EXHIBIT 10.24
SECOND AMENDED AND RESTATED ASSIGNMENT AND
BORROWER SECURITY AGREEMENT
This SECOND AMENDED AND RESTATED ASSIGNMENT AND BORROWER SECURITY
AGREEMENT (this "AGREEMENT") is dated as of July __, 2003 and entered into by
and between AMERICAN HOMEPATIENT, INC., A DELAWARE CORPORATION ("GRANTOR"), and
BANK OF MONTREAL, as agent for and representative of (in such capacity herein
called "SECURED PARTY"), the financial institutions ("LENDERS") that hold a
promissory note payable to such Lenders as set forth on Exhibit A attached
hereto (the "PROMISSORY NOTE") and amends and restates the Amended and Restated
Assignment and Borrower Security Agreement dated as of July 31, 2001 between
Grantor and Bankers Trust Company as the predecessor to the Secured Party (the
"PRIOR SECURITY AGREEMENT").
PRELIMINARY STATEMENTS
A. Grantor, Bankers Trust Company and Lenders previously entered
into that certain Fifth Amended and Restated Credit Agreement dated as of May
25, 2001.
B. Grantor filed a voluntary petition under 11 U.S.C. Sections
101 et seq. on July 30, 2002 in the United States Bankruptcy Court for the
Middle District of Tennessee. On May 27, 2003, the Bankruptcy Court confirmed
Grantor's Second Amended Joint Plan of Reorganization (herein "Joint Plan") in
all respects. The Fifth Amended and Restated Credit Agreement is no longer in
effect and as part of the Joint Plan, the Grantor will execute the Promissory
Note to the Lenders on terms and in amounts provided in the Joint Plan to
evidence Grantor's indebtedness and obligations to the Lenders.
C. Pursuant to the Joint Plan and the Bankruptcy Court's order
issued May 27, 2003, Grantor is required to amend the Prior Security Agreement
as provided herein.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Grantor hereby agrees with Secured Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor has pledged and assigned, hereby
ratifies such prior pledge and assignment and further pledges and assigns to
Secured Party, for Secured Party's benefit and the benefit of Lenders, and has
granted, hereby ratifies such prior grant and hereby further grants to Secured
Party, for Secured Party's benefit and the benefit of Lenders, a security
interest in all of Grantor's right, title and interest in and to all personal
property, including, without limitation, the following, in each case whether now
or hereafter existing or in which Grantor now has or hereafter acquires an
interest and wherever the same may be located (the "COLLATERAL"):
(a) all equipment in all of its forms, all parts thereof
and all accessions thereto (any and all such equipment, parts and accessions
being the "EQUIPMENT");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw materials,
work in process, finished goods, and materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in Grantor's
business, (iii) all goods in which Grantor has an interest in mass or a joint or
other interest or right of any kind, and (iv) all goods that are returned to or
repossessed by Grantor) and all accessions thereto and products thereof (all
such inventory, accessions and products being the "INVENTORY") and all
negotiable documents of title (including without limitation warehouse receipts,
dock receipts and bills of lading) issued by any person covering any Inventory
(any such negotiable document of title being a "NEGOTIABLE DOCUMENT OF TITLE");
(c) all accounts, receivables, contract rights, other
payment rights of any kind, chattel paper (whether tangible or electronic),
documents, instruments (including, without limitation, promissory notes),
investment property, letter-of-credit rights (whether or not such letter of
credit is evidenced by a writing), health-care-insurance receivables, supporting
obligations, general intangibles, including, without limitation, payment
intangibles, software, all intangible personal property relating to the
recordation, monitoring, collection, servicing and payment of Accounts (as
hereinafter defined), (including, without limitation, all rights, whether for
payment or performance, under (a) managed care contracts, preferred provider
contracts, and other contracts with health or medical insurance companies or
public or governmental entities relating to the payment of or reimbursement for
medical, health care and other services and products provided by the Grantor,
including, without limitation, all rights in any way related to the Medicare,
Medicaid or any other state or federal programs and (b) data processing
contracts, computer software licenses, cash management contracts and other
contracts and licenses relating to the servicing of Accounts), and, to the
extent not listed above as original Collateral, proceeds and products of the
foregoing (collectively, the "ACCOUNTS"), and any and all security agreements,
leases and other contracts securing or otherwise relating to the Accounts
(collectively, the "RELATED CONTRACTS"), whether now owned or hereafter
acquired;
(d) to the extent not included in any other paragraph of
this Section 1, all agreements, contracts and assignments including without
limitation those whereby Grantor obtains goods, services or rights that are
useful or necessary to the business or operations of Grantor as each such
agreement, contract and assignment may be amended, supplemented, restated or
otherwise modified from time to time (said agreements, contracts and
assignments, as so amended, supplemented, restated or modified, are referred to
herein individually as an "ASSIGNED AGREEMENT" and collectively as the "ASSIGNED
AGREEMENTS"), including without limitation (i) all rights of Grantor to receive
moneys due or to become due under or pursuant to the Assigned Agreements, (ii)
all rights of Grantor to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect to the Assigned Agreements, (iii) all claims of Grantor
for damages arising out of any breach of or default under the Assigned
Agreements, (iv) all rights of Grantor to terminate, amend, supplement, modify
or exercise rights or options under the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder, and (v) all agreements, permits, certifications or other rights
related to the operation of Grantor's businesses;
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(e) all deposit accounts, including without limitation
any account for the concentration or collection of the funds of Grantor and its
Subsidiaries maintained with PNC Bank, National Association, and its successors
and assigns (the agreement with such bank being herein referred to as the
"Concentration Bank Agreement"), and all deposit accounts maintained with
Secured Party or any Lender or any other party;
(f) all trademarks and tradenames, tradesecrets, business
names, patents, patent applications, licenses, certificates, operating
agreements, permits, copyrights, registrations and franchise rights, and all
goodwill associated with any of the foregoing;
(g) to the extent not included in any other paragraph of
this Section 1, all other general intangibles (including without limitation tax
refunds, rights to payment or performance, choses in action and judgments taken
on any rights or claims, whether included in the Collateral or otherwise), and
commercial tort claims, whether now owned or hereafter acquired;
(h) all plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all accessions thereto and
products thereof;
(i) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection thereof or
realization thereupon;
(j) all of Grantor's right, title and interest as a
general partner or member in a single-purpose corporation, partnership, joint
venture or other similar legal arrangement (whether created pursuant to contract
or conducted through a separate legal entity) now or hereafter formed by Grantor
with another person (other than Grantor or any of its subsidiaries) in order to
conduct a common venture or enterprise with such other person. (each a "Joint
Venture" and collectively, the "Joint Ventures"), whether now owned or hereafter
acquired, including without limitation all of Grantor's right, title and
interest in, to and under all partnership agreements or limited liability
agreements entered into from time to time by Grantor (as amended to the date
hereof and as they may hereafter be amended, supplemented or otherwise modified
from time to time, the "JOINT VENTURE AGREEMENTS"), including without limitation
Grantor's right to vote and to manage and administer the business of such Joint
Ventures, together with all other rights, interests, claims and other property
of Grantor in any manner arising out of or relating to its general partnership
or membership interests in the Joint Ventures, whatever their respective kind or
character, whether they are tangible or intangible property, and wheresoever
they may exist or be located, and further including, without limitation, all of
the rights of such Grantor as a general partner or member of any of such Joint
Ventures: (i) to (x) receive money due and to become due (including without
limitation dividends, distributions, interest, income from partnership or
limited liability company properties and operations, proceeds of the sale of
partnership or limited liability company assets and returns of capital) under or
pursuant to any of such Joint Venture Agreements, (y) receive payments upon
termination of any of such Joint Venture Agreements, and (z) receive any other
payments or distributions, whether cash or noncash, in respect of such Grantor's
general partnership or membership interests evidenced by any of such Joint
Venture Agreements; (ii) in and with respect to claims and causes of action
arising out of or relating to
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any of such Joint Ventures; and (iii) to have access to the books and records of
any of such Joint Ventures and to other information concerning or affecting such
Joint Ventures;
(k) all of Grantor's right, title and interest as a
member of any limited liability company that is a Subsidiary (each, an "LLC"
and, collectively, the "LLC'S"), whether now owned or hereafter acquired,
including without limitation all of Grantor's right, title and interest in, to
and under each limited liability company agreement, as amended to the date
hereof and as it may hereafter be amended, supplemented or otherwise modified
from time to time, (each an "LLC AGREEMENT" and collectively, the "LLC
AGREEMENTS") of such LLC (including without limitation, Grantor's right to vote
and to manage and administer the business of such LLC), together with all other
rights, interests, claims and other property of Grantor in any manner arising
out of or relating to its interest in such LLC, whatever their respective kind
or character, whether they are tangible or intangible property, and wheresoever
they may exist or be located, further including, without limitation, all of the
rights of Grantor as a member of such LLC: (i) to (x) receive money due and to
become due (including without limitation dividends, distributions, interest,
income from LLC properties and operations, proceeds of sale of LLC assets and
return of capital) under or pursuant to such LLC Agreement, (y) receive payments
upon termination of such LLC Agreement, and (z) receive any other payments or
distributions, whether cash or noncash, in respect of Grantor's membership
interest evidenced by such LLC Agreement; (ii) in and with respect to claims and
causes of action arising out of or relating to such LLC; and (iii) to have
access to such LLC's books and records and to other information concerning or
affecting such LLC; and additionally including without limitation any
"certificate of interest" or "certificates of interest" (or other certificates
or instruments however designated or titled) issued by or on behalf of any LLC
and evidencing Grantor's interest as a member of such LLC (collectively, the
"CERTIFICATE" with respect to such LLC or Subsidiary) and any interest of
Grantor in the entries on the books of such LLC or of any financial intermediary
pertaining to Grantor's interest as a member of such LLC; and
(l) all proceeds, products, rents and profits of or from
any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing Collateral.
For purposes of this Agreement, the term "proceeds" includes whatever is
receivable or received when Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary.
SECTION 2. SECURITY FOR OBLIGATIONS.
(a) This Agreement secures, and the Collateral is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)), of all obligations and liabilities of every
nature of Grantor now or hereafter existing under or arising out of in
connection with, or related to the Promissory Note, including to the extent all
or any portion of such obligations or liabilities that are paid, to the extent
all or any part of such payment is avoided or recovered directly or indirectly
from Secured Party or any Lender as a preference, fraudulent transfer or
otherwise (all such
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obligations and liabilities being the "UNDERLYING DEBT"), and all obligations of
every nature of Grantor now or hereafter existing under this Agreement (all such
obligations of Grantor, together with the Underlying Debt, being the "SECURED
OBLIGATIONS").
(b) It is the parties' desire through this Agreement to
cover all of the personal property of the Grantor to the maximum extent
permitted by law, including the provisions of Revised Article 9 of the Uniform
Commercial Code as presently existing or as hereafter adopted or modified.
Notwithstanding the foregoing, this Agreement and the related security
agreements dated of even date herewith represent the entire agreement between
the parties with respect to the subject matter herein and all oral agreements
and earlier versions of this Agreement, including without limitation that
certain Amended and Restated Borrower Security Agreement dated as of July 31,
2001, shall have no effect or validity.
SECTION 3. GRANTOR REMAINS LIABLE; NO ASSUMPTION.
(a) Anything contained herein to the contrary
notwithstanding, (i) Grantor shall remain liable under any contracts and
agreements included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by Secured Party of any
of its rights hereunder shall not release Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(iii) Secured Party shall not have any obligation or liability under any
contracts and agreements included in the Collateral by reason of this Agreement,
nor shall Secured Party be obligated to perform any of the obligations or duties
of Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
(b) Notwithstanding any of the foregoing, this Agreement
shall not in any way be deemed to obligate Secured Party, any Lender or any
purchaser at a foreclosure sale under this Agreement to assume any of Grantor's
obligations, duties, expenses or liabilities under the Joint Venture Agreements
or the LLC Agreements (including without limitation Grantor's obligations as a
general partner or member for the debts and obligations of any Joint Venture or
LLC and to manage the business and affairs of such Joint Venture or LLC) or
under any and all other agreements now existing or hereafter drafted or executed
(collectively, the "GRANTOR OBLIGATIONS"), unless Secured Party, any Lender or
any such purchaser otherwise expressly agrees to assume any or all of said
Grantor Obligations in writing. In the event of foreclosure by Secured Party on
behalf of Lenders, Grantor shall remain bound and obligated to perform the
Grantor Obligations and neither Secured Party nor any Lender shall be deemed to
have assumed any of such Grantor Obligations except as provided in the preceding
sentence. Without limiting the generality of the foregoing, neither the grant of
the security interest in the Collateral in favor of Secured Party as provided
herein nor the exercise by Secured Party of any of its rights hereunder nor any
action by Secured Party in connection with a foreclosure on the Collateral shall
be deemed to constitute Secured Party or any Lender a general partner or member
of any Joint Venture or a member of any LLC; provided, however, that in the
event Secured Party or any purchaser of Collateral at a foreclosure sale elects
to become a substituted general partner or member of any Joint Venture or member
of any LLC in place of Grantor, Secured Party or such purchaser, as the case may
be, shall adopt in writing the respective Joint Venture Agreement or LLC
Agreement, as the case may be, and agree to be bound by the terms and provisions
thereof.
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SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants as follows:
(a) Ownership of Collateral. Except for the security
interest created by this Agreement or the Prior Security Agreement, Grantor owns
the Collateral as legal and beneficial owner free and clear of any Lien. Except
such as may have been filed in favor of Secured Party relating to the Prior
Security Agreement or this Agreement, no effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any filing or recording office. Except for the security interest created
by this Agreement or the Prior Security Agreement, Grantor's title to the
Collateral is free of all adverse claims, security interests, and restrictions
on transfer or pledge.
(b) [Reserved]
(c) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor keeps its
records regarding the Accounts and all originals of all tangible chattel paper
(and the electronic equivalent thereof for electronic chattel paper) that
evidence Accounts is, and has been for the four month period preceding the date
hereof, located at the address specified on Schedule I annexed hereto. The state
of incorporation is the state identified on Schedule I annexed hereto. The
organization number is the number specified on Schedule I annexed hereto.
Grantor has not in the past done, and does not now do, business under any other
name (including any trade-name or fictitious business name) except as set forth
on Schedule II annexed hereto.
(d) Delivery of Certain Collateral. All chattel paper and
all notes and other instruments (excluding checks) comprising any and all items
of Collateral have been delivered to Secured Party duly endorsed and accompanied
by duly executed instruments of transfer or assignment in blank.
(e) Consents or Governmental Authorizations. No consent
of any other Person (including, without limitation, any other partner or member
of any Joint Venture, any member of any LLC or any creditor of Grantor), and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the assignment or
transfer of or the creation, attachment or perfection of a security interest in
any Joint Venture, and there is no rule of law, regulation or statute that
prohibits or restricts any of the foregoing.
(f) [Reserved]
(g) [Reserved]
(h) Joint Venture Agreements. The Joint Venture
Agreements, true and complete copies of which have been furnished to Secured
Party, have been duly authorized, executed and delivered by Grantor and are in
full force and effect and have not been amended or modified except as disclosed
in writing to Secured Party. No default by Grantor exists under any Joint
Venture Agreement and no event has occurred or exists that with notice or lapse
of time or both,
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would constitute a default by Grantor thereunder. To the best knowledge of
Grantor, except as disclosed to Secured Party, no default by any other partner
exists under such Joint Venture Agreement and no event has occurred or exists
that, with notice or lapse of time or both, would constitute a default by any
other partner thereunder.
(i) Deposit Accounts. Schedule III sets forth a complete
list of all deposit accounts of Grantor in which Grantor deposits any Accounts
Receivable.
(j) Other Information. All information heretofore, herein
or hereafter supplied to Secured Party by or on behalf of Grantor with respect
to the Collateral is accurate and complete in all material respects.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be reasonably necessary or
desirable, or that Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
Grantor will promptly: (i) at the request of Secured Party, xxxx conspicuously
each item of chattel paper included in the Accounts (including electronically
placing an identification of Secured Party on the electronic chattel paper),
each Related Contract and each of its records pertaining to the Collateral, with
a legend, in form and substance satisfactory to Secured Party, indicating that
such Collateral is subject to the security interest granted hereby, (ii) at the
request of Secured Party, deliver and pledge to Secured Party hereunder all
promissory notes and other instruments (including checks) and all original
counterparts (and, for electronic chattel paper, the electronic equivalent
thereof) of chattel paper constituting Collateral, duly endorsed and accompanied
by duly authenticated instruments of transfer or assignment, all in form and
substance satisfactory to Secured Party, (iii) execute and file such financing
or continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby, which shall be deemed to be all assets of Grantor; (iv) take
such action as Secured Party may request in order for Secured Party to obtain
"control" of any and all investment property, deposit accounts, electronic
chattel paper, and letter-of-credit rights (as such terms are now or hereafter
defined in Revised Article 9 of the Uniform Commercial Code ("REVISED ARTICLE
9") with corresponding provisions in Rev. Sections 9-104, 9-105, 9-106 and 9-107
pertaining to the construction of "control" for such items of Collateral), (v)
obtain the acknowledgement, in form and substance satisfactory to Secured Party,
of any bailee having possession of any of the Collateral that the bailee holds
such Collateral for Secured Party, (vi) at any reasonable time, upon request by
Secured Party, exhibit the Collateral to and allow inspection of the Collateral
by Secured Party, or persons designated by Secured Party, and (vii) at Secured
Party's request, appear in and defend any action or proceeding that may affect
Grantor's title to or Secured Party's security interest in all or any part of
the Collateral.
(b) Grantor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Grantor's
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assets, without the signature of Grantor. Grantor agrees that a carbon,
photographic, electronic or other reproduction of this Agreement or of a
financing statement executed or authenticated by Grantor shall be sufficient as
a financing statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably require, all in reasonable detail. Grantor will furnish to Secured
Party, within sixty (60) days following execution of this Agreement, thereafter
on an annual basis within sixty (60) days following the close of each of
Grantor's fiscal years, and at such additional times as the Secured Party may
reasonably require, a complete listing of each Account Debtor, including each
Account Debtor's name and complete address, in both hard copy and
machine-readable magnetic media formats.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;
(b) give Secured Party thirty (30) days prior written
notice of any change in Grantor's name or identity, corporate form or structure,
status of incorporation, state in which it is located, organization number,
chief place of business, chief executive office or residence or the office where
Grantor keeps its records regarding the Accounts and all originals of all
chattel paper that evidence Accounts;
(c) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith;
provided that Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment entered or filed against
Grantor or any of the Collateral as a result of the failure to make such
payment; and
(d) not without the written consent of Secured Party,
which shall not be unreasonably withheld, (i) cancel or terminate any Joint
Venture Agreement or consent to or accept any cancellation or termination
thereof, (ii) sell, assign (by operation of law or otherwise) or otherwise
dispose of any part of its general partnership or membership interest in any
Joint Venture, (iii) amend, supplement or otherwise modify any Joint Venture
Agreement (as in effect on the date hereof) except amendments that are
immaterial and would not have a material adverse effect on the business,
operations, property, assets, liability (contingent or otherwise), condition
(financial or otherwise) or prospects of the Grantor and subsidiaries taken as a
whole, (iv) waive any default under or breach of any Joint Venture Agreement or
waive, fail to enforce, forgive or release any right, interest or entitlement of
any kind, howsoever arising, under or in respect of any Joint Venture Agreement
or vary or agree to the variation in any respect of any of the provisions of any
Joint Venture Agreement or of the performance of any other Person under any
Joint Venture Agreement, or (v) petition, request or take any other legal or
administrative
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action that seeks, or may reasonably be expected, to rescind, terminate or
suspend any Joint Venture Agreement or to amend or modify any Joint Venture
Agreement;
(e) at its expense (i) perform and comply in all material
respects with all terms and provisions of any Joint Venture Agreement required
to be performed or complied with by it, (ii) except as otherwise provided for
herein, maintain any Joint Venture Agreement in full force and effect, (iii)
enforce any Joint Venture Agreement in accordance with its terms, and (iv) take
all such action to that end as from time to time may be reasonably requested by
Secured Party;
(f) not permit any Joint Venture to enter into any
transaction of merger or consolidation, or voluntarily liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution);
(g) deposit all accounts receivable other than accounts
receivable related to Joint Ventures in one of the deposit accounts specified on
Schedule III governed by either a control agreement; provided, however, that
Grantor shall be permitted (i) to maintain up to an aggregate of $5,000,000 in
deposit accounts with financial institutions that have not executed a control
agreement or collection bank agreement and (ii) to maintain up to $1,500,000 in
deposit accounts on behalf of any Joint Venture.
(h) direct the payor of any accounts receivable other
than accounts receivable related to Joint Ventures to be paid by wire transfer
to make such wire transfer directly to the concentration account of the Borrower
governed by the Concentration Bank Agreement; and
(i) at any time, if Grantor acquires a commercial tort
claim (as such term is defined in Revised Article 9 with corresponding provision
in Rev. Section 9-102(a)(13), regardless of whether Revised Article 9 is in
effect in any jurisdiction relevant hereto), provide written notification to
Secured Party, such notification to include details thereof, and Grantor shall
grant to Secured Party in such writing a first priority perfected security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to Secured
Party.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.
Grantor shall:
(a) cause the Equipment to be maintained and preserved in
merchantable quality, and shall forthwith, or, in the case of any loss or damage
to any of the Equipment when subsection (c) of Section 8 is not applicable, as
quickly as practicable after the occurrence thereof, make or cause to be made
all repairs, replacements and other improvements in connection therewith that
are necessary or desirable to such end. Grantor shall promptly furnish to
Secured Party a statement respecting any material loss or damage to any of the
Equipment;
(b) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory, Grantor's
cost therefor and (where applicable) the current list prices for the Inventory;
(c) upon the occurrence of an Event of Default, if any
Inventory is in possession or control of any of Grantor's agents or processors,
instruct such agent or processor to
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hold all such Inventory for the account of Secured Party and subject to the
instructions of Secured Party; and
(d) promptly upon the issuance and delivery to Grantor of
any Negotiable Document of Title, deliver such Negotiable Document of Title to
Secured Party.
SECTION 8. INSURANCE.
(a) Grantor shall, at its own expense, maintain insurance
in amounts and on terms that are commercially reasonable in Grantor's industry
with respect to the Equipment and Inventory; provided that Grantor may
self-insure against risks consistent with standard industry practices for
companies in the same or similar businesses. Such insurance shall include,
without limitation, property damage insurance and liability insurance. Each
policy for property damage insurance shall provide for all losses to be paid
directly to Secured Party. Each policy shall in addition name Grantor and
Secured Party as insured parties thereunder (without any representation or
warranty by or obligation upon Secured Party) as their interests may appear and
have attached thereto a loss payable clause acceptable to Secured Party that
shall (i) contain an agreement by the insurer that any loss thereunder shall be
payable to Secured Party notwithstanding any action, inaction or breach of
representation or warranty by Grantor, (ii) provide that there shall be no
recourse against Secured Party for payment of premiums or other amounts with
respect thereto, and (iii) provide that at least 30 days' prior written notice
of cancellation, material amendment, reduction in scope or limits of coverage or
of lapse shall be given to Secured Party by the insurer. Grantor shall, if so
requested by Secured Party, deliver to Secured Party original or duplicate
policies of such insurance and, as often as Secured Party may reasonably
request, a report of a reputable insurance broker with respect to such
insurance. Further, Grantor shall, at the request of Secured Party, duly execute
and deliver instruments of assignment of such insurance policies to comply with
the requirements of Section 5(a) and cause the respective insurers to
acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance
maintained by Grantor pursuant to this Section 8 may be paid directly to the
Person who shall have incurred liability covered by such insurance. In case of
any loss involving damage to Equipment or Inventory when subsection (c) of this
Section 8 is not applicable, Grantor shall make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by Grantor pursuant to this Section 8 shall be
paid to Grantor as reimbursement for the costs of such repairs or replacements.
(c) Upon (i) the occurrence and during the continuation
of any Event of Default or (ii) the actual or constructive loss in excess of
$100,000 per occurrence of any Equipment or Inventory, all insurance payments in
respect of such Equipment or Inventory shall be paid to and applied by Secured
Party as specified in Section 20.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED
CONTRACTS.
(a) Grantor shall remain organized under the laws of the
State of Delaware, and shall maintain its organization number as specified in
Schedule I hereto. Grantor will hold
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and preserve such records and chattel paper and will permit representatives of
Secured Party at any time during normal business hours upon reasonable notice to
the Grantor to inspect and make abstracts from such records and chattel paper.
Promptly upon the request of Secured Party, Grantor shall deliver to Secured
Party complete and correct copies of each Related Contract.
(b) Grantor shall, for not less than 5 years from the
date on which such Account arose, maintain (i) complete records of each Account,
including records of all payments received, credits granted and merchandise
returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to Grantor under the Accounts and Related Contracts. In connection
with such collections, Grantor may take such action as Grantor may deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the right
at any time, upon the occurrence and during the continuation of an Event of
Default and upon written notice to Grantor of its intention to do so, to notify
the account debtors or obligors under any Accounts of the assignment of such
Accounts to Secured Party and to direct such account debtors or obligors to make
payment of all amounts due or to become due to Grantor thereunder directly to
Secured Party, to notify each person maintaining a lockbox or similar
arrangement to which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing collections on checks
and other payment items from time to time sent to or deposited in such lockbox
or other arrangement directly to Secured Party and, upon such notification and
at the expense of Grantor, to enforce collection of any such Accounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as Grantor might have done. After receipt by Grantor of
the notice from Secured Party referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including checks and other instruments)
received by Grantor in respect of the Accounts and the Related Contracts shall
be received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of Grantor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section
20, and (ii) Grantor shall not adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.
SECTION 10. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED AGREEMENTS.
(a) Grantor shall at its expense:
(i) perform and observe all terms and provisions
of the Assigned Agreements to be performed or observed by it, maintain
the Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their terms, and take all such action to
such end as may be from time to time requested by Secured Party; and
(ii) furnish to Secured Party, promptly upon
receipt thereof, copies of all notices, requests and other documents
received by Grantor under or pursuant to the Assigned Agreements, and
from time to time (A) furnish to Secured Party such
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information and reports regarding the Assigned Agreements as Secured
Party may reasonably request and (B) upon request of Secured Party make
such demands and requests for information and reports or for action as
Grantor is entitled to make under the Assigned Agreements.
(b) Upon and during the continuance of an Event of
Default, Grantor shall not:
(i) cancel or terminate any of the Assigned
Agreements or consent to or accept any cancellation or termination
thereof,
(ii) materially amend or otherwise materially
modify the Assigned Agreements or give any consent, waiver or approval
thereunder;
(iii) waive any default under or breach of the
Assigned Agreements;
(iv) consent to or permit or accept any
prepayment of amounts to become due under or in connection with the
Assigned Agreements, except as expressly provided therein; or
(v) take any other action in connection with the
Assigned Agreements that would impair the value of the interest or
rights of Grantor thereunder or that would impair the interest or
rights of Secured Party.
SECTION 11. DEPOSIT ACCOUNTS. Upon the occurrence and during the
continuation of an Event of Default, Secured Party exercise dominion and control
over, and refuse to permit further withdrawals (whether of money, securities,
instruments or other property) from any deposit accounts maintained with Secured
Party constituting part of the Collateral. Secured Party may, to the fullest
extent, further exercise offset rights with respect to such deposit accounts.
SECTION 12. LICENSE OF PATENTS, TRADEMARKS, COPYRIGHTS. Grantor hereby
assigns, transfers and conveys to Secured Party, effective upon the occurrence
of and during the continuance of any Event of Default, the nonexclusive right
and license to use all trademarks, tradenames, copyrights, patents or technical
processes owned or used by Grantor that relate to the Collateral and any other
collateral granted by Grantor as security for the Secured Obligations, together
with any goodwill associated therewith, all to the extent necessary to enable
Secured Party to use, possess and realize on the Collateral and to enable any
successor or assign to enjoy the benefits of the Collateral. This right and
license shall inure to the benefit of all successors, assigns and transferees of
Secured Party and its successors, assigns and transferees, whether by voluntary
conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of
foreclosure or otherwise. Such right and license is granted free of charge,
without requirement that any monetary payment whatsoever be made to Grantor.
SECTION 13. TRANSFERS AND OTHER LIENS. Grantor shall not:
(a) without the consent of Secured Party, not to be
unreasonably withheld, sell, lease, license, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral other than in the
ordinary course of business; or
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(b) except for the security interest created by this
Agreement, create or suffer to exist any lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any Person, other
than (i) liens in existence on the date hereof, (ii) liens for taxes not yet due
or being contested in good faith, (iii) liens on assets purchased with
nonrecourse purchase money indebtedness, (iv) liens imposed by law, in the
ordinary course of business that are being contested in good faith or do not
materially detract from the value of the Collateral, and (v) liens relating to
bankers liens and other rights of setoff.
SECTION 14. VOTING RIGHTS; PROFITS, INTEREST AND DIVIDENDS.
(a) So long as no Event of Default shall have occurred
and be continuing:
(i) Grantor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Collateral
or any part thereof (including without limitation rights of approval
arising under any Joint Venture Agreement or LLC Agreement and the
right to manage and administer the business of any Joint Venture or
LLC) for any purpose not inconsistent with the terms of this Agreement;
provided, however, that Grantor shall not exercise or refrain from
exercising any such right if Secured Party shall have notified Grantor
that, in Secured Party's judgment, such action would have a material
adverse effect on the value of the Collateral or any part thereof; and
provided, further, that Grantor shall give Secured Party at least five
business days' prior written notice of the manner in which it intends
to exercise, or the reasons for refraining from exercising, any such
right. It is understood, however, that neither (A) the voting by
Grantor for, or Grantor's consent to, the election of directors at a
regularly scheduled annual or other meeting of stockholders or with
respect to incidental matters at any such meeting nor (B) Grantor's
consent to or approval of any action in the ordinary course of business
otherwise permitted under this Agreement shall be deemed inconsistent
with the terms of this Agreement within the meaning of this Section
14(a)(i), and no notice of any such voting or consent need be given to
Secured Party;
(ii) Grantor shall be entitled to receive, retain
and utilize any and all payments, including but not limited to profits,
dividends and other distributions, paid in respect of the Collateral;
provided, however, that any and all
(A) profits, dividends, and other
distributions paid or payable other than in cash in respect
of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) profits, dividends and other
distributions paid or payable in cash in respect of any
Collateral in connection with a partial or total liquidation
or dissolution or in connection with a reduction of capital,
and
(C) cash paid, payable or otherwise
distributed in redemption of or in exchange for any
Collateral, shall be, and shall forthwith be delivered to
Secured Party to hold as Collateral (in the case of paragraph
(A) or apply in accordance with Section 20 (in the case of
paragraphs (B) and (C)) and shall, if
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received by Grantor, be received in trust for the benefit of
Secured Party, be segregated from the other property or funds
of Grantor and be forthwith delivered to Secured Party as
Collateral in the same form as so received (with all necessary
endorsements).
(iii) Secured Party shall execute and deliver (or
cause to be executed and delivered) to Grantor all such proxies and
other instruments as Grantor may from time to time reasonably request
for the purpose of enabling Grantor to exercise the voting and other
consensual rights that it is entitled to exercise pursuant to Section
14(a)(i) and to receive the profits, dividends and other distributions
that it is authorized to receive and retain pursuant to Section
14(a)(ii).
(b) Upon the occurrence and during the continuation of an
Event of Default:
(i) upon written notice from Secured Party to
Grantor, any or all rights of Grantor to exercise the voting and other
consensual rights, and the rights to manage and administer the business
and affairs of the Joint Ventures and LLCs, that they would otherwise
be entitled to exercise pursuant to Section 14(a)(i) shall cease, and
all such rights (or such of those rights as Secured Party may have
elected) shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other
consensual rights, subject to any enforceable provisions of the Joint
Venture Agreements;
(ii) all rights of Grantor to receive any and all
payments under or in connection with any Joint Venture Agreement and
LLC Agreement, including but not limited to the profits, dividends, and
other distributions that they otherwise would be authorized to receive
and retain pursuant to Section 14(a)(ii), shall cease, and all such
rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold such payments as
Collateral; and
(iii) all payments that are received by Grantor
contrary to the provisions of Section 14(b)(ii) are received in trust
for the benefit of Secured Party, shall be segregated from other funds
of Grantor and shall be forthwith paid over to Secured Party as
Collateral in the same form as so received (with any necessary
endorsement).
SECTION 15. ASSIGNMENT OF CONCENTRATION AND COLLECTION ACCOUNTS. In
addition to, and not by way of limitation of, the granting of a security
interest in the Collateral pursuant to Section 1, Grantor hereby grants, sells,
conveys, transfers, assigns and sets over to Secured Party, for its benefit and
the ratable benefit of Lenders, all of Grantor's right, title and interest in
and to all deposit accounts, including all deposit accounts maintained at PNC
Bank, National Association, and its successors and assigns for the concentration
and collection of funds, all deposit accounts maintained with Lenders and their
successors and assigns for the concentration and collection of funds or
otherwise, including without limitation, all deposit accounts maintained with
Bankers Trust Company and its successors and assigns.
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SECTION 16. SECURED PARTY APPOINTMENT ATTORNEY-IN-FACT. Upon the
occurrence and during the continuation of an Event of Default, Grantor hereby
irrevocably appoints Secured Party as Grantor's attorney-in-fact, with full
authority in the place and stead of Grantor and in the name of Grantor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including without
limitation:
(a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to Section 8;
(b) to ask for, demand, collect, xxx for, recover,
compound, receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(c) to receive, endorse and collect (i) any drafts or
other instruments, documents and chattel paper in connection with clauses (a)
and (b) above and (ii) all instruments made payable to Grantor representing any
payment of profits, dividends or any other distribution in respect of any of the
Collateral;
(d) to file any claims or take any action or institute
any proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or liens levied or placed
upon or threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by Secured Party in
its sole discretion, any such payments made by Secured Party to become
obligations of Grantor to Secured Party, due and payable immediately without
demand;
(f) to sign and endorse 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 relating to the Collateral; and
(g) 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 Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantor's expense, at any
time or from time to time, all acts and things that Secured Party deems
necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 17. SECURED PARTY MAY PERFORM. If Grantor fails to perform any
agreement contained herein, Secured Party upon ten (10) days prior written
notice to Grantor may itself perform, or cause performance of, such agreement,
and the reasonable expenses of Secured Party incurred in connection therewith
shall be payable by Grantor.
SECTION 18. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise
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any such powers. Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property.
SECTION 19. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in addition
to all other rights and remedies provided for herein or otherwise available to
it under applicable law, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "CODE") (whether or not the Code applies to the affected
Collateral), and also may (i) require Grantor to, and Grantor hereby agrees that
it will at its expense and upon request of Secured Party forthwith, assemble all
or part of the Collateral as directed by Secured Party and make it available to
Secured Party at a place to be designated by Secured Party that is reasonably
convenient to both parties, (i) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (iii)
prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent Secured Party deems appropriate, (iv) take
possession of Grantor's premises or place custodians in exclusive control
thereof remain on such premises and use the same and any of Grantor's equipment
for the purpose of completing any work in process, taking any actions described
in the preceding clause (iii) and collecting any Secured Obligation, and (v)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or prices
and upon such other terms as Secured Party may deem commercially reasonable
irrespective of the impact of any such sales on the market price of such
Collateral. Secured Party has no obligation to clean up or otherwise prepare the
Collateral for sale. Secured Party or any Lender may be the purchaser of any or
all of the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders, shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Grantor, and Grantor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to Grantor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Secured Party shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Grantor hereby
waives any claims against Secured Party arising by reason of the fact that the
16
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if Secured
Party accepts the first offer received and does not offer such Collateral to
more than one offeree. Grantor waives any right that it may have to require
Secured Party to pursue any third person for any of the Secured Obligations. If
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Secured Obligations, Grantor shall be liable for the deficiency
and the reasonable fees of any attorneys employed by Secured Party to collect
such deficiency.
(b) Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as from time to time
amended (the "SECURITIES ACT"), and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Collateral conducted without prior registration or qualification of such
Collateral under the Securities Act and/or such state securities laws, to limit
purchasers to those who will agree, among other things, to acquire the
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Grantor acknowledges that any such private sales
may be at prices and on terms less favorable than those obtainable through a
public sale without such restrictions (including, without limitation, a public
offering made pursuant to a registration statement under the Securities Act)
and, notwithstanding such circumstances, Grantor agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner and
that Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period of time necessary
to permit any Joint Venture or LLC to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such Joint Ventures or LLCs would, or should, agree to
so register it.
(c) If Secured Party determines to exercise its right to
sell any or all of the Collateral, upon written request, Grantor shall and shall
cause all Joint Ventures from time to time to furnish to Secured Party all such
information as Secured Party may request in order to determine the number and
nature of the interests included in the Collateral that may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.
For purposes of this Agreement, "DEFAULT" or "EVENT OF DEFAULT" shall mean
Grantor's failure to pay when due any amounts owed to Secured Party under the
Promissory Note.
SECTION 20. APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Secured Party, be held by Secured Party
as Collateral for, and/or then, or at any other time thereafter, applied in full
or in part by Secured Party against, the Secured Obligations in the following
order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and
all other expenses, liabilities and advances made or incurred
by Secured Party in connection therewith, and all advances
made by Secured Party hereunder for the account of Grantor,
and to the payment of all
17
costs and expenses paid or incurred by Secured Party in
connection with the exercise of any right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) in such order as
Secured Party shall elect; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.
SECTION 21. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the indefeasible payment in full
of the Secured Obligations, (b) be binding upon Grantor, its successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
may assign or otherwise transfer any Note held by it to any other Person, and
such other person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the indefeasible payment in
full of all Secured Obligations, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Grantor. Upon any
such termination Secured Party will, at Grantor's expense, execute and deliver
to Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 22. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement.
(b) Secured Party shall have the right to resign its
duties hereunder by giving Grantor and the Lenders fifteen (15) days written
notice. Upon notice of any Secured Party's resignation, the Lenders shall
appoint a successor to the Secured Party who shall be a commercial bank or trust
company reasonably acceptable to Grantor. If no successor is appointed by the
Lenders and found acceptable to Grantor by the twentieth (20th) business day
after the date of such notice of resignation, the Secured Party's resignation
shall become effective and the Lenders shall thereafter perform all the duties
of the Secured Party hereunder until such time, if any, as the Lenders appoint a
successor to the Secured Party as provided above and provided further that
Lenders' collective expenses, costs and fees payable by Grantor while acting as
Secured Party hereunder may not materially exceed those of the initial Secured
Party.
SECTION 23. CONFLICT WITH TRADEMARK SECURITY AGREEMENT. To the extent
that the provisions of this Agreement with respect to that Collateral described
in Section 1(f) hereof conflict with the provisions of any Trademark Security
Agreement (the "TRADEMARK SECURITY AGREEMENT"), the provisions of the Trademark
Security Agreement shall control. Nothing in the
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foregoing sentence shall affect the validity or enforceability of any provision
of this Agreement with respect to any other Collateral.
SECTION 24. AMENDMENTS. No amendment or waiver of any provision of this
Agreement, or consent to any departure by Grantor herefrom, shall in any event
be effective unless the same shall be in writing and signed by Secured Party,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given.
SECTION 25. NOTICES. Any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served, or
sent by facsimile transmission or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service, upon receipt of facsimile transmission, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages hereof or, as to either
party, such other address as shall be designated by such party in a written
notice delivered to the other party hereto.
SECTION 26. FAILURE OF INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 27. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 28. HEADINGS. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 29. GOVERNING LAW; TERMS. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TENNESSEE, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES. NOTWITHSTANDING THE FOREGOING, THE SECURITY
INTERESTS GRANTED HEREUNDER SHALL BE GOVERNED AND DETERMINED BY THE UNIFORM
COMMERCIAL CODE IN EFFECT IN DELAWARE, AS SUCH CODE MAY BE AMENDED (INCLUDING
AMENDMENTS RELATED TO REVISED ARTICLE 9) OR SUCH OTHER APPLICABLE LAW (AS
AMENDED) THAT INCREASES THE VALIDITY AND ENFORCEABILITY OF THE SECURITY
INTERESTS GRANTED HEREUNDER, IT BEING THE INTENT OF THE PARTIES THAT THE
SECURITY INTERESTS HEREUNDER BE GIVEN THE BROADEST POSSIBLE SCOPE. Unless
otherwise defined
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herein, capitalized terms used in Articles 8 and 9 of the Uniform Commercial
Code, as it is currently enacted or may hereafter be amended, under the laws of
the State of Delaware shall have the meanings set forth therein.
SECTION 30. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MUST BE BROUGHT IN AN APPROPRIATE FORUM IN NASHVILLE, DAVIDSON COUNTY,
TENNESSEE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT GRANTOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. Grantor hereby agrees that service of
all process in any such proceeding in any such court may be made by registered
or certified mail, return receipt requested, to Grantor at its address provided
below, being hereby acknowledged by Grantor to be sufficient for personal
jurisdiction in any action against Grantor in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law.
SECTION 31. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Grantor and Secured Party each
acknowledge that this waiver is a material inducement for Grantor and Secured
Party to enter into a business relationship, that Grantor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Grantor and
Secured Party further warrant and represent that each has reviewed this waiver
with its legal counsel, and that each knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
SECTION 32. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. Delivery of an executed counterpart to this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
20
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
AMERICAN HOMEPATIENT, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
Title: Vice President & Secretary
Notice Address:
Maryland Farms Office Park
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention:
Telecopy:
BANK OF MONTREAL,
as Secured Party
By: __________________________________
Name: ____________________________
Title: ___________________________
Notice Address:
Attn: Xxxxxxx Turf
000 XxXxxxx Xxxxxx, 00X
Xxxxxxx, Xxxxxxxx 00000
21
SCHEDULE I
TO SECOND AMENDED AND RESTATED BORROWER SECURITY AGREEMENT
Chief Place of Business: Maryland Farms Office Park
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Chief Executive Office: Maryland Farms Office Park
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Office where Grantor keeps it Maryland Farms Office Park records
regarding Accounts and 0000 Xxxxxxxx Xxx, Xxxxx 000
all originals of all tangible Xxxxxxxxx, Xxxxxxxxx 00000-0000
chattel paper:
Organization Number: 2272797
22
SCHEDULE II
TO SECOND AMENDED AND RESTATED BORROWER SECURITY AGREEMENT
BUSINESS NAMES
23
SCHEDULE III
TO SECOND AMENDED AND RESTATED BORROWER SECURITY AGREEMENT
DEPOSIT ACCOUNTS
24
EXHIBIT A
LENDERS
25
