EXHIBIT 10.84
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of August 30, 1996 between SUGARLOAF MOUNTAIN
CORPORATION, a Maine corporation, MOUNTAINSIDE, a Maine corporation, and
SUGARTECH, a Maine corporation, (each a "Debtor" and collectively, the
"Debtors") and FLEET NATIONAL BANK, as agent (the "Agent") for itself and the
other lenders which are, or may in the future become, parties to that certain
Credit Agreement (as hereinafter defined).
Recitals
Pursuant to a joinder of even date herewith, the Debtors are parties to
that certain Credit Agreement dated as of June 28, 1996 (as amended and in
effect from time to time, the "Credit Agreement"), among the Debtors, the banks
and other financial institutions from time to time parties thereto (together
with their successors and assigns, the "Lenders"), and the Agent. Capitalized
terms used and not defined herein shall have the same definition as in the
Credit Agreement. Pursuant to the Credit Agreement, the Lenders have, upon the
terms and subject to the conditions contained therein, agreed to make loans and
otherwise extend credit to the Debtors. It is a condition precedent to the
Lenders making any loans or otherwise extending credit to the Debtors under the
Credit Agreement that the Debtors execute and deliver to the Agent, for the
benefit of the Lenders and the Agent, this Security Agreement, as security for
the payment and performance of all obligations of each of the Debtors to the
Agent and the Lenders.
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1. GRANT OF SECURITY
Section 1.1 Grant of Security. Each Debtor hereby grants to the Agent a
continuing security interest ("Security Interest") in and to all personal
property and fixtures of the Debtor, whether now or hereafter existing or now or
hereafter acquired and wherever located, including all equipment, accounts,
inventory and general intangibles, all as more fully described as follows (the
"Collateral"):
(a) All money, cash, bank accounts, deposit accounts, goods,
inventory, equipment, computer hardware and software, instruments,
securities, documents, documents of title, chattel paper, accounts,
accounts receivable, lease receivables and leases including but not
limited to, rights to rentals thereunder and the Debtor's reversionary
interest in property leased thereunder and any equity rights in leases
sold to third parties, contract rights, licenses, general intangibles,
copyrights, patents and patents pending, trademarks and goodwill, trade
secrets, credits, claims, demands and all other property of the Debtor
(including but not limited to leasehold improvements); but excluding the
capital stock and other equity interests held by the Debtors in their
Subsidiaries and any assets held by U.S. Trust Company of New York (or its
successor), as Collateral Agent under the Pledge and Disbursement
Agreement of even date herewith, by and between American Skiing Company
and U.S. Trust Company of New York;
(b) All equipment, including without limitation all fixtures,
machinery, equipment, molds, dies, motor vehicles, and other goods whether
now owned or hereafter acquired by the Debtor, wherever located, all
replacements, substitutions and all parts thereof and all accessions
thereto, as well as all of the Debtor's right, title and interest in and
to any such goods now or hereafter held or used by the Debtor under any
lease, lease-purchase, conditional sales, use or other agreements under
which the Debtor is entitled to the use and possession thereof, with any
other rights and benefits flowing from such agreements, all as may be used
or useful in connection with the Debtor's business as now or hereafter
carried on, any operations incidental to or associated with the same, or
for any other purpose (any and all such equipment, machinery and fixtures,
parts and accessions being the "Equipment");
(c) All inventory in all of its forms, wherever located, now or
hereafter existing including, but not limited to (i) raw materials and
work in process therefor, finished goods thereof, and materials used or
consumed in the manufacture or production thereof, and (ii) goods which
are returned to or repossessed by the Debtor and all accessions thereto
and products thereof (any and all such inventory, accessions and products
being the "Inventory");
(d) All accounts receivable, including without limitation accounts,
contracts, contract rights, chattel paper, instruments, licenses and other
obligations of any kind whether now existing or hereafter arising,
including without limitation any arising out of or in connection with the
operation, management or rental by Debtor of skiing, recreational,
commercial, hotel, retail, conference facility, food service, condominium,
residential, and any other type of real estate, and all rights now or
hereafter existing in and to all security agreements, leases, and other
contracts securing or otherwise relating to any such accounts, contract
rights, chattel paper, instruments, general intangibles or obligations
(any and all such accounts, contract rights, chattel paper, instruments,
general intangibles and obligations being the "Receivables," and any and
all such leases, security agreements and other contracts being the
"Contracts");
(e) All general intangibles including without limitation,
tradenames, trademarks, servicemarks, tax refunds, the corporate name and
all product names; and
(f) All products and proceeds of any and all of the foregoing
Collateral and, to the extent not otherwise included, all payments under
insurance (whether or not the Agent 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.
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Section 1.2 Security for Obligations. This Agreement and the Security
Interest shall secure the payment and performance of the Obligations.
ARTICLE 2
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Debtor represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this Agreement,
as follows:
Section 2.1 Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve and perfect the security interest
granted by such Debtor to the Agent hereby in respect of the Collateral have
been accomplished and the security interest granted to the Agent pursuant to
this Agreement in and to the Collateral constitutes, upon satisfaction of such
filings, registrations and recordings, a perfected security interest therein (to
the extent that the same can be perfected by filing, registration or recording
and excepting therefore railroad cars, locomotives and other rolling stock,
titled vehicles and aircraft) prior to the rights of all other Persons therein
(other than any such rights pursuant to Permitted Liens) and subject to no other
Liens (other than Permitted Liens) and is entitled to all the rights, priorities
and benefits afforded by the Uniform Commercial Code to perfected security
interests.
Section 2.2 No Liens. Such Debtor is, and as to Collateral acquired by it
from time to time after the date hereof such Debtor will be, the owner of all
Collateral pledged by it hereunder free from any Lien, security interest,
encumbrance or other right, title or interest of any Person (other than
Permitted Liens), and such Debtor shall defend the Collateral against all claims
and demands of all Persons at any time claiming the same or any interest therein
(other than in connection with Permitted Liens) adverse to the Agent.
Section 2.3 Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than financing statements filed in respect of
Permitted Liens), and so long as any Lender Obligations or commitments with
respect thereto are outstanding, such Debtor will not execute or authorize to be
filed in any public office any financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except financing statements filed or to be filed in
respect of and covering the security interests granted hereby by such Debtor or
in connection with Permitted Liens.
Section 2.4 Chief Executive Office; Records. As of the date hereof, the
chief executive office of such Debtor is located at the address indicated on
Exhibit A hereto for such Debtor. Such Debtor will not move its chief executive
office except to such new location as such Debtor may establish in accordance
with the last sentence of this Section 2.4. A complete set of books of account
and records of such Debtor relating to the Receivables and the
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Contract Rights are, and will continue to be, kept at such chief executive
office, at one or more of the other record locations set forth on Exhibit A
hereto for such Debtor or at such new locations as such Debtor may establish in
accordance with the last sentence of this Section 2.4. All Receivables and
Contract Rights of such Debtor are, and will continue to be, maintained at, and
controlled and directed (including, without limitation, for general accounting
purposes) from, the office locations described above or such new location
established in accordance with the last sentence of this Section 2.4. No Debtor
shall establish new locations for such offices until (a) it shall have given to
the Agent not less than 30 days' prior written notice of its intention to do so,
clearly describing such new location and providing such other information in
connection therewith as the Agent may reasonably request and (b) with respect to
such new location, it shall have taken all action reasonably satisfactory to the
Agent, to maintain the security interest of the Agent in the Collateral intended
to be granted hereby at all times fully perfected and in full force and effect.
Section 2.5 Location of Inventory and Equipment. As of the date hereof,
all Inventory and Equipment held by each Debtor is located at one of the
locations shown on Exhibit B hereto for such Debtor. Each Debtor agrees that all
Inventory and Equipment now held or subsequently acquired by it shall be kept at
(or shall be in transport to) any one of the locations shown on Exhibit B
hereto, or such new location as such Debtor may establish in accordance with the
last sentence of this Section 2.5. Any Debtor may establish a new location for
Inventory and Equipment only if (a) it shall have given to the Agent not less
than 30 days' prior written notice of its intention so to do, clearly describing
such new location and providing such other information in connection therewith
as the Agent may reasonably request and (b) with respect to such new location,
it shall have taken all action reasonably satisfactory to the Agent to maintain
the security interest of the Agent in the Collateral intended to be granted
hereby at all times fully perfected and in full force and effect.
Section 2.6 Recourse. This Agreement is made with full recourse to each
Debtor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Debtor contained herein, in the other Lender
Agreements and otherwise in writing in connection herewith or therewith.
Section 2.7 Trade Names; Change of Name. As of the date hereof, no Debtor
has or operates in any jurisdiction under, or in the preceding 12 months has had
or has operated in any jurisdiction under, any trade names, fictitious names or
other names except its legal name. No Debtor shall change its legal name or
assume or operate in any jurisdiction under any trade, fictitious or other name
and new names established in accordance with the last sentence of this Section
2.7. No Debtor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name until (a) it shall have given to the Agent not less
than 30 days' prior written notice of its intention so to do, clearly describing
such new name and the jurisdictions in which such new name shall be used and
providing such other information in connection therewith as the Agent may
reasonably request and (b) with respect to such new name, it shall have taken
all action reasonably requested by the Agent, to maintain the security
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interest of the Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect.
ARTICLE 3
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
Section 3.1 Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Debtor shall be deemed to have represented
and warranted that such Receivable, and all records, papers and documents
relating thereto are what they purport to be in all material respects, and that
such Receivable will, to the best knowledge of such Debtor, evidence true and
valid obligations of the account debtor named therein.
Section 3.2 Maintenance of Records. Each Debtor will keep and maintain at
its own cost and expense, records of its Receivables and Contracts and such
Debtor will make the same available on an Debtor's premises to the Agent for
inspection, at such Debtor's own cost and expense, at any and all reasonable
times upon reasonable prior notice to such Debtor. Upon the occurrence and
during the continuance of an Event of Default and at the reasonable request of
the Agent, such Debtor shall, at its own cost and expense, deliver all tangible
evidence of its Receivables and Contract Rights (including, without limitation,
all documents evidencing the Receivables and all Contracts) and such books and
records to the Agent or to its representatives (copies of which evidence and
books and records may be retained by such Debtor). If the Agent so directs, upon
the occurrence and during the continuance of an Event of Default such Debtor
shall legend, in form and manner satisfactory to the Agent, the Receivables and
the Contracts, as well as books, records and documents of such Debtor evidencing
or pertaining to such Receivables and Contracts with an appropriate reference to
the fact that such Receivables and Contracts have been assigned to the Agent and
that the Agent has a security interest therein.
Section 3.3 Direction to Account Debtors; Contracting Parties; etc. Upon
the occurrence and during the continuance of an Event of Default, and if the
Agent so directs any Debtor, such Debtor agrees (a) to cause all payments on
account of the Receivables and Contracts to be made directly to the Cash
Collateral Account, (b) that the Agent may, at its option, directly notify the
obligors with respect to any Receivables and/or under any Contracts to make
payments with respect thereto as provided in preceding clause (a) and (c) that
the Agent may enforce collection of any such Receivables and Contracts and may
adjust, settle or compromise the amount of payment thereof, in the same manner
and to the same extent as such Debtor. Without notice to or assent by any
Debtor, the Agent may apply any or all amounts then in, or thereafter deposited
in, the Cash Collateral Account which application shall be effected in the
manner provided in Section 7.4 of this Agreement. The reasonable costs and
expenses (including reasonable attorneys' fees) of collection, whether incurred
by the relevant Debtor or the Agent, shall be borne by the relevant Debtor. The
Agent shall deliver a
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copy of each notice referred to in the preceding clause (b) to the relevant
Debtor; provided, that the failure by the Agent to so notify such Debtor shall
not affect the effectiveness of such notice or the other rights of the Agent
created by this Section 3.3.
Section 3.4 Modification of Terms; etc. No Debtor shall rescind or cancel
any indebtedness evidenced by any Receivable or under any Contract, or modify
any term thereof or make any adjustment with respect thereto, or extend or renew
the same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of the Agent, except in accordance
with such Debtor's reasonable business practices.
Section 3.5 Collection. Each Debtor shall endeavor in accordance with
reasonable business practices to cause to be collected from the account debtor
named in each of its Receivables or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Receivable or Contract,
and apply forthwith upon receipt thereof all such amounts as are so collected to
the outstanding balance of such Receivable or under such Contract. The
reasonable costs and expenses (including, without limitation, attorneys' fees)
of collection, if incurred by an Debtor or the Agent, shall be borne by the
relevant Debtor.
Section 3.6 Instruments. If any Debtor owns or acquires any Instrument
constituting Collateral, such Debtor will within 10 Business Days notify the
Agent thereof, and upon request by the Agent will promptly deliver such
Instrument to the Agent appropriately endorsed to the order of the Agent as
further security hereunder.
ARTICLE 4
SPECIAL PROVISIONS CONCERNING TRADEMARKS
Section 4.1 Additional Representations and Warranties. Each Debtor
represents and warrants that, as of the date hereof, it is the true and lawful
owner of all right, title and interest to or otherwise has the right to use the
registered Marks listed in Exhibit C hereto for such Debtor and that, as of the
date hereof said listed Marks constitute all the marks and applications for
marks registered in the United States Patent and Trademark Office that such
Debtor presently owns or uses in connection with its business. Each Debtor
represents and warrants that it owns, is licensed to use or otherwise has the
right to use all material Marks that it uses. Each Debtor further warrants that
it has no knowledge of any third party claim that any aspect of such Debtor's
present or contemplated business operations infringes or will infringe any
trademark, service xxxx or trade name in any respect which could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of the
Borrowers and their Restricted Subsidiaries taken as a whole. Each Debtor
represents and warrants that except as listed on
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Exhibit C, as of the date hereof it is the beneficial and record owner of all
trademark registrations and applications listed in Exhibit C hereto for such
Debtor and that said registrations are valid and subsisting, and that such
Debtor is not aware of any third-party claim that any of said registrations in
respect of any material Xxxx is invalid or unenforceable. Each Debtor hereby
grants to the Agent an absolute power of attorney to sign, upon the occurrence
and during the continuance of an Event of Default, any document which may be
required by the United States Patent and Trademark Office in order to effect an
absolute assignment of all right, title and interest in each Xxxx, and record
the same.
Section 4.2 Infringements. Each Debtor agrees, promptly upon learning
thereof, to notify the Agent in writing of the name and address of, and to
furnish such pertinent information that may be available with respect to, any
party who such Debtor believes is infringing or diluting or otherwise violating
in any material respect any of such Debtor's rights in and to any material Xxxx,
or with respect to any party claiming that such Debtor's use of any material
Xxxx violates in any material respect any property right of that party. Each
Debtor further agrees to prosecute any Person infringing any material Xxxx in
accordance with reasonable business practices.
Section 4.3 Preservation of Marks. Each Debtor agrees to use its Marks as
required in each of the applicable jurisdictions during the time in which this
Agreement is in effect, sufficiently to preserve such Marks (and any
registrations thereto) as trademarks or service marks under the laws of the
United States and any other applicable law; provided, that, prior to any
Default, no Debtor shall be obligated to preserve any Xxxx in the event such
Debtor determines, in its reasonable business judgment, that the preservation of
such Xxxx is no longer desirable in the conduct of its business.
Section 4.4 Maintenance of Registration. Each Debtor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. xx.xx. 1051 et seq. to maintain trademark registrations, including but
not limited to affidavits of use and applications for renewals of registration
in the United States Patent and Trademark Office for all of its registered Marks
pursuant to 15 U.S.C. xx.xx. 1058(a), 1059 and 1065, and shall pay all fees and
disbursements in connection therewith and shall not abandon any such filing of
affidavit of use or any such application of renewal prior to the exhaustion of
all administrative and judicial remedies without prior written consent of the
Agent; provided, that, prior to any Default, no Debtor shall be obligated to
maintain any Xxxx in the event that such Debtor determines, in its reasonable
business judgment, that the maintenance of such Xxxx is no longer necessary or
desirable in the conduct of its business.
Section 4.5 Future Registered Marks. If any Xxxx registration issues
hereafter to any Debtor as a result of any application now or hereafter pending
before the United States Patent and Trademark Office, within 60 days of receipt
of such certificate, such Debtor shall deliver to the Agent a copy of such
certificate, and an assignment for security in such Xxxx, to the Agent and at
the expense of such Debtor, confirming the assignment for security in such
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Xxxx to the Agent hereunder, the form of such security to be substantially the
same as the form hereof or in such other form as may be reasonably satisfactory
to the Agent.
Section 4.6 Remedies. If an Event of Default shall occur and be
continuing, the Agent may take any or all of the following actions: (a) declare
the entire right, title and interest of such Debtor in and to each of the Marks,
together with all trademark rights and rights of protection to the same, vested
in the Agent for the benefit of the Lenders, in which event such rights, title
and interest shall immediately vest, in the Agent for the benefit of the
Lenders, and the Agent shall be entitled to exercise the power of attorney
referred to in Section 4.1 hereof to execute, cause to be acknowledged and
notarized and record said absolute assignment with the applicable agency; (b)
take and use or sell the Marks and the goodwill of such Debtor's business
symbolized by the Marks and the right to carry on the business and use the
assets of such Debtor in connection with which the Marks have been used; and (c)
direct such Debtor to refrain, in which event such Debtor shall refrain, from
using the Marks in any manner whatsoever, directly or indirectly, and, if
requested by the Agent, change such Debtor's corporate name to eliminate
therefrom any use of any Xxxx and execute such other and further documents that
the Agent may request to further confirm this and to transfer ownership of the
Marks and registrations and any pending trademark application in the United
States Patent and Trademark Office to the Agent.
Section 4.7 Collateral Assignment. In addition to, and not in limitation
of, the grant of the security interest in Article 1 above, each Debtor hereby
grants, assigns, transfers, conveys and sets over to the Agent, for the benefit
of the Lenders, Debtor's entire right, title and interest in and to the Marks
and Proceeds. Debtors have delivered to the Agent an Assignment of Trademarks
(the "Assignment") and the Agent is hereby authorized to file such Assignment
with the United States Patent and Trademark Office. Upon payment in full of all
Obligations, the Agent will assign the Marks to the Debtors.
ARTICLE 5
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
Section 5.1 Additional Representations and Warranties. Each Debtor
represents and warrants that, as of the date hereof, it is the true and lawful
owner of all rights in (a) all material Trade Secrets and Proprietary
Information necessary to operate the business of such Debtor, (b) the Patents
listed in Exhibit D hereto for such Debtor and that said Patents constitute all
the patents and applications for patents that such Debtor owns on the date
hereof and (c) the Copyrights listed in Exhibit E hereto for such Debtor and
that said Copyrights constitute all registrations of copyrights and applications
for copyright registrations that such Debtor owns on the date hereof. Each
Debtor further warrants that it has no knowledge of any third party claim that
any aspect of such Debtor's present or contemplated business operations
infringes or will infringe any patent or any copyright or such Debtor has
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misappropriated any Trade Secret or Proprietary Information, in each case in any
respect which could reasonably be expected to have a material adverse effect on
the business, operations, property, assets, liabilities or condition (financial
or otherwise) of the Borrowers and their Restricted Subsidiaries taken as a
whole. Each Debtor hereby grants to the Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of an Event of Default, any
document which may be required by the United States Patent and Trademark Office
or the United States Copyright Office in order to effect an absolute assignment
of all right, title and interest in each Patent and Copyright, and to record the
same.
Section 5.2 Infringements. Each Debtor agrees, promptly upon learning
thereof, to furnish the Agent in writing with all pertinent information
available to such Debtor with respect to any infringement, contributing
infringement or active inducement to infringe in any material respect any
material Patent or Copyright or to any claim that the practice of any material
Patent or the use of any material Copyright violates in any material respect any
property right of a third party, or with respect to any misappropriation of any
material Trade Secret Right or any claim that practice of any material Trade
Secret Right violates in any material respect any property right of a third
party. Each Debtor further agrees, to the extent consistent with reasonable
business practices, to prosecute any Person infringing any Patent or Copyright
or any Person misappropriating any Trade Secret Right.
Section 5.3 Maintenance of Patents. At its own expense, each Debtor shall
make timely payment of all post-issuance fees required pursuant to 35 U.S.C. ss.
41 to maintain in force rights under each Patent, absent prior written consent
of the Agent; provided, that no Debtor shall be obligated to maintain any Patent
in the event such Debtor determines, in its reasonable business judgment, that
the maintenance of such Patent is no longer necessary or desirable in the
conduct of its business.
Section 5.4 Prosecution of Patent Application. At its own expense, each
Debtor shall diligently prosecute all applications for Patents for such Debtor
and shall not abandon any such application prior to exhaustion of all
administrative and judicial remedies, absent written consent of the Agent;
provided, that no Debtor shall be obligated to prosecute any application in the
event such Debtor determines, in its reasonable business judgment, that the
prosecuting of such application is no longer necessary or desirable in the
conduct of its business.
Section 5.5 Other Patents and Copyrights. Within 60 days of the
acquisition or issuance of a Patent, registration of a Copyright, or acquisition
of a registered copyright, the relevant Debtor shall deliver to the Agent a copy
of said Copyright or certificate or registration of said patents, as the case
may be, with an assignment for security as to such Patent or Copyright, as the
case may be, to the Agent and at the expense of such Debtor, confirming the
assignment for security, the form of such assignment for security to be
substantially the same as the form hereof or in such other form as may be
reasonably satisfactory to the Agent.
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Section 5.6 Remedies. If an Event of Default shall occur and be
continuing, the Agent may take any or all of the following actions: (a) declare
the entire right, title, and interest of such Debtor in each of the Patents and
Copyrights vested in the Agent for the benefit of the Lenders, in which event
such right, title, and interest shall immediately vest in the Agent for the
benefit of the Lenders, in which case the Agent shall be entitled to exercise
the power of attorney referred to in Section 5.1 hereof to execute, cause to be
acknowledged and notarized and to record said absolute assignment with the
applicable agency; (b) take and practice or sell the Patents and Copyrights; and
(c) direct such Debtor to refrain, in which event such Debtor shall refrain,
from practicing the Patents and using the Copyrights directly or indirectly, and
such Debtor shall execute such other and further documents as the Agent may
request further to confirm this and to transfer ownership of the Patents and
Copyrights to the Agent for the benefit of the Lenders.
ARTICLE 6
PROVISIONS CONCERNING ALL COLLATERAL
Section 6.1 Protection of Agent's Security. Each Debtor will at all times
keep its Inventory and Equipment insured in favor of the Agent, at such Debtor's
own expense to the extent and in the manner provided in the Lender Agreements;
all policies or certificates with respect to such insurance (and any other
insurance maintained by such Debtor) (a) shall be endorsed to the Agent's
reasonable satisfaction for the benefit of the Agent (including, without
limitation, by naming the Agent as additional insured and loss payee) and (b)
shall state that such insurance policies shall not be canceled without 30 days'
prior written notice thereof by the insurer to the Agent; and certified copies
of such policies or certificates with respect thereto shall be deposited with
the Agent. If any Debtor shall fail to insure its Inventory and Equipment in
accordance with the preceding sentence, or if any Debtor shall fail to so
endorse and deposit all policies or certificates with respect thereto, the Agent
shall have the right (but shall be under no obligation), upon prior written
notice to such Debtor, to procure such insurance and such Debtor agrees to
promptly reimburse the Agent for all costs and expenses of procuring such
insurance. The Agent shall, at the time any proceeds of such insurance are
distributed to the Lenders, apply such proceeds in accordance with Section 7.4
hereof except as otherwise provided by the Credit Agreement. Each Debtor assumes
all liability and responsibility in connection with the Collateral acquired by
it and the liability of such Debtor to pay the Obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Debtor.
Section 6.2 Further Actions. Each Debtor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Agent from time to
time such lists, descriptions and designations of its Collateral, warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers
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of attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Agent deems
reasonably appropriate or advisable to perfect, preserve or protect its security
interest in the Collateral.
Section 6.3 Financing Statements. Each Debtor agrees to execute and
deliver to the Agent such financing statements, in form reasonably acceptable to
the Agent, as the Agent may from time to time reasonably request or as are
necessary or desirable in the reasonable opinion of the Agent to establish and
maintain a valid, enforceable, first priority perfected security interest in the
Collateral as provided herein and the other rights and security contemplated
hereby all in accordance with the UCC as enacted in any and all relevant
jurisdictions or any other relevant law. Each Debtor will pay any applicable
filing fees, recordation taxes and related expenses relating to its Collateral.
Each Debtor hereby authorizes the Agent to file any such financing statements
without the signature of such Debtor where permitted by law.
ARTICLE 7
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
Section 7.1 Remedies; Obtaining the Collateral Upon Default. Each Debtor
agrees that, if an Event of Default shall have occurred and be continuing, then
and in every such case, the Agent, in addition to any rights now or hereafter
existing under applicable law, shall have all rights as a secured creditor under
the UCC in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Debtor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon such
Debtor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Debtor;
(ii) instruct the obligor or obligors on any agreement, instrument
or other obligation (including, without limitation, the Receivables and
the Contracts) constituting the Collateral to make any payment required by
the terms of such agreement, instrument or other obligation directly to
the Agent;
(iii) withdraw all monies, securities and instruments in the Cash
Collateral Account and/or in any other cash collateral account for
application to the Obligations in accordance with Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct the relevant Debtor to sell,
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assign or otherwise liquidate any or all of the Collateral or any part
thereof, and, in each case, take possession of the proceeds of any such
sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Debtor in writing to deliver the same to the Agent
at any place or places reasonably designated by the Agent, in which event
such Debtor shall at its own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Agent and there delivered to the Agent;
(y) store and keep any Collateral so delivered to the Agent at
such place or places pending further action by the Agent as provided
in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for
such term and on such conditions and in such manner as the Agent shall in
its reasonable judgment determine;
it being understood that each Debtor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Agent shall be entitled to a decree
requiring specific performance by such Debtor of said obligation. The Lenders
agree that this Agreement may be enforced only by the action of the Agent acting
upon the instructions of the Majority Banks and that no other Lender shall have
any right individually to seek to enforce this Agreement or to realize upon the
security to be granted hereby, it being understood and agreed that such rights
and remedies may be exercised by the Agent for the benefit of the Lenders upon
the terms of this Agreement.
Section 7.2 Remedies: Disposition of the Collateral. Any Collateral
repossessed by the Agent under or pursuant to Section 7.1 hereof and any other
Collateral whether or not so repossessed by the Agent, may be sold, assigned,
leased or otherwise disposed of under one or more contracts or as an entirety,
and without the necessity of gathering at the place of sale the property to be
sold, and in general in such manner, at such time or times, at such place or
places and on such terms as the Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Agent or after any overhaul or repair
at the expense of the relevant Debtor which the Agent shall determine to be
commercially reasonable. Any such disposition which shall be a private sale or
other private proceedings permitted by such requirements shall be made upon
12
not less than 10 days' written notice to the relevant Debtor specifying the time
at which such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the giving
of such notice, to the right of the relevant Debtor or any nominee of such
Debtor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' written notice to
the relevant Debtor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Agent's option, be subject to reserve), after publication of notice
of such auction not less than 10 days prior thereto in two newspapers in general
circulation in Boston, Massachusetts. To the extent permitted by any such
requirement of law, the Agent may bid for and become the purchaser of the
Collateral or any item thereof, offered for sale in accordance with this Section
without accountability to the relevant Debtor. If, under mandatory requirements
of applicable law, the Agent shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of notice to
the relevant Debtor as hereinabove specified, the Agent need give such Debtor
only such notice of disposition as shall be reasonably practicable in view of
such mandatory requirements of applicable law.
Section 7.3 Waiver of Claims. Except as otherwise provided in this
Agreement, (a) EACH DEBTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE AGENT'S TAKING
POSSESSION OR THE AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH DEBTOR WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and
(b) each Debtor hereby further waives, to the extent permitted by law:
i. all damages occasioned by such taking of possession except any
damages which are determined by a final, non-appealable court
order to have been caused by the Agent's gross negligence or
willful misconduct; and
ii. all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the
Agent's rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Debtor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
13
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Debtor therein and thereto,
and shall be a perpetual bar both at law and in equity against such Debtor and
against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
such Debtor.
7.4 Application of Proceeds.
(a) All moneys collected by the Agent upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Agent hereunder, shall be applied as provided in Section 10.3 of the Credit
Agreement.
(b) Each of the Lenders agrees and acknowledges that if the Lenders
are to receive a distribution on account of undrawn amounts with respect to
Letters of Credit issued under the Credit Agreement (which shall only occur
after all outstanding Loans and unpaid Reimbursement Obligations with respect to
such Letters of Credit have been paid in full), such amounts shall be paid to
the Agent under the Credit Agreement and held by it, for the equal and ratable
benefit of the Lenders, as cash security for the repayment of Obligations owing
to the Lenders as such. If any amounts are held as cash security pursuant to the
immediately preceding sentence, then upon the termination of all outstanding
Letters of Credit, and after the application of all such cash security to the
repayment of all Obligations owing to the Lenders after giving effect to the
termination of all such Letters of Credit, if there remains any excess cash,
such excess cash shall be distributed in accordance with Section 10.3 of the
Credit Agreement.
(c) It is understood and agreed that the Debtors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
Section 7.5 Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Agent shall be in addition to every other
right, power and remedy specifically given under this Agreement, the other
Lender Agreements or now or hereafter existing at law, in equity or by statute
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by the Agent. All such
rights, powers and remedies shall be cumulative and the exercise or the
beginning of the exercise of one shall not be deemed a waiver of the right to
exercise any other or others. No delay or omission of the Agent in the exercise
of any such right, power or remedy and no renewal or extension of any of the
Obligations shall impair any such right, power or remedy or shall be construed
to be a waiver of any Default or Event of Default or an acquiescence therein. No
notice to or demand on any Debtor in any case shall entitle it to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Agent to any other or further action in any
circumstances without notice or
14
demand. In the event that the Agent shall bring any suit to enforce any of its
rights hereunder and shall be entitled to judgment, then in such suit the Agent
may recover reasonable expenses, including reasonable attorneys' fees, and the
amounts thereof shall be included in such judgment.
Section 7.6 Discontinuance of Proceedings. In case the Agent shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Agent, then and in every such case the relevant Debtor, the
Agent and each holder of any of the Obligations shall be restored to their
former positions and rights hereunder with respect to the Collateral subject to
the security interest created under this Agreement, and all rights, remedies and
powers of the Agent shall continue as if no such proceeding had been instituted.
ARTICLE 8
DEFINITIONS
In addition to terms defined elsewhere herein, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Agent for the benefit of the Lenders.
"Chattel Paper" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the Commonwealth of Massachusetts.
"Contract Rights" shall mean all rights of any Debtor (including, without
limitation, all rights to payment) under each Contract.
"Copyrights" shall mean any United States copyright owned (or subject to
the rights of ownership) by any Debtor, including any registrations of any
copyright, in the United States Copyright Office, as well as any application for
a copyright registration now or hereafter made with the United States Copyright
Office by any Debtor.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
15
"Documents" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the Commonwealth of Massachusetts.
"Event of Default" shall mean any Event of Default under, and as defined
in, the Credit Agreement and shall in any event, without limitation, include any
payment default on any of the Obligations after the expiration of any applicable
grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the Commonwealth of
Massachusetts.
"Goods" shall have the meaning provided in the Uniform Commercial Code as
in effect on the date hereof in the Commonwealth of Massachusetts.
"Instrument" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the Commonwealth of Massachusetts.
"Liens" shall mean any security interest, mortgage, pledge, lien, claim,
charge, encumbrance, title retention agreement, lessor's interest in a financing
lease or analogous instrument, in, of, or on any Debtor's property.
"Marks" shall mean any United States trademarks, service marks and trade
names now owned, subject to a right of ownership or hereafter acquired by any
Debtor, including any registration of, or application for, any trademarks and
service marks in the United States Patent and Trademark Office, and any trade
dress including logos and/or designs used by any Debtor in the United States.
"Obligations" shall mean (a) the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of all obligations and
liabilities of each Debtor now existing or hereafter incurred under, arising out
of or in connection with any Lender Agreement to which such Debtor is a party
and the due performance and compliance by each Debtor with the terms of each
such Lender Agreement; (b) any and all sums advanced by the Agent in order to
preserve the Collateral or preserve its security interest in the Collateral; (c)
in the event of any proceeding for the collection or enforcement of any
obligations or liabilities referred to in clause (a), after an Event of Default
shall have occurred and be continuing, the reasonable expenses of re-taking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Agent of its rights
hereunder, together with reasonable attorneys' fees and court costs; (d) all
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 8.1 of this Agreement; and (e) all other Lender
Obligations.
"Patents" shall mean any United States patent owned, subject to a right of
ownership by or hereafter acquired by any Debtor and any divisions,
continuations, reissues, reexaminations, extensions or renewals thereof, as well
as any application for a United States patent now or hereafter made by any
Debtor or subject to a right of ownership in such Debtor.
16
"Proceeds" shall have the meaning provided in the Uniform Commercial Code
as in effect in the Commonwealth of Massachusetts on the date hereof or under
other relevant law and, in any event, shall include, but not be limited to, (a)
any and all proceeds of any insurance, indemnity, warranty or guaranty payable
to the Agent or any Debtor from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to any Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
govern-mental authority) and (c) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Proprietary Information" means all information and know-how worldwide,
including, without limitation, technical data, manufacturing data, research and
development data, manufacturing data, research and development data, data
relating to compositions, processes and formulations, manufacturing and
production know-how and experience, management know-how, training programs,
manufacturing, engineering and other drawings, specifications, performance
criteria, operating instructions, maintenance manuals, technology, technical
information, software, engineering and computer data and databases, design and
engineering specifications, catalogs, promotional literature and financial,
business and marketing plans, inventions and invention disclosures.
"Termination Date" shall have the meaning provided in Section 10.8(a) of
this Agreement.
"Trade Secrets" means any secretly held existing engineering and other
data, information, production procedures and other know-how relating to the
design, manufacture, assembly, installation, use, operation, marketing, sale and
servicing of any products or business of the Debtor worldwide whether written or
not written.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed as follows:
(a) if to any Debtor:
c/o America Skiing Company
X.X. Xxx 000
00
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxxxxxx
(b) if to the Agent:
Fleet National Bank, as Agent
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxxx
(c) if to any Lender, at such address as such Lender shall have
specified in the Credit Agreement.
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
Section 9.2 Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Debtor directly affected thereby and the
Agent (with the consent of the Majority Lenders (or, to the extent required by
Section 11.1 of the Credit Agreement, all of the Lenders).
Section 9.3 Obligations Absolute. The obligations of each Debtor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Debtor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Lender Agreement;
or (c) any amendment to or modification of any Lender Agreement or any security
for any of the Obligations whether or not any Debtor shall have notice or
knowledge of any of the foregoing.
Section 9.4 Successors and Assigns. This Agreement shall be binding upon
each Debtor and its successors and assigns and shall inure to the benefit of the
Agent and the Lenders and their respective successors and assigns. All
agreements, statements, representations and warranties made by each Debtor
herein or in any certificate or other instrument delivered by such Debtor or on
its behalf under this Agreement shall be considered to have been relied upon by
the Lenders and shall survive the execution and delivery of this Agreement and
the other Lender Agreements regardless of any investigation made by the Agent or
the Lenders or on their behalf.
Section 9.5 Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
18
Section 9.6 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS.
Section 9.7 Debtor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Debtor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Collateral and the Agent shall not have any obligations or liabilities with
respect to any Collateral by reason of or arising out of this Agreement, nor
shall the Agent be required or obligated in any manner to perform or fulfill any
of the obligations of each Debtor under or with respect to any Collateral.
Section 9.8 Termination; Release. After the Termination Date, this
Agreement shall terminate (provided that all indemnities set forth in the Credit
Agreement shall survive such termination) and the Agent, at the request and
expense of the respective Debtor, will promptly execute and deliver to such
Debtor a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Debtor (without recourse and without any representation or warranty) such
of the Collateral as may be in the possession of the Agent and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which all Obligations have been paid in full, all commitments with respect
thereto have terminated, no Note is outstanding (and all Loans have been repaid
in full), all Letters of Credit have been terminated and all other Obligations
then due and payable have been paid in full.
Section 9.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Debtor and the
Agent.
Section 9.10 The Agent. The Agent will hold in accordance with this
Agreement all items of the Collateral at any time received under this Agreement.
It is expressly understood and agreed that the obligations of the Agent as
holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. The Agent shall act hereunder on the
terms and conditions set forth in this Agreement and in Section 12 of the Credit
Agreement.
19
WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
DEBTORS:
SUGARLOAF MOUNTAIN CORPORATION
MOUNTAINSIDE
SUGARTECH
By /s/ Xxxxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer
AGENT:
FLEET NATIONAL BANK, as Agent
By /s/ Xxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
20
EXHIBIT A
to
SECURITY
AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
DEBTOR ADDRESS PRINCIPAL FUNCTION
--------------------------------------------------------------------------------
Sugarloaf Mountain Corporation XX#0, Xxx 000,
Xxxxxxxxx, Xxxxx 00000-0000
21
EXHIBIT B
to
SECURITY
AGREEMENT
SCHEDULE OF INVENTORY
AND EQUIPMENT LOCATIONS
Principal Owned/
Name Address Function Leased
--------------------------------------------------------------------------------
Sugarloaf Mountain Corporation
Maine: Xxxxx, Xxxxx 00000 Executive Both
Offices
Maine: Xxxxxxxxx, Xxxxx 00000 Ski resort Both
Sugartech
Maine: Xxxxx, Xxxxx 00000 Executive Both
Offices
Maine: Xxxxxxxxx, Xxxxx 00000 Ski Resort Both
Mountainside
Maine: Xxxxx, Xxxxx 00000 Executive Both
Offices
Maine: Xxxxxxxxx, Xxxxx 00000 Ski resort Both
22
EXHIBIT C
to
SECURITY
AGREEMENT
LIST OF MARKS
Sugarloaf Mountain Corporation
Serial No. 74-613,971 12/20/94 SUPERQUAD
Registration No. 930,239 2/29/72 SUGARLOAF, U.S.A.
and Design
23
EXHIBIT D
to
SECURITY
AGREEMENT
LIST OF PATENTS AND APPLICATIONS
NONE
24
EXHIBIT E
to
SECURITY
AGREEMENT
LIST OF COPYRIGHTS AND APPLICATIONS
NONE
25
