1
EXHIBIT 10(y)
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") dated as of September 11, 1996
is among THORN APPLE VALLEY, INC. (the "Company"), the Subsidiaries of the
Company listed on the signature pages hereto, such other persons or entities
which from time to time may become parties hereto (collectively, including
without limitation the Company, the "Debtors" and individually each a
"Debtor"), and COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., NEW YORK
BRANCH, as collateral agent for the Creditor Parties referred to below (in such
capacity, the "Collateral Agent") and as Credit Agent for certain of the
Creditor Parties (in such capacity, the "Credit Agent").
W I T N E S S E T H:
WHEREAS, each of the Debtors has acknowledged and agreed to an
Intercreditor Agreement, dated as of September 11, 1996 (together with all
amendments and other modifications, if any, from time to time thereafter made
thereto, the "Intercreditor Agreement"), among Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., New York Branch, in its individual capacity and
as Credit Agent, Seasonal Agent and Collateral Agent (in its capacity as
Collateral Agent, the "Collateral Agent"), Old Kent Bank, National City Bank,
Xxxxxx Trust and Savings Bank, Allstate Life Insurance Company, Principal
Mutual Life Insurance Company, and Great-West Life & Annuity Insurance Company
(each, together with any other holder of Creditor Obligations as defined in the
Intercreditor Agreement and each of their respective successors, transferees
and assigns, a "Creditor Party"), which Intercreditor Agreement relates to the
provision and administration of collateral being provided by the Debtors; and
WHEREAS, as a condition precedent to the restructuring to be effected
by the Financing Agreements referred to in the Intercreditor Agreement, each
Debtor is required to execute and deliver this Agreement; and
WHEREAS, each Debtor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Debtor to execute this
Agreement inasmuch as such Debtor will derive substantial direct and indirect
benefits from the loans made and letters of credit issued from time to time to
or for the account of the Company by the Creditor Parties pursuant to the
Financing Agreements; and
2
WHEREAS, the Company and the Credit Agent are parties to a Security
Agreement dated as of July 31, 1996 (the "Prior Security Agreement"), which the
Company and the Credit Agent wish to amend and restate in this Agreement;
NOW, THEREFORE, for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to the Company by the
Creditor Parties or any of them, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. When used herein, (a) the terms Certificated
Security, Chattel Paper, Deposit Account, Document, Equipment, Farm Products,
Fixture, Goods, Inventory, Instrument, Security and Uncertificated Security
shall have the respective meanings assigned to such terms in the Uniform
Commercial Code (as defined below), (b) terms used herein and not otherwise
defined herein (including Creditor Obligations and Financing Agreements) shall
have the meanings assigned to such terms in the Intercreditor Agreement, and
(c) the following terms have the following meanings (such definitions to be
applicable to both the singular and plural forms of such terms):
Account Debtor means the party who is obligated on or under any
Account Receivable, Contract Right or General Intangible.
Account Receivable means, with respect to any Debtor, any right of
such Debtor to payment for goods sold or leased or for services rendered.
Assignee Deposit Account - see Section 4.
Collateral means, with respect to any Debtor, all property and rights
of such Debtor in which a security interest is granted hereunder.
Computer Hardware and Software means, with respect to any Debtor, all
of the following property of such Debtor, in each case whether now or hereafter
owned, licensed or leased by such Debtor, (i) all computer and other electronic
data processing hardware, including without limitation all integrated computer
systems, central processing units, memory units, display terminals, printers,
computer elements, card readers, tape drives, hard and soft disk drives,
cables, electrical supply hardware, generators, power equalizers, accessories,
peripheral devices and other related computer hardware; (ii) all software
programs designed for use on the computers and electronic data processing
hardware described in clause (i) above, including without limitation all
operating system software, utilities and application programs in whatsoever
form (source code and object code in magnetic tape, disk or hard copy format or
any other listings whatsoever); (iii) all firmware
-2-
3
associated therewith; and (iv) all documentation for the hardware, software and
firmware described in clauses (i), (ii) and (iii) above, including without
limitation flow charts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes.
Contract Right means, with respect to any Debtor, any right of such
Debtor to payment under a contract for the sale or lease of goods or the
rendering of services, which right is at the time not yet earned by
performance.
Default means the occurrence of any of the following events: (a) any
Event of Default; or (b) any warranty of any Debtor herein is untrue or
misleading in any material respect; or (c) any Debtor fails to comply or
perform any covenant or other agreement under this Agreement.
Excluded Assets means (a) the IRB Collateral, to the extent and so
long as the grant of a security interest therein violates an agreement existing
on the date hereof of the related Debtor in respect of the IRB Obligations, and
(b) any Computer Hardware and Software, to the extent and so long as the grant
of a security interest therein violates an agreement of the related Debtor
relating to such Computer Hardware and Software which existed on the date such
Debtor acquired its interest in such Computer Hardware and Software.
General Intangibles means, with respect to any Debtor, all of such
Debtor's "general intangibles" as defined in Uniform Commercial Code and, in
any event, includes all of such Debtor's trademarks, trade names, patents,
copyrights, trade secrets, customer lists, inventions, designs, software
programs, mask works, goodwill, registrations, licenses, franchises, tax refund
claims, guarantee claims, security interests and rights to indemnification.
Intellectual Property shall mean all past, present and future: trade
secrets and other proprietary information; trademarks, service marks, business
names, designs, logos, indicia, and/or other source and/or business identifiers
and the goodwill of the business relating thereto and all registrations or
applications for registrations which have heretofore been or may hereafter be
issued thereon throughout the world; copyrights (including without limitation
copyrights for computer programs) and copyright registrations or applications
for registrations which have heretofore been or may hereafter be issued
throughout the world and all tangible property embodying such copyrights;
unpatented inventions (whether or not patentable); patent applications and
patents; industrial designs, industrial design applications and registered
industrial designs; license agreements related to any of the foregoing and
income therefrom; books, records, writings, computer tapes or disks, flow
diagrams, specification sheets,
-3-
4
source codes, object codes and other physical manifestations, embodiments or
incorporations of any of the foregoing; the right to xxx for all past, present
and future infringements of any of the foregoing; and all common law and other
rights throughout the world in and to all of the foregoing.
Non-Tangible Collateral shall mean, with respect to any Debtor,
collectively, such Debtor's Accounts Receivable, Contract Rights and General
Intangibles.
Permitted Liens - see Section 3.
Senior Obligations means, as to each Debtor, all obligations (monetary
or otherwise) of such Debtor to the Creditor Parties and/or the Collateral
Agent arising under the Financing Agreements (including without limitation all
Creditor Obligations).
Uniform Commercial Code shall mean the Uniform Commercial Code as in
effect in the State of Illinois on the date of this Agreement; provided,
however, as used in Section 7 hereof, "Uniform Commercial Code" shall mean the
Uniform Commercial Code as in effect from time to time in the applicable
jurisdiction.
2. Grant of Security Interest. As security for the payment of
all Senior Obligations, each Debtor hereby assigns to the Collateral Agent for
the benefit of the Creditor Parties, and grants to the Collateral Agent for the
benefit of the Creditor Parties a continuing security interest in, the
following, whether now or hereafter existing or acquired:
All of such Debtor's:
(i) Accounts Receivable;
(ii) Certificated Securities;
(iii) Chattel Paper;
(iv) Computer Hardware and Software and all rights with
respect thereto, including without limitation any and
all licenses, options, warranties, service contracts,
program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights
and indemnifications, and any substitutions,
replacements, additions or model conversions of any
of the foregoing;
(v) Contract Rights;
(vi) Deposit Accounts;
-4-
5
(vii) Documents;
(viii) General Intangibles (including without limitation any right of
such Debtor arising from time to time to receive payment under
a billing to a Person representing such Person's obligation to
reimburse such Debtor for indebtedness paid or to be paid by
such Debtor for the account of such Person);
(ix) Goods (including without limitation all of its Equipment,
Fixtures and Inventory, Farm Products, and livestock,
including without limitation cattle, hogs, sheep and other
animals and any of the foregoing in gestation), together with
all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor;
(x) Instruments;
(xi) Intellectual Property;
(xii) money (of every jurisdiction whatsoever);
(xiii) tax refunds;
(xiv) Uncertificated Securities; and
(xv) to the extent not included in the foregoing, other personal
property of any kind or description;
together with all books, records, writings, data bases, information
and other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to any of the
foregoing, and all proceeds, products, offspring, rents, issues,
profits and returns of and from any of the foregoing; but excluding
any Excluded Assets.
3. Warranties. Each Debtor warrants that: (i) no financing statement
(other than any which may have been filed on behalf of the Collateral Agent or
in respect of Permitted Liens) covering any of the Collateral is on file in any
public office; (ii) such Debtor is and will be the lawful owner of all
Collateral, free of all liens and claims whatsoever, other than the security
interest hereunder and liens permitted under Section 2.3 of Appendix A to the
Amended Credit Agreement ("Permitted Liens"), with full power and authority to
execute this Agreement and perform such Debtor's obligations hereunder, and to
subject the Collateral to the security interest hereunder; (iii) all
information with respect to Collateral and Account Debtors set forth in any
schedule, certificate or other writing at any time heretofore or hereafter
-5-
6
furnished by such Debtor to the Collateral Agent or any Creditor Party, and all
other written information heretofore or hereafter furnished by such Debtor to
the Collateral Agent or any Creditor Party, is and will be true and correct in
all material respects as of the date furnished; (iv) such Debtor's chief
executive office and principal place of business are as set forth on Schedule I
hereto (and such Debtor has not maintained its chief executive office and
principal place of business at any other location at any time after January 1,
1995); (v) each other location where such Debtor maintains a place of business
is set forth on Schedule II hereto; (vi) except as set forth on Schedule III,
such Debtor is not now known and has not previously been known by any trade
name; (vii) except as set forth on Schedule III, such Debtor has not been known
by any legal name different from the one set forth on the signature page of
this Agreement, nor has such Debtor been the subject of any merger or other
corporate reorganization; (viii) Schedule IV hereto contains a complete listing
of all of such Debtor's Intellectual Property which is subject to registration
statutes; (ix) Schedule V hereto contains a complete listing of all of such
Debtor's interests in capital stock, partnership interests, limited liability
company membership interests and other equity interests and indebtedness, (x)
this Agreement is a legal, valid and binding obligation of such Debtor,
enforceable in accordance with its terms; (xi) such Debtor is in compliance
with the requirements of all applicable laws (including without limitation the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every governmental authority, the non-compliance with which would materially
adversely affect the business, properties, assets, operations or condition
(financial or otherwise) of such Debtor, the value of the Collateral or the
worth of the Collateral as collateral security; (xii) to the knowledge of such
Debtor, all of such Debtor's Intellectual Property is subsisting and none has
been adjudged invalid or unenforceable, in whole or in part; and (xiii) to the
best of such Debtor's knowledge, all of such Debtor's Intellectual Property
which is material to such Debtor's business is valid and enforceable.
4. Collections, etc. Until such time during the existence of a Default
as the Collateral Agent shall notify such Debtor of the revocation of such
power and authority, each Debtor (a) may, in the ordinary course of its
business, at its own expense, sell, lease or furnish under contracts of service
any of the Inventory normally held by such Debtor for such purpose, and use and
consume, in the ordinary course of its business, any raw materials, work in
process or materials normally held by such Debtor for such purpose, (b) will,
at its own expense, endeavor to collect, as and when due, all amounts due under
any of the Non-Tangible Collateral, including without limitation the taking of
such action with respect to such collection as the Collateral Agent may
reasonably request or, in the absence of such request, as such Debtor may deem
advisable, and (c) may grant, in the ordinary course of business, to any party
-6-
7
obligated on any of the Non-Tangible Collateral, any rebate, refund or
allowance to which such party may be lawfully entitled, and may accept, in
connection therewith, the return of Goods, the sale or lease of which shall
have given rise to such Non-Tangible Collateral. The Collateral Agent,
however, may, at any time that a Default exists, whether before or after any
revocation of such power and authority or the maturity of any of the Senior
Obligations, notify any parties obligated on any of the Non-Tangible Collateral
to make payment to the Collateral Agent of any amount due or to become due
thereunder and enforce collection of any of the Non-Tangible Collateral by suit
or otherwise and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder or evidenced thereby. Upon
request of the Collateral Agent during the existence of a Default, each Debtor
will, at its own expense, notify any parties obligated on any of the
Non-Tangible Collateral to make payment to the Collateral Agent of any amount
due or to become due thereunder.
Upon request by the Collateral Agent during the existence of a Default,
each Debtor will forthwith, upon receipt, transmit and deliver to the
Collateral Agent, in the form received, all cash, checks, drafts and other
instruments or writings for the payment of money (properly endorsed, where
required, so that such items may be collected by the Collateral Agent) which
may be received by such Debtor at any time in full or partial payment or
otherwise as proceeds of any of the Collateral. Except as the Collateral Agent
may otherwise consent in writing, any such items which may be so received by
any Debtor will not be commingled with any other of its funds or property, but
will be held separate and apart from its own funds or property and upon express
trust for the Collateral Agent until delivery is made to the Collateral Agent.
Each Debtor will comply with the terms and conditions of any consent given by
the Collateral Agent pursuant to the foregoing sentence.
During the existence of a Default, all items or amounts which are
delivered by any Debtor to the Collateral Agent on account of partial or full
payment or otherwise as proceeds of any of the Collateral shall be deposited to
the credit of a deposit account (each an "Assignee Deposit Account") of such
Debtor with the Collateral Agent, as security for payment of the Senior
Obligations. No Debtor shall have any right to withdraw any funds deposited in
the applicable Assignee Deposit Account. The Collateral Agent may, from time
to time, in its discretion, and shall upon request of the applicable Debtor
made not more than once in any week, apply all or any of the then balance,
representing collected funds, in the Assignee Deposit Account toward payment of
the Senior Obligations, whether or not then due, in such order of application
as the Collateral Agent may determine in accordance with the Intercreditor
Agreement, and the Collateral Agent may,
-7-
8
from time to time, in its discretion in accordance with the Intercreditor
Agreement, release all or any of such balance to the applicable Debtor.
During the existence of a Default, the Collateral Agent is authorized to
endorse, in the name of the applicable Debtor, any item, howsoever received by
the Collateral Agent, representing any payment on or other proceeds of any of
the Collateral.
5. Agreements of the Debtors. Each Debtor (a) will, upon request of the
Collateral Agent, execute such financing statements and other documents (and
pay the cost of filing or recording the same in all public offices deemed
appropriate by the Collateral Agent) and do such other acts and things
(including without limitation delivery to the Collateral Agent of any
Instruments or Certificated Securities which constitute Collateral with any
endorsements thereon or accompanying stock powers as the Collateral Agent may
request), all as the Collateral Agent may from time to time reasonably request,
to establish and maintain a valid security interest in the Collateral (free of
all other liens, claims and rights of third parties whatsoever, other than
Permitted Liens) to secure the payment of the Senior Obligations; (b) will keep
all its Inventory at, and will not maintain any place of business at any
location other than, its address(es) shown on Schedules I and II hereto or at
such other addresses of which such Debtor shall have given the Collateral Agent
not less than 30 days' prior written notice; (c) will keep, at its addresses
shown on Schedules I and II hereto, its records concerning the Non-Tangible
Collateral, which records will be of such character as will enable the
Collateral Agent or its designees to determine at any time the status of the
Non-Tangible Collateral, and no Debtor will, unless the Collateral Agent shall
otherwise consent in writing, duplicate any such records at any other address;
(d) will furnish the Collateral Agent such information concerning such Debtor,
the Collateral and the Account Debtors as the Collateral Agent may from time to
time reasonably request; (e) will permit the Collateral Agent and its
designees, from time to time, to inspect such Debtor's Inventory and other
Goods, and to inspect, audit and make copies of and extracts from all records
and all other papers in the possession of such Debtor or its agents pertaining
to the Collateral and the Account Debtors, and will, upon request of the
Collateral Agent during the existence of a Default, deliver to the Collateral
Agent all of such records and papers; (f) will, upon request of the Collateral
Agent, stamp on its records concerning the Collateral, and add on all Chattel
Paper constituting a portion of the Collateral, a notation, in form
satisfactory to the Collateral Agent, of the security interest of the
Collateral Agent hereunder; (g) except for the sale or lease of Inventory in
the ordinary course of its business, will not sell, lease, assign or permit to
exist any lien on or security interest in any Collateral other than Permitted
Liens and liens and security interests in favor of the
-8-
9
Collateral Agent or as permitted under Section 2.3 of Appendix A to the Amended
Credit Agreement; (h) will at all times keep all its Inventory and other Goods
insured under policies maintained with reputable insurance companies against
loss, damage, theft and other risks to such extent, and with only such
deductibles, as is customarily maintained by companies similarly situated (and,
in any event, as is required by applicable law), and cause all such policies to
provide that loss thereunder shall be payable to the Collateral Agent as its
interest may appear (it being understood that (A) so long as no Default shall
be existing, the Collateral Agent shall deliver any proceeds of such insurance
which may be received by it to such Debtor and (B) whenever a Default shall be
existing, the Collateral Agent may apply any proceeds of such insurance which
may be received by it toward payment of the Senior Obligations, whether or not
due, in such order of application as the Collateral Agent may determine in
accordance with the Intercreditor Agreement) and such policies or certificates
thereof shall, if the Collateral Agent so requests, be deposited with or
furnished to the Collateral Agent; (i) will take such actions as are reasonably
necessary to keep its Inventory in the condition such Debtor has customarily
maintained Inventory; (j) will take such actions as are reasonably necessary to
keep its Equipment in good repair and condition and in good working or running
order; (k) will upon request of the Collateral Agent, cause to be noted on the
applicable certificate, in the event any of its Equipment is covered by a
certificate of title, the security interest of the Collateral Agent in the
Equipment covered thereby; (l) will prosecute diligently all applications now
pending for trademarks, patents or copyrights which are material to its
business; (m) will protect, preserve and maintain all rights in the Collateral
which are material to its business, including without limitation the duty to
prosecute and/or defend against any and all suits contesting infringement or
dilution of any Intellectual Property which is material to its business, any
other suits containing allegations respecting the validity of the Collateral or
any material portion thereof, and any suits claiming injury to the goodwill
associated with any trademark which is material to its business; and (n) will
reimburse the Collateral Agent for all expenses, including without limitation
reasonable attorneys' fees and legal expenses, incurred by the Collateral Agent
in seeking to collect or enforce any rights in respect of such Debtor's
Collateral.
Any expenses incurred in protecting, preserving and maintaining any
Collateral shall be borne by the applicable Debtor. Whenever a Default shall
be existing, the Collateral Agent shall have the right to bring suit to enforce
any or all of the Intellectual Property or licenses thereunder, in which event
the applicable Debtor shall at the request of the Collateral Agent do any and
all lawful acts and execute any and all proper documents required by the
Collateral Agent in aid of such enforcement and such Debtor shall promptly,
upon demand, reimburse and indemnify
-9-
10
the Collateral Agent for all costs and expenses incurred by the Collateral
Agent in the exercise of its rights under this Section 5. Notwithstanding the
foregoing, the Collateral Agent shall have no obligation or liability regarding
the Collateral or any thereof by reason of, or arising out of, this Agreement.
6. Default. Whenever a Default exists, the Collateral Agent may exercise
from time to time any rights and remedies available to it under applicable law.
Each Debtor agrees, during the existence of a Default, at the Collateral
Agent's request, (i) to assemble, at its expense, all its Inventory and other
Goods (other than Fixtures) at a convenient place or places acceptable to the
Collateral Agent, and (ii) to execute all such documents and do all such other
things which may be necessary or desirable in order to enable the Collateral
Agent or its nominee to be registered as owner of the Intellectual Property
with any competent registration authority. Any notification of intended
disposition of any of the Collateral required by law shall be deemed reasonably
and properly given if given at least ten days before such disposition. Any
proceeds of any disposition by the Collateral Agent of any of the Collateral
may be applied by the Collateral Agent to payment of expenses in connection
with the Collateral, including without limitation reasonable attorneys' fees
and legal expenses, and any balance of such proceeds may be applied by the
Collateral Agent toward the payment of such of the Senior Obligations, and in
such order of application, as the Collateral Agent may from time to time elect
in accordance with the Intercreditor Agreement.
7. General. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral in its
possession if it takes such action for that purpose as any applicable Debtor
requests in writing, but failure of the Collateral Agent to comply with any
such request shall not of itself be deemed a failure to exercise reasonable
care, and no failure of the Collateral Agent to preserve or protect any rights
with respect to such Collateral against prior parties, or to do any act with
respect to the preservation of such Collateral not so requested by any Debtor,
shall be deemed a failure to exercise reasonable care in the custody or
preservation of such Collateral.
Any notice from the Collateral Agent or any Creditor Party to any Debtor,
if mailed, shall be deemed given five days after the date mailed, postage
prepaid, addressed to such Debtor either at such Debtor's address shown on
Schedule I hereto or at such other address as such Debtor shall have specified
in writing to the Collateral Agent as its address for notices hereunder.
Each of the Debtors agrees to pay all expenses (including without
limitation reasonable attorney's fees and legal expenses) paid or incurred by
the Collateral Agent or any Creditor Party in endeavoring to collect the Senior
Obligations of such Debtor, or
-10-
11
any part thereof, and in enforcing this Agreement against such Debtor, and such
obligations will themselves be Senior Obligations.
No delay on the part of the Collateral Agent in the exercise of any right
or remedy shall operate as a waiver thereof, and no single or partial exercise
by the Collateral Agent of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy.
This Security Agreement shall remain in full force and effect until all
Senior Obligations have been paid in full and all commitments to extend credit
under the Financing Agreements have terminated. If at any time all or any part
of any payment theretofore applied by the Collateral Agent or any Creditor
Party to any of the Senior Obligations is or must be rescinded or returned by
the Collateral Agent or such Creditor Party for any reason whatsoever
(including without limitation the insolvency, bankruptcy or reorganization of
any Debtor), such Senior Obligations shall, for the purposes of this Agreement,
to the extent that such payment is or must be rescinded or returned, be deemed
to have continued in existence, notwithstanding such application by the
Collateral Agent or such Creditor Party, and this Agreement shall continue to
be effective or be reinstated, as the case may be, as to such Senior
Obligations, all as though such application by the Collateral Agent or such
Creditor Party had not been made.
This Agreement has been delivered at Chicago, Illinois, and shall be
construed in accordance with and governed by the internal laws of the State of
Illinois, subject, however, to the applicability of the Uniform Commercial Code
of any jurisdiction in which any Goods of any Debtor may be located at any
given time. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
The rights and privileges of the Collateral Agent hereunder shall inure to
the benefit of its successors and assigns.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement. At any time after the date of this
Agreement, one or more additional Persons may become parties hereto by
executing and delivering to the Collateral Agent a counterpart of this
Agreement. Immediately upon such execution and delivery (and without any
-11-
12
further action), each such Person will become a party to, and will be bound by
the terms of, this Agreement.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH DEBTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.
EACH DEBTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH ON SCHEDULE I HERETO
(OR SUCH OTHER ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO THE COLLATERAL
AGENT AS ITS ADDRESS FOR NOTICES HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR
OUTSIDE OF THE STATE OF ILLINOIS. EACH DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
EACH OF EACH DEBTOR, THE COLLATERAL AGENT AND (BY ACCEPTING THE BENEFITS
HEREOF) EACH SECURED CREDITOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY
NOTE, ANY OTHER FINANCING DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
8. Restatement of Prior Security Agreement. The parties hereto agree
that the Prior Security Agreement is amended and restated in its entirety by
this Agreement, with the Collateral Agent succeeding to all rights of the
Credit Agent thereunder as restated hereby.
9. Release of Security Interest. Upon payment in full of all Senior
Obligations and the termination of all commitments to extend credit under the
Financing Agreements, the Collateral Agent shall, at the Debtors' expense,
execute and deliver to the related Debtors all instruments and other documents
as may be necessary or proper to release the lien on and security interest in
the Collateral which has been granted hereunder. Subject to Section 5(g) of
the Intercreditor Agreement, the Collateral Agent shall, at the request
-12-
13
of the related Debtor and at the Debtors' expense, execute and deliver to the
related Debtor all instruments and other documents as may be necessary or
proper to release the lien on and security interest in any Collateral of such
Debtor which has been granted hereunder in connection with a disposition of
such Collateral permitted under the Financing Agreements, subject to the
Collateral Agent receiving evidence reasonably satisfactory to the Collateral
Agent that such disposition is so permitted.
-13-
14
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., NEW YORK
BRANCH, as Collateral Agent
By:
------------------------------
Title:
------------------------
By:
------------------------------
Title:
------------------------
S-1
SECURITY AGREEMENT
15
THORN APPLE VALLEY, INC.
By:
------------------------------
Title:
------------------------
THORN APPLE VALLEY FOREIGN SALES
CORPORATION
By:
------------------------------
Title:
------------------------
COAST REFRIGERATED TRUCKING CO., INC.
By:
------------------------------
Title:
------------------------
XXXXXXXXX LAKEVIEW FARMS, LTD.
By:
------------------------------
Title:
------------------------
XXXXXXX HOLDINGS, INC.
By:
------------------------------
Title:
------------------------
TRI-XXXXXX TRANSPORTATION COMPANY,
INC.
By:
------------------------------
Title:
------------------------
XXXXXXXXX HOLDINGS, INC.
By:
------------------------------
Title:
------------------------
S-2
SECURITY AGREEMENT
16
GUNSBERG CORNED BEEF COMPANY
By:
------------------------------
Title:
------------------------
XXXXXX TRANSPORT, INC.
By:
------------------------------
Title:
------------------------
CROWN WEST, INC.
By:
------------------------------
Title:
------------------------
NATIONAL FOOD EXPRESS, INC.
By:
------------------------------
Title:
------------------------
PONCA HOLDINGS, INC.
By:
------------------------------
Title:
------------------------
TAV BRANDS, INC.
By:
------------------------------
Title:
------------------------
THORN APPLE HOLDINGS OF INDIANA, INC.
By:
------------------------------
Title:
------------------------
S-3
SECURITY AGREEMENT
17
TRI-XXXXXX PACKING, INC.
By:
------------------------------
Title:
------------------------
TAV SWINE BUYING STATIONS, INC.
By:
------------------------------
Title:
------------------------
S-4
SECURITY AGREEMENT
18
The undersigned is executing
a counterpart hereof for purposes
of becoming a party hereto:
-----------------------------
By:
------------------------------
Title:
------------------------
-----------------------------
By:
------------------------------
Title:
------------------------
S-5
SECURITY AGREEMENT
19
SCHEDULE I
TO SECURITY AGREEMENT
Chief Executive Offices and Principal Place of Business
20
SCHEDULE II
TO SECURITY AGREEMENT
Addresses
21
SCHEDULE III
TO SECURITY AGREEMENT
Trade Names
Other Legal Names
Mergers and Other Corporate Reorganizations
22
SCHEDULE IV
TO SECURITY AGREEMENT
Intellectual Property
23
SCHEDULE V
TO SECURITY AGREEMENT
Equity Interests and Indebtedness
S-2
