THIRD AMENDED AND RESTATED GENERAL SECURITY AGREEMENT
EXHIBIT
10.25
THIRD
AMENDED
AND RESTATED GENERAL SECURITY AGREEMENT
THIS
THIRD AMENDED AND RESTATED GENERAL SECURITY AGREEMENT dated
as
of February 28, 2007 (this "Agreement"),
between Simclar, Inc., a Florida corporation ("Simclar"),
Simclar (Mexico) Inc, a Illinois corporation ("Simclar
- Mexico"),
Simclar Interconnect Technologies, Inc. ("SIT"),
a
Delaware corporation, Simclar (North America), a North Carolina corporation
(“Simclar NA”),
Simclar De Mexico, S.A. de C.V., an entity organized under the laws of Mexico
("Simclar SA") (Simclar SA, SIT, Simclar, Simclar NA and Simclar - Mexico shall
be individually known as a "Grantor"
and
collectively as the "Grantors"),
and
The Governor and Company of the Bank of Scotland (the "Lender")
of the
Facility Letter in respect of a $5,650,000 term loan originally dated October
2,
2001, as amended on January 17, 2003, July 1, 2003, October 14, 2004 and
December 21, 2005, between Lender and Simclar (the "Term
Loan Facility Letter"),
the
Facility Letter in respect of $7,500,000 working capital facilities originally
dated October 2, 2001, as amended on July 25, 2002, November 10, 2003,
October 14, 2004, December 21, 2005 and January 26, 2007 between Lender and
Simclar (the "Working
Capital Facilities Letter")
and
the Facility Letter in respect of $1,000,000 additional working capital
facilities dated December 21, 2005, as amended on January 26, 2007, between
Lender, Simclar and SIT (the “Additional
Working Capital Facilities Letter,”
and
together with the Term Loan Facility Letter and the Working Capital Facilities
Letter, the "Facilities
Letters")
and
for and on behalf of each person or other entity which is now or hereafter
a
Security Beneficiary (as such term is defined below).
As
an
express condition of Lender agreeing to make additional loans to Simclar and
SIT, the Lender required, inter
alia,
that
Grantors provide additional security for the performance of all of the
obligations under the Loan Documents, which security Simclar agreed to provide
in accordance with the terms of that certain Second Amended and Restated General
Security Agreement dated as of February 23, 2006, between Simclar, Lender and
the other parties named therein (the "Original
Security Agreement");
and
Grantors
desire to amend and restate the terms of the Original General Security Agreement
in order to, inter
alia,
provide
additional collateral to the Lender in order to induce Lender to fund the
additional amounts under the Facilities Letters, and Lender is amenable to
such
amendment and restatement in accordance with the terms set forth herein;
and
Each
Grantor acknowledges that it has benefited from the loans already extended
by
the Lender to Simclar pursuant to the terms of the Loan Documents, and that
is
willing to derive further benefit from the funding by Lender; and
It
is a
condition precedent to the obligation of Lender agreeing to make available
to
Simclar the facilities under the Facilities Letters (and the execution of any
amendment thereto) that Grantors shall have executed and delivered this
Agreement to the Lender for the benefit of the Security
Beneficiaries.
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Accordingly,
the Grantors and the Lender, for the benefit of each of the Security
Beneficiaries, hereby agree as follows:
1. DEFINITIONS
Capitalized
terms used in this Agreement but not defined herein shall have the meanings
given to such terms in the Facilities Letters. As used herein, the following
terms shall have the following meanings:
"Accounts"
means,
with respect to each Grantor, all "accounts" (as defined in the UCC), including
health-care-insurance receivables and Supporting Obligations, now owned or
hereafter acquired by such Grantor and shall also mean and include all accounts
receivable, contract rights, book debts, Facilities Letters, drafts and other
obligations or indebtedness owing to such Grantor arising from the sale, lease
or exchange of goods or other property by it and/or the performance of services
by it (including any such obligation which might be characterized as an account,
contract right or General Intangible under the UCC in effect in any
jurisdiction) and all of such Grantor's rights in, to and under all purchase
orders for goods, services or other property, and all of such Grantor's rights
to any goods, services or other property represented by any of the foregoing
(including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to such Grantor under all contracts for the
sale,
lease or exchange of goods or other property and/or the performance of services
by it (whether or not yet earned by performance on the part of such Grantor),
in
cash case whether now in existence or hereafter arising or acquired including
the right to receive the proceeds of such purchase orders and contracts and
all
collateral security and guarantees of any kind given by any Person with respect
to any of the foregoing.
"Chattel
Paper"
has the
meaning set forth in the UCC (whether tangible or electronic).
"Collateral"
means
(a) with respect to any Grantor, all of the following types and categories
of
personal property, wherever located, in which such Grantor now has or hereafter
acquires any right or interest: all Accounts, Chattel Paper, Commercial Tort
Claims identified on Annex V hereto (including any supplement to such Annex),
Contracts, Deposit Accounts, Documents, Fixtures, General Intangibles, Goods
(including Inventory, Equipment and any accessions thereto), Instruments,
Intellectual Property, Investment Property, Pledged Deposits, Receivables,
special collateral accounts and all books and records, customer lists and credit
files related to any of the foregoing, and all proceeds and products of any
of
the foregoing, and (b) when used generally, all of the foregoing in which any
Grantor now has or hereafter acquires any right or interest, provided, however,
the term "Collateral" shall not include, (x) any Intellectual Property or
software licenses to the extent that: (i) such Intellectual Property or software
licenses are not assignable or capable of being encumbered as a matter of law
or
under the terms of the agreement for such Intellectual Property or licenses,
without the consent of the other parties thereto or licensor thereof, and (ii)
such consent has not been obtained or (y) any equipment leased by a third party
to Grantor to the extent that: (i) such leased equipment is not assignable
or
capable of being encumbered as a matter of law or under the terms of the
equipment lease for such leased equipment, without the consent of the lessor
thereof, and (ii) such consent has not
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been
obtained, and (z) any Contract, contract right, license, agreement, lease
pertaining to real or personal property or any other document, instrument or
agreement of any Grantor (each such item referred to in clause (x), (y) and
(z)
hereof of such Grantor being hereinafter referred to as "Excluded
Property"),
if
the granting of a security interest therein by such Grantor to the Lender is
expressly prohibited by the terms and provisions of the written agreement,
document or instrument creating or evidencing such Excluded Property or rights
related thereto or by applicable law (it being understood and agreed that the
Grantors shall provide to the Lender written notice of any Excluded Property
and, promptly following a request by the Lender, such Grantor shall use its
best
efforts to obtain from the Person in whose favor the prohibition has been
granted any waiver or consent necessary in order to remove or terminate such
prohibition or permit the Lender to have a security interest in the Grantors
rights to any such Excluded Property subject to such a prohibition and referred
to in such request, and that any such Excluded Property so referred to shall
constitute part of the Collateral as of the date hereof automatically upon
the
execution and delivery of the applicable waiver or consent).
"Commercial
Tort Claim"
has the
meaning set forth in the UCC.
"Contracts"
means
all contracts, agreements and other similar consensual obligations, as the
same
may from time to time be amended, supplemented or otherwise modified, including
(a) all rights to receive moneys due and to become due thereunder or in
connection therewith, (b) all rights to damages arising out of any breach or
default in respect thereof and (c) all rights to perform and to exercise
remedies thereunder.
"Copyrights"
means
(i) all copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished, all registrations and recordings thereof,
and all applications in, connection therewith, including all registrations,
recordings and applications in the United States Copyright Office, and (ii)
the
right to obtain all renewals thereof.
"Copyright
Licenses"
means
any written agreement naming any Grantor as licensor or licensee, granting
any
right under any Copyright, including the grant of rights to manufacture,
distribute, exploit, and sell materials derived from any Copyright.
"Default
Period"
means
any period during which one or more Events of Default are
continuing.
"Deposit
Accounts"
has the
meaning set forth in the UCC.
"Documents"
means
all "documents" (as defined in the UCC) or other receipts covering, evidencing
or representing Goods, now owned or hereafter acquired, by any
Grantor.
"Equipment"
means
all "equipment" (as defined in the UCC) now owned or hereafter acquired by
any
Grantor, including all rolling stock.
"Event
of Default"
means
an "Event of Default" as set forth in the Term Loan Facility
Letter.
"Excluded
Property"
has the
meaning set forth in the definition of Collateral.
"Farm
Products"
has the
meaning set forth in the UCC.
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"Fixtures"
means
all "fixtures" (as defined in the UCC) and all goods which are or are to be
attached to real property in such a manner that their removal would cause damage
to the real property and which have therefore taken on the character of the
property.
"General
Intangibles"
means
all "general intangibles" (as defined in the UCC), including payment intangibles
and Software, now owned or hereafter acquired by any Grantor, including (i)
all
right, title and interest in or under any Contract, models, drawings, materials
and records, claims, literary rights, goodwill, rights of performance and
warranties, (ii) all Intellectual Property, copyright licenses, copyrights,
patent licenses, patents, trademark licenses, trademarks, other intellectual
property rights, trade secrets, permits and licenses and (iii) all rights under
insurance policies and rights of indemnification.
"Goods"
has the
meaning set forth in the UCC, including, without limitation, embedded Software
to the extent included in such Goods.
"Grantor
Obligations"
means
the collective reference to the unpaid principal and interest under the
Facilities Letters (including interest accruing at the then applicable rate
provided in the Facilities Letters after the final repayment date referred
to
therein or any acceleration thereof pursuant to the terms of the Facilities
Letters or after the commencement of any insolvency, reorganization or like
proceeding relating to Simclar) and all other obligations and liabilities of
any
Grantor to the Lender or the Security Beneficiaries, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of or in connection with the Facilities
Letters, the other Loan Documents or any other document made, delivered or
given
by any Grantor in connection with the Loan Documents, in each case whether
on
account of principal, interest, reimbursement obligations, foes, indemnities,
costs, expenses or otherwise (including all fees and disbursements of counsel
to
the Lender or the Security Beneficiaries that are required to be paid by any
Grantor pursuant to the terms of any of the foregoing).
"Instruments"
means
all "instruments," "chattel paper" (whether tangible or electronic) or "letters
of credit" (each as defined in the UCC), including those evidencing,
representing, arising from or existing in respect of, relating to, securing
or
otherwise supporting the payment of, any of the Accounts, including (but not
limited to) the Facilities Letters, drafts, bills of exchange, trade acceptances
and Letter-of-Credit Rights, now owned or hereafter acquired by any
Grantor.
"Intellectual
Property"
means
all rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign law or otherwise,
including: all patents, patent applications, patent disclosures and inventions
(whether or not patentable and whether or not reduced to practice); all
trademarks, service marks, trade dress, trade names and corporate names and
all
the goodwill associated therewith; all registered and unregistered statutory
and
common law copyrights; all registrations, applications and renewals for any
of
the foregoing; all mask works; all trade secrets, confidential information,
ideas, formulae, compositions, know-how, manufacturing and production processes
and techniques, research and development information, drawings, specifications,
designs, plans, improvements, proposals, technical and computer data, financial,
business and marketing plans, and customer
-4-
and
supplier lists and related information; all other proprietary rights (including
all computer software and documentation and all license agreements and
sublicense agreements to and from third parties relating to any of the
foregoing); all copies and tangible embodiments of the foregoing (in whatever
form or medium); all damages and payments for past, present and future
infringements of the foregoing; all royalties and income due with respect to
the
foregoing; and the right to xxx (whether at law or in equity) and recover for
past, present and future infringements of the foregoing, and for the avoidance
of doubt, to the extant not included in, the foregoing, all Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark
Licenses.
"Intellectual
Property Collateral"
means
any Intellectual Property constituting a part of the Collateral.
"Inventory"
means
all "inventory" (as defined in the UCC), now owned or hereafter acquired by
any
Grantor, wherever located, and shall also mean and include all raw materials
and
other materials and supplies, work-in-process and finished goods and any
products made or processed therefrom and all substances, if any, commingled
therewith or added thereto.
"Investment
Property"
has the
meaning set forth in the UCC.
"Letter-of-Credit
Rights"
has the
meaning set forth in the UCC (whether or not the letter of credit is evidenced
by a writing).
"Lien"
means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or similar encumbrance, whether voluntary or involuntary or arising by operation
of law, in respect of such asset, including the Security Interests. For purposes
of this Agreement, a Person shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan
Document"
the
"BoS Documents" as defined in Term Loan Facility Letter, together with this
Agreement or any other financing statement, agreement, document or instrument
entered into or delivered pursuant thereto or hereto.
"Material
Alteration"
has the
meaning set forth in Section 4.8(b)(ii).
"Patents"
means
(i) 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, (ii) all applications for letters patent of the United
States or any other country or any political subdivision thereof an all
divisions, continuations and continuations-in-part thereof, and (iii) all rights
to obtain any reissues or extensions of the foregoing.
"Patent
License"
means
all agreements, whether written or oral, providing for the grant by or to any
Grantor of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent.
"Permitted
Liens"
means
(i) Liens for taxes, assessments, governmental charges or claims that are not
yet due and payable or that are being contested in good faith by appropriate
legal
-5-
proceedings
promptly instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with generally
accepted accounting principals ("GAAP")
shall
have been made, (ii) statutory and common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, repairmen or other similar liens arising
in
the ordinary course of business and with respect to amounts not yet delinquent
or being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have
been
made, (iii) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types
of social security, (iv) those Liens on Equipment set forth on Annex IV hereto,
and (v) Liens permitted pursuant to the Facilities Letters.
"Person"
means
any individual, corporation, company, limited liability company, voluntary
association, partnership, limited liability partnership, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"Pledge
Agreement"
means
that certain Third Amended and Restated Pledge Agreement dated February 23,
2006 and executed in connection with the Facilities Letters.
"Pledged
Account"
has the
meaning set forth in Section 7.1.
"Pledged
Deposits"
means
all deposits of money, whether or not evidenced by certificates, with any bank
(including all rights to receive interest on such deposits and all other sums
credited by or due from third parties with respect thereto), which originate
from Collateral or Proceeds and which are deposited with any bank or other
financial institution following an Event of Default.
"Proceeds"
means
all proceeds of, and all other profits, products, rentals or receipts, in
whatever form, arising from the collection, sale, lease, exchange, assignment,
licensing or other disposition of, or other realization upon, collateral,
including all claims of any Granter against third parties for loss of, damage
to
or destruction of, or for proceeds payable under, or unearned premiums with
respect to, policies of insurance in respect of, any Collateral, and any
condemnation or requisition payments with respect to any Collateral, in each
case whether now existing or hereafter arising.
"Receivables"
means
the Accounts, Chattel Paper, Pledged Deposits, Documents, General Intangibles,
Intellectual Property representing rights to the payment of money (however
arising), and any related Instruments.
"Released
Collateral"
has the
meaning set forth in Section 9.10(c).
"Security
Beneficiary"
means
the Lender and any assignee, novatee or transferee of any of the rights and
obligations of the Lender under the Facilities Letters.
"Security
Interests"
means
the security interests in the Collateral granted hereunder securing the Grantor
Obligations.
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"Software"
has the
meaning set forth in the UCC.
"Supporting
Obligations"
has the
meaning set forth in the UCC.
"Trademarks"
means
(i) all trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos 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 United States 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 subdivisions thereof, or
otherwise and all common-law rights related thereto, and (ii) the right to
obtain all renewals thereof.
"Trademark
License"
means
any agreement, whether written or oral, providing for the grant by or to any
Grantor of any right to use any Trademark.
"UCC"
means
the Uniform Commercial Code as from time to time in effect in the State of
Florida; provided
that if
by reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of a security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than Florida, "UCC" means the Uniform Commercial Code as in effect in such
other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection; and provided further
that to
the extent that the UCC is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the UCC, the definition of such term contained in Article or Division 9
shall
govern.
2. GRANT.
To
secure
payment, performance and observance of the Grantor Obligations, each Grantor
hereby: (i) pledges, and grants to the Lender, for the benefit of the Lender
and
the other Security Beneficiaries, a continuing security interest in, and a
right
of set-off against, such Grantor's Collateral (including the Intellectual
Property Collateral) and all present and future right, title and interest of
such Grantor therein; and (ii) upon demand by the Lender, upon the occurrence
of
an Event of Default and until such Event of Default shall have been cured,
assigns, transfers and conveys the Intellectual Property Collateral to the
Lender, for the benefit of the Lender and the other Security
Beneficiaries.
The
security interests and assignments granted herein shall not relieve any Grantor
from the performance of any term, covenant, condition or agreement on such
Grantor's part to be performed or observed under or in respect of any of the
Collateral or impose any obligation on the Lender or any Security Beneficiary
to
perform or observe any such term, covenant, condition or agreement on such
Grantor's part to be so performed or observed or impose any liability on the
Lender or any Security Beneficiary for any act or omission on the part of such
Grantor relative thereto or for any breach of any representation or warranty
on
the part of such Grantor contained in this Agreement or any of the Loan
Documents or in respect of the Collateral or made in connection herewith or
therewith.
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3. REPRESENTATIONS
AND WARRANTIES.
Each
Grantor hereby represents and warrants to the Lender and to each Security
Beneficiary, as of the date hereof (which representations and warranties are
in
addition to, and not in lieu of or in limitation of any representations and
warranties made in any of the other Loan Documents) that:
Section
3.1. Principal
Location; Jurisdiction of Incorporation.
Such
Grantor's mailing address, and the location of its chief executive office and
each location of any books and records (including all computer data and related
software including source codes) relating to the Accounts is disclosed in
Annex
I
hereto;
such Grantor has no other places of business except those set forth in
Annex
I
hereto.
Simclar is a corporation duly organized, validly existing and in good standing
in the State of Florida. Simclar - Mexico is a corporation duly organized,
validly existing and in good standing in the State of Illinois. Simclar SA
is an
entity duly organized, validly existing and in good standing under the laws
of
Mexico. Simclar NA is an entity duly organized, validly existing and in good
standing in the State of North Carolina.
Section
3.2. Property
Locations.
Except
as permitted hereby, the Inventory, Equipment and Fixtures are located solely
at
the locations described in Annex
I
hereto.
Except as permitted hereby, none of such locations are leased by such Grantor
as
lessee except those so designated in Annex
I
hereto.
Section
3.3. No
Other Names.
Except
as listed on Annex
II
hereto,
such Grantor does not conduct or has not conducted any trade or business under
any name except the name in which it has executed this Agreement. Such Grantor
has not been a party to any merger or consolidation in the last five years
except as disclosed on Annex
II.
Section
3.4. Filing
Requirements.
None of
the Equipment is covered by any certificate of title. None of the Collateral
consists of property subject to a statute or treaty referred to in Section
9-311
of the UCC (other than Intellectual Property Collateral). None of the Collateral
is of a type with respect to which any Lien may be filed under any federal
statute except for patents, copyrights and trademarks held by such Grantor
and
described in Annex
III
hereto.
Section
3.5. No
Financing Statements.
Except
for financing statements filed with respect to the Equipment set forth on
Annex
IV,
no
financing statement describing all or any portion of the Collateral which has
not lapsed or been terminated has been filed in any jurisdiction except
financing statements naming the Lender as secured party.
Section
3.6. Title
to Properties.
Such
Grantor has good and marketable title to and ownership of the Collateral held
by
it, free and clear of all Liens except Permitted Liens. Such Grantor has taken
all actions necessary under the UCC to perfect its interest in any Accounts
purchased or otherwise acquired by it, as against its assignors and creditors
of
its assignors. Except for the Equipment set forth on Annex
IV,
no
Collateral is in the possession of any Person (other than such Grantor)
asserting any claim thereto or Security Interest therein, except that the Lender
may have possession of Collateral as contemplated hereby.
Section
3.7. Intellectual
Property.
Annex
III
hereto
contains a complete and accurate list as of the date hereof of all patented
and
registered Intellectual Property owned by such
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Grantor
and all pending patent applications and applications for the registration of
other Intellectual Property owned or filed by such Grantor. Annex
III
also
contains a complete and accurate list of all licenses and other rights granted
by such Grantor to any third party with respect to the Intellectual Property
and
licenses and other rights granted by any third party to such Grantor. Except
as
set forth on Annex III such Grantor has made all necessary filings and
recordations and has paid all required fees and taxes to record and maintain
its
ownership of the patented or registered intellectual property rights in the
United States Patent and Trademark Office and the United States Copyright Office
and in each other applicable filing office (whether in the United States or
otherwise) and no consents are required under any licenses listed in
Annex
III
to the
grant of the security interest to, and exercise of any rights and remedies
of,
the Lender.
Section
3.8. Contracts.
No
consent of any party to any Contract is required in connection with the
execution, delivery and performance of this Agreement, other than consents
which
if not obtained could not, individually or in the aggregate, result in a
Material Adverse Effect and those consents set forth in clauses (x)(i) and
(y)(i) under the definition of "Collateral."
Section
3.9. Farm
Products.
None of
the Collateral constitutes, or is the Proceeds of, Farm Products.
Section
3.10. Perfection
Certificate.
The
information set forth in the Perfection Certificate substantially in the form
of
Exhibit
A
attached
hereto and delivered to the Lender on the date hereof and prior to the execution
and delivery of this Agreement is correct and complete.
Section
3.11. Security
Interest.
The
Security Interests constitute valid security interests under the UCC and other
applicable law securing the Grantor Obligations. The Security Interests
constitute perfected security interests in the Collateral to the extent that
a
security interest therein may be perfected (a) by filing pursuant to the UCC,
(b) with respect to registered Intellectual Property Collateral, by filing
with
the United States Patent and Trademark Office or the United States Copyright
Office, or (c) with respect to money, letters of credit, instruments and
certificated securities, by possession of the Collateral if maintained by the
Lender or any Security Beneficiary. Such perfected Security Interests are and
at
all times shall be prior to all Liens and rights of others therein except for
(a) unrecorded Permitted Liens which are (i) not for borrowed money, (ii) are
not securing obligations which are past due and (iii) have priority over the
Security Interests by operation of law, and (b) Permitted Liens on Equipment
existing on the date hereof and identified on Annex
IV.
Section
3.12. Receivables.
No
amount payable to such Grantor under or in connection with any Receivable is
evidenced by any Instrument or Chattel Paper which has not been delivered to
the
Lender; none of the obligors on any Receivable is a governmental authority
(including any the United States, any state thereof, or any other United States
or foreign federal, state or local governmental agency, authority,
instrumentality, regulatory body or subdivision); and the amounts represented
by
each Grantor to the Lender or any Security Beneficiary from time to time as
owing to such Grantor in respect of the Receivables will at all such times
be
accurate in all material respects.
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4. COVENANTS.
From
the
date of this Agreement, and thereafter until this Agreement is
terminated:
Section
4.1. Inspection
and Verification.
The
Lender and such Persons as the Lender may designate from time to time shall
have
the right, at any reasonable time or times upon prior notice and during each
Grantor's usual business hours, to inspect the Collateral, all records related
thereto (and to make extracts and copies from such records), and the promises
upon which any of the Collateral is located. In addition, the Lender and its
designees shall have such other inspection and verification rights concerning
the Collateral as are provided or permitted under other of the Loan
Documents.
Section
4.2. Records
and Reports.
Each
Grantor will maintain complete and accurate books and records with respect
to
the Collateral, and furnish to the Lender such reports relating to the
Collateral as the Lender shall from time to time reasonably
request.
Section
4.3. Financing
Statements and Other Actions.
Each
Grantor will execute and deliver to the Lender and hereby authorizes the Lender
to file all financing statements and amendments thereto and other documents,
and
take such other actions, as are from time to time reasonably requested by the
Lender in order to perfect and to maintain and protect a first priority
perfected Security Interest in the Collateral or to enable the Lender, on behalf
of the Security Beneficiaries, to exercise and enforce its rights and remedies
hereunder with respect to the Collateral.
Section
4.4. Change
in Location or Name; Change in Jurisdiction of Organization.
Each
Grantor will not (i) have any Inventory or Equipment or products thereof (other
than Inventory sold in the ordinary course of its business) at a location other
than a location specified in Annex
I
hereto,
except for Inventory and Equipment in transit between such locations, (ii)
maintain records relating to the Receivables at a location other than those
locations specified on Annex
I
hereto
as a location where such records are kept, (iii) maintain a place of business
at
a location other than a location specified on Annex
I
hereto,
(iv) change its name or jurisdiction of organization, or (v) change its mailing
address, unless in each such case such Grantor shall have given the Lender
at
least 30 days' prior written notice thereof and delivered any financing
statements or other documents requested by the Lender.
Section
4.5. Other
Financing Statements; Other Liens.
Each
Grantor will not sign, authorize the signing on its behalf or authorize the
filing of any financing statement naming it as debtor which covers all or any
portion of the Collateral, except financing statements naming the Lender as
secured party and those filed in respect of Permitted Liens. Each Grantor shall
not create, permit or suffer to exist any Liens on or with respect to any of
the
Collateral except Permitted Liens on Equipment existing on the date hereof
and
identified on Annex
IV.
Each
Grantor acknowledges that it is not authorized to file any amendment or
termination statement with respect to any financing statement without the prior
written consent of the Lender and agrees that it will not do so without the
prior written consent of the Lender (other than such filings that are made
with
respect to Permitted Liens), subject to such Grantor's rights under Section
9-509(d)(2) of the UCC.
-10-
Section
4.6. Accounts.
(a) Except
as
otherwise provided in this Agreement, each Grantor will collect and enforce
in
accordance with its past collection practices and procedures, at each Grantor's
sole expense, all amounts due or hereafter due to such Grantor under the
Accounts.
(b) Except
in
the ordinary course of business, each Grantor will not, without the Lender's
prior written consent, grant any extension of the time of payment of any of
the
Accounts, compromise, compound or settle the same for less than the full amount
thereof, release, wholly or partly, any Person liable for the payment thereof,
or allow any credit or discount whatsoever thereon.
Section
4.7. Maintenance
of Inventory and Equipment.
Each
Grantor will do all things necessary to maintain, preserve, protect and keep
the
Inventory in saleable condition and the Equipment in as good a state of repair
and condition as at the date hereof except for ordinary wear and
tear.
Section
4.8. Insurance.
(a) Each
Grantor hereby irrevocably makes, constitutes, and appoints the Lender (and
all
officers, employees, or agents designated by the Lender) as such Grantor's
true
and lawful attorney (and agent-in-fact) for the purpose of making, settling,
and
adjusting claims under policies of insurance, endorsing the name of such Grantor
on any check, draft, instrument, or other item of payment for the proceeds
of
such policies of insurance and for making all determinations and decisions
with
respect thereto. In the event that a Grantor at any time or times shall fail
to
obtain or maintain any of the policies of insurance required by Section 4.8(b)
or to pay any premium in whole or part relating thereto, the Lender may, without
waiving or releasing any obligation or liability of such Grantor hereunder
or
any Event of Default, in its sole discretion, obtain and maintain such policies
of insurance and pay such premium and take any other action with respect thereto
as the Lender deems advisable. All such sums so disbursed by the Lender,
including reasonable attorneys' fees and expenses, court costs, expenses and
other charges relating thereto, shall be payable, upon demand, by such Grantor
to the Lender and shall be additional Grantor Obligations secured
hereby.
(b) (i) Each
Grantor will maintain, with financially sound and reputable companies, insurance
policies (A) insuring the Collateral against loss by fire, explosion, theft
and
such other casualties in accordance with its past business practices and (B)
to
the extent requested by the Lender, insuring such Grantor, the Lender and the
Security Beneficiaries against liability for loss by fire, explosion, theft
and
such other casualties, personal injury and property damage relating to such
Collateral in such form and amounts as may be reasonably required by the
Lender.
(ii) All
such
insurance shall at all times (A) provide that no cancellation, material
reduction in amount or material change in coverage (collectively, a
"Material
Alteration"),
thereof shall be effective until at least 30 days after receipt by the Lender
of
written notice thereof except, in the case of any Material Alteration resulting
from nonpayment of premiums, in which instance such Material Alteration shall
not be effective until at least 10 days after receipt
-11-
by
the
Lender of written notice thereof, (B) name the Lender as insured party or loss
payee, and (C) be reasonably satisfactory to the Lender in all other
respects.
(iii) Each
Grantor shall deliver to the Lender a report of a reputable insurance broker
with respect to such insurance as the Lender may from time to time reasonably
request.
Section
4.9. Titled
Vehicles.
Upon
request of the Lender, each Grantor shall promptly execute and deliver any
instruments and documents that may be necessary or that the Lender may request
in order to perfect the Security Interests in all property now or hereafter
owned by such Grantor and subject to a certificate of title.
Section
4.10. Bailees.
If any
Collateral of a Grantor is in the possession or control of any warehouseman,
processor or other bailee, such Grantor shall notify such warehousemen,
processors and other bailees in writing (with a copy to the Lender) of the
Lender's security interest therein and, upon the occurrence and continuation
of
an Event of Default and upon the Lender's request, instruct such Persons to
hold
all such Collateral for the Lender's account and subject to the Lender's
instructions. Each Grantor will use its best efforts to obtain from any
warehouseman, processor or other bailee written acknowledgment, in form and
substance satisfactory to Lender, that such warehouseman, processor or other
bailee holds possession of the Collateral for the Lender's benefit. If any
Grantor is unable to obtain a written acknowledgment of the type required by
the
previous sentence from any warehouseman, processor or other bailee, then such
Grantor shall move such Collateral to a warehouseman, processor or bailee who
will provide the required acknowledgment. If more than $100,000 of Collateral
of
a Grantor is held by a bailee, such Grantor will file a financing statement
in
the appropriate jurisdiction against such bailee in a form appropriate for
the
underlying transaction. In addition, each Grantor agrees that if any warehouse
receipt or receipt in the nature of a warehouse receipt is issued with respect
to any of its Inventory, such warehouse receipt or receipt in the nature of
a
warehouse receipt shall not be "negotiable" (as such term is defined in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law), or, if any warehouse receipt or receipt in the
nature thereof is "negotiable" (as such term is so used), such Grantor shall
promptly take all action as may be required under the relevant jurisdiction
to
grant a perfected security interest in such Collateral to the Lender for the
benefit of the Security Beneficiaries.
Section
4.11. Delivery
of Pledged Collateral; Control of Collateral.
To the
extent not required to be delivered to the Lender pursuant to another provision
of this Agreement or pursuant to another Loan Document, each Grantor will hold
in trust for the Lender upon receipt and, upon the occurrence of an Event of
Default and the continuation thereof or if otherwise requested by the Lender,
promptly deliver to the Lender the originals of all Instruments, Documents,
Chattel Paper, letters of credit, certificated securities and certificates
issued in respect of Pledged Deposits, which shall be endorsed in blank, marked
with such legends and accompanied by such stock powers and assignments as the
Lender shall specify. To the extent Pledged Deposits constitute Deposit
Accounts, each Grantor shall take all steps that may be required (including
the
obtaining and furnishing to the Lender appropriate account control agreements
as
required under Section 9-104 of the UCC) to grant "control" (as defined in
Section 9-104 of the UCC) to the Lender. Each Grantor further agrees to take
such steps as Lender may reasonably request for the Lender to obtain "control"
(as set forth in corresponding provisions in
-12-
Sections
9-104, 9-105, 9-106 and 9-107 relating to what constitutes "control" for such
items of Collateral) of any Investment Property, other Deposit Accounts,
Letter-of-Credit Rights or electronic Chattel Paper, with any agreements
establishing control to be in form and substance satisfactory to the
Lender.
Section
4.12. Investment
Property.
If a
Grantor acquires any Investment Property (whether or not a certificated
security), such Grantor (i) shall take and cause all other relevant parties
to
take all such actions as may be requested by the Lender (including obtaining
for
the Lender the agreement of any securities intermediary to comply with
instructions and entitlement orders originated by the Lender without further
consent of such Grantor or other registered owner or entitlement holder) in
order to cause the Security Interests in such Collateral to be perfected by
"control" (as such term is used in Articles 8 and 9 of the UCC) and (ii) will
take and will cause such other relevant parties to take all other action
necessary or appropriate to create and maintain a perfected first priority
Lien
in such Investment Property in favor of the Lender for the benefit of the
Security Beneficiaries.
Section
4.13. Intellectual
Property Covenant.
Each
Grantor shall make all necessary filings and recordings and pay all required
fees and taxes to record and maintain its registration and ownership of, and
do
all other things and take all other actions necessary to preserve, protect
and
maintain, each item of Intellectual property owned by it, other than such items
the loss or forfeiture of which would not individually or in the aggregate
have
a Material Adverse Effect. Without limiting the foregoing:
(a) Each
Grantor (either itself or through licensees) will (i) continue to use each
material Trademark on each and every trademark class of goods applicable to
its
current line as reflected in its current catalogs, brochures and price lists
in
order to maintain such trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the
appropriate notice of registration and all other notices and legends required
by
applicable requirements of law, (iv) not adopt or use any xxxx which is
confusingly similar or a colorable imitation of such Trademark unless the
Lender, for the benefit of the Security Beneficiaries, shall obtain a perfected
Security Interest in such xxxx pursuant to this Agreement, and (v) not (and
not
permit any licensee or sublicensee thereof to) do any act or knowingly omit
to
do any act whereby such Trademark may become invalidated or impaired in any
way.
(b) Each
Grantor (either itself or through licensees) will not do any act, or omit to
do
any act, whereby any material Patent may become forfeited, abandoned or
dedicated to the public.
(c) Each
Grantor (either itself or through licensees) (i) will employ each material
Copyright and (ii) will not (and will not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any material
portion of the Copyrights may become invalidated or otherwise impaired. Such
Grantor will not (either itself or through licensees) do any act whereby any
material portion of the Copyrights may fall into the public domain.
-13-
(d) Each
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) Each
Grantor will notify the Lender and the Security Beneficiaries immediately if
it
knows, or has reason to know, that any application or registration relating
to
any material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding
in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor's
ownership of, or the validity of, any material Intellectual Property or such
Grantor's right to register the same or to own and maintain the
same.
(f) Whenever
a Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of Intellectual
Property with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, such Grantor shall report such filing to the
Lender within five business days after the last day of the fiscal quarter in
which such filing occurs. Upon request of the Lender, each Grantor shall execute
and deliver, and have recorded, any and all agreements, instruments, documents
and papers as the Lender may request to evidence the Security Interest in any
Copyright, Patent or Trademark and the goodwill and general intangibles of
such
Grantor relating thereto or represented thereby.
(g) Each
Grantor shall take all reasonable and necessary steps, including in any
proceeding before the United Status Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country
or
any political subdivision thereof to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including filing of applications for renewal,
affidavits of use and affidavits of incontestability.
(h) In
the
event that any material Intellectual Property is infringed, misappropriated
or
diluted by a third party, each Grantor shall (i) take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such Intellectual Property and (ii) if such Intellectual Property is of material
economic value, promptly notify the Lender after it learns thereof and xxx
for
infringement, misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution.
Section
4.14. Federal
Claim.
(a) Claims.
Each
Grantor will notify the Lender of any material Receivable which constitutes
a
claim against the United States government or any instrumentality or agency
thereof, the assignment of which claim is restricted by federal
law.
(b) Action.
Upon
the request of the Lender, each Grantor will take all reasonable actions
required to comply to the Lender's satisfaction, with the Assignment of Claims
Act of 1940, as amended, or any similar applicable law, with respect to any
such
material Receivable.
-14-
Section
4.15. Commercial
Tort Claims.
If any
Grantor shall at any time acquire a Commercial Tort Claim, then such Grantor
shall immediately notify the Lender in writing signed by such Grantor of the
brief details thereof and grant to the Lender in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to the
Lender.
Section
4.16. Subsidiaries.
If any
Grantor shall at any time control, directly or indirectly, or acquire any direct
or indirect equity participation in, any corporation, partnership, trust or
other business association, then such Grantor shall immediately notify the
Lender in writing signed by such Grantor of the details thereof and take all
action with may be necessary to grant to the agent a security interest therein.
Simclar agrees to cause Simclar - England to become a party to this Agreement
upon the acquisition of any assets.
5. REMEDIES
UPON DEFAULT.
Upon
the
occurrence and during the continuance of an Event of Default, whether or not
all
of the Grantor Obligations shall have become due and payable, the Lender may,
in
addition to its rights under any of the Loan Documents:
Section
5.1. General.
Exercise any or all of the rights and remedies provided (i) in this Agreement,
(ii) to a secured party when a debtor is in default under a security agreement
governed by the UCC or (iii) to a secured party when a debtor is in default
by
any other applicable law including any law governing the exercise of a bank's
right of set-off or bankers' lien. Without precluding any other methods of
sale,
the sale of Collateral shall be deemed to have been made in a commercially
reasonable manner if conducted in conformity with reasonable commercial
practices of commercial lenders disposing of similar property, but in any event
the Lender may sell Collateral on such terms as the Lender may choose without
assuming any credit risk and without any obligation to advertise or give notice
of any kind not expressly required under this Agreement or required by
applicable law (to the extent such notice may not be waived under applicable
law).
Section
5.2. Sale
or Disposition of Collateral.
Collect, receive, appropriate and realize upon the Collateral, and sell, resell,
assign, lease, give option or options to purchase, or otherwise dispose of,
transfer and deliver all or any part of the Collateral (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 Lender or any Security Beneficiary
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 Lender or any Security Beneficiary 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 to the fullest
extent permitted by applicable law. To the fullest extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Lender or any Security Beneficiary arising out of the
exercise by them of any rights hereunder.
-15-
Section
5.3. Access
to Leased Premises.
Immediately enter upon any premises leased by any Grantor for the storage,
warehousing or maintenance of Inventory and remove, take possession and dispose
of, or store at another site, such Inventory in the Lender's sole discretion.
Section
5.4. Pledged
Deposits.
Without
any necessity on the Lender's part to resort to other security or sources of
reimbursement for the Grantor Obligations, at any time during the continuance
of
an Event of Default and without notice to any Person, exercise rights of set-off
against any of the Pledged Deposits (general or special, time or demand,
provisional or final) or other sums of any Grantor in the possession of or
in
transit to the Lender for application to the Grantor Obligations, which rights
shall be cumulative with the Lender's other rights and remedies including other
rights of set-off.
Section
5.5. Grant
of License to Use General Intangibles.
For the
purpose of enabling the Lender to exercise rights and remedies thereunder during
the continuation of an Event of Default, each Grantor hereby grants to the
Lender an irrevocable, nonexclusive license (to the extent permitted by
applicable law, exercisable without payment of royalty or other compensation
to
such Grantor) to use, assign, license or sublicense any of the General
Intangibles to the extent permitted by the terms of such General Intangibles,
wherever the same may be located, including in such license reasonable access
to
all media in which any of the General intangibles may be recorded or stored
and
to all computer programs used for the compilation or printout thereof.
Notwithstanding the foregoing, the Lender shall have no obligations or
liabilities regarding any or all or the General Intangibles by reason of or
arising out of, this Agreement.
Section
5.6. Specific
Performance.
Each
Grantor agrees that, in addition to all other rights and remedies granted to
the
Lender in this Agreement and any other Loan Document, the Lender shall be
entitled to specific performance said injunctive and other equitable relief,
and
each Grantor further agrees to waive any requirement for the securing or posting
of any bond or other security in connection with the obtaining of any such
specific performance and injunctive or other equitable relief.
Section
5.7. Additional
Liabilities Upon Default.
Upon
the request of the Lender after the occurrence and during the continuance of
an
Event of Default, each Grantor will promptly
(a) Assembly
of Collateral.
Assemble and make available to the Lender the Collateral and all records
relating thereto at any place or places specified by the Lender within the
continental United States of America.
(b) Secured
Party Access.
Permit
the Lender, or the Lender's representatives and agents, to enter any premises
where all or any part of the Collateral, or the books and records relating
thereto, or both, are located, to take possession of all or any part of the
Collateral and to remove all or any part of the Collateral.
6. WAIVERS,
AMENDMENTS AND REMEDIES.
No
failure on the part of the Lender to exercise, and no delay in exercising,
any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy by the Lender
preclude any other or further exercise
-16-
thereof
or the exercise of any other right, power or remedy. All remedies hereunder
are
cumulative and are not exclusive of any other remedies provided by law. The
Lender shall not be deemed to have waived any rights hereunder or under any
other agreement or instrument unless such waiver shall be in writing and signed
by such parties.
7. PROCEEDS;
COLLECTION OF RECEIVABLES.
Section
7.1. Collection
of Receivables.
The
Lender may at any time during a Default Period, without notice to any Grantor,
elect to enforce collection of any Receivable, require that the Proceeds of
Receivables or other Collateral be paid directly to the Lender or to any account
specified by the Lender and/or require that Proceeds of Receivables or other
Collateral received by such Grantor be deposited into any account specified
by
the Lender (any account referred to in this sentence being a "Pledged
Account").
During any Default Period, each Grantor shall (if requested to do so by Lender),
and/or Lender may, promptly notify the account debtors or obligors of the
Receivables of the Lender's interest therein and direct such account debtors
or
obligors to make payment of all amounts then or thereafter due under the
Receivables directly to the Lender or to any account specified by the Lender.
During a Default Period, each Grantor shall hold in trust for the Lender all
amounts and Proceeds received by it with respect to the Receivables and other
Collateral, shall segregate all such amounts and Proceeds from other funds
of
such Grantor, and shall at all tames thereafter promptly deliver to the Lender
(or into any Pledged Account as the Lender may specify) all such amounts and
Proceeds in the same form as so received, whether by cash, check, draft or
otherwise, with any necessary endorsements. Each Grantor will execute and
deliver to the Lender, for delivery by the Lender to each bank or other
financial institution with which it maintains any bank or deposit account (or
if
so instructed by the Lender will execute and deliver directly to each such
bank
or other financial institution) such notices as the Lender may from time to
time
request advising each such bank or other financial institution that Proceeds
deposited to an account during a Default Period constitute Pledged Deposits
hereunder, subject to the Security Interest granted hereby, and instructing
each
such bank or other financial institution that during the Default Period each
Pledged Account and all Pledged Deposits are to be maintained by such bank
or
other financial institution subject to the absolute dominion and control of
the
Lender and are to be delivered, disbursed or otherwise distributed solely in
accordance with the instructions of the Lender, and such Grantor shall take
all
such other actions as may otherwise be required under applicable law to perfect
the Security Interest in the Pledged Accounts and Pledged Deposits.
Section
7.2. Application
of Proceeds.
(a) During
the continuance of an Event of Default, the Lender shall have the continuing
and
exclusive right to apply or reverse and re-apply any and all payments to any
portion of the Grantor Obligations. To the extent that a Grantor makes a payment
or payments to the Lender or the Lender receives any payment or proceeds of
the
Collateral, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of
such
payment or proceeds, the Grantor Obligations or part thereof intended to be
satisfied and this Agreement shall be revived and continue in full force and
effect, as if such payment or proceeds had not been received by such
party.
-17-
(b) The
proceeds of any sale of or collection of Collateral, as well as any Collateral
consisting of cash, shall be applied by the Lender first, to the payment of
the
costs and expenses of any such sale or collection, including reasonable fees
and
disbursements of the Lender's agents and counsel, and of any judicial proceeding
wherein the same may be made, and of all expenses, liabilities and advances
(to
the extent such advances are reasonably made for the protection of the
Collateral or the enforcement of the Lender's security interest in the
Collateral) made or incurred by the Lender, together with interest thereon,
second, in satisfaction of the Grantor Obligations in the order set forth in
the
Facilities Letter, and third, to whomsoever may be lawfully entitled to receive
any surplus. Each Grantor shall remain liable for any deficiency if the proceeds
of sale or other disposition of the Collateral are insufficient to pay the
Grantor Obligations and the fees and disbursements of any attorneys employed
by
the Lender or any Security Beneficiary to collect such deficiency. Upon any
sale
of the Collateral by the Lender (including pursuant to a power of sale granted
by statute or under a judicial proceeding), the receipt of the Lender or of
the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall
not
be obligated to see to the application of any part of the purchase money paid
over to the Lender or such officer or be answerable in any way for the
misapplication thereof.
8. GENERAL
PROVISIONS.
Section
8.1. Notice
of Disposition of Collateral.
Any
notice of any public sale or the time after which any private sale or other
disposition of all or any part of the Collateral may be made shall be deemed
reasonable if given to each Grantor at least 10 days prior to the time of any
such public sale or the time after which any such private sale or other
disposition may be made.
Section
8.2. Compromises
and Collection.
Each
Grantor recognizes that set-offs, counterclaims, defenses and other claims
may
be asserted by obligors with respect to certain of the Receivables, that certain
of the Receivables may be or become uncollectible in whole or in part and that
the expense and probability of success in litigating a disputed Receivable
may
exceed the amount that reasonably may be expected to be recovered with respect
to a Receivable. In view of the foregoing, each Grantor agrees that the Lender
may at any time and from time to tune upon the occurrence and during the
continuance of an Event of Default, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the Lender
in its sole discretion shall determine or abandon any Receivable, and any such
action by the Lender shall be commercially reasonable so long as the Lender
acts
in good faith based on information known to it at the time it takes any such
action.
Section
8.3. Secured
Party Performance of Debtor Secured Liabilities.
Without
having any obligation to do so, the Lender may perform or pay any obligation
which any Grantor has agreed to perform or pay in this Agreement but has not
performed or paid on the due date therefor and such Grantor shall reimburse
the
Lender for any amounts paid or incurred pursuant to this Section 8.3. Each
Grantor's obligation to reimburse pursuant to the preceding sentence shall
be
Grantor Obligations payable on demand.
Section
8.4. Authorization
for Secured Party To Take Certain Action.
Each
Grantor irrevocably authorizes the Lender at any time and from time to time
in
the sole discretion of the
-18-
Lender
and appoints the Lender as its attorney-in-fact to act on behalf of such
Grantor, in the name of such Grantor or otherwise, from time to time in the
Lender's discretion, to take any action and to execute any instrument which
the
Lender may deem necessary or advisable to accomplish the purposes of this
Agreement, including (but as to the matters described in the following clauses
(ii), (iv), (vi), (vii), (viii), (x) and (xi), only upon the occurrence and
during the continuance of an Event of Default): (i) to execute on behalf of
such
Grantor as debtor and to file financing statements, continuation statements
and
amendments thereto necessary or desirable in the Lender's sole discretion to
perfect and to maintain the perfection and priority of the Lender's security
interest in the Collateral; (ii) to endorse, deposit and collect any cash,
Instruments and other proceeds of the Collateral: (iii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Collateral as a financing statement in such offices as
the
Lender in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of the Lender's security interest in the
Collateral; (iv) to enforce payment of the Receivables in the name of the Lender
or such Grantor; (v) to cause the proceeds of any Collateral received by the
Lender or any Security Beneficiary to be applied to the Grantor Obligations
as
contemplated by the Loan Documents; (vi) to sign such Grantor's name on any
invoice or xxxx of lading relating to any Receivable, on drafts against
customers, on schedules and assignments of Receivables, on notices of
assignment, financing statements and other public records, on verifications
of
accounts and on notices to customers; (vii) to notify the post office
authorities to change the address for delivery of such Grantor's mail to an
address designated by the Lender, and to receive, open and dispose of all mail
addressed to such Grantor; (viii) to send requests for verification of
Receivables to customers or account debtors (provided that this clause shall
not
limit the Lender's rights under Section 4.1); (ix) to do any act or thing which
the Lender ought to execute and do under the terms of this Agreement or which
may be required or deemed proper in the exercise of any rights or powers
conferred on the Lender for any of the purposes of this Agreement; (x) to grant
or issue any exclusive or nonexclusive license under the Collateral to anyone;
(xi) to assign, pledge, convey or otherwise transfer title in or to or dispose
of the Collateral to anyone, including assignments, recordings, registrations
and applications therefor in the United States Patent and Trademark Office,
the
United States Copyright Office or any similar office or agency of the United
States, any State thereof or any other country or political subdivision thereof,
and to execute and deliver any and all agreements, documents, instruments of
assignment or other papers necessary or advisable to effect any of the foregoing
or the recordation, registration, filing or perfection thereof; and (xii) to
file financing statements, continuation statements and amendments thereto that
describe the Collateral (a) as all assets of such Grantor or words of similar
effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9 of the UCC, or (b) as being of an equal
or
lesser scope or with greater detail, and which contain any other information
required by Part 5 of Article 9 of the UCC for the sufficiency or filing office
acceptance of any financing statement, continuation statement or amendment,
including (x) whether the Grantor is an organization, the type of organization
and any organization identification number issued to the Grantor and (y) in
the
case of a financing statement filed as a fixture filing or indicating Collateral
as as-extracted collateral or timber to cut, a sufficient description of the
real property to which the Collateral relates. Each Grantor hereby ratifies
all
that such attorneys shall lawfully do or cause to be done by virtue hereof
and
also ratifies its authorization for the Lender to have filed in any UCC
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof. All powers, authorizations and agencies
contained in this Agreement are
-19-
coupled
with an interest and are irrevocable until this Agreement is terminated and
the
security interests created hereby are released. The powers conferred on the
Lender and the other Security Beneficiaries hereunder are solely to protect
the
Lender's and the Security Beneficiaries' interests in the Collateral and shall
not impose any duty upon the Lender or any Security Beneficiary to exercise
any
such powers. The Lender and the Security Beneficiaries 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.
Section
8.5. Use
and Possession of Certain Premises.
Upon
the occurrence and during the continuance of an Event of Default, the Lender
or
its agents or representatives shall be entitled to occupy and use any premises
owned or leased by any Grantor where any of the Collateral or any records
relating to the Collateral are located until the Grantor Obligations are paid
in
full or until the Collateral is removed therefrom, whichever occurs first,
without any obligation to pay such Grantor for such use and
occupancy.
Section
8.6. Standard
of Care.
The
Lender's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
UCC
or otherwise, shall be to deal with it in the same manner as the Lender deals
with similar property for its own account. Neither the Lender, any Security
Beneficiary 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.
Section
8.7. Specific
Provisions Regarding Execution and Filing of Financing
Statements.
Pursuant to the UCC and any other applicable law, each Grantor authorizes the
Lender to file or record financing statements and other filing or recording
documents or instruments with respect to the Collateral or to use a generic
description such as "all assets" or "all property" without the signature of
such
Grantor in such form and in such offices as the Lender reasonably determines
appropriate to perfect the security interests granted hereunder. To the extent
permitted under the UCC, a photographic or other reproduction of this Agreement
shall be sufficient as a financing statement or other filing or recording
document or instrument for filing or recording in any jurisdiction.
9. MISCELLANEOUS.
Section
9.1. [Intentionally
Omitted]
Section
9.2. [Intentionally
Omitted]
Section
9.3. Security
Interest Absolute.
The
obligations of each Grantor under this Agreement are independent of the
obligations under any of the other Loan Documents, and a separate action or
actions may be brought and prosecuted against any single, or every, Grantor
to
enforce this Agreement. All rights of the Lender hereunder, the security
interests granted
-20-
hereby,
and all Grantor Obligations of each Grantor hereunder, shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of
any
of the Loan Documents, any agreement with respect to any of the Grantor
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in
any
other term of, all or any of the Grantor Obligations, or any other amendment
or
waiver of or any consent to any departure from any of the Loan Documents or
any
other agreement or instrument, (c) any exchange, release or non-perfection
of
any other Collateral, or any release, amendment or waiver of, or consent to
or
departure from, any guaranty for all or any of the Grantor Obligations, or
(d)
any other circumstance which might otherwise constitute a defense available
to,
or a discharge of, any Grantor in respect of the Grantor Obligations or in
respect of this Agreement.
Section
9.4. Lender's
Fees and Expenses - Indemnification.
(a) Each
Grantor agrees to pay upon demand to the Lender the amount of any and all
out-of-pocket expenses, including the reasonable fees and expenses of its
counsel and of any experts or agents, which the Lender may reasonably incur
in
connection with (i) the administration of this Agreement, (ii) the custody
or
preservation of, or the sale of, collection from, or other realization upon,
any
of the Collateral, (iii) the exercise or enforcement of any of the rights of
the
Lender hereunder, or (iv) the failure by any Grantor to perform or observe
any
of the provisions hereof.
(b) Without
limiting the foregoing, each Grantor agrees to pay, and to save the Lender
and
the Security Beneficiaries harmless from, and to indemnify them against, any
and
all liabilities with respect to, or resulting from any delay in paying, any
and
all stamp, excise, sales or other 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. Any such amounts payable as
provided hereunder shall be additional Grantor Obligations secured by this
Agreement and the other Loan Documents to which the Grantors are a party. Each
Grantor further agrees to pay, and to save the Lender and the Security
Beneficiaries harmless from, and to indemnify them against, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of
this
Agreement, or arising out of or relating to the Lender's or any Security
Beneficiary's relationship with such Grantor hereunder or under any other Loan
Document.
Section
9.5. Binding
Agreement; Assignments.
This
Agreement, and the terms, covenants and conditions hereof, shall be binding
upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, except that no Grantor shall be permitted to assign
this
Agreement or any interest herein.
Section
9.6. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Florida, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Florida or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Florida.
-21-
Section
9.7. Severability.
In case
any one or more of the provisions contained in this Agreement should be invalid,
illegal or unenforceable in any respect, no party hereto shall be required
to
comply with such provision for so long as such provision is held to be invalid,
illegal or unenforceable and the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired. The parties shall endeavor in good-faith negotiations to replace
the
invalid, illegal and unenforceable provisions with valid provisions, the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
Section
9.8. Section
Headings; Interpretation.
Section
headings used herein are for convenience only and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement. The use of the word "including" or any variation or derivative
thereof in this Agreement is by way of example rather than by limitation. The
language used in this Agreement will be deemed to be the language chosen, by
the
Lender and the Grantors to express their mutual intent. In the event an
ambiguity or question of intent or interpretation arises, this Agreement will
be
construed as if drafted jointly by the Grantors and the Lender, and no
presumption or burden of proof will arise favoring or disfavoring any Person
by
virtue of the authorship of any of the provisions of this
Agreement.
Section
9.9. Counterparts.
This
Agreement may be authenticated in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and any of the parties hereto may authenticate this
Agreement by signing any such counterpart. This Agreement may be authenticated
by manual signature, facsimile or, if approved in writing by the Lender and
the
Grantors, electronic means, all of which shall be equally valid.
Section
9.10. Termination.
(a) At
such
time as all of the Grantor Obligations (other than any indemnity and similar
obligations which expressly survive termination of this Agreement and are not
then due and payable) have been paid irrevocably and in full, this Agreement
and
all obligations (other than those expressly stated to survive such termination)
of the Lender and the Grantors shall terminate, and the Collateral shall be
released from the Security Interests created hereby, all without delivery of
any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of
the
Grantors following any such termination, the Lender shall deliver to each
Grantor any Collateral of such Grantor then held by the Lender hereunder and
shall execute and deliver to such Grantor or authorize the filing of but without
recourse to or warranty by the Lender, such Uniform Commercial Code termination
statements and similar documents prepared by such Grantor which such Grantor
shall reasonably request to evidence the release of the Collateral from the
security constituted hereby.
(b) Notwithstanding
anything to the contrary contained in this Agreement, this Agreement shall
remain in full force and effect and continue to be effective should any petition
be filed by or against any Grantor for liquidation or reorganization, should
any
Grantor become insolvent or make are assignment for any benefit of creditors
or
should a receiver or trustee be appointed for all or any significant part of
any
Grantor's assets, and shall continue to be effective
-22-
or
be
reinstated, as the case may be, if at any time payment and performance of the
Grantor Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by
any
obligee of the Grantor Obligations, whether as a "voidable preference,"
"fraudulent conveyance" or otherwise, all as though such payment, or any part
thereof, had not been made.
(c) Notwithstanding
anything in this Security Agreement to the contrary, the Grantors may, to the
extent permitted by the Facility Letters sell, assign, transfer or otherwise
dispose of any Collateral. In addition, the Collateral shall be subject to
release from time to time (with the Collateral referred to in the immediately
preceding sentence, the "Released
Collateral")
in
accordance with the facility Letters. The Liens under this Security Agreement
shall terminate with respect to the Released Collateral (other than Released
Collateral that is sold, assigned, transferred or otherwise disposed to a
Grantor or any other Guarantor) upon such sale, transfer, assignment,
disposition or release, and upon the written request of the Grantor, the Lender
shall execute and deliver such instrument or document as may be necessary to
release the Liens granted hereunder; provided, however, that (i) the Lender
shall not be required to execute any such documents on terms which, in the
Lender's opinion, would expose the Lender to liability or create any obligation
or entail any consequence other than the release of such Liens without recourse
or warranty, and (ii) such release shall not in any manner discharge, affect
or
impair the Grantor Obligations or any Liens on (or obligations of any Grantor
in
respect of all interests retained by any Grantor, including without limitation,
the proceeds of any sale, all of which shall continue to constitute part of
the
Collateral unless and until applied strictly in accordance with the Loan
Documents.
Section
9.11. CONSENT
TO JURISDICTION AND SERVICE OF PROCESS.
ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN MIAMI,
FLORIDA AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH GRANTOR ACCEPTS
FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. TO
THE
EXTENT PERMITTED BY LAW, EACH GRANTOR AND THE AGENT ON BEHALF OF ITSELF AND
EACH
OF THE LENDERS HEREBY AGREES THAT SERVICE UPON IT BY CERTIFIED MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE AND SERVICE OF PROCESS. NOTHING HEREIN SHALL AFFECT
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT OF THE AGENT TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS
OF
ANY OTHER JURISDICTION.
Section
9.12. WAIVER
OF JURY TRIAL.
EACH
GRANTOR AND THE AGENT, ON BEHALF OF ITSELF AND EACH OF THE LENDERS, EACH HEREBY
IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY
IN
ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING
OUT
OF THIS AGREEMENT, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION
OR
ENFORCEMENT HEREOF; AND EACH GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED
BY
APPLICABLE
-23-
LAW,
THE
RIGHT TO INTERPOSE ANY SET OFF OR COUNTERCLAIM OR CROSS-CLAIM IN CONNECTION
WITH
ANY SUCH LITIGATION, IRRESPECTIVE OF THE NATURE OF SUCH SETOFF, COUNTERCLAIM
OR
CROSS-CLAIM EXCEPT TO THE EXTENT THAT THE FAILURE SO TO ASSERT ANY SUCH SETOFF,
COUNTERCLAIM OR CROSS-CLAIM WOULD PERMANENTLY PRECLUDE THE PROSECUTION OF OR
RECOVERY UPON SAME, Notwithstanding anything contained In this Agreement to
the
contrary, no claim may be made by any Grantor against the Lender or any Security
Beneficiary for any lost profits or any special, indirect or consequential
damages in respect of any breach or wrongful conduct (other than willful
misconduct or actual fraud) in connection with, arising out of or in any way
related to the transactions contemplated hereunder, or any act, omission or
event occurring in connection therewith; and each Grantor hereby waives,
releases and agrees not to xxx upon any such claim for any such damages. EACH
GRANTOR AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS
AGREEMENT AND ACKNOWLEDGES THAT THE LENDERS WOULD NOT EXTEND TO THE GRANTORS
THE
FACILITIES UNDER THE FACILITIES LETTERS IF THIS SECTION WERE NOT PART OF THIS
AGREEMENT.
Section
9.13. Notices.
All
notices and other communications provided for hereunder shall be in writing
(including telegraphic or telecopier communication) and mailed, telegraphed,
telecopied or delivered to the address set forth in the Facilities Letters
or to
such other address and/or with such other copy or copies as the intended
recipient may have specified by prior notice to the notifying party. All such
notices and other communications shall, when mailed, telegraphed, telecopied
or
telexed, be effective when deposited in the mails, delivered to the telegraph
company or telecopied and confirmed by answerback, respectively, addressed
as
aforesaid; except that notices and other communications to the Lender shall
not
be effective until received by the Lender. Delivery by telecopier of an executed
counterpart of any amendment or waiver or any provision of any Loan Document
shall be effective as delivery of an original executed counterpart
thereof.
Section
9.14. Acknowledgements.
Each
Grantor acknowledges that: (a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents; (b) neither the Lender, any other Lender nor any Security Beneficiary
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 each Grantor, on the one hand, and the Lender, each other
Lender and the other Security Beneficiaries, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and (c) no joint
venture is created hereby or by the Loan Documents or otherwise exists by virtue
of the transactions contemplated hereby among the Security Beneficiaries or
among any Grantor and the Security Beneficiaries.
-24-
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
date first above written.
|
GRANTORS:
|
SIMCLAR,
INC.
By:
/s/
Xxxxx X. Xxxxxx
Name:
Xxxxx
X. Xxxxxx
Title:
President
|
|
SIMCLAR
(MEXICO) INC.
By:
/s/
Xxxxx X. Xxxxxx
Name:
Xxxxx
X. Xxxxxx
Title:
President
|
|
|
SIMCLAR
DE MEXICO, S.A. DE C.V.
By:
/s/
Xxxxx X. Xxxxxx
Name:
Xxxxx
X. Xxxxxx
Title:
President
|
|
|
SIMCLAR
INTERCONNECT TECHNOLOGIES INC.
By:
/s/
Xxxxx X. Xxxxxx
Name:
Xxxxx
X. Xxxxxx
Title:
President
|
|
|
SIMCLAR
(NORTH AMERICA)
By:
/s/
Xxxxx X. Xxxxxx
Name:
Xxxxx
X. Xxxxxx
Title:
President
|
-25-
|
STATE
OF FLORIDA
|
)
|
|
)
ss:
|
|
|
COUNTY
OF MIAMI-DADE
|
)
|
The
foregoing instrument was acknowledged before me this 28th day of February,
2007,
by Xxxxx X. Xxxxxx as President of Simclar, Inc., a Florida corporation (the
"Borrower"), and before me executed the attached Third Amended and Restated
Security Agreement dated February 28, 2007, on behalf of the
Borrower.
/s/
Xxxxxx X. Xxxxxxx
NOTARY
PUBLIC
[Stamp]
(Print,
Type or Stamp Commissioned Name of Notary Public)
|
STATE
OF FLORIDA
|
)
|
|
)
ss:
|
|
|
COUNTY
OF MIAMI-DADE
|
)
|
The
foregoing instrument was acknowledged before me this 28th day of February,
2007,
by Xxxxx X. Xxxxxx as President of Simclar (Mexico) Inc., an Illinois
corporation (the "Borrower"), and before me executed the attached Third Amended
and Restated Security Agreement dated February 28, 2007, on behalf of the
Borrower.
/s/
Xxxxxx X. Xxxxxxx
NOTARY
PUBLIC
[Stamp]
(Print,
Type or Stamp Commissioned Name of Notary Public)
-00-
|
XXXXX
XX XXXXXXX
|
)
|
|
)
ss:
|
|
|
COUNTY
OF MIAMI-DADE
|
)
|
The
foregoing instrument was acknowledged before me this 28th day of February,
2007,
by Xxxxx X. Xxxxxx as President of Simclar Interconnect Technologies, Inc.,
a
Delaware corporation (the "Borrower"), and before me executed the attached
Third
Amended and Restated Security Agreement dated February 28, 2007, on behalf
of
the Borrower.
/s/
Xxxxxx X. Xxxxxxx
NOTARY
PUBLIC
[Stamp]
(Print,
Type or Stamp Commissioned Name of Notary Public)
|
STATE
OF FLORIDA
|
)
|
|
)
ss:
|
|
|
COUNTY
OF MIAMI-DADE
|
)
|
The
foregoing instrument was acknowledged before me this 28th day of February,
2007,
by Xxxxx X. Xxxxxx as President of Simclar Mexico, S.A. de C.V. (the
"Borrower"), and before me executed the attached Third Amended and Restated
Security Agreement dated February 28, 2007, on behalf of the
Borrower.
/s/
Xxxxxx X. Xxxxxxx
NOTARY
PUBLIC
[Stamp]
(Print,
Type or Stamp Commissioned Name of Notary Public)
|
STATE
OF FLORIDA
|
)
|
|
)
ss:
|
|
|
COUNTY
OF MIAMI-DADE
|
)
|
The
foregoing instrument was acknowledged before me this 28th day of February,
2007,
by Xxxxx X. Xxxxxx as President of Simclar (North America), a North Carolina
corporation (the "Borrower"), and before me executed the attached Third Amended
and Restated Security Agreement dated February 28, 2007, on behalf of the
Borrower.
/s/
Xxxxxx X. Xxxxxxx
NOTARY
PUBLIC
[Stamp]
(Print,
Type or Stamp Commissioned Name of Notary Public)
-27-
LENDER:
EXECUTED
and DELIVERED
for
and
on behalf of THE GOVERNOR
AND
COMPANY OF THE BANK OF
SCOTLAND
in the presence
of:-
/s/ Xxxxx Xxxxxx
Authorized
Signatory
/s/
Xxxxxxx X.
Xxxxxxxxx
Witness
Xxxxxxx
X.
Xxxxxxxxx
Full
Name
Bank
of
Scotland
Address
Edinburgh
-28-
