then existing between the Paying Agent and the applicable Depositary, and all payments of principal of and premium, if any, on any Global Note at the Corporate
Trust Office upon surrender of such Note for payment. The Company will make all payments of interest on any definitive Note by mailing a check to the address of each Person entitled thereto, and all payments of principal of and premium, if any, on
any definitive Note at the Corporate Trust Office upon surrender of such Note for payment. 
  

	205.	Interest Rate 

 Interest on the Notes shall accrue at the rate of 3.850% per annum.
Interest on the Notes shall accrue from February 6, 2015 or the most recent Interest Payment Date to which interest was paid or duly provided for. Interest on the Notes shall be payable semiannually in arrears on April 15 and
October 15, commencing on October 15, 2015 (each an “Interest Payment Date”), to the Persons in whose names such Notes are registered at the close of business on the April 1 or October 1, as the case may be (in either
case, whether or not a Business Day), immediately preceding such Interest Payment Date (each a “Regular Record Date”). Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. 

 

	206.	Paying Agent and Security Registrar 

 The Trustee shall initially act as the Paying Agent
and Security Registrar in respect of the Notes and its Corporate Trust Office is designated as a place where the Notes may be presented for payment or for registration of transfer or exchange. The Company may, however, change the Paying Agent or
Security Registrar for the Notes without prior notice to the Holders thereof, and the Company or any Subsidiary may act as Paying Agent or Security Registrar for the Notes. 
  

	207.	No Sinking Fund 

 The provisions of Article 12 of the Original Indenture shall not be
applicable to the Notes. 
  

	208.	Redemption of the Notes 

 The Notes are subject to redemption, in whole at any time and
in part from time to time, at the option of the Company, as set forth in the form of Note attached hereto as Exhibit A. 
  

	209.	Exchange of the Notes 

 In addition to the circumstances set forth in Clause (2) of
the last paragraph of Section 305 of the Original Indenture, and subject to the arrangements then existing between the Company and the applicable Depositary, the Company may at any time, in its sole discretion, elect to have any Global Note
exchanged in whole or in part for Notes registered in the name or names of Persons other than such Depositary or a nominee thereof. 

  
 4 

 Article III. 

MISCELLANEOUS PROVISIONS 
  

	301.	Effect of Sixth Supplemental Indenture 

 Upon the execution and delivery of this Sixth
Supplemental Indenture by the Company and the Trustee, the Indenture shall be supplemented and amended in accordance herewith, and this Sixth Supplemental Indenture shall form a part of the Indenture for all purposes. Except as otherwise provided
herein, each and every term and condition contained in this Sixth Supplemental Indenture that modifies, amends or supplements the terms and conditions of the Original Indenture, as heretofore supplemented and amended by the First Supplemental
Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, shall apply only to the Notes established hereby and not to any other series of Securities established under the Indenture. 

In the event of a conflict between any provisions of the Original Indenture, as heretofore supplemented and amended by the First Supplemental
Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, and this Sixth Supplemental Indenture, the relevant provision or provisions of this Sixth Supplemental Indenture shall govern. 

Except as supplemented or amended hereby, all other provisions in the Original Indenture, as heretofore supplemented and amended by the First
Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, to the extent not inconsistent with the terms and provisions of this Sixth Supplemental Indenture, shall remain in full force and effect, and are hereby
ratified and confirmed. 
  

	302.	Effective Date 

 This Sixth Supplemental Indenture shall be effective as of the date
first above written upon the execution and delivery hereof by the Company and the Trustee. 
  

	303.	Effect of Headings and Table of Contents 

 The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the construction or interpretation hereof. 
  

	304.	Successors and Assigns 

 All covenants and agreements in this Sixth Supplemental
Indenture by the Company shall bind its successors and assigns, whether so expressed or not. 
  

	305.	Separability Clause 

 In case any provision in this Sixth Supplemental Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

  
 5 

	306.	Counterparts 

 This Sixth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 
  

	307.	Trustee Not Responsible for Recitals 

 The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Sixth Supplemental Indenture. 

 

	308.	Governing Law 

 This Sixth Supplemental Indenture and the Notes shall be governed by, and
construed in accordance with, the law of the State of New York, but without giving effect to applicable principles of conflicts of laws. 
  

	309.	Applicable Tax Law  

 In order to comply with applicable tax laws (inclusive of rules,
regulations and interpretations promulgated by competent authorities) related to the Indenture in effect from time to time (collectively, “Applicable Tax Law”) that a foreign financial institution, issuer, trustee, paying agent or other
party is or has agreed to be subject to, the Company agrees (i) upon reasonable written request of the Trustee, to use commercially reasonable efforts to provide to the Trustee, to the extent available, sufficient information about Holders or
other applicable parties and/or transactions (including any modification to the terms of such transactions) so that the Trustee can determine whether it has tax related obligations under Applicable Tax Law and (ii) that the Trustee shall be
entitled to make any withholding or deduction in respect of taxes from payments under the Indenture to the extent necessary to comply with Applicable Tax Law for which the Trustee shall not have any liability. Nothing in the immediately preceding
sentence shall be construed as obligating the Company to make any “gross up” payment or similar reimbursement in connection with a payment in respect of which amounts are so withheld or deducted. The terms of this paragraph shall survive
the satisfaction and discharge of the Indenture. 
 [Signature page follows] 

  
 6 

 IN WITNESS WHEREOF, the parties hereto have caused this Sixth Supplemental Indenture to be duly
executed, all as of the day and year first above written. 
  

					
	NORTHROP GRUMMAN CORPORATION
		
	By:	 	  

		 	Name:	 	Stephen C. Movius
		 	Title:	 	Corporate Vice President and Treasurer
	
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:	 	  

		 	Name:	 	
		 	Title:	 	

 [Signature Page to Sixth Supplemental Indenture] 

 EXHIBIT A 

[FORM OF FACE OF NOTE] 
 [Global
Securities Legend] 
 [THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY NAMED BELOW OR A NOMINEE OF THE DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. ]* 
 [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. ]† 

 

			
	Registered	  	CUSIP No.: 666807 BJ0
		
	No. [    ]	  	Principal Amount: $[        ]

 NORTHROP GRUMMAN CORPORATION 

3.850% Senior Note due 2045 
 1. Principal and
Interest. NORTHROP GRUMMAN CORPORATION, a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to
[                                        ]‡ [CEDE &
CO.]§, or registered assigns, 

  
  

	*	To be included only if the Note is a Global Note. 

	† 	To be included only if the Depositary is The Depository Trust Company. 

	‡ 	To be included only if the Note is not a Global Note. 

	§ 	To be included only if the Note is a Global Note. 

  

					
		  	A-1	  	Face of Form of 3.850% Senior Note due 2045

 
the principal sum of
                                         Dollars,
on April 15, 2045 (the “Maturity Date”), and to pay interest thereon from February 6, 2015 (the “Original Issue Date”), or from the most recent Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on April 15 and October 15 in each year (each an “Interest Payment Date”), commencing October 15, 2015, at the rate of 3.850% per annum until the principal hereof is paid or made available for
payment. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date and on the Maturity Date will, as provided in the Indenture,
be paid to the Person in whose name this Note (or one or more Predecessor Securities to this Note (the “Predecessor Notes”)) is registered at the close of business on the April 1 or October 1 (whether or not a Business Day)
(each, a “Regular Record Date”), as the case may be, next preceding such Interest Payment Date or the Maturity Date, as applicable. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to such
Person on such Regular Record Date and may either be paid to the Holder in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee under the Indenture, notice whereof shall be given to Holders of Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Interest payable on this Note on any Interest Payment Date and on the Maturity Date, as the case may
be, will be the amount of interest accrued from and including the immediately preceding Interest Payment Date (or from and including the Original Issue Date, in the case of the initial Interest Payment Date) to but excluding the applicable Interest
Payment Date or the Maturity Date, as the case may be. If an Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, the payment will be made on the next Business Day as if it were made on the date the payment was due,
and no interest will accrue on the amount so payable for the period from and after that Interest Payment Date or the Maturity Date, as the case may be. 

2. Method of Payment. The Company will pay the principal of and premium, if any, and interest on the Notes in money of the United States of America
that at the time of payment is legal tender for payment of public and private debts. [The Company will make all payments of interest on this Global Note in accordance with the arrangements then existing between the Paying Agent and the Depositary,
and all payments of principal of and premium, if any, on this Global Note at the Corporate Trust Office upon surrender of this Global Note for payment.]** [The Company will make all payments of interest on this Note by mailing a check to the address
of the Person entitled thereto, and all payments of principal of and premium, if any, on this Note at the Corporate Trust Office upon surrender of this Note for payment.]†† 
  

 

	**	To be included only if the Note is a Global Note. 

	†† 	To be included only if the Note is not a Global Note. 

  

					
		  	A-2	  	Face of Form of 3.850% Senior Note due 2045

 Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 
 Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory
for any purpose. 
 IN WITNESS WHEREOF, the Company has caused this Note to be duly executed. 

 

			
	NORTHROP GRUMMAN CORPORATION
		
	By:	 	  

		 	Name:
		 	Title:

  

			
	 TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	
	This is one of the Securities of the series designated therein referred to in the within- mentioned Indenture
	
	THE BANK OF NEW YORK MELLON, as
	Trustee
		
	By:	 	  

		 	Authorized Signatory
		
	Dated:	 	  

  

					
		  	A-3	  	Face of Form of 3.850% Senior Note due 2045

 [FORM OF REVERSE SIDE OF NOTE] 

3.850% Senior Note due 2045 
 3. Paying Agent
and Security Registrar. The Trustee shall initially act as the Paying Agent and Security Registrar in respect of the Notes and its Corporate Trust Office is designated as a place where the Notes may be presented for payment or for registration
of transfer or exchange. The Company may, however, change the Paying Agent or Security Registrar for the Notes without prior notice to any Holders, and the Company or any Subsidiary may act as Paying Agent or Security Registrar for the Notes. 

4. Indenture. This Note is one of a duly authorized series of Securities issued or to be issued in one or more series under an Indenture dated as of
November 21, 2001 (the “Original Indenture”), as supplemented and amended by a First Supplemental Indenture dated as of July 30, 2009 (the “First Supplemental Indenture”), a Third Supplemental Indenture dated as of
March 30, 2011 (the “Third Supplemental Indenture”), a Fourth Supplemental Indenture dated as of March 30, 2011 (the “Fourth Supplemental Indenture”) and a Sixth Supplemental Indenture dated as of February 6, 2015
(the “Sixth Supplemental Indenture” and, together with the Original Indenture, the First Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “Indenture”), by and between the Company
and The Bank of New York Mellon, as Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders, and of the terms upon which the Notes are, and are to be, authenticated and delivered. 

This Note is one of the series designated as the “3.850% Senior Notes due 2045” of the Company initially limited in aggregate
principal amount to $600,000,000 (the “Notes”). Such series may be reopened, from time to time, for issuances of an unlimited aggregate principal amount of additional Securities of such series (the “Additional Notes”). Any such
Additional Notes shall have the same ranking, interest rate, maturity date and other terms as the Notes, except, if applicable, the issue date, the issue price, the initial Interest Payment Date and corresponding initial Regular Record Date and the
initial interest accrual date. Any such Additional Notes, together with the Notes, shall constitute a single series of Securities for all purposes under the Indenture, including voting, waivers, amendments and redemptions; provided,
however, that in the event any such Additional Notes are not fungible with the Notes for U.S. federal income tax purposes, such nonfungible Additional Notes shall be issued with a separate CUSIP number so that they are distinguishable from
the Notes. Additional series of Securities may be issued pursuant to the Indenture. 
 The Notes are unsecured senior obligations of the
Company and rank pari passu with all unsecured and unsubordinated obligations of the Company. 
 The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all those terms, and Holders thereof are referred to the Indenture and the Trust Indenture Act for a statement of all
those terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. 

  

					
		  		  	 Reverse Side of Form of 3.850% Senior Note due 2045

 

		  	A-4	  	

 Capitalized terms used but not defined in this Note have the respective meanings ascribed to them
by the Indenture. 
 5. Optional Redemption. The Notes are subject to redemption, in whole at any time or in part from time to time, at the option of
the Company, in principal amounts of $1,000 and integral multiples of $1,000 above such amount (provided that the unredeemed portion of any Note redeemed in part may not be less than $2,000), upon not less than 15 days nor more than 60 days prior
notice as provided in the Indenture. Prior to October 15, 2044, the Redemption Price for the Notes will equal the sum of (i) the greater of (y) 100% of the principal amount of the Notes then Outstanding to be redeemed and (z) the
sum of the present values of the remaining scheduled payments of principal and interest on the Notes then Outstanding to be redeemed (not including any portion of any payments of such interest accrued to the Redemption Date), discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a rate equal to the sum of the Adjusted Treasury Rate (as defined below), as determined by the Independent Investment Banker (as defined below),
plus 25 basis points, and (ii) accrued and unpaid interest on the principal amount of the Notes then Outstanding to be redeemed to, but not including, the Redemption Date. 

On and after October 15, 2044, the Redemption Price for the Notes will equal the sum of (i) 100% of the principal amount of the
Notes then Outstanding to be redeemed and (ii) accrued and unpaid interest on the principal amount of the Notes then Outstanding to be redeemed to, but not including, the Redemption Date. 

Notwithstanding the foregoing, installments of interest on Notes that are due and payable on Interest Payment Dates falling on or prior to a
Redemption Date will be payable on the Interest Payment Date to the Holders thereof as of the close of business on the corresponding Regular Record Date pursuant to Section 1 of this Note and Section 205 of the Sixth Supplemental
Indenture. 
 “Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. 

“Comparable Treasury Issue” means the United States Treasury security selected by the Independent Investment Banker as having a
maturity comparable to the remaining term of the Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining
term of such Notes. 
 “Comparable Treasury Price” means, with respect to any Redemption Date, (A) the arithmetic mean of the
Reference Treasury Dealer Quotations received for such Redemption Date, or (B) if only one Reference Treasury Dealer Quotation is received, such quotation. 

  

					
		  		  	 Reverse Side of Form of 3.850% Senior Note due 2045

 

		  	A-5	  	

 “Independent Investment Banker” means one of the Reference Treasury Dealers appointed
by the Company to act as the “Independent Investment Banker.” 
 “Reference Treasury Dealer” means (A) Deutsche
Bank Securities Inc. and J.P. Morgan Securities LLC (or their respective affiliates which are primary U.S. Government securities dealers in the United States (“Primary Treasury Dealers”)), and their respective successors; provided,
however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by the Company. 

“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any Redemption Date, the arithmetic
mean, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 3:30 p.m.
(New York City time) on the third Business Day preceding such Redemption Date. 
 With respect to any redemption of the Notes occurring
prior to October 15, 2044, the Company shall give the Trustee notice of the Redemption Price promptly after the calculation thereof and the Trustee shall have no responsibility for such calculation. 

In connection with any redemption of the Notes in part, if the Notes are represented by one or more Global Notes, interests in the Notes will
be selected for redemption by the Depositary in accordance with its standard procedures therefor. 
 6. Sinking Fund. The Notes are not subject to
any sinking fund or analogous provisions. 
 7. Denominations; Transfer; Exchange. The Notes are in registered form without coupons in denominations
of $2,000 and whole multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the
Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by the Holder thereof or its attorney duly authorized in writing. No service
charge shall be made for any registration of transfer or exchange of this Note, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of
transfer or exchange, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer. If the Notes are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any
Notes during the period beginning at the opening of business 15 days before the day of the mailing of the applicable notice of redemption and ending at the close of business on the day of such mailing, or (B) to register the transfer of or
exchange any Note so selected for redemption in whole or in part (except the unredeemed portion of any Note being redeemed in part). 
 8. Persons Deemed
Owner. The Holder of this Note may be treated as the owner of this Note for all purposes. 

  

					
		  		  	 Reverse Side of Form of 3.850% Senior Note due 2045

 

		  	A-6	  	

 9. Unclaimed Funds. If money for the payment of principal, premium or interest of or on the Notes remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request, subject to any applicable abandoned property laws. After any such payment, Holders entitled to the money must look only to the
Company and not to the Trustee or any Paying Agent for payment. 
 10. Defeasance and Discharge. The Notes will be subject to defeasance and
discharge as set forth in Section 1302 of the Original Indenture and to covenant defeasance as set forth in Section 1303 of the Original Indenture. 

11. Amendment; Waiver. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Note. 
 12. Defaults and Remedies. If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect provided in the Indenture. As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless: the Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes; the
Holders of not less than 25% in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity; the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and no direction inconsistent with such written request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of the Outstanding Notes. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein (including, in case of a redemption, on the Redemption Date). 
 13. Obligations
Absolute. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest
on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 

  

					
		  		  	 Reverse Side of Form of 3.850% Senior Note due 2045

 

		  	A-7	  	

 14. No Recourse Against Others. No recourse shall be had for the payment of the principal of, or premium,
if any, or interest on this Note, or for any claim based hereon or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived and released. 
 15. Trustee Dealings with the Company. Subject to
certain limitations imposed by the Trust Indenture Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Company
or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. 

16. Successors and Assigns. All covenants and agreements in the Indenture by the Company shall bind its successors and assigns, whether so expressed or
not, except as provided in Section 802 of the Original Indenture. 
 17. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW. 
 18. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders thereof. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed
thereon. 
  
  

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: 

Northrop Grumman Corporation 

2980 Fairview Park Drive 
 Falls
Church, Virginia 22042 
 Attention: Corporate Vice President and Secretary 

 
  

  

					
		  		  	 Reverse Side of Form of 3.850% Senior Note due 2045

 

		  	A-8	  	

 ABBREVIATIONS 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations: 
  

			
	TEN COM –	  	as tenants in common
	TEN ENT –	  	as tenants by the entireties
	JT TEN –	  	as joint tenants with right of survivorship and not as tenants in common

													
	UNIF GIFT MIN ACT –	  	  
	  	Custodian	  	  
	  	under Uniform Gifts to Minors Act	  	  
	  	
		  	(Cust)	  		  	(Minor)	  		  	(State)	  	

 Additional abbreviations may also be used though not on the above list. 

FORM OF ASSIGNMENT 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto (Please insert Social Security Number, Taxpayer
Identification No., or other identifying number of assignee) 
  
  

 
 (Please print or typewrite name and address,
including postal zip code, of assignee) 
 the within Note of NORTHROP GRUMMAN CORPORATION and all rights thereunder, hereby irrevocably constituting
and appointing: 
  
  

 
  

(Please print or typewrite name and address, including postal zip code, of attorney) 

as attorney to transfer said Note on the books of the Company, with full power of substitution in the premises. 

 

							
	Dated:	  	  
	  		  	  

		  		  		  	(Signature)
				
		  		  		  	  

		  		  		  	  

		  		  		  	(Please print or typewrite name and title if signing on behalf of an entity)
				
		  		  		  	NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change
whatsoever.

  

					
		  		  	 Reverse Side of Form of 3.850% Senior Note due 2045

 

		  	A-9	  	

							
	Signature(s) Guaranteed:	  		  	  

		  		  		  	(Signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.)

  

					
		  		  	 Reverse Side of Form of 3.850% Senior Note due 2045

 

		  	A-10

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