Exhibit 10.24
Execution Copy
FORM OF SECURITY AGREEMENT
SECURITY AGREEMENT dated as of November 17, 1999, among EQUIVEST
FINANCE, INC., a Delaware corporation (the "Borrower"), each Subsidiary of
the Borrower listed on Schedule I hereto (each such subsidiary
individually a "Subsidiary Guarantor" and collectively, the "Subsidiary
Guarantors"; the Subsidiary Guarantors and the Borrower are referred to
collectively herein as the "Grantors") and BANK OF AMERICA, N.A. (the
"Lender").
Reference is made to the Credit Agreement dated as of November 17,
1999 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among the Borrower, Peppertree Acquisition Corp.,
a Delaware corporation, Peppertree Acquisition II Corp., a Delaware
corporation, and the Lender.
The Lender has agreed to make a Term Loan to the Borrower pursuant
to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. Each of the Subsidiary Guarantors has agreed to
guarantee, among other things, all the obligations of the Borrower under
the Credit Agreement. The obligations of the Lender to make the Term Loan
is conditioned upon, among other things, the execution and delivery by the
Grantors of an agreement in the form hereof to secure the due and punctual
payment and performance of the Obligations.
Accordingly, the Grantors and the Lender hereby agree as follows:
Definitions Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein
shall have the meanings set forth in the Credit Agreement and all
references to the Uniform Commercial Code shall mean the Uniform
Commercial Code in effect in the State of New York on the date hereof.
Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any person who is or who may become
obligated to any Grantor under, with respect to or on account of an
Account.
"Accounts" shall mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any
such right evidenced by chattel paper, whether due or to become due,
whether or not it has been earned by performance, and whether now or
hereafter acquired or arising in the future, including accounts receivable
from Affiliates of the Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title
and interest in any returned goods, together with all rights, titles,
securities and guarantees with respect thereto, including any rights to
stoppage in transit, replevin, reclamation and resales, and all related
security interests, liens and pledges, whether voluntary or involuntary,
in each case whether now existing or owned or hereafter arising or
acquired.
"Chattel Paper" shall mean (a) a writing or writings which evidence
both a monetary obligation and a security interest in or a lease of
specific Equipment and (b) all other property now or hereafter
constituting "chattel paper" under the Uniform Commercial Code as in
effect in the State of New York or its equivalent in other jurisdictions,
in each case that are now or hereafter owned by any Grantor.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents,
(c) Chattel Paper, (d) Equipment, (e) General Intangibles, (f) cash and
cash accounts, (g) Investment Property, (h) Proceeds, and (i) Intellectual
Property; provided, however, that any property which is subject to a (x)
Permitted Lien or (y) a Lien as of the date of this Agreement (including
by virtue of an after-acquired property clause in a security agreement in
existence on the date hereof) shall not be deemed to be Collateral
hereunder, it being the intention of the parties that the Collateral
include only property which is unencumbered by Liens as of the date
hereof; provided, further, that Notes Receivable, A&D Loans Receivable and
loans secured by Notes Receivable shall not be deemed to be Collateral
hereunder.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an
option on a commodity futures contract, a commodity option or any other
contract that, in each case, is (a) traded on or subject to the rules of a
board of trade that has been designated as a contract market for such a
contract pursuant to the federal commodities laws or (b) traded on a
foreign commodity board of trade, exchange or market, and is carried on
the books of a Commodity Intermediary for a Commodity Customer.
"Commodity Customer" shall mean a person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a person who is registered
as a futures commission merchant under the federal commodities laws or (b)
a person who in the ordinary course of its business provides clearance or
settlement services for a board of trade that has been designated as a
contract market pursuant to federal commodities laws.
"Copyright License" shall mean any written agreement, now or
hereafter in effect, granting any right to any third party under any
Copyright now or hereafter owned by any Grantor or which such Grantor
otherwise has the right to license, or granting any right to such Grantor
under any copyright now or hereafter owned by any third party, and all
rights of such Grantor under any such agreement.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to
the copyright laws of the United States or any other country, whether as
author, assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States
or any other country, including registrations, recordings, supplemental
registrations and pending applications for registration in the United
States Copyright Office, including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"Documents" shall mean all instruments, files, records, ledger
sheets and documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a person identified in the records
of a Securities Intermediary as the person having a Security Entitlement
against the Securities Intermediary. If a person acquires a Security
Entitlement by virtue of Section 8-501(b)(2) or (3) of the Uniform
Commercial Code, such person is the Entitlement Holder.
"Equipment" shall mean all equipment, furniture and furnishings, and
all tangible personal property similar to any of the foregoing, including
tools, parts and supplies of every kind and description, and all
improvements, accessions or appurtenances thereto, that are now or
hereafter owned by any Grantor.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a
person or a share, participation or other interest in a person or in
property or an enterprise of a person, which is, or is of a type, dealt
with in or traded on financial markets, or which is recognized in any area
in which it is issued or dealt in as a medium for investment or (c) any
property that is held by a Securities Intermediary for another person in a
Securities Account if the Securities Intermediary has expressly agreed
with the other person that the property is to be treated as a Financial
Asset under Article 8 of the Uniform Commercial Code. As the context
requires, the term Financial Asset shall mean either the interest itself
or the means by which a person's claim to it is evidenced, including a
certificated or uncertificated Security, a certificate representing a
Security or a Security Entitlement.
"General Intangibles" shall mean all choses in action and causes of
action and all other assignable intangible personal property of any
Grantor of every kind and nature (other than Accounts Receivable) now
owned or hereafter acquired by any Grantor, including all rights and
interests in partnerships, limited partnerships, limited liability
companies and other unincorporated entities, corporate or other business
records, indemnification claims, contract rights (including rights under
leases, whether entered into as lessor or lessee, Hedge Agreements, all of
the rights of any Grantor under the Transaction Documents and other
agreements), Intellectual Property, goodwill, registrations, franchises,
tax refund claims and any letter of credit, guarantee, claim, security
interest or other security held by or granted to any Grantor to secure
payment by an Account Debtor of any of the Accounts Receivable.
"Intellectual Property" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents,
Copyrights, Licenses, Trademarks, trade secrets, confidential or
proprietary technical and business information, know-how, show-how or
other data or information, software and databases and all embodiments or
fixations thereof and related documentation, registrations and franchises,
and all additions, improvements and accessions to, and books and records
describing or used in connection with, any of the foregoing.
"Investment Property" shall mean all Securities (other than
Securities representing the Capital Stock of the Borrower or any of its
Affiliates or Subsidiaries) (whether certificated or uncertificated),
Security Entitlements, Securities Accounts, Commodity Contracts and
Commodity Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor.
"License" shall mean any Patent License, Trademark License,
Copyright License or other license or sublicense to which any Grantor is a
party, including those listed on Schedule III (other than those (i)
license agreements in existence on the date hereof which are subject to a
prior lien of a creditor listed on Schedule III and (ii) those license
agreements entered into after the date hereof, which, in either case, by
their terms prohibit assignment or a grant of a security interest by such
Grantor as licensee thereunder).
"Patent License" shall mean any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a Patent, now or hereafter owned by any Grantor or
which any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell any invention on
which a patent, now or hereafter owned by any third party, is in
existence, and all rights of any Grantor under any such agreement.
"Patents" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or
any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and pending applications in the United
States Patent and Trademark Office or any similar offices in any other
country, including those listed on Schedule IV, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions
thereof, and the inventions disclosed or claimed therein, including the
right to make, use and/or sell the inventions disclosed or claimed
therein.
"Perfection Certificate" shall mean a certificate substantially in
the form of Annex 1 hereto, completed and supplemented with the schedules
and attachments contemplated thereby, and duly executed by a Authorized
Signatory and the chief legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property
that constitutes Collateral, any value received as a consequence of the
possession of any Collateral and any payment received from any insurer or
other person or entity as a result of the destruction, loss, theft, damage
or other involuntary conversion of whatever nature of any asset or
property which constitutes Collateral, and shall include , (a) any claim
of any Grantor against any third party for (and the right to xxx and
recover for and the rights to damages or profits due or accrued arising
out of or in connection with) (i) past, present or future infringement of
any Patent now or hereafter owned by any Grantor, or licensed under a
Patent License, (ii) past, present or future infringement or dilution of
any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized
by any Trademark now or hereafter owned by any Grantor, (iii) past,
present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or
licensed under a Copyright License and (b) any and all other amounts from
time to time paid or payable under or in connection with any of the
Collateral.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an
enterprise of an issuer which (a) are represented by a certificate
representing a security in bearer or registered form, or the transfer of
which may be registered upon books maintained for that purpose by or on
behalf of the issuer, (b) are one of a class or series or by its terms is
divisible into a class or series of shares, participations, interests or
obligations and (c) (i) are, or are of a type, dealt with or traded on
securities exchanges or securities markets or (ii) are a medium for
investment and by their terms expressly provide that they are a security
governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a Financial
Asset is or may be credited in accordance with an agreement under which
the person maintaining the account undertakes to treat the person for whom
the account is maintained as entitled to exercise rights that comprise the
Financial Asset.
"Securities Intermediary" shall mean (a) a clearing corporation or
(b) a person, including a bank or broker, that in the ordinary course of
its business maintains Securities Accounts for others and is acting in
that capacity.
"Security Entitlements" shall mean the rights and property interests
of an Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Trademark License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to use any
Trademark now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, or granting to any Grantor any right
to use any trademark now or hereafter owned by any third party, and all
rights of any Grantor under any such agreement.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith,
including registrations and registration applications in the United States
Patent and Trademark Office, any State of the United States or any similar
offices in any other country or any political subdivision thereof, and all
extensions or renewals thereof, including those listed on Schedule V, (b)
all goodwill associated therewith or symbolized thereby and (c) all other
assets, rights and interests that uniquely reflect or embody such
goodwill.
Rules of Interpretation. The rules of interpretation specified in
Section 1.03 of the Credit Agreement shall be applicable to this Agreement.
Security Interest
Security Interest. As security for the payment or performance,
as the case may be, in full of the Obligations, and any extensions,
renewals, modifications or refinancings of the Obligations, each Grantor
hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
hypothecates and transfers to the Lender, its successors and assigns, and
hereby grants to the Lender, its successors and assigns, a security
interest in, all of such Grantor's right, title and interest in, to and
under the Collateral (the "Security Interest"). Without limiting the
foregoing, the Lender is hereby authorized to file one or more financing
statements (including fixture filings), continuation statements, filings
with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest
granted by each Grantor, without the signature of any Grantor, and naming
any Grantor or the Grantors as debtors and the Lender as secured party.
No Assumption of Liability. The Security Interest is granted
as security only and shall not subject the Lender to, or in any way alter
or modify, any obligation or liability of any Grantor with respect to or
arising out of the Collateral.
Representations and Warranties
The Grantors jointly and severally represent and warrant to the
Lender and the Secured Parties that:
Title and Authority. Each Grantor has good and valid rights in
and title to the Collateral, subject only to Liens expressly permitted
pursuant to the Credit Agreement, with respect to which it has purported
to grant a Security Interest hereunder and has full power and authority to
grant to the Lender the Security Interest in such Collateral pursuant
hereto and to execute, deliver and perform its obligations in accordance
with the terms of this Agreement, without the consent or approval of any
other person other than any consent or approval which has been obtained.
Filings. a) The Perfection Certificate has been duly prepared,
completed and executed and the information set forth therein is correct
and complete as of the date hereof. Fully executed Uniform Commercial Code
financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description
of the Collateral have been delivered to the Lender for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate, which are all the filings, recordings and
registrations (other than filings required to be made in the United States
Patent and Trademark Office and the United States Copyright Office in
order to perfect the Security Interest in Collateral consisting of United
States Patents, Trademarks and Copyrights) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Lender in respect of all
Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further
or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided
under applicable law with respect to the filing of continuation statements
or with respect to the filing of amendments or new filings to reflect the
change of any Grantor's name, location, identity or corporate structure.
Each Grantor shall ensure that fully executed security
agreements in the form hereof and containing a description of all
Collateral consisting of Intellectual Property shall have been received
and recorded within one month after the execution of this Agreement with
respect to United States Patents and United States registered Trademarks
(and Trademarks for which United States registration applications are
pending) and United Sates registered Copyrights by the United States
Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and
the regulations thereunder, as applicable, and otherwise as may be
required pursuant to the laws of any other necessary jurisdiction, to
protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Lender in respect of all Collateral
consisting of Patents, Trademarks and Copyrights in which a security
interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories
and possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to
perfect the Security Interest with respect to any Collateral consisting of
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).
Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to
the filings described in Section 3.02 above, a perfected security interest
in all Collateral in which a security interest may be perfected by filing,
recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or
other applicable law in such jurisdictions and (c) a security interest
that shall be perfected in all Collateral in which a security interest may
be perfected upon the receipt and recording of this Agreement with the
United States Patent and Trademark Office and the United States Copyright
Office, as applicable, within the one month period (commencing as of the
date hereof) pursuant to 35 U.S.C. ss. 261 or 15 U.S.C. ss. 1060 or 17
U.S.C. ss. 205 and otherwise as may be required pursuant to the laws of
any other necessary jurisdiction. The Security Interest is and shall be
prior to any other Lien on any of the Collateral, other than Permitted
Liens.
Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to the Credit Agreement. The Grantor has not filed or consented
to the filing of (a) any financing statement or analogous document under
the Uniform Commercial Code or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any Collateral
or any security agreement or similar instrument covering any Collateral
with the United States Patent and Trademark Office or the United States
Copyright Office or (c) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement
or similar instrument is still in effect, except, in each case, for Liens
expressly permitted pursuant to the Credit Agreement.
Covenants
Change of Name; Location of Collateral; Records; Place of
Business. b) Each Grantor agrees promptly to notify the Lender in writing
of any change (i) in its corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of its chief executive office, its
principal place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at
which Collateral owned by it is located (including the establishment of
any such new office or facility), (iii) in its identity or corporate
structure or (iv) in its Federal Taxpayer Identification Number. Each
Grantor agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Lender to
continue at all times following such change to have a valid, legal and
perfected first priority security interest in all the Collateral. Each
Grantor agrees promptly to notify the Lender if any material portion of
the Collateral owned or held by such Grantor is damaged or destroyed.
Each Grantor agrees to maintain, at its own cost and expense,
such complete and accurate records with respect to the Collateral owned by
it as is consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to
include complete accounting records indicating all payments and proceeds
received with respect to any part of the Collateral, and, at such time or
times as the Lender may reasonably request, promptly to prepare and
deliver to the Lender a duly certified schedule or schedules in form and
detail reasonably satisfactory to the Lender showing the identity, amount
and location of any and all Collateral.
Periodic Certification. Each year, at the time of delivery of
annual financial statements with respect to the preceding fiscal year
pursuant to the Credit Agreement, the Borrower shall deliver to the Lender
a certificate executed by a Authorized Signatory and the chief legal
officer of the Borrower (a) setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming that
there has been no change in such information since the date of such
certificate or the date of the most recent certificate delivered pursuant
to Section 4.02 and (b) certifying that all Uniform Commercial Code
financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or
other appropriate office in each jurisdiction identified pursuant to
clause (a) above to the extent necessary to protect and perfect the
Security Interest for a period through the Maturity Date (except as noted
therein with respect to any continuation statements to be filed within
such period). Each certificate delivered pursuant to this Section 4.02
shall identify in the format of Schedule II, III, IV or V, as applicable,
all Intellectual Property of any Grantor in existence on the date thereof
and not then listed on such Schedules or previously so identified to the
Lender.
Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Lender in the Collateral and the priority thereof against any Lien not
expressly permitted pursuant to the Credit Agreement.
Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Lender
may from time to time reasonably request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting
of the Security Interest and the filing of any financing statements
(including fixture filings) or other documents in connection herewith or
therewith. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be immediately pledged and
delivered to the Lender, duly endorsed in a manner satisfactory to the
Lender.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Lender, with prompt notice thereof to the Grantors,
to supplement this Agreement by supplementing Schedule II, III, IV or V
hereto or adding additional schedules hereto to specifically identify any
asset or item that may constitute Copyrights, Licenses, Patents or
Trademarks; provided, however, that any Grantor shall have the right,
exercisable within 10 days after it has been notified by the Lender of the
specific identification of such Collateral, to advise the Lender in
writing of any inaccuracy of the representations and warranties made by
such Grantor hereunder with respect to such Collateral. Each Grantor
agrees that it will use its best efforts to take such action as shall be
necessary in order that all representations and warranties hereunder shall
be true and correct with respect to such Collateral within 30 days after
the date it has been notified by the Lender of the specific identification
of such Collateral.
Inspection and Verification. The Lender and such persons as
the Lender may reasonably designate shall at reasonable intervals during
normal business hours and upon reasonable prior notice have the right, at
the Grantors' own cost and expense, to inspect the Collateral, all records
related thereto (and to make extracts and copies from such records) and
the premises upon which any of the Collateral is located, to discuss the
Grantors' affairs with the officers of the Grantors and their independent
accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other
matter relating to, the Collateral, including, in the case of Accounts or
Collateral in the possession of any third person, by contacting Account
Debtors or the third person possessing such Collateral for the purpose of
making such a verification.
Taxes; Encumbrances. At its option, upon prior written notice
to the applicable Grantor, the Lender may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Collateral and not
permitted pursuant to the Credit Agreement, and may pay for the
maintenance and preservation of the Collateral to the extent any Grantor
fails to do so as required by the Credit Agreement or this Agreement, and
each Grantor jointly and severally agrees to reimburse the Lender on
demand for any payment made or any expense incurred by the Lender pursuant
to the foregoing authorization; provided, however, that nothing in this
Section 4.06 shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Lender to cure or
perform, any covenants or other promises of any Grantor with respect to
taxes, assessments, charges, fees, liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Loan
Documents.
Assignment of Security Interest. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any
other person to secure payment and performance of an Account, such
interest shall become part of the Collateral without further action by any
party. Such assignment need not be filed of public record unless necessary
to continue the perfected status of the security interest against
creditors of and transferees from the Account Debtor or other person
granting the security interest.
Continuing Obligations of the Grantors. Each Grantor shall
remain liable to observe and perform all the conditions and obligations to
be observed and performed by it under each contract, agreement or
instrument relating to the Collateral, all in accordance with the terms
and conditions thereof, and each Grantor jointly and severally agrees to
indemnify and hold harmless the Lender from and against any and all
liability for Grantor's performance.
Use and Disposition of Collateral. None of the Grantors shall
make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral,
except as expressly permitted by the Credit Agreement. None of the
Grantors shall make or permit to be made any transfer of the Collateral
and each Grantor shall remain at all times in possession (which possession
shall include in the case of Investment Property, possession through one
or more Securities Intermediaries) of the Collateral owned by it, except
that unless and until the Lender shall notify the Grantors that an Event
of Default shall have occurred and be continuing and that during the
continuance thereof the Grantors shall not sell, convey, lease, assign,
transfer or otherwise dispose of any Collateral (which notice may be given
by telephone if promptly confirmed in writing), the Grantors may use and
dispose of the Collateral in the ordinary course of business in or in any
lawful manner not inconsistent with the provisions of this Agreement, the
Credit Agreement or any other Loan Document.
Limitation on Modification of Accounts. None of the Grantors
will, without the Lender's prior written consent, grant any extension of
the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof,
release, wholly or partly, any person liable for the payment thereof or
allow any credit or discount whatsoever thereon, other than extensions,
credits, discounts, compromises or settlements granted or made in the
ordinary course of business and consistent with its current practices and
in accordance with such prudent and standard practices used in industries
that are the same as or similar to those in which such Grantor is engaged.
Insurance. The Grantors, at their own expense, shall maintain
or cause to be maintained insurance covering physical loss or damage to
the Equipment in accordance with the Credit Agreement. Each Grantor
irrevocably makes, constitutes and appoints the Lender (and all officers,
employees or agents designated by the Lender) as such Grantor's true and
lawful agent (and attorney-in-fact) for the purpose, during the
continuance of an Event of Default, of making, settling and adjusting
claims in respect of Collateral under policies of insurance, endorsing the
name of such Grantor on any check, draft, instrument or other item of
payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that any
Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or
part relating thereto, the Lender may, following written notice to the
Grantors, without waiving or releasing any obligation or liability of the
Grantors hereunder or any Event of Default, in its sole discretion, obtain
and maintain such policies of insurance and pay such premium and take any
other actions with respect thereto as the Lender deems advisable. All sums
disbursed by the Lender in connection with this Section 4.11, including
reasonable attorneys' fees, court costs, expenses and other charges
relating thereto, shall be payable, upon demand, by the Grantors to the
Lender and shall be additional Obligations secured hereby.
Covenants Regarding Patent, Trademark and Copyright
Collateral. c) Each Grantor agrees that it will not, nor will it permit
any of its licensees to, do any act, or omit to do any act, whereby any
Patent which is material to the conduct of such Grantor's business may
become invalidated or dedicated to the public, and agrees that it shall
continue to xxxx any products covered by a Patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum
rights under applicable patent laws.
Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from
any claim of abandonment or invalidity for non-use, (ii) maintain the
quality of products and services offered under such Trademark, (iii)
display such Trademark with notice of Federal or foreign registration to
the extent necessary and sufficient to establish and preserve its maximum
rights under applicable law and (iv) not knowingly use or knowingly permit
the use of such Trademark in violation of any third party rights.
Each Grantor (either itself or through licensees) will, for
each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice
as necessary and sufficient to establish and preserve its maximum rights
under applicable copyright laws.
Each Grantor shall notify the Lender immediately if it knows
or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, United States
Copyright Office or any court or similar office of any country) regarding
such Grantor's ownership of any Patent, Trademark or Copyright, its right
to register the same, or to keep and maintain the same.
Each Grantor shall, within ten days after the end of each
calendar month, inform the Lender of each application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or
Copyright) with the United States Patent and Trademark Office, United
States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof filed during such calendar month by such Grantor,
either itself or through any agent, employee, licensee or designee and,
upon request of the Lender, each Grantor shall execute and deliver any and
all agreements, instruments, documents and papers as the Lender may
request to evidence the Lender's security interest in such Patent,
Trademark or Copyright, and each Grantor hereby appoints the Lender as its
attorney-in-fact to execute and file such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed;
such power, being coupled with an interest, is irrevocable.
Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency
in any political subdivision of the United States or in any other country
or any political subdivision thereof, to maintain and pursue each material
application relating to the Patents, Trademarks and/or Copyrights (and to
obtain the relevant grant or registration) and to maintain each issued
Patent and each registration of the Trademarks and Copyrights that is
material to the conduct of any Grantor's business, including timely
filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if consistent with
good business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.
In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall
notify the Lender and shall, if consistent with good business judgment,
promptly xxx for infringement, misappropriation or dilution and to recover
any and all damages for such infringement, misappropriation or dilution,
and take such other actions as are appropriate under the circumstances to
protect such Collateral.
Upon and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or
approvals by the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all of such Grantor's right,
title and interest thereunder to the Lender or its designee.
Power of Attorney
Each Grantor irrevocably makes, constitutes and appoints the Lender
(and all officers, employees or agents designated by the Lender) as such
Grantor's true and lawful agent and attorney-in-fact, and in such capacity
the Lender shall have the right, with power of substitution for each
Grantor and in each Grantor's name or otherwise, for the use and benefit
of the Lender, upon the occurrence and during the continuance of an Event
of Default (a) to receive, endorse, assign and/or deliver any and all
notes, acceptances, checks, drafts, money orders or other evidences of
payment relating to the Collateral or any part thereof; (b) to demand,
collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of any
Grantor on any invoice or xxxx of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to any
Account Debtor; (e) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction
to collect or otherwise realize on all or any of the Collateral or to
enforce any rights in respect of any Collateral; (f) to settle,
compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Lender;
and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do
all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Lender were the absolute
owner of the Collateral for all purposes; provided, however, that nothing
herein contained shall be construed as requiring or obligating the Lender
to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Lender, or to present or file
any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof
or any property covered thereby, and no action taken or omitted to be
taken by the Lender with respect to the Collateral or any part thereof
shall give rise to any defense, counterclaim or offset in favor of any
Grantor or to any claim or action against the Lender. It is understood and
agreed that the appointment of the Lender as the agent and
attorney-in-fact of the Grantors for the purposes set forth above is
coupled with an interest and is irrevocable. The provisions of this
Section shall in no event relieve any Grantor of any of its obligations
hereunder or under any other Loan Document with respect to the Collateral
or any part thereof or impose any obligation on the Lender to proceed in
any particular manner with respect to the Collateral or any part thereof,
or in any way limit the exercise by the Lender of any other or further
right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Loan Document, by law or otherwise.
Remedies
Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each
item of Collateral to the Lender on demand, and it is agreed that the
Lender shall have the right to take any of or all the following actions at
the same or different times: (a) with respect to any Collateral consisting
of Intellectual Property, on demand, to cause the Security Interest to
become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Lender, or to license or
sublicense, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any such Collateral throughout the world
on such terms and conditions and in such manner as the Lender shall
determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained), and (b) with
or without legal process and with or without prior notice or demand for
performance, to take possession of the Collateral and without liability
for trespass to enter any premises where the Collateral may be located for
the purpose of taking possession of or removing the Collateral, exercise
any Grantor's right to xxxx and receive payment for completed work and,
generally, to exercise any and all rights afforded to a secured party
under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Lender shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Lender shall deem appropriate. The Lender shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective
bidders or purchasers to persons who will represent and agree that they
are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of
any such sale the Lender shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold.
Each such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal which such Grantor now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Lender shall give the Grantors 10 days' written notice (which
each Grantor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code as in effect in the State of New
York or its equivalent in other jurisdictions) of the Lender's intention
to make any sale of Collateral. Such notice, in the case of a public sale,
shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such
board or exchange. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Lender may fix and state in the notice (if any) of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one
lot as an entirety or in separate parcels, as the Lender may (in its sole
and absolute discretion) determine. The Lender shall not be obligated to
make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have
been given. The Lender may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same
was so adjourned. In case any sale of all or any part of the Collateral is
made on credit or for future delivery, the Collateral so sold may be
retained by the Lender until the sale price is paid by the purchaser or
purchasers thereof, but the Lender shall not incur any liability in case
any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to this Section, the Lender may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all
said rights being also hereby waived and released to the extent permitted
by law), the Collateral or any part thereof offered for sale and may make
payment on account thereof by using any claim then due and payable to the
Lender from any Grantor as a credit against the purchase price, and the
Lender may, upon compliance with the terms of sale, hold, retain and
dispose of such property without further accountability to any Grantor
therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Lender shall be free to carry out such sale pursuant to such agreement and
no Grantor shall be entitled to the return of the Collateral or any
portion thereof subject thereto, notwithstanding the fact that after the
Lender shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Lender may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant
to a judgment or decree of a court or courts having competent jurisdiction
or pursuant to a proceeding by a court-appointed receiver.
Application of Proceeds. The Lender shall apply the proceeds of any
collection or sale of the Collateral, as well as any Collateral consisting
of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Lender in connection with such collection or sale or otherwise in
connection with this Agreement or any of the Obligations, including all
court costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Lender hereunder or under any other
Loan Document on behalf of any Grantor and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder
or under any other Loan Document;
SECOND, to the payment in full of the Obligations; and
THIRD, to the Grantors, their successors or assigns, or as a court
of competent jurisdiction may otherwise direct.
Subject to the foregoing, the Lender shall have absolute discretion
as to the time of application of any such proceeds, moneys or balances in
accordance with this Agreement. Upon any sale of the Collateral by the
Lender (including pursuant to a power of sale granted by statute or under
a judicial proceeding), the receipt of the Lender or of the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of
the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid
over to the Lender or such officer or be answerable in any way for the
misapplication thereof.
Grant of License to Use Intellectual Property. For the purpose of
enabling the Lender to exercise rights and remedies under this Article at
such time as the Lender shall be lawfully entitled to exercise such rights
and remedies, each Grantor hereby grants to the Lender an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Grantors) to use, license or sub-license any of the
Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, to the extent granting such license or
sub-license would not violate any agreement applicable to such
Intellectual Property, and wherever the same may be located, and including
in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The use of such
license by the Lender may be exercised, at the option of the Lender, upon
the occurrence and during the continuation of an Event of Default;
provided that any license, sub-license or other transaction entered into
by the Lender in accordance herewith shall be binding upon the Grantors
notwithstanding any subsequent cure of an Event of Default.
Miscellaneous
Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided
in the Credit Agreement. All communications and notices hereunder to any
Subsidiary Guarantor shall be given to it at its address or fax number set
forth on Schedule I, with a copy to the Borrower.
Security Interest Absolute. All rights of the Lender hereunder, the
Security Interest and all obligations of the Grantors hereunder shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing
all or any of the Obligations, or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any
Grantor in respect of the Obligations or this Agreement.
Survival of Agreement. All covenants, agreements, representations
and warranties made by any Grantor herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the Lender and
shall survive the making by the Lender of the Term Loan, and the execution
and delivery to the Lender of any note evidencing such Term Loan,
regardless of any investigation made by the Lenders or on their behalf,
and shall continue in full force and effect until this Agreement shall
terminate.
Binding Effect; Several Agreement. This Agreement shall become
effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Lender and a counterpart
hereof shall have been executed on behalf of the Lender, and thereafter
shall be binding upon such Grantor and the Lender and their respective
successors and assigns, and shall inure to the benefit of such Grantor and
the Lender and their respective successors and assigns, except that no
Grantor shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any
such assignment or transfer shall be void) except as expressly
contemplated by this Agreement or the Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each Grantor
and may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor and
without affecting the obligations of any other Grantor hereunder.
Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Lender that are contained
in this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
Lender's Fees and Expenses; Indemnification. d) Each Grantor jointly
and severally agrees to pay upon demand to the Lender the amount of any
and all reasonable expenses, including the reasonable fees, disbursements
and other charges of its counsel and of any experts or agents, which the
Lender may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection
from or other realization upon any of the Collateral, (iii) the exercise,
enforcement or protection of any of the rights of the Lender hereunder or
(iv) the failure of any Grantor to perform or observe any of the
provisions hereof.
Without limitation of its indemnification obligations under the
other Loan Documents, each Grantor jointly and severally agrees to
indemnify the Lender and the other Indemnitees against, and hold each of
them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other
charges of counsel, incurred by or asserted against any of them arising
out of, in any way connected with, or as a result of, the execution,
delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating hereto or to the Collateral, whether
or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence or willful misconduct of such
Indemnitee.
Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby. The provisions of this Section 7.06 shall
remain operative and in full force and effect regardless of the
termination of this Agreement or any other Loan Document, the consummation
of the transactions contemplated hereby, the repayment of any of the Term
Loan, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on
behalf of the Lender. All amounts due under this Section 7.06 shall be
payable on written demand therefor.
GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, EXCEPT THAT THE LAW OF
THEIR LOCATION SHALL GOVERN WITH RESPECT TO THE CREATION, PERFECTION AND
ENFORCEMENT OF SECURITY INTERESTS IN FIXTURES AND THE EXERCISE OF REMEDIES
WITH RESPECT THERETO (IF APPLICABLE).
Waivers; Amendment. e) No failure or delay of the Lender in
exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Lender hereunder
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or any other Loan Document or consent to any
departure by any Grantor therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on any Grantor in any case
shall entitle such Grantor or any other Grantor to any other or further
notice or demand in similar or other circumstances.
Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in
writing entered into by the Lender and the Grantor or Grantors with
respect to which such waiver, amendment or modification is to apply.
WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09.
Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected
or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section
7.04), and shall become effective as provided in Section 7.04. Delivery of
an executed signature page to this Agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof.
Headings. Article and Section headings used herein are for the
purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
Jurisdiction; Consent to Service of Process. f) Each Grantor hereby
irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or any Federal
court of the United States of America sitting in New York, and any
appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement shall affect any right that the Lender may otherwise have
to bring any action or proceeding relating to this Agreement or the other
Loan Documents against any Grantor or its properties in the courts of any
jurisdiction.
Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court sitting in New York. Each
of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in
this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
Termination. This Agreement and the Security Interest shall
terminate when all the Obligations (other than wholly contingent
indemnification obligations) then due and owing have been indefeasibly
paid in full, the Lender has no further commitment to lend under the
Credit Agreement, at which time the Lender shall execute and deliver to
the Grantors, at the Grantors' expense, all Uniform Commercial Code
termination statements and similar documents which the Grantors shall
reasonably request to evidence such termination. Any execution and
delivery of termination statements or documents pursuant to this Section
7.14 shall be without recourse to or warranty by the Lender. A Subsidiary
Guarantor shall automatically be released from its obligations hereunder
and the Security Interest in the Collateral of such Subsidiary Guarantor
shall be automatically released in the event that all the capital stock of
such Subsidiary Guarantor shall be sold, transferred or otherwise disposed
of to a person that is not an Affiliate of the Borrower in accordance with
the terms of the Credit Agreement.
Additional Grantors. Upon execution and delivery by the Lender and a
Subsidiary of an instrument in the form of Annex 2 hereto, such Subsidiary
shall become a Grantor hereunder with the same force and effect as if
originally named as a Grantor herein. The execution and delivery of any
such instrument shall not require the consent of any Grantor hereunder.
The rights and obligations of each Grantor hereunder shall remain in full
force and effect notwithstanding the addition of any new Grantor as a
party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
EQUIVEST FINANCE, INC.
By:
Name:
Title:
RESORT FUNDING, INC.
By:
Name:
Title:
EASTERN RESORTS CORPORATION
By:
Name:
Title:
LONG WHARF MARINA RESTAURANT, INC.
By:
Name:
Title:
BLUEBEARD'S CASTLE, INC.
By:
Name:
Title:
CASTLE ACQUISITION INC.
By:
Name:
Title:
AVENUE PLAZA LLC
By:
Name:
Title:
OCEAN CITY COCONUT MALORIE, INC.
By:
Name:
Title:
ST. AUGUSTINE RESORT DEVELOPMENT
GROUP, INC.
By:
Name:
Title:
EFI D.C. ACQUISITION, INC.
By:
Name:
Title:
EFI ST. XXXXXX ACQUISITION, INC.
By:
Name:
Title:
EFI LOUISIANA ACQUISITION, INC.
By:
Name:
Title:
EFI MARYLAND ACQUISITION, INC.
By:
Name:
Title:
EFI FLORIDA ACQUISITION, INC.
By:
Name:
Title:
PEPPERTREE ACQUISITION CORP.
By:
Name:
Title:
PEPPERTREE ACQUISITION II CORP.
By:
Name:
Title:
PEPPERTREE RESORTS, LTD.
By:
Name:
Title:
PEPPERTREE REALTY, INC.
By:
Name:
Title:
PEPPERTREE RESORT VILLAS, INC.
By:
Name:
Title:
PEPPERTREE RESORTS MANAGEMENT, INC.
By:
Name:
Title:
BANK OF AMERICA, N.A.
By: _____________________
Name:
Title:
SCHEDULE I
SUBSIDIARY GUARANTORS
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Name
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Resort Funding, Inc.
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Eastern Resorts Corporation
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Long Wharf Marina Restaurant, Inc.
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Bluebeard's Castle, Inc.
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Castle Acquisition Inc.
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Avenue Plaza LLC
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Ocean City Coconut Malorie, Inc.
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St. Augustine Resort Development
Group, Inc.
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EFI D.C. Acquisition, Inc.
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EFI St. Xxxxxx Acquisition, Inc.
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EFI Louisiana Acquisition, Inc.
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EFI Maryland Acquisition, Inc.
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EFI Florida Acquisition, Inc.
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Peppertree Acquisition II Corp.
Peppertree Resorts, Ltd.
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Peppertree Realty, Inc.
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Peppertree Resort Villas, Inc.
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Peppertree Resorts Management, Inc.
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SCHEDULE II
COPYRIGHTS OWNED BY [NAME OF GRANTOR]
[Make a separate Schedule II for each Grantor, and if no copyrights owned,
so state. List in numerical order by copyright
registration/application no.]
U.S. Copyright Registrations
Title Class Reg. Date Reg. No.
----- ----- --------- --------
Pending U.S. Copyright Applications for Registration
Title Class Date Application Filed
Non-U.S. Copyright Registrations
Country Title Class Reg. Date Reg. No.
------- ----- ----- --------- --------
Non-U.S. Pending Copyright Applications for Registration
Country Title Class Date Application Filed
Exhibit 10.24
SCHEDULE III
LICENSES
[Make a separate Schedule III for each Grantor, and if not a licensor/licensee
in a license/sublicense so state]
PART I
LICENSES/SUBLICENSES OF [NAME OF GRANTOR] ON DATE HEREOF
A. Copyrights
[List First U.S. copyrights in numerical order by Reg. No., followed by non-U.S.
copyrights by country in alphabetical order, Reg. Nos. in numerical order.]
Licensee Name Date of License/ Title of
and Address Sublicense U.S. Copyrights Class Reg. Date Reg. No.
----------- ---------- --------------- ----- --------- --------
Date of Title of
Licensee Name License/ Non-U.S.
and Address Sublicense Copyrights Country Class Reg. Date Reg. No.
----------- ---------- ---------- ------- ----- --------- --------
B. Patents
[List first in numerical order by U.S. patent nos. followed by U.S. patent application
nos., followed in alphabetical order by country, non-U.S. patent nos. followed by
non-U.S. application nos. in numerical order.]
Application
Date of Date
Licensee Name License/ Title of U.S. Filed/Issue Application/
-------------- ------------
and Address Sublicense Patent Class Date Patent No.
----------- ---------- ------ ----- ---- ----------
Date of Title of Application
Licensee Name License/ Non- U.S. Date Field/ Application/
-----
and Address Sublicense Patent Country Class Issue Date Patent No.
----------- ---------- ------ ------- ----- ---------- ----------
C. Trademarks
[List first in numerical order by U.S. trademark nos., followed by U.S. trademark
application nos., followed in alphabetical order by country, non-U.S. application nos. in
numerical order.]
Licensee Name Date of License/ Application Date Application/
and Address Sublicense U.S. Xxxx Class Filed/Reg. Date Reg. No.
----------- ---------- --------- ----- --------------- --------
Date of Application
Licensee Name License/ Title of Date Filed/ Application/
and Address Sublicense Non-U.S. Xxxx Country Class Reg. Date Reg. No.
----------- ---------- ------------- ------- ----- --------- --------
D. Others
Date of License/
Licensee Name and Address Sublicense Subject Matter
PART 2
LICENSES/SUBLICENSES OF [NAME OF GRANTOR] AS LICENSEE ON DATE HEREOF
--------------------------------------------------------------------
A. Copyrights
[List first U.S. copyrights in numerical order by Reg. No., followed by non-U.S.
copyright by country in alphabetical order, Reg. Nos. in numerical order.]
Licensor Name Date of License/ Title of
and Address Sublicense U.S. Copyright Class Reg. Date Reg. No.
----------- ---------- -------------- ----- --------- --------
Date of Title of
Licensor Name License/ Non-U.S.
--------
and Address Sublicense Copyrights Country Class Reg. Date Reg. No.
----------- ---------- ---------- ------- ----- --------- --------
B. Patents
[List first in numerical order by U.S. Patent nos. followed by U.S. patent application
nos., followed in alphabetical order by country, non-U.S. patent nos. followed by
non-U.S. application nos. in numerical order.]
Date of Application
Licensor Name License/ Title of Date/Filed/ Application/
and Address Sublicense U.S. Patent Class Issue Date Patent No.
----------- ---------- ----------- ----- ---------- ---------
Date of Title of Application
Licensor Name License/ Non-U.S. Date/Filed/ Application/
and Address Sublicense Patent Country Class Issue Date Patent No.
----------- ---------- ------ ------- ----- ---------- ----------
C. Trademarks
[List first in numerical order by U.S. trademark nos., followed by U.S. trademark
application nos., followed in alphabetical order by country, non-U.S. trademark nos.
followed by non-U.S. application nos. in numerical order.]
Date of Application
Licensor Name License/ Date Application
and Address Sublicense U.S. Xxxx Class Filed/Reg. Date Reg. No.
----------- ---------- --------- ----- --------------- --------
Date of Application
Licensor Name License/ Title of Date Application/
and Address Sublicense Non-U.S. Xxxx Country Class Filed/Reg. Date Reg. No.
----------- ---------- ------------- ------- ----- --------------- --------
D. Others
Date of License/
Licensor Name and Address Sublicense Subject Matter
SCHEDULE IV
PATENTS OWNED BY [NAME OF GRANTOR]
[Make a separate Schedule IV for each Grantor and if no patents owned so state.
List in numerical order by Patent No./Patent Application No.]
U.S. Patent Registrations
Patent Name Class Issue Date Patent No.
----------- ----- ---------- ----------
U.S. Patent Applications
Patent Name Class Filing Date Patent Application No.
----------- ----- ----------- ----------------------
Non-U.S. Patent Registrations [List in
alphabetical order by country/numerical order by Patent No.]
Country Patent Name Class Issue Date Patent No.
------- ----------- ----- ---------- ----------
Non-U.S. Patent Applications
Patent Application
Country Patent Name Class Filing Date No.
------- ----------- ----- ----------- ---
SCHEDULE V
TRADEMARK/TRADE NAMES OWNED BY [NAME OF GRANTOR]
[Make a separate Schedule V for each Grantor
and if no trademarks/trade names owned
so state.
List in numerical order by trademark registration/application no.]
U.S. Trademark Registrations
Xxxx Class Reg. Date Reg. No.
---- ----- --------- --------
U.S. Trademark Applications
Xxxx Class Filing Date Application No.
---- ----- ----------- ---------------
State Trademark Registrations
[List in alphabetical order by State/numerical order by trademark no.]
State Xxxx Class Reg. Date Reg. No.
----- ---- ----- --------- --------
State Trademark Applications [List in
alphabetical order by trademark application no.]
State Xxxx Class Filing Date Application No.
----- ---- ----- ----------- ---------------
Non-U.S. Trademark Registrations [List in
alphabetical order by Country/numerical order by trademark no.]
Country Xxxx Class Reg. Date Reg. No.
------- ---- ----- --------- --------
Non-U.S. Trademark Applications
[List in alphabetical order by Country/numerical order by application
no.]
Country Xxxx Class Filing Date Application No.
------- ---- ----- ----------- ---------------
Trade Names
Country(s) Where Used Trade Names
Exhibit 10.24
Annex 1 to the
Security Agreement
[Form Of]
PERFECTION CERTIFICATE
Reference is made to (a) the Credit Agreement dated as of November 17, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Equivest Finance, Inc., a Delaware corporation (the
"Borrower"), Peppertree Acquisition Corp., a Delaware corporation, Peppertree
Acquisition II Corp., a Delaware corporation, and Bank of America, N.A. (the
"Lender"). Capitalized terms used but not defined herein have the meanings
assigned in the Credit Agreement or the Security Agreement referred to therein,
as applicable.
The undersigned, a Authorized Signatory and the chief legal officer,
respectively, of the Borrower, hereby certifies to the Lender:
Names.
The exact corporate name of each Grantor, as such name appears in
its respective certificate of incorporation, is as follows:
Set forth below is each other corporate name each Grantor has had in
the past five years, together with the date of the relevant change:
Except as set forth in Schedule 1 hereto, no Grantor has changed its
identity or corporate structure in any way within the past five years.
Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature
or jurisdiction of corporate organization. If any such change has
occurred, include in Schedule 1 the information required by Sections 1 and
2 of this certificate as to each acquiree or constituent party to a merger
or consolidation.
The following is a list of all other names (including trade names or
similar appellations) used by each Grantor or any of its divisions or
other business units in connection with the conduct of its business or the
ownership of its properties at any time during the past five years:
Set forth below is the Federal Taxpayer Identification Number of
each Grantor:
Current Locations.
The chief executive office of each Grantor is located at the address
set forth opposite its name below:
Grantor Mailing Address County State
Set forth below opposite the name of each Grantor are all locations
where such Grantor maintains any books or records relating to any Accounts
Receivable (with each location at which instruments or chattel paper, if
any, is kept being indicated by an A*@):
Grantor Mailing Address County State
Set forth below opposite the name of each Grantor are all the
locations where such Grantor maintains any Collateral not identified
above:
Grantor Mailing Address County State
Set forth below opposite the name of each Grantor are all the places
of business of such Grantor not identified in paragraph (a), (b) or (c)
above:
Grantor Mailing Address County State
Set forth below opposite the name of each Grantor are the names and
addresses of all persons other than such Grantor that have possession of
any of the Collateral of such Grantor:
Grantor Mailing Address County State
Unusual Transactions. All Accounts Receivable have been originated
by the Grantors in the ordinary course of business.
File Search Reports. The Lender has received true copies of file
search reports and each financing statement or other filing identified in
such file search reports from the Uniform Commercial Code filing offices
where filings described in Section 2 hereof are to be made.
UCC Filings. Duly signed financing statements on Form UCC-1 in
substantially the form of Schedule 5 hereto have been prepared for filing
in the Uniform Commercial Code filing office in each jurisdiction where a
Grantor has Collateral as identified in Section 2 hereof.
Schedule of Filings. Attached hereto as Schedule 6 is a schedule
setting forth, with respect to the filings described in Section 5 above,
each filing and the filing office in which such filing is to be made.
Filing Fees. All filing fees and taxes payable in connection with
the filings described in Section 5 above have been paid.
Stock Ownership and other Equity Interests. Attached hereto as
Schedule 8 is a true and correct list of all the duly authorized, issued
and outstanding stock, partnership interests, limited liability company
membership interests or other equity interests of the Borrower and of each
Subsidiary and the record and beneficial owners of such stock, partnership
interests, membership interests or other equity interests. Also set forth
on Schedule 8 is each equity investment of the Borrower and each
Subsidiary that represents 50% or less of the equity of the entity in
which such investment was made.
Debt Instruments. Attached hereto as Schedule 9 is a true and
correct list of all promissory notes and all other evidence of
indebtedness between the Borrower and each Subsidiary of the Borrower and
between each Subsidiary of the Borrower and each other such Subsidiary.
Advances. Attached hereto as Schedule 10 is (a) a true and correct
list of all advances made by the Borrower to any Subsidiary of the
Borrower or made by any Subsidiary of the Borrower to the Borrower or any
other Subsidiary of the Borrower, and (b) a true and correct list of all
unpaid intercompany transfers of goods sold and delivered by or to the
Borrower or any Subsidiary of the Borrower.
[Reserved].
Intellectual Property. Attached hereto as Schedule 12(A) in proper
form for filing with the United States Patent and Trademark Office is a
schedule setting forth all of each Grantor's Patents, Patent Licenses,
Trademarks and Trademark Licenses, including the name of the registered
owner, the registration number and the expiration date of each Patent,
Patent License, Trademark and Trademark License owned by any Grantor.
Attached hereto as Schedule 12(B) in proper form for filing with the
United States Copyright Office is a schedule setting forth all of each
Grantor's Copyrights and Copyright Licenses, including the name of the
registered owner, the registration number and the expiration date of each
Copyright or Copyright License owned by any Grantor.
IN WITNESS WHEREOF, the undersigned have duly executed this certificate on this
[ ] day of [ ], 1999.
EQUIVEST FINANCE, INC.,
by:
Name:
Title:
by:
Name:
Title:
Exhibit 10.24
Annex 2 to the
Security Agreement
SUPPLEMENT NO. __ dated as of , to the Security Agreement dated as
of November __, 1999, among EQUIVEST FINANCE, INC., a Delaware corporation
(the "Borrower"), each subsidiary of the Borrower listed on Schedule I
thereto (each such subsidiary individually a "Subsidiary Guarantor" and
collectively, the "Subsidiary Guarantors"; the Subsidiary Guarantors and
the Borrower are referred to collectively herein as the "Grantors") and
BANK OF AMERICA, N.A. (the "Lender").
A. Reference is made to (a) the Credit Agreement dated as of
November __, 1999 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Borrower, Peppertree
Acquisition Corp., a Delaware corporation, Peppertree Acquisition II
Corp., a Delaware corporation, and the Lender.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement
and the Credit Agreement.
C. The Grantors have entered into the Security Agreement in order to
induce the Lender to make the Term Loan. Section 7.15 of the Security
Agreement provides that additional Subsidiaries of the Borrower may become
Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary (the
"New Grantor") is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Grantor under the
Security Agreement as consideration for the Term Loan.
Accordingly, the Lender and the New Grantor agree as follows:
In accordance with Section 7.15 of the Security Agreement, the
New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as
a Grantor and the New Grantor hereby (a) agrees to all the terms and
provisions of the Security Agreement applicable to it as a Grantor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct on and
as of the date hereof. In furtherance of the foregoing, the New Grantor,
as security for the payment and performance in full of the Obligations (as
defined in the Security Agreement), does hereby create and grant to the
Lender, its successors and assigns, a security interest in and lien on all
of the New Grantor's right, title and interest in and to the Collateral
(as defined in the Security Agreement) of the New Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the
New Grantor. The Security Agreement is hereby incorporated herein by
reference.
The New Grantor represents and warrants to the Lender that
this Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms.
This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when
the Lender shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Grantor and the Lender.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth
under its signature hereto, is the true and correct location of the chief
executive office of the New Grantor.
Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT THAT THE LAW OF
THEIR LOCATION SHALL GOVERN WITH RESPECT TO THE CREATION, PERFECTION AND
ENFORCEMENT OF SECURITY INTERESTS IN FIXTURES AND THE EXERCISE OF REMEDIES
WITH RESPECT THERETO (IF APPLICABLE).
In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Security Agreement shall not in any
way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to
it at the address set forth under its signature below.
The New Grantor agrees to reimburse the Lender for its
reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel
for the Lender.
IN WITNESS WHEREOF, the New Grantor and the Lender have duly
executed this Supplement to the Security Agreement as of the day and year
first above written.
[Name Of New Grantor],
by:
Name:
Title:
Address:
BANK OF AMERICA, N.A.,
as Lender,
By:
Name:
Title:
Exhibit 10.24
SCHEDULE I
to Supplement No.___ to the
Security Agreement
LOCATION OF COLLATERAL
Description Location
