EXHIBIT 10.15
SETTLEMENT
AND RELEASE AGREEMENT
This SETTLEMENT AND RELEASE AGREEMENT (hereinafter the "Release") is
made and entered into this 12th day of April, 2002 by and among Securicor plc,
a company incorporated under the laws of England and Wales with number 3811216
("Securicor"); AHL Services, Inc., a Georgia corporation ("AHL"); Xxxxxxxxxxx
Holdings Limited, a Georgia corporation and wholly-owned subsidiary of AHL
("Holdings"); Xxxxxxxxxxx, Inc., a Georgia corporation and wholly-owned
subsidiary of Holdings ("Xxxxxxxxxxx"); and AHL Europe Limited, a company
incorporated under the laws of England and Wales with number 3804405 ("AHL
Europe"). AHL, Holdings, Xxxxxxxxxxx, and AHL Europe are at times herein
referred to, collectively, as the "AHL Parties." Capitalized terms used herein
and not otherwise defined in this Release shall have the respective meanings
assigned to them in that certain Acquisition Agreement entered into by the
parties hereto as of December 14, 2000 (the "Acquisition Agreement").
WITNESSETH
WHEREAS, pursuant to the Acquisition Agreement, Securicor and Holdings
agreed to adjust the Purchase Price based on the financial results of
Xxxxxxxxxxx Security for Fiscal Year 2001, as more particularly described in
Schedule 2.01 of the Acquisition Agreement, which adjustment would result in
the payment of cash from one such party to the other (the "Purchase Price
Adjustment Amount");
WHEREAS, pursuant to the Acquisition Agreement, Securicor, Holdings
and AHL Europe agreed to adjust the US Purchase Price and the UK Purchase
Price, as the case may be, based on applicable computations of the net working
capital of and the value of certain fixed assets of the US
Business and the UK Business, as more particularly described in Section 4.02 of
the Acquisition Agreement, which adjustment would result in the payment of cash
from one such party to one or more of the others (collectively, the "Working
Capital Adjustment Amounts");
WHEREAS, pursuant to that certain letter agreement signed by Securicor
Georgia, Inc., a former subsidiary of Securicor that was merged into
Xxxxxxxxxxx Security Inc. ("Xxxxxxxxxxx Security") on December 29, 2000, and
ceased to have a separate corporate existence at that time, AHL, and Securicor
ADI Group Limited, a company incorporated under the laws of England and Wales
with number 2831083, ("ADI"), dated December 29, 2000, Securicor and ADI agreed
to reimburse AHL, Holdings, and AHL Europe for any payment made by such parties
with respect to draws made against the "Greek Letters of Credit" (as that term
is defined in said letter agreement) following the Closing Date under the
Credit Agreement (collectively, the "Draw Reimbursement Amounts");
WHEREAS, certain of the parties hereto have made representations and
warranties in the Acquisition Agreement to certain of the others and have
agreed therein to indemnify and hold harmless such other parties from any
Damages incurred or suffered that arise out of any misrepresentation or breach
of any such representations or warranties (the "Breach Claims");
WHEREAS, prior to the consummation of the transactions contemplated by
the Acquisition Agreement, the board of directors of ADI declared, and ADI
paid, a dividend to its then-parent corporation, AHL Europe (the "Preclosing
Distribution"); and
WHEREAS, except for the Excluded Claims (as defined in Section 1
hereof), the parties hereto wish to settle all rights, claims and demands which
any such party may have against any other such party arising out of or related
to the Acquisition Agreement or otherwise;
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NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Securicor and the AHL Parties hereby agree as follows:
1. (a) RELEASE AND INDEMNIFICATION BY SECURICOR. Securicor, on
behalf of itself and its successors and assigns and as agent for its
subsidiaries Xxxxxxxxxxx Security and ADI, and their respective successors and
assigns (collectively referred to herein as "Securicor Releasors"), does hereby
remise, release and forever discharge each of the AHL Parties, and their
respective affiliates, subsidiaries, agents, officers, directors, shareholders,
employees and successors and assigns, and each of them, from all manner of
actions, causes of actions, suits, claims, counterclaims, controversies, debts,
agreements, promises, liabilities, damages and demands whatsoever that now
exist or hereafter accrue, known or unknown, at law or in equity, including,
without limitation, fees for professional services and other expenses, which
any Securicor Releasor has, may have or has ever had since the beginning of
time to the date of this Release (collectively, the "Securicor Claims") which
arise from, or allegedly arise from, result from, or allegedly result from, are
based on or are connected with, either directly or indirectly, the Acquisition
Agreement, the transactions contemplated pursuant to the Acquisition Agreement
or otherwise, except for the Excluded Claims, but specifically including,
without limitation, any and all Securicor Claims (i) to any Purchase Price
Adjustment Amount, any Working Capital Adjustment Amount, any Draw
Reimbursement Amount, and any Breach Claims and (ii) against any officer or
director (current or former) of ADI in connection with the Pre-Closing
Distribution. In the event Xxxxxxxxxxx Security, or ADI hereafter makes any
demand upon or initiates any legal proceeding against any of the AHL Parties
for any of the
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released Securicor Claims, Securicor shall indemnify and hold the AHL Party or
Parties harmless from and against all losses, costs, damages, and expenses
(including attorney's fees) consequentially resulting therefrom; provided
however, that said indemnity shall be expressly conditioned upon the AHL Party
or Parties delivering prompt notice of said demand or proceeding to Securicor.
(b) RELEASE BY AHL PARTIES. The AHL Parties, on behalf
of themselves and their successors and assigns and as agent for any and all
subsidiaries and their respective successors and assigns (collectively referred
to herein as "AHL Releasors") do hereby remise, release and forever discharge
Securicor, Xxxxxxxxxxx Security, and ADI, and their respective affiliates,
subsidiaries, agents, officers, directors, shareholders, employees and
successors and assigns, and each of them, from all manner of actions, causes of
actions, suits, claims, counterclaims, controversies, debts, agreements,
promises, liabilities, damages and demands whatsoever that now exist or
hereafter accrue, known or unknown, at law or in equity, including, without
limitation, fees for professional services and other expenses, which any AHL
Releasor has, may have or has ever had since the beginning of time to the date
of this Release (collectively, the "AHL Claims") which arise from, or allegedly
arise from, result from, or allegedly result from, are based on or are
connected with, either directly or indirectly, the Acquisition Agreement, the
transactions contemplated pursuant to the Acquisition Agreement or otherwise,
except for the Excluded Claims, but specifically including, without limitation,
any and all AHL Claims (i) to any Purchase Price Adjustment Amount, any Working
Capital Adjustment Amount, any Draw Reimbursement Amount, and any Breach Claims
and (ii) against any officer or director (current or former) of any Securicor
Releasor in connection with the Pre-Closing Distribution.
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As used in this Release, "Excluded Claims" shall include (i) any and
all AHL or Securicor Claims that have arisen or could arise after execution of
this Release under Section 10.06 of the Acquisition Agreement relating to the
breach by or the failure of Xxxxxxxxxxx Security to comply with the terms of
the Philadelphia Settlement Agreement after December 29, 2000; (ii) any and all
AHL or Securicor Claims that have arisen or that could arise relating to the
fire at Seton Hall University on January 19, 2000; and (iii) any and all AHL or
Securicor Claims relating to the Post-Release Covenants (as hereinafter
defined) that arise after execution of this Release.
2. CONSIDERATION. In consideration for the settlement and the
release of all claims and all other agreements contained in this Release, AHL
shall pay Securicor or its designee an amount equal to Thirteen Million United
States Dollars (U.S. $13,000,000) plus interest as calculated herein (the sum
of the amounts herein referred to as the "Consideration"), to be paid as
follows:
(i) contemporaneous with the execution of this Release,
the AHL Parties, jointly and severally, shall issue in favor of
Securicor two term loan notes and two subordinated interest advance
notes as follows: a term loan note in the original principal amount of
U.S. $10,000,000 ("$10 Million Note"), a corresponding subordinated
interest advance note providing for advances by Securicor for the
benefit of the AHL Parties of amounts necessary to pay interest in
respect of the $10 Million Note (the "$10 Million Interest Advance
Note"), a term loan note in the original principal amount of U.S.
$3,000,000 ("$3 Million Note"), and a corresponding subordinated
interest advance note providing for advances by Securicor for the
benefit of the AHL Parties of amounts necessary to pay interest in
respect of the $3 Million Note (the "$3 Million Interest Advance
Note") (collectively referred to herein as the "Notes"). The Notes
shall be delivered to Securicor as follows:
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(A) the $10 Million Note and the $10 Million
Interest Advance Note shall be delivered to Securicor
contemporaneously with the execution of this Release;
(B) the $3 Million Note and the $3 Million
Interest Advance Note shall be delivered to the Escrow Agent
(as hereinafter defined) contemporaneously with the execution
of this Release to be held and released to either Securicor
or AHL pursuant to the terms of the Escrow Agreement (as
hereinafter defined);
(C) if the AHL Parties pay the $10 Million Note
and the $10 Million Interest Advance Note in their entirety
and in cash, including in each case any accrued and unpaid
interest thereon, on or before 2:00 p.m. Atlanta, Georgia
time on October 12, 2002 (or the next business day in
Atlanta, Georgia and London, England, if such day is not a
business day) (the "Early Payment Date"), the Consideration
will be reduced by U.S. $3,000,000, plus accrued interest on
such amount. Such reduction shall be in consideration for
Securicor's having use of the U.S. $10,000,000 sooner than
anticipated, for the freeing of Securicor's corporate
resources, financial or otherwise, to pursue other
opportunities, for the reduction of expenses expected to be
incurred by Securicor if the Notes were to remain outstanding
at or beyond their respective maturities, and for other good
and valuable consideration, the sufficiency of which the
parties hereto hereby acknowledge. Upon any such prepayment,
Securicor will authorize and direct the Escrow Agent to
deliver the $3 Million Note and the $3 Million Interest
Advance Note to AHL. If AHL does not prepay the $10 Million
Note and the $10 Million Interest Advance Note on or before
2:00 p.m. Atlanta time on the Early Payment Date, in cash,
together with all accrued and unpaid interest
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thereon, the Escrow Agent will deliver the $3 Million Note
and the $3 Million Interest Advance Note to Securicor upon
Securicor's request.
(ii) The terms of the Notes are set forth in the Notes
themselves, dated the date hereof, the forms of which are attached
hereto as Exhibits 1, 2, 3 and 4, and those terms are incorporated by
reference herein. The Notes are subject to that certain Subordination
Agreement, dated the date hereof, and the form of which is attached
hereto as Exhibit 5, and those terms are incorporated by reference
herein.
3. SECURITY INTEREST. To secure the obligations of the AHL
Parties contained herein and in the Notes, including, without limitation, the
payment of the Consideration, and to secure any and all of the obligations of
the AHL Parties under the Acquisition Agreement (to the extent reinstated upon
the occurrence of any "Event of Repudiation" (as hereinafter defined)),
Securicor shall have a second priority security interest in and to (i) the
assets of the AHL Parties and their subsidiaries, all as more particularly set
forth in that certain Security Agreement, the form of which is attached hereto
as Exhibit 6 and incorporated by reference herein; and (ii) the stock of
certain subsidiaries of the AHL Parties, all as more particularly set forth in
that certain Stock Pledge Agreement, the form of which is attached hereto as
Exhibit 7, and incorporated by reference herein.
4. DELIVERIES AND CONFIRMATIONS. Contemporaneously with the
execution and delivery of this Release, Securicor and the AHL Parties are
delivering to one another the following:
(a) the AHL Parties are delivering to Securicor the
Notes, in the forms attached hereto as Exhibits 1 through 4, executed
by the AHL Parties;
(b) the AHL Parties are delivering to Securicor the
Security Agreement, in the form attached hereto as Exhibit 6, executed
by all of the AHL Parties;
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(c) the AHL Parties are delivering to Securicor the
Stock Pledge Agreement, in the form attached hereto as Exhibit 7,
executed by all of the AHL Parties;
(d) Securicor, the AHL Parties and the Escrow Agent
named in the Escrow Agreement ("Escrow Agent") are delivering the
Escrow Agreement, in the form attached hereto as Exhibit 8 (the
"Escrow Agreement");
(d) each of the AHL Parties is delivering to Securicor a
certificate of the secretary or assistant secretary of such AHL Party,
certifying as to the resolutions of the board of directors or other
governing body authorizing this Release and the transactions
contemplated hereby, as to the bylaws, articles of incorporation or
other organizational documents of such AHL Party as currently in
effect, and as to the incumbency of the officers or representative
executing this Release and the other agreements, documents and
instruments contemplated by this Release on behalf of such AHL Party;
and
(f) the AHL Parties are delivering to Securicor the
legal opinion of King & Spalding, counsel to the AHL Parties, in the
form attached hereto as Exhibit 9.
5. NO ASSIGNMENT OR TRANSFER. The parties hereto warrant,
covenant and agree that they have not assigned or transferred to any party, in
whole or in part, any claim hereunder, and that no other person or entity has
any right to any such claim.
6. CONTRACTUAL RELEASE. The terms of this Release are
contractual and not mere recitals.
7. CONFIDENTIALITY. The parties, on behalf of each of them and
of their subsidiaries, hereby agree that any and all information furnished by
any party to any other party concerning the business of such party, the
existence of this Release, and the terms of this Release shall be kept strictly
confidential; provided, however, the parties shall be authorized to disclose
the terms of this Release to their attorneys, accountants and/or tax advisors
under circumstances where such agents or
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representatives are bound to respect the confidentiality hereof; provided,
further, however, that the parties may disclose the existence of this Release
and the terms of this Release to the extent required by applicable law. For the
avoidance of doubt, Securicor acknowledges and agrees that AHL will disclose
the existence of this Release and the terms of this Release in, and will file a
copy of this Release and the ancillary documents, as exhibits to, its public
filings pursuant to the Securities Exchange Act of 1934, as amended. The
parties also hereby agree that correspondence between any one of the parties
and any other of the parties or the party's counsel shall be kept strictly
confidential and shall not be discussed with any person or entity following the
date of execution of this Release unless compelled to testify by a court of
competent jurisdiction.
8. NON-DISPARAGEMENT. The parties, on behalf of each of them and
of their subsidiaries, hereby agree that they shall not disparage any other
party, any other party's subsidiaries, businesses, or business reputations, nor
will any party make any public derogatory or negative remarks to any third
party, including, without limitation, any financial institutions or any
competitor, customers or potential customers of another party regarding the
other parties or their businesses or business reputation.
9. ACCORD AND SATISFACTION. It is mutually understood and agreed
that the consideration recited herein is accepted as being in full accord,
satisfaction and compromise of any AHL Claim or Securicor Claim, except for the
Excluded Claims, hereunder by any party against any other party, and that the
payment and receipt of such consideration does not constitute an admission of
liability by any party but is made for the purpose of terminating all disputes
between the parties to this Release relating to the subject hereof.
10. VOLUNTARY AND KNOWING RELEASE. The parties, and each of them,
hereby acknowledge and warrant that they have been represented by independent
counsel throughout all
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negotiations which preceded the execution of this Release; that they have
reached this Release with full understanding of its terms; that their
respective counsel has explained to their satisfaction each and all of the
Release's terms and the legal effects of such terms; and that they,
respectively, are executing this Release upon the advice, consent, and approval
of their counsel. In agreeing to sign this Release, the parties, and each of
them, are acting under their own free will, without duress or pressure, and
have not relied upon any statements or explanations made by any other party or
that party's counsel.
11. REPRESENTATIONS AND WARRANTIES.
(a) AHL Parties. Each of the AHL Parties jointly and
severally represents and warrants to Securicor as of the date hereof
that:
(i) each of the AHL Parties is a corporation
duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation;
(ii) each of the AHL Parties has the full power
and authority to enter into this Release, to perform its
obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance
of this Release and the consummation of the transactions
contemplated hereby have been duly authorized by all
necessary action on the part of each AHL Party, and no other
proceedings on the part of any AHL Party are necessary to
authorize the execution, delivery and performance of this
Release thereby;
(iii) this Release has been duly executed and
delivered to Securicor by each AHL Party and shall constitute
the legal, valid and
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binding obligation of each AHL Party, enforceable against
such AHL Party in accordance with its terms, except as the
enforceability may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, and by
judicial discretion in the enforcement of equitable remedies;
and
(iv) neither the execution and delivery of this
Release by any AHL Party, nor the performance by it of its
obligations hereunder, will violate or conflict with any
provision of its Articles of Incorporation or other
organizational documents; breach or otherwise constitute or
give rise to a default under any contract, commitment or
other obligation, whether oral or written, to or by which
such AHL Party is bound or result in the creation of any lien
or other encumbrance upon any of the properties or assets of
such AHL Party; violate any statute, ordinance, law, rule,
regulation, judgment, order or decree of any court or other
governmental or regulatory authority to which such AHL Party
is subject; or require any such AHL Party to obtain any
consent, approval or authorization of, notice to, or filing,
recording, registration or qualification with any person,
entity, court or governmental or regulatory authority,
whether oral or written.
(b) Securicor. Securicor represents and warrants to each
of the AHL Parties as of the date hereof that:
(i) Securicor is a company duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization;
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(ii) Securicor has the full power and authority
to enter into this Release, to perform its obligations
hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this
Release and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on
the part of Securicor, and no other proceedings on the part
of Securicor are necessary to authorize the execution,
delivery and performance of this Release thereby;
(iii) this Release has been duly executed and
delivered to AHL by Securicor and shall constitute the legal,
valid and binding obligation of Securicor, enforceable
against Securicor in accordance with its terms, except as the
enforceability may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, and by
judicial discretion in the enforcement of equitable remedies;
and
(iv) neither the execution and delivery of this
Release by Securicor, nor the performance by it of its
obligations hereunder, will violate or conflict with any
provision of its Memorandum of Association or other
organizational documents; breach or otherwise constitute or
give rise to a default under any contract, commitment or
other obligation, whether oral or written, to or by which
Securicor is bound or result in the creation of any lien or
other encumbrance upon any of the properties or assets of
Securicor; violate any statute, ordinance, law, rule,
regulation, judgment, order or decree of any court or other
governmental or
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regulatory authority to which Securicor is subject; or
require Securicor to obtain any consent, approval or
authorization of, notice to, or filing, recording,
registration or qualification with any person, entity, court
or governmental or regulatory authority, whether oral or
written.
12. POST RELEASE COVENANTS. From and after the date of this
Release, Securicor shall, and shall cause Xxxxxxxxxxx Security, ADI and their
respective affiliates, subsidiaries, agents, officers, directors, shareholders,
employees and successors and assigns to, (i) refrain from asserting that the
Pre-Closing Distribution was an unlawful dividend and (ii) within twenty
business days of the date hereof deliver to Zurich American Insurance Company
("Zurich") and thereafter maintain an irrevocable letter of credit or a surety
bond, in either case in form and substance satisfactory to Zurich, in the
initial amount of US$8,389,000, as such amount may be adjusted by Zurich
pursuant to the terms of the insurance policies written by Zurich, or its
affiliates on behalf of Xxxxxxxxxxx Security (the "Insurance Collateral") . The
obligations of Securicor and the other Securicor Releasors set forth in this
Section 12, together with the confidentiality undertaking set forth in Section
7 and the non-disparagement undertaking set forth in Section 8 are hereinafter
referred to collectively as the "Post-Release Covenants."
13. MISCELLANEOUS.
(a) This Release contains the entire agreement and understanding
concerning the subject matter hereof between the parties hereto and supersedes
and replaces all prior negotiations, proposed agreements and agreements,
written or oral. Each of the parties hereto acknowledges that no other party
hereto nor any other agent or attorney of any such party has made any promise,
representation or warranty whatever, express or implied, not contained in this
document to induce it
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to execute this Release. Each of the parties hereto further acknowledges that
it is not executing this Release in reliance on any promise, representation or
warranty not contained in this Release.
(b) This Release may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute the same Release. Any signature
page of any such counterpart, or any electronic facsimile thereof, may
be attached or appended to any other counterpart of this Release, and
any telecopy or other facsimile transmission of any signature shall be
deemed an original and shall bind such party.
(c) This Release shall not be modified, amended,
superseded, or cancelled, nor any of the terms, covenants,
representations, warranties, or conditions hereof be waived, except
through a writing signed by all of the parties hereto, or in the case
of a waiver, by the party waiving compliance. The failure of any party
at any time or times to require performance of any term or provision
of this Release or to enforce any default hereunder shall in no manner
affect such party's rights thereafter to enforce such term or
provision or to exercise any right or remedy in the event of any other
default, whether or not similar.
(d) If any provision of this Release or in any
instrument referred to herein shall for any reason be held void,
voidable, invalid, inoperative, illegal, or unenforceable in any
respect, no other provision of this Release or any such instrument
shall be affected as a result thereof, and, accordingly, the remaining
provisions of this Release shall remain in full force and effect as
though such void, voidable, invalid, inoperative, illegal, or
unenforceable provision had not been contained herein.
(e) No party hereto shall, without the prior written
consent of the other parties hereto, transfer or assign this Release
or any duty or obligation set forth herein, and any
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attempted transfer or assignment not in accordance herewith shall be
null and void and of no force or effect.
(f) Upon the reasonable request of any other party, each
party hereto agrees to take any and all actions necessary or
appropriate to give effect to the terms of this Release.
14. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to Securicor, to:
Securicor plc
Xxxxxx Xxxx Xxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx SMI 4LD
England
Attention: Xxxxx Xxxxxxxxx
Fax: 000 00 00 0000 0000
with a copy to:
Xxxxxxxx Xxxxxxx LLP
Bank of America Plaza
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx, Esq.
Fax: (000) 000-0000
if to the AHL Parties, or any of them, to:
Xxxxxxxxxxx Holdings Limited
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: A. Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
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with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to
5:00 p.m. in the place of receipt and such day is a business day in the place
of receipt. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding business day in the
place of receipt.
15. REPUDIATION. In the event any of the AHL Parties or anyone
acting on their behalf (i) repudiates, denies, or challenges the validity or
enforceability of the Notes, of any of the other security documents referenced
in this Release, or of any portion, term or condition of the Notes or other
security document or (ii) asserts any defense to the payment or performance of
their obligations under any of the Notes or any of the other security documents
referenced in this Release for any reason other than prior performance
(collectively, a "Repudiation"), the parties hereto hereby agree that (i) the
release by Securicor or any Securicor Releasor of any AHL Party from any
Securicor Claim under the Acquisition Agreement and any obligation by Securicor
to indemnify any of the AHL Parties, as set forth in Section 1 hereof, shall be
null and void; and (ii) any Securicor Claim by Securicor or any Securicor
Releasor under the Acquisition Agreement shall be immediately reinstated. The
parties further agree that any applicable statute(s) of limitations,
contractual limitations period, or time bar pertaining to any Securicor Claim
is hereby tolled from the date of this Release though and including the date of
any Repudiation; provided, however, that nothing contained in this Section 15
shall affect the release by any AHL Party of Securicor or of any of the
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other entities or persons identified in Section 1(b) above from any AHL Claim
under the Acquisition Agreement as set forth in Section 1 hereof.
16. GOVERNING LAW. This Release is made under and shall in all
respects be governed and interpreted by the laws of the State of Georgia
without regard to the conflict of laws principles thereof.
17. ARBITRATION. (a) Any controversy or claim arising out of or
relating to this Release, the instruments referred to or incorporated herein,
or the transactions contemplated hereby and thereby shall be referred for
resolution to the Chief Executive Officers of Securicor and AHL. Either
Securicor or AHL may request resolution of any such controversy or claim by
sending the other a notice identifying the controversy or claim to be resolved.
The Chief Executive Officers of Securicor and AHL shall hold a telephone
conference within 10 days after delivery of the notice. Except as set forth in
the following sentence, any such controversy or claim that is not resolved by
the Chief Executive Officers of Securicor and AHL shall be submitted to and be
finally resolved by arbitration pursuant to the provisions of the United States
Arbitration Act (9 U.S.C. ss. 1 et seq.), to be conducted by the American
Arbitration Association ("AAA"), with the arbitration to be held in Atlanta,
Georgia, in accordance with the AAA's Commercial Arbitration Rules then in
effect. Notwithstanding the preceding sentence, the requirement for the
submission of controversies and claims to arbitration shall not apply to
controversies or claims arising out of or related to the Excluded Claims. Each
party irrevocably agrees that service of process, summons, notices or other
communications related to the arbitration procedure shall be deemed served and
accepted by the other party if given in accordance with Section 14 above. The
arbitrators will render a judgment of default against any party who fails to
appear in a properly noticed arbitration proceeding. The arbitration will be
conducted by a panel of three arbitrators selected pursuant to
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AAA rules. Any award or decision rendered in such arbitration shall be final
and binding on all parties, and judgment may be entered thereon in any court of
competent jurisdiction if necessary.
(b) Notwithstanding subsection (a) above to the contrary, any
party may seek temporary or preliminary injunctive relief against the other
party in any court of proper jurisdiction with respect to any and all temporary
or preliminary injunctive or restraining procedures pertaining to this Release
or the default or breach thereof, pending the outcome of any arbitration
proceeding.
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IN WITNESS WHEREOF, the parties hereto have executed, or caused their
respective duly authorized representatives to execute, this Release as of the
day and year first above written.
"SECURICOR"
SECURICOR PLC
By:
-------------------------------
At:
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
[Signatures continued on next page.]
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[Signatures continued from previous page.]
"AHL"
AHL SERVICES, INC.
By:
-------------------------------
At:
-------------------------------
Name: A. Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
"HOLDINGS"
XXXXXXXXXXX HOLDINGS LIMITED
By:
-------------------------------
At:
-------------------------------
Name: A. Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
"AHL EUROPE"
AHL EUROPE LIMITED
By:
-------------------------------
At: London, England
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer
European Operations
"XXXXXXXXXXX"
XXXXXXXXXXX, INC.
By:
-------------------------------
At:
-------------------------------
Name: A. Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
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EXHIBIT 1
$10 MILLION NOTE
THIS NOTE IS SUBJECT TO CERTAIN TERMS OF SUBORDINATION AS MORE FULLY SET FORTH
IN THAT CERTAIN SUBORDINATION AGREEMENT, DATED THE DATE HEREOF, AS AMENDED,
RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, BETWEEN
WACHOVIA BANK, NATIONAL ASSOCIATION, IN ITS CAPACITY AS ADMINISTRATIVE AGENT
FOR CERTAIN LENDERS, AND THE HOLDER REFERRED TO BELOW.
SUBORDINATED TERM LOAN NOTE
US$10,000,000.00 April 12, 2002
FOR VALUE RECEIVED, AHL Services, Inc., a Georgia corporation ("AHL"),
Xxxxxxxxxxx Holdings Limited, a Georgia corporation ("Holdings"), Xxxxxxxxxxx,
Inc., a Georgia corporation ("Xxxxxxxxxxx"), and AHL Europe Limited, a company
organized under the laws of England and Wales with number 3804405 ("AHL
Europe"; AHL, Holdings, Xxxxxxxxxxx and AHL Europe are hereinafter collectively
referred to as the "Makers"), jointly and severally, promise to pay to the
order of Securicor plc, a company organized under the laws of England and Wales
with number 3811216 ("Holder"), in lawful money of the United States of
America, at its office located at Xxxxxx Xxxx Xxxxx, 00 Xxxxxxxxxx Xxxx,
Xxxxxx, Xxxxxx SMI 4LD, England or wherever else Holder may specify from time
to time in writing, the sum of Ten Million and 00/100 US Dollars
(US$10,000,000.00), together with interest on the unpaid principal balance at
the rate(s) and on the terms provided in this Subordinated Term Loan Note
(including all renewals, extensions or modifications hereof, this "Note") and
such other amounts specifically referred to herein.
1. DEFINITIONS. The following capitalized terms shall have the
following meanings:
"$3 Million Note" shall mean that certain Subordinated Term
Loan Note, dated the date hereof, executed by the Makers in favor of the Holder
in the original principal amount of US$3,000,000, as amended, restated,
supplemented, substituted, replaced or otherwise modified from time to time.
"$3 Million Interest Advance Note" shall mean that certain
Subordinated Interest Advance Note, dated the date hereof, executed by the
Makers in favor of the Holder and providing for the making of advances by the
Holder from time to time for the purpose of paying accrued and unpaid interest
when due under the $3 Million Note, as amended, restated, supplemented,
replaced or otherwise modified from time to time.
"$10 Million Interest Advance Note" shall mean that certain
Subordinated Interest Advance Note, dated the date hereof, executed by the
Makers in favor of the Holder and providing for the making of advances by the
Holder from time to time for the purpose of paying accrued and unpaid interest
when due under this Note, as amended, restated, supplemented, replaced or
otherwise modified from time to time.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of
1978, as may be amended from time to time.
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in Atlanta, Georgia, or London, England
are authorized or required by law to close.
"Interest Payment Date" shall mean the first Business Day of
each January, April, July, and October, commencing with the first such date
after the date hereof.
"Loan" shall mean the indebtedness evidenced by this Note.
"Maturity Date" shall mean October 12, 2003.
"Person" shall mean and include any individual, sole
proprietorship, partnership, joint venture, limited liability company, trust,
unincorporated organization, association, corporation, institution, entity,
party or government (whether national, federal, state, county, city, municipal,
or otherwise, including, without limitation, any instrumentality, division,
agency, body or department thereof).
"Security Documents" shall mean (i) that certain Security
Agreement, dated as of the date hereof, executed by the Makers in favor of the
Holder, pursuant to which the Makers have granted a security interest in all of
their respective assets in favor of the Holder, (ii) that certain Pledge
Agreement, dated as of the date hereof, executed by the Makers in favor of the
Holder, pursuant to which the Makers have pledged certain securities to the
Holder, and (iii) each of the other security agreements, collateral assignments
and pledge agreements that the Makers, or any of them, have executed and
delivered in favor of the Holder, in each case as amended, restated,
supplemented or otherwise modified from time to time.
"Senior Credit Agreement" shall mean that certain Third
Amended and Restated Credit Agreement, dated as of April 12, 2002, as the same
has been, and as the same may be further, amended, restated, supplemented or
otherwise modified from time to time, with the Makers, ADI Alpha Holding GmbH,
a German limited liability company ("ADI Alpha"), and Tuja Zeitarbeit GmbH &
Co. K.G., Ingolstadt, a limited partnership organized under the laws of the
Federal Republic of Germany ("Tuja"), the financial institutions from time to
time party thereto, and the Senior Credit Facility Agent.
22
"Senior Credit Agreement Refinancing Date" shall mean the
date on which the indebtedness and other obligations owing under the Senior
Credit Agreement have been repaid in their entirety and/or refinanced with the
proceeds from a replacement credit facility. The Senior Credit Agreement
Refinancing Date shall not be deemed to have occurred upon an extension of the
maturity date under the Senior Credit Agreement.
"Senior Credit Facility Agent" shall mean Wachovia Bank,
National Association, in its capacity as administrative agent for certain
financial institutions party to the Senior Credit Agreement from time to time.
"Settlement Agreement" shall mean that certain Settlement and
Release Agreement, dated as of the date hereof, executed by the Makers and the
Holders, as amended, restated, supplemented or otherwise modified from time to
time.
"Settlement Documents" shall mean this Note, the $10 Million
Interest Advance Note, the $3 Million Note, the $3 Million Interest Advance
Note, the Settlement Agreement, the Security Documents and each of the other
agreements, documents and instruments executed and delivered by the Makers, or
any of them, in connection with this Note, in each case as amended, restated,
supplemented or otherwise modified from time to time.
"Solvent" shall mean, as to any Person, that such Person (a)
has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage, (b) is able to pay
its debts as they mature and (c) owns property whose fair salable value is
greater than the amount required to pay its debts (including contingent
obligations).
"Tax" shall mean and include any present or future tax, levy,
cost or charge of any nature imposed by any government or any authority or
political subdivision thereof, excluding taxes on or measured by the net income
of the Holder imposed by any jurisdiction in which the principal or relevant
office of the Holder is located.
2. INTEREST.
(A) Interest shall accrue on the aggregate unpaid
principal amount of the Loan from the date hereof until the Loan is paid in
full at a fixed rate per annum (computed on the actual number of days elapsed
over a 360-day year; i.e. 1/360th of a full year's interest shall accrue for
each day the Loan is outstanding) at all times equal to seven percent (7.00%);
provided, that following the occurrence and during the continuance of any Event
of Default, any principal, and to the extent permitted by law, interest owing
hereunder shall bear interest at a rate per annum (computed as aforesaid) equal
to nine percent (9.00%) (the "Default Rate").
(B) Nothing contained in this Note or in any of the
other Settlement Documents shall be construed to permit the Holder to receive
at any time interest, fees or other charges in excess of the amounts which the
Holder is legally entitled to charge and receive under any law to which such
interest, fees or charges are subject. In no contingency or event whatsoever
shall the compensation payable to the Holder by the Makers, howsoever
characterized or computed, hereunder or under this
23
Note or under any other Settlement Document, exceed the highest rate
permissible under any law to which such compensation is subject. There is no
intention that the Holder shall contract for, charge or receive compensation in
excess of the highest lawful rate, and, in the event it should be determined
that any excess has been charged or received, then, ipso facto, such rate shall
be reduced to the highest lawful rate so that no amounts shall be charged which
are in excess thereof; and the Holder shall apply such excess against the Loan
then outstanding (with such application being made first against the Loan, to
the extent thereof, and then to any other amounts owing hereunder) and, to the
extent of any amounts remaining thereafter, refund such excess to the Makers or
any other Person legally entitled thereto.
3. PAYMENTS.
(A) TIME OF PAYMENT. Each payment by the Makers to
Holder pursuant to this Note shall be made prior to 1:00 p.m. (prevailing
London, England time) on the date due and shall be made without set-off or
counterclaim at its address set forth above. Each such payment shall be in
lawful currency of the United States of America and in cash or immediately
available funds.
(B) TAXES. Each payment made by Makers hereunder shall
either (i) be exempt from, and be made without reduction by reason of, any Tax
or (ii) to the extent that any such payment shall be subject to any Tax, be
accompanied by an additional payment by Makers of such amount as may be
necessary so that the net amount received by the Holder (after deducting all
applicable Taxes) is the same as Holder would have received had such payment
not been subject to such Tax. Upon any payment of Tax by the Makers, the Makers
shall promptly (and in any event within 30 days) furnish to the Holder such tax
receipts, certificates and other evidence of such payment as the Holder may
reasonably request.
(C) BUSINESS DAYS. If the due date of any payment
hereunder would otherwise fall on a day which is not a Business Day, then such
payment shall be due on the next succeeding Business Day and interest shall be
payable on the principal amount of such payment for the period of such
extension.
4. REPAYMENT TERMS.
(A) INTEREST. Accrued interest shall be due and payable
quarterly in arrears on each Interest Payment Date for the preceding quarter or
portion thereof, and on the Maturity Date; provided, that any interest payable
at the Default Rate shall be payable on written demand.
On each Interest Payment Date, the Makers, jointly and
severally, hereby irrevocably authorize and direct the Holder to advance on
behalf of the Makers, and the Holder shall be deemed to have advanced on each
such Interest Payment Date, the amount of interest accrued hereon for the
quarter or portion thereof preceding such Interest Payment Date, unless and to
the extent such interest has otherwise been paid by the Makers in accordance
with the terms hereof.
24
Advances by the Holder under this subsection (a) shall be
evidenced by the $10 Million Interest Advance Note. The Makers acknowledge and
agree that the Holder shall have no obligation to make any advances for any
purpose other than as set forth herein, and shall have no obligation to make
any such Advance during the continuance of any Event of Default or any
obligation to deliver the proceeds of any such advance to any other Person.
On the first Interest Payment Date after the Senior Credit
Agreement Refinancing Date, and on each subsequent Interest Payment Date,
notwithstanding the foregoing paragraphs, the Makers, jointly and severally,
agree to pay all accrued and unpaid interest under this Note. The failure to so
pay such accrued and unpaid interest when due shall constitute an Event of
Default hereunder, and the making of any advance by the Holder in accordance
with this subsection 4(a) shall not in any way excuse, waive or cure any such
Event of Default.
(B) PRINCIPAL REPAYMENT SCHEDULE. Subject to the terms
and conditions hereof, the Makers shall repay the Loan in two installments,
with the first such installment, in the amount of US$9,000,000, payable on
April 12, 2003, and the second such installment, in an amount equal to the then
outstanding principal balance of the Loan, payable on the Maturity Date.
(C) VOLUNTARY PREPAYMENTS OF PRINCIPAL. The Makers shall
have the right, at any time or from time to time, to prepay the Loan in whole
or in part, without penalty or premium, upon prior written notice; provided
that upon each prepayment the Makers shall pay accrued and unpaid interest on
the principal amount so prepaid to the date of prepayment. Each such prepayment
under this clause (c) shall be applied to the remaining installments of
principal under this Note in the inverse order of their maturity.
(D) MANDATORY PREPAYMENTS PRIOR TO MATURITY. Immediately
following each receipt by the Makers, or any of them, of the proceeds of any
financing transaction (excluding the portion of the net proceeds from any
financing transaction which is used to partially or fully refinance or repay
obligations arising under the Credit Agreement), the Makers shall make a
prepayment of the outstanding principal balance of the Loan in an amount equal
to (i) the net proceeds of such financing transaction, times (ii) twenty
percent (20%), times (iii) a ratio, (A) the numerator of which is an amount
equal to the then outstanding principal balance of the Loan, and (B) the
denominator of which is an amount equal to the sum of (1) the then outstanding
principal balance of the Loan and (2) the then outstanding principal balance of
the indebtedness evidenced by the $3 Million Note. The aggregate maximum amount
that shall be prepaid as a mandatory prepayment under this Note and pursuant to
Section 4(d) of the $3 Million Note is $6,000,000. Each such prepayment under
this clause (d) shall be applied pro rata to the remaining installments of
principal under this Note.
(E) AGREEMENT REGARDING SUBORDINATION. The Makers agree
to use commercially reasonable efforts to obtain the agreement of the lenders
party to any credit arrangement that replaces or is substituted for the Senior
Credit Facility that the Makers shall be permitted to pay the principal of and
interest on this Note as and when due.
5. REPRESENTATIONS AND WARRANTIES. Each of the Makers represents
25
and warrants that:
(A) ORGANIZATION AND GOOD STANDING. Such Maker is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
(B) AUTHORIZATION, EXECUTION AND ENFORCEABILITY. Such
Maker has the power and authority, corporate or otherwise, to execute, deliver
and perform its obligations under this Note and the other Settlement Documents
to which it is a party, and has taken all necessary steps to authorize the
execution, delivery and performance by such Maker of this Note and the other
Settlement Documents to which it is a party. This Note and the other Settlement
Documents to which each Maker is a party have been duly executed and delivered
by such Maker and constitute valid and binding obligations of such Maker,
enforceable in accordance with their respective terms.
(C) NON-CONTRAVENTION. The execution, delivery and
performance by each Maker of this Note and other Settlement Documents to which
such Maker is a party do not and will not (i) contravene, or constitute (with
or without the giving of notice or lapse of time or both) a violation of any
provision of applicable law, a violation of the organizational documents of
such Maker, or a default under any agreement, judgment, injunction, order,
decrees or other instrument binding upon or affecting such Maker, (ii) result
in the creation or imposition of any lien on any of such Maker's assets, other
than the liens arising under the Security Documents; or (iii) give cause for
the acceleration or prepayment of any obligations of such Maker to any other
Person.
(D) GOVERNMENTAL AUTHORITY: All authority from and
approval by any governmental body, commission or agency, State, Federal or
foreign, if any, necessary to the making or validity of this Note and the other
Settlement Documents has been obtained.
6. EVENTS OF DEFAULT: The following shall be events of default
by the Makers (each, an "Event of Default"):
(A) REPRESENTATIONS AND WARRANTIES UNTRUE. Any
representation or warranty made in this Note shall prove to be false or
misleading when made; or
(B) NONPAYMENT. Failure to make prompt payment of any
installment of principal or interest or other monies due and payable on this
Note, as and when due and payable; or
(C) DEFAULT ON OTHER INDEBTEDNESS. Any Maker shall
default on any other obligation of such Maker when due or in the performance of
any obligation incurred for money borrowed in an aggregate principal amount for
all Makers exceeding One Million US Dollars (US$1,000,000); or
(D) VOLUNTARY BANKRUPTCY. Any Maker shall: (1) file a
voluntary petition or assignment in bankruptcy or a voluntary petition or
assignment or answer seeking liquidation,
26
reorganization, arrangement, readjustment of its debts, or any other relief
under the Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether State, Federal, or foreign, now or
hereafter existing; (2) enter into any agreement indicating consent to,
approval of, or acquiescence in, any such petition or proceeding; (3) apply for
or permit the appointment, by consent or acquiescence, of a receiver, custodian
or trustee of itself or for all or a substantial part of its property; (4) make
an assignment for the benefit of creditors; or (5) be unable or shall fail to
pay its debts generally as such debts become due, admit in writing its
inability or failure to pay its debts generally as such debts become due, or
otherwise cease to be Solvent; or
(E) INVOLUNTARY BANKRUPTCY. There occurs (1) a filing or
issuance against any Maker an involuntary petition in bankruptcy or seeking
liquidation of such Maker, reorganization, arrangement, readjustment of its
debts or any other relief under the Bankruptcy Code, or under any other act or
law pertaining to insolvency or debtor relief, whether State, Federal or
foreign, now or hereafter existing; (2) the involuntary appointment of a
receiver, liquidator, custodian or trustee of any Maker or for all or a
substantial part of its property; or (3) the issuance of a warrant of
attachment, execution or similar process against all or any substantial part of
the property of any Maker; or
(F) JUDGMENT. Any judgment, decree or order for the
payment of money which is not covered by any insurance maintained by the Makers
and which, when aggregated with all other judgments, decrees or orders for the
payment of money pending against the Makers not covered by any such insurance,
exceeds the sum of $1,000,000, shall be rendered against any Maker and remain
unsatisfied and in effect for a period of sixty (60) consecutive days or more
without being vacated, discharged, satisfied or stayed or bonded pending
appeal; or
(G) DISSOLUTION. The dissolution, winding up or
termination of the existence of any Maker, other than as the result of the
merger of any Maker with and into another Maker; or
(H) FAILURE OF SECURITY. At any time (1) any lien or
security interests in favor of the Holder contemplated by the Settlement
Documents shall, at any time, for any reason, be invalidated or otherwise cease
to be in full force and effect; or (2) any Maker under any such Settlement
Document seeks to repudiate its obligations thereunder; or
(I) SETTLEMENT DOCUMENTS. Any Maker shall breach any
representation, warranty or covenant contained in any other Settlement
Document, or any default shall arise thereunder.
7. REMEDIES UPON DEFAULT. In the event of the occurrence of an
Event of Default described in Section 6(d) or 6(e) above, all of the Makers'
obligations hereunder, whether for principal, interest or otherwise, shall
without notice or any other action by the Holder become automatically and
immediately due and payable. In the event of the occurrence and during the
continuance of any of the other above listed Events of Default, the Holder may
at any time thereafter, at its option, take any or all of the following
actions, at the same or different times:
27
(A) Declare the balance(s) of this Note to be forthwith
due and payable, both as to principal and interest, without presentment,
demand, protest, or other notice of any kind, all of which are hereby expressly
waived by each of the Makers, anything contained herein or the Note to the
contrary notwithstanding; and/or
(B) Exercise such other rights and remedies as the
Holder may be provided in this Note and any other Settlement Documents or as
provided by law.
8. MISCELLANEOUS PROVISIONS.
(A) SUCCESSORS AND ASSIGNS: This Note shall be binding
upon and shall inure to the benefit of the Makers and the Holder, and their
respective successors and assigns. None of the Makers may assign any of its
rights or obligations hereunder without the prior written consent of the
Holder.
(B) NON-IMPAIRMENT. If any one or more provisions
contained in this Note or any other document executed pursuant to this Note
shall be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained in this Note
and the documentation executed pursuant hereto, shall not in any way be
affected or impaired thereby and this Note shall otherwise remain in full force
and effect.
(C) WAIVER. Neither the failure nor any delay on the
part of the Holder in exercising any right, power or privilege granted pursuant
to this Note or any other Settlement Documents shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any other right, power or privilege.
(D) MODIFICATION. No modification, amendment, or waiver
of any provision of this Note shall be effective unless in writing and signed
by the Holder.
(E) COLLECTION COSTS. In the event that the indebtedness
evidenced hereby shall be collected by or through an attorney-at-law, Holder
shall be entitled to collect from Makers all costs of collection, including
reasonable attorneys' fees actually incurred, and Makers shall be jointly and
severally liable for all such costs of collection.
(F) WAIVERS. Each Maker hereby waives presentment,
demand for payment, protest and notice of protest, notice of dishonor and all
other notices in connection with this Note. This Note shall be payable without
right of setoff, any defense of want or failure of consideration,
nonperformance of any condition precedent, nondelivery or delivery for a
special purpose or any other defense of any nature whatsoever.
(G) SEVERABILITY. If any provision of this Note or of
the other Settlement Documents shall be prohibited or invalid under applicable
law, such provision shall be ineffective but only
28
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Note or other
such document.
9. CHOICE OF LAW; JURISDICTION; VENUE. THIS NOTE, AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW). EACH MAKER HEREBY (A) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF GEORGIA AND OF ANY GEORGIA STATE COURT SITTING IN ATLANTA, GEORGIA
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
NOTE AND (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE REGARDING THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE HOLDER TO BRING PROCEEDINGS AGAINST ANY MAKER IN THE COURTS OF ANY
OTHER JURISDICTION WITHIN THE UNITED STATES OF AMERICA.
10. WAIVER OF JURY TRIAL. AFTER REVIEWING THIS PROVISION
SPECIFICALLY WITH ITS COUNSEL, EACH MAKER HEREBY KNOWINGLY, INTELLIGENTLY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LEGAL PROCEEDING BASED ON OR ARISING OUT OF, UNDER, IN
CONNECTION WITH, OR RELATING TO THIS NOTE, THE TRANSACTIONS CONTEMPLATED
HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN), OR ACTIONS OF SUCH MAKER OR HOLDER. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE HOLDER TO MAKE TO ACCEPT THIS NOTE AS CONSIDERATION FOR ITS
AGREEMENTS AND RELEASES CONTAINED IN THE SETTLEMENT AGREEMENT.
29
IN WITNESS WHEREOF, the Makers, on the day and year first above written, have
caused this Note to be executed under seal.
"AHL"
AHL SERVICES, INC.
By:
-------------------------------
At:
-------------------------------
Name:
Title:
"HOLDINGS"
XXXXXXXXXXX HOLDINGS LIMITED
By:
-------------------------------
At:
-------------------------------
Name:
Title:
"AHL EUROPE"
AHL EUROPE LIMITED
By:
-------------------------------
At: London, England
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer
European Operations
"XXXXXXXXXXX"
XXXXXXXXXXX, INC.
By:
-------------------------------
At: Atlanta, Georgia
Name:
Title:
30
EXHIBIT 2
$3 MILLION NOTE
THIS NOTE IS SUBJECT TO CERTAIN TERMS OF SUBORDINATION AS MORE FULLY SET FORTH
IN THAT CERTAIN SUBORDINATION AGREEMENT, DATED THE DATE HEREOF, AS AMENDED,
RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, BETWEEN
WACHOVIA BANK, NATIONAL ASSOCIATION, IN ITS CAPACITY AS ADMINISTRATIVE AGENT
FOR CERTAIN LENDERS, AND THE HOLDER REFERRED TO BELOW.
SUBORDINATED TERM LOAN NOTE
US$3,000,000.00 April 12, 2002
FOR VALUE RECEIVED, AHL Services, Inc., a Georgia corporation ("AHL"),
Xxxxxxxxxxx Holdings Limited, a Georgia corporation ("Holdings"), Xxxxxxxxxxx,
Inc., a Georgia corporation ("Xxxxxxxxxxx"), and AHL Europe Limited, a company
organized under the laws of England and Wales with number 3804405 ("AHL
Europe"; AHL, Holdings, Xxxxxxxxxxx and AHL Europe are hereinafter collectively
referred to as the "Makers"), jointly and severally, promise to pay to the
order of Securicor plc, a company organized under the laws of England and Wales
with number 3811216 ("Holder"), in lawful money of the United States of
America, at its office located at Xxxxxx Xxxx Xxxxx, 00 Xxxxxxxxxx Xxxx,
Xxxxxx, Xxxxxx SMI 4LD, England or wherever else Holder may specify from time
to time in writing, the sum of Three Million and 00/100 US Dollars
(US$3,000,000.00), together with interest on the unpaid principal balance at
the rate(s) and on the terms provided in this Subordinated Term Loan Note
(including all renewals, extensions or modifications hereof, this "Note") and
such other amounts specifically referred to herein.
1. DEFINITIONS. The following capitalized terms shall have the
following meanings:
"$10 Million Note" shall mean that certain Subordinated Term
Loan Note, dated the date hereof, executed by the Makers in favor of the Holder
in the original principal amount of US$10,000,000, as amended, restated,
supplemented, substituted, replaced or otherwise modified from time to time.
"$10 Million Interest Advance Note" shall mean that certain
Subordinated Interest Advance Note, dated the date hereof, executed by the
Makers in favor of the Holder and providing for the making of advances by the
Holder from time to time for the purpose of paying
accrued and unpaid interest when due under the $10 Million Note, as amended,
restated, supplemented, replaced or otherwise modified from time to time.
"$3 Million Interest Advance Note" shall mean that certain
Subordinated Interest Advance Note, dated the date hereof, executed by the
Makers in favor of the Holder and providing for the making of advances by the
Holder from time to time for the purpose of paying accrued and unpaid interest
when due under this Note, as amended, restated, supplemented, replaced or
otherwise modified from time to time.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of
1978, as may be amended from time to time.
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in Atlanta, Georgia, or London, England
are authorized or required by law to close.
"Interest Payment Date" shall mean the first Business Day of
each January, April, July, and October, commencing with the first such date
after the date hereof.
"Loan" shall mean the indebtedness evidenced by this Note.
"Maturity Date" shall mean October 12, 2003.
"Person" shall mean and include any individual, sole
proprietorship, partnership, joint venture, limited liability company, trust,
unincorporated organization, association, corporation, institution, entity,
party or government (whether national, federal, state, county, city, municipal,
or otherwise, including, without limitation, any instrumentality, division,
agency, body or department thereof).
"Security Documents" shall mean (i) that certain Security
Agreement, dated as of the date hereof, executed by the Makers in favor of the
Holder, pursuant to which the Makers have granted a security interest in all of
their respective assets in favor of the Holder, (ii) that certain Pledge
Agreement, dated as of the date hereof, executed by the Makers in favor of the
Holder, pursuant to which the Makers have pledged certain securities to the
Holder, and (iii) each of the other security agreements, collateral assignments
and pledge agreements that the Makers, or any of them, have executed and
delivered in favor of the Holder, in each case as amended, restated,
supplemented or otherwise modified from time to time.
"Senior Credit Agreement" shall mean that certain Third
Amended and Restated Credit Agreement, dated as of April 12, 2002, as the same
has been, and as the same may be further, amended, restated, supplemented or
otherwise modified from time to time, with the Makers, ADI Alpha Holding GmbH,
a German limited liability company ("ADI Alpha"), and Tuja Zeitarbeit GmbH &
Co. K.G., Ingolstadt, a limited partnership organized under the laws of the
Federal Republic of Germany ("Tuja"), the financial institutions from time to
time party thereto, and the Senior Credit Facility Agent.
32
"Senior Credit Agreement Refinancing Date" shall mean the
date on which the indebtedness and other obligations owing under the Senior
Credit Agreement have been repaid in their entirety and/or refinanced with the
proceeds from a replacement credit facility. The Senior Credit Agreement
Refinancing Date shall not be deemed to have occurred upon an extension of the
maturity date under the Senior Credit Agreement.
"Senior Credit Facility Agent" shall mean Wachovia Bank,
National Association, in its capacity as administrative agent for certain
financial institutions party to the Senior Credit Agreement from time to time.
"Settlement Agreement" shall mean that certain Settlement and
Release Agreement, dated as of the date hereof, executed by the Makers and the
Holders, as amended, restated, supplemented or otherwise modified from time to
time.
"Settlement Documents" shall mean this Note, the $3 Million
Interest Advance Note, the $10 Million Note, the $10 Million Interest Advance
Note, the Settlement Agreement, the Security Documents and each of the other
agreements, documents and instruments executed and delivered by the Makers, or
any of them, in connection with this Note, in each case as amended, restated,
supplemented or otherwise modified from time to time.
"Solvent" shall mean, as to any Person, that such Person (a)
has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage, (b) is able to pay
its debts as they mature and (c) owns property whose fair salable value is
greater than the amount required to pay its debts (including contingent
obligations).
"Tax" shall mean and include any present or future tax, levy,
cost or charge of any nature imposed by any government or any authority or
political subdivision thereof, excluding taxes on or measured by the net income
of the Holder imposed by any jurisdiction in which the principal or relevant
office of the Holder is located.
2. INTEREST.
(A) Interest shall accrue on the aggregate unpaid
principal amount of the Loan from the date hereof until the Loan is paid in
full at a fixed rate per annum (computed on the actual number of days elapsed
over a 360-day year; i.e. 1/360th of a full year's interest shall accrue for
each day the Loan is outstanding) at all times equal to seven percent (7.00%);
provided, that following the occurrence and during the continuance of any Event
of Default, any principal, and to the extent permitted by law, interest owing
hereunder shall bear interest at a rate per annum (computed as aforesaid) equal
to nine percent (9.00%) (the "Default Rate").
(B) Nothing contained in this Note or in any of the
other Settlement Documents shall be construed to permit the Holder to receive
at any time interest, fees or other charges in excess of the amounts which the
Holder is legally entitled to charge and receive under any law to which such
interest, fees or charges are subject. In no contingency or event whatsoever
shall the compensation
33
payable to the Holder by the Makers, howsoever characterized or computed,
hereunder or under this Note or under any other Settlement Document, exceed the
highest rate permissible under any law to which such compensation is subject.
There is no intention that the Holder shall contract for, charge or receive
compensation in excess of the highest lawful rate, and, in the event it should
be determined that any excess has been charged or received, then, ipso facto,
such rate shall be reduced to the highest lawful rate so that no amounts shall
be charged which are in excess thereof; and the Holder shall apply such excess
against the Loan then outstanding (with such application being made first
against the Loan, to the extent thereof, and then to any other amounts owing
hereunder) and, to the extent of any amounts remaining thereafter, refund such
excess to the Makers or any other Person legally entitled thereto.
3. PAYMENTS.
(A) TIME OF PAYMENT. Each payment by the Makers to
Holder pursuant to this Note shall be made prior to 1:00 p.m. (prevailing
London, England time) on the date due and shall be made without set-off or
counterclaim at its address set forth above. Each such payment shall be in
lawful currency of the United States of America and in cash or immediately
available funds.
(B) TAXES. Each payment made by Makers hereunder shall
either (i) be exempt from, and be made without reduction by reason of, any Tax
or (ii) to the extent that any such payment shall be subject to any Tax, be
accompanied by an additional payment by Makers of such amount as may be
necessary so that the net amount received by the Holder (after deducting all
applicable Taxes) is the same as Holder would have received had such payment
not been subject to such Tax. Upon any payment of Tax by the Makers, the Makers
shall promptly (and in any event within 30 days) furnish to the Holder such tax
receipts, certificates and other evidence of such payment as the Holder may
reasonably request.
(C) BUSINESS DAYS. If the due date of any payment
hereunder would otherwise fall on a day which is not a Business Day, then such
payment shall be due on the next succeeding Business Day and interest shall be
payable on the principal amount of such payment for the period of such
extension.
4. REPAYMENT TERMS.
(A) INTEREST. Accrued interest shall be due and payable
quarterly in arrears on each Interest Payment Date for the preceding quarter or
portion thereof, and on the Maturity Date; provided, that any interest payable
at the Default Rate shall be payable on written demand.
On each Interest Payment Date, the Makers, jointly and
severally, hereby irrevocably authorize and direct the Holder to advance on
behalf of the Makers, and the Holder shall be deemed to have advanced on each
such Interest Payment Date, the amount of interest accrued hereon for the
quarter or portion thereof preceding such Interest Payment Date, unless and to
the extent such interest has otherwise been paid by the Makers in accordance
with the terms hereof.
34
Advances by the Holder under this subsection (a) shall be
evidenced by the $3 Million Interest Advance Note. The Makers acknowledge and
agree that the Holder shall have no obligation to make any advances for any
purpose other than as set forth herein, and shall have no obligation to make
any such Advance during the continuance of any Event of Default or any
obligation to deliver the proceeds of any such advance to any other Person.
On the first Interest Payment Date after the Senior Credit
Agreement Refinancing Date, and on each subsequent Interest Payment Date,
notwithstanding the foregoing paragraphs, the Makers, jointly and severally,
agree to pay all accrued and unpaid interest under this Note. The failure to so
pay such accrued and unpaid interest when due shall constitute an Event of
Default hereunder, and the making of any advance by the Holder in accordance
with this subsection 4(a) shall not in any way excuse, waive or cure any such
Event of Default.
(B) PRINCIPAL REPAYMENT SCHEDULE. Subject to the terms
and conditions hereof, the Makers shall repay the then outstanding principal
balance of the Loan on the Maturity Date.
(C) VOLUNTARY PREPAYMENTS OF PRINCIPAL. The Makers shall
have the right, at any time or from time to time, to prepay the Loan in whole
or in part, without penalty or premium, upon prior written notice; provided
that upon each prepayment the Makers shall pay accrued and unpaid interest on
the principal amount so prepaid to the date of prepayment. Each such prepayment
under this clause (c) shall be applied to the remaining installments of
principal under this Note in the inverse order of their maturity.
(D) MANDATORY PREPAYMENTS PRIOR TO MATURITY. Immediately
following each receipt by the Makers, or any of them, of the proceeds of any
financing transaction (excluding the portion of the net proceeds from any
financing transaction which is used to partially or fully refinance or repay
obligations arising under the Credit Agreement), the Makers shall make a
prepayment of the outstanding principal balance of the Loan in an amount equal
to (i) the net proceeds of such financing transaction, times (ii) twenty
percent (20%), times (iii) a ratio, (A) the numerator of which is an amount
equal to the then outstanding principal balance of the Loan, and (B) the
denominator of which is an amount equal to the sum of (1) the then outstanding
principal balance of the Loan and (2) the then outstanding principal balance of
the indebtedness evidenced by the $10 Million Note. The aggregate maximum
amount that shall be prepaid as a mandatory prepayment under this Note and
pursuant to Section 4(d) of the $10 Million Note is $6,000,000. Each such
prepayment under this clause (d) shall be applied pro rata to the remaining
installments of principal under this Note.
(E) AGREEMENT REGARDING SUBORDINATION. The Makers agree
to use commercially reasonable efforts to obtain the agreement of the lenders
party to any credit arrangement that replaces or is substituted for the Senior
Credit Facility that the Makers shall be permitted to pay the principal of and
interest on this Note as and when due.
35
5. REPRESENTATIONS AND WARRANTIES. Each of the Makers represents
and warrants that:
(A) ORGANIZATION AND GOOD STANDING. Such Maker is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
(B) AUTHORIZATION, EXECUTION AND ENFORCEABILITY. Such
Maker has the power and authority, corporate or otherwise, to execute, deliver
and perform its obligations under this Note and the other Settlement Documents
to which it is a party, and has taken all necessary steps to authorize the
execution, delivery and performance by such Maker of this Note and the other
Settlement Documents to which it is a party. This Note and the other Settlement
Documents to which each Maker is a party have been duly executed and delivered
by such Maker and constitute valid and binding obligations of such Maker,
enforceable in accordance with their respective terms.
(C) NON-CONTRAVENTION. The execution, delivery and
performance by each Maker of this Note and other Settlement Documents to which
such Maker is a party do not and will not (i) contravene, or constitute (with
or without the giving of notice or lapse of time or both) a violation of any
provision of applicable law, a violation of the organizational documents of
such Maker, or a default under any agreement, judgment, injunction, order,
decrees or other instrument binding upon or affecting such Maker, (ii) result
in the creation or imposition of any lien on any of such Maker's assets, other
than the liens arising under the Security Documents; or (iii) give cause for
the acceleration or prepayment of any obligations of such Maker to any other
Person.
(D) GOVERNMENTAL AUTHORITY: All authority from and
approval by any governmental body, commission or agency, State, Federal or
foreign, if any, necessary to the making or validity of this Note and the other
Settlement Documents has been obtained.
6. EVENTS OF DEFAULT: The following shall be events of default
by the Makers (each, an "Event of Default"):
(A) REPRESENTATIONS AND WARRANTIES UNTRUE. Any
representation or warranty made in this Note shall prove to be false or
misleading when made; or
(B) NONPAYMENT. Failure to make prompt payment of any
installment of principal or interest or other monies due and payable on this
Note, as and when due and payable; or
(C) DEFAULT ON OTHER INDEBTEDNESS. Any Maker shall
default on any other obligation of such Maker when due or in the performance of
any obligation incurred for money borrowed in an aggregate principal amount for
all Makers exceeding One Million US Dollars (US$1,000,000); or
(D) VOLUNTARY BANKRUPTCY. Any Maker shall: (1) file a
voluntary petition or
36
assignment in bankruptcy or a voluntary petition or assignment or answer
seeking liquidation, reorganization, arrangement, readjustment of its debts, or
any other relief under the Bankruptcy Code, or under any other act or law
pertaining to insolvency or debtor relief, whether State, Federal, or foreign,
now or hereafter existing; (2) enter into any agreement indicating consent to,
approval of, or acquiescence in, any such petition or proceeding; (3) apply for
or permit the appointment, by consent or acquiescence, of a receiver, custodian
or trustee of itself or for all or a substantial part of its property; (4) make
an assignment for the benefit of creditors; or (5) be unable or shall fail to
pay its debts generally as such debts become due, admit in writing its
inability or failure to pay its debts generally as such debts become due, or
otherwise cease to be Solvent; or
(E) INVOLUNTARY BANKRUPTCY. There occurs (1) a filing or
issuance against any Maker an involuntary petition in bankruptcy or seeking
liquidation of such Maker, reorganization, arrangement, readjustment of its
debts or any other relief under the Bankruptcy Code, or under any other act or
law pertaining to insolvency or debtor relief, whether State, Federal or
foreign, now or hereafter existing; (2) the involuntary appointment of a
receiver, liquidator, custodian or trustee of any Maker or for all or a
substantial part of its property; or (3) the issuance of a warrant of
attachment, execution or similar process against all or any substantial part of
the property of any Maker; or
(F) JUDGMENT. Any judgment, decree or order for the
payment of money which is not covered by any insurance maintained by the Makers
and which, when aggregated with all other judgments, decrees or orders for the
payment of money pending against the Makers not covered by any such insurance,
exceeds the sum of $1,000,000, shall be rendered against any Maker and remain
unsatisfied and in effect for a period of sixty (60) consecutive days or more
without being vacated, discharged, satisfied or stayed or bonded pending
appeal; or
(G) DISSOLUTION. The dissolution, winding up or
termination of the existence of any Maker, other than as the result of the
merger of any Maker with and into another Maker; or
(H) FAILURE OF SECURITY. At any time (1) any lien or
security interests in favor of the Holder contemplated by the Settlement
Documents shall, at any time, for any reason, be invalidated or otherwise cease
to be in full force and effect; or (2) any Maker under any such Settlement
Document seeks to repudiate its obligations thereunder; or
(I) SETTLEMENT DOCUMENTS. Any Maker shall breach any
representation, warranty or covenant contained in any other Settlement
Document, or any default shall arise thereunder.
7. REMEDIES UPON DEFAULT. In the event of the occurrence of an
Event of Default described in Section 6(d) or 6(e) above, all of the Makers'
obligations hereunder, whether for principal, interest or otherwise, shall
without notice or any other action by the Holder become automatically and
immediately due and payable. In the event of the occurrence and during the
continuance of any of the other above listed Events of Default, the Holder may
at
37
any time thereafter, at its option, take any or all of the following actions,
at the same or different times:
(A) Declare the balance(s) of this Note to be forthwith
due and payable, both as to principal and interest, without presentment,
demand, protest, or other notice of any kind, all of which are hereby expressly
waived by each of the Makers, anything contained herein or the Note to the
contrary notwithstanding; and/or
(B) Exercise such other rights and remedies as the
Holder may be provided in this Note and any other Settlement Documents or as
provided by law.
8. MISCELLANEOUS PROVISIONS.
(A) SUCCESSORS AND ASSIGNS: This Note shall be binding
upon and shall inure to the benefit of the Makers and the Holder, and their
respective successors and assigns. None of the Makers may assign any of its
rights or obligations hereunder without the prior written consent of the
Holder.
(B) NON-IMPAIRMENT. If any one or more provisions
contained in this Note or any other document executed pursuant to this Note
shall be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained in this Note
and the documentation executed pursuant hereto, shall not in any way be
affected or impaired thereby and this Note shall otherwise remain in full force
and effect.
(C) WAIVER. Neither the failure nor any delay on the
part of the Holder in exercising any right, power or privilege granted pursuant
to this Note or any other Settlement Documents shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any other right, power or privilege.
(D) MODIFICATION. No modification, amendment, or waiver
of any provision of this Note shall be effective unless in writing and signed
by the Holder.
(E) COLLECTION COSTS. In the event that the indebtedness
evidenced hereby shall be collected by or through an attorney-at-law, Holder
shall be entitled to collect from Makers all costs of collection, including
reasonable attorneys' fees actually incurred, and Makers shall be jointly and
severally liable for all such costs of collection.
(F) WAIVERS. Each Maker hereby waives presentment,
demand for payment, protest and notice of protest, notice of dishonor and all
other notices in connection with this Note. This Note shall be payable without
right of setoff, any defense of want or failure of consideration,
nonperformance of any condition precedent, nondelivery or delivery for a
special purpose or any other defense of any nature whatsoever.
38
(G) SEVERABILITY. If any provision of this Note or of
the other Settlement Documents shall be prohibited or invalid under applicable
law, such provision shall be ineffective but only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Note or other such document.
9. CHOICE OF LAW; JURISDICTION; VENUE. THIS NOTE, AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW). EACH MAKER HEREBY (A) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF GEORGIA AND OF ANY GEORGIA STATE COURT SITTING IN ATLANTA, GEORGIA
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
NOTE AND (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE REGARDING THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE HOLDER TO BRING PROCEEDINGS AGAINST ANY MAKER IN THE COURTS OF ANY
OTHER JURISDICTION WITHIN THE UNITED STATES OF AMERICA.
10. WAIVER OF JURY TRIAL. AFTER REVIEWING THIS PROVISION
SPECIFICALLY WITH ITS COUNSEL, EACH MAKER HEREBY KNOWINGLY, INTELLIGENTLY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LEGAL PROCEEDING BASED ON OR ARISING OUT OF, UNDER, IN
CONNECTION WITH, OR RELATING TO THIS NOTE, THE TRANSACTIONS CONTEMPLATED
HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN), OR ACTIONS OF SUCH MAKER OR HOLDER. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE HOLDER TO MAKE TO ACCEPT THIS NOTE AS CONSIDERATION FOR ITS
AGREEMENTS AND RELEASES CONTAINED IN THE SETTLEMENT AGREEMENT.
39
IN WITNESS WHEREOF, the Makers, on the day and year first above written, have
caused this Note to be executed under seal.
"AHL"
AHL SERVICES, INC.
By:
-------------------------------
At:
-------------------------------
Name:
Title:
"HOLDINGS"
XXXXXXXXXXX HOLDINGS LIMITED
By:
-------------------------------
At:
-------------------------------
Name:
Title:
"AHL EUROPE"
AHL EUROPE LIMITED
By:
-------------------------------
At: London, England
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer
European Operations
"XXXXXXXXXXX"
XXXXXXXXXXX, INC.
By:
-------------------------------
At: Atlanta, Georgia
Name:
Title:
40
EXHIBIT 3
$10 MILLION INTEREST ADVANCE NOTE
THIS NOTE IS SUBJECT TO CERTAIN TERMS OF SUBORDINATION AS MORE FULLY SET FORTH
IN THAT CERTAIN SUBORDINATION AGREEMENT, DATED THE DATE HEREOF, AS AMENDED,
RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, BETWEEN
WACHOVIA BANK, NATIONAL ASSOCIATION, IN ITS CAPACITY AS ADMINISTRATIVE AGENT
FOR CERTAIN LENDERS, AND THE HOLDER REFERRED TO BELOW.
SUBORDINATED INTEREST ADVANCE NOTE
(RELATING TO THE $10 MILLION NOTE)
April 12, 2002
FOR VALUE RECEIVED, AHL Services, Inc., a Georgia corporation ("AHL"),
Xxxxxxxxxxx Holdings Limited, a Georgia corporation ("Holdings"), Xxxxxxxxxxx,
Inc., a Georgia corporation ("Xxxxxxxxxxx"), and AHL Europe Limited, a company
organized under the laws of England and Wales with number 3804405 ("AHL
Europe"; AHL, Holdings, Xxxxxxxxxxx and AHL Europe are hereinafter collectively
referred to as the "Makers"), jointly and severally promise to pay to the order
of Securicor plc, a company organized under the laws of England and Wales with
number 3811216 ("Holder"), in lawful money of the United States of America, at
its office located at Xxxxxx Xxxx Xxxxx, 00 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxx SMI
4LD, England or wherever else Holder may specify from time to time in writing,
the outstanding principal amount of all Loans (as hereinafter defined),
together with interest on the unpaid principal balance hereof at the rate(s)
and on the terms provided in this Subordinated Interest Advance Note (including
all renewals, extensions or modifications hereof, this "Note") and such other
amounts specifically referred to herein.
1. DEFINITIONS. The following capitalized terms shall have the
following meanings:
"$3 Million Note" shall mean that certain Subordinated Term
Loan Note, dated the date hereof, executed by the Makers in favor of the Holder
in the original principal amount of US$3,000,000, as amended, restated,
supplemented, substituted, replaced or otherwise modified from time to time.
"$3 Million Interest Advance Note" shall mean that certain
Subordinated Interest Advance Note, dated the date hereof, executed by the
Makers in favor of the Holder and providing for the making of advances by the
Holder from time to time for the purpose of paying accrued and unpaid interest
when due under the $3 Million Note, as amended, restated, supplemented,
replaced or otherwise modified from time to time.
"$10 Million Note" shall mean that certain Subordinated Term
Loan Note, dated the date hereof, executed by the Makers in favor of the Holder
in the original principal amount of US$10,000,000, as amended, restated,
supplemented, substituted, replaced or otherwise modified from time to time.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of
1978, as may be amended from time to time.
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in Atlanta, Georgia, or London, England
are authorized or required by law to close.
"Interest Payment Date" shall mean the first Business Day of
each January, April, July, and October, commencing with the first such date
after the date hereof.
"Loan" shall mean an advance by the Holder to pay all or a
portion of the accrued and unpaid interest owing under the $10 Million Note,
and "Loans" shall mean all such advances.
"Maturity Date" shall mean October 12, 2003.
"Person" shall mean and include any individual, sole
proprietorship, partnership, joint venture, limited liability company, trust,
unincorporated organization, association, corporation, institution, entity,
party or government (whether national, federal, state, county, city, municipal,
or otherwise, including, without limitation, any instrumentality, division,
agency, body or department thereof).
"Security Documents" shall mean (i) that certain Security
Agreement, dated as of the date hereof, executed by the Makers in favor of the
Holder, pursuant to which the Makers have granted a security interest in all of
their respective assets in favor of the Holder, (ii) that certain Pledge
Agreement, dated as of the date hereof, executed by the Makers in favor of the
Holder, pursuant to which the Makers have pledged certain securities to the
Holder, and (iii) each of the other security agreements, collateral assignments
and pledge agreements that the Makers, or any of them, have executed and
delivered in favor of the Holder, in each case as amended, restated,
supplemented or otherwise modified from time to time.
"Senior Credit Agreement" shall mean that certain Third
Amended and Restated Credit Agreement, dated as of April 12, 2002, as the same
has been, and as the same may be further, amended, restated, supplemented or
otherwise modified from time to time, with the Makers, ADI Alpha Holding GmbH,
a German limited liability company ("ADI Alpha"), and Tuja Zeitarbeit GmbH &
Co. K.G., Ingolstadt, a limited partnership organized under the laws of the
Federal Republic of Germany ("Tuja"), the financial institutions from time to
time party thereto, and the Senior Credit Facility Agent.
42
"Senior Credit Agreement Refinancing Date" shall mean the
date on which the indebtedness and other obligations owing under the Senior
Credit Agreement have been repaid in their entirety and/or refinanced with the
proceeds from a replacement credit facility. The Senior Credit Agreement
Refinancing Date shall not be deemed to have occurred upon an extension of the
maturity date under the Senior Credit Agreement.
"Senior Credit Facility Agent" shall mean Wachovia Bank,
National Association in its capacity as administrative agent for certain
financial institutions party to the Senior Credit Agreement from time to time.
"Settlement Agreement" shall mean that certain Settlement and
Release Agreement, dated as of the date hereof, executed by the Makers and the
Holders, as amended, restated, supplemented or otherwise modified from time to
time.
"Settlement Documents" shall mean this Note, the $10 Million
Note, the $3 Million Note, the $3 Million Interest Advance Note, the Settlement
Agreement, the Security Documents and each of the other agreements, documents
and instruments executed and delivered by the Makers, or any of them, in
connection with this Note, in each case as amended, restated, supplemented or
otherwise modified from time to time.
"Solvent" shall mean, as to any Person, that such Person (a)
has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage, (b) is able to pay
its debts as they mature and (c) owns property whose fair salable value is
greater than the amount required to pay its debts (including contingent
obligations).
"Tax" shall mean and include any present or future tax, levy,
cost or charge of any nature imposed by any government or any authority or
political subdivision thereof, excluding taxes on or measured by the net income
of the Holder imposed by any jurisdiction in which the principal or relevant
office of the Holder is located.
2. LOANS. On each Interest Payment Date, the Holder shall be
deemed to have advanced, on behalf of the Makers, an amount equal to the
interest accrued on the $10 Million Note for the quarter preceding such
Interest Payment Date. The amount of each such deemed advance shall be a Loan
pursuant to this Note. The Holder shall note the date and amount of each such
Loan on the schedule of advances attached hereto, or in its internal records.
Absent manifest error, each such notice shall be conclusive evidence that the
Holder made a Loan pursuant to this Section on the date and in the amount
indicated; provided, however, that the failure of the Holder to make any such
recordation of the date or amount of any Loan, or any error in such records,
shall not affect any Maker's obligations under this Note. The total of all such
deemed advances at any time shall constitute the aggregate principal amount of
the Loans hereunder at such time.
43
3. INTEREST.
(A) Interest shall accrue on the aggregate unpaid
principal amount of each Loan hereunder from the date of the making of such
Loan until such Loan is paid in full at a fixed rate per annum (computed on the
actual number of days elapsed over a 360-day year; i.e. for any Loan, 1/360th
of a full year's interest shall accrue for each day such Loan is outstanding)
at all times equal to seven percent (7.00%); provided, the following the
occurrence and during the continuance of any Event of Default, any principal,
and to the extent permitted by law, interest owing hereunder shall bear
interest at a rate per annum (computed as aforesaid) equal to nine percent
(9.00%) (the "Default Rate").
(B) Nothing contained in this Note or in any of the
other Settlement Documents shall be construed to permit the Holder to receive
at any time interest, fees or other charges in excess of the amounts which the
Holder is legally entitled to charge and receive under any law to which such
interest, fees or charges are subject. In no contingency or event whatsoever
shall the compensation payable to the Holder by the Makers, howsoever
characterized or computed, hereunder or under this Note or under any other
Settlement Document, exceed the highest rate permissible under any law to which
such compensation is subject. There is no intention that the Holder shall
contract for, charge or receive compensation in excess of the highest lawful
rate, and, in the event it should be determined that any excess has been
charged or received, then, ipso facto, such rate shall be reduced to the
highest lawful rate so that no amounts shall be charged which are in excess
thereof; and the Holder shall apply such excess against the Loans then
outstanding (with such application being made first against the Loans, to the
extent thereof, and then to any other amounts owing hereunder) and, to the
extent of any amounts remaining thereafter, refund such excess to the Makers or
any other Person legally entitled thereto.
4. PAYMENTS.
(A) TIME OF PAYMENT. Each payment by the Makers to
Holder pursuant to this Note shall be made prior to 1:00 p.m. (prevailing
London, England time) on the date due and shall be made without set-off or
counterclaim at its address set forth above. Each such payment shall be in
lawful currency of the United States of America and in cash or immediately
available funds.
(B) TAXES. Each payment made by Makers hereunder shall
either (i) be exempt from, and be made without reduction by reason of, any Tax
or (ii) to the extent that any such payment shall be subject to any Tax, be
accompanied by an additional payment by Makers of such amount as may be
necessary so that the net amount received by the Holder (after deducting all
applicable Taxes) is the same as Holder would have received had such payment
not been subject to such Tax. Upon any payment of Tax by the Makers, the Makers
shall promptly (and in any event within 30 days) furnish to the Holder such tax
receipts, certificates and other evidence of such payment as the Holder may
reasonably request.
(C) BUSINESS DAYS. If the due date of any payment
hereunder would otherwise fall on a day which is not a Business Day, then such
payment shall be due on the next succeeding Business Day and interest shall be
payable on the principal amount of such payment for the period of such
extension.
44
5. REPAYMENT TERMS.
(A) INTEREST. Accrued interest shall be due and payable
quarterly in arrears on each Interest Payment Date, commencing with the first
Interest Payment Date following the Senior Credit Agreement Refinancing Date,
and on the Maturity Date; provided, that any interest payable at the Default
Rate shall be payable on written demand.
(B) PRINCIPAL REPAYMENT SCHEDULE. Subject to the terms
and conditions hereof, the Makers shall repay the Loans in two installments,
with the first such installment, in the amount equal to ninety percent (90%) of
the then outstanding principal balance of all Loans, payable on April 12, 2003,
and second such installment, in an amount equal to the then outstanding
principal balance of the Loans, payable on the Maturity Date.
(C) VOLUNTARY PREPAYMENTS OF PRINCIPAL. The Makers shall
have the right, at any time or from time to time, to prepay the Loans in whole
or in part, without penalty or premium, upon prior written notice; provided
that upon any such prepayment the Makers shall pay accrued and unpaid interest
on the principal amount so prepaid to the date of prepayment.
(D) AGREEMENT REGARDING SUBORDINATION. The Makers agree
to use commercially reasonable efforts to obtain the agreement of the lenders
party to any credit arrangement that replaces or is substituted for the Senior
Credit Facility that the Makers shall be permitted to pay the principal of and
interest on this Note as and when due.
6. REPRESENTATIONS AND WARRANTIES. Each of the Makers represents
and warrants that:
(A) ORGANIZATION AND GOOD STANDING. Such Maker is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
(B) AUTHORIZATION, EXECUTION AND ENFORCEABILITY. Such
Maker has the power and authority, corporate or otherwise, to execute, deliver
and perform its obligations under this Note and the other Settlement Documents
to which it is a party, and has taken all necessary steps to authorize the
execution, delivery and performance by such Maker of this Note and the other
Settlement Documents to which it is a party. This Note and the other Settlement
Documents to which each Maker is a party have been duly executed and delivered
by such Maker and constitute valid and binding obligations of such Maker,
enforceable in accordance with their respective terms.
(C) NON-CONTRAVENTION. The execution, delivery and
performance by each Maker of this Note and other Settlement Documents to which
such Maker is a party do not and will not (i) contravene, or constitute (with
or without the giving of notice or lapse of time or both) a violation of any
provision of applicable law, a violation of the organizational documents of
such Maker, or a default under any agreement, judgment, injunction, order,
decrees or other
45
instrument binding upon or affecting such Maker, (ii) result in the creation or
imposition of any lien on any of such Maker's assets, other than the liens
arising under the Security Documents; or (ii) give cause for the acceleration
or prepayment of any obligations of such Maker to any other Person.
(D) GOVERNMENTAL AUTHORITY: All authority from and
approval by any governmental body, commission or agency, State, Federal or
foreign, if any, necessary to the making or validity of this Note and the other
Settlement Documents has been obtained.
7. EVENTS OF DEFAULT: The following shall be events of default
by the Makers (each, an "Event of Default"):
(A) REPRESENTATIONS AND WARRANTIES UNTRUE. Any
representation or warranty made in this Note shall prove to be false or
misleading when made; or
(B) NONPAYMENT. Failure to make prompt payment of any
installment of principal or interest or other monies due and payable on this
Note, as and when due and payable; or
(C) DEFAULT ON OTHER INDEBTEDNESS. Any Maker shall
default on any other obligation of such Maker when due or in the performance of
any obligation incurred for money borrowed in an aggregate principal amount for
all Makers exceeding One Million US Dollars (US$1,000,000); or
(D) VOLUNTARY BANKRUPTCY. Any Maker shall: (1) file a
voluntary petition or assignment in bankruptcy or a voluntary petition or
assignment or answer seeking liquidation, reorganization, arrangement,
readjustment of its debts, or any other relief under the Bankruptcy Code, or
under any other act or law pertaining to insolvency or debtor relief, whether
State, Federal, or foreign, now or hereafter existing; (2) enter into any
agreement indicating consent to, approval of, or acquiescence in, any such
petition or proceeding; (3) apply for or permit the appointment, by consent or
acquiescence, of a receiver, custodian or trustee of itself or for all or a
substantial part of its property; (4) make an assignment for the benefit of
creditors; or (5) be unable or shall fail to pay its debts generally as such
debts become due, admit in writing its inability or failure to pay its debts
generally as such debts become due, or otherwise cease to be Solvent; or
(E) INVOLUNTARY BANKRUPTCY. There occurs (1) a filing or
issuance against any Maker an involuntary petition in bankruptcy or seeking
liquidation of such Maker, reorganization, arrangement, readjustment of its
debts or any other relief under the Bankruptcy Code, or under any other act or
law pertaining to insolvency or debtor relief, whether State, Federal or
foreign, now or hereafter existing; (2) the involuntary appointment of a
receiver, liquidator, custodian or trustee of any Maker or for all or a
substantial part of its property; or (3) the issuance of a warrant of
attachment, execution or similar process against all or any substantial part of
the property of any Maker; or
46
(F) JUDGMENT. Any judgment, decree or order for the
payment of money which is not covered by any insurance maintained by the Makers
and which, when aggregated with all other judgments, decrees or orders for the
payment of money pending against the Makers not covered by any such insurance,
exceeds the sum of $1,000,000, shall be rendered against any Maker and remain
unsatisfied and in effect for a period of sixty (60) consecutive days or more
without being vacated, discharged, satisfied or stayed or bonded pending
appeal; or
(G) DISSOLUTION. The dissolution, winding up or
termination of the existence of any Maker other than as the result of the
merger of any Maker with and into another Maker; or
(H) FAILURE OF SECURITY. At any time (1) any lien or
security interests in favor of the Holder contemplated by the Settlement
Documents shall, at any time, for any reason, be invalidated or otherwise cease
to be in full force and effect; or (2) any Maker under any such Settlement
Document seeks to repudiate its obligations thereunder; or
(I) SETTLEMENT DOCUMENTS. Any Maker shall breach any
representation, warranty or covenant contained in any other Settlement
Document, or any default shall arise thereunder.
8. REMEDIES UPON DEFAULT. In the event of the occurrence of an
Event of Default described in Section 7(d) or 7(e) above, all of the Makers'
obligations hereunder, whether for principal, interest or otherwise, shall
without notice or any other action by the Holder become automatically and
immediately due and payable. In the event of the occurrence and during the
continuance of any of the other above listed Events of Default, the Holder may
at any time thereafter, at its option, take any or all of the following
actions, at the same or different times:
(A) Declare the balance(s) of this Note to be forthwith due and
payable, both as to principal and interest, without presentment, demand,
protest, or other notice of any kind, all of which are hereby expressly waived
by each of the Makers, anything contained herein or the Note to the contrary
notwithstanding; and/or
(B) Exercise such other rights and remedies as the Holder may be
provided in this Note and any other Settlement Documents or as provided by law.
9. MISCELLANEOUS PROVISIONS.
(A) SUCCESSORS AND ASSIGNS: This Note shall be binding upon and
shall inure to the benefit of the Makers and the Holder, and their respective
successors and assigns. None of the Makers may assign any of its rights or
obligations hereunder without the prior written consent of the Holder.
(B) NON-IMPAIRMENT. If any one or more provisions contained in
this Note or any other document executed pursuant to this Note shall be held
invalid, illegal or unenforceable in
47
any respect, the validity, legality and enforceability of the remaining
provisions contained in this Note and the documentation executed pursuant
hereto, shall not in any way be affected or impaired thereby and this Note
shall otherwise remain in full force and effect.
(C) WAIVER. Neither the failure nor any delay on the part of the
Holder in exercising any right, power or privilege granted pursuant to this
Note or any other Settlement Documents shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege.
(D) MODIFICATION. No modification, amendment, or waiver of any
provision of this Note shall be effective unless in writing and signed by the
Holder.
(E) COLLECTION COSTS. In the event that the indebtedness evidenced
hereby shall be collected by or through an attorney-at-law, Holder shall be
entitled to collect from Makers all costs of collection, including reasonable
attorneys' fees actually incurred, and Makers shall be jointly and severally
liable for all such costs of collection.
(F) WAIVERS. Each Maker hereby waives presentment, demand for
payment, protest and notice of protest, notice of dishonor and all other
notices in connection with this Note. This Note shall be payable without right
of setoff, any defense of want or failure of consideration, nonperformance of
any condition precedent, nondelivery or delivery for a special purpose or any
other defense of any nature whatsoever.
(G) SEVERABILITY. If any provision of this Note or of the other
Settlement Documents shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note or other such document.
10. CHOICE OF LAW; JURISDICTION; VENUE. THIS NOTE, AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW). EACH MAKER HEREBY (A) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF GEORGIA AND OF ANY GEORGIA STATE COURT SITTING IN ATLANTA, GEORGIA
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
NOTE AND (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE REGARDING THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE HOLDER TO BRING
48
PROCEEDINGS AGAINST ANY MAKER IN THE COURTS OF ANY OTHER JURISDICTION WITHIN
THE UNITED STATES OF AMERICA.
11. WAIVER OF JURY TRIAL. AFTER REVIEWING THIS PROVISION
SPECIFICALLY WITH ITS COUNSEL, EACH MAKER HEREBY KNOWINGLY, INTELLIGENTLY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LEGAL PROCEEDING BASED ON OR ARISING OUT OF, UNDER, IN
CONNECTION WITH, OR RELATING TO THIS NOTE, THE TRANSACTIONS CONTEMPLATED
HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN), OR ACTIONS OF SUCH MAKER OR HOLDER. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE HOLDER TO MAKE TO ACCEPT THIS NOTE AS CONSIDERATION FOR ITS
AGREEMENTS AND RELEASES CONTAINED IN THE SETTLEMENT AGREEMENT.
49
IN WITNESS WHEREOF, the Makers, on the day and year first above written, have
caused this Note to be executed under seal.
"AHL"
AHL SERVICES, INC.
By:
-------------------------------
At:
-------------------------------
Name:
Title:
"HOLDINGS"
XXXXXXXXXXX HOLDINGS LIMITED
By:
-------------------------------
At:
-------------------------------
Name:
Title:
"AHL EUROPE"
AHL EUROPE LIMITED
By:
-------------------------------
At: London, England
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer
European Operations
"XXXXXXXXXXX"
XXXXXXXXXXX, INC.
By:
-------------------------------
At: Atlanta, Georgia
Name:
Title:
50
EXHIBIT 4
$3 MILLION INTEREST ADVANCE NOTE
THIS NOTE IS SUBJECT TO CERTAIN TERMS OF SUBORDINATION AS MORE FULLY SET FORTH
IN THAT CERTAIN SUBORDINATION AGREEMENT, DATED THE DATE HEREOF, AS AMENDED,
RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, BETWEEN
WACHOVIA BANK, NATIONAL ASSOCIATION, IN ITS CAPACITY AS ADMINISTRATIVE AGENT
FOR CERTAIN LENDERS, AND THE HOLDER REFERRED TO BELOW.
SUBORDINATED INTEREST ADVANCE NOTE
(RELATING TO THE $3 MILLION NOTE)
April 12, 2002
FOR VALUE RECEIVED, AHL Services, Inc., a Georgia corporation ("AHL"),
Xxxxxxxxxxx Holdings Limited, a Georgia corporation ("Holdings"), Xxxxxxxxxxx,
Inc., a Georgia corporation ("Xxxxxxxxxxx"), and AHL Europe Limited, a company
organized under the laws of England and Wales with number 3804405 ("AHL
Europe"; AHL, Holdings, Xxxxxxxxxxx and AHL Europe are hereinafter collectively
referred to as the "Makers"), jointly and severally promise to pay to the order
of Securicor plc, a company organized under the laws of England and Wales with
number 3811216 ("Holder"), in lawful money of the United States of America, at
its office located at Xxxxxx Xxxx Xxxxx, 00 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxx SMI
4LD, England or wherever else Holder may specify from time to time in writing,
the outstanding principal amount of all Loans (as hereinafter defined),
together with interest on the unpaid principal balance hereof at the rate(s)
and on the terms provided in this Subordinated Interest Advance Note (including
all renewals, extensions or modifications hereof, this "Note") and such other
amounts specifically referred to herein.
1. DEFINITIONS. The following capitalized terms shall have the
following meanings:
"$10 Million Note" shall mean that certain Subordinated Term Loan
Note, dated the date hereof, executed by the Makers in favor of the Holder in
the original principal amount of US$10,000,000, as amended, restated,
supplemented, substituted, replaced or otherwise modified from time to time.
"$10 Million Interest Advance Note" shall mean that certain
Subordinated Interest Advance Note, dated the date hereof, executed by the
Makers in favor of the Holder and providing for the making of advances by the
Holder from time to time for the purpose of paying accrued and unpaid interest
when due under the $10 Million Note, as amended, restated, supplemented,
replaced or otherwise modified from time to time.
"$3 Million Note" shall mean that certain Subordinated Term Loan Note,
dated the date hereof, executed by the Makers in favor of the Holder in the
original principal amount of US$3,000,000, as amended, restated, supplemented,
substituted, replaced or otherwise modified from time to time.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as may
be amended from time to time.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Atlanta, Georgia, or London, England are
authorized or required by law to close.
"Interest Payment Date" shall mean the first Business Day of each
January, April, July, and October, commencing with the first such date after
the date hereof.
"Loan" shall mean an advance by the Holder to pay all or a portion of
the accrued and unpaid interest owing under the $3 Million Note, and "Loans"
shall mean all such advances.
"Maturity Date" shall mean October 12, 2003.
"Person" shall mean and include any individual, sole proprietorship,
partnership, joint venture, limited liability company, trust, unincorporated
organization, association, corporation, institution, entity, party or
government (whether national, federal, state, county, city, municipal, or
otherwise, including, without limitation, any instrumentality, division,
agency, body or department thereof).
"Security Documents" shall mean (i) that certain Security Agreement,
dated as of the date hereof, executed by the Makers in favor of the Holder,
pursuant to which the Makers have granted a security interest in all of their
respective assets in favor of the Holder, (ii) that certain Pledge Agreement,
dated as of the date hereof, executed by the Makers in favor of the Holder,
pursuant to which the Makers have pledged certain securities to the Holder, and
(iii) each of the other security agreements, collateral assignments and pledge
agreements that the Makers, or any of them, have executed and delivered in
favor of the Holder, in each case as amended, restated, supplemented or
otherwise modified from time to time.
"Senior Credit Agreement" shall mean that certain Third Amended and
Restated Credit Agreement, dated as of April 12, 2002, as the same has been,
and as the same may be further, amended, restated, supplemented or otherwise
modified from time to time, with the Makers, ADI Alpha Holding GmbH, a German
limited liability company ("ADI Alpha"), and Tuja Zeitarbeit GmbH & Co. K.G.,
Ingolstadt, a limited partnership organized under the laws of the Federal
Republic of Germany ("Tuja"), the financial institutions from time to time
party thereto, and the Senior Credit Facility Agent.
52
"Senior Credit Agreement Refinancing Date" shall mean the date on
which the indebtedness and other obligations owing under the Senior Credit
Agreement have been repaid in their entirety and/or refinanced with the
proceeds from a replacement credit facility. The Senior Credit Agreement
Refinancing Date shall not be deemed to have occurred upon an extension of the
maturity date under the Senior Credit Agreement.
"Senior Credit Facility Agent" shall mean Wachovia Bank, National
Association in its capacity as administrative agent for certain financial
institutions party to the Senior Credit Agreement from time to time.
"Settlement Agreement" shall mean that certain Settlement and Release
Agreement, dated as of the date hereof, executed by the Makers and the Holders,
as amended, restated, supplemented or otherwise modified from time to time.
"Settlement Documents" shall mean this Note, the $3 Million Note, the
$10 Million Note, the $10 Million Interest Advance Note, the Settlement
Agreement, the Security Documents and each of the other agreements, documents
and instruments executed and delivered by the Makers, or any of them, in
connection with this Note, in each case as amended, restated, supplemented or
otherwise modified from time to time.
"Solvent" shall mean, as to any Person, that such Person (a) has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage, (b) is able to pay its debts
as they mature and (c) owns property whose fair salable value is greater than
the amount required to pay its debts (including contingent obligations).
"Tax" shall mean and include any present or future tax, levy, cost or
charge of any nature imposed by any government or any authority or political
subdivision thereof, excluding taxes on or measured by the net income of the
Holder imposed by any jurisdiction in which the principal or relevant office of
the Holder is located.
2. LOANS. On each Interest Payment Date, the Holder shall be
deemed to have advanced, on behalf of the Makers, an amount equal to the
interest accrued on the $3 Million Note for the quarter preceding such Interest
Payment Date. The amount of each such deemed advance shall be a Loan pursuant
to this Note. The Holder shall note the date and amount of each such Loan on
the schedule of advances attached hereto, or in its internal records. Absent
manifest error, each such notice shall be conclusive evidence that the Holder
made a Loan pursuant to this Section on the date and in the amount indicated;
provided, however, that the failure of the Holder to make any such recordation
of the date or amount of any Loan, or any error in such records, shall not
affect any Maker's obligations under this Note. The total of all such deemed
advances at any time shall constitute the aggregate principal amount of the
Loans hereunder at such time.
53
3. INTEREST.
(A) Interest shall accrue on the aggregate unpaid
principal amount of each Loan hereunder from the date of the making of such
Loan until such Loan is paid in full at a fixed rate per annum (computed on the
actual number of days elapsed over a 360-day year; i.e. for any Loan, 1/360th
of a full year's interest shall accrue for each day such Loan is outstanding)
at all times equal to seven percent (7.00%); provided, the following the
occurrence and during the continuance of any Event of Default, any principal,
and to the extent permitted by law, interest owing hereunder shall bear
interest at a rate per annum (computed as aforesaid) equal to nine percent
(9.00%) (the "Default Rate").
(B) Nothing contained in this Note or in any of the
other Settlement Documents shall be construed to permit the Holder to receive
at any time interest, fees or other charges in excess of the amounts which the
Holder is legally entitled to charge and receive under any law to which such
interest, fees or charges are subject. In no contingency or event whatsoever
shall the compensation payable to the Holder by the Makers, howsoever
characterized or computed, hereunder or under this Note or under any other
Settlement Document, exceed the highest rate permissible under any law to which
such compensation is subject. There is no intention that the Holder shall
contract for, charge or receive compensation in excess of the highest lawful
rate, and, in the event it should be determined that any excess has been
charged or received, then, ipso facto, such rate shall be reduced to the
highest lawful rate so that no amounts shall be charged which are in excess
thereof; and the Holder shall apply such excess against the Loans then
outstanding (with such application being made first against the Loans, to the
extent thereof, and then to any other amounts owing hereunder) and, to the
extent of any amounts remaining thereafter, refund such excess to the Makers or
any other Person legally entitled thereto.
4. PAYMENTS.
(A) TIME OF PAYMENT. Each payment by the Makers to
Holder pursuant to this Note shall be made prior to 1:00 p.m. (prevailing
London, England time) on the date due and shall be made without set-off or
counterclaim at its address set forth above. Each such payment shall be in
lawful currency of the United States of America and in cash or immediately
available funds.
(B) TAXES. Each payment made by Makers hereunder shall
either (i) be exempt from, and be made without reduction by reason of, any Tax
or (ii) to the extent that any such payment shall be subject to any Tax, be
accompanied by an additional payment by Makers of such amount as may be
necessary so that the net amount received by the Holder (after deducting all
applicable Taxes) is the same as Holder would have received had such payment
not been subject to such Tax. Upon any payment of Tax by the Makers, the Makers
shall promptly (and in any event within 30 days) furnish to the Holder such tax
receipts, certificates and other evidence of such payment as the Holder may
reasonably request.
(C) BUSINESS DAYS. If the due date of any payment
hereunder would otherwise fall on a day which is not a Business Day, then such
payment shall be due on the next succeeding Business Day and interest shall be
payable on the principal amount of such payment for the period of such
extension.
54
5. REPAYMENT TERMS.
(A) INTEREST. Accrued interest shall be due and payable
quarterly in arrears on each Interest Payment Date, commencing with the first
Interest Payment Date following the Senior Credit Agreement Refinancing Date,
and on the Maturity Date; provided, that any interest payable at the Default
Rate shall be payable on written demand.
(B) PRINCIPAL REPAYMENT SCHEDULE. Subject to the terms
and conditions hereof, the Makers shall repay the then outstanding principal
balance of the Loans on the Maturity Date.
(C) VOLUNTARY PREPAYMENTS OF PRINCIPAL. The Makers shall
have the right, at any time or from time to time, to prepay the Loans in whole
or in part, without penalty or premium, upon prior written notice; provided
that upon any such prepayment the Makers shall pay accrued and unpaid interest
on the principal amount so prepaid to the date of prepayment.
(D) AGREEMENT REGARDING SUBORDINATION. The Makers agree
to use commercially reasonable efforts to obtain the agreement of the lenders
party to any credit arrangement that replaces or is substituted for the Senior
Credit Facility that the Makers shall be permitted to pay the principal of and
interest on this Note as and when due.
6. REPRESENTATIONS AND WARRANTIES. Each of the Makers represents
and warrants that:
(A) ORGANIZATION AND GOOD STANDING. Such Maker is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
(B) AUTHORIZATION, EXECUTION AND ENFORCEABILITY. Such
Maker has the power and authority, corporate or otherwise, to execute, deliver
and perform its obligations under this Note and the other Settlement Documents
to which it is a party, and has taken all necessary steps to authorize the
execution, delivery and performance by such Maker of this Note and the other
Settlement Documents to which it is a party. This Note and the other Settlement
Documents to which each Maker is a party have been duly executed and delivered
by such Maker and constitute valid and binding obligations of such Maker,
enforceable in accordance with their respective terms.
(C) NON-CONTRAVENTION. The execution, delivery and
performance by each Maker of this Note and other Settlement Documents to which
such Maker is a party do not and will not (i) contravene, or constitute (with
or without the giving of notice or lapse of time or both) a violation of any
provision of applicable law, a violation of the organizational documents of
such Maker, or a default under any agreement, judgment, injunction, order,
decrees or other instrument binding upon or affecting such Maker, (ii) result
in the creation or imposition of any lien on any of such Maker's assets, other
than the liens arising under the Security Documents; or
55
(ii) give cause for the acceleration or prepayment of any obligations of such
Maker to any other Person.
(D) GOVERNMENTAL AUTHORITY: All authority from and
approval by any governmental body, commission or agency, State, Federal or
foreign, if any, necessary to the making or validity of this Note and the other
Settlement Documents has been obtained.
7. EVENTS OF DEFAULT: The following shall be events of default
by the Makers (each, an "Event of Default"):
(A) REPRESENTATIONS AND WARRANTIES UNTRUE. Any
representation or warranty made in this Note shall prove to be false or
misleading when made; or
(B) NONPAYMENT. Failure to make prompt payment of any
installment of principal or interest or other monies due and payable on this
Note, as and when due and payable; or
(C) DEFAULT ON OTHER INDEBTEDNESS. Any Maker shall
default on any other obligation of such Maker when due or in the performance of
any obligation incurred for money borrowed in an aggregate principal amount for
all Makers exceeding One Million US Dollars (US$1,000,000); or
(D) VOLUNTARY BANKRUPTCY. Any Maker shall: (1) file a
voluntary petition or assignment in bankruptcy or a voluntary petition or
assignment or answer seeking liquidation, reorganization, arrangement,
readjustment of its debts, or any other relief under the Bankruptcy Code, or
under any other act or law pertaining to insolvency or debtor relief, whether
State, Federal, or foreign, now or hereafter existing; (2) enter into any
agreement indicating consent to, approval of, or acquiescence in, any such
petition or proceeding; (3) apply for or permit the appointment, by consent or
acquiescence, of a receiver, custodian or trustee of itself or for all or a
substantial part of its property; (4) make an assignment for the benefit of
creditors; or (5) be unable or shall fail to pay its debts generally as such
debts become due, admit in writing its inability or failure to pay its debts
generally as such debts become due, or otherwise cease to be Solvent; or
(E) INVOLUNTARY BANKRUPTCY. There occurs (1) a filing or
issuance against any Maker an involuntary petition in bankruptcy or seeking
liquidation of such Maker, reorganization, arrangement, readjustment of its
debts or any other relief under the Bankruptcy Code, or under any other act or
law pertaining to insolvency or debtor relief, whether State, Federal or
foreign, now or hereafter existing; (2) the involuntary appointment of a
receiver, liquidator, custodian or trustee of any Maker or for all or a
substantial part of its property; or (3) the issuance of a warrant of
attachment, execution or similar process against all or any substantial part of
the property of any Maker; or
(F) JUDGMENT. Any judgment, decree or order for the
payment of money which is not covered by any insurance maintained by the Makers
and which, when aggregated with all other judgments, decrees or orders for the
payment of money pending against the Makers not covered by
56
any such insurance, exceeds the sum of $1,000,000, shall be rendered against
any Maker and remain unsatisfied and in effect for a period of sixty (60)
consecutive days or more without being vacated, discharged, satisfied or stayed
or bonded pending appeal; or
(G) DISSOLUTION. The dissolution, winding up or
termination of the existence of any Maker other than as the result of the
merger of any Maker with and into another Maker; or
(H) FAILURE OF SECURITY. At any time (1) any lien or
security interests in favor of the Holder contemplated by the Settlement
Documents shall, at any time, for any reason, be invalidated or otherwise cease
to be in full force and effect; or (2) any Maker under any such Settlement
Document seeks to repudiate its obligations thereunder; or
(I) SETTLEMENT DOCUMENTS. Any Maker shall breach any
representation, warranty or covenant contained in any other Settlement
Document, or any default shall arise thereunder.
8. REMEDIES UPON DEFAULT. In the event of the occurrence of an
Event of Default described in Section 7(d) or 7(e) above, all of the Makers'
obligations hereunder, whether for principal, interest or otherwise, shall
without notice or any other action by the Holder become automatically and
immediately due and payable. In the event of the occurrence and during the
continuance of any of the other above listed Events of Default, the Holder may
at any time thereafter, at its option, take any or all of the following
actions, at the same or different times:
(A) Declare the balance(s) of this Note to be forthwith due and
payable, both as to principal and interest, without presentment, demand,
protest, or other notice of any kind, all of which are hereby expressly waived
by each of the Makers, anything contained herein or the Note to the contrary
notwithstanding; and/or
(B) Exercise such other rights and remedies as the Holder may be
provided in this Note and any other Settlement Documents or as provided by law.
9. MISCELLANEOUS PROVISIONS.
(A) SUCCESSORS AND ASSIGNS: This Note shall be binding upon and
shall inure to the benefit of the Makers and the Holder, and their respective
successors and assigns. None of the Makers may assign any of its rights or
obligations hereunder without the prior written consent of the Holder.
(B) NON-IMPAIRMENT. If any one or more provisions contained in
this Note or any other document executed pursuant to this Note shall be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Note and the
documentation executed pursuant hereto, shall not in any way be affected or
impaired thereby and this Note shall otherwise remain in full force and effect.
57
(C) WAIVER. Neither the failure nor any delay on the part of the
Holder in exercising any right, power or privilege granted pursuant to this
Note or any other Settlement Documents shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege.
(D) MODIFICATION. No modification, amendment, or waiver of any
provision of this Note shall be effective unless in writing and signed by the
Holder.
(E) COLLECTION COSTS. In the event that the indebtedness
evidenced hereby shall be collected by or through an attorney-at-law, Holder
shall be entitled to collect from Makers all costs of collection, including
reasonable attorneys' fees actually incurred, and Makers shall be jointly and
severally liable for all such costs of collection.
(F) WAIVERS. Each Maker hereby waives presentment, demand for
payment, protest and notice of protest, notice of dishonor and all other
notices in connection with this Note. This Note shall be payable without right
of setoff, any defense of want or failure of consideration, nonperformance of
any condition precedent, nondelivery or delivery for a special purpose or any
other defense of any nature whatsoever.
(G) SEVERABILITY. If any provision of this Note or of the other
Settlement Documents shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note or other such document.
10. CHOICE OF LAW; JURISDICTION; VENUE. THIS NOTE, AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW). EACH MAKER HEREBY (A) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF GEORGIA AND OF ANY GEORGIA STATE COURT SITTING IN ATLANTA, GEORGIA
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
NOTE AND (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE REGARDING THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE HOLDER TO BRING PROCEEDINGS AGAINST ANY MAKER IN THE COURTS OF ANY
OTHER JURISDICTION WITHIN THE UNITED STATES OF AMERICA.
58
11. WAIVER OF JURY TRIAL. AFTER REVIEWING THIS PROVISION
SPECIFICALLY WITH ITS COUNSEL, EACH MAKER HEREBY KNOWINGLY, INTELLIGENTLY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LEGAL PROCEEDING BASED ON OR ARISING OUT OF, UNDER, IN
CONNECTION WITH, OR RELATING TO THIS NOTE, THE TRANSACTIONS CONTEMPLATED
HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN), OR ACTIONS OF SUCH MAKER OR HOLDER. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE HOLDER TO MAKE TO ACCEPT THIS NOTE AS CONSIDERATION FOR ITS
AGREEMENTS AND RELEASES CONTAINED IN THE SETTLEMENT AGREEMENT.
59
IN WITNESS WHEREOF, the Makers, on the day and year first above written, have
caused this Note to be executed under seal.
"AHL"
AHL SERVICES, INC.
By:
--------------------------------------
At:
--------------------------------------
Name:
Title:
"HOLDINGS"
XXXXXXXXXXX HOLDINGS LIMITED
By:
--------------------------------------
At:
--------------------------------------
Name:
Title:
"AHL EUROPE"
AHL EUROPE LIMITED
By:
--------------------------------------
At: London, England
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer European
Operations
"XXXXXXXXXXX"
XXXXXXXXXXX, INC.
By:
--------------------------------------
At: Atlanta, Georgia
Name:
Title:
60
EXHIBIT 5
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT ("Agreement") is made and entered into
this ___ day of April, 2002, by and among SECURICOR PLC, a corporation
organized under the laws of England and Wales (the "Subordinator"), in favor
the Lenders referred to below (collectively, the "Lenders"), and WACHOVIA BANK,
NATIONAL ASSOCIATION (formerly known as First Union National Bank), in its
capacity as administrative agent (in such capacity the "Administrative Agent")
for itself and for the Lenders referred to below.
WITNESSETH:
WHEREAS, pursuant to that certain Third Amended and Restated Credit
Agreement, dated as of April __, 2002 (as the same has been, and as the same
may be further, amended, restated, supplemented or otherwise modified from time
to time, and including any agreement to the extent refinancing, in whole or in
part, the obligations thereunder, the "Credit Agreement") with AHL Services,
Inc., a Georgia corporation ("AHL"), Xxxxxxxxxxx, Inc., a Georgia corporation
("Xxxxxxxxxxx"), Xxxxxxxxxxx Holdings Limited ("U.S. Holdings"), ADI Alpha
Holding GmbH, a German limited liability company ("ADI Alpha"), Tuja Zeitarbeit
GmbH & Co. K.G., Ingolstadt, a limited partnership organized under the laws of
the Federal Republic of Germany ("Tuja"), and AHL Europe Limited, a company
incorporated under the laws of England and Wales with number 3804405 ("AHL
Europe Limited"; AHL, Argenbright, U.S. Holdings, ADI Alpha, Tuja, and AHL
Europe Limited are hereinafter collectively referred to as the "Borrowers"),
the lenders from time to time party thereto (including lenders extending credit
to refinance the current credit facility, and their assignees and successors)
collectively, the "Lenders"), and the Administrative Agent, pursuant to which
the Lenders have made available to Borrowers credit facilities in an aggregate
principal amount of approximately Eighty Nine Million Three Hundred Thousand
Dollars ($89,300,000); and
WHEREAS, Subordinator acknowledges that pursuant to certain collateral
documents (collectively, the "Senior Security Documents"; the Credit Agreement
and the Senior Security Documents are hereinafter collectively referred to as
the "Senior Debt Documents"), the Borrowers have granted a security interest in
substantially all of their assets (all assets of the Borrowers and their
Subsidiaries being collectively referred to as the "Collateral") to the
Administrative Agent to secure their obligations owing to the Lenders and the
Administrative Agent; and
WHEREAS, pursuant to that certain Settlement and Release Agreement
dated as of April , 2002 (as amended, restated, supplemented or otherwise
modified from time to time, the "Settlement Agreement") among the Subordinator
and the AHL Parties (as hereinafter defined), in consideration of the agreement
of the Subordinator to settle certain claims against the AHL Parties as more
fully described in the Settlement Agreement, the AHL Parties propose to issue
to Subordinator (a) a Subordinated Term Loan Note dated the date hereof in the
original principal amount of $10,000,000 (the "$10 Million Note"), (b) a
Subordinated Loan Note dated the date hereof in the original principal amount
of $3,000,000 (the "$3 Million Note"), (c) a Subordinated Interest Advance Note
dated the date hereof providing for the making of advances by the Subordinator
to make payments of
accrued and unpaid interest with respect to the $10 Million Note, and (d) a
Subordinated Interest Advance Note dated the date hereof providing for the
making of advances by the Subordinator to make payments of accrued and unpaid
interest with respect to the $3 Million Note (collectively, the "Subordinated
Notes"). The Settlement Agreement, the Subordinated Notes, the Security
Agreements and Stock Pledge Agreements related thereto and all other documents
or instruments executed and delivered in connection therewith are collectively
referred to as the "Subordinated Debt Documents"; and
WHEREAS, pursuant to the terms of the Settlement Agreement, the AHL
Parties have agreed to secure their obligations under the Subordinated Notes by
granting a second priority security interest in the Collateral in favor of the
Subordinator; and
WHEREAS, pursuant to the terms and conditions of the Credit Agreement,
the Borrowers may not issue the Subordinated Notes or grant a security interest
in the Collateral in favor of the Subordinator without the prior written
consent of the Lenders and the Administrative Agent; and
WHEREAS, the Administrative Agent and the Lenders have required, as a
condition precedent to giving their consent to the issuance of the Subordinated
Notes and to the granting of the liens and security interests securing the
Subordinated Notes, that Subordinator execute this Subordination Agreement
subordinating (a) in right of payment and claim, the indebtedness of the AHL
Parties to Subordinator under the Subordinated Notes to the indebtedness of
Borrowers to the Lenders and the Administrative Agent, and (b) subordinating
the liens and security interests in certain of the Collateral in favor of the
Subordinator to the liens and security interests in favor of the Administrative
Agent; and
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged by Subordinator, Subordinator hereby agrees with the
Administrative Agent as follows:
1. DEFINITIONS. All capitalized terms used herein and not
expressly defined herein shall have the respective meanings given to such terms
in the Credit Agreement.
"AHL Parties" means, collectively, AHL, U.S. Holdings, Xxxxxxxxxxx and
AHL Europe Limited.
"Senior Indebtedness" means all obligations, liabilities, and
indebtedness of Borrowers to the Lenders and the Administrative Agent arising
pursuant to or in connection with the Credit Agreement or the Loan Documents
(each as amended, restated or otherwise modified from time to time), including
without limitation all principal, interest, fees, expenses, reimbursement
claims, indemnity claims, and other indebtedness, obligations and liabilities,
whether now existing or hereafter arising or acquired, outright or
conditionally, whether or not arising or accruing prior to or after the
commencement of any insolvency proceeding, and whether or not constituting an
allowed claim in any insolvency proceeding, together with any and all
indebtedness incurred to refinance or replace any Senior Indebtedness;
provided, however, that the total principal amount of Senior Indebtedness to
which the Subordinated Obligations are subordinated pursuant to this Agreement
62
shall be limited to no more than (i) $118,000,000, until the total Commitments
and the outstanding principal amount of Loans have been reduced to $80,000,000,
and (ii) $80,000,000 at all times after such reduction.
"Subordinated Obligations" means all obligations, liabilities, and
indebtedness of the AHL Parties to the Subordinator under, arising from or in
connection with the Subordinated Debt Documents (each as amended, restated or
otherwise modified from time to time), including without limitation all
principal, interest, fees, expenses other claims or indebtedness, due or not
due, direct or indirect, absolute or contingent, whether now existing or
hereafter arising under or in respect of the Subordinated Debt Documents.
Subordinated Obligations shall expressly exclude any obligations or liabilities
arising in respect of Excluded Claims (as defined in the Settlement Agreement).
2. SUBORDINATION OF DEBT. Except as set forth in Section 4
hereof, Subordinator will not ask for, demand, xxx for, take or receive from
the AHL Parties, by setoff or in any other manner, the whole or any part of any
Subordinated Obligations, unless and until all Senior Indebtedness has been
fully paid and the Commitment of each Lender has been terminated.
3. SUBROGATION. Except as set forth in Section 4 hereof,
Subordinator also agrees that, regardless of whether the Senior Indebtedness is
secured or unsecured, the Lenders shall be subrogated to Subordinator with
respect to Subordinator's claims against the AHL Parties in respect of the
Subordinated Obligations and Subordinator's rights, liens and security
interests, if any, in the Collateral and other assets (if any) and the proceeds
thereof until all of the Senior Indebtedness of Borrowers and their
Subsidiaries to the Lenders shall have been paid and fully satisfied.
4. PERMITTED TRANSACTIONS. Notwithstanding anything to the
contrary set forth herein, provided that (i) the Senior Indebtedness has not
matured or been accelerated, and (ii) no AHL Party is the subject of a
bankruptcy or insolvency case or proceeding, (a) the AHL Parties may make, and
Subordinator may accept and enforce (other than by recourse to the lien and
security interests granted to Subordinator in Collateral pursuant to the
Subordinated Debt Documents), payments of principal and interest on the
Subordinated Notes (including, without limitation, voluntary and mandatory
prepayments) to the extent and in an amount not exceeding twenty percent (20%)
of the first $30,000,000 of net cash proceeds received by the AHL Parties, or
any of them, from any equity issuance or other financing transaction (excluding
the portion of the net proceeds from any financing transaction which proceeds
are used to partially or fully refinance or repay obligations arising under the
Credit Agreement), with such mandatory prepayment(s) to be applied pro rata to
the remaining scheduled payments of principal owing in respect of the
Subordinated Notes, and (b) the AHL Parties may make, and Subordinator may
accept and enforce (other than by recourse to the lien and security interests
granted to Subordinator in Collateral pursuant to the Subordinated Debt
Documents), any and all payments of interest in respect of the Subordinated
Notes, but only to the extent that such interest payments are made exclusively
out of contemporaneous cash advances from the Subordinator to the AHL Parties.
63
5. SECURITY.
(a) Lien Priority. The Subordinator and the
Administrative Agent agree at all times, whether before, after or during the
pendency of any bankruptcy, reorganization or other insolvency proceeding and
notwithstanding the priorities which would ordinarily result from the order of
granting of any lien or security interest, or the order of filing or recording
of any mortgage or financing statements or any other matter, that the
Administrative Agent's liens and security interests in the Collateral shall
constitute a first priority lien on and security interest in such Collateral
and the Subordinator's liens and security interests in such Collateral shall
constitute a second priority lien and security interest.
(b) Enforcement. Subordinator agrees that
(i) it will not take any action to repossess,
replevy, attach, garnish, levy upon, collect the proceeds of,
foreclose its liens on or security interests in, sell or otherwise
dispose of the Collateral, or any portion thereof, whether by judicial
action, under power of sale, by self-help repossession, by setoff, by
notification to account obligors of any Borrower or otherwise, unless
and until all of the Senior Indebtedness have been paid in full and
all financing arrangements between Lenders and the Administrative
Agent, on one hand, and Borrowers, on the other hand, have been
terminated in writing; and
(ii) The Administrative Agent shall have the
exclusive right to collect, sell, transfer, liquidate or otherwise
dispose of the Collateral as provided in the Senior Debt Documents in
the manner deemed appropriate by the Administrative Agent without
regard to Subordinator's liens and security interests therein, and
Subordinator will not hinder Administrative Agent's actions in
enforcing its remedies with respect to the Collateral.
(c) Release of Liens and Security Interests.
Subordinator agrees to release (or to subordinate, if requested by the
Administrative Agent) its lien on and security interest in the Collateral, or
on any portion thereof, upon any sale or other disposition thereof if the
Administrative Agent agrees to release (or to subordinate, as applicable) its
lien and/or security interest in such Collateral or if the net cash proceeds of
such sale or disposition are being applied to the payment of the Senior
Indebtedness; provided, however, upon the release of such liens or security
interests, the lien and the security interest granted to the Subordinator
shall, subject to all of the provisions of this Agreement (including the
provision of subordination to the Administrative Agent's lien), continue in the
net proceeds of such Collateral if and to the extent such net proceeds are not
applied to the Senior Indebtedness in accordance with the terms of the Senior
Debt Documents. Subordinator hereby grants to the Administrative Agent an
irrevocable power of attorney to execute and deliver any such release required
of Subordinator hereunder.
(d) Waiver. To the maximum extent permitted by
applicable law, Subordinator hereby waives any and all rights it may have as a
junior secured creditor of the AHL Parties against the Administrative Agent
arising out of the Collateral. Without limiting the generality of the
foregoing, Subordinator hereby waives, to the maximum extent permitted by
applicable law, any and all rights it may have to: (i) notice of the sale or
other disposition by the Administrative Agent of any
64
of the Collateral; (ii) require that the Administrative Agent act in a
commercially reasonable manner; (iii) require that the sale or other
disposition of any or all of the Collateral by the Administrative Agent be
commercially reasonable; (iv) object to any non-compliance by the
Administrative Agent with the terms of Part 6 of Article 9 of the Uniform
Commercial Code, as effect in any jurisdiction, or of any other law applicable
to the exercise by the Administrative Agent of their rights and remedies under
the Senior Debt Documents; (v) require the marshaling of assets of the AHL
Parties or the right to direct the application of any proceeds received from
the Collateral or received in payment of any of the Senior Indebtedness; and
(vi) require that the Administrative Agent first proceed against any security
given for the Senior Indebtedness or against any guarantor of any of the Senior
Indebtedness. The Subordinator hereby further acknowledges and agrees that the
liens and security interests in the Collateral granted by the AHL Parties in
favor of Subordinator are intended solely to permit the Subordinator to protect
and preserve its rights and positions against the AHL Parties vis-a-vis general
unsecured trade creditors of the AHL Parties and that the waivers contained in
this subsection (d) are a material inducement to the Lenders and the
Administrative Agent to consent to the issuance of the Subordinated Notes and
to the transactions contemplated thereby.
(e) Receipt of Monies by Subordinator. Subordinator
agrees that should it receive any moneys from the sale, liquidation, casualty
or other disposition of, or as a result of, any lien on or security interest in
the Collateral at any time prior to payment in full of all Senior Indebtedness,
it will (unless then otherwise restricted by law) hold the same in trust for
the Administrative Agent and promptly pay over the same to the Administrative
Agent in precisely the form received (except for endorsement or assignment by
Subordinator where necessary), for application on any of the Senior
Indebtedness, and, until so delivered, the same shall be held in trust by
Subordinator as the property of the Administrative Agent. In the event of the
failure of Subordinator to make any such endorsement or assignment to the
Administrative Agent, the Administrative Agent or any of its officers or
employees, is hereby irrevocably authorized to make the same.
(f) Limitation on Security Interest. (i) Subordinator
acknowledges and agrees with the Administrative Agent that, if and to the
extent that any Securicor Claim (as defined in the Settlement Agreement) is
reinstated, the maximum amount of obligations of the AHL Parties (including all
payments the Subordinator has received hereafter) secured by the Subordinated
Debt Documents at any time shall not exceed the sum of (1) the amount which
would have been payable under the Subordinated Debt Documents at such time if
the Subordinated Notes had been enforced in accordance with their terms and
such Securicor Claims had not been so reinstated; and (2) any and all costs,
expenses, and other amounts expended or incurred by the Subordinator to pursue
or assert such reinstated Securicor Claims; and (ii) Subordinator further
agrees that (I) no Collateral will secure the Subordinated Obligations unless
such Collateral also secures the Senior Indebtedness, and (II) the Collateral
granted for the benefit of Subordinator pursuant to the Subordinated Debt
Documents shall only secure the Subordinated Obligations (it being understood
that the lien in the Collateral pursuant to the Settlement Documents shall not
apply to any indebtedness or liabilities of the AHL Parties or the Subordinator
except for the Subordinated Obligations).
6. SUBORDINATED OBLIGATIONS OWED ONLY TO SUBORDINATOR.
Subordinator warrants and represents that Subordinator has not previously
assigned any interest in the Subordinated
65
Obligations or the Subordinated Notes to any party, that no party owns an
interest in the Subordinated Obligations or the Subordinated Notes other than
Subordinator, and that the entire Subordinated Obligations are owing to the
Subordinator, subject only to the rights of the Lender hereunder.
7. PRIORITY ON DISTRIBUTION. In the event of any distribution,
division or application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets of the
Borrowers or their Subsidiaries or readjustment of the obligations and
indebtedness of the Borrowers or any of their Subsidiaries, whether by reason
of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding involving the
readjustment of all or any of the Subordinated Obligations, or the application
of the assets of the Borrowers or any of their Subsidiaries to the payment or
liquidation thereof, or the dissolution or other winding up of any Borrower's
or such Subsidiary's business, or upon the sale or other disposition of all or
substantially all of any Borrower's or its Subsidiaries' assets or of all of
the issued and outstanding shares of capital stock of any Borrower or any
Subsidiary, then, and in any such event, the Lenders shall be entitled to
receive payment in full of any and all of the Senior Indebtedness then owing to
them prior to the payment of all or any part of the Subordinated Obligations,
and any payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or deliverable upon or
with respect to any or all of the Subordinated Obligations shall be paid or
delivered directly to the Administrative Agent, for the benefit of the Lenders,
for application on any of the Senior Indebtedness owing to the Administrative
Agent and the Lenders, due or not due, until such Senior Indebtedness shall
have first been fully paid and satisfied.
8. RIGHTS OF SUBORDINATOR, LENDERS AND ADMINISTRATIVE AGENT IN
BANKRUPTCY. In the event any Borrower or any of its Subsidiaries becomes a
debtor in any voluntary or involuntary bankruptcy proceeding, the Subordinator
shall have the following rights:
(a) Subject to the Administrative Agent's discretion in
exercising its rights under Section 3, the Subordinator may file one or more
proofs of claim in such bankruptcy with respect to the Subordinated
Obligations, subject to the terms of Section 7 above, and the Subordinator may
appear and be heard on any matter relating to its claim in any bankruptcy
proceeding, but shall not seek to assert rights contrary to the provisions of
this Agreement. The Subordinator irrevocably agrees that it shall not vote in
favor of any plan that would cause the Subordinator to receive any payment
prior to the payment in full of the Senior Indebtedness in cash.
(b) If Subordinator shall fail to file a proof of claim
no sooner than thirty (30) days prior to the expiration of the time period
within which creditors must file their proofs of claim or take any other action
advisable to preserve or collect its claims against the AHL Parties and their
Subsidiaries (or their representatives) or within thirty (30) days of a request
from the Administrative Agent to take such action, the Subordinator agrees that
the Administrative Agent may file such claim or take such action in
Subordinator's place and stead, and as its attorney-in-fact, and the
Subordinator hereby irrevocably appoints the Administrative Agent as its
attorney-in-fact for such purposes for the term of this Agreement.
66
(c) Subordinator agrees that the Administrative Agent
and the Lenders, or any one of them, may consent to the use of cash collateral
or provide financing to the Borrowers and their Subsidiaries (under Section 363
or Section 364 of the Bankruptcy Code or otherwise) on such terms and
conditions and in such amounts as the Administrative Agent, in its sole
discretion, may decide and that, in connection with such cash collateral usage
or such financing, the Borrowers or their subsidiaries (or a trustee appointed
for the estate thereof) may grant to the Administrative Agent or the Lenders
liens and security interests upon all assets of the Borrowers and their
Subsidiaries, which liens and security interests (i) shall secure payment of
all Senior Indebtedness (whether such Senior Indebtedness arises prior to the
filing of the petition for relief or arises thereafter); and (ii) shall be
superior in priority to the liens and security interests held by Subordinator.
Subordinator agrees that it will not object to or oppose a sale or other
disposition of any assets of the Borrowers and their Subsidiaries (or any
portion thereof) free and clear of security interests, liens or other claims of
Subordinator under Section 363 of the Bankruptcy Code or any other provision of
the Bankruptcy Code if the Administrative Agent has consented to such sale or
disposition of such assets. The Subordinator agrees not to assert any right it
may have to "adequate protection" of its interest in such security in any
insolvency proceeding and agrees that it will not seek to have the automatic
stay lifted with respect to such security, without the prior written consent of
the Administrative Agent. The Subordinator waives any claim it may now or
hereafter have arising out of the Administrative Agent's or the Banks'
election, in any proceeding instituted under Chapter 11 of the Bankruptcy Code,
of the application of Section 1111(b)(2) of the Bankruptcy Code, and/or any
borrowing or grant of a security interest under Section 364 of the Bankruptcy
Code by Borrower, as debtor in possession. The Subordinator agrees not to
initiate or prosecute or encourage any other person to initiate or prosecute
any claim, action or other proceeding (i) challenging the enforceability of any
Senior Indebtedness, (ii) challenging the enforceability of any lien or
security interest of the Administrative Agent or (iii) asserting any claims
which the Borrower or its subsidiaries may hold with respect to the
Administrative Agent or the Lenders. The Administrative Agent may vote the
claims of the Subordinator in connection with any plan of the Borrowers and
their Subsidiaries in any insolvency proceeding.
9. PAYMENTS RECEIVED BY SUBORDINATOR. Except as provided in
Section 4 hereof, should any payment or distribution or security or instrument
or proceeds thereof be received by Subordinator upon or with respect to the
Subordinated Obligations prior to the satisfaction of all of the Senior
Indebtedness owing to the Lenders and the Administrative Agent, Subordinator
shall receive and hold the same in trust, as trustee, for the benefit of the
Administrative Agent and the Lenders and shall forthwith deliver the same to
the Administrative Agent in precisely the form received (except for endorsement
or assignment by Subordinator where necessary), for application on any of the
Senior Indebtedness, due or not due, and, until so delivered, the same shall be
held in trust by the Subordinator as the property of the Administrative Agent
and the Lenders. In the event of the failure of the Subordinator to make any
such endorsement or assignment to the Administrative Agent, the Administrative
Agent or any of its respective officers or employees, is hereby irrevocably
authorized to make the same.
10. INSTRUMENT LEGEND. Any instruments evidencing any of the
Subordinated Obligations, or any portion thereof, including, without
limitation, the Subordinated Notes, will, on the
67
date hereof or promptly hereafter, either expressly provide by its terms or be
inscribed with a legend conspicuously indicating that payment thereof is
subordinated to the claims of the Lenders and the Administrative Agent pursuant
to the terms of this Agreement, and promptly upon the demand of the
Administrative Agent, any such instrument shall be endorsed and delivered to
the Administrative Agent in order to secure the rights of the Lenders and the
Administrative Agent hereunder if reasonably necessary for the exercise by
Lenders and the Administrative Agent of its rights under this Agreement. Any
instrument evidencing any of the Subordinated Obligations, or any portion
thereof, which is hereafter executed by any Borrower, will, on the date
thereof, so expressly provide or be inscribed with the aforesaid legend.
11. TRANSFER OF CLAIMS. Subordinator agrees not to assign or
transfer to others any claims Subordinator has or may have against any Borrower
in respect of the Subordinated Obligations while any of the Senior Indebtedness
remains unpaid unless such assignment or transfer is made expressly subject to
this Agreement.
12. TERM. This Agreement shall constitute a continuing agreement
of subordination, and the Lenders and the Administrative Agent may continue,
without notice to Subordinator, to lend monies, extend credit and make other
accommodations to or for the account of the Borrowers on the faith hereof, and
this Agreement shall be irrevocable by Subordinator until the earlier of (a)
the date that the Senior Indebtedness of Borrowers to the Lenders and the
Administrative Agent shall have been finally paid and satisfied in full and all
financing arrangements between Borrowers and the Lenders and the Administrative
Agent have been terminated; and (b) that date that all the Subordinated
Obligations shall have been paid and satisfied in full from payments permitted
by Section 4 hereof; provided, however, that this Agreement shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any Senior Indebtedness or Subordinated Obligations is
rescinded or must otherwise be restored by the Lenders and the Administrative
Agent, Subordinator or any other Person upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Borrower and/or any of its
Subsidiaries or otherwise. Notwithstanding anything to the contrary contained
in this Section 12 or anywhere else in this Agreement, the Subordinator shall
not be required to return any amounts received by it, to the extent that the
payments of such amounts by the AHL Parties to Subordinator were permitted
under Section 4 hereof at the time made.
13. ADDITIONAL AGREEMENTS AMONG THE LENDERS, THE ADMINISTRATIVE
AGENT AND BORROWER.
(a) The Lenders and the Administrative Agent, at any time and
from time to time, may enter into such agreement or agreements with Borrowers
or any of their Subsidiaries as the Lenders and the Administrative Agent may
deem proper, extending the time of payment of or renewing or otherwise altering
the terms of all or any of the Senior Indebtedness of Borrowers, or affecting
the security underlying any or all of the Senior Indebtedness of Borrowers, or
may exchange, sell, release, surrender or otherwise deal with any such
security, without in any way impairing or affecting this Agreement hereby. The
Subordinator hereby waives any right it may have under applicable law to revoke
this Agreement or any of the provisions under this Agreement.
68
(b) The parties hereto hereby acknowledge and agree that Senior
Indebtedness shall include any indebtedness that is incurred by the AHL Parties
to refinance or replace the Senior Indebtedness.
(c) The Subordinator agrees that it will not amend or otherwise
modify any Subordinated Debt Document without the prior written consent of the
Administrative Agent.
14. SUBORDINATOR'S WAIVERS. All of the Senior Indebtedness and
the Lenders' permission of the AHL Parties to issue the Subordinated Notes
shall be deemed to have been made or incurred in reliance upon this Agreement,
and Subordinator expressly waives all notice of the acceptance by the Lenders
and the Administrative Agent of the subordination and other provisions of this
Agreement, all other notices whatsoever, and reliance by the Lenders and the
Administrative Agent upon the subordination and other agreements as herein
provided. Subordinator agrees that: (a) the Lenders and the Administrative
Agent have made no warranties or representations with respect to the due
execution, legality, validity, completeness or enforceability of the Credit
Agreement among the Lenders, the Administrative Agent and Borrowers or the
other Loan Documents, or the collectibility of the Senior Indebtedness; (b) the
Administrative Agent and the Lenders shall be entitled to manage and supervise
the loans and other extensions of credit from the Lenders and the
Administrative Agent to the Borrowers in accordance with their usual practices,
modified from time to time as it deems appropriate under the circumstances,
without regard to the existence of any rights that Subordinator may now or
hereafter have in or to any of the assets of Borrowers; and (c) neither the
Lenders nor the Administrative Agent shall have any liability to the
Subordinator for, and Subordinator waives any claim which Subordinator may now
or hereafter have against the Lenders and the Administrative Agent, arising out
of any and all actions which the Lenders and/or the Administrative Agent, in
good faith, take or omit to take (including, without limitation, actions with
respect to the creation, perfection or continuation of liens or security
interests in the Collateral, actions with respect to the occurrence of a
Default or an Event of Default, actions with respect to the foreclosure upon,
sale of, release of, depreciation of or failure to realize upon, any of the
Collateral and actions with respect to the collection of any claim for all or
any part of the Senior Indebtedness from any account debtor, guarantor or any
other party) with respect to the Credit Agreement or the other Loan Documents
or to the collection of the Senior Indebtedness or the valuation, use,
protection or release of the Collateral.
15. SENIOR CREDITORS' WAIVERS. No waiver shall be deemed to be
made by the Lenders or the Administrative Agents of any of their rights
hereunder, unless the same shall be in writing signed by the Administrative
Agent and each waiver, if any, shall be a waiver only with respect to the
specific instance involved and shall in no way impair the rights of the Lenders
and the Administrative Agent or the obligations of the Subordinator to the
Lenders and the Administrative Agent in any other respect at any other time.
16. APPLICATION OF PAYMENTS. Subordinator hereby agrees that all
payments received by the Lenders and/or the Administrative Agent from Borrowers
may be applied and reapplied, in whole or in part, to any of the Senior
Indebtedness, as the Lenders and the Administrative Agent, in their sole
discretion, deem appropriate.
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17. REPRESENTATIONS AND WARRANTIES. Subordinator hereby
represents and warrants to the Lenders and the Administrative Agent as follows:
(a) Subordinator is a corporation legally and validly
organized under the laws of the jurisdiction of its incorporation;
(b) Subordinator has all requisite power and authority
to execute, deliver and perform this Agreement and has taken all corporate
action necessary for the execution, delivery and performance of this Agreement;
and
(c) This Agreement constitutes the valid and legally
binding obligation of the Subordinator, enforceable in accordance with its
terms (except that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights generally and by general principles of equity,
whether raised in a proceeding at law or in equity), and no consent or approval
of any other party and no consent, license, approval or authorization of any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement.
18. GOVERNING LAW. This Agreement has been delivered and accepted
in and shall be deemed to have been made in New York, New York and shall be
interpreted, and the rights and liabilities of the parties hereto determined,
in accordance with the laws and decisions of the State of New York without
regard to its conflicts of law rules.
19. NO THIRD PARTY BENEFICIARY. This Agreement shall inure to the
sole benefit of the Lenders, the Administrative Agent, their successors and
assigns and no other Person shall be entitled to rely thereon.
20. CONSENT TO JURISDICTION. The parties hereto consent to the
jurisdiction of any state or federal court located in the State of New York or
in the State of Georgia. The parties hereby waive trial by jury, any objection
to any action instituted hereunder based on forum non conveniens, and any
objection to the venue or any action instituted hereunder.
21. PARTIES. This Agreement shall be binding upon, and shall
inure to the benefit of, the Lenders, the Administrative Agent, the
Subordinator and their respective successors and assigns. The term "Borrowers"
as used herein shall also refer to the successors and assigns of Borrowers,
including, without limitation, a receiver, trustee, custodian, debtor in
possession, or corporation created by, or surviving, a merger or acquisition
transaction with Borrowers.
22. SECTION TITLES. The section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which, taken together, shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
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24. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
25. CERTAIN PERFECTION MATTERS. Subordinator has appointed the
Administrative Agent as Subordinator's bailee for perfection purposes with
respect to such instruments and certificated securities that constitute part of
the Collateral that may, from time to time, be in the possession of the
Administrative Agent. The Administrative Agent hereby accepts such appointment
as bailee without any liability or recourse to the Administrative Agent with
respect to such role as bailee. Subordinator hereby releases, to the extent
permitted under the applicable law, the Administrative Agent, and the
Subordinator holds the Administrative Agent harmless for all acts and omissions
respect to such Collateral in connection with the Administrative Agent acting
as bailee for Subordinator.
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IN WITNESS WHEREOF, this instrument has been signed and sealed by the
undersigned as of the day and year first above written.
SUBORDINATOR:
SECURICOR PLC
By:
--------------------------------------
Name:
Title:
ADMINISTRATIVE AGENT:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
--------------------------------------
Name:
Title:
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EXHIBIT 6
FORM OF SECURITY AGREEMENT
THIS AGREEMENT (this "Security Agreement"), dated as of April 12,
2002, is entered into by and between ________, ("Grantor"), and SECURICOR PLC,
a company organized under the laws of England & Wales ("Secured Party").
WITNESSETH:
WHEREAS, Grantor, certain of its affiliates and Secured Party are
parties to that certain Settlement and Release Agreement dated April 12, 2002
(the "Settlement Agreement"), pursuant to which, among other things, the
Secured Party has agreed to release certain claims against the Grantor and such
affiliates, in consideration for which Grantor and such affiliates have agreed
to execute and deliver to Secured Party (i) that certain Subordinated Term Loan
Note, dated the date hereof, in the original principal amount of $10,000,000
(the "$10 Million Note"); (ii) that certain Subordinated Interest Advance Note,
dated the date hereof, providing for the making of advances by the Secured
Party to make payments of accrued and unpaid interest in respect of the $10
Million Note (the "$10 Million Interest Advance Note"); (iii) that certain
Subordinated Term Loan Note, dated the date hereof, in the original principal
amount of $3,000,000 (the "$3 Million Note"); (iv) that certain Subordinated
Interest Advance Note, dated the date hereof, providing for the making of
advances by the Secured Party to make payments of accrued and unpaid interest
in respect of the $3 Million Note (the "$3 Million Interest Advance Note"; the
$10 Million Note, the $10 Million Interest Advance Note, the $3 Million Note
and the $3 Million Interest Advance Note are hereinafter collectively referred
to as the "Notes"); and
WHEREAS, in further consideration of the Secured Party's agreement to
enter into the Settlement Agreement and to release certain claims against the
Grantor and its affiliates, the Grantor has agreed to grant a security interest
in substantially all of the Grantor's personal property to Secured Party as
security for all of Grantor's obligations under the Notes, as well as for any
Securicor Claims (as defined in the Settlement Agreement), to the extent
reinstated pursuant to the terms of the Settlement Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
I.1. DEFINED TERMS.
The following terms shall have the following respective meanings:
"Account Debtor" means each Person obligated in any way on or in connection
with an Account, Chattel Paper or General Intangibles (including a payment
intangible).
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"Accounts" means all of Grantor's now owned or hereafter acquired or
arising accounts, as defined in the UCC, including any rights to payment for
the sale or lease of goods or rendition of services, whether or not they have
been earned by performance.
"Chattel Paper" means all of Grantor's now owned or hereafter acquired
chattel paper, as defined in the UCC, including electronic chattel paper.
"Deposit Accounts" means all "deposit accounts" as such term is
defined in the UCC, now or hereafter held in the name of Grantor.
"Documents" means all documents as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title, now
owned or hereafter acquired by Grantor.
"Equipment" means all of Grantor's now owned and hereafter acquired
machinery, equipment, furniture, furnishings, fixtures, and other tangible
personal property (except Inventory), including embedded software, motor
vehicles with respect to which a certificate of title has been issued,
aircraft, dies, tools, jigs, molds and office equipment, as well as all of such
types of property leased by Grantor and all of Grantor's rights and interests
with respect thereto under such leases (including, without limitation, options
to purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
foregoing, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"Event of Default" means any of the following:
(i) an Event of Default under, and as such term is defined in,
any of the Notes; or
(ii) the occurrence of a Repudiation under, and as such term is
defined in, the Settlement Agreement; or
(iii) the breach by the Grantor of any representation, warranty or
covenant contained in this Security Agreement.
"General Intangibles" means all of Grantor's now owned or hereafter
acquired general intangibles, choses in action and causes of action and all
other intangible personal property of Grantor of every kind and nature (other
than Accounts), including, without limitation, all contract rights, payment
intangibles, Proprietary Rights, corporate or other business records,
inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to Grantor in
connection with the termination of any employee benefit plan or any rights
thereto and any other amounts payable to Grantor from any employee benefit
plan, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance
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and any proceeds thereof, proceeds of insurance covering the lives of key
employees on which Grantor is beneficiary, rights to receive dividends,
distributions, cash, Instruments and other property in respect of or in
exchange for pledged equity interests or Investment Property and any letter of
credit, guarantee, claim, security interest or other security held by or
granted to Grantor.
"Goods" means all "goods" as defined in the UCC, now owned or
hereafter acquired by Grantor, wherever located, including embedded software to
the extent included in "goods" as defined in the UCC, manufactured homes,
standing timber that is cut and removed for sale and unborn young of animals.
"Instruments" means all instruments as such term is defined in the
UCC, now owned or hereafter acquired by Grantor.
"Inventory" means all of Grantor's now owned and hereafter acquired
inventory, goods and merchandise, wherever located, to be furnished under any
contract of service or held for sale or lease, all returned goods, raw
materials, work-in-process, finished goods (including embedded software), other
materials and supplies of any kind, nature or description which are used or
consumed in Grantor's business or used in connection with the packing,
shipping, advertising, selling or finishing of such goods, merchandise, and all
documents of title or other Documents representing them.
"Investment Property" means all of Grantor's right title and interest
in and to any and all: (a) securities, whether certificated or uncertificated;
(b) securities entitlements; (c) securities accounts; (d) commodity contracts;
and (e) commodity accounts.
"Lien" means any mortgage, pledge, encumbrance, charge, security
interest, lien, assignment or other preferential arrangement of any nature
whatsoever, including any conditional sale agreement or other title retention
agreement.
"Letter-of-Credit Rights" means "letter-of-credit rights" as such term
is defined in the UCC, now owned or hereafter acquired by Grantor, including
rights to payment or performance under a letter of credit, whether or not
Grantor, as beneficiary, has demanded or is entitled to demand payment or
performance.
"Obligations" means all of the obligations of the Grantor to perform,
and/or to pay amounts owing, under the Notes, this Security Agreement, each of
the agreements, documents and instruments executed from time to time in
connection with the Notes and/or this Security Agreement, and any and all
obligations of the Grantor arising in connection with any Securicor Claim (as
defined in the Settlement Agreement), to the extent that such Securicor Claim
is reinstated pursuant to the terms of the Settlement Agreement.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, governmental authority, or any other entity.
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"Proprietary Rights" means all of Grantor's now owned and hereafter
arising or acquired: licenses, franchises, permits, patents, patent rights,
copyrights, works which are the subject matter of copyrights, trademarks,
service marks, trade names, trade styles, patent, trademark and service xxxx
applications, and all licenses and rights related to any of the foregoing, and
all other rights under any of the foregoing, all extensions, renewals,
reissues, divisions, continuations, and continuations-in-part of any of the
foregoing, and all rights to xxx for past, present and future infringement of
any of the foregoing.
"Senior Credit Facility" means the credit facilities provided to the
Grantor and its affiliates pursuant to (a) that certain Third Amended and
Restated Credit Agreement dated as of April 12, 2002, by and among the Grantor
and certain of its affiliates, as borrowers, the financial institutions from
time to time party thereto, as lenders, and Wachovia Bank, National Association
(or any successor thereto), as agent for such lenders, as such agreement has
been, and as the same may be further, amended, restated, supplemented,
extended, renewed, or otherwise modified from time to time, or (b) any
substitute or replacement senior credit facility to which the Grantor becomes a
party, the proceeds of which are used to refinance the Grantor's obligations
and/or commitments that replace commitments under the credit facility referred
to in clause (a) of this definition or a previous substitute or replacement
senior credit facility under this clause (b).
"Software" means all "software" as such term is defined in the UCC,
now owned or hereafter acquired by Grantor, other than software embedded in any
category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.
"Supporting Obligations" means all supporting obligations as such term
is defined in the UCC.
"UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of Georgia or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests.
"Uniform Commercial Code jurisdiction" means any jurisdiction that has
adopted "Revised Article 9" of the UCC on or after July 1, 2001.
All other undefined terms contained in this Security Agreement, unless
the context indicates otherwise, have the meanings provided for by the UCC to
the extent the same are used or defined therein.
II.2. GRANT OF SECURITY INTEREST.
1.(A) AS SECURITY FOR ALL OBLIGATIONS, GRANTOR HEREBY GRANTS TO
SECURED PARTY A CONTINUING SECURITY INTEREST IN, LIEN ON, ASSIGNMENT OF AND
RIGHT OF SET-OFF AGAINST, ALL OF THE ASSETS OF GRANTOR, INCLUDING, WITHOUT
LIMITATION, THE FOLLOWING PROPERTY AND ASSETS OF GRANTOR, WHETHER NOW OWNED OR
EXISTING OR HEREAFTER ACQUIRED OR ARISING, REGARDLESS OF WHERE LOCATED:
(i) all Accounts;
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(ii) all Inventory;
(iii) all contract rights;
(iv) all Chattel Paper;
(v) all Documents;
(vi) all Instruments;
(vii) all Supporting Obligations and Letter-of-Credit Rights;
(viii) all General Intangibles (including payment intangibles and
Software);
(ix) all Goods;
(x) all Equipment;
(xi) all Investment Property;
(xii) all money, cash, cash equivalents, securities and other
property of any kind of Grantor held directly or indirectly
by Secured Party;
(xiii) all of Grantor's Deposit Accounts, credits, and balances with
and other claims against any financial institution with which
Grantor maintains deposits;
(xiv) all books, records and other property related to or referring
to any of the foregoing, including books, records, account
ledgers, data processing records, computer software and other
property and General Intangibles at any time evidencing or
relating to any of the foregoing; and
(xv) all accessions to, substitutions for and replacements,
products and proceeds of any of the foregoing, including, but
not limited to, proceeds of any insurance policies, claims
against third parties, and condemnation or requisition
payments with respect to all or any of the foregoing.
All of the foregoing, together with all equity interests in
Subsidiaries pledged to Secured Party and all other property of Grantor in
which Secured Party may at any time be granted a lien or security interest as
collateral for the Obligations, is herein collectively referred to as the
"Collateral."
(b) All of the Obligations shall be secured by all of the Collateral.
III.3. PERFECTION AND PROTECTION OF SECURITY INTEREST.
1.(A) GRANTOR SHALL, AT ITS EXPENSE, PERFORM ALL STEPS
REASONABLY REQUESTED BY SECURED PARTY AT ANY TIME TO PERFECT, MAINTAIN,
PROTECT, AND ENFORCE SECURED PARTY'S SECURITY INTEREST IN THE COLLATERAL,
INCLUDING: (I) EXECUTING AND FILING, OR AUTHORIZING THE EXECUTION AND FILING
OF, FINANCING OR CONTINUATION STATEMENTS, AND AMENDMENTS THERETO, IN FORM AND
77
SUBSTANCE REASONABLY SATISFACTORY TO SECURED PARTY; AND (II) TAKING SUCH OTHER
STEPS REASONABLY REQUESTED BY SECURED PARTY TO MAINTAIN AND PROTECT SECURED
PARTY'S SECURITY INTEREST IN THE COLLATERAL.
2.(B) UNLESS SECURED PARTY SHALL OTHERWISE CONSENT IN WRITING
(WHICH CONSENT MAY BE REVOKED), GRANTOR SHALL DELIVER TO SECURED PARTY ALL
COLLATERAL CONSISTING OF NEGOTIABLE DOCUMENTS, CERTIFICATED SECURITIES
(ACCOMPANIED BY STOCK TRANSFER POWERS EXECUTED IN BLANK), CHATTEL PAPER AND
INSTRUMENTS PROMPTLY AFTER GRANTOR RECEIVES THE SAME; PROVIDED, HOWEVER, THAT
GRANTOR SHALL NOT BE OBLIGATED TO TAKE ANY SUCH ACTION TO THE EXTENT THAT DOING
SO WOULD BE PROHIBITED BY THE TERMS OF THE SENIOR CREDIT FACILITY.
3.(C) GRANTOR SHALL, UPON THE REQUEST OF THE SECURED PARTY, USE ITS
BEST EFFORTS TO OBTAIN WAIVERS OR SUBORDINATIONS OF LIENS FROM LANDLORDS AND
MORTGAGEES, AND GRANTOR SHALL IN ALL INSTANCES OBTAIN SIGNED ACKNOWLEDGEMENTS
OF SECURED PARTY'S LIENS FROM BAILEES HAVING POSSESSION OF ANY COLLATERAL THAT
THEY HOLD FOR THE BENEFIT OF SECURED PARTY; PROVIDED, HOWEVER, THAT GRANTOR
SHALL NOT BE OBLIGATED TO TAKE ANY SUCH ACTION TO THE EXTENT THAT DOING SO
WOULD BE PROHIBITED BY THE TERMS OF THE SENIOR CREDIT FACILITY.
4.(D) PROMPTLY FOLLOWING SECURED PARTY'S REQUEST THEREFOR, GRANTOR
SHALL OBTAIN AUTHENTICATED CONTROL AGREEMENTS FROM EACH ISSUER OF
UNCERTIFICATED SECURITIES, SECURITIES INTERMEDIARY, OR COMMODITIES INTERMEDIARY
ISSUING OR HOLDING ANY FINANCIAL ASSETS OR COMMODITIES TO OR FOR GRANTOR;
PROVIDED, HOWEVER, THAT GRANTOR SHALL NOT BE OBLIGATED TO TAKE ANY SUCH ACTION
TO THE EXTENT THAT DOING SO WOULD BE PROHIBITED BY THE TERMS OF THE SENIOR
CREDIT FACILITY.
5.(E) IF GRANTOR IS OR BECOMES THE BENEFICIARY OF A LETTER OF
CREDIT, GRANTOR SHALL PROMPTLY NOTIFY SECURED PARTY THEREOF AND, IF REQUESTED
BY THE SECURED PARTY, ENTER INTO A TRI-PARTY AGREEMENT WITH SECURED PARTY AND
THE ISSUER AND/OR CONFIRMATION BANK WITH RESPECT TO LETTER-OF-CREDIT RIGHTS,
ASSIGNING SUCH LETTER-OF-CREDIT RIGHTS TO SECURED PARTY, AND DIRECTING ALL
PAYMENTS THEREUNDER TO SUCH BANK ACCOUNT AS SECURED PARTY MAY DIRECT, ALL IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO SECURED PARTY; PROVIDED, HOWEVER,
THAT GRANTOR SHALL NOT BE OBLIGATED TO TAKE ANY SUCH ACTION TO THE EXTENT THAT
DOING SO WOULD BE PROHIBITED BY THE TERMS OF THE SENIOR CREDIT FACILITY.
6.(F) GRANTOR SHALL, UPON THE REQUEST OF SECURED PARTY, TAKE
ALL STEPS NECESSARY TO GRANT SECURED PARTY CONTROL OF ALL ELECTRONIC CHATTEL
PAPER IN ACCORDANCE WITH THE CODE
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AND ALL "TRANSFERABLE RECORDS" AS DEFINED IN THE UNIFORM ELECTRONIC
TRANSACTIONS ACT; PROVIDED, HOWEVER, THAT GRANTOR SHALL NOT BE OBLIGATED TO
TAKE ANY SUCH ACTION TO THE EXTENT THAT DOING SO WOULD BE PROHIBITED BY THE
TERMS OF THE SENIOR CREDIT FACILITY.
7.(G) GRANTOR HEREBY IRREVOCABLY AUTHORIZES SECURED PARTY AT ANY
TIME AND FROM TIME TO TIME TO FILE IN ANY FILING OFFICE IN ANY UNIFORM
COMMERCIAL CODE JURISDICTION ANY INITIAL FINANCING STATEMENTS AND AMENDMENTS
THERETO THAT (A) INDICATE THE COLLATERAL (I) AS ALL ASSETS OF GRANTOR OR WORDS
OF SIMILAR EFFECT, REGARDLESS OF WHETHER ANY PARTICULAR ASSET COMPRISED IN THE
COLLATERAL FALLS WITHIN THE SCOPE OF ARTICLE 9 OF THE UCC, OR (II) AS BEING OF
AN EQUAL OR LESSER SCOPE OR WITH GREATER DETAIL, AND (B) CONTAIN ANY OTHER
INFORMATION REQUIRED BY PART 5 OF ARTICLE 9 OF THE UCC FOR THE SUFFICIENCY OR
FILING OFFICE ACCEPTANCE OF ANY FINANCING STATEMENT OR AMENDMENT, INCLUDING (I)
WHETHER GRANTOR IS AN ORGANIZATION, THE TYPE OF ORGANIZATION AND ANY
ORGANIZATION IDENTIFICATION NUMBER ISSUED TO GRANTOR, AND (II) IN THE CASE OF A
FINANCING STATEMENT FILED AS A FIXTURE FILING OR INDICATING COLLATERAL AS
AS-EXTRACTED COLLATERAL OR TIMBER TO BE CUT, A SUFFICIENT DESCRIPTION OF REAL
PROPERTY TO WHICH THE COLLATERAL RELATES. GRANTOR AGREES TO FURNISH ANY SUCH
INFORMATION TO SECURED PARTY PROMPTLY UPON REQUEST. GRANTOR ALSO RATIFIES ITS
AUTHORIZATION FOR SECURED PARTY TO HAVE FILED IN ANY UNIFORM COMMERCIAL CODE
JURISDICTION ANY LIKE INITIAL FINANCING STATEMENTS OR AMENDMENTS THERETO IF
FILED PRIOR TO THE DATE HEREOF.
8.(H) GRANTOR SHALL PROMPTLY NOTIFY SECURED PARTY OF ANY COMMERCIAL
TORT CLAIM (AS DEFINED IN THE UCC) ACQUIRED BY IT AND UNLESS OTHERWISE
CONSENTED BY SECURED PARTY, GRANTOR SHALL ENTER INTO A SUPPLEMENT TO THIS
SECURITY AGREEMENT, GRANTING TO SECURED PARTY A LIEN IN SUCH COMMERCIAL TORT
CLAIM.
9.(I) FROM TIME TO TIME, GRANTOR SHALL, UPON SECURED PARTY'S
REQUEST, EXECUTE AND DELIVER CONFIRMATORY WRITTEN INSTRUMENTS PLEDGING THE
COLLATERAL TO SECURED PARTY, BUT GRANTOR'S FAILURE TO DO SO SHALL NOT AFFECT OR
LIMIT ANY SECURITY INTEREST OR ANY OTHER RIGHTS OF SECURED PARTY IN AND TO THE
COLLATERAL WITH RESPECT TO GRANTOR. SO LONG AS THIS SECURITY AGREEMENT IS IN
EFFECT AND UNTIL ALL OBLIGATIONS HAVE BEEN FULLY SATISFIED, SECURED PARTY'S
LIENS SHALL CONTINUE IN FULL FORCE AND EFFECT IN ALL COLLATERAL.
10.(J) GRANTOR SHALL NOT REINCORPORATE OR REORGANIZE ITSELF UNDER
THE LAWS OF ANY JURISDICTION OTHER THAN THE JURISDICTION IN WHICH IT IS
INCORPORATED OR ORGANIZED AS OF THE
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DATE HEREOF OR CHANGE ITS TYPE OF ENTITY AS IDENTIFIED ON SCHEDULE II WITHOUT
THE PRIOR WRITTEN CONSENT OF SECURED PARTY.
11.(K) GRANTOR ACKNOWLEDGES THAT IT IS NOT AUTHORIZED TO FILE ANY
FINANCING STATEMENT OR AMENDMENT OR TERMINATION STATEMENT WITH RESPECT TO ANY
FINANCING STATEMENT FILED IN FAVOR OF THE SECURED PARTY WITHOUT THE PRIOR
WRITTEN CONSENT OF SECURED PARTY AND AGREES THAT IT WILL NOT DO SO WITHOUT THE
PRIOR WRITTEN CONSENT OF SECURED PARTY, SUBJECT TO GRANTOR'S RIGHTS UNDER
SECTION 9-509(D)(2) OF THE UCC.
IV.4. LOCATION OF COLLATERAL. Grantor represents and warrants to Secured
Party that:
(a) Schedule I is a correct and complete list of the location of Grantor's
chief executive office, the location of its books and records, the locations of
the Collateral, and the locations of all of its other places of business; and
(b) Schedule I correctly identifies any of such facilities and locations
that are not owned by Grantor and sets forth the names of the owners and
lessors or sublessors of such facilities and locations. Grantor covenants and
agrees that it will not (i) maintain any Collateral at any location other than
those locations listed for Grantor on Schedule I, (ii) otherwise change or add
to any of such locations, or (iii) change the location of its chief executive
office from the location identified in Schedule I, unless it gives Secured
Party at least thirty (30) days' prior written notice thereof and executes any
and all financing statements and other documents that Secured Party reasonably
requests in connection therewith.
V.5. NAME, JURISDICTION OF ORGANIZATION, ETC. Grantor represents and
warrants to Secured Party that Schedule II hereto identifies Grantor's name as
of the date hereof as it appears in official filings in the state of its
incorporation, the type of entity of Grantor (including corporation,
partnership, limited partnership or limited liability company), organizational
identification number issued by Grantor's state of incorporation or a statement
that no such number has been issued and the jurisdiction in which Grantor is
incorporated. Grantor represents and warrants to Secured Party that it has only
one state of incorporation.
VI.6. TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL. Grantor represents
and warrants to Secured Party and agrees with Secured Party that:
(a) Grantor has rights in and the power to transfer all of the Collateral
free and clear of all Liens whatsoever, except for the Lien in securing the
Senior Credit Facility, and other Liens permitted by the Senior Credit
Facility;
(b) Secured Party's Liens in the Collateral will not be subject to any
prior Lien except for those Liens securing the Grantor's obligations under the
Senior Credit Facility; and
(c) Grantor will use, store, and maintain the Collateral with all
reasonable care and will use such Collateral for lawful purposes only.
VII.7. ACCESS AND EXAMINATION. Secured Party may at any time when an Event of
Default exists and is continuing have access to, examine, audit, make extracts
from or copies of and inspect any or all of Grantor's records, files, and books
of account and the Collateral, and discuss Grantor's affairs with Grantor's
officers and management. Secured Party may at any time when an Event of Default
exists, and at Grantor's expense, make copies of all of Grantor's
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books and records, or require Grantor to deliver such copies to Secured Party.
Secured Party may, without expense to Secured Party, use such of Grantor's
respective personnel, supplies, and real estate as may be reasonably necessary
for maintaining or enforcing Secured Party's Liens. Secured Party shall have
the right, at any time, in Secured Party's name or in the name of a nominee of
Secured Party, to verify the validity, amount or any other matter relating to
the Accounts, Inventory, or other Collateral, by mail, telephone, or otherwise.
VIII.8. COLLECTION OF ACCOUNTS. Secured Party or Secured Party's designee may,
at any time after the occurrence and during the continuance of an Event of
Default, notify Account Debtors that the Accounts have been assigned to Secured
Party and of Secured Party's security interest therein, and may collect them
directly and charge the collection costs and expenses as an Advance. So long as
an Event of Default has occurred and is continuing, Grantor, at Secured Party's
request, shall execute and deliver to Secured Party such documents as Secured
Party shall require in order to grant Secured Party access to any post office
box in which collections of Accounts are received.
IX.9. DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. If Grantor retains
possession of any Chattel Paper or Instruments with Secured Party's consent,
such Chattel Paper and Instruments shall be marked with the following legend:
"This writing and the obligations evidenced or served hereby are subject to the
security interest of Securicor plc, as Secured Party."
X.10. RIGHT TO CURE. Secured Party may, in its discretion, pay any
amount or do any act required of Grantor hereunder or under the Notes or
Settlement Agreement in order to preserve, protect, maintain or enforce the
Obligations, the Collateral or Secured Party's Liens therein, and which Grantor
fails to pay or do, including payment of any judgment against Grantor, any
insurance premium, any warehouse charge, any finishing or processing charge,
any landlord's or bailee's claim, and any other Lien upon or with respect to
the Collateral. All payments that Secured Party makes under this Section 10 and
all out-of-pocket costs and expenses that Secured Party pays or incurs in
connection with any action taken by it hereunder shall be deemed a loan by the
Secured Party to Grantor, and shall be included in the Obligations and secured
by the Collateral. Any payment made or other action taken by Secured Party
under this Section 10 shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.
XI.11. POWER OF ATTORNEY. Grantor hereby appoints Secured Party and Secured
Party's designee as Grantor's attorney, with power, following the occurrence
and during the continuance of an Event of Default:
XII. (a) to endorse Grantor's name on any checks, notes, acceptances,
money orders, or other forms of payment or security that come into Secured
Party's possession;
(b) to sign Grantor's name on any invoice, xxxx of lading, warehouse
receipt or other negotiable or non-negotiable Document constituting Collateral,
on drafts against customers, on assignments of Accounts, on notices of
assignment, financing statements and other public records and to file any such
financing statements by electronic means with or without a signature as
authorized or required by applicable law or filing procedure;
(c) to notify the post office authorities to change the address for
delivery of Grantor's mail to an address designated by Secured Party and to
receive, open and dispose of all mail addressed to Grantor;
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(d) to complete, in Grantor's name or Secured Party's name, any order,
sale or transaction, obtain the necessary Documents in connection therewith,
and collect the proceeds thereof;
(f) to the extent that Grantor's authorization given in Section 3(g) of
this Security Agreement is not sufficient, to file such financing statements
with respect to this Security Agreement, with or without Grantor's signature,
or to file a photocopy of this Security Agreement in substitution for a
financing statement, as Secured Party may deem appropriate and to execute in
Grantor's name such financing statements and amendments thereto and
continuation statements which may require Grantor's signature; and
(g) to do all things necessary to carry out this Security Agreement.
Grantor ratifies and approves all acts of such attorney. Neither Secured Party
nor its attorneys will be liable for any acts or omissions or for any error of
judgment or mistake of fact or law except for their willful misconduct. This
power, being coupled with an interest, is irrevocable until the Obligations
have been fully satisfied.
XIII.12. SECURED PARTY'S RIGHTS, DUTIES AND LIABILITIES.
1.(A) GRANTOR ASSUMES ALL RESPONSIBILITY AND LIABILITY ARISING FROM
OR RELATING TO THE USE, SALE, LICENSE OR OTHER DISPOSITION OF THE COLLATERAL.
THE OBLIGATIONS SHALL NOT BE AFFECTED BY ANY FAILURE OF SECURED PARTY TO TAKE
ANY STEPS TO PERFECT SECURED PARTY'S LIENS OR TO COLLECT OR REALIZE UPON THE
COLLATERAL, NOR SHALL LOSS OF OR DAMAGE TO THE COLLATERAL RELEASE GRANTOR FROM
ANY OF THE OBLIGATIONS. FOLLOWING THE OCCURRENCE AND DURING THE CONTINUATION OF
AN EVENT OF DEFAULT, SECURED PARTY MAY (BUT SHALL NOT BE REQUIRED TO), WITHOUT
NOTICE TO OR CONSENT FROM GRANTOR, XXX UPON OR OTHERWISE COLLECT, EXTEND THE
TIME FOR PAYMENT OF, MODIFY OR AMEND THE TERMS OF, COMPROMISE OR SETTLE FOR
CASH, CREDIT, OR OTHERWISE UPON ANY TERMS, GRANT OTHER INDULGENCES, EXTENSIONS,
RENEWALS, COMPOSITIONS, OR RELEASES, AND TAKE OR OMIT TO TAKE ANY OTHER ACTION
WITH RESPECT TO THE COLLATERAL, ANY SECURITY THEREFOR, ANY AGREEMENT RELATING
THERETO, ANY INSURANCE APPLICABLE THERETO, OR ANY PERSON LIABLE DIRECTLY OR
INDIRECTLY IN CONNECTION WITH ANY OF THE FOREGOING, WITHOUT DISCHARGING OR
OTHERWISE AFFECTING THE LIABILITY OF GRANTOR FOR THE OBLIGATIONS OR UNDER THE
NOTES OR ANY OTHER AGREEMENT NOW OR HEREAFTER EXISTING BETWEEN SECURED PARTY
AND GRANTOR.
2.(B) IT IS EXPRESSLY AGREED BY GRANTOR THAT, ANYTHING HEREIN TO
THE CONTRARY NOTWITHSTANDING, GRANTOR SHALL REMAIN LIABLE UNDER EACH OF ITS
CONTRACTS AND EACH OF ITS LICENSES TO OBSERVE AND PERFORM ALL THE CONDITIONS
AND OBLIGATIONS TO BE OBSERVED AND PERFORMED BY IT THEREUNDER. SECURED PARTY
SHALL NOT HAVE ANY OBLIGATION OR LIABILITY UNDER ANY CONTRACT OR LICENSE BY
REASON OF OR ARISING OUT OF THIS SECURITY AGREEMENT OR THE GRANTING HEREIN OF A
LIEN THEREON OR THE RECEIPT BY
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SECURED PARTY OF ANY PAYMENT RELATING TO ANY CONTRACT OR LICENSE PURSUANT
HERETO. SECURED PARTY SHALL NOT BE REQUIRED OR OBLIGATED IN ANY MANNER TO
PERFORM OR FULFILL ANY OF THE OBLIGATIONS OF GRANTOR UNDER OR PURSUANT TO ANY
CONTRACT OR LICENSE, OR TO MAKE ANY PAYMENT, OR TO MAKE ANY INQUIRY AS TO THE
NATURE OR THE SUFFICIENCY OF ANY PAYMENT RECEIVED BY IT OR THE SUFFICIENCY OF
ANY PERFORMANCE BY ANY PARTY UNDER ANY CONTRACT OR LICENSE, OR TO PRESENT OR
FILE ANY CLAIMS, OR TO TAKE ANY ACTION TO COLLECT OR ENFORCE ANY PERFORMANCE OR
THE PAYMENT OF ANY AMOUNTS WHICH MAY HAVE BEEN ASSIGNED TO IT OR TO WHICH IT
MAY BE ENTITLED AT ANY TIME OR TIMES.
3.(C) SECURED PARTY MAY, AT ANY TIME AFTER AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING (OR IF ANY RIGHTS OF SET-OFF (OTHER THAN SET-OFFS
AGAINST AN ACCOUNT ARISING UNDER THE CONTRACT GIVING RISE TO THE SAME ACCOUNT)
OR CONTRA ACCOUNTS MAY BE ASSERTED WITH RESPECT TO THE FOLLOWING), WITHOUT
PRIOR NOTICE TO GRANTOR, NOTIFY ACCOUNT DEBTORS, AND OTHER PERSONS OBLIGATED ON
THE COLLATERAL THAT SECURED PARTY HAS A SECURITY INTEREST THEREIN, AND THAT
PAYMENTS SHALL BE MADE DIRECTLY TO SECURED PARTY. UPON THE REQUEST OF SECURED
PARTY, GRANTOR SHALL SO NOTIFY ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON
COLLATERAL. ONCE ANY SUCH NOTICE HAS BEEN GIVEN TO ANY ACCOUNT DEBTOR OR OTHER
PERSON OBLIGATED ON THE COLLATERAL, GRANTOR SHALL NOT GIVE ANY CONTRARY
INSTRUCTIONS TO SUCH ACCOUNT DEBTOR OR OTHER PERSON WITHOUT SECURED PARTY'S
PRIOR WRITTEN CONSENT.
4.(D) SECURED PARTY MAY AT ANY TIME IN SECURED PARTY'S OWN NAME OR
IN THE NAME OF GRANTOR COMMUNICATE WITH ACCOUNT DEBTORS, PARTIES TO CONTRACTS
AND OBLIGORS IN RESPECT OF INSTRUMENTS TO VERIFY WITH SUCH PERSONS, TO SECURED
PARTY'S SATISFACTION, THE EXISTENCE, AMOUNT AND TERMS OF ACCOUNTS, PAYMENT
INTANGIBLES, INSTRUMENTS OR CHATTEL PAPER. GRANTOR, AT ITS OWN EXPENSE, SHALL
DELIVER TO SECURED PARTY THE RESULTS OF EACH PHYSICAL VERIFICATION, IF ANY,
WHICH GRANTOR MAY IN ITS DISCRETION HAVE MADE, OR CAUSED ANY OTHER PERSON TO
HAVE MADE ON ITS BEHALF, OF ALL OR ANY PORTION OF ITS INVENTORY.
XIV.13. PATENT, TRADEMARK AND COPYRIGHT COLLATERAL.
1.(A) GRANTOR REPRESENTS AND WARRANTS TO SECURED PARTY THAT IT DOES
NOT HAVE ANY INTEREST IN, OR TITLE TO, ANY PATENT, TRADEMARK OR COPYRIGHT
EXCEPT AS SET FORTH IN SCHEDULE III HERETO. GRANTOR REPRESENTS AND WARRANTS TO
SECURED PARTY THAT THIS SECURITY AGREEMENT IS EFFECTIVE TO CREATE A VALID AND
CONTINUING LIEN ON AND, UPON FILING OF THE COPYRIGHT SECURITY AGREEMENT WITH
THE UNITED STATES COPYRIGHT OFFICE AND FILING OF THE PATENT SECURITY AGREEMENT
AND THE TRADEMARK SECURITY
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AGREEMENT WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE, PERFECTED LIENS
IN FAVOR OF SECURED PARTY ON GRANTOR'S PATENTS, TRADEMARKS AND COPYRIGHTS AND
SUCH PERFECTED LIENS ARE ENFORCEABLE AS SUCH AS AGAINST ANY AND ALL CREDITORS
OF AND PURCHASERS FROM GRANTOR. GRANTOR FURTHER REPRESENTS AND WARRANTS TO
SECURED PARTY THAT, UPON FILING OF THE COPYRIGHT SECURITY AGREEMENT WITH THE
UNITED STATES COPYRIGHT OFFICE AND FILING OF THE PATENT SECURITY AGREEMENT AND
THE TRADEMARK SECURITY AGREEMENT WITH THE UNITED STATES PATENT AND TRADEMARK
OFFICE AND THE FILING OF APPROPRIATE FINANCING STATEMENTS, ALL ACTION NECESSARY
OR DESIRABLE TO PROTECT AND PERFECT SECURED PARTY'S LIEN ON GRANTOR'S PATENTS,
TRADEMARKS OR COPYRIGHTS SHALL HAVE BEEN DULY TAKEN.
2.(B) GRANTOR SHALL NOTIFY SECURED PARTY PROMPTLY IF IT KNOWS
OR HAS REASON TO KNOW THAT ANY APPLICATION OR REGISTRATION RELATING TO ANY
PATENT, TRADEMARK OR COPYRIGHT (NOW OR HEREAFTER EXISTING) MAY BECOME ABANDONED
OR DEDICATED, OR OF ANY ADVERSE DETERMINATION OR DEVELOPMENT (INCLUDING THE
INSTITUTION OF, OR ANY SUCH DETERMINATION OR DEVELOPMENT IN, ANY PROCEEDING IN
THE UNITED STATES PATENT AND TRADEMARK OFFICE, THE UNITED STATES COPYRIGHT
OFFICE OR ANY COURT) REGARDING GRANTOR'S OWNERSHIP OF ANY PATENT, TRADEMARK OR
COPYRIGHT, ITS RIGHT TO REGISTER THE SAME, OR TO KEEP AND MAINTAIN THE SAME.
3.(C) IN NO EVENT SHALL GRANTOR, EITHER DIRECTLY OR THROUGH ANY
AGENT, EMPLOYEE, LICENSEE OR DESIGNEE, FILE AN APPLICATION FOR THE REGISTRATION
OF ANY PATENT, TRADEMARK OR COPYRIGHT WITH THE UNITED STATES PATENT AND
TRADEMARK OFFICE, THE UNITED STATES COPYRIGHT OFFICE OR ANY SIMILAR OFFICE OR
AGENCY WITHOUT GIVING SECURED PARTY PRIOR WRITTEN NOTICE THEREOF, AND, UPON
REQUEST OF SECURED PARTY, GRANTOR SHALL EXECUTE AND DELIVER ANY AND ALL PATENT
SECURITY AGREEMENTS, COPYRIGHT SECURITY AGREEMENTS OR TRADEMARK SECURITY
AGREEMENTS AS SECURED PARTY MAY REQUEST TO EVIDENCE SECURED PARTY'S LIEN ON
SUCH PATENT, TRADEMARK OR COPYRIGHT, AND THE GENERAL INTANGIBLES OF GRANTOR
RELATING THERETO OR REPRESENTED THEREBY.
4.(D) GRANTOR SHALL TAKE ALL ACTIONS NECESSARY OR REQUESTED BY
SECURED PARTY TO MAINTAIN AND PURSUE EACH APPLICATION, TO OBTAIN THE RELEVANT
REGISTRATION AND TO MAINTAIN THE REGISTRATION OF EACH OF THE PATENTS,
TRADEMARKS AND COPYRIGHTS (NOW OR HEREAFTER EXISTING), INCLUDING THE FILING OF
APPLICATIONS FOR RENEWAL, AFFIDAVITS OF USE, AFFIDAVITS OF NONCONTESTABILITY
AND OPPOSITION AND INTERFERENCE AND CANCELLATION PROCEEDINGS.
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XV.14. INDEMNIFICATION. In any suit, proceeding or action brought by Secured
Party relating to any Collateral for any sum owing with respect thereto or to
enforce any rights or claims with respect thereto, Grantor will save, indemnify
and keep Secured Party harmless from and against all expense (including
reasonable attorneys' fees and expenses), loss or damage suffered by reason of
any defense, setoff, counterclaim, recoupment or reduction of liability
whatsoever of the Account Debtor or other Person obligated on the Collateral,
arising out of a breach by Grantor of any obligation thereunder or arising out
of any other agreement, indebtedness or liability at any time owing to, or in
favor of, such obligor or its successors from Grantor, except in the case of
Secured Party, to the extent such expense, loss, or damage is attributable
solely to the gross negligence or willful misconduct of Secured Party as
finally determined by a court of competent jurisdiction. All such obligations
of Grantor shall be and remain enforceable against and only against Grantor and
shall not be enforceable against Secured Party.
XVI.15. LIMITATION ON LIENS ON COLLATERAL. Grantor will not create, permit or
suffer to exist, and will defend the Collateral against, and take such other
action as is necessary to remove, any Lien on the Collateral except Liens
securing the Grantor's obligations under the Senior Credit Facility, Liens
arising hereunder, and other Liens permitted by the Senior Credit Facility, and
will defend the right, title and interest of Secured Party in and to any of
Grantor's rights under the Collateral against any Lien or claim made or
asserted against any of the Collateral by any and all Persons whomsoever,
except for Liens permitted hereunder.
XVII.16. NOTICE OF EVENT OF DEFAULT. Grantor will advise Secured Party
promptly, in reasonable detail, regarding the occurrence of any Event of
Default.
XVIII.17. REMEDIES; RIGHTS UPON DEFAULT.
1.(A) IN ADDITION TO ALL OTHER RIGHTS AND REMEDIES GRANTED TO IT
UNDER THIS SECURITY AGREEMENT AND UNDER ANY OTHER INSTRUMENT OR AGREEMENT
SECURING, EVIDENCING OR RELATING TO ANY OF THE OBLIGATIONS, IF ANY EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, SECURED PARTY MAY EXERCISE ALL
RIGHTS AND REMEDIES OF A SECURED PARTY UNDER THE UCC. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, GRANTOR EXPRESSLY AGREES THAT IN ANY SUCH EVENT
SECURED PARTY, WITHOUT DEMAND OF PERFORMANCE OR OTHER DEMAND, ADVERTISEMENT OR
NOTICE OF ANY KIND (EXCEPT THE NOTICE SPECIFIED BELOW OF TIME AND PLACE OF
PUBLIC OR PRIVATE SALE) TO OR UPON GRANTOR OR ANY OTHER PERSON (ALL AND EACH OF
WHICH DEMANDS, ADVERTISEMENTS AND NOTICES ARE HEREBY EXPRESSLY WAIVED TO THE
MAXIMUM EXTENT PERMITTED BY THE UCC AND OTHER APPLICABLE LAW), MAY FORTHWITH
ENTER UPON THE PREMISES OF GRANTOR WHERE ANY COLLATERAL IS LOCATED THROUGH
SELF-HELP, WITHOUT JUDICIAL PROCESS, WITHOUT FIRST OBTAINING A FINAL JUDGMENT
OR GIVING GRANTOR OR ANY OTHER PERSON NOTICE AND OPPORTUNITY FOR A HEARING ON
SECURED PARTY'S CLAIM OR ACTION AND MAY COLLECT, RECEIVE, ASSEMBLE, PROCESS,
APPROPRIATE AND REALIZE UPON THE COLLATERAL, OR ANY PART THEREOF, AND MAY
FORTHWITH SELL, LEASE, LICENSE, ASSIGN, GIVE AN OPTION OR OPTIONS TO PURCHASE,
OR SELL OR OTHERWISE DISPOSE OF AND DELIVER SAID COLLATERAL (OR CONTRACT TO DO
SO), OR ANY PART
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THEREOF, IN ONE OR MORE PARCELS AT A PUBLIC OR PRIVATE SALE OR SALES, AT ANY
EXCHANGE AT SUCH PRICES AS IT MAY DEEM ACCEPTABLE, FOR CASH OR ON CREDIT OR FOR
FUTURE DELIVERY WITHOUT ASSUMPTION OF ANY CREDIT RISK. SECURED PARTY SHALL HAVE
THE RIGHT UPON ANY SUCH PUBLIC SALE OR SALES AND, TO THE EXTENT PERMITTED BY
LAW, UPON ANY SUCH PRIVATE SALE OR SALES, TO PURCHASE FOR THE BENEFIT OF
SECURED PARTY, THE WHOLE OR ANY PART OF SAID COLLATERAL SO SOLD, FREE OF ANY
RIGHT OR EQUITY OF REDEMPTION, WHICH EQUITY OF REDEMPTION GRANTOR HEREBY
RELEASES. SUCH SALES MAY BE ADJOURNED AND CONTINUED FROM TIME TO TIME WITH OR
WITHOUT NOTICE. SECURED PARTY SHALL HAVE THE RIGHT TO CONDUCT SUCH SALES ON
GRANTOR'S PREMISES OR ELSEWHERE AND SHALL HAVE THE RIGHT TO USE GRANTOR'S
PREMISES WITHOUT CHARGE FOR SUCH TIME OR TIMES AS SECURED PARTY DEEMS NECESSARY
OR ADVISABLE.
2.(B) GRANTOR FURTHER AGREES, AT SECURED PARTY'S REQUEST, TO
ASSEMBLE THE COLLATERAL AND MAKE IT AVAILABLE TO SECURED PARTY AT A PLACE OR
PLACES DESIGNATED BY SECURED PARTY WHICH ARE REASONABLY CONVENIENT TO SECURED
PARTY AND GRANTOR, WHETHER AT GRANTOR'S PREMISES OR ELSEWHERE. UNTIL SECURED
PARTY IS ABLE TO EFFECT A SALE, LEASE, OR OTHER DISPOSITION OF THE COLLATERAL,
SECURED PARTY SHALL HAVE THE RIGHT TO HOLD OR USE THE COLLATERAL, OR ANY PART
THEREOF, TO THE EXTENT THAT IT DEEMS APPROPRIATE FOR THE PURPOSE OF PRESERVING
COLLATERAL OR ITS VALUE OR FOR ANY OTHER PURPOSE DEEMED APPROPRIATE BY SECURED
PARTY. SECURED PARTY SHALL HAVE NO OBLIGATION TO GRANTOR TO MAINTAIN OR
PRESERVE THE RIGHTS OF GRANTOR AS AGAINST THIRD PARTIES WITH RESPECT TO ANY
COLLATERAL WHILE SUCH COLLATERAL IS IN THE POSSESSION OF SECURED PARTY. SECURED
PARTY MAY, IF IT SO ELECTS, SEEK THE APPOINTMENT OF A RECEIVER OR KEEPER TO
TAKE POSSESSION OF THE COLLATERAL AND TO ENFORCE ANY OF SECURED PARTY'S
REMEDIES, WITH RESPECT TO SUCH APPOINTMENT WITHOUT PRIOR NOTICE OR HEARING AS
TO SUCH APPOINTMENT. SECURED PARTY SHALL APPLY THE NET PROCEEDS OF ANY SUCH
COLLECTION, RECOVERY, RECEIPT, APPROPRIATION, REALIZATION OR SALE TO THE
OBLIGATIONS AS SECURED PARTY DEEMS APPROPRIATE IN ITS SOLE DISCRETION, AND ONLY
AFTER SO PAYING OVER SUCH NET PROCEEDS, AND AFTER THE PAYMENT BY SECURED PARTY
OF ANY OTHER AMOUNT REQUIRED BY ANY PROVISION OF LAW, NEED SECURED PARTY
ACCOUNT FOR THE SURPLUS, IF ANY, TO GRANTOR. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, GRANTOR WAIVES ALL CLAIMS, DAMAGES, AND DEMANDS AGAINST SECURED
PARTY ARISING OUT OF THE REPOSSESSION, RETENTION OR SALE OF THE COLLATERAL
EXCEPT SUCH AS ARISE SOLELY OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF SECURED PARTY AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION.
GRANTOR AGREES THAT TEN (10) DAYS PRIOR NOTICE BY SECURED PARTY OF THE
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TIME AND PLACE OF ANY PUBLIC SALE OR OF THE TIME AFTER WHICH A PRIVATE SALE MAY
TAKE PLACE IS REASONABLE NOTIFICATION OF SUCH MATTERS. GRANTOR SHALL REMAIN
LIABLE FOR ANY DEFICIENCY IF THE PROCEEDS OF ANY SALE OR DISPOSITION OF THE
COLLATERAL ARE INSUFFICIENT TO PAY ALL OBLIGATIONS, INCLUDING ANY ATTORNEYS'
FEES OR OTHER EXPENSES INCURRED BY SECURED PARTY TO COLLECT SUCH DEFICIENCY.
3.(C) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, GRANTOR
HEREBY WAIVES PRESENTMENT, DEMAND, PROTEST OR ANY NOTICE (TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW) OF ANY KIND IN CONNECTION WITH THIS SECURITY
AGREEMENT OR ANY COLLATERAL.
4.(D) TO THE EXTENT THAT APPLICABLE LAW IMPOSES DUTIES ON SECURED
PARTY TO EXERCISE REMEDIES IN A COMMERCIALLY REASONABLE MANNER, GRANTOR
ACKNOWLEDGES AND AGREES THAT IT IS NOT COMMERCIALLY UNREASONABLE FOR SECURED
PARTY (A) TO FAIL TO INCUR EXPENSES REASONABLY DEEMED SIGNIFICANT BY SECURED
PARTY TO PREPARE COLLATERAL FOR DISPOSITION OR OTHERWISE TO COMPLETE RAW
MATERIAL OR WORK IN PROCESS INTO FINISHED GOODS OR OTHER FINISHED PRODUCTS FOR
DISPOSITION, (B) TO FAIL TO OBTAIN THIRD PARTY CONSENTS FOR ACCESS TO
COLLATERAL TO BE DISPOSED OF, OR TO OBTAIN OR, IF NOT REQUIRED BY OTHER LAW, TO
FAIL TO OBTAIN GOVERNMENTAL OR THIRD PARTY CONSENTS FOR THE COLLECTION OR
DISPOSITION OF COLLATERAL TO BE COLLECTED OR DISPOSED OF, (C) TO FAIL TO
EXERCISE COLLECTION REMEDIES AGAINST ACCOUNT DEBTORS OR OTHER PERSONS OBLIGATED
ON COLLATERAL OR TO REMOVE LIENS ON OR ANY ADVERSE CLAIMS AGAINST COLLATERAL,
(D) TO EXERCISE COLLECTION REMEDIES AGAINST ACCOUNT DEBTORS AND OTHER PERSONS
OBLIGATED ON COLLATERAL DIRECTLY OR THROUGH THE USE OF COLLECTION AGENCIES AND
OTHER COLLECTION SPECIALISTS, (E) TO ADVERTISE DISPOSITIONS OF COLLATERAL
THROUGH PUBLICATIONS OR MEDIA OF GENERAL CIRCULATION, WHETHER OR NOT THE
COLLATERAL IS OF A SPECIALIZED NATURE, (F) TO CONTACT OTHER PERSONS, WHETHER OR
NOT IN THE SAME BUSINESS AS GRANTOR, FOR EXPRESSIONS OF INTEREST IN ACQUIRING
ALL OR ANY PORTION OF SUCH COLLATERAL, (G) TO HIRE ONE OR MORE PROFESSIONAL
AUCTIONEERS TO ASSIST IN THE DISPOSITION OF COLLATERAL, WHETHER OR NOT THE
COLLATERAL IS OF A SPECIALIZED NATURE, (H) TO DISPOSE OF COLLATERAL BY
UTILIZING INTERNET SITES THAT PROVIDE FOR THE AUCTION OF ASSETS OF THE TYPES
INCLUDED IN THE COLLATERAL OR THAT HAVE THE REASONABLE CAPACITY OF DOING SO, OR
THAT MATCH BUYERS AND SELLERS OF ASSETS, (I) TO DISPOSE OF ASSETS IN WHOLESALE
RATHER THAN RETAIL MARKETS, (J) TO DISCLAIM DISPOSITION WARRANTIES, SUCH AS
TITLE, POSSESSION OR QUIET ENJOYMENT, (K) TO PURCHASE INSURANCE OR CREDIT
ENHANCEMENTS TO INSURE SECURED PARTY AGAINST RISKS OF LOSS, COLLECTION OR
87
DISPOSITION OF COLLATERAL OR TO PROVIDE TO SECURED PARTY A GUARANTEED RETURN
FROM THE COLLECTION OR DISPOSITION OF COLLATERAL, OR (L) TO THE EXTENT DEEMED
APPROPRIATE BY SECURED PARTY, TO OBTAIN THE SERVICES OF OTHER BROKERS,
INVESTMENT BANKERS, CONSULTANTS AND OTHER PROFESSIONALS TO ASSIST SECURED PARTY
IN THE COLLECTION OR DISPOSITION OF ANY OF THE COLLATERAL. GRANTOR ACKNOWLEDGES
THAT THE PURPOSE OF THIS SECTION 17(D) IS TO PROVIDE NON-EXHAUSTIVE INDICATIONS
OF WHAT ACTIONS OR OMISSIONS BY SECURED PARTY WOULD NOT BE COMMERCIALLY
UNREASONABLE IN SECURED PARTY'S EXERCISE OF REMEDIES AGAINST THE COLLATERAL AND
THAT OTHER ACTIONS OR OMISSIONS BY SECURED PARTY SHALL NOT BE DEEMED
COMMERCIALLY UNREASONABLE SOLELY ON ACCOUNT OF NOT BEING INDICATED IN THIS
SECTION 17(D). WITHOUT LIMITATION UPON THE FOREGOING, NOTHING CONTAINED IN THIS
SECTION 17(D) SHALL BE CONSTRUED TO GRANT ANY RIGHTS TO GRANTOR OR TO IMPOSE
ANY DUTIES ON SECURED PARTY THAT WOULD NOT HAVE BEEN GRANTED OR IMPOSED BY THIS
SECURITY AGREEMENT OR BY APPLICABLE LAW IN THE ABSENCE OF THIS SECTION 17(D).
(e) GRANTOR HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES ALL
RIGHTS WHICH IT HAS UNDER CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF
GEORGIA OR UNDER ANY SIMILAR PROVISION OF APPLICABLE LAW TO NOTICE AND TO A
JUDICIAL HEARING PRIOR TO THE ISSUANCE OF A WRIT OF POSSESSION ENTITLING
SECURED PARTY, OR THE SUCCESSORS AND ASSIGNS OF SECURED PARTY, TO POSSESSION OF
THE COLLATERAL UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING AND WITHOUT LIMITING
ANY OTHER RIGHT WHICH SECURED PARTY MAY HAVE, GRANTOR CONSENTS THAT IF SECURED
PARTY FILES A PETITION FOR AN IMMEDIATE WRIT OF POSSESSION IN COMPLIANCE WITH
SECTIONS 00-00-000 AND 00-00-000 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY
SIMILAR PROVISION OF APPLICABLE LAW, AND THIS WAIVER OR A COPY HEREOF IS
ALLEGED IN SUCH PETITION AND ATTACHED THERETO, THE COURT BEFORE WHICH SUCH
PETITION IS FILED MAY DISPENSE WITH ALL RIGHTS AND PROCEDURES HEREIN WAIVED AND
MAY ISSUE FORTHWITH AN IMMEDIATE WRIT OF POSSESSION IN ACCORDANCE WITH CHAPTER
14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR IN ACCORDANCE WITH ANY
SIMILAR PROVISION OF APPLICABLE LAW, WITHOUT THE NECESSITY OF AN ACCOMPANYING
BOND AS OTHERWISE REQUIRED BY SECTION 00-00-000 OF THE OFFICIAL CODE OF GEORGIA
OR BY ANY SIMILAR PROVISION UNDER APPLICABLE LAW.
XIX.18. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the purpose of
enabling Secured Party to exercise rights and remedies under Section 17 hereof
(including, without limiting the terms of Section 17 hereof, in order to take
possession of, hold, preserve, process, assemble, prepare for sale, market for
sale, sell or otherwise dispose of the Collateral) at such
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time as Secured Party shall be lawfully entitled to exercise such rights and
remedies, Grantor hereby grants to Secured Party an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to
Grantor) to use, license or sublicense any Proprietary Rights now owned or
hereafter acquired by Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed
items may be recorded or stored and to all computer software and programs used
for the compilation or printout thereof.
XX.19. LIMITATION ON SECURED PARTY'S DUTY IN RESPECT OF COLLATERAL. Secured
Party shall use reasonable care with respect to the Collateral in its
possession or under its control. Secured Party shall not have any other duty as
to any Collateral in its possession or control or in the possession or control
of any agent or nominee of Secured Party, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto.
XXI.20. MISCELLANEOUS.
1.(A) REINSTATEMENT. THIS SECURITY AGREEMENT SHALL REMAIN IN FULL
FORCE AND EFFECT AND CONTINUE TO BE EFFECTIVE SHOULD ANY PETITION BE FILED BY
OR AGAINST GRANTOR FOR LIQUIDATION OR REORGANIZATION, SHOULD GRANTOR BECOME
INSOLVENT OR MAKE AN ASSIGNMENT FOR THE BENEFIT OF ANY CREDITOR OR CREDITORS OR
SHOULD A RECEIVER OR TRUSTEE BE APPOINTED FOR ALL OR ANY SIGNIFICANT PART OF
GRANTOR'S ASSETS, AND SHALL CONTINUE TO BE EFFECTIVE OR BE REINSTATED, AS THE
CASE MAY BE, IF AT ANY TIME PAYMENT AND PERFORMANCE OF THE OBLIGATIONS, OR ANY
PART THEREOF, IS, PURSUANT TO APPLICABLE LAW, RESCINDED OR REDUCED IN AMOUNT,
OR MUST OTHERWISE BE RESTORED OR RETURNED BY ANY OBLIGEE OF THE OBLIGATIONS,
WHETHER AS A "VOIDABLE PREFERENCE," "FRAUDULENT CONVEYANCE," OR OTHERWISE, ALL
AS THOUGH SUCH PAYMENT OR PERFORMANCE HAD NOT BEEN MADE. IN THE EVENT THAT ANY
PAYMENT, OR ANY PART THEREOF, IS RESCINDED, REDUCED, RESTORED OR RETURNED, THE
OBLIGATIONS SHALL BE REINSTATED AND DEEMED REDUCED ONLY BY SUCH AMOUNT PAID AND
NOT SO RESCINDED, REDUCED, RESTORED OR RETURNED.
2.(B) NOTICES. EXCEPT AS OTHERWISE PROVIDED HEREIN, WHENEVER IT IS
PROVIDED HEREIN THAT ANY NOTICE, DEMAND, REQUEST, CONSENT, APPROVAL,
DECLARATION OR OTHER COMMUNICATION SHALL OR MAY BE GIVEN TO OR SERVED UPON ANY
OF THE PARTIES BY ANY OTHER PARTY, OR WHENEVER ANY OF THE PARTIES DESIRES TO
GIVE AND SERVE UPON ANY OTHER PARTY ANY COMMUNICATION WITH RESPECT TO THIS
SECURITY AGREEMENT, EACH SUCH NOTICE, DEMAND, REQUEST, CONSENT, APPROVAL,
DECLARATION OR OTHER COMMUNICATION SHALL BE IN WRITING AND SHALL BE GIVEN IN
THE MANNER, AND DEEMED RECEIVED, AS PROVIDED FOR IN THE SETTLEMENT AGREEMENT.
3.(C) SEVERABILITY. WHENEVER POSSIBLE, EACH PROVISION OF THIS
SECURITY AGREEMENT SHALL BE INTERPRETED IN A MANNER AS TO BE EFFECTIVE AND
VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SECURITY AGREEMENT
SHALL BE PROHIBITED BY OR
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INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT
OF SUCH PROHIBITION OR INVALIDITY WITHOUT INVALIDATING THE REMAINDER OF SUCH
PROVISION OR THE REMAINING PROVISIONS OF THIS SECURITY AGREEMENT. THIS SECURITY
AGREEMENT IS TO BE READ, CONSTRUED AND APPLIED TOGETHER WITH THE SETTLEMENT
AGREEMENT, THE NOTES AND THE OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS
ENTERED INTO FROM TIME TO TIME IN CONNECTION THEREWITH WHICH, TAKEN TOGETHER,
SET FORTH THE COMPLETE UNDERSTANDING AND AGREEMENT OF SECURED PARTY AND GRANTOR
WITH RESPECT TO THE MATTERS REFERRED TO HEREIN AND THEREIN.
4.(D) NO WAIVER; CUMULATIVE REMEDIES. SECURED PARTY SHALL NOT BY
ANY ACT, DELAY, OMISSION OR OTHERWISE BE DEEMED TO HAVE WAIVED ANY OF ITS
RIGHTS OR REMEDIES HEREUNDER, AND NO WAIVER SHALL BE VALID UNLESS IN WRITING,
SIGNED BY SECURED PARTY AND THEN ONLY TO THE EXTENT THEREIN SET FORTH. A WAIVER
BY SECURED PARTY OF ANY RIGHT OR REMEDY HEREUNDER ON ANY ONE OCCASION SHALL NOT
BE CONSTRUED AS A BAR TO ANY RIGHT OR REMEDY WHICH SECURED PARTY WOULD
OTHERWISE HAVE HAD ON ANY FUTURE OCCASION. NO FAILURE TO EXERCISE NOR ANY DELAY
IN EXERCISING ON THE PART OF SECURED PARTY, ANY RIGHT, POWER OR PRIVILEGE
HEREUNDER, SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY SINGLE OR PARTIAL
EXERCISE OF ANY RIGHT, POWER OR PRIVILEGE HEREUNDER PRECLUDE ANY OTHER OR
FUTURE EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT, POWER OR PRIVILEGE.
THE RIGHTS AND REMEDIES HEREUNDER PROVIDED ARE CUMULATIVE AND MAY BE EXERCISED
SINGLY OR CONCURRENTLY, AND ARE NOT EXCLUSIVE OF ANY RIGHTS AND REMEDIES
PROVIDED BY LAW. NONE OF THE TERMS OR PROVISIONS OF THIS SECURITY AGREEMENT MAY
BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT BY AN INSTRUMENT IN WRITING,
DULY EXECUTED BY SECURED PARTY AND GRANTOR.
5.(E) LIMITATION BY LAW. ALL RIGHTS, REMEDIES AND POWERS PROVIDED
IN THIS SECURITY AGREEMENT MAY BE EXERCISED ONLY TO THE EXTENT THAT THE
EXERCISE THEREOF DOES NOT VIOLATE ANY APPLICABLE PROVISION OF LAW, AND ALL THE
PROVISIONS OF THIS SECURITY AGREEMENT ARE INTENDED TO BE SUBJECT TO ALL
APPLICABLE MANDATORY PROVISIONS OF LAW THAT MAY BE CONTROLLING AND TO BE
LIMITED TO THE EXTENT NECESSARY SO THAT THEY SHALL NOT RENDER THIS SECURITY
AGREEMENT INVALID, UNENFORCEABLE, IN WHOLE OR IN PART, OR NOT ENTITLED TO BE
RECORDED, REGISTERED OR FILED UNDER THE PROVISIONS OF ANY APPLICABLE LAW.
6.(F) TERMINATION OF THIS SECURITY AGREEMENT. SUBJECT TO
SECTION 20(A) HEREOF, THIS SECURITY AGREEMENT SHALL TERMINATE UPON THE PAYMENT
IN FULL OF ALL OBLIGATIONS (OTHER THAN
90
INDEMNIFICATION OBLIGATIONS AS TO WHICH NO CLAIM HAS BEEN ASSERTED).
7.(G) SUCCESSORS AND ASSIGNS. THIS SECURITY AGREEMENT AND ALL
OBLIGATIONS OF GRANTOR HEREUNDER SHALL BE BINDING UPON THE SUCCESSORS AND
ASSIGNS OF GRANTOR (INCLUDING ANY DEBTOR-IN-POSSESSION ON BEHALF OF GRANTOR)
AND SHALL, TOGETHER WITH THE RIGHTS AND REMEDIES OF SECURED PARTY HEREUNDER,
INURE TO THE BENEFIT OF SECURED PARTY, ALL FUTURE HOLDERS OF ANY INSTRUMENT
EVIDENCING ANY OF THE OBLIGATIONS AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
NO SALES OF PARTICIPATIONS, OTHER SALES, ASSIGNMENTS, TRANSFERS OR OTHER
DISPOSITIONS OF ANY AGREEMENT GOVERNING OR INSTRUMENT EVIDENCING THE
OBLIGATIONS OR ANY PORTION THEREOF OR INTEREST THEREIN SHALL IN ANY MANNER
AFFECT THE LIEN GRANTED TO SECURED PARTY HEREUNDER. GRANTOR MAY NOT ASSIGN,
SELL, HYPOTHECATE OR OTHERWISE TRANSFER ANY INTEREST IN OR OBLIGATION UNDER
THIS SECURITY AGREEMENT.
8.(H) COUNTERPARTS. THIS SECURITY AGREEMENT MAY BE EXECUTED IN ANY
NUMBER OF SEPARATE COUNTERPARTS, EACH OF WHICH SHALL COLLECTIVELY AND
SEPARATELY CONSTITUTE ONE AND THE SAME AGREEMENT. THIS SECURITY AGREEMENT MAY
BE EXECUTED BY MANUAL SIGNATURE, FACSIMILE OR, IF APPROVED IN WRITING BY
SECURED PARTY, ELECTRONIC MEANS, ALL OF WHICH SHALL BE EQUALLY VALID.
9.(I) GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN THAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. GRANTOR HEREBY CONSENTS AND AGREES THAT THE COURTS OF THE STATE OF
GEORGIA OR OF THE UNITED STATES OF AMERICA LOCATED IN THE NORTHERN DISTRICT OF
GEORGIA SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN GRANTOR AND SECURED PARTY PERTAINING TO THIS SECURITY
AGREEMENT OR ANY AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED FROM TIME TO TIME
IN CONNECTION HEREWITH OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY SUCH AGREEMENT, DOCUMENT OR INSTRUMENT, PROVIDED,
THAT SECURED PARTY AND GRANTOR ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF SUCH JURISDICTIONS, AND,
PROVIDED, FURTHER, NOTHING IN THIS SECURITY AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE SECURED PARTY FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF SECURED PARTY. GRANTOR EXPRESSLY
91
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND GRANTOR HEREBY WAIVES ANY OBJECTION WHICH IT
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. GRANTOR HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION
OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO GRANTOR AT THE ADDRESS
SET FORTH IN THE SETTLEMENT AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
10.(J) WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
DISPUTES ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING
SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN SECURED
PARTY AND GRANTOR ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS SECURITY AGREEMENT OR THE
TRANSACTIONS RELATED HERETO. THE FOREGOING WAIVER IS MADE IN FURTHERANCE OF THE
AGREEMENT TO ARBITRATE SET FORTH IN CLAUSE (L) BELOW.
(k) ARBITRATION. Any controversy or claim arising out of or relating to
this Security Agreement shall be submitted to and finally resolved by
arbitration pursuant to Section 16 of the Settlement Agreement.
11.(L) SECTION TITLES. THE SECTION TITLES CONTAINED IN THIS SECURITY
AGREEMENT ARE AND SHALL BE WITHOUT SUBSTANTIVE MEANING OR CONTENT OF ANY KIND
WHATSOEVER AND ARE NOT A PART OF THE AGREEMENT BETWEEN THE PARTIES HERETO.
12.(M) NO STRICT CONSTRUCTION. THE PARTIES HERETO HAVE PARTICIPATED
JOINTLY IN THE NEGOTIATION AND DRAFTING OF THIS SECURITY AGREEMENT. IN THE EVENT
AN AMBIGUITY OR QUESTION OF INTENT OR INTERPRETATION ARISES, THIS SECURITY
AGREEMENT SHALL BE CONSTRUED AS IF DRAFTED JOINTLY BY THE PARTIES HERETO AND NO
PRESUMPTION OR BURDEN OF PROOF SHALL ARISE FAVORING OR
92
DISFAVORING ANY PARTY BY VIRTUE OF THE AUTHORSHIP OF ANY PROVISIONS OF THIS
SECURITY AGREEMENT.
13.(N) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH
OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS SECURITY AGREEMENT AND,
SPECIFICALLY, THE PROVISIONS OF SECTION 20(I), (J), AND (K), WITH ITS COUNSEL.
14.(O) BENEFIT OF SECURED PARTY. ALL LIENS GRANTED OR CONTEMPLATED
HEREBY SHALL BE FOR THE BENEFIT OF SECURED PARTY, AND ALL PROCEEDS OR PAYMENTS
REALIZED FROM COLLATERAL IN ACCORDANCE HEREWITH SHALL BE APPLIED TO THE
OBLIGATIONS IN ACCORDANCE WITH THE TERMS OF THE NOTES OR AS THE SECURED PARTY
MAY OTHERWISE DETERMINE IN ITS SOLE DISCRETION.
21. SUBORDINATION. This Security Agreement is subject to certain terms of
subordination as more fully set forth in that certain Subordination Agreement,
dated April 12, 2002, as amended, restated, supplemented or otherwise modified
from time to time, between the Secured Facility Agent and the Secured Party.
[Signatures On Next Page]
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15. IN WITNESS WHEREOF, EACH OF THE PARTIES HERETO HAS CAUSED
THIS SECURITY AGREEMENT TO BE EXECUTED AND DELIVERED BY ITS DULY AUTHORIZED
OFFICER AS OF THE DATE FIRST SET FORTH ABOVE.
_________________, as Grantor
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
SECURICOR PLC, as Secured Party
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
SCHEDULE I
TO
SECURITY AGREEMENT
LOCATION OF COLLATERAL
A. Location of Chief Executive Office:
B. Location of Books and Records:
C. Location of Collateral:
D. Location of all other places of business:
E. Location of leased facilities and name of lessor/sublessor:
SCHEDULE II
TO
SECURITY AGREEMENT
JURISDICTION OF ORGANIZATION
A. Grantor's official name:
B. Type of entity (i.e. corporation, partnership, limited partnership,
limited liability company):
C. Organizational identification number issued by Grantor's state of
incorporation or organization or a statement that no such number has
been issued: N/A
D. State of Incorporation or Organization:
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SCHEDULE III
PATENTS, TRADEMARKS AND COPYRIGHTS
[to be completed by Grantor]
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EXHIBIT 7
FORM OF STOCK PLEDGE AGREEMENT
------------------------------
STOCK PLEDGE AGREEMENT, dated as of April 12, 2002, made by _____
("Pledgor"), in favor of SECURICOR PLC, a company organized under the laws of
England & Wales (the "Secured Party").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Pledgor is the record and beneficial owner of the shares of
capital stock described in Exhibit A hereto (the "Pledged Securities") issued by
the corporations named therein (individually and collectively, together with any
other Subsidiary of Pledgor with respect to which a Pledge Amendment is
delivered pursuant to Section 6.5 hereof, the "Issuer"); and
WHEREAS, Pledgor, certain of its affiliates and Secured Party are
parties to that certain Settlement and Release Agreement dated April 12, 2002
(the "Settlement Agreement"), pursuant to which, among other things, the Secured
Party has agreed to release certain claims against the Pledgor and such
affiliates, in consideration for which Pledgor and such affiliates have agreed
to execute and deliver to Secured Party (i) that certain Subordinated Term Loan
Note, dated the date hereof, in the original principal amount of $10,000,000
(the "$10 Million Note"); (ii) that certain Subordinated Interest Advance Note,
dated the date hereof, providing for the making of advances by the Secured Party
to make payments of accrued and unpaid interest in respect of the $10 Million
Note (the "$10 Million Interest Advance Note"); (iii) that certain Subordinated
Term Loan Note, dated the date hereof, in the original principal amount of
$3,000,000 (the "$3 Million Note"); (iv) that certain Subordinated Interest
Advance Note, dated the date hereof, providing for the making of advances by the
Secured Party to make payments of accrued and unpaid interest in respect of the
$3 Million Note (the "$3 Million Interest Advance Note"; the $10 Million Note,
the $10 Million Interest Advance Note, the $3 Million Note and the $3 Million
Interest Advance Note are hereinafter collectively referred to as the "Notes");
and
WHEREAS, in further consideration of the Secured Party's agreement to
enter into the Settlement Agreement and to release certain claims against the
Pledgor and its affiliates, the Pledgor has agreed to grant a security interest
in the Pledged Securities to Secured Party as security for all of Pledgor's
obligations under the Notes, as well as for any Securicor Claims (as defined in
the Settlement Agreement), to the extent reinstated pursuant to the terms of the
Settlement Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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1. Definitions. The following capitalized terms shall have
(unless otherwise provided elsewhere in this Stock Pledge Agreement) the
following respective meanings (such meanings being equally applicable to both
the singular and plural form of the terms defined):
"Agreement" shall mean this Stock Pledge Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Bankruptcy Code" shall mean Xxxxx 00, Xxxxxx Xxxxxx Code, as amended
from time to time, and any successor statute thereto.
"Event of Default" shall mean any of the following events:
(a) there shall occur any "Event of Default" under any of
the Notes, as such term is defined therein;
(b) any of the Pledged Collateral shall be attached or
levied upon or seized in any legal proceedings, or held by virtue of
any lien or distress; or
(c) Pledgor makes any representations or warranties in
this Agreement or in any certificate or statement furnished at any time
hereunder or thereunder or in connection herewith or therewith which
proves to have been untrue or misleading in any material respect when
made or furnished and which continues to be untrue or misleading in any
material respect.
"Lien" means any mortgage, pledge, encumbrance, charge, security
interest, lien, assignment or other preferential arrangement of any nature
whatsoever, including any conditional sale agreement or other title retention
agreement.
"Obligations" means all of the obligations of the Pledgor to perform,
and/or to pay amounts owing, under the Notes, this Agreement, each of the
agreements, documents and instruments executed from time to time in connection
with the Notes and/or this Agreement, and any and all obligations of the Pledgor
arising in connection with any Securicor Claim (as defined in the Settlement
Agreement), to the extent that such Securicor Claim is reinstated pursuant to
the terms of the Settlement Agreement.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, governmental authority, or any other entity.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
"Senior Credit Facility" means the credit facilities provided to the
Pledgor and its affiliates pursuant to (a) that certain Third Amended and
Restated Credit Agreement dated as of April 12, 2002, by and among the Pledgor
and certain of its affiliates, as borrowers, the financial
- 99 -
institutions from time to time party thereto, as lenders, and Wachovia Bank,
National Association (or any successor thereto), as agent for such lenders, as
such agreement has been, and as the same may be further, amended, restated,
supplemented, extended, renewed, or otherwise modified from time to time, or (b)
any substitute or replacement senior credit facility to which the Pledgor
becomes a party, the proceeds of which are used to refinance the Pledgor's
obligations (and/or commitments that replace commitments) under the credit
facility referred to in clause (a) of this definition or a previous substitute
or replacement senior credit facility under this clause (b).
"Senior Credit Facility Agent" means Wachovia Bank, National
Association or any successor thereof or replacement therefor, in its capacity as
agent for the lenders party to the Senior Credit Facility.
2. Pledge. Pledgor hereby pledges, conveys, hypothecates,
mortgages, assigns, sets over, delivers and grants to the Secured Party a
security interest in all of the following (collectively, the "Pledged
Collateral"):
2.1. the Pledged Securities and the certificates
representing the Pledged Securities, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Securities;
2.2. all additional shares of capital stock of the Issuer
and all Subsidiaries of Pledgor from time to time acquired by Pledgor in any
manner (which shares shall be deemed to be part of the Pledged Securities), and
the certificates representing such additional shares, and all dividends,
distributions, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares; and
2.3. all proceeds of any of the foregoing.
Until the Senior Credit Facility has been terminated and all
obligations owing thereunder have been repaid in their entirety, Pledged
Collateral shall specifically exclude any assets or properties that have not
been pledged as security for the obligations under the Senior Credit Facility.
3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is security for, the payment and performance of all of the
Obligations.
4. Delivery of Pledged Collateral. All certificates representing
or evidencing the Pledged Securities shall be delivered to and held by the
Secured Party pursuant hereto or on behalf of the Secured Party by the Senior
Credit Facility Agent and shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Secured Party. The Secured Party shall have the right, in its discretion and
without notice to Pledgor at any time after the occurrence and during the
continuance of an Event of Default, to transfer to or to register in the name of
the Secured Party, or any of its nominees, subject to the terms of this
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Agreement, any or all of the Pledged Securities. In addition, the Secured Party
shall have the right at any time following the occurrence and during the
continuance of an Event of Default to exchange certificates or instruments
representing or evidencing Pledged Securities for certificates or instruments of
smaller or larger denominations.
5. Representations and Warranties. Pledgor represents and
warrants to the Secured Party that, as of the date hereof:
5.1. Pledgor is, and at the time of delivery of the
Pledged Securities to the Secured Party pursuant to Section 4 hereof will be,
the sole holder of record and the sole beneficial owner of the Pledged
Collateral free and clear of any Lien thereon or affecting the title thereto
except for the Lien created by this Agreement, Liens securing the obligations of
Pledgor under the Senior Credit Facility, and other Liens permitted under the
Senior Credit Facility.
5.2. The Pledged Securities included in the Pledged
Collateral constitute the percentage of the issued and outstanding shares of
capital stock of the Issuer as is determined in accordance with Exhibit A
attached hereto. All of the Pledged Securities have been duly authorized,
validly issued and are fully paid and non-assessable; and there are no existing
options, warrants or commitments of any kind or nature or any outstanding
securities or other instruments convertible into shares of any class of capital
stock of the Issuer, and no capital stock of the Issuer is held in the treasury
of the Issuer.
5.3. Pledgor has the right and requisite authority to
pledge, assign, transfer, deliver, deposit and set over the Pledged Collateral
to the Secured Party as provided herein, subject to the rights of the Senior
Credit Facility Agent therein.
5.4. None of the Pledged Securities has been issued or
transferred in violation of the securities registration, securities disclosure
or similar laws of any jurisdiction to which such issuance or transfer may be
subject. Pledgor's execution and delivery of this Agreement and the pledge of
the Pledged Collateral hereunder do not, directly or indirectly, violate or
result in a violation of any such laws.
5.5. None of the Pledged Securities included in the
Pledged Collateral is, as of the date of this Agreement, Margin Stock (as such
term is defined in 12 C.F.R. Section 207), and Pledgor shall, promptly after
learning thereof, notify the Secured Party of any Pledged Collateral which is or
becomes Margin Stock and execute and deliver in favor of the Secured Party any
and all instruments, documents and agreements (including, but not limited to
Form U-1) necessary to cause the pledge of such Margin Stock to comply with all
applicable laws, rules and regulations.
5.6. No consent, approval, authorization or other order of
any Person (other than the lenders under the Senior Credit Facility) and no
consent, authorization, approval, or other action by, and no notice to or filing
with, any governmental departments, commissions, boards, bureaus, agencies or
other instrumentalities, domestic or foreign, is required to be made or obtained
by Pledgor either (a) for the pledge of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement by
Pledgor or (b) for the exercise by the Secured Party of
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the voting or other rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement, except as may be
required in connection with such disposition by laws affecting the offering and
sale of securities generally.
5.7. The pledge, and assignment of the Pledged Collateral
pursuant to this Agreement, together with the acknowledgment and agreement of
the Senior Credit Facility Agent that it holds the Pledged Collateral for the
benefit of the Secured Party, creates a valid second priority Lien on and a
second priority perfected security interest in the Pledged Collateral pledged by
Pledgor, and the proceeds thereof, securing the payment of the Obligations,
subject to no other Lien other than the Lien securing the obligations under the
Senior Credit Facility Agent and other Liens permitted under the Senior Credit
Facility, but only to the extent such other Liens are junior and subordinated to
the Lien of the Pledgor.
5.8. This Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding obligation of
Pledgor enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, or other similar laws affecting the rights
of creditors generally or by the application of general equity principles
(regardless of whether enforcement is sought in equity or at law).
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
6. Covenants. Pledgor covenants and agrees that until the
termination of this Agreement in accordance with Section 12 hereof:
6.1. Except as provided herein, without the prior written
consent of the Secured Party, Pledgor will not sell, assign, transfer, pledge,
or otherwise encumber any of its rights in or to the Pledged Collateral or any
unpaid dividends or other distributions or payments with respect thereto or
xxxxx x Xxxx in any therein, except as permitted under the Senior Credit
Facility.
6.2. Pledgor will not, subsequent to the date of this
Agreement, cause or, to the extent it is able to do so, permit the Issuer to
issue any shares of capital stock or securities convertible into shares of
capital stock, other than for the purpose of qualifying directors, unless and
except upon first having obtained the prior written consent of the Secured Party
thereto (such consent to be granted or denied in good faith), except as
permitted under or in connection with the Senior Credit Facility.
6.3. Pledgor will, at its expense, promptly execute,
acknowledge and deliver all such instruments and take all such action as the
Secured Party from time to time may reasonably request in order to ensure to the
Secured Party the benefits of the Liens in and to the Pledged Collateral
intended to be created by this Agreement, including the filing of any necessary
or desirable Uniform Commercial Code financing statements, which may be filed by
the Secured Party with or without the signature of Pledgor, and will cooperate
with the Secured Party, at Pledgor's expense, in obtaining all necessary
approvals and making all necessary filings under federal or state law in
connection with such Liens or any sale or transfer of the Pledged Collateral.
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6.4. Pledgor has and will defend the title to the Pledged
Collateral and the Liens of the Secured Party thereon against the claim of any
Person and will maintain and preserve such Liens.
6.5. Pledgor will, upon obtaining any additional shares of
capital stock of the Issuer, or any Subsidiary of Pledgor that was not
theretofore an "Issuer" hereunder, which are not already Pledged Collateral,
promptly (and in any event within five (5) Business Days) deliver to the Secured
Party a Pledge Amendment, duly executed by Pledgor, in substantially the form of
Exhibit B hereto (a "Pledge Amendment"), in respect of 100% of the additional
Pledged Collateral to confirm the pledge of such additional Pledged Collateral
pursuant to this Pledge Agreement; provided, however, that the failure of
Pledgor to execute and deliver any such Pledge Amendment shall not prevent such
additional Pledged Collateral from being subject to the Lien created by this
Pledge Agreement. Pledgor hereby authorizes the Secured Party to attach each
Pledge Amendment to this Pledge Agreement and agrees that: (a) all shares of
stock listed on any Pledge Amendment delivered to the Secured Party shall for
all purposes hereunder be considered Pledged Securities hereunder and shall be
included in the Pledged Collateral; and (b) the issuer of any shares of capital
stock listed on any Pledge Amendment delivered to the Secured Party shall for
all purposes hereunder be considered an Issuer.
Notwithstanding the foregoing, for so long as the Senior Credit
Facility remains in existence or any obligations remain outstanding thereunder,
the Pledgor will not be required to comply with this Section 6.5 to the extent
such compliance would result in a violation of the terms of the Senior Credit
Facility or the Subordination Agreement referred to in Section 19 hereof.
6.6. Pledgor will pay all taxes, assessments and charges
levied, assessed or imposed upon the Pledged Collateral owned by it before the
same become delinquent or become liens upon any of the Pledged Collateral except
where such taxes, assessments and charges may be contested in good faith by
appropriate proceedings.
6.7. Pledgor will not create, grant or suffer to exist any
lien, encumbrance, mortgage, or security interest on any of the Pledged
Collateral except (a) those in favor of the Secured Party, (b) Liens securing
the Pledgor's obligations under the Senior Credit Facility, and (c) other Liens
permitted under the Senior Credit Facility.
7. Distributions; Etc.
7.1. Right of Pledgor to Receive Distributions. For so
long as no Event of Default exists, Pledgor shall have the right to receive cash
distributions declared and paid with respect to the Pledged Collateral, to the
extent such distributions are permitted by the Senior Credit Facility. Any and
all stock or liquidating distributions, other distributions in property, return
of capital or other distributions made on or in respect of Pledged Collateral,
whether resulting from a subdivision, combination or reclassification of the
outstanding capital stock of any Issuer or received in exchange for Pledged
Collateral or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which any Issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral and, if received
by Pledgor, shall be received in trust for benefit of the Secured
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Party, be segregated from the other property and funds of Pledgor, and shall
forthwith be delivered to the Secured Party or, for so long as the Senior Credit
Facility remains in existence or any obligations thereunder remain outstanding,
to the Senior Credit Facility Agent, to be held subject to the terms of this
Agreement.
7.2. Termination of Pledgor's Right to Receive
Distributions. Upon and after the occurrence of any Event of Default, all rights
of Pledgor to receive any cash distributions pursuant to Section 7.1 hereof
shall cease, and all such rights shall thereupon become vested in the Secured
Party, and the Secured Party shall have the sole and exclusive right to receive
and retain the distributions which Pledgor would otherwise be authorized to
receive and retain pursuant to Section 7.1 hereof. In such event, Pledgor shall
pay over to the Secured Party any distributions received by it with respect to
the Pledged Collateral and any and all money and other property paid over to or
received by the Secured Party pursuant to the provisions of this Section 7.2
shall be retained by the Secured Party as Pledged Collateral hereunder and/or
shall be applied to the repayment of the Obligations in accordance with the
provisions hereof.
7.3. Holding Pledged Collateral; Exchanges. The Secured
Party may hold any of the Pledged Collateral, endorsed or assigned in blank, and
during the existence of an Event of Default, may deliver any of the Pledged
Collateral to the issuer thereof for the purpose of making denominational
exchanges or registrations or transfers or for such other reasonable purpose in
furtherance of this Agreement as the Secured Party may in good xxxxx xxxx
desirable. The Secured Party shall have the right, if necessary to perfect its
security interest, to transfer to or register in the name of the Secured Party
or any of its nominees, any or all of the Pledged Collateral; provided that
notwithstanding the foregoing, until any transfer of beneficial ownership with
respect to the Pledged Collateral pursuant to any exercise of remedies under
Section 8 hereof, Pledgor shall continue to be the beneficial owner of the
Pledged Collateral.
8. Remedies. Upon the occurrence and during the continuance
of an Event of Default, the Secured Party shall have the following rights and
remedies:
8.1. Secured Creditor. All of the rights and remedies of a
secured party under the Uniform Commercial Code of the State where such rights
and remedies are asserted, or under other applicable law all of which rights and
remedies shall be cumulative, and none of which shall be exclusive, to the
extent permitted by law, in addition to any other rights and remedies contained
in this Agreement.
8.2. Right of Sale. The Secured Party may, without demand
and without advertisement, notice or legal process of any kind (except as may be
required by law), all of which Pledgor waives, at any time or times (a) apply
any cash distributions received by the Secured Party pursuant to Section 7.2
hereof to the Obligations and (b) if following such application there remains
outstanding any Obligations, sell the remaining Pledged Collateral, or any part
thereof at public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery as the Secured Party
shall deem appropriate in good faith. The Secured Party shall be authorized at
any such sale (if, on the advice of counsel, it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the
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Pledged Collateral for their own account for investment and not with a view to
the distribution or resale thereof, and upon consummation of any such sale the
Secured Party shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Pledged Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of Pledgor. The proceeds realized from the sale of
any Pledged Collateral shall be applied to the Obligations in such manner as the
Secured Party may determine in its sole discretion.
8.3. Notice. In addition thereto, Pledgor further agrees
that in the event that notice is necessary under applicable law, written notice
mailed to Pledgor in the manner specified in Section 16 hereof ten (10) Business
Days prior to the date of the disposition of the Pledged Collateral subject to
the security interest created herein at any such public sale or sale at any
broker's board or on any such securities exchange, or prior to the date after
which private sale or any other disposition of said Pledged Collateral will be
made, shall constitute commercially reasonable and fair notice.
8.4. Securities Act, etc. If, at any time when the Secured
Party shall determine to exercise its right to sell the whole or any part of the
Pledged Collateral hereunder, such Pledged Collateral or the part thereof to be
sold shall not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as now or hereafter in effect, or any similar statute
now or hereafter in effect in any jurisdiction (collectively, the "Securities
Laws"), the Secured Party may, in its discretion (subject only to applicable
requirements of law), sell such Pledged Collateral or part thereof by private
sale in such manner and under such circumstances as the Secured Party may deem
necessary or advisable, but subject to the other requirements of this Section 8,
and shall not be required to effect such registration or to cause the same to be
effected. Without limiting the generality of the foregoing, in any such event,
the Secured Party in its discretion may, in accordance with applicable
Securities Laws, (a) proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Collateral or
part thereof could be or shall have been filed under any applicable Securities
Law, (b) approach and negotiate with a single possible purchaser to effect such
sale, and (c) restrict such sale to a purchaser who will represent and agree
that such purchaser is purchasing for its own account, for investment and not
with a view to the distribution or sale of such Pledged Collateral or part
thereof. In addition to a private sale as provided above in this Section 8, if
any of the Pledged Collateral shall not be freely distributable to the public
without registration under applicable Securities Laws at the time of any
proposed sale pursuant to this Section 8, then the Secured Party shall not be
required to effect such registration or cause the same to be effected but, in
its discretion (subject only to applicable requirements of law), may require
that any sale hereunder (including a sale at auction) be conducted subject to
restrictions (i) as to the financial sophistication and ability of any Person
permitted to bid or purchase at any such sale, (ii) as to the content of legends
to be placed upon any certificates representing the Pledged Collateral sold in
such sale, including restrictions on future transfer thereof, (iii) as to the
representations required to be made by each Person bidding or purchasing at such
sale relating to that Person's access to financial information about Pledgor and
such Person's intentions as to the holding of the Pledged Collateral so sold for
investment, for its own account, and not with a view to the distribution
thereof, and (iv) as to such other matters as the Secured Party may, in its good
faith discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors'
rights and all applicable Securities Laws.
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8.5. Registration. Pledgor acknowledges that
notwithstanding the legal availability of a private sale or a sale subject to
the restrictions described above in Section 8.4, the Secured Party may, in its
discretion and at its sole expense, elect to register any or all of the Pledged
Collateral under applicable Securities Laws. Pledgor, however, recognizes that
the Secured Party may be unable to effect a public sale of any or all the
Pledged Collateral and may be compelled to resort to one or more private sales
thereof. Pledgor also acknowledges that any such private sale may result in
prices and other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Secured Party shall be under no obligation to delay a sale of any of
the Pledged Collateral for the period of time necessary to permit the registrant
to register such securities for public sale under applicable Securities Laws,
even if Pledgor would agree to do so.
8.6. Waiver of Certain Rights. Pledgor agrees that
following the occurrence and during the continuance of an Event of Default it
will not at any time plead, claim or take the benefit of any appraisal,
valuation, stay, extension, moratorium or redemption law now or hereafter in
force in order to prevent or delay the enforcement of this Agreement, or the
absolute sale of the whole or any part of the Pledged Collateral or the
possession thereof by any purchaser at any sale hereunder, and Pledgor waives
the benefit of all such laws to the extent it lawfully may do so. Pledgor agrees
that it will not interfere with any right, power and remedy of the Secured Party
provided for in this Agreement or now or hereafter existing at law or in equity
or by statute or otherwise, or the exercise or beginning of the exercise by the
Secured Party of any one or more of such rights, powers or remedies. No failure
or delay on the part of the Secured Party to exercise any such right, power or
remedy and no notice or demand which may be given to or made upon Pledgor by the
Secured Party with respect to any such remedies shall operate as a waiver
thereof, or limit or impair the Secured Party's right to take any action or to
exercise any power or remedy hereunder, without notice or demand, or prejudice
its rights as against Pledgor in any respect.
8.7. Specific Performance. Pledgor further agrees that a
breach of any of the covenants contained in this Section 8 will cause
irreparable injury to the Secured Party, that the Secured Party has no adequate
remedy at law in respect of such breach and, as a consequence, agrees that each
and every covenant contained in this Section 8 shall be specifically enforceable
against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that the Obligations are not then due and payable in accordance with the
agreements and instruments governing and evidencing such obligations.
9. Power of Attorney; Proxy; Voting.
9.1. Upon the occurrence and during the continuance of an
Event of Default, Pledgor irrevocably designates, makes, constitutes and
appoints the Secured Party (and all Persons designated by the Secured Party) as
its true and lawful attorney (and agent-in-fact) and the Secured Party, or the
Secured Party's agent, may, without notice to Pledgor, and at such time or times
thereafter as the Secured Party or said agent, in its good faith discretion, may
determine, in the name of Pledgor or the Secured Party: (a) transfer the Pledged
Collateral on the books of the issuer thereof,
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with full power of substitution in the premises; (b) endorse the name of Pledgor
upon any checks, notes, acceptance, money orders, certificates, drafts or other
forms of payment of security that come into the Secured Party's possession to
the extent they constitute Pledged Collateral; and (c) do all acts and things
necessary, in the Secured Party's discretion, to fulfill the obligations of
Pledgor under this Agreement.
9.2. Upon the occurrence and during the continuance of any
Event of Default, the Secured Party, or its nominee, without notice or demand of
any kind to Pledgor, shall have the sole and exclusive right to exercise all
voting powers pertaining to any and all of the Pledged Collateral (and to give
written consents in lieu of voting thereon to the extent permitted by applicable
law) and may exercise such power in such manner as the Secured Party, in its
sole discretion, shall determine. THIS PROXY IS COUPLED WITH AN INTEREST AND IS
IRREVOCABLE. The exercise by the Secured Party of any of its rights and remedies
under this Section shall not be deemed a disposition of Pledged Collateral under
Article 9 of the Uniform Commercial Code nor an acceptance by the Secured Party
of any of the Pledged Collateral in satisfaction of any of the Obligations.
Notwithstanding the foregoing, so long as no Event of Default exists, Pledgor
shall be entitled to exercise any and all consensual rights pertaining to the
Pledged Collateral owned by it and to give consents, waivers or ratifications in
respect thereof (provided that nothing in this sentence shall be construed to
permit Pledgor to take any action in violation of this Agreement or any
agreement, document or instrument executed in connection herewith).
10. Waiver. No delay on the Secured Party's part in exercising any
power of sale, Lien, option or other right hereunder, and no notice or demand
which may be given to or made upon Pledgor by the Secured Party with respect to
any power of sale, Lien, option or other right hereunder, shall constitute a
waiver thereof, or limit or impair the Secured Party's right to take any action
or to exercise any power of sale, Lien, option, or any other right hereunder,
without notice or demand, or prejudice the Secured Party's rights as against
Pledgor in any respect.
11. Assignment. The Secured Party may assign, indorse or transfer
any instrument evidencing all or any part of the Obligations, and the holder of
such instrument shall be entitled to the benefits of this Agreement.
12. Termination. This Agreement shall terminate and be of no
further force or effect upon the payment and performance in full of the
Obligations. Upon the termination of this Agreement, the Secured Party shall
deliver to Pledgor the Pledged Collateral at the time subject to this Agreement
and then in the Secured Party's possession or control and all instruments of
assignment executed in connection therewith, free and clear of the Liens hereof
and, except as otherwise expressly provided herein, all of Pledgor's obligations
hereunder shall at such time terminate.
13. Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Pledgor for liquidation or reorganization, should Pledgor become insolvent or
make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of Pledgor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or
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must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference", "fraudulent conveyance", or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
14. Miscellaneous. This Agreement shall be binding upon Pledgor
and its successors and assigns, and shall inure to the benefit of, and be
enforceable by, the Secured Party and its successors and assigns. This Agreement
shall be governed by, and construed and enforced in accordance with, the
internal laws in effect in the State of Georgia, and none of the terms or
provisions of this Agreement may be waived, altered, modified or amended except
in writing duly signed for and on behalf of the Secured Party and Pledgor.
15. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or effect those
portions of this Agreement which are valid.
16. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give or
serve upon any other a communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be delivered in accordance with the terms of
Section 14 of the Settlement Agreement.
17. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
18. Counterparts. This Agreement may be executed in any number
of counterparts, which shall, collectively and separately, constitute one
agreement.
19. Subordination. This Stock Pledge Agreement, and the exercise
by the Secured Party of its rights hereunder, are subject to certain terms of
subordination as more fully set forth in that certain Subordination Agreement,
dated April 12, 2002, as amended, restated, supplemented or otherwise modified
from time to time, between the Senior Credit Facility Agent and the Secured
Party.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
By:
----------------------------------------------
Name:
----------------------------------------------
Title:
----------------------------------------------
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EXHIBIT A
to the Stock Pledge Agreement
Attached to and forming a part of that certain Stock Pledge Agreement
dated as of April 12, 2002 executed and delivered by Pledgor to Securicor plc.
Class of Certificate Number of Number of Shares
Issuer Stock Number(s) Shares Issued & Outstanding
------ -------- ----------- --------- --------------------
-- -- --
EXHIBIT B
to the Stock Pledge Agreement
PLEDGE AMENDMENT
This Pledge Amendment, dated as of ________________, 20___, is
delivered pursuant to Section 6.5 of the Stock Pledge Agreement referred to
below. The undersigned hereby (a) pledges, conveys, hypothecates, mortgages,
assigns, sets over, delivers and grants to the Securicor plc (the "Secured
Party") a security interest in the shares of capital stock set forth below (the
"Additional Securities") and all dividends, distributions, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Additional Securities, all on the terms and conditions set forth in that
certain Stock Pledge Agreement, dated as of April 12, 2002 (the "Stock Pledge
Agreement"), executed and delivered by the undersigned, as Pledgor, to the
Secured Party, which terms and conditions are hereby incorporated herein by
reference; (b) agrees that this Pledge Amendment may be attached to the Pledge
Agreement; and (c) agrees that the Additional Securities listed on this Pledge
Amendment shall be deemed to be a part of the Pledged Securities under the
Stock Pledge Agreement, shall become a part of the Pledged Collateral referred
to in the Stock Pledge Agreement and shall secure all Obligations referred to
in the Stock Pledge Agreement.
By:
-------------------------------------------
Name:
-------------------------------------------
Title:
-------------------------------------------
Class of Certificate Number of Number of Shares
Issuer Stock Number(s) Shares Issued & Outstanding
----------- -------- ----------- ---------- --------------------
[_________] [Common] [_________] [________] [_________]
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EXHIBIT 8
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of April 12, 2002, ("Escrow
Agreement"), is by and among SECURICOR, PLC, a company organized under the laws
of England & Wales with number 3811216 ("Securicor"), AHL SERVICES, INC., a
Georgia corporation ("AHL"), XXXXXXXXXXX HOLDINGS LIMITED, a Georgia corporation
and a wholly-owned subsidiary of AHL ("Holdings"); XXXXXXXXXXX, INC., a Georgia
corporation and a wholly-owned subsidiary of Holdings ("Xxxxxxxxxxx"); and AHL
Europe Limited, a company incorporated under the laws of England and Wales with
number 3804405 ("AHL Europe"; AHL, Holdings, Xxxxxxxxxxx, and AHL Europe are at
times herein referred to, collectively, as the "AHL Parties."); and SUNTRUST
BANK, as Escrow Agent hereunder ("Escrow Agent").
BACKGROUND
WHEREAS, Securicor and the AHL Parties have entered into that certain
Settlement Agreement dated the date hereof (as amended, restated, supplemented
or otherwise modified from time to time, the "Settlement Agreement"), pursuant
to which Securicor and the AHL Parties have agreed to settle and release certain
claims against one another; and
WHEREAS, in connection with the settlement agreement, the AHL Parties
have agreed to execute and deliver in favor of Securicor (i) that certain
Subordinated Term Loan Note dated the date hereof in the original principal
amount of $10,000,000 (the "$10 Million Note"); (ii) that certain Subordinated
Interest Advance Note dated the date hereof and relating to the $10 Million Note
(the "$10 Million Interest Advance Note"); (iii) that certain Subordinated Term
Loan Note dated the date hereof in the original principal amount of $3,000,000
(the "$3 Million Note"); and (iv) that certain Subordinated Interest Advance
Note dated the date hereof and relating to the $3 Million Note (the "$3 Million
Interest Advance Note"); and
WHEREAS, Securicor and the AHL Parties have agreed that the $10 Million
Note and the $10 Million Interest Advance Note will be delivered directly by the
AHL Parties to Securicor, and that the $3 Million Note and the $3 Million
Interest Advance Note (collectively, the "Escrowed Notes") will be held in
escrow for six months following the execution and delivery thereof. In
consideration of the prepayment by the AHL Parties of the $10 Million Note and
the $10 Million Interest Advance Note not later than October 12, 2002, and for
the other good and valuable consideration recited in the Settlement Agreement,
Securicor has agreed that the $3 Million Note and the $3 Million Interest
Advance Note shall be returned to the AHL Parties; otherwise, the $3 Million
Note and the $3 Million Interest Advance Note will be delivered to the
Securicor; and
WHEREAS, Securicor and the AHL Parties have requested that the Escrow
Agent agree to accept, hold and deliver the Escrowed Notes as hereinafter set
forth, and the Escrow Agent has agreed to so accept, hold, and deliver the
Escrowed Notes;
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NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, for
themselves, their successors and assigns, hereby agree as follows:
1. Definitions. The following terms shall have the following
meanings when used herein:
"AHL Parties" shall have the meaning given to such term in the
introductory paragraph of this Agreement.
"Escrow Agent" shall have the meaning given to such term in the
introductory paragraph of this Agreement.
"Escrow Period" shall mean the period commencing on the date hereof and
ending on October 12, 2002.
"Escrowed Notes" shall have the meaning given to such term in the
recitals to this Agreement.
"Joint Written Direction" shall mean a written direction executed and
delivered by Securicor and the AHL Parties directing Escrow Agent to deliver
either or both of the Escrowed Notes as specified in such written direction or
to take or refrain from taking an action pursuant to this Escrow Agreement.
"Securicor" shall have the meaning given to such term in the recitals
to this Agreement.
2. Appointment of and Acceptance by Escrow Agent. Securicor and
the AHL Parties each hereby appoints Escrow Agent to serve as escrow agent
hereunder. Escrow Agent hereby accepts such appointment and, by its execution
and delivery of this Agreement, acknowledges receipt of the Escrowed Notes.
3. Delivery of Escrowed Notes. Escrow Agent agrees that it shall
deliver the Escrowed Notes as follows:
a. Joint Written Direction. Escrow Agent shall deliver either or
both of the Escrowed Notes, at any time, in accordance with a fully
executed, original Joint Written Direction.
b. Expiration of Escrow Period. Upon the expiration of the Escrow
Period, Escrow Agent shall deliver, as promptly as practicable, the Escrowed
Notes to Securicor, unless Escrow Agent has received prior to the close of
business on the business day following the last day of the Escrow Period a fully
executed, original Joint Written Direction providing for other directions.
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4. Duties of Escrow Agent. Escrow Agent undertakes to perform
only such duties as are expressly set forth herein, and no additional duties or
obligations shall be implied hereunder. In performing its duties under this
Agreement, or upon the claimed failure to perform any of its duties hereunder,
Escrow Agent shall not be liable to anyone for any damages, losses or expenses
which may be incurred as a result of Escrow Agent so acting or failing to so
act; provided, however, Escrow Agent shall not be relieved from liability for
damages arising out of its proven gross negligence or willful misconduct under
this Agreement. Escrow Agent shall in no event incur any liability with respect
to (i) any action taken or omitted to be taken in good faith upon advice of
legal counsel (which may not be counsel to any party hereto), given with respect
to any question relating to the duties and responsibilities of Escrow Agent
hereunder or (ii) any action taken or omitted to be taken in reliance upon any
instrument delivered to Escrow Agent and believed by it to be genuine and to
have been signed or presented by the proper party or parties. Escrow Agent shall
not be bound in any way by any agreement or contract between Securicor and the
AHL Parties (including, but not limited to, the Settlement Agreement), whether
or not Escrow Agent has knowledge of any such agreement or contract.
5. No Security Interest. Each of Securicor and the AHL Parties
warrants to and agrees with Escrow Agent that, unless otherwise expressly set
forth in this Agreement, there is no security interest in the Escrowed Notes or
any part of the Escrowed Notes; no financing statement under the Uniform
Commercial Code of any jurisdiction is on file in any jurisdiction claiming a
security interest in or describing, whether specifically or generally, the
Escrowed Notes or any part of the Escrowed Notes; and the Escrow Agent shall
have no responsibility at any time to ascertain whether or not any security
interest exists in the Escrowed Notes or any part of the Escrowed Notes or to
file any financing statement under the Uniform Commercial Code of any
jurisdiction with respect to the Escrowed Notes or any part thereof.
6. Suspension of Performance; Disbursement Into Court. As an
additional consideration for and as an inducement for Escrow Agent to act
hereunder, it is understood and agreed that, in the event of any disagreement
between the parties to this Agreement or among them or any other person(s)
resulting in adverse claims and demands being made in connection with or for any
money or other property involved in or affected by this Agreement, Escrow Agent
shall be entitled, at the option of Escrow Agent, to refuse to comply with the
demands of such parties, or any of such parties, so long as such disagreement
shall continue. In such event, Escrow Agent shall make no delivery or other
disposition of the Escrowed Notes, or either of them. Anything herein to the
contrary notwithstanding, Escrow Agent shall not be or become liable to such
parties or any of them for the failure of Escrow Agent to comply with the
conflicting or adverse demands of such parties or any of such parties.
Escrow Agent shall be entitled to continue to refrain and refuse to deliver or
otherwise dispose of the Escrowed Notes or either of them or to otherwise act
hereunder, as stated above, unless and until:
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a. the rights of such parties have been finally settled by
binding arbitration or duly adjudicated in a court having jurisdiction of the
parties and the Escrowed Notes; or
b. the parties have reached an agreement resolving their
differences and have notified Escrow Agent in writing of such agreement and have
provided Escrow Agent with indemnity satisfactory to Escrow Agent against any
liability, claims or damages resulting from compliance by Escrow Agent with such
agreement.
In the event of a disagreement between such parties as described above, Escrow
Agent shall have the right, in addition to the rights described above and at the
option of Escrow Agent, to tender into the registry or custody of any court
having jurisdiction, the Escrowed Notes and may take such other legal action as
may be appropriate or necessary, in the opinion of Escrow Agent. Upon such
tender, the parties hereto agree that Escrow Agent shall be discharged from all
further duties under this Agreement; provided, however, that the filing of any
such legal proceedings shall not deprive Escrow Agent of its compensation
hereunder earned prior to such filing and discharge of Escrow Agent of its
duties hereunder.
7. Fees and Expenses of Escrow Agent. Securicor agrees to pay
Escrow Agent for its ordinary services hereunder the fees determined in
accordance with and payable as specified in the Schedule of Fees set forth in
Schedule A attached hereto and made a part hereof. In addition, Securicor agrees
to pay to Escrow Agent its expenses incurred in connection with this Agreement,
including but not limited to the actual cost of legal services in the event
Escrow Agent deems it necessary to retain counsel. Such expenses shall be paid
to Escrow Agent within fifteen (15) days following receipt by Securicor of a
written statement setting forth such expenses.
The parties hereto jointly and severally agree that, in the event any
controversy arises under or in connection with this Agreement or the Escrowed
Notes or Escrow Agent is made a party to or intervenes in any litigation
pertaining to this Agreement or the Escrowed Notes, to pay to Escrow Agent
reasonable compensation for its extraordinary services and to reimburse Escrow
Agent for all costs and expenses associated with such controversy or litigation.
As security for all fees and expenses of Escrow Agent hereunder and any
and all losses, claims, damages, liabilities and expenses incurred by Escrow
Agent in connection with its acceptance of appointment hereunder or with the
performance of its obligations under this Agreement and to secure the obligation
of the parties hereto to indemnify Escrow Agent as set forth in paragraph 10
hereof, Escrow Agent is hereby granted a security interest in and a lien upon
the Escrowed Notes, which security interest and lien shall be prior to all other
security interests, liens or claims against the Escrowed Notes or any part
thereof.
8. Resignation and Removal of Escrow Agent. Escrow Agent may
resign at any time from it obligations under this Agreement by providing written
notice to the parties hereto. Such resignation shall be effective on the date
set forth in such written notice which
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shall be no earlier than 30 days after such written notice has been given. In
the event no successor escrow agent has been appointed on or prior to the date
such resignation is to become effective, Escrow Agent shall be entitled to
tender into the custody of a court of competent jurisdiction all assets then
held by it hereunder and shall thereupon be relieved of all further duties and
obligations under this Agreement. Escrow Agent shall have no responsibility for
the appointment of a successor escrow agent hereunder.
9. Limitation on Obligations of Escrow Agent. Escrow Agent shall
have no obligation to take any legal action in connection with this Agreement or
towards its enforcement, or to appear in, prosecute or defend any action or
legal proceeding which would or might involve it in any cost, expense, loss or
liability unless security and indemnity, as provided in this paragraph, shall be
furnished.
10. Indemnification. Securicor and the AHL Parties jointly and
severally agree to indemnify Escrow Agent and it officers, directors, employees
and agents and save Escrow Agent and its officers, directors, employees and
agents harmless from and against any and all Claims (as hereinafter defined) and
Losses (as hereinafter defined) which may be incurred by Escrow Agent or any of
such officers, directors, employees or agents as a result of Claims asserted
against Escrow Agent or any of such officers, directors, employees or agents as
a result of or in connection with Escrow Agent's capacity as such under this
Agreement by any person or entity, except to the extent that such Claims or
Losses arise out of the gross negligence or bad faith of the Escrow Agent or any
such officer, director, employee, or agent For the purposes hereof, the term
"Claims" shall mean all claims, lawsuits, causes of action or other legal
actions and proceedings of whatever nature brought against (whether by way of
direct action, counterclaim, cross action or impleader) Escrow Agent or any such
officer, director, employee or agent, even if groundless, false or fraudulent,
so long as the claim, lawsuit, cause of action or other legal action or
proceeding is alleged or determined, directly or indirectly, to arise out of,
result from, relate to or be based upon, in whole or in part: (a) the acts or
omissions of Securicor or any AHL Party, (b) the appointment of Escrow Agent as
escrow agent under this Agreement, or (c) the performance by Escrow Agent of its
powers and duties under this Agreement; and the term "Losses" shall mean losses,
costs, damages, expenses, judgments and liabilities of whatever nature
(including but not limited to attorneys', accountants' and other professionals'
fees, litigation and court costs and expenses and amounts paid in settlement),
directly or indirectly resulting from, arising out of or relating to one or more
Claims. Upon the written request of Escrow Agent or any such officer, director,
employee or agent (each referred to hereinafter as an "Indemnified Party"), and
to the extent that Securicor and the AHL Parties may be liable therefor under
this Section 10, Securicor and the AHL Parties, jointly and severally agree to
assume the investigation and defense of any Claim, including the employment of
counsel acceptable to the applicable Indemnified Party and the payment of all
expenses related thereto and, notwithstanding any such assumption, the
Indemnified Party shall have the right, and Securicor and the AHL Parties
jointly and severally agree to pay the cost and expense thereof, to employ
separate counsel with respect to any such Claim and participate in the
investigation and defense thereof in the event that such Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to such Indemnified Party which are different from or additional to
those available to either Securicor or any of the AHL Parties. Securicor and the
AHL Parties hereby
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agree that the indemnifications and protections afforded Escrow Agent in this
section shall survive the termination of the Agreement.
11. Representations and Warranties.
a. Each of the AHL Parties makes the following representations
and warranties to Escrow Agent and Securicor:
(i) Each AHL Party is a company duly organized, validly
existing and in good standing under the laws of
jurisdiction of its organization and has full power
and authority to execute and deliver this Escrow
Agreement and to perform its obligations hereunder.
(ii) This Escrow Agreement has been duly approved by all
necessary action of such AHL Party, including any
necessary shareholder or equity holder approval, has
been executed by duly authorized officers or
representatives of such AHL Party, and constitutes a
valid and binding agreement of such AHL Party,
enforceable in accordance with its terms.
(iii) The execution, delivery, and performance by such AHL
Party of this Escrow Agreement is in accordance with
the Settlement Agreement and will not violate,
conflict with, or cause a default under the articles
of incorporation or bylaws of such AHL Party, any
applicable law or regulation, any court order or
administrative ruling or decree to which such AHL
Party is a party or any of its property is subject,
or any material agreement, contract, indenture, or
other binding arrangement to which such AHL Party is
a party or any of its property is subject.
(iv) A. Xxxxxxx Xxxxxxx has been duly appointed to act as
the representative of each AHL Party hereunder and
has full power and authority to execute, deliver, and
perform this Escrow Agreement, to execute and deliver
any Joint Written Direction, to amend, modify or
waive any provision of this Agreement and to take any
and all other actions as the representative of each
of the AHL Parties under this Agreement, all without
further consent or direction from, or notice to, any
AHL Party or any other party.
(v) All of the representations and warranties of each AHL
Party contained herein are true and complete as of
the date hereof and will be true and complete at the
time of any delivery of the Escrowed Notes.
b. Securicor makes the following representations and warranties
to Escrow Agent and the AHL Parties:
(i) Securicor is a corporation duly organized, validly
existing, and in good standing under the laws of the
England and Wales, and has full power and
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authority to execute and deliver this Escrow
Agreement and to perform its obligations hereunder;
(ii) This Escrow Agreement has been duly approved by all
necessary corporate action of Securicor, including
any necessary shareholder approval, has been executed
by duly authorized officers of Securicor, and
constitutes a valid and binding agreement of
Securicor, enforceable in accordance with its terms.
(iii) The execution, delivery, and performance by Securicor
of this Escrow Agreement is in accordance with the
Settlement Agreement and will not violate, conflict
with, or cause a default under the Memorandum of
Association of Securicor, any applicable law or
regulation, any court order or administrative ruling
or decree to which Securicor is a party or any of its
property is subject, or any material agreement,
contract, indenture, or other binding arrangement to
which Securicor is a party or any of its property is
subject.
(iv) Xxxxx Xxxxxxxxx has been duly appointed to act as the
representative of Securicor hereunder and has full
power and authority to execute, deliver, and perform
this Escrow Agreement, to execute and deliver any
Joint Written Direction, to amend, modify or waive
any provision of this Agreement and to take any and
all other actions as the representative of Securicor
under this Agreement, all without further consent or
direction from, or notice to, Securicor or any other
party.
(v) All of the representations and warranties of
Securicor contained herein are true and complete as
of the date hereof and will be true and complete at
the time of any delivery of the Escrowed Notes.
12. Consent to Jurisdiction and Venue. In the event that any party
hereto commences a lawsuit or other proceeding relating to or arising from this
Agreement, the parties hereto agree that the United States District Court for
the Northern District of Georgia shall have the sole and exclusive jurisdiction
over any such proceeding. If such court lacks federal subject matter
jurisdiction, the parties agree that the Superior Court of Xxxxxx County,
Georgia shall have sole and exclusive jurisdiction. Any of these courts shall be
proper venue for any such lawsuit or judicial proceeding and the parties hereto
waive any objection to such venue. The parties hereto consent to and agree to
submit to the jurisdiction of any of the courts specified herein and agree to
accept service or process to vest personal jurisdiction over them in any of
these courts.
13. Notice. All notices and other communications hereunder shall
be in writing and shall be deemed to have been validly served, given or
delivered five (5) days after deposit in the United States mails, by certified
mail with return receipt requested and postage prepaid, when delivered
personally, one (1) day after delivery to any overnight courier, or when
transmitted by facsimile transmission facilities, and addressed to the party to
be notified as follows:
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if to Securicor, to:
Securicor plc
Xxxxxx Xxxx Xxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx SMI 4LD
England
Attention: Xxxxx Xxxxxxxxx
Fax: 000 00 00 0000 0000
Tel. No.: 000 00 00 0000 0000
with a copy to:
Xxxxxxxx Xxxxxxx LLP
Bank of America Plaza
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx, Esq.
Fax: (000) 000-0000
Tel. No.: (000) 000-0000
if to the AHL Parties, or any of them, to:
Xxxxxxxxxxx Holdings Limited
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: A. Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
Tel. No.: (000) 000-0000
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Tel. No.: (000) 000-0000
If to the Escrow Agent, to:
SunTrust Bank
00 Xxxx Xxxxx
- 000 -
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
Tel. No.: (000) 000-0000
or to such other address as each party may designate for itself by like notice.
14. Amendment or Waiver. This Escrow Agreement may be
changed, waived, discharged or terminated only by a writing signed by Securicor,
the AHL Parties and the Escrow Agent. No delay or omission by any party in
exercising any right with respect hereto shall operate as a waiver. A waiver on
any one occasion shall not be construed as a bar to, or waiver of, any right or
remedy on any future occasion.
15. Severability. To the extent any provision of this
Escrow Agreement is prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Escrow Agreement.
16. Governing Law. This Escrow Agreement shall be
construed and interpreted in accordance with the internal laws of the State of
Georgia without giving effect to the conflict of laws principles thereof.
17. Entire Agreement. This Escrow Agreement, together
with the Settlement Agreement, constitutes the entire agreement between the
parties relating to the holding and delivery of the Escrowed Notes and sets
forth in their entirety the obligations and duties of Escrow Agent with respect
to the Escrowed Notes.
18. Binding Effect. All of the terms of this Escrow
Agreement, as amended from time to time, shall be binding upon, inure to the
benefit of and be enforceable by the respective heirs, successors and assigns of
Securicor, each of the AHL Parties and the Escrow Agent.
19. Execution in Counterparts. This Escrow Agreement
may be executed in two or more counterparts, which when so executed shall
constitute one and the same agreement or direction. Any Joint Written Direction
may not be executed in counterparts.
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed under seal as of the date first above written.
"ESCROW AGENT"
SUNTRUST BANK
By:
-----------------------------------
Name:
Title:
"SECURICOR"
SECURICOR PLC
By:
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
"AHL"
AHL SERVICES, INC.
By:
-----------------------------------
Name: A. Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
"HOLDINGS"
XXXXXXXXXXX HOLDINGS LIMITED
By:
-----------------------------------
Name: A. Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
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"AHL EUROPE"
AHL EUROPE LIMITED
By:
-----------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer
European Operations
"XXXXXXXXXXX"
XXXXXXXXXXX, INC.
By:
-----------------------------------
Name: A. Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
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SCHEDULE A
FEES PAYABLE TO ESCROW AGENT
The annual fee of $2000.00 for administering this Escrow Agreement is payable in
advance at the time of closing and, if applicable, will be invoiced each year to
the appropriate party or parties on the anniversary of the closing date of the
Escrow Agreement.
A one time legal review fee incurred by SunTrust Bank in connection with the
negotiation, execution and delivery of this Escrow Agreement, in the amount of
$500, is payable at closing.
Out of pocket expenses such as, but not limited to, postage, courier, overnight
mail, insurance, money wire transfer, long distance telephone charges,
facsimile, stationary, travel, legal fees (in excess of the legal review fee
referred to above) or accounting fees, etc., will be billed at cost.
These fees do not include extraordinary services which will be priced according
to time and scope duties. The fees shall be deemed earned in full upon receipt
by the Escrow Agent, and no portion shall be refundable for any reason,
including without limitation, termination of the Escrow Agreement.
It is acknowledged that the schedule of fees shown above are acceptable for the
services mutually agreed upon.
EXHIBIT 9
LEGAL OPINION OF KING & SPALDING
April 12, 2002
Securicor plc
Xxxxxx Xxxx Xxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx SMI 4LD
England
Gentlemen:
We have acted as counsel to AHL Services, Inc., a Georgia corporation
("AHL"); Xxxxxxxxxxx Holdings Limited, a Georgia corporation ("Holdings"); and
Xxxxxxxxxxx, Inc., a Georgia corporation ("Xxxxxxxxxxx" AHL, Holdings and
Xxxxxxxxxxx are hereinafter collectively referred to as the "AHL Parties"), in
connection with the Settlement and Release Agreement, of even date herewith (the
"Settlement Agreement"), by and among Securicor plc, a company organized under
the laws of England & Wales ("Securicor"), and the AHL Parties.
In our capacity as counsel to the AHL Parties, we have reviewed the
following documents:
(a) the Subordinated Term Loan Note, dated the date hereof, in the
original principal amount of $10 Million, executed by the AHL Parties and AHL
Europe Limited, a company organized under the laws of England and Wales ("AHL
Europe"), in favor of Securicor (the "$10 Million Note");
(b) the Subordinated Term Loan Note, dated the date hereof, in the
original principal amount of $3 Million, executed by the AHL Parties and AHL
Europe in favor of Securicor (the "$3 Million Note");
(c) the Subordinated Interest Advance Note, dated the date hereof
and related to the $10 Million Note, executed by the AHL Parties and AHL Europe
in favor of Securicor (the "$10 Million Interest Advance Note");
(d) the Subordinated Interest Advance Note, dated the date hereof
and related to the $3 Million Note, executed by the AHL Parties and AHL Europe
in favor of Securicor (the "$3 Million Interest Advance Note");
(e) the Security Agreements, dated as of the date hereof,
executed by each of the AHL Parties in favor of Securicor (collectively, the
"Security Agreements");
(f) the Stock Pledge Agreements, dated as of the date hereof,
executed by each of the AHL Parties in favor of Securicor (collectively, the
"Stock Pledge Agreements"); and
(g) Uniform Commercial Code financing statements naming each AHL
Party as a debtor and Securicor as secured party (the "Financing Statements")
covering certain assets of the AHL Parties and filed or to be filed with the
Clerk of the Superior Court of Xxxxxx County, Georgia.
The instruments, documents and agreements listed in subparagraphs (a)
through (f) above are hereinafter collectively referred to as the "Opinion
Documents."
We also have reviewed (i) the articles of incorporation and bylaws of
each AHL Party, as amended to date, (ii) a certificate of existence for each of
the AHL Parties, issued by the Secretary of State of Georgia as of a recent
date, copies of each of which have been furnished to you (the "Good Standing
Certificates"), (iii) corporate resolutions of each of the AHL Parties
authorizing the transactions described in the Opinion Documents, and (iv) such
other agreements, corporate records, communications, instruments, certificates
of public officials, documents and records and given consideration to such
matters of law and fact as we have deemed appropriate to render the opinions
expressed herein. As to factual matters, with your permission, we have relied
upon the factual representations made in the Opinion Documents, statements and
other representations of the AHL Parties and their respective officers, and
certificates of public officials, in each case without any independent
investigation.
Whenever any opinion or confirmation of fact set forth herein is
qualified by the words "to our knowledge", "known to us" or words of similar
import, the quoted words mean the current awareness of lawyers in the primary
lawyer group of factual matters such lawyers recognized as being relevant to the
opinion or confirmation so qualified. "Primary lawyer group" means the lawyer
who signs this opinion letter and, solely as to information relative to an
opinion or confirmation issue, any lawyer in this firm who is responsible for
providing the response covering the particular issue.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia,
which Interpretative Standards are incorporated in this opinion letter by this
reference. Capitalized terms used in this opinion letter and not otherwise
defined herein shall have the meanings assigned to such terms in the
Interpretive Standards or in the Opinion Documents, as the case may be.
The opinions set forth herein are limited to the laws of the State of
Georgia and the applicable federal laws of the United States of America.
Furthermore, our opinion in paragraph 9 is limited to Article 8 and Article 9 of
the Uniform Commercial Code as in effect in the State of Georgia (the "Georgia
UCC"), and our opinions in paragraphs 7 and 8 are limited to Article 9 of the
Georgia UCC; accordingly, those opinion paragraphs do not address (i) laws of
jurisdictions other than Georgia, and of Georgia except for Article 8 or Article
9, as the case
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may be, of the Georgia UCC and (ii) collateral of a type not subject to Article
8 or Article 9, as the case may be, of the Georgia UCC.
In rendering the opinions set forth herein, we have assumed (i) the
legal capacity of all natural persons executing and delivering the Opinion
Documents; (ii) the genuineness of all signatures (other than the signatures of
the AHL Parties); (iii) the authenticity of all documents submitted to us as
originals; (iv) the conformity to authentic original documents of all documents
submitted to us as photostatic or certified copies; (v) the due organization,
valid existence and good standing under the laws of the jurisdiction of
formation of all of the parties to the Opinion Documents other than the AHL
Parties and, to the extent relevant, the due qualification as a foreign
corporation, and the authorization to transact business in the State of Georgia,
of all such parties other than the AHL Parties; (vi) the legal right and power
of all such parties other than the AHL Parties under all applicable laws and
regulations to enter into, execute and deliver such agreements and documents;
(vii) the due authorization, execution and delivery of the Opinion Documents by
all parties thereto other than the AHL Parties; (viii) the enforceability of all
agreements and documents against all parties thereto other than the AHL Parties
and AHL Europe; and (ix) the compliance by Securicor with all standards of
conduct applicable to it with respect to the Opinion Documents (including,
without limitation, any requirement that Securicor act reasonably, in good
faith, in a commercially reasonable manner or otherwise in compliance with
applicable law). Furthermore, in rendering the opinions set forth herein, we
have assumed, and we express no opinion as to, compliance by Securicor with any
state, federal or other laws or regulations applicable to it or to the legal or
regulatory status or the nature of the business of Securicor.
We have further assumed that (i) each AHL Party and AHL Europe that is
a party to a Security Agreement has or will have rights in, or the power to
transfer rights in, all "Collateral" as defined in such Security Agreement and
each AHL Party that is a party to a Stock Pledge Agreement has or will have
rights in, or the power to transfer rights in, all "Pledged Securities" as
defined in such Stock Pledge Agreement (such "Collateral" and "Pledged
Securities", collectively, the "Collateral"), (ii) "value" has been given by
Securicor sufficient for purposes of Section 9-203 of the Georgia UCC, (iii) the
description of the Collateral contained in the Security Agreements and the Stock
Pledge Agreements reasonably identifies the collateral intended to be covered
thereby, (iv) the correct legal name of the Securicor is Securicor plc; and (v)
the correct mailing address of Securicor is set forth on the Financing
Statements.
No opinion is expressed with respect to any of the following:
(i) the existence of, or any of the AHL Parties' title to or
rights in, any of the Collateral;
(ii) any Collateral that consists of timber to be cut, goods that
are or are to become fixtures, as-extracted collateral, commercial tort claims,
collateral arising from consumer transactions, deposit accounts, electronic
chattel paper, letter of credit rights, investment property (other than the
Pledged Securities), agricultural liens, farm products, manufactured homes,
goods subject to certificates of title, and commodity contracts, in each case as
defined in the Georgia UCC;
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(iii) the creation, attachment, perfection or enforcement of any
security interest in any collateral that is subject to an agreement that is, or
purports to be, nonassignable or nontransferrable, or any collateral that may
not be assigned by its terms or under applicable law or regulation, other than
collateral consisting of accounts, chattel paper, general intangibles, lease
agreements or promissory notes (as such terms are defined in the Georgia UCC) to
the extent provided in Sections 9-406, 9-407 and 9-408 of the Georgia UCC;
(iv) the enforceability, as against the government of the United
States of America or any state thereof, of any assignment or security interest
in any collateral constituting accounts or other claims against the government
of the United States of America subject to the Federal Assignment of Claims Act
or against any such state subject to similar laws restricting or prohibiting
assignment of government claims;
(v) the priority of any security interest in any Collateral;
(vi) the effect of Section 9-315 of the Georgia UCC with respect to
any Collateral consisting of proceeds; and
(vii) the effect of any provision of any Opinion Document which is
intended to establish any standard other than a standard set forth in the
Georgia UCC as the measure of the performance by any party thereto of such
party's obligations of good faith, diligence, reasonableness or care or of the
fulfillment of the duties imposed on any secured party with respect to the
maintenance, disposition or redemption of collateral, accounting for surplus
proceeds of collateral or accepting collateral in discharge of liabilities.
Based upon the foregoing, we are of the opinion that:
1. Each of the AHL Parties is a corporation duly organized under
the laws of the State of Georgia and validly existing in the State of Georgia.
Each of the AHL Parties has the corporate power to execute, deliver and perform
its obligations under the Opinion Documents to which it is a party.
2. The execution, delivery and performance by each AHL Party of
the Opinion Documents to which it is a party have been duly authorized by all
requisite corporate action on the part of such AHL Party. The Opinion Documents
to which any AHL Party is a party have been duly executed and delivered by such
AHL Party.
3. The execution, delivery and performance by each AHL Party of
the Opinion Documents to which it is a party will not violate the Articles of
Incorporation, By-laws or other organizational documents of such AHL Party.
4. The execution, delivery and performance by each AHL Party and
AHL Europe of the Opinion Documents to which it is a party will not (a) violate
any Georgia or federal law or regulation; (b) to our knowledge, violate any
order, writ, injunction or decree of any court or governmental authority or
agency to which any AHL party is subject; or (c) result in a breach of
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or constitute (with giving of notice and/or lapse of time, or both) a default
under that certain Third Amended and Restated Credit Agreement, dated as of
April 12, 2002, among the AHL Parties, AHL Europe, certain of their affiliates,
the financial institutions party thereto, and Wachovia, as agent for such
financial institutions, as amended or otherwise modified through and including
the date hereof.
5. Each of the Opinion Documents constitutes the valid and
binding obligation of each of the AHL Parties and AHL Europe that is a party
thereto, enforceable against such AHL Party and AHL Europe, as the case may be,
in accordance with its terms, except that the validity, binding effect and
enforceability of such Opinion Documents are subject to and limited by:
(a) the effect of bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, transfer or obligation, and moratorium laws
and other similar laws affecting creditors' rights generally;
(b) general principles of equity (whether asserted in an action at
law or in equity), including concepts of materiality, commercial reasonableness
or conscionability, an implied covenant of good faith and fair dealing, and
rules governing the availability of equitable relief (including specific
performance of any particular provision of the Opinion Documents) which in any
event is subject to the discretion of the court from which such relief may be
sought;
(c) applicable laws and judicial decisions of the State of Georgia
that may limit or render unenforceable certain remedial provisions and waivers
of rights contained in the Opinion Documents or that may limit the availability
of certain equitable and specific remedies provided for in the Opinion
Documents, but the inclusion of such provisions or remedies in the Opinion
Documents do not render the Opinion Documents invalid as a whole and the Opinion
Documents contain adequate provisions for the practicable realization of the
rights and benefits intended to be provided to Securicor by the Opinion
Documents, except for the economic consequences, if any, resulting from any
delay; and
(d) obligations of good faith under Section 11-1-203 of the
Georgia UCC and obligations as to commercial reasonableness under Sections
11-9-607, 11-9-610, 11-9-626 and 11-9-627 of the Georgia UCC.
In addition to the foregoing limitations and qualifications, we express
no opinion as to the validity, binding effect or enforceability of (i)
provisions imposing increased interest rates or late payment charges upon
delinquency in payment or default or providing for liquidated damages, or
premiums on prepayment, acceleration, redemption, cancellation or termination,
to the extent any such provisions are deemed to be penalties or forfeitures,
(ii) any provision of any of the Opinion Documents if and to the extent that
such provision requires or permits, due to default, prepayment, acceleration or
otherwise, the payment of interest, fees or other charges at a rate in excess of
5% per month, or the payment of interest on unpaid interest, (iii) provisions
for the appointment of Securicor as attorney-in-fact or granting to the
Securicor a power of attorney, (iv) provisions that amendments, modifications
and waivers may be affected only in writing, (v) rights of contribution or
indemnity which are violative of public policy, (vi) provisions waiving
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trial by jury or providing for binding arbitration, (vii) provisions to the
effect that the determination of a party or a party's designee is conclusive or
that such determination may be made in the sole and absolute discretion of such
party; (viii) provisions that any provision of an agreement is severable, and
(ix) any provision to the effect that a party may exercise a right of setoff.
6. No consent or approval of any other party and no consent,
license, approval or authorization of any governmental authority, bureau or
agency of the State of Georgia or the federal government of the United States of
America is required in connection with the execution, delivery and performance
by the AHL Parties and AHL Europe of the Opinion Documents to which they are
party, or the validity and enforceability of the Opinion Documents.
7. Each Security Agreement creates in favor of Securicor a valid
security interest in all right, title and interest of the AHL Party or AHL
Europe that is a party to such Security Agreement in and to those items and
types of Collateral described in such Security Agreement in which a security
interest may be created under Article 9 of the Georgia UCC (the "Article 9
Collateral").
8. With respect to that portion of the Article 9 Collateral
described in the Security Agreements to which any AHL Party is a party and as to
which a security interest can be perfected under Article 9 of the Georgia UCC by
the filing of a financing statement (the "Georgia Filing Collateral"), upon the
proper filing of the Financing Statements in the office of the Clerk of the
Superior Court of Xxxxxx County, Georgia, such security interest in such Georgia
Filing Collateral will be perfected.
9. The provisions of each Stock Pledge Agreement are sufficient
to create in favor of Securicor a valid security interest in all right, title
and interest of the AHL Party or AHL Europe that is a party to such Stock Pledge
Agreement in such Pledged Securities under Articles 8 and 9 of the Georgia UCC.
We call to your attention that:
(a) pursuant to Section 9-316 of the Georgia UCC,
perfection of a security interest in the Collateral will terminate one
year after any transfer of such Collateral by any AHL Party or AHL
Europe to a person that thereby becomes a debtor and is located in
another jurisdiction, including without limitation, any merger or
consolidation of such AHL Party or AHL Europe into another person,
unless such security interest becomes perfected under the laws of such
other jurisdiction prior to such termination;
(b) pursuant to Section 9-507(c) of the Georgia UCC,
perfection of a security interest in the Collateral will terminate as
to any property acquired by any AHL Party or AHL Europe, or any new
debtor that becomes bound to any Security Agreement or Stock Pledge
Agreement under Section 9-203(d) of the Georgia UCC if the name of such
new debtor is seriously misleading under Sections 9-506 and 9-508 of
the Georgia UCC, more than four months after the date such AHL Party or
AHL Europe so changes
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its name or such new debtor becomes bound to any Security Agreement or
Stock Pledge Agreement as to make the filed financing statement
seriously misleading unless an amendment to the financing statement
which renders the financing statement not seriously misleading is filed
within four months after the change;
(c) Section 552 of the U.S. Bankruptcy Code limits the
extent to which property acquired after the commencement of a
proceeding may be subject to a security interest arising from a
security agreement entered into by the debtor prior to the commencement
of such proceeding;
(d) under Section 9-515 of the Georgia UCC, the perfected
security interest of Securicor in the Collateral requires the filing of
continuation statements within the period of six (6) months prior to
the expiration of five (5) years from the date of filing of the
original financing statement; and
(e) a record communicated to the filing office with
tender of the appropriate filing fee, but which the filing office
refuses to accept for a reason other than one set forth in Section
9-516(b) of the Georgia UCC, is not effective against a purchaser of
the Collateral who gives value in reasonable reliance upon the absence
of the record from the files.
This opinion letter is furnished for the sole benefit of the addressees
and may not be used or relied upon by any other person or entity or in
connection with any other transaction without our prior written consent in each
instance. This opinion letter is limited to the matters expressly stated herein,
and no opinion is implied or may be inferred beyond the matters expressly
stated. The opinions rendered herein are as of the date hereof, and we make no
undertaking to supplement such opinions if, after the date hereof, facts or
circumstances come to our attention or changes in the law occur which could
effect such opinions.
Very truly yours,
/s/ KING & SPALDING
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