Exhibit 10.3
BORROWER SECURITY AGREEMENT
THIS BORROWER SECURITY AGREEMENT (this "Agreement"), dated as of December
20, 2002, is between THE XXXXXXXX GROUP, LTD., a Delaware corporation (the
"Debtor") and ANTARES CAPITAL CORPORATION, a Delaware corporation, as agent (the
"Secured Party") for the benefit of the "Agents" and the "Lenders" (as such
terms are hereinafter defined).
W I T N E S S E T H:
WHEREAS, Debtor has entered into that certain Credit Agreement of even date
herewith (the same, as it may be amended, restated, supplemented or otherwise
modified and in effect from time to time, being herein referred to as the
"Credit Agreement") with Secured Party, General Electric Capital Corporation, as
syndication agent ("Syndication Agent"), LaSalle Bank National Association, as
documentation agent ("Documentation Agent"), Xxxxxx Trust and Savings Bank, as
co-agent ("Co-Agent") (Secured Party, Syndication Agent, Documentation Agent and
Co-Agent are sometimes referred to herein as the "Agents"), and the Lenders
party thereto, providing for the Lenders to make available to the Debtor certain
term and revolving credit facilities (collectively, the "Loans") on the terms
and conditions set forth therein; and
WHEREAS, to induce the Secured Party and the Lenders to enter into the
Credit Agreement and make the Loans thereunder, Debtor has agreed to pledge and
grant a security interest in the Collateral (as such term is hereinafter
defined) as security for the Obligations (as such term is defined in the Credit
Agreement).
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein without definition
and defined in the Credit Agreement are used herein as defined therein. In
addition, as used herein:
"Account Debtor" means "account debtor," as such term is defined in
the Uniform Commercial Code.
"Act" shall have the meaning ascribed thereto in Section 4.8 hereof.
"Accounts" means any "account," as such term is defined in the Uniform
Commercial Code, and, in any event, shall include, without limitation,
"supporting obligations" and "health-care-insurance receivables" as such
terms are defined in the Uniform Commercial Code.
"Bank Agency Agreement" shall have the meaning ascribed thereto in
Section 4.5 hereof.
"Blocked Accounts" shall have the meaning ascribed thereto in Section
4.5 hereof.
"Certificated Securities" means "certificated securities," as such
term is defined in the Uniform Commercial Code.
"Chattel Paper" means any "chattel paper," as such term is defined in
the Uniform Commercial Code.
"Collateral" shall have the meaning ascribed thereto in Section 3
hereof.
"Collecting Banks" shall have the meaning ascribed thereto in Section
4.5 hereof.
"Commercial Tort Claims" means "commercial tort claims," as such term
is defined in the Uniform Commercial Code.
"Contracts" means all contracts, undertakings, or other agreements
(other than rights evidenced by Chattel Paper, Documents or Instruments) in
or under which Debtor may now or hereafter have any right, title or
interest, including, without limitation, with respect to an Account, any
agreement relating to the terms of payment or the terms of performance
thereof.
"Control" means the manner in which "control" is achieved under the
Uniform Commercial Code with respect to a particular item of Collateral.
"Copyrights" means any copyrights, rights and interests in copyrights,
works protectable by copyrights, copyright registrations and copyright
applications, including, without limitation, the copyright registrations
and applications listed on Schedule III attached hereto, and all renewals
of any of the foregoing, all income, royalties, damages and payments now
and hereafter due and/or payable under or with respect to any of the
foregoing, including, without limitation, damages and payments for past,
present and future infringements of any of the foregoing and the right to
xxx for past, present and future infringements of any of the foregoing.
"Deposit Accounts" means all "deposit accounts," as such term is
defined in the Uniform Commercial Code, now or hereafter held in the name
of Debtor, including, without limitation, Blocked Accounts and the
Depository Account.
"Depository Account" shall have the meaning ascribed thereto in
Section 4.5 hereof.
"Documents" means any "documents," as such term is defined in the
Uniform Commercial Code, and shall include, without limitation, all
documents of title, bills of lading or other receipts evidencing or
representing Inventory or Equipment.
"Equipment" means any "equipment," as such term is defined in the
Uniform Commercial Code, and, in any event, shall include, Motor Vehicles.
"Fixtures" means "fixtures," as such term is defined in the Uniform
Commercial Code.
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"General Intangibles" means any "general intangibles," as such term is
defined in the Uniform Commercial Code, and, in any event, shall include,
without limitation, Payment Intangibles, Software, and all right, title and
interest in or under all Contracts, models, drawings, materials and
Records, claims, literary rights, goodwill, rights of performance,
Copyrights, Trademarks, Patents, warranties, rights under insurance
policies and rights of indemnification.
"Goods" means any "goods," as such term is defined in the Uniform
Commercial Code, including, without limitation, Equipment, Fixtures and
embedded Software to the extent included in "goods," as such term is
defined in the Uniform Commercial Code.
"Instruments" means any "instrument," as such term is defined in the
Uniform Commercial Code, and shall include, without limitation, promissory
notes, drafts, bills of exchange, trade acceptances, Lender Letters of
Credit and other letters of credit, Letter-of-Credit Rights and Chattel
Paper.
"Inventory" means any "inventory," as such term is defined in the
Uniform Commercial Code.
"Investment Property" means any "investment property," as such term is
defined in the Uniform Commercial Code, and shall include, without
limitation, Certificated Securities and Uncertificated Securities.
"Liabilities" shall mean, collectively, the Obligations, the Rate
Contract Obligations and all obligations, liabilities and Indebtedness of
the Debtor under or in respect of this Agreement.
"Letter-of-Credit Rights" means "letter-of-credit rights," as such
term is defined in the Uniform Commercial Code.
"Motor Vehicles" means motor vehicles, tractors, trailers and other
like property, whether or not the title thereto is governed by a
certificate of title or ownership.
"Patents" means any patents and patent applications, including,
without limitation, the inventions and improvements described and claimed
therein, all patentable inventions and those patents and patent
applications listed on Schedule IV attached hereto, and the reissues,
divisions, continuations, renewals, extensions and continuations-in-part of
any of the foregoing, and all income, royalties, damages and payments now
or hereafter due and/or payable under or with respect to any of the
foregoing, including, without limitation, damages and payments for past,
present and future infringements of any of the foregoing and the right to
xxx for past, present and future infringements of any of the foregoing.
"Payment Intangibles" means "payment intangibles," as such term is
defined in the Uniform Commercial Code.
"Proceeds" means "proceeds," as such term is defined in the Uniform
Commercial Code and, in any event, includes, without limitation, (a) any
and all proceeds
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of any insurance, indemnity, warranty or guaranty payable with respect to
any of the Collateral, (b) any and all payments (in any form whatsoever)
made or due and payable from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Collateral by any governmental body, authority, bureau or
agency (or any Person acting under color of governmental authority), and
(c) any and all other amounts from time to time paid or payable under, in
respect of or in connection with any of the Collateral.
"Record" means "record," as such term is defined in the Uniform
Commercial Code.
"Representative" means any Person acting as agent, representative or
trustee on behalf of the Secured Party from time to time.
"Software" means all "software," as such term is defined in the
Uniform Commercial Code, now owned or hereafter acquired by Debtor, other
than software embedded in any category of Goods, including, without
limitation, all computer programs and all supporting information provided
in connection with a transaction related to any program.
"Trademarks" means any trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on
which any of the foregoing have appeared or appear, all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, the trademarks and applications listed in
Schedule V attached hereto and renewals thereof, all of the goodwill of the
business connected with the use of, and symbolized by each of the
foregoing, and all income, royalties, damages and payments now or hereafter
due and/or payable under or with respect to any of the foregoing,
including, without limitation, damages and payments for past, present and
future infringements of any of the foregoing and the right to xxx for past,
present and future infringements of any of the foregoing.
"Uncertificated Securities" means "uncertificated securities," as such
term is defined in the Uniform Commercial Code.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect from time to time in the State of Illinois; provided, that to the
extent that the Uniform Commercial Code is used to define any term herein
or in any Loan Document and such term is defined differently in different
Articles or Divisions of the Uniform Commercial Code, the definition of
such term contained in Article or Division 9 shall govern.
Section 2. Representations, Warranties and Covenants of the Debtor. After
giving effect to the Related Transactions, the Debtor represents and warrants
to, and covenants with, the Secured Party, for the benefit of the Agents and the
Lenders, as follows:
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(a) the Debtor has rights in and the power to transfer the Collateral
in which it purports to grant a security interest pursuant to Section 3 hereof
(subject, with respect to after-acquired Collateral, to the Debtor acquiring the
same) and no Lien other than Permitted Liens exists or will exist upon such
Collateral at any time;
(b) this Agreement is effective to create in favor of the Secured
Party, for the benefit of the Agents and the Lenders, a valid security interest
in and Lien upon all of the Debtor's right, title and interest in and to the
Collateral, and, upon the timely filing of appropriate Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule I attached hereto,
such security interest will be duly perfected in all the Collateral (other than
Instruments not constituting Chattel Paper) to the extent such security interest
can be perfected by the filing of such Uniform Commercial Code financing
statements, and upon delivery of the Instruments to the Secured Party or its
Representative, duly indorsed by the Debtor or accompanied by appropriate
instruments of transfer duly executed by the Debtor, the security interest in
the Instruments will be duly perfected;
(c) all of the Equipment, Inventory and Goods owned by the Debtor are,
when not in use at client sites, being repaired or in transit, located at the
places as specified on Schedule I attached hereto. Except as disclosed on
Schedule I, none of the Collateral is in the possession of any bailee,
warehousemen, processor or consignee. Schedule I discloses the Debtor's name as
of the date hereof as it appears in official filings in the state of its
incorporation, formation or organization, as applicable, the type of entity of
the Debtor (including corporation, partnership, limited partnership or limited
liability company), organizational identification number issued by the Debtor's
state of incorporation, formation or organization, as applicable (or a statement
that no such number has been issued), the Debtor's federal employer
identification number, state of incorporation, formation or organization, as
applicable, and the chief place of business, chief executive office and the
office where the Debtor keeps its books and records. The Debtor has only one
state of incorporation, formation or organization, as applicable. The Debtor
(including any Person acquired by the Debtor) does not do business and has not
done business during the past five (5) years under any trade name or fictitious
business name except as disclosed on Schedule II attached hereto;
(d) no Copyrights, Patents or Trademarks listed on Schedules III, IV
and V, respectively, if any, have been adjudged invalid or unenforceable or have
been canceled, in whole or in part, or are not presently subsisting. Each of the
material Copyrights, Patents and Trademarks listed thereon is valid and
enforceable. The Debtor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of such Copyrights,
Patents and Trademarks, identified on Schedules III, IV and V, respectively,
free and clear of any Liens, charges and encumbrances, including without
limitation licenses, shop rights and covenants by the Debtor not to xxx third
persons, other than Permitted Liens. The Debtor has adopted, used and is
currently using, or has a current bona fide intention to use, all of such
Trademarks and Copyrights material to its business. The Debtor has no notice of
any suits or actions commenced or threatened with reference to the material
Copyrights, Patents or Trademarks owned by it;
(e) Debtor agrees to deliver to the Secured Party an updated Schedule
I and/or II, within five (5) Business Days of any change thereto, and, in the
event of any change thereto, an updated Schedule III, IV and/or V in connection
with each delivery of a Compliance Certificate;
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(f) all Deposit Accounts and other accounts maintained by the Debtor
are described on Schedule VI hereto, which description includes for each such
account the name of the Debtor maintaining such account, the name, address and
telephone and facsimile numbers of the financial institution at which such
account is maintained, the account number and the account officer, if any, of
such account. The Debtor shall not open any new accounts except as permitted
under the Credit Agreement. The Debtor shall deliver to the Secured Party a
revised version of Schedule VI showing any changes thereto within five (5)
Business Days of any such change. The Debtor hereby authorizes the financial
institutions at which the Debtor maintains an account to provide the Secured
Party with such information with respect to such account as the Secured Party
from time to time reasonably may request, and the Debtor hereby consents to such
information being provided to the Secured Party; and
(g) the Debtor does not own any Commercial Tort Claims except for
those disclosed on Schedule VII hereto.
Section 3. Collateral. As collateral security for the prompt payment in
full when due (whether at stated maturity, by acceleration or otherwise) of the
Liabilities, the Debtor hereby pledges and grants to the Secured Party, for the
benefit of the Secured Party and the Lenders, a Lien on and security interest in
and to all of the Debtor's right, title and interest in the following personal
property of Debtor, whether now owned by the Debtor or hereafter acquired and
whether now existing or hereafter coming into existence and wherever located
(all being collectively referred to herein as "Collateral"):
(a) Instruments, together with all payments thereon or thereunder:
(b) Accounts;
(c) Inventory;
(d) General Intangibles;
(e) Equipment;
(f) Documents;
(g) Contracts;
(h) Goods;
(i) Investment Property;
(j) Deposit Accounts, including, without limitation, the balance from
time to time in all bank accounts maintained by the Debtor;
(k) Commercial Tort Claims specified on Schedule VII attached hereto;
and
(l) all other tangible and intangible property, including, without
limitation, all Proceeds, tort claims, products, accessions, rents, profits,
income, benefits, substitutions,
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additions and replacements of and to any of the property of the Debtor described
in the preceding clauses of this Section 3 (including, without limitation, any
proceeds of insurance thereon, insurance claims and all rights, claims and
benefits against any Person relating thereto), other rights to payments not
otherwise included in the foregoing and all books, correspondence, files,
Records, invoices and other papers, including without limitation all tapes,
cards, computer runs, computer programs, computer files and other papers,
documents and Records in the possession or under the control of the Debtor or
any computer bureau or service company from time to time acting for the Debtor.
Notwithstanding the foregoing, and with respect to the grant of Liens and
security interests hereunder only, the term "Collateral" shall not include (i)
Debtor's Equipment that is subject to a purchase money security interest or
equipment lease (the "Excluded Equipment") and (ii) any property of the type
specified in clauses (d), (g) and (l) above (such property, together with the
Excluded Equipment, the "Excluded Collateral"), to the extent the assignment,
granting, creation, mortgage, pledge, hypothecation or transfer of such Excluded
Collateral would violate the terms of, or would otherwise constitute a default
or termination or similar event under any document or instrument to which Debtor
is a party relating to the ownership of, or pertaining to any rights or interest
held in such Excluded Property, to the extent that no such term, document or
instrument is in contravention of Sections 9-406, 9-407 or 9-408 of the UCC.
Debtor hereby represents and warrants to the Secured Party that the failure of
the Secured Party to receive a security interest in any of the Excluded
Collateral, for the benefit of the Agents and the Lenders, shall not result in
the Secured Party failing to have a priority security interest in a material
portion of the Collateral and the Excluded Collateral, when taken as a whole, is
not material to the operations, business, properties or condition of the Debtor.
Section 4. Covenants; Remedies. In furtherance of the grant of the pledge,
security interest and Lien pursuant to Section 3 hereof, the Debtor hereby
agrees with the Secured Party, for the benefit of the Secured Party and the
Lenders, as follows:
4.1 Delivery and Other Perfection; Maintenance, Etc.
(a) Delivery of Instruments, Documents, Etc. The Debtor shall deliver
and pledge to the Secured Party or its Representative any and all Instruments,
negotiable Documents, Chattel Paper and Certificated Securities (accompanied by
stock powers or assignments separate from certificate, as applicable, executed
in blank) duly indorsed and/or accompanied by such instruments of assignment and
transfer executed by the Debtor in such form and substance as the Secured Party
or its Representative may request; provided, that so long as no Event of Default
shall have occurred and be continuing and Secured Party has not directed the
Debtor to act otherwise, the Debtor may retain for collection in the Ordinary
Course of Business any Instruments, negotiable Documents and Chattel Paper
received by the Debtor in the Ordinary Course of Business, and the Secured Party
or its Representative shall, promptly upon request of the Debtor, make
appropriate arrangements for making any other Instruments, negotiable Documents
and Chattel Paper pledged by the Debtor available to the Debtor for purposes of
presentation, collection or renewal (any such arrangement to be effected, to the
extent deemed appropriate by the Secured Party or its Representative, against
trust receipt or like document). If the Debtor retains possession of any Chattel
Paper, negotiable Documents or Instruments pursuant to the terms hereof, other
than checks received for deposit that have been in Debtor's
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possession for less than three (3) Business Days, such Chattel Paper, negotiable
Documents and Instruments shall be marked with the following legend: "This
writing and the obligations evidenced or secured hereby are subject to the
security interest of Antares Capital Corporation, as secured party, for the
benefit of itself and certain lenders, among others."
(b) Other Documents and Actions. The Debtor shall give, execute,
deliver, file and/or record any financing statement, notice, instrument,
document, agreement or other papers that may be necessary or appropriate (in the
reasonable judgment of the Secured Party or its Representative) to create,
preserve, perfect or validate the security interest granted pursuant hereto or
to enable the Secured Party or its Representative to exercise and enforce the
rights of the Secured Party hereunder with respect to such pledge and security
interest, provided that notices to Account Debtors in respect of any Accounts or
Instruments shall be subject to the provisions of clause (e) below.
Notwithstanding the foregoing, the Debtor hereby irrevocably authorizes the
Secured Party at any time and from time to time to file in any filing office in
any Uniform Commercial Code jurisdiction any initial financing statements and
amendments thereto that (a) indicate the Collateral (i) as all assets of the
Debtor or words of similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9 of the Uniform
Commercial Code of the State of Illinois, as in effect from time to time, or
such jurisdiction, or (ii) as being of an equal or lesser scope or with greater
detail, and (b) contain any other information required by part 5 of Article 9 of
the Uniform Commercial Code of the State of Illinois, as in effect from time to
time, for the sufficiency or filing office acceptance of any financing statement
or amendment, including (i) whether the Debtor is an organization, the type of
organization and any organization identification number issued to the Debtor,
and (ii) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates. The
Debtor agrees to furnish any such information to the Secured Party promptly upon
request. The Debtor also ratifies its authorization for the Secured Party to
have filed in any Uniform Commercial Code jurisdiction any like initial
financing statements or amendments thereto if filed prior to the date hereof.
(c) Books and Records. The Debtor shall maintain at its own cost and
expense and in all material respects complete and accurate books and records of
the Collateral, including, without limitation, a record of all payments received
and all credits granted with respect to the Collateral and all other dealings
with the Collateral. Upon the occurrence and during the continuation of any
Event of Default, the Debtor shall deliver and turn over any such books and
Records (or true and correct copies thereof) to the Secured Party or its
Representative at any time on demand. The Debtor shall permit Secured Party,
representatives and independent contractors of the Secured Party (at the expense
of the Debtor, provided that Debtor shall be responsible for such expenses not
more than one (1) time per year unless an Event of Default has occurred and is
continuing), or any Lender accompanying Secured Party (at such Lender's expense
unless an Event of Default shall have occurred and be continuing), to examine
the Debtor's books and Records, and make copies thereof or abstracts therefrom,
and to discuss the same with the Debtor's directors and officers at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Debtor; provided, however, when
an Event of Default exists the Secured Party or any Lender may do any of the
foregoing at the expense of the Debtor at any time during normal business hours
and without advance notice.
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(d) Motor Vehicles. Upon the occurrence and during the continuance of
an Event of Default, the Debtor shall, promptly upon the request of the Secured
Party or its Representative, cause the Secured Party to be listed as the
lienholder on each certificate of title or ownership covering any items of
Equipment, including Motor Vehicles.
(e) Notice to Account Debtors; Verification. (i) Upon the occurrence
and during the continuance of any Event of Default (or if any rights of set-off
(other than set-offs against an Account arising under the Contract giving rise
to the same Account) or contra accounts may be asserted), upon request of the
Secured Party or its Representative, the Debtor shall promptly notify (and the
Debtor hereby authorizes the Secured Party and its Representative to so notify)
each Account Debtor in respect of any Accounts or Instruments or other Persons
obligated on the Collateral that such Collateral has been assigned to the
Secured Party hereunder, and that any payments due or to become due in respect
of such Collateral are to be made directly to the Secured Party and (ii) the
Secured Party and its Representative shall have the right at any time or times
to make direct verification with the Account Debtors or other Persons obligated
on the Collateral of any and all of the Accounts or other such Collateral
(f) Intellectual Property. The Debtor represents and warrants that the
Copyrights, Patents and Trademarks listed on Schedules III, IV and V,
respectively, constitute all of the U.S. federally registered Copyrights and all
of the Patents and Trademarks now owned by the Debtor. If the Debtor shall (i)
obtain rights to any registered Copyrights or any Patents or Trademarks or (ii)
become entitled to the benefit of any registered Copyrights or any Patents or
Trademarks or any improvement on any Patent, the provisions of this Agreement
shall automatically apply thereto and the Debtor shall give to the Secured Party
prompt written notice thereof. The Debtor hereby authorizes the Secured Party to
modify this Agreement by amending Schedules III, IV and V, as applicable, to
include any such U.S. federally registered Copyrights or any such Patents and
Trademarks. The Debtor shall have the duty to the extent it determines to do so
in its reasonable business judgment (i) to prosecute diligently any material
patent, trademark, or service xxxx applications pending as of the date hereof or
hereafter, (ii) to make application on unpatented but patentable material
inventions and on material trademarks, material copyrights and material service
marks, as appropriate, (iii) to preserve and maintain all rights in the
Copyrights, Patents and Trademarks, to the extent material to the operations of
the business of the Debtor, and (iv) to ensure that the Copyrights, Patents and
Trademarks are and remain enforceable, to the extent material to the operations
of the business of the Debtor. Any expenses incurred in connection with the
Debtor's obligations under this Section 4.1(f) shall be borne by the Debtor. The
Debtor shall not abandon any right to file a material patent, material trademark
or material service xxxx application, or abandon any pending patent, application
or any other Copyright, Patent or Trademark without the written consent of the
Secured Party, which consent shall not be unreasonably withheld.
(g) Further Identification of Collateral. The Debtor will, when and as
often as requested by the Secured Party or its Representative, furnish to the
Secured Party or its Representative, statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Secured Party or its Representative may reasonably
request, all in reasonable detail.
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(h) Investment Property. The Debtor will take any and all actions
required or reasonably requested by the Secured Party, from time to time, to (i)
cause the Secured Party to obtain exclusive Control of any Investment Property
owned by the Debtor in a manner acceptable to the Secured Party and (ii) obtain
from any issuers of Investment Property and such other Persons, for the benefit
of the Secured Party, written confirmation of the Secured Party's Control over
such Investment Property. For purposes of this Section 4.1(h), the Secured Party
shall have exclusive Control of Investment Property if (i) such Investment
Property consists of Certificated Securities and the Debtor delivers such
Certificated Securities to the Secured Party (with appropriate indorsements if
such Certificated Securities are in registered form), (ii) such Investment
Property consists of Uncertificated Securities and either (x) the Debtor
delivers such Uncertificated Securities to the Secured Party or (y) the issuer
thereof agrees, pursuant to documentation in form and substance satisfactory to
the Secured Party, that it will comply with instructions originated by the
Secured Party without further consent by the Debtor, and (iii) such Investment
Property consists of security entitlements and either (x) the Secured Party
becomes the entitlement holder thereof or (y) the appropriate securities
intermediary agrees, pursuant to the documentation in form and substance
satisfactory to the Secured Party, that it will comply with entitlement orders
originated by the Secured Party without further consent by the Debtor.
(i) Compliance with Loan Documents. The Debtor shall comply with the
provisions of the Loan Documents applicable thereto.
(j) Commercial Tort Claims. The Debtor shall promptly notify the
Secured Party of any Commercial Tort Claim acquired by it and unless otherwise
consented to by the Secured Party, the Debtor shall enter into a supplement to
this Agreement, granting to the Secured Party a Lien on and security interest in
such Commercial Tort Claim.
4.2 Other Liens. The Debtor will not create, permit or suffer to exist, and
will defend the Collateral against and take such other action as is necessary to
remove, any Lien on the Collateral except Permitted Liens, and will defend the
right, title and interest of the Secured Party in and to the Collateral and in
and to all Proceeds thereof against the claims and demands of all Persons
whatsoever.
4.3 Preservation of Rights. Whether or not any Event of Default has
occurred or is continuing, the Secured Party and its Representative may, but
shall not be required to, upon notice to the Debtor, take any steps the Secured
Party or its Representative deems necessary to preserve any Collateral or any
rights against third parties to any of the Collateral, including obtaining
insurance of Collateral at any time when the Debtor has failed to do so, and the
Debtor shall promptly pay, or reimburse the Secured Party for, all expenses
incurred in connection therewith.
4.4 Good Standing; Name Change; Location; Bailees.
(a) Without limiting the prohibition on mergers involving the Debtor
contained in the Credit Agreement, but except as permitted under the Credit
Agreement, Debtor shall not (i) reincorporate or reorganize itself under the
laws of any jurisdiction other than the jurisdiction in which it is incorporated
or organized, as applicable, as of the date hereof without the prior written
notice to the Secured Party or (ii) otherwise change its name, identity or
corporate or
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other organizational structure, as applicable without prior notice. The Debtor
will notify the Secured Party promptly in writing prior to any change in
Debtor's legal name as identified on Schedule I attached hereto.
(b) Except for the sale of Inventory in the Ordinary Course of
Business and except as expressly permitted in the Credit Agreement, all
Collateral of the Debtor, except for Collateral in transit in the Ordinary
Course of Business, is located at the locations specified in Schedule I attached
hereto. The Debtor will give the Secured Party thirty (30) days' prior written
notice of any change in the Debtor's chief place of business or of any new
location for any of the Collateral.
(c) If any Collateral is at any time in the possession or control of
any warehousemen, bailee, consignee or processor, the Debtor shall, after the
occurrence and during the continuance of an Event of Default and upon the
request of the Secured Party or its Representative, notify such warehousemen,
bailee, consignee or processor of the Lien and security interest created hereby
and shall instruct such Person to hold all such Collateral for the Secured
Party's account subject to the Secured Party's instructions and shall obtain an
acknowledgement from such warehousemen, bailee, consignee or processor that such
Person holds the Collateral for Secured Party's benefit.
(d) The Debtor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement filed pursuant to this Agreement without the prior written
consent of the Secured Party and agrees that it will not do so without the prior
written consent of the Secured Party, subject to the Debtor's rights under
Section 9-509(d)(2) of the Uniform Commercial Code.
(e) The Debtor shall not enter into any Contract that restricts or
prohibits the grant to the Secured Party of a security interest in Accounts,
Chattel Paper, Instruments or Payment Intangibles or the Proceeds of the
foregoing, unless such restriction or prohibition shall be ineffective pursuant
to Section 9-406, 9-407 or 9-408 of the Uniform Commercial Code.
4.5 Bank Accounts.
(a) On or prior to the Closing Date, the Secured Party and the Debtor
shall enter into a bank agency agreement in a form specified by the Secured
Party ("Bank Agency Agreement"), with each financial institution set forth on
Part A of Schedule VI attached hereto. At any time after the occurrence and
during the continuance of an Event of Default, at the Secured Party's request,
the Secured Party and the Debtor shall enter into a Bank Agency Agreement with
any and all financial institutions with which the Debtor maintains from time to
time any Deposit Accounts (general or specific), and including without
limitation those financial institutions set forth on Part B of Schedule VI
attached hereto. Pursuant to the Bank Agency Agreements and pursuant hereto, the
Debtor grants and shall grant to the Secured Party a continuing Lien upon, and
security interest in, all such Deposit Accounts and all funds at any time paid,
deposited, credited or held in such accounts (whether for collection,
provisionally or otherwise) or otherwise in the possession of such financial
institutions, and each such financial institution shall act as the Secured
Party's agent in connection therewith. Following the Closing
11
Date, the Debtor shall not establish any Deposit Account with any financial
institution except as permitted under the Credit Agreement.
(b) Upon the occurrence, and during the continuance of, an Event of
Default and upon the Secured Party's request, the Debtor shall establish
lock-box or blocked accounts (collectively, "Blocked Accounts") in the Debtor's
name with such banks as are acceptable to the Secured Party ("Collecting
Banks"), subject to irrevocable instructions in a form specified by the Secured
Party, to which the obligors of all Accounts shall directly remit all payments
on Accounts and in which the Debtor will immediately deposit all cash payments
for Inventory or other cash payments constituting Proceeds of Collateral in the
identical form in which such payment was made, whether by cash or check. In
addition, the Secured Party may establish one or more depository accounts at
each Collecting Bank or at a centrally located bank (collectively, the
"Depository Account"). From and after receipt by any Collecting Bank of written
notice from the Secured Party to such Collecting Bank that an Event of Default
has occurred and is continuing, all amounts held or deposited in the Blocked
Accounts held by such Collecting Bank shall be transferred to the Depository
Account. Subject to the foregoing, the Debtor hereby agrees that all payments
received by the Secured Party or any Lender whether by cash, check, wire
transfer or any other instrument, made to such Blocked Accounts or otherwise
received by the Secured Party or any Lender and whether in respect of the
Accounts or as proceeds of other Collateral or otherwise will be the sole and
exclusive property of the Secured Party for the benefit of the Agents and the
Lenders. The Debtor, and any of its Affiliates, employees, agents and other
Persons acting for or in concert with the Debtor shall, acting as trustee for
the Secured Party, receive, as the sole and exclusive property of the Secured
Party, any moneys, checks, notes, drafts or other payments relating to and/or
Proceeds of Accounts or other Collateral which come into the possession or under
the control of the Debtor or any Affiliates, employees, agent or other Persons
acting for or in concert with the Debtor, and immediately upon receipt thereof,
the Debtor or Persons shall deposit the same or cause the same to be deposited
in kind, in a Blocked Account.
4.6 Events of Default, Etc. During the period during which an Event of
Default shall have occurred and be continuing:
(a) the Debtor shall, at the request of the Secured Party or its
Representative, assemble the Collateral and make it available to the Secured
Party or its Representative at a place or places designated by the Secured Party
or its Representative which are reasonably convenient to the Secured Party or
its Representative, as applicable, and the Debtor;
(b) the Secured Party or its Representative may make any reasonable
compromise or settlement deemed desirable with respect to any of the Collateral
and may extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;
(c) the Secured Party shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
(whether or not said Uniform Commercial Code is in effect in the jurisdiction
where the rights and remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be asserted, including,
without
12
limitation, the right, to the maximum extent permitted by law, to exercise all
voting, consensual and other powers of ownership pertaining to the Collateral as
if the Secured Party were the sole and absolute owner thereof (and the Debtor
agrees to take all such action as may be appropriate to give effect to such
right);
(d) the Secured Party or its Representative in their discretion, in
the name of the Secured Party or in the name of the Debtor or otherwise, may
demand, xxx for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral, but shall be
under no obligation to do so;
(e) the Secured Party or its Representative may take immediate
possession and occupancy of any premises owned, used or leased by the Debtor and
exercise all other rights and remedies of an assignee which may be available to
the Secured Party; and
(f) the Secured Party may, upon ten (10) Business Days' prior written
notice to the Debtor of the time and place (which notice the Debtor hereby
agrees is commercially reasonable notification for purposes hereof), with
respect to the Collateral or any part thereof which shall then be or shall
thereafter come into the possession, custody or control of the Secured Party or
its Representative, sell, lease, license, assign or otherwise dispose of all or
any part of such Collateral, at such place or places as the Secured Party deems
best, and for cash or for credit or for future delivery (without thereby
assuming any credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition or of the time
or place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Secured Party or anyone else may be the
purchaser, lessee, licensee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted by
law, at any private sale) and thereafter hold the same absolutely, free from any
claim or right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise), of the Debtor, any such demand, notice and right or
equity being hereby expressly waived and released. The Secured Party 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
sale may be so adjourned. The proceeds of each collection, sale or other
disposition under this Section 4.6 shall be applied in accordance with Section
4.9 hereof.
4.7 Deficiency. If the proceeds of sale, collection or other realization of
or upon the Collateral are insufficient to cover the costs and expenses of such
realization and the payment in full of the Liabilities, the Debtor shall remain
liable for any deficiency.
4.8 Private Sale. The Debtor recognizes that the Secured Party may be
unable to effect a public sale of any or all of the Collateral consisting of
securities by reason of certain prohibitions contained in the Securities Act of
1933, as amended (the "Act"), and applicable state securities laws, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account for investment and not with a view to the
distribution or resale thereof. The Debtor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
13
commercially reasonable manner. The Secured Party shall be under no obligation
to delay a sale of any of the Collateral to permit the Debtor to register such
Collateral for public sale under the Act, or under applicable state securities
laws, even if the Debtor would agree to do so. The Secured Party shall not incur
any liability as a result of the sale of any such Collateral, or any part
thereof, at any private sale provided for in this Agreement conducted in a
commercially reasonable manner, and the Debtor hereby waives any claims against
the Secured Party arising by reason of the fact that the price at which the
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale or was less than the aggregate
amount of the Liabilities, even if the Secured Party accepts the first offer
received and does not offer the Collateral to more than one offeree.
The Debtor further agrees to do or cause to be done all such other acts and
things as may be necessary to make such sale or sales of any portion or all of
any such Collateral valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees or awards of
any and all courts, arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, all at the Debtor's
expense, provided that the Debtor shall be under no obligation to take any
action to enable any or all of such Collateral to be registered under the
provisions of the Act. The Debtor further agrees that a breach of any of the
covenants contained in this Section 4.8 will cause irreparable injury to the
Secured Party, that the Secured Party has no adequate remedy at law in respect
of such breach and, as a consequence, agrees that each and every covenant
contained in this Section 4.8 shall be specifically enforceable against the
Debtor, and the Debtor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred and is continuing.
4.9 Application of Proceeds. The proceeds of any collection, sale or other
realization of all or any part of the Collateral, and any other cash at the time
held by the Secured Party under this Agreement, shall be applied in accordance
with subsection 1.10(c) of the Credit Agreement.
4.10 Attorney-in-Fact. The Debtor hereby irrevocably constitutes and
appoints the Secured Party, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Debtor and in the name of the Debtor or in its own name, from
time to time in the discretion of the Secured Party, for the purpose of carrying
out the terms of this Agreement, to take, after the occurrence, and during the
continuance of, an Event of Default, any and all appropriate action and to
execute and deliver any and all documents and instruments which may be necessary
or desirable to accomplish the purposes of this Agreement and, without limiting
the generality of the foregoing, hereby gives the Secured Party the power and
right, on behalf of the Debtor, without notice to or assent by the Debtor, to do
the following upon the occurrence and during the continuance of any Event of
Default:
(a) to ask, demand, collect, receive and give acquittance and receipts
for any and all moneys due and to become due under any Collateral and, in the
name of the Debtor or its own name or otherwise, to take possession of and
indorse and collect any checks, drafts, notes, acceptances or other Instruments
for the payment of moneys due under any Collateral and to file any claim or to
take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Secured Party for the purpose of collecting any and
all such moneys
14
due under any Collateral whenever payable and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Secured Party for the purpose of collecting any and all such
moneys due under any Collateral whenever payable;
(b) to pay or discharge charges or Liens levied or placed on or
threatened against the Collateral (other than the Permitted Liens), to effect
any insurance called for by the terms of this Agreement and to pay all or any
part of the premiums therefor;
(c) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due, and to become due
thereunder, directly to the Secured Party or as the Secured Party shall direct,
and to receive payment of and receipt for any and all moneys, claims and other
amounts due, and to become due at any time, in respect of or arising out of any
Collateral;
(d) to sign and indorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other Documents
constituting or relating to the Collateral;
(e) to commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any part thereof and to enforce any other right in respect of any Collateral;
(f) to defend any suit, action or proceeding brought against the
Debtor with respect to any Collateral;
(g) to settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges or
releases as the Secured Party may deem appropriate;
(h) to the extent that the Debtor's authorization given in Section
4.1(b) of this Agreement is not sufficient, to file such financing statements
with respect to this Agreement, with or without the Debtor's signature, or to
file a photocopy of this Agreement in substitution for a financing statement, as
the Secured Party may deem appropriate, and to execute in the Debtor's name such
financing statements and amendments thereto and continuation statements which
may require the Debtor's signature; and
(i) generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Secured Party were the absolute owners thereof for all purposes,
and to do, at the Secured Party's option and at the Debtor's expense, at any
time, or from time to time, all acts and things which the Secured Party
reasonably deems necessary to protect, preserve or realize upon the Collateral
and the Secured Party's Lien therein, in order to effect the intent of this
Agreement, all as fully and effectively as the Debtor might do.
The Debtor hereby ratifies, to the extent permitted by law, all that such
attorneys lawfully do or cause to be done by virtue hereof. The power of
attorney granted hereunder is a power
15
coupled with an interest and shall be irrevocable until the Liabilities (other
than contingent indemnification obligations) are paid in full in cash and the
Credit Agreement is terminated.
The Debtor also authorizes the Secured Party, at any time from and after
the occurrence and during the continuation of any Event of Default, (x) to
communicate in its own name with any party to any Contract with regard to the
assignment of the right, title and interest of the Debtor in and under the
Contracts hereunder and other matters relating thereto and (y) to execute, in
connection with any sale of Collateral provided for in Section 4.5 hereof, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
4.11 Perfection. Prior to or concurrently with the execution and delivery
of this Agreement, the Debtor shall:
(a) deliver to or authorize the Secured Party to file such financing
statements, assignments for security and other documents in such offices as may
be necessary or as the Secured Party or its Representative may request to
perfect the security interests granted by Section 3 of this Agreement;
(b) at the Secured Party's request, deliver to the Secured Party or
its Representative the originals of all Instruments together with, in the case
of Instruments constituting promissory notes, allonges attached thereto showing
such promissory notes to be payable to the order of a blank payee;
(c) at Secured Party's request, deliver to the Secured Party or its
Representative instruments representing or evidencing all certificated
Investment Property, in suitable form for transfer by delivery or accompanied by
applicable indorsements, where necessary, or duly executed instruments of
transfer or assignments in blank, all in form and substance reasonably
satisfactory to Secured Party; and
(d) take any other action or do any other thing reasonably required by
Secured Party or its Representative so that Secured Party shall have a first
priority perfected security interest in the Collateral, other than delivery of
Motor Vehicle titles, subject only to Permitted Liens.
4.12 Termination. This Agreement and the Liens and security interests
granted hereunder shall not terminate until the termination of the Credit
Agreement and the full and complete performance, satisfaction and payment in
full in cash of all the Liabilities (other than contingent indemnification
obligations and Rate Contract Obligations), whereupon the Secured Party shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral to or on the order of the Debtor. To the extent that Collateral is
sold or otherwise disposed of as permitted by the Credit Agreement, Secured
Party hereby agrees to release the Liens and security interests granted
hereunder in any such Collateral. The Secured Party shall also execute and
deliver to the Debtor upon such termination such Uniform Commercial Code
termination statements or amendments, certificates for terminating the Liens on
the applicable Motor Vehicles (if any) and such other documentation as shall be
reasonably requested by the Debtor to effect the termination and
16
release of the Liens and security interests in favor of the Secured Party
affecting the Collateral.
4.13 Further Assurances. At any time and from time to time, upon the
written request of the Secured Party or its Representative, and at the sole
expense of the Debtor, the Debtor will promptly and duly execute and deliver any
and all such further instruments, documents and agreements and take such further
actions as the Secured Party or its Representative may reasonably require in
order for the Secured Party to obtain the full benefits of this Agreement and of
the rights and powers herein granted in favor of the Secured Party, including,
without limitation, using the Debtor's commercially reasonable efforts to secure
all consents and approvals necessary or appropriate for the assignment to the
Secured Party of any Collateral held by the Debtor or in which the Debtor has
any rights not heretofore assigned, the filing of any financing or continuation
statements under the Uniform Commercial Code with respect to the Liens and
security interests granted hereby, transferring Collateral to the Secured
Party's possession (if a security interest in such Collateral can be perfected
by possession), placing the interest of the Secured Party as lienholder on the
certificate of title of any Motor Vehicle as required hereby and obtaining
waivers of Liens from landlords and mortgagees. The Debtor also hereby
authorizes the Secured Party and its Representative to file any such financing
or continuation statement without the signature of the Debtor to the extent
permitted by applicable law.
4.14 Limitation on Duty of the Secured Party. The powers conferred on the
Secured Party under this Agreement are solely to protect the Secured Party's
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. The Secured Party shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither the
Secured Party nor its Representative nor any of their respective officers,
directors, employees or agents shall be responsible to the Debtor for any act or
failure to act, except for gross negligence or willful misconduct. Without
limiting the foregoing, the Secured Party and any Representative shall be deemed
to have exercised reasonable care in the custody and preservation of the
Collateral in their possession if such Collateral is accorded treatment
substantially equivalent to that which the relevant Secured Party or any
Representative, in its individual capacity, accords its own property consisting
of the type of Collateral involved, it being understood and agreed that neither
the Secured Party nor any Representative shall have any responsibility for
taking any necessary steps (other than steps taken in accordance with the
standard of care set forth above) to preserve rights against any Person with
respect to any Collateral.
Also without limiting the generality of the foregoing, neither the Secured
Party nor any Representative shall have any obligation or liability under any
Contract or license by reason of or arising out of this Agreement or the
granting to the Secured Party of a security interest therein or assignment
thereof or the receipt by the Secured Party or any Representative of any payment
relating to any Contract or license pursuant hereto, nor shall the Secured Party
or any Representative be required or obligated in any manner to perform or
fulfill any of the obligations of the Debtor under or pursuant to any Contract
or license, or to make any payment, or to make any inquiry as to the nature or
the sufficiency of any payment received by it or the sufficiency of any
performance by any party under any Contract or license, or to present or file
any claim, or to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
17
Section 5. Miscellaneous.
5.1 No Waiver. No failure on the part of the Secured Party or any of its
Representatives to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Secured Party or
any of its Representatives of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.
5.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws and decisions of the State of Illinois,
without regard to the conflict of law principles thereof.
5.3 Notices. All notices, approvals, requests, demands and other
communications hereunder shall be given in accordance with the notice provisions
of the Credit Agreement.
5.4 Amendments, Etc. The terms of this Agreement may be waived, altered or
amended only by an instrument in writing duly executed by the Debtor and the
Secured Party. Any such amendment or waiver shall be binding upon the Secured
Party and the Debtor and their respective successors and assigns.
5.5 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of each of the parties
hereto, provided, that the Debtor shall not assign or transfer its rights
hereunder without the prior written consent of the Secured Party.
5.6 Counterparts; Headings. This Agreement may be authenticated in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may authenticate this Agreement by
signing any such counterpart. This Agreement may be authenticated by manual
signature, facsimile or, if approved in writing by the Secured Party, electronic
means, all of which shall be equally valid. The headings in this Agreement are
for convenience of reference only and shall not alter or otherwise affect the
meaning hereof.
5.7 Severability. If any provision hereof is invalid and unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (a) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Secured Party and its
Representative in order to carry out the intentions of the parties hereto as
nearly as may be possible and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
5.8 Other Loan Documents. This Agreement supplements the other Loan
Documents and nothing in this Agreement shall be deemed to limit or supersede
the rights granted to Secured Party or the Lenders or their agent in any other
Loan Document. In the event of any conflict between this Agreement and the
Credit Agreement, the provisions of the Credit
18
Agreement shall govern. To the extent that any provision of any other Loan
Document provides rights, remedies and benefits to the Secured Party that exceed
the rights, remedies and benefits provided to the Secured Party under this
Agreement, such provisions of such other Loan Document shall be deemed to
supplement (and not conflict with) the provisions hereof.
5.9 SUBMISSION TO JURISDICTION; WAIVER OF VENUE. (a) THE DEBTOR HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE DEBTOR HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE SECURED PARTY TO BRING PROCEEDINGS
AGAINST THE DEBTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE DEBTOR AGAINST THE SECURED PARTY OR ANY LENDER OR ANY
AFFILIATE OR REPRESENTATIVE THEREOF INVOLVING DIRECTLY OR INDIRECTLY ANY MATTER
IN ANY WAY ARISING OUT OF, RELATED TO OR IN CONNECTION WITH THIS AGREEMENT SHALL
BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
5.10 WAIVER OF RIGHT TO TRIAL BY JURY. THE DEBTOR AND THE SECURED PARTY
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE DEBTOR
AND THE SECURED PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
[Remainder of page intentionally left blank, signature page follows]
19
IN WITNESS WHEREOF, the parties hereto have caused this Borrower Security
Agreement to be duly executed and delivered as of the date first above written.
THE XXXXXXXX GROUP, LTD., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------
Title: Vice President
------------------------------
ANTARES CAPITAL CORPORATION, a
Delaware corporation, as Agent
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
-------------------------------
Title: Director
SCHEDULE I
TO
BORROWER SECURITY AGREEMENT
UCC Financing Statements; Location of Equipment, Inventory, Goods and Books and
Records; Goods in Possession of Consignees, Bailees, Warehousemen, Agents and
Processors; Debtor's Legal Names; State of Incorporation or Formation;
Organizational Identification Number; Chief Executive Office.
I. DEBTOR: THE XXXXXXXX GROUP, LTD.
1 Legal Name of Debtor:
----------------------------
2 State of Incorporation:
----------------------------
3 Organizational Identification Number:
----------------------------
4 Chief Executive Office:
----------------------------
5 Location of Books and Records:
----------------------------
6 Locations of Equipment, Inventory
and Goods: ----------------------------
----------------------------
----------------------------
7 Locations of Goods in Possession of
Consignees, Bailees, Warehousemen, ----------------------------
Agents and Processors (including
names of such consignees, bailees, ----------------------------
etc.):
----------------------------
----------------------------
8 Jurisdictions For UCC Filings:
----------------------------
SCHEDULE II
TO
BORROWER SECURITY AGREEMENT
Tradenames and Fictitious Names
(Present and Past Five Years)
1 :
------------------------------- ---------------------------------------
---------------------------------------
SCHEDULE III
TO
BORROWER SECURITY AGREEMENT
U.S. Copyright Registrations; Foreign Copyright Registrations; U.S. Copyright
Applications; Foreign Copyright Applications; Copyright Licenses
U.S. Copyright Registrations
XXXXXX XXXX REGISTRATION REGISTRATION
NUMBER DATE
Foreign Copyright Registrations
XXXXXX XXXX COUNTRY REGISTRATION REGISTRATION
NUMBER DATE
U.S. Copyright Applications
XXXXXX XXXX APPLICATION APPLICATION
NUMBER DATE
Foreign Copyright Applications
XXXXXX XXXX COUNTRY APPLICATION APPLICATION
NUMBER DATE
Copyright Licenses
LICENSED MARKS NAME OF PARTIES DATE OF
AGREEMENT AGREEMENT
SCHEDULE IV
TO
BORROWER SECURITY AGREEMENT
U.S. Patent Registrations; Foreign Patent Registrations;
U.S. Patent Applications; Foreign Patent Applications; Patent Licenses
U.S. Patent Registrations
HOLDER PATENT REGISTRATION REGISTRATION
NUMBER DATE
Foreign Patent Registrations
HOLDER PATENT COUNTRY REGISTRATION REGISTRATION
NUMBER DATE
U.S. Patent Applications
HOLDER PATENT APPLICATION APPLICATION
NUMBER DATE
Foreign Patent Applications
HOLDER PATENT COUNTRY APPLICATION APPLICATION
NUMBER DATE
Patent Licenses
LICENSED PATENTS NAME OF PARTIES DATE OF
AGREEMENT AGREEMENT
SCHEDULE V
TO
BORROWER SECURITY AGREEMENT
U.S. Trademark Registrations; Foreign Trademark Registrations;
U.S. Trademark Applications; Foreign Trademark Applications; Trademark Licenses
U.S. Trademark Registrations
XXXXXX XXXX REGISTRATION REGISTRATION
NUMBER DATE
Foreign Trademark Registrations
XXXXXX XXXX COUNTRY REGISTRATION REGISTRATION
NUMBER DATE
U.S. Trademark Applications
XXXXXX XXXX APPLICATION APPLICATION
NUMBER DATE
Foreign Trademark Applications
XXXXXX XXXX COUNTRY APPLICATION APPLICATION
NUMBER DATE
Trademark Licenses
LICENSED MARKS NAME OF PARTIES DATE OF
AGREEMENT AGREEMENT
SCHEDULE VI
TO
BORROWER SECURITY AGREEMENT
Depository Accounts and Other Accounts
Part A
Name of Account Bank Type of Account (with Account
Holder general description) Number
[From Deposit Account Exhibit in Closing Agenda]
Part B
Name of Account Bank Type of Account (with Account
Holder general description) Number
[All others from due diligence list]
SCHEDULE VII
TO
BORROWER SECURITY AGREEMENT
Commercial Tort Claims
