Exhibit 10.8
SECURITY AGREEMENT
This SECURITY AGREEMENT made as of April 3, 2001 is by and between
INDIGO ACQUISITION CORP., a Delaware corporation (the "Debtor") and BEAR,
XXXXXXX CORPORATE LENDING, INC., as Security Trustee (as defined in the
Facilities Agreement described below) or, upon its resignation, its appointed
successor Security Trustee, pursuant to the Facilities Agreement (the "Secured
Party").
In consideration of any loans, extensions of credit, or other financial
accommodations made or to be made by the Secured Party or any of its affiliates
to the Debtor, or to any other Obligor (as defined herein) under each and every
Finance Document, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Debtor and the Secured Party hereby agree, under seal, as follows:
1. DEFINITIONS.
a. BOOKS AND RECORDS. The term "Books and Records" means all of
the Debtor's books and records, including, but not limited to,
records indicating, summarizing, or evidencing the Collateral,
the Secured Obligations, and the Debtor's property, business
operations, or financial condition; computer runs, invoices,
tapes, processing software, processing contracts (such as
contracts for computer time and services) and any computer
prepared information, tapes, or data of every kind and
description, whether in the possession of the Debtor or in the
possession of third parties.
b. COLLATERAL. The term "Collateral" means all tangible and
intangible property of the Debtor (other than the Excluded
Collateral) whether now owned or hereafter acquired,
including, but not limited to, the Debtor's interest now and
in the future in the following types or items of property:
i. ACCOUNTS - All presently owned and hereafter acquired
accounts, accounts receivable, contract rights,
bills, acceptances, and other forms of obligations
arising out of the sale, lease or consignment of
goods or the rendition of services by the Debtor;
together with any property evidencing or relating to
the Accounts (such as guaranties, credit insurance,
Letters of Credit), any security for the Accounts,
all Books and Records relating thereto, and all
Proceeds of any of the foregoing, including returned
or reclaimed Inventory.
ii. INVENTORY - All presently owned and hereafter
acquired inventory of every nature, kind and
description, wherever located, including, without
limitation, raw materials, goods, work in process,
finished goods, parts or supplies; all goods and
property held for sale or lease or to be furnished
under contracts of service; and all goods and
inventory returned, reclaimed or repossessed,
together with all Proceeds of any of the foregoing.
iii. EQUIPMENT - All presently owned and hereafter
acquired equipment whether or not affixed to realty,
including, without limitation, trucks, trailers,
motors, tools, dies, parts, jigs, goods, accessories,
handling and delivery equipment, fixtures,
improvements, office machines and furniture, together
with all Proceeds of any of the foregoing, and all
accessions, accessories, replacements and the rights
of the Debtor under any manufacturer's warranties
relating to the foregoing.
iv. CHATTEL PAPER - All presently owned and hereafter
acquired chattel paper, including, but not limited
to, any writing or writings which evidence both a
monetary obligation and a security interest in or a
lease of specific goods, together with all Proceeds
of any of the foregoing.
v. GENERAL INTANGIBLES - All presently owned and
hereafter acquired general intangibles, including,
without limitation, any personal property, Investment
Property, choses in action, causes of action,
designs, plans, goodwill, tax refunds, licenses,
franchises, trademarks, trade names, service marks,
copyrights, customer lists and patents, and all
rights under license agreements for use of the same,
together with all Proceeds of any of the foregoing.
vi. INSTRUMENTS - All presently owned and hereafter
acquired instruments, including, without limitation,
bills of exchange, notes, and all negotiable
instruments, all certificated securities, all
certificates of deposit and any other writing which
evidences a right to the payment of money and is not
itself a security agreement or lease and is of a type
which is in the ordinary course of business
transferred by delivery with any necessary
endorsement or assignment, together with all Proceeds
of any of the foregoing.
vii. DOCUMENTS - All presently owned and hereafter
acquired documents, including, but not limited to,
documents of title (as that term is defined in the
Uniform Commercial Code) and any and all receipts,
including, but not limited to, receipts of the kind
described in Article 7 of the Uniform Commercial
Code, together with all Proceeds of any of the
foregoing.
viii. LETTERS OF CREDIT - All presently owned and hereafter
acquired letters of credit, including, but not
limited to, any written undertaking to pay money
conditioned upon presentation of specified documents,
and advices of letters of credit, together with all
Proceeds of any of the foregoing.
ix. PROCEEDS - All presently owned and hereafter acquired
proceeds, as that term is defined in the Uniform
Commercial Code, including, without limitation,
whatever is received upon the use, lease, sale,
exchange, collection, any other utilization or any
disposition of any of the Collateral described in
this Section 1.b., whether cash or non-cash, all
rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general
intangibles, equipment, inventory, substitutions,
additions, accessions, replacements, products, and
renewals of, for, or to such property and all
insurance therefor.
c. DEFAULT. The term "Default" has the meaning assigned to it in
the Facilities Agreement.
d. ENVIRONMENTAL LAWS. The term "Environmental Laws" means,
without limitation, all legal requirements of any governmental
authority pertaining to the environment, including (i) the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"); (ii) the Resource Conservation and Recovery Act of
1976, as amended, 42 U.S.C. 6901 et seq. ("RCRA"); and (iii)
any and all laws, regulations, and executive orders, federal,
state and local, pertaining to environmental matters, as the
same may be amended, replaced or supplemented from time to
time.
e. ERISA. The term "ERISA" means 29 U.S.C.Section 1001 et seq.,
as amended from time to time, and all rules, regulations,
orders and publications adopted or promulgated pursuant
thereto.
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f. EXCLUDED COLLATERAL. The term "Excluded Collateral" means any
chattel paper and general intangibles which are now or
hereafter held by the Debtor as licensee, lessee or otherwise,
to the extent that (i) such chattel paper and general
intangibles are not assignable or capable of being encumbered
as a matter of law or under the terms of the license, lease or
other agreement applicable thereto (but solely to the extent
that any such restriction shall be enforceable under
applicable law), without the consent of the licensor or lessor
thereof or other applicable party thereto and (ii) such
consent has not been obtained; provided, however, that the
term Excluded Collateral shall not include (A) any and all
proceeds of such chattel paper and general intangibles to the
extent that the assignment or encumbering of such proceeds is
not so restricted and (B) upon any such licensor, lessor or
other applicable party consent with respect to any such
otherwise excluded chattel paper or general intangibles being
obtained, such chattel paper or general intangibles or
proceeds thereof that might have theretofore have constituted
Excluded Collateral.
g. FACILITIES AGREEMENT. The term "Facilities Agreement" means
the Facilities Agreement dated February 22, 2001 between,
inter alia, Inveresk Research Group Limited and Subsidiaries
and Bear, Xxxxxxx Corporate Lending, in certain capacities, as
it may be amended, replaced or supplemented from time to time.
h. FINANCE DOCUMENT(S). The term "Finance Document(s)" has the
meaning assigned to it in the Facilities Agreement.
i. OBLIGOR. The term "Obligor" means the Debtor and each and
every Borrower and Guarantor from time to time under the
Facilities Agreement (as each such term "Borrower" and
"Guarantor" is defined in the Facilities Agreement).
j. SECURED OBLIGATIONS. The term "Secured Obligations" means all
monies, liabilities and obligations whatsoever under the
Finance Documents (as they may be amended, modified,
supplemented or novated from time to time) which are now or at
any time hereafter may be due, owing or incurred, by the
Debtor to the Lender (as defined in the Facilities Agreement),
actually or contingently, solely, jointly and/or severally
with another, as principal or surety, including (but without
limitation) principal, interest, commission and all banking,
legal and other costs, charges and expenses arising from the
Security Trustee enforcing or attempting to enforce the pledge
under this Security Agreement or any other security interest
held by the Security Trustee from the Debtor from time to
time.
k. SECURITY AGREEMENT . The term "Security Agreement" means this
Security Agreement, together with all schedules and exhibits
hereto and all amendments and modifications as may from time
to time be in effect with respect hereto.
l. UNIFORM COMMERCIAL CODE. The term "Uniform Commercial Code"
means the Uniform Commercial Code, in effect from time to time
in the State of New York.
Unless the context otherwise requires, all capitalized terms not
specifically defined herein which are defined in the Uniform Commercial
Code shall have the meanings stated therein.
2. SECURITY INTEREST. In order to secure the due and punctual payment and
performance of the Secured Obligations, the Debtor hereby grants to the
Secured Party, for the benefit of the Lenders, a continuing security
interest in and general lien upon its right, title and interest in: (i)
the Collateral, and (ii) all property of the Debtor now or hereafter in
the actual or constructive possession of the Secured Party and/or any
affiliate thereof in any capacity whatsoever, including but not limited
to, any balance or share of any deposit, trust or agency account. The
security
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interests granted herein are granted as security only and shall not
subject the Secured Party to, or in any way affect or modify, any
obligation or liability of the Debtor or any other Obligor with respect
to any of the Collateral or any transaction which gave rise thereto.
3. FURTHER ASSURANCES; FILING.
a. DELIVERY OF DOCUMENTS; INSPECTION OF COLLATERAL. At any time
and from time to time, upon the demand of the Secured Party,
the Debtor will, at the Debtor's expense: (i) immediately
deliver and pledge to the Secured Party, properly endorsed to
the Secured Party and/or accompanied by such instruments of
assignment and transfer in such form and substance as the
Secured Party may reasonably request, any and all instruments,
documents, and/or chattel paper owned by Debtor as the Secured
Party may specify in its demand; (ii) give, execute, deliver,
file, and/or record any notice, statement, instrument,
document, agreement or other papers that may be necessary, or
that the Secured Party may reasonably request, in order to
create, preserve, perfect or validate any security interest
granted pursuant hereto or intended to be granted hereunder or
to enable the Secured Party to exercise or enforce its rights
hereunder or with respect to such security interest; (iii)
keep, stamp or otherwise xxxx any and all documents,
instruments, chattel paper and its Books and Records relating
to the Collateral in such manner as the Secured Party may
reasonably require; and/or (iv) permit representatives and
agents of the Secured Party access to its premises at any
reasonable time requested by the Secured Party to inspect the
Collateral and the Books and Records and to audit and make
abstracts from the Books and Records.
b. FILING OF FINANCING STATEMENT. At the Secured Party's sole
option, and without the Debtor's consent, the Secured Party
may file a carbon, photographic or other reproduction of this
Security Agreement or any financing statement executed
pursuant hereto as a financing statement in any jurisdiction
so permitting. Except as may be otherwise permitted under the
Facilities Agreement, without the prior written consent of the
Secured Party, the Debtor will not file or authorize or permit
to be filed in any jurisdiction any such financing or like
statement in which the Secured Party is not named as the sole
secured party.
c. SECURED PARTY'S RIGHTS IN COLLATERAL. With respect to the
Collateral, or any part thereof, which at any time may come
into the possession, custody or under the control of the
Secured Party or any of its affiliates, for any purpose, the
right is expressly granted to the Secured Party, at its sole
discretion: (i) upon and after the occurrence of an Event of
Default, to transfer or register in the name of itself or its
nominee any of the Collateral, and whether or not so
transferred or registered, to receive the income and dividends
thereon, including stock dividends and rights to subscribe,
and to hold the same as a part of the Collateral and/or apply
the same as hereafter provided; (ii) upon and after the
occurrence of an Event of Default, to exchange any of the
Collateral for other property upon the reorganization,
recapitalization or other readjustment of the Debtor and in
connection therewith, to deposit the Collateral or any part
thereof with any nominee or depository upon such terms as it
may determine in its sole discretion; and (iii) upon and after
the occurrence of an Event of Default hereunder, to vote the
Collateral so transferred or registered and to exercise, or
cause its nominee to exercise, all or any powers or rights
with respect thereto with the same force and effect as an
absolute owner thereof, all without notice to any Obligor and
without liability, except to account for property actually
received by the Secured Party. The Secured Party shall be
deemed to have possession of any of the Collateral in transit
to, or set apart for, it or any of its agents, affiliates,
associates or correspondents.
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d. SECURED PARTY'S COLLATERAL CUSTODY DUTIES. With respect to the
Collateral, or any part thereof, which at any time may come
into the possession, custody or under the control of the
Secured Party or any of its affiliates, agents, associates or
correspondents, the Debtor hereby acknowledges and agrees that
the Secured Party's sole duty with respect to the custody,
safekeeping and physical preservation of such Collateral,
whether pursuant to Section 9-207 of the Uniform Commercial
Code or otherwise, shall be to deal with it in the same manner
as it deals with similar property for its own account. Neither
the Secured Party, nor any of its directors, officers,
employees, affiliates, agents, associates or correspondents
shall be liable for failure to demand, collect or realize upon
any of the Collateral or for any delay in doing so.
4. REPRESENTATIONS AND WARRANTIES. The Debtor represents and warrants to
the Secured Party, which representations and warranties shall be
continuing representations and warranties until all of the Secured
Obligations are satisfied in full, as follows:
a. SECURITY AGREEMENT QUESTIONNAIRE. All information provided by
the Debtor to the Secured Party and set forth on the Security
Agreement Questionnaire attached hereto as Schedule A and made
a part hereof, is true and correct as of the date hereof.
b. LOCATION OF DEBTOR, COLLATERAL. The Debtor is located at 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 and does business in New
York, New York. All other places of business of the Debtor,
locations of Collateral, or addresses from which invoices are
sent, if any, are listed on Schedule A attached hereto.
c. LOCATION OF BOOKS AND RECORDS. The Debtor maintains its Books
and Records at the location of Debtor set forth in Section
4.b. above.
d. AUTHORITY. Debtor has the power and authority to enter into
and perform this Agreement and any documents or instruments
executed in connection herewith, including without limitation
all financing statements.
e. DEBTOR IS SOLE OWNER OF COLLATERAL. The Debtor is, or, to the
extent that any Collateral will be acquired after the date
hereof, will be, the sole owner of the Collateral, holding
good and valid title thereto, free from any lien, security
interest, encumbrance or claim (other than the liens and
encumbrances in favor of the Secured Party or otherwise
permitted under the Facilities Agreement) and has the right to
grant the security interests created by this Security
Agreement.
f. MATERIALLY MISLEADING STATEMENTS. No representation, warranty,
or statement made herein, on any schedule or exhibit hereto or
in any certificate or document furnished or to be furnished
pursuant hereto contains or will contain any untrue statement
of a material fact or omits or will omit any material fact
necessary to make it not misleading.
g. NO FICTITIOUS NAMES. The Debtor does not operate or issue
invoices under any name other than the name(s) set forth on
the signature page hereof or on the Security Agreement
Questionnaire attached hereto as Exhibit A.
h. COLLATERAL NOT SUBJECT TO AGREEMENTS OR LICENSES. The
Collateral is not subject to or restricted by any agreement or
license relating to patents, trademarks, trade secrets or
copyrights.
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5. COVENANTS. The Debtor hereby covenants and agrees that for as long as
any Secured Obligations are outstanding:
a. DEFENSE OF COLLATERAL. The Debtor shall defend the Collateral
against all claims and demands of all persons or entities at
any time claiming any interest therein other than the Secured
Party.
b. NOTICE OF CHANGES IN LOCATION OF DEBTOR, BOOKS AND RECORDS,
COLLATERAL. The Debtor shall provide the Secured Party with
prompt written notice of: (i) any intended change in the
location of the Debtor and/or the office where the Debtor
maintains its Books and Records; and (ii) the location or
movement of any Collateral to or at an address other than the
addresses set forth on the signature page hereof or on the
Security Questionnaire, all such notices to be received by the
Secured Party at least 30 days prior to the effective date of
any such change. If any such new location as set forth in
subsections (i) and (ii) hereof is on leased or mortgaged
premises, the Debtor will furnish the Secured Party, prior to
the effective date of any such change, with landlord's or
mortgagee's waivers pertaining to such premises in form and
substance reasonably satisfactory to the Secured Party.
c. DELIVERY OF INSTRUMENTS, CHATTEL PAPER AND DOCUMENTS OF TITLE.
At the request of Secured Party, immediately upon receipt of
any instrument, Chattel Paper, and/or document of title
(including bills of lading and warehouse receipts), the Debtor
shall deliver such Collateral to the Secured Party and shall
execute any form of assignment or endorsement reasonably
requested by the Secured Party with respect thereto.
d. NOTICE OF ADVERSE CHANGES, EVENTS OF DEFAULT, SEIZURES AND
INSTITUTION OF LITIGATION. The Debtor shall immediately notify
the Secured Party of: (i) any material adverse changes in its
business, property or financial condition, including, without
limitation, any loss of or damage to any Collateral; (ii) any
seizure of the Collateral or any claims or alleged claims of
third parties to the Collateral; and (iii) to the extent not
otherwise required by the Facilities Agreement, the
institution of any litigation, arbitration, administrative
proceedings or claims against the Debtor, in which the Debtor
is a party or in which any of the Collateral is concerned,
involving a sum in excess of $100,000.
e. INSURANCE. To the extent not otherwise required by the
Facilities Agreement, Debtor shall effect and maintain such
insurance over the Collateral in such manner and to such
extent as is reasonable and customary for a business engaged
in the same or a similar activity and the same or similar
localities to it (subject to the terms set forth below) and
shall maintain such policies of insurance in full force and
comply with all its obligations relating thereto. All such
policies of insurance shall provide for not less than thirty
(30) days' prior written notice to the Secured Party of
intended cancellation or reduction coverage. The Debtor shall
furnish the Secured Party with certificates or other evidence
satisfactory to the Secured Party of compliance with the
foregoing insurance provisions. The Secured Party shall have
the right (but shall be under no obligation) to pay any of the
premiums on such insurance and all such payments shall become
part of the Secured Obligations and be considered an advance
at the highest rate of interest provided for in the Facilities
Agreement. After the occurrence of an Event of Default, the
Debtor expressly authorizes its insurance carriers to pay
proceeds of all insurance policies covering all or any part of
the Collateral directly to the Secured Party.
f. DISPOSITION OF COLLATERAL. Except as may be otherwise
permitted under the Facilities Agreement, the Debtor shall not
sell, offer to sell, otherwise assign, or permit the
involuntary transfer of, or disposition of the Collateral or
any interest therein, without the
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prior written consent of the Secured Party; provided, however,
that unless the Secured Party notifies the Debtor otherwise,
the Debtor may sell its inventory in the ordinary course of
its business.
g. SECURITY INTERESTS IN COLLATERAL. Except as may be otherwise
permitted under the Facilities Agreement, the Debtor shall
keep the Collateral free from any lien, security interest or
encumbrance except those in favor of the Secured Party, in
good order and repair, reasonable wear and tear excepted, and
will not waste or destroy the Collateral or any part thereof,
used or useful in its business or having any material value.
If requested by the Secured Party, the Debtor shall give
notice of the Secured Party's security interests in the
Collateral to any third person with whom the Debtor has any
actual or prospective contractual relationship or other
business dealings.
h. MAINTENANCE, INSPECTION OF BOOKS AND RECORDS. The Debtor shall
maintain complete and accurate Books and Records in accordance
with generally accepted accounting principles ("GAAP") in
effect in the United States from time to time, and shall make
all necessary entries therein to reflect the costs, values and
locations of its Inventory and Equipment and the transactions
giving rise to its Accounts and all payments, credits and
adjustments thereto. The Debtor shall keep the Secured Party
fully informed as to the location of all such Books and
Records and shall permit the Secured Party and its authorized
agents to have full, complete and unrestricted access thereto
at all reasonable times to inspect, audit and make copies of
any and all such Books and Records. Upon submission to the
Debtor of an invoice therefore, the Debtor will reimburse the
Secured Party for any and all reasonable fees and costs
related to any inspection and/or audit by the Secured Party
and its authorized agents of the Books and Records. The
Secured Party's rights hereunder shall be enforceable at law
or in equity, and the Debtor consents to the entry of judicial
orders or injunctions enforcing specific performance of such
obligations hereunder.
i. ASSIGNMENT OF UNITED STATES ACCOUNTS. If any of the Accounts
arise out of contracts with the United States or any of its
departments, agencies or instrumentalities, the Debtor shall
immediately notify and identify same to the Secured Party, and
shall promptly execute and deliver to the Secured Party an
assignment of claims for such Accounts in form acceptable to
the Secured Party, and shall take all steps deemed reasonably
necessary to protect the Secured Party's interest therein
under the Federal Assignment of Claims Act or any similar law
or regulation.
j. MAINTENANCE AND INSPECTION OF EQUIPMENT AND INVENTORY. With
respect to Equipment and Inventory, the Debtor shall: (i) keep
accurate books and records with respect thereto, including,
without limitation, maintenance records and current stock, and
cost and sales records accurately itemizing the types and
quantities thereof; (ii) upon request, deliver to the Secured
Party all evidence of ownership in such Collateral, including
certificates of title with the Secured Party's interest
appropriately noted on the certificate; (iii) permit the
Secured Party and its authorized agents to inspect any or all
of the Inventory and Equipment at all reasonable times; (iv)
preserve the Inventory and Equipment in good condition and
repair, and pay the cost of all necessary replacement parts,
repairs to and maintenance of the Inventory and Equipment; and
(v) if any of the Collateral is located upon land which is the
subject of a lease or mortgage, deliver an agreement of
subordination from the lessor or mortgagee providing that any
lien of such party shall be subordinate to the security
interest of the Secured Party granted herein.
k. ASSIGNMENT OF ACCOUNTS. With respect to Accounts, the Debtor
shall, upon request, immediately give the Secured Party
assignments, in a form acceptable to the Secured
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Party, of all Accounts, all original and other documents
evidencing a right to payment of Accounts, financial
statements, agings, reports, lists of account debtors, copies
of purchase orders, invoices, contracts, shipping and delivery
receipts, and such other data concerning the Accounts as the
Secured Party may reasonably request. The Debtor agrees that
the Secured Party and its authorized agents shall at all times
have the right to confirm orders and to verify any or all of
the Accounts in the Secured Party's name, or in any fictitious
name used by the Secured Party for verifications.
l. CONTINUING OF PERFECTED STATUS OF COLLATERAL. The Debtor
agrees to cooperate and join with the Secured Party, at
Debtor's expense, in taking such steps as are necessary to
perfect or continue the perfected status of the security
interests granted herein, including, without limitation, the
execution and delivery of any financing statements, amendments
thereto and continuation statements, the delivery of Chattel
Paper, Documents or Instruments to the Secured Party, the
obtaining of landlords' and mortgagees' waivers required by
the Secured Party, the notation of encumbrances in favor of
the Secured Party on certificates of title, and the execution
and filing or any collateral assignments and any other
instruments or required to perfect the Secured Party's
security interest in any and all of the Debtor's patents,
trademarks, service marks, trade names, copyrights, other
General Intangibles and other assets of any nature. The
Secured Party is expressly authorized to file financing
statements without the Debtor's signature.
6. GENERAL AUTHORITY.
a. SECURED PARTY AS ATTORNEY-IN-FACT. The Debtor hereby
irrevocably appoints the Secured Party (and any of its
attorneys, officers, employees or agents) as its true and
lawful attorney-in-fact, said appointment being coupled with
an interest, with full power of substitution, in the name of
the Debtor, the Secured Party, or otherwise, for the sole use
and benefit of the Secured Party in its sole discretion, but
at the Debtor's expense, to exercise, to the extent permitted
by law, in its name or in the name of the Debtor or otherwise,
the powers set forth herein, such powers, including, but not
limited to, the power at any time: (i) upon and after the
occurrence of a Default, to endorse the name of the Debtor
upon any instruments of payment, invoice, freight, or express
xxxx, xxxx of lading, storage, or warehouse receipt relating
to the Collateral; (ii) upon and after the occurrence of a
Default, to demand, collect, receive payment of, settle,
compromise, or adjust all or any of the Collateral; (iii) to
sign and file one or more financing statements naming the
Debtor as debtor and the Secured Party as secured party and
indicating therein the types or describing the items of
Collateral herein specified; (iv) upon and after the
occurrence of a Default, to correspond and negotiate directly
with insurance carriers; and (v) to execute any notice,
statement, instrument, agreement, or other paper that the
Secured Party may require to create, preserve, perfect or
validate any security interest granted pursuant hereto or to
enable the Secured Party to exercise or enforce its rights
hereunder or with respect to such security interest.
b. LIABILITY OF SECURED PARTY AS ATTORNEY-IN-FACT. Neither the
Secured Party nor its attorneys, officers, employees or agents
shall be liable for acts, omissions, any error in judgment or
mistake in fact in its/their capacity as attorney-in-fact,
except those arising from its gross negligence or willful
misconduct. The Debtor hereby ratifies all acts of the Secured
Party as its attorney-in-fact. This power, being coupled with
an interest is irrevocable until the Secured Obligations have
been fully satisfied. The Secured Party shall not be required
to take any steps necessary to preserve any rights against
prior parties with respect to any of the Collateral.
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c. EFFECT OF EXTENSIONS AND MODIFICATIONS. The Secured Party may,
after the occurrence of an Event of Default, extend the time
of payment, arrange for payment in installments, or otherwise
modify the terms of, or release, any of the Collateral,
without thereby incurring responsibility to, or discharging or
otherwise affecting any liability of, the Debtor or any other
Obligor.
7. EVENTS OF DEFAULT. The occurrence of an Event of Default as defined in
the Facilities Agreement shall be an Event of Default under this
Security Agreement.
8. REMEDIES.
a. ACCELERATION OF SECURED OBLIGATIONS; GENERAL RIGHTS OF SECURED
PARTY. Upon the occurrence and during the continuance of an
Event of Default described in Section 7 hereof, the Secured
Party may, at its option, exercise any and all rights and
remedies it has under this Security Agreement and/or
applicable law.
b. RIGHT OF SETOFF. Upon and after the occurrence of a Default,
the Secured Party shall have the right, without notice to the
Debtor or to any other Obligor and regardless of the adequacy
of the Collateral for the Secured Obligations or other means
of obtaining repayment of the Secured Obligations, and is
specifically authorized hereby to apply toward and set-off
against and apply to the then unpaid balance of the Secured
Obligations which are due and payable, any items or funds of
any Obligor held by the Secured Party or any affiliate
thereof, any and all deposits (whether general or special,
time or demand, matured or unmatured) or any other property of
the Debtor, including, without limitation, securities, now or
hereafter maintained by the Debtor for its own account with
the Secured Party or any affiliate thereof, and any other
indebtedness at any at any time held or owing by the Secured
Party or any affiliate thereof to or for the credit or the
account of any Obligor, even if effecting such set-off results
in a loss or reduction of interest or the imposition of a
penalty applicable to the early withdrawal of time deposits.
For such purpose, the Secured Party shall have, and the Debtor
hereby grants to the Secured Party, a first lien on and
security interest in such deposits, property, funds and
accounts and the proceeds thereof.
c. TURNOVER OF PROPERTY HELD BY AFFILIATES. The Debtor authorizes
any affiliate of the Secured Party, upon and following the
occurrence of an Event of Default, at the request of the
Secured Party, and without notice to the Debtor, to turn over
to the Secured Party any property of the Debtor held by such
affiliate for the Debtor's account and to debit any deposit
account maintained by the Debtor with such affiliate (even if
such deposit account is not then due or there results a loss
or reduction of interest or the imposition of a penalty in
accordance with law applicable to the early withdrawal of time
deposits), in the amount requested by the Secured Party up to
the amount of the Secured Obligations, and to pay or transfer
such amount or property to the Secured Party for application
to the Secured Obligations.
d. ADDITIONAL RIGHTS AND REMEDIES. In addition to the rights and
remedies available to the Secured Party as set forth above,
upon the occurrence of an Event of Default hereunder, or at
any time thereafter, the Secured Party may at its option,
immediately and without notice, do any or all of the
following, which rights and remedies are cumulative, may be
exercised from time to time, and are in addition to any rights
and remedies available to the Secured Party under any other
agreement or instrument by and between any Obligor and the
Secured Party:
9
i. Exercise any and all of the rights and remedies of a
secured party under the Uniform Commercial Code,
including, without limitation, the right to require
the Debtor to assemble the Collateral and make it
available to the Secured Party at a place reasonably
convenient to the parties;
ii. Operate, utilize, recondition and/or refurbish any of
the Collateral for the purpose of enhancing or
preserving the value thereof by any means deemed
appropriate by the Secured Party, in its sole
discretion, including, without limitation, converting
raw materials and/or work-in-progress into finished
goods;
iii. Notify the account debtors for any of the Accounts to
make payment directly to the Secured Party, or to
such post office box as the Secured Party may direct;
iv. Demand, xxx for, collect, or retrieve any money or
property at any time payable, receivable on account
of, or in exchange for, or make any compromise, or
settlement deemed desirable with respect to any of
the Collateral;
v. Notify the post office authorities to change the
address for delivery of the Debtor's mail to an
address designated by the Secured Party and to
receive, open, and distribute all mail addressed to
the Debtor, retaining all mail relating to the
Collateral and forwarding all other mail to the
Debtor; and/or
vi. Upon ten (10) calendar days' prior written notice to
the Debtor (or one (1) day notice by telephone with
respect to Collateral that is perishable or threatens
to decline rapidly in value), which the Debtor hereby
acknowledges to be sufficient, commercially
reasonable and proper, the Secured Party may sell,
lease or otherwise dispose of any or all of the
Collateral at any time and from time to time at
public or private sale, with or without advertisement
thereof, and apply the proceeds of any such sale
first to the Secured Party's expenses in preparing
the Collateral for sale (including reasonable
attorneys' fees) and second to the complete
satisfaction of the Secured Obligations in any order
deemed appropriate by the Secured Party in its sole
discretion. The Debtor waives the benefit of any
marshalling doctrine with respect to the Secured
Party's exercise of its rights hereunder. The Debtor
grants a royalty-free license to the Secured Party
for all patents, service marks, trademarks, trade
names, copyrights, computer programs and other
intellectual property and proprietary rights
sufficient to permit the Secured Party to exercise
all rights granted to the Secured Party under this
Section. To the extent lawfully permitted, Secured
Party or anyone else may be the purchaser of any or
all of the Collateral so sold and thereafter hold
such Collateral absolutely, free from any claim or
right of whatsoever kind, including any equity of
redemption of the Debtor or any other Obligor, any
such notice, right and/or equity of redemption being
hereby expressly waived and released.
9. MISCELLANEOUS.
a. REMEDIES CUMULATIVE; NO WAIVER. The rights, powers and
remedies of the Secured Party provided in this Security
Agreement and any of the other Finance Documents are
cumulative and not exclusive of any right, power or remedy
provided by law or equity. No failure or delay on the part of
the Secured Party in the exercise of any right, power or
remedy shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or remedy preclude any
other or further exercise thereof, or the exercise of any
other right, power or remedy.
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b. NOTICES. All notices shall be delivered in accordance with the
terms of Section 32 of the Facilities Agreement.
c. COSTS AND EXPENSES. Whether or not the transactions
contemplated by this Security Agreement and the other Finance
Documents are fully consummated, the Debtor shall promptly pay
(or reimburse, as the Secured Party may elect) all costs and
expenses which the Secured Party has incurred or may hereafter
incur in connection with the negotiation, preparation,
reproduction, interpretation, perfection, monitoring,
administration and enforcement of the Finance Documents, the
collection of all amounts due under the Finance Documents, and
all amendments, modifications, consents or waivers, if any, to
the Finance Documents. Such costs and expenses shall include,
without limitation, the reasonable fees and disbursements of
counsel to the Secured Party (including the Secured Party's
in-house counsel), the costs of appraisals, searches of public
records, costs of filing and recording documents with public
offices, internal and/or external audit and/or examination
fees and costs, stamp, excise and other taxes, the fees of the
Secured Party's accountants, consultants or other
professionals, costs and expenses from any actual or attempted
sale at all or any part of the Collateral, or any exchange,
enforcement, collection, compromise or settlement of any of
the Collateral or receipt of the proceeds thereof, and for the
care and preparation for sale of the Collateral (including
insurance costs) and defending and asserting the rights and
claims of the Secured Party in respect thereof, by litigation
or otherwise. The Debtor's reimbursement obligations under
this Section shall survive any termination of the Finance
Documents.
d. GOVERNING LAW. This Security Agreement shall be construed in
accordance with and governed by the substantive laws of the
State of New York without reference to conflict of laws
principles.
e. INTEGRATION. This Security Agreement and the other Finance
Documents constitute the solo agreement of the parties with
respect to the subject matter hereof and thereof and supersede
all oral negotiations and prior writings with respect to the
subject matter hereof and thereof.
f. AMENDMENT; WAIVER. No amendment of this Security Agreement,
and no waiver of any one or more of the provisions hereof
shall be effective unless set forth in writing and signed by
the parties hereto.
g. SUCCESSORS AND ASSIGNS. This Security Agreement (i) shall be
binding upon the Debtor and the Secured Party and, where
applicable, their respective successors and permitted assigns,
and (ii) shall inure to the benefit of the Debtor and the
Secured Party and, where applicable, their respective
successors and permitted assigns; provided, however, that the
Debtor may not assign its rights hereunder or any interest
herein without the prior written consent of the Secured Party,
and any such assignment or attempted assignment by the Debtor
shall be void and of no effect with respect to the Secured
Party.
h. SALE, ASSIGNMENT OR PARTICIPATIONS. The Secured Party may from
time to time sell or assign, in whole or in part, or grant
participations in some or all of the Documents and/or the
obligations evidenced thereby. The holder of any such sale,
assignment or participation, if the applicable agreement
between the Secured Party and such holder so provides, (i)
shall be entitled to all of the rights, obligations and
benefits of the Secured Party, and (ii) shall be deemed to
hold and may exercise the rights of setoff or Secured Party's
lien with respect to any and all obligations of such holder to
the Debtor, in each case as fully as though the Debtor were
directly indebted to such holder. The Secured Party may in its
discretion, give notice to the Debtor of such sale, assignment
or
11
participation; however, the failure to give such notice shall
not affect any of the Secured Party's or such holder's rights
hereunder. In accordance with and in a manner consistent with
the confidentiality provisions of Facilities Agreement, the
Debtor authorizes the Secured Party to provide information
concerning the Debtor to any prospective purchaser, assignee
or participant. The information provided may include, but is
not limited to, amounts, terms, balances, payment history,
return item history and any financial or other information
about the Debtor. The Debtor agrees to indemnify, defend,
release the Secured Party, and hold the Secured Party
harmless, at the Debtor's cost and expense, from and against
any and all lawsuits, claims, actions, proceedings or suits
against the Secured Party or against the Debtor and the
Secured Party, arising out of or relating to the Secured
Party's reporting or disclosure of such information, except
any of the foregoing resulting from the Secured Party's gross
negligence or willful misconduct.
i. SEVERABILITY. The illegality or unenforceability of any
provision of this Security Agreement or any instrument or
agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining
provisions of this Security Agreement or any instrument or
agreement required hereunder. In lieu of any illegal or
unenforceable provision in this Security Agreement, there
shall be added automatically as a part of this Security
Agreement a legal and enforceable provision as similar in
terms to such illegal or unenforceable provision as may be
possible.
j. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Debtor
irrevocably appoints each and every officer of the Debtor as
its attorneys upon whom may be served, by regular or certified
mail at the address set forth in Section 4.b. of this Security
Agreement, any notice, process or pleading in any action or
proceeding against it arising out of or in connection with
this Security Agreement or any of the other Finance Documents.
The Debtor hereby consents that any action or proceeding
against it may be commenced and maintained in any court within
the State of New York or in the United States District Court
for the Southern District of New York by service of the
process on any such owner, partner and/or officer. The Debtor
further agrees that such courts of the State of New York and
the United States District Court for the Southern District of
New York shall have jurisdiction with respect to the subject
matter hereof and the person of the Debtor and all Collateral
for the Secured Obligations.
k. INDEMNIFICATION.
i. If, after receipt of any payment of all or any part
of the Secured Obligations, the Secured Party is
compelled or agrees, for settlement purposes, to
surrender such payment to any person or entity for
any reason (including, without limitation, a
determination that such payment is void or voidable
as a preference or fraudulent conveyance, an
impermissible setoff, or a diversion of trust funds),
then this Security Agreement and the other Finance
Documents shall continue in full force and effect,
and the Debtor shall be liable for, and shall
indemnify, defend and hold harmless the Secured Party
with respect to the full amount so surrendered.
ii. The Debtor shall indemnify, defend and hold harmless
the Secured Party with respect to any and all claims,
expenses, demands, losses, costs, fines or
liabilities of any kind (including, without
limitation, those involving death, personal injury or
property damage and including reasonable attorneys'
fees and costs) arising from or in any way related to
any hazardous materials or dangerous environmental
condition within, on, from, related to or affecting
any real property owned or occupied by the Debtor,
other than those resulting from the gross negligence
or willful misconduct of the Secured Party.
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iii. The provisions of this Section shall survive the
termination of this Security Agreement and the other
Finance Documents and shall be and remain effective
notwithstanding the payment of the Secured
Obligations, the release of any security interest,
lien or encumbrance securing the Secured Obligations
or any other action which the Secured Party may have
taken in reliance upon its receipt of such payment.
Any action by the Secured Party shall be deemed to
have been conditioned upon any payment of the Secured
Obligations having become final and irrevocable.
l. INCONSISTENCIES. The Finance Documents are intended to be
consistent. However, in the event of any inconsistencies among
any of the Finance Documents, such inconsistency shall not
affect the validity or enforceability of any Finance Document.
In the event of any inconsistency or ambiguity in any of the
Finance Documents, the Finance Documents shall not be
construed against any one party but shall be interpreted
consistent with the Secured Party's policies and procedures.
m. HEADINGS. The headings of sections and paragraphs have been
included herein for convenience only and shall not be
considered in interpreting this Security Agreement.
n. SCHEDULES. If a schedule and/or an exhibit is attached hereto,
the provisions thereof are incorporated herein.
o. JUDICIAL PROCEEDING; WAIVERS.
i. EACH PARTY TO THIS SECURITY AGREEMENT AGREES THAT ANY
SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
COUNTERCLAIM, BROUGHT OR INSTITUTED BY ANY PARTY
HERETO OR ANY SUCCESSOR OR ASSIGN OF ANY PARTY, ON OR
WITH RESPECT TO THIS SECURITY AGREEMENT, ANY OF THE
OTHER FINANCE DOCUMENTS, THE COLLATERAL OR THE
DEALINGS OF THE PARTIES WITH RESPECT HERETO OR
THERETO SHALL BE TRIED ONLY BY A COURT AND NOT BY A
JURY.
ii. THE DEBTOR AND THE SECURED PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDINGS. FURTHER, EACH PARTY WAIVES ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.
iii. THE DEBTOR ACKNOWLEDGES AND AGREES THAT THIS SECTION
IS A SPECIFIC AND MATERIAL ASPECT OF THIS SECURITY
AGREEMENT AND THAT THE SECURED PARTY WOULD NOT EXTEND
CREDIT IF THE WAIVERS SET FORTH IN THIS SECTION WERE
NOT A PART OF THE SECURITY AGREEMENT.
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IN WITNESS WHEREOF, the authorized officers of the parties hereto have caused
this Security Agreement to be signed, sealed and delivered on the date above
first written.
DEBTOR:
Attest: INDIGO ACQUISITION CORP.
By: /s/ By: /s/ Xxxxxx Xxxxx (SEAL)
-------------------------- -------------------------------------
Name: Name: Xxxxxx Xxxxx
Title: Title:
SECURED PARTY:
BEAR, XXXXXXX CORPORATE LENDING, INC., as
Security Trustee
By: /s/
-------------------------------------------
Name:
Title:
14
