EXHIBIT 10.28
SECURITY AGREEMENT
DATED AS OF NOVEMBER 22, 1996
AMONG
XXXX INDUSTRIES, INC. AND ALCORE, INC.
AND
FIRST UNION NATIONAL BANK OF MARYLAND
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT (AS AMENDED, SUPPLEMENTED OR MODIFIED
FROM TIME TO TIME, THIS "AGREEMENT") IS DATED AS OF NOVEMBER 22, 1996 AND IS
BETWEEN XXXX INDUSTRIES, INC., A DELAWARE CORPORATION, AND ALCORE, INC., A
DELAWARE CORPORATION (BOTH OF WHICH SHALL BE REFERRED TO HEREIN COLLECTIVELY AND
INDIVIDUALLY AS THE "BORROWER"), AND FIRST UNION NATIONAL BANK OF MARYLAND, A
NATIONAL BANKING ASSOCIATION (THE "BANK").
The Borrower and the Bank are parties to a Credit Agreement
dated as of November 22, 1996 (as the same may be amended, supplemented or
modified from time to time and including any agreement extending the maturity
of, refinancing or otherwise restructuring all or any portion of the obligations
of the Borrower under such agreement or any successor agreement, the "Credit
Agreement"). To induce the Bank to enter into the Credit Agreement, and as a
condition precedent to the Bank's obligations thereunder, the Borrower has
agreed to grant a continuing security interest in and to the Collateral (as
hereinafter defined) to secure the Obligations (as hereinafter defined).
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. Terms defined in the Credit
Agreement and not otherwise defined herein have, as used herein, the respective
meanings provided for therein.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 2.01 TITLE TO COLLATERAL. The Borrower has good and
marketable title to all of the Collateral, free and clear of any Liens other
than Permitted Liens. The Borrower has taken all actions necessary under the UCC
to perfect its interest in any Accounts and "chattel paper" (as defined in the
UCC) purchased or otherwise acquired by it, as against its assignors and
creditors of its assignors. The Borrower has not performed any acts which might
prevent the Bank from enforcing any of the terms of this Agreement or which
would limit the Bank in any such enforcement. Other than financing statements or
other similar or equivalent documents or instruments with respect to the
Security Interests and Permitted Liens, no financing statement, mortgage,
security agreement or similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in any jurisdiction in
which such filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person (other than the
Borrower) asserting any claim thereto or security interest therein, except that
the Bank or its designee may have possession of Collateral as contemplated
hereby and by the Credit Agreement.
SECTION 2.02 VALIDITY, PERFECTION AND PRIORITY OF SECURITY
INTERESTS. The Security Interests constitute valid security interests under the
UCC securing the Obligations. When UCC financing statements containing a
description of the Collateral in the form specified in Exhibit B hereto shall
have been filed in the offices specified in Schedule 4.01 hereto, the Security
Interests shall constitute perfected security interests in all right, title and
interest of the Borrower in the Collateral (except Inventory in transit) to the
extent that a security interest therein may be perfected by filing pursuant to
the UCC, prior to all other Liens and rights of others therein except for
Permitted Liens.
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SECTION 2.03 INSURANCE. The Inventory and Equipment are
insured in accordance with the requirements of the Credit Agreement.
SECTION 2.04 FAIR LABOR STANDARDS ACT. All Inventory has or
will have been produced in compliance with the applicable requirements of the
Fair Labor Standards Act, as amended from time to time, or any successor
statute, and regulations promulgated thereunder.
SECTION 2.05 PATENTS AND TRADEMARKS. As of the date hereof,
the Borrower does not have any Patents, Patent Licenses, Trademarks or Trademark
Licenses.
ARTICLE III
SECURITY INTEREST
SECTION 3.01 GRANT OF SECURITY INTERESTS. In order to secure
the full and punctual payment of all of the Obligations in accordance with the
terms thereof (regardless of whether any Loan was advanced on the basis of the
Xxxx Borrowing Base or the Alcore Borrowing Base), and to secure the performance
of all of the obligations of the Borrower hereunder and under the Credit
Agreement and the other Loan Documents, the Borrower hereby jointly and
severally grants to the Bank a continuing security interest in and to all of the
Collateral, whether now owned or existing or hereafter acquired, created or
arising, whether tangible or intangible, and regardless of where located.
SECTION 3.02 CONTINUING LIABILITY OF THE BORROWER. The
Security Interests are granted as security only and shall not subject the Bank
to, or transfer or in any way affect or modify, any obligation or liability of
the Borrower with respect to any of the Collateral or any transaction in
connection therewith.
SECTION 3.03 INSURANCE ACCOUNT.
(a) Creation of and Deposits to Insurance Account. Promptly
upon and at all times after the receipt of any cash proceeds of insurance
policies, awards of condemnation or other compensation required to be paid
to the Bank pursuant to Section 4.10 of this Agreement (the "Insurance
Proceeds"), the Borrower shall establish and shall thereafter maintain a
cash collateral account (the "Insurance Account") at the offices of the
Bank or such other bank as the Borrower and the Bank may agree (the
"Insurance Account Bank"), in the name and under the exclusive control of
the Bank. Forthwith upon such establishment, the Borrower shall notify the
Bank of the location, account name and account number of such account. The
Borrower hereby agrees to cause any Insurance Proceeds received from time
to time after the establishment of the Insurance Account to be deposited
therein as set forth in this paragraph. Any Insurance Proceeds received
from time to time by the Bank in respect of which the Bank is an insured
party and loss payee shall be promptly deposited in the Insurance Account
as set forth in this paragraph. Any income received with respect to the
balance from time to time standing to the credit of the Insurance Account,
including any interest or capital gains on Liquid Investments, shall
remain, or be deposited, in the Insurance Account. All right, title and
interest in and to the cash amounts on deposit from time to time in the
Insurance Account together with any Liquid Investments from time to time
made pursuant to Section 3.03(c) shall vest in the Bank, shall constitute
part of the Collateral and shall not constitute payment of the Secured
Obligations until applied thereto as hereinafter provided.
(b) Withdrawals from Insurance Account. The balance from time
to time standing to the credit of the Insurance Account shall be subject
to withdrawal only upon the instructions of the Bank. Except
upon the occurrence and continuation of a Default, the Bank agrees to give
instructions to distribute such amounts to the Borrower at such times and
in such amounts as the Borrower shall request for the purpose of
repairing, reconstructing or replacing the property in respect of which
such Insurance Proceeds were received. Any such request shall be
accompanied by a certificate of the chief executive officer or treasurer
of the Borrower setting forth in detail reasonably satisfactory to the
Bank the repair, reconstruction or replacement for
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which such funds will be expended. If immediately available cash on
deposit in the Insurance Account is not sufficient to make any
distribution to the Borrower referred to in the previous sentence of this
Section 3.03(b), the Bank shall cause to be liquidated as promptly as
practicable such Liquid Investments in the Insurance Account designated by
the Borrower as are required to obtain sufficient cash to make such
distribution and, notwithstanding any other provision of this Article III,
such distribution shall not be made until such liquidation has taken
place. Upon the occurrence and continuation of an Event of Default, the
Bank may (in its sole discretion) apply or cause to be applied (subject to
collection) any or all of the balance from time to time standing to the
credit of the Insurance Account in the manner specified in Section 5.04.
(c) Investment of Funds in Insurance Account. Amounts on
deposit in the Insurance Account shall be invested and re-invested from
time to time in such Liquid Investments as the Borrower shall determine,
which Liquid Investments shall be held in the name and be under the
control of the Bank, provided that, if an Event of Default has occurred
and is continuing, the Bank may liquidate any such Liquid Investments and
apply or cause to be applied the proceeds thereof in the manner specified
in Section 5.04. For this purpose, "Liquid Investments" means Cash
Equivalents; provided that (i) each Liquid Investment shall mature within
30 days after it is acquired by the Bank and (ii) in order to provide the
Bank with a perfected security interest therein, each Liquid Investment
shall be either:
(i) evidenced by negotiable certificates or
instruments, or if non-negotiable then issued in the name of the Bank,
which (together with any appropriate instruments of transfer) are
delivered to, and held by, the Bank or an agent thereof (which shall
not be the Borrower or any of its Affiliates) in the State of Maryland;
or
(ii) in book-entry form and issued by the United
States and subject to pledge under applicable state law and Treasury
regulations and as to which (in the opinion of counsel to the Bank)
appropriate measures shall have been taken for perfection of the
Security Interests.
SECTION 3.04 CASH PROCEEDS ACCOUNTS.
(a) Creation of Cash Proceeds Accounts. There is hereby
established with the Bank (i) a cash collateral account in the name of
"Xxxx Industries, Inc. - First Union National Bank of Maryland", and (ii)
a cash collateral account in the name of "Alcore, Inc. - First Union
National Bank of Maryland" (each, a "Cash Proceeds Account" and
collectively, the "Cash Proceeds Accounts"), and under the exclusive
control of the Bank into which there shall be deposited from time to time
the cash proceeds of the Collateral required to be delivered to the Bank
pursuant to paragraph (b) of this Section or any other provision of the
Loan Documents. Any income received by the Bank with respect to the
balance from time to time standing to the credit of a Cash Proceeds
Account, including any interest, shall remain, or be deposited, in the
applicable Cash Proceeds Account. All right, title and interest in and to
the cash amounts on deposit from time to time in the Cash Proceeds
Accounts shall vest in the Bank, shall constitute part of the Collateral
and shall not constitute payment of the Obligations until applied thereto
as hereinafter provided.
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(b) Deposits to Cash Proceeds Account. The Borrower shall
instruct all Account Debtors and other Persons obligated in respect of
Accounts and other Collateral to make all payments in respect of the
Accounts or other Collateral directly to the Bank (by instructing that
such payments be remitted to a post office box which shall be in the name
and under the control of the Bank). Upon the earlier of (i) notification
by the Bank and (ii) the occurrence of a Default or an Event of Default,
all such payments made to the Bank shall be deposited in the applicable
Cash Proceeds Account. In addition to the foregoing, the Borrower agrees
that if the proceeds of any Collateral (including the payments made in
respect of Accounts) shall be received by it, the Borrower shall as
promptly as possible deposit such proceeds to the applicable Cash Proceeds
Account. Until so deposited, all such proceeds shall be held in trust by
the Borrower for and as the property of the Bank and shall not be
commingled with any other funds or property of the Borrower. The Borrower
hereby irrevocably authorizes and empowers the Bank, its officers,
employees and authorized agents to endorse and sign its name on all
checks, drafts, money orders or other media of payment so delivered, and
such endorsements or assignments shall, for all purposes, be deemed to
have been made by the Borrower prior to any endorsement or assignment
thereof by the Bank. The Bank may use any convenient or customary means
for the purpose of collecting such checks, drafts, money orders or other
media of payment.
(c) Withdrawals from Cash Proceeds Account. Collected funds on
deposit in the Cash Proceeds Accounts shall be withdrawn by the Bank on
the Business Day following the day on which the Bank considers the funds
deposited therein to be collected funds and applied to repay the
Obligations which are then due and payable. Until a Default shall occur,
all collected funds remaining on deposit in the Cash Proceeds Account
after the application required by the preceding sentence shall then be
deposited in each Borrower's respective Operating Account, as applicable.
ARTICLE IV
COVENANTS
The Borrower covenants and agrees with the Bank that until the
payment in full of all Obligations and until there is no Commitment by the Bank
to make further advances, incur obligations or otherwise give value, the
Borrower will comply with the following:
SECTION 4.01 DELIVERY OF PERFECTION CERTIFICATE; FILING OF
FINANCING STATEMENTS AND DELIVERY OF SEARCH REPORTS. On or prior to the
Effective Date, the Borrower shall deliver the Perfection Certificate to the
Bank and shall cause all filings and recordings and other actions specified in
Schedule 4.01 hereto to have been completed. The information set forth in the
Perfection Certificate shall be correct and complete. Not later than 60 days
following the Closing Date, the Borrower shall furnish to the Bank file search
reports from each UCC filing office set forth in Schedule 4.01 confirming the
filing information set forth in such Schedule.
SECTION 4.02 CHANGE OF NAME, IDENTITY OR STRUCTURE; LOCATIONS
OF PLACES OF BUSINESS, CHIEF EXECUTIVE OFFICE AND COLLATERAL. The Borrower will
not change its name, identity or corporate structure in any manner unless it
shall have given the Bank not less than 30 days' prior notice thereof. The
Borrower will not change the location of (i) its place or places of business,
its chief executive office or its chief place of business or (ii) the locations
where it keeps or holds any Collateral or any records relating thereto from the
applicable location described in the Perfection Certificate unless it shall have
given the Bank not less than 30 days' prior notice thereof. The Borrower shall
not in any event change the location of its place or places of business, its
chief executive office or any Collateral if such change would cause the Security
Interests in such Collateral to lapse or cease to be perfected.
SECTION 4.03 FURTHER ASSURANCES. The Borrower will, from time
to time, at its expense, execute, deliver, file and record any statement,
assignment, instrument, document, agreement or other paper and take any other
action, (including, without limitation, any filings of financing or continuation
statements under the UCC and
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any filings with the United States Patent and Trademark Office) that from time
to time may be necessary or desirable, or that the Bank may request, in order to
create, preserve, perfect, confirm or validate the Security Interests or to
enable the Bank to obtain the full benefit of this Agreement, or to enable the
Bank to exercise and enforce any of its rights, powers and remedies created
hereunder or under applicable law with respect to any of the Collateral. To the
extent permitted by applicable law, the Borrower hereby authorizes the Bank to
execute and file financing statements or continuation statements without the
Borrower's signature appearing thereon. The Borrower agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement. The Borrower shall
pay the costs of, or incidental to, any recording or filing of any financing or
continuation statements concerning the Collateral.
SECTION 4.04 COLLATERAL IN POSSESSION OF OTHER PERSONS. If any
Collateral is at any time in the possession or control of any warehouseman,
bailee or any of the Borrower's agents or processors, the Borrower shall notify
such warehouseman, bailee, agent or processor of the Security Interests created
hereby and to hold all such Collateral for the Bank's account subject to the
Bank's instructions. The Borrower agrees that if any warehouse receipt or
receipt in the nature of a warehouse receipt is issued with respect to any of
its Inventory, such warehouse receipt or other receipt in the nature thereof
shall not be "negotiable" (as -104 of the Uniform Commercial Code in any
relevant jurisdiction or under other relevant law).
SECTION 4.05 BOOKS AND RECORDS. The Borrower shall keep full
and accurate books and records relating to the Collateral, including, without
limitation, the originals of all documentation with respect thereto, records of
all payments received, all credits granted thereon, all merchandise returned and
all other dealings therewith, and the Borrower will make the same available to
the Bank for inspection, at the Borrower's own cost and expense, at any and all
reasonable times upon demand. Upon direction by the Bank, the Borrower shall
stamp or otherwise xxxx such books and records in such manner as the Bank may
reasonably require in order to reflect the Security Interests.
SECTION 4.06 DELIVERY OF INSTRUMENTS. The Borrower will
immediately deliver each Instrument, certificated security and uncertificated
security to the Bank indorsed (as applicable) to the Bank; provided that so long
as no Event of Default shall have occurred and be continuing and except as
provided by any other Loan Document, the Borrower may retain for collection in
the ordinary course of business any Instruments (other than certificated
securities, checks, drafts and other Instruments constituting payments in
respect of Accounts and other Collateral, as to which the provisions of Section
2.08(c) of the Credit Agreement and Section 3.04 hereof shall apply) received by
it in the ordinary course of business and the Bank shall, promptly upon request
of the Borrower, make appropriate arrangements for making any other Instrument
pledged by the Borrower available to it for purposes of presentation, collection
or renewal (any such arrangement to be effected, to the extent deemed
appropriate to the Bank, against trust receipt or like document).
SECTION 4.07 MODIFICATION OF ASSIGNED AGREEMENTS, ETC. The
Borrower shall keepssigned Agreements. The Borrower will not, except with the
consent of the Bank amend, modify, extend, renew, cancel or terminate any
Assigned Agreement, waive any default under or breach of any Assigned Agreement,
compromise or settle any material dispute, claim, suit or legal proceeding
relating to any Assigned Agreement, sell or assign any Assigned Agreement or
interest therein, consent to or permit or accept any prepayment of amounts to
become due under or in connection with any Assigned Agreement, except as
expressly provided therein, or take any other action in connection with any
Assigned Agreement which would impair the value of the interests or rights of
the Borrower thereunder or which would impair the interests or rights of the
Bank under this Agreement, except that, unless the Bank shall have notified the
Borrower upon the occurrence of a Default or Event of Default that this
exception is no longer applicable, the Borrower may modify, make adjustments
with respect to, extend or renew any Assigned Agreements in the ordinary course
of business. The Borrower will duly fulfill all of its obligations under or in
connection with the Assigned Agreements.
SECTION 4.08 CERTIFICATES OF TITLE; FIXTURES. The Borrower
shall (i) on or prior to the date of
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the first Loan advance, in the case of Equipment constituting one or more titled
vehicles now owned and (ii) within 10 days of acquiring any other Equipment
constituting one or more titled vehicles, deliver to the Bank any and all
certificates of title, applications for title or similar evidence of ownership
of such Equipment and shall cause the Bank to be named as lienholder on any such
certificate of title or other evidence of ownership. The Borrower shall promptly
inform the Bank of any additions to or deletions from the Equipment and shall
not permit any such items to become a fixture to real estate or an accession to
other personal property.
SECTION 4.09 DISPOSITION OF COLLATERAL. Without the prior
written consent of the Bank, the Borrower will not sell, lease,
exchange, assign or otherwise dispose of, or grant any option with respect to,
any Collateral except that, subject to the rights of the Bank hereunder if an
Event of Default shall have occurred and be continuing, the Borrower may sell,
lease or exchange Inventory and obsolete, unused or unnecessary Equipment in the
ordinary course of business, whereupon, in the case of such a sale or exchange,
the Security Interests created hereby in such item (but not in any Proceeds
arising from such sale or exchange) shall cease immediately without any further
action on the part of the Bank.
SECTION 4.10 INSURANCE. Prior to the Closing Date, the
Borrower will cause the Bank to be named as an insured party and loss payee on
each insurance policy covering risks relating to any of its Inventory and
Equipment. The Borrower will deliver to the Bank, upon its request, the
insurance policies for such insurance or certificates of insurance evidencing
such coverage. Each such insurance policy shall include effective waivers by the
insurer of all claims for insurance premiums against the Bank, provide for
coverage to the Bank regardless of the breach by the Borrower of any warranty or
representation made therein, not be subject to co-insurance, provide that all
insurance proceeds in excess of $50,000 per claim shall be adjusted with and
payable to the Bank and provide that no cancellation, termination or material
modification thereof shall be effective until at least 30 days after receipt by
the Bank of notice thereof. The Borrower hereby appoints the Bank as its
attorney-in-fact to make proof of loss, claim for insurance and adjustments with
insurers, and to execute or endorse all documents, checks or drafts in
connection with payments made as a result of any insurance policies. The
Borrower assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of the Borrower to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to the Borrower.
SECTION 4.11 INFORMATION REGARDING COLLATERAL. The Borrower
will, promptly upon request, provide to the Bank all information and evidence it
may reasonably request concerning the Collateral to enable the Bank to enforce
the provisions of this Agreement.
SECTION 4.12 COVENANTS REGARDING PATENT, TRADEMARK AND
COPYRIGHT COLLATERAL.
(a) The Borrower (either itself or through licensees) will,
for each Patent, not do any act, or omit to do any act, whereby any Patent
which is material to the conduct of the Borrower's business may become
invalidated or dedicated to the public, and shall continue to xxxx any
products covered by a Patent with the relevant patent number or indication
that a Patent is pending as required by the Patent laws.
(b) The Borrower (either itself or, if permitted by law,
through its licensees or its sublicensees) will, for each Trademark
material to the conduct of the Borrower's business, (i) maintain such
Trademark in full force free from any claim of abandonment or invalidity
for non-use, (ii) maintain the quality of products and services offered
under such Trademark, (iii) display such Trademark with notice of federal
registration to the extent required by applicable law, (iv) not knowingly
use or knowingly permit the use of such Trademark in violation of any
third party rights and (v) not permit any assignment in gross of such
Trademark.
(c) The Borrower (either itself or through licensees) will,
for each work covered by a material copyright, continue to publish,
reproduce, display, adopt and distribute the work with appropriate
copyright notice.
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(d) The Borrower shall notify the Bank immediately if it knows
or has reason to know that any Patent, Trademark or copyright (or any
application or registration relating thereto) material to the conduct of
its business may become abandoned or dedicated to the public, or of any
adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, United States
Copyright Office or any court) regarding the Borrower's ownership of any
Patent, Trademark or copyright, its right to register the same or to keep
and maintain the same.
(e) The Borrower will take all necessary steps to file,
maintain and pursue each material application relating to the Patents,
Trademarks and/or copyrights (and to obtain the relevant grant or
registration) and to maintain each registration of the Patents, Trademarks
and copyrights which is material to the conduct of the Borrower's
business, including filing of applications for renewal, affidavits of use,
affidavits of incontestability and maintenance fees, and, if consistent
with good business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.
(f) In the event that any rights to any Patent, Trademark,
copyright or License relating thereto material to the conduct of the
Borrower's business is believed infringed, misappropriated or diluted by a
third party, the Borrower shall notify the Bank promptly after it learns
thereof and shall, if consistent with good business judgment, promptly xxx
for infringement, misappropriation or dilution and to recover any and all
damages for such infringement, misappropriation or dilution, and take such
other actions as the Borrower shall reasonably deem appropriate under the
circumstances to protect such Patent, Trademark, copyright or License.
(g) In no event shall the Borrower, either itself or through
any agent, employee, licensee or designee, file an application for any
Patent, Trademark or copyright with the United States Patent and Trademark
Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, unless not less than 10 days prior thereto
it informs the Bank, and, upon request of the Bank, executes and delivers
any and all agreements, instruments, documents and papers as the Bank may
request to evidence the Security Interests in such Patent, Trademark or
copyright and the goodwill or accounts and general intangibles of the
Borrower relating thereto or represented thereby, and the Borrower hereby
appoints the Bank its attorney-in-fact to execute and file such writings
for the foregoing purposes.
ARTICLE V
REMEDIES; RIGHTS UPON DEFAULT
SECTION 5.01 GENERAL AUTHORITY. The Borrower hereby
irrevocably appoints the Bank its true and lawful attorney, with full power of
substitution, in the name of the Borrower, the Bank or otherwise, for the sole
use and benefit of the Bank, but at the Borrower's expense, to the extent
permitted by law to exercise at any time and from time to time while an Event of
Default has occurred and is continuing, all or any of the following
powers with respect to all or any of the Collateral, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an interest,
is irrevocable until the Obligations are paid in full and until there is no
Commitment by the Bank to make further advances, incur obligations or otherwise
give value:
(a) to demand, xxx for, collect, receive and give
acquittance for any and all monies due or to become due thereon or
by virtue thereof,
(b) to settle, compromise, compound, prosecute or
defend any action or proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or
with the same or the proceeds or
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avails thereof, including without limitation for the implementation of
any assignment, lease, License, sublicense, grant of option, sale or
other disposition of any Patent, Trademark or copyright or any action
related thereto, as fully and effectually as if the Bank were the
absolute owner thereof, and
(d) to extend the time of payment of any or all
thereof and to make any allowance and other adjustments with
reference thereto;
provided that the Bank shall give the Borrower not less than ten days' prior
notice of the time and place of any sale or other intended disposition of any of
the Collateral, except any Collateral which is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market. The Bank and the Borrower agree that such notice constitutes "reasonable
notification" within the meaning of Section 9-504(3) of the UCC. Except as
otherwise provided herein, the Borrower hereby waives, to the extent permitted
by applicable law, notice and judicial hearing in connection with the Bank's
taking possession or the Bank's dispositions of any of the Collateral,
including, without limitation, any and all prior notice and hearing for any
prejudgment remedy or remedies and any such right which the Borrower would
otherwise have under the Constitution or any statute of the United States or of
any state.
SECTION 5.02 REMEDIES UPON EVENT OF DEFAULT.
(a) If any Event of Default has occurred and is continuing,
the Bank may exercise all rights of a secured party under the UCC (whether or
not in effect in the jurisdiction where such rights are exercised) and, in
addition, the Bank may, without being required to give any notice, except as
herein provided or as may be required by mandatory provisions of law, (i)
withdraw all cash and Liquid Investments in the Collateral Accounts and apply
such cash and Liquid Investments and other cash, if any, then held by it as
Collateral as specified in Section 5.04 and (ii) if there shall be no such cash
or Liquid Investments or if such cash and Liquid Investments shall be
insufficient to pay all the Obligations in full or cannot be so applied for any
reason, sell the Collateral or any part thereof at public or private sale, for
cash, upon credit or for future delivery, and at such price or prices as the
Bank may deem satisfactory. The Bank may be the purchaser of any or all of the
Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale). The Borrower
will execute and deliver such documents and take such other action as the Bank
deems necessary or advisable in order that any such sale may be made in
compliance with law. Upon any such sale, the Bank shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold.
Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of the Borrower which may be waived, and the
Borrower, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 5.01 shall (he time ad place fixed for such sale, and (ii) in the case
of a private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Bank may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety or
in separate parcels, as the Bank may determine. The Bank shall not be obligated
to make any such sale pursuant to any such notice. The Bank may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned without further notice. In the case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Bank until the selling price is paid by the purchaser thereof,
but the Bank shall not incur any liability in the case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in the case of any
such failure, such Collateral may again be sold upon like notice. The Bank,
instead of exercising the power of sale herein conferred upon it, may proceed by
a suit or suits at law or in equity to foreclose the Security Interests and sell
the Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
(b) For the purpose of enforcing any and all rights and
remedies under this Agreement the Bank may (i) require the Borrower to, and the
Borrower agrees that it will, at its expense and upon the request of the Bank,
forthwith assemble all or any part of the Collateral as directed by the Bank and
make it available at a place
- 8 -
designated by the Bank which is, in the Bank's opinion, reasonably convenient to
the Bank and the Borrower, whether at the premises of the Borrower or otheower's
obligation so to deliver the Collateral is of the essence of this Agreement and
that, accordingly, upon application to a court of equity having jurisdiction,
the Bank shall be entitled to a decree requiring specific performance by the
Borrower of such obligations; (ii) to the extent permitted by applicable law,
enter, with or without process of law and without breach of the peace, any
premise where any of the Collateral is or may be located, and without charge or
liability to the Bank seize and remove such Collateral from such premises; (iii)
have access to and use the Borrower's books and records relating to the
Collateral; and (iv) prior to the disposition of the Collateral, store or
transfer it without charge in or by means of any storage or transportation
facility owned or leased by the Borrower, process, repair or recondition it or
otherwise prepare it for disposition in any manner and to the extent the Bank
deems appropriate and, in connection with such preparation and disposition, use
without charge any Patent, Trademark, copyright, License relating thereto or
technical process used by the Borrower. The Bank may also render any or all of
the Collateral unusable at the Borrower's premises and may dispose of such
Collateral on such premises without liability for rent or costs.
(c) Without limiting the generality of the foregoing, if any
Event of Default has occurred and is continuing:
(i) the Bank may license, or sublicense, whether
general, special or otherwise, and whether on an exclusive or
non-exclusive basis, any Patents, Trademarks or copyrights included in
the Collateral throughout the world for such term or terms, on such
conditions and in such manner as the Bank shall in its sole discretion
determine;
(ii) the Bank may (without assuming any obligations
or liability thereunder), at any time and from time to time, enforce
(and shall have the exclusive right to enforce) against any licensee or
sublicensee all rights and remedies of the Borrower in, to and under
any Patent License, Trademark License or license with respect to
copyrights and take or refrain from taking any action under any
provision thereof, and the Borrower hereby releases the Bank from, and
agrees to hold the Bank free and harmless from and against any claims
arising out of, any lawful action so taken or omitted to be taken with
respect thereto; and
(iii) upon request by the Bank, the Borrower will use
its best efforts to obtain all requisite consents or approvals by the
licensor or sublicensor of each Patent License, license with respect to
copyrights or Trademark License to effect the assignment of all of the
Borrower's rights, title and interest thereunder to the Bank or its
designee and will execute and deliver to the Bank a power of
attorney, in form and substance satisfactory to the Bank, for the
implementation of any lease, assignment, license, sublicense, grant of
option, sale or other disposition of a Patent, Trademark or copyright;
and
(iv) the Bank may direct the Borrower to refrain, in
which event the Borrower shall refrain, from using or practicing any
Trademark, Patent or copyright in any manner whatsoever, directly or
indirectly and shall, if requested by the Bank change the borrower's
name to eliminate therefrom any use of any Trademark and will execute
such other and further documents as the Bank may request to further
confirm this and transfer ownership of the Trademarks, Patents,
copyrights and registrations and any pending applications therefor to
the Bank.
(d) In the event of any disposition of any Patent, Trademark
or copyright pursuant to this Article V, the Borrower shall supply its know-how
and expertise relating to the manufacture and sale of the products or services
bearing Trademarks or the products, services or works made or rendered in
connection with or under Patents, Trademarks or copyrights, and its customer
lists and other records relating to such Patents, Trademarks or copyrights and
to the distribution of said products, services or works, to the Bank.
SECTION 5.03 LIMITATION ON DUTY OF THE BANK IN RESPECT OF
COLLATERAL. Beyond the exercise of reasonable care in the custody thereof, the
Bank shall have no duty to exercise any rights or take any steps to preserve the
rights of the Borrower in the Collateral in its or the Borrower's possession or
control or in the
- 9 -
possession or control of any agent or bailee or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto, nor shall the Bank be liable to the Borrower or any other Person for
failure to meet any obligation imposed by Section 9-207 of the
UCC or any successor provision. The Bank shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property, and shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any warehouseman, carrier,
forwarding agency, consignee or other agent or bailee selected by the Bank in
good faith.
SECTION 5.04 APPLICATION OF PROCEEDS. The proceeds of any sale
of, or other realization upon, all or any part of the Collateral and any cash
held in the Collateral Accounts shall be applied by the Bank in the following
order of priorities:
(a) to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Bank, and all expenses, liabilities and advances incurred or
made by the Bank in connection therewith, and any other Obligations
owing to the Bank in respect of sums advanced by the Bank to preserve
the Collateral or to preserve its security interest in the Collateral;
(b) an amount equal to (A) the unpaid principal of
and accrued but unpaid interest on all Loans and all other Obligations
which arise or are incurred in connection with the Loan Documents; plus
(B) all unpaid fees owing to the Bank under the Credit Agreement; plus
(C) to the extent not covered by paragraph (i) above, all unreimbursed
expenses for which the Bank is to be reimbursed pursuant to Section
8.03 of the Credit Agreement or Section 7.03 hereof shall be applied to
payment of the Obligations;
(c) an amount equal to the Derivatives Obligations
shall be applied to the payment thereof;
(d) to the payment of all other Obligations, until
all Obligations shall have been paid in full; and
(e) to payment to the Borrower or its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
SECTION 5.05 ASSIGNED AGREEMENTS. The Borrower hereby
irrevocably authorizes and empowers the Bank, in the Bank's sole discretion, if
an Event of Default has occurred and is continuing, to assert, either directly
or on behalf of the Borrower, any claims the Borrower may have, from time to
time, against any other party to any Assigned Agreement or to otherwise exercise
any right or remedy of the Borrower under any Assigned Agreement (including
without limitation, the right to enforce directly against any party to an
Assigned Agreement all of the Borrower's rights thereunder, to make all demands
and give all notices and make all requests required or permitted to be made by
the Borrower under any Assigned Agreements) as the Bank may deem proper. The
Borrower hereby irrevocably makes, constitutes and appoints the Bank (and all
officers, employees or agents designated by the Bank) as the Borrower's true and
lawful attorney-in-fact for the purpose of enabling the Bank, to assert and
collect such claims and to exercise such rights and remedies.
ARTICLE VI
MISCELLANEOUS
- 10 -
SECTION 6.01 NOTICES. Unless otherwise specified herein, all
notices, requests or other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission or similar writing)
and shall be given to such party (i) at its address set forth on the signature
pages hereto or (ii) other address, facsimile number or telex number as such
party shall hereafter specify for the purpose of communications hereunder by
notice to the other parties hereto. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received, (iii) if given by mail, 72 hours after such
communication is deposited, certified mail, return receipt requested, in the
mails with appropriate first class postage prepaid, addressed as aforesaid or
(iv) if given by other means, when delivered at the address specified in this
Section 6.01. Rejection or refusal to accept, or the inability to deliver
because of a changed address of which no notice was given shall not affect the
validity of notice given in accordance with this Section.
SECTION 6.02 NO WAIVERS; NON-EXCLUSIVE REMEDIES. No failure or
delay on the part of the Bank to exercise, no course of dealing with respect to,
and no delay in exercising any right, power or privilege under this Agreement or
any other Loan Document or any other document or agreement contemplated hereby
or thereby shall operate as a waiver thereof nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided herein and in the other Loan Documents are
cumulative and are not exclusive of any other remedies provided by law. Without
limiting the foregoing, nothing in this Agreement shall impair the right of the
Bank to exercise any right of set-off or counterclaim it may have and to apply
the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Credit Agreement and the other
Loan Documents.
SECTION 6.03 COMPENSATION AND EXPENSES OF THE BANK;
INDEMNIFICATION.
(a) Expenses. The Borrower shall pay (i) all out-of-pocket
expenses of the Bank, including fees and disbursements of special and
local counsel for the Bank, in connection with the preparation and
administration of this Agreement or any document or agreement contemplated
hereby, any consent or waiver hereunder or any amendment hereof or any
Default or alleged Default and (ii) if an Event of Default occurs, all
out-of-pocket expenses incurred by the Bank, including (without
duplication) the fees and disbursements of outside counsel in connection
with such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom.
(b) Protection of Collateral. If the Borrower fails to comply
with the provisions of the Credit Agreement, this Agreement or any other
Loan Document, such that the value of any Collateral or the validity,
perfection, rank or value of any Security Interest is thereby diminished
or potentially diminished or put at risk, the Bank may, but shall not be
required to, effect such compliance on behalf of the Borrower, and the
Borrower shall reimburse the Bank for the costs hereof on demand. All
insurance expenses and all expenses of protecting, storing, warehousing,
appraising, insuring, handling, maintaining and shipping the Collateral,
any and all excise, property, sales and use taxes imposed by any state,
federal or local authority on any of the Collateral, or in respect of
periodic appraisals and inspections of the Collateral to the extent the
same may be requested by the Bank from time to time, or in respect of the
sale or other disposition thereof shall be borne and paid by the Borrower.
If the Borrower fails to promptly pay any portion thereof when due, the
Bank may, at its option, but shall not be required to, pay the same and
charge the Borrower's account therefor, and the Borrower agrees to
reimburse the Bank therefor on demand. All sums so paid or incurred by the
Bank for any of the foregoing and any and all other sums for which the
Borrower may become liable hereunder and all costs and expenses (including
attorneys' fees, legal expenses and court costs) reasonably incurred by
the Bank in enforcing or protecting the Security Interests or any of its
rights or remedies under this Agreement, shall, together with interest
thereon until paid at the rate applicable to the Loans plus 2%, be
additional Obligations hereunder.
(c) Indemnification. The Borrower agrees to indemnify each
Indemnitee and hold each
- 11 -
Indemnitee harmless from and against any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, suits, judgments,
costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by,
imposed on or asserted against such Indemnitee in connection with any
investigation or administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of this Agreement or in any other way connected
with the enforcement of any of the terms of, or the preservation of any
rights hereunder, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchasing, delivery, control,
acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable) the
violation of the laws of any country, state or other governmental body or
unit, any tort (including, without limitation, any claims, arising or
imposed under the doctrine of strict liability, or for or on account of
injury to or the death of any Person (including any Indemnitee), or
property damage), or contract claim; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction. The Borrower agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, loss, damage,
penalty, claim, demand, action, judgment or suit, the Borrower shall
assume full responsibility for the defense thereof. Each Indemnitee agrees
to use its best efforts to notify the Borrower of any such assertion of
which such Indemnitee has knowledge.
(d) Obligations; Survival. Any amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement
shall constitute Obligations. The indemnity obligations of the Borrower
contained in this Section 6.03 shall continue in full force and effect
notwithstanding the full payment of all Note and all of the other
Obligations and notwithstanding the discharge thereof.
SECTION 6.04 AMENDMENTS AND WAIVERS. Any provision of this
Agreement may be amended, changed, discharged, terminated or waived if, but only
if, such amendment or waiver is in writing and is signed by the Borrower and the
Bank.
SECTION 6.05 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon each of the parties hereto and inure to the benefit of the Bank and
its successors and assigns. The Borrower shall not assign or delegate any of its
rights and duties hereunder without the prior written consent of the Bank.
SECTION 6.06 LIMITATION OF LAW; SEVERABILITY.
(a) All rights, remedies and powers provided in this 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
Agreement are intended to be subject to all applicable mandatory
provisions of law which may be controlling and be limited to the extent
necessary so that they will not render this Agreement invalid,
unenforceable in whole or in part, or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
(b) If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Bank in
order to carry out the intentions of the parties hereto as nearly as may
be possible; and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability
of such provisions in any other jurisdiction.
SECTION 6.07 GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of Maryland except as
otherwise required by mandatory provisions of law and except to the extent that
remedies provided by the laws of any jurisdiction other than such states are
governed by the laws of such jurisdictions.
SECTION 6.08 COUNTERPARTS; EFFECTIVENESS. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon
- 12 -
the same instrument. This Agreement shall become effective when the Bank shall
receive counterparts hereof executed by itself and the Borrower.
SECTION 6.09 TERMINATION. Upon full, final and irrevocable
payment and performance of all Obligations and the termination of the Commitment
under the Credit Agreement, the Security Interests shall terminate and all
rights to the Collateral shall revert to the Borrower. In addition, at any time
and from time to time prior to such termination of the Security Interests, the
Bank may release any of the Collateral. Upon any such termination of the
Security Interests or release of Collateral, the Bank will, upon request by and
at the expense of the Borrower, execute and deliver to the Borrower such
documents as the Borrower shall reasonably request to evidence the termination
of the Security Interests or the release of such Collateral, as the case may be.
Any such documents shall be without recourse to or warranty by the Bank.
SECTION 6.10 ENTIRE AGREEMENT. This Agreement and the other
Loan Documents constitute the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
oral or written, and any contemporaneous oral agreements and understandings
relating to the subject matter hereof and thereof.
- 13 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
WITNESS/ATTEST: XXXX INDUSTRIES, INC.
________________________ By:________________________________________
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer and Chairman
0 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: ____________________
WITNESS: ALCORE, INC.
________________________ By:__________________________________(SEAL)
Name: Xxxxxx X. Xxxxx
Title: President/General Manager
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: ___________________
WITNESS/ATTEST: FIRST UNION NATIONAL BANK OF MARYLAND
________________________ By:________________________________________
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
0 Xxxx Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
- 14 -
SCHEDULE 4.01
TO
SECURITY AGREEMENT
SCHEDULE OF FILINGS
TO PERFECT SECURITY INTERESTS
--------------------------------------------------------------------------------------------------------------------------------
Time for Filing of
Filing Type of File Date of Periodic Continuation
Name of Debtor Jurisdiction Filing Number Filing Statements
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
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- 1 -
EXHIBIT A
TO
SECURITY AGREEMENT
PERFECTION CERTIFICATE
- 1 -
SCHEDULE B
TO
SECURITY AGREEMENT
DESCRIPTION OF COLLATERAL
Description for Face of UCC-1:
All of the Debtor's now existing or hereafter arising, right, title and interest
in and to all personal property, tangible or intangible, whether now or
hereafter in existence, including, without limitation, all accounts, accounts
receivable, contract rights, money, instruments, documents, chattel paper,
general intangibles, inventory, equipment and fixtures, as more fully described
in Schedule A hereto which is made a part hereof. Products and proceeds of the
foregoing, including any of the foregoing which are acquired with any cash
proceeds of the foregoing, are included.
Text of Schedule A to UCC-1:
This financing statement covers the types of property
described on the face of the Financing Statement of which this Schedule is a
part and all right, title and interest of the Debtor in and to the following
types (or items) of property whether now owned or existing or hereafter
acquired, created or arising (all being collectively referred to as the
Collateral):
(a) Accounts;
(b) Inventory;
(c) General Intangibles;
(d) Documents;
(e) Instruments;
(f) Equipment;
(g) the Collateral Accounts, all cash deposited therein from
time to time, the Liquid Investments and other monies and property
(including deposit accounts) of any kind of the Debtor maintained with or
in the possession or under the control of the Secured Party;
(h) all books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other
computer materials and records) of the Debtor pertaining to any of the
Collateral; and (g) all Proceeds of all or any of the Collateral described
in clauses (a) through (g) hereof.
As used in this Schedule A, the following terms have the
following meanings:
"Accounts" means all "accounts" now owned or hereafter
acquired by the Debtor, and shall also mean and include all accounts receivable,
contract rights, book debts, notes, drafts and other obligations or indebtedness
owing to the Debtor arising from the sale, lease or exchange of goods or other
property by it and/or the performance of services by it (including, without
limitation, any such obligation which might be characterized as an account,
contract right or general intangible under the Uniform Commercial Code in effect
in any jurisdiction) and all of the Debtor's rights in, to and under all
purchase orders for goods, services or other property, and all of the Debtor's
rights to any goods, services or other property represented by any of the
foregoing (including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to the Debtor under all contracts for the sale,
lease or exchange of goods or other
- 1 -
property and/or the performance of services by it (whether or not yet earned by
performance on the part of the Debtor), in each case whether now in existence or
hereafter arising or acquired including, without limitation, the right to
receive the proceeds of said purchase orders and contracts and all collateral
security and guarantees of any kind given by any Person with respect to any of
the foregoing.
"Cash Equivalents" means (i) direct obligations of the United
States or any agency thereof, or obligations guaranteed by the United States or
any agency thereof, (ii) commercial paper rated in the highest grade by a
nationally recognized credit rating agency or (iii) time deposits with,
including certificates of deposit issued by, any office located in the United
States of any bank or trust company which is organized under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $250,000,000; provided, in each case that such
investment matures within one year from the date of acquisition thereof by the
Debtor.
"Collateral Accounts" means one or more deposit accounts
established with or in the possession or under the control of the Secured Party
into which cash or cash proceeds (including cash proceeds of insurance policies,
awards of condemnation or other compensation) of any Collateral are deposited
from time to time.
"Documents" means all "documents" or other receipts covering,
evidencing or representing goods, now owned or hereafter acquired by the Debtor.
"Equipment" means all "equipment" now owned or hereafter
acquired by the Debtor, including all items of machinery, equipment, fur,
trucks, trailers, railcars, barges and vehicles of every description, trailers,
handling and delivery equipment, all additions to, substitutions for,
replacements of or accessions to any of the foregoing, all attachments,
components, parts (including spare parts) and accessories whether installed
thereon or affixed thereto and all fuel for any thereof.
"General Intangibles" means all "general intangibles" now
owned or hereafter acquired by the Debtor, including, without limitation, (i)
all obligations and indebtedness owing to the Debtor (other than Accounts), from
whatever source arising (ii) all Patents, Trademarks, copyrights, Licenses,
rights in intellectual property, goodwill, trade names, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how, software, customer lists, subscription lists, data bases and related
documentation, registration, franchises and all other intellectual or other
similar property rights, (iii) all rights or claims in respect of refunds for
taxes paid and (iv) all rights in respect of any pension plans or similar
arrangements maintained for employees of the Debtor or any member of the ERISA
Group and (v) all "uncertificated securities".
"Instruments" means all "instruments", "chattel paper",
"certificated securities" or "letters of credit" evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts or General Intangibles, including
(but not limited to) promissory notes, drafts, bills of exchange and trade
acceptances, now owned or hereafter acquired by the Debtor.
"Inventory" means all inventory now owned or hereafter
acquired by the Debtor, wherever located, and shall also mean and include,
without limitation, all raw materials and other materials and supplies,
work-in-process and finished goods and any products made or processed therefrom
and all substances, if any, commingled therewith or added thereto.
"Licenses" means any Patent License, Trademark License or
other license or sublicense as to which the Debtor is a party (other than those
license agreements which by their terms prohibit assignment or a grant of a
security interest by such Debtor as licensee thereunder); provided that the
rights to payments under any such Licenses shall be included in the Collateral
to the extent permitted thereby or by Section 9-318 of the Uniform Commercial
Code.
"Liquid Investments" means Cash Equivalents; provided that (i)
each Liquid Investment shall
- 2 -
mature within 30 days after it is acquired by the Secured Party and (ii) in
order to provide the Secured Party with a perfected security interest therein,
each Liquid Investment shall be either:
(i) evidenced by negotiable certificates or
instruments, or if non-negotiable then issued in the name of
the Secured Party, which (together with any appropriate
instruments of transfer) are delivered to and held by, the
Secured Party or an agent thereof (which shall not be the
Debtor or an affiliate) in the State of Maryland; or
(ii) in book-entry form and issued by the
United States and subject to pledge under applicable state law
and United States Treasury regulations and as to which (in the
opinion of counsel to the Secured Party) appropriate measures
shall have been taken for perfection of the security
interests.
"Patent License" means any agreement now or hereafter in
existence granting to the Debtor, or pursuant to which the Debtor has granted to
any other person, any right with respect to any Patent or any invention now or
hereafter in existence, whether patentable or not, whether a Patent or
application for Patent is in existence on such invention or not, and whether a
Patent or application for Patent on such invention may come into existence.
"Patents" means all of the following:
(a) all letters patent and design letters patent of
the United States or any other country, all applications for letters
patent and design letters patent of the United States or any other
country including, without limitation, applications in the United
States Patent and Trademark Office or in any similar office or agency
of the United States, any State thereof or any other country or
political subdivision thereof;
(b) all reissues, divisions, continuations,
continuations-in-part, renewals or extensions thereof;
(c) all claims for, and rights to xxx for, past or
future infringement of any of the foregoing; and
(d) all income, royalties, damages and payments now
or hereafter due or payable with respect to any of the foregoing,
including, without limitation, damages and payments for past or future
infringements thereof.
"Proceeds" means all proceeds of, and all other profits,
products, rents or receipts, in whatever form arising from the collection, sale,
lease, exchange, assignment, licensing or other disposition of or other
realization upon or payment for the use of, collateral, including (without
limitation) all claims of the Debtor against third parties for loss of, damage
to or destruction of, or for proceeds payable under, or unearned premiums with
respect to, policies of insurance in respect of, any collateral, and any
condemnation or requisition payments with respect to any collateral, in each
case whether now existing or hereafter arising.
"Trademark License" means any agreement now or hereafter in
existence granting to the Debtor, or pursuant to which the Debtor has granted to
any other person, any right to use any Trademark.
- 3 -
"Trademarks" means all of the following:
(i) the following registered Trademarks and
Trademark applications:
(ii) all other trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos, brand names, trade dress, prints and
labels on which any of the foregoing have appeared or appear, package
and other designs, and any other source or business identifiers, and
general intangibles of like nature, and the rights in any of the
foregoing which arise under applicable law,
(iii) the goodwill of the business symbolized
thereby or associated with each of them,
(iv) all registrations and applications in connection
therewith, including, without limitation, registrations and
applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any
other country or any political subdivision thereof,
(v) all reissues, extensions and renewals
thereof,
(vi) all claims for, and rights to xxx for,
past or future infringements of any of the foregoing; and
(vii) all income, royalties, damages and payments now
or hereafter due or payable with respect to any of the foregoing,
including, without limitation, damages and payments for past or future
infringements thereof.
As used in this Schedule A, the uncapitalized terms "account",
"account debtor", "certificated securities", "uncertificated securities",
"chattel paper", "contract right", "document", "equipment", "letter of credit",
"instrument", "warehouse receipt", "xxxx of lading", "document of title",
"inventory", "general intangibles", "money" and "proceeds" have the meanings of
such terms as defined in the Uniform Commercial Code.
- 4 -
