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SECURITY AND COLLATERAL AGREEMENT
AMONG
THE PENN TRAFFIC COMPANY
and the Grantors
and
FLEET CAPITAL CORPORATION
as Agent
Dated as of June 29, 1999
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS..............................................1
1.1 Definitions................................................1
1.2 Other Definitional Provisions..............................7
SECTION 2. GRANT OF SECURITY INTERESTS AND LIENS; RIGHTS OF
AGENT AND LENDERS..........................................7
2.1 Grant of Security Interest and Liens.......................7
2.2 Perfection and Protection of Security Interest.............8
2.3 Perfecting and Protecting Security Interests and Liens With
Respect to Collateral Real Estate Interests; Application
of Repayments..............................................9
2.4 Appraisals.................................................9
2.5 Access and Examination.....................................9
2.6 Insurance.................................................10
2.7 Collateral Reporting......................................10
2.8 Right to Cure.............................................11
2.9 Power of Attorney.........................................11
2.10 Recourse..................................................11
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS.................11
3.1 Necessary Filings.........................................12
3.2 Title to, Liens on, and Sale and Use of Collateral........12
3.3 Other Financing Statements................................12
3.4 Chief Executive Office; Records...........................12
3.5 Location of Inventory And Equipment.......................13
3.6 Trade Names; Change of Name...............................14
3.7 Accounts..................................................14
3.8 Inventory.................................................15
3.9 Franchise Agreements......................................16
3.10 [Intentionally Deleted]...................................17
3.11 Additional Representations, Warranties and Covenants
With Respect to Equipment.................................17
3.12 Additional Representations, Warranties and Covenants
With Respect to Collateral Real Estate Interests..........17
3.13 Special Provisions Concerning Intellectual Property.......19
3.14 Special Provisions as to Pledged Collateral...............23
3.15 Further Assurances; Additional Grantors; Additional
Actions, etc..............................................27
SECTION 4. REMEDIES UPON OCCURRENCE OF SPECIFIED EVENTS..............27
4.1 Remedies; Obtaining the Collateral upon Default...........27
4.2 Remedies; Disposition of the Collateral...................29
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4.3 Remedies; Collateral Real Estate Interests................30
4.4 Waiver of Claims..........................................30
4.5 Application of Proceeds...................................31
4.6 Remedies Cumulative; No Waiver............................31
SECTION 5. INDEMNITY.................................................31
5.1 Indemnity.................................................31
5.2 Indemnity Obligations Secured by Collateral; Survival.....32
5.3 Agent's Rights, Duties, and Liabilities...................32
SECTION 6. THE AGENT.................................................33
SECTION 7. MISCELLANEOUS.............................................33
7.1 Notices...................................................33
7.2 Waiver; Amendment.........................................33
7.3 Obligations Absolute......................................33
7.4 Successors and Assigns....................................34
7.5 Headings Descriptive......................................34
7.6 Severability..............................................34
7.7 GOVERNING LAW.............................................34
7.8 Grantors' Duties..........................................34
7.9 Termination; Release......................................34
7.10 Counterparts..............................................35
EXHIBIT A Collateral Real Estate Interests
EXHIBIT B Pledged Notes; Pledged Stock
EXHIBIT C UCC Filing Offices
EXHIBIT D Chief Executive Offices; Location of Books and Records; Location of
Collateral; Locations of Other Places of Business; Leased Facilities
and Locations
EXHIBIT E Trade Names; Fictitious Names; Other Names; Trade Names
EXHIBIT F Franchise Agreements; Operators
EXHIBIT G Trademarks
EXHIBIT H Intellectual Property Licenses and Agreements
EXHIBIT I Form of Borrowing Base Certificate
EXHIBIT J Excluded Receivables
ANNEX 1 U.S. Trademark Security Agreement
ANNEX 2 U.S. Patent Security Agreement
ANNEX 3 U.S. Copyright Security Agreement
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SECURITY AND COLLATERAL AGREEMENT, dated as of June 29, 1999, made
by each of the signatories hereto (the "Initial Grantors" and, together with any
other entity that may become a party hereto as a "Grantor", the "Grantors"), in
favor of Fleet Capital Corporation, a Rhode Island corporation ("Fleet"), as
Agent (the "Agent") for the financial institutions (the "Lenders") from time to
time parties to the Revolving Credit and Term Loan Agreement, dated as of June
29, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among THE PENN TRAFFIC COMPANY, a Delaware corporation
("Penn Traffic"), DAIRY DELL, INC., a Pennsylvania corporation, BIG M
SUPERMARKETS, INC., a New York corporation and XXXXX XXXXXXX BAKING COMPANY
INC., a New York corporation (collectively, the "Borrowers"), the Agent, GMAC
Business Credit, LLC as documentation agent, and AmSouth Bank and Bank of
America National Trust and Savings Association as co-agents.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;
WHEREAS, each of the Initial Grantors is, and each additional
Grantor will be, a member of an affiliated group of companies that includes the
Borrowers, and the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrowers to finance their own and
the related businesses of the Grantors; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Initial Grantors shall have executed and delivered
this Security and Collateral Agreement to the Agent for the benefit of the
Secured Parties (as defined in the Credit Agreement);
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders and the Agent to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrowers
thereunder, each Grantor hereby agrees with the Agent, for the benefit of the
Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the specified meanings:
"Account": a Grantor's right to payment for a sale or lease of goods
or rendition of services.
"After-Acquired Real Estate Interest": any Real Estate Interest of a
Grantor acquired after the Closing Date excluding any Real Estate Interest (a)
consisting of a Real Property Leasehold, (i) as to which the granting by a
Grantor to the Agent of a Lien thereon will violate a Lien Prohibition, (b)
consisting of Real Property Owned (i) which is subject to any Lien otherwise
permitted under the Credit Agreement and (ii) as to which the granting by a
Grantor to the Agent of a Lien thereon will violate a Lien Prohibition or (c),
which the Agent determines in its sole discretion to be of minimal value;
provided, that for the purposes of this definition, the term "acquired" shall
not include the renewal, extension or modification after the Closing Date of a
Real Property Leasehold.
"Agreement": this Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Borrowers' Obligations": the Obligations as defined in the Credit
Agreement.
"Collateral": as defined in Section 2.
"Collateral Account": any collateral account established by the
Agent as provided in the Credit Agreement.
"Collateral Real Estate Interests": The Scheduled Real Estate
Interests and all After-Acquired Real Estate Interests.
"Copyright Office": the United States Copyright Office of the
Library of Congress.
"Copyright License": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in Exhibit H)
granting any right under any Copyright, including, without limitation, the grant
of rights to manufacture, distribute, exploit and sell materials derived from
any Copyright, in each case, not subject to a Lien Prohibition.
"Copyrights": (i) all copyrights arising under the laws of the
United States, whether registered or unregistered and whether published or
unpublished (including, without limitation, those listed in Exhibit H), all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the Copyright Office, and (ii) the right to obtain all renewals
thereof.
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"Equipment": "Equipment" as defined in the Credit Agreement, except
that the term "Borrower" as used therein shall be deemed replaced by the term
"Grantor" for the purposes of this Agreement.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the State
of New York on the date hereof and, in any event, including, without limitation,
with respect to any Grantor, all forms of obligations owing to such Grantor
(including by any of its Subsidiaries and Affiliates) and all contracts,
agreements, instruments and indentures in any form, and portions thereof, to
which such Grantor is a party or under which such Grantor has any right, title
or interest or to which such Grantor or any property of such Grantor is subject,
as the same may from time to time be amended, supplemented or otherwise
modified, including, without limitation, (i) all rights of such Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of such Grantor to damages arising thereunder and
(iii) all rights of such Grantor to perform and to exercise all remedies
thereunder, in each case to the extent the grant by such Grantor of a security
interest pursuant to this Agreement in its right, title and interest in such
contract, agreement, instrument or indenture is not prohibited by such contract,
agreement, instrument or indenture without the consent of any other party, would
not give any other party the right to terminate its obligations under such
contract, agreement, instrument or indenture, or is permitted with consent if
all necessary consents to such grant of a security interest have been obtained
from the other parties thereto (it being understood that the foregoing shall not
be deemed to obligate such Grantor to obtain such consents); provided, that the
foregoing limitation shall not affect, limit, restrict or impair the grant by
such Grantor of a security interest pursuant to this Agreement in any Receivable
or any money or other amounts due or to become due under any such contract,
agreement, instrument or indenture; and (iv) all causes of action, tax refunds,
tax refund claims, Reversions and other amounts payable to such Grantor from
pension and employee benefit plans, rights and claims against shippers and
carriers, rights to indemnification, and business interruption insurance.
"Guarantor Obligations": with respect to any Subsidiary Guarantor,
all obligations and liabilities of such Subsidiary Guarantor which may arise
under or in connection with its Guaranty Agreement or this Agreement or any
other Loan Document to which such Subsidiary Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Agent or to the Lenders that are
required to be paid by such Subsidiary Guarantor pursuant to the terms of its
guaranty, this Agreement or any other Loan Document).
"Initial Pledged Securities": as defined in Section 3.14(a).
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks and the Trademark
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Licenses, and all rights to xxx at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by
any Grantor to any of its Subsidiaries, or to any other Grantor or any such
Grantor's Subsidiaries.
"Inventory": "Inventory" as such term is defined in the Credit
Agreement, except that the term "Borrower" as used therein shall be deemed
replaced by the term "Grantor" for the purposes of this Agreement.
"Issuers": the collective reference to each issuer of a Pledged
Security.
"Legal Requirements": statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of any Public Authority affecting
any Grantor, any Loan Document or all or part of any Collateral Real Estate
Interests or the construction, ownership, use, alteration or operation thereof,
whether now or hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instrument, either of record or
known to any Grantor, at any time in force affecting all or part of any
Collateral Real Estate Interests, including any that may (i) require repairs,
modifications or alterations in or to all or part of any Collateral Real Estate
Interests, or (ii) in any way limit the use and enjoyment thereof.
"Lien Prohibition": means an agreement, instrument or document
evidencing Intellectual Property, or evidencing a Lien on Equipment or
evidencing a Real Property Leasehold, the terms of which would be breached by
the creation thereon of a Lien on such Intellectual Property, Equipment or Real
Property Leasehold in favor of the Agent, but only so long as such terms are in
effect.
"Mortgage Forms": shall mean the various forms of fee and leasehold
mortgages and fee and leasehold deeds of trust contained in the Mortgage Forms
Appendix bound separately from, but which is a part of, this Agreement.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of the Borrowers, the Borrowers'
Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations,
and (iii) all liabilities and obligations of any Grantor hereunder or under any
other Loan Document.
"Patent": shall mean any United States patents and all reissues,
divisions, continuations, continuations-in-part, renewals and extensions
thereof, now held or hereafter made or acquired by any Grantor, as well as any
application for a United States patent now held or
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hereafter made or acquired by any Grantor, and all inventions (including
software and operating systems) and improvements described and claimed in any of
the foregoing.
"Patent License": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in Exhibit H)
granting any right under any Patent, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials derived from any
Patent, in each case, not subject to a Lien Prohibition.
"Pledge Grantor": means each Grantor granting a Security Interest in
any Pledged Collateral.
"Pledged Collateral": shall have the meaning set forth in Section
3.14.
"Pledged Notes": all promissory notes listed on Exhibit B, all
Intercompany Notes at any time issued to any Grantor and, to the extent
permitted under the instruments or agreements evidencing such notes, all other
promissory notes issued to or held by any Grantor (other than promissory notes
issued in connection with extensions of trade credit by any Grantor in the
ordinary course of business, but including promissory notes of Franchisees
issued to a Grantor) while this Agreement is in effect.
"Pledged Securities": collectively, the Initial Pledged Securities
and the Subsequent Pledged Securities.
"PTO": The United States Patent and Trademark Office.
"Real Estate Interests": with respect to a Grantor, all Real
Property Owned and all Real Property Leaseholds.
"Real Estate Records": all books, records, information and data, in
whatever form, maintained or compiled by or on behalf of any Grantor with
respect to Collateral Real Estate Interests.
"Real Property Leaseholds": all leases now or hereafter owned or
held by a Grantor, of real property whether improved or unimproved and all
rights, interests and estates, real and personal, arising under or in connection
with such leases and such real property, including without limitation all
buildings and all personal property and fixtures included under such leases.
"Real Property Owned": means all parcels of land now or hereafter
owned by a Grantor, together with the right, title and interest of the Grantor
in and to adjacent streets, the air space and development rights, all rights of
way, privileges, tenements, hereditaments and appurtenances thereto, and
fixtures, easements, all royalties and rights pertaining to the use of the real
property, including, without limitation, all alleys, vaults and drainage
together with all buildings and other improvements now or hereafter erected
thereon and all fixtures and personal
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property appertaining thereto and all additions thereto and all substitutions
and replacements thereof.
"Receivables": with respect to a Grantor, all of such Grantor's now
owned and hereafter arising or acquired: Accounts (whether or not earned by
performance), including, without limitation, Accounts owed to such Grantor by
any of its Subsidiaries or Affiliates, together with all interest, late charges,
penalties, collection fees, and other sums which shall be due and payable in
connection with any Account; proceeds of any letters of credit naming such
Grantor as beneficiary, chattel paper, instruments, documents, General
Intangibles and guarantees and other security for any of the foregoing; rights
of stoppage in transit, replevin, and reclamation; and other rights or remedies
of an unpaid vendor, lienor, or secured party.
"Scheduled Real Estate Interests": means the Real Estate Interests
listed on Exhibit A.
"Securities Act": the Securities Act of 1933, as amended.
"Subject Equipment": means all Equipment of each Grantor, other than
Equipment subject to a Permitted Lien and a Lien Prohibition.
"Subsequent Pledged Securities": as defined in Section 3.14(a).
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, 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, or any State thereof and all common-law rights related thereto,
including, without limitation, any of the foregoing referred to in Exhibits E
and G, and (ii) the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Exhibit G and
in Exhibit H, in each case, which is not subject to a Lien Prohibition.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title law of any
state and all tires and other appurtenances to any of the foregoing.
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1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Exhibit references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
rights or remedies of the Secured Parties, shall, unless otherwise defined
herein, have the meanings set forth in the New York UCC, and when used in
relation to a Grantor, shall refer to such Grantor's Collateral or the relevant
part thereof.
SECTION 2. GRANT OF SECURITY INTERESTS AND LIENS; RIGHTS OF AGENT
AND LENDERS.
2.1 Grant of Security Interest and Liens. As security for the full
and prompt payment and performance when due of all Obligations, each Grantor
hereby grants to the Agent, for the benefit of the Secured Parties, a continuing
security interest in, lien on, and assignment of, all of such Grantor's right,
title and interest in the following, whether now owned or hereafter acquired or
arising: (a) (i) Receivables (other than the Receivables identified on Exhibit J
hereto (the "Excluded Receivables")), General Intangibles, Subject Equipment,
Inventory, Intellectual Property, Collateral Real Estate Interests, and the
Pledged Collateral; (ii) moneys, securities and other Property and accounts
relating thereto, now or hereafter held or received by, or in transit to, the
Agent, the Bank or any Lender from or for such Grantor, whether for safekeeping,
pledge, custody, transmission, collection or otherwise, including, without
limitation, all of such Grantor's deposit accounts, credits, and balances with
the Agent, the Bank or any Lender, (iii) any Collateral Account and any deposit
accounts with any financial institution with which the Grantor maintains
deposits (other than trust accounts and other accounts excluded with the
approval of the Agent); and (iv) books, records and other Property relating to
or referring to any of the foregoing, including, without limitation, all books,
records, ledger cards, data processing records, computer software and other
Property, including without limitation the Real Estate Records; and (b) all
Proceeds of all of the foregoing, wherever located and whether now existing or
hereafter arising or acquired (all of the foregoing under subsections (a) and
(b) above, together with all other Property in which the Agent may at any time
be granted a Lien to secure any of the Obligations, being herein collectively
referred to as the "Collateral"). The Agent, for the benefit of the Secured
Parties, shall have all of the rights of a secured party with respect to the
Collateral under the New York UCC and other applicable laws. Notwithstanding
anything herein, in any Mortgage or in any filing relating hereto or thereto, no
grant of a security interest in Equipment (other than Subject Equipment), is
intended to be given hereby or thereby to the extent such Equipment is subject
to a Permitted Lien and a Lien Prohibition.
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2.2 Perfection and Protection of Security Interest. (a) Without
limiting the application of Section 3.13 with respect to Intellectual Property
or Section 3.14 with respect to Pledged Collateral, each Grantor shall, at its
expense, perform all steps to more fully perfect, maintain, protect, and enforce
the Security Interest including, without limitation: (i) executing and filing
(A) financing or continuation statements, and amendments thereof, in form and
substance satisfactory to the Agent, including without limitation for filing in
the Uniform Commercial Code filing offices listed on Exhibit C hereto and (B)
with respect to Intellectual Property, short-form security agreements in the
form of Annex 1 and Annex 2 (for filing with the PTO) and Annex 3 (for filing
with the Copyright Office) (and, in each case, the Power of Attorney attached
thereto); (ii) delivering to the Agent the originals of all instruments,
documents, and chattel paper, and all other Collateral of which the Agent
determines it should have physical possession in order to more fully perfect and
protect the Security Interest therein, duly endorsed or assigned to the Agent
without restriction; (iii) placing notations on such Grantor's books of account
to disclose the Security Interest; and (iv) at the Agent's request, delivering
to the Agent all letters of credit on which such Grantor is named beneficiary.
(b) The Agent may file, without any Grantor's signature, one or more
financing statements describing the Collateral in whole or part. Each Grantor
agrees that a carbon, photographic, photostatic, or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.
(c) If any Collateral is at any time in the possession or control of
any warehouseman or bailee, then the Grantors shall notify the Agent thereof and
shall notify such Person of the Security Interest in such Collateral and, upon
the Agent's request following the occurrence and during the continuance of an
Event of Default, instruct such Person to hold all such Collateral for the
Agent's account subject to the Agent's instructions. If at any time any
Collateral is located on any premises that are not owned by a Grantors (except
for retail stores or warehouses leased by a Grantor, then, if the Agent so
requests, the Grantors shall use commercially reasonable efforts to obtain
written waivers, in form and substance satisfactory to the Agent, of all present
and future Liens which the owner or lessor or any mortgagee of such premises may
be entitled to assert against the Collateral.
(d) From time to time, each Grantor shall, upon the Agent's request,
execute and deliver confirmatory written instruments pledging to the Agent the
Collateral, but a Grantor's failure to do so shall not affect or limit the
Security Interest. So long as this Agreement is in effect and until all
Obligations have been fully satisfied (other than any surviving indemnity
obligations in the Loan Documents), the Security Interest shall continue in full
force and effect in the Collateral (whether or not deemed eligible for the
purpose of calculating the Revolving Borrowing Capacity of any Borrower or as
the basis for any advance, loan, extension of credit, or other financial
accommodation).
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(e) The Liens granted to the Agent for the benefit of the Secured
Parties shall constitute valid and perfected Liens, free and clear of any Liens
other than Permitted Liens.
2.3 Perfecting and Protecting Security Interests and Liens With
Respect to Collateral Real Estate Interests; Application of Repayments. (a) Each
Grantor shall, at its expense, perform all steps reasonably requested by the
Agent to more fully perfect, maintain, protect, and enforce the Security
Interest and Liens on Collateral Real Estate Interests constituting Scheduled
Real Estate Interests; and
(b) With respect to any Collateral Real Estate Interest constituting
an After-Acquired Real Estate Interest (i) promptly execute and deliver to the
Agent a Mortgage substantially in the form of the Mortgage Form appropriate in
respect of each such Collateral Real Estate Interest; (ii) cause such executed
and delivered Mortgages to be duly recorded in the appropriate recording office
or offices, and (iii) pay all fees and taxes and recording charges payable in
connection therewith.
(c) Notwithstanding anything herein or in any other Loan Document,
including Section 30(b) of the Mortgages, to the contrary, the Grantors may, in
the ordinary course of business and without the consent of the Agent, (i)
modify, amend, surrender, cancel or terminate any Real Property Leasehold or
(ii) operate, repair, make additions to or demolish the Property or improvements
relating to any Real Estate Interest, in each case, to the extent it is
commercially reasonable to do so in such Grantors' good faith business judgment
and subject in the case of a cancellation or termination to the giving of notice
as provided in Section 7.3(d)(ii) and compliance with Section 8.1(e).
2.4 Appraisals. The Grantors shall, at the request of the Agent,
provide the Agent with, or give the Agent access to obtain, appraisals or
updates thereof of any or all of the Collateral from an appraiser satisfactory
to the Agent. If an Event of Default has occurred and is continuing, such
appraisals or updates shall be at the expense of the Grantors. Otherwise, such
appraisals or updates shall be at the Lenders' expense.
2.5 Access and Examination. The Agent may at all reasonable times,
and with reasonable notice, have access to examine, audit, make copies and
extracts from, and inspect each Grantor's records, files, and books of account
and the Collateral and to discuss each Grantor's affairs with such Grantor's
officers and management. Each Lender may, at its own cost and expense, provide a
representative or agent to accompany the Agent on any such examination, audit,
or inspection. At the Agent's request, each Grantor will deliver to the Agent
any instrument necessary for the Agent to obtain records from any service bureau
maintaining records for such Grantor. The Agent may, without expense to the
Agent or any Secured Party, use such of each Grantor's personnel, supplies, and
premises as may be reasonably necessary for maintaining or enforcing the
Security Interest. The Agent shall have the right, at any time, in the Agent's
or any Secured Party's name or in the name of a nominee of the Agent, to verify
the validity, amount or any other matter relating to the Accounts, by mail,
telephone, or otherwise.
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2.6 Insurance. The Grantors shall insure the Collateral (other than
Collateral no longer used or useful in the Grantors' business) for amounts and
on terms (including deductibles) prudently determined by each Grantor in the
context of industry practice against standard, all-risk perils, including
without limitation loss or damage by fire with extended coverage, flood (for any
Collateral Real Estate Interests located in an area identified by the Federal
Emergency Management Agency ("FEMA") as an area having special flood hazards),
theft, burglary, pilferage, loss in transit, and such other hazards as the Agent
shall reasonably specify, under policies and by insurers reasonably acceptable
to the Agent. The Grantors shall cause the Agent, on behalf of the Secured
Parties, to be named in each such policy as secured party and loss payee or
additional insured as its interests may appear, in a manner reasonably
acceptable to the Agent. Each policy of insurance shall contain a clause or
endorsement requiring the insurer to give not less than ten (10) days' prior
written notice to the Agent in the event of cancellation of the policy for any
reason whatsoever. Upon request of the Agent, each Grantor shall deliver to the
Agent original or certified duplicate policies, or certificates or other
evidence reasonably satisfactory to the Agent of its compliance herewith. All
premiums for such insurance shall be paid by the Grantors when due, and
certificates of insurance and photocopies of the policies shall be delivered to
the Agent. The Grantors shall promptly notify the Agent, in accordance with the
terms of the Credit Agreement of any material loss, damage, or destruction to,
or arising from the use of any Collateral. Following the occurrence and during
the continuation of an Event of Default, the Agent is hereby authorized to
collect all insurance proceeds directly.
2.7 Collateral Reporting. Each Grantor will provide the Agent with
the following documents at the following times in form satisfactory to the
Agent: (a) no later than Friday of each week, a Borrowing Base Certificate in
the form of Exhibit I hereto (a "Borrowing Base Certificate"), calculated as of
a date no earlier than the end of the preceding week, except as otherwise
provided below; (b) if requested by the Agent within seven days after the end of
each month, a monthly aging of Accounts for such month; (c) if requested by the
Agent with each Borrowing Base Certificate, weekly warehouse Inventory turnover
reports and weekly store Inventory reports; (d) if requested by the Agent,
monthly perpetual inventory reports, reporting Inventory by location and major
category; (e) such other reports as to the Collateral as the Agent shall
reasonably request from time to time; and (f) certificates of an officer of such
Grantor certifying as to the foregoing. If any Grantor's records or reports of
the Collateral are prepared by an accounting service or other agent, such
Grantor hereby authorizes such service or agent to deliver copies of such
records, reports, and related documents to the Agent. If the Agent determines,
in its sole discretion, that more timely reporting is necessary in order to
administer effectively the terms hereof or to protect adequately the Secured
Parties' rights and remedies hereunder, then the Grantors shall (to the extent
feasible without the necessity of hiring additional employees or materially
changing its accounting and reporting systems) calculate the Accounts and the
Inventory in each Borrowing Base Certificate on a more timely basis.
10
2.8 Right to Cure. The Agent may, in its sole discretion, pay any
amount or do any act required of a Grantor hereunder in order to preserve,
protect, maintain or enforce the Obligations, the Collateral or the Security
Interest, and which such Grantor fails to pay or do, including, without
limitation, payment of any judgment against such Grantor, any insurance premium,
any warehouse charge, any processing charge, any landlord's claim, and any other
Lien upon the Collateral. All payments that the Agent makes under this Section
and all out-of-pocket costs and expenses that the Agent pays or incurs in
connection with any action taken by it hereunder shall be charged to such
Grantor's loan accounts as set forth in Sections 2.14, 2.15 and 11.10 of the
Credit Agreement. Any payment made or other action taken by the Agent under this
Section shall be without prejudice to any right to assert an Event or Event of
Default hereunder and to proceed accordingly.
2.9 Power of Attorney. Each Grantor hereby appoints the Agent and
the Agent's designees as such Grantor's attorney, with power: (a) if an Event of
Default has occurred and is continuing: (i) to endorse such Grantor's name on
any checks, notes, acceptances, money orders, or other forms of payment or
security that come into the Agent's possession; (ii) to sign such Grantor's name
on drafts against customers and notices of assignment, financing statements and
other public records; (iii) to sign such Grantor's name on notices to Account
Debtors and on any invoice, xxxx of lading, or other document of title relating
to any Collateral; and (iv) to do all things necessary to carry out this
Agreement; and (b) to send requests for verification of Accounts to Account
Debtors. Each Grantor ratifies and approves all acts of such attorney. The Agent
will give each Grantor prior notice of any material act it intends to take as
such Grantor's attorney when an Event of Default has not occurred. Neither the
Agent nor the attorney will be liable for any acts or omissions or for any error
of judgment or mistake of fact or law, except those due to the Agent's bad
faith, willful misconduct or gross negligence. This power, being coupled with an
interest, is irrevocable until this Agreement has been terminated and the
Obligations have been finally paid and performed in full (other than any
surviving indemnity obligations under Section 11.8 of the Credit Agreement).
2.10 Recourse. This Agreement is made with full recourse to each
Grantor and pursuant to and upon all the warranties, representations, covenants,
and agreements on the part of each Grantor contained herein, in the other Loan
Documents, or otherwise in writing in connection herewith or therewith.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Grantor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
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3.1 Necessary Filings. All filings, registrations and recordings,
including filings in the PTO or the Copyright Office or similar agencies in any
State or political subdivision thereof necessary or appropriate to create,
preserve, protect and perfect the security interest granted by each Grantor to
the Agent hereby in respect of the Collateral have been delivered to the Agent
or its counsel on or before the Closing Date (or thereafter, as agreed by the
Agent) and (after such filings have been made) the security interest granted to
the Agent pursuant to this Agreement in and to the Collateral constitutes or
shall constitute a perfected security interest therein (as provided in the
Uniform Commercial Code) to the extent that perfection is effected through such
filings, registrations or recordings, and is or shall be entitled to all the
rights, priorities and benefits afforded by the Uniform Commercial Code or other
relevant law as enacted in any relevant jurisdiction to security interests.
3.2 Title to, Liens on, and Sale and Use of Collateral. Each Grantor
represents and warrants to the Agent and each Lender that: (a) the Collateral is
and will continue to be owned (or with respect to certain Intellectual Property,
licensed) by the Grantors (except for Collateral disposed of in accordance with
clause (d) of this provision), free and clear of all Liens whatsoever, except
for the Security Interest and other Permitted Liens; (b) the Grantors will use
the Collateral for lawful purposes only, and each Guarantor assumes all
liability arising from the ownership or use of the Collateral; and (c) except as
otherwise specifically provided herein or in any other Loan Document, the
Grantors will not, without the Agent's prior written approval, sell, or dispose
of or permit the sale or disposition of any Collateral, except as permitted
hereunder or under the Credit Agreement. The inclusion of Proceeds in the
Collateral shall not be deemed to constitute the Agent's consent to any sale or
other disposition of the Collateral.
3.3 Other Financing Statements. As of the Closing Date, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) on file or of record in any relevant jurisdiction
covering or purporting to cover any interest of any kind in the Collateral
except as disclosed in Exhibit B to the Credit Agreement and so long as any of
the Obligations (other than any surviving indemnity obligations under the Credit
Agreement) remain unpaid (or any Commitments are in effect), no Grantor will
execute or authorize to be filed in any public office any financing statement
(or similar statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except financing
statements or other registrations filed or to be filed in respect of Permitted
Liens.
3.4 Chief Executive Office; Records. As of the Closing Date, the
location of the chief executive office of each Grantor is listed on Exhibit D.
No Grantor will move its chief executive office except to such new location as
such Grantor may establish in accordance with this Section 3.4. The originals of
all documents evidencing all Receivables of each Grantor and the only original
books of account and records of such Grantor relating thereto are, and will
continue to be, kept at such chief executive office, at such other locations
shown on Exhibit D hereto or at such new locations as such Grantor may establish
in accordance with this Section 3.4 or Section 3.5; provided, that, so long as
(x) true and correct copies of all documents evidencing such Receivables and
copies of such books and records are kept at such chief executive office or
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at such other locations shown on Exhibit D hereto, or at such new locations as
Grantor may establish in accordance with this Section 3.4 or section 3.5, and
(y) the failure to maintain any original copies of the foregoing at such
locations could not have an adverse effect upon the validity, perfection or
priority of any security interest granted hereunder, each Grantor shall be
permitted to keep original copies of the foregoing at other locations to be
determined in a manner consistent with its past practices. No Grantor shall
establish a new location for its chief executive office until (i) it shall have
given to the Agent not less than 30 days' prior written notice of its intention
so to do, clearly describing such new location and providing such other
information in connection therewith as the Agent may reasonably request, and
(ii) with respect to such new location, it shall have taken all action to
maintain the Security Interest of the Agent in the Collateral at all times to be
fully perfected and in full force and effect, and at the request of the Agent,
it shall execute and deliver all filing of financing statements or continuations
and amendments or supplements thereto, as necessary, for filing in appropriate
filing offices, and taken all other actions (including, without limitation, the
payment of all filing fees and taxes, if any, payable in connection with such
filings) necessary in order to perfect (and maintain the perfection and priority
of) the Security Interest. Any such notice of a change or addition to the
locations on Exhibit D shall, after compliance with the immediately preceding
sentence, be deemed to amend such Exhibit to reflect such change or addition, to
the same extent as if the Grantors, the Agent and each Lender entered into a
formal written amendment hereof for that purpose.
3.5 Location of Inventory And Equipment. As of the Closing Date, all
Inventory and Equipment (other than Vehicles) held on the date hereof by each
Grantor is located at the addresses shown for such Grantor on Exhibit D hereto.
Each Grantor agrees that all Inventory and all Equipment (other than Vehicles)
now held or subsequently acquired by it shall be kept at (or shall be in
transport to) the locations shown on Exhibit D hereto; provided, that each
Grantor may establish a new location for Inventory and Equipment only if (i) it
shall give to the Agent written notice of such new location as promptly as
practicable and in no event later than 60 days after the establishment thereof,
clearly describing such new location and providing such other information in
connection therewith as the Agent may reasonably request, (ii) with respect to
such new location, as promptly as practicable and in no event later than 75 days
after the establishment thereof, it shall have taken all action to maintain the
security interest of the Agent in the Collateral intended to be granted hereby
to be at all times fully perfected and in full force and effect, and at the
request of the Agent shall execute and deliver all filing of financing or
confirmation statements and amendments or supplements thereto, as necessary, for
filing in the appropriate filing office or offices, and taken all other actions
(including, without limitation, the payment of all filing fees and taxes, if
any, payable in connection with such filings) necessary, in order to perfect
(and maintain the perfection and priority of) the Security Interest; provided
further, that the requirements of the foregoing clauses (i) and (ii) shall not
apply to Vehicles. Any such notice of a change or addition to the locations on
Exhibit D shall, after compliance with the immediately preceding sentence, be
deemed to amend such Exhibit to reflect such change or addition, to the same
extent as if the Grantors, the Agent and each Lender entered into a formal
written amendment hereof for that purpose.
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3.6 Trade Names; Change of Name. As of the Closing Date, no Grantor
operates in any jurisdiction under, or in the preceding 12 months has operated
in any jurisdiction under, any trade names, fictitious names or other names
(including, without limitation, any names of divisions or operations) except its
legal name and such other trade, fictitious or other names as are listed for
such Grantor on Exhibit E hereto. No Grantor shall change its legal name or
assume or operate in any jurisdiction under any trade, fictitious or other name
except those names listed for such Grantor on Exhibit E hereto and new names
(including, without limitation, any names of divisions or operations)
established in accordance with this Section 3.6. No Grantor shall assume or
operate in any jurisdiction under any new trade, fictitious or other name until
(i) it shall have given to the Agent not less than 30 days' prior written notice
of its intention so to do, clearly describing such new name and the
jurisdictions in which such new name shall be used and providing such other
information in connection therewith as the Agent may reasonably request, (ii)
with respect to such new name, it shall have taken all action to maintain the
security interest of the Agent in the Collateral intended to be granted hereby
at all times to be fully perfected and in full force and effect and at the
request of the Agent, it shall have furnished to the Agent all financing or
continuation statements and amendments or supplements thereto, as necessary, for
filing in the appropriate filing office or offices, and taken all other actions
(including, without limitation, the payment of all filing fees and taxes, if
any, payable in connection with such filings) necessary, in order to perfect
(and maintain the perfection and priority of) the Security Interest. Any such
notice of change in or additions to trade, fictitious or other names on Schedule
E, shall, after compliance with the immediately preceding sentence, be deemed to
amend such Exhibit to reflect such change or addition, to the same extent as if
the Grantor, the Agent and each Lender entered into a formal written amendment
hereof for such purpose.
3.7 Accounts. (a) (i) Each existing Account of each Grantor
represents, and each future Account of such Grantor will represent, a bona fide
sale or lease of goods by such Grantor, or the rendition of services by such
Grantor; (ii) each existing Account of such Grantor is, and each future Account
of such Grantor will be, for a liquidated amount payable by the Account Debtor
thereon on the terms set forth in the invoice therefor or in the schedule
thereof delivered to the Agent, without deduction other than such allowances or
credits given or allowed and in accordance with the Grantor's ordinary business
practices or as otherwise permitted hereunder or under the Credit Agreement;
(iii) all payments received with respect to each Account of such Grantor, and
all credits, discounts, allowances, and extensions with respect to each such
Account, will be accurately reflected in each report of Accounts given to the
Agent under the Loan Documents; and (iv) all goods described in each invoice
will have been delivered to the Account Debtor and all services of such Grantor
described in each invoice will have been performed.
(b) A Grantor shall not re-date any invoice or sale or make sales on
extended dating beyond that customary in such Grantor's business. Together with
each Borrowing Base Certificate delivered, Grantor shall deliver a schedule of
all Account Debtors with an outstanding account balance of more than $250,000,
50% or more of which is over 30 days past due, the foregoing schedule to be true
and correct as of the date of delivery thereof.
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(c) Without the Agent's prior written consent, a Grantor shall not
accept any note or other instrument (except a check or other instrument for the
immediate payment of money) with respect to any Account other than (i) in
connection with a Permitted Inducement, (ii) as part of or in connection with a
Permitted Claim Settlement or (iii) to the extent consistent with such Grantor's
prior business practices. Any instrument accepted by a Grantor (with the Agent's
prior consent or as permitted hereunder) shall be considered as evidence of the
Account and not payment thereof and upon the Agent's request, such Grantor will
promptly deliver such instrument to the Agent appropriately endorsed.
(d) Each Grantor shall, consistent with prior practice, promptly
settle or adjust all disputes and claims with or against Account Debtors without
expense to the Agent or any Lender. The Agent's prior written consent shall be
required in connection with any discount, credit or allowance made or given if
(i) the amount thereof exceeds $100,000 and an Event of Default has occurred and
is continuing, or (ii) such discount, credit or allowance is made or given other
than as a part of or in connection with a Permitted Inducement or Permitted
Claim Settlement or otherwise in the ordinary course of such Grantor's business,
or (iii)(x) an individual discount, credit or allowance exceeds $500,000 in
amount (excluding the amount described in the proviso hereto) or (y) the
aggregate amount of all such discounts, credits and allowances made or given by
all Grantors since the date of the most recently delivered Borrowing Base
Certificate exceeds $1,000,000 (excluding the amount described in the proviso
hereto); provided, however, that so long as no Event of Default has occurred and
is continuing, the Agent's consent shall not be required for discounts, credits
or allowances made or given by a Grantor in favor of M&G Markets, Inc. and X.
Xxx & T. Xxxxxx Xxxxxxxxx and their respective Affiliates. At all times when an
Event of Default exists and is continuing, each Grantor shall promptly notify
the Agent of disputes and claims, and the Agent may settle or adjust disputes
and claims directly with Account Debtors for amounts and upon terms which the
Agent considers advisable. In such cases, the Agent will credit the applicable
Grantor's loan accounts with only the net amounts received by the Agent in
payment of an Account.
(e) If an Account Debtor returns any Inventory to a Grantor, then
such Grantor shall promptly determine the reason for such return and, subject to
Section 3.7(d), shall issue a credit memorandum to the Account Debtor in the
appropriate amount. All returned Inventory shall remain subject to the Security
Interest. Whenever any Inventory is returned, the related Account of such
Grantor shall be deemed ineligible and, unless such return has been
appropriately reflected in a Borrowing Base Certificate, the Revolving Borrowing
Capacity of such Grantor shall be adjusted accordingly.
3.8 Inventory. All of the Inventory of such Grantor is and will be
held for sale or lease, or to be furnished in connection with the rendition of
services, in the ordinary course of such Grantor's business. Each Grantor will
keep its Inventory in good and marketable condition, at its own expense. Each
Grantor will maintain a perpetual inventory reporting system at all times. Each
Grantor will conduct a physical count of the Inventory at least once each Fiscal
Year, and, after an Event of Default has occurred and so long as it is
continuing, at such other
15
times as the Agent requests, and shall promptly supply the Agent with a copy of
such count accompanied by a report of the value of such Inventory (valued at the
lower of cost, on a first-in, first-out basis, or market value, computed in the
same manner as the Value of Eligible Inventory). On any report of Inventory or
Accounts provided to the Agent pursuant to Section 2.7 or otherwise, the
Grantors will identify the amount of all Inventory reported therein which was
acquired or accepted, and the amount of all Accounts reported therein which
arose from sales of Inventory, on a xxxx-and-hold, guaranteed sale, sale and
return, sale on approval, consignment, or other repurchase or return basis; and
the Grantors will not include any such Inventory or Accounts as Eligible
Inventory or Eligible Accounts in any Borrowing Base Certificate.
3.9 Franchise Agreements. As of, and after giving effect to, the
Closing Date, (a) Exhibit F hereto is a complete list of the name of each Person
which operates a Riverside Markets, Bi-Lo Markets, or Big M franchise on the
date hereof, and the location of each such franchise; (b) each of the Franchise
Agreements is in full force and effect; and (c) none of the Grantors or, to the
best of their knowledge, any other party to the Franchise Agreements is in
default under one or more of the Franchise Agreements in any material respect.
If the Grantors add any new franchise to the Riverside Markets, Bi-Lo Markets,
or Big M franchise programs, or terminate any such franchise, or change the
Person operating any such franchise, then the Grantors shall give the Agent
written notice thereof within 30 days after such event occurs. Each Grantor
shall fully perform all of its obligations under the Franchise Agreements in all
material respects, and shall enforce all of its rights and remedies thereunder,
in each case as it deems appropriate in its business judgment; provided,
however, that none of the Grantors shall (x) take any action or fail to take any
action with respect to the Franchise Agreements that would result in a waiver or
other loss of any material right or remedy of any Grantor thereunder, or (y)
without the Agent's prior written consent, modify, amend, supplement,
compromise, satisfy, release, or discharge any of the Franchise Agreements or
any Person liable directly or indirectly with respect thereto if an Event of
Default has occurred and is continuing or would occur after giving effect
thereto and if in the case of each of (x) or (y), such action (or inaction) is
reasonably likely to have a Material Adverse Effect. If an Event of Default has
occurred and is continuing, then to the extent permitted by applicable law or
the relevant agreements, the Agent may directly enforce the Franchise Agreements
in its own or any Grantor's name and may enter into such settlements or other
agreements with respect thereto as the Agent determines. All amounts thereby
recovered by the Agent, after deducting the Agent's costs and expenses in
connection therewith, shall be applied to the Obligations in such order as
provided in the Credit Agreement. In any proceeding or action brought by the
Agent under any of the Franchise Agreements for any sum owing thereunder, each
of the Grantors shall jointly and severally indemnify and hold the Agent
harmless from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment, or reduction of liability whatsoever
of the obligor thereunder arising out of a breach by any Grantor of any
obligation thereunder or arising out of any other agreement or liability at any
time owing from any Grantor to such obligor. All such obligations of the
Grantors shall be and remain enforceable only against the Grantors and shall not
be enforceable against any of the Secured Parties. Notwithstanding any provision
hereof to the contrary, each of the Grantors shall at all times remain liable to
observe and perform all of its duties and
16
obligations under the Franchise Agreements, and the Secured Parties' exercise of
any of their rights with respect to the Collateral shall not release a Grantor
from any of such duties and obligations. The Agent shall not be obligated to
perform or fulfill any of the Grantor's duties and obligations under the
Franchise Agreements or to make any payment thereunder, or to make any inquiry
as to the nature or sufficiency of any payment or Property received by it
thereunder.
3.10 [Intentionally Deleted]
3.11 Additional Representations, Warranties and Covenants With
Respect to Equipment. (a) The Agent shall at all times have free access to and
right of inspection of the Equipment and Equipment records (and the right to
make extracts therefrom and to receive true copies thereof and of any papers or
instruments relating to the Equipment); (b) the Subject Equipment is and shall
remain personal property, and no Grantor will permit, other than in the ordinary
course of business, any of the Subject Equipment to become a part of or affixed
to real property with the effect that the owner thereof or the mortgagee of such
owner shall obtain rights therein superior to those of the Agent, without prior
written notice to and consent by the Agent; (c) each Grantor shall keep the
Subject Equipment in good order, repair, running and marketable condition
(ordinary wear and tear excepted); and shall use the Subject Equipment with all
reasonable care and caution and in accordance with applicable standards of any
insurance and in conformity with all applicable laws, and Grantors assume all
responsibility and liability arising from the use of the Subject Equipment; and
(d) without the prior written consent of the Agent, a Grantor will not Dispose
of (except as provided in Section 8.1 of the Credit Agreement) or xxxxx x Xxxx
upon, (except as permitted by Section 8.9 of the Credit Agreement) the Subject
Equipment, or any part thereof; and (e) the Subject Equipment valued in the
Xxxxx-Xxxxxx Appraisal Corporation Appraisal dated March 12, 1999, is, as of the
Closing Date, owned by one or more of the Grantors.
3.12 Additional Representations, Warranties and Covenants With
Respect to Collateral Real Estate Interests.
(a) (i) The Collateral Real Estate Interests of each Grantor are
owned, and will be so owned, free and clear of any Lien (other than Permitted
Liens); (ii) the Real Estate Records are located at the addresses of the
locations set forth on Exhibit D hereto, and Grantors will not change the same
without prior written notice to the Agent; and (iii) the Collateral Real Estate
Interests are being used and will be used in the business of the Grantors and
not for personal, family, household or farming use, for lawful purposes only,
with all reasonable care and caution and in conformity with Legal Requirements;
(b) Each Grantor covenants and agrees that: (i) the Agent shall at
all times have free access to and right of inspection of the Collateral Real
Estate Interests and Real Estate Records (and the right to make extracts
therefrom and to receive originals or true copies thereof and of any papers or
instruments relating to the Collateral Real Estate Interests); (ii) it assumes
all responsibility and liability arising from the use of the Collateral Real
Estate Interests; and (iii) it will not Dispose of (except as provided in
Section 8.1 of the Credit Agreement) or grant a
17
Lien upon, (except as permitted by Section 8.9 of the Credit Agreement) the
Collateral Real Estate Interests, or any part thereof;
(c) In addition to the requirements of Section 2.3(a) with respect
to the execution, delivery and recording of Mortgages, with respect to
After-Acquired Real Estate Interests, and if requested by the Agent, the Agent
shall receive as soon as commercially reasonable:
(i) a mortgagee's title insurance policy (or policies) or
marked up unconditional binder for such insurance. Each such policy shall (A) be
in an amount reasonably satisfactory to the Agent; (B) be issued at ordinary
rates; (C) insure that the Mortgage insured thereby creates a valid Lien on such
Real Property owned free and clear of all defects and Liens except for Permitted
Liens; (D) name the Agent for the benefit of the Secured Parties as the insured
thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended 10/17/70 and
10/17/84) (or equivalent policies); (F) contain such endorsements and
affirmative coverage as the Agent may reasonably request and (G) be issued by
title companies satisfactory to the Agent (including any such title companies
acting as co-insurers or reinsurers, at the option of the Agent). The Agent
shall have received evidence satisfactory to it that all premiums in respect of
each such policy, all charges for mortgage recording tax, and all related
expenses, if any, have been paid;
(ii) (and the title insurance companies issuing the policies
referred to in clause (i) above (collectively, the "Title Insurance Company"
shall have received), maps or plats of an as-built survey of the sites of any
After-Acquired Real Estate Interest, certified to the Agent and the Title
Insurance Company in a manner reasonably satisfactory to them, dated a date
satisfactory to the Agent and the Title Insurance Company by an independent
professional licensed land surveyor reasonably satisfactory to the Agent and the
Title Insurance Company, which maps or plats and the surveys on which they are
based shall be made in accordance with the Minimum Standard Detail Requirements
for Land Title Surveys jointly established and adopted by the American Land
Title Association and the American Congress on Surveying and Mapping in 1992,
and, without limiting the generality of the foregoing, there shall be surveyed
and shown on such maps, plats or surveys the following: (A) the locations and
heights on such sites of all the buildings, structures and other improvements,
the established building setback lines and other zoning requirements, together
with a certification setting forth the Legal Requirements with respect to the
foregoing; (B) the number of striped parking spaces together with the minimum
number of spaces required to comply with all Legal Requirements; (C) the lines
of streets abutting the sites and width thereof; (D) all access and other
easements appurtenant to the sites; (E) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar encumbrances
affecting the site, whether recorded, apparent from a physical inspection of the
sites or otherwise known to the surveyor; (F) any encroach ments on any
adjoining property by the building structures and improvements on the sites; (G)
if the site is described as being on a filed map, a legend relating the survey
to said map; and (H) the flood zone designations, if any, in which the Real
Property Owned is located.
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(iii) (A) a policy of flood insurance which (1) covers any
After-Acquired Real Estate Interest constituting Real Property Owned and which
is located in an area identified by FEMA as an area having special flood
hazards, and is to be encumbered by any Mortgage, (2) is written in an amount
not less than the outstanding principal amount of the indebtedness secured by
such Mortgage which is reasonably allocable to such Real Property Owned or the
maximum limit of coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968, whichever is less, and
(3) has a term ending not later than one year after the Termination Date; (B)
confirmation that the Grantor has received the notice required pursuant to
Section 208(e)(3) of Regulation H of the Board; and (C) (1) "Phase One"
environmental reports, (2) Property condition reports, (3) evidence as to zoning
compliance and (4) a certificate of occupancy.
(iv) The Agent shall have received a copy of all recorded
documents referred to, or listed as exceptions to title in, the title policy or
policies referred to in clause (ii) above and a copy of all other material
documents affecting such Collateral Real Estate Interest.
(d) Each Grantor shall notify the Agent in writing not later than 30
days after the end of each month of the acquisition of any After-Acquired Real
Estate Interest during such month, setting forth in such notice the nature of
such Property and such other information as may be reasonably requested by the
Agent, including copies of all material agreements and documents with respect to
such acquisition.
3.13 Special Provisions Concerning Intellectual Property.
(a) Trademarks.
(i) Additional Representations and Warranties. Each Grantor
represents and warrants as of the Closing Date that: (1) it is the true and
lawful, sole and exclusive owner of the Trademarks listed for such Grantor on
Exhibit G hereto with respect to the goods and services sold by such Grantor (or
its licensee) thereunder and that Exhibit G includes all the material Trademarks
that are registered or applied for and all material unregistered Trademarks that
such Grantor now has trademark rights in connection with its business; (2) it
owns or is licensed to use all material Trademarks that it uses, and that all
licenses to Grantor to use any material Trademarks, to the best of such
Grantor's knowledge, are in full force and effect; (3) it is the owner of record
of all registrations and applications listed for such Grantor on Exhibit G
hereto and that said registrations are, to the best of such Grantor's knowledge,
valid, subsisting, have not been canceled and that such Grantor is not aware of
any third-party claim pending, threatened, or supportable that any of said
registrations is invalid or unenforceable; (4) all registration and maintenance
fees that have become due and payable in respect of any Trademarks listed on
Exhibit G have been paid and, to the best knowledge of such Grantor, no act has
been done or omitted to be done by such Grantor which act or omission entitles
any governmental authority to cancel, forfeit, modify or declare abandoned any
of the material Trademarks listed on Exhibit G; and (5) to the knowledge of such
Grantor, there are no
19
pending or threatened suits, claims, oppositions, or other challenges by any
person against the ownership by such Grantor of any of the material Trademarks
listed on Exhibit G and to the knowledge of such Grantor, the conduct of the
business of such Grantor and its use of any material Trademark listed on Exhibit
G in connection therewith does not infringe upon or otherwise violate any right
of any third party. Each Grantor hereby grants to the Agent an absolute power of
attorney to sign, upon the occurrence and during the continuance of an Event of
Default, any document which may be required by the PTO in order to effect an
absolute assignment of all right, title and interest in each Trademark, and
record the same, in connection with the sale or transfer of that portion of the
Grantor's business to which the Trademark relates.
(ii) Licenses and Assignments. Each Grantor represents and
warrants that the documents listed on Exhibit H and the Franchise Agreements
listed on Exhibit F (and any other Franchise Agreements or licensing agreements
entered into after the Closing Date in the ordinary course of business) set
forth, as of the Closing Date, a complete and accurate list of all material
license agreements and other agreements pursuant to which such Grantor has
granted to any third party any right in and to any of the Trademarks. Other than
the license agreements listed for each Grantor on Exhibit H and the Franchise
Agreements listed on Exhibit F (and any other franchise agreements or licensing
agreements entered into after the Closing Date in the ordinary course of
business) and any extensions or renewals thereof, such Grantor hereby agrees not
to divest itself of any right under any material Trademark absent prior written
approval of the Agent, unless, in each case, the management of the Grantor
concludes that the Trademark in question is of minimal value to the Grantor.
(iii) Infringements. Each Grantor agrees, promptly upon
learning thereof, to notify the Agent in writing of the name and address of, and
to furnish such pertinent information that may be available with respect to, any
party who, in any material respect, may be infringing or otherwise violating any
of such Grantor's rights in and to any material Trademark, or with respect to
any party claiming that such Grantor's use of any material Trademark violates or
infringes upon in any material respect any right of that party. Each Grantor
further agrees, unless otherwise agreed by the Agent, to prosecute diligently
(to the extent it is commercially reasonable to do so in the Grantor's good
faith business judgment) any Person infringing, in any material respect, any
material Trademark, unless, in each case, the management of the Grantor
concludes that the Trademark is of minimal value to the Grantor.
(iv) Preservation of Trademarks. Except in a case in which the
management of the Grantor concludes that the Trademark in question is of minimal
value to such Grantor, each Grantor agrees to use its reasonable best efforts:
(A) to use each of its material Trademarks in interstate commerce in each and
every trademark class of goods and/or services in which such Trademark is
currently used during the time in which this Agreement is in effect,
sufficiently to preserve such Trademarks as Trademarks or service Trademarks
under the laws of the United States, any State thereof or any political
subdivision thereof, (B) to maintain at a level at least in accordance with past
practice the quality of products and services offered under material Trademarks,
(C) to employ such material Trademarks as are registered with the notice of
Federal or other registration as the case may be, if such violation would have a
Material Adverse
20
Effect, (D) not to use any material Trademark or otherwise operate its business
in material violation of any third party's rights to the extent it could
reasonably be expected to have a Material Adverse Effect, and (E) not to do any
act or knowingly omit to do any act that could result in cancellation,
forfeiture, modification or abandonment of any material Trademark, if such
result would have a Material Adverse Effect.
(v) Maintenance of Registration. Each Grantor shall (i) at its
own expense use commercially reasonable efforts to diligently process all
documents required by the Trademark Act of 1946, 15 U.S.C. Sections 1051 et seq.
to maintain trademark registration (or, with respect to applications, to make
commercially reasonable efforts to have a registration issue therefrom),
including but not limited to affidavits of use and applications for renewals of
registration in the PTO for all of its material Trademarks pursuant to 15 U.S.C.
Sections 1058(a), 1059 and 1065, and shall pay all fees and disbursements in
connection therewith and (ii) not abandon any registration or application for
any material Trademark prior to the exhaustion of all administrative and
judicial remedies (to the extent it is commercially reasonable to do so in the
good faith judgment of the Grantor) without prior written consent of the Agent,
unless, in each case, the management of the Grantor concludes that the Trademark
is of minimal value to the Grantor.
(vi) Future Registered Trademarks. If any Trademark
registration issues hereafter to any Grantor as a result of any application now
or hereafter pending before the PTO or any similar office or agency of any
jurisdiction, or if any Grantor acquires any Trademarks, then within thirty (30)
days of receipt of any certificate evidencing such registration or the
effectiveness of the acquisition thereof, as appropriate, such Grantor shall
deliver a copy of such certificate or sufficient documents to evidence such
acquisition, and a grant of a security interest in such xxxx to the Agent,
confirming the grant thereof hereunder substantially in the form of Annex 1
hereto.
(vii) Remedies. If there shall occur and be continuing an
Event of Default, the Agent may, by written notice to any Grantor, take any or
all of the following actions in addition to any rights and remedies that the
Agent may have under any Loan Document or applicable law: (x) declare the entire
right, title and interest of such Grantor in and to each of the Trademarks,
together with all trademark rights and rights of protection to the same, vested,
in which event such rights, title and interest shall immediately vest, in the
Agent for the benefit of the Lenders, in which case the Agent shall be entitled
to exercise the power of attorney referred to in Section 3.13(a)(i) hereof to
execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency; (y) take and use or sell the Trademarks
and the goodwill of such Grantor's business symbolized by the Trademarks and the
right to carry on the business and use the assets of such Grantor in connection
with which the Trademarks have been used; and (z) direct such Grantor to
refrain, in which event such Grantor shall refrain, from using the Trademarks in
any manner whatsoever, directly or indirectly, and, if requested by the Agent,
change such Grantor's corporate name to eliminate therefrom any use of any
Trademark and execute such other and further documents that the Agent may
reasonably request to further
21
confirm this and to transfer ownership of the Trademarks and registrations and
any pending trademark application in the PTO to the Agent.
(b) Patents and Copyrights.
(i) Additional Representations and Warranties. Each Grantor
represents and warrants that: as of the Closing Date, it does not own any
Patents or Copyrights. Each Grantor hereby grants to the Agent an absolute power
of attorney to sign, upon the occurrence and during the continuance of an Event
of Default, any document which may be required by the Copyright Office or the
PTO in order to effect an absolute assignment of all right, title and interest
in each Patent and Copyright, and record the same.
(ii) Licenses and Assignments. Other than franchise agreements
or licensing agreements entered into in the ordinary course of business, and any
extensions or renewals thereof, such Grantor hereby agrees not to divest itself
of any right under any material Patent or material Copyright absent prior
written approval of the Agent, unless in each case the management of the Grantor
concludes that the Patent or Copyright is of minimal value to the Grantor.
(iii) Infringements. Each Grantor agrees that it shall not use
its Patents or Copyrights or otherwise operate its business, in violation of any
third party's rights known to such Grantor, to the extent such violation is
likely to have a Material Adverse Effect. Each Grantor agrees, promptly upon
learning thereof, to furnish the Agent in writing with all pertinent information
available to such Grantor with respect to any material infringement or other
material violation of such Grantor's rights in any Patent or Copyright, or with
respect to any claim that the use of any Patent or Copyright materially violates
any right of any party. Each Grantor further agrees, absent direction of the
Agent to the contrary, diligently to prosecute (to the extent it is commercially
reasonable to do so in the good faith judgment of the Grantor) any Person
infringing, in any material respect, any material Patent or material Copyright
unless in each case the management of the Grantor concludes that the Patent or
Copyright is of minimal value.
(iv) Maintenance of Patents and Copyrights. At its own
expense, each Grantor shall make timely payment of all post-issuance fees
required pursuant to 35 U.S.C. Section 41 to maintain in force rights under each
Patent (to the extent it is commercially reasonable to do so in the good faith
judgment of the Grantor). Each Grantor agrees that it shall not do or knowingly
omit any act that could result in the impairment, cancellation, forfeiture,
modification, abandonment, or dedication to the public of any material Patent or
material Copyright unless in each case the management of the Grantor concludes
that the Patent or Copyright is of minimal value.
(v) Other Patents and Copyrights. Within 30 days of
acquisition, issuance or registration of a Patent or Copyright, or of filing of
an application for a United States Patent or Copyright, such Grantor shall
deliver to the Agent a copy of said Patent or Copyright or such application, as
the case may be, with a grant of security as to such Patent or Copyright, as
22
the case may be, confirming the grant thereof hereunder, the form of such
confirmatory grant to be substantially in the form of Annex 3 hereto (for
Patents) or Annex 2 hereto (for Copyrights), as appropriate.
(vi) Remedies. If there shall occur and be continuing an Event
of Default, the Agent may by written notice to any Grantor, take any or all of
the following actions: (x) declare the entire right, title, and interest of such
Grantor in each of the Patents and Copyrights vested, in which event such right,
title, and interest shall immediately vest in the Agent for the benefit of the
Secured Parties, in which case the Agent shall be entitled to exercise the power
of attorney referred to in Section 3.13(b)(i) of this Agreement to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency; (y) take and use or sell the Patents and Copyrights; and
(z) direct such Grantor to refrain, in which event such Grantor shall refrain,
from using the Patents and Copyrights directly or indirectly, and such Grantor
shall execute such other and further documents as the Agent may request further
to confirm this and to transfer ownership of the Patents and Copyrights to the
Agent for the benefit of the Secured Parties, as the Agent may reasonably
request.
3.14 Special Provisions as to Pledged Collateral.
(a) Specific Grant. As security for the payment and performance in
full of the Obligations, each Pledge Grantor hereby transfers, grants, bargains,
sells, conveys, hypothecates, pledges, sets over and delivers to the Agent, and
grants to the Agent, for the benefit of the Secured Parties, a security interest
in all its right, title and interest in the following:
(i) (A) the shares of common stock listed on Exhibit B (the
"Initial Pledged Securities") with respect to each Issuer identified on such
Exhibit B (the "Initial Issuers") and (B) any additional shares of Capital Stock
of an Initial Issuer owned by any Grantor or the Capital Stock of any other
Subsidiary of a Borrower to the extent this Agreement or the Credit Agreement
requires that such Capital Stock become subject to the Security Interest at any
time after the Closing Date (the "Subsequent Pledged Securities");
(ii) the Pledged Notes; and
(iii) subject to Section 3.14(e) below, all proceeds of the
Pledged Securities and the Pledged Notes including, without limitation, all
cash, securities or other property at any time and from time to time received by
or otherwise distributed to the Pledge Grantor in respect of or in exchange for
any of or all the Pledged Securities or the Pledged Notes (the items referred to
in clauses (i) through (iii) being collectively called the "Pledged Col
lateral").
(b) Delivery of Pledged Collateral. (i) Pledged Securities. Each
Pledge Grantor shall deliver to the Agent, on the Closing Date, the Initial
Pledged Securities, and agrees promptly to deliver or cause to be delivered to
the Agent any and all Subsequent Pledged Securities, in each case in such manner
that the Agent shall have "control" thereof as defined in
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the New York UCC (including, in the case of certificated securities, accompanied
by undated stock powers duly executed in blank and any and all certificates or
other instruments or documents representing any of such Pledged Securities),
together with other instruments of transfer reasonably satisfactory to the Agent
as the Agent may reasonably request.
(ii) Pledged Notes. Upon the written request of the Agent
given in its sole discretion, each Pledge Grantor shall deliver any Pledged Note
held by it to the Agent together with an endorsement to the order of the Agent,
which endorsement may be without recourse.
(iii) Schedule. Each delivery after the Closing Date of
Subsequent Pledged Securities or Pledged Notes shall be accompanied by a
schedule showing a description of the Pledged Collateral then being pledged
hereunder, which schedule shall be attached hereto as a supplement to Exhibit B
and made a part hereof. Each schedule so delivered shall, to the extent complete
and accurate, supersede any prior schedules so delivered.
(c) Representations, Warranties and Covenants. (i) Each Pledge
Grantor hereby represents, warrants and covenants to and with the Agent that:
(A) except as otherwise permitted under the Credit Agreement,
such Pledge Grantor (1) is and will at all times continue to be the direct
owner, beneficially and of record, of the Pledged Securities and the Pledged
Notes that it pledges hereunder, (2) will hold the Pledged Collateral free and
clear of all Liens other than Permitted Liens, and (3) will make no assignment,
pledge, hypothecation or transfer of, or create any Lien on, the Pledged
Collateral, except as permitted under the Credit Agreement;
(B) such Pledge Grantor (1) has good right and legal authority
to pledge the Pledged Collateral it is pledging hereunder in the manner hereby
done or contemplated and (2) will defend its title or interest thereto or
therein against any and all attachments, liens, claims, encumbrances, security
interests or other impediments of any nature, however arising, of all Persons
whomsoever, other than Permitted Liens;
(C) no consent or approval of any governmental body or
regulatory authority or any securities exchange was or is necessary to the
validity of the pledge effected hereby;
(D) by virtue of the execution and delivery by such Pledge
Grantor of this Agreement, when the Agent obtains control of the Property
constituting the Pledged Securities and possession of the Pledged Notes,
including by delivery to the Agent in accordance with this Agreement of the
certificates, instruments or other documents representing or evidencing the
Pledged Securities and the Pledged Notes, the Agent will obtain a valid and per
fected first lien upon and security interest in the Pledged Collateral as
security for the repayment of the Obligations (to the extent perfection is so
effectuated), free and clear of all other Liens other than Permitted Liens;
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(E) at the Closing Date, the Initial Pledged Securities
constitutes all of the issued outstanding shares of Capital Stock of each
Initial Issuer and such Grantor owns no other equity securities of such Initial
Issuers;
(ii) all of the Initial Pledged Securities have been validly
issued, fully paid and are non-assessable. There is no existing option, warrant,
call, commitment or other agreement to which Penn Traffic or any Initial Issuer
is a party requiring, and there are no convertible securities of Penn Traffic or
any Initial Issuer outstanding which upon conversion would require, the issuance
of any additional stock of any Initial Issuer or other securities convertible
into stock of any Initial Issuer, there are no stockholders' preemptive rights
created by agreement, or rights of first refusal or other similar rights with
respect to the issuance of stock of any Initial Issuer.
(d) Registration in Nominee Name; Denominations. To the extent
permitted under applicable law, and any agreement governing the Pledged Notes,
upon the occurrence and during the continuance of an Event of Default, the Agent
shall have the right (in its sole and absolute discretion with subsequent notice
to the relevant Securities Grantor) to transfer to or to register the Pledged
Securities, in its own name or the name of its nominee. In addition, the Agent
shall at all times have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations for any
purpose consistent with this Agreement.
(e) Voting Rights; Dividends; etc. (i) Unless and until an Event of
Default shall have occurred and be continuing:
(A) The Pledge Grantor shall be entitled to exercise any and
all voting and/or consensual rights and powers accruing to an owner of the
Pledged Securities or any part thereof for any purpose not inconsistent with the
terms of this Agreement and the Credit Agreement.
(B) The Agent shall execute and deliver to the Pledge Grantor,
or cause to be executed and delivered to the Pledge Grantor, all such proxies,
powers of attorney, and other instruments as the Pledge Grantor may reasonably
request for the purpose of enabling the Pledge Grantor to exercise the voting
and/or consensual rights and powers which they are entitled to exercise pursuant
to subparagraph (A) above.
(C) The Pledge Grantor shall be entitled to receive and retain
any and all cash dividends paid on the Pledged Securities only to the extent
that such interest or cash dividends are permitted by, and otherwise paid in
accordance with the terms and conditions of, the Credit Agreement and applicable
laws. Any and all:
a. noncash dividends,
25
b. stock or dividends paid or payable in cash or otherwise
in connection with a partial or total liquidation or
dissolution, and
c. instruments, securities, other distributions in
property, return of capital, capital surplus or paid-in
surplus or other distributions made on or in respect of
Pledged Securities (other than dividends permitted by
this Section 3.14 (e)(C)), whether paid or payable in
cash or otherwise, whether resulting from a subdivision,
combi nation or reclassification of the outstanding
capital stock of any Issuer of any Pledged Securities or
received in exchange for Pledged Collateral or any part
thereof, or in redemption thereof, as a result of any
merger, consolidation, acquisition or other exchange of
assets to which such issuer may be a party or otherwise,
shall be and become part of the Pledged Collateral, and, if received by the
Pledge Grantor, shall not be commingled by the Pledged Grantor with any of its
other funds or property but shall be held separate and apart therefrom, shall be
held in trust for the benefit of the Agent and the Secured Parties and shall be
forthwith delivered to the Agent in the same form as so received (in the manner
required for delivery under Section 3.14(b).
(ii) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledge Grantor to receive any dividends
which the Pledge Grantor is authorized to receive pursuant to paragraph (i)(C)
of this Section 3.17 (e) shall cease, and all such rights shall thereupon become
vested in the Agent, which shall have the sole and exclusive right and authority
to receive and retain such dividends. All dividends which are received by the
Pledge Grantor contrary to the provisions of this Section shall be received in
trust for the benefit of the Secured Parties, shall be segregated from other
property or funds of the Pledge Grantor and shall be forthwith delivered to the
Agent as Collateral in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or received by
the Agent pursuant to the provisions of this Section shall be retained by the
Agent in an account to be established by the Agent upon receipt of such money or
other property and shall be applied in accordance with the applicable provisions
of the Credit Agreement.
(iii) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledge Grantor to exercise the voting and
consensual rights and powers which it is entitled to exercise pursuant to
Section 3.14(e) shall cease, and all such rights shall thereupon become vested
in the Agent, which shall have the sole and exclusive right and authority to
exercise such voting and consensual rights and powers.
(f) Issuance of Additional Securities. Each Pledge Grantor agrees
that, it will cause each Issuer not to issue any equity securities, whether in
addition to, by stock dividend or other distribution upon, or in substitution
for, the Pledged Securities or otherwise, unless such shares are pledged
hereunder.
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3.15 Further Assurances; Additional Grantors; Additional Actions,
etc. (a) Each Grantor agrees, upon the request of the Agent, to take such
actions, including the execution and delivery to the Agent of such amendments to
this Agreement or such other documents as the Agent deems necessary or advisable
to create and perfect the Security Interest granted under this Agreement, free
and clear of any Liens except Permitted Liens, including without limitation, the
filing of Uniform Commercial Code financing statements or amendments or
continuations in such jurisdictions as may be required by this Agreement or by
law or as may be requested by the Agent.
(b) With respect to any new Subsidiary created or acquired after the
Closing Date, by a Grantor or any of such Grantor's Subsidiaries, promptly (i)
(A) execute and deliver to the Agent such amendments to this Agreement as the
Agent deems necessary or advisable to grant to the Agent, for the benefit of the
Secured Parties, a perfected first priority security interest in the securities
of such new Subsidiary which are owned by such Grantor or any of its
Subsidiaries, and (B) take the action required by Section 3.14(b) and (ii) cause
such new Subsidiary (A) to become a party to this Agreement and (B) to take such
actions necessary or advisable to grant to the Agent for the benefit of the
Secured Parties a perfected security interest in the Collateral (free and clear
of any Lien other than a Permitted Lien) in which such new Subsidiary has an
interest (other than such Property as is subject to a Permitted Lien and a Lien
Prohibition), including, without limitation, the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by this
Agreement or by law or as may be requested by the Agent.
SECTION 4. REMEDIES UPON OCCURRENCE OF SPECIFIED EVENTS
4.1 Remedies; Obtaining the Collateral upon Default. Each Grantor
agrees that, if there shall have occurred and be continuing any Event of
Default, then and in every such case, subject to any mandatory requirements of
applicable law then in effect, the Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions (and,
with respect to Intellectual Property, the Xxxxxx Act, the Copyright Act and the
Patent Act) and may also:
(a) personally, or by any agent or attorneys, immediately retake
possession of the Collateral or any part thereof, from each Grantor or any other
Person who then has possession of any part thereof with or without (to the
extent permitted by applicable law) notice or process of law, and for that
purpose may enter upon such Grantor's premises or, to the extent that any
Grantor has a right to consent thereto, such other Person's premises where any
of the Collateral is located and remove the same and use in connection with such
removal any and all services, supplies, aids and other facilities of such
Grantor; and
27
(b) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the terms
of such agreement, instrument or other obligation directly to the Agent and may
exercise any and all remedies of such Grantor in respect of such Collateral; and
(c) sell, assign or otherwise liquidate, or direct each Grantor to
sell, assign or otherwise liquidate, any or all of the Collateral or any part
thereof, and take possession of the proceeds of any such sale or liquidation;
and
(d) take possession of the Collateral or any part thereof, by
directing each Grantor in writing to deliver the same to the Agent at any place
or places designated by the Agent, in which event such Grantor shall at its own
expense:
(i) forthwith cause the same to be moved to the place or
places so designated by the Agent and there delivered to the Agent, and
(ii) store and keep any Collateral so delivered to the Agent
at such place or places pending further action by the Agent as provided in
Section 4.2, and
(iii) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be necessary to protect
the same and to preserve and maintain them in good condition; and
(e) license or sublicense, whether on an exclusive or nonexclusive
basis, any Intellectual Property included in the Collateral for such term and on
such conditions and in such manner as the Agent shall in its sole judgment
determine; and
(f) without consent from any Grantor, xxx upon or otherwise collect,
extend the time for payment of, modify or amend the terms of, compromise or
settle for cash or credit, grant other indulgences, extensions, renewals,
compositions, or releases (to Persons directly or indirectly liable in
connection with the foregoing Collateral), and take or omit to take any other
action with respect to the Collateral, any security therefor, any agreement
relating thereto, or any insurance applicable thereto.
it being understood that each Grantor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Agent shall be entitled to a decree
requiring specific performance by such Grantor of said obligation.
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4.2 Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Agent under or pursuant to Section 4.1 and any other
Collateral whether or not so repossessed by the Agent, may be sold, assigned,
leased or otherwise disposed of under one or more contracts or as an entirety,
and without the necessity of gathering at the place of sale the property to be
sold, and in general in such manner, at such time or times, at such place or
places and on such terms as the Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Agent or after any overhaul or repair
which the Agent shall determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceedings permitted
by such requirements shall be made upon not less than 10 days' written notice to
such Grantor specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of such Grantor or any
nominee of such Grantor to acquire the Collateral involved at a price or for
such other consideration at least equal to the intended sale price or other
consideration so specified. Any such disposition which shall be a public sale
permitted by such requirements shall be made upon not less than 10 days' written
notice to such Grantor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Agent's option, be subject to reserve), after publication of notice
of such auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York as well as the City of Syracuse, New York.
To the extent permitted by any such requirement of law, any of the Secured
Parties may bid for and become the purchaser of the Collateral or any item
thereof, offered for sale in accordance with this Section without accountability
to such Grantor. In the payment of the purchase price of the Collateral, the
purchaser shall be entitled to have credit on account of the purchase price
thereof of amounts owing to such purchaser on account of any of the Obligations
which would be payable to it in accordance with the terms and provisions of the
Credit Agreement, and any such purchaser may deliver notes, claims for interest,
or claims for other payment with respect to such Obligations in lieu of cash up
to the amount which would, upon distribution of the net proceeds of such sale,
be payable thereon. Such notes, if the amount payable hereunder shall be less
than the amount due thereon, shall be returned to the holder thereof after being
appropriately stamped to show partial payment. If, under mandatory requirements
of applicable law, the Agent shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of notice to
such Grantor as hereinabove specified, the Agent need give such Grantor only
such notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law. Such Grantor agrees to do or cause to
be done all such other acts and things as may be reasonably necessary to make
such sale or sales of all or any portion of the Collateral valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Grantor's expense.
29
4.3 Remedies; Collateral Real Estate Interests. Upon the occurrence
and during the continuance of an Event of Default, or at any time after
acceleration under Section 9.2 of the Credit Agreement, the Agent shall have the
right (in addition to any other rights the Agent may have under this Agreement,
any Mortgage or applicable law) at any time and from time to time, (i) with or
without judicial process or the aid or assistance of others, to enter upon any
premises constituting any Collateral Real Estate Interest and, without
resistance or interference by a Grantor, take possession and control of the
Collateral Real Estate Interest; (ii) take possession of all Real Estate
Records; (iii) exercise all rights and powers of the Grantor including to
collect all revenues, rents and profits; (iv) to sell or otherwise dispose of
any or all of the Collateral Real Estate Interests, by foreclosure, public or
private sale or otherwise. Rights of the Agent under this Section 4.3 shall be
exercised consistently with any superior rights under applicable law of holders
of prior Liens.
4.4 Waiver of Claims. Except as otherwise provided in this
Agreement, EACH GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE AGENT'S TAKING
POSSESSION OR THE AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH GRANTOR WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and
each Grantor hereby further waives, to the extent permitted by law:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Agent's gross negligence or willful
misconduct, but in no event any consequential or punitive damages;
(b) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Agent's rights
hereunder; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law in
order to prevent or delay the enforcement of this Agreement or the absolute sale
of the Collateral or any portion thereof, and each Grantor, for itself and all
who may claim under it, insofar as it or they now or hereafter lawfully may,
hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of each Grantor therein
and thereto, and shall be a perpetual bar both at law and in equity against each
Grantor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Grantor.
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4.5 Application of Proceeds. All moneys collected by the Agent upon
any sale or other disposition of the Collateral, together with all other moneys
received by the Agent hereunder, or under any Guaranty Agreement or other Loan
Document, shall be applied in the manner provided in the Credit Agreement.
4.6 Remedies Cumulative; No Waiver. Each and every right, power and
remedy hereby specifically given to the Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, Hedging
Agreements or the other Loan Documents or now or hereafter existing at law or in
equity, or by statute and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time or simultaneously and as often and in such order as may be deemed expedient
by the Agent. All such rights, powers and remedies shall be cumulative and the
exercise or the beginning of exercise of one shall not be deemed a waiver of the
right to exercise of any other or others. No delay or omission of the Agent in
the exercise of any such right, power or remedy and no renewal or extension of
any of the Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Event or Event of Default or an acquiescence
therein. No notice to or demand on any Grantor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Agent to any other or further
action in any circumstances without notice or demand. In the event that the
Agent shall bring any suit to enforce any of its rights hereunder and shall be
entitled to judgment, then in such suit the Agent may recover reasonable
expenses, including attorneys' fees, and the amounts thereof shall be included
in such judgment.
SECTION 5. INDEMNITY
5.1 Indemnity. (a) Each Grantor agrees to indemnify, reimburse and
hold each Indemnitee harmless from any and all liabilities, obligations,
damages, injuries, penalties, claims, demands, actions, suits, judgments and any
and all costs, expenses or disbursements (including reasonable attorneys' fees
and expenses) (for the purposes of this Section 5.1 the foregoing are
collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to or
arising out of this Agreement, any other Security Document or any other document
executed in connection herewith and therewith or in any other way connected with
the administration of the transactions contemplated hereby and thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, or in any way relating to or arising out of the ownership, ordering,
purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the
Collateral (including, without limitation, latent or other defects, whether or
not discoverable), any contract claim or, to the maximum extent permitted under
applicable law, the violation of the laws of any country, state or other
governmental body or unit, or any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage); provided that no Indemnitee shall be indemnified pursuant to this
Section 5.1(a) for expenses to the extent caused by the gross negligence, bad
faith, breach of
31
a material obligation under a Loan Document, or willful misconduct of such
Indemnitee. Each Grantor agrees that upon written notice by any Indemnitee of
the assertion of such a liability, obligation, damage, injury, penalty, claim,
demand, action, suit or judgment, such Grantor shall assume full responsibility
for the defense thereof. Each Indemnitee agrees to use its best efforts to
promptly notify such Grantor of any such assertion to which such Indemnitee has
knowledge.
(b) Without limiting the application of Section 5.1(a), each Grantor
agrees to pay, or reimburse the Agent for (if the Agent shall have incurred
fees, costs or expenses because such Grantor shall have failed to comply with
its obligations under this Agreement or any other Loan Document), any and all
fees, costs and expenses of whatever kind or nature incurred in connection with
the creation, preservation or protection of the Agent's Liens on, and security
interest in, the Collateral, including, without limitation, all fees and taxes
in connection with the recording or filing of instruments and documents in
public offices, payment or discharge of any taxes or Liens upon or in respect of
the Collateral, premiums for insurance with respect to the Collateral and all
other fees, costs and expenses in connection with protecting, maintaining or
preserving the Collateral and the Agent's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 5.1(a) or (b), each
Grantor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, costs, damages and expenses which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any misrepresentation by
such Grantor in this Agreement, any other Loan Document, or in any writing
contemplated by or made or delivered pursuant to or in connection with this
Agreement or any other Loan Document.
(d) If and to the extent that the obligations of any Grantor under
this Sec tion 5.1 are unenforceable for any reason, such Grantor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
5.2 Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of the Grantors contained in this Section 5 shall continue
in full force and effect notwithstanding the full payment of all the Obligations
and notwithstanding the discharge thereof.
5.3 Agent's Rights, Duties, and Liabilities. Unless the Agent has
acted in bad faith or engaged in willful misconduct, neither the Agent nor any
of its officers, directors, employees, and Agent shall be liable or responsible
in any way for the safekeeping of any of the Collateral, or for any act or
failure to act with respect to the Collateral, or for any loss or damage
thereto, or for any loss or claim arising from or related to the use, sale, or
other disposition of the Collateral, or for any diminution in the value thereof,
or for any act or default by any warehouseman, carrier, forwarding agency or
other person whomsoever, all of which shall be at
32
each Grantor's sole risk. The Obligations shall not be affected by any failure
of the Agent to take any steps to perfect the Security Interest or to collect or
realize upon the Collateral. Neither any loss of nor damage to the Collateral
shall release any Grantor from any of the Obligations.
SECTION 6. THE AGENT
All provisions of Article 12 of the Credit Agreement are hereby
incorporated in full by reference.
SECTION 7. MISCELLANEOUS
7.1 Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be given and shall be effective as provided in Section 11.11 of the
Credit Agreement.
7.2 Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Grantors and the Agent with the consent of
the Required Lenders, subject to the limitations set forth in Section 11.14(f)
of the Credit Agreement.
7.3 Obligations Absolute. The obligations of each Grantor hereunder
shall be absolute and unconditional in accordance with its terms and shall
remain in full force and effect without regard to, and shall not be impaired,
released, discharged, terminated or otherwise affected by any circumstance or
occurrence whatsoever (other than full satisfaction of the Obligations),
including, without limitation: (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such Grantor;
(b) any exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, the Credit Agreement, or any
other Loan Document (including without limitation, any sale, compromise,
collection or liquidation of any Collateral) except as specifically set forth in
a waiver granted pursuant to Section 7.2 hereof; (c) any furnishing of any
additional security to the Agent, the other Lenders or their assignees or any
acceptance thereof or any release of any security by the Agent, the other
Lenders or their assignees; (d) any lack of validity or enforceability of the
Credit Agreement, any Note, any other Loan Document or any other documents,
instruments or agreements referred to therein or any assignment or transfer of
any thereof; (e) any limitation on any party's liability or obligations under
any such instrument or agreement or any invalidity or unenforceability, in whole
or in part, of any such instrument or agreement or any term thereof; (f) any
amendment, indulgence, renewal, extension, modification or addition, consent or
supplement to or deletion from any Loan Document or any security for any of the
Obligations; whether or not such Grantor shall have notice or knowledge of any
of the foregoing or (g) any other circumstance which might otherwise constitute
a defense available to, or a discharge of such Grantor. The rights and remedies
of the Agent herein provided are cumulative and not exclusive of any rights or
remedies which the Agent would otherwise have.
33
7.4 Successors and Assigns. This Agreement shall be binding upon
each Grantor and its successors and assigns and shall inure to the benefit of
the Agent and each Lender and their respective successors and assigns, provided
that no Grantor may transfer or assign any or all of its rights or obligations
hereunder without the written consent of the Required Lenders. All agreements,
statements, representations and warranties made by any Grantor herein or in any
certificate or other instrument delivered by such Grantor or on its behalf under
this Agreement shall be considered to have been relied upon by the Lenders and
shall survive the execution and delivery of this Agreement and the other Loan
Documents regardless of any investigation made by the Secured Creditors or on
their behalf.
7.5 Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
7.6 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.
7.7 GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION
5-1401 OF THE GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK, BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAWS
PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION (OTHER THAN THE PROVISIONS OF ss. 9-103 OF THE NEW YORK UCC).
7.8 Grantors' Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Grantor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Collateral and the Agent shall not have any obligations or liabilities with
respect to any Collateral by reason of or arising out of this Agreement, nor
shall the Agent be required or obligated in any manner to perform or fulfill any
of the obligations of any Grantor under or with respect to any Collateral.
7.9 Termination; Release. (a) After the Termination Date, this
Agreement shall terminate and the Agent, at the request and expense of the
Grantors, will execute and deliver to the Grantors a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to the Grantors (without recourse and
without any representation or warranty) such of the Collateral of the Grantors
as may be in the possession of the Agent and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used in this
Agreement, "Termination Date" shall mean the date upon which the Revolving
Credit Commitments have been terminated, no Note
34
remains outstanding, all Letters of Credit have been terminated (or fully
cash-collateralized) and all Obligations have been paid in full.
(b) It is expressly acknowledged and agreed that all or a portion of
the Collateral shall be released from the Liens and security interests created
hereunder upon any sale thereof from time to time to the extent permitted by,
and in accordance with the terms of, the Credit Agreement or this Agreement.
Upon any sale of the type described in the preceding sentence, the Agent shall,
at the request and expense of any Grantor, and without the further consent of,
or liability to, any Lender, release such Collateral and execute and deliver to
such Grantor a proper instrument or instruments acknowledging the release of
such Collateral from this Agreement, and will duly assign, transfer and deliver
to such Grantor (without recourse and without any representation or warranty)
the Collateral being sold or released as described above.
(c) At any time that any Grantor desires that the Agent take any
action to acknowledge or give effect to any release of Collateral pursuant to
the foregoing Section 7.9(a) or (b), it shall deliver to the Agent a certificate
signed by its chief financial officer stating that the release of the respective
Collateral is permitted pursuant to Section 7.9(a) or (b). The Agent shall have
no liability whatsoever to any Lender as the result of any release of Collateral
by it as permitted by this Section 7.9. Upon any release of Collateral pursuant
to Section 7.9(a) or (b), none of the Lenders shall have any continuing right or
interest in such Collateral, or the proceeds thereof.
7.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
35
IN WITNESS WHEREOF, the parties hereto have caused this Collateral
and Security Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
THE PENN TRAFFIC COMPANY
DAIRY DELL, INC.
BIG M SUPERMARKETS, INC.
XXXXX XXXXXXX BAKING COMPANY INC.
SUNRISE PROPERTIES, INC.
By: ____________________________
Name: Xxxxxx X. Xxx
in his capacity as Vice Chairman, Finance of
The Penn Traffic Company and as Vice
President for each other Initial Grantor
36
FLEET CAPITAL CORPORATION, as Agent
By: ____________________________
Name: Xxxxxx Xxxxx
Title: Senior Vice President
37
EXHIBIT A
Collateral Real Estate Interests
A-1
EXHIBIT B
Pledged Notes; Pledged Stock
B-1
EXHIBIT C
UCC Filing Offices; Permitted Filings; Other Filings
C-1
EXHIBIT D
Chief Executive Offices; Location of Books and Records;
Location of Collateral; Locations of Other Places of Business;
Leased Facilities and Locations
D-1
EXHIBIT E
Trade Names; Fictitious Names; Other Names
E-1
EXHIBIT F
Franchise Agreements; Operators
F-1
EXHIBIT G
Trademarks
G-1
EXHIBIT H
Intellectual Property Licenses and Agreements
H-1
EXHIBIT I
Form of Borrowing Base Certificate
I-1
EXHIBIT J
Excluded Receivables
J-1
Annex 1 to
Security and Collateral Agreement
SECURITY AGREEMENT
(TRADEMARKS)
WHEREAS, _________________________, a [____________] corporation
(herein referred to as "Assignor"), having an address at _______________________
_______, __________, (1) has adopted, used and is using, or (2) has intended to
use and filed an application indicating that intention, but has not yet filed an
allegation of use under Section 1(c) or 1(d) of the Trademark Act, or (3) has
filed an application based on an intention to use and has since used and has
filed an allegation of use under Section 1(c) or 1(d) of the Trademark Act, the
trademarks, trade names, trade styles and service marks listed on the attached
Schedule 1, which trademarks, trade names, trade styles and service marks are
registered in the United States Patent and Trademark Office (the "Trademarks");
WHEREAS, The Penn Traffic Company, a Delaware corporation, Dairy
Dell, Inc., a Pennsylvania corporation, Big M Supermarkets, Inc., a New York
corporation and Xxxxx Xxxxxx Baking Company Inc. (the "Borrowers"), are entering
into a Revolving Credit and Term Loan Agreement dated as of June __, 1999 (said
Agreement as it may be hereafter amended, supplemented, restated or otherwise
modified from time to time being the "Credit Agreement") with the financial
institutions now or hereafter parties thereto (collectively, the "Lenders"),
Fleet Capital Corporation, as agent (the "Agent", and together with any
successor in such capacity, is herein referred to as the "Assignee"), and
certain additional agents;
WHEREAS, Assignor, together with certain of its affiliates, has
entered into a Security and Collateral Agreement dated as of June __, 1999 (said
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time being the "Security Agreement"; capitalized terms used therein
and not otherwise defined herein being used herein as therein defined) in favor
of the Assignee; and
WHEREAS, pursuant to the Security Agreement, Assignor has granted to
Assignee a security interest in, and mortgage on, all right, title and interest
of Assignor in and to the Trademarks, designs and general intangibles of like
nature, now existing or hereafter adopted or acquired, and the goodwill of the
business symbolized by the Trademarks and the applications, registrations and
recordings in the United States Patent and Trademark Office or in any similar
office or agency of the United States or any State thereof, all whether now or
hereafter owned or licensable by Assignor, and all reissues, extensions or
renewals thereof and all proceeds thereof, including, without limitation, any
claims by Assignor against third parties for infringement thereof (the
"Collateral"), to secure the payment, performance and observance of the
Obligations;
ANNEX 1-1
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, Assignor does hereby grant to Assignee a security
interest in, and mortgage on, the Collateral and, effective upon the occurrence
of and for so long as an Event of Default is continuing under the Credit
Agreement, assigns the Collateral to Assignee, in order to secure the prompt
payment, performance and observance of the Obligations.
Assignor does hereby further acknowledge and affirm that the rights
and remedies of Assignee with respect to the security interest in and mortgage
on and assignment of the Collat eral made and granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
Assignee's address is 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Concurrently with the execution and delivery hereof, the Assignor
shall execute and deliver to the Agent, in the form of Exhibit 1 hereto, three
originals of a Power of Attorney for the implementation of the rights of the
Assignee to dispose of and transfer the Collateral, and the Assignor hereby
releases the Agent and the Secured Parties from any claims, causes of action or
demands at any time arising out of or with respect to any actions taken or
omitted to be taken by the Agent under such Power of Attorney, other than
actions taken or omitted to be taken through the gross negligence or willful
misconduct of the Agent.
IN WITNESS WHEREOF, Assignor has duly executed or caused this
Assignment to be duly executed by its officer thereunto duly authorized as of
the __ day of June, 1999.
[Seal] [_________________________]
By: _____________________________
Name:
Title:
XXXXX 0-0
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________________, 1999, before me personally
appeared _____________________________________, to me known, who, being by me
duly sworn, did depose and say that he/she resides at __________________________
and that he/she is ________________________ of the Assignor; that he/she knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was affixed pursuant to authority of the Board of
Directors of said corporation and that he/she signed his/her name thereto in
his/her capacity as an authorized officer of said corporation pursuant to such
authority.
------------------------------
Notary Public
ANNEX 1-3
SCHEDULE 1 TO SECURITY AGREEMENT (TRADEMARKS)
TRADEMARKS
Application
Application or Serial No. or
Trademark Registration Date Registration No.
--------- ----------------- ----------------
ANNEX 1-4
Exhibit 1 to
Security Agreement (Trademarks)
SPECIAL POWER OF ATTORNEY
-------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, THAT ________________________, a
__________ [corporation] [general] [limited] [partnership] [ ] with its
principal office at __________________________, __________ (hereinafter called
"Assignor"), hereby appoints and constitutes FLEET CAPITAL CORPORATION, as
Assignee as described in the Security Agreement referred to below (hereinafter
called "Assignee"), its true and lawful attorney, with full power of
substitution, and with full power and authority to perform the following acts on
behalf of Assignor:
1. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
letters patent, design and plant patents, utility models, industrial
designs, inventor certificates and statutory invention registrations of
the United States or any other country or political subdivision thereof,
and all registrations, recordings, reissues, continuations,
continuations-in-part, term restorations and extensions thereof, and all
pending applications therefor, and for the purpose of the recording,
registering and filing of, or accomplishing any other formality with
respect to the foregoing, to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose; and
2. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
trademarks, trade names, trade styles and service marks, and all
registrations, recordings, reissues, extensions and renewals thereof, and
all pending applications therefor, and for the purpose of the recording,
registering and filing of, or accomplishing any other formality with
respect to the foregoing, to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
ANNEX 1-5
3. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
copyrights, and all registrations, recordings, extensions and renewals
thereof, and all pending applications therefor, and for the purpose of the
recording, registering and filing of, or accomplishing any other formality
with respect to the foregoing, to execute and deliver any and all
agreements, documents, instruments of assignment or other papers necessary
or advisable to effect such purpose; and
4. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the purposes
described above as Assignee may in its sole discretion determine.
This power of attorney is made pursuant to a Security Agreement
(Trademarks) executed and delivered pursuant to a Security and Collateral
Agreement, dated as of June __, 1999 (as amended from time to time, the
"Security Agreement") by Assignor and certain other grantors named therein in
favor of Assignee and will take effect solely for the purposes of Section ___
thereof and is subject to the conditions thereof and may not be revoked until
the payment or performance in full of all "Obligations" as defined in such
Security Agreement and expiration or termination of all "Commitments" as such
term is used in the Credit Agreement (as defined in Security Agreement) and the
expiration or termination of any further commitment of any Lender or Letter of
Credit Issuer as such term is used in the Credit Agreement (as defined in
Security Agreement) to open or cause to be opened Letters of Credit under the
Credit Agreement (or the payment in full of the obligations in respect of
Letters of Credit).
Dated: ________ __, 1999
[Seal] [__________________________]
By: ____________________________
Name:
Title:
ANNEX 1-6
Annex 2 to
Security and Collateral Agreement
SECURITY AGREEMENT
------------------
(PATENTS)
---------
WHEREAS, __________________________, a [________] corporation
(herein referred to as "Assignor"), whose address is __________________________,
__________, owns the letters patent, and/or applications for letters patent, of
the United States, more particularly described on Schedule 1 attached hereto as
part hereof (the "Patents");
WHEREAS, The Penn Traffic Company, a Delaware corporation, Dairy
Dell, Inc., a Pennsylvania corporation, Big M Supermarkets, Inc., a New York
corporation and Xxxxx Xxxxxx Baking Company Inc., a New York corporation (the
"Borrowers"), are entering into a Revolving Credit and Term Loan Agreement dated
as of June __, 1999 (said Agreement as it may be hereafter amended,
supplemented, restated or otherwise modified from time to time being the "Credit
Agreement") with the financial institutions now or hereafter parties thereto
(collectively, the "Lenders"), Fleet Capital Corporation, as agent (the "Agent",
and together with any successor in such capacity, is herein referred to as the
"Assignee"), and certain additional agents;
WHEREAS, Assignor, together with certain of its affiliates, has
entered into a Security and Collateral Agreement dated as of June __, 1999 (said
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time being the "Security Agreement"; capitalized terms used therein
and not otherwise defined herein being used herein as therein defined) in favor
of the Assignee; and
WHEREAS, pursuant to the Security Agreement, Assignor has granted to
Assignee a security interest in, and mortgage on, all right, title and interest
of Assignor in and to the Patents, together with all registrations thereof,
including, without limitation, applications and statutory invention
registrations in the United States Patent and Trademark Office or in any similar
office or agency of the United States, or any State thereof, all whether now or
hereafter owned or licensable by Assignor, and all reissues, continuations,
continuations-in-part, term restorations or extensions thereof and all proceeds
thereof, including, without limitation, any claims by Assignor against third
parties for infringement thereof for the full term of the Patents (the
"Collateral"), to secure the prompt payment, performance and observance of the
Obligations;
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, Assignor does hereby grant to Assignee a security
interest in, and mortgage on, the Collateral and, effective upon the occurrence
of and for so long as an Event of Default is continuing under the Credit
Agreement, assigns the Collateral to Assignee, in order to secure the prompt
payment, performance and observance of the Obligations.
ANNEX 2-1
Assignor does hereby further acknowledge and affirm that the rights
and remedies of Assignee with respect to the security interest in and mortgage
on and assignment of the Collateral made and granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
Assignee's address is 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Concurrently with the execution and delivery hereof, the Assignor
shall execute and deliver to the Agent, in the form of Exhibit 1 hereto, three
originals of a Power of Attorney for the implementation of the rights of the
Assignee to dispose of and transfer the Collateral, and the Assignor hereby
releases the Agent and the Secured Parties from any claims, causes of action or
demands at any time arising out of or with respect to any actions taken or
omitted to be taken by the Agent under such Power of Attorney, other than
actions taken or omitted to be taken through the gross negligence or willful
misconduct of the Agent.
IN WITNESS WHEREOF, Assignor has duly executed or caused this
Assignment to be duly executed by its officer thereunto duly authorized as of
the ____ day of June, 1999.
[Seal] [_______________________________]
By: _____________________________
Name:
Title:
XXXXX 0-0
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________________, 1999, before me personally
appeared _____________________________________, to me known, who, being by me
duly sworn, did depose and say that he/she resides at __________________________
and that he/she is ________________________ of the Assignor; that he/she knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was affixed pursuant to authority of the Board of
Directors of said corporation and that he/she signed his/her name thereto in
his/her capacity as an authorized officer of said corporation pursuant to such
authority.
------------------------------
Notary Public
ANNEX 2-3
SCHEDULE 1 TO SECURITY AGREEMENT (PATENTS)
PATENTS
Date Filed First Named
Title or Granted Inventor Patent No.
----- ---------- -------- ----------
PATENT APPLICATIONS
First Named
Title Date Filed Inventor Serial No.
----- ---------- -------- ----------
ANNEX 2-4
Exhibit 1 to
Security Agreement (Patents)
SPECIAL POWER OF ATTORNEY
-------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, THAT ________________________, a
__________ [corporation] [general] [limited] [partnership] [ ] with its
principal office at __________________________, __________ (hereinafter called
"Assignor"), hereby appoints and constitutes FLEET CAPITAL CORPORATION, as
Assignee as described in the Security Agreement referred to below (hereinafter
called "Assignee"), its true and lawful attorney, with full power of
substitution, and with full power and authority to perform the following acts on
behalf of Assignor:
1. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
letters patent, design and plant patents, utility models, industrial
designs, inventor certificates and statutory invention registrations of
the United States or any other country or political subdivision thereof,
and all registrations, recordings, reissues, continuations,
continuations-in-part, term restorations and extensions thereof, and all
pending applications therefor, and for the purpose of the recording,
registering and filing of, or accomplishing any other formality with
respect to the foregoing, to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose; and
2. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
trademarks, trade names, trade styles and service marks, and all
registrations, recordings, reissues, extensions and renewals thereof, and
all pending applications therefor, and for the purpose of the recording,
registering and filing of, or accomplishing any other formality with
respect to the foregoing, to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
ANNEX 2-5
3. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
copyrights, and all registrations, recordings, extensions and renewals
thereof, and all pending applications therefor, and for the purpose of the
recording, registering and filing of, or accomplishing any other formality
with respect to the foregoing, to execute and deliver any and all
agreements, documents, instruments of assignment or other papers necessary
or advisable to effect such purpose; and
4. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the purposes
described above as Assignee may in its sole discretion determine.
This power of attorney is made pursuant to a Security Agreement
(Patents) executed and delivered pursuant to a Security and Collateral
Agreement, dated as of June __, 1999 (as amended from time to time, the
"Security Agreement") by Assignor and certain other grantors named therein in
favor of Assignee and will take effect solely for the purposes of Section ___
thereof and is subject to the conditions thereof and may not be revoked until
the payment or performance in full of all "Obligations" as defined in such
Security Agreement and expiration or termination of all "Commitments" as such
term is used in the Credit Agreement (as defined in Security Agreement) and the
expiration or termination of any further commitment of any Lender or Letter of
Credit Issuer as such term is used in the Credit Agreement (as defined in
Security Agreement) to open or cause to be opened Letters of Credit under the
Credit Agreement (or the payment in full of the obligations in respect of
Letters of Credit).
Dated: ________ __, 1999
[Seal] [__________________________]
By: ____________________________
Name:
Title:
ANNEX 2-6
Annex 3 to
Security and Collateral Agreement
SECURITY AGREEMENT
------------------
(COPYRIGHTS)
------------
WHEREAS, ________________________, a [_____________] corporation
(herein referred to as "Assignor"), has adopted, used and is using the
copyrights listed on the attached Schedule 1, which copyrights are registered in
the United States Copyright Office (the "Copyrights");
WHEREAS, The Penn Traffic Company, a Delaware corporation, Dairy
Dell, Inc., a Pennsylvania corporation, Big M Supermarkets, Inc., a New York
corporation and Xxxxx Xxxxxx Baking Company Inc., a New York corporation (the
"Borrowers"), are entering into a Revolving Credit and Term Loan Agreement dated
as of June __, 1999 (said Agreement as it may be hereafter amended,
supplemented, restated or otherwise modified from time to time being the "Credit
Agreement") with the financial institutions now or hereafter parties thereto
(collectively, the "Lenders"), Fleet Capital Corporation, as agent (the "Agent",
and together with any successor in such capacity, is herein referred to as the
"Assignee"), and certain additional agents;
WHEREAS, Assignor, together with certain of its affiliates, has
entered into a Security and Collateral Agreement dated as of June __, 1999 (said
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time being the "Security Agreement"; capitalized terms used therein
and not otherwise defined herein being used herein as therein defined) in favor
of the Assignee; and
WHEREAS, pursuant to the Security Agreement, Assignor has granted to
Assignee a security interest in, and mortgage on, all right, title and interest
of Assignor in and to the Copyrights, and the registrations and recordings
thereof in the United States or any State thereof, all whether now or hereafter
owned or licensable by Assignor and all extensions or renewals thereof and all
licenses thereof and all proceeds thereof, including, without limitation, any
claims by Assignor against third parties for infringement thereof (the
"Collateral"), to secure the payment, performance and observance of the
Obligations;
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, Assignor does hereby grant to Assignee a security
interest in, and mortgage on, the Collateral and, effective upon the occurrence
of and for so long as an Event of Default is continuing under the Credit
Agreement, assigns the Collateral to Assignee, in order to secure the prompt
payment, performance and observance of the Obligations.
ANNEX 3-1
Assignor does hereby further acknowledge and affirm that the rights
and remedies of Assignee with respect to the security interest in and mortgage
on and assignment of the Collateral made and granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
Assignee's address is 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Concurrently with the execution and delivery hereof, the Assignor
shall execute and deliver to the Agent, in the form of Exhibit 1 hereto, three
originals of a Power of Attorney for the implementation of the rights of the
Assignee to dispose of and transfer the Collateral, and the Assignor hereby
releases the Agent and the Secured Parties from any claims, causes of action or
demands at any time arising out of or with respect to any actions taken or
omitted to be taken by the Agent under such Power of Attorney, other than
actions taken or omitted to be taken through the gross negligence or willful
misconduct of the Agent.
IN WITNESS WHEREOF, Assignor has duly executed or caused this
Agreement to be duly executed by its officer thereunto duly authorized as of the
__ day of June, 1999.
[Seal] [_________________________]
By: ____________________________
Name:
Title:
XXXXX 0-0
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________________, 1999, before me personally
appeared _____________________________________, to me known, who, being by me
duly sworn, did depose and say that he/she resides at __________________________
and that he/she is ________________________ of the Assignor; that he/she knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was affixed pursuant to authority of the Board of
Directors of said corporation and that he/she signed his/her name thereto in
his/her capacity as an authorized officer of said corporation pursuant to such
authority.
------------------------------
Notary Public
ANNEX 3-3
SCHEDULE 1 TO SECURITY AGREEMENT (COPYRIGHTS)
---------------------------------------------
COPYRIGHTS
----------
Issue or
Titles Filing Date Copyright No.
------ ----------- -------------
ANNEX 3-4
Exhibit 1 to
Security Agreement (Copyrights)
SPECIAL POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, THAT ________________________, a
__________ [corporation] [general] [limited] [partnership] [ ] with its
principal office at __________________________, __________ (hereinafter called
"Assignor"), hereby appoints and constitutes FLEET CAPITAL CORPORATION, as
Assignee as described in the Security Agreement referred to below (hereinafter
called "Assignee"), its true and lawful attorney, with full power of
substitution, and with full power and authority to perform the following acts on
behalf of Assignor:
1. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
letters patent, design and plant patents, utility models, industrial
designs, inventor certificates and statutory invention registrations of
the United States or any other country or political subdivision thereof,
and all registrations, recordings, reissues, continuations,
continuations-in-part, term restorations and extensions thereof, and all
pending applications therefor, and for the purpose of the recording,
registering and filing of, or accomplishing any other formality with
respect to the foregoing, to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose; and
2. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
trademarks, trade names, trade styles and service marks, and all
registrations, recordings, reissues, extensions and renewals thereof, and
all pending applications therefor, and for the purpose of the recording,
registering and filing of, or accomplishing any other formality with
respect to the foregoing, to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
3. For the purpose of assigning, selling, licensing or otherwise
disposing of all right, title and interest of Assignor in and to any
copyrights, and all registrations, recordings, extensions and renewals
thereof, and all pending applications therefor, and for the purpose of the
recording, registering and filing of, or accomplishing any other formality
ANNEX 3-5
with respect to the foregoing, to execute and deliver any and all
agreements, documents, instruments of assignment or other papers necessary
or advisable to effect such purpose; and
4. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the purposes
described above as Assignee may in its sole discretion determine.
This power of attorney is made pursuant to a Security Agreement
(Copyrights) executed and delivered pursuant to a Security and Collateral
Agreement, dated as of June __, 1999 (as amended from time to time, the
"Security Agreement") by Assignor and certain other grantors named therein in
favor of Assignee and will take effect solely for the purposes of Section ___
thereof and is subject to the conditions thereof and may not be revoked until
the payment or performance in full of all "Obligations" as defined in such
Security Agreement and expiration or termination of all "Commitments" as such
term is used in the Credit Agreement (as defined in Security Agreement) and the
expiration or termination of any further commitment of any Lender or Letter of
Credit Issuer as such term is used in the Credit Agreement (as defined in
Security Agreement) to open or cause to be opened Letters of Credit under the
Credit Agreement (or the payment in full of the obligations in respect of
Letters of Credit).
Dated: ________ __, 1999
[Seal] [__________________________]
By: ____________________________
Name:
Title:
ANNEX 3-6
SCHEDULE OF RECORD LOCATIONS
LOCATION COUNTY
THE PENN TRAFFIC COMPANY
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------------------------
