EXHIBIT 4.2
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement") dated as of November 9, 2005 by
and among each of the undersigned, having a place of business at 0000
Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx, Xxxxxxx, 00000 (individually, a
"Grantor" and collectively, the "Grantors"), and BANK OF AMERICA, N.A., a
national banking association, as collateral agent (in such capacity, the
"Collateral Agent" for the Secured Parties (as defined herein), in
consideration of the mutual covenants contained herein and benefits to be
derived herefrom.
WITNESSETH:
Reference is made to that certain Credit Agreement dated as of even date
herewith (as the same may be amended, modified, supplemented or restated
hereafter, the "Credit Agreement") by, among others, (i) the Grantors, as
Borrowers, (ii) the Lenders named therein, (iii) Bank of America, N.A., as
Administrative Agent and Collateral Agent for the Lenders, and as Swingline
Lender, and (iv) Bank of America, N.A., as Issuing Bank.
The Lenders have agreed to make Loans to the Borrowers, and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrowers,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit are each conditioned on, among other
things, the execution and delivery by the Grantors of an agreement in the form
hereof to secure the Obligations.
Accordingly, the Grantors and the Collateral Agent, on behalf of itself and
each other Secured Party (and each of their respective successors and assigns)
hereby agree as follows:
ARTICLE 1
Definitions
1.1 Generally. Unless the context otherwise requires, all capitalized terms
used but not defined herein shall have the meanings set forth in the Credit
Agreement, and all references to the UCC shall mean the Uniform Commercial Code
as in effect from time to time in the State of New York; provided, however, that
if a term is defined in Article 9 of the UCC differently that in another Article
thereof, the term shall have the meaning set forth in Article 9, and provided
further that if by reason of mandatory provisions of law, perfection, or the
effect of perfection or non-perfection, of the Security Interest in any
Collateral or the availability of any remedy hereunder is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
"UCC" means the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection or availability of such remedy, as the case may be.
1.2 Definition of Certain Terms Used Herein. As used herein, the following
terms shall have the following meanings:
"Accessions" shall have the meaning given that term in the UCC.
"Account Debtor" shall have the meaning given that term in the UCC.
"Accounts" shall include, without limitation, "accounts" as defined in the
UCC, and also all: accounts, accounts receivable, receivables, and rights to
payment (whether or not earned by performance) for: (i) property that has been
or is to be sold, leased, licensed, assigned, or otherwise disposed of; (ii)
services rendered or to be rendered; (iii) a policy of insurance issued or to be
issued; (iv) a secondary obligation incurred or to be incurred; or (v) arising
out of the use of a credit or charge card or information contained on or used
with that card. The term "Accounts" shall also include Health-Care-Insurance
Receivables.
"Blue Sky Laws" shall have the meaning assigned to such term in Section 6.1
of this Agreement.
"Chattel Paper" shall have the meaning given that term in the UCC.
"Collateral" shall mean all personal and fixture property of each Grantor,
including, without limitation, all: (a) Accounts, (b) Chattel Paper, (c)
Commercial Tort Claims, (d) Deposit Accounts, (e) Documents, (f) Equipment, (g)
Fixtures, (h) General Intangibles (including Payment Intangibles), (i) Goods,
(j) Instruments, (k) Inventory, (l) Investment Property, (m) Letter-of-Credit
Rights, (n) Software, (o) Supporting Obligations, (p) money, policies and
certificates of insurance, deposits, cash, or other property, (q) all books,
records, and information relating to any of the foregoing and/or to the
operation of any Grantor's business, and all rights of access to such books,
records, and information, and all property in which such books, records, and
information are stored, recorded and maintained, (r) all insurance proceeds,
refunds, and premium rebates, including, without limitation, proceeds of fire
and credit insurance, whether any of such proceeds, refunds, and premium rebates
arise out of any of the foregoing ((a) through (q)) or otherwise, (s) all liens,
guaranties, rights, remedies, and privileges pertaining to any of the foregoing
((a) through (r)), including the right of stoppage in transit, and (t) any of
the foregoing whether now owned or now due, or in which any Grantor has an
interest, or hereafter acquired, arising, or to become due, or in which any
Grantor obtains an interest, and all products, Proceeds, substitutions, and
Accessions of or to any of the foregoing.
"Collateral Agent's Rights and Remedies" shall have the meaning assigned to
such term in Section 8.8.
"Commercial Tort Claim" shall have the meaning given that term in the UCC.
"Credit Agreement" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Deposit Account" shall have the meaning given that term in the UCC and
shall also include all demand, time, savings, passbook, or similar accounts
maintained with a bank or other financial institution.
"Documents" shall have the meaning given that term in the UCC.
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"Equipment" shall include, without limitation, "equipment" as defined in
the UCC, and also all furniture, store fixtures, motor vehicles, rolling stock,
machinery, office equipment, plant equipment, tools, dies, molds, and other
goods, property, and assets which are used and/or were purchased for use in the
operation or furtherance of a Grantors' business, and any and all Accessions or
additions thereto, and substitutions therefor.
"Financing Statement" shall have the meaning given that term in the UCC.
"Fixture Filing" shall have the meaning given that term in the UCC.
"General Intangibles" shall have the meaning given that term in the UCC,
and shall also include, without limitation, all: Payment Intangibles; rights to
payment for credit extended; deposits; amounts due to any Grantor; credit
memoranda in favor of any Grantor; warranty claims; tax refunds and abatements;
insurance refunds and premium rebates; all means and vehicles of investment or
hedging, including, without limitation, options, warrants, and futures
contracts; records; customer lists; telephone numbers; goodwill; causes of
action; judgments; payments under any settlement or other agreement; literary
rights; rights to performance; royalties; license and/or franchise fees; rights
of admission; licenses; franchises; license agreements, including all rights of
any Grantor to enforce same; permits, certificates of convenience and necessity,
and similar rights granted by any governmental authority; internet addresses and
domain names; developmental ideas and concepts; proprietary processes;
blueprints, drawings, designs, diagrams, plans, reports, and charts; catalogs;
technical data; computer software programs (including the source and object
codes therefor), computer records, computer software, rights of access to
computer record service bureaus, service bureau computer contracts, and computer
data; tapes, disks, semi-conductors chips and printouts; user, technical
reference, and other manuals and materials; patents, patent applications and
patents pending; trade secret rights, copyrights, copyright applications, mask
work rights and interests, and derivative works and interests; trade names,
trademarks, trademark applications, service marks, and service xxxx
applications, together with all goodwill connected with and symbolized by any of
the foregoing; all other general intangible property of any Grantor in the
nature of intellectual property; proposals; cost estimates, and reproductions on
paper, or otherwise, of any and all concepts or ideas, and any matter related
to, or connected with, the design, development, manufacture, sale, marketing,
leasing, or use of any or all property produced, sold, or leased, by or credit
extended or services performed, by any Grantor, whether intended for an
individual customer or the general business of any Grantor, or used or useful in
connection with research by any Grantor.
"Goods" shall have the meaning given that term in the UCC.
"Health-Care-Insurance Receivables" shall have the meaning given that term
in the UCC, and shall also mean an interest in, or claim under, a policy of
insurance or otherwise which is a right to payment of a monetary obligation for
health-care goods or services provided.
"Indemnitee" shall have the meaning assigned to such term in Section 8.6 of
this Agreement.
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"Instruments" shall have the meaning given that term in the UCC.
"Inventory" shall have the meaning given that term in the UCC, and shall
also include, without limitation, all: (a) Goods which (i) are leased by a
Person as lessor, (ii) are held by a Person for sale or lease or to be furnished
under a contract of service, (iii) are furnished by a Person under a contract of
service, or (iv) consist of raw materials, work in process, or materials used or
consumed in a business; (b) Goods of said description in transit; (c) Goods of
said description which are returned, repossessed and rejected; (d) packaging,
advertising, and shipping materials related to any of the foregoing; (e) all
names, marks, and General Intangibles affixed or to be affixed thereto or
associated therewith; and (f) Documents which represent any of the foregoing.
"Investment Property" shall have the meaning given that term in the UCC.
"Letter-of-Credit Right" shall have the meaning given that term in the UCC
and shall also mean any right to payment or performance under a letter of
credit, whether or not the beneficiary has demanded or is at the time entitled
to demand payment or performance.
"Payment Intangible" shall have the meaning given that term in the UCC, and
shall also refer to any General Intangible under which the Account Debtor's
primary obligation is a monetary obligation.
"Proceeds" shall include, without limitation, "Proceeds" as defined in the
UCC and each type of property described in the definition of Collateral.
"Secured Parties" shall mean (a) the Lenders, (b) the Agents and their
Affiliates, (c) the Issuing Bank, (d) the beneficiaries of each indemnification
obligation undertaken by any Grantor under any Loan Document, (e) Bank of
America, N.A. and any of its Affiliates with respect to any transaction entered
into by any Grantor with any such Person which arises out of any cash
management, depository, investment, letter of credit, Hedging Agreement, or
other banking or financial services provided by any such Person, (f) any other
Person to whom Obligations under the Credit Agreement and other Loan Documents
are owing, and (g) the successors and assigns of each of the foregoing.
"Securities Act" shall have the meaning assigned to such term in Section
6.1 of this Agreement.
"Security" shall have the meaning given that term in the UCC.
"Security Interest" shall have the meaning assigned to such term in Section
2.1 of this Agreement.
"Software" shall have the meaning given that term in the UCC.
"Supporting Obligation" shall have the meaning given that term in the UCC
and shall also refer to a Letter-of-Credit Right or secondary obligation that
supports the payment or
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performance of an Account, Chattel Paper, a Document, a General Intangible, an
Instrument, or Investment Property.
1.3 Rules of Interpretation. The rules of interpretation specified in
Section 1.02 of the Credit Agreement shall be applicable to this Agreement.
ARTICLE 2
Security Interest
2.1 Security Interest. As security for the payment or performance, as the
case may be, in full of the Obligations, each Grantor hereby bargains, assigns,
mortgages, pledges, hypothecates and transfers to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, and hereby
grants to the Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, a security interest in, all of such Grantor's right, title
and interest in, to and under the Collateral (the "Security Interest"). Without
limiting the foregoing, each Grantor hereby designates the Collateral Agent as
such Grantor's true and lawful attorney, exercisable by the Collateral Agent
whether or not an Event of Default exists, with full power of substitution, at
the Collateral Agent's option, for the purpose of filing one or more Financing
Statements (including Fixture Filings), continuation statements, or to sign
other documents for the purpose of perfecting, confirming, continuing, enforcing
or protecting the Security Interest granted by each Grantor, without the
signature of any Grantor (each Grantor hereby appointing the Collateral Agent as
such Person's attorney to sign such Person's name to any such instrument or
document, whether or not an Event of Default exists), and naming any Grantor or
the Grantors as debtors and the Collateral Agent as secured party.
2.2 No Assumption of Liability. The Security Interest is granted as
security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.
ARTICLE 3
Representations and Warranties
The Grantors jointly and severally represent and warrant to the Collateral
Agent and the other Secured Parties that:
3.1 Representations and Warranties Incorporated by Reference. Each Grantor
hereby makes each of the representations and warranties set forth in Article III
of the Credit Agreement with respect to such Grantor as a Loan Party. Each such
warranty and representation is incorporated herein by reference.
3.2 Title and Authority. Each Grantor has good and valid rights in, and
title to, the Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms
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of this Agreement, without the consent or approval of any other Person other
than any consent or approval which has been obtained.
3.3 Filings. Financing Statements (including Fixture Filings, as
applicable) or other appropriate filings, recordings or registrations containing
a description of the Collateral have been filed in each governmental, municipal
or other office as is necessary to publish notice of and protect the validity of
and to establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the benefit of the Secured Parties) in respect of all
Collateral in which the Security Interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or re-registration is necessary in any such
jurisdiction, except as provided under Applicable Law with respect to the filing
of continuation statements and except with respect to the acquisition by any
Grantor of any property for which additional filings or recordings are
necessary.
3.4 Validity and Priority of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all of the Collateral
securing the payment and performance of the Obligations, and (b) subject to the
filings described in Section 3.3 above, a perfected security interest in all of
the Collateral. The Security Interest is and shall be prior to any other Lien on
any of the Collateral, subject only to those Permitted Encumbrances which have
priority under Applicable Law.
3.5 Absence of Other Liens. The Collateral is owned by the Grantors free
and clear of any Lien, except for Liens expressly permitted pursuant to Section
6.02 of the Credit Agreement. Except as provided in the Loan Documents, the
Grantors have not filed or consented to the filing of (a) any Financing
Statement or analogous document under the UCC or any other Applicable Law
covering any Collateral, (b) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (c) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Collateral with any foreign governmental, municipal or other office, which
Financing Statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Liens expressly
permitted pursuant to Section 6.02 of the Credit Agreement.
3.6 Bailees, Warehousemen, Etc. No Inventory of any Grantor is in the care
or custody of any third party or stored or entrusted with a bailee or other
third party. If any such Inventory shall hereafter be placed under such care,
custody, storage or entrustment of such third party or bailee, the Grantors
shall notify the Collateral Agent and at the request of the Collateral Agent,
shall use best and good faith efforts to obtain a waiver or other agreement by
such third party or bailee reasonably satisfactory to the Collateral Agent.
3.7 Consignments. No Grantor has, and none shall have, possession of any
property on consignment.
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ARTICLE 4
Covenants
4.1 Covenants Incorporated by Reference. Each Grantor hereby covenants and
agrees that each Grantor shall perform, observe and otherwise comply with the
covenants set forth in Articles V and VI of the Credit Agreement with respect to
such Grantor as a Loan Party.
4.2 Change of Name; Location of Collateral; Records; Place of Business.
(a) Each Grantor agrees promptly to notify the Collateral Agent of (i)
any change in its legal name or in any trade name used to identify it in
the conduct of its business or in the ownership of its properties, (ii) any
change in the location of its chief executive office, its principal place
of business, any office in which it maintains books or records relating to
Collateral owned by it, or any office or facility at which Collateral owned
by it is located, including the establishment of any such new office or
facility, (iii) any change in its identity or organizational structure,
(iv) any change in its Federal Taxpayer Identification Number or
organizational number, if any, assigned to it by its state of organization,
or (v) the acquisition by any Grantor of any property for which additional
filings or recordings are necessary to perfect and maintain the Collateral
Agent's Security Interest therein. Upon receipt of such notice, Collateral
Agent shall promptly make all filings under the UCC or otherwise that are
required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected first priority
security interest in all of the Collateral, and each Grantor agrees not to
effect or permit any change referred to in the preceding sentence until all
such filings have been made by the Collateral Agent.
(b) Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Collateral owned by it as
is consistent with its current practices, but in any event to include
complete accounting records indicating all payments and proceeds received
with respect to any part of the Collateral, and, at such time or times as
the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in
form and detail reasonably satisfactory to the Collateral Agent showing the
identity, amount and location of any and all Collateral.
4.3 Protection of Security. Each Grantor shall, at its own cost and
expense, take any and all actions reasonably necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien not
expressly permitted pursuant to Section 6.02 of the Credit Agreement.
4.4 Further Assurances. Each Grantor agrees, at its own expense, to
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent may
from time to time reasonably request to assure, preserve, protect and perfect
the Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the filing
of any Financing
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Statements (including Fixture Filings) or other documents in connection herewith
or therewith. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note or other
instrument, the Grantors shall notify the Collateral Agent and upon the request
of the Collateral Agent, such note or instrument shall be immediately pledged
and delivered to the Collateral Agent, duly endorsed in a manner satisfactory to
the Collateral Agent.
4.5 Inspection and Verification. Subject to and without limiting the terms
and conditions of Sections 5.09 of the Credit Agreement, the Collateral Agent
and such Persons as the Collateral Agent may reasonably designate shall have the
right, at the Grantors' own cost and expense, on reasonable prior notice except
if an Event of Default then exists, to inspect the Collateral, all records
related thereto (and to make extracts and copies from such records) and the
premises upon which any of the Collateral is located, to discuss the Grantors'
affairs with the officers of the Grantors and their independent accountants and
to verify the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Collateral, including, in the case of
Accounts or Collateral in the possession of any third Person, by contacting
Account Debtors or the third Person possessing such Collateral for the purpose
of making such a verification. The Collateral Agent shall have the absolute
right to share any information it gains from such inspection or verification
with any Secured Party.
4.6 Taxes; Encumbrances. At its option, the Collateral Agent may discharge
past due taxes, assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Collateral and not permitted
pursuant to Section 6.02 of the Credit Agreement, and may take any other action
which the Collateral Agent may deem necessary or desirable to repair, maintain
or preserve any of the Collateral to the extent any Grantor fails to do so as
required by the Credit Agreement or this Agreement, and each Grantor jointly and
severally agrees to reimburse the Collateral Agent on demand for any payment
made or any expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided, however, that the Collateral Agent shall not have any
obligation to undertake any of the foregoing and shall have no liability on
account of any action so undertaken except where there is a specific finding in
a judicial proceeding (in which the Collateral Agent has had an opportunity to
be heard), from which finding no further appeal is available, that the
Collateral Agent had acted in actual bad faith or in a grossly negligent manner;
and provided further that the making of any such payments or the taking of any
such action by the Collateral Agent shall not be deemed to constitute a waiver
of any Default or Event of Default arising from the Grantor's failure to have
made such payments or taken such action. Nothing in this Section 4.6 shall be
interpreted as excusing any Grantor from the performance of any covenants or
other promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interests or other encumbrances and maintenance as set forth
herein or in the other Loan Documents.
4.7 Assignment of Security Interest.
(a) If at any time any Grantor shall take a security interest in any
property of an Account Debtor or any other Person to secure payment and
performance of an Account, such Grantor shall promptly assign such security
interest to the Collateral Agent. Such assignment need not be filed of
public record unless necessary to continue
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the perfected status of the security interest against creditors of, and
transferees from, the Account Debtor or other Person granting the security
interest.
(b) To the extent that any Grantor is a beneficiary under any written
letter of credit now or hereafter issued in favor of such Grantor, such
Grantor shall deliver such letter of credit to the Collateral Agent. The
Collateral Agent shall from time to time, at the request and expense of
such Grantor, make such arrangements with such Grantor as are in the
Collateral Agent's reasonable judgment necessary and appropriate so that
such Grantor may make any drawing to which such Grantor is entitled under
such letter of credit, without impairment of the Collateral Agent's
perfected security interest in such Grantor's rights to proceeds of such
letter of credit or in the actual proceeds of such drawing. At the
Collateral Agent's request, such Grantor shall, for any letter of credit,
whether or not written, now or hereafter issued in favor of such Grantor as
beneficiary, execute and deliver to the issuer and any confirmer of such
letter of credit an assignment of proceeds form, in favor of the Collateral
Agent and satisfactory to the Collateral Agent and such issuer or (as the
case may be) such confirmer, requiring the proceeds of any drawing under
such letter of credit to be paid directly to the Collateral Agent.
4.8 Continuing Obligations of the Grantors. Each Grantor shall remain
liable to observe and perform all the conditions and obligations to be observed
and performed by it under each contract, agreement or instrument relating to the
Collateral, all in accordance with the terms and conditions thereof, and each
Grantor jointly and severally agrees to indemnify and hold harmless the
Collateral Agent and the Secured Parties from and against any and all liability
for such performance.
4.9 Use and Disposition of Collateral. None of the Grantors shall make or
permit to be made an assignment, pledge or hypothecation of the Collateral or
shall grant any other Lien in respect of the Collateral or shall grant control
(as defined in the UCC) of any Collateral to any third person, except as
expressly permitted by Section 6.02 of the Credit Agreement. Except as expressly
permitted in the Credit Agreement, none of the Grantors shall make or permit to
be made any transfer of the Collateral, and each Grantor shall remain at all
times in possession of the Collateral owned by it, except that the Grantors may
use and dispose of the Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Credit Agreement or any other Loan Document,
including, without limitation, the sale of Inventory in the ordinary course of
business.
4.10 Limitation on Modification of Accounts. None of the Grantors will,
without the Collateral Agent's prior written consent, grant any extension of the
time of payment of any of the Accounts, compromise, compound or settle the same
for less than the full amount thereof, release, wholly or partly, any Person
liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, releases, credits, discounts, compromises or
settlements granted or made in the ordinary course of business and consistent
with its current practices.
4.11 Insurance.
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(a) Each Grantor shall (i) maintain or shall cause to be maintained
such insurance as is required pursuant to Section 5.07 of the Credit
Agreement; (ii) maintain such other insurance, as may be required by law;
and (iii) furnish to the Collateral Agent, upon written request, full
information as to the insurance carried.
(b) All such insurance which covers the Collateral shall include an
endorsement in favor of and reasonably satisfactory to the Collateral
Agent.
(c) Each Grantor hereby irrevocably makes, constitutes and appoints
the Collateral Agent (and all officers, employees or agents designated by
the Collateral Agent) as such Grantor's true and lawful agent (and
attorney-in-fact), for the purpose of making, settling and adjusting claims
in respect of Collateral under policies of insurance, endorsing the name of
such Grantor on any check, draft, instrument or other item of payment for
the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that any
Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or
part relating thereto, the Collateral Agent may, without waiving or
releasing any obligation or liability of the Grantors hereunder or any
Default or Event of Default, in its sole discretion, obtain and maintain
such policies of insurance and pay such premium and take any other actions
with respect thereto as the Collateral Agent deems advisable. All sums
disbursed by the Collateral Agent in connection with this Section 4.11,
including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable, upon demand, by the Grantors to
the Collateral Agent and shall be additional Obligations secured hereby.
4.12 Commercial Tort Claims. If any Grantor shall at any time acquire a
Commercial Tort Claim in excess of $50,000, such Grantor shall promptly notify
the Collateral Agent in writing of the details thereof and the Grantors shall
take such actions as the Collateral Agent shall reasonably request in order to
grant to the Collateral Agent, for the ratable benefit of the Secured Parties, a
perfected and first priority security interest therein and in the Proceeds
thereof.
4.13 Legend. Each Grantor shall legend, in form and manner reasonably
satisfactory to the Collateral Agent, its Accounts and its books, records and
documents evidencing or pertaining thereto with an appropriate reference to the
fact that such Accounts have been assigned to the Collateral Agent for the
benefit of the Secured Parties and that the Collateral Agent has a security
interest therein.
ARTICLE 5
Collections
5.1 Collections.
(a) Each Grantor shall at all times comply with the Cash Receipts
provisions of Section 2.22 of the Credit Agreement.
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(b) Without the prior written consent of the Collateral Agent, no
Grantor shall modify or amend the instructions pursuant to any of the DDA
Notifications, the Credit Card Notifications, or the Blocked Account
Agreements. So long as no Cash Dominion Event has occurred, each Grantor
shall, and the Collateral Agent hereby authorizes each Grantor to, enforce
and collect all amounts owing on the Inventory and Accounts, for the
benefit and on behalf of the Collateral Agent and the other Secured
Parties; provided, however, that such privilege may, at the option of the
Collateral Agent, be terminated upon the occurrence of any Cash Dominion
Event.
5.2 Power of Attorney. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents designated
by the Collateral Agent) as such Grantor's true and lawful agent and
attorney-in-fact, and in such capacity the Collateral Agent shall have the
right, with power of substitution for each Grantor and in each Grantor's name or
otherwise, for the use and benefit of the Collateral Agent and the other Secured
Parties, (a) at any time, whether or not a Default or Event of Default has
occurred, to take actions required to be taken by the Grantors under Section 2.1
of this Agreement, and (b) upon the occurrence and during the continuance of a
Cash Dominion Event or as otherwise permitted under the Credit Agreement, (i) to
take actions required to be taken by the Grantors under Section 5.1 of this
Agreement, (ii) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Collateral or any part thereof; (iii) to demand, collect, receive payment
of, give receipt for and give discharges and releases of all or any of the
Collateral; (iv) to sign the name of any Grantor on any invoices, schedules of
Collateral, freight or express receipts, or bills of lading storage receipts,
warehouse receipts or other documents of title relating to any of the
Collateral; (v) to sign the name of any Grantor on any notice to such Grantor's
Account Debtors; (vi) to sign the name of any Grantor on any proof of claim in
bankruptcy against Account Debtors, and on notices of lien, claims of mechanic's
liens, or assignments or releases of mechanic's liens securing the Accounts;
(vii) to sign change of address forms to change the address to which each
Grantor's mail is to be sent to such address as the Collateral Agent shall
designate; (viii) to receive and open each Grantor's mail, remove any Proceeds
of Collateral therefrom and turn over the balance of such mail either to the
Lead Borrower or to any trustee in bankruptcy or receiver of a Grantor, or other
legal representative of a Grantor whom the Collateral Agent determines to be the
appropriate person to whom to so turn over such mail; (ix) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (x) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (xi) to take all such action as may be
necessary to obtain the payment of any letter of credit and/or banker's
acceptance of which any Grantor is a beneficiary; (xii) to repair, manufacture,
assemble, complete, package, deliver, alter or supply goods, if any, necessary
to fulfill in whole or in part the purchase order of any customer of any
Grantor; (xiii) to use, license or transfer any or all General Intangibles of
any Grantor; and (xiv) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Collateral Agent were the
absolute owner of the Collateral for all purposes; provided, however, that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent or any other
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Secured Party to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Collateral Agent or any other Secured
Party, or to present or file any claim or notice. It is understood and agreed
that the appointment of the Collateral Agent as the agent and attorney-in-fact
of the Grantors for the purposes set forth above is coupled with an interest and
is irrevocable until such time as the Obligations have been indefeasibly paid in
full in cash and satisfied and the Security Interest has been terminated in
accordance with Section 8.14 hereof.
5.3 No Obligation to Act. The Collateral Agent shall not be obligated to do
any of the acts or to exercise any of the powers authorized by Section 5.2, but
if the Collateral Agent elects to do any such act or to exercise any of such
powers, it shall not be accountable for more than it actually receives as a
result of such exercise of power, and shall not be responsible to any Grantor
for any act or omission to act except for any act or omission to act as to which
there is a final determination made in a judicial proceeding (in which
proceeding the Collateral Agent has had an opportunity to be heard) which
determination includes a specific finding that the subject act or omission to
act had constituted gross negligence, willful misconduct or actual bad faith.
The provisions of Section 5.2 shall in no event relieve any Grantor of any of
its obligations hereunder or under any other Loan Document with respect to the
Collateral or any part thereof or impose any obligation on the Collateral Agent
or any other Secured Party to proceed in any particular manner with respect to
the Collateral or any part thereof, or in any way limit the exercise by the
Collateral Agent or any other Secured Party of any other or further right which
it may have on the date of this Agreement or hereafter, whether hereunder, under
any other Loan Document, by law or otherwise.
ARTICLE 6
Remedies
6.1 Remedies upon Default. Upon the occurrence of an Event of Default, it
is agreed that the Collateral Agent shall have in any jurisdiction in which
enforcement hereof is sought, in addition to all other rights and remedies, the
rights and remedies of a secured party under the UCC or other Applicable Law.
Without limiting the foregoing, upon the occurrence of an Event of Default, the
rights and remedies of the Collateral Agent shall include, without limitation,
the right to take any of or all the following actions at the same or different
times:
(a) With respect to any Collateral consisting of Accounts, General
Intangibles (including Payment Intangibles), Letter-of-Credit Rights,
Instruments, Chattel Paper, Documents, and Investment Property, the
Collateral Agent may collect the Collateral with or without the taking of
possession of any of the Collateral.
(b) With respect to any Collateral consisting of Accounts, the
Collateral Agent may (i) demand, collect and receive any amounts relating
thereto, as the Collateral Agent may determine; (ii) commence and prosecute
any actions in any court for the purposes of collecting any such Accounts
and enforcing any other rights in respect thereof; (iii) defend, settle or
compromise any action brought and, in connection therewith, give such
discharges or releases as the Collateral Agent may reasonably deem
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appropriate; (iv) without limiting the Collateral Agent's rights set forth
in Section 5.2 hereof, receive, open and dispose of mail addressed to any
Grantor and endorse checks, notes, drafts, acceptances, money orders, bills
of lading, warehouse receipts or other instruments or documents evidencing
payment, shipment or storage of the goods giving rise to such Accounts or
securing or relating to such Accounts, on behalf of and in the name of such
Grantor; and (v) sell, assign, transfer, make any agreement in respect of,
or otherwise deal with or exercise rights in respect of, any such Accounts
or the goods or services which have given rise thereto, as fully and
completely as though the Collateral Agent were the absolute owner thereof
for all purposes.
(c) With respect to any Collateral consisting of Investment Property,
the Collateral Agent may (i) exercise all rights of any Grantor with
respect thereto, including without limitation, the right to exercise all
voting and corporate rights at any meeting of the shareholders of the
Issuer of any Investment Property and to exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or
options pertaining to any Investment Property as if the Collateral Agent
was the absolute owner thereof, including the right to exchange, at its
discretion, any and all of any Investment Property upon the merger,
consolidation, reorganization, recapitalization or other readjustment of
the Issuer thereof, all without liability except to account for property
actually received as provided in Section 5.3 hereof; (ii) transfer such
Collateral at any time to itself, or to its nominee, and receive the income
thereon and hold the same as Collateral hereunder or apply it to the
Obligations; and (iii) demand, xxx for, collect or make any compromise or
settlement it deems desirable. The Grantors recognize that (a) the
Collateral Agent may be unable to effect a public sale of all or a part of
the Investment Property by reason of certain prohibitions contained in the
Securities Act of 1933, 15 U.S.C. Section 77, (as amended and in effect,
the "Securities Act") or the Securities laws of various states (the "Blue
Sky Laws"), but may be compelled to resort to one or more private sales to
a restricted group of purchasers who will be obliged to agree, among other
things, to acquire the Investment Property for their own account, for
investment and not with a view to the distribution or resale thereof, (b)
that private sales so made may be at prices and upon other terms less
favorable to the seller than if the Investment Property were sold at public
sales, (c) that neither the Collateral Agent nor any Secured Party has any
obligation to delay sale of any of the Investment Property for the period
of time necessary to permit the Investment Property to be registered for
public sale under the Securities Act or the Blue Sky Laws, and (d) that
private sales made under the foregoing circumstances shall be deemed to
have been made in a commercially reasonable manner.
(d) With respect to any Collateral consisting of Inventory, Goods, and
Equipment, the Collateral Agent may conduct one or more going out of
business sales, in the Collateral Agent's own right or by one or more
agents and contractors. Such sale(s) may be conducted upon any premises
owned, leased, or occupied by any Grantor. The Collateral Agent and any
such agent or contractor, in conjunction with any such sale, may augment
the Inventory with other goods (all of which other goods shall remain the
sole property of the Collateral Agent or such agent or contractor). Any
amounts realized from the sale of such goods which constitute augmentations
to the Inventory (net of an
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allocable share of the costs and expenses incurred in their disposition)
shall be the sole property of the Collateral Agent or such agent or
contractor and neither any Grantor nor any Person claiming under or in
right of any Grantor shall have any interest therein. Each purchaser at any
such going out of business sale shall hold the property sold absolutely,
free from any claim or right on the part of any Grantor.
(e) With or without legal process and with or without prior notice or
demand for performance, the Collateral Agent may enter upon, occupy, and
use any premises owned or occupied by each Grantor, and may exclude the
Grantors from such premises or portion thereof as may have been so entered
upon, occupied, or used by the Collateral Agent until this Agreement has
been terminated in accordance with Section 8.14 hereof. The Collateral
Agent shall not be required to remove any of the Collateral from any such
premises upon the Collateral Agent's taking possession thereof, and may
render any Collateral unusable to the Grantors. In no event shall the
Collateral Agent be liable to any Grantor for use or occupancy by the
Collateral Agent of any premises pursuant to this Section 6.1, nor for any
charge (such as wages for the Grantors' employees and utilities) incurred
in connection with the Collateral Agent's exercise of the Collateral
Agent's Rights and Remedies (as defined herein) hereunder.
(f) The Collateral Agent may require any Grantor to assemble the
Collateral and make it available to the Collateral Agent at the Grantor's
sole risk and expense at a place or places which are reasonably convenient
to both the Collateral Agent and such Grantor.
(g) Each Grantor agrees that the Collateral Agent shall have the
right, subject to Applicable Law, to sell or otherwise dispose of all or
any part of the Collateral, at public or private sale, for cash, upon
credit or for future delivery as the Collateral Agent shall deem
appropriate. Each purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of any Grantor.
(h) Unless the Collateral is perishable or threatens to decline
speedily in value, or is of a type customarily sold on a recognized market
(in which event the Collateral Agent shall provide the Grantors such notice
as may be practicable under the circumstances), the Collateral Agent shall
give the Grantors at least ten (10) days' prior written notice, by
authenticated record, of the date, time and place of any proposed public
sale, and of the date after which any private sale or other disposition of
the Collateral may be made, which notice shall describe the Collateral that
is the subject of the intended sale, state the method of the intended sale
and state that the Grantors are entitled to an accounting of the
Obligations and state the charge, if any, for such accounting. Each Grantor
agrees that such written notice shall satisfy all requirements for notice
to that Grantor which are imposed under the UCC or other Applicable Law
with respect to the exercise of the Collateral Agent's rights and remedies
upon default. The Collateral Agent shall not be obligated to make any sale
or other disposition of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale or other disposition of such
Collateral shall have been given. The Collateral Agent may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from
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time to time by announcement at the time and place fixed for sale, and such
sale may, without further notice, be made at the time and place to which
the same was so adjourned.
(i) Any public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent
may fix and state in the notice of such sale. At any sale or other
disposition, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may
(in its sole and absolute discretion) determine. If any of the Collateral
is sold, leased, or otherwise disposed of by the Collateral Agent on
credit, the Obligations shall not be deemed to have been reduced as a
result thereof unless and until payment is finally received thereon by the
Collateral Agent.
(j) At any public (or, to the extent permitted by Applicable Law,
private) sale made pursuant to this Section 6.1, the Collateral Agent or
any other Secured Party may bid for or purchase, free (to the extent
permitted by Applicable Law) from any right of redemption, stay, valuation
or appraisal on the part of any Grantor, the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim
then due and payable to the Collateral Agent or such other Secured Party
from any Grantor on account of the Obligations as a credit against the
purchase price, and the Collateral Agent or such other Secured Party may,
upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor.
(k) For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof. The
Collateral Agent shall be free to carry out such sale pursuant to such
agreement and no Grantor shall be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after
the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full.
(l) As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in
equity to foreclose upon the Collateral and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts
having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver.
(m) To the extent permitted by Applicable Law, each Grantor hereby
waives all rights of redemption, stay, valuation and appraisal which such
Grantor now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.
6.2 Application of Proceeds. After the occurrence of an Event of Default
and acceleration of the Obligations, the Collateral Agent shall apply the
proceeds of any collection or sale of the Collateral, as well as any Collateral
consisting of cash, or any Collateral granted under any other of the Security
Documents as set forth in Section 7.03 of the Credit Agreement. Upon
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any sale or other disposition of the Collateral by the Collateral Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the purchase money by the Collateral Agent or of the
officer making the sale or other disposition shall be a sufficient discharge to
the purchaser or purchasers of the Collateral so sold or otherwise disposed of
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
ARTICLE 7
Perfection of Security Interest
7.1 Perfection by Filing. This Agreement constitutes an authenticated
record, and each Grantor hereby authorizes the Collateral Agent, pursuant to the
provisions of Sections 2.1 and 5.2, to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral, in such filing offices as the Collateral Agent shall deem
appropriate, and the Grantors shall pay the Collateral Agent's reasonable costs
and expenses incurred in connection therewith. Each Grantor hereby further
agrees that a carbon, photographic, or other reproduction of this Agreement
shall be sufficient as a Financing Statement and may be filed as a Financing
Statement in any and all jurisdictions.
7.2 Other Perfection, Etc. The Grantors shall at any time and from time to
time take such steps as the Collateral Agent may reasonably request for the
Collateral Agent (a) to obtain an acknowledgment, in form and substance
reasonably satisfactory to the Collateral Agent, of any bailee having possession
of any of the Collateral that the bailee holds such Collateral for the
Collateral Agent, (b) to obtain "control" of any Investment Property, Deposit
Accounts, Letter-of-Credit Rights or electronic Chattel Paper (as such terms are
defined in the UCC), with any agreements establishing control to be in form and
substance satisfactory to the Collateral Agent, and (c) otherwise to insure the
continued perfection of the Collateral Agent's security interest in any of the
Collateral with the priority described in Section 3.4 and of the preservation of
its rights therein.
7.3 Savings Clause. Nothing contained in this Article VII shall be
construed to narrow the scope of the Collateral Agent's Security Interest in any
of the Collateral or the perfection or priority thereof or to impair or
otherwise limit any of the Collateral Agent's Rights and Remedies hereunder
except (and then only to the extent) as mandated by the UCC.
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ARTICLE 8
Miscellaneous
8.1 Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement.
8.2 Grant of Non-Exclusive License. In addition to (and not in limitation
of) the Security Interest granted by the Grantors in Section 2.1 hereof, upon
the occurrence of an Event of Default, each Grantor hereby grants to the
Collateral Agent a royalty free, non-exclusive, irrevocable license, to use,
apply, and affix any trademark, trade name, logo, or the like in which any
Grantor now or hereafter has rights, such license being with respect to the
Collateral Agent's exercise of the Collateral Agent's Rights and Remedies
hereunder including, without limitation, in connection with any completion of
the manufacture of Inventory or any sale or other disposition of Inventory.
8.3 Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest and all obligations of the Grantors hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document, or any other agreement or instrument, (c)
any exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from the
Guaranty or any other guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor in respect of the
Obligations or this Agreement.
8.4 Survival of Agreement. All covenants, agreements, representations and
warranties made by the Grantors herein and in any other Loan Document and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the execution and delivery of this Agreement and the other Loan
Documents and the making of any Loans and the issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Agents, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended under the Loan Agreement, and shall continue in
full force and effect as long as the Obligations are outstanding and unpaid or
the Letter of Credit Outstandings to not equal zero, or are not fully cash
collateralized in a manner reasonably satisfactory to the Issuing Bank and the
Administrative Agent, and as long as the Commitments have not expired or
terminated.
8.5 Binding Effect; Several Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors
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and assigns of such party, and all covenants, promises and agreements by or on
behalf of the Grantors that are contained in this Agreement shall bind and inure
to the benefit of each Grantor and its respective successors and assigns. This
Agreement shall be binding upon each Grantor and the Collateral Agent and their
respective successors and assigns, and shall inure to the benefit of each
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such attempted assignment or transfer shall be void) except
as expressly permitted by this Agreement or the Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each Grantor and may
be amended, modified, supplemented, waived or released with respect to any
Grantor without the approval of any other Grantor and without affecting the
obligations of any other Grantor hereunder.
8.6 Collateral Agent's Fees and Expenses; Indemnification.
(a) Without limiting any of their obligations under the Credit
Agreement or the other Loan Documents, the Grantors jointly and severally
agree to pay all reasonable out-of-pocket expenses incurred by the
Collateral Agent, including the reasonable fees, charges and disbursements
of any counsel and any outside consultants for the Collateral Agent, in
connection with (i) the administration of this Agreement, (ii) the custody
or preservation of, or the sale of, collection from or other realization
upon any of the Collateral, (iii) the exercise, enforcement or protection
of any of the Collateral Agent's Rights and Remedies hereunder or (iv) the
failure of any Grantor to perform or observe any of the provisions hereof.
(b) Without limiting any of their indemnification obligations under
the Credit Agreement or the other Loan Documents, the Grantors shall
jointly and severally indemnify each Secured Party and each Related Party
of any Secured Party (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the reasonable
fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with,
or as a result of, (i) the execution or delivery or performance of this
Agreement or any other Loan Document, the performance by any Grantor of its
obligations under this Agreement or any other Loan Document, or the
consummation of the transactions contemplated by the Loan Documents or any
other transactions contemplated hereby, or (ii) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing or to the Collateral, whether based on contract, tort or any
other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or related
expenses resulted from the gross negligence or willful misconduct of any
Indemnitee or any Affiliate of an Indemnitee (or of any officer, director,
employee, advisor or agent of such Indemnitee or any such Indemnitee's
Affiliates). In connection with any indemnified claim hereunder, the
Indemnitee shall be entitled to select its own counsel and the Grantors
shall promptly pay the reasonable fees and expenses of such counsel.
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(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. All amounts
due under this Section 8.6 shall be payable promptly after written demand
therefor.
8.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.8 Waivers; Amendment.
(a) The rights, remedies, powers, privileges, and discretions of the
Collateral Agent hereunder (herein, the "Collateral Agent's Rights and
Remedies") shall be cumulative and not exclusive of any rights or remedies
which it would otherwise have. No delay or omission by the Collateral Agent
in exercising or enforcing any of the Collateral Agent's Rights and
Remedies shall operate as, or constitute, a waiver thereof. No waiver by
the Collateral Agent of any Event of Default or of any Default under any
other agreement shall operate as a waiver of any other Event of Default or
other Default hereunder or under any other agreement. No single or partial
exercise of any of the Collateral Agent's Rights or Remedies, and no
express or implied agreement or transaction of whatever nature entered into
between the Collateral Agent and any Person, at any time, shall preclude
the other or further exercise of the Collateral Agent's Rights and
Remedies. No waiver by the Collateral Agent of any of the Collateral
Agent's Rights and Remedies on any one occasion shall be deemed a waiver on
any subsequent occasion, nor shall it be deemed a continuing waiver. The
Collateral Agent's Rights and Remedies may be exercised at such time or
times and in such order of preference as the Collateral Agent may
determine. The Collateral Agent's Rights and Remedies may be exercised
without resort or regard to any other source of satisfaction of the
Obligations. No waiver of any provisions of this Agreement or any other
Loan Document or consent to any departure by any Grantor therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or
demand on any Grantor in any case shall entitle such Grantor or any other
Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Collateral Agent and the Grantor or Grantors with respect to
whom such waiver, amendment or modification is to apply, subject to any
consent required in accordance with Section 9.02 of the Credit Agreement.
8.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A JURY IN ANY TRIAL OF ANY CASE
OR CONTROVERSY IN WHICH ANY PARTY HERETO IS OR BECOMES A PARTY (WHETHER SUCH
CASE OR CONTROVERSY IS INITIATED BY OR AGAINST ANY PARTY HERETO OR IN WHICH ANY
PARTY HERETO IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES
OUT OF OR RELATES TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. EACH
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PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS SET FORTH IN THIS SECTION 8.9.
8.10 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
8.11 Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
8.12 Headings. Article and Section headings used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.
8.13 Jurisdiction; Consent to Service of Process.
(a) The Grantors agree that any suit for the enforcement of this
Agreement or any other Loan Document may be brought in any New York state
or federal court sitting in New York County as the Collateral Agent may
elect in its sole discretion and consent to the non-exclusive jurisdiction
of such courts. The Grantors hereby waive any objection which they may now
or hereafter have to the venue of any such suit or any such court or that
such suit is brought in an inconvenient forum. The Grantors agree that any
action commenced by any Grantor asserting any claim or counterclaim arising
under or in connection with this Agreement or any other Loan Document shall
be brought solely in any New York state or federal court sitting in New
York County as the Collateral Agent may elect in its sole discretion and
consent to the exclusive jurisdiction of such courts with respect to any
such action.
(b) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.13. Nothing in this
Agreement or any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
8.14 Termination; Release of Collateral. Except for those provisions which
expressly survive the termination thereof, the Credit Agreement, this Agreement
and the Security Interest granted herein shall terminate when all the
Obligations have been paid and performed in full, the
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Lenders have no further commitment to lend, the Letter of Credit Outstandings
have been reduced to zero or fully cash collateralized in a manner satisfactory
to the Issuing Bank and the Administrative Agent, and the Issuing Bank has no
further obligation to issue Letters of Credit under the Credit Agreement, at
which time the Collateral Agent shall execute or authorize and deliver to the
Grantors, at the Grantors' expense, all UCC termination statements and similar
documents that the Grantors shall reasonably request to evidence such
termination; provided, however, that the Credit Agreement, this Agreement, and
the Security Interest granted herein shall be reinstated if at any time payment,
or any part thereof, of any Obligation is rescinded or must otherwise be
restored by any Secured Party upon the bankruptcy or reorganization of any
Borrower, Grantor or other Loan Party, and provided further that the Security
Interest granted herein shall not terminate as to any indemnification obligation
of any Borrower, Grantor or other Loan Party which expressly survives the
termination of the Credit Agreement and this Agreement, including, without
limitation, the obligations of the Loan Parties set forth in Section 9.03 of the
Credit Agreement and the obligations of the Grantors set forth in Section 8.6 of
this Agreement. Any execution and delivery of termination statements or
documents pursuant to this Section 8.14 shall be without recourse to, or
warranty by, the Collateral Agent.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
under seal as of the day and year first above written.
GRANTORS:
XXXXX SUPERMARKETS, LLC
XXXXX SUPERMARKETS, INC.
XXXXX DRUGS, INC.
XXXXX VILLAGE PANTRIES, INC.
X. X. XXXX & SONS, INC.
XXXXX REALTY, INC.
MAR PROPERTIES, INC.
MARLEASE, INC.
XXXXX INTERNATIONAL, INC.
XXXXX DRUGS OF ILLINOIS, INC.
LIMITED HOLDINGS, INC.
XXXXX SUPERMARKETS OF ILLINOIS, INC.
TEMPORARY SERVICES, INC.
CONTRACT TRANSPORT, INC.
NORTH XXXXXX DEVELOPMENT CORPORATION
O'MALIA FOOD MARKETS, LLC
FLORAL FASHIONS, LLC
CRYSTAL FOOD SERVICES, LLC
XXXXXXXX, LLC
LOBILL FOODS, LLC
CONTRACT TRANSPORT, LLC
VILLAGE PANTRY, LLC
XXXXX DRUGS, LLC
XXXXX CLEARING HOUSE, LLC
CRYSTAL CAFE MANAGEMENT GROUP, LLC
CONVENIENCE STORE TRANSPORTATION
COMPANY, LLC
CRYSTAL FOOD MANAGEMENT SERVICES, LLC
XXXXXXXXXXX FOODS, LLC
By: /S/ Xxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxx, Senior Vice
President,
Chief Financial Officer and
Treasurer
Attest: /S/ X. Xxxxxxxx Butt
--------------------------------
X. Xxxxxxxx Butt, Secretary
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PANTRY PROPERTY, LLC
BY: VILLAGE PANTRY, LLC
MS PROPERTY, LLC
BY: XXXXX SUPERMARKETS, LLC
BF PROPERTY, LLC
BY: XXXXXXXXXXX FOODS, LLC
CF PROPERTY, LLC
BY: CRYSTAL FOOD SERVICES, LLC
MD PROPERTY, LLC
BY: XXXXX DRUGS, LLC
LB PROPERTY, LLC
BY: LOBILL FOODS, LLC
MCN PROPERTY, LLC
BY: XXXXXXXX, LLC
CSD PROPERTY, LLC
BY: CRYSTAL CAFE MANAGEMENT GROUP, LLC
FLORAL PROPERTY, LLC
BY: XXXXX SUPERMARKETS, LLC
By: /S/ Xxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxx, Senior Vice
President, Chief Financial Officer
and Treasurer
Attest: /S/ X. Xxxxxxxx Butt
--------------------------------
X. Xxxxxxxx Butt, Secretary
TRADEMARK HOLDINGS, INC.
By: /S/ X. Xxxxxxxx Butt
------------------------------------
X. Xxxxxxxx Butt, Assistant
Treasurer
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COLLATERAL AGENT: BANK OF AMERICA, N.A.
By: /S/ Xxxxx Xxxxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxxxx
Director
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