SECURITY AGREEMENT
Exhibit 10.3
Execution Version
SECURITY AGREEMENT (this “Agreement”), dated as of September 17, 2009, among (a) KAMAN
CORPORATION, a Connecticut corporation (the “Company”), (b) KAMAN AEROSPACE GROUP, INC., a
Connecticut corporation, KAMATICS CORPORATION, a Connecticut corporation, KAMAN PRECISION PRODUCTS,
INC., a Florida corporation, KAMAN AEROSPACE CORPORATION, a Delaware corporation, KAMAN
AEROSTRUCTURES GROUP — WICHITA, INC., a Delaware corporation, KAMAN AEROSTRUCTURES — WICHITA, INC.,
a Delaware corporation, KAMAN INDUSTRIAL TECHNOLOGIES CORPORATION, a Connecticut corporation, KAMAN
X CORPORATION, a Connecticut corporation, and K-MAX CORPORATION, a Connecticut corporation (each a
“Guarantor”, and collectively, the “Guarantors”), (c) each other party as shall
from time to time become a party hereto (each such other party, the Company and the Guarantors
being hereinafter referred to from time to time, individually, as a “Grantor” and,
collectively, as the “Grantors”) and (d) BANK OF AMERICA, N.A. (“Bank of America”),
as collateral agent (hereinafter, in such capacity, the “Collateral Agent”) for the Senior
Secured Parties under, and as defined in, the Intercreditor Agreement, dated as of the date hereof
(as amended, restated, extended, supplemented, modified and otherwise in effect from time to time,
the “Intercreditor Agreement”), by and among the Revolving Loan Administrator, the Term
Loan Administrator and the Collateral Agent and acknowledged by the Loan Parties (as defined in the
Intercreditor Agreement) signatory thereto.
WHEREAS, (a) the Company, the Collateral Agent, the lenders party thereto from time to time
(the “Revolving Loan Lenders”), Bank of America and The Bank of Nova Scotia, each as a
Co-Administrative Agent for the Revolving Loan Lenders, Bank of America, as Administrator for the
Revolving Loan Lenders (the “Revolving Loan Administrator”) and as Collateral Agent, RBS
Citizens, National Association, as Syndication Agent, and certain other parties thereto from time
to time, have entered into that certain Revolving Credit Agreement, dated as of the date hereof (as
amended, restated, extended, supplemented, modified and otherwise in effect from time to time, the
“Revolving Credit Agreement”), (b) the Guarantors have entered into a Domestic Subsidiary
Guarantee pursuant to which they have Guaranteed the Obligations (as defined in the Revolving
Credit Agreement), (c) the Company, the Collateral Agent, the lenders party thereto from time to
time (the “Term Loan Lenders”), Bank of America and The Bank of Nova Scotia, each as a
Co-Administrative Agent for the Term Loan Lenders, Bank of America, as Administrator for the Term
Loan Lenders (the “Term Loan Administrator”), and certain other parties thereto from time
to time, have entered into that certain Amended and Restated Term Loan Credit Agreement, dated as
of the date hereof (as amended, restated, extended, supplemented, modified and otherwise in effect
from time to time, the “Term Loan Credit Agreement” and together with the Revolving Credit
Agreement, the “Credit Agreements”), and (d) the Guarantors have entered into a Domestic
Subsidiary Guarantee pursuant to which they have Guaranteed the Obligations (as defined in the Term
Loan Credit Agreement);
WHEREAS, it is (i) a condition precedent to the Revolving Loan Lenders making any loans or
otherwise extending credit to the Borrowers under, and as defined in, the Revolving Credit
Agreement and (ii) a requirement under the Term Loan Credit Agreement that the Grantors execute and
deliver to the Collateral Agent, for the benefit of the Senior Secured Parties, a security
agreement in substantially the form hereof; and
WHEREAS, each Grantor wishes to grant a security interest in favor of the Collateral Agent,
for the benefit of the Senior Secured Parties, as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. Definitions. All capitalized terms used herein without definitions shall have the
respective meanings provided therefor in the Intercreditor Agreement. The term “State”, as used
herein, means the State of New York. All terms defined in the Uniform Commercial Code of the State
and used herein shall have the same definitions herein as specified therein. However, if a term is
defined in Article 9 of the Uniform Commercial Code of the State differently than in another
Article of the Uniform Commercial Code of the State, the term has the meaning specified in Article
9. The term “electronic document” applies in the event that the 2003 revisions to Article 7, with
amendments to Article 9, of the Uniform Commercial Code, in substantially the form approved by the
American Law Institute and the National Conference of Commissioners on Uniform State Laws, are now
or hereafter adopted and become effective in the State or in any other relevant jurisdiction.
2. Security Interest.
2.1. Grant of Security Interest. Each Grantor hereby grants to the Collateral
Agent, for the benefit of the Senior Secured Parties, to secure the payment and performance
in full of all of the Senior Obligations, a security interest in and pledges and assigns to
the Collateral Agent, for the benefit of the Senior Secured Parties, the following
properties, assets and rights of such Grantor, wherever located, whether now owned or
hereafter acquired or arising, and all proceeds and products thereof (all of the same being
hereinafter called the “Collateral”): all personal and fixture property of every
kind and nature including all goods (including inventory, equipment and any accessions
thereto), instruments (including promissory notes), documents (including, if applicable,
electronic documents), accounts (including health-care-insurance receivables), chattel paper
(whether tangible or electronic), letter-of-credit rights (whether or not the letter of
credit is evidenced by a writing), commercial tort claims, securities and all other
investment property (subject to Sections 2.2 and 5.1), money, cash or cash
equivalents, supporting obligations, any other contract rights or rights to the payment of
money, insurance claims, all general intangibles (including all payment intangibles,
software and intellectual property), and any books, records or information relating to the
foregoing and any proceeds of the foregoing. The Collateral Agent acknowledges that the
attachment of its security interest in any commercial tort claim of any Grantor as original
collateral is subject to such Grantor’s compliance with Section 4.8.
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2.2. Non-Transferable Collateral. (a) The grant of the security interest
contained in Section 2.1 shall not extend to, and the term “Collateral” shall not
include (a) any personal property of any Grantor constituting “Equipment for Sale” (the
“Excluded Inventory”) as defined in that certain Settlement Deed dated March 19,
2008, by and among The Commonwealth of Australia as represented by the Department of
Defense, Kaman Aerospace International Corporation, Kaman Aerospace Corporation, and Kaman
Corporation (as amended prior to the date hereof, the “Settlement Agreement”), to
the extent that the Settlement Agreement prohibits the granting of a security interest in
any Excluded Inventory, (b) any directly held investment property, or any general
intangibles, now or hereafter held or owned by the Grantors, to the extent, in each case,
that (i) a security interest may not be granted by the Grantors in such directly held
investment property or general intangibles as a matter of law, or under the terms of the
governing document applicable thereto, without the consent of one or more applicable parties
thereto and (ii) such consent has not been obtained, or (c) more than 66% of the Equity
Interests (as defined in each Credit Agreement) of any first-tier Foreign Subsidiary (as
defined in each Credit Agreement), and, to the extent not yet paid to such Grantor, the
corresponding proportion of dividends, distributions, interest and other payments with
respect thereto.
(b) The grant of the security interest contained in Section 2.1 shall
extend to, and the term “Collateral” shall include, (i) any and all proceeds of the
Excluded Inventory, which any Grantor is entitled to retain under the terms of the
Settlement Agreement, and such directly held investment property or general
intangibles to the extent that such proceeds are not themselves directly held
investment property or general intangibles subject to Section 2.2(a) and
(ii) upon any such applicable party or parties’ consent with respect to any
otherwise excluded Excluded Inventory, directly held investment property or general
intangibles being obtained, thereafter such Excluded Inventory, directly held
investment property or general intangibles.
(c) The provisions of Section 2.2(a) shall not apply to (i) directly
held investment property or general intangibles to the extent that the restriction
on the Grantor granting a security interest therein is not effective under
applicable law or (ii) payment intangibles.
3. Authorization to File Financing Statements. Each Grantor hereby irrevocably
authorizes the Collateral Agent at any time and from time to time to file in any filing office in
any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto
that (a) indicate the Collateral (i) as all assets of such Grantor or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls within the scope of
Article 9 of the Uniform Commercial Code of the State or such other jurisdiction, or (ii) as being
of an equal or lesser scope or with greater detail, and (b) provide any other information required
by part 5 of Article 9 of the Uniform Commercial Code of the State or such other jurisdiction for
the sufficiency or filing office acceptance of any financing statement or amendment, including (x)
whether such Grantor is an organization, the type of organization and any organizational
identification number issued to such Grantor and, (y) in the case of a financing statement filed as
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a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates. Each Grantor agrees to
furnish any such information to the Collateral Agent promptly upon the Collateral Agent’s request.
Each Grantor also ratifies its authorization for the Collateral Agent to have filed in any Uniform
Commercial Code jurisdiction any like initial financing statements or amendments thereto if filed
prior to the date hereof, with all costs and expenses to be at the Grantors’ expense.
4. Other Actions. Further to insure the attachment, perfection and first priority of,
and the ability of the Collateral Agent to enforce, the Collateral Agent’s security interest in the
Collateral, each Grantor agrees, in each case at such Grantor’s expense, to take the following
actions with respect to the following Collateral and without limitation on such Grantor’s other
obligations contained in this Agreement:
4.1. Promissory Notes and Tangible Chattel Paper. If any Grantor shall, now or
at any time hereafter, hold or acquire any promissory notes or tangible chattel paper (a)
individually having a face value in excess of $1,000,000 (each, a “Material Note”)
or (b) collectively, including the sum of (i) the promissory notes and tangible chattel
paper of all Grantors (collectively, the “Excess Notes”) together with (ii) the
electronic chattel paper, electronic documents and other “transferrable records,” as that
term is defined in Section 201 of the federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in
any relevant jurisdiction, of all Grantors (collectively, the “Excess Electronic Chattel
Paper” and, together with the Excess Notes, the “Excess Notes/Chattel Paper”),
having a face value in excess of $5,000,000 in the aggregate, such Grantor shall forthwith
(A) endorse, assign and deliver to the Collateral Agent each such Material Note and, (B) to
the extent the Excess Notes/Chattel Paper have a face value in excess of $5,000,000 in the
aggregate, (1) endorse, assign and deliver to the Collateral Agent such Excess Notes having
the highest face value (collectively with the Material Notes, the “Pledged Debt”)
pursuant to this Section or (2) take such action as the Collateral Agent may reasonably
request to vest in the Collateral Agent control of such Excess Electronic Chattel Paper
having the highest face value pursuant to Section 4.6, such that the aggregate face value of
the remaining Excess Notes that are not endorsed, assigned and delivered to the Collateral
Agent pursuant to this Section and the remaining Excess Electronic Chattel Paper that are
not in control of the Collateral Agent pursuant to Section 4.6, shall not exceed $5,000,000
in the aggregate, and, in each case of a required endorsement, assignment and delivery,
accompanied by such instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time specify.
4.2. Deposit Accounts. For each deposit account that any Grantor, now or at
any time hereafter, opens or maintains, such Grantor shall, at the Collateral Agent’s
reasonable request and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (a) cause the depositary bank to agree to
comply without further consent of such Grantor, at any time with instructions from the
Collateral Agent to such depositary bank directing the disposition of funds from time to
time credited to such deposit account, or (b) arrange for the Collateral Agent to become the
customer of the depositary bank with respect to the deposit account, with
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such Grantor being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw funds from such deposit account. The Collateral Agent agrees
with each Grantor that the Collateral Agent shall not give any such instructions pursuant to
clause (a) above or withhold any withdrawal rights from any Grantor pursuant to clause (b)
above, unless an Event of Default has occurred and is continuing or would occur if effect
were given to any withdrawal not otherwise permitted by the Loan Documents (as defined in
each Credit Agreement). The provisions of this paragraph shall not apply to any deposit
accounts specially and exclusively used for payroll, payroll taxes and other employee wage
and benefit payments to or for the benefit of any Grantor’s employees.
4.3. Investment Property. Subject to Section 2.2, if any Grantor
shall, now or at any time hereafter, hold or acquire any certificated securities of any
Subsidiary, such Grantor shall forthwith endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in
blank as the Collateral Agent may from time to time specify. If any securities now or
hereafter acquired by any Grantor are (a) (i) uncertificated or (ii) certificated and issued
by a Person other than a Subsidiary, (b) issued to such Grantor or its nominee directly by
the issuer thereof, and (c) (i) individually have a principal amount or value in excess of
$1,000,000 in the aggregate (each a “Material Security”) or (ii) collectively, with
such securities of all Grantors, have a principal amount in excess of $5,000,000 in the
aggregate, such Grantor shall immediately notify the Collateral Agent thereof and, at the
Collateral Agent’s request and option, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, either (A) cause the issuer to agree to
comply, without further consent of such Grantor or such nominee, at any time with
instructions from the Collateral Agent as to each Material Security and, to the extent such
securities of all Grantors have a principal amount or value in excess of $5,000,000 in the
aggregate, such securities having the highest principal amounts (collectively, the
“Excess Securities” and, together with the Material Securities, the “Pledged
Securities”) such that the aggregate principal amount or value of the remaining
securities shall not exceed $5,000,000 or (B) arrange for the Collateral Agent to become the
registered owner of the Pledged Securities. If any securities, whether certificated or
uncertificated, or other investment property now or hereafter acquired by any Grantor are
held by such Grantor or its nominee through a securities intermediary or commodity
intermediary and constitute Pledged Securities, such Grantor shall immediately notify the
Collateral Agent thereof and, at the Collateral Agent’s request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral Agent, either (1)
cause such securities intermediary or (as the case may be) commodity intermediary to agree
to comply, in each case without further consent of such Grantor or such nominee, at any time
with entitlement orders or other instructions from the Collateral Agent to such securities
intermediary as to such Pledged Securities, or (as the case may be) to apply any value
distributed on account of any commodity contract as directed by the Collateral Agent to such
commodity intermediary, or (2) in the case of Pledged Securities held through a securities
intermediary, arrange for the Collateral Agent to become the entitlement holder with respect
to such Pledged Securities, with such Grantor being permitted, only with the consent of the
Collateral Agent, to exercise rights to withdraw or otherwise deal with such investment
property. The Collateral Agent agrees with each
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Grantor that the Collateral Agent shall not give any such entitlement orders or
instructions or directions to any such issuer, securities intermediary or commodity
intermediary pursuant to clauses (A) or (1) above, and shall not withhold its consent to the
exercise of any withdrawal or dealing rights by such Grantor pursuant to clauses (B) or (2)
above, unless an Event of Default has occurred and is continuing or would occur after giving
effect to any such investment and withdrawal rights not otherwise permitted by the Loan
Documents (as defined in each Credit Agreement). The provisions of this paragraph shall not
apply to any financial assets credited to a securities account for which the Collateral
Agent is the securities intermediary.
4.4. Collateral in the Possession of a Bailee. If any Collateral of any
Grantor constituting at least 5% of the total book value of the assets of the Company and
its Subsidiaries is, now or at any time hereafter, in the possession of a bailee at a
particular location, such Grantor shall promptly notify the Collateral Agent thereof and
shall promptly obtain an acknowledgement from the bailee with respect to such location, in
form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds
such Collateral for the benefit of the Collateral Agent and such bailee’s agreement to
comply, without further consent of such Grantor, at any time with instructions of the
Collateral Agent, as to such Collateral. The Collateral Agent agrees with each Grantor that
the Collateral Agent shall not give any such instructions unless an Event of Default has
occurred and is continuing or would occur after taking into account any action by such
Grantor with respect to the bailee.
4.5. Landlord Waivers. If any Collateral of any Grantor constituting at least
5% of the total book value of the assets of the Company and its Subsidiaries is, now or at
any time hereafter, located at a leased property, such Grantor shall promptly notify the
Collateral Agent thereof and shall promptly obtain a landlord waiver in form and substance
reasonably satisfactory to the Collateral Agent with respect to such location.
4.6. Electronic Chattel Paper, Electronic Documents and Transferable Records.
If any Grantor, now or at any time hereafter, holds or acquires an interest in any
electronic chattel paper, any electronic document or any “transferable record,” (a)
individually having a face value in excess of $1,000,000 (each a “Material Electronic
Paper”) or (b) collectively, including the sum of all Excess Notes/Chattel Paper, having
a face value in excess of $5,000,000 in the aggregate, such Grantor shall (i) promptly
notify the Collateral Agent thereof and, at the request and option of the Collateral Agent,
shall take such action as the Collateral Agent may reasonably request to vest in the
Collateral Agent control of such Material Electronic Paper, under Section 9-105 of the
Uniform Commercial Code of the State or any other relevant jurisdiction, Section 7-106 of
the Uniform Commercial Code of the State or any other relevant jurisdiction, Section 201 of
the federal Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction, as applicable,
and, (ii) to the extent the Excess Notes/Chattel Paper have a face value in excess of
$5,000,000 in the aggregate, (A) endorse, assign and deliver to the Collateral Agent such
Excess Notes having the highest face value pursuant to Section 4.1 or (B) take such action
as the Collateral Agent may reasonably request to vest in the Collateral
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Agent control of such Excess Electronic Chattel Paper having the highest face value
pursuant to this Section, such that the aggregate face value of the remaining Excess Notes
that are not endorsed, assigned and delivered to the Collateral Agent pursuant to Section
4.1 and the remaining Excess Electronic Chattel Paper that are not in control of the
Collateral Agent pursuant to this Section, shall not exceed $5,000,000 in the aggregate.
The Collateral Agent agrees with each Grantor that the Collateral Agent will arrange,
pursuant to procedures satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent’s loss of control, for such Grantor to make
alterations to the electronic chattel paper, electronic document or transferable record
permitted under XXX Xxxxxxx 0-000, XXX Section 7-106, or, as the case may be, Section 201 of
the federal Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act for a party in control to make without loss of control,
unless an Event of Default has occurred and is continuing or would occur after taking into
account any action by such Grantor with respect to such electronic chattel paper, electronic
document or transferable record. The provisions of this Section 4.6 relating to
electronic documents and “control” under UCC Section 7-106 apply in the event that the 2003
revisions to Article 7, with amendments to Article 9, of the Uniform Commercial Code, in
substantially the form approved by the American Law Institute and the National Conference of
Commissioners on Uniform State Laws, are now or hereafter adopted and become effective in
the State or in any other relevant jurisdiction.
4.7. Letter-of-Credit Rights. If any Grantor is, now or at any time hereafter,
a beneficiary under a letter of credit now or hereafter (a) individually having a maximum
amount that may be drawn in excess of $1,000,000 in the aggregate (each, a “Material
Letter of Credit”) or (b) collectively, with the letters of credit of all Grantors,
having a maximum amount that may be drawn in excess of $5,000,000 in the aggregate, such
Grantor shall promptly notify the Collateral Agent thereof and, at the request and option of
the Collateral Agent, such Grantor shall, pursuant to an agreement in form and substance
satisfactory to the Collateral Agent, either (A) arrange for the issuer and any confirmer or
other nominated person of each such Material Letter of Credit and, to the extent all such
letters of credit of the Grantors have a maximum amount that may be drawn in excess of
$5,000,000 in the aggregate, such letters of credit having the highest amounts that may be
drawn (collectively, the “Excess Letters of Credit” and, together with the Material
Letters of Credit, the “Pledged Letters of Credit”), such that the aggregate maximum
amount that may be drawn on such letters of credit which are not Pledged Letters of Credit
does not exceed $5,000,000, to consent to an assignment to the Collateral Agent of the
proceeds of the Pledged Letters of Credit or (B) arrange for the Collateral Agent to become
the transferee beneficiary of such Pledged Letters of Credit, it being understood that, in
each case, the proceeds of such Pledged Letters of Credit shall be delivered to the
applicable Grantor unless an Event of Default has occurred and is continuing, in which event
the proceeds of such Pledged Letters of Credit shall be applied to the Senior Obligations,
subject to the terms of the Intercreditor Agreement, as provided in Section 8.03 of each
Credit Agreement.
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4.8. Commercial Tort Claims. If any Grantor shall, now or at any time
hereafter, hold or acquire a commercial tort claim, such Grantor shall promptly notify the
Collateral Agent in a writing signed by such Grantor of the particulars thereof and grant to
the Collateral Agent, for the benefit of the Senior Secured Parties, in such writing a
security interest therein and in the proceeds thereof, all upon the terms of this Agreement,
with such writing to be in form and substance satisfactory to the Collateral Agent. Such
notice shall be deemed to be an amendment to such Grantor’s Perfection Certificate with
respect to such commercial tort claim.
4.9. Federal Assignment of Claims Act. In addition to the account debtors
listed on Schedule 8 hereto, to the extent any other account debtors or other persons
obligated on any account constituting Collateral with an aggregate value in excess of
$15,000,000 during any fiscal year is a governmental authority covered by the Federal
Assignment of Claims Act or like federal, state or local statute or rule in respect of the
applicable Collateral, the applicable Grantor shall notify the Collateral Agent and provide
the Collateral Agent all necessary approvals and documentation to evidence compliance and
satisfaction with the requirements of such statute, which evidence shall be in form and
substance reasonably satisfactory to the Collateral Agent.
4.10. Equipment For Sale. Each Grantor agrees that it will include on each
Compliance Certificate delivered pursuant to Section 6.01 of each Credit Agreement (i) a
reasonably detailed description of any Excluded Inventory sold during the applicable fiscal
year or fiscal quarter, as the case may be, (ii) the aggregate amount of proceeds arising
from such sale or sales, (iii) the amount of such proceeds to be retained by such Grantor,
and (iv) a certification as to such Grantor’s actual receipt of such proceeds.
4.11. Other Actions as to Any and All Collateral. Each Grantor further agrees
upon the request of the Collateral Agent and at the Collateral Agent’s option, to take any
and all other actions as the Collateral Agent may reasonably determine to be necessary or
useful for the attachment, perfection and first priority of, and the ability of the
Collateral Agent to enforce, the Collateral Agent’s security interest in any and all of the
Collateral including (a) executing, delivering and, where appropriate, filing financing
statements and amendments relating thereto under the Uniform Commercial Code of any relevant
jurisdiction, to the extent, if any, that such Grantor’s signature thereon is required
therefor, (b) causing the Collateral Agent’s name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition to attachment,
perfection or priority of, or ability of the Collateral Agent to enforce, the Collateral
Agent’s security interest in such Collateral, (c) complying with any provision of any
statute, regulation or treaty of the United States as to any Collateral if compliance with
such provision is a condition to attachment, perfection or priority of, or ability of the
Collateral Agent to enforce, the Collateral Agent’s security interest in such Collateral,
(d) obtaining governmental and other third party waivers, consents and approvals, in form
and substance satisfactory to the Collateral Agent including any consent of any licensor,
lessor or other person obligated on Collateral and any party or parties whose consent is
required for the security interest of the Collateral Agent to attach under Section
2, (e) using commercially reasonable efforts to obtain waivers from landlords in form
and
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substance satisfactory to the Collateral Agent in addition to those required pursuant
to Section 4.5, and (f) taking all actions under any earlier versions of the Uniform
Commercial Code or under any other law, as reasonably determined by the Collateral Agent to
be applicable in any relevant Uniform Commercial Code or other jurisdiction, including any
foreign jurisdiction.
5. Relation to Other Senior Collateral Documents. The provisions of this Agreement
shall be read and construed with the other Senior Collateral Documents referred to below in the
manner so indicated.
5.1. Securities Pledge Agreement. Concurrently herewith certain of the
Grantors are executing and delivering to the Collateral Agent, for the benefit of the Senior
Secured Parties, a securities pledge agreement pursuant to which each Grantor party thereto
is pledging to the Collateral Agent, for the benefit of the Senior Secured Parties, all of
its Equity Interests in its Domestic Subsidiaries (as defined in each Credit Agreement) and
66% of its Equity Interests in its first-tier Foreign Subsidiaries (as defined in each
Credit Agreement). Such pledges shall be governed by the terms of such securities pledge
agreement and not by the terms of this Agreement.
5.2. Patent and Trademark Agreements. Concurrently herewith the Grantors are
executing and delivering to the Collateral Agent, for the benefit of the Senior Secured
Parties, a Patent Collateral Assignment and Security Agreement (the “Patent Security
Agreement”) and a Trademark Collateral Security and Pledge Agreement (the “Trademark
Security Agreement”) pursuant to which the Grantors are assigning to the Collateral
Agent, for the benefit of the Senior Secured Parties, certain Collateral consisting of
patents and patent rights and trademarks, service marks and trademark and service xxxx
rights, together with the goodwill appurtenant thereto. The provisions of the Patent
Security Agreement and the Trademark Security Agreement are supplemental to the provisions
of this Agreement, and nothing contained in the Patent Security Agreement or the Trademark
Security Agreement shall derogate from any of the rights or remedies of the Collateral Agent
or any of the Senior Secured Parties hereunder. Neither the delivery of, nor anything
contained in, the Patent Security Agreement or the Trademark Security Agreement shall be
deemed to prevent or postpone the time of attachment or perfection of any security interest
in such Collateral created hereby.
5.3. Copyright Memorandum. Concurrently herewith the Grantors are executing
and delivering to the Collateral Agent, for the benefit of the Senior Secured Parties, for
recording in the United States Copyright Office (the “Copyright Office”), a
Memorandum of Grant of Security Interest in Copyrights (the “Copyright Security
Agreement”). Each Grantor represents and warrants to the Senior Secured Parties that
Schedule A to such Copyright Security Agreement identifies all now existing material
copyrights, identified, where applicable, by title, author and/or Copyright Office
registration number and date.
6. Representations and Warranties Concerning Grantors’ Legal Status. Each Grantor has
previously delivered to the Collateral Agent a certificate signed by such Grantor and
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entitled “Perfection Certificate” (each, a “Perfection Certificate”). Each Grantor
represents and warrants to the Senior Secured Parties as follows: (a) such Grantor’s exact legal
name is that indicated on its Perfection Certificate and on the signature page hereof, (b) such
Grantor is an organization of the type, and is organized in the jurisdiction, set forth in its
Perfection Certificate, (c) the Perfection Certificate of the applicable Grantor accurately sets
forth such Grantor’s organizational identification number or accurately states that such Grantor
has none, (d) the Perfection Certificate of the applicable Grantor accurately sets forth such
Grantor’s place of business or, if more than one, its chief executive office as well as such
Grantor’s mailing address if different and (e) all other information set forth on the Perfection
Certificate of the applicable Grantor pertaining to such Grantor is accurate and complete in all
material respects.
7. Covenants Concerning Grantors’ Legal Status. Each Grantor covenants with the
Senior Secured Parties and the Collateral Agent as follows: (a) without providing at least thirty
(30) days prior written notice to the Collateral Agent, such Grantor will not change its name, its
place of business or, if more than one, chief executive office, or its mailing address or
organizational identification number if it has one, (b) if such Grantor does not have an
organizational identification number and later obtains one, such Grantor will promptly (but in any
event not later than five (5) Business Days thereafter) notify the Collateral Agent of such
organizational identification number, and (c) such Grantor will not change its type of
organization, jurisdiction of organization or other legal structure, except as permitted by Section
7.04 of each Credit Agreement.
8. Representations and Warranties Concerning Collateral, Etc. Each Grantor further
represents and warrants to the Senior Secured Parties and the Collateral Agent as follows: (a) such
Grantor is the owner of, or has other rights in, or power to transfer, the Collateral, free from
any right or claim of any person or any adverse Lien, except for the security interest created by
this Agreement and other Liens permitted by the Credit Agreements, (b) none of the Collateral
constitutes, or is the proceeds of, “farm products” as defined in Section 9-102(a)(34) of the
Uniform Commercial Code of the State, (c) other than the account debtors existing on the date
hereof and listed on Schedule 8 attached hereto, and any other account debtors with respect
to which notice has been provided to the Collateral Agent in compliance with Section 4.9,
none of the account debtors or other persons obligated on any of the Collateral with an aggregate
value in excess of $15,000,000 during any fiscal year is a governmental authority covered by the
Federal Assignment of Claims Act or like federal, state or local statute or rule in respect of such
Collateral, (d) to the best of its knowledge, such Grantor holds no commercial tort claim except as
indicated on its Perfection Certificate, (e) such Grantor has at all times operated its business in
compliance in all material respects with all applicable provisions of the federal Fair Labor
Standards Act, as amended, and with all applicable provisions of federal, state and local statutes
and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or
substances, and (f) all other information set forth on the Perfection Certificate of the applicable
Grantor pertaining to the Collateral is accurate and complete in all material respects.
9. Covenants Concerning Collateral, Etc. Each Grantor further covenants with the
Senior Secured Parties as follows: (a) the Collateral, to the extent not delivered to the
Collateral Agent pursuant to Section 4 or disposed of as permitted by Section 7.06 of each
Credit Agreement, will be kept at those locations listed on such Grantor’s Perfection Certificate
and
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such Grantor will not remove the Collateral from such locations without providing at least
thirty (30) days prior written notice to the Collateral Agent except to (i) another location listed
on such Grantor’s or any other Grantor’s Perfection Certificate or (ii) another location of a
Grantor that is located within the United States but not listed on any Grantor’s Perfection
Certificate, as amended from time to time (any such location, an “Unlisted Location”);
provided, that the aggregate value of the Collateral located at such Unlisted Location
shall not exceed $5,000,000, (b) except for the security interest herein granted and the Liens
permitted by the Credit Agreements, such Grantor shall be the owner of or have other rights in the
Collateral free from any right or claim of any other person or any lien, and such Grantor shall
defend the same against all claims and demands of all persons at any time claiming the same or any
interests therein adverse to the Collateral Agent or any of the other Senior Secured Parties, (c)
such Grantor shall not pledge, mortgage or create, or suffer to exist any right of any person in,
or claim by any person to, the Collateral, or any Lien in the Collateral in favor of any person, or
become bound (as provided in Section 9-203(d) of the Uniform Commercial Code of the State or any
other relevant jurisdiction or otherwise) by a security agreement in favor of any person as secured
party, other than the Collateral Agent except for the Liens permitted by the Credit Agreements, (d)
such Grantor will keep the Collateral in good order and repair and will not use the same in
violation of law or any policy of insurance thereon, (e) subject to Section 6.06 of each Credit
Agreement, such Grantor will permit the Collateral Agent, or its designee, to inspect the
Collateral at any reasonable time, wherever located, (f) such Grantor will pay promptly when due
all taxes, assessments, governmental charges and levies upon the Collateral or incurred in
connection with the use or operation of the Collateral or incurred in connection with this
Agreement, (g) such Grantor will continue to operate, its business in compliance in all material
respects with all applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and ordinances dealing with the
control, shipment, storage or disposal of hazardous materials or substances, (h) such Grantor will
not sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any
interest therein except for Dispositions expressly permitted by Sections 7.04 or 7.06 of each
Credit Agreement, (i) except in order to secure the Senior Obligations, such Grantor will not incur
or permit to exist any Lien on any Excluded Inventory and (j) with each annual Compliance
Certificate delivered pursuant to Section 6.01 of each Credit Agreement, the Company shall, on
behalf of itself and each other Grantor, provide information updating each Grantor’s Perfection
Certificate, including, without limitation, any new locations at which any Collateral is located.
10. Insurance.
10.1. Maintenance of Insurance. Each Grantor will maintain with financially
sound and reputable insurers insurance with respect to its properties and business as
required by the Credit Agreements. Such insurance shall be in such amounts that such
Grantor will not be deemed a co-insurer under applicable insurance laws, regulations and
policies and otherwise shall be in such amounts, contain such terms, be in such forms and be
for such periods as may be reasonably satisfactory to the Collateral Agent. In addition,
the All Risk replacement cost property insurance shall be payable to the Collateral Agent as
lenders’ loss payee as their interests may appear (ATIMA) under a “standard” or “New York”
loss payee clause for the benefit of the Senior Secured Parties.
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Further, the Collateral Agent for the benefit of the Senior Secured Parties will be
named as additional insured under such Grantor’s commercial general liability insurance
policies, excess umbrella liability insurance policies, and automobile liability insurance
policies.
10.2. Insurance Proceeds. The proceeds of any casualty insurance in respect of
any casualty loss of any of the Collateral shall, subject to the rights, if any, of other
parties with an interest having priority in the property covered thereby, be retained by the
applicable Loan Party; provided, that if an Event of Default has occurred and is
continuing, such proceeds shall, upon request by the Revolving Loan Administrator or the
Term Loan Administrator, be deposited with the Collateral Agent for distribution as provided
for in the Loan Documents.
10.3. Continuation of Insurance. All policies of insurance shall provide for
at least thirty (30) days prior written cancellation notice to the Collateral Agent. In the
event of failure by any Grantor to provide and maintain insurance as herein provided, the
Collateral Agent may, at its option, provide such insurance and charge the amount thereof to
such Grantor. Each Grantor shall furnish the Collateral Agent with certificates of
insurance with corresponding endorsements and policies evidencing compliance with the
foregoing insurance provisions.
11. Collateral Protection Expenses; Preservation of Collateral.
11.1. Expenses Incurred by Collateral Agent. In the Collateral Agent’s
discretion, the Collateral Agent may discharge taxes and other encumbrances at any time
levied or placed on any of the Collateral, maintain any of the Collateral, make repairs
thereto and pay any necessary filing fees or insurance premiums, in each case if any Grantor
fails to do so. Each Grantor agrees to reimburse the Collateral Agent on demand for all
expenditures so made. The Collateral Agent shall have no obligation to any Grantor to make
any such expenditures, nor shall the making thereof be construed as a waiver or cure of any
Default or Event of Default.
11.2. Collateral Agent’s Obligations and Duties. Anything herein to the
contrary notwithstanding, each Grantor shall remain obligated and liable under each contract
or agreement comprised in the Collateral to be observed or performed by such Grantor
thereunder. Neither the Collateral Agent nor any other Senior Secured Party shall have any
obligation or liability under any such contract or agreement by reason of, or arising out
of, this Agreement or the receipt by the Collateral Agent or any other Senior Secured Party
of any payment relating to any of the Collateral, nor shall the Collateral Agent or any
other Senior Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under, or pursuant to, any such contract or agreement, to make inquiry as to the
nature or sufficiency of any payment received by the Collateral Agent or any other Senior
Secured Party in respect of the Collateral or as to the sufficiency of any performance by
any party under any such contract or agreement, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which may have
been assigned to the Collateral Agent or to
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which the Collateral Agent, or any other Senior Secured Party, may be entitled at any
time or times. The Collateral Agent’s sole duty with respect to the custody, safe keeping
and physical preservation of the Collateral in its possession, under Section 9-207 of the
Uniform Commercial Code of the State or otherwise, shall be to deal with such Collateral in
the same manner as the Collateral Agent deals with similar property for its own account.
12. Securities and Deposits. The Collateral Agent may at any time following and
during the continuance of an Event of Default, at its option, transfer to itself or any nominee any
securities constituting Collateral, receive any income thereon and hold such income as additional
Collateral or apply it to the Senior Obligations, subject to the terms of the Intercreditor
Agreement, in accordance with Section 8.03 of each Credit Agreement. Whether or not any Senior
Obligations are due, the Collateral Agent may following and during the continuance of an Event of
Default demand, xxx for, collect, or make any settlement or compromise which it deems desirable
with respect to the Collateral. Regardless of the adequacy of Collateral or any other security for
the Senior Obligations, any deposits or other sums at any time credited by, or due from, the
Collateral Agent or any other Senior Secured Party to any Grantor may at any time during the
continuance of an Event of Default be applied to, or set off against, any of the Senior
Obligations, subject to the terms of the Intercreditor Agreement, in accordance with Section 8.03
of each Credit Agreement.
13. Notification to Account Debtors and Other Persons Obligated on Collateral. If an
Event of Default shall have occurred and be continuing, each Grantor shall, at the request and
option of the Collateral Agent, notify account debtors and other persons obligated on any of the
Collateral of the security interest of the Collateral Agent in any account, chattel paper, general
intangible, instrument or other Collateral and that payment thereof is to be made directly to the
Collateral Agent or to any financial institution designated by the Collateral Agent as the
Collateral Agent’s agent therefor, and the Collateral Agent may itself, if an Event of Default
shall have occurred and be continuing, without notice to, or demand upon, any Grantor, so notify
account debtors and other persons obligated on Collateral. After the making of such a request or
the giving of any such notification, such Grantor shall hold any proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral received by such
Grantor as trustee for the Collateral Agent, for the benefit of the Senior Secured Parties and the
Collateral Agent, without commingling the same with other funds of such Grantor and shall turn the
same over to the Collateral Agent in the identical form received, together with any necessary
endorsements or assignments. The Collateral Agent shall apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral received by the
Collateral Agent to the Senior Obligations, subject to the terms of the Intercreditor Agreement, in
accordance with Section 8.03 of each Credit Agreement, such proceeds to be immediately credited
after final payment in cash or other immediately available funds of the items giving rise to them.
14. Power of Attorney.
14.1. Appointment and Powers of Collateral Agent. Each Grantor hereby
irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof,
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with full power of substitution, as its true and lawful attorneys-in-fact with full
irrevocable power and authority in the place and stead of such Grantor or in the Collateral
Agent’s own name, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments that may be
necessary or useful to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives said attorneys the power and right, on behalf of
any Grantor, without notice to, or assent by, such Grantor, to do the following:
(a) upon the occurrence and during the continuance of an Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or otherwise dispose of or deal
with any of the Collateral in such manner as is consistent with the Uniform Commercial Code
of the State or any other relevant jurisdiction and as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and to do, at such
Grantor’s expense, at any time, or from time to time, all acts and things which the
Collateral Agent deems necessary or useful to protect, preserve or realize upon the
Collateral and the Collateral Agent’s security interest therein, in order to effect the
intent of this Agreement, all no less fully and effectively as such Grantor might do,
including (i) the filing and prosecuting of registration and transfer applications with the
appropriate federal, state or local agencies or authorities with respect to trademarks,
copyrights and patentable inventions and processes, (ii) upon written notice to such
Grantor, the exercise of voting rights with respect to voting securities, which rights may
be exercised, if the Collateral Agent so elects, with a view to causing the liquidation of
assets of the issuer of any such securities and (iii) the execution, delivery and recording,
in connection with any sale or other disposition of any Collateral, of the endorsements,
assignments or other instruments of conveyance or transfer with respect to such Collateral;
and
(b) to the extent that such Grantor’s authorization given in §3 is not sufficient, to
file such financing statements with respect hereto, with or without such Grantor’s
signature, or a photocopy of this Agreement in substitution for a financing statement, as
the Collateral Agent may deem appropriate and to execute in such Grantor’s name such
financing statements and amendments thereto and continuation statements which may require
such Grantor’s signature.
14.2. Ratification by Grantors. To the extent permitted by law, each Grantor
hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue
hereof. This power of attorney is a power coupled with an interest and is irrevocable.
14.3. No Duty on Collateral Agent. The powers conferred on the Collateral
Agent hereunder are solely to protect the interests of the Collateral Agent and the other
Senior Secured Parties in the Collateral and shall not impose any duty upon the Collateral
Agent to exercise any such powers. The Collateral Agent shall be accountable only for the
amounts that it actually receives as a result of the exercise of such powers, and neither it
nor any of its officers, directors, employees or agents shall be responsible to any
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Grantor for any act or failure to act, except for the Collateral Agent’s own gross
negligence or willful misconduct.
15. Rights and Remedies. If an Event of Default shall have occurred and be
continuing, the Collateral Agent, without any other notice to, or demand upon, any Grantor, shall
have in any jurisdiction in which enforcement hereof is sought, in addition to all other rights and
remedies, the rights and remedies of a secured party under the Uniform Commercial Code of the State
or any other relevant jurisdiction and any additional rights and remedies as may be provided to a
secured party in any jurisdiction in which Collateral is located, including the right to take
possession of the Collateral, and for that purpose the Collateral Agent may, so far as the Grantors
can give authority therefor, enter upon any premises on which the Collateral may be situated and
remove the same therefrom. The Collateral Agent may in its discretion require the Grantors to
assemble all or any part of the Collateral at such location or locations within the jurisdiction(s)
of such Grantors’ principal office(s) or at such other locations as the Collateral Agent may
reasonably designate. Unless the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, the Collateral Agent shall give to
such Grantor at least ten (10) Business Days prior written notice of the time and place of any
public sale of Collateral or of the time after which any private sale or any other intended
disposition is to be made. Each Grantor hereby acknowledges that ten (10) Business Days prior
written notice of such sale or sales shall be reasonable notice. In addition, each Grantor waives
any and all rights that it may have to a judicial hearing in advance of the enforcement of any of
the Collateral Agent’s rights and remedies hereunder, including its right following an Event of
Default to take immediate possession of the Collateral and to exercise its rights and remedies with
respect thereto.
16. Standards for Exercising Rights and Remedies. To the extent that applicable law
imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable manner,
each Grantor acknowledges and agrees that it is not commercially unreasonable for the Collateral
Agent (a) to fail to incur expenses reasonably deemed significant by the Collateral Agent to
prepare Collateral for disposition or otherwise to fail to complete raw material or work in process
into finished goods or other finished products for disposition, (b) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against
account debtors or other persons obligated on Collateral or to fail to remove Liens on or any
adverse claims against Collateral, (d) to exercise collection remedies against account debtors and
other persons obligated on Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through publications or media
of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact
other persons, whether or not in the same business as such Grantor, for expressions of interest in
acquiring all, or any portion of, the Collateral, (g) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the Collateral is of a specialized
nature, (h) to dispose of Collateral by utilizing Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than
retail markets, (j) to disclaim disposition warranties, (k) to purchase insurance or credit
enhancements to insure the
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Collateral Agent against risks of loss, collection or disposition of Collateral or to provide
to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or
(l) to the extent deemed appropriate by the Collateral Agent, to obtain the services of brokers,
investment bankers, consultants and other professionals to assist the Collateral Agent in the
collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of
this Section 16 is to provide non-exhaustive indications of what actions or omissions by
the Collateral Agent would fulfill the Collateral Agent’s duties under the Uniform Commercial Code
of the State or any other relevant jurisdiction in the Collateral Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Collateral Agent shall not be
deemed to fail to fulfill such duties solely on account of not being indicated in this Section
16. Without limitation upon the foregoing, nothing contained in this Section 16 shall
be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent
that would not have been granted or imposed by this Agreement or by applicable law in the absence
of this Section 16.
17. No Waiver by Collateral Agent, etc. The Collateral Agent shall not be deemed to
have waived any of its rights and remedies in respect of the Senior Obligations or the Collateral
unless such waiver shall be in writing and signed by the Collateral Agent with the consent of the
requisite Lenders, as provided for in the relevant provisions of the Intercreditor Agreement or, if
the Intercreditor Agreement has been terminated, as provided for in the relevant provisions of the
applicable Credit Agreement. No delay or omission on the part of the Collateral Agent in
exercising any right or remedy shall operate as a waiver of such right or remedy or any other right
or remedy. A waiver on any one occasion shall not be construed as a bar to, or waiver of, any
right or remedy on any future occasion. All rights and remedies of the Collateral Agent with
respect to the Senior Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly, alternatively,
successively or concurrently at such time or at such times as the Collateral Agent deems expedient.
18. Suretyship Waivers by Grantors. Each Grantor waives demand, notice, protest,
notice of acceptance of this Agreement, notice of loans made, credit extended, Collateral received
or delivered or other action taken in reliance hereon and all other demands and notices of any
description. With respect to both the Senior Obligations and the Collateral, each Grantor assents
to any extension or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of, or failure to perfect, any security interest in any
Collateral, to the addition or release of any party or person primarily or secondarily liable
therefor, to the acceptance of partial payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such time or times as the Collateral Agent may
deem advisable. The Collateral Agent shall have no duty as to the collection or protection of the
Collateral or any income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof as set forth in
Section 11.2. Each Grantor further waives any and all other suretyship defenses.
19. Marshaling. Neither the Collateral Agent nor any other Senior Secured Party shall
be required to marshal any present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Senior Obligations or any of them or to
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resort to such collateral security or other assurances of payment in any particular order, and
all of the rights and remedies of the Collateral Agent or any other Senior Secured Party hereunder
and of the Collateral Agent or any other Senior Secured Party in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to all other rights
and remedies, however existing or arising. To the extent that it lawfully may, each Grantor hereby
agrees that it will not invoke any law relating to the marshaling of collateral which might cause
delay in, or impede the enforcement of, the Collateral Agent’s rights and remedies under this
Agreement or under any other instrument creating or evidencing any of the Senior Obligations or
under which any of the Senior Obligations is outstanding or by which any of the Senior Obligations
is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each
Grantor hereby irrevocably waives the benefits of all such laws.
20. Proceeds of Dispositions; Expenses. Each Grantor jointly and severally agrees to
pay to the Collateral Agent on demand any and all expenses, including reasonable attorneys’ fees
and disbursements, incurred or paid by the Collateral Agent in protecting, preserving or enforcing
the Collateral Agent’s rights and remedies under, or in respect of, any of the Senior Obligations
or any of the Collateral. After deducting all of said expenses, the residue of any proceeds of
collection or sale or other disposition of Collateral shall, to the extent actually received in
cash, be applied to the payment of the Senior Obligations, subject to the terms of the
Intercreditor Agreement, in such order or preference as is provided Section 8.03 of each Credit
Agreement, proper allowance and provision being made for any Senior Obligations not then due. Upon
the final payment in cash and satisfaction in full of all of the Senior Obligations and after
making any payments required by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial
Code of the State, any excess shall be returned to the applicable Grantor. In the absence of final
payment and satisfaction in full of all of the Senior Obligations, each Grantor shall remain
jointly and severally liable for any deficiency.
21. Overdue Amounts. Until paid, all amounts due and payable by any Grantor hereunder
shall be a debt secured by the Collateral and shall bear, whether before or after judgment,
interest at the Default Rate.
22. Governing Law; Consent to Jurisdiction; Service of Process. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW). EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING
IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF, OR RELATING
TO, THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY
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APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT SHALL AFFECT ANY RIGHT THAT THE COLLATERAL AGENT OR ANY OF THE OTHER SENIOR SECURED
PARTIES MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY
GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH GRANTOR IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF, OR
RELATING TO, THIS AGREEMENT IN ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY NEW
YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK.
23. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, OR RELATING TO, THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION.
24. Miscellaneous. The headings of each section of this Agreement are for convenience
only and shall not define or limit the provisions thereof. This Agreement and all rights and
obligations hereunder shall be binding upon each Grantor and its successors and assigns, and shall
inure to the benefit of the Collateral Agent, the other Senior Secured Parties and their respective
successors and assigns. If any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and this
Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable term
had not been included herein. Each Grantor acknowledges receipt of a copy of this Agreement.
25. Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Loan Documents (as defined in each Credit Agreement) constitute the
entire contract among the parties relating to the subject matter hereof and supersede any and
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all previous agreements and understandings, oral or written, relating to the subject matter
hereof. Delivery of an executed counterpart of a signature page of this Agreement by electronic
transmission shall be effective as delivery of a manually executed counterpart of this Agreement.
26. Additional Grantors. Any Subsidiary of any Loan Party (each an “Additional
Grantor”) may hereafter become a party to this Agreement by executing a counterpart hereof or a
joinder agreement, in each case in form and substance satisfactory to the Collateral Agent, and
there shall be no need to re-execute, amend or restate this Agreement in connection therewith.
Upon such execution and delivery by any Additional Grantor, notice of which is hereby waived by the
Grantors, such Additional Grantor shall be deemed to have made the representations and warranties
set forth herein, and shall be bound by all of the terms, covenants and conditions hereof to the
same extent as if such Additional Grantor had executed this Agreement as of the Closing Date, and
the Collateral Agent, for the benefit of the Senior Secured Parties, shall be entitled to all of
the benefits of such Additional Grantor’s obligations hereunder.
27. Notice, etc. All notices, requests and other communications hereunder shall be
made in the manner and to the addresses set forth in Section 10.02 of each Credit Agreement or at
such other address in the United States as may be specified by a written notice delivered to the
other parties hereto.
28. Termination. Upon payment in full of all Senior Obligations (excluding any
Obligations with respect to any Secured Cash Management Agreement, Secured Hedge Agreement or
Secured Line) and the termination of all obligations under the Credit Agreements and all the other
Loan Documents (as defined in each of the Revolving Credit Agreement and the Term Loan Credit
Agreement), this Agreement shall terminate.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, intending to be legally bound, the undersigned have caused this Agreement
to be duly executed as of the date first above written.
| Grantors: KAMAN CORPORATION KAMAN AEROSPACE GROUP, INC. KAMATICS CORPORATION KAMAN PRECISION PRODUCTS, INC. KAMAN AEROSPACE CORPORATION KAMAN AEROSTRUCTURES GROUP -WICHITA, INC. KAMAN AEROSTRUCTURES — WICHITA, INC. KAMAN INDUSTRIAL TECHNOLOGIES CORPORATION KAMAN X CORPORATION K-MAX CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Vice President & Treasurer, Kaman Corporation | |||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Secretary, each Kaman Subsidiary | |||
Signature
Page to Security Agreement
Accepted:
BANK OF AMERICA, N.A., as
Collateral Agent
Collateral Agent
By: |
/s/ Xxxxxxx X. XxXxxxxxxx | |||
| Title: SVP |
Signature
Page to Security Agreement
CERTIFICATE OF ACKNOWLEDGMENT
[TO BE COMPLETED BY GRANTORS]
| COMMONWEALTH OR STATE OF CONNECTICUT | ) | |||||||||||
| ) | ss. | Bloomfield | ||||||||||
COUNTY
OF HARTFORD
|
) | |||||||||||
On
this 15th day of September, 2009, before me, the undersigned notary public, personally
appeared Xxxxxx X. Xxxxx, proved to me through satisfactory evidence of identification,
which was personal knowledge, to be the person whose name is signed on the preceding or
attached document, and acknowledged to me that he signed it voluntarily for its stated
purpose as Vice President & Treasurer for Kaman Corporation, a
Connecticut corporation.
| Xxxxxxx X. Xxxxxxx | ||||
| (official signature and seal of notary) | ||||
| My commission expires: April 30, 0000 | ||||
| XXXXXXXXXXXX XX XXXXX XX XXXXXXXXXXX | ) | |||||||||||
| ) | ss. | Bloomfield | ||||||||||
COUNTY
OF HARTFORD
|
) | |||||||||||
On this 15th day of September, 2009, before me, the undersigned notary public, personally appeared
Xxxxxxx X. Xxxxx, proved to me through satisfactory evidence of identification, which was personal
knowledge, to be the person whose name is signed on the preceding or attached document, and
acknowledged to me that she signed it voluntarily for its stated purpose as Secretary for the other
Grantors.
| /s/ Xxxxxxx X. Xxxxxxx | ||||
| (official signature and seal of notary) | ||||
| My commission expires: April 30, 2010 | ||||
