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EXHIBIT 10.4
EXECUTION COPY
THIRD AMENDED AND RESTATED
SECURITY AGREEMENT
dated as of
June 30, 1992
amended and restated as of
August 5, 1997
and further amended and restated as of
November 30, 1999
and further amended and restated as of
February 23, 2001
among
ORBITAL SCIENCES CORPORATION,
EACH OF ITS SUBSIDIARIES PARTY HERETO,
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent
and
BANK OF AMERICA, N.A.,
as Designated Lockbox Bank
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THIRD AMENDED AND RESTATED SECURITY AGREEMENT
THIRD AMENDED AND RESTATED SECURITY AGREEMENT dated as of June 30, 1992,
amended and restated as of August 5, 1997, and further amended and restated as
of November 30, 1999 and further amended and restated as of February 23, 2001
among ORBITAL SCIENCES CORPORATION (with its successors, the "COMPANY") and each
of the Subsidiaries of the Company listed on the signature pages hereof and each
other Subsidiary of the Company that may from time to time become a party to
this Agreement (each such Subsidiary, with its successors, a "SUBSIDIARY DEBTOR"
and together with the Company, the "DEBTORS"), XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK , as Collateral Agent (with its successors, the "COLLATERAL AGENT") and
BANK OF AMERICA, N.A., as Designated Lockbox Bank (with its successors, the
"DESIGNATED LOCKBOX BANK").
W I T N E S S E T H :
WHEREAS, the Company, certain banks listed therein, Xxxxxx Guaranty
Trust Company of New York, as administrative agent (the "ADMINISTRATIVE AGENT")
and the Collateral Agent have entered into a 364-Day Senior Credit Agreement
dated as of February 23, 2001 (as amended from time to time, the "NEW
AGREEMENT"); and
WHEREAS, the Debtors, certain banks listed therein, the Collateral Agent
and the Administrative Agent are parties to a Third Amended and Restated Credit
Agreement dated as of December 21, 1998 (as heretofore amended, as amended and
restated by Amendment No. 13 thereto dated as of the date hereof ("AMENDMENT NO.
13") and as the same may be further amended from time to time hereafter, the
"EXISTING AGREEMENT"); and
WHEREAS, the Debtors, the Collateral Agent and the Designated Lockbox
Bank have entered into a Second Amended and Restated Security Agreement dated as
of June 30, 1992, amended and restated as of August 5, 1997 and further amended
and restated as of November 30, 1999 (the "EXISTING SECURITY AGREEMENT"); and
WHEREAS, pursuant to the New Agreement and Amendment No. 13, the Company
and Subsidiary Debtors party hereto are required to enter into a security
agreement substantially in the form hereof; and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
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acknowledged, the Existing Security Agreement is amended and restated in its
entirety as follows:
SECTION 1. Definitions . (a) Terms Defined in Credit Agreements. Terms
defined in the Credit Agreements and not otherwise defined in subsection (b) or
(c) of this Section have, as used herein, the respective meanings provided for
therein.
(b) Terms Defined in UCC. As used herein, each of the following
terms (1) if it is defined in both the Current UCC and the Revised UCC, has the
meaning specified in the Current UCC until the UCC Revision Date and the meaning
specified in the Revised UCC on and after the UCC Revision Date or (2) if it is
defined in the Revised UCC but not in the Current UCC, has the meaning specified
in the Revised UCC at all times:
Term Current UCC Revised UCC
---- ----------- -----------
Authenticate not defined 9-102
Deposit Account not defined 9-102
Entitlement Holder 8-102 8-102
Entitlement Order 8-102 8-102
Equipment 9-109 9-102
Financial Asset 8-102 & 103 8-102 & 103
Inventory 9-109 9-102
Record not defined 9-102
Securities Account 8-501 8-501
Securities Intermediary 8-102 8-102
Security 8-102 & 103 8-102 & 103
Security Entitlement 8-102 8-102
(c) Additional Definitions. The following additional terms, as used
herein, have the following respective meanings:
"ANCILLARY RIGHTS" means, with respect to each Debtor, rights incidental
or ancillary to the Receivables of such Debtor and the administration, servicing
and collection thereof, including, without limitation, all collateral security
and guarantees of any kind (including without limitation letters of credit or
other forms of credit enhancement) given by any Person to such Debtor with
respect to any Receivable of such Debtor.
"BANK COLLATERAL" has the meaning set forth in Section 3(a).
"COLLATERAL" means the Bank Collateral and the Shared Collateral.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 5.
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"CONTROL" has the following meanings:
(a) when used with respect to any Security or
Security Entitlement, (i) before the applicable UCC Revision
Date, the meaning specified in Current UCC Section 8-106 and
(ii) on and after the applicable UCC Revision Date, the meaning
specified in Revised UCC Section 8-106; and
(b) when used with respect to any Deposit Account,
the meaning specified in Revised UCC Section 9-104.
"CONTROLLED ACCOUNT" means a Controlled Deposit Account or a Controlled
Securities Account.
"CONTROLLED DEPOSIT ACCOUNT" means a Deposit Account (i) that is subject
to a Deposit Account Control Agreement or (ii) as to which the Collateral Agent
is the Depositary Bank's "customer" (as defined in UCC Section 4-104).
"CONTROLLED SECURITIES ACCOUNT" means a Securities Account that (i) is
maintained in the name of a Debtor at an office of a Securities Intermediary
located in the United States and (ii) together with all Financial Assets
credited thereto and all related Security Entitlements, is subject to a
Securities Account Control Agreement among such Debtor, the Collateral Agent and
such Securities Intermediary.
"COPYRIGHT LICENSE" means, with respect to each Debtor, any agreement
now or hereafter in existence granting to such Debtor, or pursuant to which such
Debtor has granted to any other Person, any right to use, copy, reproduce,
distribute, prepare derivative works, display or publish any records or other
materials on which a Copyright is in existence or may come into existence,
including, without limitation, any agreement identified in Schedule 1 to a
Copyright Security Agreement.
"COPYRIGHTS" means all the following: (i) all copyrights under the laws
of the United States or any other country (whether or not the underlying works
of authorship have been published), all registrations and recordings thereof,
all copyrightable works of authorship (whether or not published), and all
applications for copyrights under the laws of the United States or any other
country, including, without limitation, registrations, recordings and
applications in the United States Copyright Office or any other country or any
political subdivision thereof, including, without limitation, those described in
Schedule 1 to any Copyright Security Agreement, (ii) all renewals thereof, (iii)
all claims for, and rights to xxx for, past or future infringements of any of
the foregoing, and (iv) all income, royalties, damages and payments now or
hereafter due or payable with respect to any of the foregoing,
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including, without limitation, damages and payments for past or future
infringements thereof.
"COPYRIGHT SECURITY AGREEMENT" means a Copyright Security Agreement,
substantially in the form of Exhibit B hereto, executed and delivered by a
Debtor in favor of the Collateral Agent, for the benefit of the Secured Parties,
as amended from time to time.
"CREDIT AGREEMENT" means the New Agreement or the Existing Agreement,
and "CREDIT Agreements" means the New Agreement and the Existing Agreement.
"CURRENT UCC" means the UCC as in effect from time to time before the
UCC Revision Date.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" means, with respect to any Deposit
Account of any Debtor, an agreement among such Debtor, the Collateral Agent and
the relevant Depositary Bank, set forth in an Authenticated Record, (i) that
such Depositary Bank will comply with instructions originated by the Collateral
Agent directing disposition of the funds in such Deposit Account without further
consent by such Debtor and (ii) subordinating to the relevant Lien all claims of
the Depositary Bank to such Deposit Account (except its right to deduct its
normal operating charges and any uncollected funds previously credited thereto).
"DEPOSITARY BANK" means a bank at which a Controlled Deposit Account is
maintained.
"DESIGNATED LOCKBOX BANK" means Bank of America, N.A.
"EVENT OF DEFAULT" means an Event of Default as defined in either Credit
Agreement.
"FINANCING DOCUMENT" means any Financing Document as defined in either
Credit Agreement.
"GENERAL INTANGIBLES" means, with respect to each Debtor, all "general
intangibles" (as defined in the UCC) now owned or hereafter acquired by such
Debtor (but excluding any partnership interests or limited liability company
interests of any Person held by such Debtor), including, without limitation, (i)
all obligations or indebtedness owing to such Debtor (other than (x) Receivables
of such Debtor and (y) limited liability company interests or partnership
interests of any Person held by such Debtor from whatever source arising, (ii)
Intellectual Property, goodwill, trade names, service marks, trade secrets,
inventions, permits and licenses, (iii) all rights or claims in respect of
refunds for taxes paid and (iv) all
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rights in respect of any pension plan or similar arrangement maintained for
employees of any member of the ERISA Group.
"INSTRUMENTS" means, with respect to each Debtor, all "instruments",
"chattel paper" or "letters of credit" (each as defined in the UCC), including
(but not limited to) promissory notes, drafts, bills of exchange and trade
acceptances, now owned or hereafter acquired by such Debtor, including the
Second Magellan Note, but excluding any of the foregoing evidencing,
representing, arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Receivables.
"INSURANCE ACCOUNT" has the meaning set forth in Section 6.
"INSURANCE PAYMENTS" means all proceeds payable to the Collateral Agent
as loss payee under, or unearned premiums with respect to, the Insurance
Policies.
"INSURANCE POLICIES" means the insurance policies evidencing the
insurance the Company and its Subsidiaries are maintaining at any time pursuant
to Section 5.03 of either Credit Agreement other than any Excluded Coverages.
"INTELLECTUAL PROPERTY" means (i) Patents, (ii) Patent Licenses, (iii)
Trademarks, (iv) Trademark Licenses, (v) Copyrights and (vi) Copyright Licenses,
and all rights in or under any of the foregoing.
"INTELLECTUAL PROPERTY FILING" means (i) with respect to any Patent,
Patent License, Trademark or Trademark License, the filing of the applicable
Patent Security Agreement or Trademark Security Agreement with the United States
Patent and Trademark Office, together with an appropriately completed
recordation form, and (ii) with respect to any Copyright or Copyright License,
the filing of the applicable Copyright Security Agreement with the United States
Copyright Office, together with an appropriately completed recordation form, in
each case sufficient to record the Security Interest granted to the Collateral
Agent in such Intellectual Property.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" means a Copyright Security
Agreement, a Patent Security Agreement or a Trademark Security Agreement.
"JUNIOR BANK PARTIES" means the Administrative Agent under the Existing
Agreement, each Bank from time to time party to the Existing Agreement and the
Treasury Management Bank.
"JUNIOR BANK SECURED OBLIGATIONS" means:
(x) with respect to the Company, (a) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case,
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proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company, whether or not allowed or allowable as a claim in
any such proceeding) on any loan to the Company under, or any note issued by the
Company pursuant to, the Existing Agreement, (b) all Reimbursement Obligations
and all interest thereon (including, without limitation, any interest which
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Company, whether or not
allowed or allowable as a claim in any such proceeding), (c) all other amounts
payable by the Company under any Financing Document in respect of or relating to
the Existing Agreement, and (d) any renewals or extensions of any of the
foregoing; and
(y) with respect to the Company, all amounts payable by the Company
pursuant to the Treasury Management Agreement; provided that such amounts shall
not constitute Junior Bank Secured Obligations to the extent the aggregate
amount thereof exceeds $4,300,000; and
(z) with respect to each Subsidiary Debtor, all obligations of such
Subsidiary Debtor incurred by such Subsidiary Debtor pursuant to Section 23 with
respect to the obligations described in (x) and (y) above.
"JUNIOR SECURED OBLIGATIONS" means the Junior Bank Secured Obligations
and, solely with respect to the Shared Collateral, the NML Secured Obligations.
"JUNIOR SECURED PARTIES" means the Junior Bank Parties and, solely with
respect to the Shared Collateral, NML.
"LETTER OF CREDIT OBLIGATION" means, at any time, any Reimbursement
Obligations or other obligation to make a payment in connection with a Letter of
Credit issued under the Existing Agreement, including contingent obligations
with respect to amounts which are then, or may thereafter become, available for
drawing under such Letter of Credit.
"LIQUID INVESTMENTS" means, with respect to each Debtor, Temporary Cash
Investments; provided that (i) each Liquid Investment shall mature within 30
days after it is acquired by the Collateral Agent and (ii) in order to provide
the Collateral Agent, for the benefit of the Secured Parties (other than NML),
with a perfected security interest therein, each Liquid Investment shall be
either:
(i) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of such Debtor, which (together with any
appropriate instruments of transfer) are delivered to, and held by, the
Collateral Agent or an agent thereof (which shall not be such Debtor or any of
its Affiliates) in the State of New York; or
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(ii) in book-entry form and issued by the United States and subject to
pledge under applicable state law and Treasury regulations and as to which (in
the reasonable opinion of counsel to the Collateral Agent) appropriate measures
shall have been taken for perfection of the Security Interests.
"MAGELLAN NOTE" means the promissory note dated November 30, 1999 in the
principal amount of $23,000,000.00 issued by Magellan to the Company.
"MATERIAL GOVERNMENT CONTRACT" means, with respect to each Debtor, any
contract between such Debtor and any United States government agency under which
contract payments to such Debtor in an amount in excess of $3,000,000 may be
made.
"NML GUARANTY AGREEMENT" means the Subsidiary Guaranty Agreement dated
as of January 31, 2000, by the Subsidiary Debtors for the benefit of NML.
"NML NOTE AGREEMENT" means the agreement dated as of June 1, 1995 (as
amended from time to time) between the Company and The Northwestern Mutual Life
Insurance Company (with its successors and assigns, "NML").
"NML SECURED OBLIGATIONS" means:
(x) with respect to the Company, (a) all principal of and interest on
any note issued by the Company pursuant to the NML Note Agreement (including,
without limitation, any interest which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company, whether or not allowed or allowable as a claim in
any such proceeding), (b) all other amounts, including without limitation,
make-whole amount, if any, payable by the Company under the NML Note Agreement
and (c) any renewals or extensions of any of the foregoing; and
(y) with respect to each Subsidiary Debtor, all obligations of such
Subsidiary Debtor incurred by such Subsidiary Debtor pursuant to the NML
Guaranty Agreement or pursuant to Section 23 with respect to the obligations
described in (x) above.
"PATENT LICENSE" means, with respect to each Debtor, any agreement now
or hereafter in existence granting such Debtor, or pursuant to which such Debtor
has granted to any other Person, any right with respect to any Patent, now or
hereafter in existence, including, without limitation, any agreement identified
in Schedule 1 to a Patent Security Agreement.
"PATENTS" means (i) all letters patent and design letters patent of the
United States or any other country and all applications for letters patent and
design letters patent of the United States or any other country, including,
without limitation,
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applications in the United States Patent and Trademark Office or in any similar
office or agency of any other country or any political subdivision thereof, (ii)
all reissues, divisions, continuations, continuations-in-part, revisions and
extensions thereof, (iii) all claims for, and rights to xxx for, past or future
infringements of any of the foregoing and (iv) all income, royalties, damages
and payments now or hereafter due or payable with respect to any of the
foregoing, including, without limitation, damages and payments for past or
future infringements thereof.
"PATENT SECURITY AGREEMENT" means a Patent Security Agreement,
substantially in the form of Exhibit C hereto, executed and delivered by a
Debtor in favor of the Collateral Agent, for the benefit of the Secured Parties,
as amended from time to time.
"PERFECTION CERTIFICATE" means the certificate, substantially in the
form of Exhibit A, completed and supplemented with the schedules and attachments
contemplated thereby to the satisfaction of the Collateral Agent, and duly
executed by the Debtors.
"PERMITTED LIENS" means the Liens permitted both under Section 5.12 of
the New Agreement and under Section 5.14 of the Existing Agreement.
"PROCEEDS" means all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, Collateral,
including without limitation all claims of each Debtor against third parties for
loss of, damage to or destruction of, or for proceeds payable under, or unearned
premiums with respect to, policies of insurance in respect of, any Collateral,
rights to any returned or repossessed goods relating to any Collateral, and any
condemnation or requisition payments with respect to any Collateral, in each
case whether now existing or hereafter arising.
"RECEIVABLES" means, with respect to each Debtor, all "ACCOUNTS" (as
defined in the UCC) now owned or hereafter acquired by such Debtor, and shall
also mean and include all accounts receivable, contract rights, book debts,
chattel paper, notes, drafts and other obligations or indebtedness owing to such
Debtor arising from the sale, lease or exchange of goods or other property by it
and/or performance of services by it (including, without limitation, any such
obligation which might be characterized as an account, contract right or general
intangible under the Uniform Commercial Code in effect in any jurisdiction) and
all of such Debtor's right in, to and under all purchase orders for goods,
services or other property to be provided or sold by it or any Affiliate, and
all of such Debtor's rights to any goods, services or other property represented
by any of the foregoing (including returned or repossessed goods and unpaid
sellers' rights of rescission, replevin, reclamation and rights to stoppage in
transit) and all monies due to or to become due to such Debtor under all
contracts for the sale (as seller), lease (as lessor) or exchange of goods or
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other property and/or performance of services by it (whether or not yet earned
by performance on the part of such Debtor), in each case whether now in
existence or hereafter arising or acquired including, without limitation, the
right to receive the proceeds of said purchase orders and contracts and all
collateral security and guarantees of any kind given by any Person with respect
to any of the foregoing.
"RELATED DOCUMENTS" means the Financing Documents, the NML Guarantee
Agreement, the NML Note Agreement and the Treasury Management Agreement.
"RELEASE CONDITIONS" means the following conditions for releasing all of
the Secured Guarantees and terminating all Liens:
(i) all Commitments under either Credit Agreement shall have expired
or been terminated;
(ii) all Secured Obligations shall have been paid in full.
"REQUIRED BANKS" means (i) until such time as all Loans outstanding
under the New Agreement have been paid in full, together with accrued interest
thereon and all other amounts then due under the New Agreement, and the
Commitments thereunder shall have terminated, the Required Banks as defined in
the New Agreement and (ii) thereafter, the Required Banks as defined in the
Existing Agreement.
"REVISED ARTICLE 9" means revised Article 9 of the Uniform Commercial
Code as set forth in the 1998 Official Text thereof; provided that, when used
with respect to any jurisdiction on or after the date when revised Article 9
(with or without local changes therein) first becomes effective in such
jurisdiction, "Revised Article 9" refers to Article 9 as in effect in such
jurisdiction from time to time.
"REVISED UCC" means (i) before the UCC Revision Date, the Uniform
Commercial Code as set forth in the 1998 Official Text thereof and (ii) on and
after the UCC Revision Date, the Uniform Commercial Code as in effect from time
to time in the State of New York.
"SECOND MAGELLAN NOTE" means the Unsecured Subordinated Revolving
Promissory Note dated November 29, 1999 in the principal amount of
$26,700,000.00 issued by Magellan to the Company.
"SECURED GUARANTEE" means, with respect to each Guarantor, its guarantee
of the Secured Obligations under Section 23 hereof.
"SECURED OBLIGATIONS" means:
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(x) with respect to the Company, (a) the Senior Secured Obligations of
the Company, (b) the Junior Bank Secured Obligations of the Company and (c) the
NML Secured Obligations of the Company; and
(y) with respect to each Subsidiary Debtor, (a) the Senior Secured
Obligations of such Subsidiary Debtor, (b) the Junior Bank Secured Obligations
of such Subsidiary Debtor and (c) the NML Secured Obligations of such Subsidiary
Debtor.
"SECURED PARTIES" means the Senior Secured Parties, the Junior Secured
Parties, the Collateral Agent and the Designated Lockbox Bank.
"SECURITIES ACCOUNT CONTROL AGREEMENT" mean, with respect to any
Securities Account of any Debtor, an agreement set forth in an Authenticated
Record among the relevant Securities Intermediary, such Debtor and the
Collateral Agent to the effect that such Securities Intermediary will comply
with Entitlement Orders originated by the Collateral Agent with respect to such
Securities Account without further consent by the relevant Debtor.
"SECURITY EVENT" means any event, occurrence or condition which, in the
sole discretion of the Required Banks acting in good faith, "impairs the
prospect of payment" by the Debtors within the meaning of Section 1-208 of the
UCC.
"SECURITY INTERESTS" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"SENIOR SECURED OBLIGATIONS" means:
(x) with respect to the Company, (a) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Company, whether or not allowed or allowable
as a claim in any such proceeding) on any loan to the Company under, or any note
issued by the Company pursuant to, the New Agreement, (b) all other amounts
payable by the Company under any Financing Document in respect of or relating to
the New Agreement and (c) any renewals or extensions of any of the foregoing;
and
(y) with respect to each Subsidiary Debtor, all obligations of such
Subsidiary Debtor incurred by such Subsidiary Debtor pursuant to Section 23 with
respect to the obligations described in (x) above.
"SENIOR SECURED PARTIES" means the Administrative Agent under the New
Agreement and each Bank from time to time party to the New Agreement.
"SHARED COLLATERAL" has the meaning set forth in Section 3(b).
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"TRADEMARK LICENSE" means, with respect to each Debtor, any agreement
now or hereafter in existence granting to such Debtor, or pursuant to which such
Debtor has granted to any other Person, any right to use any Trademark,
including, without limitation, any agreement identified in Schedule 1 to any
Trademark Security Agreement.
"TRADEMARKS" means: (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos, brand names, trade dress, prints and labels on which any of the
foregoing have appeared or appear, package and other designs, and any other
source or business identifiers, and general intangibles of like nature, and the
rights in any of the foregoing which arise under applicable law, (ii) the
goodwill of the business symbolized thereby or associated with each of them,
(iii) all registrations and applications in connection therewith, including,
without limitation, registrations and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country or any political subdivision thereof,
including, without limitation, those described in Schedule 1 to any Trademark
Security Agreement, (iv) all renewals thereof, (v) all claims for, and rights to
xxx for, past or future infringements of any of the foregoing and (vi) all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and
payments for past or future infringements thereof.
"TRADEMARK SECURITY AGREEMENT" means a Trademark Security Agreement,
substantially in the form of Exhibit D hereto, executed and delivered by a
Debtor in favor of the Collateral Agent, for the benefit of the Secured Parties,
as amended from time to time.
"TREASURY MANAGEMENT AGREEMENT" means the treasury management
arrangement established by the Treasury Management Bank for the benefit of the
Company, as evidenced by, among other things, that certain zero Balance Account
Service Agreement dated as of May 15, 1997 and that certain Authorization and
Agreement for Treasury Services dated as of the date hereof, including those
accounts bearing account numbers 4113052459, 4122852365, 79176554 and
4113052381, and such other accounts as are or may be established in connection
therewith.
"TREASURY MANAGEMENT BANK" means Bank of America, N.A., in its capacity
as provider of treasury management services under the Treasury Management
Agreement. The term shall also include any affiliate providing such services
under the Treasury Management Agreement.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection or the
priority of the
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Security Interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection or priority.
"UCC REVISION DATE" means the date when Revised Article 9 first becomes
effective in the State of New York; provided that, if perfection or the effect
of perfection or non-perfection or the priority of any Transaction Lien on any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "UCC Revision Date" means the date when
Revised Article 9 first becomes effective in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority. Such provisions often refer to the
relevant date as the "APPLICABLE UCC REVISION DATE".
SECTION 2. Representations and Warranties . Each Debtor represents and
warrants as follows:
(a) Such Debtor has good title to all of the Collateral, free and
clear of any Liens other than the Permitted Liens. Such Debtor has taken all
actions necessary under the UCC to perfect its interest in any Receivables
purchased or otherwise acquired by it, as against its assignors and creditors of
its assignors.
(b) Other than financing statements, mortgages, security agreements
or other similar or equivalent documents or instruments with respect to the
Security Interests and the Permitted Liens, no financing statement, mortgage,
security agreement or similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in any jurisdiction in
which such filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person (other than such
Debtor) asserting any claim thereto or security interest therein, except that
the Collateral Agent or its designee may have possession of Collateral as
contemplated hereby.
(c) Such Debtor has delivered the Perfection Certificate to the
Collateral Agent. The information set forth therein is correct and complete in
all material respects. Promptly after the receipt thereof, such Debtor shall
furnish to the Collateral Agent acknowledgment copies of the filings set forth
in Schedule 7 to the Perfection Certificate.
(d) The Security Interests constitute valid security interests under
the UCC securing the Secured Obligations to the extent the UCC is applicable
thereto. Upon filing of the financing statements, the Security Interests will
constitute perfected security interests in the Collateral of each Debtor to the
extent that a security interest therein may be perfected by filing pursuant to
the UCC, subject to
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no Liens except for the Permitted Liens and prior to all Liens except for the
Permitted Liens (other than the Security Interests) existing on and as of the
date on which such Debtor becomes a party to this Agreement. When, in addition
to the filing of UCC financing statements, the applicable Intellectual Property
Filings have been made with respect to each Debtor's Intellectual Property
(including any future filings required pursuant to Section 4(b)), the Security
Interests will constitute perfected security interests in all right, title and
interest of each Debtor in its Intellectual Property to the extent that security
interests therein may be perfected by such filings, subject to no Liens except
for the Permitted Liens and prior to all Liens except for the Permitted Liens
(other than the Security Interests) existing on and as of the date such Debtor
becomes a party to this Agreement.
(e) Upon the delivery to the Collateral Agent by such Debtor of
assignments and notices of assignment substantially in the forms of Exhibits E-1
and E-2 hereto, respectively, and the filing of each such notice with the
governmental authority or agency or other office described therein, the Security
Interests shall constitute valid assignments of the Receivables of such Debtor
due under Material Government Contracts of such Debtor to the extent that such
assignment is governed by the Assignment of Claims Act.
(f) No Person other than the Collateral Agent has been named as a
loss payee on any of the Insurance Policies except to the extent contemplated by
Section 5.03(c) of the Credit Agreements. No consent of any Person is required
in connection with the pledge of the Insurance Policies hereunder, other than
the consent of NML set forth in that certain waiver and consent letter, dated
November 30, 1999.
SECTION 3. The Security Interests . (a) In order to secure the full and
punctual payment of the Junior Bank Secured Obligations in accordance with the
terms thereof, and to secure the performance of all of the obligations of each
Debtor hereunder, under the Treasury Management Agreement and under the other
Financing Documents with respect thereto, each Debtor hereby grants to the
Collateral Agent for the ratable benefit of the Junior Bank Parties a continuing
security interest in and to all of the following property of such Debtor,
whether now owned or existing or hereafter acquired or arising and regardless of
where located (all being collectively referred to as the "BANK COLLATERAL"):
(1) Receivables;
(2) Ancillary Rights;
(3) Insurance Payments;
(4) Insurance Policies;
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(5) The Collateral Account, all cash deposited therein from time to
time, all investments thereof made pursuant to Section 5(d) and other monies and
property of any kind of such Debtor in the possession or under the control of
the Collateral Agent;
(6) The Insurance Account, all cash deposited therein from time to
time, and all investments thereof made pursuant to Section 6(c);
(7) The Magellan Note;
(8) All books and records (including, without limitation, customer
lists, credit files, computer programs, printouts and other computer materials
and records) of such Debtor pertaining to any of the Collateral described in
clauses 1 through 7 hereof; and
(9) All Proceeds of all or any of the Collateral described in
clauses 1 through 8 hereof.
The Security Interests granted pursuant to this Section 3(a) shall be
subordinate in right of payment as set forth in Section 11 to the Security
Interests granted pursuant to Section 3(c).
(b) In order to secure the full and punctual payment of the Junior
Secured Obligations in accordance with the terms thereof, and to secure the
performance of all of the obligations of each Debtor hereunder, under the other
Financing Documents, under the NML Note Agreement, under the NML Guaranty and
under the Treasury Management Agreement with respect thereto, each Debtor hereby
grants to the Collateral Agent for the ratable benefit of the Junior Secured
Parties, a continuing security interest in and to all of following property of
such Debtor, whether now owned or existing or hereafter acquired or arising and
regardless of where located (all being collectively referred to as the "SHARED
COLLATERAL"):
(1) Copyrights;
(2) Copyright Licenses;
(3) Patents;
(4) Patent Licenses;
(5) Trademarks;
(6) Trademark Licenses;
(7) General Intangibles (other than Receivables, Ancillary Rights,
Insurance Payments and Insurance Policies);
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(8) Instruments (other than the Magellan Note);
(9) Subject to Section 3(d) below, Inventory and Equipment;
(10) Subject to Section 3(e) below, Securities Accounts, including
all Financial Assets credited thereto from time to time and all
Security Entitlements in respect thereof, and Controlled Deposit
Accounts (in each case, other than the Collateral Account and
the Insurance Account);
(11) All books and records (including, without limitation, customer
lists, credit files, computer programs, printouts and other
computer materials and records) of such Debtor pertaining to any
of the Collateral described in clauses 1 through 10 hereof; and
(12) All Proceeds of all or any of the Collateral described in
clauses 1 through 11 hereof.
The Security Interests granted pursuant to this Section 3(b) shall be
subordinate in right of payment as set forth in Section 11 to the Security
Interests granted pursuant to Section 3(c).
(c) In order to secure the full and punctual payment of the Senior
Secured Obligations in accordance with the terms thereof, and to secure the
performance of all the obligations of each Debtor hereunder and under the other
Financing Documents with respect thereto, each Debtor hereby grants to the
Collateral Agent for the ratable benefit of the Senior Secured Parties a
continuing security interest in and to all Collateral of such Debtor, whether
now owned or existing or hereafter acquired or arising and regardless of where
located.
(d) The Collateral shall not include Inventory or Equipment to the
extent that the grant of a security interest therein is validly and effectively
prohibited, or made subject to the requirement of third-party consent which
consent has not been obtained, pursuant to the terms of an agreement in effect
on the Effective Date. Upon request of the Collateral Agent, each Debtor will
use its commercially reasonable efforts to obtain any such required consent.
(e) To the extent that Collateral described in Section 3(b)(10)
includes Proceeds of Bank Collateral, such Collateral shall be deemed to be
solely Bank Collateral and not Shared Collateral.
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(f) The Security Interests are granted as security only and shall
not subject the Collateral Agent or any other Secured Party to, or transfer or
in any way affect or modify, any obligation or liability of any Debtor with
respect to any of the Collateral or any transaction in connection therewith.
SECTION 4. Further Assurances; Covenants . (a) Each Debtor will not
change its name, identity or corporate structure in any manner or change the
location of (i) its chief executive office or chief place of business, or (ii)
the locations where it keeps or holds any Collateral from the applicable
location described in the Perfection Certificate unless it shall have given the
Collateral Agent 30 days prior notice thereof, shall have taken all such action
as the Collateral Agent shall reasonably deem necessary to maintain at all times
the perfection of the Security Interests in the Collateral granted hereunder and
shall have delivered an opinion of counsel with respect thereto in accordance
with Section 4(h).
(b) Each Debtor will, from time to time, at its expense, execute,
deliver, file and record any statement, notice, assignment, instrument,
document, agreement or other paper and take any other action (including, without
limitation, any filings of financing or continuation statements under the UCC
and any Intellectual Property Filings, and, solely with respect to any Material
Government Contract, any such document or action in respect of the Assignment of
Claims Act) that from time to time may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to create, preserve, perfect,
confirm or validate the Security Interests or to enable the Collateral Agent and
the Secured Parties to obtain the full benefits of this Agreement, or to enable
the Collateral Agent to exercise and enforce any of its rights, powers and
remedies hereunder with respect to any of the Collateral. To the extent
permitted by applicable law, each Debtor hereby authorizes the Collateral Agent
to execute and file financing statements or continuation statements or
Intellectual Property Filings without such Debtor's signature appearing thereon.
Each Debtor agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement. Each Debtor shall pay the costs of, or incidental to, any
recording or filing of any financing or continuation statements concerning the
Collateral.
(c) Each Debtor will maintain its qualification to do business and
all necessary licenses, permits and other governmental authorizations necessary
in any jurisdiction to enable such Debtor to perform its obligations in respect
of the Receivables of such Debtor and to administer, service and collect such
Receivables.
(d) Each Debtor will not, without the consent of the Required Banks,
change its credit or collection policies in a manner that is reasonably likely
to impair the collectability of the Receivables of such Debtor.
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(e) Each Debtor will keep full and accurate books and records
relating to the Collateral, and stamp or otherwise xxxx such books and records
in such manner as the Required Banks may reasonably require in order to reflect
the Security Interests.
(f) Each Debtor shall use all commercially reasonable efforts to
cause to be collected from its account debtors, as and when due, any and all
amounts owing under or on account of each Receivable of such Debtor (including,
without limitation, Receivables which are delinquent, such Receivables to be
collected in accordance with lawful collection procedures) and shall apply
forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivables. Subject to the rights of the Collateral
Agent and the Secured Parties hereunder if an Event of Default shall have
occurred and be continuing, each Debtor may allow in the ordinary course of
business as adjustments to amounts owing under the Receivables of such Debtor
(i) an extension or renewal of the time or times of payment, or settlement for
less than the total unpaid balance and (ii) a refund, credit or other adjustment
due as a result of returned, damaged, or non-conforming merchandise, products or
services, all in accordance with such Debtor's sound business judgment. The
costs and expenses (including, without limitation, reasonable attorney's fees)
of collection, whether incurred by such Debtor or the Collateral Agent, shall be
borne by such Debtor.
(g) Each Debtor will, promptly upon request, provide to the
Collateral Agent all information and evidence it may reasonably request
concerning the Collateral to enable the Collateral Agent to enforce the
provisions of this Agreement.
(h) Not more than six months nor less than 30 days prior to each
date on which any Debtor proposes to take any action in connection with which an
opinion of counsel is to be delivered pursuant to Section 4(a), such Debtor
shall, at its cost and expense, cause to be delivered to the Secured Parties an
opinion of counsel, reasonably satisfactory to the Collateral Agent, in form and
substance reasonably satisfactory to the Collateral Agent, to the effect that
all financing statements and amendments or supplements thereto, continuation
statements and other documents required to be recorded or filed in order to
continue the perfection of the Security Interests in the Collateral following
the proposed action by such Debtor have been filed in each filing office
necessary for such purpose and that all filing fees and taxes, if any, payable
in connection with such filings have been paid in full.
(i) Within 30 days after entering into any Material Government
Contract, such Debtor shall deliver to such government agency an instrument of
assignment duly completed and executed by such Debtor substantially in the form
of Exhibit E-1 hereto.
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(j) If any Collateral of any Debtor is at any time in the possession
or control of any warehouseman, bailee or any of such Debtor's agents or
processors, such Debtor shall notify such warehouseman, bailee, agent or
processor of the Security Interests created hereby and to hold all such
Collateral for the Collateral Agent's account subject to the Collateral Agent's
instructions.
(k) Each Debtor will immediately deliver and pledge each Instrument
to the Collateral Agent, appropriately endorsed to the Collateral Agent,
provided that so long as no Event of Default shall have occurred and be
continuing, each Debtor may retain for collection in the ordinary course any
Instruments (other than checks and drafts constituting payments in respect of
Receivables of such Debtor described in clauses (x) or (y) of Section 5(b), as
to which the provisions of such Section shall apply) received by it in the
ordinary course of business and the Collateral Agent shall, promptly upon
request of such Debtor, make appropriate arrangements for making any other
Instrument pledged by such Debtor available to it for purposes of presentation,
collection or renewal (any such arrangement to be effected, to the extent deemed
appropriate to the Collateral Agent, against trust receipt or like document).
(l) Each Debtor shall notify the Collateral Agent promptly if it
knows that any application or registration relating to any material Intellectual
Property owned or licensed by such Debtor may become abandoned or dedicated, or
of any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Copyright Office, the United States Patent and Trademark
Office or any court) regarding such Debtor's ownership of such material
Intellectual Property, its right to register or patent the same, or its right to
keep and maintain the same. If any of such Debtor's rights to any material
Intellectual Property are infringed, misappropriated or diluted by a third
party, such Debtor shall notify the Collateral Agent within 30 days after it
learns thereof and shall take all actions as such Debtor shall reasonably deem
appropriate under the circumstances to protect such Intellectual Property.
(m) On the date on which each Debtor becomes a party to this
Agreement, such Debtor will execute and deliver to the Collateral Agent
Intellectual Property Security Agreements with respect to all Intellectual
Property then owned by it. Within 30 days after each March 31 and September 30
thereafter, each such Debtor will execute and deliver to the Collateral Agent
any Intellectual Property Security Agreement necessary to grant Security
Interests in any Intellectual Property owned by it on such March 31 or September
30 that are not covered by the Security Interests granted in any previous
Intellectual Property Security Agreements so executed and delivered by it. In
each case, each such Debtor will promptly make all Intellectual Property Filings
necessary to record the Security Interests in such Intellectual Property.
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SECTION 5. Collateral Account . (a) The Company has established with the
Collateral Agent a cash collateral account (the "COLLATERAL ACCOUNT") in the
name and under the control of the Collateral Agent into which there shall be
deposited from time to time (i) the cash proceeds of the Collateral of each
Debtor (other than any cash proceeds of the Insurance Payments or the Insurance
Policies) required to be delivered to the Collateral Agent pursuant to
subsection (b) of this Section 5 and (ii) the Borrower LC Amount received by the
Collateral Agent pursuant to Section 6.01 of the Existing Agreement. Any income
received by the Collateral Agent with respect to the balance from time to time
standing to the credit of the Collateral Account, including any interest or
capital gains on Liquid Investments, shall remain, or be deposited, in the
Collateral Account. The cash amounts on deposit from time to time in the
Collateral Account together with any Liquid Investments from time to time made
pursuant to subsection (d) of this Section shall constitute part of the
Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied thereto as hereinafter provided.
(b) Each Debtor shall instruct all account debtors and other Persons
obligated in respect of (x) all Receivables of such Debtor in an amount in
excess of $1,000,000 and (y) all Receivables (regardless of the amount thereof)
of such Debtor payable pursuant to a contract under which the aggregate amount
of payments to be made exceeds $1,000,000 to make all payments in respect
thereof either (i) directly to the Collateral Agent (by instructing that such
payments be remitted to a post office box which shall be in the name and under
the control of the Collateral Agent) or (ii) to one or more other banks in any
state in the United States (by instructing that such payments be remitted to a
post office box which shall be in the name and under the control of such bank)
under a Lockbox Letter substantially in the form of Exhibit G hereto duly
executed by such Debtor and such bank or under other arrangements, in form and
substance reasonably satisfactory to the Collateral Agent, pursuant to which
such Debtor shall have irrevocably instructed such other bank (and such other
bank shall have agreed) to remit all proceeds of such payments directly to the
Collateral Agent for deposit into the Collateral Account or as the Collateral
Agent may otherwise instruct such bank. All such payments made to the Collateral
Agent shall be deposited in the Collateral Account. In addition to the
foregoing, each Debtor agrees that if the Proceeds of any Collateral hereunder
(including the payments made in respect of Receivables) shall be received by it,
such Debtor shall as promptly as possible deposit such Proceeds into the
Collateral Account. Until so deposited, all such Proceeds shall be held in trust
by such Debtor for the Collateral Agent and the other Secured Parties and shall
not be commingled with any other funds or property of such Debtor.
(c) The balance from time to time standing to the credit of the
Collateral Account shall, except upon the occurrence and continuation of a
Security Event or an Event of Default, be distributed to the Company upon the
order of the Company. If immediately available cash on deposit in the Collateral
Account is not sufficient to make any distribution to the Company or referred to
in the previous sentence of
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this Section 5(c), the Collateral Agent shall liquidate as promptly as
practicable Liquid Investments as required to obtain sufficient cash to make
such distribution and, notwithstanding any other provision of this Section 5,
such distribution shall not be made until such liquidation has taken place. Upon
the occurrence and during the continuation of an Event of Default the Collateral
Agent shall, if so instructed by the Required Banks, apply or cause to be
applied (subject to collection) any or all of the balance from time to time
standing to the credit of the Collateral Account in the manner specified in
Section 11.
(d) Amounts on deposit in the Collateral Account aggregating
$1,000,000 or more shall be invested and re-invested from time to time in such
Liquid Investments as the Company shall determine, which Liquid Investments
shall be under the control of the Collateral Agent, provided that, if an Event
of Default has occurred and is continuing, the Collateral Agent shall, if
instructed by the Required Banks, liquidate any such Liquid Investment and apply
or cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 11.
SECTION 6. Insurance Accounts . (a) The Company has established with the
Collateral Agent a cash collateral account (the "INSURANCE ACCOUNT") in the name
and under the control of the Collateral Agent into which there shall be
deposited from time to time any amounts received by the Collateral Agent
pursuant to Section 5.03(c) of either Credit Agreement. Any income received by
the Collateral Agent with respect to the balance from time to time standing to
the credit of the Insurance Account, including any interest or capital gains on
Liquid Investments, shall remain, or be deposited, in the Insurance Account. The
cash amounts on deposit from time to time in the Insurance Account together with
any Liquid Investments from time to time made pursuant to subsection (c) of this
Section shall constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied thereto as
hereinafter provided.
(b) The balance from time to time standing to the credit of the
Insurance Account shall, except upon the occurrence and during the continuation
of a Security Event or an Event of Default, be distributed to the Company upon
the order of the Company. If immediately available cash on deposit in the
Insurance Account is not sufficient to make any distribution to the Company
referred to in the previous sentence of this Section 6(b), the Collateral Agent
shall liquidate as promptly as practicable Liquid Investments as required to
obtain sufficient cash to make such distribution and, notwithstanding any other
provision of this Section 6, such distribution shall not be made until such
liquidation has taken place. Upon the occurrence and during the continuation of
an Event of Default, the Collateral Agent shall, if so instructed by the
Required Banks, apply or cause to be applied (subject to collection) any or all
of the balance from time to time standing to the credit of the Insurance Account
in the manner specified in Section 11.
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(c) Amounts on deposit in the Insurance Account aggregating
$1,000,000 or more shall be invested and re-invested from time to time in such
Liquid Investments as the Company shall determine, which Liquid Investments
shall be under the control of the Collateral Agent, provided that, if an Event
of Default has occurred and is continuing, the Collateral Agent shall, if
instructed by the Required Banks, liquidate any such Liquid Investment and apply
or cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 11.
SECTION 7. Controlled Accounts . Each Debtor represents, warrants and
covenants as follows:
(a) Security Entitlements. (i) Within 15 days (or such longer
period, not exceeding 60 days, as the Collateral Agent may approve, such
approval not to be unnecessarily withheld) after the later of the Effective Date
and the date this Agreement becomes effective as to such Debtor, such Debtor
will, with respect to each Security Entitlement then owned by it, enter into
(and cause the relevant Securities Intermediary to enter into) a Securities
Account Control Agreement in respect of such Security Entitlement and the
Securities Account to which the underlying Financial Asset is credited and will
deliver such Securities Account Control Agreement to the Collateral Agent (which
shall enter into the same). Thereafter, whenever such Debtor acquires any other
Security Entitlement, such Debtor will, as promptly as practicable, cause the
underlying Financial Asset to be credited to a Controlled Securities Account.
The provisions of this subsection are subject to Section 7(d).
(ii) So long as the Financial Asset underlying any Security
Entitlement owned by such Debtor is credited to a Controlled Securities Account,
(x) the Lien on such Security Entitlement will be perfected, subject to no prior
Liens or rights of others (except Liens and rights of the relevant Securities
Intermediary that are Permitted Liens), (y) the Collateral Agent will have
Control of such Security Entitlement and (z) no meritorious action based on an
adverse claim to such Security Entitlement or such Financial Asset, whether
framed in conversion, replevin, constructive trust, equitable lien or other
theory, may be asserted against the Collateral Agent or any other Secured Party.
(iii) In respect of all Security Entitlements owned by such
Debtor, and all Securities Accounts to which the related Financial Assets are
credited, the Securities Intermediary's jurisdiction (determined as provided in
UCC Section 8-110(e)) will at all times be located in the United States.
(b) Deposit Accounts. (i) At all times 15 days (or such longer
period, not exceeding 60 days, as the Collateral Agent may approve, such
approval not to be unreasonably withheld) or more after the later of the
Effective Date and the date this Agreement becomes effective as to such Debtor,
all cash owned by such Debtor
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will be deposited, upon or promptly after the receipt thereof, in one or more
Controlled Deposit Accounts; provided that cash subject to a Lien securing
obligations other than Secured Obligations which Lien is permitted both under
Section 5.12 of the New Agreement and under Section 5.14 of the Existing
Agreement may be maintained in Deposit Accounts which are not Controlled Deposit
Accounts. The provisions of this subsection (b)(i) are subject to Section 7(d).
(ii) In respect of each Controlled Deposit Account, the
Depositary Bank's jurisdiction (determined as provided in Revised UCC Section
9-304) will at all times after the UCC Revision Date be a jurisdiction in which
Revised Article 9 is in effect.
(iii) On and after the applicable UCC Revision Date, so long
as the Collateral Agent has Control of a Controlled Deposit Account, the Lien on
such Controlled Deposit Account will be perfected, subject to no prior Liens or
rights of others (except the Depositary Bank's right to deduct its normal
operating charges and any uncollected funds previously credited thereto).
(c) Disbursement and Transfer. (i) With respect to each Controlled
Account, the Collateral Agent will instruct the relevant Securities Intermediary
or Depositary Bank that the relevant Debtor may withdraw, or direct the
disposition of, funds or Financial Assets held therein unless and until the
Collateral Agent rescinds such instruction. The Collateral Agent will not
rescind such instructions unless directed to do so by the Administrative Agent
under either Credit Agreement at a time when an Event of Default shall have
occurred and be continuing.
(ii) No Debtor will cause funds to be transferred from a
Controlled Account to any other account owned by the Company or any of its
Subsidiaries unless (x) such other account is a Controlled Account or (y) such
funds constitute a payment that is not prohibited by either Credit Agreement and
made to a Person other than a Debtor. The provisions of this subsection (c)(ii)
are subject to Section 7(d).
(iii) If an Event of Default shall have occurred and be
continuing, the Collateral Agent may (x) retain, or instruct the relevant
Securities Intermediary or Depositary Bank to retain, all cash and Financial
Assets then held in any Controlled Account, (y) liquidate, or instruct the
relevant Securities Intermediary or Depositary Bank to liquidate, any or all
Financial Assets held therein and/or (z) withdraw any amounts held therein and
apply such amounts as provided in Section 11.
(d) Basket Exception. The Debtors have the right not to comply with
subsections (a)(i), (b)(i) and (c)(ii) of this Section with respect to cash and
Financial Assets having a fair market value that does not at any time exceed
$1,500,000 in the aggregate for all Debtors. However, if an Event of Default
occurs and is
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continuing, the Collateral Agent may terminate the foregoing right not to
comply, or reduce the amount thereof, by giving at least ten days' notice of
such termination or reduction to the relevant Debtors, whereupon such relevant
Debtors shall transfer such cash and Financial Assets to one or more Controlled
Deposit Accounts and Controlled Securities Accounts, respectively.
SECTION 8. General Authority . Each Debtor hereby irrevocably appoints
the Collateral Agent its true and lawful attorney, with full power of
substitution, in the name of such Debtor, the Agents, any other Secured Parties
or otherwise, for the sole use and benefit of the Collateral Agent and the
Secured Parties, but at such Debtor's expense, to the extent permitted by law
(including, without limitation, applicable laws, rules, regulations and orders)
to exercise, at any time and from time to time while and only after an Event of
Default has occurred and is continuing, all or any of the following powers with
respect to all or any of the Collateral:
(i) to demand, xxx for, collect, receive and give
acquittance for any and all monies due or to become due thereon or by virtue
thereof;
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;
(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually as if the
Collateral Agent were the absolute owner thereof; and
(iv) to extend the time of payment of any or all thereof and
to make any allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give such Debtor not less than ten
days' prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral of such Debtor, except any Collateral which
is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. Each Debtor agrees that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the UCC.
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SECTION 9. Remedies upon Event of Default . (a) If any Event of Default
has occurred and is continuing, the Collateral Agent may at the direction of the
Required Banks, exercise on behalf of the Secured Parties all rights of a
secured party under the UCC (or, if the Uniform Commercial Code is not in effect
in the jurisdiction where such rights are exercised, the UCC as in effect in the
State of New York to the extent not prohibited by the laws of such
jurisdiction), and, in addition, the Collateral Agent may, at the direction of
the Required Banks, without being required to give any notice, except as herein
provided or as may be required by mandatory provisions of law, (i) withdraw all
cash and Liquid Investments in the Collateral Account and the Insurance Account
and apply such cash and Liquid Investments and other cash, if any, then held by
it as Collateral as specified in Section 11 and (ii) if there shall be no such
cash or Liquid Investments or if such cash and Liquid Investments shall be
insufficient to pay all the Secured Obligations in full, sell the Collateral
(subject to any applicable laws, rules, regulations and orders) or any part
thereof at public or private sale, for cash, upon credit or for future delivery,
and at such price or prices as the Collateral Agent may reasonably deem
satisfactory. The Collateral Agent or any other Secured Party may be the
purchaser of any or all of the Collateral (subject to any applicable laws,
rules, regulations and orders) so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale). Each Debtor will execute and deliver such documents and take such other
action as the Collateral Agent reasonably deems necessary or advisable in order
that any such sale may be made in compliance with law. Upon any such sale the
Collateral Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold (subject to any applicable laws, rules,
regulations and orders). Each purchaser at any such sale shall (subject to any
applicable laws, rules, regulations and orders) hold the Collateral so sold to
it absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of any Debtor which may be waived, and each
Debtor, to the extent permitted by law, hereby specifically waives all rights of
redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 8 shall (1) in the case of a public sale, state the time and place fixed
for such sale, and (2) in the case of a private sale, state the day after which
such sale may be consummated. 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 in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may determine. The Collateral Agent shall not be obligated to
make any such sale pursuant to any such notice. 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 the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so
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sold may be retained by the Collateral Agent until the selling price is paid by
the purchaser thereof, but the Collateral Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may again be sold upon
like notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it (subject to any applicable laws, rules, regulations and
orders) may, at the direction of the Required Banks, proceed by a suit or suits
at law or in equity to foreclose the Security Interests and sell the Collateral,
or any portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction.
(b) For the purpose of enforcing any and all rights and remedies
under this Agreement the Collateral Agent may (i) require each Debtor to, and
each Debtor agrees that it will, at its expense and upon the request of the
Collateral Agent, forthwith assemble all or any part of the Collateral as
directed by the Collateral Agent and make it available at a place reasonably
designated by the Collateral Agent which is, in its opinion, reasonably
convenient to the Collateral Agent and such Debtor, whether at the premises of
such Debtor or otherwise, (ii) to the extent permitted by applicable law, enter,
with or without process of law and without breach of the peace, any premise
where any of the Collateral is or may be located, and without charge or
liability to it seize and remove such Collateral from such premises, (iii) have
access to and use each Debtor's books and records relating to the Collateral and
(iv) prior to the disposition of the Collateral, store or transfer it without
charge in or by means of any storage or transportation facility owned or leased
by any Debtor, process, repair or recondition it or otherwise prepare it for
disposition in any reasonable manner and to the extent the Collateral Agent
deems reasonable, appropriate and, in connection with such preparation and
disposition, use without charge any trademark, trade name, copyright, patent or
technical process used by any Debtor.
(c) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing,
(i) the Collateral Agent may license, or sublicense, whether
general, special or otherwise, and whether on an exclusive or non-exclusive
basis, any Intellectual Property included in the Collateral throughout the world
for such term or terms, on such conditions and in such manner as the Collateral
Agent shall in its sole discretion determine;
(ii) the Collateral Agent may (without assuming any
obligations or liability thereunder), at any time and from time to time, in its
sole and reasonable discretion, enforce (and shall have the exclusive right to
enforce) against any licensee or sublicensee all rights and remedies of any
Debtor in, to and under any of its Intellectual Property and take or refrain
from taking any action under any thereof, and each Debtor hereby releases the
Collateral Agent and each of the other Secured Parties from, and agrees to hold
the Collateral Agent and each of the other
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Secured Parties free and harmless from and against any claims and expenses
arising out of, any lawful action so taken or omitted to be taken with respect
thereto, except for claims and expenses arising from the Collateral Agent's or
such Secured Party's gross negligence or willful misconduct; and
(iii) upon request by the Collateral Agent (which shall not be
construed as implying any limitation on the rights or powers of the Collateral
Agent), each Debtor will execute and deliver to the Collateral Agent a power of
attorney, in form and substance satisfactory to the Collateral Agent, for the
implementation of any lease, assignment, license, sublicense, grant of option,
sale or other disposition of any Intellectual Property owned by such Debtor or
any action related thereto. In the event of any such disposition pursuant to
this Section, subject to confidentiality restrictions imposed on such Debtor in
any license or similar agreement, such Debtor shall supply its know-how and
expertise relating to or the products or services made or rendered in connection
with Patents, and its customer lists and other records relating to such
Intellectual Property and to the distribution of said products or services, to
the Collateral Agent.
SECTION 10. Limitation on Duty of Collateral Agent in Respect of
Collateral . Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Collateral Agent in good
faith.
SECTION 11. Application of Proceeds . (a) Upon the occurrence and during
the continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral of each Debtor and any cash
held in the Collateral Account and Insurance Account shall be applied by the
Collateral Agent in the following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and
counsel for the Collateral Agent, and all expenses, liabilities
and advances incurred or made by the Collateral Agent in
connection therewith, and any other unreimbursed expenses for
which the Collateral Agent or the Designated Lockbox Bank is to
be reimbursed pursuant to any Financing Document and unpaid fees
owing to the Collateral Agent under any Financing Document;
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second, to payment of any unreimbursed expenses for
which any Senior Secured Party is to be reimbursed pursuant to
any Financing Document, and unpaid fees owing to the
Administrative Agent under the New Agreement;
third, to the ratable payment of accrued but unpaid
interest on the Senior Secured Obligations;
fourth, to the ratable payment of Senior Secured
Obligations consisting of unpaid principal of Loans made under
the New Agreement;
fifth, to the ratable payment of all other Senior
Secured Obligations, until all such Secured Obligations have
been repaid in full;
sixth, to the ratable payment of any unreimbursed
expenses for which any Junior Secured Party is to be reimbursed
pursuant to any Financing Document, unpaid fees owing to the
Administrative Agent under the Existing Agreement and unpaid
amounts owing to the Treasury Management Bank under the Treasury
Mangement Agreement which are Junior Bank Secured Obligations;
seventh, to the ratable payment of accrued but unpaid
interest on the Junior Bank Secured Obligations (or, solely with
respect to the proceeds of any sale of, or other disposition or
realization upon, the Shared Collateral, to the ratable payment
of accrued but unpaid interest on the Junior Bank Secured
Obligations and the NML Secured Obligations);
eighth, to the ratable payment of Junior Bank Secured
Obligations consisting of unpaid principal of Loans made under
the Existing Agreement and, subject to the second sentence of
subsection (b), Letter of Credit Obligations (or, solely with
respect to the proceeds of any sale of, or other disposition or
realization upon, the Shared Collateral, to the ratable payment
of (x) the Junior Bank Secured Obligations consisting of unpaid
principal of Loans and, subject to the second sentence of
subsection (b), Letter of Credit Obligations and (y) the NML
Secured Obligations);
ninth, to the ratable payment of all other Junior Bank
Secured Obligations (or, solely with respect to the proceeds of
any sale of, or other disposition or realization upon, the Shared
Collateral, to the
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ratable payment of all other Junior Bank Secured Obligations and
NML Secured Obligations), until all such Junior Bank Secured
Obligations have been repaid in full; and
finally, to payment to such Debtor or its successors or
assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining from such proceeds.
(b) The Collateral Agent may make distributions hereunder in cash or
in kind or, on a ratable basis, in any combination thereof. If at any time any
monies collected or received by the Collateral Agent are distributable pursuant
to this Section in respect of a Letter of Credit Obligation which is a
contingent obligation at such time, then the Collateral Agent shall invest such
amounts in Liquid Investments selected by it and shall hold all such amounts so
distributable and all such Liquid Investments and the net proceeds thereof in
trust for application to the payment of such Letter of Credit Obligation at such
time as such Letter of Credit Obligation is no longer a contingent obligation.
If the Collateral Agent holds any amounts which were distributable in respect of
any Letter of Credit Obligations after all Letters of Credit have expired and
all amounts payable with respect thereto have been paid, such amounts shall be
applied in the order set forth in subsection (a) above.
(c) In making the determinations and allocations required by this
Section, the Collateral Agent shall have no liability to any Secured Party for
actions taken in reliance on information supplied by such Secured Party as to
the amounts of the Secured Obligations held by them. All distributions made by
the Collateral Agent pursuant to this Section shall be final, and the Collateral
Agent shall have no duty to inquire as to the application by any Secured Party
of any amount distributed to them. However, if at any time the Collateral Agent
determines that an allocation or distribution previously made pursuant to this
Section was based on a mistake of fact (including, without limiting the
generality of the foregoing, mistakes based on any assumption that principal or
interest has been paid by payments which are subsequently recovered from the
recipient thereof through the operation of any bankruptcy, reorganization,
insolvency or other laws or otherwise), the Collateral Agent may in its
discretion, but shall not be obligated to, adjust subsequent allocations and
distributions hereunder so that, on a cumulative basis, the Collateral Agent and
the other Secured Parties receive the distributions to which they would have
been entitled if such mistake of fact had not been made.
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SECTION 12. Appointment of Co-agents . At any time or times, in order to
comply with any legal requirement in any jurisdiction, the Collateral Agent may
appoint another bank or trust company or one or more other Persons, either to
act as collateral co-agent or collateral co-agents, jointly with the Collateral
Agent, or to act as separate collateral agent or collateral agents on behalf of
the Secured Parties with such power and authority as may be necessary for the
effectual operation of the provisions hereof and may be specified in the
instrument of appointment (which may, in the discretion of the Collateral Agent,
include provisions for the protection of each such collateral co-agent or
separate collateral agent similar to the provisions of Article 7 of either
Credit Agreement).
SECTION 13. Designated Lockbox Bank. The Designated Lockbox Bank shall
have the rights and obligations of the Collateral Agent in respect of the
Collateral Account specified in Section 5 of this Agreement, provided that if an
Event of Default has occurred and is continuing, the Designated Lockbox Bank
shall exercise such rights and perform such obligations at the direction of the
Collateral Agent. In exercising such rights and performing such obligations the
Designated Lockbox Bank shall have the benefit of all privileges, immunities and
indemnities provided for the Collateral Agent under this Agreement. The
Designated Lockbox Bank may resign as Designated Lockbox Bank in accordance with
the provisions of Section 7.08 of either Credit Agreement.
SECTION 14. Expenses . Each Debtor agrees that it will, on demand, pay
to the Collateral Agent the amount of any and all reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of counsel and of any
other experts, which the Collateral Agent may incur in connection with (x) the
administration or enforcement of this Agreement, including such expenses as are
incurred to preserve the value of the Collateral and the validity, perfection,
rank and value of any Security Interest, (y) the collection, sale or other
disposition of any of the Collateral or (z) the exercise by the Collateral Agent
of any of the rights conferred upon it hereunder. The obligation to pay any such
amount shall be an additional Secured Obligation hereunder, and each such amount
shall bear interest from the time of demand at the rate applicable to Base Rate
Loans.
SECTION 15. Termination of Security Interests; Release of Collateral .
(a) Upon the repayment in full of all Secured Obligations, the termination of
the Commitments under the Credit Agreements and the cancellation or expiration
of all Letters of Credit, the Security Interests and all obligations of each
Debtor under this Agreement shall terminate and all rights to and interests in
the Collateral shall revert to such Debtor.
(b) Subject to the rights of the Secured Parties hereunder if an
Event of Default shall have occurred and be continuing and subject always to the
rights of the Senior Secured Parties under the New Agreement, to the rights of
the Junior Bank Parties under the Treasury Management Agreement and the Existing
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Agreement and to the rights of NML under the NML Note Agreement, upon any sale
or other disposition of any Collateral permitted under Section 5.13 of the
Existing Agreement and Section 5.13 of the New Agreement (any such sale or other
disposition, a "PERMITTED COLLATERAL SALE"), the Security Interests in the
Collateral subject to such Permitted Collateral Sale (but not in any Proceeds
thereof) shall cease immediately without any further action on the part of the
Collateral Agent. The Collateral Agent shall be fully protected in relying on a
certificate from any Debtor stating that a sale or other disposition of any
Collateral constitutes a Permitted Collateral Sale.
(c) In addition to releases of Collateral effected by subsection
(b), at any time and from time to time prior to the termination of the Security
Interests, the Collateral Agent may release any of the Collateral with the prior
written consent of the Required Banks; provided that the Collateral Agent may
release all or substantially all of the Collateral (for purposes of this proviso
only, as defined in the Credit Agreements) only with the prior written consent
of all of the Banks.
(d) Upon the termination of the Security Interests or any release of
any Collateral effected or permitted by this Section, the Collateral Agent will
promptly, at the expense of each Debtor, execute and deliver to such Debtor such
documents as such Debtor shall reasonably request to evidence the termination of
the Security Interests or the release of such Collateral, as the case may be,
including UCC termination statements, and will duly assign, transfer and deliver
to such Debtor or to whomever lawfully shall be entitled to receive the same,
such of the Collateral as may be in the possession of the Collateral Agent.
(e) Upon the repayment in full of all NML Secured Obligations, NML's
rights under this Agreement shall terminate. Upon any such termination, NML
will, at the expense of the Debtors, execute and deliver to the Debtors such
documents as any Debtor may reasonably request to evidence such termination.
SECTION 16. Notices . All notices, communications and distributions to
any party hereunder shall be given in accordance with Section 10.01 of the
Existing Agreement and Section 8.01 of the New Agreement.
SECTION 17. Waivers, Non-Exclusive Remedies . No failure on the part of
the Collateral Agent to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
of any right under this Agreement preclude any other or further exercise thereof
or the exercise of any other right. The rights in the Financing Documents are
cumulative and are not exclusive of any other remedies provided by law.
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SECTION 18 . Successors and Assigns . This Agreement is for the benefit
of the Collateral Agent and the other Secured Parties and their successors and
assigns, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness. This Agreement shall be
binding on each Debtor and the Collateral Agent and their respective successors
and assigns.
SECTION 19. Changes in Writing . Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by each Debtor and the Collateral Agent with the consent
of the Required Banks (or, in the case of Section 15(a) or to the number of
Banks whose consent shall be required for the Collateral Agent to take any
action under this Section or any other provision of this Agreement, the consent
of all the Banks).
SECTION 20. New York Law . This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, except as
otherwise required by mandatory provisions of law and except to the extent that
remedies provided by the laws of any jurisdiction other than New York are
governed by the laws of such jurisdiction.
SECTION 21. Severability . If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral Agent
and the other Secured Parties in order to carry out the intentions of the
parties hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 22. Counterparts . This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 23. Guarantees by Subsidiary Debtors .
(a) Secured Guarantees. Each Subsidiary Debtor unconditionally
guarantees the full and punctual payment of each Secured Obligation when due
(whether at stated maturity, upon acceleration or otherwise). If any other
Debtor fails to pay any Secured Obligation punctually when due, each Subsidiary
Debtor agrees that it will forthwith on demand pay the amount not so paid at the
place and in the manner specified in the relevant Financing Document.
(b) Secured Guarantees Unconditional. The obligations of each
Subsidiary Debtor under its Secured Guarantee shall be unconditional and
absolute and,
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without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver
or release in respect of any obligation of any other Debtor or any other Person
under any Related Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any
Related Document;
(iii) any release, impairment, non-perfection or invalidity of
any direct or indirect security for any obligation of any other Debtor or any
other Person under any Related Document;
(iv) any change in the corporate existence, structure or
ownership of any Debtor or any other Person or any of their respective
subsidiaries, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Debtor or any other Person or any of their assets or
any resulting release or discharge of any obligation of any Debtor or any other
Person under any Related Document;
(v) the existence of any claim, set-off or other right that
such Guarantor may have at any time against any other Debtor, any Secured Party
or any other Person, whether in connection with any Related Document or any
unrelated transactions, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or
against any other Debtor or any other Person for any reason of any Related
Document, or any provision of applicable law or regulation purporting to
prohibit the payment of any Secured Obligation by any other Debtor or any other
Person; or
(vii) any other act or omission to act or delay of any kind by
any Debtor, any other party to any Related Document, any Secured Party or any
other Person, or any other circumstance whatsoever that might, but for the
provisions of this clause (vii), constitute a legal or equitable discharge of or
defense to any obligation of any Subsidiary Debtor hereunder.
(c) Release of Secured Guarantees. (i) All the Secured Guarantees
will be released when all the Release Conditions are satisfied. If at any time
any payment of a Secured Obligation is rescinded or must be otherwise restored
or returned upon the insolvency or receivership of any Debtor or otherwise, the
Secured Guarantees shall be reinstated with respect thereto as though such
payment had been due but not made at such time.
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(ii) If all the capital stock of a Subsidiary Debtor or all
the assets of a Subsidiary Debtor are sold, directly or indirectly, to a Person
other than the Company or one of its Subsidiaries in a transaction not
prohibited by either Credit Agreement (any such sale, a "SALE OF SUBSIDIARY
DEBTOR"), the Collateral Agent shall release such Subsidiary Debtor from its
Secured Guarantee; provided that, if such sale is a Reduction Event under either
Credit Agreement, arrangements satisfactory to the Administrative Agent have
been made to apply the Net Cash Proceeds thereof as required by the Credit
Agreements. Such release shall not require the consent of any Secured Party, and
the Collateral Agent shall be fully protected in relying on a certificate of the
Debtor as to whether any particular sale constitutes a Sale of Subsidiary Debtor
and on the Administrative Agent as to whether satisfactory arrangements for
applying the Net Cash Proceeds thereof, if needed, have been made.
(iii) In addition to any release permitted by subsection (ii),
the Collateral Agent may release any Secured Guarantee with the prior written
consent of the Required Banks.
(d) Waiver by Subsidiary Debtor. Each Subsidiary Debtor irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action be
taken by any Person against any other Debtor or any other Person.
(e) Subrogation. Each Subsidiary Debtor irrevocably waives any and
all rights to which it may be entitled, by operation of law or otherwise, upon
making any payment hereunder to be subrogated to the rights of the payee against
any Debtor with respect to such payment or against any direct or indirect
security therefor, or otherwise to be reimbursed, indemnified or exonerated by
or for the account of the Debtor in respect thereof.
(f) Contribution; Subordination. Each Subsidiary Debtor (a
"CONTRIBUTING SUBSIDIARY Debtor") agrees that, in the event a payment shall be
made by any other Subsidiary Debtor under this Agreement or under Article 9 of
the Existing Agreement or assets of any other Subsidiary Debtor shall be sold
pursuant to this Agreement to satisfy a claim against any Debtor (such other
Subsidiary Debtor, the "CLAIMING SUBSIDIARY DEBTOR"), the Contributing
Subsidiary Debtor shall indemnify the Claiming Subsidiary Debtor in an amount
equal to the amount of such payment or the greater of the book value or the fair
market value of such assets, as the case may be, in each case multiplied by a
fraction of which the numerator shall be the net worth of the Contributing
Subsidiary Debtor on the date the Contributing Subsidiary Debtor becomes a party
hereto and the denominator shall be the aggregate net worth of all the
Subsidiary Debtors on the date the Contributing Subsidiary Debtor becomes a
party hereto. All rights of the Subsidiary Debtors under this Section and any
other rights of indemnity, contribution or subrogation under applicable law or
otherwise not
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effectively waived pursuant to subsection (e) shall be fully subordinated to the
indefeasible payment in full in cash of the Secured Obligations.
(g) Stay of Acceleration. If acceleration of the time for payment of
any Secured Obligation by a Debtor is stayed by reason of the insolvency or
receivership of such Debtor or otherwise, all Secured Obligations otherwise
subject to acceleration under the terms of any Related Document shall
nonetheless be payable by the Subsidiary Debtors hereunder forthwith on demand
by the Collateral Agent.
(h) Right of Set-Off. If any Secured Obligation is not paid promptly
when due, each of the Secured Parties and their respective affiliates is
authorized, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other obligations at any time owing by such Secured Party or
affiliate to or for the credit or the account of any Subsidiary Debtor against
the obligations of such Subsidiary Debtor under its Secured Guarantee,
irrespective of whether or not such Secured Party shall have made any demand
thereunder and although such obligations may be unmatured. The rights of each
Secured Party under this subsection are in addition to all other rights and
remedies (including other rights of setoff) that such Secured Party may have.
(i) Continuing Guarantee. Each Secured Guarantee is a continuing
guarantee, shall be binding on the relevant Subsidiary Debtor and its successors
and assigns, and shall be enforceable by the Collateral Agent or the Secured
Parties. If all or part of any Secured Party's interest in any Secured
Obligation is assigned or otherwise transferred, the transferor's rights under
each Secured Guarantee, to the extent applicable to the obligation so
transferred, shall automatically be transferred with such obligation.
(j) Limitation on Obligations of Subsidiary Debtor. The obligations
of each Subsidiary Debtor under its Secured Guarantee shall be limited to an
aggregate amount equal to the largest amount that would not render such Secured
Guarantee subject to avoidance under Section 548 of the United States Bankruptcy
Code or any comparable provisions of applicable law.
SECTION 23. Additional Debtors . Any Subsidiary of the Company may
become a "Subsidiary Debtor" party hereto and bound hereby by executing a
counterpart hereof and delivering same to the Collateral Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ORBITAL SCIENCES CORPORATION
By
---------------------------------
Name:
-----------------------------------
Title:
---------------------------------
ENGINEERING TECHNOLOGIES, INC.
By
---------------------------------
Name:
-----------------------------------
Title:
---------------------------------
ORBITAL SPACE SYSTEMS, INC.
By
--------------------------------------
Name:
-----------------------------------
Title:
---------------------------------
ORBITAL COMMERCIAL SYSTEMS, INC.
By
---------------------------------
Name:
-----------------------------------
Title:
---------------------------------
ORBITAL INTERNATIONAL, INC.
By
---------------------------------
Name:
-----------------------------------
Title:
---------------------------------
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ORBITAL SERVICES CORPORATION
By
---------------------------------
Name:
-----------------------------------
Title:
---------------------------------
ORBITAL NAVIGATION CORPORATION
By
---------------------------------
Name:
-----------------------------------
Title:
---------------------------------
ORBLINK LLC
By
---------------------------------
Name:
-----------------------------------
Title:
---------------------------------
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent
By
---------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BANK OF AMERICA, N.A.,
as Designated Lockbox Bank and as
Treasury Management Bank
By
---------------------------------
Name:
-----------------------------------
Title:
----------------------------------
36
