________________________________________________
SECURITY AND PLEDGE AGREEMENT
between
TEREX CORPORATION
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Collateral Agent
Dated as of May 9, 1995
________________________________________________
TABLE OF CONTENTS
Page
1. Definitions 1
2. Creation of Security Interest, etc. 13
3. Representations and Warranties 15
3.1 Validity, Perfection and Priority 15
3.2 No Liens; Other Financing Statements 16
3.3 Chief Executive Office 17
3.4 Location of Inventory and Equipment 17
3.5 Fair Labor Standards Act 17
3.6 Tradenames; Prior Names 17
3.7 Certificate of Title 17
3.8 Pledged Securities 18
3.9 Receivables 19
3.10 Intellectual Property 19
4. Covenants 21
4.1 Books and Records 21
4.2 Further Assurances 22
4.3 Change of Chief Executive Office 22
4.4 Change of Location of Inventory and Equipment 23
4.5 Change of Name; Identity or Corporate Structure 24
4.6 Subsequently Acquired Pledged Securities, etc. 24
4.7 Delivery of Instruments. 25
4.8 Delivery of Chattel Paper 25
4.9 Right of Inspection 25
4.10 Insurance 26
4.11 Warehouse Receipts Non-negotiable 29
4.12 Motor Vehicles 29
4.13 Compliance with Laws 30
4.14 Payment of Obligations 30
4.15 No Impairment 30
4.16 Negative Pledge 30
4.17 Limitations on Dispositions of Collateral 31
4.18 Maintenance of Equipment 31
4.19 Provisions Regarding Receivables 31
4.20 Intellectual Property 32
4.21 Notice 34
4.22 Performance by Collateral Agent of
Company's Obligations; Reimbursement 34
5. Appointment of Sub-Agents 34
6. Voting, etc. 35
7. Payments and Other Distributions 36
8. Collateral Account 37
8.1 Collateral Account 37
8.2 Deposit of Proceeds 37
8.3 Investment of Balance in Collateral Account 37
9. Power of Attorney 38
9.1 Collateral Agent's Appointment as Attorney-in-Fact 38
10. Remedies 41
10.1 Rights and Remedies Generally 41
10.2 Proceeds 42
10.3 Direct Company to Dispose of Collateral 43
10.4 Collateral Account 44
10.5 Possession of Collateral 44
10.6 Disposition of the Collateral 45
10.7 Voting of Pledged Securities etc. 46
10.8 Registration Rights; Private Sales 47
10.9 Provisions Regarding Receivables 49
10.10 Recourse 50
10.11 Expenses; Attorneys' Fees 50
10.12 Preventing Impairment of the Collateral 50
10.13 Limitation on Duties
Regarding Preservation of Collateral 50
10.14 Waiver of Claims 51
10.15 Discontinuance of Proceedings 52
10.16 Intellectual Property License 53
11. Additional Xxxxxxxxxx 00
00. Compensation and Indemnification 53
12.1 Compensation 53
12.2 Indemnity, etc. 53
12.3 Indemnity Obligations Secured by Collateral; Survival 55
13. Governing Law; Submission to Jurisdiction 55
14. Limitation of Liability 56
15. Notices 57
16. Successors and Assigns 57
17. Waivers and Amendments 57
18. No Waiver; Remedies Cumulative 58
19. Termination; Release 58
20. Counterparts 58
21. Headings Descriptive 59
22. Marshalling 59
23. Severability 59
24. Survival 59
25. Powers Coupled with an Interest 59
26. Authority of Collateral Agent 59
27. Waiver 60
Schedules
SECURITY AND PLEDGE AGREEMENT
THIS SECURITY AND PLEDGE AGREEMENT, dated as of May 9, 1995 is
entered into between TEREX CORPORATION, a Delaware corporation (together with
its permitted successors and assigns, the "Company"), and UNITED STATES TRUST
COMPANY OF NEW YORK, a New York corporation, as collateral agent (together with
its successors and assigns, the "Collateral Agent").
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, covenant and agree as follows:
1. Definitions. Unless the context hereof clearly requires
otherwise:
(a) words and terms defined in the Indenture and not defined
herein shall have the same meanings herein as therein provided; and
(b) the following words and terms shall have the following
meanings:
"Account Debtor" shall mean the person who is obligated on a
Receivable.
"Accounts" shall mean "accounts" as such term is defined in Section
9-106 of the UCC.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Baulift" shall mean Baulift Baumaschinen und Xxxxx Handels GmbH, a
Gesellschaft mit beschrankter Haftung organized under the laws of the Federal
Republic of Germany, and its successors and assigns.
"Baulift Note" shall mean that certain promissory note dated May 9,
1995 in the principal amount of U.S.$733,000 made by Baulift to the order of
the Company, as the same may be amended, modified, supplemented, restated,
refunded or replaced from time to time.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
Section 9-105(b) of the UCC.
"Collateral" shall have the meaning assigned to it in Section 2
hereof.
"Collateral Account" shall mean the account (which may be a
securities account) established and maintained pursuant to Section 8 of this
Security Agreement by the Collateral Agent, entitled "Terex Corporation
Collateral Account, United States Trust Company of New York, as collateral
agent, secured party", and all funds, securities and other property or other
items from time to time credited to such account and all interest, income and
distributions thereon.
"Collateral Records" shall mean books, records, computer software,
computer printouts, customer lists, blueprints, technical specifications,
manuals, and similar items which relate to any Collateral other than such items
obtained under license or franchise agreements that prohibit assignment or
disclosure of such items.
"Congress Intercreditor Agreement" shall mean that certain
Intercreditor Agreement dated as of May 9, 1995, between Congress Financial
Corporation and Foothill Capital Corporation, individually and as Revolving
Loan Agent, and the Collateral Agent, as the same may be amended, modified,
supplemented or restated from time to time.
"Copyright Licenses" means all of the Company's right, title, and
interest in and to any and all agreements providing for the granting of any
right in or to Copyrights (whether the Company is licensee or licensor
thereunder) including, without limitation, each agreement referred to in Item B
of Schedule VI.
"Copyrights" means all of the Company's right, title, and interest in
and to all United States and foreign copyrights and all semiconductor chip
product mask works, whether registered or unregistered, now or hereafter in
force throughout the world, all registrations and applications therefor
including, without limitation, the copyright and mask work registrations and
applications referred to in Item A of Schedule VI, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof, the
right to xxx for past infringements of any of the foregoing, and all proceeds
of the foregoing, including, without limitations, license, royalties, income,
payments, claims, damages, and proceeds of suit.
"Distributions" shall mean all dividends, distributions, payments of
interest and principal and other amounts (whether consisting of cash,
securities, personalty or other property) from time to time received,
receivable or otherwise distributed in respect of or in exchange or
substitution for any of the Pledged Securities.
"Documents" shall mean "documents" as such term is defined in Section
9-105(f) of the UCC.
"Equipment" shall mean "equipment" as such term is defined in Section
9-109(2) of the UCC and shall include, without limitation and in any event, all
machinery, manufacturing and assembly equipment, data processing equipment,
motor vehicles not constituting Inventory of the Company, computers, office
equipment, furniture, appliances, tools, dies and material handling equipment.
"Exempt Instruments" shall have the meaning provided in Section
3.8(b) of this Security Agreement.
"Existing Notes" shall mean the collective reference to the PPM
France Note, the PPM U.S. Note, the Terex Cranes Note, the PPM Xxxxx Note, the
Baulift Note and each other promissory note and Instrument identified on
Schedule II hereto.
"Fixtures" shall mean "fixtures" as such term is defined in Section
9-313 of the UCC.
"General Intangibles" shall mean "general intangibles" as such term
is defined in Section 9-106 of the UCC, including, without limitation and in
any event, rights to the payment of money, Trademarks, Copyrights, Patents, and
contracts, licenses and franchises (except in the case of licenses and
franchises in respect of which the Company is the licensee or franchisee if,
and for so long as, the agreement in respect of such license or franchise
prohibits by its terms any assignment or grant of a security interest therein),
limited and general partnership interests and joint venture interests, federal
income tax refunds, trade names, distributions on certificated securities (as
defined in Section 8-102(1)(a) of the UCC) and uncertificated securities (as
defined in Section 8-102(1)(b) of the UCC), computer programs and other
computer software, inventions, designs, trade secrets, goodwill, proprietary
rights, customer lists, supplier contracts, sale orders, correspondence,
advertising materials, payments due in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property, reversionary
interests in pension and profit-sharing plans and reversionary, beneficial and
residual interests in trusts, credits with and other claims against any Person,
together with any collateral for any of the foregoing and the rights under any
security agreement granting a security interest in such collateral.
"Hedging Agreements" shall mean interest rate, currency or commodity
protection or hedging arrangements, including without limitation, caps,
collars, floors, forwards and any other similar or dissimilar interest rate,
currency or commodity exchange agreements or other interest rate, currency or
commodity hedging arrangements.
"Indenture" shall mean that certain Indenture, dated as of the date
hereof, among the Company, the Guarantors named therein and the Trustee, as the
same may be amended, modified, supplemented or restated from time to time.
"Instruments" shall mean "instruments" as such term is defined in
Section 9-105(1)(i) of the UCC.
"Insurance Policies" shall mean insurance policies procured by or on
behalf of the Company relating to the Collateral identified in clauses (i)
through (xvi), inclusive, and (xviii) of Section 2 hereof.
"Intellectual Property Collateral" means, collectively, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks, the Trademark Licenses, and the Trade Secrets Collateral.
"Inventory" shall mean "inventory" as such term is defined in Section
9-109(4) of the UCC, including without limitation and in any event, all goods
(whether such goods are in the possession of the Company or of a lessee, bailee
or other Person for sale, lease, storage, transit, processing, use or otherwise
and whether consisting of whole goods, spare parts, components, supplies,
materials or consigned or returned or repossessed goods) which are held for
sale or lease or are to be furnished (or which have been furnished) under any
contract of service or which are raw materials or work in progress or materials
used or consumed in the Company's or any of its Subsidiaries' business.
"Majority Holders" shall mean the Holder or Holders of a majority in
aggregate principal amount of the outstanding Notes.
"Mortgaged Property" shall mean all property and assets in which a
Lien is granted under the Mortgages.
"Non-located Assets" shall have the meaning provided in Section 4.4
of this Security Agreement.
"Patent Licenses" means all of the Company's right, title, and
interest in and to any and all agreements providing for the granting of any
right in or to Patents (whether the Company is licensee or licensor thereunder)
including, without limitation, each agreement referred to in Item D of Schedule
VI.
"Patents" means all of the Company's right, title, and interest in
and to all United States and foreign patents and applications for letters
patent throughout the world, including, but not limited to each patent and
patent application referred to in Item C of Schedule VI, all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and
reexaminations of any of the foregoing, all rights corresponding thereto
throughout the world, and all proceeds of the foregoing including, without
limitation, license, royalties, income, payments, claims, damages, and proceeds
of suit and the right to xxx for past infringements of any of the foregoing.
"Permitted Liens" shall mean the Liens permitted pursuant to Section
4.12 of the Indenture.
"Permitted Working Capital Financers" shall mean those Persons
providing financing to the Company or its Subsidiaries permitted pursuant to
Section 4.9(b)(i) of the Indenture which is secured by Liens on all or part of
the Working Capital Collateral of the Company and/or its Subsidiaries permitted
pursuant to Section 4.12(i) of the Indenture.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Pledged Securities" shall mean the collective reference to (i) all
shares of capital stock of any corporation, and all ownership and equity
interests in any other Person, from time to time owned by the Company or
options or rights to acquire any such shares or interests now or hereafter
owned by the Company, including, without limitation, the capital stock and
interests identified on Schedule II hereto, (ii) the PPM France Note, the PPM
U.S. Note, the Terex Cranes Note, the PPM Xxxxx Note, the Baulift Note and all
other promissory notes and other Instruments now or hereafter owned by the
Company, all security therefore and all rights of the Company under any and all
documents or agreements pursuant to which any such promissory note or other
such Instrument is secured, (iii) all Distributions on Pledged Securities (as
constituted immediately prior to such Distribution) constituting securities
(whether debt or equity securities or otherwise), (iv) all other or additional
stock, notes, securities or property (including cash) paid or distributed in
respect of Pledged Securities (as constituted immediately prior to such payment
or distribution) by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement and (v) all other or additional
stock, notes, securities or property (including cash) that may be paid in
respect of Pledged Securities (as constituted immediately prior to such
payment) by reason of any consolidation, merger, exchange of stock, conveyance
of assets, liquidation, bankruptcy or similar corporate reorganization or other
disposition of Pledged Securities.
"PPM France" shall mean P.P.M., S.A., a societe anonyme organized
under the laws of the Republic of France, and its successors and assigns.
"PPM France Note" shall mean that certain promissory note dated May
9, 1995 in the principal amount of U.S.$56,861,000 made by PPM France to the
order of the Company, as the same may be amended, modified, supplemented,
restated, refunded or replaced from time to time.
"PPM Xxxxx" shall mean PPM Xxxxx GmbH, a Gesellschaft mit
beschrankter Haftung organized under the laws of the Federal Republic of
Germany, and its successors and assigns.
"PPM Xxxxx Note" shall mean that certain promissory note dated May 9,
1995 in the principal amount of U.S.$733,000 made by PPM Xxxxx to the order of
the Company, as the same may be amended, modified, supplemented, restated,
refunded or replaced from time to time.
"PPM U.S." shall mean PPM Cranes, Inc., a Delaware corporation, and
it successors and assigns.
"PPM U.S. Note" shall mean that certain promissory note dated May 9,
1995 in the principal amount of U.S.$21,200,000 made by PPM U.S. to the order
of the Company, as the same may be amended, modified, supplemented, restated,
refunded or replaced from time to time.
"Proceeds" shall mean "proceeds" as such term is defined in Section
9-306(1) of the UCC.
"Purchase Agreement" shall mean that certain Purchase Agreement,
dated as of the date hereof, among the Company, certain Subsidiaries of the
Company and each of the purchasers signatory thereto, as the same may be
amended, modified, supplemented or restated from time to time.
"Receivables" shall mean all rights to payment for goods sold or
leased or services rendered, whether or not earned by performance and all
rights in respect of the Account Debtor, including without limitation all such
rights constituting or evidenced by any Account, Chattel Paper or Instrument,
together with (a) any collateral assigned, hypothecated or held to secure any
of the foregoing and the rights under any security agreement granting a
security interest in such collateral, (b) all goods, the sale of which gave
rise to any of the foregoing, including, without limitation, all rights in any
returned or repossessed goods and unpaid seller's rights, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing and (d) all
powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith.
"Receivables Records" shall mean (a) all original copies of all
documents, instruments or other writings evidencing the Receivables, (b) all
books, correspondence, credit or other files, records, ledger sheets or cards,
invoices, and other papers relating to Receivables, including without
limitation all tapes, cards, computer tapes, computer discs, computer runs,
record keeping systems and other papers and documents relating to the
Receivables, whether in the possession or under the control of the Company or
any computer bureau or agent from time to time acting for the Company or
otherwise and (c) all credit information, reports and memoranda relating
thereto.
"Security Agreement" shall mean this Security and Pledge Agreement,
as the same may be amended, modified, supplemented or restated from time to
time.
"Secured Obligations" shall mean all obligations, liabilities
(including, without limitation, contingent obligations) and indebtedness of
every nature of the Company or any of its Subsidiaries to the Secured Parties
now existing or hereafter incurred, arising under or in connection with the
Collateral, the Mortgaged Property or the Transaction Collateral or this
Security Agreement, the Purchase Agreement, the Indenture, the Registration
Rights Agreement, the Notes, the Mortgages or the Transaction Security
Documents, and shall include, interest on the Notes accruing after the filing
of any petition under the Bankruptcy Code at the default rate applicable under
the Indenture.
"Secured Parties" shall mean the collective reference to the
Collateral Agent, the Trustee and each Holder.
"Subject Subsidiary Chattel Paper" shall mean Chattel Paper
constituting Subsidiary Collateral and that has not been delivered to, or is
not being held by any Subsidiary party to the Subsidiary Security Agreement
subject to the Lien of, a Permitted Working Capital Financer as security.
"Subject Subsidiary Instruments" shall mean Instruments constituting
Subsidiary Collateral and representing Receivables that have not been delivered
to a Permitted Working Capital Financer as security.
"Subordination Agreement" shall have the meaning provided in Section
2(b) of this Security Agreement.
"Subsidiary" of any Person shall mean (i) a corporation a majority of
whose capital stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly, owned by
such Person, by one or more subsidiaries of such Person or by such Person and
one or more subsidiaries of such Person or (ii) a partnership in which such
Person or a subsidiary of such person is, at the date of determination, a
general partner of such partnership, or (iii) any other Person (other than a
corporation or a partnership) in which such Person, a subsidiary of such person
or such Person and one or more subsidiaries of such Person, directly or
indirectly, at the date of determination, has (x) at least a majority ownership
interest or (y) the power to elect or direct the election of the directors or
other governing body of such Person.
"Subsidiary Collateral" shall mean "Collateral" as defined in the
Subsidiary Security Agreement.
"Subsidiary Security Agreement" shall mean that certain Subsidiary
Security and Pledge Agreement dated as of the date hereof between certain
Subsidiaries of the Company and the Collateral Agent, as the same may be
amended, modified, supplemented or restated from time to time.
"Terex Cranes" shall mean Terex Cranes, Inc., a Delaware corporation,
and it successors and assigns.
"Terex Cranes Note" shall mean that certain promissory note dated May
9, 1995 in the principal amount of U.S.$13,360,000 made by Terex Cranes to the
order of the Company, as the same may be amended, modified, supplemented,
restated, refunded or replaced from time to time.
"Trademark Licenses" means all of the Company's right, title, and
interest in and to any and all agreements providing for the granting of any
right in or to Trademarks (whether the Company is licensee or licensor
thereunder) including, without limitation, each agreement referred to in Item F
of Schedule VI.
"Trademarks" means all of the Company's right, title, and interest in
and to all United States and foreign trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of business
identifiers, designs and general intangibles of a like nature, all
registrations and applications for any of the foregoing including, but not
limited to the registrations and applications referred to in Item E of Schedule
VI, all extensions or renewals of any of the foregoing; all of the goodwill of
the business connected with the use of and symbolized by the foregoing; the
right to xxx for past infringement or dilution of any of the foregoing or for
any injury to goodwill, and all proceeds of the foregoing, including, without
limitation, license royalties, income, payments, claims, damages, and proceeds
of suit.
"Trade Secrets Collateral" means all of the Company's right, title,
and interest in and to trade secrets and all other confidential or proprietary
information and know-how now or hereafter owned or used in, or contemplated at
any time for use in, the business of the Company (all of the foregoing being
collectively called a "Trade Secret"), whether or not such Trade Secret has
been reduced to a writing or other tangible form, including all documents and
things embodying, incorporating, or referring in any way to such Trade Secret,
all licenses of Trade Secrets including, without limitation each such license
referred to in Item G of Schedule VI, the right to xxx for past infringement or
dilution of any Trade Secret, and all proceeds of the foregoing, including,
without limitation, license royalties, income, payments, claims, damages, and
proceeds of suit.
"Transaction Collateral" shall mean the collective reference to
"Collateral" as defined in each of the Transaction Security Documents.
"Transaction Security Documents" shall mean the Subsidiary Security
Agreement each other security agreement, pledge agreement, mortgage, deed of
trust and other document, instrument and agreement executed or delivered by the
Company or any Subsidiary of the Company from time to time pursuant to which
the Company or any such Subsidiary shall xxxxx x Xxxx on any of its properties
or revenues in favor of any Secured Party to secure any of the Secured
Obligations, including, without limitation, , as each such document, instrument
or agreement may be amended, modified, supplemented or restated from time to
time.
"Trustee" shall mean United States Trust Company of New York, as
trustee under the Indenture, and any successor trustee thereunder.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the State of New York.
"Working Capital Collateral" shall mean those assets, properties and
rights of the Company identified on Schedule VII hereto.
(c) All terms defined in the UCC and not otherwise defined
herein shall have the meanings assigned to them in the UCC.
2. Creation of Security Interest, etc.
(a) As security for the prompt and complete payment and
performance in full of all the Secured Obligations, the Company hereby assigns,
pledges, transfers and delivers to the Collateral Agent for the benefit of
itself and the other Secured Parties and grants to the Collateral Agent for the
benefit of itself and the other Secured Parties a security interest in and
continuing lien on all of the Company's right, title and interest in, to and
under the following, in each case, whether now owned or existing or hereafter
acquired or arising, and wherever located (all of which being hereinafter
collectively called the "Collateral"):
(i) all Inventory;
(ii) all Accounts;
(iii) all Pledged Securities;
(iv) all Equipment;
(v) all Distributions;
(vi) the Collateral Account;
(vii) all Collateral Records;
(viii) all Documents;
(ix) all Fixtures;
(x) all Chattel Paper;
(xi) all General Intangibles;
(xii) all Hedging Agreements;
(xiii) all Instruments;
(xiv) all Receivables;
(xv) all Receivables Records;
(xvi) all Intellectual Property Collateral;
(xvii) all Insurance Policies; and
(xviii) all accessions and additions to, all substitutions and
replacements for, and all Proceeds or products of, any or all of the foregoing;
provided, however, that Collateral Agent shall not have any security interest
in, or Lien on, any Equipment or Fixtures acquired by the Company with the
proceeds of Purchase Money Obligations permitted under the terms of the
Indenture, which Equipment or Fixtures are subject to Purchase Money Liens
permitted under the terms of the Indenture, if, and for so long as, the
agreements governing the terms of such Purchase Money Obligations and Purchase
Money Liens prohibit the grant by the Company of such security interests and
Liens on the assets so acquired. If the agreements governing the terms of any
permitted Purchase Money Obligations and Purchase Money Liens prohibit the
grant by the Company of security interests and Liens on the assets so acquired,
the Collateral Agent shall (at the request and sole expense of the Company)
execute and deliver to the Person holding such Purchase Money Liens on
Equipment or Fixtures, partial releases on Form UCC-3 (or comparable form),
which partial releases shall provide that the Collateral Agent shall have no
security interests or Liens on the Equipment or Fixtures subject to such
Purchase Money Liens but only for so long as (i) such Purchase Money
Obligations are outstanding and (ii) such agreements prohibit the grant by the
Company of such security interests and Liens.
(b) Notwithstanding anything contained herein to the contrary,
the Collateral Agent on behalf of the Secured Parties hereby acknowledge that
the Lien of the Secured Parties in Working Capital Collateral, shall be junior
and subordinate in priority to any Liens in Working Capital Collateral of the
Company granted by the Company to Permitted Working Capital Financers. The
Collateral Agent is authorized to enter into the Congress Intercreditor
Agreement and any other intercreditor or subordination agreement necessary or
appropriate to effectuate and be consistent with the foregoing (each such
agreement being a "Subordination Agreement").
(c) The Company acknowledges that all its rights under each
Existing Note and any documents or agreements pursuant to which either such
note is secured, including, without limitation, all rights to make decisions
regarding amendments, consents and waivers with respect thereto, rights to
accept prepayments of the principal amount thereof, rights to make demands
thereunder and the exercise of rights and the taking or refraining from taking
of any actions thereunder, have been assigned to the Collateral Agent for the
benefit of the Secured Parties and the Company agrees that until the full and
final payment of the Secured Obligations, all such rights shall be exercised
only by the Collateral Agent, it being understood that the Collateral Agent
shall not make any demand for payment of principal under any Existing Note
unless an Event of Default shall have occurred and be continuing. The Company
hereby agrees that all such decisions shall be conclusive and binding on it and
waives any and all claim against the Collateral Agent and/or any Secured Party
in respect of any such decision, exercise, action or inaction.
3. Representations and Warranties. The Company represents and
warrants to the Collateral Agent and the other Secured Parties, which
representations and warranties shall survive the execution and delivery of this
Security Agreement, as follows:
3.1 Validity, Perfection and Priority.
(a) The security interests in the Collateral granted to the
Collateral Agent for the benefit of itself and the other Secured Parties
hereunder constitute valid and continuing security interests in the Collateral.
(b) Upon (i) the filing of financing statements naming the
Company as "debtor" and the Collateral Agent as "secured party" and describing
the Collateral in the filing offices set forth on Schedule I hereto, (ii) to
the extent not subject to Article 9 of the Applicable UCC, the recordation of
the security interests granted hereunder in Patents, Trademarks and Copyrights
in the applicable patent, trademark and copyright registries and the
registration of all Copyrights, (iii) upon the delivery by the Company of
certificates and instruments evidencing all of the Pledged Securities
identified on Schedule II hereto, indorsed in blank or accompanied by undated
stock powers duly executed in blank, as the case may be, with respect thereto,
and (iv) the consummation of all transactions and the taking of all actions
required under the Security Documents with respect to the perfection of
security interests in Pledged Securities consisting of equity securities issued
by Persons not organized in the United States or any State thereof, the
security interests in the Collateral granted to the Collateral Agent for the
benefit of itself and the other Secured Parties hereunder will constitute
perfected security interests therein superior and prior to all Liens (other
than Permitted Liens), rights or claims of all other Persons.
3.2 No Liens; Other Financing Statements.
(a) Except for the Lien granted to the Collateral Agent
hereunder for the benefit of itself and the other Secured Parties, the Company
owns and, as to all Collateral whether now existing or hereafter acquired will
continue to own, each item of the Collateral free and clear of any and all
Liens (other than Permitted Liens), rights and claims, and the Company shall
defend the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent or
any other Secured Parties other than holders of Permitted Liens on the
Collateral entitled to priority therein under applicable law.
(b) No financing statement or other evidence of Lien covering
or purporting to cover any of the Collateral is on file and is effective in any
public office other than (i) financing statements filed or to be filed in
connection with the security interests granted to the Collateral Agent
hereunder, (ii) financing statements for which proper, executed termination
statements have been delivered to the Collateral Agent for filing and (iii)
financing statements filed in connection with Permitted Liens.
3.3 Chief Executive Office. The chief executive office of the
Company is located at 000 Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000. The
originals of the Receivables Records and all Collateral Records are located at
the locations identified on Schedule III as such or at the chief executive
office of the Company. All Receivables are maintained at, and controlled and
directed (including, without limitation, for general accounting purposes) from
the chief executive office or the offices identified on Schedule III as such.
3.4 Location of Inventory and Equipment. All Inventory and
Equipment (other than Non-located Assets with an aggregate book value (together
with the aggregate book value of all Non-located Assets (as defined in each
Transaction Security Document)) not in excess of $10 million) now or from time
to time included in the Collateral is kept only at (or shall be in transit to)
the locations listed on Schedule III and IV hereto. None of such Inventory or
Equipment is in the possession of an issuer of a negotiable document (as
defined in Section 7-104 of the UCC) therefor or otherwise in the possession of
a bailee or other Person, except as set forth on Schedule IV hereto.
3.5 Fair Labor Standards Act. Any goods now or hereafter produced
by the Company included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as amended.
3.6 Tradenames; Prior Names. The only names under which the Company
has conducted business during the last five years are as set forth on Schedule
V hereto.
3.7 Certificate of Title. There is no property of the Company the
title to which is governed by a certificate of title or ownership other than
(i) motor vehicles which constitute Inventory of the Company and (ii) motor
vehicles which constitute Equipment of the Company and (to the extent that
failure to have accomplished the same would render the representation contained
in the first sentence of Section 3.4 hereof incorrect) with respect to which
the Lien of the Collateral Agent is duly noted on the certificate of title
issued with respect to such motor vehicles.
3.8 Pledged Securities. (a) The Company is the legal, record and
beneficial owner of, and has good title to, the Pledged Securities listed on
Schedule II hereto and such Pledged Securities are not subject to any put,
call, option or other right in favor of any other Person whatsoever, (b) except
as disclosed on Schedule 3.8, the Pledged Securities listed on Schedule II
hereto constitutes all of the capital stock owned legally or beneficially by
the Company of any corporation organized under the laws of the United States or
any State thereof and all of the ownership and equity interests owned legally
or beneficially by the Company of any other business entity organized under the
laws of the United States or any State thereof and all promissory notes and
other Instruments in which the Company has a legal or beneficial ownership
interest on the date hereof (other than Instruments constituting Working
Capital Collateral that have been delivered to a Permitted Working Capital
Financer and other Instruments in a principal amount, individually or in the
aggregate, not required to be delivered to the Collateral Agent pursuant to
Section 4.7 hereof (collectively, "Exempt Instruments")), (c) except as set
forth on Schedule II hereto, the Company has no options or other rights to
acquire any capital stock or other ownership or equity interests of any other
Person, (d) the Company is not a party to or bound by any agreement with any
other Person (including, without limitation, any Subsidiary or any other
stockholder of any Subsidiary) which restricts the ability of the Company to
vote, transfer or dispose of any Capital Stock owned by the Company or any of
the other Pledged Securities, (e) no consent of any other Person (including,
without limitation, any Subsidiary of the Company or any other stockholder of
any such Subsidiary) is required to be obtained by the Company in connection
with the pledge by the Company of any of the Pledged Securities or the
consummation of the other transactions contemplated hereby, including, without
limitation, the exercise by the Collateral Agent of the voting or other rights
provided for in this Security Agreement with respect to the Pledged Securities
or the remedies in respect of the Pledged Securities provided pursuant to this
Security Agreement, (f) all of the Pledged Securities listed on Schedule II
have been duly and validly issued, and are fully paid and nonassessable and (g)
each of the Existing Notes (i) evidences bona fide indebtedness of the issuer
thereof to the Company, (ii) is not subject to any offset for counterclaim and
(iii) is enforceable against the maker thereof in accordance with its terms,
except as enforceability may be limited by bankruptcy, reorganization,
moratorium and other laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity or
at law).
3.9 Receivables.
(a) Each Receivable (i) is and will be the genuine, legal,
valid and binding obligation of the Account Debtor in respect thereof,
representing an unsatisfied obligation of such Account Debtor, (ii) is and will
be enforceable in accordance with its terms, (iii) is and will be in full force
and effect and is not and will not be subject to any setoffs, defenses, taxes,
counterclaims (except (x) with respect to refunds, returns and allowances in
the ordinary course of business and (y) to the extent that such Receivable may
not yet have been earned by performance) and (iv) is and will be in compliance
with all applicable laws, whether federal, state, local or foreign.
(b) No Receivables in excess of $250,000 individually or
$2,000,000 in the aggregate (together with Receivables represented by
Instruments not delivered to a Permitted Working Capital Financer and not
delivered to the Collateral Agent pursuant to the terms of the Transaction
Security Documents) are evidenced by any Instrument which has not been
delivered to the Collateral Agent or a Permitted Working Capital Financer.
(c) The representations and warranties contained in this
Section shall be deemed to be repeated by the Company as of the time when each
Receivable arises.
3.10 Intellectual Property. Except as disclosed in Item H of
Schedule VI, as of the date hereof:
(a) all Intellectual Property Collateral material to the
business of the Company is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part;
(b) to the best of the Company's knowledge, all Intellectual
Property Collateral material to the business of the Company is valid and
enforceable;
(c) all Trademark, Patent and Copyright registrations and
applications are (except as disclosed in Items A, C or E of Schedule VI hereof)
standing in the name of the Company, and none of the Trademarks, Patents,
Copyrights or Trade Secret Collateral material to the business of the Company
has been licensed by the Company to any affiliate or third party, except as
disclosed in Items B, D, F and G of Schedule VI;
(d) the Company has been using appropriate statutory notice of
registration in connection with its use of registered Trademarks material to
the business of the Company, proper marking practices in connection with the
use of Patents material to the business of the Company and appropriate notice
of copyright in connection with the publication of Copyrights material to the
business of the Company;
(e) the Company is the exclusive owner of the entire and
unencumbered right, title and interest in and to all Intellectual Property
Collateral material to the business of the Company (subject only to Permitted
Liens and the licenses and other disclosures identified in Items B, D, F and G
of Schedule VI) and, to the best of the Company's knowledge, no claim has been
made that the use of such Intellectual Property Collateral violates the
asserted rights of any third party;
(f) to the best of the Company's knowledge, the conduct of the
Company's business does not infringe upon any trademark, patent, copyright,
trade secret or similar intellectual property right owned or controlled by a
third party and, to the best of the Company's knowledge, no third party is
infringing upon any Intellectual Property Collateral;
(g) no holding, decision, or judgment has been rendered in any
action or proceeding challenging the validity of or the Company's rights to use
any Intellectual Property Collateral and no such action or proceeding is
pending or, to the best of the Company's knowledge, threatened;
(h) the Company has performed all acts and has paid all
required fees and taxes to maintain each and every registration and application
of Intellectual Property Collateral material to the business of the Company in
full force and effect;
(i) the Company owns or has valid rights to use, all patents,
trademarks, trade secrets, copyrights, and similar intellectual property rights
material to the business of the Company and used in the conduct of the
Company's business; and
(j) Schedule VI set forth (i) all United States, state and
foreign registrations of and applications for Patents, Trademarks and
Copyrights of the Company and (ii) all Patent Licenses, Trademark Licenses and
Copyright Licenses material to the business of the Company.
4. Covenants. The parties agree that the following provisions shall
be applicable to the Company and the Collateral, and the Company covenants and
agrees that at all times during the term of this Security Agreement and until
the Secured Obligations have been full and finally paid:
4.1 Books and Records.
(a) The Company shall keep accurate and complete books and
records concerning each category of the Collateral, including, but not limited
to, the originals of all documentation with respect to all Receivables and
records of all payments received and all credits granted on the Receivables,
all merchandise returned and all other dealings therewith. The Company shall,
at any time that Chattel Paper and Receivables are not pledged to a Permitted
Working Capital Financier, legend, in form and manner reasonably satisfactory
to the Collateral Agent, all Chattel Paper and Receivables Records with an
appropriate reference to the fact that the Chattel Paper and all other
Receivables have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.
(b) The Company shall furnish to the Collateral Agent at such
times and in such form and substance as the Collateral Agent may reasonably
request, but in any event within ten business days after the occurrence of an
Event of Default and at least every 30 days thereafter during the continuance
of such Event of Default, information reasonably adequate to enable the
Collateral Agent to identify the Collateral and determine the amount and value
thereof, including, without limitation, the location, cost, net book value and
fair market value of Collateral.
4.2 Further Assurances. At any time and from time to time, upon the
reasonable request of the Collateral Agent, and at the sole expense of the
Company, the Company shall promptly do all such further things and duly execute
and deliver any and all such further conveyances, assignments, agreements,
instruments, indorsements, powers of attorney and other documents, make such
filings, give such notices and take such further action as the Collateral Agent
may reasonably deem necessary in obtaining the full benefits of this Security
Agreement and of the rights, remedies and powers herein granted or in order to
assure and confirm unto the Collateral Agent the Collateral Agent's rights,
powers and remedies hereunder, including, without limitation, the filing of any
financing statements, in form reasonably acceptable to the Collateral Agent
under the Uniform Commercial Code in effect in any jurisdiction with respect to
the Liens granted hereby. The Company also hereby authorizes the Collateral
Agent to file any such financing statement without the signature of the Company
to the extent permitted by applicable law. A photocopy or other reproduction
of this Security Agreement shall be sufficient as a financing statement and may
be filed in lieu of the original to the extent permitted by applicable law.
The Company will pay or reimburse the Collateral Agent for all filing fees and
related reasonable out-of-pocket expenses and will make or reimburse the
Collateral Agent for making all searches reasonably deemed necessary by the
Collateral Agent to establish and determine the priority of the security
interests of the Collateral Agent created hereunder or to determine the
presence or priority of other secured parties.
4.3 Change of Chief Executive Office. The Company will not move its
chief executive office from that disclosed in Section 3.3 hereof (or move or
establish any registered office in Kentucky) except to such new location as the
Company may establish in accordance with the last sentence of this Section.
The originals of all Receivables Records will continue to be kept at such chief
executive office, at the offices designated on Schedule III as offices at which
Receivables Records are located, or at such new locations as the Company may
establish in accordance with the last sentence of this Section. All
Receivables and Receivables Records of the Company will continue to be
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, such chief executive office or a location
identified as a location at which Receivables or Receivables records are
maintained, controlled and directed on Schedule III, or such new locations as
the Company may establish in accordance with the last sentence of this Section.
The Company shall not establish a new location for its chief executive office
or such activities (or move any such activities from any such locations) or
move or establish any registered office in Kentucky until (i) it shall have
given to the Collateral Agent not less than 30 days' prior written notice of
its intention to do so, clearly describing such new location and providing such
other information in connection therewith as the Collateral Agent may
reasonably request and (ii) with respect to such new location, it shall have
taken all action as the Collateral Agent may reasonably request to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected with the same or better priority
and in full force and effect.
4.4 Change of Location of Inventory and Equipment. The Company
agrees that (i) all Inventory and Equipment now held or subsequently acquired
by it shall only be kept at (or shall be in transit to) the locations shown on
Schedule III hereto (or, in the case of Inventory held by a bailee, those
locations shown on Schedule IV hereto), or such new locations as the Company
may establish in accordance with the last sentence of this Section. The
Company may establish a new location for Inventory and Equipment only if (i) it
shall have given to the Collateral Agent not less than 30 days' prior written
notice of its intention to do so, clearly describing such new location and
providing such other information in connection therewith as the Collateral
Agent may reasonably request and (ii) with respect to such new location, it
shall have taken all action as the Collateral Agent may reasonably request to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected with the same or
better priority and in full force and effect. Notwithstanding anything to the
contrary contained in this Section 4.4, the Company may keep Inventory and
Equipment at locations other than those set forth on Schedules III and IV
hereto and locations other than with respect to which it has notified the
Collateral Agent in advance (collectively, "Non-located Assets"); provided,
however, that at no time shall the aggregate book value of all Non-located
Assets (together with all other Non-located Assets (as defined in each of the
Transaction Security Documents)) and the book value of all Motor Vehicles
constituting Equipment owned by the Company or any of its Subsidiaries in which
the Collateral Agent does not have a perfected, first-priority Lien hereunder
or under the Transaction Security Documents exceed (a) $2,000,000 in any State
of the United States, province of Canada or in any other country or (b)
$10,000,000 in the aggregate for all such assets and at all locations.
4.5 Change of Name; Identity or Corporate Structure. The Company
shall not change its name (or conduct any significant portion of its business
under any tradenames (other than those identified with an asterisk on Schedule
V hereto)), identity or corporate structure unless (i) it shall have given to
the Collateral Agent not less than 30 days' prior written notice of its
intention to do so, clearly describing such new name, identity or corporate
structure or such new tradename and providing such other information in
connection therewith as the Collateral Agent may reasonably request and (ii)
with respect to such new name, identity or corporate structure or such new
tradename, it shall have taken all action as the Collateral Agent may
reasonably request to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected with
the same or better priority and in full force and effect.
4.6 Subsequently Acquired Pledged Securities, etc. If at any time
or from time to time after the date hereof, the Company shall acquire any
additional Pledged Securities (by purchase, stock dividend, in lieu of interest
or otherwise) (other than Exempt Instruments), the Company will forthwith
pledge and deposit such Pledged Securities with the Collateral Agent and
deliver to the Collateral Agent certificates or instruments therefor, indorsed
in blank by the Company or accompanied by undated stock powers duly executed in
blank by the Company or such other documentation reasonably required by the
Collateral Agent to perfect its first-priority Lien therein.
4.7 Delivery of Instruments. If any Instrument (other than
Instruments representing Receivables that have been delivered to a Permitted
Working Capital Financer as security) in excess of $250,000 individually or
(together with Subject Subsidiary Instruments) $2,000,000 in the aggregate
shall at any time comprise any portion of the Collateral and the Subsidiary
Collateral, combined, the Company shall within thirty days notify the
Collateral Agent thereof, and promptly deliver such Instrument or Instruments
to the Collateral Agent appropriately indorsed or assigned or to the order of
the Collateral Agent or in such other manner as shall be satisfactory to the
Collateral Agent.
4.8 Delivery of Chattel Paper. If Chattel Paper (other than Chattel
Paper representing Receivables that has been delivered to, or is being held by
the Company subject to the Lien of, a Permitted Working Capital Financer as
security) representing Receivables in excess of $250,000 individually or
(together with Subject Subsidiary Chattel Paper) $2,000,000 in the aggregate
shall at any time comprise any portion of the Collateral and the Subject
Collateral, combined, the Company shall within thirty days notify the
Collateral Agent thereof, and promptly deliver such Chattel Paper to the
Collateral Agent.
4.9 Right of Inspection. The Collateral Agent shall at all times
have full and free access during normal business hours to all the books,
correspondence and records of the Company relating to the Collateral, and the
Collateral Agent and its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and the Company agrees to render to the
Collateral Agent, at the Company's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. The Collateral
Agent and its representatives shall at all times during normal business hours
also have the right to enter into and upon any premises where any of the
Inventory or Equipment is located for the purpose of inspecting the same,
observing its use or otherwise protecting its interests therein. The
Collateral Agent shall, if no Event of Default shall then exist, provide
reasonable notice to the Company of any access and inspections permitted under
this Section and shall use all reasonable efforts to ensure that the business
of the Company will not be unreasonably disrupted thereby.
4.10 Insurance. The Company shall maintain or cause to be
maintained with financially sound and reputable insurers acceptable to the
Collateral Agent and licensed to do business in each state in which any of the
Collateral covered by any policy is located, insurance with respect to the
Collateral and its use, against loss or damage of the kinds customarily insured
against by reputable companies in the same or similar businesses, such
insurance to be of such types and in such amounts (with such deductible
amounts) as is customary for such companies under the same or similar
circumstances, and the types, amounts and terms of which (other than products
liability, which the Company self-insures) shall, in any event, be reasonably
acceptable to the Collateral Agent. Without limiting the generality of the
foregoing, the Company (a) will keep the Collateral insured on an "all risk"
basis, as appropriate for any particular Collateral against loss or damage by
fire, standard extended coverage perils and such other hazards, occurrences and
events customarily required by a prudent lender in the area where the
Collateral is located in amounts not less than the replacement cost of the
Collateral and (b) will maintain in the amount customarily obtained by the same
or similar businesses, general public liability insurance against claims for
bodily injury, death or property damage. The Company shall not obtain or carry
separate insurance concurrent in form or contributing in the event of loss with
that required in this Section to be furnished by the Company unless the
Collateral Agent and the other Secured Parties are included as named insured,
with loss payable as provided herein. All policies of insurance shall (i) name
the Collateral Agent, on behalf of itself and the other Secured Parties as
additional insured (with respect to liability insurance policies) or loss
payees with a lender's loss payable indorsement and a standard "New York"
mortgagee provision with a no contribution clause (with respect to property
insurance policies), in each case as their respective interests may appear,
(ii) include waivers by the insurer of all claims for insurance premiums
against the Collateral Agent and the other Secured Parties, (iii) provide that
any losses shall (subject to the terms of any Subordination Agreement) be
payable to the Collateral Agent notwithstanding (A) any act, failure to act or
negligence of or violation of warranties, declarations or conditions contained
in such policy by the Company, the Collateral Agent or any other Secured
Parties, (B) any foreclosure or other proceedings or notice of sale relating to
any Collateral insured thereunder, or (C) any change in the title to or
ownership of any Collateral insured thereunder and (iv) provide that no
cancellation, termination or lapse in coverage thereof shall be effective until
at least 30 days after receipt by the Collateral Agent of written notice
thereof. The Company shall pay the premiums for all policies of insurance as
the same become due and payable and shall deliver evidence thereof to the
Collateral Agent. At the request of the Collateral Agent, the Company will
(subject to the terms of any Subordination Agreement relating to casualty
insurance on Working Capital Collateral) assign and deliver all policies of
insurance to the Collateral Agent. In any event, a certificate of insurance
for each of the policies of insurance shall be issued to the Collateral Agent,
and copies of all original policies, together with the indorsements thereof
required hereunder, shall be delivered to the Collateral Agent within ten days
of the Collateral Agent's request therefor. Not later than fifteen days prior
to the expiration date of each of the policies, the Company will deliver to the
Collateral Agent a renewal policy or policies or certificates of insurance to
the Collateral Agent. If at any time the Collateral Agent is not in receipt of
written evidence that all insurance required hereunder is in full force and
effect, the Collateral Agent shall have the right upon seven days' prior
written notice to the Company to take such action as the Collateral Agent deems
necessary to protect its interest in the Collateral, including, without
limitation, the payment of any premiums that are due and payable or the
obtaining of such insurance coverage as the Collateral Agent in its reasonable
discretion deems appropriate, and all reasonable out-of-pocket expenses
incurred by the Collateral Agent in connection with such action or in obtaining
such insurance and keeping it in effect, together with interest thereon at the
rate of 10% per annum shall be paid by the Company to the Collateral Agent upon
demand and such payment obligations shall be secured hereby. Anything
contained in this Section to the contrary notwithstanding, any and all
insurance which the Company is obligated to carry pursuant to this Section may
be carried under a general coverage "floater" policy, master insurance policy,
"blanket" policy or policies covering other properties or liabilities, provided
that the coverage so provided in accordance with the requirements set forth
herein shall not be diminished or hindered by reason of the inclusion of any
such required insurance under a policy containing aggregate loss limits.
If the Collateral shall be damaged or destroyed, in whole or in part,
by fire or other casualty, the Company shall give prompt notice thereof to the
Collateral Agent. No settlement on account of any material loss covered by
insurance shall be made for less than insured value without the consent of the
Collateral Agent. Except with respect to third party liability insurance,
after the occurrence and during the continuance of an Event of Default, all
sums payable to the Company by any insurer with respect to a casualty relating
to all or any part of the Collateral shall be paid to the Collateral Agent.
Unless an Event of Default shall have occurred and be continuing and subject,
in any event, to the terms of the Mortgages and the Indenture, (i) all
insurance proceeds from any insurance policy held by the Company shall be paid
to the Company and (ii) the Company may invest such proceeds in assets related
to the business of the Company or its Subsidiaries or otherwise apply such
proceeds in the ordinary course of its business. If the Company shall receive
any insurance proceeds which are to be paid to the Collateral Agent pursuant to
this Section, the Company shall hold such proceeds in trust for the Collateral
Agent, shall segregate such proceeds from other funds of the Company, and shall
immediately forward such proceeds in the form received to the Collateral Agent
(appropriately indorsed by the Company to the order of the Collateral Agent or
in such other manner as shall be satisfactory to the Collateral Agent). All
such insurance proceeds may be retained by the Collateral Agent in the
Collateral Account as Collateral hereunder and/or applied by the Collateral
Agent toward payment of all or part of the Secured Obligations (whether matured
or unmatured) in such order as is provided herein. If any portion of the
insurance proceeds are made available to the Company, the Collateral Agent
shall not be obligated to see to the application of any amount paid to the
Company.
4.11 Warehouse Receipts Non-negotiable. The Company agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt or other
Document is issued with respect to any of its Inventory, such warehouse receipt
or receipt in the nature thereof or other Document shall not be "negotiable"
(as such term is used in Section 7-104 of the UCC or under other relevant law).
4.12 Motor Vehicles.
(a) Within the number of days permitted by the applicable
jurisdiction for delivery or filing in order to perfect a security interest as
of the time of its creation (but subject to the qualification contained in the
last sentence of Section 4.4 hereof relating to Motor Vehicles and Non-located
Assets), if after the date hereof the Company shall acquire any Motor Vehicle
or any other item of property the title to which is governed by a certificate
of title or ownership, the Company shall file in each office in each
jurisdiction or deliver to each Person which the Collateral Agent shall deem
necessary or advisable to perfect its first priority security interest in such
Motor Vehicles or other property, all applications for certificates of title or
ownership indicating the Collateral Agent's first priority lien on the Motor
Vehicle or other property covered by such certificate, and any other necessary
documentation and thereafter as soon as practicable, the Company shall deliver
to the Collateral Agent originals of the certificates of title or ownership for
such Motor Vehicles or other property with the Collateral Agent listed as
lienholder, together with the manufacturer's statement of origin; provided,
however, if the Motor Vehicle or other property acquired is subject to a
Purchase Money Lien, the Collateral Agent shall be listed as a junior
lienholder to the Person holding such Purchase Money Lien.
No Motor Vehicle or other property shall be removed from the state
which has issued a certificate of title therefor for a period equal to or in
excess of four months except for the purpose of reregistering such Motor
Vehicle or other property, in which case the Company shall take all steps
necessary to continue the perfection and priority of the Collateral Agent's
Lien on such Motor Vehicle or other property.
(b) Any certificates of title or ownership delivered pursuant
to the terms hereof shall be accompanied by odometer statements for each Motor
Vehicle covered thereby.
4.13 Compliance with Laws. The Company will comply in all material
respects with all requirements of law applicable to the Collateral or any part
thereof; provided, however, that the Company may contest any requirement of law
in any reasonable manner which shall not, in the reasonable opinion of the
Collateral Agent, materially and adversely affect the Collateral Agent's or the
Secured Parties' rights in any of the Collateral or adversely affect the
priority of the Liens created hereunder in any of the Collateral.
4.14 Payment of Obligations. The Company will pay promptly when due
all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials,
supplies and services) against or with respect to the Collateral, except that
no such charge need be paid if (i) the validity thereof is being contested in
good faith by appropriate proceedings, (ii) such proceedings do not involve, in
the reasonable opinion of the Collateral Agent, any material danger of the
sale, forfeiture or loss of any of the Collateral or any interest therein that
could reasonably be expected to have an adverse effect on the Secured Parties
and (iii) such charge is adequately reserved against on the Company's books in
accordance with GAAP.
4.15 No Impairment. Except as expressly permitted herein or in the
Indenture, the Company will not take or knowingly permit to be taken any action
which could impair the Collateral Agent's or any Secured Party's rights in the
Collateral.
4.16 Negative Pledge. The Company will not create, incur or permit
to exist, will defend the Collateral against, and will take such other action
as is necessary to remove, any Lien or claim on or to the Collateral, other
than the Liens created hereby and other than the Permitted Liens, and will
defend the right, title and interest of the Collateral Agent and the other
Secured Parties in and to any of the Collateral against the claims and demands
of all Persons whomsoever other than holders of Permitted Liens on the
Collateral entitled to priority therein under applicable law.
4.17 Limitations on Dispositions of Collateral. The Company will
not sell, transfer, lease or otherwise dispose of any of the Collateral or any
right or interest therein, or attempt, offer or contract to do so except for
dispositions of Collateral either permitted pursuant to or not prohibited by
the provisions of Section 4.10 of the Indenture and, to the extent provided for
in Section 4.10 of the Indenture, the proceeds of which are applied as
permitted or required by such section. In the event of a sale, transfer, lease
or other disposition of any of the Collateral permitted by this Section, the
Collateral Agent shall, subject to the terms of Section 10.3 of the Indenture,
at the sole cost and expense of the Company, execute such documents as the
Company shall reasonably request to evidence the release of the Lien created by
this Security Agreement with respect to such Collateral and, to the extent such
Collateral is in he possession of the Collateral Agent, deliver such Collateral
to the Company or its designee.
4.18 Maintenance of Equipment. The Company will maintain each item
of Equipment in good operating condition, ordinary wear and tear and immaterial
impairments of value and damage by the elements excepted, and will provide all
maintenance, service and repairs necessary for such purpose, unless and to the
extent that the Company reasonably determines that such item of Equipment is
obsolete, worn out or that repair is not economically feasible or economically
desirable.
4.19 Provisions Regarding Receivables.
(a) The Company shall perform in all material respects all of
its obligations with respect to the Receivables.
(b) The Company shall use commercially reasonable efforts
(including, without limitation, prompt and diligent exercise of each material
right it may have under any Receivable (other than any right of termination))
to cause to be collected from each Account Debtor, as and when due (including,
without limitation, amounts which are delinquent, such amounts to be collected
in accordance with generally accepted lawful collection procedures) any and all
amounts owing under or on account of any Receivable, and apply all collected
amounts to the outstanding balance of such Receivable immediately upon receipt
thereof. Notwithstanding the foregoing, the Company shall not be obligated to
exercise any rights with respect to any Receivables to the extent that it
determines in good faith that such exercise would not be commercially
reasonable or, in the exercise of its best business judgment, prudent. The
costs of collection, whether incurred by the Company or the Collateral Agent
shall be borne by the Company and if incurred by the Collateral Agent shall be
reimbursed, together with interest thereon at the rate of 10% per annum, to the
Collateral Agent upon demand and such reimbursement obligation shall be secured
hereby.
(c) Upon the occurrence and during the continuance of an Event
of Default, but subject to the terms of any Subordination Agreement, the
Company shall establish such lock-box arrangements for the collection of
Receivables as the Collateral Agent may require in its sole discretion.
(d) The Company shall, (i) and shall cause each of its
Subsidiaries organized in any jurisdiction in the United States (collectively,
"Domestic Subsidiaries") that has granted a Lien on any Working Capital
Collateral to secure Indebtedness owed to a Permitted Working Capital Financer
by the Company or any Domestic Subsidiary, to settle all Receivables owing by
the Company or any such Domestic Subsidiary to the Company or any such Domestic
Subsidiary within ninety days from the date such Receivable arises unless there
is a bona fide dispute as to the amount of any such Receivable, in which case
such Receivable shall be settled promptly after the resolution of such dispute
and (ii) and shall cause each of its Subsidiaries to, apply any payments on any
intercompany Indebtedness among or between the Company and its Subsidiaries
first to the payment of intercompany Indebtedness constituting intercompany
Receivables until such intercompany Receivables are paid in full.
4.20 Intellectual Property.
(a) The Company shall not do any act or omit to do any act
whereby any of the Intellectual Property Collateral may lapse or become
abandoned or dedicated to the public or unenforceable if the same could
reasonably be expected to have a material adverse effect on the business,
operations, condition (financial or otherwise) or prospects of the Company (a
"Material Adverse Effect").
(b) The Company shall not, in each case to the extent that it
could reasonably be expected to have a Material Adverse Effect, (i) cease the
use of any of the Trademarks or (ii) fail to maintain as in the past the level
of the quality of products and services offered under any of the Trademarks.
(c) The Company shall promptly notify the Collateral Agent if
it knows that any item of the Intellectual Property Collateral that is material
to the business of the Company may become (a) abandoned or dedicated to the
public or placed in the public domain, (b) invalid or unenforceable, or (c)
subject to any adverse determination or development (including the institution
of proceedings) or any adverse determination or development in any proceeding
in the United States Patent and Trademark Office, the United States Copyright
Office, and state registry any foreign counterpart thereof or any court.
(d) The Company shall take all commercially reasonable steps,
including in the United States Patent and Trademark Office, the United States
Copyright Office, or any state or foreign counterpart thereof, to maintain and
pursue any application and to maintain any registration of each Trademark,
Patent, and Copyright owned by the Company including, but not limited to, the
filing of applications for renewal, affidavits of use, affidavits of
incontestability, the prosecution and defense of opposition, interference, and
cancellation proceedings, and the payment of fees and taxes (except to the
extent that such dedication, abandonment, or invalidation, or the failure to
pursue and maintain the same could reasonably be expected to have a Material
Adverse Effect).
(e) The Company shall promptly (but in no event more than
ninety days after the Company obtains knowledge thereof) report to the
Collateral Agent (i) the filing of any application to register any Intellectual
Property Collateral (whether such application is filed by the Company or
through any agent, employee, licensee or designee thereof) with the United
States Patent and Trademark Office, the United States Copyright Office, or any
State or foreign counterpart thereof and (ii) the registration of any
Intellectual Property Collateral by any such office. Upon the request of the
Collateral Agent, the Company shall promptly execute and deliver any and all
agreements, instruments, documents, and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's security interest in such
Intellectual Property Collateral.
(f) The Company shall, promptly upon the reasonable request of
the Collateral Agent, execute and deliver to the Collateral Agent any document
required to acknowledge, confirm, register, record or perfect the Collateral
Agent's interest in any part of the Intellectual Property Collateral.
4.21 Notice. The Company will advise the Collateral Agent promptly,
in reasonable detail, in accordance with the provisions hereof (a) of any Lien
(other than Permitted Liens) on, or claim asserted against, any of the
Collateral and (b) of the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value of the
Collateral or any material component thereof or an adverse effect on the Liens
created hereunder.
4.22 Performance by Collateral Agent of Company's Obligations;
Reimbursement. If the Company fails to perform or comply with any of its
agreements contained herein, the Collateral Agent may, without consent by the
Company and upon such notice to the Company as the Collateral Agent reasonably
deems appropriate under the circumstances, perform or comply or cause
performance or compliance therewith and the expenses of the Collateral Agent
incurred in connection with such performance or compliance, together with
interest thereon at a rate equal to 10% per annum, shall be payable by the
Company to the Collateral Agent on demand and such reimbursement obligation
shall be secured hereby.
5. Appointment of Sub-Agents. The Collateral Agent shall have the
right, with the consent of Company (which consent shall not be unreasonably
withheld) if an Event of Default shall not then have occurred and be
continuing, to appoint one or more sub-agents or nominees for the purpose of
retaining physical possession of the Collateral, which may be held (if
applicable and in the discretion of the Collateral Agent) in the name of the
Collateral Agent, indorsed or assigned in blank or in favor of the Collateral
Agent or any nominee or nominees of the Collateral Agent or a sub-agent
appointed by the Collateral Agent. All references to the Collateral Agent
herein shall be deemed to include such sub-agents or nominees acting in their
capacity as such.
6. Voting, etc. Unless and until (i) an Event of Default shall have
occurred and be continuing under Sections 6.1(1) or (2) of the Indenture or
(ii) an Event of Default shall have occurred and be continuing under any other
provision of the Indenture and the obligations of the Company under the
Indenture and the Notes shall have been accelerated pursuant to Section 6.2 of
the Indenture (either, a "Voting Divestiture Event"), the Company shall be
entitled to vote any and all of the Pledged Securities and to give consents,
waivers or ratifications in respect thereof; provided, that no vote shall be
cast or any consent, waiver or ratification given or any action taken which
would violate or be inconsistent with any of the terms of this Security
Agreement, the Purchase Agreement or the Indenture or any other instrument or
agreement relating to the Secured Obligations, or which would have the effect
of impairing the position or interests of the Collateral Agent or any other
Secured Party hereunder or thereunder or which would authorize or effect
actions prohibited under the terms of this Security Agreement, the Purchase
Agreement, the Indenture or any instrument or agreement relating to the Secured
Obligations. All such rights of the Company to vote and to give consents,
waivers and ratifications shall cease in the event that a Voting Divestiture
Event has occurred and is continuing. The Company hereby grants to the
Collateral Agent an irrevocable proxy to vote the Pledged Securities, which
proxy shall be effective immediately upon the occurrence and during the
continuance of a Voting Divestiture Event. After the occurrence and during the
continuance of a Voting Divestiture Event and upon request of the Collateral
Agent, the Company agrees to deliver to the Collateral Agent such further
evidence of such irrevocable proxy or such further irrevocable proxies to vote
the Pledged Securities as the Collateral Agent may reasonably request.
7. Payments and Other Distributions. Unless an Event of Default
shall have occurred and be continuing, all cash Distributions payable in
respect of the Pledged Securities (other than Exempt Instruments) shall be paid
to the Company, provided that all cash Distributions payable in respect of the
Pledged Securities which are determined by the Collateral Agent, in its
reasonable discretion, to represent in whole or in part a payment of principal
thereon or an extraordinary, liquidating or other distribution in return of
capital (or which, in the absence of any such determination by the Collateral
Agent, shall constitute such a distribution), shall be paid to the Collateral
Agent, deposited by it in the Collateral Account and retained by it as part of
the Collateral. The Collateral Agent shall at all times be entitled to receive
directly, and to retain as part of the Collateral:
(a) all other or additional stock or securities or property
(other than cash) paid or distributed by way of Distribution in respect of the
Pledged Securities (other than Exempt Instruments);
(b) all other or additional stock or other securities or
property (including cash) paid or distributed in respect of the Pledged
Securities (other than Exempt Instruments) by way of stock-split, spin-off,
split-up, reclassification, combination of shares or similar rearrangement; and
(c) all other or additional stock or other securities or
property which may be paid in respect of the Pledged Securities (other than
Exempt Instruments) by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation, bankruptcy or similar corporate
reorganization or other disposition of such Pledged Securities.
All monies and other property which are payable to the Collateral Agent or
which the Collateral Agent is entitled to receive pursuant to this Section 7
and which are received by the Company shall be held by the Company in trust for
the Collateral Agent and the other Secured Parties, segregated from other
monies and other property of the Company and shall forthwith upon receipt by
the Company be turned over to the Collateral Agent in the same form received by
the Company (appropriately indorsed or assigned by the Company to the order of
the Collateral Agent or in such other manner as shall be reasonably
satisfactory to the Collateral Agent).
8. Collateral Account.
8.1 Collateral Account. There is hereby established with the
Collateral Agent the Collateral Account. The Collateral Account shall be under
the sole and exclusive dominion and control of the Collateral Agent and the
Company shall have no rights with respect to the Collateral Account other than
with respect to the receipt of Proceeds of Collateral deposited therein upon
the termination of this Security Agreement and the full and final payment of
all of the Secured Obligations. Without limiting the generality of the
foregoing, the Company shall have no right of withdrawal or transfer from the
Collateral Account.
8.2 Deposit of Proceeds. There shall be deposited in the Collateral
Account from time to time the cash proceeds (as defined in Section 9-306(1) of
the UCC) of, and cash Distributions on, any of the Collateral (including
insurance proceeds thereon) required to be delivered to the Collateral Agent
pursuant hereto or under the Indenture. All amounts and investments and other
items credited to the Collateral Account from time to time shall constitute
Collateral hereunder and shall not constitute payment of the Secured
Obligations until applied as hereinafter provided. So long as no Default or
Event of Default has occurred and is continuing, the Collateral Agent shall,
upon five business days' prior written notice from the Company (which notice
shall be accompanied by a certificate (in form and substance satisfactory to
the Collateral Agent) executed by a senior officer of the Company as to the
absence of any such Default or Event of Default) release funds then credited to
the Collateral Account to the Company. At any time following the occurrence
and during the continuance of an Event of Default, the Collateral Agent may in
its discretion apply or cause to be applied (subject to collection) the balance
from time to time outstanding to the credit of the Collateral Account to the
payment of the Secured Obligations in the manner specified herein.
8.3 Investment of Balance in Collateral Account. If an Event of
Default shall not then have occurred and be continuing, substantially all
amounts credited to the Collateral Account shall be invested from time to time
by the Collateral Agent upon the direction of the Company in Cash Equivalents
reasonably satisfactory to the Collateral Agent and in which the Collateral
Agent shall have a first priority perfected security interest, which accounts,
investments, instruments and securities shall be held in the name and be under
the control of the Collateral Agent. If an Event of Default shall have
occurred and be continuing, all amounts credited to the Collateral Account
shall be invested by the Collateral Agent in such accounts (interest-bearing or
otherwise), investments, instruments and securities as the Collateral Agent
shall elect in its sole discretion. The Collateral Agent shall have no
responsibility or liability for any losses in connection with any investment in
connection with the Collateral Account, including, without limitation, losses
incurred in connection with the liquidation of any such investments.
9. Power of Attorney.
9.1 Collateral Agent's Appointment as Attorney-in-Fact.
(a) The Company hereby irrevocably constitutes and appoints the
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Company and in the name of
the Company or in its own name, from time to time in the Collateral Agent's
discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of
the foregoing, the Company hereby gives the Collateral Agent the power and
right, on behalf of the Company, without assent by the Company and upon such
notice to the Company as the Collateral Agent deems appropriate under the
circumstances, to do the following:
(i) at any time after the occurrence and during the continuance
of an Event of Default, in the name of the Company or its own name, or
otherwise, to take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under, or
with respect to, any Collateral; in the name of the Company or otherwise to
direct any party liable for any payment under any of the Collateral (other
than, until amounts then payable to Permitted Working Capital Financers have
been paid in full, Account Debtors with respect to Receivables in which any
such Permitted Working Capital Financer has a Lien permitted under the
Indenture which are not Subject Accounts) to make payment of any and all moneys
due or to become due thereunder directly to the Collateral Agent or as the
Collateral Agent shall direct; to ask or demand for, collect, receive payment
of and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;
(ii) after the occurrence and during the continuance of an
Event of Default, to prepare, sign and file any Uniform Commercial Code
financing statements in the name of the Company as debtor;
(iii) after the occurrence and during the continuance of an
Event of Default, to take or cause to be taken all actions necessary to perform
or comply or cause performance or compliance with the terms of this Security
Agreement, including, without limitation, actions to pay or discharge taxes and
Liens levied or placed on or threatened against the Collateral, to effect any
repairs or obtain any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iv) after the occurrence and during the continuance of any
Event of Default (a) to sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (b) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any thereof and to enforce any other right in respect
of any Collateral; (c) to defend any suit, action or proceeding brought against
the Company with respect to any Collateral; (d) to settle, compromise or adjust
any suit, action or proceeding described in the preceding clause and, in
connection therewith, to give such discharges or releases as the Collateral
Agent may deem necessary or commercially reasonable under the circumstances;
and (e) generally, to sell or transfer and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Collateral Agent were the absolute owner thereof for all purposes, and to
do, at the Collateral Agent's option and the Company's expense, at any time, or
from time to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the Liens of
the Collateral Agent and the other Secured Parties thereon and to effect the
intent of this Security Agreement, all as fully and effectively as the Company
might do; and
(v) after the occurrence and during the continuance of an Event
of Default, at any time and from time to time, to execute, in connection with
any foreclosure, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
The Company 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 shall be irrevocable.
The Company hereby acknowledges and agrees that in acting pursuant to
this power-of-attorney the Collateral Agent shall be acting in its own interest
and in the interest of the other Secured Parties, and the Company acknowledges
and agrees that the Collateral Agent shall have no fiduciary duties to the
Company and the Company hereby waives any claims to the rights of a beneficiary
of a fiduciary relationship hereunder.
(b) No Duty on the Part of Collateral Agent or Secured Parties.
The powers conferred on the Collateral Agent hereunder are solely to protect
the interests of the Collateral Agent and the other Secured Parties in the
Collateral and shall not impose any duty upon the Collateral Agent or any other
Secured Party to exercise any such powers. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to the
Company for any act or failure to act hereunder unless the same shall result
from the gross negligence or willful misconduct of such Person.
10. Remedies.
10.1 Rights and Remedies Generally. (a) If an Event of Default
shall occur and be continuing, then and in every such case, the Collateral
Agent shall have all the rights of a secured party under the UCC, shall have
all rights now or hereafter existing under all other applicable laws, and,
subject to any mandatory requirements of applicable law then in effect, shall
have all the rights set forth in this Security Agreement and all the rights set
forth with respect to the Collateral or this Security Agreement in any other
agreement between the parties. No enumeration of rights in this Section or
elsewhere in this Security Agreement or in any related document or other
agreement shall be deemed to in any way limit the rights of the Collateral
Agent as described in this Section.
(b) If an Event of Default occurs and is continuing, the
Collateral Agent may, and within three Business Days after instructions from
the Majority Holders and the delivery of such indemnities from such Holders
against loss, liability or expense satisfactory to the Collateral Agent shall,
commence the taking of such actions toward collection or enforcement of this
Security Agreement and the Collateral (or any portion thereof), including,
without limitation, action toward foreclosure upon any Collateral, as the
Collateral Agent deems in its discretion to be appropriate or as otherwise
instructed by the Majority Holders.
10.2 Proceeds. (a) If an Event of Default shall occur and be
continuing, (i) all Proceeds and Distributions received by the Company
consisting of cash, checks and other near-cash items shall be held by the
Company in trust for the Collateral Agent and the other Secured Parties,
segregated from other funds of the Company in a separate deposit account
containing only Proceeds and Distributions, and shall forthwith upon receipt by
the Company, be turned over to the Collateral Agent in the same form received
by the Company (appropriately indorsed or assigned by the Company to the order
of the Collateral Agent or in such other manner as shall be satisfactory to the
Collateral Agent) and (ii) any and all such Proceeds and Distributions received
by the Collateral Agent (whether from the Company or otherwise), or any part
thereof, may, in the sole discretion of the Collateral Agent, be held by the
Collateral Agent in the Collateral Account as Collateral hereunder and/or then
or at any time or from time to time thereafter, be applied by the Collateral
Agent against the Secured Obligations (whether matured or unmatured), in the
order provided for herein.
(b) Except as otherwise provided in Section 10.3 of the
Indenture, the proceeds received by the Collateral Agent in respect of any sale
of, collection from or other realization upon all or any part of the Collateral
shall be applied, together with any other sums then held by the Collateral
Agent pursuant to this Agreement (including, without limitation, sums credited
to the Collateral Account), promptly by the Collateral Agent as follows:
First, to the payment of all costs and expenses, commissions and
taxes of such sale, collection or other realization, including, without
limitation, compensation to the Collateral Agent and its agents and counsel,
and all expenses, liabilities and advances made or incurred by the Collateral
Agent in connection therewith;
Second, to the payment of all other costs and expenses of such
sale, collection or other realization, including, without limitation,
compensation to the Secured Parties and their agents and counsel and all costs,
liabilities and indebtedness made or incurred by the Secured Parties in
connection therewith;
Third, to the payment of the remaining outstanding Secured
Obligations to the Trustee under the Indenture for application in accordance
with the Indenture;
Fourth, (i) if the Secured Obligations have not been paid and
performed in full, the Collateral Agent shall deposit such surplus in the
Collateral Account or (ii) if the Secured Obligations have been paid and
performed in full, the Collateral Agent shall pay such surplus to the Company,
or its successors or assigns, or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
10.3 Direct Company to Dispose of Collateral. If an Event of
Default shall occur and be continuing:
(a) the Collateral Agent may direct the Company to sell, assign
or otherwise liquidate or dispose of all or from time to time any portion of
the Collateral, and the Company shall do so. The Collateral Agent may direct
the Company to direct that all Proceeds of such Collateral be paid directly to
the Collateral Agent or may permit the Proceeds of such Collateral to be paid
to the Company and all such Proceeds consisting of cash, checks, or near-cash
items shall be held by the Company in trust for the Collateral Agent,
segregated from other funds of the Company in a separate deposit account
containing only Proceeds and shall forthwith upon receipt by the Company, be
turned over to the Collateral Agent, in the same form received by the Company
(appropriately indorsed or assigned by the Company to the order of the
Collateral Agent or in such other manner as shall be satisfactory to the
Collateral Agent); and
(b) any and all such Proceeds received by the Collateral Agent
(whether from the Company or otherwise) may, in the sole discretion of the
Collateral Agent, be held by the Collateral Agent in the Collateral Account as
Collateral hereunder and/or then or at any time or from time to time
thereafter, be applied by the Collateral Agent against the Secured Obligations
(whether matured or unmatured) in the order provided for herein.
10.4 Collateral Account. If an Event of Default shall occur and be
continuing, the Collateral Agent may liquidate any investments, instruments and
securities credited to the Collateral Account (without any liability for any
losses sustained in such liquidation) and apply the proceeds thereof and any
other amounts credited to the Collateral Account to the Secured Obligations
(whether matured or unmatured) in the order provided for herein.
10.5 Possession of Collateral.
(a) If an Event of Default shall occur and be continuing, and
subject to mandatory provisions of applicable law, (i) the Collateral Agent
may, personally or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from the Company or any other Person who then
has possession of any part thereof with or without notice or judicial process,
and for that purpose may enter upon the Company's premises where any of the
Collateral is located and remove the same and may use in connection with such
removal any and all services, supplies, aids and other facilities of the
Company and (ii) upon 15 days' notice to the Company, the Company shall, at its
own expense, assemble the Collateral (or from time to time any portion thereof)
and make it available to the Collateral Agent at any place or places designated
by the Collateral Agent, whether at the Company's or the Collateral Agent's
premises or elsewhere. The Company shall, at its sole expense, store and keep
any Collateral so assembled at such place or places pending further action by
the Collateral Agent and 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 the Collateral in good condition. The
Company's obligation so to assemble and deliver the Collateral is of the
essence of this Security Agreement and, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to
a decree requiring specific performance by the Company of said obligation.
(b) When Collateral is in the Collateral Agent's possession,
(i) the Company shall pay (or reimburse the Collateral Agent on demand for) all
out-of-pocket expenses (including the cost of any insurance and payment of
taxes or other charges) reasonably incurred in the custody, preservation, use
or operation of the Collateral, and the obligation to reimburse all such
expenses shall be secured hereby and (ii) the risk of accidental loss or damage
to the Collateral shall be on the Company to the extent of any deficiency in
any effective insurance coverage.
10.6 Disposition of the Collateral. If an Event of Default shall
occur and be continuing, the Collateral Agent may sell, assign, lease, give an
option or options to purchase or otherwise dispose of the Collateral (or
contract to do any of the foregoing) under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale of the
property to be sold, at public or private sale or sales, conducted by any
officer, nominee or agent of, or auctioneer or attorney for the Collateral
Agent at any location of any third party conducting or otherwise involved in
such sale or any office of the Collateral Agent or any other Secured Party or
elsewhere and in general in such manner, at such time or times and upon such
terms and conditions and at such price as it may consider commercially
reasonable, for cash or on credit or for future delivery without assumption of
any credit risk. The Collateral Agent may in its discretion restrict
prospective bidders as to their number, nature of their business and investment
intention. Any of the Collateral may be sold, leased, assigned or options or
contracts entered to do so, or otherwise disposed of, in the condition in which
the same existed when taken by the Collateral Agent or after any overhaul or
repair which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other
private proceeding shall be made upon not less than 10 days' written notice to
the Company (which the Company agrees to be commercially reasonable) specifying
the time after which such disposition is to be made and the intended sale price
or other consideration therefor. Any such disposition which shall be a public
sale shall be made upon not less than 10 days' written notice to the Company
(which the Company agrees to be commercially reasonable) specifying the time
and place of such sale and, in the absence of applicable requirements of law to
the contrary, shall be by public auction (which may, at the Collateral Agent's
option, be subject to reserve), after publication of notice of such auction for
not less than ten days prior thereto in two newspapers in general circulation
in New York City. To the extent permitted by applicable law, the Collateral
Agent and/or any other Secured Party may bid for and become purchasers of the
Collateral or any item thereof, offered for sale in accordance with this
Section without accountability to the Company (except to the extent of surplus
money received) as provided below. 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
obligations of the Company to it 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. Notwithstanding the foregoing, if the Collateral or any portion
thereof is perishable or threatens to decline speedily in value or is of a type
customarily sold in a recognized market, no notice of disposition shall be
required.
10.7 Voting of Pledged Securities etc. If an Event of Default shall
occur and be continuing under Sections 6.1(1) or (2) of the Indenture or if any
other Event of Default shall have occurred and be continuing and the
obligations of the Company under the Indenture and the Notes shall have been
accelerated pursuant to Section 6.2 of the Indenture with respect to such other
Event of Default, (a) the Collateral Agent shall be entitled to exercise all
voting, corporate and other rights pertaining to all or any portion of the
Pledged Securities at any meeting of the shareholders of the issuer thereof or
otherwise pursuant to the irrevocable proxy granted to it by the Company herein
and (b) the Collateral Agent may register all or any portion of the Pledged
Securities in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (i) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders of the issuer thereof or otherwise and (ii) any and all rights
of conversion, exchange, subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of such Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of the issuer thereof, or upon the exercise by the Company or the
Collateral Agent of any right, privilege or option pertaining to such Pledged
Securities, and in connection therewith, the right to deposit and deliver any
and all of such Pledged Securities with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
it may determine), all without liability except to account for property
actually received by it, but the Collateral Agent shall have no duty to the
Company to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
10.8 Registration Rights; Private Sales.
(a) If the Collateral Agent shall determine to exercise its
rights to sell any or all of the Pledged Securities pursuant to this Section
10, and if in the opinion of the Collateral Agent it is necessary or advisable
to have the Pledged Securities, or that portion thereof to be sold, registered
under the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), the Company will use its best efforts to cause the issuer thereof to (i)
execute and deliver, and cause the directors and officers of the issuer thereof
to execute and deliver, all such instruments and documents, and do or cause to
be done all such other acts as may be, in the reasonable opinion of the
Collateral Agent, necessary to register the Pledged Securities, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) to use its
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date of the
first public offering of the Pledged Securities, or that portion thereof to be
sold, and (iii) to make all amendments thereto and/or to the related prospectus
which, in the opinion of the Collateral Agent, are necessary or advisable, all
in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. The
Company agrees to cause such issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the Collateral
Agent shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) The Company recognizes that the Collateral Agent may be
unable to effect a public sale of any or all the Pledged Securities, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Company acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged
Securities for the period of time necessary to permit the issuer to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if the issuer thereof would agree to do so.
(c) The Company further agrees to use its best efforts to do or
cause to be done all such other acts as may be reasonably necessary to make
such sale or sales of all or any portion of the Pledged Securities pursuant to
this Section 10.8 valid and binding and in compliance with any and all other
applicable requirements of law. The Company further agrees that a breach of
any of the covenants contained in this Section 10.8 will cause irreparable
injury to the Collateral Agent and the other Secured Parties, that the
Collateral Agent and the other Secured Parties have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant
contained in this Section 10.8 shall be specifically enforceable against the
Company, and the Company hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred.
10.9 Provisions Regarding Receivables.
(a) Anything herein to the contrary notwithstanding (including
without limitation the grant of any rights to the Collateral Agent), the
Company shall remain liable under each of the Receivables to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
each such Receivable. Neither the Collateral Agent nor any Secured Party shall
have any obligation or liability under any Receivable (or any agreement giving
rise thereto) by reason of or arising out of this Security Agreement or the
receipt by the Collateral Agent or any of the Secured Parties of any payment
relating to such Receivable pursuant hereto, nor shall the Collateral Agent or
any of the Secured Parties be obligated in any manner to perform any of the
obligations of the Company under or pursuant to any Receivable (or any
agreement giving rise thereto) to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
(b) At any time after an Event of Default shall have occurred
and be continuing (but subject to the terms of any Subordination Agreement),
the Collateral Agent may, and upon request of the Collateral Agent the Company
shall, notify Account Debtors that the Receivables have been assigned to the
Collateral Agent and that payments in respect thereof shall be made directly to
the Collateral Agent. The Collateral Agent may in its own name or in the name
of others communicate with Account Debtors to verify with them to its
satisfaction the existence, amount and terms of any Receivables.
(c) If required by the Collateral Agent at any time that an
Event of Default shall have occurred and be continuing (but subject to the
terms of any Subordination Agreement), any payments of Receivables, when
collected by the Company, shall be forthwith (and, in any event, within two
Business Days) delivered by the Company to the Collateral Agent in the exact
form received, duly indorsed by the Company to the Collateral Agent if
required, for deposit in the Collateral Account, and, until so turned over,
shall be held by the Company in trust for the Collateral Agent and the Secured
Parties, segregated from other funds of the Company. All such Proceeds, while
held by the Collateral Agent (or by the Company in trust for the Collateral
Agent and the Secured Parties), shall continue to be Collateral securing all of
the Secured Obligations and shall not constitute payment thereof until applied
as hereinafter provided.
10.10 Recourse. The Company shall remain liable for any deficiency
if the proceeds of any sale or other disposition of the Collateral are
insufficient to satisfy the Secured Obligations.
10.11 Expenses; Attorneys' Fees. The Company shall reimburse the
Collateral Agent for all its reasonable out-of-pocket expenses in connection
with the exercise of its rights hereunder, including without limitation all
reasonable attorneys' fees and legal expenses incurred by the Collateral Agent
in connection therewith. Such out-of-pocket expenses including, without
limitation, all reasonable attorneys' fees and legal expenses shall constitute
Secured Obligations secured by this Security Agreement.
10.12 Preventing Impairment of the Collateral. Regardless of
whether there shall have occurred any Event of Default, the Collateral Agent
may institute and maintain or cause in the name of the Company or of the
Collateral Agent, or both, to be instituted or maintained, such suits and
proceedings as the Collateral Agent may be advised by counsel shall be
necessary to prevent any impairment of the Collateral in contravention of the
terms of this Security Agreement, of the Notes, of the Purchase Agreement or of
the Indenture.
10.13 Limitation on Duties Regarding Preservation of Collateral.
(a) The Collateral Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to deal with
it in the same manner as the Collateral Agent deals with similar property for
its own account, it being understood that neither the Collateral Agent nor any
Secured Party shall have responsibility for (i) ascertaining or taking action
with respect to calls, conversations, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Collateral Agent or any
Secured Party has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral.
(b) The Collateral Agent shall have no obligation to take any
steps to preserve rights against prior parties to any Collateral.
(c) Neither the Collateral Agent nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Company or otherwise and the rights of the Collateral
Agent and the other Secured Parties hereunder shall not be conditioned or
contingent upon the pursuit by the Collateral Agent or any other Secured Party
of any right or remedy against the Company or against any other Person which
may be or become liable in respect of all or any part of the Secured
Obligations or against any collateral security therefor, guarantee therefore or
right of offset with respect thereto.
10.14 Waiver of Claims. Except as otherwise provided in this
Security Agreement, THE COMPANY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL 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 THE COMPANY
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and the Company hereby further waives, to the extent permitted
by law:
(a) all damages occasioned by such taking of possession except
any damages which are the sole and direct result of the Collateral Agent's
gross negligence or willful misconduct as determined in a final, non-appealable
judgment of a court of competent jurisdiction;
(b) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the Collateral
Agent's and the other Secured Parties' rights hereunder;
(c) demand of performance or other demand, notice of intent to
demand or accelerate, notice of acceleration presentment, protest,
advertisement or notice of any kind to or upon the Company or any other Person;
and
(d) all rights of redemption, appraisement, valuation,
diligence, stay, extension or moratorium now or hereafter in force under any
applicable law in order to hinder, prevent or delay the enforcement of this
Security Agreement or the absolute sale of the Collateral or any portion
thereof and the Company, 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.
To the extent permitted by applicable law, any sale of, or the
exercise of any options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest, claim and
demand, at law or in equity, of the Company therein and thereto, and shall be a
perpetual bar both at law and in equity against the Company and against any and
all persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, through and under the Company.
10.15 Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy
under this Security Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Agent, then and in every
such case the Company, the Collateral Agent and the other Secured Parties shall
be returned to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Security
Agreement, and all rights, remedies and powers of the Collateral Agent shall
continue as if no such proceeding had been instituted.
10.16 Intellectual Property License. Solely for the purpose of
enabling the Collateral Agent to exercise rights and remedies under this
Section 10 and at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, the Company hereby grants to the
Collateral Agent, to the extent it has the right to do so, an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Company), but subject to appropriate rights to quality
control and inspection in favor of the Company, to use, license or sublicense
any Trademark, Trademark License, Patent, Patent License, Copyright, Copyright
License or Trade Secret Collateral, and any license with respect to any of the
foregoing, now owned or hereafter acquired by the Company, and wherever the
same may be located.
11. Additional Collateral. Without notice or consent of the Company
and without impairment of the security interest and rights created by this
Security Agreement, the Collateral Agent may accept from any person or persons
additional collateral or other security for the Secured Obligations. The
creation of the security interest created hereunder shall not prevent the
Collateral Agent from resorting to such additional collateral or security
without affecting the Collateral Agent's rights hereunder. The Collateral
Agent's acceptance of any such additional collateral or security shall not
prevent the Collateral Agent from resorting to the Collateral without affecting
the Collateral Agent's rights in and to such additional collateral or security.
12. Compensation and Indemnification.
12.1 Compensation. The Company shall pay to the Collateral Agent
from time to time reasonable compensation for its services. The Collateral
Agent's compensation shall not be limited by any law on compensation of a
collateral agent pursuant to a security agreement.
12.2 Indemnity, etc.
(a) The Company agrees to indemnify, reimburse and hold the
Collateral Agent and each other Secured Party, and their respective officers,
directors, employees, representatives, attorneys and agents (hereinafter in
this Section 12 referred to individually as "Indemnitee" and collectively as
"Indemnitees") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, suits, costs, expenses
or disbursements (including, without limitation, reasonable attorneys' fees and
expenses) (for the purposes of this Section the foregoing are collectively
called "expenses") of whatsoever kind or nature which may be imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to
or arising out of the Security Documents or the documents executed in
connection therewith or in any other way connected with the administration of
the transactions contemplated thereby or the enforcement of any of the terms of
or the preservation of any rights hereunder, or in any way relating to or
arising out of the manufacture, 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), the
violation of the laws of any country, state or other governmental body or unit,
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 for property damage) or any contract
claim; provided that no Indemnitee shall be indemnified pursuant to this
section for expenses to the extent solely caused by the gross negligence or
wilful misconduct of such Indemnitee as determined in a final, non-appealable
judgment of a court of competent jurisdiction. The Company agrees that upon
written notice by any Indemnitee of any assertion that could give rise to an
expense, the Company shall, if so requested by such Indemnitee, assume full
responsibility for the defense thereof.
(b) Without limiting the application of subsection (a) above,
the Company agrees to pay, or reimburse the Collateral Agent for any and all
reasonable out-of-pocket fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral and the
acceptance or administration or performance by the Collateral Agent of its
duties under the Security Documents, including, without limitation, all fees
and taxes in connection with the search of the records of, and 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 reasonable out-of-pocket fees,
costs and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral 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 subsections (a) or (b),
above, the Company agrees to pay, indemnify and hold each Indemnitee harmless
from and against any expenses which such Indemnitee may suffer, expend or incur
in consequence of or growing solely out of any misrepresentation by the Company
and reliance thereon in this Security Agreement or in any statement or writing
contemplated by or made or delivered pursuant to or in connection with this
Security Agreement.
(d) If and to the extent that the obligations of the Company
under this Section 12 are unenforceable for any reason, the Company hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
12.3 Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Secured Obligations secured by the Collateral.
The indemnity obligations of the Company contained in this Security Agreement
shall continue in full force and effect notwithstanding the full payment and
performance of the Secured Obligations and notwithstanding the discharge
thereof.
13. Governing Law; Submission to Jurisdiction. THIS SECURITY
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. THE
COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. THE COMPANY IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS
SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
NOTHING SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
14. Limitation of Liability. No claim may be made by the Company or
any other Person against the Collateral Agent or any other Secured Party or the
affiliates, directors, officers, employees, attorneys or agent of any of them
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by the Security Documents, or any act,
omission or event occurring in connection therewith except that the same may be
determined by a final, non-appealable judgment of a court of competent
jurisdiction to have resulted solely from such Person's actions taken in bad
faith; and the Company hereby waives, releases and agrees not to xxx upon any
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor. The Company hereby agrees to indemnify the
Collateral Agent, each Secured Party and their affiliates, directors, officers,
employees, attorneys and agents for all of their costs and expenses (including
the attributed costs of internal counsel) incurred in connection with defending
any claim made by the Company or any other Person against any of them for any
special, indirect, consequential or punitive damages if in a final,
non-appealable judgment a court of competent jurisdiction does not award such
special, indirect, consequential or punitive damages or, if such damages are
awarded, the court does not determine that such person took actions in bad
faith. In performing its duties under the Security Documents, the Collateral
Agent shall be entitled to all of the powers, privileges and protections
afforded to the Trustee under the Indenture, including, without limitation, the
provisions contained in Article 7 thereof.
15. Notices. Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile, telex, or cable
communication), in the case of each party hereto, at its address specified
opposite its signature below, or to such other address as may be designated by
any party in a written notice to the other party hereto, provided that notices
and communications to the Collateral Agent shall not be effective until
received by the Collateral Agent. All such notices, requests and demands shall
be deemed to have been duly given: when delivered by hand, if personally
delivered; one business day after being timely delivered to a next-day air
courier; five business days after being deposited in the mail, postage prepaid,
if mailed; when answered back if telexed; and when receipt is confirmed, if
sent by facsimile.
16. Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of the Company, the Collateral Agent, the
other Secured Parties, all future Holders of the Secured Obligations and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Security Agreement without
the prior written consent of the Collateral Agent and each other Secured Party.
17. Waivers and Amendments. None of the terms or provisions of this
Security Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Article 9 of the Indenture.
18. No Waiver; Remedies Cumulative. No failure or delay on the part
of the Collateral Agent in exercising any right, power or privilege hereunder
and no course of dealing between the Company and the Collateral Agent shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by
the Collateral Agent of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Collateral Agent
would otherwise have on any future occasion. The rights and remedies herein
expressly provided are cumulative, may be exercised singly or concurrently and
as often and in such order as the Collateral Agent deems expedient and are not
exclusive of any rights or remedies which the Collateral Agent would otherwise
have whether by agreement or now or hereafter existing under applicable law.
No notice to or demand on the Company in any case shall entitle the Company to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Collateral Agent to any other or
further action in any circumstances without notice or demand.
19. Termination; Release. When the Secured Obligations have been
finally paid and performed in full, this Security Agreement shall terminate,
and the Collateral Agent, at the request and sole expense of the Company, will
execute and deliver to the Company the proper instruments (including Uniform
Commercial Code termination statements) acknowledging the termination of this
Security Agreement, and will duly assign, transfer and deliver to the Company,
without recourse, representation or warranty of any kind whatsoever, such of
the Collateral as may be in possession of the Collateral Agent and has not
theretofore been disposed of, applied or released.
20. Counterparts. This Security Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
21. Headings Descriptive. The headings in this Security Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of this Security Agreement.
22. Marshalling. Neither the Collateral Agent nor any other Secured
Party shall be under any obligation to xxxxxxxx any assets in favor of the
Company or any other Person or against or in payment of any or all of the
Secured Obligations.
23. Severability. If any term, provision, covenant or restriction
of this Security Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
24. Survival. All indemnities set forth herein shall survive the
execution and delivery of this Security Agreement and the making and repayment
of the Secured Obligations.
25. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
26. Authority of Collateral Agent. The Company acknowledges that
the rights and responsibilities of the Collateral Agent under this Security
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Collateral Agent and the
other Secured Parties, be governed by the Indenture and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Company, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, to the extent it has the
right to do so and the Company shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
27. Waiver. To the extent permitted by applicable law, the Company
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Secured Obligations and this Security Agreement and
any requirement that the Collateral Agent protect, secure, perfect or insure
any security interest or any property subject thereto or exhaust any right or
take any action against the Company or any other person or entity.
IN WITNESS WHEREOF, the Company and the Collateral Agent have caused
this Security Agreement to be duly executed and delivered as of the date first
above written.
TEREX CORPORATION
By: Xxxxxx X. Xxxxxxxxx
Title: Secretary
Address for Notices:
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telex:
Facsimile: 000-000-0000
UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent
By: Xxxx Xxxxxxxx
Title: Vice President
Address for Notices:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Division and Agency
Telex:
Facsimile: 212-852-1625
Schedules
Schedule I Filing Offices
Schedule II Pledged Securities
Schedule III Inventory and Equipment Locations
Schedule IV Inventory in Possession of Bailee
Schedule V Trade Names
Schedule VI Intellectual Property Collateral
Item A: Copyrights
Item B: Copyright Licenses
Item C: Patents
Item D: Patent Licenses
Item E: Trademarks
Item F: Trademark Licenses
Item G: Trade Secret Collateral
Item H: Intellectual Property Collateral Matters
Schedule VII Working Capital Collateral
