Exhibit 10.2
AMENDED AND RESTATED SECURITY AGREEMENT dated as of
May 14, 2002 (the "Agreement"), among XXXXXX RESPIRATORY CARE
INC., a California corporation (the "Borrower"), RIVER HOLDING
CORP., a Delaware corporation ("Holding"), each subsidiary of
the Borrower listed on Schedule I hereto (each such subsidiary
individually a "Subsidiary Guarantor" and collectively, the
"Subsidiary Guarantors"; the Subsidiary Guarantors, Holding and
the Borrower are referred to collectively herein as the
"Grantors") and DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly
Bankers Trust Company), a New York banking corporation
("Deutsche Bank"), as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined
herein).
RECITALS
WHEREAS, pursuant to the Credit Agreement dated as of April 7,
1998 (the "Original Credit Agreement") among the Borrower, Holding, the lenders
from time to time party thereto (the "Lenders"), Salomon Brothers Inc, as
arranger, advisor and syndication agent and Bankers Trust Company, as
administrative agent for the Lenders, Collateral Agent and as issuing bank, the
Grantors entered into that certain Security Agreement dated as of April 7, 1998
(the "Original Security Agreement"), pursuant to which the Grantors granted to
the Collateral Agent, for the ratable benefit of the Secured Parties, a first
priority security interest in the Collateral as defined in the Original Credit
Agreement.
WHEREAS, the Borrower, Holding, Deutsche Bank and the Required
Lenders party to the Original Credit Agreement are, concurrently herewith,
amending and restating the Original Credit Agreement in the form of the Amended
and Restated Credit Agreement dated as of May 14, 2002 (as amended, supplemented
or otherwise modified from time to time, the "Amended and Restated Credit
Agreement"), among the Borrower, Holding, the lenders from time to time party
thereto (the "Lenders") and Deutsche Bank, as swingline lender, issuing bank,
administrative agent and Collateral Agent for the Lenders.
WHEREAS, the Lenders have agreed to make Loans to the Borrower, and
the Issuing Bank has agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Amended and Restated Credit Agreement. Each of Holding and the
Subsidiary Guarantors has agreed to guarantee, among other things, all the
obligations of the Borrower under the Amended and Restated Credit Agreement. The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit are conditioned upon, among other things, the execution and
delivery by the Grantors of an agreement in the form hereof to secure (a) the
due and punctual payment by the Borrower of (i) the principal of and premium, if
any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by the Borrower under the
Amended and Restated Credit Agreement in respect of any Letter of Credit, when
and as due, including payments in respect of reimbursement of disbursements,
interest thereon and obligations to provide cash collateral and
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Exhibit 10.2
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Borrower to the Secured Parties
under the Amended and Restated Credit Agreement and the other Credit Documents,
(b) the due and punctual performance of all covenants, agreements, obligations
and liabilities of the Borrower under or pursuant to the Amended and Restated
Credit Agreement and the other Credit Documents, (c) the due and punctual
payment and performance of all the covenants, agreements, obligations and
liabilities of each Credit Party under or pursuant to this Agreement and the
other Credit Documents and (d) the due and punctual payment and performance of
all obligations of the Borrower under each Interest Rate Agreement entered into
with any counterparty that was a Lender at the time such Interest Rate Agreement
was entered into (all the monetary and other obligations described in the
preceding clauses (a) through (d) being collectively called the "Obligations").
WHEREAS, in connection with the execution of the Amended and
Restated Credit Agreement Deutsche Bank, the Required Lenders and the Grantors
desire to amend and restate Original Security Agreement in is entirety pursuant
to this Agreement.
WHEREAS, it is the intention of Deutsche Bank, the Required Lenders
and the Grantors party to the Original Credit Agreement that security interests
granted and the Liens created by the Original Security Agreement shall continue,
uninterrupted, in full force and effect under and as amended by this Agreement.
Accordingly, the Grantors and the Collateral Agent, on behalf of
itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
ARTICLE I.
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the context otherwise
requires, all capitalized terms used but not defined herein shall have the
meanings set forth in the Amended and Restated Credit Agreement and all
references to the Uniform Commercial Code shall mean the Uniform Commercial Code
in effect in the State of New York on the date hereof. Each item of Collateral
listed in Section 1.02 that is defined in Articles 8 or 9 of the Uniform
Commercial Code, as it exists on the date of this Agreement or as it may
hereafter be amended, in the State of New York (the "UCC") shall have the
meaning set forth in the UCC , it being the intention of the Grantors that the
description of the Collateral set forth below be construed to include the
broadest possible range of assets.
SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.
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Exhibit 10.2
"Accounts" shall mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any such
rights evidenced by chattel paper, and, accounts, contract rights, chattel
paper, documents, instruments , health care insurance receivables,
letter-of-credit rights and other rights and obligations of any kind owned by or
owing to such Grantor and all rights in, to and under all security agreements,
leases and other contracts securing or otherwise relating to any such accounts,
contract rights, chattel paper, documents, instruments, health care insurance
receivables, letter-of-credit rights or other rights and obligations (any and
all such accounts, contract rights, chattel paper, documents, instruments,
health care insurance receivables, letter-of-credit rights and other rights and
obligations) whether due or to become due, whether or not they have been earned
by performance, and whether now or hereafter acquired or arising in the future,
including accounts receivable from Affiliates of the Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Amended and Restated Credit Agreement" shall have the meaning assigned
to such term in the preliminary statement of this Agreement.
"Chattel Paper" shall mean (a) a writing or writings which evidence
both a monetary obligation and a security interest in or a lease of specific
Equipment and (b) all other property now or hereafter constituting "chattel
paper" or "electronic chattel paper" under the Uniform Commercial Code as in
effect in the State of New York or its equivalent in other jurisdictions, in
each case that are now or hereafter owned by any Grantor.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents, (c)
Chattel Paper, (d) Equipment, (e) General Intangibles, (f) Inventory, (g) cash
and cash accounts, (h) Proceeds, (i) Investment Property, (j) Financial Assets
and (k) Equity Interests.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an option
on a commodity futures contract, a commodity option or any other contract that,
in each case, is (a) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to the
federal commodities laws or (b) traded on a foreign commodity board of trade,
exchange or market, and is carried on the books of a Commodity Intermediary for
a Commodity Customer.
"Commodity Customer" shall mean a person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a person who is registered as a
futures commission merchant under the federal commodities laws or (b) a person
who in the ordinary
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Exhibit 10.2
course of its business provides clearance or settlement services for a board of
trade that has been designated as a contract market pursuant to federal
commodities laws.
"Copyright License" shall mean any written agreement, now or hereafter
in effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule II.
"Documents" shall mean all instruments, files, records, ledger sheets
and documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the New York Uniform Commercial Code, such
person is the Entitlement Holder.
"Equipment" shall mean all equipment, furniture and furnishings, and
all tangible personal property similar to any of the foregoing, including tools,
parts and supplies of every kind and description, and all improvements,
accessions or appurtenances thereto, that are now or hereafter owned by any
Grantor. The term Equipment shall include Fixtures.
"Equity Interest" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company or beneficial
interests in a trust or other equity ownership interests in a person.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a
person or a share, participation or other interest in a person or in property or
an enterprise of a person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another person in a Securities Account if the
Securities Intermediary has expressly agreed with the other person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term "Financial Asset" shall mean
either the interest itself or the means by which a person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
"Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
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Exhibit 10.2
"General Intangibles" shall mean all choses in action and causes of
action and all other intangible personal property of any Grantor of every kind
and nature (other than Accounts Receivable) now owned or hereafter acquired by
any Grantor, including corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, Interest Rate Agreements and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims, permits,
licenses, rights of access and any letter of credit, guarantee, claim, security
interest or other security held by or granted to any Grantor to secure payment
by an Account Debtor of any of the Accounts Receivable.
"Health care insurance receivable" means an interest in or claim under
a policy of insurance which is a right to payment of a monetary obligation for
health-care goods or services provided.
"Intellectual Property" shall mean all right, title and interest in and
to all intellectual and similar property of any Grantor of every kind and nature
now owned or hereafter acquired by any Grantor, including inventions, designs,
Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or
proprietary technical and business information, know-how, show-how or other data
or information, software and databases and all embodiments or fixations thereof
and related documentation, registrations and franchises, and all additions,
improvements and accessions to, and books and records describing or used in
connection with, any of the foregoing.
"Inventory" shall mean all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service, or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing supplies
and spare parts, and all such goods that have been returned to or repossessed by
or on behalf of any Grantor.
"Investment Property" shall mean all Securities (whether certificated
or uncertificated), Security Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of any Grantor, whether now owned or hereafter
acquired by any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule III.
"Obligations" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or any
other country, all registrations and recordings thereof, and all applications
for letters patent of the United States or any other
5
Exhibit 10.2
country, including registrations, recordings and pending applications in the
United States Patent and Trademark Office or any similar offices in any other
country, including those listed on Schedule IV, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof,
and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in the
form of Annex 1 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by a Financial Officer and
the chief legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession of
any Collateral and any payment received from any insurer or other person or
entity as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which constitutes
Collateral, and shall include (a) any claim of any Grantor against any third
party for (and the right to xxx and recover for and the rights to damages or
profits due or accrued arising out of or in connection with) (i) past, present
or future infringement of any Patent now or hereafter owned by any Grantor, or
licensed under a Patent License, (ii) past, present or future infringement or
dilution of any Trademark now or hereafter owned by any Grantor or licensed
under a Trademark License or injury to the goodwill associated with or
symbolized by any Trademark now or hereafter owned by any Grantor, (iii) past,
present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or licensed
under a Copyright License and (b) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Secured Parties" shall mean (a) the Lenders, (b) the Administrative
Agent, (c) the Collateral Agent, (d) the Issuing Bank, (e) each counterparty to
an Interest Rate Agreement entered into with the Borrower if such counterparty
was a Lender at the time the Interest Rate Agreement was entered into, (f) the
beneficiaries of each indemnification obligation undertaken by any Grantor under
any Credit Document and (g) the successors and assigns of each of the foregoing.
"Securities" shall mean
(i) the shares of stock, partnership interests,
interests in joint ventures, limited liability company interests and all other
equity interests in a person that is, or becomes, a direct Subsidiary of such
Grantor, including all securities convertible into, and rights, warrants,
options and other rights to purchase or otherwise acquire, any of the foregoing
now or hereafter owned by such Grantor, including those owned on the date
hereof, and the certificates or other instruments representing any of the
foregoing and any interest of such Grantor in the entries on the books of any
securities intermediary pertaining thereto (the "Pledged Shares"), and all
dividends, distributions, returns of capital, cash, warrants, option, rights,
instruments, rights to vote or manage the business of such person pursuant to
organizational documents governing the rights and obligations of the
stockholders, partners, members or other owners thereof and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Pledged Shares;
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Exhibit 10.2
(ii) the indebtedness from time to time owed to such Grantor
by any obligor that is, or becomes, a direct or indirect Subsidiary of such
Grantor, or by any obligor of which Grantor is a direct or indirect Subsidiary
and issued by the obligors named therein, and the instruments evidencing such
indebtedness (the "Pledged Debt"), and all interest, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Debt; and
(iii) all other investment property of such Grantor
"Securities Account" shall mean an account to which a Financial Asset
is or may be credited in accordance with an agreement under which the person
maintaining the account undertakes to treat the person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Security Entitlements" shall mean the rights and property interests of
an Entitlement Holder with respect to a Financial Asset.
"Security Intermediary" shall mean (a) a clearing corporation or (b) a
person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Trademark License" shall mean any written agreement, now or hereafter
in effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office,
any State of the United States or any similar offices in any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule V, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
SECTION 1.03. Rules of Interpretation. The rules of interpretation
specified in Section 1.02 of the Amended and Restated Credit Agreement shall be
applicable to this Agreement.
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Exhibit 10.2
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
mortgages, pledges, hypothecates and transfers as security for the Obligations
as contemplated hereunder to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in, all of such Grantor's right, title and
interest in, to and under the Collateral (the "Security Interest"); provided,
however, that no mortgage, pledge, hypothecation or security interest shall be
created or granted hereunder if such creation or grant would constitute a
violation of a valid and enforceable restriction on such creation or grant,
unless and until any required consents shall have been obtained. Without
limiting the foregoing, the Collateral Agent is hereby authorized to file one or
more financing statements (including fixture filings), continuation statements,
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security Interest
is granted as security only and shall not subject the Collateral Agent or any
other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
The Grantors severally represent and warrant to the Collateral
Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other person other than any consent or approval which has been obtained.
SECTION 3.02. Filings. The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete in all material respects. Fully executed Uniform Commercial
Code financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the
Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate,
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Exhibit 10.2
which are all the filings, recordings and registrations (other than filings
required to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the Security Interest in
Collateral consisting of United States Patents, Trademarks and Copyrights) that
are necessary to publish notice of and protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral in
which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements or with respect to the filing of amendments or new
filings to reflect the change of any Grantor's name, location, identity or
corporate structure.
SECTION 3.03. Validity of Security Interest. The Security
Interest constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Obligations, (b) subject
to the filings described in Section 3.02, a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code or other applicable law in such jurisdictions and
(c) a security interest that shall be perfected in all Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, and otherwise as may be required
pursuant to the laws of any other necessary jurisdiction. The Security Interest
is and shall be prior to any other Lien on any of the Collateral, other than
Liens expressly permitted to be prior to the Security Interest pursuant to
Section 6.02 of the Amended and Restated Credit Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by
the Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.02 of the Amended and Restated Credit Agreement. The
Grantor has not filed or consented to the filing of (a) any financing statement
or analogous document under the Uniform Commercial Code or any other applicable
laws covering any Collateral, (b) any assignment in which any Grantor assigns
any Collateral or any security agreement or similar instrument covering any
Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (c) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Liens expressly
permitted pursuant to Section 6.02 of the Amended and Restated Credit Agreement.
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records;
Place of Business.
9
Exhibit 10.2
(a) Each Grantor agrees promptly to notify the Collateral Agent
in writing of any change (i) in its corporate name or jurisdiction of
incorporation, (ii) in the location of any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at which
Collateral owned by it is located (including the establishment of any such new
office or facility) other than (A) with respect to goods in transit between
facilities, whether in vehicles owned by the applicable Grantor or on common
carriers and (B) in the case of temporary warehousing which will last for no
longer than one month, (iii) in its identity or corporate structure or (iv) in
its Federal Taxpayer Identification Number. Each Grantor agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the Uniform Commercial Code or otherwise that are required in
order for the Collateral Agent to continue at all times following such change to
have a valid, legal and perfected first priority security interest in all the
Collateral. Each Grantor agrees promptly to notify the Collateral Agent if any
material portion of the Collateral owned or held by such Grantor is damaged or
destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense,
such complete and accurate records with respect to the Collateral owned by it as
is consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
any part of the Collateral, and, at such time or times as the Collateral Agent
may reasonably request, promptly to prepare and deliver to the Collateral Agent
a duly certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all
Collateral.
SECTION 4.02. Periodic Certification. Each year, at the time of delivery of
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.04 of the Amended and Restated Credit Agreement, the Borrower shall
deliver to the Collateral Agent a certificate executed by a Financial Officer of
the Borrower (a) setting forth the information required pursuant to Section 2 of
the Perfection Certificate or confirming that there has been no change in such
information since the date of such certificate or the date of the most recent
certificate delivered pursuant to Section 4.02 and (b) certifying that all
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (a) to the
extent necessary to protect and perfect the Security Interest for a period of
not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period). Each certificate delivered pursuant to this Section 4.02 shall identify
in the format of Schedule II, III, IV or V, as applicable, all Patents,
Trademarks, Copyrights and Licenses of any Grantor in existence on the date
thereof and not then listed on such Schedules or previously so identified to the
Collateral Agent.
SECTION 4.03. Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority
10
Exhibit 10.2
thereof against any Lien not expressly permitted pursuant to Section 6.02 of the
Amended and Restated Credit Agreement.
SECTION 4.04. Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent may
from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be promptly
pledged and delivered to the Collateral Agent, duly endorsed in a manner
satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to
supplement this Agreement by supplementing Schedule II, III, IV or V hereto or
adding additional schedules hereto to specifically identify any asset or item
that may constitute Copyrights, Licenses, Patents or Trademarks; provided,
however, that any Grantor shall have the right, exercisable within 10 days after
it has been notified by the Collateral Agent of the specific identification of
such Collateral, to advise the Collateral Agent in writing of any inaccuracy of
the representations and warranties made by such Grantor hereunder with respect
to such Collateral. Each Grantor agrees that it will use its best efforts to
take such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such Collateral
within 30 days after the date it has been notified by the Collateral Agent of
the specific identification of such Collateral.
SECTION 4.05. Inspection and Verification. The Collateral Agent and such
persons as the Collateral Agent may reasonably designate shall have the right,
subject to compliance with Section 5.07 of the Amended and Restated Credit
Agreement, to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantors' affairs with the officers of the
Grantors and their independent accountants and to verify under reasonable
procedures the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Collateral, including, in the case of
Accounts or Collateral in the possession of any third person, by contacting
Account Debtors or the third person possessing such Collateral for the purpose
of making such a verification; provided, however, that the Collateral Agent
shall give the applicable Grantor reasonable notice of proposed discussions with
such Grantor's accountants and representatives of such Grantor shall be entitled
to participate in such discussions. The Collateral Agent shall have the absolute
right to share any information it gains from such inspection or verification
with any Secured Party (it being understood that any such information shall be
deemed to be "Information" subject to the provisions of Section 9.16 of the
Amended and Restated Credit Agreement).
SECTION 4.06. Taxes; Encumbrances. At its option and after notice to the
applicable Grantor, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens,
11
Exhibit 10.2
security interests or other encumbrances at any time levied or placed on the
Collateral and not permitted pursuant to Section 6.02 of the Amended and
Restated Credit Agreement, and may pay for the maintenance and preservation of
the Collateral to the extent any Grantor fails to do so as required by the
Amended and Restated Credit Agreement or this Agreement, and each Grantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
payment made or any expense incurred by the Collateral Agent pursuant to the
foregoing authorization; provided, however, that nothing in this Section 4.06
shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Credit Documents.
SECTION 4.07. Assignment of Security Interest. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any other
person to secure payment and performance of an Account, such Grantor shall
promptly assign such security interest to the Collateral Agent. Such assignment
need not be filed of public record unless necessary to continue the perfected
status of the security interest against creditors of and transferees from the
Account Debtor or other person granting the security interest.
SECTION 4.08. Continuing Obligations of the Grantors. Each Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.
SECTION 4.09. Limitation on Possession of Inventory by Bailee. Each Grantor
agrees that it shall not permit any Inventory to be in the possession or control
of any warehouseman, bailee, agent or processor at any time unless such
warehouseman, bailee, agent or processor shall have been notified of the
Security Interest and shall have agreed in writing to hold the Inventory subject
to the Security Interest and the instructions of the Collateral Agent and to
waive and release any Lien held by it with respect to such Inventory, whether
arising by operation of law or otherwise.
SECTION 4.10. Limitation on Modification of Accounts. None of the Grantors
will, without the Collateral Agent's prior written consent, grant any extension
of the time of payment of any of the Accounts Receivable, compromise, compound
or settle the same for less than the full amount thereof, release, wholly or
partly, any person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and in accordance with such prudent and standard practices used in industries
that are the same as or similar to those in which such Grantor is engaged.
SECTION 4.11. Insurance. The Grantors, at their own expense, shall maintain
or cause to be maintained insurance covering physical loss or damage to the
Inventory and Equipment in accordance with Section 5.02 of the Amended and
Restated Credit Agreement. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or
12
Exhibit 10.2
agents designated by the Collateral Agent) as such Grantor's true and lawful
agent (and attorney-in-fact) for the purpose, during the continuance of an Event
of Default, of making, settling and adjusting claims in respect of Collateral
under policies of insurance, endorsing the name of such Grantor on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
In the event that any Grantor at any time or times shall fail to obtain or
maintain any of the policies of insurance required hereby or to pay any premium
in whole or part relating thereto, the Collateral Agent may, without waiving or
releasing any obligation or liability of the Grantors hereunder or any Event of
Default, in its sole discretion, obtain and maintain such policies of insurance
and pay such premium and take any other actions with respect thereto as the
Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in
connection with this Section 4.11, including reasonable attorneys' fees, court
costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Grantors to the Collateral Agent and shall be additional
Obligations secured hereby.
SECTION 4.12. Covenants Regarding Patent, Trademark and Copyright
Collateral.
(a) Each Grantor agrees that it will not, nor will it permit any
of its licensees to, do any act, or omit to do any act, whereby any Patent which
is material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue to xxxx any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
(c) Each Grantor (either itself or through licensees) will, for
each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent immediately if
it knows or has reason to know that any Patent, Trademark or Copyright material
to the conduct of its business may become abandoned, lost or dedicated to the
public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any
agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the
13
Exhibit 10.2
registration of any Trademark or Copyright) with the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, unless it promptly informs the Collateral Agent,
and, upon request of the Collateral Agent, executes and delivers any and all
agreements, instruments, documents and papers as the Collateral Agent may
request to evidence the Collateral Agent's security interest in such Patent,
Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent as
its attorney-in-fact to execute and file such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power, being coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly xxx for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or approvals
by the licensor of each Copyright License, Patent License or Trademark License
to effect the assignment of all of such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.
(i) Each Grantor shall ensure that fully executed security
agreements in the form hereof and containing a description of all Collateral
consisting of Intellectual Property shall have been received and recorded within
three months after the execution of this Agreement with respect to United States
Patents, United States registered Trademarks (and Trademarks for which United
States registration applications are pending) and United States registered
Copyrights have been delivered to the Collateral Agent for recording by the
United States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. (S) 261, 15 U.S.C. (S) 1060 or 17 U.S.C. (S) 205 and the
regulations thereunder, as applicable, and otherwise as may be required pursuant
to the laws of any other necessary jurisdiction, to protect the validity of and
to establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Collateral consisting of Patents, Trademarks and registered Copyrights in
which a security interest may be perfected by filing, recording or registration
in the United States (or any political subdivision thereof) and its territories
and
14
Exhibit 10.2
possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Collateral consisting of Patents,
Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).
ARTICLE V
Power of Attorney
Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent and attorney-in-fact,
and in such capacity the Collateral Agent shall have the right, with power of
substitution for each Grantor and in each Grantor's name or otherwise, for the
use and benefit of the Collateral Agent and the Secured Parties, upon the
occurrence and during the continuance of an Event of Default (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof; (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral; (c) to sign the
name of any Grantor on any invoice or xxxx of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral; (g)
to notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided,
however, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent or any Secured Party to make any commitment or
to make any inquiry as to the nature or sufficiency of any payment received by
the Collateral Agent or any Secured Party, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby, and no action taken or omitted to be taken by the Collateral Agent or
any Secured Party with respect to the Collateral or any part thereof shall give
rise to any defense, counterclaim or offset in favor of any Grantor or to any
claim or action against the Collateral Agent or any Secured Party. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantors for the purposes set forth above is coupled
with an interest and is irrevocable. The provisions of this Section shall in no
event relieve any Grantor of any of its obligations hereunder or under any other
Credit Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Credit Document, by law or otherwise.
15
Exhibit 10.2
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or nonexclusive basis, any such Collateral throughout the world on such terms
and conditions and in such manner as the Collateral Agent shall determine (other
than in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained), and (b) with or without legal process and with or
without prior notice or demand for performance, to take possession of the
Collateral and without liability for trespass to enter any premises where the
Collateral may be located for the purpose of taking possession of or removing
the Collateral and, generally, to exercise any and all rights afforded to a
secured party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal
which such Grantor now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.
The Collateral Agent shall give the Grantors 10 days' written notice (which
each Grantor agrees is reasonable notice within the meaning of Section 9-504(3)
of the Uniform Commercial Code as in effect in the State of New York or its
equivalent in other jurisdictions) of the Collateral Agent's intention to make
any sale of Collateral. Such notice, in the case of a public sale, shall state
the time and place for such sale and, in the case of a sale at a broker's board
or on a securities exchange, shall state the board or exchange at which such
sale is to be made and the day on which the Collateral, or portion thereof, will
first be offered for sale at such board or exchange. Any such public sale shall
be held at such time or times within ordinary business hours and at such place
or places as the Collateral Agent may fix and state in the notice (if any) of
such sale. At any such sale, the Collateral, or portion thereof, to be sold may
be sold in one lot as an entirety or in separate parcels, as the Collateral
Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any
16
Exhibit 10.2
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to this Section, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Grantor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor. For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Collateral Agent shall be free to carry
out such sale pursuant to such agreement and no Grantor shall be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
SECTION 6.02. Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of the Collateral, as well as any Collateral
consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent or the Collateral Agent (in its capacity as such
hereunder or under any other Credit Document) in connection with such
collection or sale or otherwise in connection with this Agreement or any of
the Obligations, including all court costs and the fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Collateral Agent hereunder or under any other Credit Document on behalf of
any Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Credit
Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance
with the amounts of the Obligations owed to them on the date of any such
distribution); and
THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
17
Exhibit 10.2
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 6.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent, upon the occurrence
and during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Amended and Restated Credit Agreement. All
communications and notices hereunder to any Subsidiary Guarantor shall be given
to it at its address or telecopy number set forth on Schedule I, with a copy to
the Borrower.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Amended and Restated Credit Agreement, any
other Credit Document, any agreement with respect to any of the Obligations or
any other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Amended and Restated Credit Agreement, any other Credit
Document or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations, or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Grantor in respect of the Obligations or this Agreement (other than indefeasible
payment in full of all Obligations and termination of all commitments of the
Lenders and the Issuing Banks).
18
Exhibit 10.2
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the making by the Lenders of the Loans, and
the execution and delivery to the Lenders of any notes evidencing such Loans,
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect until this Agreement shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Amended and Restated Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.
(a) Each Grantor jointly and severally agrees to pay upon demand
to the Collateral Agent the amount of any and all reasonable expenses, including
the reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Collateral Agent may incur in connection with (i)
the administration of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from or other realization upon any of the Collateral,
(iii) the exercise, enforcement or protection of any of the rights of the
Collateral Agent hereunder or (iv) the failure of any Grantor to perform or
observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under
the other Credit Documents, each Grantor jointly and severally agrees to
indemnify the Collateral Agent and the other Indemnitees against, and hold each
of them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any way
connected with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating
hereto or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related
19
Exhibit 10.2
expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section 7.06 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Credit
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Credit Document, or any investigation
made by or on behalf of the Collateral Agent or any Lender. All amounts due
under this Section 7.06 shall be payable on written demand therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 7.08. Waivers; Amendment.
(a) No failure or delay of the Collateral Agent in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent hereunder and of the Collateral Agent, the
Issuing Bank, the Administrative Agent and the Lenders under the other Credit
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provisions of this Agreement or any
other Credit Document or consent to any departure by any Grantor therefrom shall
in any event be effective unless the same shall be permitted by clause (b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on any Grantor in any
case shall entitle such Grantor or any other Grantor to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Grantor or Grantors with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 9.08 of the Amended and Restated
Credit Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
20
Exhibit 10.2
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract (subject to Section 7.04), and
shall become effective as provided in Section 7.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used herein are for
the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Credit Documents, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent, the Administrative Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Credit Documents against any Grantor or its properties in the courts
of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Credit
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
21
Exhibit 10.2
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 7.14. Termination; Release of Collateral. (a) This Agreement and the
Security Interest shall terminate when all the Obligations (other than inchoate
rights to indemnification and reimbursement) have been indefeasibly paid in
full, the Lenders have no further commitment to lend, the L/C Exposure has been
reduced to zero and the Issuing Bank has no further commitment to issue Letters
of Credit under the Amended and Restated Credit Agreement, at which time the
Collateral Agent shall execute and deliver to the Grantors, at the Grantors'
expense, all Uniform Commercial Code termination statements and similar
documents which the Grantors shall reasonably request to evidence such
termination. Any execution and delivery of termination statements or documents
pursuant to this Section 7.14 shall be without recourse to or warranty by the
Collateral Agent. A Subsidiary Guarantor shall automatically be released from
its obligations hereunder and the Security Interest in the Collateral of such
Subsidiary Guarantor shall be automatically released in the event that all the
capital stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of to a person that is not an Affiliate of the Borrower in
accordance with the terms of the Amended and Restated Credit Agreement; provided
that the Required Lenders shall have consented to such sale, transfer or other
disposition (to the extent required by the Amended and Restated Credit
Agreement) and the terms of such consent did not provide otherwise.
(b) In the event any Collateral is sold or transferred in an Asset
Sale or other transaction permitted by the Amended and Restated Credit Agreement
or is to be subject to a Lien permitted by Section 6.02(i) of the Amended and
Restated Credit Agreement, the Administrative Agent shall (i) concurrently with
the consummation of such Asset Sale or other transaction release the Collateral
that is subject of such sale or transfer free and clear of the Lien and security
interest under this Agreement, or (ii) in connection with a financing
contemplated by Sections 6.01 and 6.02(i) of the Amended and Restated Credit
Agreement, at the request of the lender providing the financing and at such
lender's election, either (A) subordinate the Lien and security interest under
this Agreement on any assets being financed to the Lien and security interest of
such lender pursuant to an intercreditor and/or subordination agreement in form
and substance satisfactory to such lender, the Administrative Agent and the
Grantor, or (B) release the Lien and security interest under this Agreement on
any such assets to the extent required by such lender. In connection with any
release or subordination pursuant to this Section 7.14(b), the Administrative
Agent shall execute and deliver, at the Grantors' expense, any Uniform
Commercial Code termination statements or other documents necessary to effect
and evidence such release or subordination as may be reasonably requested by the
Grantors.
SECTION 7.15. Additional Grantors. Pursuant to Section 5.11 of the Amended
and Restated Credit Agreement, each Domestic Subsidiary of the Borrower that was
not in existence or not a Subsidiary on the date of the Amended and Restated
Credit Agreement is required to enter into this Agreement as a Grantor upon
becoming a Subsidiary. Upon execution and delivery by the Collateral Agent and a
Subsidiary of an instrument in the form of Annex 2 hereto, such Subsidiary shall
become a Grantor hereunder with the same force and effect as if originally named
as a Grantor herein. The execution and delivery of any such instrument shall not
require the consent of any Grantor hereunder. The rights and obligations of each
Grantor
22
Exhibit 10.2
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor as a party to this Agreement.
SECTION 7.16. Certain Other Rights and Waivers. (a) The Grantors authorize
the Collateral Agent, without notice or demand and without affecting their
liability hereunder, from time to time, either before or after revocation
hereof, to (i) renew, compromise, extend, accelerate, or otherwise change the
time for payment of, or otherwise change the terms of the indebtedness or any
part thereof, including increase or decrease of the rate of interest thereon;
(ii) receive and hold security for the payment of the Obligations, and exchange,
enforce, waive, release, fail to perfect, sell, or otherwise dispose of any such
security; (iii) apply such security and direct the order or manner of sale
thereof as the Collateral Agent in its discretion may determine; and (iv)
release or substitute any one or more of the endorsers or guarantors.
(b) The Grantors waive any right to require the Collateral Agent to
(i) proceed against the Borrower; (ii) proceed against or exhaust any security
held from the Borrower; or (iii) pursue any other remedy in the Collateral
Agent's power whatsoever. The Grantors waive any defense arising by reason of
any disability or other defense of the Borrower, or the cessation from any cause
whatsoever of the liability of the Borrower, or any claim that the Grantors'
obligations exceed or are more burdensome than those of the Borrower. Until the
indebtedness shall have been paid in full, even though the indebtedness is in
excess of the Grantors' liability hereunder, the Grantors will not pursue any
right of subrogation, reimbursement, indemnification, and contribution
(contractual, statutory, or otherwise) including, without limitation, any claim
or right of subrogation under the Bankruptcy Code (Title 11, United States Code)
or any successor statute, arising from the existence or performance of this
Agreement, and until such payment in full, the Grantors will not pursue any
right to enforce any remedy which the Collateral Agent and the Lenders now have
or may hereafter have against the Borrower and will not pursue any benefit of,
and any right to participate in, any security now or hereafter held by the
Collateral Agent. The Grantors waive all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor,
and notices of acceptance of this Agreement and of the existence, creation, or
incurring of new or additional indebtedness.
(c) (i) The Grantors understand and acknowledge that if the Collateral
Agent forecloses, either by judicial foreclosure or by exercise of power of
sale, any deed of trust securing the Obligations, that foreclosure could impair
or destroy any ability that the Grantors may have to seek reimbursement,
contribution, or indemnification from the Borrower or others based on any right
the Grantors may have of subrogation, reimbursement, contribution, or
indemnification for any amounts paid by the Grantors under this Agreement. The
Grantors further understand and acknowledge that in the absence of this
paragraph, such potential impairment or destruction of the Grantors' rights, if
any, may entitle the Grantors to assert a defense to this Agreement based on
Section 580d of the California Code of Civil Procedure as interpreted in Union
Bank x. Xxxxxxx, 265 Cal. App. 2d 40 (1968). By executing this Agreement, the
Grantors freely, irrevocably, and unconditionally: (A) waive and relinquish that
defense and agree that the Grantors will be fully liable under this Agreement
even though the Collateral Agent may foreclose, either by judicial foreclosure
or by exercise of power of sale, any deed of trust securing the Obligations; (B)
agree that the Grantors will not assert that defense in any action or proceeding
which the Collateral Agent may commence to enforce this Agreement; (C)
acknowledge and agree that the rights and defenses waived by the Grantors in
23
Exhibit 10.2
this Agreement include any right or defense that the Grantors may have or be
entitled to assert based upon or arising out of any one or more of Sections
580a, 580b, 580d, or 726 of the California Civil Code; and (iv) acknowledge and
agree that the Collateral Agent and the Lenders are relying on this waiver in
creating the indebtedness, and that this waiver is a material part of the
consideration which the Collateral Agent and the Lenders are receiving for
creating the indebtedness.
(ii) The Grantors waive any rights and defenses that are or may
become available to the Grantors by reason of Sections 2787 to 2855, inclusive,
of the California Civil Code.
(iii) The Grantors waive all rights and defenses that the
Grantors may have because any of the indebtedness is secured by real property.
This means, among other things: (A) the Collateral Agent may collect from the
Grantors without first foreclosing on any real or personal property collateral
pledged by the Borrower; and (B) if the Collateral Agent forecloses on any real
property collateral pledged by the Borrower: (x) the amount of the indebtedness
may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price, and
(y) the Collateral Agent may collect from the Grantors even if the Collateral
Agent, by foreclosing on the real property collateral, has destroyed any right
the Grantors may have to collect from the Borrower. This is an unconditional and
irrevocable waiver of any rights and defenses the Grantors may have because any
of the indebtedness is secured by real property. These rights and defenses
include, but are not limited to, any rights or defenses based upon Section 580a,
580b, 580d, or 726 of the California Code of Civil Procedure.
(iv) The Grantors waive any right or defense they may have at
law or equity, including California Code of Civil Procedure Section 580a, to a
fair market value hearing or action to determine a deficiency judgment after a
foreclosure.
(v) No provision or waiver in this Agreement shall be construed
as limiting the generality of any other waiver contained in this Agreement.
(d) The Grantors acknowledge and agree that they shall have the sole
responsibility for obtaining from the Borrower such information concerning the
Borrower's financial conditions or business operations as the Grantors may
require, and that the Collateral Agent has no duty at any time to disclose to
the Grantors any information relating to the business operations or financial
conditions of the Borrower.
SECTION 7.17. Confirmation. For avoidance of doubt, the parties hereto
agree that on the Amended and Restated Credit Agreement Closing Date, the
security interests granted and the Liens created by the Original Security
Agreement shall continue, uninterrupted, in full force and effect under and as
amended by this Agreement.
24
Exhibit 10.2
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXXX RESPIRATORY CARE INC.,
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
RIVER HOLDING CORP.,
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
S-1
Exhibit 10.2
IH HOLDING LLC
By: XXXXXX RESPIRATORY CARE INC., its
Managing Member
By: ___________________________________
Name:
Title:
S-2
Exhibit 10.2
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent,
By: __________________________________
Name: ____________________________
Title: ___________________________
S-3
Exhibit 10.2
Schedule 1
Subsidiary Guarantors
Schedule-1
Exhibit 10.2
Schedule 2
Copyrights
Schedule-2
Exhibit 10.2
Schedule 3
Licenses
Schedule-3
Exhibit 10.2
Schedule 4
Patents
Schedule-4
Exhibit 10.2
Schedule 5
Trademarks
Schedule-5
Exhibit 10.2
Annex 1
to the Amended and
Restated Security Agreement
[Form of]
PERFECTION CERTIFICATE
Reference is made to the Amended and Restated Credit Agreement dated as
of May ___, 2002 (as amended, supplemented or otherwise modified from time to
time, the "Amended and Restated Credit Agreement"), among the Borrower, Holding,
the lenders from time to time party thereto (the "Lenders") and Deutsche Bank
Trust Company Americas, as swingline lender, issuing bank, administrative agent
and collateral agent (in such capacity, the "Collateral Agent") for the Lenders.
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Amended and Restated Credit Agreement.
The undersigned, a Financial Officer and the chief legal officer,
respectively, of the Borrower, hereby certify to the Collateral Agent and each
other Secured Party as follows:
1. Names.
(a) The exact corporate name of each Grantor, as such name appears in
its respective certificate of incorporation, and the jurisdiction of corporate
organization of such Grantor, is as follows:
Grantor Jurisdiction of Corporate Organization
(b) Except as set forth in Schedule 1 hereto, no Grantor has changed
its identity or corporate structure in any way within the past five years.
Changes in identity or corporate structure would include mergers, consolidations
and acquisitions, as well as any change in the form, nature or jurisdiction of
corporate organization. If any such change has occurred, include in Schedule 1
the information required by Sections 1 and 2 of this certificate as to each
acquiree or constituent party to a merger or consolidation.
(c) Set forth below is the Federal Taxpayer Identification Number of
each Grantor:
1
Exhibit 10.2
2. Current Locations.
(a) Set forth below opposite the name of each Grantor are all locations
where such Grantor maintains any books or records relating to any Accounts
Receivable (with each location at which chattel paper, if any, is kept being
indicated by an "*"):
Grantor Mailing Address County State
(b) Set forth below opposite the name of each Grantor are all the
locations where such Grantor maintains any Collateral not identified above:
Grantor Mailing Address County State
(c) Set forth below opposite the name of each Grantor are the names and
addresses of all persons other than such Grantor that have possession of any of
the Collateral of such Grantor:
Grantor Mailing Address County State
3. Unusual Transactions. All Accounts Receivable have been
originated by the Grantors and all Inventory has been acquired by the Grantors
in the ordinary course of business.
4. File Search Reports. Attached hereto as Schedule 4(A) are true
copies of file search reports from the Uniform Commercial Code filing offices
where filings described in Section 3.19 of the Amended and Restated Credit
Agreement are to be made. Attached hereto as Schedule 4(B) is a true copy of
each financing statement or other filing identified in such file search reports.
5. UCC Filings. Duly authorized financing statements on Form UCC-1 in
substantially the form of Schedule 5 hereto have been prepared for filing in the
Uniform Commercial Code filing office in the jurisdiction of corporate
organization of each Grantor identified in Section 1 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule
setting forth, with respect to the filings described in Section 5 above, each
filing and the filing office in which such filing is to be made.
7. Filing Fees. All filing fees and taxes payable in connection with
the filings described in Section 5 above have been paid.
2
Exhibit 10.2
8. Stock Ownership and other Equity Interests. Attached hereto as
Schedule 8 is a true and correct list of all the duly authorized, issued and
outstanding stock, partnership interest, membership interests or other Equity
Interests of the Borrower and of each Subsidiary and the record and beneficial
owners of such stock, partnership interests, membership interests or other
Equity Interests. Also set forth on Schedule 8 is each equity Investment of the
Borrower and each Subsidiary that represents 50% or less of the equity of the
entity in which such investment was made.
9. Notes. Attached hereto as Schedule 9 is a true and correct list of
all notes held by each Subsidiary and all intercompany notes between the
Borrower and each Subsidiary of the Borrower and between each Subsidiary of the
Borrower and each other such Subsidiary.
10. Advances. Attached hereto as Schedule 10 is (a) a true and correct
list of all advances made by the Borrower to any Subsidiary of the Borrower or
made by any Subsidiary of the Borrower to the Borrower or any other Subsidiary
of the Borrower, which advances will be on and after the date hereof evidenced
by one or more intercompany notes pledged to the Collateral Agent under the
Pledge Agreement, and (b) a true and correct list of all unpaid intercompany
transfers of goods sold and delivered by or to the Borrower or any Subsidiary of
the Borrower.
11. Mortgage Filings. Attached hereto as Schedule 11 is a schedule
setting forth, with respect to each Mortgaged Property, (i) the exact corporate
name of the corporation that owns such property as such name appears in its
certificate of incorporation, (ii) if different from the name identified
pursuant to clause (i), the exact name of the current record owner of such
property reflected in the records of the filing office for such property
identified pursuant to the following clause and (iii) the filing office in which
a Mortgage with respect to such property must be filed or recorded in order for
the Collateral Agent to obtain a perfected security interest therein.
3
Exhibit 10.2
IN WITNESS WHEREOF, the undersigned have duly executed this certificate
on this [_] day of May, 2002.
XXXXXX RESPIRATORY CARE INC.,
By: ___________________________________________
Name:
Title:
By: ___________________________________________
Name:
Title:
S-1
Annex 2 to the
Amended and Restated
Security Agreement
SUPPLEMENT NO. __ dated as of , to the Amended
and Restated Security Agreement dated as of May ___, 2002 (the
"Security Agreement"), among XXXXXX RESPIRATORY CARE INC., a
California corporation (the "Borrower"), RIVER HOLDING CORP., a
Delaware corporation ("Holding"), each subsidiary of the Borrower
listed on Schedule I thereto (each such subsidiary individually a
"Subsidiary Guarantor" and collectively, the "Subsidiary
Guarantors"; the Subsidiary Guarantors, Holding and the Borrower
are referred to collectively herein as the "Grantors") DEUTSCHE
BANK TRUST COMPANY AMERICAS, a New York banking corporation, as
collateral agent (in such capacity, the "Collateral Agent") for
the Secured Parties (as defined therein).
A. Reference is made to (a) the Amended and Restated Credit Agreement
dated as of May ___, 2002 (as amended, supplemented or otherwise modified from
time to time, the "Amended and Restated Credit Agreement"), among the Borrower,
Holding, the lenders from time to time party thereto (the "Lenders") and
Deutsche Bank Trust Company Americas, as swingline lender, issuing bank,
administrative agent and Collateral Agent for the Lenders.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Amended and Restated Credit Agreement.
C. The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Section 7.15 of Security Agreement provides that additional Domestic
Subsidiaries of the Borrower may become Grantors under the Security Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Domestic Subsidiary (the "New Grantor") is executing this Supplement
in accordance with the requirements of the Amended and Restated Credit Agreement
to become a Grantor under the Security Agreement in order to induce the Lenders
to make additional Loans and the Issuing Bank to issue additional Letters of
Credit and as consideration for Loans previously made and Letters of Credit
previously issued.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 7.15 of the Security Agreement,
the New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Grantor, as security for the payment and
performance in full of the Obligations (as defined in the Security Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the New Grantor's right, title and
interest in and to the Collateral (as defined in the Security Agreement) of the
New Grantor. Each
1
reference to a "Grantor" in the Security Agreement shall be deemed to include
the New Grantor. The Security Agreement is hereby incorporated herein by
reference.
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor other than (i) Collateral
which is in transit between facilities, whether in vehicles owned by the
applicable Grantor or on common carriers and (ii) Collateral which is located in
temporary warehousing and will remain in such warehousing for no longer than one
month, and (b) set forth under its signature hereto, is the true and correct
location of the chief executive office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below.
S-1
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
[Name of New Grantor],
by
_______________________________
Name:
Title:
Address:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent,
by
_______________________________
Name:
Title:
S-1
SCHEDULE I
to Supplement No. ___to the
Amended and Restated
Security Agreement
LOCATION OF COLLATERAL
Description Location
EXCEPTED COLLATERAL
Schedule-I
